Saturday, 31 January 2009

The Death of Push Marketing


Some thoughts on the death of 'push marketing' and the corresponding rise of ‘authenticity’, consumer involvement and giving back…

Aug. '07: What’s ‘Push Marketing’?

It’s what we enjoyed from the late 1800’s until about 2005. It involves manufacturers making stuff they want us to buy from them, putting ads in newspapers and on TV shows and radio stations where it is difficult to avoid being exposed to them, then paying retail stores to put these products in prominent locations on the shelf. It also involves the retailers pushing back and telling manufacturers that, if they wanted to bring out a new flavour or pack size or product, they had to take an existing product off their shelves. The manufacturers and retailers controlled what consumers purchased, including what we believed about the benefits of the ‘brands.’ There was no access to any information other than the manufacturer’s advertising.

“Web 2.0”: the Birth of “Pull Marketing”, Where Consumers Are in Control

Things changed with the advent of “Web 2.0” in about 2006. Web 2.0 was actually not anything new, it was merely the moment in time when sufficient households had computers, broadband and sufficient internet surfing experience, in addition to most businesses and organizations having web sites plus web software being sufficiently ‘user-friendly,’ for internet communication to become commonplace. Suddenly ‘TV ad zapping,’ used to avoid the endlessly repeated commercials, was not the only phenomenon disaffecting the manufacturers’ expensive marketing efforts, people had a endlessly entertaining and flexible alternative to TV! Zounds! “How will we control their behavior now?” cried the manufacturers and media companies.

With the arrival of open communication between strangers over a real-time network, the era of ‘push marketing’ ended in it’s traditional form. Suddenly manufacturers had to worry a LOT about what their consumers where saying online in forums and blogs. People began to simply ignore advertising and started getting all the information they needed in order to decide what product they wanted to buy via the World Wide Web. American seniors started to buy their medication from Canada via the Internet. Control shifted into the hands and minds of the consumer.

The manufacturers’ early (actually on-going) attempts to ‘seed’ the Internet with their marketing messages caused a great deal of anger and cynicism on the part of consumers. (In actual fact, if major advertisers took the extraordinarily large budgets they continue to devote to TV advertising and spent that money on the internet, they could virtually ‘buy up’ most of the communication about their products – but there would still be the uncontrolled ‘specter’ of a negative PR backlash to deal with afterwards.) What this detrimental and costly attempt to ‘fix’ a PR disaster led to is a new consumer driven demand for authenticity, not whitewashing.

Authenticity, Originality and Intangibles

Consumers are now demanding honesty, full transparency, engagement and interaction from manufacturers and service providers. Either you have something truly different about your product that they love, or a ‘story’ that engages them, or a design that they think is cool, or a price-value relationship they feel is worthwhile, but don’t try to fool them or they WILL make you suffer!

In fact, when dealing with Millennials, there’s the additional demand for something else, something more intangible: an authentic and heartfelt passion for charitable corporate giving. Giving back to the community, helping the planet, being proactive and leading the charge. Their cry is ‘what have you done for us, all of us, lately?” (And there better be a response!)

In the new realm of ‘pull marketing,’ firms have to continually be reaching out, providing information and advice, helping, even guiding/leading, but never pushing. They’re expected to listen well and involve their consumers in the product development process, ensuring that the product features really, truly, match the consumers’ needs, not simply doing what the manufacturer thinks is right or sufficient. The ‘beta testing’ firms do these days leads to positive opinions floating about in the blogosphere and goodwill towards the brand. This helps protect the brand even if some errors are made along the way.

A Pre-Obama Prediction re: the Influence of Youth on His Election

Jun. '08: What’s happening out there?

What trends are beginning to take hold of the people around the planet that might affect companies of all sizes and stripes today?

1. Globalism – selling products and services worldwide.
2. Rejection of the old ‘push’ marketing model and a demand for total honesty.
3. A growing recognition of human impact on the planetary ecosystem.
4. Change. Wholesale, mind-boggling, life-altering change -- in our lifetime.

