It's no secret the Internet has changed the way consumers get information about products and the companies that provide them. Because so much intelligence about a potential transaction is so readily available from independent sources, the message provided by conventional advertising has declined in value to consumers, who even question its trustworthiness.
None of this is to say that traditional one-way advertising—say, the kind you find on TV or in print publications and even banner ads on a Web page—can't play an important role in communicating with customers. At its best, the mission of the marketer is the creation of meaning. Taking a common product and imbuing it with the aspiration of adventure, achievement, or beauty was one of the amazing feats of the 20th century.
But in 2002, Unilever's Dove brand began a radical experiment. By launching the "Campaign for Real Beauty," Dove challenged a core precept of the beauty industry: Is the standard for female beauty that had been set by the industry destructive to the very customers it seeks to serve? By engaging with the market on this question, inviting conversation and even parody, Dove also challenged a core marketing precept—that a company must dominate and control the message about its brand in the marketplace.
Starting a Conversation
By taking a point of view and then participating in an ongoing discussion, Dove invited collaboration. Instead of passively receiving Dove's message, the market engaged in helping the conversation evolve. In an industry that emphasizes the domination and control of the message, why would a beauty-products brand take a point of view that challenges the very idea of beauty and create an open and direct conversation with its market on the topic?
Dove and a growing number of brands are finding that the kind of marketing the 20th century perfected is becoming less effective in the 21st. A recent McKinsey report predicts that, "Traditional TV advertising will be one-third as effective in 2010 as it was in 1990." Other advertising media aren't working as well as they once did either. Not as many people are dialing the 800 number, clicking the banner ad, or remembering the tagline, regardless of whether it's a radio spot on a CBS (CBS) broadcast, an ad in The New York Times (NYT), or even a banner on Yahoo! (YHOO). In fact, marketing that seeks to control has become an annoyance in a media environment of virtually unlimited choice. In a 2006 study, researchers found that only 53% of consumers said they believed ads were a good way to learn about new products. That was down from a 78% response in 2002.
In part, this is a story of market fragmentation. As the sources of media content have proliferated—first through cable, then satellite, and more recently the Internet—the audience for each individual source has shrunk, dispersed among that many more choices. But the cost to produce and distribute a television show has remained relatively stable. So if the audience for that show is smaller, then advertisers are asked to pay a higher per-person advertising rate.
Word of Mouth
A shift also has occurred in terms of the consumer's patience for marketing—and that presents a fundamental challenge to the role that advertising plays. For the past 100 years of the industrial era, most or all the information a consumer was likely to have about a product came from a company's (and its competition's) advertising. Advertising would inform, engage, entertain, and even create aspirations. This communication was largely one-way, defined by the media that carried the ads.
As consumers, we had little ability to question the content, or the companies, or gather independent perspectives. The effectiveness of advertising became, in part, dependent on the trust we developed in a brand.
But while most of today's adults are well acclimated to this "industrial marketing" approach, it does not reflect the historical norm of human behavior. For thousands of years before communications became industrialized, people chose a bakery or blacksmith based on word-of-mouth recommendations, reputation, and social networks. Selection of a vendor might reflect social class, neighborhood, recommendation, or personal relationship. Endorsement by royalty, for example, was one of the first forms of mass marketing precisely because it took the sociology of recommendation and, because of the fame of the endorser, allowed the recommendation to scale beyond personal relationships.
So today, as a new set of community technologies develop on the Internet, we should not be surprised to discover that the sociology of how we buy isn't new at all. In fact, it is as old as civilization. Today's markets will come to resemble these pre-industrial markets, with some major exceptions. Our pre-industrial ancestors were constrained by time and distance in developing opinions about vendors. But in the post-industrial world, reputation, relationships, and recommendations can come at any time from anywhere to affect a purchase decision.
Back to the Future
This technology-enabled shift back to pre-industrial market behavior changes the way we react to advertising in a fundamental way. Where advertising was once a desirable form of information—a way for me to hear about something I hadn't been aware of—there's now such an enormous amount of information available on demand that advertising is simply annoyance: one-sided, questionable, and provided at the wrong time.
Before you entirely discard the notion of advertising, however, it is worth noting that it can and will change. Companies will recognize that there is a conversation going on in the marketplace that they should join, not dominate. Consumers, experts, and competitors are all talking about your company, its products, and the competition's products. Joining that conversation means providing information, answering questions, and responding to concerns instead of just broadcasting one-way messages. Participating allows a company to correct misinformation, offer insights, develop a reputation, and create a relationship with the most influential people in a given market.
Once a company has become a part of the conversation, conventional one-way advertising can serve a meaningful purpose. It can draw attention to the conversation and to the company's participation. It can alert a market to change. It can be a form of information that is valuable again—information about where and when the market is operating and how to engage with it.