Rise of customer experience design marks a shift beyond paid media
A view from Michael Karg

Rise of customer experience design marks a shift beyond paid media

A shift in consumer behaviour has accelerated brand investment in customer experience design, Michael Karg says.

The emergence and dominance of digital technologies and platforms have changed how marketers support their brands.

This has led to a fundamental shift in investment strategy, with many brands moving from a purely paid media-based approach to a more balanced portfolio of activities.

Savvy, successful brands today carefully allocate their spend between advertising and customer experience design, including digital utilities, content, ecommerce, and digital-in-store.

This change has been driven by the opportunities that experience design offers to brands in terms of creating meaningful engagements with their customers, leading to consumer and influencer advocacy, and balancing interruption-based advertising with offering unique services, engaging brand content, or other forms of value exchange. 

Controlling brand experience and exposure

What’s more, a key driver of this change has been consumers modifying their behaviour.

Embracing the power and ability of digital and connectedness, they’ve become more selective about when, where, and how they are exposed to brands.

Many restrict and filter out what they see as brand intrusion – as many as a quarter of adults in the UK and almost 40% in the US have now installed ad blockers.

Several new and emerging tech players have started to put the protection of privacy and ad blocking at the heart of their services, including browser company Brave and DNS resolution service

With the rise of blockchain and other enabling technologies, there are inevitably more to come, and the media ecosystem will have to evolve further.

Established power players have also launched initiatives to make the digital marketing experience better for consumers and brands alike.

Apple was a pioneer, blocking tracking pixels, and at June’s worldwide developer conference, it announced that its 2018 operating system updates – iOS 12 and High Sierra – will actively block Facebook tracking.

Google created Accelerate Mobile Pages (AMP) and prioritised load times in its search algorithms.

And with GDPR now a reality, the new EU regulation will be a further catalyst for change, with significant implications for advertisers using third-party data for programmatic and retargeting.

The rise and rise of customer experience design

This shift in consumer behaviour has accelerated brand investment in customer experience design.

During the first half of 2017, customer experience budgets rose three times faster than media budgets.

As a result, a recent Gartner study  reported that the CMO’s IT budget is typically on the same scale as the CIO’s. 

Consider the example of the Nespresso membership programme which has created an entirely cohesive and frictionless customer experience across channels, physical and digital.

Red Bull has been rewriting the rules of brand building for many years by deploying content, content platforms, and experiences that resonate powerfully with consumers. So, too, has Tesla.

And who’s to say that the next generation financial services products will come from traditional financial services firms?

Enter the consultancies

The growth in customer experience design is what has given licence to the consultancies to enter the marketing space.

IBM, PwC, and KPMG are all power players in digital marketing through customer experience design programmes that they aim to develop for their clients.

And earlier this year, Accenture Interactive was ranked  as the largest digital network worldwide with revenues of $6,5bn in 2017, representing 35% growth in the previous year.

The agency holding companies have invested heavily in customer experience design, too.

Over the years, for instance, Publicis Groupe acquired Digitas, Razorfish, and SapientNitro, and WPP’s stable of digital agencies includes AKQA, Essence, and Wunderman.

Omnicom, IPG, DentsuAegis, and Havas have all also undertaken significant initiatives in this area.

Future balance

However, great brand advertising is neither dead nor dying, and brands that thrive are those that succeed in blending great storytelling with great customer experience design.

Building and sustaining brands, around the world, requires scale, reach, and proven and measurable ROI.

But it also requires the analytical rigour of marketing analytics and attribution to evaluate the right balance between paid media and experience design.

This will enable brand owners to know what incrementality looks like when combining both ways of engaging with consumers.

Resources are always scarce – even for the biggest brands – and identifying the right balance will make a big difference.

Michael Karg is chief executive of Ebiquity