Just Let Go

Speaking to the Association of National Advertisers (ANA), P&G CEO A.G. Lafley suggested those responsible for marketing and promotion “let go” and instead take a note from consumers. Most interesting is who said this, and the impact it’s likely to have. Given P&G’s long-established discipline of methodical research and planning around brand building, marketers who may have been unwilling to embrace the notion of “consumer in charge” may now feel better about doing this.

While thinking about Lafley’s comments, I was working on a business plan with Snapse, a client I’m engaged with. Snapse is a participative video platform that derives revenue from multiple sources, including advertising. Included in the items we were planning were revenues associated with traditional online ads and with commercial content placement, direct integration of marketing material in online video. The plan was forward-looking, five years out.

We all know a five year plan is pretty much a three year plan with more trending. Even a three year plan in this business is at best a defensible estimate for up to about 18 months. Nevertheless, “just letting go” and “consumer participation,” kept creeping into my estimates. I was thinking about various future scenarios, like consumers’ willingness to be interrupted, and the steady march of technology that will surely result in better ad-avoidance filters, therefore less interruption to begin with.

Consumers love knowing about new things and hate being pestered. Home Depot used to have one store about 20 minutes from my house. I knew with one stop I could get everything I needed. Then, they opened a second store, about 15 minutes away. Then another, also 15 minutes away, but in the opposite direction. Now, they’ve added one 5 minutes away. Problem is, the new one’s smaller and it doesn’t have stuff I generally need. So not only do I have to drive past the closer store to get to the one I’ve always gone to, but Home Depot has resorted to more intensive advertising to fill the new stores with many of the same people who shopped at the old ones. At a certain point, consumers are saturated. Home Depot has hit that point.

Back to Snapse. As I was working on the plan, I found myself projecting steady growth in ad revenue almost out of habit: grow the site, increase the traffic, sell more ads, then further grow the site. As if it never stops. Then I thought about Yahoo and CEO Terry Semel’s comments on ad sales slowing down. Maybe it’s more than just the “industry sensitivity to current economic conditions” he cited. Maybe it’s an actual downward trend. I ended up projecting a growth in ad revenue as the site grew for about 24 months, then a decline, even as traffic continued to increase. On revenue associated with direct integration of commercial content, I projected growth for all five years.

Why the difference?

If consumers are invited to create commercials (a stretch, but assume it’s true for a moment) and if these more loosely constrained, user-built commercials are even slightly preferable to the highly controlled ads we now experience, then there’s a huge opportunity for tools, content, and services that enable consumers to participate in marketing in this way. The rise of word-of-mouth marketing is evidence for this; the only tool you really need is a speaking platform, and between blogs, consumer feedback platforms built by firms like Bazaarvoice, and in-person conversations, we’re already well equipped to participate. As a result, word-of-mouth marketing is emerging as a strong component of many marketing toolkits.

Andy Sernovitz makes this point in his forthcoming book Word of Mouth Marketing: How Smart Companies Get People Talking. According to Andy, “Word-of-mouth has been with us forever. What’s new is the second M: marketing. Word-of-mouth marketing is learning to work with [word-of-mouth] toward a marketing objective.”

In this context, isn’t consumer-generated video really just a richer form of online consumer expression? How long before video becomes a standard word-of-mouth medium? When that happens, smart marketers will immediately set about the task of learning to effectively integrate their content into consumer content.

Wait — that would be an interruption, right? Not necessarily. If a marketer dumps a spot on the front and back ends of a consumer video, it’s an interruption. Given the consumer holds the controls, it’s likely to be a short lived one. Hence, my negative projection for future ad growth. But if the consumer picks up some commercial content and integrates it into her video — in the same way she currently relays a fact or benefit through speech, e-mail, or print — what Andy would call a “WOM unit,” then instead of an interruption we’d see naturally occurring word-of-mouth marketing through new video channels. Hence, the projection for content integration revenue growth in the plan.

Where does all this net out? Go back to P&G CEO Lafley’s suggestion to “let go.” Learn to let customers do the talking and make sure it’s easy for them to do so, a point Sernovitz stresses as well. While you’re at it, get to know the folks in operations and make sure you’re marketing a product that’s worth talking about (favorably). Next, heed Yahoo CEO Terry Semel’s comments. I really can’t think of a business that isn’t “sensitive to economic conditions,” so perhaps he’s saying interruptive online ad sales are slowing, period. By enabling consumers to market for you in the brave new world of video, you plant the seeds of your own marketing success.