According to Mathew Sweezey, Director of Market Strategy for Salesforce and author of The Context Marketing Revolution, individuals become the largest creators of noise in the marketplace – surpassing brands – and will “remain the largest creators of noise until the end of time”. And what has happened since then and continues to happen at an accelerated rate is something you ignore at your own peril, as what worked in marketing yesterday might not work for you tomorrow. And even that might not work for you the day after that.
I had a great LinkedIn Live conversation with Sweezey to go over a few main themes he covers in the book, along with a few current topics that are already changing the marketing game from what it was in the very recent past. Below is an edited transcript from a portion of our conversation. Click on the embedded SoundCloud player to check out the full conversation.
The Context Marketing Revolution
Matthew Sweezey: If you look at marketing, marketing is a game. We need to think about it as a game. The rules that we believe, the truisms that we know, such as no such thing as bad press, sex sells, right message, right person, right time. These are games that we created to be played, given a specific media environment. When that media environment changes, we have to change the very definition of the idea of what marketing is. Hence, a new rule for a new game. I was able to prove that we entered a new media environment that is radically different from one that we’ve ever experienced before. And I coined the term infinite media era. In that infinite media era, the ground of the modern media environment is context. The easiest way to understand this is to look at a social media feed. In a world with limited media, when social media first came out, you went to your social media feed and you noticed your feed was a chronological account of all of your network’s activity, chronological because there wasn’t a ton of content.
Now that we have so much content, what happens is that feed moves from chronological to contextual being driven by artificial intelligence owning that context. So that is what the word context means. It means that it is the foundational ground of the modern media environment. Now, what most people want to do is they want to take this word context and say, “How do I make my X, Y, Z more contextual?” My response is, that is you trying to take an old idea and forcing it into a new framework. Rather, realize context means how is it found, who does it come from? It’s the environment that surrounds the thing. It’s not, how do I make the thing more contextual?
Then the second part is revolution. This is not an evolution of old ideas. We must realize that this is a complete resetting of the media foundation or the fluid that interacts, that connects brands and consumers. So that’s why we’re talking about the revolution.
So in short, what is the context marketing revolution about? It’s about a new idea of marketing made for a new point in time.
Tesla vs Mercedes Benz – A Case Study in Contextual Marketing
I love the example of Tesla. Tesla is very much a contextual marketing organization and people are like, “Why is that the case?” And I was like, “Well, here’s the best case study in the world. How does a brand that does not have a product outsell the number one marketer in that space by a factor of three, spending 1/150th of the budget to do so?” And that’s the answer of Tesla versus Mercedes-Benz. So I go through that case study. Really, once you look at it, they have a totally different definition of the word marketing, and here’s how it kind of breaks down.
Mercedes-Benz, and looking specifically, so it’s very specific, we’re looking at United States data in 2017 comparing the Mercedes-Benz C-Class to the Tesla Model 3. At that point in time, Mercedes-Benz is the number one luxury car manufacturer in the world. They’re spending on average, $926 in advertising cost per unit sold, and they sell 86000 units. Now, their definition of marketing and what marketing means to their organization is they build a product, marketing then tells the world about the thing that they’ve built to drive demand, and then they sell that car. That’s their business model. It’s the relationship marketing has to that model.
Now, if we were to change this definition of marketing and give it a new role, scope and function, we see Tesla. First off, Tesla doesn’t have a CMO. What does Tesla do? Well, first off, they start by having a conversation with the marketplace about, how do we get the world off of fossil fuels? They continue that conversation by radical innovation; everything from his flame throwers to the Boring project, to throwing a ball into the window, whatever. Staged or not, that’s the conversation they’re having with the marketplace. How do we get the world off of fossil fuels? And we’re going to use radical innovation to do it. Through that conversation, they then build this massive audience that they then they ask to then help them accomplish the goal together. They then co-create this product and say, “If you want this, help fund it so that we can even build it from,” then they pre-sell.
Now, once they then pre-sell, they then build, and then they continue to create the most amazing customer experience that’s ever been known in the car buying world. If you have a friend that owns a Tesla, you know because they’ve told you. That’s how powerful that moment is. Now, if we look at their business model, it is not build a car market, a car, sell a car as Mercedes-Benz. It’s have a conversation with the marketplace, co-create the product, then build the product, then continue to market it to the most amazing customer experience. Marketing is totally different. Now, here’s the nuts. What they did is they spend 1/150th, their advertising cost per unit sold is $6. They sold 276000 cars. *Those cars don’t exist. $They’ve never made an economy car before. The brief is insane. So that’s the difference. So there are companies who are doing this, but if you were to ask Tesla, they’re not going to say, “We’re a contextual marketing organization.” They’re just doing what works in a modern world in an innovative way.
