Attending MX 2012, I was struck by a pattern that I’ve been eager to share, but have waited until the videos from the conference were posted, which happened yesterday.
I saw the pattern after connecting three dots. The first dot came long before MX, when I found out that the reason you no longer see television ads for Amazon is that they shifted all the money they spent on advertising to Amazon Prime, their $79/year service that provides 2-day shipping on any item, streaming videos, and the Kindle Lending Library.
The second dot was Hotwire’s’ Melissa Matross’ talk at MX, where she explained how she turned “bad revenue” into good. Her approach was to take meaningless banner ads that existed solely as a tacked-on income stream, and use that screen real estate to allow shoppers to easily compare Hotwire’s prices with competitors. That might seem nuts(“You’re sending traffic to the competition!”), but her research had shown that users were comparing across multiple sites anyway, and wouldn’t it be better for Hotwire to get some money (through referral fees) rather than no money at all? The strategy paid off big — users were happier, and Hotwire had more revenue.
The third dot came from Brandon Schauer’s closing talk. Among his examples were Tesco’s initiative to offer grocery shopping in South Korean subway stations — not by locating a physical store there, but providing QR-coded wall-sized print outs of store shelves, where advertising was typically shown. Commuters photograph desired items through a smartphone app, which are then delivered to your home. South Korea is infamous for its overtaxed workforce, and this service allows people to complete necessary household chores without taking additional time from their day.
In each case, we have resources that were once dedicated to advertising instead being used to enhance a customer’s experience, and proving far more beneficial both to the customer and the business. Traditional advertising grew up in an industrial age world dominated by mass-manufacture and products. As we shift into a connected age built on services and customer relationships, savvy businesses are those that recognize money is best spent not cramming messages down people’s throats, but tirelessly figuring out how to enhance the service experience.
Addendum (1:31pm May 16, 2012)
Something I meant to mention, but forgot in my original writing, was since MX, I found out about the phenomenon of the Growth Hacker. The idea is that a web service’s best marketing opportunity is to figure out how to embed the service meaningfully into user’s lives, to go where they are, not with messages, but with a functional aspect of the service.
Great examples, nicely chronicled.