Four Things That Differentiate New Marketing From Old Marketing

A great example of marketing as we know it is the Marlboro Man. The macho, cowboy hat wearing, cigarette smoking epitome of masculinity was conceived in the 1950s, when compelling scientific data on the harmful effects of cigarette smoking forced the cigarette industry to turn to filtered cigarettes.

cowboy

Till then, filtered cigarettes were targeted toward women, and cigarette companies like Philip Morris & Co. were faced with the task of making their product appealing across the gender divide. Most cigarette companies and their advertising agencies did not fully grasp how crucial this one factor was, instead focusing on the technology behind the filter and how this made cigarettes safer to smoke.

What was of importance, however, was that market research showed that whilst a majority of men would consider making the switch to filtered cigarettes, they perceived the product as feminine.  Chicago advertiser Leo Burnett — who is the man behind the Marlboro Man — was the first to realise that the repositioning of Marlboro needed to stem from projecting the cigarettes as appealing to men, as opposed to the safer, healthier narrative that agencies were pushing.

The success of the Marlboro Man is evinced by the fact that within one year of launching the campaign, Marlboro’s market share rose from less than one percent to the fourth best-selling brand.

The Marlboro Man represents how marketing has traditionally operated. It is a separate entity from the product, and its job has been to find a way to sell the product, no matter what. In traditional marketing, you do not tweak the product, you do not incorporate ways that it can be improved… you just find a way to make it work.

Well, all that has changed.

As I asked in a previous blog entry, have you ever seen an advertisement for Facebook, Twitter, Instagram or Dropbox on a billboard, in a magazine, or on TV?

If Facebook had launched and found itself not working, could it have rebranded itself through expensive print ads showing trendy college-going students enjoying the website and expected that to work?

The biggest change that has happened is that marketing is no longer a separate entity, divorced from the product. Marketing today has to be built into the product if the product is going to work. And the product itself needs to be constantly tweaked, thereby its marketing being tweaked, if is going to work.

Let me explain this further by drawing a comparison between what I will call old and new marketing.

1. Old marketing has no accountability, new marketing does

Marketing has changed from being brand-based to metric and data driven. In the Marlboro Man days, figuring out whether a marketing initiative has worked was linked to an increase in sales, without any accurate measurability. Today, finding and getting customers is no longer a guessing game. Analytics record everything about the user/customer: age, gender, demographic, interests, conversion rates, what devices they are using, where they’re coming from etc.

Marketing today therefore is scalable and measurable. Most of all, based on being measurable, it is dynamic.

As Ryan Holiday says in his book “Growth Hacker Marketing” (2014), “You know what the single worst marketing decision you can make is? Starting with a product nobody wants or needs. Yet for years, this was a scenario that marketers tolerated and accepted as part of their job. We all told ourselves that “you go to the market with the product you have, not the one you want.” And then we wondered why our strategies failed – and why those failures were so expensive.”

This approach has since been proved flawed. Businesses and products need to evolve based on market response. A useful concept here if PMF, i.e., Product Market Fit. PFM is the achievement of a state in which a product and its customers are in perfect sync with one another. Tweaking is a value creating exercise.

Let’s take the example of Airbnb, a start-up currently valued somewhere above $10 billion. Airbnb started out in 2007 as airbedandbreakfast.com — a platform for the founders to put out air mattresses on their floor and offer free homemade breakfast to guests. Realising the potential of their idea, the founders went back to the drawing board and re-conceptualised the site as an alternative to hotels for the cost-conscious traveller. They built on this further — shortening the name to Airbnb and catering to the type of traveller who did not want to crash on couches and air mattresses, the type of traveller who was willing to pay the rates commanded by hotels — but was nonetheless looking for an alternative. Airbnb became a place for people to rent any kind of lodging — be it penthouses, castles, trains, boats, yachts, private islands, and yes, even an air mattress in a corner of a shared living room.

