Op-ed: Digital engagement matters to companies – and their investors – in a post-pandemic world
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One of my favorite quotes from the movie comes from “Gladiator” when Maximus calls the crowd, “Aren’t you amused?” In this new, pandemic-centric world, apparently we should in “Aren’t You Engaged?” To change.
The subject of engagement is everywhere.
At home, parents seek to maximize engagement with their children in ways their parents and grandparents could never have imagined. At work, employee engagement is a focus for HR professionals as well as a metric that can be used to measure manager performance and determine the effectiveness of programs and communications to strengthen employee retention. A lack of customer loyalty can torpedo an entire business area. Engagement scores can even be used to convince top talent to join an organization.
In the digital world, however, engagement is paramount – a world we have immersed ourselves into more than ever in the past twelve months.
Earnings calls point to a variety of metrics that measure this engagement: digital ad revenue, new subscribers, and average revenue per user are just a few examples.
Impressive results for many technology and communications services companies are directly attributable to increased customer loyalty over the past year, which is hardly surprising given the shift in our leisure activities during the pandemic.
Where do we go from here? How does reopening the economy change engagement in a post-pandemic world?
One of the rallying calls for cops was the idea that vaccines will spark a massive burst of pent-up demand as American consumers reconnect with friends and communities, resume previous shopping patterns, and perhaps most importantly, travel again to cyclical consumer businesses like accommodations and airlines.
The American consumer has become a captive audience in the past 12 months, as the producers of Tiger King and TikTok influencers can attest. One could argue that there is a risk that our attention will be redirected to more traditional forms of engagement, and the desire to come back and live life again without being bound by explicit or behavioral restrictions becomes the level of digital engagement decrease, come to the company rely on.
If the past decade is an indication, the chances of this happening are slim.
The growth in spending on digital advertising, which is directly correlated to the rising values of companies like Alphabet and Facebook, has continued virtually unabated as the targeted advertising offered by these companies works.
There is no better way to attract an audience to a product or service than by using an algorithm that allows you to target consumers who have themselves subtly stated that they are more likely to make a purchase.
Amazon has created an entire ecosystem of sellers vying for the opportunity to appear in the top picks band on a given day. New streaming services are launched every week, responding to consumers’ desires to improve their viewing experience. Existing services are rewarded with new subscribers with each new series.
The fear of missing out is real. The desire to remain culturally relevant can be attributed to Millennials and Gen Y, but it goes way beyond that.
The maturation of an exceptional digital delivery system is not without its challenges. The data backing the effectiveness of digital advertising is the target of privacy concerns from regulators, consumer groups, and government agencies. Disruption is always a threat and competition between platforms is fierce.
Investors looking to move on to longer-term trends should consider the end-to-end beneficiaries of this trend – from chips to chats to charismatic consumer brands. Branding and marketing are more important than ever, and companies that consult and provide tools to improve the customer experience can benefit from the growth of the market, not how well a particular platform is doing in the current competitive landscape.
While we can slander the appeal of the digital world and the time it takes to distract us from more organic forms of personal connection, there is no denying that companies that deliver the digital experience have to do something right in order for us to keep coming back.