To Internet and Beyond In Homage to Marketing: From www. to IoT
Philip Kotler surmised marketing as “the science and art of exploring, creating and delivering value to satisfy the needs of a target market at a profit”. In continuation of the definition, he acknowledged the importance of segmentation, targeting, positioning, needs, wants, demand, offerings, brands, value and satisfaction, exchange, transactions, relationships and networks, marketing channels, supply chain, competition and the marketing environment in general. This Kotler statement of how marketers need to identify “unfulfilled needs and desires of the audiences” reflects in the Mad Men dialogue, “..what you call love was invented by guys like me, to sell nylons”, delivered by Don Draper.
However, by 1996, CTR started dropping and banner ads were converting at only 0.1%. With companies still spending millions on banner ads without gaining adequate ROI, the industry started to dwindle. The flawed idea that reaching a larger consumer base would automatically mean higher profits was permeating throughout. Businesses focused on expanding their consumer reach instead of focusing on profit growth. This was the case with other industries as well. Investors were blindly investing in start-ups with unsustainable business models. This led to the famed dot-com-bubble burst. Tech stocks lost almost 60% of their value. NASDAQ composite decreased by 78%. The whole industry was affected and internet advertising revenue fell by 32% in mid-2000.
1996 was also the year when Microsoft sponsored the Superbowl Website for $200,000. When Google launched its search engine in 1999, the online ad industry had already reached $1 billion in revenues. Pay Per Click ad model was adopted by Google in 2002 and it soon became a major source of revenue for all search engines. This was only the start – soon, Social Media would bring with it a bigger realm for marketers to explore and eventually, conquer.
Launch of Facebook saw the rise of a new vertical, Social Media Marketing. Designed at first to allow users to connect and network virtually, Facebook’s potential as a marketing tool was easy to notice. In 2004, when more than 7.3% of the global population started using the platform, domain and scale widened. In 2006, Facebook announced a marketing agreement with JP Morgan Chase for promotion of its Credit Card line of business.
Later in the same year, Facebook and Microsoft teamed up for advertising syndication, aiming to bring relevant ads to the 9 million Facebook users, then. Come 2007, Facebook gave an opt-out feature giving ad owners the ability to prevent their ad from showing to the wrong audience. A year later, Facebook launched “Facebook Ads for Businesses-Beacon”, which focused on viral brand messaging and engaging ads to capture user attention through viral and powerful, provocative messages. By 2009, advertisers were able to target demographics based on language, as well as location. Although Beacon was shut down by 2010, Social Context Metrics were introduced into Analytics. By 2011, Sponsored Stories and Ads API encouraged regular innovations to stay relevant to the dynamic consumer/buyer life cycle.
While the technology behind Atlas (aQuantive) was purchased in 2007 by Microsoft for $6.2 billion, it was later acquired by Facebook for less than $100 million. With a net worth of around $350 billion2, revenue of 27.64 billion USD, 1.86 billion monthly active users and the purchase of Instagram for a billion dollars, Facebook played an instrumental role in creating the foundation for Social Media Marketing.
It wasn’t just Facebook though; Celebrity/Influencer Marketing got a kickstart 4 years after the launch of Twitter, when Kim Kardashian was (rumored to) being paid $10,000 per tweet through Ad.ly. With the launch of Promoted Trends and Tweets, Disney’s Toy Story 3 got recognized as the first paid trend. As of 2012, Twitter’s Mobile Ad revenue has exceeded Facebook’s.
It’s a common knowledge that global mobile commerce is expected grow; from US$170 billion in 2016 to US$694 billion in 20193. This, clubbed with the constant emergence of multiple social media platforms and the rise of content consumption through mobile internet, brands have started to realize the need for the “clutter-breaking”.
One good example of the shift in the scale required to “make it big” would be Red Bull’s Stratos Jump with Felix Baumgartner. With this success, Red Bull managed to give its public image some wings. The stunt managed to garner more than 8 million views on the YouTube Live stream. Breaking through the boundaries of traditional marketing and sponsorship alike, Red Bull sparked a change in the way clients asked marketers for “something viral, something out of the box”.
Looking forward, the need for Content Marketing, Experiential Marketing, a clear and strong brand persona is essential for the survival of brands. With Programmatic and RTB (Real-Time Bidding) quickly paving way for technological autonomy and intelligent data analytics, the future signals the need for adaptability to innovations.
Talking about the future, industry giants have recognized the promise and need of AI in Advertising, for a seamless consumer experience. With around 18 major M&As in 2016, by contenders like Google, Twitter, Intel, Apple, and GE, the future looks intelligent. Google has been the most active player with as many as 200 acquisitions under its belt, the first being deja.com, an internet software and service (2001). With the flurry of AI for not just data solutions but also for IoT products, possibilities are huge. Products like Google Home, Amazon Echo, Apple HomeKit and Microsoft Azure are already creating buzz and despite scepticism towards security, the industry is expected to grow. In 2013, Heineken used smart technology for “Ignite”, limited stock of bottles which flashed in time with the music and it up every time they were clinked. Although it wasn’t successful in creating a big buzz, it gave an interesting insight – being courageous won’t be enough for brands, they have to think of scalability, as well. The recent Burger King – Google Home controversy signals the arrival of a more competitive future and further reinforces the prediction that AI and Marketing grounds will soon be intertwined. Regarding this, some vital questions pop up: Will IoT spearhead the industry towards singularity? Are the innovations yet to peak? That being said, it’d be intriguing to see how Brands prepare and combat the apparent and approaching paradigm shift.