What is the impact of technology on marketing?
I wrote this FAQ a long time ago (July 2012) – but it continues to receive a lot of hits. So you might want to read some of my more recent articles on the topic before the older material.
AR, VR and EX (November 2020)
The growth of MarTech in professional service firms (March 2020)
Technology and psychology skills needed (July 2019)
How technology drives marketing intelligence and efficiency (May 2019)
Marketing after the technology revolution (July 2018)
This book on advanced marketing management (which I reviewed in May 2019) also discusses the impact of technology – particularly in analytics and “predictives”.
The original article ( July 2012)
This is a really big and topical subject and I have written various articles on the subject. However, here is a kind of ‘brain dump’ summarising the key points in a fairly random way:
The Internet is changing the product and services available in a big way. In professional services, the Internet is allowing firms to develop new ‘packaged’ products – sometimes by providing integrated or related services such as financial and estate agents services. Using extranets means that certain clients can be provided with access to the firm’s internal systems which both adds value and ‘locks in’ clients to your service.
There are some good legal examples at kt.uklaw.net and fidler.co.uk. The expansion of the Internet is creating new issues in terms of contractual rights and copyright too – new service areas for lawyers. (A more recent example is from Royds Withy King and its LifeSafe product.)
The Internet allows a lot of information to be obtained easily by customers. One side effect is that it is much easier to compare prices making price competition fiercer. The use of computer systems to reduce the time and effort involved in producing and delivering products and services means that suppliers can either increase their margins or offer the same services at a lower price. Commoditisation is also occurring where people ‘package’ new products and services together and offer them, via technology, at a lower price (the high volume, low value approach). On-line payment (through credit cards) makes it more convenient to clients/customers and can make cash collection quicker and cheaper for suppliers – again increasing the possibility of price reductions. Yet the Internet can make it more difficult to offer discriminatory pricing (i.e. different prices for different customer groups).
The developments in the power of databases means that direct marketing is really coming to the fore allowing new segments to be more easily identified and allowing segments-of-one to be profitably targeted. Permission marketing has been born but is still in its infancy. The Internet is also a great source of information – allowing you to keep up with your competitors’ and clients’ activities. On-line polls and surveys can yield a large amount of additional information about your clients.
It also means that it is much more difficult to retain any form of differentiation when your services and approach are clear for all – including your competitors – to see. The Internet also allows you to reach a much wider geographical spread than was previously possible. The Internet makes markets more even – allowing smaller players to compete with big players and overseas competitors to enter new markets with ease. Some argue that the Internet is just another channel which needs managing just the same as other channels (e.g. retail outlets, warehouses, direct mail etc).
In just about every sphere of promotion – advertising, direct marketing, personal selling, public relations – CD Roms, web sites, personalisation and interactivity are making fundamental changes to the way marketing works. For example:
You need a web site – even if only as an on-line brochure. You need to advertise to get traffic to your web site. You can provide a web address in advertisements to provide further information or to capture customer information and orders. Digital television and the broadcasting revolution (including web TV) makes mass advertising practical and affordable for much smaller companies than previously. There are all sorts of new advertising media now available – electronic posters, information kiosks, banner advertisements, on-line directory entries etc. Interaction and multimedia are challenging the creative treatments of advertising as well.
Database technology aligned with digital printing of short runs of full colour promotional materials has had a dramatic impact on direct mail. Email lists make it easier to have more regular and focused communications with key customers and clients. The use of call centres and computer assisted voice telephony are rewriting the books on customer service and fulfilment. Permission marketing is where customers provide information about their needs and preferences and agree to the supplier using this information for further marketing activities.
Brochures and publications are now electronic, interactive and tailorable to the specific needs and interests of smaller markets and even individuals. On the WWW, the customer decides what information they require and in what order so some level of supplier control is lost. Desktop design and publishing is reducing the need for and cost of expensive designers and printers – sadly, good design is becoming rarer as more amateurs try their hands. Client communication programmes are much more easily maintained through the use of email and electronic communications – which also reduces the cost of postage. Media relations can be enhanced by providing background information and news releases on web sites. The Internet environment has generated a wide range of additional media which are hungry for good content.
Those tasked with selling can use the Internet to undertake fast research into prospects. Electronic presentations can be easily tailored and presented desk side or remotely (by email or teleconference). Databases have revolutionised client and contact management systems and field sales staff effectiveness and supervision.
The use of 3D simulations and virtual reality means you no longer have to create a real exhibition space or show suites. Giveaways are often technology flavoured (mousemats, screen savers, free software etc).
Malcolm McDonald provides a useful summary of the impact of technology on marketing
Technology changes marketing:
- Integration – know your client
- Interactivity – beyond addressibility to dialogue
- Individualisation – information enabled tailoring
- Independence of location – death of distance
- Intelligence – informed strategy
- Industry restructuring – redrawing the marketing map
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As always, if there are particular topics you would like me to address in the future, please let me know. You will also find a source of more and up to date information on a broad range of management and marketing issues in the professions by checking out the blog where I also post regular reviews of books that might be helpful.