Take also the example of Instagram. The massively popular social media app started as a location based social network called Burbn with an optional photo feature. The product received $500,000 in funding and the founders soon realised that users were flocking to one aspect of the app — the photos and filters. Like the founders of Airbnb, Burbn’s core team went back to the drawing board and decided to tweak the product into Instagram as we know it: a mobile app for sharing photos with filters. The app attracted one hundred thousand users within a week of relaunching. The rest, as they say, is history, with the founders selling Instagram to Facebook for $1 billion within eighteen months.

What I am trying to elucidate is that Airbnb and Instagram (and the like) did not start out as Airbnb and Instagram (and the like). They became Airbnb and Instagram (and the like) based on accountability — a careful monitoring and analysis of what was working and what wasn’t, and the tweaking of the product till it achieved PFM.

Compare that to Marlboro cigarettes, where the product was what it was, and the tweaking was limited to the advertising and marketing.

2. Old marketing looks out, new marketing looks in

I attempted to write a business plan for my start-up The Citizen a few months ago — that was before I had embarked on the digital media learning exercise that forms the rationale behind this blog. A large section of that business plan focused on the numbers, and a large chunk of those numbers were in the form of a “marketing budget” i.e. money I thought we would need for ads, campaigns, promotional pieces, et al.

This is what is called “looking out” — old marketing wants to divorce itself from the product and focus on getting customers through ineffective (and very expensive) brainwashing.

Now let me explain how new marketing “looks in” rather than looking out. Take Evernote — a start-up that offers productivity and organisational software. When Evernote launched, the core team decided that not a penny was to be spent on marketing for the first several years of the products growth. That “marketing budget” as we know it was diverted “in” — it was poured into product development (which in turn was based on accountability as outlined in point no. 1). This may have slowed brand building at first – but it paid off. Evernote soon emerged as the best organisational productivity app available, and today, it practically markets itself.

It is important to not confuse “looking in” with “doing nothing” in terms of promoting your product. Sticking with the example of Evernote, the company came up with little tricks to ensure that the product received visibility whilst placing marketing (and a marketing budget) on the back burner. For instance, after hearing customers complain that their bosses were suspicious of employees using their laptops in meetings, the folk at Evernote printed stickers that read: “I’m not being rude. I’m taking notes in Evernote.” This was turning their customers into active billboards that went from meeting to meeting — at virtually no cost on Evernote’s part.

As Holiday writes: “Once we stop thinking of the products we market as static — then our job as marketers is to simply work with what we’ve got instead of working on and improving what we’ve got — the whole game changes. Now we are not helpless, repeatedly pitching a product to reporters and users that is not resonating. Instead, we use this information to improve the product, with the idea of ultimately refining our idea into something that can in many ways sell itself.”

3. Old marketing targets everyone, new marketing targets the right people

The conventional wisdom in marketing has been to target as many people as you can. It is based on the premise that a percentage of these people will become customers, and the more people you target, the higher number of customers that percentage will eventuate in. The pertinent question here is: is why waste your time going after people who are never going to become your customers?

New marketing understands this rhetorical question. It focuses on a clearly definable target audience and does so as cheaply as possible. A good indication of this target audience is the product’s early adopters. Again, this is not to suggest that niche products are the way forward and the mass market is dead. Rather, the point that I am trying to make is that to get to the mass market, the niche, or rather specific, market has to first be cultivated.

Let me try and offer another example. Look at a selection of Instagram celebrities who have now built products based on a target audience that they identified and catered to. One such personality is Nicole Warne, aka Gary Pepper Girl, whose website details her travel and style, and neatly links this to a “shop” where you can purchase clothing, bags and accessories. Warne is a fashion blogger who rose to fame focusing on a target audience — namely, fashion and lifestyle enthusiasts. She has gone on to acquire over two million followers on Instagram just posting the sort of images that this target audience finds useful. Warne does not try and cater to everyone; her posts very clearly target a type of Instagram user. The type of user who is likely to find the “shop” on her website of interest. Further, while you will find Warne on Instagram and Snapchat — platforms that her target audience uses — you will not find her on TechCrunch or Hacker News, where you will, for instance, find entrepreneurs who are trying to build a tech product.

