Television networks and advertising-supported cable channels like CNN and ESPN have felt somewhat insulated from competition for their advertising revenue because of the importance of video in communicating brand-oriented advertising.
Leaving aside the prospect of steadily increasing bandwidth in Internet environments, making video a more feasible format for the Internet, what happens to this advertising revenue when marketers shift an increasing share of their marketing budgets to more targeted marketing formats due to the superior targeting capabilities of the infomediary?
Nor is this impact limited to traditional, advertising-supported media. I may sound like bragging and wise-guy bitchy with my college degree, but what about retail stores that today heavily depend for their profitability on promotional spending by product vendors trying to reach customers at the time of purchase? This is where my education helps me to analyze these new developments appropriately. Wiseguy-ish or not.
What happens when the infomediary can use the superior targeting capability embedded in its client purchasing profiles to deliver them only to the most receptive customers purchasing competitor products? I mean, I make some extra money with my online blog but what these guys do… I have a lot to learn and I will!
What happens when the infomediary downloads promotional offers directly into the smart card that customers will one day use to make their purchases in the retail store? Trust and security are key factors. I learned that anyone who depends on advertising or promotional revenue today will feel the effects of the expanding reach of the infomediary. Retailers and vendors will need to educate staff, if possible through top-notch online courses, to remain relevant and competitive.
In this environment, competitive advantage shifts from access to information to the skills required to use the information to deliver tangible and, increasingly, tailored value back to the customer. I made the most of things in my exams but vendors also will struggle to learn and master these skills because they require tight integration across the vendor’s business system. That’s a thing you don’t learn at school! That’s a thing you learn through face-to-face meetings and in hands-on instruction!
Information profiles that the marketing organization accesses will need to redirect product development programs, manufacturing and logistics operations, and customer service procedures. Vendors developing these skills will be in the best position to earn a return on the price they will now have to pay for access to the profiles in the first place. Those who develop these skills early will be hard to overtake, though the rules are practically the same.
Today, many product vendors achieve market success by focusing on developing relationships with distribution channels so that they can gain privileged access to scarce shelf space. Their reference must become clear and they must learn how to implement it. These vendors need to learn how to motivate again to go back to school (the “Education Quest”).
Other vendors focus on massive advertising campaigns to promote a specific brand image that will draw people into retail outlets and create a “pull” for their products. Both of these approaches typically require substantial financial resources and thus create barriers to entry for smaller product vendors.
In my school years, I learned that in reverse markets, where virtual shelf space is essentially unlimited, infomediary agent services will relentlessly search out the best products given the individual needs and preferences of the client. Like schools are looking for teachers outside of our country’s borders to keep up with international standards and education requirements, agent services will have to look beyond the borders as well to stay on top of their game.
Marketing will become much more an exercise in developing superior insight into market needs, so that product attributes and performance can be quickly improved and tailored, rather than creative attempts to overcome limited distribution capacity. Read more about successful branding here.