‘Change' is the New Status Quo

Most of us are familiar with the quote “Nothing is constant but change” and we all know, inherently, that the one thing most people hate more than anything is change – we are most comfortable with what we know and some people (especially older folks) will stubbornly cling to the familiar even as their seaside cottage is slowly becoming a houseboat. The kind of change we have been facing since the year 2000 however, is tough to wrap our heads around.

What’s About To Change?

1. The rhino, tiger, orangutan, jaguar, and over 46,000 invertebrate species (amongst many others) will vanish forever from the wild in the next 5 to 15 years.

2. Oil is running out. The cost of transporting cheap cargo from Asia to the developed world is about to go up by a thousand-fold. Average citizens will no longer be flying to vacation destinations unless they’re doing it in nuclear powered aircraft. Really. What did we think would happen once the oil ran out? << http://news.nationalgeographic.com/news/2005/05/0516_050516_chinaeco.html >>

3. The generation who went to primary school in the ‘80’s and ‘90’s in the developed world have a fundamentally different life/work ethic than ‘Gen X-ers’ or the ‘Boomers’ before them.

4. There will be 30 million MORE male than female Chinese becoming adults over the next 12 years, while China will become the world’s largest economy and single largest creditor to the US, but will have zero national debt, only large reserves of cash.

Why?

1. Extinctions will happen, in large part, because of the last point above. In the same way as the powerful, and non-eco-minded Europeans denuded the forests of North America and wiped out species wholesale in the 17th and 18th century, China will do the same to Africa and South America in the coming decade (offer a rhino preserve game warden making $100 a month $20,000 for a nighttime access to the park with machine guns and the results are inevitable). China will soon surpass the US as the world’s policeman and they’ll do as they please (e.g. the US never listened to the UN’s proclamations). The nouveaux riche in that culture like to demonstrate their wealth by eating rare animals.

2. Oil IS running out. Alberta’s vast plains and water resources are already being laid to waste simply because easy-to access oil reserves are now sufficiently low to justify the expense of extraction. (There are no ecological recovery plans either completed, nor even underway, in Alberta.) Nuclear power is the only currently viable cheap energy to meet the growing needs of the developed world and those of both China and India, but we still have no truly safe or effective disposal process for the spent fuel. Given human resourcefulness, we’ll likely come up with viable alternatives, but we haven’t yet, so when are we REALLY going to initiate the push to do so? (Here’s an idea: let’s have as much fun as we can right now, make as much money as we can, and let the next generation worry about it! Human nature has changed little in a couple of centuries.)

3. “Gen Y-ers”, or “Millennials”, were educated (worldwide) in school programs that were heavily weighted with ecological lessons and projects that focused upon disappearing indigenous cultures and creatures. Philanthropy runs in their veins -- ‘working for the man’ 40+ hours a week does not. Mr. Rogers and Barney told them they were all equally ‘special’. They were not rewarded for their accomplishments; they were rewarded just for participating. Many believe having four jobs on their resume in their first year or work is a sign of ‘smart career planning’ (i.e. not doing what ‘doesn’t feel right’ for little Bobby). This new supply of workers has no problem quitting a promising job to go surfing in Polynesia for the winter, or, to be fair, building housing for the poor in Latin America. Get used to them. They feel entitled and they are the future. It’s not that they will not work, just that they’ll only work at things they like and feel are worthwhile. Millennials in China are much the same, having grown up as ‘only children,’ although only 11% are entering post-secondary education vs. 64% of American kids...

4. Do the math. Even if the Chinese prove to be 100% benevolent dictators, they have countless and enormous technologically advanced production facilities, huge reserves of low-cost labourers, vast reserves of cash to buy technology and arms, 30,000,000 young men with low education and no prospect of getting married, ever, and a Politburo dictatorship that must continue to leverage nationalism (‘manifest destiny’), hyperbole and distraction to maintain control. The Chinese will control virtually the entire world economy in 15 to 20 years. Everyone is already reliant on doing business with the Chinese today, and tomorrow, even if the oil crisis slows their exports, their economic health (the purchasing power of average Chinese) will mean the rest of the world will continue to have to do business with them. Plus they’ll have the money to buy, or the strength to take, the raw materials they’ll need -- and there’ll be no one to stop them from doing so, or from building huge nuclear-powered facilities to supply their growing energy demands. They might become democratic, but then America was the first true democracy and the US became the world’s most powerful and dominant nation. Like the Roman Empire and so many other world powers, the ‘developed West’ won’t be in charge anymore, and this will happen very soon.

