What is Utility Marketing?

The “digital shift” has been talked as a revolution in marketing for years now. But how has it turned out? According to Ozgur Alan at PSFK, not well.

It’s not that digital ads, especially the traditional banner ads, are entirely useless, but statistics are showing that user engagement is alarmingly low. Alan reports that the rate of overall banner clicks is below 0.1%, and 85% of that tiny amount of clicks is made by the same 8% of internet users. That means that your ad revenue is being inadvertently targeted to the tiny demographic of people who account for almost all banner clicks.

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But it’s not all doom and gloom. These numbers for banner ads reflect all sectors of the advertising industry, not the best of the best. We’ve spoken previously about how Buzzfeed’s successful model delivers a 1-2 punch by serving Facebook banner ads after a user read a piece of native advertising. But Alan’s solution is a bit different, and equally interesting. He calls it “utility marketing.”

“Utility Marketing is about developing tools that make people’s lives easier by helping them understand their needs and by addressing their issues.”

If this doesn’t sound like anything new, it’s because radio’s been doing it for years. But utility marketing in a digital era provides an endless amount of opportunities for innovative marketing. Utility marketing could be as simple, and as time-tested, as “News and weather provided by [your company here].” But in a digital era, companies like Fiat and Nike are using utility marketing in far more creative ways. Alan notes:

Nike+ allows people to know themselves better and get social by keeping their running records. Paywithatweet project allows people to pay with their influence on Twitter. Fiat EcoDrive app is educating drivers without their knowledge in order to cause them to drive in a better and more eco-friendly way. All these advertisements make people’s lives easier in a way that has not been imagined before. They discover new ways to pull people toward their services.

A lot of “utility marketing” is based on a simple premise: good, useful products will sell themselves. For instance, Allstate’s Drivewise, which tracks a user’s driving habits to provide even lower rates for its customers.

Marketers should strive to provide utility in their entire cross-platform portfolio, but digital seems to be the area where it’s sorely needed. How can marketers provide this?

Attention-grabbing graphics will certainly help, but any successful marketer might want to take a page from local radio and strive to provide utility to keep their consumers engaged.