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Why Marketing Has Changed… Forever

2013 February 13
new-paradigm1

The marketing world, in large part, can be split into two camps. Traditionalists, most notably Bob Hoffman at The Ad Contrarian believe that nothing has really changed except the tools.  After all, while there has been a revolution in technology, basic human nature remains the same.

Digital advocates, on the other hand, are sure that the realm of communication has changed so completely that the old rules have lost relevance. They believe that the traditionalists are just fooling themselves, grasping at any straw in order to avoid changing their old, tired ways.

Having spent time in both camps, I have sympathy for both points of view. I’m equally frustrated with those who try to fit new media into old models and those who think that every shiny object represents a new paradigm.  Nevertheless, it’s clear that something fundamental has changed and it starts with one of marketing’s most basic assumptions.

The Sales Funnel

The Sales funnel should be familiar to anyone involved in sales and marketing.  It has been a staple for decades and many different iterations have arisen, but here’s a pretty basic version:
 

sales-funnel

 
The funnel is a graphical representation of the AIDA model that’s been in use for at least a century and appeals to our basic common sense.  You get a prospect’s attention, inspire their interest, overcome their objections and get them to act.  The implicit assumption is that the more you put into the front of the funnel, the more you’ll get out the end.

This led to marketers to focus on building brand awareness, mainly through TV campaigns. While some energy went into tactics further down the line, the thinking was that awareness was a tide that lifted all boats.  I think that everybody knew that the notion wasn’t 100% accurate, but it was true enough that it worked and played a crucial role in building our most beloved brands.

That model is now broken because 60% of TV viewers are surfing the Internet while they watch, so the action that a TV ad is most likely to elicit is not a trip to the store, but an Internet search.  That’s a very fundamentally change and it means we need to do things differently.

The Three Pillars of the Brand

Once a consumer begins to research a category purchase online, their data trail will alert your competitors, who will retarget those same consumers with new offers based on their surfing behavior.   In effect, by building brand awareness you are also building category awareness and allowing your rivals to line their coffers.

To respond to the new challenges many marketers have developed path-to-purchase models.  Like purchase funnels, there are multiple versions, but here’s the one that I favor:
 

1

 
At first glance, the contrast may seem mostly cosmetic.  After all, you still have most of the same major elements, simply rearranged.  However, what used to be a linear process has been replaced by a continuum and that makes all the difference in the world.

In short, marketers need to shift from grabbing attention to holding attention and that will require a change in skills, mindset and organizational integration.

From Big Ideas to Pervasive Brand Experiences

In the old model, marketers strove to come up with the “big idea” that they could back up with massive ad spending on TV.  It made sense because TV was (and still is) an incredibly efficient medium.  You could create a compelling 30’ spot, put it on air and reach untold millions of potential prospects in a matter of a few days..

Now that’s a fool’s errand, because all those TV dollars will only incite consumers to start searching for more information on the Internet, where they will be retargeted by competitors.  So many top brands have deemphasized building awareness in favor of creating pervasive brand experiences that keep consumers engaged.

A great example is Nike’s + program, which has developed an entire ecosystem that helps their consumers track their own training programs through a fuelband that monitors their activity, devices implanted in basketball shoes that can record how high they jump and interfaces with both the Apple iPod and Microsoft Kinect platforms.  They can even link their profiles with friends and compete with them.

And Nike is not alone.  Many successful marketers are moving away from one way communication and towards a true value exchange, where consumers interact with the brand continuously because they are getting more than just a slogan.

The Organizational Imperative

We have to get away from “big ideas” and the star culture they promote.  Big ideas, all too often, are merely a proxy for big people – individuals with enough charisma and organizational clout to attract resources.

However, as Ed Catmull of Pixar points out in this fantastic HBR piece, creativity is no longer a “solo act.”  Today, collaboration is not just important, it’s absolutely essential and that’s why digital marketing is so hard.

Marketing services companies, which have spent decades metastasizing into evermore modular operational units, are ill equipped to provide the integration needed to create immersive experiences that scale.  The challenge ahead is to build completely new marketing organizations (although not necessarily new brands) that are networked to succeed.

However, the shift requires tight integration of a much wider set of skills than in the old “big idea” era.  Beyond making ads, todays marketing effort requires technologists, usability experts, community managers, retail specialists and sometimes even a mathematician or two.