Even ‘Change’ is Changing!

What all this means is that change is not going away, rather it’s accelerating. Hillary Clinton could not keep up with all this change; she focused on bringing a decades old plan for universal healthcare to fruition. Beneficial, clever, absolutely necessary for the US, but not in tune with what is happening from the satellite view of the entire planet and the role that the US must now take, given the mistakes it has made. McCain is trying to leverage fear of change (“not the right change”), but it is looking increasingly likely that a brand new factor will prove the GOP’s undoing (see point #3 above!)...

Millennials are not apathetic when it comes to voting like their Gen X parents were (this latter tendency was understandably, given that the parents of Gen X were the Boomers and they told their kids “our generation has everything under control” as, in their own minds, the Boomers were destined to change the world for the better). Millennials, in fact, believe that everything they say and do is ‘special’ and that participation counts more than accomplishments. When everyone is ‘special’, then voting is the only way to change things. Speak to this group about ‘change’ and they’ll FLOOD the voting booths.

Integral to this latter point, pollsters are making dire predictions about the impact on the upcoming election, telling us that the voting force who have traditionally been the most influential in America (i.e. old folks), will not vote a black man into the White House. The retired whites and all the Hispanics may not vote for a black man, but is anyone taking a close look at the 18 to 24 year olds who, in the past, never voted?

Even the whitest white kids from the ‘red south’ of the US (including the young Hispanics), look up to black culture as the coolest, most aspirational culture they can imagine. In the Millennials’ few years of adulthood, blacks have dominated the global music scene, Tiger Woods has dominated golf, the Williams sisters have dominated tennis, Collin Powell and Condoleezza Rice were front and center on the military and political arenas and integration is everywhere in the media and their schools. Bubba and Biff down in Alabama dress like black rappers, talk like urban ‘brothers,’ dance like the hip-hop aficionados they are and, for the most part, see NO problem voting for a black president.

When the polls open us this time round, it is most likely that, not only will more young people vote than ever before, they’ll vote independently of their prejudiced, aging parents and grandparents. It is most likely that they’ll vote for what they stand for, the thing their parents and grandparents feel most uncomfortable with: change.

So we all best get ready for a whole bunch of change! It’s already all around us and both the pace and volume of technological and cultural change will only increase. This will mean more and more specialization, more narrow focus for businesses, more flexibility, more strategic thinking, more niche marketing, not mass marketing. Businesses will have to be specialized, not in a producing a single product, but in being adaptable and flexible within a certain area of production or service. The days of spending years and years serving up exactly the same recipe, year after year, are over, but the days of knowing how to cook superbly are not.

What is now in demand are ‘chefs’ who have mastered the science of cooking to the point that they can not only put together ingredients that have never been combined before, but quickly learn new methods of cooking (in vacuum bags at low temperatures over a 48 hour period) that make their product taste both unique and far better than the competition’s. It is now all about both being two steps ahead of your nearest competitor, but also about being more creative and quick to adapt to unexpected changes in the marketplace or your area of expertise.

"Going Green" is Now a Cost of Doing Business

Jun. '08: A Shift From Short-Term Profit, to Long-Term Sustainable Investment

For transparent reasons, the largest global businesses and the governments they back, whether in the US, China, or Bangladesh, have a short-term view of the world. Shareholders make it so, but gradually those same stakeholders are beginning to see that adopting a slightly longer-term perspective might better improve their investments within their lifetimes.

Yes, many (if not most) people in North America still are claiming to be too busy to worry about all that environmental, ‘green’ stuff. (Note that in Europe, where space is severely limited and environmental impact is readily apparent, the majority of people have gone ‘eco-warrior green,’ to the point where ‘keying’ of the sides of SUV’s is common, as well as spitting invective at SUV owners!). Here we’re all too busy getting our kids’ lunches ready, packing tap water pre-packaged in PET containers, plastic cracker packs and apples flown in from New Zealand into their lunch bags, then rushing our kids into the SUV to drive them to school (European kids tend to walk or cycle to school – in part because they don’t live in a ‘politics of fear’ environment and they recognize that the chance of their child being abducted by a stranger is 1,000 times less likely than getting killed in the family car). Here in North America we don’t have time for recycling (“just a waste of time, anyway”), or for worrying about our “carbon footprint”, or learning why we should be adamantly refusing to eat wild sea bass.

