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by Charlie Mathews (@CharlesLeeZA) Technology is transforming marketing faster than ever before, and a slew of new laws and policies are being enforced across the world to govern how marketers source, store and work with customer data. MarkLives speaks to Arthur Goldstuck (@art2gee), IT analyst and World Wide Worx founder, about how tech continues to disrupt marketing, and the coming privacy showdown.

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“Transformers Transform 2020” is a special series produced by MarkLives and HumanInsight and sponsored by the Association for Communication and Advertising (ACA), running Jun–Sep 2020. Together with Lebogang Tshetlo, we’ll be profiling remarkable local #Transformers every other Friday until September, featuring Tshetlo’s photography. The objective of this an independently managed, journalism-driven research project is to explore and map new paths for brands and marketers to transform, adapt and build resilience while the world adapts to covid-19 and its resultant social, political and economic toll.

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South Africa’s much-anticipated Protection of Personal Information Act (POPI) was gazetted at the beginning of July 2020. This law makes companies responsible for how they acquire, store, use and process data from people.

This in-depth video interview covers:

• What transformation is, and the difference between digital transformation and digitisation
• Why transformation is a broad disruptive experience and how human beings, not technology, drive change
• Why deep listening and understanding is fundamental to transformation
• The privacy arms race: unpacking a new global privacy legislation that will change the way marketers work
• How artificial intelligence (AI) will change marketing forever and why internet access should be a basic human right

While we have your attention, please would you consider taking out a MarkLives membership to help finance our operations? The covid-19 pandemic is having a huge impact on society and industry. With your support, either as a once-off or monthly contribution, we can continue our coverage of its impact on our industry.

 

Full transcript

My name is Charles Mathews and I’m here today with Arthur Goldstuck. Few people need [an] introduction to [him]. Arthur grew up and through the internet and has seen the advent of technological transformation, and has been a key voice for South Africans involved in this burgeoning fourth [industrial] revolution [4IR] that we’re living through. Welcome and let’s kick off by hearing your thoughts on transformation. How would you define transformation?
Arthur Goldstuck: Thank you for your kind words, Charles. Transformation in the digital environment refers to the complete change, evolution and development of platforms, systems and processes. The big mistake that tends to be made when people both define and implement transformation is that they don’t look at the meaning of the word. So, for example, digital transformation refers to a complete transformation of the way you operate, compared to what they refer to as digitisation, which is simply putting paper processes or paper documents into digital format. That’s not a change in the way you operate or in your processes; that is simply a change in format. And that symbolises the difference between a shift and a transformation.

A transformation requires more than just changing the formats that you use but changing the processes principles and modus operandi that you embrace. So, the difference between digitisation and digitalisation really sums it up. Digitisation is taking paper and putting it into digital format. Digitalisation is taking all processes, and interconnecting them making them digital in the sense that they can be placed on any platform and linked to each other, on or via or between any platform.

So, let’s bring this immediately to the world of marketing, and let’s just say that I am the leader of a great advertising agency, of the ilk of Ogilvy, or a Joe Public, and you are advising me on transformation. What is the story about transformation that you’re going to tell me? And what is it that I need to do to transform?
AG: I’m going to tell you that you have to look at every aspect of the business. You might think that your core business is creating great advertising messages. But that’s just one of the things you do in your business. So, to start with, that aspect of the business ‘content creation’ has to become fully digital. And what that means is that any resources that you use any content, any format of content that you use, has to be at some point digital. And it has to be able to be utilised or leveraged on any platform because of being digital. So, for example, if you have video, and audio, it’s all available in a digital format, which means you can mix and match whatever content you have, whether digitally, whether it’s audio, whether it’s video, or simply store images, or text even all of those can be blended, used, reused, and repurposed in any way you wish. Whereas with the traditional way of operating, you would have some of it in still images, for example, you would have some of it stored on hard disks or on some kind of medium, that you’ve got to extract it from every time you want to reuse it.

