How Has Technology Changed The Role Of Marketing In The Past Ten Years, And How Do You See It Changing In The Next Five
There’s no denying that technology has changed the way that global citizens receive, interpret and react to information. With the proliferation of the internet at the turn of the twenty-first century, and the rapid evolution of devices that allow quick and easy access to its millions of portals, consumers are finding new ways to interact with companies and with products. Given these new forms of buyer seller interactions, many professionals and individuals alike now believe that the information age, facilitated by evolving technologies, has redefined the role of marketing. But is this belief valid? Sure the role of marketing has historically changed with time. In Kotler’s Defining Marketing for the Twenty-First Century we are walked through marketing’s evolution from being a production and product based concept in the early 1900’s, to being selling focused in the 1920’s. In the same text, we are enlightened to the way in which marketing’s role post World War II, well into the 1990’s, changed from selling products to embracing the marketing concept of providing customer needs. What Kotler and others have gone onto emphasize, is how marketing’s role further changed in the 1990’s. Instead of merely concerning itself with providing products that meet the needs and wants of consumers, marketing’s role shifted to developing and managing customer relationships. Today, more than decade after this new role was adopted, marketers are still engaged in building these relationships. So the question begs, “If the role of marketing hasn’t changed with technology in the last ten years, then what has?”
The answer to the above is simple. Though the role of marketing has not changed due to technology, the power dynamic in buyer seller relationships, corporate attitudes toward the marketing function and marketing approaches have all been inextricably altered by the rapid evolution of technology. The paper will look at each of these three changes, and their underlying catalysts, which have propagated the new face of marketing experienced by today’s marketers.
Change In The Power Dynamic
The proliferation of the internet has been the single most detrimental catalyst in the change of the power dynamic from marketers to consumers. Through the use of the internet, consumers have gained access to multitudes of data from around the world – data that is timeless, critical and verifiable. With just a click of a button consumers can gain meaningful insights about companies and their products. They can compare products, find lower prices, read reviews and even communicate with other users about product quality and buyer satisfaction. According to Tech Target, more than 64% of car buyers use the Internet to research car models, features, and prices. Even more, 68% of new car buyers attest to visiting an average of seven different sites, such as Kelly Blue Book, Autobytel, and Edmunds. Feeding this need for information, tech giants have created a slew of digital devices, including smartphones and tablets that give probing consumers on demand access to their most sought after desires.
Even further, internet users are not just using content, they are creating and sharing with others, allowing for unprecedented transfers of information and knowledge. With the explosion of social media, such as Facebook, Twitter, Tumblr, Instagram and more, consumers can access direct feedback about products – both good and bad – from their connections. Today, a blog or video created by a dissatisfied customer can become viral in a matter of hours. Even more impactful than the action of the post is the reaction it elicits in those it encounters. A viral video can mount an army of criticism and online hate for a product, even a company. By eMarketer’s estimate, 35% of people are influenced by brands on social media. The reality of the matter is that unlike the past where marketers hurled messages to consumers, who gullibly accepted their pitches as fact, today, consumers are enlightened and astute to lies, a mile away. Consumers no longer believe in the words of the marketer, instead they believe in the words of their communities.
This shift is consequently eliminating the notion of brand supremacy and brand loyalty. As consumers seek value at lower costs, brands are fast becoming commodities, posing challenges to the modern marketer. How has marketing responded? Today marketers must ensure brand integrity. Since simply creating a product and pushing it upon customers no longer works. Marketing is now forced to listen to customers and find ways of converting interactions into personalized, value-laden products that are affordable and better than that of competitors. It must also find ways of infusing its products with “A” class service that can win digital brand ambassadors, who can trumpet brand value to their connections. Whatever the approach, the reality remains that companies are no longer in charge of the communication process, their brand message and even their pricing models at times. Technology has given way to the rise of the conscious consumer.
Marketing Is Everyone’s Business
Traditionally, marketing has been labeled as one of the four key functional areas of a business (the others being finance, operations and management). However with marketing’s role changing in the late 1990’s to building customer relationships, there has been a subsequent change in the way the overall function is regarded internally within corporations. Today, marketing is recognized as the glue that binds organizations together. It is marketing’s sales projections that assist operations in determining production levels and finance in planning budgets. It is the very same marketing, whose predictive analytics of customer trends and needs that helps research and development determine new projects for product development.
Integral to this cross-functional view is the belief that marketing has become everyone’s business. Why you ask; and how has technology helped? The answer is in the connections. With increased access to information encouraged by the use of mobile digital technologies, consumers are no longer waiting for marketers to reach out to them. Today, consumers interested in seeking additional information may reach out to a company, both online and offline. The individuals and systems with which these consumers engage are all touch points. They provide valid sources of information that help companies create dynamic customer profiles and typesets. These can in-turn be used to develop personalized messages and products, which companies can later market to these very customers.
