December 3rd, 2015

The History of Marketing and how it’s Changing

Globe of Flags


The History of Marketing and how it’s Changing

The Age of Information

What is The Sharing Economy and how is it taking the “On Demand” World by Storm?

What Exactly Does “On Demand” Mean?

The Leading Companies in the Sharing Economy Space

Rent The Runway

The Groups to Market to in the Sharing Economy

Baby Boomers
Generation X

Effective Ways of Marketing to These Groups

The Strategy

The Network Effect

The Result

How the On-Demand Business Model Markets to the Seller

What Are the Sellers Actually Looking For?

Heading Into the Future of Marketing

Rating the Ratings System

Some Things to Think About





Do you sell a product by saturating the market, or do you build a relationship with your customers, enticing them to keep coming back through trust and familiarity? Over the decades, marketing has been shifting in line with technology and the needs of the consumer. In the past, we were used to waiting for products to come to us, whether that’s scheduled program times on the television, or in-your-face ad campaigns for the newest product that “everybody needs.” Televisions, newspapers and billboards were the primary method of communication from business to customer, and the marketing methods reflected that.

The Age of Information

Over time however, as technology improved, bringing with it the internet and smartphones, the information age introduced a host of new platforms and avenues for both the consumer to find out about products they want, and businesses to reach their customers. With increased broadband capacity and mobile access to the internet, the public could finally look for the content that they wanted, rather than wait for it to come to them. The world was introduced to likes, tweets, favorites and thumbs up—crucial tools in “sharing” information. A world where in the last 2 years, smartphones overtook laptops as the primary device for accessing the internet in Britain. (Wired, 2015)

What is The Sharing Economy and how is it taking the “On Demand” World by Storm?

But what is the Sharing Economy? And what does “on demand” actually mean in terms of services? The Business of sharing, by Alex Stephany, puts it rather well: “Why pay a lot to own a hedge trimmer you use twice a year? Why not pay a little to borrow someone else’s?”

If you have something that you are not always using, such as a spare bedroom, then the time that the commodity is not being used may be seen as wasted. The sharing economy is the business of maximizing an asset’s utility when not in use. Companies and services market to both the people who own these commodities (whether they be items, housing, products, or time) and to the people who want to use those services “on demand.”

What Exactly Does “On Demand” Mean?

What is On Demand?
“On Demand” refers to the process of using something only when you want it or need it. A good example would be if you live in a dense city and find owning a car impractical, but still needing one now and again… you can use a car on demand with rental companies or car-sharing services, such as Zipcar and Uber.

As technology becomes ever more prevalent in our lives, shaping our world into a by-the-minute experience, we are constantly finding the demand for things as we need them, rather than owning them outright. Millennials have dubbed it the “post ownership economy.” For those that own the assets that others want to make occasional use of, then a business cycle is established. As time goes on and the technology and business model improves, the trust in that economy strengthens, and so more and more people from different economic and social backgrounds get involved. According to PwC, the sharing economy will grow into a $335 billion market by 2025.

The Leading Companies in the Sharing Economy Space

So who are the companies that are at the forefront of this new technological revolution? How do they market to their user base? How have they grown in this space to become the leaders of the sharing economy?

Here are four of the headline-grabbing companies that are taking the on-demand market by storm:


Uber Taxis
One service that most people have likely heard about by now is Uber, a car service which allows providers to market themselves to an on-demand consumer base. Similar to call-in taxi services, customers provide the app with their location and car requirements, then wait for the car to turn up and take them where they need to go. One of the main differences from other services, is that Uber itself doesn’t own a single car, but vehicle owners and other companies make use of the app to share their car with riders. On top of that, all transactions (except for the specific taxi-linked service) are completed online, and no cash is transferred between the driver and customer.


Airbnb is an online service which hosts a collected database of renting accommodation provided by users registered on the site. Customers can search the locations by city or street where they wish to rent, as well as their pricing and accommodation specifics. Customers can see exactly what sort of accommodation they are getting as well as the ratings of previous Airbnb users. This allows them to find affordable accommodation where they want and how they want it.

The site gives individuals or companies the opportunity to rent out their free rooms, which may otherwise go unused. By hosting vacancies on the site, their rooms can be occupied far more regularly throughout the year. In San Francisco, for example, Airbnb users have a 90% occupancy rate, compared to the San Francisco average of 84%. (PKF CABA study, 2014)

Hosts are reassured of taking in guests due to the site’s $1m guarantee for damage or loss, as well as their ID verification and screening systems for potential tenants.


Driving in circles around a city looking for that one free parking space is one of the worst ways to spend your time on that day trip out with your family. Founded by Anthony Eskinazi, JustPark is the service that has stepped up to solve this issue and is filling a very large demand in almost every city, worldwide. The service allows owners of free parking spots to market their available spaces to people who may need them in relation to their on-demand nature. 