So, that then further implies that you’re going to use a storage environment that is accessible at any time from anywhere, and that means cloud computing. So, the cloud has to become your platform; it can no longer be a case of having to figure out where you stored stuff. It all has to be accessible uniformly, or in a uniform environment. So, that’s the starting point; then it comes to your processes or ways of operating and there’s two levels there. One is your business operations and the other is your people, communications and relationships. So, that’s where many organisations fall down on transformation. They get the processes right but they forget that people are a key part of these processes. And they forget that they also have to transform the attitude towards people. And that refers to both internal people management and external people relationships. And it all boils down to the experience that people have of your brand or of your organisation. And the typically untransformed company still sticks to the old way of doing things, the old way of communicating and the old rules, and sometimes that works for them but, in many cases, it results in falling behind in terms of best practice in terms of human relations and the like.

A great example that I came across recently was an interview I did with the chief people officer of Cisco Systems. So, they call her the chief people officer, not the chief HR officer, because it’s not about resources. It’s about people and that’s a fundamental transformation that many organisations don’t undergo and that means that the digital transformation is out of kilter with the people at transformation.

Now, it is said, a critical part of transformation is undoing the hierarchies, or the processes, or the practices that you yourself have put into place. Very often you need to look at your own legacy, which is quite difficult for humans because, as humans, we can be quite “tricksy” and we develop things called cognitive blindspots, and because of that change can be very, very difficult. What advice do you have for people? How can we become more agile and flexible and move more confidently into the future?
AG: I don’t have all the answers and I also run the risk of being very glib about such things because I run a very small business, and it’s always been intentionally small. It was created with the idea of never creating an empire. My previous business had got[ten] too large and unwieldy for me to be truly hands on and I felt [had] I lost control but also I [had] lost the meaning of that business. So, my principle is to keep it small and that’s relatively easy to manage. It’s very different when it’s a very large organisation but some of the principles are still the same.

So, at the risk of being glib about this, there’s two fundamental requirements, two fundamental ways of ensuring that you don’t remain stuck in the past. The one is to listen to people, all your stakeholders, internal and external. Don’t continually try to justify what you’re doing and explain to people why they are experiencing what they are when they’re criticising you or trying to make suggestions. Rather listen and internalise what they are saying, rather than try to force your view onto them. You could call that “people-splaining” if you like; be careful of people-splaining when people are trying to tell you what they’re experiencing of your organisation or your brand. And the other one, which is pretty simple, and anyone can do it in any industry and at any level, because search engines are your friend, you only have to Google or Bing or whatever other tool you use, DuckDuckGo, to find out how people are wrestling with these issues, what is best practice and what has worked and what has been a dismal failure, because there are many failures as well. But the successes are all out there, and they’re waiting for you to learn from them.

What transformations have you been through and what have you learned from these transformations?
AG: From a digital point of view, I have to say that we always have been digitally transformed. I came across the JSC handbook from 2006, for which I wrote an article called the virtual office. What I was describing there was the office operating pretty much like the remote working office does today. So, it’s not new to us. It’s not exactly visionary, either, because if one was examining the digital world, one could say that was the way it was going to go. So, we have fitted incredibly comfortably into this new environment but, also for the last five to 10 years, we’ve been talking the language of digital transformation, and trying to push organisations in that direction. So, we have certainly learnt new elements of it, and we keep learning about the new tools, and we keep looking for better ways of doing things. One of the areas in which I’ve actually completely reskill myself has been in presenting or taking part in panel discussions, because previously those were always live. Over the past 10 years before covid-19, I had done maybe half a dozen webinars or remote-presentation type events. So, I had a background in that, but it was very rare and, once I started doing it as the standard way of taking part in panels or webinars, I actually learned a new visual language and a new visual approach. And in the process of learning that, I also discovered how little guidance there was for people in this area. So that, in fact, gave us the opportunity to create a new service in which we train people in how to face the webcam, and also the various elements around media facing executives having to learn how to embrace and address this new world.

