Some Industry Experts Think 'Traditional Marketers Are Screwed.' Here's How to Prove Them Wrong. Businesses of every size need to foster individual consumer relationships.
Opinions expressed by Entrepreneur contributors are their own.
The Interactive Advertising Bureau (IAB) recently released a research report that has a lot of traditional marketers feeling anxious. So much so that after speaking with IAB's president and CEO about the report, Business Insider's Mike Shields wrote "Traditional marketers are screwed." A harsh summation attributed to the fact that non-traditional strategies like those used by direct-to-consumer (DTC) upstarts are systematically crippling growth for the world's biggest businesses.
Related: Use These 5 Steps to Create a Marketing Plan
So, what does that mean for businesses -- big and small -- that typically rely on traditional marketing tactics to reach consumers on channels like Facebook and Google? Shields says it best when he writes, "It's the direct consumer relationship, and the use of consumer data, that is completely game-changing for the marketing world."
Businesses of every size need to foster individual consumer relationships, rather than blast out flashy, broadly distributed ads or pay celebrities to speak on their behalf. And while it certainly doesn't make sense for every business to blow up its existing model to become a direct-to-consumer (DTC) brand, there are key learnings from the DTC playbook that any business can apply.
A 2017 Consumer Content Report revealed that 86 percent of people say authenticity is important when deciding which brands they like and support; more specifically, 90 percent of millennials say brand authenticity is key, reiterating that younger consumers -- who possess $200 billion in annual spending power -- would rather see "real and organic" content instead of "perfect and packaged."
This report found the best way to foster authenticity is through user generated content (UGC). Rent the Runway, an online ecommerce website that allows women to rent designer apparel and accessories, uses UGC as a cornerstone of its business model.
Related: 4 Ways to Market Your Business for Free
Instead of exclusively flooding shoppers with images of picture-perfect models strutting around in their dresses, Rent the Runway prominently features user photos of real customers wearing the dresses alongside their dress reviews, helping users visualize how a dress will look and feel in real life. Users are encouraged to provide feedback on the dresses they order -- regardless of whether the reviews are positive or negative -- to help others make a decision about whether a dress will be right for them. It underscores the idea that Rent the Runway's primary goal is to help shoppers find a gown that will truly make them feel their best, not force a sale -- which has gone a long way toward Rent the Runway's success.
Interaction is greater than transaction.
Building brand authenticity means that immediate transactions can't be the focal point of successful marketing and advertising efforts. Instead brands must look to foster consistent, positive engagement that keeps their brand top of mind when a consumer eventually makes a purchasing decision.
Fast-food giant Wendy's has done this exceptionally well with its fun, irreverent Twitter account.
Wendy's most successful and buzzworthy tweets have nothing to do with deals or selling its food; they involve real interactions with engaged consumers -- and, at times, competitor brands! The brand has developed a personality that consumers recognize, believe and are drawn to -- and those interactions and high levels of engagement can certainly swing favor toward Wendy's when choosing between its brand and the competition.
Own your data.
A key takeaway from the IAB research report is that "an arms race for first-party data is influencing strategy, investment and marketing strategies among major incumbent brands across all categories."
Related: 10 Laws of Social Media Marketing
Take Stitch Fix, the online subscription and personal stylist, for example. Stitch Fix uses a mix of real stylists and algorithms to select five clothing and accessory items to ship to a customer, either on a subscription basis or as a one-off request. The brand relies on customer data to personalize the experience, serving initial recommendations based on a "Style Profile" the user fills out. An order undergoes five to 10 initial algorithms before it even reaches a human stylist. From there, the brand relies on data to learn what products a user buys or returns from her box, helping personalize the experience for each individual user.
Putting this type of data to work is something that all brands should strive for, and illustrates why ownership of data is so important. Rather than giving all of your customer data to other platforms -- like Facebook and Google -- make it a priority to capture data from your customers on your own website and digital properties, and use that data to inform decisions being made across the board.
This is a new beginning for marketing.
As IAB's research report suggests, today marks the dawning of a new era in the marketing and advertising space. Today's consumers have a waning attention span for traditional interruptive advertising, and brands can no longer simply "buy" audiences as the primary, most effective means to reach consumers. While, yes, this poses near-term hurdles for brands that have relied on traditional marketing tactics in the past, there's no reason to panic. Instead, brands and businesses should take a page from the direct-to-consumer playbook, and focus their overall strategy on building stronger, individual consumer relationships.
Sound easier said than done? I assure you, it's not. Weaving proven, new engagement tactics into even the most traditional marketing campaigns will help endear brands to their target consumers on a one-to-one level. Marketers must understand that changes won't happen overnight. However, should businesses commit to prioritizing authenticity, inspiring interactions rather than transactions and owning (and utilizing) their own data to make decisions and meet the needs of their customers, they will slowly but surely insulate themselves from the major shifts the industry now faces.
Related Video: The 2 Keys to a Media and Marketing Strategy