About 99 per cent of every online advertising dollar is wasted and it's time for organisations to adopt a more customer-focused approach to marketing in the digital age, says MyWave founder and CEO Geraldine McBride.
She cited the statistic in a keynote presentation, entitled The Digital Customer Revolution, which she delivered at the Loyalty NZ conference in Auckland last week.
"Consumerisation and the millennial generation's desire to share experiential activities -- aided by the proliferation of digital devices -- are key drivers that will eventually force companies to abandon traditional methods of production, supply, and marketing," she says.
"Organisations that continue to base their business on transactional relationships will struggle to meet growing consumer demands for targeted, contextual and, most importantly, personalised products and services."
McBride says online advertising is a good case in point. "An overwhelmingly one-sided relationship exists between online advertisers and their audiences. The more people feel they are being stalked across their online activity, the less they are willing to click on an advert."
According to McBride, the average online user now sees over 1700 advertisements a month, and the total number of display advertisements served up in 2013 was over 5 trillion. "No wonder click- through rates are dropping. It is no surprise that around 20% of web users have installed ad blockers on their devices. Privacy and trust is being eroded and consumers are treating online advertising for what it really is -- just spam."
As a result 99 per cent of every online advertisement dollar is wasted. "Consumers find banner ads annoying and have stopped clicking them."
In the face of this consumer backlash a new marketing model is evolving. She calls its CMR (customer managed relationships), and it is a relationship model that looks at the world through the eyes of the consumer.
"It s new way of thinking that puts the customer in charge of their own data and experiences. Customers want to feel special and they want personalised relationships with the brands they trust. If organisations can respond to that by providing products and services that are unique to their individual consumers, they will create a powerful value chain that results in increased customer loyalty, improved marketing ROI and more sales."