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.
