Why don’t tech companies ‘get’ marketing?

Nov 16, 2015 by Mark Baines Category: Marketing 0 comments

What drives your company? Marketing, sales or technology?

Yelp and Twitter are in trouble, and it’s largely because they fundamentally lack an understanding of how marketing works. Even Apple, once a marketing leader, seems to be faltering.

Over the last couple of decades marketing has become an almost forgotten skill in the technology sector. This seems strange and partially explains why Apple, which was the only marketing-driven company in it, was so massively successful. So because engineering skills were more highly valued there seemed to be a sense that these talented engineers could take over marketing rolls as CEOs; they generally lacked marketing training, but nevertheless came on board and ruined them or never created effective marketing organizations.

This is very evident with Twitter and especially with Yelp. Both firms now face severe image problems largely because they and their industry fundamentally don’t understand marketing. This isn’t just tech, you see it across engineering and many of the professional services sectors. Perhaps it’s time for a reminder of what good marketing is and can do.

What is good marketing?

People who don’t understand marketing mix it up with communications – advertising or websites -and think it is all about selling to, or engaging with, the audience. It’s not and it isn’t.   For example, advertising is a relatively small sub-set of marketing, which also includes selection and development of the product, determination of the price, distribution methods and all the other elements of ensuring the product or service gets bought. Advertising and websites usually fall under the fourth ‘P’ – Promotion – one of 4, 7 or 11 ‘P’s depending on which school of thought you subscribe to! This is because marketing in a broad sense is about manipulation and this is why engineers, by and large, don’t understand it.   It’s not that it isn’t based in solid science, it is, but that it is based more on psychology than it is on thermodynamics.

Or put a different way, it is more about the whole business process than just manufacturing. In effect it results in sales, as the ultimate goal of marketing is to convince people that otherwise wouldn’t buy a product, to buy it – at a profit.

Apple and the iPad

Take Apple, for instance. Microsoft had tried for years to convince people to use a Windows tablet believing that there were many people who used paper and pens that could be moved to PCs if those PCs imitated paper and pens. Microsoft created the product and tens of people flocked to buy it – generally regretting their purchase. On paper the products were vast improvements over what they replaced. They digitized the content, they could auto-index and auto-convert it to type, and they could store and find the content on demand. Unfortunately this solution was heavy, had lousy battery life, was expensive, and very complex. And it was targeted at a group of people who were avoiding technology.

Apple, on the other hand, created a product for the general market that abandoned the “replace paper and pen” concept and sold what was basically a really big iPod as something new, magical and amazing – and had an instant hit.   Bill Gates came up with an idea that addressed a group he wasn’t part of and it flopped, while Steve Jobs came up with an idea for a product he’d use and it was a success. Neither man is stupid, but one product was created to address a market that didn’t exist (luddites who liked technology), and the other a market that did – people who wanted a big screen personal entertainment device.

Apple practiced end-to-end marketing and Microsoft led with engineering and the result couldn’t have been more dramatic.

How about Yelp and Twitter?

Yelp has a perception problem.

There have simply been too many reviews of shills and trolls/griefers (a gaming term referring to people who just like to hurt other people) on the service destroying  confidence.   While Yelp has implemented programmes to increase the accuracy of the reviews, they haven’t marketed the difference or showcased the advantages of using Yelp, either as a buyer or a seller.   Added to this is what appears to be a concerted effort by Google to make it harder to find Yelp reviews, and you’re on a downward spiral.

So, for Yelp, a brand recovery effort has to be implemented that may require rebranding the company, especially if it is found that it has negative brand equity. It may be easier to start again than to try to convince people that a brand they don’t trust is worth engaging with. But if neither users nor businesses see Yelp as a benefit to them, it will die.

Twitter has more than just a marketing problem

Twitter has a very different problem and marketing is only part of it. The short format model doesn’t lend itself to ads. Twitter is a powerful service that is increasingly used as a reference in ad-based news organizations, but they’re not buying advertising on Twitter. A tie-up with a major news agency would help their reputation and bring in income, but they still need to attract more users and engage those that are on the service, which has also been damaged by bad behaviour forcing many high-profile celebrities to abandon it.

So now it is more common to see a story on how Twitter has destroyed someone’s life and career than a story about how Twitter made someone famous. Changing that simple perception so that Twitter appeared to be a vehicle for status and fame would go a long way towards improving its reputation and perceived value. Combined with a strong financial relationship with a major news/entertainment organization and you’d have the foundation for a far more powerful channel.

Twitter’s CEO does seem to recognize marketing is at the core of his problem, but he’s yet to make the changes.

The importance of marketing

It’s amazing how regularly marketing becomes a lost art, only to resurface as dominant firms give way to younger challengers that ‘get’ marketing. It looks to me like we are again in a period where the people running companies lack any real understanding of marketing, suggesting that we will soon be looking at new market entries taking the established players off their guard!

Seeing the huge example that Apple set, you’d have thought that people have learnt their lesson and know better – even at Apple. However, both the name and execution of the Apple Watch shows more of an engineering than a marketing focus, which suggests even Apple is losing its marketing edge.

Anyone got a crystal ball handy?…

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