Wednesday, January 7, 2009

The Evolution of Market, Marketing and Customer Research

According to IDC, the digital universe in 2007 was 2.25 x 10^21 bits (281 exabytes or 281 billion gigabytes). By 2011, the digital universe will be 10 times the size it was in 2006. The enterprise share of the digital universe is widely skewed by industry, having little relationship to GDP or IT spending. The finance industry, for instance, accounts for almost 20% of worldwide IT spending but only 6% of the digital universe. Meanwhile, media, entertainment, and communications industries will account for 10 times their share of the digital universe in 2011 as their share of worldwide gross economic output.

One area driving this exponential growth of information is content creation. Content is increasing created originally in digital format. In addition we are rapidly converting analog content into digital information. Moreover, a phenomena called “mashup” is becoming widespread. Wikipedia defines a digital mashup as “a digital media file containing any or all of text, graphics, audio, video, and animation, which recombines and modifies existing digital works to create a derivative work.” This has always been going on in a wide range of fields from science to art, but in digital form, it is exploding, creating even more digital information.

Tidwit describes digital content as “quite simply any form of data or information in digital form (i.e. an electronic file) rather than physical form. Examples of digital content can be anything from a simple poem to photos, graphic art, research papers, articles, reports, statistical databases, business plans, engineering designs, e-books, multimedia (music and movies), etc. In other words, digital content is any type of content that happens to be in bits and bytes.” And, in my diagram below, content include the development of platforms, environments and other tools that enable users to create more content.

Content is created by an enterprise. The enterprise can be an individual or a multinational corporation. In the past, the enterprise created content and interacted with the content in order to improve it. The content was developed for a medium, when completed it was published. It was then distributed and delivered via a device to multiple people. In order to determine the number of potential users, user needs for the content or how best to market it, market or marketing research was conducted. Or, if you wished to know how the content was being used, what people thought about it, or what improvements were needed, customer research was performed. However, that research was conducted outside the development - distribution system.

Today’s process is similar to the past except that now content is often created for multiple media and devices. For example, a song is performed for live audiences, recorded on a CD, performed in a DVD, and downloaded online as an mp3. For companies like Disney you can include movies, Broadway shows and then park rides. Devices range from movie theaters to telephones.

Yesterday’s process was developed before digital media. Today’s process includes the capabilities of web 1.0. Yesterday’s and today’s process is enterprise centric. However, with the development of web 2.0, the process begins to shift from enterprise centric to content centric. (See Web 2.0 & Social Media for More information on web 1.0 & web 2.0 )

With web 2.0, the process of creating and distributing content can be much more interactive. Market, marketing and customer research is embedded in the process because the users can feedback information (actively or passively through sensors) at any part of the process and the enterprise can query, or collect data, at all stages of the process (with proper user knowledge and concurrence). However, the process is still enterprise centric.

In the future, as web 2.0 tools are developed and diffused, another significant shift occurs, as the process becomes content centric. Multiple enterprises and users collaborate through multiple devices and media to create content. This step short circuits the enter concept of market, marketing and customer research as users are partners, and integrated into the entire process.

The latter stages of the development of the process accelerates innovation by closing the loop between needs and implementation. It also fosters additional innovation as content becomes more easily “mashable”. Innovation diffusion accelerates.

This process is applicable to digital content where digital media and devices exist broadly. It is most applicable to incremental and distinct innovation. It is probably not useful for breakthrough innovation. At least in the past using the enterprise centric model, a lot of dat exists indicating that users can’t easily define the needs for breakthrough innovations. However, we have no data on the content centric process for breakthrough innovations. (See Innovate! for more information on incremental, distinctive and breakthough innovation. )

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