The service allows owners of free parking spots to market their available spaces to people who may need themClick To Tweet

The sellers list their unoccupied parking spaces wherever they are, whether they are hotels, commercial car parks, churches or private driveways. Drivers can then search an area before they travel, and book a parking space using the JustPark app, saving them time and stress looking for one when they arrive. Drivers can then give ratings on the spot based on how it matches up as advertised and the quality of the parking space.

Rent The Runway

Rent the Runway
Owning a lot of clothes in various fashions for all four seasons can be a very expensive premise, as designer clothes don’t come cheap. Rent The Runway offers a service which allows you to choose what you want to wear, when you want to wear it. By leasing out designer clothes in whatever size you need for whatever occasion, the service enables you to dress lavishly for a fraction of the cost. A dress made by a designer can be worn by many different people on many different occasions, allowing the designer to both make more money from their design, as well as showcasing their design to a much larger audience.

What they have in common

The core concept linking all these companies, is they allow the sharing of something not in use; be it an unused patch of tarmac, a car, a designer dress, or a spare room. They do all this despite not owning any of those cars, rooms, dresses or parking spaces. They operate in a multi-billion dollar economy as mediators between independent buyers and sellers.

All of these companies, while offering vastly different services, use very similar marketing and operating strategies to both maintain their user base, and attract new buyers or sellers. By hosting your service, each company effectively gives you access to their existing and growing customer pool. The ratings systems builds customer confidence in providers’ services, weeding out both individual unsatisfactory service providers, as well as troublesome or unwanted service users. So not only are customers able to pick and choose based on reviews of a provider’s service, but providers can avoid potentially troublesome customers who have a track record of not paying fees, or being generally unpleasant.

The Groups to Market to in the Sharing Economy

When it comes to new industries like the sharing economy, you really need to understand who is going to be using your services, and what attracts their business. There’s a whole ecosystem of buyers and sellers, all having their own relationships with their clients and the service as a whole.

The site allows you to place orders to hire designers and their clothes, handling selection, delivery and insurance online. You can also book guided visits to warehouses and stores where assistants will personally help you pick out the best clothes for your occasion. Insurance is included in the fee you pay, protecting you from damage costs. Once you are finished with your rental, you are provided with free return delivery to make the process as stress-free as possible.
Groups to Market to


“The Silent Generation” is comprised of those born before 1945, where the vast majority are in their 70s and 80s. While reluctant to use cutting-edge technology such as smartphones, apps and social media, this is the wealthiest retired population, representing over two thirds of America’s wealth. (Forbes, 2014) They are a beneficial demographic to market to as they have plenty of disposable income to spend, as well as assets to provide for rental services.

Mainly hosts for Airbnb and JustPark, they occasionally make use of Uber and Rent The Runway. Like the boomers, traditionalists value reputability and availability above value.

Baby Boomers

Born in the post-war “baby boom” of the 50s and 60s, this group is now in the age range of 55-65. While this consumer group has some of the largest savings of disposable income, they aren’t as ready to adopt to the latest changes in technology. As owners of property, baby boomers are predominantly sellers for Airbnb and JustPark. They tend to make use of all four services, though mainly Rent The Runway, JustPark and Uber. Convenience, availability and reputability are the main values for the boomers. (Generational Generalities, 2005)

Generation X

“Gen X” is the group of people born between the 60s and 80s, making them between 35-55 years of age. Generally owners of property while having more disposable income than the millennials, Gen X is a core source of both buyers and sellers in the sharing economy. Despite their use of social media and internet based services, they aren’t as quick to adopt new services as the millennials (Adweek, 2015) but will hop on board once the service is proven viable and cost-effective. Gen X makes wide us of all the previously mentioned services as both buyers and sellers. (TheVenture, 2015)


Millenials“Millennials” are the generation born from the 80s to early 2000s, and make up the young adult population to the age of 35. This is by far the biggest group that’s marketed to by on-demand services as they are the most technologically-savvy group of consumers. According to recent surveys, 51% of millennials own a laptop smartphone and tablet compared to the 37% average of all Americans over 14. (MarketingCharts, 2014) Most are active users of the internet and social media, owning smartphones and tablets, as well as making frequent use of apps. This is the group most likely to quickly adapt to new changes in business models that make use of mobile technology which is integrated into the paying for, and reviewing, of services. They are the group most likely to be buyers in the sharing economy, as they don’t generally own assets such as cars and houses, and prefer to rent them as-needed. Millennials are rarely sellers in the sharing economy, except in the case of Uber.

