Terror in the Ad World

The Cluetrain Manifesto (1999) talks about the new marketplace of the Internet, where customers no longer want to be considered as markets but as individuals. Some people in business regard this kind of idea as much too radical, and stick to more traditional perspectives of markets – just read any business plan. From Laudably/Renewal, I came across this reference to a Wired magazine interview (reported by David Kirkpatrick of Fortune) with Jeff Bezos of Amazon, where he discusses the value of TV advertising:

Bezos explained why Amazon doesn’t advertise on TV. It tried television advertising in two markets as a test not long ago but that didn’t drive enough additional sales to justify the costs. He said the company concluded it was better to use that money to continue driving prices lower and increase free shipping.

He doesn’t worry people won’t find out when Amazon offers something desirable. "Word of mouth is becoming more powerful," he said. "If you offer a great service people find out about it. We’re getting information perfection on the Internet." He predicted that for all businesses, the amount of money spent on marketing and advertising will decline while the amount spent developing better products or services will increase as a result. "If the successful recipe is spending 70% of your money shouting about your service and 30% producing a better service, over the next 20 years that will reverse."

"Is that a bad thing for print magazines that depend on advertising?" Anderson asked nervously. Bezos did not console him. "Terror would be a helpful response," he said cheerfully. I shifted uncomfortably in my own seat.

Amazon is proving that marketing ain’t what it used to be, and the new Medium has obsolesced the darlings of the broadcast model – marketing & advertising. Not everyone gets it yet, but eBay, Amazon and Google do. The rest will eventually catch on or die. I think that the same goes for small business. Don’t spend your time with hit or miss marketing of your wares at trade shows. Focus on better products and services, and then let the ‘Net effect take over. It may take some time to reach the Connectors, but when you do, you will be ready with good products and services, not just marketing hype.


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