Campaign marketing is dead. Long live contextual marketing.
That's the message today from Forrester Research as it formally embraced the evolution from an age when marketers convinced people to buy things to an age where marketers simply help people find what they intend to buy.
Explaining the change, the influential Massachusetts research house insisted that companies must build "contextual marketing engines" that include "marketing automation, real-time analytics, customer databases and personalized content delivered contextually throughout the customer life cycle."
Today's Tipping Point
While this trend has been developing for years, Forrester declared the actual tipping point at the opening of its Forum for Marketing Leaders in three back-to-back speeches by Forrester vice presidents Melissa Parrish, David Cooperstein and Carlton Doty. A pair of formal studies -- the principal authors are Doty and Parrish -- are scheduled for publication by Forrester next Monday; CMSWire obtained advanced copies.
The first paper, Create Marketing Your Customers Can Use, reports half of online American adults are "always addressable," which means they use at least three Internet-connected devices and get online several times a day from multiple locations. "This gives marketers more opportunities than ever before to engage their customers in meaningful ways -- or to screw it up," said the paper written by Parrish and co-authored by Doty, Cooperstein, Olivia French and Luca Paderni.
"These are empowered customers who are forcing businesses to enter the age of the customer" because they have lots of buying power, ignore conventional ads, and are especially large in the younger generations that are destined to dominate the marketplace of the future, the report said.
For example, of households with income of $70,000 to $99,000, 54 percent are always addressable; the percentage rises to 60 for those with incomes upwards of $100,000. In Gen X, 54 percent are always addressable, but the numbers rise to 65 and 68 percent for Generations Y and Z, respectively.
Make Yourself Useful
"Your most desirable customers don't trust shallow branded messages but are exposed to more of them than other customers because of their perpetual digital connections," said the paper.
Customers are "willing to interact" with companies, if the companies can recognize what is happening. "You must first accept a hard truth: All of the interactions your customers have with your brand define it, and it is the context of those interactions that determines if they'll interact and transact with you again," the report said.
The paper said companies must build a sense of "utility," that is to make themselves useful to their customers. The four anchors for that are identifying how addressable the customers are, the maturity of the data analysis capabilities of the company, partner compatibility a deep commitment to the digital age. Companies with all four have the potential of offering "daily utility for your customers in whatever way they choose to interact with you, today and in the future as their needs change," said the report.
Doty's study, The Power of Customer Context, nails shut the coffin of campaign marketing:
For all the activity you try to catalyze through campaigns, individuals more commonly interact with your brand outside of those campaigns. They may learn about your product or service prior to purchase. Then they'll use your product, connect with others and even organize activities around it. They spread word of mouth, positive and negative -- and that, whether you like or not, is your actual brand image."
Doty declares the context of all those interactions is what will determine if they will continue to support a brand through the "interaction cycle" that appears at the start of this article. "Marketing's job now is to identify and use context to create repeatable cycle of interactions, drive deeper engagement and learn more about the customer process," he wrote.
To be sure, the notion of contextual marketing didn't surface suddenly in San Francisco today. It has been coming for a long time. Last May, for example, another Forrester analyst, Anthony Mullen, wrote about it in his blog: " Context marketing represents a new pinnacle of what marketers are striving for - modeling the internal and external worlds of the customer in order to deliver meaningful, real-time experiences."
A quick search on Google turned up 7.2 million references to "contextual marketing." Still, that is a smidgeon compared to the 415 million references to "campaign marketing."
Doty's paper cites examples to support its case. McCormick, the spice company, launched its FlavorPoint site by inviting consumers to say what they like and what ingredients they have. McCormick then recommends recipes to them. Since the site's launch, spice purchases by its users have doubled.
In another example, Nike slashed its mass media spend by 40 percent, but still expects to grow revenue by $9 billion in three years. Part of its strategy is to used data from devices like the FuelBand to drive consumers to its site, Nike Plus, which includes social sharing and fitness contests. As of last August, Nike Plus had 18 million members, rivaling the scale of mass media.
Campaigns, it concludes, "don't deliver competitive advantage anymore ... because your competitors are just as skilled as you are at the campaign game," Doty wrote. "Change your focus from customer acquisition to interaction management and from media schedules to customer moments."
That is where the "contextual marketing engine" comes in. "You must build a mechanism that allows you to act on that insight in the moment, propellling the customer to the next best interaction," the paper said.
"The power of customer context will catalize a shift in marketers' priorities, budgets and span of influence," Doty said. "While marketing budgets will continue to grow overall, a larger portion of that budget will shift from media to technology and innovation, leading to widespread change to marketing as we know it."
Images from Forrester Research.