Noodle X: Anonymity, Marketing and Predicting the Future

Anonymity, Marketing and Predicting the Future shows that, although each culture has its own concepts of “anonymity” and “marketing,” anonymity will prove to have been a temporary phenomenon in most human cultures because communications technologies are counteracting it. Moreover, based on my studies of and experience with sociology, evolutionary psychology and technology, I observe that 20th century marketing is grounded in anonymity, so we can predict the future of marketing by exploring anonymity and its relationship to marketing.

In brief, marketing’s influence is most poignant when anonymity is high and the marketing “target” is ignorant of the product/service and how to use it. In this scenario, the target is most open marketing’s influence. Read on to learn how marketing is related to anonymity, where anonymity is going and how marketing can transform to strengthen its influence.

Marketing organizations that do not transform will be sidelined because anonymity is dissipating fast.

Marketing Processes

For our purposes, I’ll call out these marketing processes:

• Marketing is the practice of trying to increase demand for a product or service.
• Marketing uses numerous tactics to attract potential buyers’ attention and to influence behavior by increasing buyers’ perceived relevance of the product/service or by decreasing their perceived barriers to purchase.
• Marketing mechanizes communication in several ways: it studies behavior by researching various swathes of target populations (“demographics”), designs messages and uses one-to-many mechanized communications to reach potential buyers (broadcast media, Internet adverts, social media content…).
• Conventional business wisdom holds that the future of marketing is based on optimizing scale and personalization. “Big data” is the most recent incarnation. It mechanically assembles and analyzes data relevant to individuals in order to, mechanically, deliver individualized messages and offers.

How Marketing Is Based on Anonymity: A Simple Use Case

Increase demand and influence behavior have been effective in an environment of high anonymity in which potential buyers had few relevant sources of information and advice about outcomes they wanted to achieve. An important false assumption of 20th century marketing is that people want to buy products and services. They do buy, but only because products and services are enablers of outcomes that people want. The marketer loves products and services, but the user/buyer doesn’t care, with very few exceptions.

To see how this works, let’s think about a common use case. Think back to your first car, which you want to keep shiny, so you are a prospective buyer of waxing products. You have a kind of decision making funnel that helps you create a predictable outcome with the least amount of risk. The funnel has many shades of gray, but at its simplest it looks like this:

1. The “tried and true” is the process/products you’ve used before. The least risk because you have used it before and attained a result. This is white anonymity (none).
2. Getting advice from the highest trusted authority available. Here, you ask a friend who always has a fantastic looking car and does her own washing and waxing, which is the same process that you want to use. Quite low risk, but higher than the tried and true. Gray anonymity; its shade varies with how well you and the authority know each other (trust and the authority’s social knowledge of your personality and abilities).
3. Getting advice from a low-confidence source, either a person you barely know, or a website or other third party. This is the highest risk. Black anonymity. This is where marketing influence lives.

Number one is the most preferred source, number three the least.

Enter Digital Social Venues

Digital social venues straddle the second and third parts of the funnel. They are a completely new source of information and, even better, interactivity. Anyone can ask questions of the community, which may be quite large. Here are three examples for our use case.

I analyze behavior in thousands of interactions on client engagements, and I’ve learned that digital social venues are breakthrough because they provide information integrated with social context. Most people don’t think about it, but at some level they know they want outcomes, and social context is the channel for outcomes. Talking about “the situation” naturally is social.

Study the three examples for our use case. People who choose to participate are passionate or knowledgeable or both, and their many-to-many interaction quickly provides the social and contextual information that confers extensive authority, even though you often don’t know any of the people personally.

No brand can compete with this because none of these people have anything to “gain” by misleading you, where the brand is hardly an impartial trusted source. True, people may mislead out of ignorance, but because they interact in the group, ignorance quickly becomes apparent in most cases. Having observed and analyzed thousands of such interactions, I predict that 20th century (mass) marketing will see diminishing returns to scale. People will believe it less and less, and its ability to influence will fall. It will be disintermediated by digital social venues.

Big Data—Why It Won’t Be a Marketing Panacea

Mechanized communication and Optimizing scale/personalization will continue to create efficiencies, but their impact will disappoint because they are still in the third part of the funnel. They are doing more of the same, more efficiently. And prospective users will increasingly ignore the third part because superior information is available via their tablet or smartphone, instantly, anywhere.

As a three-time marketing executive myself, I would think this last assertion preposterous if I hadn’t subsequently experienced sociality in digital social venues. Think Yelp for anywhere you want to do business, or Amazon for any product you are considering online.

Further, I have spent most of my career entertaining a belief that most marketing still harbors: “customers use facts to make rational decisions.” What I have learned is that “outcomes” are grounded in emotion, and facts are supporting actors, even extras. The stars are emotional experiences that outcomes help people have. Clotaire Rapaille has done pioneering work in decision-making in the context of marketing and global brands. Here’s a nugget of Rapaille’s thinking that helps to explain the confusion:

People don’t admit they make decisions based on emotion, so marketing research that asks people about their decisions is usually misleading. People fake it; they rationalize their decisions because they want to believe that they are governed by rationality. They are not.

Moreover, when people are talking with each other, socially, the outcome naturally emerges. That doesn’t happen when people communicate with brands because brands ask the wrong questions, they are focused on products, not outcomes.

