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.
So, we’ve gone from 600 pages mailed infrequently to a huge, captive audience to interactive tweets between brand and consumer/user/publisher.
Given that marketing has become so much smaller, marketers have to become smaller, too. This doesn’t mean marketing departments become smaller. Rather, instead of a small number of employees marketing to a captive audience, leverage a large number of employees marketing to a large number of customers and prospects. Honestly, employees won’t employ marketing; they'll simply host conversations.
My dad ran an antique store. Every customer who came in the store was different. Some customers wanted to interact with him; some wanted to learn more about the history behind individual items; others didn’t want to be bothered. My dad had to act “small” with every single customer.
Direct marketing is being transformed from mass messages to mass audiences to small, individual conversations. This isn't a transition to the one-to-one CRM model proposed earlier, because in that model the brand controlled the message. Instead, the model is switching, becoming more similar to that employed by my dad and his antique store. Your job is to experiment and fail now so you're not put in a frustrating position when mass messages (e.g., catalogs, emails) become less productive.