The demise of advertising has long been predicted, but it is now on the verge of experiencing upheaval hitherto reserved for the music, movie and publishing industries. Unlike the content businesses, it isn’t access to pirated content that is causing advertising to come unstuck, but the rise of online social networks and the mobile Internet. And it’s not that advertising doesn’t work any more – Nike’s “Write the Future” and “Old Spice Man” achieved big successes in 2010 – it’s simply that the social context of every decision we make is now far more visible than in a pre- social networking world, and thus far too important for marketing to ignore. Christakis and Fowler, of “Connected” fame (a book even Oprah Winfrey championed) talk of the human superorganism, linking us all together in a web of relationships and influence. As the Internet matures to become a truer reflection of our real lives, and signposts our relationships and wants, marketing will have to follow suit, and better understand and influence this superorganism.
Marketing is, and always has been, about influencing people (oh and selling stuff). From traveling salesmen, to big budget Nike TV spots, and highly focused PR releases, the objective has always been to engage, influence, and ultimately sell. The traveling salesman could do all of these things in a personal manner. As broadcast media emerged, however, the problem was not that advertising could not engage and influence (TV spots are still the cornerstone of brand-building campaigns), but that there were few ways of quantifying it’s impact. That’s why we ended up with fairly abstract measures for advertising / marketing success, and an industry born out of trying to show the connection between audiences, ad spots and sales. GRP’s, CPM’s, Reach, Ratings, ABC’s. Did any of these metrics show us where we really should be targeting, and the success of our advertising? Did pre- and post- surveys capture anything more than what people thought the effect of our advertising was?
The rise of online media has surely improved our tools – we measure online searches, clicks and sales – but a little bit of data can indeed be a dangerous thing, and it has been all too easy to throw money at this ‘last-click’ model. Google’s fortunes are largely built upon it, and while it is without doubt that search engines are hugely useful, the ROI of pay-per-click search campaigns is not as black and white. Do we know what really drives a sale, the value of other media in the mix, or any more about perception shift driven by advertising – rarely. Do we understand the influence of ads, and in turn, how the influence propagates to others within our various social networks? No.
And that is why, rightly so, the rise of social media and mobile are heralded as such a potential game-changer for advertising and marketing. It’s why Facebook has a $50bn valuation – their current revenue models alone do not justify such a price tag – and why Google is currently scrabbling to catch up and get involved in the social party.
The overall trend is fairly simple. As the Internet continues to mature, the initial heady days of digital escapism and unfettered expression are giving way to something altogether more pragmatic, more real. Perhaps Facebook’s greatest ‘invention’ was the realization that the Internet didn’t have to be a melting pot of imagined identities, but could actually be an extension of everyday lives. By insisting we are who we say we are, Facebook has helped usher in an Internet that is converging on our real lives, while seeing off MySpace along the way. We have seen the Internet, and it is us: a constant flow of information from people, and the objects they surround themselves with.
Three key trends have been apparent in 2010, and show no sign of abating into 2011. They each are facilitating the rise of influence mapping and targeting in marketing:
The continued rise of online social networks
Facebook, Twitter, Tumblr, Zynga, Yelp – leading social networks and businesses built on top of these platforms have had an incredible growth year. The Internet has become an increasingly social place, as online experiences have become more dependent on others in our social spheres, and not simply editorial decisions. Mark Zuckerberg, recent Time Magazine’s Person of the Year, predicts an Internet curated by your social network, in stark contrast to the series of connected web pages he sees the Internet as today. This has fundamental implications for the Internet, and also how brands market themselves within such socially curated environments.
Online social networks moving offline, into every walk of life
2010 has also been the year of location-based social networks, building networks around places and real-world experiences rather than ‘friends’. Foursquare now has c. 4 million users, and Facebook made an aggressive move into this space earlier in the year, through their launch of Facebook Places. This marks an important shift for the Internet, fusing together online with offline, virtual with real, and has huge implications for outdoor and point of sale marketing, among others.
The digitizing of self – ‘lifelogging’ every aspect of our lives
The 3rd piece of the puzzle is still embryonic, but growing, and set to effect our experience of all aspects of our life, not just social ones. With more and more data going online about what we are doing and with whom, this technology is increasingly being used to ‘lifecast’ data about us. Nike + was an early example of this: streaming data about your running habits and using it to record, motivate and built social experiences around this data. The same can, and is, being applied to all other walks of life. Evernote, a service helping you to remember everything has 5 million users, and a healthy premium userbase. Sleep Cycle helps monitor your sleeping patterns, knowing when best to wake you up. Wifi enabled scales are becoming more popular, allowing people to share their weight, in order to motivate and also monitor trends. There will doubtless be countless games for Xbox Kinect which use your personal information to motivate and entertain. Within the next 5 years, significant numbers of people will continuously monitor their location, heart rates, weights, temperatures etc, and some will share these things. It is not hard to understand how this trend connects our real and digital selves, and opens up exciting new marketing opportunities. Mood targeting anyone? In the immediate term, 2011 is set to be the year of ‘persistent location’ applications: apps that constantly know your location (assuming you let them), rather than simply at certain times of updating your online statuses. This is a game-changer in terms of social interaction in the real-world, the recording of data about individuals and also marketing.
Put these three things together (or even just two), and you get a much more complete picture than ever before, of what people are thinking and doing at any given moment. The Internet becomes a valuable backchannel or shadow to our lives, an increasingly detailed snapshot of everything we do. For marketing, this heralds a major departure, as it gives us enough data to begin to understand the social context of individual buying decisions, and target accordingly. It is at once highly scientific, and a return to more personal relationships between brands and customers. ‘Influence’ is as old as civilization itself, but only recent Internet developments are enabling marketers to model social context at significant scale.
A variety of fairly blunt ‘influence’ metrics exist from the likes of Klout, Peerindex etc, which are targeted more to the consumer, and use a series of social networking metrics to model influence. Advertisers are, however, already using custom tools and network science theories to extend this much further, and create detailed models of social networks online. These can be used to understand sentiment, but also influence, and how memes propagate through a given network. For marketing, this is profound. It can be used in targeting, in developing messages with the strongest chance of success, and also in quantifying the effect of campaigns. Buzz and sentiment tools such as Radian6 and Brandwatch have existed for a number of years, but 2011 will be the year that brands get serious about quantifying influence, and better understanding the following aspects of the networks that are relevant to them:
The aggregation and analysis of real-time data sources – bringing together all related data from the open Internet, and more closed social networks.
Sentiment scoring – better understanding what consumers really think about a brand, and which events are significant.
Network topology – the shape and propagation characteristics of different networks, covering types of individuals and density of connections.
Aligning internal and external sources of data – understanding the overlap between the social footprint of a brand, and existing information from customer databases, such as lifetime value, advocacy etc.
Micro-targeted brand content – creating content based on knowledge of individuals’ lifetime value, brand advocacy, and influence.
Marketing will be one of the first industries to (be forced to) benefit from a social Internet. As real-time data on consumers gets richer, marketers will gain greater insights into the social context of decision-making. They will begin to consider the influence of individuals alongside their monetary value to the business. Where brands can identify the top 50 or so people responsible for mass message propagation, why do they need to spend millions of dollars on advertising? This is, granted, a gross simplification. Advertising will remain an important component of marketing across the board, and particularly for communicating messages that do not easily propagate, but 2011 will be the first year that it feels the force of the rise of influence-based marketing.
Oliver Snoddy
