Disruptive Marketing

Geoffrey Colon

• Publisher: AMACOM
• Year: 2016
• ISBN:
  9780814437407
• Topic: Commerce
• Subtopic: Marketing numérique

With 75 percent of screen time being spent on connected devices, digital strategies have moved front and center of marketing plans. Getting a message through to customers, and not just in front of them for a second before being thrown away, requires radical rethinking.

What if that's not enough? How often does consumer engagement go further than the "like" button? With the average American receiving close to 50 phone notifications a day, do the company messages get read or just tossed aside? The reality is that technology hasn't just reshaped mass media; it's altering behavior as well.

Disruptive Marketing challenges you to toss the linear plan, strip away conventions, and open your mind as it takes you on a provocative, fast-paced tour of our changing world, where you'll find that:

• Selling is dead, but ongoing conversation thrives
• Consumers generate the best content about brand
• People tune out noise and listen to feelings
• Curiosity leads the marketing team
• Growth depends on merging analytics with boundless creativity

Packed with trends, predictions, interviews with big-think marketers, and stories from a career spent pushing boundaries, Disruptive Marketing is the solution you've been looking for to boost your brand into new territory!

PART I

A WORLD WITHOUT RULES

CHAPTER 1

THE DISRUPTIVE MINDSET

Create, Engage, Adapt

The true scarce commodity is increasingly human attention.

—SATYA NADELLA,
Chief executive officer, Microsoft

ONE HOT AND humid evening in late August 1922 a sound wave coursed through the New York City sky. Only those with a radio console tuned to 660 AM could hear the male voice, speaking in a “you’d-better-not-miss-this” tone, which traveled those airwaves.

The station was not WFAN Sports Radio, “The FAN,” which currently inhabits that frequency, where on-air hosts spend hours talking about the failures of the Jets and the Knicks. This station, whose call letters were WEAF, pumped out a steady stream of talk, news, and cultural tidbits interspersed with jazz and swing—the popular music of the early 1920s. Who could have guessed that the one male voice, speaking nonstop for about sixty seconds at 5 PM on that August evening, would ultimately transform how electronic communications would operate for the next eighty years.

Friend, you owe it to yourself and your family to leave the congested city and enjoy what nature intended you to enjoy. Visit our new apartment homes in Hawthorne Court, Jackson Heights, where you may enjoy community life in a friendly environment.

Today, Jackson Heights is a densely populated area that pulses with the captivating odors of Colombian, Ecuadorian, and Argentinean cuisine punctuated by street-corner discussions on fútbol clubs like Deportivo Cali, Emelec, and Boca Juniors. In 1922, however, this part of Queens was still being developed and that early radio ad touted its virtues.

In the modern era, anyone who still listens to AM/FM radio anywhere in the world will find an on-air commercial like this commonplace. But in 1922, it was new. Why would a voice bark out a message about the Hawthorne Court Apartments? Was it part of the evening’s programming? Or was something else behind it?

What listeners at the time did not know was that Hawthorne Court had shelled out $50, the modern-day equivalent of $678.64, factoring for inflation, to WEAF. Essentially what listeners heard that evening was the first paid radio advertisement.

Of course we understand that ads or content like this doesn’t simply end up on the air naturally. During my daily drive home on the crowded Interstate 405 from Bellevue to Kirkland, Washington, the Ron and Don Show on 97.3 FM KIRO radio will, out of nowhere, say something like, “Hey, do you want to eat a fresh lunch? Subway, eat fresh,” before continuing to talk about that day’s news. They do it so casually it’s as if they hadn’t interrupted the flow of the news to promote Subway. But we all know that these on-air personalities didn’t simply decide to talk about Subway or any of their favorite eateries without compensation to the station.

Third parties want to use media to reach audiences they feel will use their services or purchase their products. This is pretty common knowledge. The Hawthorne Court Apartments radio advertisement on WEAF was intended to appeal to a middle-class, radio-owning audience. But how did WEAF know to do this? Why did station management decide to take money from the Hawthorne Court Apartments in the first place?

To answer that, we need to look back to those who shaped radio into an advertising channel that would eventually influence its later cousins, television and the Internet. As is often true when something is done differently, it wasn’t radio people who developed the idea that led to selling advertising time on the radio. In fact, like most disruptive scenarios, the idea of radio advertising came from a source outside the radio business.

DISRUPTIVE MARKETING AND THE CREATION OF RADIO ADVERTISING

Actually, the idea for radio advertising came from the telephone industry. Specifically, it was the telephone call, not the telephone hardware, that ushered in the radio advertising model. In 1913, Bell Telephone and its parent, AT&T, unwittingly joined the radio race when it acquired a patent for the vacuum tube, which turned out to play a central role in radio broadcasting. As a result, AT&T had a prominent stake in the radio in 1922 when the station it owned, WEAF, aired that ad. But how did AT&T come up with the concept of selling airtime to third parties? The answer lies in telephone usage and behavior.

In this era, there was no rotary phone. You would pick up the transmitter and an operator would come on the other end of the line and say, “Operator; how may I direct your call?” and you would tell the operator the number, and she would connect the call. The underlying technology of the telephone—that any message could be carried and connected to any place at any time—was the connective link. Once the parties were connected, the operator left, and all the caller would pay for was the length of the call from that moment.

Herein lies the centerpiece of the future commercial broadcasting industry. The mechanics of placing a telephone call today (if you even make a phone call using a landline, with all the available alternatives of email, SMS, text applications, social networks, Slack, WhatsApp, etc.) are camouflaged in the convenience of area codes and direct dialing. But even mobile phone users know that what we are still buying from the AT&Ts, T-Mobiles, and Verizons of the world is time measured in exact minutes and seconds on a communication system for hire.

