Consumers rule in today’s challenging marketing landscape

Author Bruce Philip is a firm believer in the power of the consumer—so much so that he wrote what is arguably the modern manifesto on the subject, the award-winning “Consumer Republic.”

So what has digital done to empower consumers, and why should we care? Here’s what Philip, a principal and founder of Heuristic Branding, a brand strategy consultancy, and a 30-year veteran of consumer branded marketing, had to say. This interview is from volume 1 of “The SoDA Report 2014,” presented by SoDA, the Global Society for Digital Marketing Innovators.

Graves: In your book, “Consumer Republic: Using Brands to Get What You Want, Make Corporations Behave, and Maybe Even Save the World,” you speak to the idea that consumers are far more empowered than they realize when it comes to exacting real change from companies and their respective brands. Can you elaborate on that?
Philip: To some extent, consumers have always been more empowered than they believed they were. More CEOs than you might think obsess about consumer sentiment and use it to stir things up inside their organizations.

But the real game changer has been the Web and, specifically, of course, social media. These tools let people instantly feed their feelings about brands back into our system of commerce. Those feelings are then turned into corporate performance indicators. [They] influence brand value, and do it all in full view for the world to see. The potential of this sort of immediate public dialogue has been evidently clear since the Web was born. And although we may not yet know what the end game looks like, that ball today is squarely in the consumer’s court.

Graves: What do you see as the dangers for society, as a whole, if we fail to appreciate the active responsibility we have as consumers?
Philip: Essentially, the less engaged consumers are, the less accountable corporations become. It’s just that brutally simple. In marketplaces as in democracies, we cannot outsource our consciences; we’ll never have governments or corporations more moral than we ourselves are willing to be. We create those institutions by our choices, in one case because we give them power, and the other because we give them money.

So if we decide that we are somehow above marketing, then corporations will adapt by competing to make the cheapest product at the detriment of the economy and planet. If we complain publicly but fail to vote with our money, corporations will learn that our complaints don’t mean anything and just stop listening. If we act as though everything we buy is merely a commodity, industries will eventually consolidate, and we’ll lose the power of choice. It may be more responsibility than we want, but the fact is that the only thing keeping our systems in check is our own engagement in those systems.

Graves: In what ways can digital play a role in promoting this more sustainable approach to consuming?
Philip: In one sense, the digital world is already making its most important contribution by creating commercially valuable ways for consumers and corporations to listen to each other. This has been revolutionary and given consumers unprecedented agency in capitalism.

I think that the area of ethics in digital marketing needs work. Its earliest practitioners promised us accountability for marketing that was never possible in the age of mass media. Digital marketing would eliminate waste, make things measurable, democratize marketplaces, and hear the consumer in real time. But in the last few years, there have been too many unsettling stories about the way companies collect data, about the reliability of display advertising analytics, about faking consumer endorsements—that kind of thing.

Digital marketing is still too young to withstand widespread mistrust. To have a chance at fulfilling its potential, it has to be better than what it’s replacing by holding itself to a higher standard. The credulity of the consumer isn’t a renewable resource.

Graves: What specifically can we as digital agencies do to help our clients also adopt this thinking? And what—if anything—is at stake for our industry as a whole if we fail?
Philip: There is a growing body of evidence that consumer trust is actually the foundation of enterprise value. Brands now compete for it the same way they used to compete for fame. I would argue that trust is an annuity; it puts money in the bank. If people believe in what motivates your brand—not based on what you say, but on what they have experienced—they’ll come back to you again and again simply because it’s in their best interest to do so.

What’s at stake if we fail is the sustainability of marketing itself. Today, brands can’t survive based only on what their products do. The trust people have in the company that made those products is where the margin is. If we squander that trust, all that’s left to manage is cost. In commodity marketplaces, brands neither have nor create any value. Eventually, I guess, that means we’d all lose our jobs. But what’s worse is that consumers would lose choice and, with it, their ability to influence capitalism. I can’t think of any stakes higher than that.