See original post on Ed Montes’ LinkedIn Page.
I recently had the opportunity to read Jerry Chen’s post “The New Moats: Why Systems of Intelligence are the Next Defensible Business Model.” It’s an insightful review of traditional economic moats for enterprise technologies and introduces the concept of “systems of intelligence” (insights layer), sandwiched between “systems of record” (data source layer) and “systems of engagement” (channel layer). I oversimplify, but Chen’s thesis is that business moats are “good” and that systems of intelligence cross multiple data sets and multiple systems of record to potentially create new moats based on generating insights and intelligence from these disparate data sources. As Chen writes, “…the battle is moving from the old moats, the sources of the data, to the new moats, what you do with the data.”
So, what has this got to do with marketing?
In digital marketing, the moats built by the so-called walled gardens of Facebook and Google are real and expanding. The Marianas Trench sized-moats built by the duopoly dominate the digital marketing economy. Their Faustian bargain to brands and advertisers is this: transact through us to reach your consumers today and forever, and in return, we will tell you how well you did, while we enrich our own data sets and coffers at your expense.
The snag for marketers is that the duopoly’s protective trench ensures that you will lose the ability to connect with your customer unless you pay a steep tax. Like the enterprise technology monopolies of the past, the digital duopoly lives in rarefied business model air where network effects, unlimited distribution, high switching costs and brand strength have created a virtuous flywheel of profit. Truth be told, it is inevitable that Amazon will also share the marketing spotlight in the immediate future. Others like Snap, Verizon and more have similar intentions. In the end, the topology of the marketing enterprise stack will be remade into a facsimile of the moon’s surface of dead volcanoes, impact craters and lava flows.
Interested in reading more? Head over to Ed’s LinkedIn Page for the rest of the article.