The buying services making the marketing message irrelevant

It is not market and media fragmentation that marketers should be concerned about but a new breed of services like Kelkoo and MySpace

I have a question for you: is a 30-second commercial half way through Lost the best for way for an individual to gather the information he needs to make an informed purchase?

A silly question? It might have been, yesterday. But it’s not any more, because the world is changing. The future of marketing communications depends less and less on whether consumers continue to watch programmes like Lost, or even whether they choose to access content via traditional broadcast mechanisms or the internet. It doesn’t hinge on whether television audience sizes are rising, falling or fragmenting. Or on how the costs of buying TV or print advertising are trending. In fact, for the first time in decades, it doesn’t really depend on the activities or strategies of advertisers or media owners at all. The action is moving elsewhere.

Take a scoop of Google (search), add a dollop of Kelkoo (price and product comparison) and mix in a liberal dose of MySpace (peer-to-peer community) and you have all the essential ingredients of an emerging form of consumer service that is changing the way consumers go to market.

Let’s call this new type of service an “added value buying service” (AVBS). By combining price and other comparisons with independent expert assessments (such as JD Power and Which? reports) and peer-to-peer customer experiences and information sharing, AVBSs massively reduce consumers’ costs and the hassle of finding the rich, relevant and up-to-date information they need to make better purchasing decisions. With an AVBS consumers can achieve in seconds what they couldn’t previously do in days.

As AVBSs learn how to do this job well, they will earn themselves a new role as the consumer’s first and natural port of call for all significant purchasing decisions (whether finally bought online or offline). Planning to buy a widget? Check it out first at WidgetBuyersGuide.com. You’ll get some pretty good answers in seconds, with much more detail available if you want.

By offering this simple facility AVBSs do two things.

First, they insert themselves between consumers and retailers at the crucial juncture of consumer decision making, to become the first real “disintermediator” challenge to the fixed location shop in 100 years. And what a challenge it is. A new report on the subject* suggests that up to 40% of household purchases (about &£200bn-worth) will be influenced by, and/or transacted through, AVBSs within the next ten to 15 years.

People magnets

Second, they become natural magnets of consumer attention. Not any form of consumer attention, but the consumer attention that matters: the attention that is focused on the things the marketers are most concerned about – a purchasing decision. So, increasingly, if marketers want to communicate or interact with potential customers at the one time when their input really matters, they will have to make their presence felt at the relevant AVBS.

Most marketers’ reaction to this scenario is one of horror. AVBSs follow a buyer-centric, rather than a seller-centric agenda: they address the information needs of the buyer not the messaging needs of the seller. They imply a loss of advertiser control over the timing and the content of the information consumers use when considering alternative brands. They raise the spectre of lowest-common-denominator competition over price.

But on second thoughts, most brand managers will come to welcome AVBSs. For three reasons.

First, AVBSs will actually create a perfect new medium for advertisers: the opportunity to reach and interact with exactly the right people in the right mode (active, “leaned forward”, interested), about exactly the right things, at exactly the right time.

Second, price is not and never will be the consumer’s only consideration. Yes, ruthless price competition is unavoidable (what’s new?). But AVBSs will quickly evolve, segmenting their offerings to cater for different consumer priorities: convenience, quality and reliability, service, supply chain responsibility and ethics, new and cool, connoisseurship, special occasions, gift giving and so on. Price is just the easiest and most obvious entry point for a new type of service.

Third, brands will find themselves competing increasingly over the quality of their information services – their ability to provide answers to the questions consumers are asking, not only about their products specifically but also more generally: how to solve the problems of daily life as they relate to key “departments” such as home, health, money and so on. This is a potentially huge source of added value in its own right. It is also a powerful form of ongoing, real-time market research.

So what does the emergence of AVBS mean for the evolution of marketing communications? One thing it doesn’t mean is “the death of advertising”. Human minds are “always on” and can’t help being influenced simply by being made aware of something. Awareness advertising has an assured future.

At the same time, however, when it comes to actual purchasing decisions, consumers’ interest and attention is beginning to migrate en masse towards services that specifically address their information needs ⦠rather than simply interrupting content consumption with seller-centric messaging.

Advise, don’t dictate

This creates a need for marketers to make some much clearer distinctions, in terms of both content and channel, between ads that simply raise brand awareness and communications designed to influence final purchasing decisions. The theories in Scott Donaton’s book Madison & Vine – brand engagement, viral marketing, flash media, mobile marketing, sponsorship, e-mail marketing, interactivity – what unites them is that they all address a messaging agenda. They assume that the communication environment is still organised around the messaging needs of sellers – when, in fact, it is being reorganised around the information needs of consumers.

The problem today in marketing communications is not that audiences are fragmenting, that media consumption habits are changing, that new channels are emerging, or that cost structures are morphing. The problem today is that advertisers and their agencies are still focused on messaging – “what message do I want to get across and how?” – when messaging is losing its relevance. A focus on messaging – on the seller’s go-to-market agenda – precludes a focus on the one question that really matters: “what information are consumers looking for, and where can they get it from?”. And if you focus all your efforts on the wrong question, your chances of getting the right answer are slim indeed. 

*Reinventing Shopping: A Manifesto for a New Market. Available from www.rightsideup.net. (Alan Mitchell was involved in the preparation of this report.)