Part 4 - Internet Marketing
When marketing became interactive, measurable and connected directly to the customer
The Internet not only changed how businesses published information and delivered services. It also began to change marketing itself. The website created a new interface between the business and the customer. Email made direct digital communication possible on a large scale. Banner ads introduced clickable ads. Search engines turned the customer's active information needs into a marketing opportunity. Cookies and web analytics made parts of the customer's digital behavior observable.
Over time, CRM systems, customer data and automation made communication increasingly targeted and personalized.
Internet marketing was therefore never just traditional advertising moved to a computer screen. The Internet introduced features that traditional mass media could not offer to a much lesser extent at the same time: interactivity, immediate response, individual communication, continuous measurement and a direct connection between marketing, information, customer dialogue and transaction.
For the marketing profession, this meant a gradual change in both tools and working methods. The business could not just send a message out to the market. It could observe the response, learn from it, and use the knowledge to develop the next activity.
The Internet thus made marketing an increasingly continuous learning process.
Marketing before the internet
Marketing, of course, existed long before the internet. Newspapers, magazines, radio, television, outdoor advertising, catalogs, direct mail, and telemarketing were established channels for reaching customers and markets. Segmentation, branding, positioning, pricing, distribution, and customer needs were already central parts of the marketing profession.
The Internet therefore did not replace the marketing profession. Many of the fundamental questions remained. The business still had to understand who the customer was, what needs were to be met, what value proposition was to be offered, and how the business wanted to position itself.
The digital shift was rather about new technological capabilities changing how these questions could be answered.
Traditional mass media was largely built around one-to-many communication. The business developed a message and distributed it to an audience. The effect could be examined through, among other things, sales figures, market research, coupons, telephone response and various forms of media measurement, but the connection between exposure and individual action was often indirect.
On the web, the user could click.
The seemingly simple act was to have great significance.
The clickable ad
A symbolic breakthrough came in 1994 when HotWired, the digital edition of Wired, began running banner ads. AT&T was among the first advertisers. The banner format was simple, but it introduced a fundamental feature: The ad could be linked directly to a digital action. The user could see the message and click through to other digital content.
HotWired also provided advertisers with click response reports.
Thus, the marketer could observe a direct reaction to the advertisement in a way that differed from much traditional mass communication.
This established a mechanism that would later become fundamental to digital marketing:
exposure → interaction → response → measurement.
There was still advertising, but the infrastructure around the advertising was different.
An ad could lead the user directly to product information, registration or eventually a transaction.
Marketing and the customer's next action could be more closely linked.
The website became the new home of marketing
The banner ad had limited value if the business had no relevant place to send the user. Therefore, the business's own website became increasingly important.
In Part 3 we saw how the website evolved from a digital publication to a digital service. For marketing, this development had a parallel significance. The business gained a digital surface that it could largely control itself.
Here products could be presented. Stories could be told.
Campaigns could be run. Contact information could be offered. The customer could register interest, subscribe to information and eventually make a purchase.
This changed the relationship between paid and own media.
The business could buy attention through advertisements, but the actual customer experience could continue in the business's own digital environment.
The website thus became a link between communication and action.
As e-commerce evolved, the connection became even clearer. A digital ad could lead to a product page, which could lead to a shopping cart, which could lead to a checkout. Marketing and sales could be connected through the same digital infrastructure.
Email made communication direct
Email existed before the World Wide Web, but the commercial spread of the internet made email available to a much wider audience, giving businesses a digital channel for direct communication with individuals.
Email combined several features that made the channel attractive. The cost of distribution was low compared to physical mail. Communications could be sent quickly. Content could be tailored to different target groups. Links could take the recipient directly to the website or a specific action. Response could be measured.
At the same time, a problem became apparent almost immediately: The low cost of distribution also made it very easy to send unwanted messages on a large scale.
The distinction between relevant customer communication and spam therefore became important. Marketers had to ask not only what the technology made possible, but also what the recipient wanted.
This contributed to the development of permission marketing and a stronger understanding of consent, relevance, and customer relationship. Seth Godin popularized the term permission marketing in the late 1990s, arguing for a marketing approach where businesses gradually build relationships based on the customer's voluntary attention, rather than constantly interrupting people with messages they haven't asked for.
The Internet thus made an old marketing idea increasingly important: A customer is more than a recipient of advertising.
From campaign to dialogue
Traditional marketing was often organized around campaigns with a defined beginning and end. The Internet made this model less dominant.
The website was available continuously. Emails could be sent when relevant. The customer could contact the business whenever the customer wanted. Discussion forums, comment boxes and later social media opened up further dialogue.
This allowed marketing to evolve from a series of limited mailings to a more continuous relationship.
This also meant that the customer had greater control over the timing of the communication. The customer could seek out the business through the website, subscribe to information or later find the business through a search engine.
