Software is Eating Marketing

Like so many industries today, technology is changing the field of marketing and advertising. The way people buy is changing. The way people consume media is changing. The way marketers can reach buyers is changing too. New technologies present both opportunities and challenges to marketers who are vying for buyer attention. Let's first consider some new technology trends.


In 2000 there was a huge bubble in the technology sector. There was a lot of speculation about how the Internet would change the world. The Internet was relatively new and not a lot of people were actually using it yet. Eventually the bubble popped and a lot of people lost a lot of money.

The difference between 2000 and today is that the Internet is no longer "relatively new." There are now billions of people using the Internet. What entrepreneurs and investors were expecting in 2000 is finally coming to fruition. In addition, it's no longer for just the young and rich. The internet is used in emerging markets, under-developed countries, and even old people!


Not only are people using the Internet for research, they're finally starting to get comfortable with purchasing all kinds of products online.

The U.S. Census Bureau reports that e-commerce penetration of total retail sales in the U.S. was around 8% in 2012. That's small! There's still a ton of room for growth. In addition, online retail has strong cost and product advantages over its offline counterparts.

Product Development

The cost of building a product and taking it to market has gotten cheaper and easier. What used to take months if not years and millions of dollars now takes weeks (if not less) and thousands of dollars (if not less). This means more competition for attention.


New distribution networks such as Twitter and Facebook give marketers access to hundreds of millions of potential customers at the click of a mouse. For free! The Internet is the great equalizer. Anyone with a message or product that people like can and will be found.

Consumer Behavior

People don't get sold anymore. They buy. Many of the old methods of advertising and customer acquisition are either not performing as well or simply not working. Traditional media buying and advertising is expensive, unmeasurable, and less effective than it used to be. People buy from companies they know, like and trust.


Innovation in payments, including PayPal, Stripe, Gumroad, and Bitcoin, has made it cheaper and easier than ever to transfer money. Paying for something is as easy as sending an email, clicking a hyperlink, or scanning a QR code.


Mobile devices have become nearly as powerful as desktops or laptops. Furthermore, there are many things we can do with our phone that we can't do on our desktop/laptop.

There has been mass adoption of mobile devices across the world, including in countries with high poverty where people could not previously afford a desktop or laptop.

We're all walking around with high-powered computers in our pockets that can be used to buy products and/or consume content!

The New Marketing

Traditional marketing and advertising is broken. Tactics like billboards, TV and radio advertising, paper mail advertising, and cold calling, are expensive, hard to measure, inefficiently targeted, and often ineffective. In fact, people often find them really annoying.

Content marketing, social media marketing, and "growth hacking" leverage the new ways people are consuming media and buying. They take advantage of the trends described above to attract, engage with, and acquire customers in a measurable, efficient, and effective way.

Dropbox has spent very little on advertising, yet it is worth $10 billion. How can they acquire customer so effectively? They have done a few things really well...

Dropbox makes it simple for people to share files. Both the sender and the receiver have little work to do. By sending people the photos that are hosted on the Dropbox website, Dropbox is getting more exposure (for free) to potential users.

Before Dropbox "launched," they submitted a 3 minute demo video to HackerNews with a link to their simple landing page where users could simply submit their email address to express interest. After 2,000 "diggs" Dropbox's beta waiting list jumped from 5,000 to 75,000 in one day.

PayPal famously offered a "2-way reward" in the early days. If you successfully referred a friend you would get $10 and your friend would get $10.PayPal grew to tens of millions of users before ending this promotion

Airbnb had an early feature that allowed users to post their listings to Craigslist, taking advantage of Craigslist's massive user base. Instagram encouraged users to share photos to Twitter and Facebook by providing exposure to hundreds of millions of people.

These are just a few of many examples.


Acquiring customers today requires capturing attention in an increasingly competitive world. It requires interacting genuinely, being helpful. The role of marketing and advertising is changing drastically.

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