The New Quid Pro Quo

Anyone who works in advertising, comedian Bill Hicks once said, should kill themselves. Many brand owners might agree: In the last 10 years, ad effectiveness has fallen by 40 percent due to saturation, ad avoidance has risen to record levels, and more than three-quarters of consumers say they don’t trust advertising messages.

But is there a truly new model?

The old world of marketing, so the story goes, was based on interruption. You’re there enjoying your magazine or television program, and suddenly you are interrupted with a message from our sponsors. As the amount of advertising increased, these interruptions became less and less effective. Brands began to look for new places to ambush their prospective customers, which led to the growth of guerrilla and ambient advertising, ads on coffee cups or pavements—what has been called “urban spam.”

Today, in response to an aversion to advertising, some of the world’s leading brands have begun to craft an entirely new model for communications to help them earn the right to talk to consumers. They’re doing this by making their marketing valuable, developing brand communications that deliver a genuine service value to consumers, free and with no strings attached. This is Marketing 2.0.

The mechanisms for delivering this value are as varied as the array of media options now open to consumers.

Nokia is “Connecting people” by providing a tool called Park WiFi that you can download to your cell phone or computer to receive free Internet access in 10 of New York’s parks. Nike is providing RouteFinder, an online tool that helps runners plan routes around London. And Honda recently launched Honda Mobile, a free tool for your cell phone that helps with some of the daily hassles of life on the road, like keeping track of all your travel expenses. And these are just a few examples.

The birth of Marketing 2.0 reinforces the fact that in an increasingly ad-adverse and digitally empowered world, consumers are demanding something of value in return for consuming a brand’s communications. This is forcing advertisers to become, as one advertising think tank recently put it, “innovators in making ourselves useful.”

Forward-thinking brands are seeing this as a great opportunity to grow their brand and damage their competitors. For example, Google Spreadsheet, Google’s free version of Microsoft Excel, is a powerful utility that, together with Writely (Google’s word processor) and Google Gmail/Google Calendar, could seriously harm Microsoft’s Office business.

But forays into this new space are not always successful. Consumers quickly see through tokenistic utilities that are not relevant to the brand that provides them. For example, Wal-Mart stumbled in launching an Internet community because it was accused of “flogging” (creating fake blogs).

To build a successful value-added campaign, companies need to identify something that is both useful to consumers and relevant to their brand. Most important, there must be an equitable value transfer. Consumers must enjoy a genuine utility in return for consuming the communication. At their best, brands can create a win-win marketing model whereby consumers get a useful service and the brand builds engagement with its targets.

Ultimately, this evolution is making companies rethink the division between their “service” and their “communications.” As Amazon CEO Jeff Bezos recently said, the model where companies spend 70 percent of their marketing budget on telling people about their service and only 30 percent on making the service more useful is rapidly becoming inverted.

Amazon chose to address this by taking its media budget and investing it in free postage and packing; Evian has invested its media budget in free “Purity Spas,” which offer hot stone massages and detox treatments; Charmin invested in free public toilets in Times Square; Europe’s biggest health and beauty retailer, Alliance Boots, reallocated much of its ad budget to simply retraining its pharmacy staff.

In an age of ad-versity, successful brands will increasingly be those that use marketing less as a mouthpiece and more as a service. Maybe the marketers who embrace this won’t need to kill themselves after all.