Rethink needed to solve the consumer value crisis

According to new research by Yankelovich in the US, 69 per cent of consumers say they are interested in products and services that enable them to block, skip, or opt out of being exposed to marketing and advertising. While marketing productivity is “measurably in decline”, resistance to marketing “has gone mainstream”, says Yankelovich Partners president J Walker Smith. “For many consumers, marketing and advertising is a detriment to their quality of life.”

Two themes stand out from this research. First, the scale of the trend, which is long term. Similar research conducted for the American Advertising Agencies Association 40 years ago showed a three-to-one majority of consumers having favourable attitudes towards advertising, with only 15 per cent concerned enough to want some form of change.

Today, the “wholly negatives” outnumber the “wholly positives”, as consumers begin to see advertising as another form of pollution: they rank it fourth behind water pollution, toxic waste and air pollution as an issue where more government regulation is needed.

Thus, 61 per cent say the amount of marketing and advertising is getting out of control and a majority want to see advertising eliminated completely in e-mail, schools and mail, with sizeable minorities extending this “ban it all” sentiment to websites and cable television too. People are “awash in marketing smog”, declares Smith.

The second theme is the sophistication of the consumer response. Consumers are well aware of the potential benefits of advertising. Three-quarters agree it’s good for the economy, 68 per cent say it gives them “useful ideas about how to make my life better”, and 47 per cent say they enjoy advertising.

But at the same time, in addition to the 69 per cent looking for ad-blocking assistance, 54 per cent say they positively avoid products that overwhelm them with marketing and advertising, and 61 per cent say that in exchange for no advertising, they would be prepared to do more research themselves to find out what’s on sale. Forty-one per cent even say they would be prepared to pay for traditionally free media in exchange for it being advertising-free.

As Smith notes: “Many consumers are interested in doing business in a completely different way.” In this Google generation, it seems consumers are no longer prepared to be eyeballs waiting for opportunities to see. If they’re interested in something they’ll search for it themselves.

Without similar research in the UK, we don’t know if the situation is as bad here. Nevertheless, we are seeing similar trends. Up to 50 per cent of consumers are now opting out of receiving marketing messages, even from companies they already do business with. That’s prompted the Direct Marketing Association to form a special Opt-In Action Group to resist the trend. But what is the underlying problem, and what can be done about it?

The problem itself is simple to state. Modern marketing is defined by a fundamental division of labour between the product and its communication. It’s the job of the product (or service) to create value for the consumer, and it’s the job of communications to help realise this value for the company by driving sales. The product is designed to meet the consumption needs of the consumer. The communication is designed to meet the go-to-market needs of the seller – leaving the consumer’s go-to-market needs largely unaddressed. Which is why most consumers see marketing and advertising as valueless or value destroying, as Smith suggests.

The problem is getting worse, and not just because of increasing overload. Generally speaking, the amount of money spent producing products and services is falling relatively to the amount of money spent going to market. This means that companies tend to spend less on stuff designed to add value for consumers and more on stuff that’s not designed to. Yet consumers pay for all this activity via the price of the products and services they buy. They are not getting value for money.

So this is a genuine, systemic crisis in consumer value – not just a blip requiring us to pay more attention to the apparent technicalities of marketing “effectiveness” or “accountability”. Effectiveness is declining because marketing communications are not “effective” for the people who matter – consumers.

Not surprisingly, there’s a wide variety of responses to this now-endemic crisis.

One surprisingly powerful response is, “so what?”. If author Robert Heath is right, like broadband, our minds are “always on”. We naturally process all in- coming information at an unconscious level, so we can’t help being influenced by advertising, whether we like it or not. Consumers are “hugely vulnerable” to under-the-radar messaging and “we could use this mechanism far more than we do”, Heath told the recent Media 360 conference in Scotland.

His theory of “low-involvement processing” suggests traditional advertising will be around for a long time to come. But does it really solve the problem? Or will it simply exacerbate the increasingly adversarial relationship between consumers and marketers?

Another popular response is increasing subterfuge: “ambush” marketing, advertising via non-traditional media, blurring the line between editorial and advertising. In the long term, this also threatens to exacerbate the underlying problem

A third response is to develop saturation “surround-a-sound” multi-channel integrated marcomms strategies which make the brand a part of daily life. However, this option is expensive and is only really available to established mega-brands exploiting past momentum.

The alternative response, Smith argues, is to recognise that “consumers want immediate value (in the form of ‘information, entertainment or compensation’) from the ad or marketing itself, not the promise of value in a product to buy”.

Another option is to use emerging digital technologies to empower consumers with increasingly rich, detailed, relevant information that addresses their go-to-market needs, and is therefore worth paying attention to. Think “Google-squared”. Either way, as Smith argues, it means “putting consumers in control”.

So, what next? We can’t expect marketers to jump for joy at such an agenda. Addressing this problem involves a rethink of marketing strategies and theories that have been embedded into people’s minds and day-to-day activities for decades.

So, like most systemic crises, the overwhelming response so far is… sweet nothing. The urgent (achieving next month’s targets) is driving out the important. There are also vested interests at work. As Smith observes, big advertisers and agencies “have got a lot at stake”.

Nevertheless, it’s also a huge opportunity for genuine value innovation. For clients, the challenge is: “If your marketing was a product in its own right, would anyone think it valuable enough to buy?” Smith says: “Devising a suitable business model seems more sensible than continued saturation.”

And for agencies? Agencies force their clients to pay attention to bad news about their brands, market share, and so on, comments Smith. “Now agencies need to apply the same discipline to themselves.”

Alan Mitchell, asmitchell@aol.com