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  • Lou Killeffer

Advertising in the Age of Alexa

Welcome to an Ocean of Commotion

We all know things are changing incredibly fast. This is particularly true in every aspect of the commerce in goods and services. All driven by the overwhelming force of the internet with the somehow now routine but nonetheless profound implications for sales & marketing. Including:

  • Individual consumer control like never before

  • The dramatic disruption of retail distribution - and the near constant shredding of its corollaries in both traditional and evolving media channels

  • Lower barriers to entry for almost any and all new brands and products, further amplifying consumer choice and accompanying brand competition, and finally

  • The advent of meaningful metrics, coupled to increasing intelligent automation, in the express service of the most robust, most compelling and complete direct response vehicle the world has ever known

No wonder so many companies, brands, and their leaders fear falling behind, unable to keep up, much less be successful. Simply staying relevant is a full-time job today complicated by a lack of certainty in knowing what works and what doesn't - and the confidence to stay the course. Maybe that's why even some of the world's best regarded brands often look like they’re driving with the brakes on…

In his essay in last weekend’s Wall Street Journal, Amazon Takes Over the World, NYU professor Scott Galloway argues that among the clear four tech behemoths, Amazon, Apple, Facebook, and Google, Jeff Bezos relentless pursuit of “the most enduring consumer wants - price, convenience and selection” makes Amazon both “the most impressive and feared firm in business”. While I fully believed this to be true before scanning the Journal, Mr. Galloway’s piece makes my own conclusions seem, well, rather small by comparison.

Consider just three of his points:

  • While Google leads in search, Amazon leads in product search, commanding a full 55% of all product searches in the US, making Amazon, as Galloway says, nothing less than “a search engine with a warehouse attached to it”.

  • Gartner predicts 30% of search will be screenless by 2020, and of course the race certainly isn't over, yet Amazon and Alexa have clearly swept past Apple and Siri to claim a commanding 70% share of in-home voice devices.

  • Amazon’s acquisition of Whole Foods looks to be pure genius, the perfect union of online and bricks and mortar, whose initial implications included a whopping 30% collapse in Kroger’s market value just "between the announcement and the close" of the deal...

Beating the Algorithm - or the More Things Change...

The very concept and act of shopping is changing everywhere quickly. This puts pressure on all aspects of the customer journey and accompanying marketing decision making. But in the end, where it all leads, as far as I can see, is back to the brand.

The client and agency executives I know are all intently engaged with their brands as solutions; the keys to a successful future. Indeed, one client leader at an FMCPG firm told me he was leading a brand review to reassess what was most significant and proprietary about where they were and what they must add to further distinguish their brand and product offerings. As he acknowledged, "Amazon will reap its rewards in low price selection, and we'll take our fair share from the middle, but we need a premium brand image that can take us further...We don't just need a dynamic brand, we need a brand that can beat the algorithm."

To me, this sounds, excuse me, a lot like back to future.

A long, long time ago, Peter Drucker famously said, “The purpose of a business is to create a customer." Somewhat later, David Ogilvy offered, "Every advertisement should be thought of as a contribution to the complex symbol which is the brand image.” (He also famously pointed out, “The consumer is not a moron, she's your wife.”) Many, many other men and women have added to our understanding and application of these precepts through time but in fact these essential truths remain largely unimproved.

Isn’t brand building the very best, if not the only enduring, antidote to commoditization? Isn’t this in fact what Amazon clearly threatens across virtually every category, what makes them the "most feared firm" on the planet?

A sale is a transaction, but creating a customer is creating a relationship. So real success was never about the best distribution, the best sales incentives, the best ads and best marketing; but rather, as always, who really cares most about creating customers. The winner is the one who has the courage to put creating meaningful brand-driven relationships with customers at the center of the enterprise. Isn’t that - everything else aside, all which of course is staggering - exactly what Jeff Bezos has done? Isn't that the quintessential Amazon insight?

Doesn’t it prove that in the end, from Drucker, to Ogilvy, to Bezos that what's always worked well, still works well for some very fundamental reasons? People are people. Self-interest is self-interest. And choice is choice. Brands are relationships. And successful “advertising”, from sandwich boards to branded-content, is brand storytelling that uniquely creates and nurtures those relationships.

Lessons Learned

This fall I've added teaching an advertising class in the evening to my consulting practice. It's been incredibly refreshing and rewarding on a number of levels from day one. In trying to establish the essentials we’d be covering, and find out just where everyone was coming from, I closed the first day of class by asking the students to consider the following scenario:

A young couple have just finished a quick stand up dinner in their apartment between feeding, bathing, and tucking their two small children into bed. He then offers her a glass of wine as they sit down to relax and compare notes on their day. Before settling in, she says “Just a minute” turns to the sideboard and says, “Alexa, please ship me a super pack of Pampers infant diapers.”

I then asked, "What was the most remarkable aspect of the scene as just described?"

Everyone started speaking at once as several key themes emerged and were developed…

“How far and how fast voice recognition software has come!”

“The extension of the internet into the very last mile!”

“Amazon’s remarkable reach into the home!”

“The crushing impact this is having on traditional retail and grocery stores!”

After a while our discussion fell off and everything got quiet as the energy subsided and the students sensed I was looking for more; for something else. Nothing was said for a half-minute or so as I fought my inclination to give them a hint or lead them to an answer until one student raised her hand and looking around at her peers and then at me suggested,

“I’m not really sure, but isn’t the most amazing thing the fact that she requested Pampers by name?”

Yes, indeed, in my world it is, and always was and always will be. It’s the critical achievement and the single hardest thing to do. It's why companies go into business, why brands exist, what effective “advertising” does and as I said to my pupils“...why you’re sitting in your seats today”.

Class dismissed.

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