Vivaldi's Insights from Digital Darwinism Summit 2015

Vivaldi hosted its third annual Digital Darwinism Summit (DDS) in Frankfurt on February 4th, 2015. Over 220 business leaders and marketing executives from various industries came together at the magnifcent “Palmengarten” to discuss the next chapter in the digital business and brand age.

The Vivaldi Digital Darwinism Summit provides a spotlight on the challenges and opportunities of the rapid digitalization across companies and industries. This year, we were proud to yet again host renowned speakers from various industries—ranging from consumer electronics, automotive and financial services to Internet, technology, and media—to discuss the wide range of experiences posed by the digital transformation.

To summarize the most compelling findings, we have put together a snapshot of each speaker’s presentation and insights shared during the Vivaldi Digital Darwinism Summit.

DIGITAL PREPAREDNESS

Vivaldi Partner’s Markus Zinnbauer opened this year’s DDS by presenting the results of the survey conducted prior to the summit. The underlying objective of the study was to assess the level of digital readiness of the participating companies, according to a number of key criteria.

One of the key findings was that digital increasingly becomes an integrated part of the business and also the personal literacy has increased, yet the majority still lags behind in their digital marketing activities. The respondents admitted that they lack digital customer insights and an according to need to map their customers’ journey. Moreover, they assessed their own company’s digital competence to be well behind the competition. The surveyed executives felt that they do not su ciently embrace and deploy digitization within the organization required to set them ahead of the competition. More than 65% of interviewed participants stated that too many competing priorities hinder their organization bene ting from the digital opportunities.

While companies are trying to adapt to the digital revolution, we are moving towards an even more connected and complex world, as the first speaker Liat Ben-Zur from Phillips laid out.

CONNECTED DEVICES, COMPETITIVE ADVANTAGE & THE FUTURE OF COMMERCE

Liat Ben-Zur shared her personal view on today’s meaning of digital revolution and the impact it will have on companies in the future. She emphasized that digital has become a central element of today’s businesses and should be at the heart of every corporate strategy, regardless of the industry a company is operating in.

“Smart is more than just connectivity.
Products become smart when they share, adopt and learn to become part of customers’ lives!”

The next big thing in the digital revolution, she argued, will be smart products that disrupt value chains, force companies to rethink their way of doing business internally and unleash a new era of competition. So far, products are perceived as “smart because they are connected.” But connectivity is only the rst step for smart products.

Ben-Zur illustrated that the power of smart products lies in the opportunity to create value by sharing information among seemingly unrelated devices, using medical technology as an example. If a doctor gains data from smart devices such as a toothbrush, s/he could, based on the condition of the patient’s gum, assess the risk of a stroke. Truly smart health product need to be part of a bigger health continuum by becoming a contributor to the overall health.

The key for connected devices is to seamlessly t into the ecosystem of consumers. Only then they can reach their true disruptive potential and provide valuable bene ts based on the information they exchange.

HOW TO WIN BY DISRUPTING YOUR OWN INDUSTRY?

Claudia Lang and Dirk Rieken shared insights on the future of the insurance industry in the digital age. While other companies moved their business online several years ago, the insurance industry has struggled with outmoded organizational structures and the broker paradigm, explained Dirk Rieken. As a result, many insurers lagged behind in the ability to serve the needs of digital customers.

“Insurers that build brand through trust and transparency will thrive in the digital age.”

Yet, as big data, telemetrics and mobile distributions emerge, the traditional insurance distribution process will move away from the broker paradigm to a wide variety of direct and indirect channels between providers and customers.

Lang, former board member of Canada Life, pointed out that the key for successful insurers in the digital age is to build trusted brands known for good service through transparency and less complex products. She also explained that insurances ironically lag behind today because they were ahead of the IT game in previous decades. Additionally, a shift towards creating additional values along a digital customer journey is required in order to gather insights via data, which will allow insurers to provide customized cover and more risk-based pricing. With all these insights, Lang has given herself the mission to demonstrate what ‘Insurance 2.0’ looks like and launched a start-up that is backed risk-wise through a partnership with Swiss Re.