So, that’s on a purely technical and technological level, but there has been a different transformation that I’ve also gone through in recent months and that has been the transformation of really caring for people who are not having it as easy as we are in terms of embracing the new world, and also trying to find ways to make life a little easier for people. So, for example, one of our core businesses is conducting independent self-funded research, which we then sell to corporate. That’s the business model that we’ve been following all these years. Sometimes the research is sponsored, which enables us to do far bigger projects at the same time, or in the same context that we previously would have done a self-funded project. So, these reports get sold for not a small amount because we have to cover our costs and we have to earn a living. Then, when students request it, because students often need this kind of data or these kinds of projects to provide them with a foundation for their own new research, we’ve always advised them to approach the faculty and their faculty will then order the research through the library. So, universities have always been customers of our research but we found in the last while that university budgets have been slashed and previously. We would have said, “Well, this is our business model, we can’t give it away.” But, in fact, that’s exactly what we have started doing.

So, when students request access to our research, we’ve been a lot kinder than ever before, and even small businesses. So, of course, there are people who take chances, or claim to be small businesses or students saying they can’t afford the research but they, in fact, represent a corporation, but that’s a chance that we take. We feel that it’s one of the contributions we’re able to make, to give more ready access to research.

The second area and directly related to that where I’ve experienced a personal transformation has been giving more time to people who contact me for advice or information, or even people looking for a job now. We are tiny; we don’t really have capacity to hire people and, when we do, it’s usually people that we’ve already worked with. So, everyone on our team has worked with us before, and we know them and we know that they integrate well with the team. So, there’s simply no jobs available. In the past, that’s all I would have said to someone saying they’d love to work for us for this reason or that reason and I would have said, “Sorry, there’s no vacancies.” And I’ve realised now, especially, people who are making those kinds of approaches are in tremendous pain because they can’t earn a living; they don’t have the means to find a job, and they’re looking wherever they can. So, what we’ve tried to do now is actually give people advice, look at where they’re coming from, what they’re wanting to do, and try to point them in the right direction rather than simply say, no vacancies here. So, again, that’s the kind of attitude transformation that we’ve undergone during this period.

Reminds me a lot of Paracelcus and he is an ancient philosopher and writer, but he speaks about the more knowledge there is in a system, the more love there is in the system. And he wrote this at a time, where humanity had no comprehension, about the power of data and, indeed, we are moving into a world where we are grouping together and using and storing and liberating and being involved in data, both in governments, in enterprises, and in small businesses, It is the source of our success. The way we reach out to the markets, the way we kind of speak to each other, the way we understand how we do commerce, and that sort of thing. So, what you say to me really touches my heart, because it speaks to that listening and things you wouldn’t normally listen to, and that is diversity and inclusion. And that is transformation.
AG: I’m astonished to hear that the concept goes back to the times of ancient Greeks and it just tells you how visionary he was to have come up with that idea at a time when there was no context for it. But, certainly, it’s a very real idea today and I really do believe that the more one shares knowledge, the more you empower yourself, let alone empower everybody who’d benefit from that knowledge.

Now, we’ve talked about data and we would be remiss to talk about transformation in advertising without talking about privacy. We’re entering a trepidatious time in the world when it comes to privacy; we’ve seen the great actors who have stood up for privacy, who’ve been locked away, and banished, and persecuted, and at times have even died to preserve our privacy. What situation are we in with regards to privacy, and how most marketers think about data and privacy in a way that is transformed?
AG: It’s an arms race in the world of privacy. We can see new legislation emerging all the time. The European legislation, the South African legislation, the California legislation, all kind of arriving at a similar time, when we have more data about ourselves emerging in the world out there and available in the world out there than ever before. It’s exploited to an extent that it never was before. So, the arrival of this legislation couldn’t have come soon enough. But, at the same time, what you’re also seeing is the rise of artificial intelligence, in order to not just analyse the data but also source and sort the data that’s available in the world. So, it’s possible to use artificial intelligence to trawl the internet and pull together profiles of individuals both on a one-by-one basis and on a mass-aggregated basis and then to utilise, leverage, and exploit all of that data, and artificial intelligence is going to bring far more benefit to humanity than harm. But part of the harm is going to be something of a privacy apocalypse, I believe, and that’s something that we have to be very aware of and very alert to. Agencies have a massive role to play in fending off the privacy apocalypse because they themselves are often responsible for creating the platforms or the campaigns that pull in all of this private data, all of this individual data — the intention of digital advertising campaigns, in many cases, is to gather user data, customer data, and behavioral data. So, that means there’s a massive responsibility to ensure that data is used in a way that doesn’t violate the privacy of the individual.