The question is this:  If marketing practice has changed so fundamentally, why do our marketing organizations look so much the same?

– Greg

19 Responses leave one →
  1. February 13, 2013

    Greg – thanks for this article. You are one of the very few who have identified the need for brands to ‘hear from’ their clients and prospects. As an entrepreneur who runs a coaching company with a team of 4 coaches, I am very interested in the concept of 2-way communication with our past, current, and future clients. As such, I invite them to journal in an online journal (www.journalengine.com). The marketing impact is astounding. If you have any interest, I would be delighted to share the process with you and show you what we have created…

    Cheers!

    Kim

    [Reply]

    Greg Reply:

    Sounds cool Kim. Good luc with it!

    – Greg

    [Reply]

  2. February 13, 2013

    Greg,

    Good read. So, instead of “Be satisfied” (Be cool) new consumer’s paradigm is “Stay motivated, challenged and connected” (Nike+).

    Instead of “Brand” we have “Brand+Activity” and “Brand+Community” (Nike+). Is this a new strategy on saturated and innovated markets?

    Does the “Brand+ecosystem (activity & community)” mean “New value” for consumer? What is this New value? – To be “motivated, challenged and connected”???

    So, human being for his self-realization and survival needs today not the product but motivation for creativity?

    How difficult to be Cool on falling markets and overwhelming commodities wealth :-))
    Only emotional drive stays a real coin of happiness… :-))

    Sergei

    [Reply]

  3. February 14, 2013

    Greg,

    Let me add some thoughts.

    I think the Nike+ strategy is absolutely true but I’d like to modify their slogans a little bit: “Brand+ Knowledge and Activity” and “Brand+ Relationships and Community”.

    In practice if consumer applies to Internet to make a decision, so new strategy might be “Brand+ Digital Assets” …

    Sergei

    [Reply]

    Greg Reply:

    As always, Interesting ideas Sergei.

    – Greg

    [Reply]

    Neno Reply:

    any proof that decision is made based on brand’s internet marketing activities (not by asking theri friends via email or facebook)?
    all I’ve ever seen is that people are surfing more. which basically means nothing cause it’s too wide.

    than it’s “the community”.
    well, how about dr. marten’s community? Vespa community? Citroen AMI? Harley Davidson? Walkman? I could go on for decades. these are all communities that were built with traditional advertising and lasted for decades. and these communities are defined on the terms new-media prophets define community, not some old definition that anyone can call outdated.
    not one single brand built with “new media” (if there is one) lasted that long.
    besides, Coca-Cola as a case-study for building biiiiig fan base on Facebook (80 million). out of 4 billion drinkers!!!!!! that’s peanuts. that’s not success. one Superbowl commercial gets more. if it’s great, iz has even longer effect.

    marketing people seem to forget that people are using new media/technology to AVOID advertising. so engagement model is actually interuption model rediscovered.

    on the other hand Kahneman proved that internet searching de-motivates the decision. solely because of the too big amount of info. and people thant refer to their trustees – and none of them are brands, or communicity, or ecosystem. it’s the guy down the road with toothpick in his mouth.

    if, we’re taking sides I’m afraid Hoffman is more right.
    if not, than Wieden is right – old and new must work together – old to spread, new to narrow it.

    [Reply]

    Greg Reply:

    Thanks for sharing.

    – Greg

    [Reply]

  4. February 22, 2013

    I blog also and I’m composing something similar to this particular
    blog, “Why Marketing Has Changed… Forever
    | Digital Tonto”. Will you care in cases where I personallymake use of a lot of of your concepts?
    Thanks for your time -Franchesca
    Shay´s last blog post ..Shay

    [Reply]

    Greg Reply:

    Sure. No problem.

    Good luck with it.

    – Greg

    [Reply]

  5. Kuldip Singh permalink
    February 26, 2013

    Brands are now hiring journalists in their marketing department. Marketing has changed.

    [Reply]

    Greg Reply:

    Indeed it has. Agencies are hiring journalists as well.

