If brands and advertising have become less useful as tools to both companies and consumers, how can businesses grow?
Five factors are changing the types of products that succeed today and how they engage with their audiences.
Marketing has become an arms race that’s led to hollow value and stifled innovation. Bad products with lots of media muscle can steamroll good ones with less resources. The competition of overcrowded categories creates brands trying to outspend each other with ads that grow increasingly detached from reality.
The post-advertising world is not one without advertising, but one where our use of traditional ads and brands has peaked and a new model for growth is emerging. Five areas play a key role in shaping this change — lessons from the businesses leveraging these, offer a potent blueprint for success:
1. Meaningful improvement
Brands have made businesses lazy. Competition has become matching competitors’ offerings and winning in the margins, while much energy is spent in the battle of perceptions. Look at how similar Mercedes and BMW’s offerings are. Their models and pricing almost mirror each other. They spend a fortune trying to convince us how different they are.
People are inundated with choices in many categories, while brands find more safety in matching each other than offering something new. Adidas makes knitted sneakers. Nike makes knitted sneakers. Who was first? It doesn’t matter — it’s not meaningful progress.
Technology isn’t what makes companies like Netflix, Amazon, Uber or Tesla appealing, the massive value they have unlocked for their customers does. Technology is obviously a factor in this.
Uber displaces taxis because they’ve created a fundamentally better way to get around, not because Millenials like apps. By making millions of unused cars available they’ve created new supply and driven down prices, that have been too high for too long. The net benefit is huge.
Many lesser examples simply find ways around the inefficiencies or layers of middlemen in existing industries to offer meaningfully better value — rather than incremental improvements.
Many of the structures that brands rely on are weakening. This is driving a return to the product and a departure from the fluff around it. If your product doesn’t offer significantly improved value to an existing or previously unknown problem — go back to the drawing board. Surely that’s the way it should always have been?
2. Product storytelling
Aren’t brands precisely about storytelling? Brands have become too much story and too little substance. Those trying to convince us of the countless ‘scientific breakthroughs’ in detergent (soap) have become a parody in the transparency of the internet. This doesn’t just diminish their brand — it reduces belief in brands altogether.
Products that naturally tell good stories win, not because they tell better stories, because they are better products. Warby Parker recognized that good glasses are still made of plastic and shouldn’t have to cost $300. Oddbox realized that food waste is a huge problem and that we should be eating the odd looking produce that most retailers shun. These are great marketing angles — but first, they were great solutions.
It’s becoming harder to stray from the truth. In Hollywood, Rotten Tomatoes has changed how people choose movies and shows and sterilized much of the marketing. Products are telling their own stories while advertising has a shrinking margin of influence.
3. Earned attention
Possibly the single most overlooked fact in marketing presently, is that social media charges less to show better ad content. It’s a fairly simple equation with powerful implications: because ads have become skippable — media platforms can offload more engaging content more easily, get paid more quickly and earn more (as they have virtually infinite inventory). So, they incentivize this with lower prices. To reiterate: Facebook or Youtube charges less for a good video to reach people than a bad one. The price difference between good and bad content isn’t marginal, it’s measured in multiples.
It seems painfully obvious but this has exposed the hollow value of forced media, like ads on linear TV, that people may watch but don’t necessarily add value for the consumer or the brand.
Dollar Shave Club launched their business off a video. It’s worth watching just on the entertainment value, but they land all the key benefits of their offering too. This approach is now widely used to introduce new offerings. Dollar Shave Club has since been acquired for a billion dollars. It’s worth noting, they could never have made this video if they didn’t have a great product and story to tell.
‘Earned media’ (the sharing of content) is a widely used marketing term but a misunderstood principle. It is possibly the best tool marketers have today, not because it provides free media but because it validates that the audience likes the message. It means your message is resonating. It’s working. Hallelujah! This is the real feedback that advertisers have been craving since the invention of TV ratings.
Attention has become discretionary. The interruptive power of ads has diminished and people are obviously opting out of what doesn’t interest them. There is a downside to this meritocracy — because people would rather watch cat videos than learn about most products. Still, brands must take advantage of this by making great content. If you can’t — don’t bother, you will simply be making noise.
A lot of the magic of brands and advertising came from consumers believing what brands said — not being able to test claims and even wanting them to be true. The internet has changed this. Reviews, ratings and comments are there for all to see. Brands with overly ambitious positioning can expect to be called out. Or worse, companies that are found to be irresponsible will face the wrath of the crowd.
Buying is stressful — especially the anxiety of not knowing whether you have made the right choice. Getting validation before a purchase is much safer and it’s becoming easier. The threshold for products that justify pre-purchase research lowers as the information becomes more available. Increasingly companies with good products lead with ratings and reviews — leaving those that don’t, with an added disadvantage: doubt.
Reviews can make or break new offerings. Early momentum has become critical for success. The window to get things right is small and unforgiving. The maxim of under-promise and over-deliver still holds, but it doesn’t mean you have to be boring, as long as your product offers meaningful improvement to the status quo.
5. Reducing burden
People are overloaded with stuff. More brands in more categories, have more ads on more media — taking up more of our time. Phones have invited ads into just about every part of our day now. Increasingly I see people looking at their phones while walking, when I look up from mine.
Big brands and campaigns are often demonstrating their lack of empathy for our overloaded attention alongside their products. This is simply the nature of brands and advertising. Gaining attention is a zero sum battle of attrition, that has become more costly for everyone.
Overload has opened the door for offerings that simplify. Buying a mattress is a chore — Casper makes it easy with limited choice and a good product that just works. It’s not cheap but they bring it to you and will pick it up if you don’t like it after three months, at no cost and with little risk. Customers that opt in to these kinds of offerings are essentially opting out of buying the old way, from categories that have too many options built on superfluous differences. Often we simply stick with what we know. Much of what’s called ‘loyalty’ is just capitulation.
Driving repeat sales generally requires ongoing marketing. The bulk of marketing spend is not to introduce new offerings but to reinforce the ones we know. This is how they compete.
Subscriptions have emerged as a vehicle for a far less onerous relationship — they don’t require endless maintenance marketing. Opting in, customers exchange the burden of ongoing decision making and transactions for their patronage and attention. Then the product has to do the talking.
Whether through subscriptions or other low friction approaches, the products making life easier gain appeal as the burdens on attention and decision making in the marketplace grow.
Products that offer meaningful improvements — tell good stories and earn inexpensive attention. If they then provide proof to support their claim, while making it easy for customers to opt in — there’s a good chance they will.
The fact that a burgeoning but relatively small group of these examples has emerged from the much greater pool of traditional brands is probably proof that these principles are easier said than done, but if you succeed in implementing them, we’ll all be better off.