Has the internet really changed everything?

This series begins a debate about the issues in the internet revolution. Paul Feldwick, the sceptic, opens the conversation with some thoughts and questions, and evangelist Mark Sherrington takes up the challenge. We will be continuing the debate on the Marketing Society blog (http://blog.marketing-soc.org.uk – go to Judie Lannon). We encourage readers to join in with their views and we plan to publish extracts from the site as it develops in subsequent editions of Market Leader

Dear Mark, I seem to see a lot of comments about how the internet – and currently 'social media' – have changed all the fundamentals of marketing.

Because everyone can now communicate with everyone else, people can't be fooled any more by brands or advertising. Instead there will be a new transparency, and the newly 'empowered' consumer will choose only better quality and service.

Richard Scase's article (Market Leader, Q1, 2010) is a fine example of what I'm talking about, and I had a go at it in one of my Admap columns (Feb 2010). Now I'm looking at your recent blog where you are developing a similar argument. Permit me to quote:

'In the second half of the 20th century mass production, distribution, media and just about everything else relegated PR and word of mouth further down the list of effective marketing tools and along with them a focus on true product quality and authenticity. They did not render them redundant, just less important.

'A great ad, some stand-out packaging and a full listing in Tesco could trump a better product with a small but loyal following, including some opinion leaders. Any marginal product deficiencies were drowned out by didactic mass and, to be fair, mass production based on mass distribution gave the big brands cost advantages.

'The views of experts did matter and some negative word-of-mouth could be very damaging, but who knew who the experts were, and how many people could you practically share your negative experiences of such and such a brand with? National newspapers and TV told you who the experts were in their “unbiased opinion” (hmmm) and they did not give you much of a platform to share your views other than the letters page or Watchdog.

'Search engines and social media platforms have changed all that. We can research in seconds and we can share our views with millions of folk all over the world in just a few seconds more. PR and word-of-mouth are back on top and with them the need to make consistently better spears.'

You make the case in a more elegant and nuanced way than some do. Word-of-mouth, of course, isn't new. Your claim is just that during the 50 years to 2000 it was somehow drowned out by the power of mass media, and that the growth of the internet has now restored it to its former dominance. Hence product quality will become more important than brands and advertising.

It sounds plausible, but I'd just like to challenge whether this narrative can really be supported by evidence (and I'm open to being convinced if the evidence is there).

First, did PR and word-of-mouth ever really lose their importance?

Second, has the internet in practice really made word-of-mouth significantly more important in consumer choice?

Third, would that mean that consumers are now making more rational, product-based decisions rather than (the implication seems to be) being conned by the old smoke and mirrors?

Of course these questions are big ones, and even if we knew how to find solid answers they would have to be framed in terms of 'how much?' rather than 'yes or no'.

But if we could just agree on that it would, I think, be an improvement on the grand narrative of 'internet changes everything' and 'the empowered consumer'. Let me just add a brief, contrarian thought on each of these questions before I kick it over to you: was word-ofmouth really sidelined in the era of mass media?

Perhaps it was in marketing departments, because there was no easy way of listening in to it or influencing it. But I think it was probably no less important for all that.

Bill Bernbach claimed that word-of-mouth was still the best kind of advertising. First-hand testimony from someone you know has always been the most credible source of a message.

And even without the internet, word-of-mouth could travel around the world if it was interesting enough. Men talked about cars and beer, and women talked about make-up and still do, and I suspect offline is still much more important than online in all that.

In practice, has the internet made word-of-mouth significantly more important in consumer choice? Agreed, it offers new channels for it and is searchable.

In many situations, this can be transformatory: people sharing knowledge about disease or computer problems, for instance. So, in theory, this could apply to brand choice. But how often does it? In a 'high involvement' decision, such as booking a holiday, I can go on TripAdvisor and find 50 reviews of each hotel I consider. Typically five of these describe it as the hotel from hell and another five as the earthly paradise, with the rest somewhere in the middle.

More information doesn't always make for easier, or better, decision making (see Barry Schwartz, The Paradox of Choice).

For some choices I can use a comparison site, but I still need to decide which one – and that choice (for insurance sites in the UK) has recently been powerfully influenced by a good old-fashioned TV campaign. Because yes, people still watch TV, and all the evidence is that they are still influenced by TV commercials.

As for sites such as Facebook and Twitter – which increasingly seems to mean 'Facebook and Twitter' – how much of what goes on there is brand related, and how much is really effective in influencing behaviour? I don't really know, but I suspect it is 'not that much'.

Lastly, I suspect the whole story is underpinned by a lingering belief that consumer decision making is primarily based on objective judgments of quality, whereas I believe it has just as much to do with associations and feelings that are unconsciously acquired. Some of those may come through the internet, but they don't outweigh those that come through TV, the telephone or the packaging, or who else you see using the brand. Most of us still spend more time in the real world than the virtual one.

It's tempting, at a time of rapid and complex change, to come up with simple stories that appear to make sense of them. Tempting, but probably not that useful. Certainly the internet changes things for marketers, and will do so increasingly more in the future. But just what will change, and how much?

The answers to that are likely to be more complex, and more interesting, than this popular narrative of the empowered consumer.

