CX advertising

Is customer experience replacing advertising as today's biggest brands?


As brands like Tesla shun creative marketing in favour of customer experience innovation, is CX design going to take the ad agency’s creative crown?

13th Sep 2021

Is product experience becoming more important than advertising? When was the last time you saw an ad for Tesla? That’s right, you haven’t, because Elon Musk believes the brand’s cash should be continually invested in innovation not creative marketing.

Apart from Musk’s idiosyncratic and highly personal approach to marketing, Tesla has thrived in large part due to the UX experience of its cars. In some models, dials and levers have been reduced down to a steering wheel and iPad style screen integrating displayed driving, navigation and external internet access.    

Digital disruptors like Uber, Airbnb and Deliveroo have also chosen this route, making the decision to invest relatively little in advertising - particularly in the early growth stages of the business. Instead, ground-breaking concepts and elegant service design enabled them to transform entire markets.

This approach concentrates on the power of word-of-mouth backed by repeated positive customer interactions at all touch points. Brands such as Trainline harnessed this model, relying on organic growth through an excellent CX strategy.

The impact of CX design can be seen everywhere, even in the previously niche world of stock market investment. Robinhood provides a cheap, easy to use trading alterative and reached 18 million accounts in March 2021, a year-on-year increase of 151%. It achieved such stella growth by creating an app that took many design cues from social platforms and essentially gamified stock trading – enabling activist private traders to take direct action to support companies such as GameStop and AMC in the process.

By 2023 businesses worldwide are predicted to be investing almost two trillion dollars in digital transformation projects. In comparison they’ll be spending a relatively humble $600 billion on advertising.

A big slice of the money spent on digital transformation will be focussed on digital services and consumer engagement or interaction. The global customer experience management (CXM) market’s CAGR is estimated to be around 12%, which should result in the market being worth around 14.5 billion by 2025.

This begs the question; if the brands that succeed in shaping or outperforming markets are those that step ahead of the pack with unique experiences and products rather than those investing heavily in advertising, will the centre of the creative universe shift from advertising towards CX-orientated creativity leveraging data, UX and service innovation over the coming decade?

The CX medium is the message

This huge predicted investment in digital transformation speaks to the emergence of fundamental changes in the way that organisations and businesses, new and old, are thinking about how to either generate sales or to achieve long-term brand loyalty.

The digital economy is creating an ever more powerful cycle of digitisation with on one hand, ever better and faster digital products, services and devices and on the other the huge pressure on organisations to use technology to transform their operations.

This process means that we are well and truly on our way to the realisation of an experience or expectation-based economy where the quality of experiences delivered to customers is the key factor in determining corporate performance.

In this world, the medium is very much the message, so rather than relying on paid media to deliver mass market messages dreamed up in ad agencies, brands and increasingly public sector organisations realise that their owned technology platforms are as important in delivering growth or outcomes and by word of mouth – generating awareness.

This is particularly true where products and services are heavily commoditised in highly competitive markets, where the quality of experience can be a deciding factor.

Parallel studies indicate that people are becoming increasingly distrustful of advertising and particularly concerned and irritated by being bombarded and targeted with commercial messages.

Personality through design innovation

So, what will drive creative CX design innovation to rival the sometimes-brilliant images and words of advertising?

If advertising is about memorability, building affinity and promoting emotional reactions such as desire which hopefully lead to a sale, CX design relates to similar emotional responses overlayed on functional foundations.

Chief among these is pleasure. Aarron Walter compared Maslow’s pyramid of human needs to a pyramid of user needs such as functional, reliable, usable and with pleasurable experience being the final cherry on top as the ultimate user sensation.

Pleasure can be challenging to design in a digital product. User interfaces (UI) used across apps, computers and mobile phones are intrinsic to generating pleasurable responses and developing a brand personality which will create a connection with the consumer.

Innovation in this field is perhaps the front line in creative CX. In addition to visual functional design, audio and voice are increasingly important. The use of brand’s first-party data to fuel contextually, or behaviourally tailored interactions will also become a vital area for creative thought.

Perhaps one of the most interesting fields of CX creativity will be the fusion of advertising with user experience design within brand experiences. So rather than a battle for supremacy – perhaps CX strategy will become the focal point for increasing creative collaboration between technology designers and advertisers.

Replies (3)

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Dr. Graham Hill
By Dr. Graham Hill
13th Sep 2021 10:55

Hi Jack
Thanks for writing such an interesting article.
From my perspective, advertising, marketing and customer experience all fulfil different, but complementary roles. That means each will continue but that they should be better integrated.
Advertising's role is to create markets. Marketing's is to generate demand. The customer experience's is to facilitate consumption. Thirty years of research into the Marketing Effies, (see the various publications of Binet & Fields), suggests most companies would be well advised to spend 60-70% of their Marketing budget on advertising and 30-40% on marketing. Whereas there is ample evidence that advertising and marketing drive SHV, the evidence that customer experience directly drives SHV is much much weaker. So how much should we spend on customer experience? And where should the budget come from?
Best regards, Graham

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aplusb supplements
By aplusbsupplements
16th Sep 2021 10:23

Hello Jack. Advertising and customer experience are the two sides of a single coin. Your post is really good. Thanks for sharing.

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By siluri
16th Sep 2021 10:31

I can only agree with the importance of customer experience in driving emotional and behavioural loyalty at the coal face, but would be wary about conflating it with 'digital transformation'. CX is ultimately about fostering customer trust by understanding and meeting their expectations. The smart application of technology to this goal doesn't have to mean complex, expensive and time-consuming IT project to 'transform' the whole organisation.

The important thing in CX is to listen to your customers, understand what matters most to them - and explore how investing in digital can help you be more effective in response. Digital Transformation in itself is not enough.

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