That’s all about to change (and very soon), whether we ‘feel like it’ or not. Globally influenced economics will force the change. Bury our heads as deep as we’d like, the new global reality will keep coming back to bite us on our exposed backsides: we cannot take A LOT of carbon out of the ground every year, exhaust it into the atmosphere and expect it not to change the ecological balance. Einstein’s definition of insanity was doing the same thing over and over and expecting a different result. Humans have been steadily increasing our consumption of carbon-based fuel year after year, yet many people still insist that the world’s atmosphere is not suffering because of it.

Inarguably, Al Gore had more impact upon the world after his stint as VP than during, but his simple repetition of some very simple facts, over and over, has helped humankind, around the globe, to reluctantly see the challenge we face (see his 28 min. speech at TED at <>. For hundreds of millions of years carbon from the atmospheric soup of our planet grew as wood/plants, then got buried and became coal, oil and natural gas and more or less stayed there, sealed off deep underground. For the past couple of hundred years we humans have been digging it up and burning it. And not just a couple hundred thousand of humans are continuing to do this, there’s now 6,674, 840,039 of us (as of 21:43 GMT, June 17, '08). The US alone is putting the equivalent of 1.2 billion elephants up into air every year in the form of burned carbon fuels. One point two billion elephants worth! Every year! (And increasing!)

Mr. Gore quotes an African proverb:

“If you want to go fast, go alone.
If you want to go far, go together.”


His point is that, right now, we have to go far, fast. Individually and as a group, whether the group is local, national or global, niche or broad spectrum, we have to act, and act very fast to prevent what currently looks inevitable. And the action we take cannot be to simply ship our developed world problem to the developing world; it must be globally sensitive, ecologically responsible action.

Greening Your Firm/Brand: A Sustainable Business Model

Lately we’ve made big strides lead by community leaders towards redirecting a lot of garbage away from landfills and incinerators and into recycling channels. The reality has been that much of this so-called ‘recycled’ material was still being sent to landfills or dumped into the ocean, especially in the early days of the programs. A portion of it still is, or is being shipped off to the developing world where some is actually recycled, but a good proportion is dumped into landfills or the ocean, or is burned. The key factor here, however, is NOT what portion is still not put to good use, but rather that the material is now being collected and separated into streams. This means that there are now viable supplies of material, stockpiles that can be put to use. This creates an unprecedented incentive for scientists and entrepreneurs to find uses for the material, uses that would only have been theoretical prior to the collection program being in place.

Like any ‘chain’, however, the recycling separation and collection process is only as strong as it’s weakest link. While pressure to recycle effectively and consistently has only begun to filter down through communities to every individual household and office/company, it will soon become a permanent part of the collective consciousness, no different from the pressure we face to ensure we use garbage bag pick-up, versus simply tossing our trash out the kitchen window or onto the street. Effective recycling in every office and factory cafeteria is becoming a cost of doing business, a cost of membership in the corporate collective, just as using tap water in place of bottled tap or spring water will soon be (the protests against this lucrative business model are beginning to mount).

Companies who are found by their suppliers or customers to not be scrupulous and exacting in their efforts to be ‘model citizens’ will suffer and be ostracized, those leading the charge will be praised and will benefit.


Cause Marketing: "Riding the Breast Cancer Bandwagon" vs. Finding a Strategic Fit

What is increasingly becoming a similarly crucial element in any brand's marketing model is the charity that it is partnered with (and the core cause that the brand's parent company supports).  The breast cancer pink ribbon has become so ubiquitous that it has to undercut the authenticity of any brand's real 'heart' for the cause.  Playtex had a good strategic fit with the cause, but frozen foods?  Cookies?  Cement?  When brands are contributing 'out of the blue' for a charity simply because it is popular, the 'disconnect' becomes problematic.

