Technology is having a profound effect on the world of marketing. Thus far, we’ve had fintech, insuretech, even foodtech. Like many marketers, I started my career in FMCG with physical products. Cadbury, Mars and Unilever were must-have brands on a marketer’s CV to get your classical training.
Does that still hold true with the rise of virtual brands such as Uber, Airbnb, Deliveroo and Zoopla. And how did we get here?
Financial services emerged as the first step towards intangible products and began to lure FMCG marketers into their world. Then, service brands, such as O2, offered even more intangible services like voice, text and data.
Bigger waves brought us deeper into the virtual world. I recall the surprised reaction of my colleagues when I left Barclays to join Moneysupermarket.com. I was looking to the future, and a virtual one at that. It was the rise of the aggregators, which virtually curated so many areas from insurance, finance and even travel.
I could see how these new players would disaggregate established brands. To a large extent, they have succeeded. Take car insurance – 70% of consumers now go to a price-comparison site instead of direct to an insurer.
The same is true for travel where Booking.com and Expedia have disrupted established brands. Meanwhile, new brands such as Trussle are aggregating mortgage brokers and using technology to improve the customer experience. Virtual players have emerged in every sector, with smart curation and technology being the key drivers.
So what are the implications for marketing and marketers? First, this isn’t a short-term trend like the early dotcoms. It’s a permanent disruption. Consumers have adopted these upstarts, which are growing exponentially.
Years ago, marketers in FMCG categories had to deal with the rise of supermarkets; now we have to do the same with virtual brands. If we don’t, we risk damage to our brands and careers.
Generally, it’s bad news for brand leaders – resistance is futile and delays the inevitable. When an FMCG brand as big as Coca-Cola needs to be on Tesco’s physical shelf, service brands have no choice but to be on the virtual shelves of aggregators.
Conversely, it has provided opportunities for new or weaker brands to improve their rankings on aggregators, thereby gaining access to a larger marketplace at a relatively low cost. Marketers, take note: playing the virtual game has a real-world upside.
Second, the new wave of virtual brands will save commercial TV. These brands need awareness to fuel growth. Virtual brands are now the biggest TV spenders. Mars or Coke can’t match their firepower. Even brands such as Amazon are converts to TV or "mass advertising", as they call it. Another huge virtual sector is gaming, with its brands using TV heavily.
Third, more marketers will fast-track my career journey from FMCG, financial or telecoms and go straight to virtual brands. Why not? It’s the present and the future of marketing. Be virtual.
Paul Troy is the former chief marketing officer at Confused.com.