Modern marketing really began in the 1960’s with Philip Kotler and his ideas about uncovering the “needs, wants and interests of target markets.” Ever since, generations of marketers have learned to focus on the consumer and communicating features and benefits to them effectively.
Yet perhaps an even more important source of wisdom for marketers today is Ronald Coase’s famous 1937 paper about The Nature of the Firm, which argued that the purpose of a firm is to minimize transaction costs, especially search and information costs. Surely, that is also an important function of brands.
Today, digital technology has brought search and information costs crashing down. So the challenge is no longer getting a message in front of consumers, but that they are so deluged with information that they are often completely overwhelmed. That’s why marketers need to worry less about collecting “eyeballs” and learn to design rich and seamless interfaces.
How New Markets Are Created
Innovation guru Tim Kastelle argues that the early adopters of any new product are the ones with the greatest “pain” to be relieved. So when computers were first developed, they were used exclusively by scientists at research centers who were in dire need of something to help them with large and complex calculations.
But in the early 1970’s, Bob Taylor had a very different vision. He saw that as processing power became exponentially cheaper, the computer would evolve into a communications device. So he and his colleagues built a machine at Xerox PARC that did something unthinkable at the time, it devoted two thirds of its computing power to the display.
It was called the Alto, a computer like no other that came before it. The Alto was designed to be used by a single individual—almost all computers at the time were time-shared among a number of users—and had a simple, intuitive interface. You didn’t need to be a specialist to use this machine, almost anyone could be up and running with it in under an hour.
Some time later, Steve Jobs visited PARC, saw the Alto and was blown away. He adopted many of its features, such as the mouse and the graphical user interface, but also added a few of his own, like a suite of elaborate fonts. In 1984, Apple launched the Macintosh and the market for computers was never quite the same again.
In truth, the Macintosh did not greatly surpass the capabilities of its competitors, nor did it communicate its benefits in any special way. The key to its success was that its interface made those benefits far more accessible than ever before.
The Brand As An Open API
The Apple II made Steve Jobs rich, but the Macintosh made him a legend. Throughout the rest of his career, interfaces were the focal point of his product development. There were many digital music players in 2001, but the iPod changed the game entirely, just as there were already smartphones on the market in 2007, when the iPhone redefined the category.
What Mark Zuckerberg did in 2007 was no less impactful. At the time, Facebook was still chasing the market leader, MySpace and Zuckerberg did something truly unprecedented. Through a technology called an Application Programming Interface (API), he opened up the Facebook platform to any outside developer who wanted to create a feature for it.
It was a revolutionary move. Up until that point, control of the user experience was considered highly proprietary. Now Zuckerberg, only 23 years old at the time, was completely changing the game. Instead of seeking to control the user experience, he was inviting anybody who wanted to enhance it. Thousands of developers took him up on his offer.
With one brilliant stroke, Facebook became more than just a website or even a brand, it became a platform. By May 2009 Facebook passed MySpace on its way to becoming the most popular Web destination in the world. Today. it has 1.5 billion users and is worth $270 billion. MySpace was sold for a reported $35 million in 2011.
Using Platforms To Access Ecosystems
Facebook’s rise to dominance underscores how much has changed since Kotler established the rules of marketing a half century ago. Back then, everything went one way, from supplier to producer to consumer. Now that linear model has been exploded. Today, firms not only need to position themselves in front of consumers, but at the center of networks.
While MySpace’s head start gave it huge advantages in financing and user base, Zuckerberg had tapped into something far more powerful—the ability of a platform to access ecosystems. The legions of independent developers that were working on Facebook’s behalf far outperformed MySpace’s internal capabilities—or anyone else’s for that matter.
Before long, Steve Jobs, a champion among control freaks, learned the same trick. In 2007, Apple launched its App Store. At first, Jobs locked the developers out, but he soon saw the error of his ways and the App Store is now a $10 billion dollar business. More recently, IBM has followed a similar strategy with its Watson Ecosystem.
So rather than a linear chain, marketers today must manage ecosystems in both directions, those of partnership networks and consumer networks. The entry point is no longer the brand message, but the brand interface.
From Crafting Messages To Creating Experiences
Kotler’s key insight was that enterprises create value not only through design, engineering and production, but also by how they connect with consumers. Because this idea coincided with the rise of mass media, crafting the right message and delivering it to the right person at the right time became central to how marketers did their jobs.
Yet today, Bob Taylor’s vision of the computer as a communication device has long become a reality. In fact, we carry around devices in our pockets thousands of times more powerful than the Alto and think nothing of it. Consumers have now come expect brands to act as concierges, connecting them to positive experiences on demand, at any time or in any place.
Unfortunately, marketers have gotten sidetracked with trying to engineer consumer decision journeys, which all too often simply leads to annoying customers at more times and in more places. We need to shift our focus from identifying touch points to enhancing experiences all the way through.
Marketers need to shift from crafting messages to creating experiences. And it all starts with designing better interfaces.
Image via flickr