Two drivers are key at play here. The first is that consumers no longer differentiate between customer service and product. Just as technology has integrated the world, placing it at every consumer’s finger tips, so too have their beliefs of customer service, product, marketing and business functions become integrated as one. Consumers will create touch points with every aspect of the business, which means these interfaces must be prepared to engage, that is, market their products and themselves. Herein lies the second driver. Because marketing’s role is to build customer relationships, and because touch points do not only happen between the marketing department and customers, other departments must also be infused with the marketing function. With the increasing use of Customer Relationship Management systems within companies that help to integrate and transform the information from these touch points, it to dynamic strategies, it has become even more important for marketing to be diffused throughout every aspect of a business. Companies, such as Starbucks and Zappos that have embraced this new marketing concept have lived to experience tremendous success in this highly transparent world.
The Approach Changes
I. From Web 1.0 to 2.0
When the internet began entering homes in the 1990’s, it was mostly “brochureware.” The platform used was static and the messages provided were rather informal, professional and very autocratic. Websites existed in vacuums, allowing little interaction or connectivity to other sites. Furthermore, manipulating and/or feeding information to sites was controlled by site administrators, who were required to have knowledge of html coding and other scripts. Following the Dot.Com bubble burst at the turn of the century, a fundamental shift was made in the evolution of the internet, which not only changed virtual encounters in the digital world, but transformed the business environment and the marketing function.
During the past decade, the design of web technologies, and the internet platform, evolved to allow more interactive, participative, real-time experiences – creating a new version of the World Wide Web, known popularly as Web 2.0. Characteristic of Web 2.0, is the opening-up of websites that now allow users to create, upload and share content. This fundamental change in protocols has allowed for a critical shift in communication from being one-way monologues, to two-way interactive dialogues; and for enhanced transparency perpetuated by extensive data sharing.
In this Web 2.0 reality, particularly with the advent of social media sites such as Facebook and LinkedIn in 2004 and Twitter in 2006, users are forming communities, creating content across multiple channels and uploading and downloading at alarming speeds. By 2008, Facebook had 150 million users recording uploads of 700 million photos per month; Twitter had grown by 752% to 4.4 million unique monthly visitors and 10% of all internet traffic was video-sharing through the popular social media site YouTube. As users became more fascinated with the instant, real-time access of verifiable information, quick service and the freedom of expression the internet provided, their affinity for traditional forms of media diminished. By 2011, internet usage surpassed television viewership among younger viewers and at least one in every two persons owned a smartphone. As users claimed their right to access information on their own terms, they began fighting back against the push messages fed to them by marketers through traditional media. By 2012, two hundred and seventeen million Americans had registered with the Federal Trade Commission’s Do Not Call Registry Data Book; 44% of direct mail was left unopened and 91% of users unsubscribed from a company email list that they previously signed on to.
II. Interactive Marketing
With the traditional media outlets now diseased by Web 2.0 syndrome, marketers were forced to take a different approach to the marketing function. Understanding that the power of the message no longer laid in the medium, as Marshall McLuhan suggested, but rather in the ways in which the medium is used, most marketers began rebranding their business, focusing their resources on building interactive relationships with consumers in online communities rather than pushing media campaigns. How is this different from everything marketing had done up until then? Well for starters, marketers are no longer guided by the adage, “a superior product will sell itself.” Understanding how the internet has facilitated globalization, and the ease at which customers can source and purchase products from anywhere in the world, marketers have become more robust, strategically positioning themselves wherever their customers are located in the digital sphere. At these new touch points, the astute marketer listens to his customer, gathers enriched, personalized data, which he manipulates to provide valuable solutions, not push his product unto the customer.
Today’s marketer understands that content is king and that to survive, marketers must become multi-channel publishers as well. As users continuously search for fresh information, marketers are now faced with the challenge of continuously feeding that need and doing so using the right format, scope and tone. Developing open-source content is critical to this strategy, as is finding ways to ensure that the messages are syndicated and integrated with other sites through links. Websites are now filled with blogs, through which marketers offer insights – not necessarily about their products or services – but more so about their customers most pressing concerns – all in the hopes of nurturing the buyer seller relationship and building brand loyalty. According to the HubSpot State of Inbound Marketing Report, B2C companies that blog, tend to generate 88% more leads per month than those who do not.
A key accompaniment of this new approach is the deterrence of mass customization of content. Unlike traditional media that sought to expel standardized messages on the greatest numbers, marketing in the Web 2.0 era, has been typified by personalized messages to users. Understanding the perceived value that customers ascribe to personalized messages, the practice of mass marketing has taken a back seat, to diversified advertising that is rooted in the notion that quality customer relationships translate to greater returns than just mere relationships. Using technologies, such as Ad Exchange and Demand Side Platform, marketers can ensure that their tailored messages are received by those they are intended for.
