Digital Disruption: How Will You Respond?

Many of you may know that I live in the Nashville area. Nashville is known for music and we have many friends in the business. As you might suspect, music piracy is taken very seriously here.

sources of music collections in the US

That’s why I was interested to read a comprehensive study from The American Assembly, a non-partisan public affairs forum affiliated with Columbia University. They conducted the Copy Culture Survey, based on thousands of phone interviews in the United States and Germany. The group released part of the results, which show that people who download music illegally also buy more music than those who don’t.

The research found that in the United States, people who download pirated music have larger music libraries—around 37% larger than those who download only legal songs. “But some of it also comes from significantly higher legal purchases of digital music than their non-P2P using peers—around 30% higher among U.S. P2P users,” Joe Karaganis from American Assembly explained.

He added: “Our data is quite clear on this point and lines up with numerous other studies. The biggest music pirates are also the biggest spenders on recorded music.” Compared to the United States, in Germany the figures stack up even higher, with pirates buying nearly three times as much digital music as the legal downloaders, the study found.

While peer-to-peer sharing of files is the most prevalent form of illegally acquiring music files, in the United States, according to the survey, 29% of those under 30 listen to most all of their music via streaming services. However, only 11% of those have a paid subscription, which would indicate that music streaming services play a similar role to pirated music: try before you buy.

The music industry was perhaps one of the first to experience a digital disruption. Others—like the book publishing business—are not far behind. But the response of the Recording Industry of America was to sue its best customers. It’s a strategy that doesn’t seem to have worked very well.

How will you respond?

What assumptions are you making when planning for your agency’s future? Will you respond like many industries and keep your head in the sand? Or, will you look to the future and try to see what opportunities digital disruption provides?

If something can be done, it will be done. And if you don’t do it, then someone else will. Commit to being an agency that is willing to embrace change and explore how you can take advantage of the opportunities created by disruption.

Who Owns What?

I spend a lot of time talking about generational differences. This infographic from the Pew Research Center is very interesting. It shows the results of a survey they conducted looking at generations and the gadgets they own. Click on the graphic to get the full details…

generations-and-gadgets

Click on the graphic to get the full details…

There’s An App for That

Mobile devices and the apps people use with them are changing how consumers interact with information. The programming and development trend of creating small apps that accomplish a specific function will also change how business programs are developed.

phone-apps

Why aren’t our agency systems more like Facebook?

Facebook is easy to use, and it’s a robust tool. Grandparents can browse pictures of their grandchildren in a matter of minutes, while teenagers manage their entire social lives from the site. Furthermore, Facebook is free. So why isn’t agency software more like Facebook?

The insurance industry is not known for fast innovation. Yet all of us are competing in an environment where apps developed for the consumer and small business market are innovating at a breakneck pace. As a result, we’re seeing more and more of those consumer tools finding their way into the workplace.

In the not-too-distant future, agencies will be able to purchase only the apps that they want for their organizations. These apps will accomplish a single purpose and will communicate with one another. There will be an app for customer information, one for policy detail, one for claims administration, one for mobile access for both producers and clients, and who knows what else. The list of apps will only be limited by the imagination of users and developers.

Instead of having to purchase one monolithic expensive program that does everything for everyone, agencies will be able to build their own customized products that do exactly (and only) what they need.

Here are some lessons that agency system vendors need to learn from the vibrant and innovative consumer Web apps market.

  • Foster innovation through third parties. Open up your systems. Innovation won’t come solely from within a single company. By having open and documented Application Program Interfaces (APIs), a vendor encourages third parties to build upon and enhance their products. Salesforce.com is a great example of fostering innovation by opening a core program to outside developers.
  • Release early; iterate often. The release cycles of traditional vendor software are way too drawn out, which means the software isn’t as nimble or able to respond to new techniques and technology as it should be. If you are not slightly embarrassed when it is released you have waited too long.
  • Ease of use matters. Some agency software systems could be described as, well, a bit clunky, usually requiring extensive training to use. On the other hand, apps in the consumer space tend to be very well designed, with a great deal of care paid to making them easy to use.
  • Use social features to encourage adoption. Users can be resistant to fitting new tools or features into their workflow. By taking cues from the social features found in apps like Facebook, developers can encourage users to embrace new applications.

