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Why Marketing Had to Change
Marketing methodologies developed back in the 1960s and 1970s are now so
far out of date that they would bankrupt any business using them.
In those earlier times marketing consisted largely of coming up with a
showy, big-budget commercial and buying as much expensive airtime as
possible. Products that weren’t advertised on radio or television, or
promoted extensively in national magazines had little chance of gaining
shelf space in stores owned by the big retailing chains.
The advertising agency was the source of most companies’ marketing
advice. Most businesses therefore fought for their share of market in
largely the same way, and their market share was closely related to the
advertising funds they expended, mostly to those spent on television.
Growth was dependent on spending more to achieve it.
And when it came to evaluating advertisements in the 1960s and 1970s
fairly primitive technique were used. The advertising was pre-tested on
small groups to see if it was liked and whether it communicated the
desired messages, then it went to air. Afterwards – usually within the
following week, a random audience sample was selected to see how many
recalled the advertising and the points it made.
Print advertising received a similar post-appearance evaluation
technique. Ads appeared in the press or magazines and were then shown to
research subjects who were asked to comment on whether they’d noticed
them and what information they got from them.
Missing Metrics
A lack of analytical measurements applied to most areas of marketing. To
sell more, companies simply spent more, and calculating a genuine ROI on
expenditure was so difficult that few businesses even attempted it.
It’s almost impossible now to believe that this simplistic approach to
marketing was applied by large and successful companies that included
corporate giants like Proctor & Gamble, Kellogg’s, General Electric and
United Airlines, yet that’s how the world worked at the time.
It worked because audiences were tightly-held by a few major advertising
channels. Families watched TV each evening and that meant choosing
between three major networks. Big brands dominated marketing channels
and consumers responded fairly predictably to the messages sent through
them. “As seen on TV” was a marketable phrase.
Compare the way things were thirty years ago to today’s market
conditions and the degree of change is staggering. The proliferation and
fragmentation of the media has opened up marketing channels undreamed of
by marketers back then. Consumers have overthrown the ‘one size fits
all’ treatment and are now segmented by generation, gender, and even
subculture.
The changes in the market have been dramatic!
Television - In the US, the marketplace that was once under the
control of just three major networks is now serviced by thousands of
broadcast sources, from independent local operators to cable and
subscription broadcasters. The situation is similar in Europe and the
Asia Pacific region.
The Internet - Marketers have been forced to seek new ways of
getting products into the hands of consumers who can shop online and
receive product information from blogs and newsgroups. Search engine
optimization has become as essential as point-of-sale display
advertising.
Advertising – Consumers are now bombarded with thousands of
advertising messages daily. To achieve ‘cut through’ an advertiser has
to be noticed by doing something special to attract the attention of
prospects. The rapid growth of ‘viral’ and ‘buzz’ marketing is part of
the response.
Legislation – Various ‘truth in advertising’ laws have been
enacted that make it difficult for advertisers to make any claim that
could even possibly be considered misleading. Some products – notably
tobacco and alcohol, have been restricted or prohibited from
advertising. In these cases the onus is often put on the advertiser to
prove that no laws have been broken if a complaint is made.
How are Marketers Responding?
To cope with these changes marketers have had to change their ways of
setting goals and measuring results. They’ve had to recognize the
fragmentation of the ‘traditional’ media – radio, TV, print – as well as
learning how to use the Internet and other new arrivals on their
marketing horizons.
This doesn’t mean they’ve been entirely successful in adjusting their
methodologies to the changing situation. Nine out of ten new products
are failures, and the growth in ‘home brand’ products indicates that at
least some of the marketers’ targets reject their messages entirely.
Perhaps most surprising is that advertising revenues for the major
television networks have continued to increase despite the need for the
application of marketing budgets into less traditional media. This would
suggest that the marketing ROI on consumer products is declining when
compared to earlier times because marketers haven’t yet broken free of
old ways of thinking and budgeting.
There’s little doubt that marketing had to change in response to the
significant changes happening in the marketplace. There is, however,
some reason to doubt that marketers have yet made the degree of change
necessary to optimize their results.
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