Because of the ease and frequency of distribution of user and marketer generated content, marketers are also “brand vigilantes,” forced to keep a watchful eye for brand defamation online. Just as one good review written by a customer, which is shared with connections in an online community can boost a brand’s reputation and customer base, so too can negative feedback offered by users. American food company Applebee’s knows all too well about this. After firing two waitresses for posting a receipt left by a pastor who refused to pay a tip, numerous “Boycott Applebee’s” groups sprung up on Facebook, along with “Rehire Chelsea Welch” and other similar groups. Even the company’s Twitter page took a heavy beating. It is marketing’s role, along with that of public relations, to monitor these uprisings and through social media platforms, find ways of safely pacifying them in a timely fashion. Failure to do this can quickly derail any profitable marketing campaign.
III. The Fundamental Shift
By far the most compelling change of the approach to the marketing function since the turn of the century has been the shift from Outbound Marketing to Inbound Marketing. Building from the experiences learned from doing business in the new Web 2.0 era, businesses have come to recognize the overwhelming advantages of pulling customers toward their product, rather than pushing their products toward their customers.
Outbound Marketing, defined by its insistence on bombarding consumers with messages through print, radio and television advertisements, as well as those annoying telemarketing and spam email messages, are not only costly, but are simply no longer effective. As mentioned before, not only have 217 million Americans blocked telemarketers from calling their homes, today more and more consumers are avoiding television commercials – a whopping 86% according to the Guardian – either by switching channels or purchasing DVR’s – yet another digital technology. Approximately 84% of users between the ages of 24 and 34, also admit to having left a favorite website because of an obtrusive advertisement.
The realization of the inability of traditional marketing to cut it on its own has given way to the pull marketing phenomena. This new strategy provides tremendous benefits to businesses. Inbound Marketing pulls customers toward a brand by supplying value laden content, such as white papers, ebooks, infographics and more that allow marketers to earn their way into customers inner circles. From here marketers can massage the needs of their customers and gain privileged, personal information that they can use to redefine and specify their market segments, determine valuable leads and create personalized messages and products. As content is fed through sites like Twitter, Facebook and news aggregators, such as Reddit.com and Digg.com, its reach can multiply making its message viral. With search engines being the go to tool for consumers seeking to clarify or gather information, marketing is also charged with the responsibility of ensuring that their content is not only customer focused, but search engine optimized by its use of specific ad words.
Through social media and the internet, marketing’s attitude toward the development of advertisements and promotions has also changed. Those who remember the 2013 Super Bowl are reminded of the hilarious Doritos commercials, both of which were crowd sourced through Doritos’ “Crash the Super Bowl,” competition. Even closer to home, Hult International Students, recently participated in a Nokia Square One challenge to create the concept for its prospective “Here Explorer” application. Before the change in approach, marketing departments depended on inside creativity and intellect, or that of outsourced hires, to help conceptualize advertising campaigns. With crowd sourcing, companies can continue strengthening their customer relationships and achieve winning advertisements at a cheaper rates.
This brings us to the issue of cost, and the ways in which this new marketing approach affects the bottom-line. Unlike traditional Outbound Marketing, Inbound Marketing, because of its use of digital technologies that allow for greater reach and specificity, offers greater, quantifiable returns, at cheaper costs. Inbound Marketing reportedly cost 62% less per lead than outbound marketing. As such, according to HubSpot, 89% of marketers are increasing or maintaining their Inbound Marketing budgets. This is especially important given that churn rates are increased by 15% per customer whenever a company fails to respond to social media complaints (Gartner Group).
The use of business intelligence, predictive analytics, Customer Relationship Management systems and other software applications and programs are all inherent in this new marketing approach. These technologies allow companies to quickly sort, analyze and translate the variety of data they access from the increasing touch points with their customers. Together with the evolution of the internet and digital devices that allow quick reliable access to its portals, the marketing approach, not its role, will continue to evolve.
What Happens Next
In the next five years, it won’t be strange to see marketing’s function becoming more diluted with information technology, giving birth to marketing-tech teams. CMOs and CIOs will collaborate on greater projects, with the former dropping more budget bucks on information technology than the latter. Why will this happen? Mankind’s fascination with mobile technologies, configured with GPS, 4G and Wi-Fi capabilities, combined with their thirst for information on-the-go will channel attention away from traditional media outlets to handheld devices. Already, the Gartner Group estimates that the mobile application industry will reap USD 15 billion by 2015. With the need to be where the customer is, marketing will be charged with the responsibility of not only creating content, but formatting it to meet the mobile platform. This however, will not mean the death of traditional Outbound Marketing and thus the historical function of marketing. Because there will always be differentiated customers; because old systems can be repurposed; and because even popular Inbound Marketing champs HubSpot now admit to using a mixture of both Inbound and Outbound Marketing, I believe marketing’s function will be split, whether evenly or unevenly, amongst the two approaches. Whatever happens, one thing is certain: Marketing’s role of developing quality customer relationships will force its function to positively correlate with the changing behaviors of its customers. Their behaviors and habits whether driven by technology, globalization, or other trends, will direct the continuous evolution of the marketing function.