What is a high-performance marketing organization
What are the key differences between high-performing marketing organizations and everyone else? So those organizations that are significantly beating their direct competition and happy with their marketing results, those are the two keys to being high performance. So here’s what we find. The number one key difference between all high performers and everyone else is simply executive buy-in to a new idea of marketing. That’s it. You have to have full executive buy-in to go down this path. And here’s the problem with that, is going back to that thing we talked about. What happens when you have executives who have been running a play for so many years, have an educational system that they believe in, and they are unable to see there is a new world that they must change to and they just want to hold on to those old things? This is the standard story of why the number one companies on the Fortune 500 are new and they’re not the same as they were 10 years ago, is because innovation, when you have free periods of time, requires change. Those unwilling to change just simply get left behind.
So the number one factor is executive buy-in to a new idea of marketing. Now, let me further that definition. What is that new definition? That new definition is marketing is no longer a siloed function with the goal of telling the world about the products you make. It evolves to become, they become the owners and sustainers of all moments across the customer journey. That’s it. That’s the simple definition. When you start there, then everything else is possible moving forward. But without that, you can’t do it. Now to quote Marshall McLuhan whose son and grandson I worked with to write this book, which is the notion of when the media environment changes men change. That is a definition, right? We have to realize that what we think, how we know, how we operate. Here’s what’s critical to marketing. How we make decisions changes when the media environment changes. What we sense and what we want changes. What we trust changes.
More to Oreos than the creamy filling
Matthew Sweezey: Subscription businesses need to follow contextual methodologies, but so does everyone else. So does Oreo. In fact, Oreo did. One of the examples I use in the book is when they wanted to come up with a new product, first off, I didn’t know that there were the oldest cookie brand in the world. Oreo’s been around over 100 years. So first off, fun fact you just learned there. Now, here’s what happens. They could have gone the traditional product roadmap, which says, “Let’s put people into a room. Let’s figure out what flavors we want to create. Let’s get our scientists on this. Once we come up with the new flavors we want to create, hand that over to marketing, have them drive demand for the product, get the product on the shelf.” Normal process.
June 24th 2009 – The day ownership in the media environment changed forever
Matthew Sweezey: Now, in this new world, remember context is about a new way that we can relate and connect to each other. That’s really what this is about this. The biggest thing that in the infinite media era is, who is the owner of the media environment? This is what brands have to realize. We created marketing and we created all these games in a world where we owned the media environment. We were the largest creators of noise. What has happened and what I proved out mathematically was June 24, 2009. Thanks, Tim Rondo. He did the math for me. What we find in this is that on that day, individuals become the largest creators of noise in the marketplace and will remain the largest creators of noise until the end of time. Now, here’s the fascinating aspects about this noise. When you plot the noise from a brand and when you plot the noise from consumers, they have different reactions to the market. In fact, when we look at noise, noise from brands has a saturation point, meaning that there is a point that we will not surpass in that marketplace because there is diminishing law of returns.
Now, when we look at consumer created noise, there is no stop, meaning there is a constant demand for that product and what we see is exponential growth of that type of noise. My Oreo creation, tell us the craziest flavors that you want. They get hundreds of thousands of submissions. The contextual part was number one, they did it with the market. When I talk about the context, that’s when we must realize it’s that we have to come up with ways of doing things with the market because the owners of the media environment now are the individuals. So that’s one of the big key concepts of the book is learning to work with our markets, not on the market.
Small businesses and the contextual marketing revolution
Brent Leary: How can small folks who have traditionally not been able to capture enough attention to create a brand for themselves, because that’s kind of what everybody seems to be wanting to do right now, how can they leverage this approach in order to compete with everybody else who’s basically trying to grab that megaphone and try to steer the attention to them as opposed to the small guys?
Sweezey: Yeah. Small guys definitely can play in this world. This again, affects all people. So let’s look at a couple of really awesome examples. One is there is a maker of clothes and they are a small, private manufacturer. Rather than making clothes and trying to come up with ads to get people to buy the clothes, they co-create the products with the marketplace. So they go through the production cycle with the individual people saying, “What do you want? What looks do this look like?” That process then builds demand for the product. So once the product is finished, demand is instantly in the product and people are buying the product. They help create it. So it’s a different methodology of how we think about going to market.
Now, yes, you could say, “Well, how does this apply to a traditional person that doesn’t have a product? They’re going to create a restaurant or some type of mom and pop retail shop.” Well, the answer there is you just have to work with your audience. You need to build a community. The fact is, you can now. You can have a direct relationship and be a significant part of their lives in new and different ways, and that’s what we must be working and striving towards to do.
