Jorge Mesquita, a senior executive at Johnson & Johnson, made some startling admissions recently.
J&J is the 7th most valuable company in the USA – worth $360 billion – thanks to advantages it has held for decades. And according to Mr. Mesquita, those advantages have now eroded.
J&J, and other large consumer products companies, are finding that their massive capital resources are now no better than venture capital money. Small companies can rival their large manufacturing assets with contract manufacturing. Their talent-recruitment machines are now matched by LinkedIn and its ecosystem of headhunters.
Their relationships with retailers were once a difficult barrier for upstarts to cross. But anyone can now sell directly to customers worldwide.
And it wasn’t long ago that only hefty budgets could build brands through mass media. But with online marketing, new brands are building communities of users on shoestring budgets. (Or on hawser budgets and VC money. Either way.)
The bottom line: J&J and other large consumer products companies are losing market share.
Think about it. A $360 billion company is worried about losing its markets, and is buying upstart competitors to stanch the trend.
That’s a lot of value up for grabs. And the opportunity is not over. J&J is still a $360B company (ok, most of that value is on the pharmaceutical and medical devices side, but still). In the most recent quarter, Amazon sold $25B worth of merchandise, while Wal-Mart sold $120B. The Internet Revolution is mostly in the future.
There are enormous vaults of legacy wealth up for grabs, and online advertising is the key to a huge chunk of it.
Well … smart advertising is.
Some things haven’t changed. “Half” of all advertising remains wasted, and it’s still hard to know which half. Except on those campaigns where it’s pretty clear you wasted all of it. (Hey, we’ve all been there.)
One of the many temptations of online advertising, is the data that comes with it. We have the unprecedented ability to know who did what and when, and to talk to individuals based on their unique profiles …
… and yet … I think most people are disappointed that it hasn’t gotten easier. We have all the data in the world, but campaigns still bomb all the time.
And that’s what Explorics is all about. Getting smarter about online advertising. Learning to use all this data to waste less and impact more.
The Internet is still in its infancy, online advertising is still in its infancy, and so are we. We all have a lot left to learn.
I think it’s an exciting place to be. And the upsides haven’t been higher in a very long time.