The Rise of the Digital Platform

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Yesterday, I awoke with a sense of fear. I looked bleary-eyed at my iPhone that doubles as my alarm clock. Then I looked outside only to notice that it was not only colder than usual, but also raining. Raining?  “F this,” I thought. I really didn’t want to drag myself out of bed, don my running shoes and get pelted by raindrops for the better part of an hour. But I felt compelled to go, not entirely out of a proactive motivation to conquer the world, but out of fear. Fear? Fear of what? Fear of the absence of data. Fear that when I launched a certain web page that displayed ‘Today’, there would be nothing to show for it. Fear that maybe my friends are logging runs and getting better and I’m not. Fear that my digital ‘Coach Program’ might send me a message. So I’m training for a half marathon and the biggest motivator I have is a blank space on a graph on a web page? Yes. Because that page helps bring the best out of me.

Back in May of 2006, the first and most groundbreaking digital platform was created – Nike Plus. It was the end result of a collaboration between Nike, Apple and R/GA, NIke’s lead digital agency. Nike Plus is an application that connects people to their running data, their music, and to a social network of runners across the globe. The nikeplus.com site was praised by early adopters and to date envelops a community of over 2 million runners who have logged millions of miles on the site. Furthermore, Nike grew its marketshare by nearly 10% in the running shoe category in its first year alone and continues to build on those positive sales results.

The most important aspect of creating digital platforms is that it forces marketers to think broadly about the business they’re in -  not just in terms of product but in terms of the end-user experience. It’s a valuable exercise that helps shape the kind of behavior that best fits the consumer. In fact, ultimately the platform becomes more meaningful to the consumer than the physical product. It becomes irreplaceable while the physical product is easily tossed aside for an upgrade – the digital platform therefore operates as a retainer to offset physical product obsolescence. In the context of Nike Plus, runners can easily opt to switch to a new pair of shoes but can still retain the more valuable running data and community that the digital component provides.

Nike garnered a lot of hype from Nike Plus and many experts pointed to it as the ‘future’ of product development. It turned out that Nike was in fact, ahead of its time. The physical product required cross-disciplinary teams from apparel, technology, research, footwear design and music both from Nike and Apple to collaborate in new ways. Furthermore, R/GA’s launch of the nikeplus.com site that built in a tight-knit community of runners into the concept was an early entrant into social media and extremely well-executed. The combination of utility and community made it a destination that procured ongoing engagement for consumers.

Thankfully, a lot of other companies have caught up and are rolling out exciting new digital platforms. The Fiat eco:drive that launched in 2008 is another noteworthy example of a successful digital platform and product integration launch. Fiat recognized the global issue of sustainability and launched the world’s first in-car USB drive that tracks drivers’ performance, visualizes it on a website and provides suggestions how to reduce their emissions.

This year, two new exciting platforms have been developed in time for ski and snowboarding season – Vail Resort’s Epic Mix App and Nokia’s Push Burton collaboration. Vail Resort’s Epic Mix is enabled by a chip embedded into lift tickets that are scanned at each lift. The chip tracks data based on lift checkins, such as amount of vertical feet skied and amount of time spenton the mountain. The platform also awards participants for achievements and provides utility for trail conditions, where friends are on the mountain, and weather info – all accessible online or through a mobile app.

Nokia’s Push Burton project is an intense research and development program that will create a connected, game-like experience for snowboarders, automatically tracking moves and calculating stats and data for individuals. From there, boarders can work on new moves and challenge friends and let their skills speak for themselves.

We’ve reached a turning point in how marketers should view their business. The “new normal” necessitates that the brand equity statement must be met with a digital solution. This below-the-line investment can have drastic effects on above-the-line sales, strengthen brand loyalty and improve customer service. Although digital products are an emerging market for brands, they will soon prove to be key to survive and be competitive. Sure, they don’t exactly fit into the quarterly media budget which results in a financial challenge. They’ll cost more than your typical banner campaign and there isn’t a lot of hard data to justify the cost in terms of expectations and impressions, but the tangible benefits of taking a long-term approach (Nike Plus is almost at 4 years old now) prove worthwhile.

While a few exciting examples currently exist, we haven’t come close to tapping the potential for new digital products. So when approaching your next project, consider the intersection of product and end-user, utility and community, and you might be onto the next big platform idea.

Tell us – what are your thoughts about digital platforms and what are your favorite ones to use?

Article Info
Posted by: Steve Peck
Thinking About: Advertising / Branding / Design / Digital / Platforms / Product / Strategy
Location: New York City
Website: http://stevepeck.net
Twitter: @stevenpeck
Comments
  1. Grant Miller

    Generally, I agree that the physical world needs to increase its reach into the digital domain by adopting the best of new/emerging technologies.

    EpicMix looks pretty fantastic particularly the tracking capabilities for friends to meet easily (though I’d be concerned about reception on more remote mountains). However, I feel like this might be a project that has all of the technology du jour today (mobile, social, location aware), but if there isn’t a team dedicated to keeping these resorts & their development on the bleeding edge it might seem out of date within a year or two. Do they have the budget that a brand like Nike has to keep this alive & iterating for years?

    • Steve Peck

      Thanks Grant. You bring up a really good point about the business implications of building platforms. They’re a big commitment because once they’re built, they must be maintained to continue to deliver a good user experience. And to be perfectly honest, I have no idea what the costs are to maintain platforms and fund updates to the mobile app and website components. I’d like to say that those costs are minimal compared to their overall advertising budget, but that statement would be purely speculative. You highlight an important decision management faces regarding ROI. For companies like NIke, Nokia and others, it’s much less of an issue. But for smaller businesses, when does the investment become worthwhile? Vail will serve as an interesting testing ground for that question.

      I’d actually like to see the EpicMix platform scale up. While it gives Vail a competitive advantage for now, it could probably become much more profitable and definitely more widely adopted if it included all the resorts in the US (and even abroad). That would be a much bigger investment but the potential is huge. And it would be tons of fun to rack up points and play against your friends on mountains everywhere, not just at Vail. We’ll see what happens in the future, but I’m excited to see what’s next.

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    I am glad to know that you were able to reach a turning point in how marketers should view their business. Nonetheless, I would like to know more secrets which are essential for the rise of the digital platform.

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