July 29, 2014

The Consumer Is In Charge. Of What?

"The Consumer Is In Charge" says Kaiser Permanente CIO

"Consumers and their demands are in charge of business" says Frito-Lay’s senior vice president and chief marketing officer.

“Today, the customer is in charge,” said SrVP for marketing at Wal-Mart Stores, 
One of the inescapable clichés of modern marketing is that "the consumer is in charge."

It's virtually impossible to talk with anyone in the marketing industry for any period of time without hearing this trite lump of nothing.

There are three things horribly wrong with it:
1. It assumes that there was a time in the past in which the consumer wasn't in charge of making buying decisions. I'd love to know when that was.

2. It assumes the usual bullshit about the web having "changed everything." For a nice chuckle about this lovely bit of stupidity, I refer you to one of my favorite all-time classics of marketing doubletalk.

3. Most depressingly, it shows a remarkable and frightening lack of understanding about what's really going on in the world.
Today, we going to focus on item #3.

Among the most disturbing aspects of economics and society today is the alarming degree to which a handful of companies control what we see, hear, and buy. Never before in my lifetime has so much power been consolidated into the hands of so few entities. Never before have the choices for consumers been so concentrated.

Here's a look at the food industry in the U.S.

According to the Huffington Post "These 10 Companies Control Enormous Number Of Consumer Brands" (click to enlarge.)

Media is even worse. Here is an infographic from 2012 reproduced by Business Insider, that claimed that 6 companies control 90% of the media in the U.S. A few things have changed since 2012, but the trend is no better.

The financial industry is equally concentrated. Here's a chart from Mother Jones that shows how 37 banks became 4.

As for the mythical democratizing effect of the web, Google, Facebook and Yahoo dominate web traffic pretty effectively. Google alone is responsible for about 1/4 of all web traffic. And more than 50% of all web video is shared by YouTube and Netflix.

And please don't get me started about the hideous amount of information these creeps are collecting on us.

You have to do some truly monumental logic torturing to come up with a story in which all this consolidation and concentration of economic, marketing, and communication power leaves the consumer in charge. 

More than ever in my lifetime, the big guys are driving the bus. The bullshit about the consumer being in charge is just the blind utopian rubbish of clueless digital nitwits.


Steve Hall said...

Awesome!!! Especially the last sentence!

Karis Higson said...

What a refreshingly honest view of Marketing.

Mark Pilipczuk said...

Anything of value always consolidates to a few key players, as you point out in the banking and food industry. However, there's a million social media marketing companies, with more created every day. Hmm.

Cecil B. DeMille said...

And what exact effect do these million social media marketing companies have on the consumer's ability to choose? How do they affect the monopolization of choices offered to us? Is it a cry in the void for a voice that can be heard, or is it a bunch of youngsters hoping to catch on so that they can get bought out by Google or Facebook?

Mark Pilipczuk said...

"And what exact effect do these million social media marketing companies have on the consumer's ability to choose?"

When looking at results (not hype), almost zero.

J.S. Gilbert said...

You mean having a choice of 23 toasters I can buy for fifteen bucks or less doesn't mean I'm in charge?

timorr said...

Not if they're all made by the same companies using the same technology, and especially not if none of them work worth a damn!

Jerome said...

Nice!!! thanks for sharing....

its what I do said...

I always saw this whole "consumer in charge" nonsense as nothing more than the self-justifiying drivel of social media agencies and their minions.

But social media marketing, in general, is being outed slowly but surely, (or, quickly but surely on this page) as fraudulent.

So the "consumer in charge" lie should be tossed away as well, like gift wrapping on an empty box.

James said...

"More than ever in my lifetime, the big guys are driving the bus. "

Ralph Nader was interviewed this morning by Michael Krazny on KQED's Forum. He was plugging his new book, Unstoppable, about a cross party coalition that is forming with the intent of getting big business out of the business of running the country. http://www.kqed.org/a/forum/R201407301000

Jim Mitchem said...

Seems about right considering the fact that the top 1% control 40% of the wealth in America, and the top 10% control 80% of all financial assets.

Esteban Contreras said...

Fraudulent? Perhaps their are fraudulent (or misleading / shady / less-than-trustworthy) agencies with minions... but social media marketing is not going anywhere. Companies like Samsung and GoPro would not be where they are today without social media.

Regarding the article's point about consumer power (or lack thereof), I think we can all agree that brands and individual consumers are not at the same "level" because one is spending great amounts of money to reach the other, and because yes, choice is limited (Google is all alone in the search game, for example).

But can't we also agree on the fact that consumers have more power / control than ever before? It would be absurd to pretend that connected consumers (those with Internet access) don't have more power and control than in the past. We have great information at our disposal (Product reviews, consumer reviews, price comparison, Wikipedia, Quora, WebMD, social networks, etc.). Access to information changed the buying process greatly.

I'm OK with ha-ha cynicism, I get the point about consolidation in multiple industries, and I agree that the "consumers are in charge" language has been exaggerated... but the Internet has indeed changed things greatly in the past 15 years -- and this has impacted every marketing organization and how they communicate with customers. The same goes for customer care and PR / Corp Comm.

Davina K. Brewer said...

Was just commenting elsewhere on my long-held theory that many businesses are PR, crisis, marketing proof. To wit: @timorr on the 'choice' of airline, as if what they tweet or say matters in terms of price, bag fees and what's available to you. And @J.S. Gilbert on 'choice' of toaster. As you say, they're all made or owned by the same entity, same brands in the same stores. See also all the things we buy, tons of brands but all managed by a few. (Though I did read that P&G is going to drop a number of under-performing brands from its massive lineup.)

I can pay more to 'shop local' vs. going to discount chain. I can either overpay or go without. I can pick the lesser of two evil Big Box options. Or I can look elsewhere, to the options Google filters for me. As a customer, I'm only in charge of my wallet and deciding who gets the least of my money. FWIW.

Miguel said...

SIR, you need to check your data. How many companies have failed because of a social media brainfart? None, pundits like to say that Kodak and some newspapers have failed because they didn't adapt and embrace the socia media blah blah blah. Point is, they failed because of financial mismanagement and very poor investment decisions.
Now, how many companies have succeeded because of social media brilliance? Samsung was big before the social media hype, their success is based on developing good technology and haveing broader distribution channels than their competitors. GoPro si a very acclaimed company with a very small market share in the video recording industry. Everyone wants one but we keep buying Sony or Samsung cameras.
The internet has created an illusion of power, we CAN make better choices but it is against human nature to make (economical) rational decisions so we keep making our choices the same way we have evolved to DO, we use heuristics to grab the most salient stuff we find in a plethora of choice.
Here you find the very problem with the web stuff, which is a framing problem... we need to separate the potential that the web and social media provides versus the actual behavior people show when doing stuff. The money is, IMO, in the latter frame.

Josh said...

Great points. But is that power differential absolute? How do you explain Bank of America's debit card fees?

Doug Garnett said...

That's just typical market forces at work. Same thing happened in the past. Need an example... New Coke? That was pre-internet.

Doug Garnett said...

It's always fascinated me how ad agencies and marketers trot out tripe like this...and it sounds remarkably like the myth of the New Soviet Man. Guess nobody in advertising reads history, though, or they'd understand that utopianism hasn't ever really turned out too well. Or is it that being in our business requires a naiveté' that creates an opening for ideas like this to fester and grow?

Ju said...

hahahahahaha! the same here! and I think, "yes, it was hard chosing between you and that other that costs twice as much / have flights only at 3 am / etc... shut up and spare my ears"