How world history, misinformation and Gen Z leads to a new definition of marketing
Summary:
I introduce a new definition of marketing that prioritizes creating trust over creating value. It’s based on both new research data and cycles that have repeated for hundreds of years.
These cycles explain massive geopolitical events, information trends/habits, and rises and falls of top brands. Yet so many organizations ignore the signals.
The best organizations stay nimble, continually update their target audience assumptions, and act appropriately on new trends and changes in consumer trust.
A few years ago, I formed a new definition for marketing and communications that replaces classical definitions of marketing as an avenue of value creation. My definition:
Marketing and communications are, at their highest-order objective, practices through which an organization manages the trust between it and its stakeholders.
If the organization can keep trust in itself high, it gains permission to maneuver itself within the information flow, and ultimately the decision-making process, of its stakeholders, and influence its stakeholders to take specific desirable actions.
Why this new definition? I argue that value creation is a lagging indicator of high stakeholder trust. Trust can act as either a force multiplier, or an impenetrable roadblock, to value creation, especially in a modern marketing world where marketing's stakeholder groups include more audiences than simply paying customers, but also employees, investors, boards of directors, business partners, government stakeholders, and others.
I can already hear the traditionalists saying, "but trust from all those stakeholder audiences mean nothing if marketing doesn't generate paying customers!" Fine, let's focus on generating paying customers. What convinces people to create value for an organization, anyway? Let's refer to the Edelman Trust Barometer:
2022: Information quality is the number one most powerful trust builder for businesses, above "holding others accountable," "communications and transparency" and "getting results," per slide 36. (crucially, "Information quality" is the number one way for all institutions to build trust)
2021: "Highly trusted brands are seven times more likely to be purchased." Consumers are 4.5 times more likely to buy if a brand addresses human rights, 4x more likely if it speaks out on systemic racism and 3.5x more likely if it takes on economic inequality.
2020: "Trust unlocks deeper, more resilient relationships between the brand and its consumers." 53 percent of respondents said, "whether you trust the company that owns the brand or brand that makes the product" is the second most important factor when purchasing a new brand. Trust is second only to price (64 percent). 70 percent said, trusting a brand is more important today than in the past – a shared belief among age groups, gender and income. 81 percent said, personal vulnerability (around health, financial stability, and privacy) is a reason why brand trust has become more important.
To me, the data is clear: brands require high trust to maximize value creation, and without trust, value creation potential becomes severely compromised.
The research also shares specific ways brands can build trust, by taking actions that improve climate change, racial justice, gender and social equity, and others. Those are all important! But in my opinion, the what you communicate is moot if the how is wrong.
Again from the trust barometer:
2021: A person like yourself ranks as the MOST credible, overtaking academic expert and company technology expert. (see slide 25)
2020: "Influence is built through authority and empathy, with industry experts and people like themselves rated as most credible (60 percent and 59 percent respectively)."
Simply ”saying the right thing” isn’t enough. You must also meet your audience where they are by saying it the right way, to the right people, at the right time.
Changes in communications and culture continually shift what it means to meet your audience where they are: new ways to distribute content, large-scale cultural phenomenon, new audience tastes or preferences, or a combination.
I believe that marketing's ability to create and maintain trust relies on their ability to identify, and act on, those changes. Conversely, marketing's inability to identify, and act on, those changes -- the inability of brands to properly meet their audiences where they are with quality information -- results in loss of trust between brand and audience over time that limits their ability to create value.
All audience actions – like votes, purchases, subscriptions, follows, investments, partnerships, vaccine acceptance, etc. – are temporary symbols of trust. If audience trust is not carefully managed, the loss of these actions will follow.
While brands can certainly rapidly lose trust more quickly by taking an action on climate change, social justice, racial equity, etc., that their audience disagrees with, losing trust via missing your audience happens more slowly, more invisibly, and is much harder to recover.
I also believe that brands, governments, and organizations of all stripes exist in a state of constant catchup to the changes in communications and culture mentioned above. This has been the case for hundreds, if not thousands, of years.
