Challenges to Effective New Media Marketing on Ricci Street's Port 80: Docks: Marketing

Whether you think the Web is growing too fast or too slow, it still has forces driving it and forces restraining it. Some of the driving forces include Moore's Law and what is often called "the compelling nature of computer-mediated interactive communication." How's that for a mouthful? Some of the restraining forces include an uncertain legal and regulatory environment as well as consumer fear and hypocrisy. Underlying them are the negative baggage from traditional marketing: mass marketing, psychometics, and the war between the marketing department and their customers.

Nevertheless, there are many opportunities for doing things differently with new media marketing: open marketing, even gonzo marketing.

E-commerce promises structural changes and efficiencies. Five or six years into it:

it's easy to enter, hard to stay

smaller players are marginalized by larger

new intermediaries emerge, old ones adapt

friction is real

The Bad News

The Web is designed as an open publication medium. There is widespread disregard for copyrights, licenses, and intellectual property.

Common operating systems, Web browsers, and Internet protocols have numerous security vulnerabilities. Intruders break into Internet servers, scribble graffiti over Web pages, steal information, delete files, and shut down systems.

Encryption technologies, essential for network authentication and privacy, are not widely available and globally interoperable. Intruders scoop up passwords and credit card numbers with packet sniffers; impostors create fake e-mail return addresses.

Electronic mail has become a primary vehicle for delivering viruses and Trojan horses that can wipe out a hard drive.

Many consumers are taking new practices for logging and profiling users as privacy threats.

Internet crimes, which are hard to track and which involve multiple jurisdictions, are stressing the capabilities of law enforcement.

Even if all this nastiness that so resembles real life were to disappear, the Web would be far from perfect. Here's the rest of Peter Denning's bad news.

When customers and performers are separated by distance via an Internet connection, there are many opportunities for breakdowns: in the communication infrastructure, inflexibilities, requests, negotiations, performances, settlements, and lack of responsibility by performers or customers.

authentication

reliability of the Internet itself

privacy and security of confidential and proprietary information

state-of-the-transaction commerce coordination

payments

Techno-Hypocrisy

Do you know anyone who holds cyberspace to higher standards than physical space? Many are naive dreamers. Others fundamentally misunderstand what's going on. The Internet and the Web are a new medium for human communication. And guess what?

Truth be told, your average "real" storefront or restaurant is a hotbed of all sorts of immorality and crime. If you listened in on all the conversations in a restaurant, you would be shocked. SHOCKED. The couple holding hands at the front table aren't married. The two guys laughing at the table against the wall are dining on funds they got from financing a bootleg cigarette run over the Peace Bridge. The guy with his teenage daughters over near the door is bribing them with a fancy meal not to tell their mom about his new girlfriend.

So if I want to open a Swedish restaurant on Hertel Avenue are you going to advise me against it? After all:

cash registers are notoriously easy for employees to short change

my staff will under-report their tip income to the IRS (with my implicit knowledge, of course, so I can minimize wages)

the meatballs I got for a bargain actually got carried out of the Tops at 3 a.m. yesterday morning (without my knowledge, of course)

What about the dozens of credit card numbers my employees collect each week along with the appropriate signatures? Won't they be tempted to sell to a thief?

So what's the other reason people like the Bad News?

It lets them dismiss something new, avoid change, and cling to their old ways. Also, I think, the Internet makes them feel like the rules are changing and folks who succeeded under the old rules don't always want them changed.

For example, some young boys were attracted to computers because the mainframe technology of the 80's gave them centralized power and control. Almost all male, they grew into mandarins, possessors of the arcane language and code, comfortable moving among the lesser mortals, also called "stupid end-users", usually female, earning barely above minimum wage at monochrome terminals. These mandarins resist new media.

To the mandarins, the barbarians are at the gates. That means you and me and the woman who can design systems that won't treat people like "stupid end-users". We don't know Geek (Unix or C++) and we don't want to learn it any more than we want to learn plumbing and wiring and calculus before we open a restaurant.

Many people focus on the Bad News. An effective marketer must take them into account, no matter how wrong-headed and frightened they may be.

Even if they're the boss?

As for bosses, I think that we haven't begun to see the backlash yet. It will occur when the early adopters are on board and the technophobes start feeling disenfranchised. In the automobile industry, this backlash occurred about when Henry Ford found the mass market by making cars black and easier to use and making the parts interchangeable and easy to maintain. You see the results from Brake-O to Pep Boys to the babies conceived in back seats to the funerals of traffic fatalities when those automotive products "crash". The press recently discovered drunk driving and Road Rage about fifty years after they became popular.

Problems with Traditional Marketing

Mass marketing

TV commercials, billboards, full-page newspaper ads, logowear, junk mail. They are a blight on our culture and they demean our spirits. To take the title of Neil Postman's classic, we are Amusing Ourselves to Death. And we wonder why people in other countries don't want to be like us?

The Internet is a popular medium, but it is not a mass medium. Radio and TV are one-to-many, analog, and atoms-based. The Internet is many-to-many, digital, and bit-based. Those fundamental and profound differences make it unsurprising that simply repurposing successful mass marketing techniques (and the research that supports is), doesn't work.

Now is an important time to step back and review where we are in the progression of the Internet. We've gone through a period of incredible growth and a groundswell of enthusiasm for what the Internet can do for business, learning and other aspects of society. This period has been followed by one of disillusionment as business models and technologies have failed to meet our expectations for immediate success.

Industry analysts are now beginning to ask—what next?

So what will work? Probably something we haven't thought of before. The most expensive early printed books (around 1500) looked like they had been hand-written: faux calligraphy. The early automobile was called a horseless carriage.

