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Old vs. New Marketing

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Bruce Eckel

Posts: 874
Nickname: beckel
Registered: Jun, 2003

Old vs. New Marketing (View in Weblogs)
Posted: Apr 23, 2007 12:24 AM
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Summary
Old: Seller pays. New: Buyer pays.
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I'm not really sure what marketing means. Neither is the Wikipedia: "Marketing is one of the terms in academia that does not have one commonly agreed upon definition. Even after a better part of a century the debate continues. In a nutshell it consists of the social and managerial processes by which products, services and value are exchanged in order to fulfill individual's or group's needs and wants."

However, I think I know what marketing does: presents the customer with things they might want.

Currently, customers spend a lot of time sorting through conflicting information to try to figure out what they want. In the past, these sources of information have been restricted to something tolerably small by things like the cost of printing presses and the weight of paper. And if information flow became too great, those costs became a throttle. Without enough readers, your newspaper or magazine becomes too expensive to publish. This automatically narrowed the selection to a manageable number of publications, for some definition of "manageable."

Now, we think nothing of using our publishing machine -- the Web -- to publish to two people. There's an exponential explosion of information (for some definition of "information") on the web, with no throttle.

Sorting through the conflicting information has always been hard, but at least we've had limited conflicting information, so we could pretend that it was a workable system even if we did get fooled a lot (and because this worked, a lot of marketing, or at least advertising, became "fooling people into using a product that we know in our hearts to be inferior").

Now that we have unlimited conflicting information, we can no longer pretend that the system works, because we definitely don't have unlimited time to absorb all this information.

And the process has always been suboptimal, because every time you make a mistake in choosing a product, it costs you time and money -- even if the product itself costs no money. If you need to get something done, which of these costs less: the open-source product that's free, or the product that costs a little but that your friends have used and told you that it works well? I have learned that it costs a lot to explore all the different available products, compared to having someone make the choices for you.

The MacBook has been an example of this for me. Instead of getting a box full of parts and a hammer, the Macbook arrived ready to go. In general, the choices had all been made for me by someone who did a pretty good job. After only owning it for a few days I had decided that instead of taking two notebooks to Russia, I'd just take the MacBook, and I wasn't sorry. (I'll write more about OSes in a separate article). It was worth paying to have someone trusted make those decisions for me.

Unfortunately, trusted sources can come and go, and they often have conflicting interests. Magazines and book publishers can start out as trusted sources, and then something happens -- usually it comes down to pressures from shareholders who are only interested in quarterly profits -- and that trust gets sold for short term gains. I got fooled a couple of times over the years into buying the "best" product as pitched by PC Magazine, until I finally came to the conclusion that the "best" was whoever bought the biggest ads that month. Consumer Reports takes no ads (and is a nonprofit organization, thus avoiding the shareholder problem) because they know that advertising would ultimately compromise their integrity.

There's my own situation since I've been consulting with Adobe to help people learn about Flex. Long before this consulting arrangement, I looked at a lot of different solutions to the user-interface problem (with or without the Web), and eventually came to my own conclusion that Flex looks like it could solve most or all of my problems. But I avoided it until the essential tools became free -- not because I wasn't willing to pay for them but because I find it hard to convince people who just want to experiment with a product to shell out a lot on faith. I've had very good success with Flex and I intend to use it more. So I honestly believe in it, and I would not have started consulting with Adobe's Flex group otherwise. In general, though, I'm trying to teach you how to come to your own conclusion, because the best marketing is useful information.

For the JavaPosse Roundup, O'Reilly Publishing sent swag in a box marked "chocolate" and I was Less Than Amused to discover that it contained instead T-shirts and a bunch of little books called "Tim O'Reilly in a Nutshell" (the leftovers ended up in Russia as gifts). Much of this article was inspired by some of the essays in that book. Here's an especially insightful paragraph (p. 88):

It was at this time that we stumbled on an incredibly powerful approach to marketing. We had recently hired Brian Erwin, the former director of activism for the Sierra Club, to head our PR efforts. Brian helped us to realize that we shouldn't be promoting our products. He showed us how much more powerful it was to talk about the technologies themselves, the possibilities that they might unleash, or the threats to the future that we might encounter. He reminded us that in marketing, as well as in product development, the best way to have an impact was to be useful.

Don't promote. Be useful.

Your problem as a customer isn't just sifting through information and choosing a product. There is already too much information, so you must figure out who your trusted sources are, and your task becomes sifting through trusted sources. As information explodes, we need multiple levels of trusted sources, to the point where we are sifting through sources who sift through sources. Companies require CIOs and technical staff to perform analyses and make buying decisions.

This information explosion makes something we already know even more obvious: word-of-mouth is the most powerful tool. When you need to buy something, your first hope is that one of your friends has done the research and can tell you what to buy. One of the reasons I like going to Costco is that they've typically found the best product, and they only sell that, so I don't have to "shop." If my friends or Costco have done the research, I have very little buying hesitation.

