By David L. Rawle
Marketing Matters

The other day, I went to look for a movie at Blockbuster. Unfortunately, I couldn’t find what I was looking for.

Since 90% of Blockbuster’s rentals are new releases, the choices are somewhat limited.

Searching up and down each of the way-too-brightly lit aisles can be mind-numbing.

Netflix, on the other hand, carries 20 times more titles than the typical Blockbuster. And, of course, finding what you’re looking for is a breeze.

Conventional wisdom (Blockbuster’s included) would suggest that the real money is in the new releases and the most popular titles, and the rest of the titles probably sit on the shelf gathering dust.

Not so. Surprisingly, only 30% of Netflix’s rentals are for new releases, while 70% are for backlist titles. Almost 95% of Netflix’s 65,000 titles get rented at least once per quarter. Yes, the new releases generate good revenue, but the real money is in the rest.

You may ask, how is that possible? And how do people know about and become interested in all of those other titles?

The first answer is that consumer interests are more diverse than ever before, and there are significant numbers of people interested in virtually any subject. Thanks principally to the Internet, they find one another and they find the movies or other products that relate to their interests.

For example, go to meetup.com and you’ll discover 129 affinity groups within 50 miles of Charleston. These are groups with shared interests ranging from Yorkshire terriers to ghost tracking, from bunko to belly dancing. They get together regularly, whether in person or in cyberspace.

We live in a world in which people’s individual interests, shared with others, have more economic power than the overall common interests. Mega-hits have given way to niche winners.

Data management helps in identifying individual interests and marketing specifically to them. Stores now know all about us, because they are able to track, analyze and act upon our purchases. For example, Netflix follows customers’ rental patterns and suggests titles that are consistent with those patterns. Amazon and others do the same.

Here in Charleston, Piggly Wiggly is testing a program known as “Pigs Perks” at its Harborview Road store on James Island and at both of its Mount Pleasant stores. Swipe your “Pig’s Favorite Customer” card as you enter the store and you get coupons that are customized just for you, based upon your previous patterns of purchase. For example, if you’ve been a big Coke purchaser, you might get a coupon for a six-pack of Coke. If you’ve been buying baby food, you might be offered a deal on Pampers. The point is that you get coupons that really matter to you.

And, when you get to the checkout register, there’s no fumbling for those coupons.

As soon as you swipe your PFC card, the register automatically gives you the discount on your special items as they are scanned.

Customization may also soon be more prevalent in advertising. We’ll see more advertising that is specifically relevant to our individual interests. For example, there’s a company called BlueLithium that delivers highly targeted ads on the Internet by monitoring people’s click streams. They watch your Web click patterns and, when you click on one of the 1,000 sites they monitor, they determine within 10 milliseconds which ad to serve up.

I find all of this wonderfully encouraging. For customers, it means they can have what they want, in terms of products and services, and they can receive messages that are most likely to be relevant to them.

And for marketers, it means that we can communicate more efficiently, with greater focus and accountability.

David L. Rawle is chairman of Charleston-based Rawle-Murdy Associates Inc., a marketing, advertising and public relations firm. E-mail him at drawle@rawlemurdy.com or visit his blog at davidrawle.blogspot.com.

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