The 20th century was a pernicious orgy of marketing excess. The main marketing strategy for most companies was - and still is - "spray and pray," assuming that the most promising marketing method was to flood the marketplace with shouting messages, and hope for the best. ...

This age of mass marketing - the only age we have known - will come to be viewed as a strange historical aberration, a period when our capabilities to execute mass marketing exceeded both our capability to understand why we were doing it and our capability to do it well. ...

History will look at the 20th century advertising agencies the way we now look at 19th century quack physicians ... ostensible professionals who deluded themselves and their customers by confusing conjecture with solid expertise.

The "conjecture" Yastrow claims in the final sentence is based on numbers. Numbers look so definite and behave among themselves in such an orderly way. Where do they come from?

Psychometrics

Can psychological phenomena be quantified? It's only within the last hundred years that we even tried. If we can reduce the variation in machined parts like pistons and cylinders well enough to power engines, why can't we reduce the variation in people well enough to power organizations? First, we have to measure the variation, quantify it in a precise number.

I see value in statistics measuring human behavior. Who's the better baseball player? Let's look at Jason Giambi, the Yankees's new first baseman for the 2002 season, and Tino Martinez, the man he replaces. One way to answer is to use their past behavior to predict their future value. David Schoenfield wrote an article for ESPN.com that does a terrific job of comparing their "stats".

Baseball is a stats junkie's delight. The difference between a .250 hitter, a solid professional, and a .300 hitter, a Hall-of-Fame candidate, is one hit per week over the full season. As you can see from Schoenfield's analysis, the difference between Giambi and Martinez is a slim difference. Is it a significant difference? Giambi signed a contract for 7 years and $120 million. Martinez will make a third of that, 3 years, $21 million, with his new, the St. Louis Cardinals. Yet those stats still don't answer the question of who's better.

Much of a player's real value to a team is intangible. It's in the player's head and in his interaction with the other players, the fans, the media, the competition. Can we measure that?

Psychometricians say they can. They don't measure the baseball hitter's behavior, they measure his knowledge and attitudes and preferences. That's what marketers do with consumers. "Fifty-five percent of high-income suburban parents register at least a ten-percentage point preference for our brand over the competition's. Therefore, we should spend next year's ad budget on ...."

A public relations firm hired to promote historically black Morgan State University is under fire for telling students not to show up for a TV commercial with dreadlocks, head wraps, corn rows or braids.

The nadir of psychometrics is grades in school. It's one thing to grade the schools by psychometric testing of every child every year. It's a whole other thing to grade each child.

President George W. Bush's long-held vision for a near-complete overhaul of the nation's public education system moved closer to reality Thursday.... The bill authorizes $26.5 billion in federal spending on education, up $4 billion from the last fiscal year. Its centerpiece is a scheduled testing regimen.

You've taken lots of such tests. What did they measure? Your short-term memory. Your test-taking savvy. How well you swallowed the "keep your work to yourself; don't cheat" ethical standard.

Such testing is seductive. It gives a discrete number on a one-dimensional line between 0 and 100. Once the messy person is turned into a number, the number can be averaged with other numbers and compared to numbers attached to other messy people.

After a dozen or more years of formal education we've so bought into that system that we inflict it on our children and let the mass marketers use psychometrics to treat us as consumer demographics.

How in the world did education get along for thousands of years without grades? How did commerce get along without psychometric market research? Just fine, thank you.

I'm not objecting to all market research. A certain product sells more on a higher shelf in the grocery store. That's solid market research.

One big problem with today's marketing campaigns is that most marketers think of the audience as a seething, heaving blob of humanity, rather than one person at a time. Yeah, yeah, yeah, there's "1:1 Marketing," to which we all pay lip service. But how many copywriters think of an actual individual when they sit down to write copy?

Old time radio host Arthur Godfrey actually pinned a picture of a face to the microphone and talked to that face during his broadcasts. No wonder listeners said it felt like he was talking right to them.

This is what today's marketers have long since forgotten, amidst all the statistical analysis, demographics, geographics, psychographics, etc. This cacophony of data produces so much of that advertising clap trap that spews out the other end, which you and I get to watch, see, hear, and surf right past, because it isn't talking to us. Those ads are talking to abstractions, not people.

Increasingly, people have resorted to guerilla tactics to protect themselves from a growing onslaught of unwanted marketing. Multiple mailboxes are one example. Lying is another.

Users lie to protect their privacy, they lie to protect their identity, they lie because they think their data will be misused or shared with third parties, or they lie because opt-in/out policies are misleading or mistrusted. It's quid pro quo -- they give as good as they get.

Metaphors of war

Web marketing will succeed when it's based on trust. Sites that intimidate, scare, or anger users into lying help no one, least of all themselves. Marketers need as much data as they can get about their users. Users are increasingly reluctant to hand it over because they get burned, spammed, called, collected, and traded. "Relationship" and "permission" marketing have been discarded for an us-against-them vicious circle in which the customer is a commodity. Keep it up and, a researcher predicts, "consumers will end up buying less, lying more, and complaining to third-party advocates."

Vicious circles? The marketing literature is full of it: campaigns, strategies, deployment of resources, beating the competition.

That sounds to me like a lot of little boys who never grew up. They're at was with their customers.

My point here is to give you some perspective on mass marketing and psychometrics. They're recent and the consequences are mostly bad for people. As an MBA, you're wise to put very little stock in market research based on psychometrics. When it comes to online marketing, you're wise to look for techniques that haven't been tried before. This medium is different and people behave differently when using it.

I encourage you to think in a different way and to think about different things. If it feels risky and hard to understand, you're probably making progress. Thinking about Chris Locke's ideas are a good way to start getting a clue.


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modified: October 30, 2001 by Douglas Anderson http://RicciStreet.net/port80/docks/marketing/challenges.htm