THE TABER REPORT
The Voice of Effective Marketing
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The realities of the information age have been a lot less dramatic, and probably will be for a long time to come. In this issue, we'll explore the real-world impact of the technologies that we've been building and marketing. Why? Because the best marketing is based on truth, not fabulous stories. The magic of marketing happens with believable hype.
Future Schlock Computers and high technology have had a huge impact on our lives. But the impact is rarely as envisioned -- or as marketed -- by the technology's purveyors. For example, Alexander Graham Bell did not expect that the telephone would be used for point-to-point conversations. He thought that people would come to auditoriums to listen to the news, lectures, and music brought by telephone wires. This is what radio eventually did, only decades later and in the home. One hundred years later, developers of the Short Message Service in cell phones expected their system to be used for occasional paging among professionals. What happened instead: millions of teenagers tapping out SMS messages as a replacement for passing notes around the classroom. Looking at the core of the IT industry:
Looking further afield, at electronic media and entertainment:
How has this changed the economy?
But the dramatic changes from the PC are complete, and future innovation at the base level will have only incremental effects. (In fact, we're probably near the end of the PC era as we know it. The only things preventing the PDA/phone from supplanting most PCs: the size of the keyboard, and the limited battery life. Find a way to eliminate a laptop's screen through an audio or eye-movement interface, and the PC is toast.) After all the hype about the Next Big Thing, what really changed the economy was not routine automation or individual productivity software, but digitized content and the internet. Ironically, the really important impacts -- the effect on documents, research, and media -- were not hyped that much. The gravitational pull of the Network Effect was, truth be told, missed even by Bill Gates and Scott McNealy for quite a while. Universal email (and its cousins, IM, newsgroups, and blogs) has all but wiped out postal mail, faxes, and office memos. VOIP and audio chats will wipe out conventional telephony.
Newspapers and news magazines are commercial zombies, ravaged by declining readership thanks to the internet. They are in a death spiral as they cut their reporting and editorial staff to meet budgetary realities. Although there is a great example of open source information content in the WikiPedia, blogs and talk radio are not likely to serve as credible substitutes for professional reporters. As modern societies need a flow of quality news in order to function properly, something big is going to change here: watch for a tipping point. Radio has been able to adapt much more readily to the internet than print media, and overall listenership is still healthy. But podcasting is making a serious dent by changing consumer listening patterns. In my family, listenership to real-time radio has fallen to zero in just 2 years. Podcasting might have seemed like just hype, but its user impact is probably even more significant than Tivo. And users of these new media always skip over any ads.
However, TV is still much more economically potent than radio, because people
spend more
Advertising has been turned upside down by all these trends. Print advertising in newsmagazines, professional journals, and newspapers is in deep trouble, although print ads in gaming, fashion, and lifestyle magazines are still OK. Advertising's impact in broadcast media has been dramatically reduced by Tivo and podcasting, and rates there will decline as audiences splinter. On the other hand, there's a ton of positive innovation in online advertising, both in Google and the major media properties. Watch for a tipping point here as well, as innovators create closed-loop advertising and marketing systems that really engage their audiences as a community of interest. What does this mean for marketing? You don't have to have read The Innovator's Dilemma to know that high tech products evolve a whole lot faster than the user's ability to take advantage of them. Countless product innovations just won't matter, and a lot of hype won't either. Wonder why you can't get any attention from reporters and editors about your new product? They're completely jaded, after having been bludgeoned by countless over-zealous product managers. If you want them to give you some ink, give them an interesting customer story.
This awareness-building hype is necessary, but it must not permeate the value propositions or sales materials for products. Overblown claims cannot be effective because they aren't really relevant or credible to the customer. Applying the right amount of hype -- and for the right reasons -- is the trick.
Looking at the impact of the IT and internet revolutions, big changes have happened to the craft of marketing: advertising, merchandising, selling, and continuous customer interaction. The internet enables companies to rapidly and economically create communities of interest that form the basis for very low cost commercial interaction and loyalty. Take a look at what Woot has done with almost zero capital. Clever marketers figure out how to engage their communities throughout the product life-cycle, and create closed-loop systems for measuring and optimizing every phase of doing business. Unfortunately, most companies have not invested properly in their marketing departments. They need to evolve their skills to effectively leverage new tools and available information.
Segmentation for fun and profit -- coming in November
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Since
the dawn of the information age, TV and films have portrayed computers as being capable of evil,
mayhem, murder, and even world domination. War Games, 2001, Demon Seed,
The Matrix, I Robot, Star Trek, and dozens of other science fiction books
and movies painted really scary portraits of what our digital creations would do
to us if given the chance.
Terminator's story line had it that the Final Conflict began just 15
minutes after Skynet's link-up allowed it to gain consciousness.
Clearly, IT has had a dramatic impact on business and consumer
purchasing patterns. Slide rules, drafting tables, typewriters, and pocket
protectors disappeared within 10 years or their digital replacements.
Book
and record stores die on a weekly basis because of the triple onslaught of Amazon,
recordable CD / DVD media, and MP3 compression. Just last week, Tower Records -- once the
world's largest record store chain -- was sold out of bankruptcy. iTunes
and their cousins essentially remove the need for media stores and CD production
altogether, and in 2007 iTunes alone represented 10% of the retail US music
market. The fabled internet disintermediation has actually happened
here.
hours watching TV than listening to radio. There are more channels to watch every year... and Tivo,
satellites, broadband
internet, IpTV, YouTube, and Video iPods ensure that this trajectory will continue for a long time to come. However,
because viewership is constrained by the number
of free hours in a day, audiences will be increasingly fragmented.
Don't
get me wrong: hype is a necessary and even desirable thing. You
won't get headlines without it. To
get funding and press attention, company founders must make grandiose
claims about the impact their technology is going to have.
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