The Downsizing of Marketing

Back in the day, the Montgomery Ward catalog was a welcome sight — 600 pages of magic. In the old days, there wasn’t a lot of competition. So big catalogs were sent to big audiences, and the equation worked well.

The advent of database marketing changed direct marketing. From 1980 through 1999, it became fashionable to send smaller catalogs on a more frequent basis to smaller audiences. Direct marketers figured out that not every customer would generate productivity on every single catalog page. It was better to send the same, highly productive page to a highly productive customer than to send every page to every customer and prospect.

Database marketing ended the reign of big catalogs. From 1995 to 2005, email marketing put a dent in smaller catalog productivity. It became more profitable to generate 20 cents per customer on something that cost 0.3 cents than it was to send a catalog page to a million customers.

The past decade saw the advent of search marketing. Search changed customer acquisition. Instead of sending a catalog page or an email that a customer may or may not want to receive, search allowed marketers to spend money only on customers who had specific needs at specific points in time. Search marketing is another example of the downsizing of marketing, with specific messages targeted to individual customers. Inclusively, the search relationship requires both parties to participate, a fundamental change from traditional direct marketing models where the marketer controls the entire conversation.

And then you toss in social media, the generally unproductive darling of the past five years. We haven’t fully figured this thing out yet. Small has become “really small.” Individual users aren’t just consuming; they're publishing their own content. Marketers struggle when they do what they’ve always done — broadcast messages. Broadcasting minimizes marketers’ abilities to communicate and receive feedback. The next five years will require direct marketers to transition from broadcasting messages to enabling conversations.