Part of the problem also lies with how agencies tend to adopt new tools. The ease with which information can be shared on a site like Facebook can run counter to many organizations’ internal cultures. The mindset of an agency (and the rest of the industry) must change from being rigidly hierarchical and siloed towards being more open, flat, and transparent. Companies now have the ability to change the way their employees work.

What can you do? Begin to understand apps by personally using an iPhone or Android-based smartphone, or use a tablet like an iPad or Galaxy Tab. Unfortunately, a BlackBerry doesn’t count, as its apps are so universally poor. As you start using apps, you will begin to understand the transformation taking place.

Today, companies like Facebook, Twitter, and YouTube have transformed the way people communicate and collaborate, globally. In five years (or less?), how agencies communicate and collaborate with everyone will also be transformed because “there will be an app for that.”

IBM Predicts the Next Five Years

IBM Labs has released its 5th annual “Next Five in Five” – a list of innovations with the potential to change the way people work, live and play over the next 5 years. The Next Five in Five is based on market and societal trends expected to transform our lives, as well as emerging technologies from IBM Labs around the world that can make these innovations possible.

Their predictions include:

  • Holograms will be a part of our lives. You will be able to beam 3D images to people and talk with them. 3D cameras will be small enough to use with a mobile device. Hosting an online meeting will be very different.
  • The emergence of “citizen scientists” who collect data from sensors in our cars or any physical device that will be added to massive data sets.
  • Batteries that are powered by static energy or even the air we breathe.
  • The heat from data centers may help power cities.
  • Your commute will be personalized. Adaptive traffic systems will intuitively learn behavior.

Here is a 3 1/2 minute video talking about each of the five.

Your Web Strategy Must Change

Go to your agency’s Web site right now. Look at the home page. Put yourself in the mind of a random person who doesn’t know your agency from any other agency. Now look at the page and ask yourself, “What is it they want me to do?”

If you can’t immediately answer that question, your Web site needs work.

Most agency Web sites were originally created in the late 90s as a response to the growth of the Internet and search engines. Many people, including myself, said that an agency needs to have a Web site so that they have a presence on the Internet. In response to this, most agencies had a Web site created that was simply an electronic version of their printed agency brochure.

I would argue that even the term “agency Web site” needs to change. In today’s hyper-connected world, you need to create a strategy for your “online presence,” not just your “agency Web site.”

Your online presence will include a combination of multiple Web sites, an agency blog, a Facebook page, a LinkedIn presence for all producers and staff, a Twitter account for customer service, a YouTube channel for agency videos, Google Places for local search, and who knows what else in the next few years.

Along with Duke Williams, I have created the Agency Internet Boot Camp as a way to help agencies understand how to create a strategy for their “online presence” and how to start implementing that strategy.

While content is still what gets people to interact with you, it’s also your ability to interact with customers and prospects via heightened functionality that kicks off the process of engagement — the new success metric. It’s not enough for your content to simply be there, flat and uninviting. It has to stand up and practically beg people to interact with it. Your Web site must be more Web app-like than browser-like.

What does this mean for your agency, you ask? Here are a few thoughts:

  • Use blog software as the engine: Blog software, such as WordPress, is essentially content management software with SEO, community, and syndication built in. I can think of very few instances where it would not make sense for an agency to use a tool like WordPress to run their entire Internet presence.
  • Get feedback: People are getting used to sites that allow them to offer ratings and reviews. This type of functionality is easy to offer and can give social reassurance-if the reviews are good-to visitors considering your agency.
  • Beef up your content: In terms of traffic, Google is the number-one search engine, but YouTube is number two. Adding video and audio content has become a must, as visitors expect it and consume it in ways that keep them on your site much longer than sites that feature only static text.
  • Integrate Social Media: Adding Facebook “Like” buttons that allow visitors to share your content with their friends is an effective way to allow Facebook visitors to interact with your site. Plugins (e.g. Sociable) make it very easy for people to share, subscribe, and bookmark content found on your Web pages.

Having an agency Web site is just not enough anymore. Creating a comprehensive strategy that integrates all aspects of your online presence will help you become more visible to prospects and to retain clients.