Best regards,

Paul

Dear Paul,

Thanks for your letter (which arrived instantly, digitally and without the need to cut down any trees). I am really looking forward to this debate, not just your erudite contribution and that of, hopefully, many others, but also the chance that we will build a point of view about how the internet will change things in the future – not whether, nor even how much, it has already.

We are not going to disagree on that I am sure. In fact, let me quickly get past that and some of the comments you make on my recent post.

Have the internet and social media changed the fundamentals of marketing? The fundamentals – building and sustaining reputation based on value added – remain the same. But the means by which we market goods and services, and the oppportunties to market new products, have changed profoundly.

I made a point about word-of-mouth (or mouse) becoming much more important than it was during the era – out of which we are now passing – of mass marketing/media/distribution. To answer the questions you posed, was word-of-mouth sidelined in the era of mass media?

No, word-of-mouth was never sidelined, nor even drowned out, by bigbrand, big-budget advertising, but it was rendered less important. Evidence – unless we were all stupid – the relatively small amount of time, attention and budget we gave to good old PR in the good old days.

Has the internet made-word-of mouth/mouse significantly more important in consumer choice?

Yes, it has. Evidence – where do I start? Well, let's look at what is getting more and more of marketers' attention (not necessarily budget since this can be done very cheaply).

The answer is social media. A local retail brand I looked at just this week got 100 online mentions in tweets and blogs (good and bad) which reached more than 100,000 people.

More conversations about brands are going on than ever before thanks to the internet, and marketers have dived into social media tools to listen and, wherever possible, to participate in, these conversations. I have described this previously as a move away from market research towards market intelligence since these conversations can be tracked, evaluated and measured in real time.

Now there is a fundamental change in marketing: less time spent in focus groups and more time actually listening to real feedback virtually for free.

Does this mean consumers are now making more rational choices?

My problem with this is that I think they always did. It was marketers who deemed badge values to be an emotional choice and functional benefits to be rational.

I believe that making a choice based on what it says about me, and how it makes me feel, is entirely rational because, like the rest of my fellow primates, I am a social animal. But that is not the point.

Whether I want to learn more about the benefits, relative prices or see which celebrity is wearing it, the internet has empowered me to do this much better and pass my views on.

No, I don't think we will get very far debating whether things have changed profoundly versus the fundamentals having changed.

Whether by foot or by plane, the fundamentals of travel (and why we want to travel) remain largely unchanged. But trains, cars and planes have changed society fundamentally.

Since Iron Age tribes displaced Stone Age tribes, technology has changed society and the economy. The printing press, steam engines, telephones and television all changed society. What is interesting is that they did not do so predictably. And that is where I hope our debate will take us. No one foresaw mass media advertising when they invented the printing press.

No one foresaw the annual holiday, – and thus the tourist industry – when the first steam engine rolled down the tracks.

No one forseaw reality TV when the first television flickered into life, nor even the internet when they discovered computers.

So where is this all heading? I would argue that the internet has fundamentally changed three things:

• the way we can and will market existing goods and services
• the goods and services we can market (people pay money for virtual merchandise for their virtual avatars for goodness sake)
• the actual market itself.

I'll make a few points about each to see where you want to focus the debate.

HOW WE MARKET EXISTING GOODS AND SERVICES

People are empowered, they can share and compare more, we can measure everything, we can co-create innovation, we can aggregate a viable market for a niche product (cf Anderson's 'Long Tail').

Maybe the fundamentals have not changed – most of this was possible before to some degree – but I refer you back to walking or flying to China.

WHAT WE MARKET

Whatever we market, from information to ideas to applications, there is a whole new economy exploding as much, if not more so, than post the industrial revolution.

THE ACTUAL MARKET

The market itself has changed – this is a point I want to emphasise. The internet is essentially a market, a place where we – and I mean all of us, not just the owners of capital – can exchange our time, attention, opinions, ideas and indeed our money for things that we value which in turn may be ideas, information, social kudos, entertainment or goods and services.

Marketers have made an even bigger mistake than they made in the 1950s when they assumed television was radio with pictures. Too many see the internet as a 'new medium' and treat it as such by wasting money on banner ads and pretty but unvisited websites.

The internet is indeed, as Jeremy Clarkson so amusingly calls it, an 'interweb' of social and commercial exchange. Walking has more in common with flying than a conventional market has with the internet. We have only scratched the surface – the possibilities are endless.

But I guess if you think that selling a few, literally branded cattle down at the market is similar to brand marketing, then it is hard to see what all the fuss is about.

You caution against using simple stories (analogies) to make sense of how the internet is changing our society and, along with it, our marketing profession. With a brain dulled by age and swamped by change, it is the only way I can make sense of things.

But we are in violent agreement about the core of this debate – what precisely will change, how much and, I would add, how, as marketers, must we adapt our game? I have some ideas but look forward to hearing where you think it would be most useful to start.

My best wishes,

Mark

ABOUT THE AUTHORS

Paul Feldwick is a consultant. [email protected]

Mark Sherrington is chairman of Quirk eMarketing and a non-executive director of Brandtone, Mobile Marketing.