Of course, traditional marketing and advertising looks at this and says "how can we game word-of-mouth? How can we trick people into giving our product good word of mouth?" And this is totally understandable -- it's what we do as tool-using humans; go around and see how our tools can be applied. In this case, however, the system backfires quickly on a bad product. If the goal is to get people to try something and tell their friends how wonderful it is, people will quickly "out" a bad product. "My Crocs are so comfortable" or "my Harley makes me feel really great" fizzles out very fast if they don't. Word-of-mouth only works with products that people love (at the JavaPosse Roundup I was practically browbeaten into buying the Macbook, for example).

Traditional marketing approaches are the wrong tool to generate good word-of-mouth in the age of the information explosion. In fact, this is a place where we need a Web-2.0-style inversion of control. The new marketers will be working for the buyers, not the sellers.

Right now, every time I want to buy something I feel like I'm starting from zero. I've stumbled across some things that help. For example, Kevin Kelly's Cool Tools has been a great resource for products in general. And for software, I've found myself relying on The 46 Best-ever Freeware Utilities site. I find that the fact that they are free utilities makes it easier to trust that site, and I'm much more likely to try a free utility based on that recommendation than to even try to wade into the mire of payware products, even though I'll happily pay for something if I know it will solve my problem. It just costs me too much to try to wade through all the ads and reviews that result from payware products. The free products exist on a level playing field, so I'm more likely to trust that recommendations are about the quality of the product rather than exchange of money.

We need people we can trust that will filter through the explosion of information and help us know what to get. Our friends have only so much time. Traditional marketers represent the sellers. We need someone like a personal buyer, who is in our corner with our best interests at heart. And this entity is extremely valuable. Think of how much time you would save if you could know with a much greater certainty that you could buy or otherwise get something and it would solve your problem. Think of how much money you would save if you knew the probability was much higher that you wouldn't have to buy and experiment with a bunch of things in order to get the desired result. And think of how many roadblocks could be removed from moving forward on your projects or your life if there was some reliable system that could tell you "this tool will probably solve your problem."

I would happily pay money for such a service. In fact, I have, because I've hired administrative assistants to take care of certain types of problems. I have a lawyer and a CPA who have domain-specific knowledge and can solve those kinds of problems for me. I have worked with others who have time and talents different from mine. Of course, I have to manage all those relationships, and we are trying to move towards "services" on the Web. OK, then I'd like such a service that can find me, for example, an electronic quick-lock for my bicycle (like the remote lock for your car), and give me a list of the best ones to buy. Or the best wireless router for my needs. I would not only be thrilled to be able to pay for such a service, I would almost certainly buy more stuff. Of course, I must be able to trust that service; that's the whole point.

I can envision a business model for such a service. The system could tell you how much the search will cost (this might be an initial search, with more involved research estimable after the initial search), and if it's something the system hasn't done before, or it's only been able to sell a few times, the price would be higher. So you pay a lot the first time the research is done or if only a few people have bought it, but as more and more people buy it you get reimbursed, so that everyone ends up paying the same price at any point. This would also allow you to indicate you're willing to pay for the research, but not full price, and wait for others to join you until you have enough buyers to bring the price down enough. Basically, it's a new kind of information development where the interested consumers are either investing to get the information developed, or buying the information at market value once it's been developed. It's basically taking the middleman out of the process and allowing the interested buyers to contract directly with the information developers.

This might be a way for experts to sell their services, and justify their expertise whether it was gained in an amateur or professional way, in the same way that experts appear on Wikipedia, where the impassioned amatuer can often be more informative than many professionals. I don't know how such experts would be discovered other than through a customer ranking service, but that's also in the spirit of the web of participation.

All I know is that, if I knew it was more reliable than the mass of unfiltered data on the Web, there's information I would happily pay for, and that would make me more likely to buy. That sounds like marketing, but it would be marketing for me rather than marketing to me.

(This and other topics will be discussed in person at the upcoming conference Learning in the Age of the Internet, to be held June 18-20 in Crested Butte, Colorado).


Dave Webb

Posts: 55
Nickname: lazydaze
Registered: Feb, 2006

Re: Old vs. New Marketing Posted: Apr 23, 2007 10:24 AM
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Great article Bruce.

I've been looking at ways to organize information on the web with a friend for the past year or so (there are many sites at the mo that do it, like delicious, diggit, etc, but i'm sure they are just a step along the way)

This article and your previous one about RSS both have a theme runing through them.. sources of information that are valuable to you personally. And that value comes from building relationships between people in some way. A simple vote on a particular thing (e.g. a rating for a book on amazon) is useful to an extent, but what you really want is the approval of people who you trust, or at least have found to be helpful to you in the past.

So far, I've tended to go with brand loyalty, or recommendations from friends. I bought some Nikes a while back and they fell to pieces within a year. So I tried Merrells and they've stayed in one piece for years now. So I stick with Merrells. Same with Dell.. they've never caused me problems so I stick with them.