Marketing therefore had to handle both push and pull to a greater extent . The business could still send out messages, but at the same time had to be relevant and available when the customer himself sought information.
This difference would become particularly clear with the breakthrough of search engines.
The search engine changed the starting point of marketing
Search engines introduced a radically different situation than traditional advertising. The customer themselves expressed an intention through the search.
A person searching for a product, a destination, a problem or a service indirectly tells something about what that person is interested in right now. For the marketer, this represented a whole new opportunity.
The business could try to be visible exactly when the customer requested the information.
Google, established in 1998, eventually took on a dominant role in this development. Search engine optimization, SEO, and paid search engine marketing, SEM, developed into their own fields of expertise.
Search will be covered in more detail in Part 6. In the history of internet marketing, it is nevertheless important because search illustrates a larger shift: Marketing could increasingly meet stated customer intent , not just assumed target groups.
From demographics to behavior
Traditional segmentation could be based on age, gender, location, income, life stage, interests, and past purchases, among other things. The Internet introduced a new and ever-growing data source: digital behavior.
Which pages did the user visit?
What did that person click on?
Where did the traffic come from?
How long was the user on the site?
Which products were examined?
Where in the purchasing process did the customer leave the website?
What campaign led to the signup or purchase?
Such data gave marketers new opportunities to analyze what people actually did in digital channels.
The HTTP cookie, developed in the 1990s, enabled websites to preserve information between user requests, and later became an important technological component in tracking and personalization on the web. The development opened up major commercial opportunities, but also marked the beginning of a long-running discussion about privacy, tracking, and control over personal data.
Digital marketing thus faced a fundamental dilemma early on: The more the business could know about user behavior, the more important the question became of what the business should know and how the information should be used.
Web analytics made the response visible
One of the most significant features of internet marketing was measurement.
The earliest websites could be analyzed through server logs. Over time, specialized analytics tools developed that made it increasingly easier to track traffic, user behavior, and results.
This changed the way marketers work.
A digital campaign could be followed while it was running. Different messages could be compared. Traffic sources could be analyzed.
Registrations and purchases could be linked to digital activities. Conversion rates could be calculated.
Thus, marketing gained a closer connection to experimentation.
Two different versions of a page or message could be tested against each other. The results could be used to improve the next version. Over time, the business could establish a continuous cycle:
publish → measure → learn → improve.
This is one of the most important shifts the internet brought to marketing.
Data did not replace marketing judgment, creativity, or customer insight. But data made it possible to test more assumptions against actual digital behavior.
What can be measured is not necessarily what matters most.
The new measurement capability also created a risk. Digital activities produced large amounts of easily accessible numbers, and thus attention could be drawn to what was easiest to measure.
Clicks, page views, opens, followers, and other activity metrics could provide useful information, but they didn't necessarily tell you whether your marketing created lasting customer relationships, higher customer value, or a stronger brand.
A campaign with many clicks could be less valuable than a campaign with fewer clicks but more relevant customers.
This distinction between activity and effect therefore became increasingly important.
Digital marketing made marketing more measurable. It didn't automatically make it better.
The crucial thing was still what goals the business was trying to achieve and how the digital goals could be connected to real business and customer goals.
CRM connected marketing to customer relationships
Customer Relationship Management, CRM, existed as an idea and practice before today's digital marketing, but digital systems made it possible to collect and use customer information in a far more systematic way.
Instead of considering each campaign as an isolated activity, the business could try to understand the customer's overall relationship with the business.
What products had the customer purchased?
When was the customer last in contact with the business?
What offers could be relevant?
How has customer value evolved over time?
Thus, parts of marketing moved from transactional orientation towards relationship orientation.
This was particularly important in industries with long-term customer relationships.
Banks, airlines, telecommunications, insurance and subscription services had strong incentives to understand the customer over time, not just the individual purchase.
In this context, loyalty programs gained a new digital dimension. Customer transactions and preferences could be linked to communications, offers and services.
Marketing, customer data, and customer experience began to grow together.
From mass communication to personalization
When the business combined digital contact surfaces, customer data and analytics, it became possible to tailor communications to smaller segments and eventually to individual customers.
Personalization could be simple. An email could use the customer's name. A website could remember previous choices. An online store could display products based on previous purchases.
Gradually, the methods became much more advanced.
Recommender systems could analyze large amounts of behavioral data and identify patterns between users and products. Amazon, Netflix, and later Spotify became well-known examples of businesses where recommendations were integrated into the customer experience itself.
The boundary between marketing and service thus became less clear.
A relevant product recommendation can be marketing, but it can also help the customer find something they actually want.
It introduces an important principle of digital marketing: The most valuable marketing can, in some situations, be part of the service itself.
Marketing automation made communication continuous
As businesses gained more customers, touchpoints, and data, it became difficult to handle all communication manually.
Marketing automation made it possible to establish rules and workflows where communication was triggered by events or customer behavior.
