Today, we are bringing you a special edition of RTBlog. Not only was the below interview conducted by a guest writer, Rob Garner, but the subject of the interview is the father of real-time himself, Regis McKenna. Garner had a guest post on MediaPost back in November, 2012, explaining how McKenna defined real-time marketing.
In that post, Garner wrote, "…legendary marketer Regis McKenna laid the groundwork for real-time marketing back in 1995." He added, "Many people know McKenna as the marketing guru for Apple, and as a close partner with Steve Jobs. What many (if not most) contemporary marketers do not know is that it was McKenna who first came up with the concept of “real-time marketing.” Here is that original article in the Harvard Business Review that McKenna wrote in 1995.
In the below email interview, Garner asked McKenna to weigh in on contemporary real-time marketing, picked his brain on the now famous 2013 Oreo Super Bowl ad, and had him explain the relationship between social media and real-time marketing. You might want to listen up.
Rob Garner: There have been many different recent interpretations of the concept of “real-time marketing,” with specific applications to real-time bidding, creative, social media, real-time search, real-time content distribution, and social CRM. How do you compare your first definition with some of these current interpretations?
Regis McKenna: Any marketing advance has to be
interpreted in terms of the technology of the time. I often use the example that mass production had to be in place before mass marketing could be applied. Likewise, computers ushered in the ability
to build customer databases and do segmentation, and so on. Real-time (RT) has always referred to some sort of computerized response that is simultaneous with the actual event. In a marketing context,
I defined real-time as the shortest time between customer want or need and satisfaction (or perhaps dissatisfaction). In so far as social media is used to create a dialog or relationship with
customers rather than simply track and sell, it is a valuable marketing tool.
The second part of my answer is in my definition of marketing: “Marketing is the continuous process of organizational learning. That learning process is done by interacting with customers and various marketplace players and the subsequent adaptation to social, economic, technological and competitive change. It is a continuous process enabling the enterprise (producer) to acquire and apply knowledge in order to respond, adapt and innovate reliably and competitively.”
The end game is to form lasting, value-enhancing relationships with customers. IT is the glue that binds the company and its customers in a dynamic feedback loop of information and services. Staying in touch with customers, developing programs that sustain interaction and maintaining a competitive edge require people who understand what each solution means to the customer.
Garner: What are “real-time” marketers doing wrong? What are they doing right?
McKenna: There are many RT marketers that are doing it very well. Amazon, Apple, eBay, Zappos, Netflix, Google, Starbucks, Land’s End to name a few. These companies have a
corporate culture of listening and supporting customers. I think the biggest mistake is thinking that RT marketing is a function of marketing when, in fact, it is a corporate culture and explicit
strategy that involves every business function. It takes a total corporate commitment to build and sustain the IT infrastructure for continuous customer interaction, support, responding, listening,
monitoring and maintaining inventories and a host of other activities that add up to building and maintaining customer loyalty.
Garner: There have been examples of major brands executing on-the-fly creative in real-time, and many marketers are defining this practice as “real-time marketing.” What is your take on recent "in the moment" creative like the Oreo Super Bowl "Dunk in the Dark" ad?.
McKenna: I don’t see the connection between what I believe is RT marketing and these ads. Creative, trendy yes. But, I suspect that a more important element for Oreo might be RT stocking activities or perhaps new channels of distribution. Such activities would have more impact on sales and customer satisfaction than last year's Super Bowl ad. Suppose, if you will, that Oreo cookies were now available at Starbucks. That would make people sit up and take notice and sell more cookies. I don’t think Oreo’s market share changed significantly due to the ads. They already enjoy perhaps the largest share of any other brand with the exception of private label as a group.
I read where the Oreo ads were compared with the 1984 Apple Super Bowl ad. Advertising agencies love the ad, but it did not change Apple’s market share, nor did the “Think Different” campaign. What changed Apple’s market share was not only its new product innovations but the expansion of its retail stores, flexibility in offering online customization of products and a vast logistics network used for tracking orders, forecasting, sourcing components from around the globe, manufacturing and delivering and tracking deliveries. Plus, registration and warranties, help-desk tracking allow for constant customer interaction. Before 2000, Apple had no such capability. (Note: Tim Cook, by the way, can be given most of the credit for putting all this in place for Apple beginning in 2008/2009.)
One last point: Broadcast advertising simply cannot be real-time and will not have that capability until consumers/viewers can point that remote at the screen and take some immediate action.
Garner: How is real-time marketing similar to what we now term as “social media” or “social networks”? How should marketers differentiate “social” from “real-time” as a practice, or are they one in the same?
McKenna: Social media or social networks are still emerging
applications of technology. Facebook has 1 billion members. Twitter has in excess of half a billion. Consumers world-wide – their stories, photos, wants, needs, locations, hobbies, desires,
likes and dislikes have become the largest portion of information commerce. Information today is so prolific and constant that it has become consumable and disposable. The idea of maintaining a
customer relationship (or customer loyalty) through a customer’s lifecycle is increasingly challenging. If we thought broadcast advertising had a high noise level threshold, social media noise
level is already orders of amplitude above anything we have seen to date. I do think that social media will become more and more valuable as a marketing tool as it is integrated into the overall
business intelligence and marketing strategy. After all, most traditional databases contain abstracted information about customers. Social media data isthe RT voice of the
There is a real-time IT response to this "noise level" but it is only just beginning.”Big Data” combines both traditional, structured data (fit nicely into relational database tables) with unstructured data (no identifiable structure). Unstructured data – emails, Tweets, texts, images, videos, etc. - is hard to organize into some rational way to manage, track and respond. But, it is being done and within a few years, software programs will be able to integrate customer data regardless of the form of media or nature of the transaction used. The technology of gathering and making sense of all the various forms of data from and to customers is increasingly complex but IT has always been able to respond. Since the integration of structured and unstructured data is a work in progress, marketing people should dive in and get educated now.
This was part one of Rob Garner's interview with Regis McKenna. Keep your eyes open for the upcoming second half.