Last week I introduced the second shift of the connected consumer in moving from vertical to horizontal branding

When making purchase decisions, consumers have typically been driven by individual preference as well as by a desire for social conformity. The level of importance for each of these two factors varies from one person to another. It also varies across industries and categories.

Given the connectivity we live in today, the weight of social conformity is increasing across the board. Consumers care more and more about the opinions of others. They also share their opinions and compile massive pools of reviews. Together, consumers paint their own picture of companies and brands, which is often very different from the image that companies and brands intend to project. The Internet, especially social media, has facilitated this major shift by providing the platform and tools.

This trend will continue. Virtually everyone on earth will be connected very soon. It turns out that the solution for the Internet laggards was not cheap laptops but rather cheap smartphones. In fact, it is projected by the UMTS Forum that mobile data traffic will jump by a factor of 33 from 2015 to 2020.

With such vast connectivity, market behavior will become significantly different. For example, in many countries in-store research using mobile phones to compare prices and check reviews is trending. Mobile connectivity allows consumers to access the wisdom of the crowd and to make better purchase decisions.

In such an environment, consumers conform more to social opinions. In fact, most personal purchase decisions will essentially be social decisions.

Consumers communicate with one another and converse about brands and companies. From a marketing communications point of view, consumers are no longer passive targets but are becoming active media of communications.

A beauty products brand—Sephora —has been exploring communities as a new form of media assets. Sephora has built a social media community in which all community-generated content is incorporated into the Beauty Talk platform. It has become a trusted medium for consumers who are trying to consult with other members of the community.

Embracing this trend is not easy. Companies used to have control over marketing communications, and they used to handle consumer complaints individually. With community-generated content, companies have no control over the conversation. Censoring content will weaken credibility. They must also be prepared for massive social backlash when something goes wrong.

That being said, companies and brands that have strong reputations and honest claims about their products should have nothing to worry about. But those who make false claims and have poor products will not survive. It is practically impossible to hide flaws or isolate consumer complaints in a transparent, digital world.

Iconic brand Coopers found this out the hard way. Following somewhat innocently providing free beer to the Bible Society for its debate between two opposing views centred on Marriage Equality, Coopers felt the wrath of its adoring supporters. Viewed as supporting the ‘negative’, publicans took the draught beer off tap and consumers stayed away from the brew. All fuelled by a scathing viral backlash, Coopers sales fell 30% during this period and are still feeling the impact a 18 months on. The rise of social can also seen in movements such as ‘Me Too’, voter fury against President Trump and arguably have impacted community sentiment against recent sporting dramas such as the cricket ball tampering debacle and even yesterday’s tragic horse death in the Melbourne Cup.

Marketers need to embrace the shift to a more horizontal, inclusive, and social business landscape. The market is becoming more inclusive. Social media eliminate geographic and demographic barriers, enabling people to connect and communicate and companies to innovate through collaboration.

Consumers are becoming more horizontally oriented. They are becoming increasingly wary of marketing communications from brands and are relying instead on the f-factor (friends, families, fans, and followers). Finally, the consumer buying process is becoming more social than it has been previously.

Consumers are paying more attention to their social circle in making decisions. They seek advice and reviews, both online and offline.

Next week we will look at the next component of Marketing 4.0 that being the paradoxes of Marketing to Connected Consumers.

CMO Perspective: Seth Farbman – Spotify

Mobile has been an enormous trend. Everything is now completely accessible in your pocket. What that means is that people have access, the ability to listen in so many parts of their lives.

We talk about the trends. What are the macro trends? Waiting in line is a macro trend. People wait in line much more. That is normally a negative thing in people’s lives. If you are able to listen to fourteen tracks while waiting in line wherever you are, we’ve just turned a negative into a positive. Suddenly, something that was frustrating is a respite. It’s your quiet time. It’s your “you time,” in a way.

Mobility is probably the most massive trend that’s affecting so many people in so many countries. Within the industry, we’re seeing an obvious trend towards discovery. One of the things that has personally excited me about streaming and Spotify – and we’re seeing it across almost all of our customers – is that the very nature of how you engage with music has shifted from one of buyer’s remorse: “I don’t know. Should I buy an album? Am I really going to listen to it? Is it worth $12.99? Is the track worth $1.29?” And while those seem like small decisions – what’s $1.29, right? – and we’re willing to spend that on ourselves, there is always this sense of “Is this the right purchase for me? Is this the right track for me?” By having all the world’s music for the price of a single album taking away that buyer’s remorse, you see a tremendous amount of discovery. People say, “I will sample. I will expand my interests. I will trial. I will take a risk. I will see why so many people are interested in the artist.” There is no downside.

We start with our greatest asset, our tremendously large and addressable audience of a hundred million people from around the world. We start with them, and one of the things I’ve said to the team here is, “When you are coming up with an idea, if it is not right for the existing audience, throw it away. Let’s start from the inside out because we have this asset that can be shared and deployed and empowered.”

People on Spotify are the ones who from the beginning understood and valued music, were open to discovery, and liked to share music. A lot of marketers are looking outside their audience and outside their company for so-called influencers. We just call them customers. But how do we deploy them? Looking from the inside out is the start.

I’ll give you a practical example – something we launched recently called “Found Them First.” There’s a recognition that there is a sense of pride, a sort of personal accomplishment if you’ve identified early on in your listening an artist that is going to be huge. We all love when we have found something first. It is a powerful tool in marketing. You can’t shove things at people anymore. You have to let them discover things for themselves. You have to be in a place where they feel they are in control. Nobody wants to be marketed to anymore.

Found Them First simply aggregates all of your data. We know what you listen to. And, we know what people like to listen to, so what we have done is create a campaign that essentially goes to all of our customers and allows them to interact. There’s a simple interface, and it will deliver back to you in real time a list of artists that you’ve helped break and others who have done the same. Instantly you feel special. You feel like your sense of individuality has been recognized and appreciated, and you also feel part of a community.

One of the things I learned at GAP that I find completely applicable here is that these human truths, like a desire to fit in and stand apart, seem like conflicts. That’s what humans are. If you are able to understand, nurture and respect that, then you get a lot of appreciation as a brand. People say, “You get me.” That’s what something like Found Them First does. It taps into that human need and at the same time reinforces the value of Spotify.

So what happens next? You share it. If you’ve broken some great artists, you are going to share that. You are going to brag about that. And you’re going to identify yourself as a real music fan, a member of the Spotify community, and someone who is interested in sharing your knowledge of music. It’s a powerful thing.

That is how you take data and insights and respect for an audience and put them into the centre. That becomes the essence of repeatable marketing.