A brief history of Marketing and the Impact of Digital

This article explores the rise of ‘digital’, in marketing, its origins and how it has impacted traditional sales and marketing strategy...

4 P’S

This has been the marketing strategy of choice for much of the 20th Century.  The strategy made complete sense for marketers primarily targeted with reaching target audiences without any direct communications channel nor ones which afforded meaningful feedback.  Print media, television and radio were the dominant marketing channel groups from which 20th century buyers would ascertain their knowledge of products, services, news, events and trends.

Advertisers would match their assumptions about their customer groups and match them with equivalent channels; homeware products marketed through daytime television, sporting goods through sports magazines and toys during Saturday morning children’s tv sessions.

The 4 P’s model

The diagram below illustrates how it worked; in order to reach your target marketing, simply set an appropriate ‘marketing mix’ of Product, Price, Promotion and Place.

4 P’s Model

4 P’s Model

The Emergence of Customer Centricity

In 1990 Bob Lauterborn wrote an article in Advertising Age saying how the 4Ps were dead and today’s marketer needed to address the real issues.   He was right; developed markets were becoming increasingly competitive, customers were becoming increasingly knowledgeable and annoyingly choosy.  Less likely to positively react to anything that was pushed their way, brands and corporations realised that incorporating the customer more sincerely within their services and product development was a crucial part of developing a business that delivered viability for the medium and longer terms.

The 4 C’s model

As the model indicates; the customers are now at the heart of marketing communications which is oriented around their needs, their buying habits, the end result they are actually seeking from the ‘total product offer’ and much they are willing to pay for it.

4 C’s Model

4 C’s Model

Digital is Changing the Funnel

The diagram below illustrates a marketing funnel,  the ‘funnel’ describes the flow of customers into your organization, this means their ‘journey’ from being ‘suspects’ (meaning they are potential customers who are unaware of your organization and with whom you have no present connection), through to prospects (they have now become aware of your products) to sales leads and eventually into customers.  The diagram shows how the customer ‘controls’ the journey at the top of the funnel.  In most industries potential customers are able to perform extensive research independently of suppliers, largely through internet research and thus are in control over their ‘buying journey’,

The Modern Customer Journey

It is little understood or appreciated by the vast majority of us (suppliers and customers alike) just how much this ‘journey’ has changed over the last 15-years. Think about the ‘customer journey’s’ of yester-year; the holidaymaker, the gamer and the gambler. 

Short-listing, comparing and buying a holiday was in recent times an exercise involving several trips to the local travel agent. Buying the latest video games, until recently, involved befriending the specialist in your local computer games store and gambling has quickly moved into a fiercely competitive online battle between betting brands for gamblers hunting the internet for the best combination of odds and perks.  All these and 99% of others have been irrevocably changed by the advent of the internet.

The Digital Marketing Funnel

The Digital Marketing Funnel

But, the examples above bleed into the delivery and the sales channels involved.  By this, we mean how the customer ‘purchases’ the product.  Holidays, gambling and games have been particularly ‘hot’ sectors for e-commerce because they lend themselves particularly well to being able to ‘transact’ (make the purchase) on the internet.  This is true and is most certainly the reason why these industry sectors have been amongst the first to have been transformed by the internet.  However, the wider point is that the fundamental methodology that the majority of internet users are following to conduct their internet research for every other product in the world has fundamentally changed, now and is continuing to change at a rapid pace – and the direction of travel is clear; customers have more control over their product research phases and it is increasingly important that suppliers and brands understand how to respond.

The concept of customers managing the research and comparison phases of their ‘buying journey’ is perfectly well accepted now, but, when they honestly ask themselves the question; only a minority of suppliers can say that they have fully re-engineered their ‘top of the funnel’ marketing efforts to reflect this new (and continually evolving) reality.   

 

Marketing vs Sales

Traditionally marketing people run a mile from having to be responsible for sales.

After all: how can we be expected to create valuable brand experiences for customers if we are constantly having to worry about an ROI on marketing? 

Exasperated CEOs and CFO’s shout back: share-holders need us to maximise profits – tell us which half of this advertising budget is working so we can cut the other?!

In the modern world, the truth is that both have a point.  In later chapters we’ll come to learn the enduring value of human creativity (even when measured by the commercial yard-stick of ROI), but, digital has driven sales and marketing so close that in many industries it is now indivisible (again, just 15-years ago this would be considered blasphemous in some sectors of the economy).

Marketers are Sales Lead Generators

As digital pushes the influence of the customer further and further down the funnel, so the convergence of sales and marketing has continued.

The Relationship Between Marketing and Sales

The Relationship Between Marketing and Sales

They meet at the point of lead generation and this is the ultimate KPI for the many marketing functions today.  In e-commerce businesses and increasing number of others, revenue is the direct objective.  Lead generation and sales conversions pre-supposes the brand awareness and lead generation activities have also been optimised and very often this activity is far less ‘neat’ to measure.

 In this regard the role of create, innovative brand awareness marketing (and its impact on the bottom line) is alive and well.