PANEL I: WHO WINS IN THE AGE OF DIGITAL DARWINISM: FIRST MOVERS OR FOLLOWERS?

Panel participants debated who the winners are in the age of Digital Darwinism – the rst movers or the followers? Undoubtedly, the participants took the same view that digitalization brings meaningful opportunities for companies across a variety of key dimensions. But before rms emerge as winners in the digital age, they have to adapt to new circumstances and master new capabilities.

“Big data will come to you; you don’t have to search for them.“

Big Data analytics, for example, provide new opportunities for companies to both deliver services and to improve operational intelligence. Yet, the discussions around big data miss a crucial point: the opportunity of small data. Winners of the ‘Big data challenge’ will be those companies who move from small to big data ltering the right information, highlighted Rob Walker.

Dr. Rob Walker
/Vice President Decision Management, Pegasystems/

Prof. Dr.-Ing. Dieter Wegener
/Senior Vice President Industry, Siemens/

Katrin Saternus
/Head of Corporate Communication, Daimler Mobility Services/

But digitalization is not only a purely market facing transformation. Industry 4.0 will also open up huge potentials for companies to respond to the demand of speed and agility necessary to survive in the digital age, as stated by Dieter Wegener. He explained that companies should start with the digitization of their value chain – connecting tools, machines, employees and the outside world (namely the internet) – to gain competitive advantage. Smart factories will enable individual customer requirements and the ability to respond exibly to changes. Siemens, for example, increased the output per worker at its factories by a factor of 6 through their Industry 4.0 program.

“The customer is the real driver of digital transformation.“

With regard to mobility, today’s user journeys have extended far beyond a nifty collection of gimmicky technology touchpoints – they expect their experience to be smart, convenient and seamless. Katrin Saternus explained that companies have to broaden and grow their digital ecosystem to deliver on the expectations of today’s customers, consumers.

Although rst mover advantage is critical to survive in the digital age, companies that set best-practice standards will at the end separate the winners from the losers, concluded Dieter Wegener. The question is not so much, how early you adapt a speci c technology. Instead you have to understand how to address the key driver of digital Darwinism: the customer

Chair: Roland Bernhard
/Senior Partner, Vivaldi Partners Group/

INDUSTRY: Advertising – Google

A NEW MARKETING PARADIGM: DATA DRIVEN STORYTELLING

Paul Co ey, of Google, discussed the growing importance of data-driven storytelling for marketing campaigns. He explained that the success factors of campaigns have radically changed through digitalization. While in the past the marketing strategies of companies were mainly focused on advertising their products, today the key to good campaigns lies in storytelling and deep audience insights.

“The power of successful digital campaigns lies in the contextualization of audience signals.”

As a result of digital revolution, companies often face several challenges including fragmented insights, performance obstacles and ine ciencies of managing campaigns across multiple formats and devices. These challenges force companies to rethink their traditional approach towards pursuing marketing campaigns.

Co ey proposed three key levers to succeed in this environment: First, attack the increased fragmentation by using a single operating model to reach the right user at the right time with the right message while getting smarter along the way. Second, shift to a programmatic ecosystem that will increase e ciency and decrease the process time of a campaign by up to 33%. And third, use the combination of audience signals across various touchpoints to ‘supercharge ads’, with a potential 542x uplift in marketing e ectiveness.

The key for marketers will lie on contextualization by using technology and audience insights simultaneously to drive successful campaigns.

Paul Co ey
/Director Business Development Europe, Google/

THE REAL DISRUPTORS? YOUR CUSTOMER

Erich Joachimsthaler made it clear that digital Darwinism can certainly not be regarded solely as an event. In fact, it is a systematic and time consuming process of multiple innovations where lucky strikes are rare. Along with this process, not only is technology changing, but also consumers are changing and adapting to these shifting circumstances.

“Hope is not a strategy to win in the digital age.”

