Last week, a traditional meatspace advertising agency closed shop in Lagos. His last customer did not renew the contract. The company was a victim of creative destruction where ICT utilities like Facebook and Google are disintermediating agencies by making it easier for brands to reach customers without supply-side gatekeepers. Companies like Google control demand (the customers), and the internet has made supply largely unbounded and unconstrained (there are many ways to get content to the web via Twitter, FB, WordPress, etc) thereby commoditizing supply to a large extent.
Creative destruction describes the deliberate dismantling of established processes in order to make way for improved methods of production. The term is most often used to describe disruptive technologies such as the railroads or, in our own time, the Internet
So, while they remain important, newspapers are not as dominant as they used to be for brands to reach customers. Understanding that construct, brands now focus on the digital platforms which have the demand (the customers), in the process de-prioritizing the old suppliers of ad space (newspapers) and their syndicated ad agencies. The signs of creative destruction are everywhere:
Amazon controls roughly half of US e-commerce and 5% of all US retail sales. It also holds nearly half of global cloud services through AWS, and is carving out a sizable chunk of search.
Facebook counts 2.2 billion daily active users across Facebook, Instagram, WhatsApp, and Messenger. That’s 29% of the entire global population
More so, with the ease of use of Facebook and Google ad technologies, most midscale brands do the jobs by themselves with minimal help from external consultants. At the end, it is a double-whammy (lost ads to digital platforms and customers can manage the ads by themselves) and many traditional ad agencies are closing.
This redesign cuts across sectors including banking. For the digital-only-banks in Nigeria, your playbook must consider Silicon Valley Bank. That bank does many things for startups: funding, lending, consulting, networking, and cheerleading. You better check how your industry is changing and ensure you adapt.