A new customer could receive a series of introductory messages. An abandoned cart could trigger a reminder. An existing customer could receive information related to previous purchases or usage of
the service.
This allowed communication to move from a calendar-driven campaign model towards a more event-based model.
The business didn't necessarily communicate because the marketing department had decided that Tuesday was campaign day.
The communication could be triggered because the customer had done something .
This was another step towards a more customer-centric marketing system.
Internet marketing became digital marketing
The term internet marketing was particularly natural in a period when the internet represented a new channel alongside established media. Over time, the distinction became more difficult to maintain.
The smartphone made the internet continuously accessible. Social media established new contact surfaces. Video and audio were distributed digitally. Physical stores were connected to digital customer data. Television and other media were digitized. Marketing could follow the customer across devices and touchpoints.
Thus, digital marketing became a broader term than internet marketing.
But this distinction is also becoming less and less meaningful.
When the customer journey moves between physical store, website, app, search engine, social media, email and customer service, the question doesn't necessarily become which marketing is digital.
The question becomes how the business creates a cohesive customer relationship in a digitalized world .
Internet marketing pushed forward a new customer focus
Internet marketing gave the business more opportunities to influence the customer, but at the same time the customer had far greater opportunities to influence the business.
The customer could ignore the ad.
Cancel your subscription.
Compare prices.
Search for competitors.
Read reviews.
Publish your own experiences.
Later, the customer could discuss the business publicly on social media.
Marketing thus lost some of the control it had had in a more unidirectional media world.
This helped push the business towards a stronger strategic customer focus. Relevant communications required customer insights. Good digital results required good digital services. Marketing could drive traffic to the website, but if the customer experience was poor, that same traffic could make the problem visible.
Marketing, service, and customer experience could no longer be treated as completely separate areas.
From the eMarketing study to practical digital marketing
For me, this development became particularly concrete around the turn of the millennium. I studied eMarketing at BI in 2000–2001 at the same time that the internet was establishing itself as an increasingly important commercial channel. Later studies in digitalization and innovation and professional seminars in San Francisco and Oxford, among others, provided more perspectives on how technology, market, customer and innovation gradually began to become more closely connected. My own presentation of my professional journey describes studies in eMarketing, innovation and digital development at BI as part of this work.
The special thing about studying eMarketing at this time was that the subject did not just describe an established reality. Large parts of reality were still under development. The website, email, digital advertising, search, measurement and digital customer relations opened up questions that businesses had to try to answer as the technology and customers' use of it evolved.
The theory could therefore almost immediately be met with practical issues in working life.
For me, this happened especially in SAS.
SAS – when internet marketing became practical experience
From 1999 to 2004, I worked as an Internet manager at SAS Norway. This period is also documented in my public professional profile, and in January 2003, Digi.no mentioned me as an Internet manager at SAS in connection with SAS becoming the first advertiser to join the Norwegian Internet organization INMA.
The reasoning at the time is interesting to read more than twenty years later. We wanted to help professionalize interactive media as a marketing channel. At the same time, I told Digi.no that SAS had to be active on the internet all the time.
It illustrates a shift I experienced very concretely.
The Internet was no longer something the business could treat as an occasional promotional channel. Customers were there continuously.
Thus, the business also had to learn to be present continuously.
It was a different logic than the traditional campaign.
From advertising to engagement
In the years that followed, we continued to work on how the web could be used for more than product information and traditional advertising.
One example was digital campaigns that invited people to actively participate. In 2006, SAS Braathens launched the Friends in the Air campaign . The background was, among other things, the observation of how people's use of the internet was changing. The internet had become a place where people not only obtained information, but also met, communicated and built social relationships. This was before today's social media landscape had taken its current form.
SAS Braathens already had experience with interactive activities. According to contemporary figures, Valentine campaigns had received more than 160,000 unique users and 66,000 registered users, while a football game had exceeded 170,000 unique users.
Friends in the Air would later achieve 302,463 unique visitors, 105,522 registered participants, and 71,126 completed participations. The campaign also generated 53,990 email addresses. The numbers are preserved in my later documentation of the campaign.
The numbers are interesting, but the most important thing in this context is what they represented.
The customer wasn't just exposed to an advertisement.
The customer participated .
The digital pulse
In an interview with HegnarOnline, later Finansavisen, in connection with Venner i lufta, I described the internet as a digital artery because we could quickly gain knowledge about how activities developed.
That phrase still describes some of what I perceive as the most important difference between internet marketing and much of the marketing we had worked with previously.
We could follow the activity.
We could see the response.
We could see the registrations.
We could see how people participated.
And we could learn while the activity was going on.
The Internet thus made marketing more than just distributing a ready-made message. The digital channel could provide the business with continuous information back.
It was the beginning of a way of working that seems natural today, but which at the time represented a significant change.