Joachimsthaler concisely illustrated the pace of digital transformation by reviewing the changing focus of Vivaldi Partners’ event series at the summit over the past three years. When coming together for the rst time three years ago, the growing importance and disruptive power of digital start-ups were the spotlight of the summit. Three years later, we now talk about how digital transformation disrupts entire industries. It is no longer only about connected products; it is about how industries connect with each other.

In his presentation, he also pointed out that digital transformation is only one step to succeed in the digital age. Another key factor for companies is to capture the value from digitalization and to monetize the mass of data. This will require changes in marketing, branding and often new business models.

Dr. Erich Joachimsthaler
/CEO and Founder, Vivaldi Partners Group/

INDUSTRY: Automotive – BMW Group

LEADING CHANGE THROUGH BRANDING AND NEW BUSINESS MODELS IN THE DIGITAL ECOSYSTEM

Steven Althaus spoke on the changing role of mobility within the automotive industry and the way BMW manages to lead this change in the digital age. He gave a deep insight into BMW’s cutting-edge project and illustrated how successful change requires shifting and heightening the area of interest.

“Companies have to consider and treat digital transformation as new business models
and not only as a partial aspect in the eld of communication and marketing.”

Companies have to change their views from within the walls of the enterprise to a much broader ecosystem to be able to re-de ne their business models and brands accordingly. Rede ning the understanding of the industry is the key in a digital age to appeal new customer segments with new products and services and to shape the future through a future-proof brand portfolio.

Althaus further demonstrated how BMW managed to lead change by implementing their digital ecosystem approach. As a key takeaway, Althaus made clear that in the digital age it is a must for companies to build brands around a digital ecosystem in order to adapt to the rapid changes that digital Darwinism and the digital customer bring upon them.

Dr. Steven Althaus
/Senior Vice President Brand Management & Marketing Service, BMW Group/

PANEL II: CMO-CIO RELATIONSHIP

In the light of the ongoing discussion about CMO-CIO relationship, we have asked leading Marketing and IT executives for their opinion on that matter. To turn the bene ts of technologies into pro t and growth, a close collaboration between the CIO and the CMO is essential, agreed the participants.

As customer experiences become more technology-driven and data-dependant, the CMO-CIO relationship has become a crucial corner stone for every company to develop a thriving customer relationship. Along with the digital revolution, IT has become a crucial success factor in today’s growth strategies forcing CIO’s to shift their role from being only an internal service provider to becoming a strategic partner or even a business accelerator. CMOs on the other hand need to develop a su cient understanding of the potential of new technologies and anticipate new opportunities to reach customers through cutting-edge digital means.

At the same time, the role of business software provides as SAP will change towards a ‘bridge builder’ function in order to connect IT and marketing, and support marketers to better connect with their customers.

The panel agreed that a key challenge for heterogeneous teams lies in their ability to simplify unstructured data and overcome business complexity to derive actionable insights and develop meaningful digital solutions that precisely target the speci c needs of today’s always-on consumers.

Stephan Gemm
/CIO, Trelleborg Vibracoustic SAP/

Dr. Steven Althaus
/Senior Vice President Brand Management & Marketing Service, BMW Group/

Oguzhan Genis
/Vice President & CIO Customer O ce, SAP SE/

THE KEY TAKEAWAY

In summary, the Vivaldi Digital Darwinism Summit 2015 highlighted recent key developments across various industries. Understanding and leveraging the context of the daily lives of consumers and customers have become crucial in order to remain relevant and access new revenue streams. This also implies that the CMO and CIO roles need to grow much closer together to excel in this digital environment. Moreover, often times partnerships are essential to creating value add for the customer within a broader ecosystem. At the same time, our survey documented that there is still a lot of potential – especially from a customer insight perspective – to drive digitization within businesses. Only a thorough end-to-end digital strategy from the customer to product/production and down to the actual customer experience will create a sustainable competitive advantage. As our CEO Erich Joachimsthaler put it: it is the customer, not technology, that is disrupting industries.