From Net to TiVo, Marketers Need to Use New Technology

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After years of denial, seasoned marketing executives are recoiling from the waste they see in mass advertising. Magazine ad pages fell 11.7% last year, the steepest plunge in nearly a quarter century. Merrill Lynch projects a 4% drop in TV spending this year, after a similar fall last year.

These are not simply responses to recession and Sept. 11, but a permanent shift in favor of accountability best represented by the rise of customer relationship management.

But you know what? CRM is beginning to look unaccountable, too. Marketers, who can drop millions simply for basic database consolidation, are starting to complain they're not seeing a return. If John Wanamaker were alive today, he'd probably say, "I know I waste half the money I spend on CRM systems. And I still don't know which half."

CRM's ineffectiveness
The reason for

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CRM's ineffectiveness should be obvious. As I told the Automotive News World Congress last week, the average interaction between an auto company and a customer is 1.2 times per year. It's simply not enough data to answer such crucial questions as "Which people should get what offer on which product at what time?"

But CRM need not be a waste. It obviously needs to understand the depth of the ownership experience: the consumer's relationship with the product, service or brand throughout the ownership cycle. But marketers should not wait until the first purchase is consummated before they begin relating to customers as individuals. Effective CRM must dive deep into the purchase decision before the purchase is made. Call this purchase-cycle intimacy. Sounds tough. But it can be done.

New linkages between the Internet and conventional communications vehicles make it more possible to capture consumer insights in the middle of the purchase process. Interactive kiosks in dealerships -- or in alternative sales venues -- already are proving excellent tools with which to begin to engage consumers in dialogue without requiring them to engage with a salesperson. Such "assisted sales processes" provide critical information for customer-contact and broad marketing planning and save on sales training costs.

Online activity at home or office is another vital opportunity for purchase-cycle intimacy. Some 70% of U.S. consumers use the Internet during the auto purchase process. Better segmenting methodologies are available to improve the targeting of online marketing communications and the design of Web sites.

From Net to home entertainment center
Imagine these tailored consumer engagements moving from the Internet into the home entertainment center. It is not a fantasy. Toyota helped launch the Lexus ES 300 two months ago with a TiVo cross-promotion sweepstakes that uploaded commercials into the box, invited sampling of other spots programmed into NBC network shows and asked contestants to register on the Web. Think of the opportunities when TV, personal video recorders and the Web, entertainment, brand advertising and interactive direct marketing converge on a single screen, in one room.

This is inevitable as broadband-linked personal video recorders are built into set-top boxes. At last, old John Wanamaker will be able to rest in peace.

Mr. Rothenberg, an author and longtime journalist, is chief marketing officer at consultancy Booz Allen Hamilton.

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