Relationship Marketing 103: It’s the 90s!
As relationship marketing became a more tangible concept, the internet changed the industry forever
Post-war TV, Madison Avenue agencies, “He likes it! Hey Mikey!”, where’s my MTV? No, this isn’t an alternate version of “We Didn’t Start the Fire” — it’s a quick recap of what we covered last month in the previous installment of our Relationship Marketing series. The rise of the television era and the 1960s attitude of excess elevated the “mad men” of the advertising industry to new heights. By the early ’80s, however, the onset of cable and increased competition had advertisers fiercely battling for consumers’ time and attention.
Marketing even played a major role in the 1984 presidential election, as Ronald Reagan captured American hearts and minds with a re-election ad campaign promising a new dawn for the nation. But while the actor-turned-politician served his first term in the White House, marketing scholars were finally putting a name to the existing concept of advertisers forming long-term relationships with consumers.
You’ll never guess what they called it.
Spoiler Alert: It’s Relationship Marketing
The year was 1983. Michael Jackson dominated the airwaves. Return of the Jedi wrapped up the original Star Wars trilogy. President Reagan was developing his own “Star Wars” in the form of the controversial Strategic Defense Initiative. With so much going on both culturally and politically, the annual American Marketing Association’s Services Marketing Conference didn’t exactly make headlines — but that doesn’t mean it wasn’t a significant event.
At the 1983 conference, marketing scholar and professor Leonard L. Berry presented a research paper simply titled “Relationship Marketing.” The paper emphasized that relationship marketing, or marketing that focused on retention over one-time sales transactions, was necessary for businesses to foster lucrative long-term customer relationships. Though Berry’s research was specific to the service industry, Barbara Bund Jackson proposed that relationship marketing could benefit all businesses just two years later.
As we’ve seen throughout marketing history, this wasn’t the first time businesses realized that striking up a relationship with consumers could be beneficial. However, Berry and Jackson gave this concept a name, a definition, and a tangible strategy.
You can see a more relationship-oriented approach in Pepsi’s 1984 “New Generation” campaign, starring none other than a moonwalking Michael Jackson himself. The soft drink brand had been using the “Pepsi Generation” approach to marketing since the 60s, but previous iterations focused more on the product itself.
With this campaign, which became infamous for setting Michael Jackson’s hair on fire, Pepsi positioned itself as more than just a soda — it symbolized bringing people together and passing the torch to tomorrow’s brightest stars. As a bonus, it was much cooler than competitor Coca-Cola; did you see the moonwalking?
By the late 1980s, relationship marketing was everywhere. However, few advertisers created relationship-centric campaigns with as much impact as Nike’s. In 1988, the sneaker brand launched its very first “Just Do It” commercial, kicking off a slogan that’s still central to Nike’s marketing more than 30 years later.
While brands like Hanes were using professional athletes to showcase their products, Nike took a different approach. A shirtless 80-year-old man probably isn’t what first comes to mind when you think about athletic wear, but that’s exactly what made the first “Just Do It” commercial so effective.
If Walt Stack can run 17 miles every morning, you can get off the couch and take your first step into a healthier lifestyle. No more excuses; just do it. And if you happen to be wearing Nikes while you just do it, even better.
Throughout the 1980s and into the early ’90s, TV commercials remained a dominant force in advertising. By 1989, 30-second Super Bowl spots cost marketers $675,500, more than triple the going rate at the start of the decade. However, breakthroughs in technology would soon challenge the television ad throne and transform the marketing industry once again.
You’ve Got Mail
The 1990s were less a single, definitive era than several contrasting trends stacked together in a trench coat. On the one hand, the grunge scene led by bands like Nirvana and Pearl Jam gave the disenfranchised youth a voice; on the other, absurdly upbeat pop-punk and ska acts like No Doubt and Green Day got fans dancing in their mosh pits.
Saved by the Bell and Beverly Hills 90210 showed the aspirational and consequence-free life of privileged Los Angeles teenagers, while My So-Called Life and Party of Five showed a darker, more realistic view of young adulthood. Scripted shows like Seinfeld dominated the ratings, but The Real World and Survivor began a shift towards the reality TV landscape we know so well today. There was only one thing popular culture seemed to agree on: it was, in fact, the ‘90s.
For many people, the ’90s represented a time of social change and new technology. And while the decade gave rise to many recognizable (and sometimes regrettable) trends, from butterfly clips to boy bands, few things evoke ’90s nostalgia like the sound of a dial-up modem.
The internet was around well before the 1990s, of course; its earliest applications date back to the ’60s, and a half-million tech-savvy computer owners were using it at home by 1989. But it was in the mid-’90s that it became widely commercially available thanks to the arrival of the World Wide Web and services like Prodigy, Earthlink, CompuServe, and — of course — America Online. By the second half of the decade, internet growth rates were increasing by 100% every year.
The rise of the commercial internet provided new opportunities for businesses, who could now instantly reach millions of customers. In 1995, Jeff Bezos launched an online bookstore called Amazon, while the popular auction site eBay arrived that same year. The advent of Paypal gave online shoppers an easier way to complete transactions, and major retailers like Target were taking their inventory online with branded websites. And to help you find things on the internet, a series of search engines went live, the most notable of which was 1998’s Google.
The dot-com boom was a boon to retailers and investors, but it also created new opportunities for marketers. In 1994, the first banner ad appeared on the now-defunct HotWired.com.
By today’s standards, the banner ad isn’t exactly inspiring. The colors are obnoxious, the call to action is confusing, and you can’t even tell what it’s advertising. Yet, according to The Atlantic, 44% of people who saw this ad clicked on it, a metric that’s unthinkable today.
What made this ad — which, for the record, was from AT&T — so effective? Curiosity undoubtedly played a part; after all, being able to interact with an ad by clicking on it was a brand-new experience. There’s also the interactive element that commercials and print marketing simply couldn’t emulate. You can’t tap a magazine ad to find out more about the brand, and you can’t talk back to a TV commercial, but you can simply move your mouse cursor and click. In this case, clicking the ad gave early internet adopters more information from AT&T’s “You Will” campaign, which helped show the world exactly what their technology could do.
After that first banner, online advertising became an industry in and of itself. The Interactive Advertising Bureau formed in 1996; to this day, the IAB develops industry standards for all online advertising, conducts research, and provides legal support for the industry. DoubleClick became the first company to provide online ad placement services in 1996 and was later acquired by Google for $3.1 billion.
Speaking of Google, the launch of AdWords at the turn of the millennium allowed marketers to launch large-scale campaigns with ads that appeared alongside search results. It was a shot heard ‘round the world in terms of marketing history. Co-founder Larry Page described AdWords’ capabilities as “the most technologically advanced features available, enabling any advertiser to quickly design a flexible program that best fits its online marketing goals and budget.” Today, Google is one of the biggest companies in the world, and a dominant force in the online advertising landscape.
From A/S/L to Y2K
While rapid internet adoption and the massive growth of ecommerce defined the late ’90s and early 2000s, “going online” was still a relatively primitive process compared to today’s internet options. There was still plenty of electronic literacy to be gained, as proven by the widespread myth of the world-ending Year 2000 bug. While some people spent New Year’s Eve ’99 prepping for the digital apocalypse, another technological revolution was brewing. By the end of the next decade, dial-up would be a relic of the past — but the internet was here to stay.
Check back next month for the fourth installment in our Relationship Marketing series!
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