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How Has the Brand/Customer Relationship Changed?

  • “Digital disruption has driven much of this shift. Digitally enabled tools and processes have altered what and how a business sells, flipped the tables on the typical customer relationship, introduced a glut of new channels and competitors, and made it harder for organizations to break through ‘the noise.’”4
  • —”The Rebirth of the CMO”

A Brief History of Online Marketing

The first “host-to-host” connection of the ARPANET, the precursor to today’s Internet, took place October 29, 1969. Teams of researchers at Stanford University and University of California–Los Angeles shared a single message: “Login”.

Two years later, Ray Tomlinson sent the first email—to himself. As far as he recollects, “Most likely the first message was QWERTYUIOP or something similar.”5

From such inspirational beginnings, digital marketing was born. It took another six years for the first email marketing campaign (DEC Systems 2020’s message about the “world’s cheapest mainframe computer”6) to come to fruition. A full 25 years later, in 1994, the first-ever banner ad went online. It was part of AT&T’s “You Will” campaign and featured the proto-clickbait headline “Have you ever clicked your mouse right HERE? YOU WILL.”

Three months’ worth of space on Hotwired, the first commercial web magazine, cost $30,000. In a powerful display of first-mover advantage, the banner achieved a clickthrough rate of 44%. How times change.

The Potential of the Internet Begins to Be Realized

For the first couple decades of its existence, the Internet (and digital technology more broadly) were little more than an academic curiosity. But over time, the world’s population began to associate the clicks and whistles of a dial-up modem with a gate opening onto a new “information superhighway.” And as customers lead, so companies follow. Customers began to spend more time online, and brands began to invite themselves to the party.

The banner ads ushered in by AT&T were quickly superseded by more sophisticated—and expensive—campaigns. Microsoft paid $200,000 to sponsor the 1996 Super Bowl website, and major nontech brands such as Toyota and Douglas began to spend money on online ads from this point on.7

In 2000, Google launched the “pay per click” element of AdWords, the first sighting of what’s now known as programmatic advertising. The product brought in $85 million in 2001 and became the bedrock of one of the world’s biggest companies.

Transparency Rising

But as the power of the digital world grew, the first rumblings of another fundamental shift were beginning to make themselves felt. Digital technology made it incredibly easy for customers to access information. Importantly, that information was often created and distributed by peers, not the traditional media or advertisers.

The sheer amount of information at a customer’s fingertips facilitated a growing discernment in purchasing choice. Customers could compare and contrast price, investigate functionality, check out reviews, and more at the click of a mouse. More than that, they could educate themselves on companies in a way that was impossible previously.

According to Cammie Dunaway, it became thrillingly easy for customers to “find out pretty much anything about your company.”

The Internet heralded a new age of transparency in the previously murky relationship between brands, their products, and their customers. This transparency began to shift power from the brand to the customer.

And then in 2005, “social media” was born.

A Free Loudspeaker for All!

In 2005, MySpace and LinkedIn launched, with Facebook following the next year. Web 2.0 and its more sophisticated younger sister, social media, gave customers the ability not only to hear more and understand more, but also to talk more. This development only accelerated the transition of power between brand and customer.

The Internet always had places for online discussion and debate. We’ve moved from early message boards such as the Well (launched in 19858), through the now-desolate wastelands of Geocities and Tripod, past Friends Reunited and MySpace, through a period of dominance for undisputed leader Facebook. We’ve now arrived at a fragmented, more privacy-conscious environment populated by one-to-one and small group communications channels such as Snapchat, WhatsApp, and YikYak. That’s a considerable departure from the “town square,” public approach of Facebook and other social media networks.

Until social media became a societal norm, only companies with significant advertising budgets had the capacity to reach out to many people at one time to get a particular message across. With the advent of a social web, every individual with an Internet connection and something to say was given an industrial-grade loudspeaker powerful enough to be heard around the world.

Nowadays, that means the opinion of a single customer can hold as much weight as reviews from the New York Times or Consumer Reports. Ninety percent of people say that online reviews influence their purchasing decisions.9 That development completely changes the customer’s journey—and thus the marketer’s role. Previously, brand communication played a fundamental part in defining how a brand was seen and determining the viability of products for purchase. These days, however, your customers, empowered by social media, hold that power.

Customers are no longer at the mercy of what a brand is telling them, no longer a prisoner of the marketing budget. Social media has contributed meaningfully to the growth of transparency in the relationship between brands and their customers, handing power to the customer.

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