A Funny Thing Happened on the Way to the Internet - How the New Consumer Foiled the Web Gurus
By Mike Carlton
It Was All So Simple
The concept was brilliant. Dramatically increase the efficiency of marketing to the consumer. Wean her away from her traditional purchasing behavior, and migrate her to the Internet. Purchasing speed would be increased. The consumer would get lower prices. The marketerís costs would be reduced. Software providers would flourish. Everybody would benefit.
It would be a frictionless marketplace. The seers predicted rapid consumer behavioral change. The new economy would forever prosper. There was incredible buzz. Half of American households became wired. Startups abounded. The financial markets bought the concept, big time.
But Then Something Happened
Those unpredictable consumers didnít behave the way they were supposed to. Sure, they came online in mind-boggling numbers. And, they surfed the web just fine. But they didnít buy the way the thought leaders planned. Something was amiss. Wall Street first became concerned. And then panicked. And the great dot com meltdown began.
While there are lots of theories, it appears that the root cause is the age-old truism that the customer always acts in what he believes to be in his best interests. Even if that behavior contradicts well thought out theoretical logic.
Letís take a closer look at how the consumer behaved, and some important implications for advertising agencies.
It All Starts With Marketing 101
Most sales and marketing people learned early on that the buyer goes through several predictable stages on the way to a purchase.
Many organize those stages as Awareness, Comprehension, Conviction and Action.
At the first stage, the consumer becomes aware of the product or service. If she moves forward in the purchase process, she next comprehends the features and benefits that the product or service offers. Following that, she must develop the conviction that this particular product or service is best for her at this particular time. And finally, the consumer must take action to overcome inertia and make the purchase and take delivery.
We are all intimately familiar with it. It is a process each of us goes through every day. It sounds so simple. And at the conceptual level, it is, since it is so universal and repeatable. But, at the practical level, it is incredibly complex with each of us individually internalizing the process slightly differently.
What Influences Us
As we move through these stages we are influenced by an ever-changing combination of stimuli. While it is never exactly the same in two different circumstances, or with two different people, there are patterns that traditionally appear regularly. And different players that assume leadership at different stages.
The brand is the handle to consumer awareness. Historically, the advertising agency was charged with major responsibility for building brand awareness. While the consumer became aware of the brand in many different ways, media advertising usually played a major role.
Comprehension builds upon the awareness as the consumer learns and understands the features and benefits of the brand. Again, the agency was often deeply involved.
At the conviction stage, often the consumer wanted to touch and feel the product or service. And, if appropriate, have dialog with a knowledgeable salesperson. Thus, the clientís sales and distribution organization moved to the forefront. The role of the retailer, agent, or sales representative became pivotal to the consumer as he built conviction about the appropriateness of the product or service to meet his needs.
At the final stage, the customer makes her decision, and then acts upon it. Sometimes the decision would be made alone. Sometimes with counsel from friends and family. But, often the helpful and trusted salesperson, agent or representative nurtured the decision. And then, sealed the transaction and arranged delivery and fulfillment.
Thatís The Way It Was
Before the Internet, that is pretty much how the consumer made a purchase. While direct marketing and catalog sales moved the consumer through the stages in slightly different ways, most purchases followed this traditional pattern.
The functions of the advertising agency, the media, the client sales and marketing organization and the retailer were clear.
Advertising established the brand awareness and part of the comprehension. Collateral picked up some of the comprehension load.
Then, the client sales and marketing organization took over for the conviction and action stages.
This pattern for making purchase decisions worked. Consumers liked it, and were comfortable and familiar with it. They were not clamoring for change.
The Truth About Us
Most of us generally like the way things are. And, we like the control we enjoy over our lives. We change only when we believe that change will be of specific and direct benefit to us individually. We enjoy knowing new things, and understanding new ideas. But, we only apply those new ideas when we believe they advance our personal interests.
In addition, we like our power as consumers. We recognize that the consumer is king. And we enjoy the application of that power.
We are confident in our ability to make the right decisions. And to shape what we find to fit our particular needs. We donít mind being a bit contrary, if that serves our purposes.
Most importantly, we like finding our own way.
If you doubt this, ask yourself why Americans seldom read instructions before trying to figure out how to make something work. Is it any wonder that personal computer popularity only really took hold after intuitive systems were introduced?
Enter E Commerce
The original vision for e-commerce saw the consumer moving from traditional ways of purchasing to the much more efficient e-commerce model.
It envisioned the consumer moving in total to the web market as she came online. Whether articulated or not, the expectation was that the consumer would move through the four stages almost exclusively on the Internet.
This led to website design that often appeared to function in a vacuum, independent of the experience the consumer was accustomed to for each of the four stages.
Initially, traditional marketers and their agencies werenít sure what to make of the Internet. Many just ignored it, or marginalized it to a point that it was viewed as kind of a novelty. Possibly hoping it would go away. But, the concept was too powerful for that.