The numbers were people
At the same time, there is an important lesson in these experiences that has become clearer to me over the years.
It's easy to become fascinated by digital measurement.
302,463 unique visitors.
105,522 registered participants.
71,126 completed participations.
53,990 email addresses.
But behind every number there was a person.
A person had chosen to visit the campaign. A person had spent time on it. A person had registered. A person had perhaps invited a friend to participate.
That's why customer insights and digital analytics can never just be about dashboards and conversion rates.
Data represents human behavior.
That understanding has become increasingly important as digital marketing has gained access to more data, more advanced analytics tools, and now artificial intelligence.
From SAS to today's digital marketing
When I look back on the work with the internet at SAS, it is striking how many of the issues are still relevant.
We tried to understand how people used the web.
We wanted to create activities they actually wanted to participate in.
We measured the response.
We learned from the results.
We tried to connect the digital activity to the customer relationship and the business's goals.
Technologies have since become far more advanced. The smartphone has made the internet continuously available. Social media has turned the customer into a publicist. CRM and marketing automation have made communication more individualized. Modern analysis tools can process enormous amounts of data. Artificial intelligence can produce content, analyze customer data, and personalize communication on a scale we could not imagine around the turn of the millennium.
But the fundamental question is remarkably stable:
How do we use technology to create something that is actually relevant and valuable to the customer?
It's a marketing issue.
It is a digitalization issue.
And finally, it is a question of value creation.
From internet marketing to the fight to be found
Internet marketing began with new digital interfaces, but the rapid growth of the web soon created a new problem: The more information was published, the harder it became to find.
The business could build a great website, publish relevant products, and develop great digital services. It was of little use if the customer couldn't find them.
This means that search engines have taken on an increasingly important role between the customer and the business.
Marketing moved into a new competitive arena where businesses didn't just have to be present online.
It had to be found .
That's the story we'll return to in Part 6 about Search, SEO, and the new power of information.
Gulltaggens Honorary Award – a recognition I still hold in high regard
The work with internet and digital marketing at SAS also became part of a larger Norwegian professional community that grew up around interactive media in the 2000s. In 2007, I received the Gulltaggens Ærespris .
It is a recognition that I still hold very highly. Finansavisen/HegnarOnline wrote after the award that the jury believed that my commitment had left its mark on an entire industry, and that the effort had gone far beyond what could be expected of a partner and individual in the industry.
It was also a special year because the SAS Braathens campaign Friends in the Air won the Gold Tag for Best Online DM . The campaign was a concrete example of much of what we had tried to learn over the years: using the web not just to send out advertising, but to create participation, engagement, response and knowledge about the customer.
When I look back at the award today, it's not the technology that comes to mind first. Internet marketing was developed through collaboration between many people – colleagues, agencies, technologists, designers, analysts and academics trying to understand a medium that was still new.
Academic background and further reading
This series also builds on my own professional journey through the Web Design study , the eMarketing study , Innovation and Commercialization and professional seminars in San Francisco and Oxford . Here you will find the background, professional environments and experiences that have followed the development from the early years of the web to today's digitalization.
Recommended literature
The literature presented here spans several disciplines and periods. The books provide perspectives on digitalization, innovation and strategy , and show how technology, markets, organizations and people have been understood and developed over time. Some of the works are classics, others represent newer academic perspectives, but together they provide a useful basis for further in-depth study of the topics we work with at The Invisible Capital .
The Long Tail: Why the Future of Business Is Selling Less of More
Author(s): Chris Anderson
Short review
The Long Tail is one of the most influential books on how the internet has transformed commerce, marketing, and consumer behavior. Chris Anderson introduces the theory of the “Long Tail,” which explains how digital markets enable significant value creation through a large number of niche products, rather than relying on a few bestsellers.
The book shows how digital distribution, low inventory costs, search engines, and intelligent recommendation systems have made it profitable to offer an almost unlimited product range. Where traditional stores were limited by physical shelf space, online stores can offer millions of products and let customers find exactly what they are looking for.
Chris Anderson illustrates the theory with examples from Amazon, Netflix, Google, and the digital music industry, showing how the internet has changed the rules of competition for businesses around the world. Many of the insights have since become even more relevant through artificial intelligence, personalization, and modern search technology.
The authors take the reader through the entire process – from planning and organizing to publishing, managing and continuously improving content on websites and digital services. Although technology has evolved since the book was published, the principles of quality, relevance, management and long-term content work are at least as relevant in an era where search engines and artificial intelligence assess the credibility and usefulness of content.
Why we recommend the book
At The Invisible Capital, we consider The Long Tail to be one of the most important books in e-commerce, digitalization, and modern value creation.
The book explains why customers no longer just buy the most popular products, but increasingly find value in specialized products and services that meet individual needs. This insight has had enormous impact on the development of online stores, digital marketplaces, search engine optimization (SEO), information architecture, and content strategy.