A Solution out of Thin Air

WEAF essentially was one of the first disruptive marketers. It found an answer to the problem that was in “plain blind sight,” also known as “inattentional blindness,” which Christopher Chabris and Daniel Simons discuss in their book, The Invisible Gorilla.

Thus, WEAF asked a “What if” question that the radio industry needed to solve: “What if we finance an endless stream of programming by giving airtime to businesses who will pay us for it?” This, of course, is an ongoing question for media; think of the freemium applications you download onto your smartphone. But in 1922, AT&T figured out a solution to a problem that others may have seen but hadn’t solved: how to bring together space, time, and reach to create a revenue model. This financial structure, used by the marketing industry ever since, is how most media outlets became cash rich in the twentieth century.

In the 1920s, the radio was a consumer item, a piece of furniture housed in an attractive wooden cabinet, with simple controls designed for anyone to operate. Think of it as comparable to today’s smartphone. But unlike your smartphone, which monetizes itself via data and calling plans, in 1922 the radio had a lot of time but, seemingly, nothing to sell to pay for the operating costs and technology.

The concept of time as revenue has always been used in economic models. In fact, AT&T was already using that model when, in 1922, it decided to sell what it called “toll broadcasting” on radio. The company simply brought payment for time and access from one technology (telephone) to another (radio). And it worked. Across many industries, time is the essential ingredient in the billing and revenue-generation process.

In fact, if you’re reading this during work hours, technically you’re going to have to make up that time later in order to earn your income. Even if you don’t bill by the hour, time is what your annual salary is based on. And if you work a shift, you are effectively billing a particular rate per hour. This rate is one set by the government, the employer, a combination of the two, or by you if you are offering a service as a third-party vendor.

Time billing is how professionals such as lawyers, consultants, construction people, and even creative services make most of their income. Therefore, it makes sense that time is the essential value that the media sell to third parties who want to use those media to reach audiences. Time is what advertisers are basically paying for when they buy media for their message.

Yet, time isn’t the sole quotient in this model.

In 1922, WEAF had a large listening audience because it covered a one-hundred-square-mile radius in a metro area with close to 5.6 million people. Because WEAF owned the technology and could rent that time to third parties that wanted to reach their audiences, we entered an era known as “pay to reach.” This was later amplified by television and the Internet, and more recently social media platforms like Facebook. For the remainder of the twentieth century, marketers essentially paid for two things when they bought media on third-party platforms: space and time.

Geoffrey Colon @djgeoffe

In old media, marketers paid for space and time. In emerging media, marketers will pay for audience and attention. #disruptivefm

6:25 PM—21 Feb 2016

All of those models of space and time in the form of billboards, newspaper and magazine ads, radio and television spots, digital online banner ads, Facebook ads, promoted tweets, and pre-roll video (the annoying thirty-second video spots you see on YouTube, the ones with the “Skip This Ad” buttons that I know you hurriedly tap) are now seen as distractions and clutter.

WHY ADS DON’T MATTER ANYMORE

We have become accustomed to tuning out the advertising and marketing messages because we don’t like interruptions in our habit-formed lives. And we’re skeptical of the messages ads bring us. In fact, most of us feel ads don’t bring much value to our lives, just more distraction.

There’s another reason we tune out ads. Frank Rose, author of The Art of Immersion: How the Digital Generation Is Remaking Hollywood, Madison Avenue, and the Way We Tell Stories, explained this to me in a Skype chat. Frank spent many years as a writer at Wired magazine. Many of his pieces were on the intersections of media, technology, and human behavior. There is no better person to talk to about this than Frank.

On why ads don’t matter as much anymore, Frank said, “The main reason is people are so much more media savvy than they used to be and it’s not hard to figure out that advertisers are simply trying to advertise.” Frank Rose noted how the power that technology gives to users reshapes their behavior. We can see it in our day-to-day lives. How many of you reading this book watch live television anymore? Do you own a DVR that gives you the capability to fast-forward through the ads? Do you even pay cable companies to access their content from a cable converter box, or are you a cord cutter? How many of you click on the banner ads, search ads, Facebook ads, or any other ad on your mobile device?

Rose is right: the world we live in is focused on how we personalize our experiences, which inevitably leads to rapid withdrawal from the interruptive advertising format. As he put it,

If you look back at the history of marketing, which came about in the mid-century in the 1950s with the rise of mass media, people were not very sophisticated. The whole 1960s approach to marketing is obsolete. . . . People are so much more sophisticated largely because of the Internet. The Internet has called into question the whole thirty-second spot. People had to watch those because they had no choice back in the day. You only had three channels and limited options. People don’t want clutter. The whole point of marketing now is moving toward creating messages that people want to share with others.

Geoffrey Colon @djgeoffe

The average amount of ads a person living in a city is exposed to daily? 4,000! #disruptivefm

6:26 PM—21 Feb 2016

Nevertheless, Rose said, organizations aren’t systemically ready for disruptive marketing. No matter how many articles you read about digital, social, or mobile marketing in Advertising Age, Adweek, Digiday, or some marketing blog, conventional marketing is the norm. And the data backs it up.

In a study, the market research firm eMarketer reports that most big brands still put heavy emphasis on creating thirty-and sixty-second television spots, even though there are many other options that would get more traction. According to that same study, TV ad spending is forecast to be in the $75 billion range by 2017. According to Rose,

Interruption is something people will try to avoid at all c...