Having a decade plus experience with Database Marketing, I can attest to everything you said about it being customer centric, rooted in quantitative and statistical fundamentals, and based on needs rather than anecdotal. I think “Advertising” can benefit tremendously by collaborating/partnering with their Database Marketing folks (if they have one) or getting into it as you suggested.

Also, in addition to some of the excellent reads you mention I will also encourage folks to attend one or two conferences outside of the pure web arena — like the NCDM conference on Database Marketing, to get a fresh perspective on things. The other thing that cannot hurt is to brush up on general business fundamental systems and models, whether it is the McKinsey frameword, Porter’s 5 forcecs or the cost curve. Knowing what shapes your business and competition would provide a stronger foundation on setting up your overall strategy and product/service planning.

I know this is going to come off like I’m an angry old man, but I’m not angry, just old – and frustrated with the glacial pace of tangible, real learning taking place in Online Marketing.

I think when people look back on this period, one of the great mysteries will be the idea that for an entire generation, Marketing = Advertising, which drove the corollary “traditional Marketing doesn’t work anymore” when what these younger folks really mean is “traditional *Advertising* doesn’t work anymore”.

And worse, this attitude completely neglects the fact there is a 50+ year old discipline called Database Marketing that for decades has been customer-centric, cared about customer experience, believed mass media was wasteful and inefficient, embraced word of mouth, and made extensive use of customer testimonials.

If these folks understood what Marketing is, what they’d say is “traditional, reach-based mass media *Advertising* doesn’t work very well on the web. An interactive medium requires an interactive Marketing approach like Database Marketing, where the individual is recognized and communications customized based on needs.”

A tremendous amount of time and money has been wasted as a result of confusing Advertising with Marketing, and not following the lessons already learned in Direct and Database Marketing offline. Seems like every single day I read about a “discovery” someone has made in online Marketing that is 40 years old offline. Heck, Relationship Marketing – which basically defines what is going on with Social now – is nearly 20 years old!

Solutions:

If you’re still not clear on the difference between Advertising and Marketing, do yourself a huge favor – get your hands on some Marketing textbooks (Kotler is the standard) and read them. If you don’t want to go that deep at first, read “Marketing Champions” by Young, Weiss and Stewart to get a feel for all the good stuff you are missing!

I’d advise having a basic understanding of Marketing itself before trying to go too deep into Direct or Database Marketing. But if you want to go straight to the guts of Direct, try Direct Marketing: Strategy, Planning, Execution by Ed Nash or for a lighter overview see Being Direct: Making Advertising Pay by Lester Wunderman.

Database Marketing, try “Strategic Database Marketing: The Masterplan for Starting and Managing a Profitable, Customer-Based Marketing Program” by Arthur Middleton Hughes. Lighter overview, see my book “Drilling Down: Turning Customer Data into Profits with a Spreadsheet” which only uses a few very simple models of behavior.

If you don’t care about Strategy (a bad idea, IMHO) and are more interested in “Tips and Tricks” kind of content try “2,239 Tested Secrets For Direct Marketing Success” by Denny Hatch, where you will read about tomorrow’s web marketing “discoveries” before they happen!

Thoughts on my theory? How do we get people out of the web echochamber and get them learning what is already known, so the web can “move on” and build someting new instead of repeating the past? Do people even want to learn, or would they rather just iterate, even though that is a huge waste of resources?

Yes, I’d argue a mix, a balance. You take classic customer-centric 4P marketing strategy and then *augment* with Iteration, not replace. The fact you have the capability to respond with changes should not preclude launching with the best set-up for success you can deliver.

Otherwise, it seem to me a lot of time gets wasted. Pure Iteration might be fine for certain software applications where it’s truly a blue sky exercise, but if the online is born of the offline, there’s no reason to suspect human behavior will be any different just because the channel is.

In the end, the predominance of ‘Promotion’ might be a combination of all these: the traditional companies throwing their product over the wall to be “sold” on this channel by the Ad folks, the lack of robust product planning from some of the pure online companies, the pressure to compete from a speed-to-market etc. etc. And like you mention, it would be worth a study to delve in this a bit more and garner learnings that can help both existing and future businesses when it comes to setting up a more complete online marketing foundation.

One thing I should mention though is that the “iterative” model you mention is not a bad idea– especially in today’s world and economy. I think the key is to find the right balance. Some firms hold off on their product launch for ages, tinkering with it to make it ‘perfect’ — I don’t agree with this either as this is a sure fire way to loose your competitive edge. On the flip side, there are firms that release their product before it is ready — again a recipe for failure in the marketplace. The art and science is to know what version of the prototype is ready for the market — it might not be perfect and might need iteration based on feedback but it is not a raw version either that is full of flaws and nothing to catch the consumer’s eye.

I like that theory, certainly can imagine that scenario playing out in businesses adding the web as a channel. So from the corporate perspective, the web was simply another “Place” which required a different kind of Promotion, with Product / Price predetermined.

However, that leaves a lot of standalone online businesses we need to explain. One idea I had (not expressed above) was that in some ways, Iteration has replaced Product and Price for the pure online business.

That is, lacking the knowledge to develop Product and Pricing, and with Place as a “given” (the web), people will simply try different ideas and do their best to evolve them before the seed money runs out, iterating instead of going in with the best offering they could develop.

This would explain, for example, the dotcom era and the resulting high failure rate. Clearly many of those businesses “broke the rules” in a way that doomed them to failure from the beginning. The fact Place was new and different did not release them from the requirements of proper Product and Pricing development.

What I’d like to know (especially from the WAA education perspective) is whether this approach is intentional (do people even know they are ignoring the fundamentals?) or not, why in many ways it seems to continue to this day, and how we might help people get a perspective that would result in higher success rates in the future.

I think when the web and online space first began to grow years ago, the traditional [brick-and-mortar] companies saw this purely as a selling channel. These companies had their critical 2Ps (Product,Price) totally outside and independent of the online space. Once they had these two figured out, I think the online channel was added to the 3rd P (Place) as an afterthought and funds allocated to the 4th P (Promotion) to sell on this channel. So most of the folks initially involved with the online channel were those entrusted with selling a service/product already created by the company (without any feedback or customization specifically for the online world) — and hence the predominance of Ad folks. And even though this channel has gained growing importance and the Online Marketing world increased in breadth and depth, there has not been a proportional increase of skill-depth in the Online Marketing community. Only recently has many firms come to realize that it behooves them to have the first 2Ps (Product,Price) also customized to the online channel and have folks from these areas as part of the Online Marketing Community.

Now I will admit all this is conjecture on my part based on anecdotal evidence from my experiene rather than based on empirical data. But I figured I will throw it in for discussion’s sake :-). Enjoyed the post.