One-on-one with Raising the Bar Speaker Scott Galloway
By: Ben Gilden
“We are only scratching the surface of what can be done with data. The question remains, however, whether these new jobs will be created as fast as the jobs being destroyed.”
We recently sat down with digital entrepreneur and NYU professor Scott Galloway to discuss the current state of the technology world. The California-native shares his views on the most dominating companies in the digital space, his predictions for the future, as well as advice he has for people looking to enter the workforce today.
Scott has spoken at two Raising the Bar events in New York: His first entitled “True Romance: Luxury and Digital” and his second entitled “The Four Horsemen: Amazon, Apple, Facebook, Google”.
Where do you work currently and what do you do?
Scott: I’m the founder and chairman of L2, a digital intelligence firm that benchmarks the digital performance of consumer brands, and identifies digital strengths, weaknesses, and opportunities. I’m also an adjunct professor at NYU Stern School of business where I teach Brand Strategy and Digital Marketing to second-year MBA students
Which specific element of the digital world is particularly fascinating to you at this time, and why?
Scott: Amazon. The company has already dominated retail with a fulfillment service (Prime) that nobody can compete with, and it captures one of every $2 spent on goods online.There are also the lesser known parts: Amazon Media Group, Amazon Web Services. The latter brought it 3.2 billion in revenue in Q3 2016, a 55% increase since last year. With all of the information, Amazon has of 300 million customers, it is well positioned to grab a large portion of the advertising industry.
Since your Raising the Bar talk "The Four Horsemen: Amazon, Apple, Facebook, and Google," have things changed significantly in the digital space? How correct were your predictions in terms of growth and decline of these companies, or is it still too early to tell?
Scott: Things have changed but stayed relatively the same. These are still the top companies in tech and “The Four Horsemen” of our era. Here are how our predictions for each of them turned out:
Amazon – We were wrong. We said Amazon was going to suffer from its lack of retail footprint. Amazon has only grown since then. Macy’s stock plummeted in January after a meek holiday season, making it just one of the retailers
Google – We were right and wrong. Google+ is still a failure and Google has opted out of wearables. However, Google controls 52% of all growth in digital advertising. Facebook controls 38% and all the other players are fighting for the scraps, i.e. 10% of all digital advertising growth.
Facebook – We were right. Facebook’s acquisitions are on point. It acquired Instagram at the right time and set its sights on Snapchat when it realized it’s where the youth are spending their time. When it couldn’t acquire Snapchat, it offered a version on Instagram called Stories. Stories have all the features of Snapchat but better targeting and analytics, which makes it a more attractive platform for brands.
Apple – We were right. Apple is now a luxury brand. It partnered with Hermès to sell $2,000 watches. It has been a successful effort, and the Apple Watch is not on everyone’s wrist because it is a luxury product.
Which major tech company do you have your eye on in 2017?
Scott: Uber. Uber is more than a ride-sharing service and is gaining traction on Uber Eats and Uber Rush. These local, short-window, same day delivery services are the only chance retailers have against Amazon.
Which startups do you think we should continue to watch?
Scott: Anything in messaging. Whatsapp has been another successful acquisition in Facebook, and the other major social media players – Instagram, Snapchat – have upped their game in messaging. This phenomenon has already happened in Asia: WeChat growth is outpacing Sina Weibo, and Line has become an $8 billion business by being a platform where users and brands can message each other.
In what ways has digitalization affected marketing strategies?
Scott: Is traditional marketing even relevant anymore? Targeting and relevance have become even more important. Facebook and Google, which I believe have ads that suck less than others, have experienced tremendous growth in digital advertising and it is not a coincidence. Traditional television ads are no longer relevant to the viewer. For example, on cable TV I see ads for bipolar disorder and restless leg syndrome.
Do you have any advice for young people looking to advance in digital or business world today?
Scott: My controversial advice is this: Don’t follow your passion. If you enter a field like filmmaking or nightclub ownership, you will likely be paid significantly less than your peers who are working in boring fields like finance and accounting. My advice is to find something you are good at - and it must be difficult for others to do – and work hard at it to make a great living that allows you to enjoy life to the fullest.
“My controversial advice is this: Don’t follow your passion.”
Do you think the digital market will become as condensed as the media market in terms of a few big companies owning most of the market share, or do you think that many small companies will continue to pop up and remain individual entities?
Scott: It is already condensed. As I mentioned in my response to a previous question, Google and Facebook collectively account for 90% of the growth happening in digital advertising. It is possible that one or two new players emerge, but it will remain a winner-take-all field.
Do you foresee that there will be a growth in the number of jobs available in the high-tech world, or have we reached the peak? Why?
Scott: Growth will continue as the tech sector is on the verge of explosion. Room for innovation remains in many areas: smarter cars, smarter cities, security, health care, the Internet of Things, and wireless networks. We are only scratching the surface of what can be done with data. The question remains, however, whether these new jobs will be created as fast as the jobs being destroyed. Certain jobs like retail salesperson, real estate broker, factory worker are becoming increasingly irrelevant, and the jobs being added require extensive education. The new jobs being created are either high-salaried roles in Cupertino or factory positions in Zhengzhou, creating a gap in the middle class that tech leaders and policy makers have to work together to resolve.