As usual, in their efforts to trample over each other trying to be on the latest bandwagon, young brand managers did more harm to the concept of 'Cause Marketing' than good in the medium term (many brands were contributing such a miniscule percentage of net margins that their impact was negligible given their brand value in the marketplace).  I say 'medium term' because over the long term the net effect has been to create the beginning of a groundswell that will see every serious brand partnering with a cause that actually makes strategic sense for the brand.  

Good examples are out there, from Apple CEO Steve Job's visions for giving back to higher education programs (Apple has designed and built, and given away, special Mac models for schools for ages), to vaguely strategic fits like Coca Cola's 'save the polar bears' efforts (the Xmas polar bear ads having created an odd advertising-built link for the brand with this now endangered animal).  Key to any effort in terms of marketing strategy, is finding charities that actually are a natural fit for the brand.  

It's unlikely to happen soon, but I'd like to see Coke and Pepsi contributing to obesity-fighting efforts in every country they're sold in, as distribution of their entire line-up of convenience store products is the precursor to each successive country's children rapidly becoming obese.  [Salty snacks, frozen desserts, candy bars and sugar water (pop and juices) proliferate at attractive prices on every corner and BOOM!  Fat kids!]  Nike should sponsor efforts to eliminate child labour in the counties they manufacture in.  Beer brands should partner with MADD (Mothers Against Drunk Driving) while the iPad should contribute to efforts to reforest land (perhaps the most amusing of my examples!).

P&G has made some really odd charity-brand links in the past, but as a corporation their bread and butter has always been housewives.  They have supported 'soap operas' since their inception (an invention of theirs in the early days of TV) around the world through their prolific advertising, and these shows are the single biggest 'educator' of women in the world (the primary lesson being that if you have less kids, each child grows up to have a better life more full of opportunities).  If they translated this into a global cause for Planned Parenthood, or even simply education in safe sexual practices, they'd be benefiting the entire human race with far more than the Swiffer Duster!

Eventually we'll finally see all the big brands figuring this out, but first I predict we'll have to suffer through  lot of  bizarre and inappropriate partnerships before Cause Marketing really 'hits its stride'. 

Motivators Behind the Millennials' Lead of the Change Revolution

Jun. '08: Why will Millennials lead the coming 'change revolution' so aggressively?

At current growth rates, the global population will increase by another 50% within the next 25 years. The onslaught of extinctions that will take place around the world in the next couple of decades, if not the next few years, will leave them aghast. As unprecedented numbers of developing world entrepreneurs become flush with cash, the last of the forests and rainforests will be cut down to feed and accommodate our exponentially exploding human population, while the oceans (already fished to the point that we are now eating rare bottom feeders ground into our frozen fish sticks), will be exhausted by the free-ranging floating factories currently sweeping the seas.

This is not dire fantasy, just simple mathematics. As people multiply AND become more prosperous, the demand for meat will rise along with the demand for land to farm and property to live on. Furthermore, with more wealth, but insufficient education, old superstitions will persist and new convictions will spring up – the value of concoctions like rhinoceros horn and tiger testicle aphrodisiac potions are about to rise astronomically as these creatures become ever more rare.

If anything will drive home the seriousness of human impact upon the globe, it will be the day that the last townhouses are finally erected over what was the vast Serengeti. Rare animals will exist in zoos and preserves, but not in the wild. The Millennials grew up suspecting, if not admitting to themselves, that this tragedy is coming. They are ready now, as they enter adulthood, to lead the charge for change to try to reverse or mitigate these tragedies.

Millennials will be in the midst of adulthood as all of the full reality of human impact on the planet takes place and it will have a profound impact upon them. The Boomers will all be dead, while the Millennials’ Gen X parents will be firmly in charge of all major businesses and governments. The Millennials will be left ‘holding the proverbial bag,’ dealing with Gen X-ers in all the drivers’ seats worried about increasing their retirement nest eggs (which tends to reduce their concern for the environment, not unlike George W’s friends and cohorts during 2000-2008), but facing the reality of a swiftly deteriorating global environment.