Do you see a future where marketing may split off into two binary streams? And we might call the one dark marketing; we might call the other stream light marketing. Dark marketing may be interruptive and exploitative, and use your data without your knowledge for means that you may not even consent to. Like putting someone in the White House that is someone [who] you would dare not want to see there. And would light marketing include permissions, and we would see ecosystems where trust would be put at the very heart of the wheelhouse, and these ecosystems or online shopping centres would become better and better because they’re using my data in a virtuous way to improve customer service, to improve, to reduce all the frictions, to make my life better. Would we see marketing splitting into two camps then, almost like a good camp and a bad camp, and everything in between?
AG: The examples you gave tell us that we already have dark marketing, light marketing and a few shades in between as well. The very fact of the 2016 US election outcome tells us so much about dark marketing and about our data being used in a way that we wouldn’t have allowed it to be used. And even at the platforms, on which the data was gathered, wouldn’t have allowed it to be used if they had known, or understood, or if there was a deeper sense of responsibility in those platforms. And that still continues to this day: we still see incredible activity by state actors, the likes of Russia, China, and So, on using data, using marketing techniques and tools, in a way that the citizenry and the world’s populace doesn’t actually realise. So, dark marketing is with us. But, then, you have many forms of marketing that wouldn’t fit into what you might call traditional light marketing that you also have to put on a continuum. So, that’s really what we have now. Guerilla marketing, for example, fits somewhere between dark marketing and light marketing and, if you look at it as a continuum, then you realise that there is the very best intended advertising or marketing out there and is also the most ‘evilly’ intended marketing out there. It goes from the one end of the spectrum to the other end. Eventually you can treat it as something that is split off from the marketing industry.

So then, perhaps we call in the Peter Parker principle, that with great power comes great responsibility, and perhaps that then is the call to agencies, and marketers, and digital marketers, that we are working with great power and we are creating the underpinnings of the new world. It’s a form of responsibility.
AG: That is one of my favorite quotes from the world of comic books, the Spider Man principle, or the Peter Parker principle, for that matter, but it applies especially with the advent and the rapid growth of artificial intelligence, because artificial intelligence brings so much power to those who have access to the data or control the data, that it demands of them that they exercise the greatest of responsibility. Of course, the marketing industry hasn’t filled us with confidence that it will do so — but it has an obligation to do so. And, in this era of calling out entities, people or organisations that abuse their responsibility, I think it will be enormously self-damaging for agencies, for organisations, not to appreciate the responsibility they have in this regard.

On that note, I was reading last night about the boycott against Facebook and one of the pundits — I think it was in the Wall Street Journal or New York Times… no, it was in Slashdot — and it said that this may well be a death knell to Facebook. That, if the advertising streams are cut off sufficiently, it would humble them and force change from Mark Zuckerberg, who in terms of the business setup has quite a lot more control than most CEOs and exercises that control. What do you think of this? Is this the activism we’re going to see in the future?
AG: I do agree with the second part of that argument. I don’t believe it will be the death knell of Facebook, because Facebook is capable of reinventing itself and transforming itself, but it has to be committed to that transformation. The second part of that argument, I fully agree with that: the extent of advertising boycott of Facebook is humbling, is going to be humbling, and has to be humbling for Facebook. If it doesn’t, if it doesn’t humble them, or humble Mark Zuckerberg, then it will be the death knell of Facebook. This is a classic example of where you have to listen to what you’re being told, rather than try to, let’s call it “message-splain” or “social-splain” to the world’s advertisers. You can maybe pull the wool over the eyes of Congress about how you operate, but you can’t pull it over the eyes of the advertising industry that knows exactly where their message is appearing, how it’s appearing, and how it’s being perceived and, therefore, the image that they are projecting by sharing their marketing messages, with the kind of content that Facebook has allowed to flourish on its platforms; that time is over.