Marketers will ask, “Why won’t big data save the marketing status quo? What could be better than individualized offers based on people’s unique data?” Response: personal attention by a group of other people.

Big data will add incremental value—individualized communications and offers are more relevant than generalized—but it won’t prevent 20th century marketing from losing influence. Remember, prior to digital social venues, people had two main types of information: other people with whom they had some kind of personal connection (few and hard to access practically) or commercial/third party factual information (i.e. Consumer Reports) or brand information. These latter sources are generalized and do not take into account the user’s individual needs; moreover, they are not interactive, which prevents the user from getting clarification.

Big data continues along the impersonal marketing scale vector, so even its “individualized” offers and communications, although incrementally more relevant, will be less emotionally attractive than human interactions in digital social venues for most users. In addition, because it is mechanized, it will commoditize relatively quickly; it will become table stakes and its differentiation will be fleeting.

How Anonymity and Ignorance Are Dissipating

Human beings don’t like risks, and we share our dislike of risk with other animals. In other words, it is written into animals’ DNA because higher risk threatens survival. Since we have a strong preference for predicting outcomes, anything that helps us to do that will be extremely attractive at a deep level.

• The forum discussions in the above use case served as a simple example of collective risk mitigation. Other prevalent examples are reviews on Amazon.com and Yelp.
• Anonymity means uncertainty. Human beings never lived in anonymity before urbanization led to the rise of large cities, beginning with mercantilism (trade is necessary for cities). This represents a very short interval in our 250,000 year history.
• Digital social networks counteract ignorance and anonymity. Sociality is primates’ (and human beings’) key survival strategy, so I predict that digital social networks will continue to grow—and digital sociality uses any available technology. In 2013, “social” features are being bolted onto every software product because sociality is critical to relevance and viability.
• Even though people prize anonymity—it is strongly related to what we currently call “privacy” (many cultures almost equate it with “liberty”)—I believe it will continue to lose to our desire to be connected to mitigate our risks. As I argued in The Big Switch review (see “Privacy”), I think we will discover that anonymity (privacy) was not “natural” for humans. We will seek a new synthesis that optimizes sociality and privacy.
• The bottom line is that more social networks mean more relevant information infused with social context from (relatively) impartial third parties (other people interacting voluntarily). Marketing, since it is practiced by firms making products or delivering services, will always be trusted less than impartial people.
• Marketers who don’t get this shift will end up like the unsecured creditors, standing behind a long line of secured creditors. Marketers will earn smaller and smaller crumbs of attention and confidence because more reliable sources are exploding. This won’t be obvious at first because large portions of populations are still learning how to use social technologies, but the latter are steadily making their way into people’s lifestreams, how people live and do things. Generations of marketing and conditioning are firmly embedded in older strata of populations, and this temporarily dampens the effect.

Looking at the situation another way, 2oth century marketing is no longer needed because personalized recommendations are increasingly available anywhere, anytime.

21st Century Marketing: Making the Transition

When read from the perspective of 20th century marketing, the above is admittedly a grim scenario, but there has never been a better time to be in marketing—for marketers who practice some mental jujitsu to transform their practices and earn new relevance. Here’s how:

• Let go. No, it won’t happen overnight in most brands and industries, but 20th century marketing will disappear because machine-created messages will be increasingly ignored.
• Bank on the lack of anonymity. Assume that all aspects of your actions and conduct will be shared by everyone and will influence buying decisions. You won’t. Marketing was able to influence large portions of populations living in anonymity because, in many buying situations, no greater authority was practically available. Understanding and accepting this shift is the first step.
• Trust and respect the users of your product or service to know what is best for them. Trust their friends and advisors, too. Remember, now they increasingly have many advisors whom they trust more than strangers. Therefore, don’t try to “sell” or “market” your product or service.
• Accept that your users don’t like your product nearly as much as you do. They use it to produce an outcome, some improvement in their lives. People buy holes, not drills.
• Shift your resources to focus on user outcomes by interacting with users in digital social venues and serving them. Actively assist them to have their desired outcomes without focusing on your product or service. For more on this, see Building Post-Product Relationship in the Social Channel.
• I believe that serving people is the new “marketing.” Moreover, because digital social venues are highly networked, when you serve the few, you influence the many. For more on this, see Customer Service Is the New Marketing.
• Mine and deliver your firm’s/brand’s knowledge to market to build influence by serving people online. To make this practical and efficient, you need to conduct a strategy to make explicit what users (stakeholders, customers, clients) you want to service in what contexts). Then optimize the most valuable information/expertise you have with your ease of sharing.
• Prior to digital social technologies, marketers had a valid excuse for being out of alignment with their users. Communication about outcomes was too impractical, expensive and distorted. This is less true every day now. Rather than focusing primarily on your product or service, focus on user outcomes. Firms/brands that do this will lead. Others will perish.
• Open and maintain conversations with your users to study how they are using your product and what outcomes are most important. This will help you (longer term) to design new products/services by collaborating with users. Being engaged with users of your product/service will give you real-time information about outcomes and is the aorta of relevance and profit.

I’ll go as far as saying that, in 20 years at the outside, marketers will look back, scratch their heads, and wonder how 20th century marketing and product development could possibly work without continuous collaboration with users/customers. Exactly.