Decency is the new ad

I’m well aware that I have been painting myself in a corner – or rather, I fear that media and journalism are:

I’ve been arguing that charging for content online – news content – is futile and that print as a vehicle for advertising and a source of profit is unsustainable. Thus, online advertising is our only hope. But advertising will decline. For I’ve also been saying that the internet enables direct relationships among companies and customers: Your product is your ad and customer your ad agency. That’s the ideal. It’s only when that doesn’t work that you need to advertise. Advertising is failure. Welcome to the chaos scenario.

Now it gets worse – for media, that is. Ryan Jones blogs about Green Mountain Coffee’s “growth story without ads.” Jones does this on his personal blog, but it’s worth noting that he happens to be a global brand manager for the largest advertiser there is, Procter & Gamble, and he’s paying attention.

For Green Mountain, it’s the company’s behavior that is its selling point. Its morals become its marketing. We’re going to see more of that, especially after the financial crisis bared such distrust of companies. Jones writes:

Here’s a number that will shock some traditional marketers…Green Mountain says it only spent $17 Million on Marketing on a business that is upwards of $800 Million in revenue. What? To achieve this, Green Mountain is probably using a smart strategy where they leverage the Product as the ad and customers as the ad agency (see this speech by Jeff Jarvis ). According to AdAge, Green Mountain has been relying on sustainability efforts to build its reputation & brand. Historically, the company has avoided traditional marketing, considering itself a “discovery brand.” Only recently has (more traditional) consumer marketing become a part of the equation.

With such incredibly low marketing costs, Green Mountain can afford to have ultra-high quality coffee, pay its people well, give back to coffee growing communities, and give back to charity. And this is exactly what Green Mountain is doing. . . .

Green Mountain is a values based company with a strong sustainability driven purpose. They integrate their values with their business operations and “put their money where their values are” by donating 5% of their pre-tax earnings to social and environmental causes. Green Mountain has also long been an advocate of high quality, farmer friendly, Fair Trade coffee…it now seems that Fair Trade coffee is gaining more traction in the minds of consumers.

In my last book and what I hope will be my next one, I say that when the internet makes price transparent and competition on price thus all but impossible, and when you sell commodity products (as P&G sort of does) then one frontier for competition is virtue: more responsible products, more responsible companies. Given the choice of two toilet papers, maybe you’ll take the one that’s sustainable from the company you trust.

Now add the Zappos gospel: Your customer service is your advertising. Treat people will and they will advertise you.

Blogger Jones quotes Gary Hirshberg of Stonyfield Farms Yogurt, who considers “advertising to be the fertilizer of traditional business.

You spray it on a field of consumers to grow their awareness and hopefully incite them to try your product. Then, you hope that a trial leads to a purchase, then to repeat purchases, and finally, if you are fortunate, to true product loyalty. But just as with conventional farming practices, where petroleum-based fertilizer is needed to grow each succeeding year’s crops, a fairly high % of your revenue has to be plowed back into buying more advertising to keep next year’s crop of product users growing. That money thus becomes unavailable for enriching your product and deepening your relationship with the consumers you already have. You’re left to depend year after on what your advertising can deliver.

Here’s what I said on the topic in What Would Google Do?

Start, of course, by investing in your product or service. Tobaccowala said no amount of advertising will make up for a bad product. “Stop this yelling and screaming about what’s your Facebook strategy,” he tells clients. “Make absolutely certain that you have a great product or service. Make absolutely certain you have great customer service. Those are the first two rules of so-called advertising in this world. If you don’t have those, don’t pay any money to anyone to do anything.”

Then turn the relationship with the customer upside-down. First, invest in customer service, making it a goal to satisfy every single customer. Remember that your worst customer is your best friend. Second, invest effort in social tools that enable customers to tell you what you should be producing; hand over as much control to them as you can (I examine this idea from another perspective in the chapter on manufacturing). The goal must be to produce a product people love. All companies claim that customers love their brands. But I mean customers love your product so much they want to tell the world—that kind of love, Apple love. Third, hand over your brand to your customers—recognizing that they have always owned it. Don’t tell them what your brand means. Ask them what it means.

Every product is great; every relationship is satisfying—shoot for nothing less. So now you are spending quality dollars and relationship dollars over advertising dollars. You have handed over control of the product and the brand and gotten out of the way. If you haven’t gone out of business by now and convinced every boss, board member, analyst, reporter, and stockbroker that you’ve gone mad, then it probably worked.

