Dust Value

A SHORT HISTORY OF PRE-21ST CENTURY DIGITAL MARKETING

In 1971, the world of communication was forever changed in a small lab in Cambridge, Massachusetts, when computer programmer Ray Tomlinson sent an electronic mail – later known as “e-mail” or simply “email” (the latter of which Tomlinson himself preferred) – to a neighbouring computer in the same lab over the 2-year old Advanced Research Projects Agency Network (ARPANET). This change wasn’t an overnight phenomenon of course, the pace of this so-called “internet” growing slowly but steadily over the next two decades like the first half of an exponential curve through periods of global recession, wars both hot and cold, stock market crashes and the rise of both the United States and China as the two dominant economic superpowers of the post-Soviet world.

However, let’s not get ahead of ourselves. For believe it or not, the story of what we today call digital marketing is even older than the email.

1967

The same year Tomlinson joined Cambridge-based BBN Technologies – then known as Bolt, Beranek and Newman – another major revolution was already underway in the world of marketing roughly a thousand miles away.

This revolution took place in Chicago, where former direct marketing manager Robert and his wife Kate Kestnbaum founded their brand-new marketing consulting firm, Kestnbaum & Co. Their methods were highly unorthodox at the time, to say the least. They not only used statistical models to empirically gauge economic relationships with customers, but they even found ways to mathematically model real-world financial situations. Pretty soon, the Kestnbaums also figured out how to accurately forecast a business’ net profit from potential customers even before they became customers.

All of the above laid the foundations for what we today know as Database Marketing – the type of marketing that literally utilises “databases” of names, addresses and even records of financial transactions with customers in order to promote and eventually sell a particular product. The invention of Database Marketing was a watershed moment in the marketing landscape; however, much like the ARPANET, it would take decades for the rest of the world to catch on.

1980s

One year before The Greed Decade began, the American company Motorola launched the Motorola 68000 microprocessor. Considerably faster than the low-selling MC6800 from five years earlier, the soon widely-adapted 32-bit design of the 68000 would go on to usher in a whole new era of computing with companies like Apple, Commodore International and Texas Instruments scrambling to put out ever more affordable, faster and user-friendlier computers on the market with considerably larger storage capabilities.

The internet also underwent a sea-change throughout the decade: from the launch of the ARPANET-alternative Computer Science Network (CSNET) for academic/research purposes to the National Science Foundation Network (NSFNET) to dozens of other local, similarly-specialised networks spread around to the world – all of which would eventually be connected through Transmission Control Protocols (TCP) and Internet Protocols (IP) to create what is today known as the global internet by the turn of the decade.

Meanwhile, Kestnbaum’s radical approach to marketing was finally starting to gain popularity, with multinational corporations such as BT Group and Barclays utilising the collaborative efforts of him and his once-employee Robert Shaw to create extensive online databases for millions of customers. The latter also incorporated features such as contact optimisation, campaign management, field sales and telephone sales channel automation into his mentor’s approach, thus effectively creating the blueprint for marketing in the decades come.

1990s

According to a Wired magazine article, the term “Digital Marketing” was coined in the final decade of the 20th century, around the same time as the launch of the internet’s first search engine. While the source of the term has apparently been lost to the annals of time, it’s really not hard to understand why that term was coined then. With the popularity of personal computers now spreading across the world – entering the homes of the kind of middle-class masses who might have never even dreamt of getting their own computer system even a decade back, let alone one with a (albeit primitive) internet connection – the boom proved to be a goldmine for marketers finding ever newer ways to find the right kind of customer. And frankly, it has been that way ever since.

In 1993, the San Mateo-based Siebel Systems drew on the approach of Kestnbaum and Shaw to launch the first Customer Relationship Management system on the market. These systems, whose net-updated versions became known as eCRM systems, compiled data from communication channels ranging from telephone, email to even company websites – replacing, in one stroke, the ineffective manual system of list brokers that had been popular in the previous decade. However, there were way more components to this eCRM system, such as:

  • Lead management
  • HR management
  • Marketing and sales force automation
  • Customer data analytics

As the eCRM competition grew more and more fierce with each passing year, vendors were forced to keep adding more and more components to the system in order to keep themselves ahead of the curve. The system eventually became so advanced that companies could even gauge the priorities of their customers’ online experience. The result? AT&T launching the internet’s first clickable banner-ad in 1994, as a part of their You Will campaign.

Frankly, after this point, the evolution of 90s digital marketing became so rapid that they’re best summarised by bullet points as follows:

  • 1994 – The launch of Jerry’s Guide to the World Wide Web, later simply known as Yahoo, which received more than a million hits within a year. This completely upended the digital marketing landscape with companies now scrambling to find ways to optimise their search results. Sound familiar?
  • 1996 – The launch of tools such as Alexa, LookSmart and HotBot as a consequence.
  • 1998 – The launch of Yahoo web search, along with the births of Microsoft’s MSN search engine and Google.

The market, at this point, was flooded with a host of smaller search engines such as AltaVista, Digex and World Online, all vying for space in the booming internet landscape. In fact, the end of the 20th century saw the online field becoming one of the most profitable, with the seemingly-unshakable collective confidence of investors in the internet’s potential to turn massive profits in the future driving up stock prices rapidly.

As the century turned, however, all of that was going to change.