The Madison Ave Hangover: Goodbye Broadcast
Everyone knows what the oldest profession in the world is (ahem.. this is awkward). The question is, how did people know where to find it, what to do, how much to pay, etc? The answer is word-of-mouth advertising.
A quick look at the evolution of marketing shows that advertising has always been dependant on the technological advances that propel how people communicate and spread information. As “media” time evolved - from face-to-face conversations, to newspapers, magazines, radio and then to television - advertisers transitioned from direct dialogue with consumers to finding the content that target consumers would be interacting with and then plastering it with eye-catching ads.
Advances in media enabled information to reach wider audiences across geographies, and marketers soon discovered highly scalable ways to broadcast their advertisements. The tradeoff for reaching more people with each ad meant that the 1:1 effectiveness of word-of-mouth became watered down and marketers became satisfied with lower and lower ad success (albeit at increasingly higher volumes). Madison Avenue, complete with its 3 martini lunches, came into prominence during this information age to hone the brand messages broadcast to the masses and to help companies tell consumers exactly what to think / feel / say about their clients’ products.
Enter the web era. In the early innings, advertisers used the web just like any other medium: to broadcast (spoonfeed?) a message to a massive audience by branding content that will hopefully get noticed and generate the almighty click-thru. Initially, people were simply reading articles or watching content, and the broadcasting methodology was moderately successful. But as savvy developers began to rapidly innovate with adding social features to web applications, web users realized that they had the tools to communicate 1:1 as well as to reach widespread audiences. The web democratized content dissemination, providing all publishers the ability to become media properties. This, in effect, is social media and is demonstrated in apps like social networks, blogs, microblogs, wikis, chat/forums, email, comment platforms, etc… - effectively all of the apps web users know and love.
So the web has become a decentralized platform enabling 1:1 and 1:many relationships in billions of different ways. Metcalfe’s Law holds increasingly true, and the value of the web has grown exponentially with each additional user. The “richness” of relationships on the web, and the ability to influence friends, family and followers has cascaded from celebrities of the silver screen to your next door neighbor. The web provides the tools for everyone to be listened to, spoken with, and above all else, to express themselves.
This ability for everyone to be a web celebrity, or an Influential, is the essence of social media and advertisers have only marginally improved upon the techniques used to build brand loyalty or to drive sales on other mediums, nevermind trying a novel approach to crack the social media nut. People are using the web to have a conversation, but advertisers are still trying to broadcast a message and to tell consumers what to think. This harkens back to the Madison Ave glory days. Madison Avenue made advertising a big business in the 1920’s, with tremendous infrastructure and money at stake. The money has only gotten bigger, and the stakes are now even higher, so it is understandable why marketing departments have been averse to change. But..
People are spending more and more time in front of their computers, and it is clear that we will continue to do so at an increasing pace. New apps come out every day that make the web a better place to hang out. In fact, Internet media share is now comparable to TV at about 35% (Nielsen, several others) of all consumer media time. The web has ushered in an entirely new paradigm of communication, and Madison Ave needs to get on bord. No longer does it work to shout a message at consumers, nor is it effective to play it safe with branding professional content. Its a waste of money on the social web, as indicated by ever-falling CPMs/CPCs and increasingly fragmented audiences resulting in poor ROI.
The next step function in advertising is starting in Boston with a little company called Shortbord. In the words of two very smart researchers at Forrester, “Your brand is no longer what you say it is, its what your consumers say it is.” Madison Ave mentality hangs over the web stifling innovation. Eighty years of marketing education has trained too many smart people to look backward and to try and replicate successful campaigns of yore. Years and years of “big business” infrastructure and resistance to change have overshadowed the most basic and primitive form of advertising: word-of-mouth. No advertisement will ever match the emotional power of a big brother endorsing Gatorade to a younger brother.
If we look at the ground we’ve covered, there are some interesting takeaways so far. The first takeaway is that people are using the web to have a conversation, and are making up their own minds (or listening to friends, or to Ashton Kutcher on Twitter), about what to think about brands. The second takeaway is that marketers are not prepared to join the conversation in a systematic way. The web is too decentralized, too fragmented, and consumers are too driven by self-interest to listen to anything that happens outside of their personal bubbles. This is a major problem for advertisers, especially considering the central goal of advertisers is to connect with their target consumers on a personal level.
So what’s a marketer to do? How can brands systematically join the conversation that is already happening on the web to build brand loyalty and awareness and to drive sales in-stores and online? The answer is Shortbord.
Shortbord knows that on the web, individuals are media properties (meaning they generate impressions and serve leads, just like a “traditional” media property). We call individuals Surfers because regardless of the many platforms they are using as their soapbox (Facebook, Twitter, Wordpress, etc), they are the same person. Individuals literally surf from app to app, cultivating massive followings, generating millions of impressions and serving thousands of leads. The really interesting thing about Surfers, in fact, is that they actually go to all of the content you used to target with ads, and many more places as well. If only there was a way to connect with your target consumers, endorse them, and let them show all of their friends, family and followers how much they love your products. Surely its not that easy…
Shortbord is a platform that lets Surfers sign up to get endorsed by the companies they love. Companies, which we call Sponsors, are able to target-in on their core demographics (the people they know buy their goods or the people they WANT to buy their goods - for example, males aged 18-30 who like sports and live within 200 miles of New York City). Sponsors then offer a price for endorsement for a fixed amount of money and finite period of time. That means $10 for 5 days, or $2 for 2 days, whatever feels right. Sponsors all know how much their customer acquisition costs are, so they are buying the right to have their target consumers promote their brand to everyone in their bubble. Behind the logo that gets displayed alongside all of the Surfer’s content is a landing page that hosts any ad creative the Sponsor wants - a link to a deal, a promo/coupon code, a timely offer - anything that entices a Surfer’s friends to get involved. Sponsors can leverage the Surfer’s “Influence,” but should work hard to entice the clicks by running great deals that resonate with people.
We get a kick out of the unbelievably advanced technology needed to essentially get back to basics. Billions of dollars after Madison Ave shook up the advertising industry and began manufacturing brands by telling people how to think about certain goods and services, we’re at a point where technology has caused the broadcast to fall on deaf ears. Marketing should probably be known as the second oldest profession in the world, and word-of-mouth its most useful tool.
Stay tuned to find out how social media apps can win the monetization struggle by letting Surfers follow their own self interests, express themselves and make the apps they use and love even more important to their daily lives.
