Opinion: Technology creates seismic shift in marketing

Recently, I sat down for a wide-ranging discussion with consummate marketer, author, academic and futurist Peter Sealey. An alumnus of marketing giant Procter & Gamble, as well as ex-marketing chief at The Coca-Cola Co. and Columbia Pictures, Sealey delivered an unvarnished take on what’s coming down the marketing pike, and who will survive what he maintains is an approaching seismic shift in the worlds of marketing and communications.

Nucifora: From the time you entered the marketing business, to today, what have been the seismic shifts?

Sealey: We are in the midst of a societal transformation that occurs in western societies every 200 to 300 years, and that transformation is the leaving of an industrial/agricultural economy and moving into a knowledge economy.

This doesn’t happen very often. It happened when Europe came out of the Dark Ages in the 11th century. It happened in the high Renaissance in the 1500s. It happened in the Industrial Revolution in the late 18th century. It’s happening now, and part of that transformation is impacting marketing.

Nucifora: If you were advising somebody coming into the marketing profession today, what would you say?

Sealey: Brands are going to become even more important. Brands are incredibly powerful. They create enormous shareholder wealth. They are indigenous. They are created spontaneously. People need brands.

In the old Soviet Union, where there were no brands, people would identify factories that made better appliances and you would see Soviet consumers on their knees at the back of a refrigerator or a stove looking for the manufacturing plate to identify a factory that had a better reputation for quality than others.

Nucifora: You see no diminution in the value of brands?

Sealey: I see an increase because of the pace of society and the need for people to have comfortable and reliable choices.

There is a manufacturing facility in the East Bay owned by GM and Toyota jointly. Two of the cars that come out of that plant are the Pontiac Vibe and the Toyota Matrix. They are absolutely identical … made by the same workers, same power train, same body. However, they put different names on them … and the Toyota sells for $1,500 more at retail because of the power of the brand.

Nucifora: Let’s discuss some of the trends that will change our personal and professional lives. The growth of broadband in the home?

Sealey: Changes the world. I’m talking pipeline with 30-, 40-, 50- maybe 100-megabits per second. When we get that big pipe, then something else will happen … the IP addressable television set … Internet Protocol TV. The device will have an Internet protocol address just like you have an IP address for your Web site and your e-mail. Imagine when we have the really fat pipe and an addressable, 50-inch, plasma, high-definition screen with 1080i interlaced video resolution.

When that happens, there will be an enormous disenfranchisement of the distribution system. Comcast, Direct TV and the like will be in deep trouble because the guys with the power will be the guys producing and creating the movies. And the average Joe sitting in Middletown, U.S.A., with the beautiful 50-inch plasma set isn’t going to go to the movies on a given Friday night. That’s going to change the entertainment business.

Nucifora: What about iPods … 14 million sold in the fourth quarter last year?

Sealey: Media is becoming digital, personal and controllable. We’ll no longer settle for receiving one-to-many. We now configure our media the way we want it … customized. And we take it with us. Marketers and advertisers have to adapt to that reality.

Nucifora: Satellite Radio? Up to 9 million subscribers as of January 2006, before Howard Stern.

Sealey: Clear Channel is in deep trouble. And Westwood One. Here’s the problem with terrestrial radio. The satellite guys have an enormous footprint and great variety between ad support and in-premium services. That stuff is going to be available everywhere. The 41 million iPods owned by the people walking around with earplugs in their ears are not listening to a radio station.

Nucifora: Brands you admire. Who’s doing it right?

Sealey: Apple … fabulous. I’m on my eighth or ninth generation iPod now. They just keep coming out with new stuff. Mini Cooper... BMW introduces a new car in the U.S. without television advertising. It’s a cult. Harley-Davidson, Starbucks and In-N-Out Burger are other fabulous successes.

Nucifora: On the other side, the brands that are killing themselves?

Sealey: Sony, a great company, is in the process of destroying itself. The latest one is putting spyware on their CDs. Sony rightfully should have had the iPod. They failed to understand flat panel television. Literally at every juncture in the last decade, they have made the wrong decision, starting with Betamax in 1976. It almost makes me cry to see them disintegrate into mush.

Alf Nucifora is a California-based marketing consultant. To correspond with Alf or to receive a copy of his free, monthly, on-line newsletter, “The Alf Report,” you can contact him at alf@nucifora.com or via his web site www.nucifora.com.