The point that I am trying to make is that old marketing tries be everywhere; new marketing will choose where to be and do that as cost effectively as possible.

Another example of the above is Uber, which began by giving out free rides during Austin’s SXSW conference and has been doing so for several years. In that one week, thousands of potential Uber customers — tech savvy, high income young adults who need transport — are motivated to try out Uber’s service. Instead of spending millions on trying to reach anyone and everyone in multiple cities, Uber waited till this target group was in one place at the same time, and found a way to motivate them to use their service.

Of course, identifying the target audience and arriving at a novel strategy for reaching out to them is not that simple a task. However, there are tricks to this too (what do you think is the purpose of this blog?), which I will elaborate on in a future post.

4. Old marketing has clearly defined roles, new marketing does not 

Traditional marketing as we know by now is an entity separate from the product. Marketers would bring in the potential customers, and someone else had to figure out what to do with them. Whether customers stayed or not — is not the domain of traditional marketers.

New marketing, on the other hand, focuses on lifelong customers. You know that annoyingly high “bounce rate” that Google Analytics insists on showing you? That makes new marketers seethingly angry. What’s the point of bringing in a new customer if they are going to leak out from a hole in the bottom? What’s the point of driving a new customer to your product only for them to find out it wasn’t worth it and leave?

This is why new marketing concerns itself directly with the product. Why is the bounce rate high? Why is the new user not sticking? How can we decrease this bounce rate? How can the new user become a lifelong customer? What needs to be tweaked in the product for this to happen?

From the above it becomes clear that a new marketer is not just a marketer, but is very closely concerned with the product development aspect of the business.

Take the example of Twitter. In its early days Twitter had managed to receive a lot of attention and hype. The product, however, faced one big issue. Users were not sticking. They would sign up for the service but end up not using their account. Twitter could have brought in a marketing executive who would send out emails, run ads, organise events … the traditional stuff.

Instead, they brought in a man called Josh Elman. Elman and his team realised that when a user manually selected five to ten accounts to “follow” on the first day, the user was far more likely to stick around.

Holiday relates a conversation with Elman in his book (2010), where Elman explained: “When I first joined the company, the suggested user list had 20 random people who were default selected to follow. Given this data insight, we rest the new user flow to encourage people to follow their first -10 people and offer them a lot of choices, but no default selection. Then we later built a feature that continually suggested new users to follow on the sidebar of the website. These two changes helped people get started following, and more importantly understand that following was important to get the most out of Twitter. So over time more people did just this and became more likely to be retained.”

Is this marketing or product development, and does it even matter? These two changes have been responsible for millions of users not just joining Twitter, but actually using it — and what’s the former without the latter?

Resources:

Holiday, R. (2010): Growth Hacker Marketing: “A Primer On The Future Of PR, Marketing, And Advertising.” Portfolio Penguin.

Ellis, S. (2010): “Lean Marketing for Startups: Agile Product Development, Business Model Design, Web Analytics, and Other Keys to Rapid Growth.” Hyperink

Maurya, A. (2010): “Running Lean: Iterate from Plan A to a Plan That Works.” Oreilly Media.

One thought on “Four Things That Differentiate New Marketing From Old Marketing

  1. This is a very interesting read. I’m not sure if you’ve read some of the literature on marketing, but this ties in very neatly with the Nordic School’s concept of ‘relationship marketing.’ It’s more related to the service industry, but proposes a similar idea, which is that customers are co-producers of the services they consume. Therefore, marketing cannot be seen as separate from the service, but is integral to it, and value is derived from the longer-term relationships that service providers build with their customers. I think a similar trend is evident when it comes to products, and you’ve illustrated some interesting examples with AirBnb, Instagram, and Evernote.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s