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Marketing as a contract with the consumer

November 24, 2009

Remember when advertising was simple?

Mass media created content for the masses on TV, radio and print. The people were amassed by the content and called the target market. Advertisers were invited (for a fee) to offer these people a reason to buy.

That’s brand marketing.

This article by Randall Rothenberg gives you a good look back on the history of marketing. It is one of the best things I’ve ever read on advertising, and where things are going. Stop reading this blog post and go read it. His post has some really head noddy stuff. I love it because the way Randall speaks about marketing sounds a lot like how my boss does.

Now back to this post.

This entire ‘brand marketing, mass media’ transaction was predicated on a ‘contract with the consumer’. The contract essentially went like this:

“The content you are consuming is underwritten by this ad”.

Advertising is an underwriter for content. The bigger the crowd the content amassed, the more brands paid to pitch the assembled mass. Think about the Super Bowl. The model that worked for ages was content subsidized by the ads.


There’s still validity in this model. The obvious issue is that content creators are having a harder time amassing the mass market in one place (one can watch TV on TV, on the computer and even on their phone).

And that’s blurring the lines of the contract. Alan Wolk wrote about a new contract, calling it another tier, in which iTunes sells a commercial free version of a show.

Newspapers are dying partly because they messed up their part of the contract. They gave people content for free in one place while charging for the same content in another place. And even though the fee was less than a dollar, free is significantly less than a dollar. So people opted for a different contract, and learned to ignore banner ads.

For an even stranger example, consider this blog. It has no contract: I don’t sell ads on this, nor do I ever intend to. Readers get content at no cost. Occasionally I post things I work on, but rarely. So this blog might actually be part of the problem we’re experiencing with digital.

Blogs, Twitter, Facebook pages, these all lack that content contract.

Is that bad? For an answer, consider direct marketing. It is a tactic that skips the contract.

Direct marketing comes from seller to buyer via mail, phone calls or e-mail, skipping the middle man. The middle man though is the content.

I don’t think it is a coincidence that these are the three most hated tactics in marketing. Postal mail is junk mail. E-mail is Spam. And telemarketing has do not call lists. People appear to hate things that skip content.  They hate billboards and get annoyed by ads at the movie theater (where ads don’t appear to make the content cheaper). In examples where there’s no consumer contract, the result is a consumer backlash against the ads.

So this notion of skipping the content provider to go right to the consumer clearly agitates people. Maybe the simple answer is that consumers are aware they are getting nothing out of being pitched?

In the digital world, marketers are struggling to figure out ways to write a new contract.

Consider the Facebook page as exhibit A for the so-called new marketing. The Facebook Page doesn’t underwrite Facebook. A Facebook page doesn’t bring anything of value to the fan. (The exception is brands with a lot of brand cache. Well known brands get rewarded for building good brands).

Like the website before it, which also had no contract with the consumer, social media needs to ask: what’s in it for the consumer in a way that wasn’t required of traditional advertising.

What’s the 2.0 contract with the consumer?


The predominance of promotions in social media is the early solution to this problem. Fan this page, get a free thing. Enter to win on tabs on pages (or microsites). Those are clear contracts with the consumer. In return for a name, the brand offers a consumer a chance at something free. (Promotion experts are aware that there’s only so much information they can ask from a consumer before the consumer elects to not enter into the contract).

But when the promotion ends, that’s when a new contract needs to begin. What will you do with those names after? If not another promotion, then what?

For the record, that’s what I love about the McDonald’s ARG. I think that’s a real interesting contract with the consumer — play this game, have fun, and don’t worry, there’s no pitch.

For now, you can count on more promotions in social media. Brands can always give away stuff. From shirts and hats to free merchandise, the one to one ability of social media will force marketers to rethink the contract. But soon, we’ll need to think more about the relationship.

I think that’s when the fun starts.

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