The irrelevant speck that changed the way we think

The search revolution means advertisers must mentally adjust to create an information solution to satisfy customer demand

Not long ago Google was an irrelevant speck on the commercial landscape. In 1999 its total revenues were a puny $220,000 (£117,000). By 2001 its income was a more respectable $86m (£46m). Last year, its sales were $6.1bn (£3.25bn). And last week, it reported sales growth of 70%.

Google has done what every marketer dreams of/ it has unleashed a tidal wave of previously unidentified, unarticulated demand, in this case for convenient access to relevant information.

Don’t underestimate the significance of the Google earthquake. Along with all the other technologies and services that surround and facilitate searching and accessing information via the Internet, it is transforming the paradigm under which the media and advertising industries work.

Structural change number one: opening up a new media channel that’s triggering a migration of audiences, and therefore advertising spends, away from “old” media. Competition for consumer attention is intensifying massively.

Structural change number two: the rise of a pull rather than a push media environment (video-on-demand and so on).

Structural change number three: a revolution in the economics of information use. One of the characteristics of information is that you only know how valuable it is after you have “consumed” it. You don’t know whether a film is good until you have seen it; you don’t know if a fact is relevant until after you have considered it. The more information there is to filter, the more expensive finding the right information becomes. As Nobel Prize-winning economist Herbert Simon put it, the central challenge of the information age “is not to provide more information to people, but to allocate the time they have to the available information, so that they will get only the information that is most important and relevant to the decisions they will make”.

By pre-defining information acquisition rather than post-sifting it, search revolutionises the cost of information acquisition and use, with far-reaching implications for advertising. (How many people would search for your advertising?) Structural shift number four: new consumer decision-making “eco-systems” are emerging. Consumer purchasing decisions have always been influenced by many things: editorial coverage in the media, media advertising, word-of-mouth recommendations from friends and family, personal experience, and so on. Media editorial and advertising were never necessarily the most powerful of these influences. Word of mouth and personal experience were probably always more important, but they were never accessible to commercialisation. They couldn’t be turned into scalable, revenue-generating business models as editorial and advertising could. Result: one, single, dominant advertising ecosystem involving advertisers, media owners and consumers.

Now a separate and parallel eco-system is emerging, built around search plus technology-enabled word of mouth (chat, peer-to-peer product reviews, and so on). When it comes to purchasing decisions (if not entertainment), these new services provide consumers with Herbert Simon’s “most important and relevant” information far more efficiently than today’s media and advertising industries do. They’ve invented a better mousetrap, and people are rushing to use it.

So what are the implications for marketers? For as long as anyone can remember, advertising has operated according to an audience paradigm, which boils down to three very simple steps. 1) Advertisers send out messages to consumers. 2) These messages go into consumers’ heads. 3) Consumers act on them.

The audience paradigm is surrounded by all manner of sophistications and complications. It’s generally agreed, for example, that some advertisers send out more influential and persuasive messages than others. And there is endless argument as to the true source of this influence. Is it emotional appeal, being funny and liked, being memorable, being talked about? It’s also generally agreed that getting messages into consumers’ heads is getting harder: “we have to find a way to cut through the clutter”. So, getting cost-effective reach, weight and frequency calculations right isn’t easy.

Meanwhile there are endless debates as to how to prove that consumers have indeed acted on these messages. Do we measure advertising effectiveness over the short term or long term? What does advertising have to do to be effective? Does it have to work directly, prompting people to rush out and buy tomorrow? Or can it seep slowly into their attitudes and behaviours to build “brand equity”? In which case, how do we identify what the specific and particular contribution of the advertising is?

Emotional Appeal
Now the search revolution is posing a new question. Is the audience paradigm actually true? Was it ever true? Perhaps search is exposing ‘new’ information – information that was always there but was previously impossible to see – that that makes an alternative explanation possible.

True, the audience paradigm seems to explain the available evidence: when advertisers send out messages consumers seem to respond (some of them, some of the time, at least). But then, Ptolemy’s cosmology explained the available evidence and could make predictions that appeared to confirm the theory as true. Everyone could see this evidence with their own eyes – that the sun orbits the earth – until the telescope came along.

The alternative explanation is the “search paradigm”. It, too, has three simple steps. 1) Consumers are always searching for better value. 2) They sift through the information they come across, keeping the bits that help them in this search for value and discarding the rest. 3) They act on those bits of information they find the most useful – where (by the way) “information” doesn’t only include facts and figures but associations, imagery, emotional appeals and so on.

The audience paradigm interprets consumer responses to advertising as advertiser success at inserting messages in consumers heads and changing attitudes and behaviours. It works to a control agenda. The search paradigm draws a different conclusion. Consumers always keep an eye out for information that could be useful in their search for value, and when they stumble across a useful piece, whether in the form of advertising or not, they pick it up and use it.

Be Useful
The reason why some ads are more “effective” than others is not because they have been more successful in changing consumers’ minds, but because consumers have found them to be more useful. These uses may vary greatly: alerting us to a value opportunity such as a sale; to a new form of value such as a new product; a chance to say something about ourselves to others, a talking point; a source of amusement. But ultimately, under the search paradigm the real test of advertising effectiveness is not “persuasion” but whether or not it fits the consumer’s value/search agenda.

Advertising can fit this search agenda in many different ways. It can trigger new searches. It can suggest ideas of what details to investigate. It can offer another perspective. It may even obviate the need for a search. But either way, the acid test of success is whether it fits the consumer’s value agenda. Just like any product, in fact.

If the search paradigm is right, advertisers will increasingly design and construct their media advertising as they do products. Not just from their own seller-centric point of view (“what message do I want to get across”) but from the user’s point of view. Instead of asking “how can we change the consumer’s mind in our favour?”, advertisers will ask “what information are our particular customers searching for? In what form do they want this information? Where and how do they want to access this information? And how can our advertising fit this search agenda so that it is picked up and used by more consumers more often?” Seen from this perspective, the search revolution isn’t so much a threat as a huge opportunity – an opportunity for innovation. But only an opportunity for those able to mentally adjust to a very different paradigm.

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