Why are FTSE companies so slow to respond to digital first demand?

Nov 2019 · Finance

According to Wikipedia, Digital first is a communication theory that publishers should release content into new media channels in preference to old media. … A “digital first” decision occurs when a publisher chooses to distribute information online in preference to or at the expense of traditional media like print publishing. What then exactly is ‘new media’. These are forms of media that are native to computers and relying on computers for distribution. For example, websites, mobile apps, virtual worlds, computer games are all examples of ‘new media’. In a time where new media is commonplace there are now levels of digital first leading to the growth of the term digital transformation.

The next question to ask then becomes why should new media channels take preference to old media to invest in?

The growth of the ‘gig-economy’ has had a large impact, the ever increasing numbers of self-employed people in the UK mean that remote working is making new demands of technology to access information. The number of self-employed people in the UK has risen by 30,000 over the past three months, according to figures from the Office for National Statistics. This means that the large numbers working from mobiles and tablets are demanding responsive mobile sites from service providers.

Outside of the professional environment the smartphone also reigns supreme, a recent study by Hubspot shows that the average person spends 147 minutes on a smartphone while comparatively only 108 on a laptop. It’s this data surrounding user behaviour that is motivating service provider businesses’ to swiftly move their business to a digital first one with a strong focus on mobile. FTSE 100/350 companies make up a large number of the big hitters in services: banks, retail, insurance etc. Due to their large economic resources and ability to recruit the best they are often the trailblazers for digital strategy. It is then proving a strange phenomenon that the exact opposite is playing out in front of our eyes.

What’s the history?

In 2012 statistics showed that 20% of FTSE 100 companies had websites optimised specifically for mobile. Two years later in 2014, figures show that out of the entire FTSE 100, only two companies were utilising a responsive design; Chilean mining company Antofagasta and UK based commercial property company Land Securities Group. Of the remaining 98 companies, over 50% didn’t provide any sort of mobile experience. The Search Agency UK revealed these results as part of its mobile experience scorecard, in which the mobile site performance of each of the FTSE 100 companies was evaluated. The top scorers in the test were Tesco, which came in first with a score of 4.38 out of five, and Morrison Supermarkets, which came in second with 4.12 out of five. In 2015 Marketing Week results branded FTSE 100 brands “digitally immature”. Twelve months on there were some signs of progress with a 45% increase in responsive websites and 71% of the FTSE 100 now embracing mobile.

However, the overall standard remains “mediocre”, according to Radley Yeldar:

New research shows that the majority of FTSE 350 corporate brands are churning out “mediocre” digital communications, missing out on the opportunity to engage with audiences through their corporate websites.

Why is this the case?

In a recent article on the ‘Econsultancy blog’ Grant Kemp suggests that responsive design might not be the right answer for all businesses. He isn’t alone in his argument. A responsive site design could potentially mean having to make compromises to an existing desktop site, which could lead to user dissatisfaction and ultimately a drop in conversion. Mobile users potentially also have a different agenda to a desktop user and therefore would need alternate information quickly and efficiently.

Understanding user needs based on the actual use-case scenario is a vital component to effective responsive planning.

Poor planning can mean that the creation of a responsive desktop site can hamper the mobile user’s journey, making for an experience that is potentially dissatisfying as it was never correctly optimised for that device. There is also potentially a more basic financial reason to what Radley Yeldar defines as missed opportunities — that in an increasingly volatile market these companies are maintaining a focus of resources spent physical experiences and digital engagement perhaps takes a back seat.

Within Studiomade we have helped different organisations transform their digital experience and drag it out of the dark ages. A particularly successful example of this is TLA Worldwide Ltd. In 2015 we took hold of their brand strategy across both print and digital. Following TLA’s growth strategy, including the acquisition of Australian brand ESP, the organisation had to represent their new global presence as one of the world’s leading sports marketing agencies. The site needed to be a lightening rod for their digital strategy over the next five years; future-proofed. A mobile site was top of the list of requirements. Considerations were made such as a reduced menu, alternate image selections, different placement for ‘call to actions’. All seemingly small amends but resulting in a much more satisfying mobile user experience.

Similarly when updating the brand for Mackay Williams we ensured that a responsive site with a focus on mobile was a primary objective, putting them within the finance sector’s digital leaders.

What’s next?

Several years on and there remains a lack of interest in mobile engagement from some FTSE companies — but this doesn’t mean the issue has gone unchecked. The roll out of Google’s new mobile first Index has forced the hand of a number of companies. In the current index, which most people will continue to get results from, desktop content is indexed and used for showing listings to both desktop and mobile users. A special mobile-friendly ranking system is then used to boost content for Google’s mobile listings. The new version however has said that it will look at the mobile version of your site. If that has less content on page A than the desktop version of page A, then Google will probably just see the mobile version with less content. There are however some small mercy’s, Google is apparently using machine learning to try and develop algorithms that return a set of search results that are listed with the results that give the best information for the search query. In essence trying to understand human behaviour rather than keyword relevancy. Companies have combatted this by bringing in people that can manage the rapidly increasing rate of digital transformation. According to analysis of FTSE 100 companies carried out by recruitment firm Robert Half UK, the number of CEOs with a background in IT has trebled over the past four years, with one in ten CEOs in the UK’s top 100 companies now having a background in IT.

The size of many FTSE companies make them the shipping tankers of industry, complete with seven-mile-long manoeuvres. However the manoeuvre towards a digital first approach, and indeed digital transformation, has definitely been begun. Both industry and user demands have inadvertently formed a pincer effect on the service industry and strategy is finally being forced into being. So what of the other large issues facing the FTSE; GDPR, Cyber Security, Big Data. The list goes on. The one known is that it’s going to get better for users; more investment, more engagement and more innovation.

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