It’s the equivalent for Facebook of the #MeToo movement and the #BlackLivesMatter movement almost coming together to smack them in the face with the reality that they have to address. It’s not good enough for Facebook to say they want to leave it to the user or the reader to decide for themselves. You don’t allow evil to be foisted upon the public and say, “No, the public must decide for themselves whether it’s good or evil.” Come on, wake up.

Last question. In SA — let’s bring it home — in SA, we sit with a dire economic situation and you alluded to the pain that people have of mobilising forward to get access to capitals and market. How important is technology in that and what can be done to make technology more available and accessible, both from an infrastructural and the cost perspective?And companies [which] want to help, what can they do right now to help everyone?
AG: We saw from the very beginning of the covid-19 crisis just how important technology was in the context of connectivity and access to the economic goods of this country. So, those who had the means, those who had fibre to the home or high-speed broadband of one form or another, were able to pivot very quickly from working in an office or studying in a classroom to doing that from home. And that highlighted dramatically the digital divide in SA, because such a high proportion of the population simply didn’t have that option. It wasn’t a choice. So, in that context, I talk about digital transformation being a choice for the privileged but, for those on the other side of the divide, there is no such choice; there’s no such option.

And this, I argued quite early during the crisis in one of my columns, highlighted the extent to which internet access has to be a human right. When that idea was first floated about 10 years ago by the United Nations, people tended to dismiss it and they said it’s fanciful, and it’s also the voice of the privileged claiming it must be a human right, So, they could get free internet access but the reality is that, if internet access was available to everybody, you’d be solving part of the equation, part of the problem, of how to give access to the workplace, to education for people who couldn’t move for people who were stuck at home.

So, let’s say connectivity becomes readily available, let’s say everyone is allocated a minimum quota of mobile data every day, then it becomes a question of having the right tools to access information or the appropriate platforms online. So, that means that everyone would have to have some kind of computer or tablet or smartphone, for example. Now, that seems unfeasible but, when you look at the amount of money that has been thrown at projects that have failed, and that have been demonstrably corrupt, or dishonest, you realised that there is money in this economy, or rather, there has been money in this economy to make it possible to equip every child, every school child in this country, with the right equipment. Of course, that does raise issues of security, of safety and of having, for example, a supply of electricity at home to be able to power the devices. But, again, the same context applies: the amount of money that has been thrown away, could so easily have been utilised to provide electricity to every single home in this country.

That is really the demand that we have to make of government, before it spends so much on so many other projects that are either poorly thought out or simply where the money, the contracts, the tenders go to people who have the right connections, who have no intention of actually carrying out those projects. When you look at the level of money that has been wasted on corruption, all of these problems could have been solved. So, let’s say all of that does get resolved. Let’s say we suddenly have an outbreak of leadership in this country and of political will, and that becomes an epidemic and you solve those problems, you still have the issue of the educational means to be able to utilise all of these tools, to be able to utilise the internet, because it does take a level of education, it does take a level of literacy, but also it takes a level of participation in that digital economy.

We’ve talked for years about the digital participation curve, which is a function of how long people have been online or engaged in digital activities, and people who’ve never been engaged in such activities have a very steep learning curve to learn how to engage in it. But you have to start at some point in order to find yourself. Let’s say five years down the line, everyone [has] five years’ experience, at a minimum, of engaging in the digital economy by starting now. That means that, five years from now, you have a population that is in a position to take advantage of the digital economy. The problem is that the starting now never happens and that means, five years from now, we’ll still be stuck in this situation, where we still have to persuade the department of communications that internet access is a human right.