The next aspect of this is to say then any small business, big or large, go back to that customer journey. This applies to all people. Follow that customer journey across. How are people finding you? And then find ways that you can be contextual inside of that. Super easy example that’s obvious that everyone knows is ratings and reviews. If you are a restaurant and someone is going to Google, “Where do I eat tonight?” what is one of the number one things that they look at? They’re going to look at the ratings and reviews. If you don’t have a process that’s helping improve those ratings and reviews systems, if you don’t understand that it is a powerful driver, probably more powerful than any advertisement you’ll ever create to your bottom line, then you’re missing the boat. That is contextual marketing because you’re not the one telling people to go eat at your restaurant. It’s other people in the environment giving that message, and that’s where the context comes in.
The rebirth of newsletters
Brent Leary: What do you make of this? Is this something that you, particularly the small and mid sized businesses, how do they leverage this kind of rebirth of the newsletter? Because to me it’s like, okay. There’s a lot of stuff out here and now we’re throwing newsletters back in?
Sweezey: Let’s look at this through a couple of lenses. Number one is there’s a difference between a newsletter and a newsletter. There are crappy ones, there are horrible ones and then there are phenomenal ones. The resurgence that we’re watching is really kind of driven by a Patrion or Patreon, however you want to say it, and some of the end Substack and some of these other things. Now, what those newsletters are, are hyper specific micro feeds of a very specific type of content. Essentially, we’re moving into a world where I’m not going to the BBC because I like the journalist the BBC hires. I’m just going to go to the journalists I want and they’re going to send me newsletters.
It’s no different than if you were just following them on social channels, except it’s a different format and it’s a different delivery method. So rather than you having to scroll through a feed and find the things you want, you’re just getting them right into your inbox, whether that’s going to be read through an RSS reader, through some type of Feedly account or whatever else. That’s the big thing that we’re watching. The other big thing that is powerful here that is a yes and… is how these things are being paid for because our old newsletter, there’s a couple of basic payment models. One is free. You don’t pay anything. In that model, I simply just want to have a connection with you. I’m going to create content and give you this newsletter. That’s the basic free model.
There’s the ad supported model, which is people are buying and paying ads to then support that brand. That’s usually like, so first, as a brand produces it on their own, they take the cost. The second is a third party puts it on. Other brands pay for that cost. Regular subscription model. The third, the interesting one is individual payment model. That’s what Substack and what Patreon are really doing, which is I’m going to pay you $5 a month for this content because I want to support individual journalism. I want to support your creative efforts. Then also, we start to look at what happens in these newsletters and some of them just aren’t newsletters. They may be like, “Here’s the latest three art projects I created.” “Here are the new lyrics to the song I’m writing.” It’s a whole nother genre of really what is happening, and it’s much more aligned to people are willing to pay for specific content that they value and they’re doing it. So it’s really more of a resurgence, like a restarting of the next era of media.
Brent Leary: If I’m a small business particularly, and I’m trying to kind of wrap my hands around, what do I need to do right off the bat that’s going to get me the most bang for my buck, is going to get me kind of the most direct attention that I can start to do, kind of interact with people and convert that attention into something tangible? What would they do coming out the box right now?
Sweezey: Once again, it’s so hard to give a macro answer for everyone because everyone’s going to be different. Depending on the business is going to depend on what you should do, but should you start thinking about audiences again and how do I build a specific audience? The answer is yes, but let’s underscore the reason why. The old reason why was because I wanted push button access to those people. That still has a lot of value, but there’s now other value. Then other values where we really start to go back to this word of context because once you have that audience, you can do the following. You can co-create with that audience.
So go back to what Tesla did. They co-created with that audience, go back to what we talked about that the small fashion brand did. They co-created the products with their audience. Once you have that connection, take the next step and start to bring them into the process and co-create with them. It doesn’t matter where you are along the customer journey. If you’re just simply co-creating content with them, that helps build your awareness. And once again, that awareness carries a different context because it’s not the brand having the conversation, it’s people on the brand’s behalf having the conversation with other people, which is the context of the modern era. That’s how we trust. We trust things coming from other people more so than we do brands now.
This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.
When discussing Tesla, you also need to remember that they were basically subsidized by the government through tax credits. Really gave them a leg up on traditional auto manufacturers.
You have a point there. Is should be a fair comparison and playfield.
Robert, while that was a factor of the time if it was a significant factor all EV sales should have surged by the same amount. In that year Tesla sold more EV’s than had ever been sold in total before. There was a lot more than a tax incentive going on. For comparison, the Nissan Leaf in 2017 only sold 11k units.