    – Greg

    [Reply]

  6. October 22, 2013

    Hum, wish it was so easy. I don’t recall having searched the internet for any FMCG lately, for which brand saliency makes the whole difference.
    Also, check out info of the percentage of “online searchers” within a higher involvement product category (say cosmetics). Far, very far from 100%. Lots of decisions there also taken into the store, and influenced by good old branding practices (and yes, TV, among others). Last, if you question the effectiveness of tv advertising, which effectiveness has been demonstrated again by robust and recent academic research, you should as well question the effectiveness of online behavioral targeting. In your piece, it looks like money spent on TV is wasted BECAUSE consumers exposed to TV advertising might be retargeted. That is a big shortcut right there.
    I would therefore say that things are way, way more complicated that what you are writing there. Shortcuts are nice, and attention-grabing, but they don’t tell the whole story.
    Vincent Balusseau, Assistant Professor of Marketing, Audencia School of Management.

    [Reply]

    Greg Reply:

    Vincent,

    You should take another look. I never said TV isn’t effective (actually, I don’t even recall thinking it), but merely pointed out that TV results in trackable behavior that can be retargeted. In effect, by simply building awareness and walking away, you risk doing your competitors demand generation for them.

    While this may not yet be an issue in academic circles, among marketers who actually build brands for a living, this is an increasingly important problem and one that we are working hard to solve.

    Thank you for sharing your thoughts.

    – Greg

    [Reply]

    Vincent Balusseau Reply:

    “Now that’s a fool’s errand, because all those TV dollars will only incite consumers to start searching for more information on the Internet, where they will be retargeted by competitors”. It seems to me that this means that TV advertising is counter-productive, hence worse than not effective. I mean this is what I gather from the “fool’s errand” notion :)

    [Reply]

    Greg Reply:

    Vincent,

    Yes. That is a direct quote which referred directly to the paragraph that preceded it

    In the old model, marketers strove to come up with the “big idea” that they could back up with massive ad spending on TV. It made sense because TV was (and still is) an incredibly efficient medium. You could create a compelling 30’ spot, put it on air and reach untold millions of potential prospects in a matter of a few days.

    I’m not an academic and not in the business of parsing words, but I would argue that the bit about “TV was (and still is) an incredibly efficient medium,” would tend to imply that TV was—and still is—an incredibly efficient medium for promoting awareness about ideas.

    The problem we are running into in practice is that awareness doesn’t convert to sales as well as it used to. In fact, I’ve found in my work with some of the world’s largest and most sophisticated marketers that the relationship can sometimes be inverse—marketers can be successful in improving awareness but market share suffers.

    Usually, this happens when they are competing with one marketer in particular who has been really smart about digital marketing and retargeting while at the same time maintaining a very large commitment to TV and, in doing so, have managed to kink up the “path to purchase” curve. They have been able to do this across many product categories.

    So I would urge you to rethink your “TV vs. the world” mentality. In practice, we are not so much concerned with championing one particular medium or tactic, but achieving business objectives.

    – Greg

  7. October 24, 2013

    Thanks for your advice Greg ! I would then return the favor, and incite you – if I may – to read the Institute of Practionners in Advertising latest report (Datamine 3, new models of marketing effectiveness): it analyzes data from hundreds of the most effective cross-media campaigns entered in the IPA databank. Their conclusions, based on thorough and careful data analysis across a wide range of industries, draw quite a different picture than yours. Or, to put it differently, it defends a way more nuanced vision that yours. No catchy shorcuts there, just conclusions grounded in hundreds of award-winning campaigns data analysis. It is not “TV vs the rest of the world” at all, as it shows how media work best together to increase campaigns effectiveness and efficiency. A compelling read, to which I would also add body of research done by the Ehrenberg Bass Institute, and funded by major mass-marketers, that again tends to challenge current wisdom and snappy formulas surrounding marketing in the digital age.

    [Reply]

    Greg Reply:

    Yes. I’ve spoken with Byron Sharp and he reads and comments on this blog occasionally. I think it’s great that you’re keeping up with the literature. Maybe someday, you might actually have an opportunity to see how it all works in the real world.

    – Greg

    [Reply]

    Vincent Balusseau Reply:

    Oh, I did that before, spent ten years in the advertising industry , at the MD Level in my last position, working for big brands (Heineken, HP, Orange, etc), mostly on cross-media and digitally-driven campaigns (believe it or not), and I carry on doing occasional consulting and training work for Publicis and Omnicom. (Some) academics may also have “real-world” experience :)

    [Reply]

    Greg Reply:

    Good for you! I think that’s very admirable.

    – Greg

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