Per what Aristotle said, “The whole is greater than the sum of its parts”; a piece of an ecosystem cannot surpass in size the greatness of that very ecosystem.
On a previous article at Venture Beat by guest author, Soeren Stamer, he basically questions whether the approach to business by THE two internet giants (Google & Facebook) is all wrong from a long-term standpoint.
In concept, the use of advertising is an accelerator to create the togetherness of a customer and a brand, and once this context of proximity is created the chances of resulting on a transaction of a product or service are higher. However, a transaction can occur regardless of the fact of advertising but, advertising is much less likely to happen if a transaction is not the focus.
When conglomerates like Google and Facebook focused on a piece of the whole, they are by definition limiting their scope for growth and in a way they will fight for the first layer or revenue, which is only an initial part of the pie, which is focused on creating the togetherness, which however, as explained in the previous article, made much sense from a cost standpoint and a time investment perspective.
On the other hand, and regardless of contexts, the whole commerce scenario, where advertising is only one way to create the togetherness, there can be other ways to build consistently many situations – organically, socially and focused on growth hacking opportunities – that can propel togetherness and thus transactions.
The cases of Google and Facebook today when looking at profitability for Brands, it is getting narrower and narrower as it entangles a continued fight for margins, ROI increase, and effectiveness of every dollar spent on those channels.
Those dollars are all used just to create the togetherness situation rather than focused on the result itself, which is the transaction.
In cases like WeChat, the win-win situation for the whole ecosystem is not focused on creating the togetherness nor charging for it. The togetherness is clearly an axiom needed for the rest to happen, however, the real value for all parts takes place when the transaction is effective, a customer and a brand exchange a monetary value for a product or a service respectively.
Now, as changes are happening in the market and awareness is awakening in certain players, what will be the biggest challenges? Brand positioning? Implementation know-how? User experience? Business models?
Quoting Darwin’s natural selection, “Only the quickest who adapt to change will prevail”, who will those be in the digital landscape? Do they all necessarily need to adapt to survive? Is it mutation more than adaptation that is required?