Today we see that the theory also fits very well into the development of artificial intelligence. AI helps people discover relevant content, products and knowledge that were previously difficult to find. This has given the Long Tail principle a new dimension, where well-structured content and high professional quality are increasingly important for visibility, trust and value creation.
This is a book we believe everyone who works with e-commerce, digital marketing, customer experience, innovation, digital strategy or artificial intelligence should read.
Content Strategy for the Web (2nd Edition)
Author/authors: Kristina Halvorson and Melissa Rach
Short review
How do you create content that actually helps people – and at the same time supports your business goals? Content Strategy for the Web is considered one of the most influential books in the field of content strategy and digital communications. The book shows how good content does not arise by chance, but through a deliberate strategy where user needs, the organization's goals, structure, work processes and management are closely linked.
The authors take the reader through the entire process – from planning and organizing to publishing, managing and continuously improving content on websites and digital services. Although technology has evolved since the book was published, the principles of quality, relevance, management and long-term content work are at least as relevant in an era where search engines and artificial intelligence assess the credibility and usefulness of content.
Why we recommend the book
At The Invisible Capital, we believe that good content is one of the most important forms of invisible value creation. A website is far more than design and technology – it is the content that builds trust, creates great customer experiences and helps people find the answers they are looking for.
This book is perfect for leaders, communications consultants, content producers, web editors, UX designers, and anyone working with digital services. It shows why a clear content strategy leads to better user experiences, more effective interactions, and stronger digital results over time.
In an era where artificial intelligence is increasingly important in how information is discovered, understood, and communicated, this book is more relevant than ever. It reminds us that technology alone never creates value – it is good, structured, and relevant content that makes the difference.
Don't Make Me Think
Author: Steve Krug
Short review
Don't Make Me Think is one of the world's most influential books on usability and web design. Since its first edition in 2000, the book has helped designers, developers, content producers, and managers understand a simple but powerful principle: Good digital services should be intuitive. The user should be able to complete their task without having to stop and think about how the website works.
Why we recommend the book
This is one of the books that has had the greatest impact on my own work with digital services. Over the years – from SAS and the Norwegian Opera & Ballet to working on Bærum Municipality’s website – the principles in this book have been an important reminder that technology is never an end in itself. The goal is to make everyday life easier for the people who use the services. Despite the fact that the book was published many years ago, the message is just as relevant today.
Internet Marketing & eCommerce
Authors: Ward Hanson and Kirthi Kalyanam
Short review
Internet Marketing & eCommerce provides a thorough introduction to how the internet has changed marketing, commerce, and business development. The book combines theory and practical examples in digital marketing, e-commerce, customer behavior, value creation, and digital business models. Although written at a time when the internet was still in its infancy, many of the fundamental principles are still highly relevant.
Why we recommend the book
This book was an important part of my own learning journey in digital marketing and e-commerce. It helped build my understanding of how technology, customer experiences and business strategy are interconnected – an insight that later became very important in my work with SAS, the Norwegian Opera & Ballet, Bærum Municipality and eventually the project The Invisible Capital. Many of the ideas about customer value, digitalization and innovation presented on the website have their roots in the knowledge this book conveys.
The Innovator's Solution: Creating and Sustaining Successful Growth
Authors: Clayton M. Christensen and Michael E. Raynor
Short review
In this sequel to The Innovator's Dilemma, Clayton Christensen shows how businesses can translate innovation theory into practical strategy. The book explains how companies can identify new growth opportunities, develop disruptive innovations, and build organizations that thrive in rapidly changing markets.
Why we recommend the book
While The Innovator's Dilemma explains why established businesses are often challenged, The Innovator's Solution provides concrete advice on how to meet the challenges. The book is therefore a natural next step for anyone who wants to understand innovation, strategy and long-term value creation.
The Innovator's DNA: Mastering the Five Skills of Disruptive Innovators
Authors: Jeff Dyer, Hal Gregersen and Clayton M. Christensen
Short review
What characterizes people who create groundbreaking innovations? The authors identify five key skills – observation, questioning, experimentation, networking and association – that are common to the world's most innovative leaders and entrepreneurs.
Why we recommend the book
This book shifts the focus from organizations to the people behind innovation. It shows that creativity and innovation can be developed through deliberate training and experience. The perspectives align well with the philosophy behind Invisible Capital, where human competence and curiosity are the most important drivers of development.
Competing Against Luck: The Story of Innovation and Customer Choice
Authors: Clayton M. Christensen, Taddy Hall, Karen Dillon and David S. Duncan
Short review
In this book, Clayton Christensen further develops the theory of Jobs to Be Done – the idea that customers do not primarily buy products, but "hire" them to solve specific needs. Through practical examples, the authors show how businesses can develop products and services that address customers' real-world challenges.