It is heartbreaking, and it is heartbreaking because we stood in queues in 1994 and, at that very same time, Rwanda was awash with rivers of blood. There was a genocide going on in the country. Now, there was enough political will to merge the ministry of youth and the ministry of technology and to forge a new way forward. And there are many things that the president of that country can be criticised for in terms of human rights but, when it comes to technology and enabling intelligent infrastructure and enabling progress from a rural to city level, there is much we can learn from Rwanda, and Rwanda certainly is in a very different place to what it was in 1994. And the question then comes: what have we done?

AG: What we’ve done is had 10 different ministers of communication in 12 years and the one time we had an effective minister of communication, around four or five years ago, he was in place for maybe nine months, and one could argue that perhaps he was too effective; he obviously was driving people up the wrong way, because he was pretty quickly put back on the back benches and then we saw a litany of further ministers who have really done very, very little to advance the digital agenda, and digital democracy in this country.

I hear you but isn’t it really important for companies in the communication sector to understand what’s happening to digital policy, to understand what’s happening to communication and technology policy, because that policy is going to decide the very future of this industry?
AG: The big problem for telecommunications companies is that they’ve been led by the accounting standards, principles, or rules within the organisation, which have said that you’ve got to maximise your profit per customer. They have a concept called ARPU — average revenue per user. And that’s probably the most-important metric to many of these organisations, aside from the actual customer numbers, but those customer numbers are really for bragging rights. The real metric that they’re pursuing is increased average revenue per user.

And that means servicing the most-profitable users and, therefore, those who can spend the most money, and that means being there for the privileged and we are among those privileged [who] are being served by the communications companies, but there has to be a deeper understanding on their part. There has to be true human transformation in these organisations to understand that it’s in the interests of the country of the economy and of the individuals and, ultimately, of these companies themselves to ensure that everyone has access to the digital economy. Digital democracy will lift all boats on a rising tide of knowledge, access, and prosperity. And the communications companies will be among the great beneficiaries of this rising tide, rather than holding it back because they want to protect the profits that they can see and understand in front of their eyes.

Can you leave us with some good news please?
AG: There is a lot of good news. The one positive that’s come out of the crisis has been that organisations have learned that they can operate in many cases more effectively, more efficiently, and even more profitably by embracing digital transformation. And that means that, from now onwards, they’re going to look for ever improving ways of servicing their customers via digital platforms or through digital means, and that includes bringing on board those who were stuck on the other side of the digital divide. There is, I think, a deeper understanding now than ever before, of the idea that digital democracy is an important concept for everybody and, that if they can promote that digital democracy and help bring people over the divide, it’s going to be in their interest, too. So, I think that there is a true digital awakening that has happened in South Africa among businesses and, to a lesser extent, within government as well, and we will never go back to the way the world was before. So, we have to keep improving the world that we’re moving into now. And I think that is happening thanks to this digital awakening.

Thank you so much for your time, for the insight all based on decades of great research.

See also

• #Transformers Transform 2020 • Sponsored by the ACA
• #Transformers video interviews on transformation on YouTube
• #Transformers video interviews on transformations on Facebook
• Download the #TransformersTransform2020 pdf
• Zeitgeist of Now: Privacy in today’s world & what it means for brands — Jason Stewart
• POPI Act FAQ: What’s next? — Retailing Africa

 

As an entrepreneur, Charlie Mathews (@CharlesLeeZA) has worked in growth teams with Naspers, Microsoft, and Tutuka.com (the global prepaid card company). Mathews has also successfully founded and exited two marketing companies. Published in Rolling Stone magazine, Guardian UK, and SA’s Greatest Entrepreneurs, edited by Moky Makura, Mathews wrote for Daily Maverick during the title’s legendary startup era. Today, Mathews is the founder and CEO of HumanInsight, a research, insights and learning company that helps brands better understand, and serve — humans.

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