One way forward with the web that I can see is to somehow 'stamp' pieces of information with your approval as an individual. In this way, searching for, and evaluating, information isn't just about the text and its tags and its general popularity, it's also about agreement about the credibility of the info an an individual-indivual basis.

Anyhow, on the basis of your RSS article, I'm developing an RSS aggregator based on this relationship between people finding things useful/credible, so thanks for the inspiration.

Todor Boev

Posts: 8
Nickname: rinswind
Registered: Nov, 2004

Re: Old vs. New Marketing Posted: Apr 23, 2007 12:25 PM
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It's not just the web...it's whole of life. I need reserch services for everything not just buying. I live in an extremely 'ill-arranged' country and mere words can't express how sick and tired I am of being an expert in everything. Event the most trivial thing I need to do means I need first to become an expert on the subject in order to win the upcomming battles of attrition with the legions of beurocrats, salse people, public service officials, doctors, lawyers...the list goes on and on. It feels like people won't do their jobs even if it means they will make money :(

Jeremy Ross

Posts: 1
Nickname: jeremyross
Registered: Feb, 2007

Re: Old vs. New Marketing Posted: Apr 23, 2007 8:58 PM
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If I can avoid it, I never make material purchases in retail stores (unless I know exactly what I want, and even then I usually regret it due to no stock or full SRP). I rely strongly on user reviews for just about everything - cars, books, computer stuff, etc.

BTW, Bruce, how did that video conversion contraption end up working out?

Bruce Eckel

Posts: 874
Nickname: beckel
Registered: Jun, 2003

Re: Old vs. New Marketing Posted: Apr 25, 2007 4:32 PM
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The initial experience was not good, but I didn't personally play with it. I think it may still have potential, but it obviously doesn't just do the right thing right out of the box.

Michael Easter

Posts: 3
Nickname: codetojoy
Registered: Mar, 2007

Re: Old vs. New Marketing Posted: Apr 25, 2007 11:38 PM
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Some random thoughts:

-- There's an old saw that a salesperson and a marketer go to an tropical country for a shoe company. Upon their return, the salesperson meets with the CEO and reports, dejectedly, "a fruitless trip -- no one there wears shoes". Later, the marketer comes bounding in: "Great news, boss, NO ONE there wears shoes!!!!"

-- re: don't promote, be useful. Is there a better bumper sticker for Google's success?

-- Something rings false to me about comparing a CPA's or lawyer's services with a service that can recommend products or tools. CPAs, lawyers, doctors can certainly be trusted because (a) division of labour/specialization but also (b) they deal with facts. We can't have an opinion about our taxes. There is no "productive UI design" for our health. I _do_ believe that there is an absolute sense of good design (there is something magically palpable about it), but generally it is very hard for others to provide a service about things that involve our personal experience and opinions. And that is often what distinguishes our joy: after all, at a functional level, many products perform their job adequately. It's that intangible that makes a product _great_ and I think it is rare indeed that a product surpasses great to the universally sublime (e.g. iPod, Google, Python ;-).

Michael Cohen

Posts: 1
Nickname: michaelbc
Registered: Apr, 2007

Re: Old vs. New Marketing Posted: Apr 28, 2007 2:59 AM
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I learnt how to programme java from the 2nd ed of Thinking, and I have been following the blog ever since, even though I now mostly use Ruby. So I am living proof that once you find a good source of information you stick with it.

BUT there are lots of product areas were "Unfortunately, trusted sources ... often have conflicting interests." I teach finance, and this is one area were there are few trusted sources to be had! Sure, you will get advise, but you will not be able to tell how good the advise is - you will only pay taxes once (on each years income), but how can you tell if you paid more than you should have?

The general point is that if (i) your adviser's income is directly related to your purchase/expenditure, and (ii) it is difficult (or impossible) to compare the advise that you are given with that of another adviser, you are probably going to get hurt by the obvious conflict of interest.

I guess that the interest in this topic came up in relationship to education. The college textbook market is a prime example of this conflict of interests. Publishers come by your office and practically plead with you to publish a textbook. They know that you are going to prescribe that book and that they have a captive market; all they have to do is divide the cost of production by the number of students who are likely to buy the book to get to the selling price. If you then ask why the book is so expensive, they will point to the short production run! I am sure that non-academics do not believe this, but ask why is the royalty rate (about 20%) so much higher than for other types of books. Oh, of course, I forgot that this is a very scarce skill - silly me.

So, when you mix up reward with giving advise you sometimes get the worst of both worlds; self-serving advise given dishonestly. Sometimes, but not always .... but it is hard to tell.

Default Name

Posts: 1
Nickname: dfaultname
Registered: May, 2007

Re: Old vs. New Marketing Posted: May 9, 2007 5:47 AM
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Due to the dynamic environment in which IT requires us to be in,
at least, marketing takes on a new light. It doesn't simply mean
"presents the customer with things they might want" but more of something
which works for both seller and buyer as well. Just look at certain
websites today, affiliate marketing has been very successful since its intro.

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