Why we recommend the book
For anyone working in customer experience, service design, and innovation, this is one of the most insightful books ever written. It reminds us that value creation always starts with understanding the people we are developing solutions for – a fundamental principle of Invisible Capital.
The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail
Author: Clayton M. Christensen
Short review
The Innovator's Dilemma is considered one of the most influential books on innovation and technological change. Clayton M. Christensen introduces the theory of disruptive innovation and explains why even the most successful businesses can fail when new technologies and business models challenge established markets. Through a series of examples, he shows how companies often focus on today's customers and incremental improvements, while overlooking innovations that later change entire industries.
Why we recommend the book
This is one of the books that has had the greatest impact on modern innovation thinking. When I first read it, it gave me a whole new perspective on why some businesses succeed in transformation, while others lag behind – even when they are well led. The insight has been an important part of my own understanding of digitalization, innovation and change management, and many of the reflections in The Invisible Capital build on the ideas Clayton Christensen presents in this classic. The book is as relevant today, in the face of artificial intelligence and digital transformation, as it was when it was published.
Open Innovation: The New Imperative for Creating and Profiting from Technology
Author: Henry Chesbrough
Short review
Henry Chesbrough introduced the concept of Open Innovation and changed the way many businesses think about research and development. He shows how companies can create more innovation through collaboration with customers, universities, start-ups, suppliers and other external partners.
Why we recommend the book
Open Innovation has had a major influence on modern innovation thinking and was also an important topic during the seminars in Oxford and San Francisco. The book shows why future value creation occurs in the interaction between people, businesses and knowledge environments – not within closed organizations alone.
Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant
Authors: W. Chan Kim and Renée Mauborgne
Short review
Blue Ocean Strategy challenges businesses to shift their focus away from fierce competition and instead create new markets with little or no competition. The authors present strategies and models that help organizations develop innovative products, services, and business models.
Why we recommend the book
This book has inspired leaders around the world to rethink strategy and innovation. Instead of competing for the same customers, it shows how businesses can create new value through creativity and differentiation. The perspectives align very well with the themes of innovation, digitalization, and long-term value creation in Invisible Capital.
Outside Innovation: How Your Customers Will Co-Design Your Company's Future
Authors: Patricia B. Seybold
Short review
Patricia Seybold shows how businesses can create better products and services by actively involving customers in the innovation process. The book describes how dialogue, co-creation and close collaboration with users can provide better solutions and stronger competitiveness.
Why we recommend the book
Customers often hold the most important insights into how products and services can be improved. This book emphasizes the importance of listening, involving, and learning from users – a perspective that is echoed in many of the articles on The Invisible Capital. Innovation rarely happens alone; it is created in the interaction between people.
Blown to Bits: How the New Economics of Information Transforms Strategy
Authors: Philip Evans and Thomas S. Wurster
Short review
This book analyzes how digital information is changing competitive conditions, markets, and business strategies. The authors explain how the internet is disrupting established structures and creating new opportunities for businesses that are able to think differently.
Why we recommend the book
Although written early in the internet revolution, the book describes many of the developments that still characterize business today. It provides valuable perspective on how digitalization affects value chains, competition, and innovation – themes that are central to Invisible Capital.
Wikinomics: How Mass Collaboration Changes Everything
Authors: Don Tapscott and Anthony D. Williams
Short review
Wikinomics shows how openness, sharing and collaboration across organizations create new forms of innovation and value creation. Through a number of international examples, the authors describe how digital networks make it possible to develop products, services and knowledge together.
Why we recommend the book
This book was groundbreaking when it was first published, and many of the ideas have since become a natural part of everyday digital life. The perspectives on collaboration, knowledge sharing, and open innovation processes align very well with the philosophy behind Invisible Capital, where people and networks are at the center of value creation.
The Competitive Strategy: Techniques for Analyzing Industries and Competitors
Author(s): Author: Michael E. Porter
Short review
Competitive Strategy is Michael E. Porter's classic work on how companies can understand the competition they find themselves in and develop a position that provides a basis for long-term profitability. Porter shifts the focus from the individual competitor to the structure of the entire industry and shows how competition is affected by customers, suppliers, new entrants, substitutes and the rivalry between existing companies. This forms the basis for what has later become known as Porter's Five Forces. The book is also about how companies can choose a competitive strategy on the basis of this analysis. It thus established an analytical language for strategy that has gained great importance in both research, teaching and practical strategy work.
Why we recommend the book
We recommend Competitive Strategy because it provides the analytical foundation for much of the thinking Porter later develops in What Is Strategy?. If a company is to choose a unique strategic position, it must also understand the competitive forces, the industry structure and the factors that affect the ability to create and retain value. The book is particularly useful because it reminds us that strategy is not just about internal goals, plans and ambitions. Strategy must be developed in the face of customers, competitors, suppliers, technology and structural changes in the market. Together with What Is Strategy?, the book therefore provides a much richer picture: First, the company must understand the competitive arena. Then, it must choose how to be different.
