This is the 4th part in our ongoing series, The Evolution of Marketing Technology. You can find the first 3 parts here:
The invention of mainframe computing didn’t directly influence how people communicated with each other at first. Unlike language, writing, printing, telephony, radio, and television, it wasn’t initially used as a method of transferring information, but instead as a tool for collecting, storing, and interpreting this information like never before. For the first time, large amounts of data like the U.S. Census could be housed, accessed, and interpreted all in one central location, at a speed that couldn’t be replicated even by a thousand clerks.
The large corporations created during the industrial revolution began using these mainframe computers to better target their advertising. Ratings systems such as Nielsen were used to determine where advertising dollars went. Companies were able to test messaging in different markets and determine – statistically – which was superior.
Reports from Nielsen helped advertisers strategize their marketing spend.
What’s more, the mainframe computers had the processing power to handle large amounts of feedback from potential customers efficiently and quickly. This decreased the feedback loop for marketing campaigns and allowed companies to adjust their strategy based on the response rate.
In 1967, this ability to quickly measure marketing signals contributed to the development of a new school of marketing thought named direct marketing, which was a then-unheard of tactic of delivering marketing materials directly to the customer in order to communicate and encourage a direct response. It was most popular with mail, at first, but quickly spread to other channels by incorporating targeted ads that used calls to action. Due to its effectiveness, direct marketing is still predominantly used today.
An example of a direct mail advertisement for music lessons.
The late 1960s saw the rise of 1-800 numbers and loyalty programs. Consumers were encouraged to do more than just buy products, but interact and correspond with companies. Their buying habits could now be directly measured. Companies could now not only react to but model and predict consumer behavior.
Instead of buying a TV advertisement and hoping that the right audience was reached, companies could take a scalpel and carve out the exact audience their product was meant for. Anyone could now collect, buy, or trade a database with millions of customer and prospect entries and directly communicate with them by phone or mail.
Today, this practice still thrives in the digital world, but we’ve come a long way since the mainframe computers of yesteryear. With even more powerful processing power and the introduction of big data, we’ve moved past scalpels to the precision cutting techniques of lasers. In the final part of this series, we will discuss the Personalization Period as well as the state of marketing technology today.