Then & Now What?

IN THE BEGINNING, it was all about choice. There were vendors and customers and all “marketing” was on a personal, one-to-one basis. Vendors communicated directly with customers, extolling the virtues of their product or service, while answering any questions the customer might have and providing service when needed. This was the most effective form of marketing because it gave full attention to the one-to-one communication between the vendor and the customer. It was a simple matter of - did the consumer want the product or not.

 

THEN, as vendors could produce more than they themselves could possibly market on a one-to-one basis, (advertising)agents were hired to assist them in reaching consumers by creating ways to interrupt the consumers and deliver the vendor’s pitch. By definition, this “interruption-based advertising,” wasn’t as personal or as efficient, but it produced the necessary volume of customers to buy the vendor’s products, as well as propagating all the forms of mass media we know today. The vendors got hooked and cranked out products as fast as they could.

During the heydays of the 1950’s and 1960’s Procter & Gamble and others created and perfected a symbiotic system that Seth Godin, author of “Permission Marketing” and “The Purple Cow” calls the “TV-industrial complex” that he illustrates with the following diagram:

Seth Godin explains: “Before Advertising, there was word of mouth. Products and services that could solve a problem got talked about and eventually got purchased...The best vegetable seller at the market had a reputation, and her booth was always crowded.

During Advertising, the combination of increasing prosperity, seemingly endless consumer desire, and the power of television and mass media led to a magic formula: If you advertised directly to the consumer (every consumer), sales would go up. A partnership with the right ad agency and the right banker meant you could drive a company to be almost as big as you could imagine.

After Advertising, we’re almost back where we started. But instead of products succeeding by slow and awkward word of mouth, the power of our new networks allows remarkable ideas to diffuse through segments of the population at rocket speed.

As marketers, we know the old stuff isn’t working. And we know why: because as consumers, we’re too busy to pay attention to advertising, but we’re desperate to find good stuff that solves our problems.”

 

WHAT HAPPENED? First, interruption-based advertising began to lose its effectiveness because both the number of vendors and the number of products increased to the point that the sheer volume of advertising messages as well as the media delivering those messages, far exceeded the consumer's limited ability and/or desire to pay any meaningful attention to the messages, much less the products and services themselves.

Second, the overall quality of products and services improved and became so competitive that consumers felt little need to switch from one to another.

And finally, the arrival of the Internet magnified the power and impact of these first two changes exponentially, while simultaneously empowering the consumer with near-instantaneous access to information (read “competitors”) heretofore unavailable.

NOW, vendors must face markets with more expensive but less effective advertising, an information-empowered consumer, and global competition literally just one click away. Survival will depend on how quickly vendors learn to harness the same information technologies that have empowered the consumer, to increase consumer TRUST in their company and their products and services.