Competitive Advantage: Creating and Sustaining Superior Performance
Author(s): Author: Michael E. Porter
Short review
In Competitive Advantage, Porter moves the analysis from the industry to the business itself. The main question is how competitive advantage is actually created. One of the book's most important contributions is the value chain, where the business is understood as a system of activities that collectively develop, produce, market, deliver and support a product or service. Competitive advantage cannot therefore be understood only through products or overall strategies; one must examine the activities that create costs, differentiation and value. This understanding later becomes central to Porter's argument about strategic fit: the activities must not only be good in isolation, but also fit together and reinforce each other.
Why we recommend the book
We recommend Competitive Advantage because it brings strategy right down to where value is actually created: in the activities the business performs. This makes the book particularly relevant together with What Is Strategy?. When Porter argues in 1996 that strategy consists of performing different activities than competitors, or performing similar activities in other ways, this builds on the thinking he developed here. For our perspective on value creation, this is particularly interesting. Value does not arise because the business has formulated a strategy on a document, but through people, expertise, technology, processes, collaboration and activities that together enable the business to create something that customers value. The book therefore provides an important connection between strategy, competitive advantage and actual value creation.
The Competitive Advantage of Nations
Author(s): Author: Michael E. Porter
Short review
In The Competitive Advantage of Nations, Porter raises the perspective from business to countries, regions and business environments. The book is based on extensive studies of the competitiveness of ten leading trading nations and examines why certain countries and business clusters are particularly successful in certain industries. A central premise is that national prosperity is not simply something a country inherits through natural resources or other given conditions. It is created, and productivity, innovation, competence, competition and the quality of the environment in which businesses operate are crucial. Here, Porter also develops the well-known diamond model to explain how different national and regional conditions can interact and stimulate competitiveness.
Why we recommend the book
We recommend The Competitive Advantage of Nations because here Porter extends the strategy perspective to the ecosystem surrounding the business itself. Value creation does not occur in a vacuum. Businesses develop in societies with education, research, infrastructure, capital, suppliers, demanding customers, competing businesses and public institutions. This makes the book particularly interesting for understanding value creation as an interaction between people, businesses and society. It also provides an important corrective to the notion that a country's competitiveness can mainly be understood through low costs or access to natural resources. Innovation, productivity and the ability to continuously develop are far more central to Porter's explanation.
Understanding Michael Porter: The Essential Guide to Competition and Strategy
Author: Joan Magretta
Short review
Understanding Michael Porter brings together and explains the most important parts of Michael Porter's strategic thinking in one accessible whole. Joan Magretta herself worked on strategy at the Harvard Business Review and organizes Porter's ideas around two fundamental questions: What is competition, and what is strategy? She explains, among other things, the Five Forces, competitive advantage, the value chain, value creation, trade-offs, fit, and strategic continuity. This makes the connection between Porter's various works clearer than when the concepts are studied separately. The book also includes an interview with Porter.
Why we recommend the book
We recommend Understanding Michael Porter because it helps the reader see the whole picture of Porter's understanding of strategy. Porter is often reduced to the Five Forces or a few models used in isolation. Magretta shows why this is too simple. Competition, value creation, strategic positioning, trade-offs, activity systems, fit and continuity are interconnected. This makes the book a particularly good supplement after reading What Is Strategy?. It makes it easier to understand why Porter does not view strategy as a plan or a collection of goals, but as a coherent system of choices about how the business will create value and compete over time.
HBR's 10 Must Reads on Strategy
Authors: Harvard Business Review, Michael E. Porter, W. Chan Kim, Renée A. Mauborgne and more
Short review
HBR's 10 Must Reads on Strategy brings together some of Harvard Business Review's most influential writings on strategy. The original collection from 2011 features Michael E. Porter's What Is Strategy? as its main article and combines it with works on competitive forces, Blue Ocean Strategy, the organization's vision, business models, strategy execution, and the Balanced Scorecard, among others. The result is not one unified theory of strategy, but multiple perspectives on how organizations can develop, formulate, and execute strategy.
Why we recommend the book
We recommend HBR's 10 Must Reads on Strategy because it places Porter in a broader strategic context. After reading What Is Strategy?, it will be interesting to encounter other central perspectives and see how they complement, challenge, or extend Porter's understanding. The collection also shows why strategy cannot be reduced to a single model. Competitive position, choice, innovation, business model, execution, priorities, and measurement must be seen in context. For the reader who wants to move on from Porter and into the strategy discipline more generally, this is therefore a very good introduction.