So, while the traditionalists in marketing and advertising did the traditional things, website development became the province of a new breed. They knew the technology, but were not as strong on the marketing and communications side.
Unfortunately, in the early days, the traditionalists and web market people did not communicate well with each other. As a result, the web market side came to see itself carrying the entire load in moving the consumer through the four stages.
Discussions of website branding came into vogue. As if it was separate and distinct from the existing brand experience the consumer had. Websites handled information well, thus enriching the fact basis for consumer comprehension. Impersonal websites left something of a void in addressing the conviction need, but secure technology made online transactions easy for the action function.
The New Consumer
Much to the chagrin of the seers, the traditional consumer did not transition into the web market consumer as expected. While half the homes in America came online, and there was lots of surfing, only a small percentage of consumers actually purchased over the web. What was happening? Why was the technically savvy consumer behaving this way?
The answer is simple. While the traditionalists clung to the separate traditional approach, and the web marketers trumpeted their separate new channel, the consumer took charge, and discovered, all by himself, how to mix and match.
So, rather than viewing the web as something separate and distinct, the new consumer quickly learned how to use the best of each Ė in a way that worked primarily for his benefit
A Touch Of Perversity
The new consumer does not behave as expected. She does not stay exclusively in one channel or the other.
Rather, she jumps around on each purchase, depending on what she views as being in her best interest.
For example, the new consumer may get most of her awareness through media advertising, but then go to the web for product information to satisfy her comprehension needs.
But then, go to a retailer of the product to touch and feel, and talk with a sales person.
Then, finally, go back to the web to buy for convenience, or to avoid state sales taxes. And, on the next purchase, she may follow a completely different track between the traditional and web market channels. Is it any wonder that clicks and mortar marketers are doing better than pure dot com ones?
Whatís This Mean For Advertising Agencies
The emergence of new media has not been easy for advertising agencies.
Traditional agency people are still very TV and print centric. New media people are very tech centric. Few agencies have been able to integrate these differences in a holistic way. As a result, clients have often had conflicting counsel on how to address traditional and new media communications.
In a sense, this was OK when there was the belief that these were two separate channels. But now, the new consumer has spoken.
The new consumer expects to have a cohesive experience as he bounces between a marketerís traditional and web channels. He expects that there will be continuity between the two, and that they support each other seamlessly. He expects that they will conform to the way he moves through the purchase stages, rather than preconceived philosophical concepts.
Marketers who donít do this will see the new consumer drift away to be served by competitors who address her holistically.
Agencies that can meld the skills of traditional and new media into a holistic customer focused solution will have a significant competitive advantage.
There appears to be a breathing spell. During the past few years, clients have run at a frenetic pace in applying new media solutions Ė solutions that were not often well thought out from a holistic point of view. In the current economic climate, clients have become more thoughtful and deliberate in considering the role of new media in their total marketing mix.
While this lull is probably temporary, it provides agencies with an opportunity to more carefully design, build (or partner outsource) and integrate their new media capabilities. And, the opportunity to find new media talent with work and compensation expectations more congruent with traditional agency practices.
A Biased Point Of View
I believe that traditional agency people, with their foundation in the psychology and behavior of the customer, are better equipped than new media people, to meld the capabilities of new media into holistic client programs.
If Iím right, this means traditional agencies will most likely need to find within their ranks renaissance people with sound understanding of customer psychology and behavior who are capable of stretching their thinking to enthusiastically embrace the capabilities of new media. Alternatively, but I believe less likely, they may find individuals without agency experience who intuitively have the skills to fulfill this role.
These renaissance people must have both the breadth of vision to understand what new media technology can do and the marketing and communications savvy to understand how to apply it. They do not have to be technical experts, but they do have to cultivate the ability to communicate effectively with technically focused people
Agencies will need to proactively search for these renaissance people Ė probably only some of current staff will be suited for the transition. And, agencies will need to provide time and training so that they can adequately expand the thinking of their people.
The Demand For Proactivity
It will not be easy for an agency to make its tent big enough to truly and enthusiastically embrace new media, as part of a cohesive and holistic capability. Half hearted or lip service efforts will not do Ė in fact, they may be worse than no action at all. Agencies embarking on this course must aggressively pursue this outcome in a managed, programmatic way.
Agencies that donít become as proficient in the use of new media as they are in TV and print will effectively marginalize themselves as the new consumerís use of new media increases, and clients demand holistic solutions that embrace all media
The Good News
This revolution was started by the technologists. It has now been taken over by the new consumer. And, control will remain in the new consumerís hands. The great and abiding strength of agencies is their empathy for, and understanding of, the consumer.
No one is in a better position to guide holistic communications to the new consumer as their buying practices evolve