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Marketing, as we know it, is obsolete.

So say Simonson & Rosen in their recent book 'Absolute value'. Theirs is not a lone voice,  similar sentiments date from as early as 1999, in the Cluetrain Manifesto.

As it came in the peak of the dot-com bubble, though, that message was largely ignored.

Why do they say we’ve no use for marketing? It’s because of the rising power of the voice of the customer. With the growing availability of consumer opinions, the importance of brand messaging is diminishing.

Consequently, things are changing in the world of advertising. Slowly, but surely.

As an example of change, here is a headline that reached the 2013 top five most clicked articles on LinkedIn:

P&G to lay off 1,600 after discovering it's free to advertise on Facebook.

That’s just P&G staff. The staff that deal with the ad agencies. The agencies themselves surely must feel the impact. P&G spent $10bn on advertising in just one year.

Will it be spending anything at all in three years time?

Where is this going? Are the public opinions of consumers chasing the ad men and women out of Madison Avenue and into the unemployment lines? What is happening, and why?

Well, what is happening is that all life forms in the advertising ecosystem from the media owners, to the ad men, to the brands, right down to the consumers are subjected to the change fueled by technological innovation.

The media landscape is changing. The days when the nation’s eyeballs would be focused on a few TV stations, movie theatres, radio stations or, originally, newspapers are long gone.

There are a million distractions and a wealth of content, all because of a small thing called the internet.

The net is not only a medium in its own right; the net also changes all other media. Granted, the dream of web-tv is still largely a dream to many, even though it is now 19 years since Microsoft bought the start-up WebTV. Nevertheless, slowly but surely, we are moving towards a place where your TV is just another computer you are logged into.

And with such a connected device comes personalized advertising. We’re seeing the first glimpses on the web today.

It knows what you search for, what you buy, read and watch. It knows what others who seem somewhat similar to you have bought and infers from that that you are a likely lead. Personalised advertising is much more effective – and do not underestimate the impact of that fact.

Media owners will rise in standing. The consumers’ perception of ads being a necessary evil will soften as relevancy goes up and disruption remains the only negative.

Technology is also changing the ads themselves. It’s now possible to tailor the ad to an individual consumer.

Digital ads on the web can dynamically adapt to maximize impact, using parameters as diverse as your location, time, browsing history, Facebook profile and current weather. You shall soon see an ad that no one else has ever seen, not even the ad agency itself.

Machine learning will play its part here too. The same is going to happen elsewhere; on the fast growing number of digital billboards, on TV and anywhere you see a screen.

What you search for on your mobile will influence the ad served to you, and only you, on TV a minute later.

Brands, be they manufacturers, retailers or service providers, are also heavily affected by technological change.

Brands now also communicate directly to the consumer through their presence on the web and social media. Many manufacturers have started selling directly from their websites as well.

The old model

The old model

The new model

The new model

Finally, let’s look at the key life form in this ecosystem, the consumer.

These are the inputs consumers used to take into account when deciding what to buy:

  • Media messages: brands like Volvo claiming safety.
  • Prior experiences: evaluation of a brand’s previous products.
  • Opinions of others: limited to friends and family.

It was hard to figure out if a new product from an unfamiliar company was reliable or not, so brand loyalty was a way of reducing risk. In the 1980s, pre-internet, 75% of US car buyers stayed loyal to a brand.

Consumers were largely dependent on information provided by the brand’s ad agency.

But today, the consumer has access to the information provided by their peers, the opinions of strangers. There are billions of reviews of products and services out there, instantly available at each choice point. The consumer trusts the opinion of others more than the media message, as civilians don’t have “sell” on their agenda. Looking at the hard numbers today, US car brand loyalty is down to 50%.

So although the types of input haven’t changed, the importance of each of them has changed dramatically. Consequently, compared to pre-internet, each product now has to prove itself on its own, according to Simonson & Rosen.

That’s the state of play.

Simonson & Rosen believe that many companies need to dramatically shift their marketing strategies to account for the rising power of future customers powered by the opinions of existing ones.

Consumers now buy because of peer opinion far more than marketing for many product categories. Many, but not all. Makers of habitual items (milk) and luxury items (Rolex) will be immune. Madison Avenue will keep its agencies, so say Simonson & Rosen.

Although I can see much lower click through rates for ink-cartridges than for printers in our database, I believe that wherever there is choice, consumer opinion will matter.

Even habitual purchases have their moments of change, and in those moments, consumer opinion will matter again. At the Rolex end of the spectrum, there might very well be less choice, which is why it may seem to matter less.

This clearly is an area that needs some investigation. (We have reached out to professor Simonson and are now mining our anonymised data together.)

However, this does not mean I think that ad agencies are on the way out. I think that their creative strategies need to center around consumer opinion.

We have already seen some of that change. Our client Kia was the first to do so in a national campaign including TV which has seen positive results, so much so that it has since ran a second campaign.

This form of messaging, I believe, is the future. Agencies can mix the consumer opinion with the brand’s spiel. The credibility of the messenger increases if the message includes consumer opinion.

I envision a digital personalized TV ad that shows product opinion from people like me, showing data I can verify on an independent third party website to guarantee integrity.

I get a camera ad served while watching a nature program on TV the day after I searched on the web for SLR cameras. The ad shows me the product’s consumer rating, a sentiment analysis of all their reviews, and a few quotes from individual reviewers who classified themselves as nature photographers.

Creativity is needed to explore the opportunities provided in the emerging digital, connected world, with a changing media landscape, and changing brands and consumers.

It’s going to be busy on Madison Avenue.

Edwin Bos

Published 23 May, 2014 by Edwin Bos

Edwin Bos is VP Innovation at Reevoo and a contributor to Econsultancy.. 

8 more posts from this author

Comments (1)


Umair Mohsin

Had this article been writing in three years ago, it would have made more sense. Now it doesn't. Whilst social & reviews are now a 'must' feature for any brand, they're just another key to unlock our consumer's ever clenching purse, and whilst personalization is great, it still doesn't help with discovery since its always based on history and the consumer is always moving forward.

The role of Madison Avenue will always be as the Brand Creators - ensuring the brand's promise is communicated across all channels whether it's TV or it's the net. Consumers don't know what they want and it's the advertisers job to show them what they want. The medium is irrelevant.

over 2 years ago

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