Creating a Learning Society: A New Approach to Growth, Development, and Social Progress
Author: Joseph E. Stiglitz and Bruce C. Greenwald
Short review:
Creating a Learning Society examines how knowledge, learning, and technological development contribute to economic growth and long-term value creation. Joseph E. Stiglitz and Bruce C. Greenwald challenge the notion that economic development is primarily about accumulating more physical capital. They argue that society’s ability to create, disseminate, and apply knowledge is crucial to productivity growth and improved living standards. A key point is that learning does not only occur in schools and universities. It also occurs in businesses, through work, production, innovation, and the interaction between people and organizations. Knowledge can also spread from one business and one part of the economy to others.
The book thus provides an important perspective on why human capital, competence, innovation and learning must be understood as central parts of a society's ability to create value over time.
Why we recommend the book
We recommend Creating a Learning Society because it expands the understanding of what lies behind economic value creation.
Machines, technology and financial capital are important, but they do not create productivity growth alone. Behind the development are people who learn, develop knowledge, improve work processes, share experiences and find new solutions.
This makes the book particularly relevant to Invisible Capital and our perspective on value creation: A significant part of society's value-creating capacity is found in the knowledge, competence, and learning ability of the people who participate in the economy.
Stiglitz and Greenwald thus provide an academic foundation for one of the most important relationships in modern value creation:
The Value of Everything: Making and Taking in the Global Economy
Author: Mariana Mazzucato
Short review
In The Value of Everything, Mariana Mazzucato asks a fundamental question: What exactly is value – and who creates it? Mazzucato returns to the historical discussions of value in economics and shows how the understanding of value creation has changed. She challenges the notion that high income, high prices or large profits necessarily mean that correspondingly large values have been created. One of the book's most important contributions is the distinction between value creation and value extraction . Mazzucato examines the financial sector, the pharmaceutical industry, innovation and the public sector, among others, and argues that we must become better at distinguishing between activities that actually create new values, and activities that primarily extract values that have already been created.
The book also challenges the traditional notion that the private sector creates value while the public sector mainly consumes or redistributes it. Innovation and economic development often arise through a complex interaction between public investment, research, businesses, capital and people.
The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations
Author: Philippe Aghion, Céline Antonin and Simon Bunel
Short review
The Power of Creative Destruction is about one of the most important drivers of long-term economic growth: innovation.
Philippe Aghion, Céline Antonin and Simon Bunel build on Joseph Schumpeter's classic idea of "creative destruction" – the process by which new technologies, businesses, products and ideas challenge and replace existing solutions.
But the book is not just about the disappearance of the old. The authors examine why some economies manage to create continuous innovation and productivity growth, while others stagnate. Competition, entrepreneurship, research, education, institutions and public policy thus become important parts of the explanation.
Creative destruction also comes at a cost. New technologies and businesses create opportunities and jobs, but can also make existing skills, tasks and business models less relevant. The challenge is therefore to create societies that both promote innovation and enable people to participate in the transition.
Why we recommend the book
We recommend The Power of Creative Destruction because it shows why innovation is a fundamental driver of value creation .
Value creation is not just about producing more of what we already produce. It also occurs when people develop new ideas, technology, and ways of working that enable us to solve tasks better than before.
This makes the book particularly relevant to The Invisible Capital. Behind innovation are people with knowledge, expertise, creativity and experience. But Aghion's perspective also shows that human capital must be part of a larger system where competition, institutions, research, investment and policy create the conditions for new ideas to actually turn into economic and social development.
The book thus provides an important context in our understanding of value creation:
Knowledge → new ideas → innovation → productivity growth → long-term value creation.
Institutions, Institutional Change and Economic Performance
Author: Philippe Aghion, Céline Antonin and Simon Bunel
Short review
Institutions, Institutional Change and Economic Performance is one of Douglass C. North's most important works on why some societies are more successful than others in creating economic development over time.
North shifts attention from traditional factors of production such as capital and labor to the institutions that shape how people, businesses, and governments act and cooperate. Institutions are society's formal and informal rules of the game – including laws, regulations, norms, traditions, and established ways of organizing interaction.
These rules of the game affect the incentives that people and organizations face. They also affect investments, knowledge development, cooperation, transaction costs, and which economic activities emerge.
North also shows that institutions develop over time. History therefore matters: Today's economic opportunities are influenced by institutional choices and development paths that can stretch far back in time.
Why we recommend the book
We recommend Institutions, Institutional Change and Economic Performance because it explains a crucial aspect of value creation that easily becomes invisible:
Value creation needs good rules of the game.
People may have knowledge. Businesses may have capital. Entrepreneurs may have great ideas. A society may have natural resources and advanced technology. But outcomes are also influenced by the institutions that determine how people can collaborate, invest, compete, make deals, and develop businesses.
This makes North particularly interesting for our understanding of trust as part of invisible capital. Trust is not the same as institutions, but stable rules of the game, credible agreements, and well-functioning institutions can reduce uncertainty and make economic interaction easier.
North thus gives us another important part of the value creation picture:
Institutions → predictability and incentives → cooperation and investment → productive activity → long-term value creation.
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