My friend Greg Yardley asks “What happens … if due to the increased effectiveness of targeted advertising, we all experience a sudden uptick in the things we want?”
It’s an interesting question. First, let’s stipulate that no one has any more money to spend than they already do (the Bureau of Economic Analysis shows the personal savings rate at less than 1% of disposable income… not much for marketers to fight over.) We also have to note that having too many choices causes consumers to make suboptimal choices, a theory popularized in books like The Paradox of Choice (or, if you prefer, as I do, by Devo: “In ancient Rome there was a poem/About a dog who found two bones/He picked at one/He licked the other/He went in circles/He dropped dead.”)
Clearly, if targeted marketing gets really good, we’ll be alerted to more products that we really want but can’t afford. One result will be that we replace products we almost wanted with products we really did (in Greg’s example, we’ll get the chocolate covered bacon burger instead of the suboptimal caramel covered bacon burger. Or vice versa in my case.) Another result will be that we’ll be unhappy (“Look at all the things I can’t afford. Waah.”)
But in the spirit of advancing the Science of Marketing, what’s the best path for these advances to take? What moves us forward at the highest speed?
Let’s talk about this paradox of choice/behavioral economics bunkum. I prefer to think of the problem of too many choices as an information cost problem, not a my-poor-brain-is-too-small-please-make-my-choices-for-me problem. In the words of X: “there are seven kinds of Coke/500 kinds of cigarettes/This freedom of choice in the USA drives everybody crazy.” (woohoo, this Amazon.com associate thing could turn out to be a firehose of earnings!) Comparing two products is relatively easy, comparing 500 kinds of cigarettes is impossible without some sort of tool. Given the difficulty of deciding between Kools and, I don’t know, Salem Lights, I think many people just throw up their hands and walk away. Or they just go with the biggest brand, the Marlboros (do you want the hard pack or the soft pack?) It’s easy to explain suboptimal results from too much choice as a cost of search.
This dovetails with the problem of not being able to afford more than we consume already. We have too many choices, we need to decide what to buy and which brand of those things to buy. How do we maximize our spending utility?
Clearly, comparison tools are one solution. But there’s not many tools out there except for ones around big-ticket items like cars, or ones that are internal to a brand (i.e. do you want this Dell or that Dell.) And what is out there isn’t so easy to use. I’d be curious to know why this is. Regardless, I think it’s clear that consumers’ desire to maximize spending utility, coupled with the shrinking cost of searching for product information, will cause people to rely much more heavily on finding the products they want themselves, rather than waiting to hear some marketer’s pitch.
My theory is that consumer-driven product search is what will flip marketing from being a shotgun used by marketers to being a tweezer used by consumers. We know the general outlines of what we need and want and how much expendable income we have (more or less.) We will, more and more, search for the type of thing they want rather than be told. What happens then and how should marketers respond?
I was emailing a friend about sea-kayaking the other day. Gmail started showing me various ads targeted to the keyword kayak. I ignored them all. Instead, I searched for sea-kayaking and looked for a site that could recommend trips. I don’t trust the ads, I trust the sites that don’t advertise. I trust the enthusiast sites, the user-driven content, the blogs from people who have actually been there. How can a marketer reach me?
Traditionally marketers have done PR, paid for product placement, given away free product, let journalists have an advance look. All for the understood quid pro quo of rave reviews (how many test drive invitations do you think a journalist would get after a pan?) Aside from consumers having become quite cynical about this (at least in my imagination), this is no longer viable: you can’t give a free kayaking trip to the writer of every sea-kayaking blog. So what do you do now?
Here’s what I would do: give all the information anyone could possibly need to compare your product to others away. For free (as in speech, not beer.) If you’re a car manufacturer, create an open API to your database of car specification. Cooperate to make the data fields standard across the industry. Put up a library of photos and videos that anyone can put on their site in any way they choose (they won’t put them up otherwise, bloggers hate being manipulated.) Let every blogger easily compare your new car to any other new car, or old car for that matter. The fact is, a blogger who runs a Mustang enthusiast site is only going to savage your new Mustang if it really sucks. If you believe your product is at all competitive, even if only on its own terms, then make it easy for the new media to judge it on its merits.
My grandfather, a notable curmudgeon, once said that marketing is the art of getting people to buy things they do not want. Perhaps it was. That strategy will no longer work. Targeted marketing will eat itself.