Thursday, March 27, 2008

The death of advertising?

I came across a presentation of Paul Isakson who explores the future of marketing and advertising. It contains some pretty interesting views about the future and that is very much in line with a number of the conclusions of our strategic analysis at Vanksen Group. However, there are a few specific points that I think are worth discussing here. But first the deck of slides:

A few thoughts on the contents of the presentation:

  1. stating that advertising is terminally ill and about to disappear completely may be rushing to an extreme conclusion. Advertising and brand communications are undergoing a radical transformation and as a result they will not be what they used to, but I don't think they'll just disappear and here are a couple of the impacts I see:
    • in today's world despite the substantial increase of ways for marketers to spend (a lot of) money, it becomes increasingly easy to identify which half of the marketing budget is wasted and that puts a lot of pressure on all intermediaries and service providers (e.g. agencies, creative consultants, ad networks, PR agencies...) some of whom used to make a very handsome living on the inefficiencies and lack of transparency of the market;

    • with consumers being completely empowered and able to make themselves heard, no brand can afford the centralized one-to-many communication model and on top of that brand owners are now confronted with a completely new class of missions having to do with the way their brands are protected from an ever increasing number and sorts of abuse and practices that lead to either a decrease of brand equity (for a definition I recommend this site - search the page for "brand equity") or a reduction of return on the existing brand equity (loss of transactions, theft, counterfeit...)

    • for all of the fuss about online conversations, interactions, communities and generally speaking all of the latest fads surrounding viral campaigns, word of mouth and other practices of influence, the point is that these phenomena do not occur just like that by miracle. A brand does need specialized service providers to initiate, feed, amplify, dampen and monitor the process. In that sense, advertising and brand communications don't simply go away, but they are radically transformed and the truth is that no established agency is well prepared to deal with these new requirements of the market;

    • advertising in its first form may be less and less relevant in today's interconnected world of empowered individuals and communities, yet advertising remains extremely powerful when it becomes a service to the intended audience. When one thinks about the conditions of future success for advertising and brand communications without paying too much attention to the viability of their current forms or to what will become of current intermediaries and service providers, it does seem that they boil down to love, care  and respect:
      • successful successor forms should love people enough to be wanting only the very best for them, to reach out to them only with extremely relevant high-quality offerings. In that respect Paul Isakson's assertion that "the product is the marketing" is super relevant;

      • successful successor forms should care for the relationship between a human person and an offering. In other words care for the experience of the "user" with the "product" for as long as the relationship goes. That is especially relevant in a world where one doesn't simply air an ad and then there's nothing: in today's world every single piece of communication has some degree of remanence (it remains accessible over a period of time at least online, even after a "campaign" is over) and  successive communications have a cumulative effect;

      • successful successor forms should respect people who collectively form an audience (they're not just "targets") and thus never assume that they are owed attention, brain time and engagement. They must earn them through a balanced relationship, not by trying to high-jack the attention of a person who is really just trying to watch a soccer game or a movie and is compelled to go through a quarter of an hours of advertising carpet bombing. That's not respect and that's not balanced. That's manipulation and a fundamental violation of free choice, even though one of the benefits of the mechanism may be for the consumer to be paying a newspaper 25% of the price it would cost without any advertising revenues: that's just the nice manipulative excuse and besides it's not relevant in a world where publication is no longer a privilege of the few...

  2. in a couple of his slides Paul shows the contrast between "old world" and "modern marketing", which he seems to sum-up in the change of flow from product-to-consumer to consumer-to-product. I suppose his point is that the consumer is a whole lot more empowered to influence products today, yet at the same time existing tools and practices for involving consumers / users in the design of products seem extremely inadequate and ineffective (see Steve Jobs' quote). I think this ties back to the fact that in a whole array of fields of economic activity the means and tools of production inherited from the industrial revolution need to be (re)imagined as Tom Peters would say.To make it more specific with examples starting with the field of product design and software development:
    • traditional methodologies had "determinism" as their philosophical foundation, which is why it was assumed that a good product could not be designed unless the right amount of expertise was invested upfront in planning, engineering and design. It was assumed that the more effort would go into studying a product, specifying it in the greatest of details and then moving to execute in a rigorous, martial and rigid manner was the safest way to delivering something that met the needs of a market. In the field of IT the way this took form was a development methodology called waterfall: it's based on the premise that if one analyzes and captures exactly all of the requirements of a user then the outcome of the development process can be nothing but success. Alas (fortunately as far as I am concerned), the world is a chaotic and messy place and determinism does not work very well as shown by the scientists of chaos theory and by those working in the field of complex adaptive systems. Hence rigid waterfall-like approaches mean guaranteed failure of product design at very high-cost, which then creates incentives to invest a lot of money in advertising and communications to salvage the initial investment. That's why we see more fluid ways of doing emerge, and that's one of the things I was looking for by attending my recent scrum master training in Paris. So no wonder focus groups don't work very well and if all "modern" marketing does is invert the flow by giving the initiative to the consumer without changing the "layers" between the consumer and the product, then it's bound for failure. Marketing and product design ought to learn from the field of complex adaptive systems and agile software development. That's where the future of marketing lies and large collaborative open-source projects provide ample evidence to back that claim.

    • a second example of the inadequacy of tools and practices inherited from the industrial age would have to do with the way many companies are organized and run, especially in France. They're set-up as collections of pyramids walled and fenced from each other with "importance" being given to the guys at the top of the pyramid who get more or less absolute powers through the command-and-control paradigm of management, which leads people working under their "supervision" to fight and compete to get to the top instead of cooperating to achieve business results. Usually in such organizations there is also an unspoken assumption that is tyranny both for the teams and for the "bosses": "the boss knows better". That's what is stifling initiative, innovation and movement, while killing productivity in a major way. There's no flow in this form of organization and the time it needs to adapt to an ever changing market is just not an option today. Again, managers ought to learn from complex adaptive systems, focus on hiring the right people and then let them self-organize to achieve results.

  3. traditionally there's been a sort of back and forth movement in the field of marketing and communications with fads like "customer-centric marketing", "ego marketing", "brand-centric marketing", "lovebrands"... All the authors and researchers who have been involved in identifying, formalizing, teaching and practicing these things have something in common: a fascination for the occurrences of high-quality interactions between one or more human persons (the consumer or the buyer) and a (branded) product. It's what Tom Peters calls the WOW effect. Now, I think it is relevant to note that this WOW effect is not the result of some unique characteristic of either party to the relationship (the consumer or the product / service): you don't get people WOWed only because there is something exceptional in the product or service, but you do get the RIGHT people WOWed with the finely targeted product attributes that exactly match their "secret" needs, those they cannot express in a focus group or interview. In that sense, Paul's point about the relevance of emergent digital ethnography and collaboration do make great sense. In a certain way this is a great instance of real-world application of some of the stuff discussed by Robert Pirsig in Zen and the Art of Motorcylce Maintenance, a book that was recommended to me in the mid-nineties by my good friend Roberto Ostinelli, the CTO of OpenSpime. So of course, since current advertising is in essence a hired gun for wealthy brands who seek to manipulate the masses and talk them into buying more of their stuff, its does not really qualify for a world in which the balance has been shifting dramatically to become refocused on the quality of experience and hence on the relationship, on the way a product or service "meets" the people who will use it to achieve something of importance to them. There is simply a clash of values between the old form of advertising and communications and today's world.

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