Contextual marketing in 2025: an observation
Meet Peter.
Pieter wakes up, as may like us, by his smartphone alarm app. Takes a shower and enjoys his cappuccino from his coffee machine before he gets in his car to work. An ordinary day for an ordinary guy, but in an extraordinary time.
Peter does not actually own his alarm app. Neither the coffee machine or the car he drives. It has been put there by those that thought he would need it.
Peter never paid for the device, but merely for the ‘service’ of using it. His alarm cost him 0,000001 euro today. A reasonable compensation for the free software installation on the phone he was given some time ago: a pay-per-wake-up-call.
Likewise the water, the shower head it came from and the towel he used was borrowed from someone who thought he’d use it. In fact, the water was not as hot as he used to enjoy before, due to his choice to drink a premium coffee afterwards, which in total met his morning expenditure target. His connected house offered him the service that fit him best. A compromise between his preferences and his budget, where the cappuccino prevailed over a slightly warmer shower..
Peter does not own anything anymore. He consumed whatever he needed, nothing more and nothing less. Why own any of the hardware it came from?
‘Why own it if you can rent it’
It seems to be the millennial adage. In a time of immediate gratification and ever smaller windows until the next desirable product catches our eye, we are prone to accept to pay the premium for renting over buying. After all, with an ever more transparent market due to mass social marketing’s reach and a thorough google validation one is bound to get the best possible offer out there. So why the wait?
Our spendable income increases. More money, more spending and more things to own. Things are about to change though, but it might not change in a direction that an old-fashioned marketer would suggest. Instead of owning more, we might own less. The next phase of renting builds on the way we consume digital products today.
In the digital world pay-per-view is already well embedded into our consumerist mindset. We stream music and films on Spotify and Netflix. As long as we stay connected we get exactly what is right for us, on the right time and in the right place. So why is this not true for physical goods? Why can’t we eat, drink and move ourselves from A to B at will?
Every consumption needs a purchase decision. Is it readily available? Is the price right? Is the quality right? We often postpone the purchase because the conditions are not right (yet). And if we do decide, the transaction often takes a disproportionate chunk of our time, or might even disrupt the buying decision all together. Some restaurants have recognized this a long time ago. You pay on entering and from there on there is an all-you-can-eat approach, directly connecting the desire to the consumption.
These type of consumption does have its down side. Less balanced meals, overeating and unfair distribution of the cost (as everybody pays the same, but does not eat the same amount).
If we could administer usage and bill accordingly, we could take consumption to the next level. Not to overeat, but to offer the right product, in the right amount at the right place.
| The Land of Cockaigne
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| We might be stuck in a world where every ‘purchase’ is a trade off. Do I need it? Can I afford it? What do I need to sacrifice in order to use it? It is a burden for most. The ever present limitation of what you can afford.
But why so? Imagine the world as all-you-can-eat. As soon as the need is felt, the gratification is nearby. It might sound like the land of milk and honey, and might succumb to a similar fate given the inevitable greedy nature of man. After all, how would we not fall for a trap of gluttony and indulgence? |
Technology to the rescue!
Recent technological breakthroughs open up a new world of possibilities. Contextual marketing, ultra-personalization by social media and micro payments with cryptocurrencies have changed the landscape of consumerism. And not necessarily for the worse. If we would consume responsibly in the light of environmental and financial sustainability, then we could actually reduce a lot of waste incurred by today’s carpet bombing approach of marketing. Walking today’s high-street feels like a bombardment of advertising. All aimed at luring in customers to buy regardless of their need or ability. It we could advance the approach of marking to a highly personalized experience, then we would be able to offer targeted products rather than engage in a cacophony of commercials.
Let’s break down the three key challenges:
– we’d need to distribute the right products (right time and place)
– we’d need to offer appropriate products (right for you)
– we’d need to administer the usage (seamless micro payments)
– we’d need to avoid indulgence (avoid bill-shock, or bad debt)
Distribution
Physical goods require distribution, and therefore a long(er) commitment by its user. You more or less invest in a product by picking it up or having it delivered. The cost of distribution is an investment into its further use. But what if these physical products were abundant and within immediate reach? Would you not simply open a nearby vending machine, pick your meal of choice and consume instantly? What about cars or the clothes you’d like to wear?
The answer might not be found in the supply of the products, but rather on managing the demand of the user. After all, if there is no demand, then the distribution is no longer a problem. We shall only distribute those products for which there is demand at a specific time and place. As for many products it is true that the demand is predominantly created by advertising. Even more so now contextual triggers enhance that effect and offer more subtle means of offering goods and services.
Once we know the weather is nice and a yoga class just ended in the park, we could offer smoothies right there and then and in the flavors that group would appreciate most. This is a reality now every adult has a smartphone and (imminently) every child wears a connected garment or gadget. The consumer is connected and the context is rich and know enough to predict consumption.
Pay your dues
We live in a world of inequality. As much as we have overcome differences in class, gender and ethnicity, we do (and will) have different financial means. This is a pillar of the capitalist society itself and, at least in the western world, is derived from individual choices of contribution (labor) and consumption (or the postponing of consumption). As a logical consequence, not everything is ‘within reach’ for every individual. Even being offered appropriate products, based on the context you are in, there will still be choices to be made between competing products. Whatever that choice is, the price needs to be settled.
This requires some exploration. Given the nature of the all-you-can-eat approach, it is likely that the user consumes small quantities. A drink or even a sip at the time. This requires micro bookkeeping and subsequent settlements.
Credit cards and bank transfers simply have too much overhead to cater for this type of consumption. Crypto currencies might offer a solution due to their small overhead, potential for registration/automation and practically limitless divisibility into small units of account.
Indulgence and suffer post-consumption shock
A well know problem with the all-you-can-eat approach, as targeted as it might be, is overeating. Physically, but namely financially. People are prone to consume now and worry later. A key to this new market if to offer what is appropriate to that specific user. Ultra personalized advertising, within his preference and means. In practice those products outside of their preference or means would simply not be offered, and thereby not generating the need in the first placed. This would not work with a cardboard sign above a table filled with smoothies, but could work if the beverage was offered by augmented reality via a smartphone or wearable.
So what is the problem?
Indulgence trumping choice is a major limitation of freedom. To a large extend this is true today and has been for a long time. Some might even argue since the rise of an overwhelming consumerism a the post-war era of the fifties and sixties of the 20th century.
However, the dominance of the digital age and the upcoming of ‘web3’ made this increasingly pressing. We don’t see more of what we like, like we did in a time of ever more successful advertising, we might see ‘only’ what a marketer wants us to see. This is an echo chamber of unprecedented narrowness and slippery slope toward censorship and illegitimate control. A limitation of choice and opaqueness of ambition. One might argue that emotions like envy, pain and longing are key ingredients for innovation and progress. When you and I are soothed into a world of the achievable, the within-reach and a frictionless consumerism as a result, then we might not be incentivised to overcome the obstacles we no longer face. Consumerism would cease to be be the driver for innovation and rather implode in its own indulgence. When there is no choice, quality-of-life might wither, ironically, without anyone noticing its decline. When serendipity dies, so does awe.