During the advent of the web, the dominant paradigm for advertising and marketing was built on the notion of frequency and reach. The idea being that if a brand or product was promoted enough, eventually the message would sync into your consciousness. We can all remember TV ads that struck the zeitgeist and were showed over and over again. In order to capture the largest possible audience, ads were geared toward the lowest/largest common denominator and there were mnemonic devices like jingles and slogans that embed the message into your brain.
For some fun, I am going to throw out a few examples and see if you remember the brand or product behind the slogan or jingle:
Plop Plop Fizz Fizz oh what a relief it is
The Energizer bunny
Quality is job one
Just Do It
Where’s the beef
The most interesting man in the world
We know a thing or two because we’ve seen a thing or two
MMM MMM GOOD
Melts in your mouth not in your hands
Don’t leave home without it
Because you’re worth it
A diamond is forever
My guess is that most of you’ll know the majority of these… I’ll send a copy of Ogilvy on Advertising to the first person who replies with the correct answer to all the slogans.
In the era of mass-market media, there were three basic forms of advertising: print, radio, and TV. Targeted marketing began in the ’80s and ’90s with segmentations based on household demographic data (age, income, gender, and the number of people within a household). Snail mail was delivered to a home in an effort to provide a targeted offer that drove a business outcome. One could argue this was the beginning of personalization.
With the rise of the web, most marketers took the view that the web was essentially another version of print advertising. In the early days of the web, we spoke a lot about the promise of dynamic experiences, demand-based pricing, and segmented content – however, it ran contrary to the dominant paradigm and there were not enough CPU cycles, hard disk space, and bandwidth to support many of these concepts. As a consequence, websites were built in a one-size-fits-all model and the end-user was left to traverse the content as they saw fit – a choose your own adventure model.
In the late ’90s, e-commerce began to take hold, replacing the catalog business or the travel agent. In these scenarios, sorting the offers and providing recommendations became an explicit requirement. This began the next wave of personalization. We saw things like Amazon’s “people who bought this also liked this” and A/B testing models in which small units of content or offers were selectively presented to audiences to see what was most effective. Unfortunately, these models reinforce the tyranny of the majority; if 51% of the visitors respond to the red button then everyone eventually gets the red button.
Concurrently, many of the Direct Marketers began email marketing campaigns. Electronic direct mail with ads and offers designed to promote action. While email marketing was dramatically less costly, it was also less effective because the second step in the process, taking an action – buying something or signing up for something – requires a landing page or a web experience that supported the offer.
Targeted marketing through e-commerce and email marketing became the new paradigm. Define a segment, create a variety of ads, test, and then optimize… Rinse and repeat. We’ve spent more than a decade in this model. You could call it personalization, but I’d argue it’s just informed guessing.
Because these programs are relatively low cost when compared to TV ad campaigns, marketers have accepted shockingly poor results. We have one client who was bragging about their 1:1,400 click-through rate on banner ad campaigns. When I pressed on the results to find out how much revenue was being generated from these campaigns, I discovered that the click-through rate was measured by how many people visited the site, not how many insurance policies were issued!
The convenience of e-commerce has fueled tremendous growth, so the paradigm of targeting content, offers, and testing has continued to reign, but the technology hasn’t stood still. As more and more information was posted to the web and the social media wave took hold, it meant that any purchase could be researched and validated with a broad audience of friends and consumers. The notion of a considered sales cycle, one in which a consumer conducted a fair amount of research, now applies to virtually any purchase – big or small. Furthermore, consumers began to share their experiences with a product or service supplanting or marginalizing the advertising delivered through a frequency and reach model. You can advertise that “Quality is Job One” but if your product sucks, everyone will know about it.
The nexus of information and social media has given rise to the experience economy. Not only does your product have to deliver on the brand promise, but consumers also need to be able to share their experience. I have written a long whitepaper on the experience economy which is available on my blog. Another way to think about the experience economy is, “it is not how much you have, it’s how good you have it”. A great product and a sharable experience work together to create brand resonance.
This brings me to why the current personalization paradigm of targeted content optimization is not sufficient. Consumers want to learn about products and have experiences that are pleasing and sharable. This means they will conduct research and experience products over multiple visits to the web. Marketers need to sequence content and experiences in ways that help consumers learn about a product and that reinforces the brand. You can’t just test the red button vs. the blue button or review A vs. review B. You need to model human to human interaction, think in terms of how people learn, what their expectations are and how they want to be engaged.
To deliver true personalization is to closely model the same experience you would have when you walk into a Nordstrom store and ask for help. A good salesperson assesses your needs, guides you through a selection process, and ensures that you leave satisfied. Tahzoo’s personalization solution provides technology to understand your customer, all of your content, the context of the engagement, and where they are in the journey before the content is presented to a customer. We are not just testing units of content for a better result, we are providing a framework for unique experiences for each customer that is differentiated and evolving. Much like a good friendship, it grows and becomes more intimate over time. As the experience becomes more resonant it also becomes more frequently shared, creating a virtuous cycle. Next week I am going to get into the specific techniques and technical aspects of the Tahzoo solution, but this week I wanted everyone to have some perspective on where we’ve been and where we are going.
Let’s go be great!
Brad