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Chapter 2: A Brief History of Business to Business Marketing
“But I already understand how marketing works,” Chuck said. “I have an MBA and years of experience to prove that. I must tell you, Ryan, that the last 20 years have put me in a room with too many people with new ideas that don’t work. What is this Attraction you’re talking about, other than just slapping a new label on something I already understand?”
“Why should we trust what you’re telling us?” Carole added, “Everybody and their pet rabbit are saying they have the solution.”
“Because you understand how marketing works,” I told them. “Old-school marketing worked because of a combination of features surrounding how people consumed media.”
“The good old days of mass market communication,” Chuck said.
“Well, the really old days. In this decade, the “old days” are anything between 1995 and 2009,” I said.
“What happened in 1995?” asked Carole.
“The internet happened, and it changed everything.”
Marketing Through the Decades
Chances are, as a CEO, you’re already familiar with some of the history of business and marketing. There’s an equal chance that your education didn’t look at that history through the lens of what happened next.
Some of the wunderkindern in your marketing and digital departments know this material backward and forward. They grew up in the middle of it. For those of us who went to B-School before this all happened, here’s the just-the-facts version.
The Early Days of Marketing
Once upon a time, people generated customers by being near them. The blacksmith sold horseshoes to the people in town, and the local pub sold beer to the people in the neighborhood. Marketing was personal and direct, because communication technology provided no other option. Town criers were the closest thing we had to interruptive marketing.
Then came mass market communication, starting in 1450 when Gutenberg invented movable type. This was first applied to the Bible, but soon saw use for broadsheets and flyers. Magazines and newspapers followed fast behind. Print advertising wasn’t used only to sell products, but also to sell ideas. The American and French revolutions both gained much of their momentum from printed tracts passed quietly from hand to hand. By 1900, print media marketing was firmly established.
Starting in the 1920s, radio hit the scene. It was joined by television in 1942, when Bulova Watch Co. sponsored the first TV commercial. It took just three years after that first commercial for TV to surpass print as the premier advertising medium. Telemarketing soon followed.
Though these new technologies fundamentally changed how advertising looked, they didn’t really touch how advertising worked. Just like the print posters stuck on London walls, they were interruptive declarations of a brand’s quality, availability, and price. They talked at consumers, not to them.
The digital age came into its own in 1984 with Apple’s release of the Macintosh. The internet was still a decade off, and social media even further away, but computers immediately began to change how advertising worked. Desktop publishing led to an explosion in print advertising, even as cable and broadcast TV displaced newspapers as the largest ad medium in the United States.
But it was the internet that really did it. The World Wide Web broke big in the mid-‘90s, leading to a rapid succession of innovations and discoveries:
- April 1994: Canter and Seigel, a Phoenix law firm, posts a message to several thousand newsgroups at once, inventing spam.
- 1995: Yahoo and AltaVista become the first search engines.
- 1997: The number of people searching for products on the web reaches 70 million.
- 1999: Brad Fitzpatrick launches LiveJournal, pushing blogging to the edges of mainstream culture.
By 2000, the “Dotcom Bubble” had burst, but the internet had already gained all the traction it needed. Over 413 million people were regularly online, and every major corporation had some kind of website. The web was with us to stay.
And things were about to get even more interesting.
New Money for Old Ideas
Pay-per-click advertising broke big in 2000 when Google introduced AdWords, a service to facilitate ads appearing on websites to entice users to click over to advertiser’s sites. In 2003, spam had become so pervasive that Congress passed a law restricting unsolicited email advertising. The next year, establishment of the National Do Not Call Registry demonstrated how ubiquitous telemarketing had become.
Although those events showed a changing landscape, they pointed to two inescapable conclusions:
- Most marketers weren’t using new methods. They were simply applying old methods to new medium.
- People were getting fed up with those old methods.
Fortunately, analytics was beginning to suggest a better way to apply the new technologies.
The Age of Digital Marketing
The years between 2004 and 2011 saw refinements in both how search engines presented websites and how web searchers interacted with search engines. Although Google did little to share the behind-the-scenes algorithms that drove both ends of these refinements, smart and observant marketers connected many of the most important dots.
- Sites containing words or phrases used in searches ranked higher for those searches.
- Pages with links leading to them from other pages ranked higher.
- Grammar, value, good writing, and even accuracy were secondary concerns.
This led to business models like content mills and legal advice pages that basically applied the concept of spam to the Google age. Sites blanketed the web with pages flooded with specific search terms that offered questionable value to people looking for that information. Snake-oil types used “grey-hat” and “black-hat” techniques like blocks of search terms in a color that matched a page’s background, or paying for thousands of meaningless comments throughout the web with links pointing to their pages.
This was the beginning of SEO, which I’m sure you’ve heard of. Small businesses got thousands of new leads using these techniques. New business models made millions. The customers got lots of information, but not much value, from an internet full of pages observing the letter of the Google search law while ignoring its spirit.
Then, in 2011, Google flexed its muscles.
Gaming a system is fine and dandy until somebody changes the rules of the game. In early 2011, Google did exactly that by introducing an algorithm update code-named Panda. The update rendered questionable content unhelpful, and actively punished most of the common grey-hat and black-hat techniques.
This was terrible news for most SEO “experts,” and for businesses that used their techniques. As the new, improved internet adjusted, it was great news for consumers. The post-Panda internet rewarded good-faith efforts to provide high-quality, topical content for people who needed it.
I’m going to say that again, because it will be a key part of understanding everything in this book:
Provide high-quality, relevant content for people who need it.
Businesses needed to do that because nobody was going to listen to interruptive marketing anymore. Just look at the record:
- By 2011, watching TV via DVR devices like TEVO reached 42% of the market, owing mostly to being able to skip through commercials.
- That same year, San Francisco banned the unsolicited distribution of yellow pages.
- Also in 2011, internet usage surpassed screen time spent watching TV for generations X, Y, and Z.
Put another way, the instant people found out they could skip interruptive advertising and focus on content they valued, they did exactly that. They ignored ads and went for the good stuff.
This puts modern business growth in an environment where two factors rule every decision:
- Consumers demand high-quality, relevant content from anybody who wants to hold their attention.
- Google, the company connecting consumers with content, also demands high-quality, relevant content
You didn’t get where you are today by not reading the writing on the wall, so I’m not going to repeat that core message a third time. Instead, I’ll spend the rest of this book showing you how to provide, track, and leverage that content.
Future Shock and Changing Times
In 1970, Alvin Toffler wrote Future Shock, a book about how rapidly things would change in coming decades. His core concept was that the rate of change was, and would continue to be, accelerating. If you picked up a marketer from 1750 and dropped them in 1850, they would be able to succeed after only a little adjustment, because things hadn’t really changed all that much. Drop them in 1950, and mass media would render almost everything they knew useless. It would take 200 years of time travel to put them out of their element.
But if you picked up a marketer from 1950 and dropped them in 2000, they would be completely confused just 50 years into their future.
And techniques golden in 2007? Not just useless, but actively harmful just 5 years later.
That’s why it’s important for you, as a C-level executive, to understand the whys and core concepts of marketing in the new age. The technology changes faster than the underlying concepts, so long as you keep abreast of trends and broad changes, you can let your team handle the details.