Quality dollars, relationship dollars, and now decency dollars. Except decency doesn’t have to cost you anything, or not much. If you can compete on the basis of morality, of making the right decisions and treating customers, not to mention the planet well, that starts to look like an efficient and even inexpensive marketing strategy.

So here’s the real punchline: Advertising ends up having nothing to do with media. They become decoupled. Audience no longer yields advertising. Hell, advertising isn’t advertising. It’s relationships. Media only get in the way. There’s the corner we’re painted into, the chaos scenario, perhaps the doomsday scenario for media.

  • http://pblks.com Douglas Haddow

    Excellent points, all. I wrote an article based on your idea that “advertising is failure”:

    http://www.adbusters.org/magazine/84/pop_nihilism_adverting_eats_itself.html

    My only real reservation is that this chaos scenario will instead lead to complete synergy rather than a decoupling.

  • http://zuluzulu.net Wessel van Rensburg

    Very interesting Mr Jarvis. I was wondering that with the maxim that advertising is a tax on unremarkable products, where this would leave commodity producers. Competing on morality could be one way to become remarkable.

    • http://www.sgcicom.com elizabeth braid

      Morality based on whose morals?

      • http://www.buzzmachine.com Jeff Jarvis

        The customers’, in the end.

  • Mark

    When everybody—including advertisers—can be a publisher and reach audiences directly, then the need for vehicles to connect advertisers to audiences is essentially gone. Uh-oh.

  • http://www.hubspot.com Rick Burnes

    Jeff, great post.

    A good way to summarize this “growth story w/o ads” is that it replaces the traditional outbound approach to marketing (think sledge hammer) w/ an inbound approach (think magnet).

    Outbound marketing is, as you say, failure. It means banging people over the head with your message. It is inefficient for the seller and buyer.

    Inbound marketing is far more efficient for both buyer and seller. It means creating content, and doing social good that attracts your target customers.

  • scottRcrawford

    Good logic on most points. But there’s still an element of comprehension about how advertising works that’s missing from this.

    Ask yourself this: If everyone on the planet knows what coke is, recognizes the iconic bottle, why does it advertise? When you can answer that, you’ll have a better grasp on the other role advertising plays beyond generating trial. And that role will most likely continue to, implemented across all forms of media.

    • http://www.buzzmachine.com Jeff Jarvis

      Coke is always used as the example. One wonders what the P&L would look like without advertising. We’ll never know because they’ll be scared of Pepsi. Or water. Could go either way. (And mind you, I’m no enemy of advertising! I want it to support media. I’m just raising the spectre.)

  • http://www.pinee.net Dennis Tracz

    The reason they don’t have to spend $ on advertising is because of the enormous success of a really NOT sustainable k cup product line: Analysts say Waterbury, Vt.-based Green Mountain follows a printer-and-ink sales model: It sells single-cup Keurig brewers cheaply (around cost, depending on the model) so it can make its real money resupplying its pods of coffee called K-Cups. “What we really are focused on internally … is K-Cup demand,” CEO Lawrence Blanford said in a recent conference call. http://bit.ly/19VA0r

    Green Mountain Coffee’s K Cups are NOT sustainable/recyclble and there are many millions of them piling up in landfills! http://bit.ly/bDdxS

    • http://www.buzzmachine.com Jeff Jarvis

      Touché. One had best not brag too much, eh?

  • http://www.pinee.net Dennis Tracz

    GE including it’s NBC and Ecoimagination divisions reportedly have more than 5,000 keurig machines serving a lot of non-recycleable petroleum-based waste K cups coffee and other beverages

  • http://www.pinee.net Dennis Tracz

    Jeff,

    Mostly finished with “What Would Google Do?”. Found the book enlightening and in fact has made me make a number of significant changes in my new start-up business. We won the Dartmouth DEN Regional Business Plan competition a month ago and I’m convinced if I had been able to think about the approaches you mentioned in the book we would have won the national competition as well. We can be found on twitter.com/pineeir

    • http://www.buzzmachine.com Jeff Jarvis

      tell more.

      • http://www.darrenherman.com Darren Herman

        curious to hear more as well.

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  • http://www.ktvz.com Barney Lerten

    Great post as always, sir.

    If more companies large and small realized they didn’t need the media to tell their story directly to their customers and would-be customers, we’d be….

    Oh, wait a minute, maybe that’s a big reason we already ARE in deep trouble;-)

  • Renaud

    Good post. Reminds me of what Ries wrote in “The fall of advertising and the rise of PR” a few years ago:
    – PR builds brands. All that’s needed is a remarkable product/service. Then the media will help out and spread the word.
    – Advertising has a role: it is to sustain the image consumers have of the brand (once it has had some success and the media are tired of pushing it). But Ads have no credibility, so they can’t build the brand.
    In the internet age, social media are reinforcing the role of PR. Advertising is not a failure, so much as a tool that should be used in precise circumstances.

