A couple of weeks ago I wrote a column called The Trouble with Advertising. The response to this column was interesting, to say the least. It was also extremely divided.
On the one hand, I received a ton of mail and a great deal of recognition from people who agreed with what I said. It seems that many people hold a similar opinion but have not seen it published widely before.
On the other hand, the advertising industry came after me. They accused me of making unsubstantiated claims. While it wasn't an Oprah versus the Cattlemen kind of battle (although I kind of wish it was, given the potential publicity), it was pretty interesting. It seems that the advertising industry has a problem with anyone criticizing their medium.
Hey, it's a big industry and there's a lot of money at stake.
The advertising industry has sent me research to try to sway me, but I am not moved. I don't agree with their first premise - "Everyone advertises, and since you are going to advertise, here is how you should spend your money."
I think that in many cases you shouldn't advertise at all.
I also don't feel that the industry has good research that advertising works. What I have seen is too full of the phrases "may" and "it is possible". The research that I have done on my own has also strengthened my convictions.
So what do you do if you don't accept the premise that you will advertise? What do you do? How do you spend your money?
What's the alternative?
Well, I can think of three things. The first is good old-fashioned evangelism. The second is PR. The third is the topic at hand: Personalization.
Evangelism works because it involves getting people out in the field and doing personal selling to groups or individuals. This personal selling usually includes a demo of the product. While this is a lot of work (which may be why people go the easy route and just advertise), I have found that people tend to believe the message because they can see the product's results with their own eyes. The best book on the subject of evangelism remains Guy Kawasaki's Selling the Dream, but I also love Emanuel Rosen's new book The Anatomy of Buzz.
PR works because of its higher level credibility. It is all about what other people say about your product, not what you say about your product. As Guy Kawasaki says, your saying "I'm the world's greatest lover" is much less credible than Cindy Crawford's saying "He's the world's greatest lover." It's not just that she is Cindy Crawford. It's that she's not you. Here's a link to a great Brill's Content article about how and why PR has worked for Microsoft.
So why does personalization work?
Relevance.
In my Signals, Noises, and Pain column I presented an attentional model of the human brain that is based on relevance. The idea is that the brain exists in a world where it is constantly bombarded by messages. It has to figure out some way to manage this information overload and pick out the messages that it should pay attention to. It does this by filtering messages based on their relevance. A message is determined to be relevant if it corresponds to a product or service that the person either wants or needs.
I would submit that products that solve a pain are the ones that are likely to be seen as the most relevant.
One of the main problems that I have with advertising is that it ignores this relevance model. The whole premise of mass marketing is that you expose a huge number of people to the same message and hope that it resonates with some of them. You make no attempt to tune or focus the message for a specific audience. Of course, this message may be encoded in an ad that is also funny or clever or subtle and further disguises the core message. In both cases, you reduce the likelihood that anyone will understand the core message or find it truly relevant.
However, relevance is at the core of personalization.
The whole point of personalization is to craft a message or an experience that is tuned to an individual based on some prior knowledge of their interests. By design, personalization is designed to present information that is more likely to be perceived as relevant.
This has a number of benefits for me as a customer.
For one thing, it means that I will be exposed largely to messages that I care about. It also means that my experience will get better the more I frequent the company. Personalization can also influence how I feel about the company. I am more likely to do business with a company that I think understands my interests and doesn't treat me like everyone else. All of this can help lock me into a company by increasing switching costs. I don't want to change vendors and go back to being a nobody.
Personalization can also have significant benefits for Web-based companies and, if done properly, can give them an advantage over a physical company. The reason for this has to do with selection and the signal to noise ratio.
One thing that companies have been using to their advantage is selection. This is the primary tool of the category killer. However, there is an upper limit to selection. A store can only be so big and still be navigable in a reasonable amount of time.
As the store gets bigger and bigger, the noise goes up and the signal goes down.
Interestingly, this is, but doesn't have to be, a problem with a Web-based business. They don't have to worry about physical constraints. What I see happening in the near future is a few Web category killers emerging who will use personalization to dynamically tailor their sites to the interests of their customers.
They will use the technology of The Personalized Web to build a new site for each customer.
Imagine if you could go to Wal-Mart and they would slide the Automotive, Sporting Goods, and Home Electronics departments to the front of the store instead of forcing you to walk all the way to the back corner of the building.
Not much of this is happening right now. At the most, what you see are personalized greetings and customizable main pages. However, most of this personalization has to be done manually by the user or by someone with information about the user.
Things will (and are starting to) get really interesting when the application server that runs the site can do this on its own.
However, as it stands right now whenever I go to Amazon.com to look for books I am immediately frustrated. I have to wade through all of the other departments to get to the books department. This used to be easier when they were focused, but has gotten worse each time they add a new department. Amazon.com should be using personalization to tailor the site to what I want to do and not annoy me and try to get me to visit their other departments.
Annoy me enough and I will just go to BN.com.
Some people would say that you don't want to let the user see just what they want to see. What about cross-selling? What about up-selling? What about someone buying something just because they stumbled across it?
I would submit that those ideas, while interesting in theory, don't work that well in the real world. The problem has to do with my whole relevance model. If someone isn't looking for a product or service in some manner, then it is almost impossible for them to see a message as signal. Most of the time they will perceive it as noise. Bombard them with enough noise and only a few signals and soon everything is perceived as noise. This is especially the case for the higher-ticket products that are well-suited to delivery over the Web. That it works for gum and magazines isn't really relevant for the Web.
I think a much better strategy would be to cut down the number of messages and just display those that will be perceived as signal. If an entire page is full of things that interest me, then I guarantee you that you will get my attention both now and in the future.
The Personalized Web cannot come too soon for buyers or sellers.
Copyright © 2001 Chris O'Leary
