Invest in CRM, focus on relevance and follow new rules to survive in "attention economy."
CHICAGO -- People pay for "free" content not with money but with their attention.
As a result, attention has become today's most valuable currency. And because consumers control the inventory, it has become one of the most complex. A variety of environmental forces, such as cultural changes, relationships and personal lifestyle habits, all combine to influence unpredictable attention spans.
In a nutshell, we have embarked upon the "attention economy," as author Esther Dyson explains in her book "The Economics of Attention." She claims it's not that marketers don't have data to support actionable insight, but that they have been slow to adjust to the needs and habits of users in this new economy. Marketers are being forced to think the way consumers think -- in modes, not channels. Few companies have truly revolutionized their communication approaches to catch up with consumer patterns.
An Ad:Tech Chicago panel, "Brand Marketing in the Attention Economy," tackled this very issue Tuesday.
Moderator Dave Hutchinson, president of Conversion Partners, framed the discussion with three principles for brand marketing in this attention-focused environment:
- Customer relationship management (CRM) is a business philosophy driven by marketing and supported by technology.
- Media channels are collapsing into a single dialogue between brands and consumers.
- Attention is becoming the ultimate "common currency" for modern marketing.
"We have proof that you can capture the full attention of the viewer and find ways to keep them involved with a site," said panelist Dana Jones, president of Ultramercial.
Their model asks consumers to interact with an advertiser's commercial in exchange for free access to content that otherwise would have to be paid, such as music downloads, video clips, premium news reports, financial portfolio tools and other entertainment content. In effect, Ultramercial takes the value decision out of the hands of adware and lets consumers decide, 80.55 percent of who have agreed to watch advertising.
Out of 102 campaigns, one of Ultramercial's biggest successes was for Salon, averaging 4.34 percent clickthrough this year.
Relevance reduces consumer anger
Since the Millennial generation continues to be bombarded with excessive marketing messages, panelists urged brand marketers to understand this segment's behavior and responses to certain messages and products before communicating with them. Panelist David Tokheim, senior director of consumer intelligence at IGN/Gamespy, said that his site captured the 18 to 34 year-old early adopter audience that marketers crave and has already sold out its inventory for Q4.
"We can map our audience to the needs of the advertisers and work with them to reach the target in the most relevant manner," he told the audience. "Relevance allows brands to avoid angering consumers and helps prevent backlash."
Unfortunately, consumer backlash to advertising has been growing rapidly in the past year, he said. Consumers often pay more to block advertising than they do for the products that advertising is trying to sell. Corporations are finding that a successful CRM best practice is to ask consumers if they want more information and if they want to continue the exchange of communication.
Entertainment has emerged as the new way to break into consumer attention, with corporations aggressively building branded entertainment programs. However, even some high-profile brands with loyal customer bases have failed miserably in this endeavor. Consumers have been able to see right through the supposedly "opaque" attempts.
New names, new rules
The who, what and how of consumer behavior change daily. As executive vice president of strategy and analysis at Target Base, an Omnicom company born out of a market research firm, panelist Scott Bailey's job is to fully understand these three components.
"Historically the rules of marketing have said that 40 percent of how successful your campaign will be is based on targeting, 40 percent based on your offer and 20 percent based on your creative. This is flawed and recently we've had to add media to that mix," Bailey said.
CRM is also taking a larger role. The mandatory first step to making the process work, he said, is identifying the lifetime value of the customer. Next, the corporation must determine a value for what its brands offer to customers. This dual dimension provides marketers with better segmentation capability and a platform on which to review media habits.
"CRM is not an approach, but rather a business philosophy. Relationships are based on relevance and value exchange. The challenge is for advertisers to find ways to encourage this value exchange to continue," Bailey told the audience.
In advertising's model of subsidizing the cost of most content, the implicit exchange is that advertisers provide content while promoting their messages -- and consumers give, in return, their attention to the advertiser. The new generation of users, however, doesn't believe they have to fulfill their end of the bargain.
As the rules of the marketing game change, so must the language. Bailey said even Procter & Gamble has changed the term "media planning" to "communication planning," and marketing partners are developing new terms less limiting than "shop" or "ad agency."
Next up: operational struggles
The panelists agreed that all of the changes in external forces are forcing changes to internal structures. Target Base's Bailey said that phase one -- understanding that this is an attention economy -- has been completed. The industry is now in phase two -- doing the painful but vital operational work on the corporate environment.
The traditional agency model is fading and is no longer run by creatives, thereby giving a larger role to media planners and buyers. Management structures are changing and new compensation rules are emerging. Companies are asking for integrated services, but don't want to pay for them because they're accustomed to silo pricing. With that integration, current measurement of return on investment is inaccurate because of redundancy and overlap.
"Media buyers ask us to knock their socks off with an idea, but we feel it's only appropriate to respond with ways that meet the client's objectives," Tokheim told the crowd. "We're seeing that there is no unified strategy tying together all of the touch points across media."
Bailey also pointed out the enormous gap between marketing and technology. The capability for the two vastly different departments exists and systems are available, but lack of communication between teams and common metrics inhibit success.
One solution to this communication barrier, Tokheim of IGN/Gamespy said, is to have someone serve as the liaison between the marketing and technology teams to interpret each side's goals and results. This person should be responsible for defining a common language that supports actionable steps.