When AT&T entered the credit card business in March 1990, it had a powerful source of competitive advantage: it knew millions of its prospective customers by name and reputation because they were telephone customers.1 Many of those who called its toll free number in response to advertising were told, “You have been preapproved for the Universal Card with a credit limit of $....”
Even before a customer phoned, AT&T knew how badly it wanted that individual’s business and how large an incentive to offer to get it. The results were impressive: within three months there were over a million Universal Card holders, and they had made more than $100 million in purchases. AT&T was exploiting the freshest option available to marketing in the 1990s, the ability to address each customer personally, with information unique to his or her relationship with AT&T drawn from its on-line database.
The shift from broadcasting to directly addressing customers is a subtle change, but quite radical in its consequences for marketing practice. Broadcast media send communications; addressable media send and receive. Broadcasting targets its audience much as a battleship shells a distant island into submission; addressable media initiates conversations. The new marketing does not deal with consumers as a mass or as segments, but creates individual relationships, managing markets of one, addressing each in terms of its stage... To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
- Register for free access to recent articles and the current issue of MIT Sloan Management Review.
- Subscribe and read articles from the past three years online.
- Premium subscription give you access to the entire archive of articles.