During the Renaissance, governments and churches reacted too slowly to the rise of the printing press and the spread of ideas, leaving lasting cultural change, the establishment of Protestantism, among other changes; in the 1800's, Jefferson's challenger Republican party tapped cheap, rapid periodical printing and more rapid delivery mechanisms to entrench anti-Federalist attitudes through fake news and propaganda before Adams' Federalist government could react; the Arab Spring left governments and brands around the world flat-footed to the power and effectiveness of Twitter in rapidly spreading messages; and many, many, many other examples.
In each example, audiences lost enough trust in their respective institutions that they not only became far less likely to respond positively to their calls-to-action (aka, create value for them). They also became less likely to believe the information coming from those institutions, and instead, sought information from other sources: people like themselves. Once stakeholder audiences begin to tune out the organization, the organization's calls-to-action become less effective, impeding their ability to create value, until a breaking point: organizational correction, organizational turnover, stakeholder takeover, etc.
This cycle repeats so much that I created a new theory to explain its continual reoccurrence. I call the theory The Trust Gap.
Here's how The Trust Gap works:
In almost every example I could find, when the Trust Gap reaches its zenith, audiences trust people like themselves more than their respective institutions, creating an inversion of power and influence. This gives rise to revolutions, polarization, and misinformation and disinformation, loss of brand equity, and more.
If this sounds like what we're experiencing today, well, right you are! I believe that where we are today, particularly in the US, is a result of decades of institutions, most prominently the US government, not coming remotely close to meeting their audience where they are with quality information through messengers their audiences trust. The government, and many brands, could not catch up quickly enough to changes in communications and culture, and many exacerbated their problem by misreading their audiences' stances on the issues they cared about.
For what it’s worth, I think we are post-zenith - the worst of the modern Trust Gap is likely behind us - but also not yet remotely close to renewed trust alignment. Such realignment requires rebuilt trust: repeated demonstration of meeting audiences where they are, with quality information through messengers that audiences trust. Such trust cannot be rebuilt overnight.
Fortunately, these days, modern marketers are awash in data and perspectives about how to best meet audiences where they are. Beyond having access to tons of insights, I also truly believe a large swath of marketers and leaders in organizations understand shifting contexts – and the Trust Gap – and truly want to evolve.
But many organizations - even those with vested interest in targeting Gen Z, Gen Alpha, etc., whom we know exactly how to reach - dangerously sleepwalk into these shifts, nudging their spend and talents toward isolated, tactical trends while overwhelmingly sticking with structures and strategies that worked over the last 5-10 years. I love HBR's definition of this way of thinking: active inertia, "an organization’s tendency to follow established patterns of behavior—even in response to dramatic environmental shifts".)
Business follows behaviors. We know the channels, messages and actions consumers prefer brands adopt, what messengers they prefer to hear brands speak through, and thanks to research from Edelman and others, the primary lens through which consumers decide to act – trust – supersedes most other decision-making mechanisms.
The nimble, agile organizations that adapt to these shifts (as well as, inevitably, the next shift) will gain stakeholder trust and have the opportunity to move more boldly than their slower-moving competitors; their stakeholder groups, from their board, to their employees, to their business partners, all the way down to their consumers, are more likely to act on calls-to-action.
Organizations that play around the edges, sticking mostly to what worked before, risk suffering a slow loss in stakeholder trust – maybe so slow that everything seems fine – until one day, when you need stakeholders to act on your call-to-action and they don't, it's too late.
This is why the new definition of marketing and communications revolves around creating and maintaining trust with stakeholder groups. Without trust, long-term value generation becomes impossible.
Takeaways for marketers:
Refresh your target audience profile every 12 to 18 months at minimum. Update your data, assumptions, etc., on their tastes, attitudes, culture, style and (most importantly) their information preferences. Hold your leaders accountable to put this new thinking into action.
Dedicate a meaningful budget toward testing and learning new channels and styles; enough to impactfully meet your audience where they are, but not enough to create catastrophe if the tests don't immediately return huge value. Empower members of your organization to deeply learn the mechanics of these channels. Few such bets will become pillars of your long-term marketing strategy, and leaders must be disciplined to differentiate "future" from "fad".
Proactively measure the trust your target audience has in you. Conduct research to better understand the actions you could take to fortify trust, through some combination of strategy, execution decision making, content strategy, content quality, etc. Take (and promote) the actions you can. As trust increases, test increasingly aggressive CTA's to maximize value creation. As trust wanes, dial down aggressiveness and rebuild trust. Measure the differences.