Attention! Spoon-Fed Marketing is Around the Corner… And How it May Backfire

Imagine walking into a store to purchase a particular item. As you pass through the door, you receive a promotional ad from the retailer on your cellphone, but the discount is for another, unrelated product that you happen to be actively searching for. Did they read your mind?

 

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Though this scenario may sound a little creepy, it’s one that is very much in the works (with some of it even happening today), and it heralds a new pervasive, “personalized” approach to marketing. This personal marketing is not based on relationships, though. It’s based on data, and lots of it.

Earlier this week, I came across this blog post over at Allbusiness.com about the recent announcement of Google’s new mobile payment system, Google Wallet, and how mobile payments in general may one day effectively alter the buyer-seller experience (on both ends of the transaction). Here’s a quote from the post:

“…Google can currently track your every online move. It has been doing this for years, personalizing your searches, monitoring your browser habits, and providing really useful free services to keep you logged into Google longer so they can track your purchasing and personal habits better… They have also generated revenue by sharing some of that data with merchants. That way, if you look at an e-commerce site for camping equipment–even if you don’t buy anything–personalized ads and messages will start to populate your Internet experience.

…Last week I looked for a new ergonomic desk with room for two or more monitors, and now I see ads for dual monitor stands, control switches, and desks quite a bit. Even Amazon sent me a sales announcement for a dual-monitor stand, and I’m pretty sure I wasn’t looking for a desk on Amazon that day.

The Google payment system will take that data one step further into the real world. If I had this system now, then you could bet if I walked into a office supply store to get some pens, a coupon or discount announcement would pop up on my phone informing me of an X percent discount on desks.” 

Whether or not Google’s efforts to enter mobile payments are successful is a bit irrelevant, because the technology certainly exists to support this kind of transaction. It will happen; it’s just a matter of time. There’s certainly plenty of money to be made in such a setup, and where there’s money, then rest assured there will be enough resources invested to convince the “hold-outs” to jump on that bandwagon.

Why Data-Driven, Personalized Marketing May Ultimately Backfire

There are two main reasons why hyper-targeted, data-centric marketing may not be successful in the long run. The first reason is that it’s intrusive, and consumers may ultimately rebel with the attitude of “Ugh! Don’t tell me what I should be buying now!”

The second reason is even stronger: being electronically spoon-fed deals, coupons, and purchasing recommendations automatically depreciates the value of the product or service. It takes out a large chunk of the shopping process- a process that for many is inherently satisfying- and thus alters the buying experience.

This is all based on a simple truism that you can probably see in your own life: there’s more value in the product that you’ve worked for and for which you’ve actively searched- you considered your options and chose it for whatever reason. Even if you bought an item on whim, the fact is you still actively made the decision.

It reminds me of an older lady I know who was telling me about her experiences growing up in a developing country. At the beginning, when she went to the store for fruits and vegetables there wasn’t much of a selection, and she didn’t have much money either. How much time she spent carefully looking over each tomato, cucumber and potato before deciding to purchase it! Everything she ultimately brought home was so much more precious than it is today now that selection abounds and money is more plentiful.

Bottom line: In the end, marketing and management fundamentals will always hold out, whether or not you or your business buys into all the “essential” technology (and the truth is that depending on the nature your business you may ultimately have to in order to stay competitive). Better, I say, to focus most of your energies on developing a real relationship with your customers, and having them come to you for a product or service rather then trying to force feed them an “unbeatable deal”

Comments

  1. says

    You couldn’t be more correct that developing the brand, and the connection with the consumer will always be paramount to couponing and discounting.

    That said, I would welcome a little comparison competition in the grocery store. Maybe it’s the fact that it’s lower ticket items? I don’t know. But reading the post, I kind of like the idea of deals being beamed to me from somewhere, saving me money at the register. We’ll see if I like it when it actually happens.

    Nice post!

  2. says

    I agree that it could backfire but I think it is more than the reasons you have stated above. yes, it is intrusive however so are commercials and while we have DVR’s and such to not see the commercials, we are still faced with them and have gotten used to/accepted/drowned them out. The same will be with targeted search results. Being in the right sidebar, above the organic search results we have already trained our eyes to go to the area where we will get the search results we want. We have tuned out the noise.

    There is also the factor of the smartphone/mobile advertising. We walk into a store and boom we get a text of a deal. How upset will we be if we are able to get a discount on an item while we are there? Will it make us do the math a bit on that $75 chair, which we now are saving 20% on and buy some accessory like a lamp? We may be spending the same amount but many were not walking out of the store leaving that 20% discount on the table.

    I think we will get bombarded more with the add ons that people try and sell us. They know we are looking for that chair, so they have us, we are engaged and engrossed in finding that chair and our propensity to purchase is high. What about the coupon/discount to buy the lamp, floor mat for the chair, etc. That is where we would get more annoyed I think.

    We also know that Google is watching .. but we forget. When we are faced with it head on in the ads that get targeted to us we start to narrow our searches and act differently. You cannot even type the word football in a Facebook comment without ads coming up in seconds about football. Creepy. I may not even like football (which I do) and was typing it in a comment to someone who does and I am sent ads. Wrong person to target.

    This targeting for a bit may go the direction of pop-up ads. We will find barriers and then something new will be create and the cycle will start all over.

    Great article, I really enjoyed it and your perspective. Well done!

  3. The Frugal Entrepreneur says

    Hi Suzanne,

    I agree 100%!

    I also think consumers will just ultimately tune out this new form of marketing. And with those “add-ons,” as you put it, that will inevitably make their way on to our cell phones, I think at first people may not mind and may even find it kind of cool, but the annoyance will quickly follow for the reasons I’ve mentioned above.

    Thanks for the comment.

    Adam Gottlieb

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