Neanderthal-style marketing

Given the rapid and fundamental shift in consumer behaviour, the pace of technological change and the vast availability of consumer data, most of today’s interruption-based, mass-media advertising techniques can best be described as ‘Neanderthal-style’. This marketing model is wasteful, increasingly irrelevant and ignores new realities. As a consequence, marketers and their agencies are putting the very survival of their brands at risk.

Numerous studies suggest that over $100 billion spent on advertising is wasted annually. The global display advertising industry alone is expected to waste around $11 billion in 2014. Despite that, marketers globally are hesitant to change their current model.

In the history of human commerce, mass media advertising is a fairly recent phenomenon, dating back to the ’50s. It had its place and time when channel choices were small, availability of media inventory limited, audiences captive as well as receptive, and trust in brands and authority relatively high.

Since then things have moved on. Over the course of the last decade, many marketers have been caught off-guard and are having a hard time adjusting to new realities. Today, customers can instantly find and verify almost any piece of information. For example, if a consumer wants to find out what the most fuel-efficient, five-door vehicle is – aside from asking friends and family – she will likely use a search engine early on in the process. Hence, the need to create mass awareness via traditional advertising (TV, radio, print, and such) needs to be re-thought. In addition, mass audience reach outside of prime time events (such as the Super Bowl, World Cup, Olympic Games, national elections) is becoming a thing of the past. As a result, publishers around the world are greatly struggling with declining subscriber numbers. For example, between 2010 and 2013, five million people ended their cable and broadband subscriptions in the US, and since 2007, over 200 notable newspapers have become defunct in the US alone.

Fullfilment of basic needs

At the same time, the true value and success of social media platforms often seems misunderstood. Advertising executives look at them for reach and frequency first and foremost. This is fundamentally wrong. It’s a mistake that led to a decline in Facebook’s user base, a course correction in its strategy, and ultimately the $19-billion purchase of WhatsApp in a bid to secure Facebook’s longer-term survival. In essence, social media platforms allow the fulfilment of fairly basic human needs (such as expression, recognition, instant gratification) at scale, 24/7, globally, in real-time. Social platforms put friends’ and family’s recommendations – the number one influencer of purchase decisions – ‘on steroids’, which is well demonstrated with the rapid growth of WhatsApp’s or WeChat’s user base.

For any product or service to succeed in this environment it must truly and uniquely fulfill a customer need. This requires a fundamental shift in today’s marketing model – brands need to go back to providing what consumers really want, not what their brands like to offer.

In this context, brands such as Google, Facebook, Netflix or Twitter have been built in a very different way compared with brands such as Kellogg’s, Pepsi, Gillette or Nestle. However, it is not just technology brands that embrace a new model. Red Bull approaches the market very differently from Coca-Cola; the former owns every single consumer interaction end-to-end (Red Bull F1 racing, for example) while the latter still spends billions of dollars on traditional advertising and sponsorship. And firms such as Uber, WhatsApp or WeChat have reached global scale with no traditional advertising, but via referrals based on consumer insight and an extremely well-executed service model. In fact, they go even further. None of them allow any interruption-based advertising on their platforms. They are laser-focused on delivering value to their customers.

Obsolete models

Neanderthal-style marketing is everywhere. It occurs not just in traditional channels. Banner ads or video advertising pre-runs are digital examples of the same practice. While they are often highly targeted they still represent an obsolete model. The assumption is that these techniques are evolving — from Neanderthal-style 1.0 to 2.0. The bad news is that while waste and the level of annoyance are reduced they still ignore new realities and hence will ultimately fail, especially in a mobile-first world.

Most executives - both inside marketing and advertising firms as well as on the client’s side - don’t seem under any particular pressure to evolve. Surprisingly, many still completely misjudge how profoundly new technologies and consumer behaviour changes are affecting each and every value chain. To some extent the slow response of CMOs and CTOs is understandable. Past success combined with inertia is holding them back, and CEOs and Boards are not setting the right incentives. As long as CMOs are primarily rewarded for driving reach and frequency (instead of revenues) and continue to be far removed from the departments that drive product and service innovation nothing will truly change.

The big question is, will Neanderthal-style marketing be absorbed by a new model or become extinct? Only time will tell. Should you spot signs of Neanderthal-marketing in your organisation we strongly recommend implementing change fast. Just ask the likes of Kodak, Blockbuster, HMV, BlackBerry or Barnes & Noble.

Michael Karg is International CEO of interactive agency Razorfish

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