Is Advertising Losing Its Appeal?

3 minute read
Gerry McGovern avatar

Are we reaching a point in society where advertising is being superseded by search engines and social media? 

“Walmart is asking suppliers to cut back on advertising spending in its stores as it seeks lower prices on goods that it sells to its own customers,” according to the Associated Press in April 2015.

“Top marketers these days are quick to point to an overarching trend in the industry: With the rise of public forums such as social media, fewer companies are finding success with 'mass marketing' tactics,” Stephanie Walden wrote for Mashable in March 2015.

According to the Wall Street Journal, the top 10 US marketers reduced spending on traditional media and online display advertising by 4.2 percent in 2014. According to AdAge, Nike reduced mass media spending in the U.S. by 40 percent in 2014.

Walmart is focused on reducing prices and improving the experience of customers in its stores. Part of improving experience involves paying its staff better, more training, and more on floor managers. What Walmart has realized is that if you want to give a good experience to customers then you need staff who are well-trained and who feel they are being treated fairly.

Walmart knows that if you run a certain size supermarket in a certain size town you need a certain size of workforce to make sure customers get a good experience. Recently, I had a chat with an intranet manager for a large organization who had eight people working for her. Two of them had just been allocated to other roles and there was no plan to replace them. There was no measure within the organization for calculating how this would impact the experience of employees as they searched and tried to do things on the intranet.

Learning Opportunities

I also spoke to a new marketing manager recently who was very focused on the campaigns he intended to run. He freely admitted that the majority of people who were currently arriving at his website were leaving almost immediately. While he recognized that this was a problem, he didn’t really understand how he might solve it. His gut instinct was just to run more campaigns.

The new marketing and advertising is about giving attention rather than getting attention. It is about focusing on the customers we already have and helping them complete the tasks they have come to us to complete. But this requires a real cultural shift from marketers and advertisers. It's not about finding new converts. It’s about serving those who are already converted.

Walmart’s “savings catcher” is a good example of this new thinking. As Michael Schrage wrote in the Harvard Business Review in March 2015,

it promises shoppers that they will never overpay for purchasing at the store. By submitting their receipt through the app, Walmart customers receive credit in their account if the product was available for a lower price elsewhere.”

That’s the perfect experience for a Walmart customer. You never miss the lowest price. I’m sure it doesn’t always work perfectly, but it does reflect the marketing of the future. A win-win situation. Loyalty that is a result of the customer trusting that you will do right by them. Technology enables this new type of relationship. Let’s hope we see more of them. 

About the author

Gerry McGovern

Gerry McGovern is the founder and CEO of Customer Carewords. He is widely regarded as the worldwide authority on increasing web satisfaction by managing customer tasks.