This article explores how the speed of information has changed the “game” and the “playing field” for advertisers and proposes the concept of in-situ marketing as a way for advertisers to not only survive in this new business landscape but also to achieve completive advantage.
Rapid advances in the speed with which information is shared and disseminated have had an enormous impact on advertising and marketing as we know it. Technological developments have changed virtually every aspect of our lives, including the way in which consumers make decisions and the way in which they gather the information they use for those decisions. In this radically changed environment traditional forms of advertising – getting information to prospective customers or encouraging them to adopt certain behaviors – are no longer effective.
The first part of the article will consider the way in which the environment has changed and how this has affected traditional marketing and advertising. In the second part of the article, we consider a new technique which we call “in-situ” marketing and look at how it can be used to take advantage of the new environment by utilizing the very changes which have rendered traditional methods obsolete.
The Impact of Speed
the single most unifying characteristic of recent technological advances is the
vastly increased speed with which information can be transmitted. At the same
time, the increase in speed has been matched with a similar increase in the
numbers of people who can be reached without the need for a corresponding
increase in effort. The internet clearly lies at the center of this revolution,
allowing as it does the almost immediate transmission of information to a vast
number of people for comparatively little investment. No industry is immune to
the effects of this revolution.
The fundamental issue for advertising is that traditional forms have lost the effectiveness they once had. In a recent Forrester survey of the advertising industry, 78% of those surveyed noted that TV advertising was producing ever diminishing returns, while 48% noted that the most significant threat to successful advertising is “commercial clutter” - consumers are simply too inundated with information to be able to select and sort it in a way that is useful to them (and thus useful to the advertiser). In recognition of the fact that the environment has changed, 80% of those surveyed said that they would be spending more web-based advertising, as well as on other alternatives such as branded entertainment within TV programs (61%), TV program sponsorships (55%), interactive advertising during TV programs (48%), online video ads (45%) and product placement (44%).
In the past there was a relatively simple correlation between the amount spent by a company on advertising and its sales – the more it spent, the greater the sales. This no longer holds true. A company can increase the amount it spends on advertising and can even target its advertising more carefully and selectively, but this is no longer necessarily correlated with an increase in sales.
Why is this the case? In the first place, consumers are heavily inundated with information to the point where much advertising is simply ignored because consumers do not have the time to determine what is relevant to them and what is not. Technology in many cases assists consumers to do this, enabling them for example to mute or skip past advertising. This problem is compounded by consumers having become more savvy and sophisticated in their responses to advertising. They are less likely to trust the information they receive than in the past, and will be skeptical at best at what they learn from an advertisement. Consumers are looking elsewhere for their information and placing their trust in different sources. The internet in particular has given huge power to individuals and to groups by virtue of the ease with which information is shared. A single blogger sharing his views on a certain product can reach a mass audience and, if he has established a level of trust, can wield significant influence. Similarly, this “power of one” is complemented by the “power of many”, with websites such as such as “del.icio.us”, “flickr”, and “myspace” creating virtual communities in which information is instantaneously shared. In such an environment, the success or failure of a movie, for example, can be determined in a matter of days as people around the globe praise or disparage it, while the movie’s hype will be largely ignored and discounted.
A further problem is that advertising is essentially what we term “incidental contact”, meaning that there is no particular correspondence between the product being advertised and the time at which the consumer views the advertisement. In the past, when information was more scarce and it required greater effort to obtain it, consumers were more likely to tolerate a situation in which they would learn about products in this haphazard manner. Today, however, consumers are far less tolerable of this because technology has enabled them to find information about what they want when they want it.
Additionally, because traditional forms of advertising effectively “throw” the advertisements out to the world without knowing precisely who will receive them, they frequently rely on “blended averages”, slogans and watered-down messages designed to appeal to as many people as possible, but which frequently have the reverse effect because they fail to tell the consumer anything meaningful about the product.
Finally, traditional forms of advertising suffer from three related but distinct disconnects: there is the “spatial” disconnect whereby the consumer views the advertisement but must go to the store to make the purchase (thus limiting impulse purchasing); there is the “temporal” disconnect whereby the time at which the consumer receives the information may not be the time she is interested in it (the problem of incidental contact); and there is the “logical” disconnect between the “blended average” message and the key information which an actual consumer wants to make an informed decision about the product.
