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The way software mediates between us and the information we use has paved the way for a new consumer mindset. Luckily, notes Michael Nutley, interactive media is also the principal delivery platform for the added value customers are expecting...

The way software increasingly mediates between us and the information we use in our lives has paved the way for a new consumer mindset. Luckily, interactive media is also the principal delivery platform for the added value customers are expecting...

By Michael Nutley



One of the most important aspects of interactive media is the way software increasingly mediates between us and the information we use in our lives. If you doubt that, just think back to the days before search engines, when research took actual physical effort and it was important how good your memory was. When it meant something for Albert Einstein to say he never bothered to remember anything if he knew where it was written down.

These days that's what Google's for; to remember for us where what we want is written down. And it's not just Google. PVRs do it too, recording programmes for us on the basis of what we've recorded before. Amazon does it with its recommendations. And online media owners are starting to use behavioural targeting to do it.

In other words we're seeing yet another promise from the early days of the Internet starting to come true. I remember, back in the mid-1990s, reading articles about intelligent agents that would do our shopping for us. We would input the specifications of our desired purchase, and how much we wanted to pay, and the software would go off to find someone willing to sell such a product to us at such a price. One of the conclusions drawn at that time was that this would mean the end for branding. When every shopping decision is based purely on price, the argument ran, what value is the soft, fuzzy stuff involved in branding?

Brand promiscuity

Between then and now, of course, anyone suggesting that the Internet was rendering brands irrelevant would have been ridiculed, because the sudden explosion of commercial web sites meant trust in a brand was a crucial way of navigating the new landscape. This led to the Internet advertising boom around the turn of the century, as hundreds of Internet start-ups poured their recently acquired VC funding into ad campaigns intended to build their brands.

Nonetheless, our relationship with brands is changing. Recent research has found that the bulk of online searches aren't brand-driven, but are conducted using generic search terms. Last November, Wired magazine reported the results of a tracking survey by NPD Group in the US which found that nearly half the people who described themselves as highly loyal to a brand were no longer loyal a year later. The argument being advanced is that brands mattered when quality was variable and information was hard to find. But in an age when many companies' products are built in the same factory and simply badged differently, and when product information both from professionals such as Which? and amateurs in chat rooms, Web sites and message boards is easy to find, brands are losing their potency. Instead, rather than brands giving their lustre to products, it's products that are boosting the value of brands.

Dawn of the "experience economy"

And this ties in with another trend, one highlighted at the Institute of Direct Marketing's annual lecture earlier this month. Discussing what the consumers of the future might be like, the neuroscientist Baroness Susan Greenfield predicted a future in which brands would derive value from providing customers with opportunities to be creative, from experiences rather than static properties.

We're already seeing a propensity among affluent consumers to prioritise experiences over possessions. We're also seeing an increasing number of FMCG companies attempting to increase customer loyalty to their products by wrapping them in value-adding services; nappy brands such as Pampers and Huggies are the most famous examples here. And these services are only enabled by interactive media.

In other words, we're once again seeing the creative destruction of the Internet at work. Interactive media have created the conditions for a new type of consumer, but at the same time provided the tools for companies to respond to their demands.

About the Author:

Michael Nutley is the editor of New Media Age.


Further Reading (NMK recommends):

The Substance Of Style - Virginia Postrel interviewed in Boxes and Arrows (Sept 2003)
www.boxesandarrows.com/archives/talking_with_virginia_postrel.php

Art and Retail (NMK, February 2004)
By Andy Cameron of Benetton's Fabrica research centre
www.nmk.co.uk/article/2004/02/11/art-and-retail

Generation C (Trendwatching, January 2005)
www.trendwatching.com/trends/GENERATION_C.htm

Communities Dominate Brands (Futuretext, March 2005)
By Tomi Ahonen and Alan Moore
www.communities.futuretext.com/