    • http://www.buzzmachine.com Jeff Jarvis

      Except I don’t think it’s PR either. The company and its people must build their own relationships. Can’t outsource that to an agency. In my book, I suggest that the role of the outsider becomes consultative and that consultants, if they’re good, eventually leave.

      • http://sonofgeektalk.wordpress.com Gianni

        As a PR man, I agree – the distinction between PR and Advertising is blurring; however, I think there are new concept in PR (such as contextual-aware conversations or relevance indexed pitch rankings) that can PR more applicable.
        The one skill PR people have when they’re good is their obsession with “content” i.e. finding the story that’s right for the target.

        It is not necessarily “listening”, but pretty close…

      • Renaud

        I Agree. Work on the fundamentals (something that is worth talking about) and chances of success are higher.

  • http://linkstainedwretch.com Daniel Lathrop

    Jeff, taking your point as a given … then doesn’t support not for “media” but for high quality news and/or art become a virtue differentiator? Call this this “Hallmark Hall of Fame” effect for commercial and noncommercial media. Certainly, Mutual of America gains a lot of understood virtue when Bill Moyers calls them “our sole corporate funder” every week. Maybe that’s our future.

  • http://prinzip.livejournal.com Vasily Gatov

    Absolutely loved this :)
    Thanks, Jeff – very important story.

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  • David Chen

    If P&G sold commodity products, they wouldn’t have to advertise in the first place.

    • http://www.buzzmachine.com Jeff Jarvis

      As much as commodity – one cleaner v another; they just clean.

      • David Chen

        If that were the case, toothpaste would only have one price point.

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  • http://cindygallop.com Cindy Gallop

    I couldn’t agree more. As someone who’s spent 24 years working in brandbuilding, marketing and advertising, I believe the advertising of the future is not about saying, but doing; not about telling, but being – ‘You are what you do.’ Brands and businesses will be judged by their actions as much as people are. This idea of ‘action branding’ for both individuals and companies lies at the heart of the venture I’m working on launching, IfWeRanTheWorld:

    http://www.wired.com/epicenter/2009/03/yes-we-plan-how/

  • http://journalism.unr.edu/classes/j453 Donica Mensing

    One problem with decoupling advertising from media is the messiness of large scale relationship building between thousands of products and millions of consumers. The model doesn’t scale much beyond where we are right now. I can take the social marketing through my Facebook and Twitter accounts today because it’s manageable. But it’s only a fraction of the market. If more companies jump in, there’s no way I can keep up.

    So even if a company is decent and one that I want to support, I can’t possibly relate to all the companies that want to relate to me. I don’t want to be that findable. That means we still have a huge need for aggregation. Only now the aggregators don’t have to be media. They can be epinions.com, Amazon, or a RL store, such as Whole Foods. I trust Whole Foods to do all the research to find the sustainable, ethical, ecological products I want to support and then — without having to do my own extensive research — shop freely (mostly) within the aggregation of a single store.

    There’s no reason more media companies can’t be critical, central aggregators to help match products, services and consumers. The matching just needs to be far more intelligent, guided, and integrated than brute force display advertising. Or a random Google search.

  • http://www.worldplenty.com John Banfill

    Great post, Jeff.

    A couple of points. How much has Google spent on advertising itself? How much has Facebook or MySpace spent?

    You say advertising indicates failure. Does money also indicate failure?

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  • http://www.linkam.co.uk Vince Kamp

    Great post, and something that we have been wholeheatedly practising for many years. We design and manufacture scientific instruments. Scientists all know each other, they all read each others published research in their specific fields of interest. If you piss off one scientist with bad customer service, news will spread in the scientific community like wildfire. Likewise, if you sell the right scientist a great product and back it up with more than decent service, everyone will hear about it. They will even publish what equipment they use, talk about it in their seminars and happily provide you with an application note for further marketing.
    Sell to the right scientist and you never have to advertise again.

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  • http://www.dbmi.us Robert Wogrin

    This all begs the question – when everyone is using great customer service, the bar is raised and great customer service no longer stands out. What happens then?

  • Quentin Thorne

    If I ever live in a world where all levels of customer service are the same and companies have to be defined by something else first I will be happy. That would be a fantastic world to live in where you the company you were doing business with actually had your interests first. Like this dry feet cream company, They make a quality product and have the customer first and foremost in their minds.

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