In a similar vein, traditional forms of marketing are suffering in the brave new world of the internet and mobile phones and blackberries. There is a raft of marketing approaches – direct, email, word-of-mouth, guerilla, online, stealth, sponsorships to name but a few – but they share in common the characteristic of seeking to “push” the consumer towards the product in question. But just as with advertising, consumers now come equipped with filters which prevent the marketing from having any impact: marketing is no longer trusted and it is most often irrelevant to the consumer at the time at which it is received. Filtered out from consumers’ awareness, many marketing campaigns fail even to get the product to the point of being considered for purchase.
In a nutshell, traditional approaches to advertising and marketing do not succeed in the changed environment in which information is shared almost instantaneously by innumerable consumers who are inundated with information and who are skeptical at best about the information they receive from people wanting to sell them their wares. How can advertisers and marketers adapt to the new environment so that they can again be effective?
We believe the key to taking advantage of the new environment is by adopting what we call “in-situ” marketing. In this part of the paper we will briefly define the term and then go on to consider each part of the definition in more detail.
“In-situ” marketing can be defined as marketing that leverages real-time, observed metrics to target individual consumers and improve effectiveness while the campaign is still running. So what does this mean in practice? Firstly, it means that the information which advertisers and marketers utilize to make judgments about how best to proceed with a campaign is real-time information, received while the campaign is underway and acted on immediately. This contrasts with traditional techniques which would rely on information gathered perhaps over a six-month period or more, by which time the window of opportunity more often than not would have been lost. It means, secondly, that the information relied upon is gathered by observing the actual behavior of consumers, rather than relying on the self-reported behavior of consumers which, for a whole host of reasons, can often be quite different. By using the actual behavior, the campaign can proceed on the basis of much sounder and accurate data and will be consequently more effective. “In-situ” marketing also means targeting individual consumers based on the information which is obtained so that there is a much greater correlation between the information being provided in the campaign and the person receiving it. Rather than relying on broad groups based on demographic information or segments identified by certain characteristics, “in-situ” marketing is concerned with finding all consumers who might be interested in the product, not simply those people who fall within a particular group identified by the marketing department. Finally, it means that the information which is gathered can be acted upon immediately so that a campaign can be altered and amended while it is still running to ensure that it as effective as possible from the point at which it begins until it ends.
“In-situ” marketing also differs from traditional techniques by virtue of the point in what we term the “purchase consideration spectrum” at which it functions. The spectrum describes the basic process a consumer goes through in purchasing a product: there is first awareness of the products available, then consideration of these products, then a choice is made, which is followed by a purchase, which in turn is followed, ideally, by product loyalty. Traditional techniques such as TV, print and radio advertising are focused on the beginning of the spectrum, that is, on the awareness stage, aiming to make consumers aware of the product. But such advertising is, as we have previously observed, merely “incidental contact” based on broad-brush estimates of the demographic group being reached. “In-situ” marketing, on the other hand, aims to move further along the spectrum towards the purchase and loyalty end, directly stimulating purchases by reducing the distance and time between “market research” (understanding consumer preferences) and “driving sales” (acting upon insights to trigger sales), and by targeting individual consumers based on actual purchases they have made without the risk of violating privacy. Such an approach reduces the reliance on demographic information and is much more accurate in its targeting than “segmentation”.
This new approach is based on certain key principles:
• be where the consumers are already rather than seek to force them to go somewhere else – know where they are at now;
• find out what they think or know already and leverage it – consumers are empowered with lots of information and new sources they trust;
• leverage services that consumers already use for amplification - services like del.icio.us, moviefone, epinions have the “power of many”;
• create opportunities to observe preferences to the level of the individual, then act upon it to serve the individual;
• change traditional feedback loops making them “drastically tighter and faster” to match the speed of information;
• build a two way interaction with consumers and earn a trust relationship with them.
In this article we have looked at the way in which technological changes which allow for the rapid transmission of information to vast numbers of people for little effort have made traditional advertising and marketing techniques obsolete and ineffective. We have then considered a new approach which we term “in-situ” marketing as a means of harnessing these new technologies so that advertising and marketing can become relevant again to consumers and hence more effective. “In-situ” marketing is defined as marketing that leverages real-time, observed metrics to target individual consumers and improve effectiveness while the campaign is still running. It acts on information gathered while the campaign is underway so that the campaign can be modified immediately to be more effective in targeting individuals.
2006, Dr. Augustine Fou
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