The Legacy of the Boomers

Before we write off the influence of the Boomers entirely, however, let’s keep in mind that they truly believed that theirs would be the generation that would change the way that humans interact with each other (“make love, not war”) AND that would change how we interact with the environment (communes and “flower power”). This group is just now entering retirement and are at the point in life where they worry very much about their legacies – what did they do to improve the world, what will be said about their generation when they’re gone? I suspect that, in America at least, it will be that they were the Gordon Gecko generation: “the one who dies with the most ‘toys’ (SUV’s, ATV’s, RV’s, snowmobiles, powerboats and ride ‘em mowers) wins!”

But wait, the Boomers who live in the developed world have unprecedentedly large investment nest eggs in their banks. Both their children and grandchildren are well taken care of WITHOUT their inheritances. They thought that they’d change things for the better, but over the past few years, they’ve been slowly coming to the realization that their generation quite literally raped the environment. It was the Boomers drive to succeed at all costs, to ‘live large,’ that led us to where we are today. Now they have a choice, with time on their hands and money in the bank, will they buy even bigger retirement homes with 4 car garages and matching his and hers Hummers, or will they try to fulfill their original mission to change the world for the better?

They are old now, and the older folks are, the less they like change, yet they have the power, the ‘mantle’ of the Flower Power generation and the mandate that goes with it, to enable them to make a difference and benefit both their children and grand children’s lives. Their grandkids, the ‘apples of their eyes’, are tearfully watching the rapid extinction of many species, species that the Boomers, when they were children, knew roamed in large numbers in the wild. The reality is that the Boomers are starting to pay a great deal of attention to ‘Green Portfolios,’ buying carbon offsets, recycling and philanthropy. They got a bit distracted between the ‘60’s and 2000’s with making money and raising kids, but they’re back!

We’re witnessing the emergence of an odd pairing, generational bookends: an activist generation of kids entering adulthood who grew up on a steady educational diet of environmentalism and a generation of relatively young retired folks who entered adulthood with the mandate to leave the world with a healthier environment than they started with. These unlikely partners just might help improve thing on this little planet we call Earth, both in the developed world and, surprisingly, upon the developing world that supplies them with much of what they consume through the demands they make as consumers.

The Death of Frequency

Comment posted to AdAge.com, Jan. 29, 2009: ABC Says Web Viewers Will Tolerate Twice the Ads

The 'TV ad industry' is on a slippery slope here. OF COURSE you can do almost the same thing you do on the net that you do on TV and put many advertisers into a show (I sometimes think the brains of people in the industry went into paralysis in the face of what is simply a new conduit for content, albeit interactive -- maybe it was the influence of 'fear politics'!), but the simple, core lesson that the Internet has taught us is still in danger of not penetrating into the consciousness of the majority: NO MORE REPETITION! Only Apple, who (until this past holiday season) gets this and constantly cycles new, genuinely funny, inexpensively produced video ads into their mix.

When was the last time you felt the need to sit through another viewing of an ad you've already seen? MAYBE you'll watch a really funny ad twice, but rarely more. Zapping and clicking away are what consumers do to explain this really clearly to all the wannabe film directors dreaming of winning a Lion -- NO ONE wants to watch their 'short films' more than once.

Make your ads interesting and watchable, lobby the unions for lower residuals and the production companies to reduce costs, and figure out how to crank out more new ads and more quirky versions of each in different lengths and you will win in this new age where the consumer is in charge, not of the marketing industry, but of what they are interested in (and don't mistake the later for a desire amongst consumers to create advertising -- everyone prefers professionally written and produced ads to amateur attempts). Just don't try to force viewers to watch any ad more than once. It's all about reach today, NOT frequency.

Otherwise nothing much has changed radically for advertising in the 'motion picture' A/V format, outside of the fact that ATL is now merely a small part of a brand's 'ecosystem'. This traumatic shift has meant that, ironically, the formerly relatively small element of PR has become VASTLY more important (due to consumer to consumer conversations), and experiential marketing (XM) has finally become recognized as the key tool for locking-in brand loyalty.

Where will The Death of Frequency lead our industry?  To our Holy Grail!  (Click this title to read more.)

To see a portion of my keynote on this insight, click the play button:

LinkWithin

Related Posts Plugin for WordPress, Blogger...