Effective Ways of Marketing to These Groups

Each different demographic has their own tendencies and ways of providing and using services. Millennials, for example, are often the first to adopt brand new and relatively untested ways of getting the content or services that they want. They see it as “being at the forefront” of innovation, and are usually eager to show off their exciting new experiences on social media with their peers. (AdWeek, 2015) Baby Boomers however, tend to wait until something is proven and already adopted as “the leading service” before they will start using it. This group responds poorly to social media advertising and is more responsive to mainstream advertising or promotions, as well as word of mouth. If you can present your service as “the one everyone uses,” then you will effectively capture this audience. (BusinessInsider, 2015)

The Strategy

Social Media SignsBy targeting millennials first, you can get your service off the ground and generate a solid social media platform amongst that demographic. At this point, you should be a competitor in the sharing market. From here, you will want to target Gen X, and to a lesser extent, baby boomers. Gen X isn’t concerned with a service being “the leader” as long as it’s established and offers both good opportunities and value. With enough market presence through the millennial boom on social media and the following adoption of the Gen X, baby boomers will begin making use of the service as it becomes prevalent. Once baby boomers are on board, attracted by the potential market exposure for their assets, traditionalists will begin to nudge into the space too.

Baby boomers and traditionalists take a more prominent role in business once your service has been established, offers good value, and markets itself as the reliable leader in the sector. Once you are convenient and trusted enough, baby boomers will happily use services and provide their own.

In the end, the proof is in the numbers. While there have been great successes in the generational use of sharing companies throughout the years, a night back in 2012 really highlights the diversity of the sharing economy. In one evening there were over 60,000 bookings, ranging from millennial backpackers renting out treehouses, to billionaire boobers renting out private islands. (TechCrunch, 2012)

The Network Effect

The Network EffectWhen a user, more specifically, the number of users, has a direct effect on the adoption of a service or product, this is known as the network effect. The more people that use the service, the more valuable that service is, since with a low user rate, the service quality declines, resulting in loss of customers.

The larger and more widely adopted a service is, the more people are attracted to that service out of convenience and potential customer base. This often results in a single competing service taking precedent over all other competitors solely because it’s the most used, therefore most convenient to use.

The Result

By using a less-adopted service, for example, you are limiting yourself to other potentially more suitable services in a particular area. If one company has ten service providers in the area you want to go, but the other has two, then chances are the company with ten will have the exact service you want. Over time, this repeats itself as more and more new customers go to the larger service, leaving the smaller service bleeding sellers and buyers until it fades into obscurity.

The end result is that you have one dominating company in each vertical. The further at each end of the spectrum you are, whether you have a low user-base or high user-base, the easier it is to move to the end of each extreme.

How the On-Demand Business Model Markets to the Seller

As a provider of services and products, your number one goal is usually to find your customers and make a sale. Historically this has been achieved through mass advertising, or targeted marketing, both of which are very expensive and are in some cases, inefficient. (Profitup, 2015) When you put out an ad campaign, you might spend $10,000 to market to 500,000 people. That equates to an effective marketing cost of $0.02 per view. Of those views, only a small percentage are likely to be in your targeted marketing audience—maybe 10%. After that, only a small percentage of those will actually result in a sale—maybe 25%. That means that out of 500,000 people, you generate 12,500 sales, at a marketing cost of just under a dollar per sale.

What Are the Sellers Actually Looking For?

With an on-demand market strategy, you aren’t trying to buy the views of potential customers, but are presenting your service to customers who want that service. Whether you make the sale or not depends on your reviews and pricing in comparison to your competitors. The sharing market and its platforms give you the opportunity to reach these customers at almost no cost. You simply offer whatever you are providing, and if you match a customer’s requirements, you make the transaction. The key factors for the seller is how large the user base of the hosting service is, and how reputable the service and clients are. These sharing market companies are competing to provide the sellers with the largest and most trusted platform available.

Heading Into the Future of Marketing

With social media becoming such a powerful marketing tool, having the ability to shape the opinion of millions in a matter of hours, what’s to stop it from altering the way effective marketing operates itself? With the Uber riots being fueled through social media backlashes to company decisions, we can see just how quickly the community can reach out and respond to its participants. The same can go for Uber drivers themselves, as protests over fee increases and the way Uber treats its drivers spread nationwide. In a matter of days, company policy was changed to supplement the demands Uber drivers because without the drivers providing their cars, Uber can’t function as a company. They depend on each other. As seller, buyer, and service become more intertwined, will we see some drastic changes in the future? (NBCBayArea, 2015) (Independent, 2015)

Rating the Ratings System

Rating SystemsThe review systems themselves are ever changing in relation to effective and ineffective models. This entire system is Darwinian in style, and thus naturally, the “best” service or system rises above the rest, while others may fail if they do not swiftly adapt. Some of these rating systems have died out and are being replaced by verifiable, non-abusable systems which protect both the sellers and the buyers of services. A recently famous example of ratings abuse was seen in the Amazon case, where thousands of people were paid to write positive reviews of products they had never used, in order to give the seller a trustworthy rating. This was eventually answered by a legal case and plans to put in place a transaction verification system, to ensure any reviewer has actually bought the product before they can rate it. (Guardian, 2015)

What Lies Ahead?

But even as “the best” offerings come to the forefront, better, more suitable systems may arise and erode at these, until they themselves take the top spot. Because of this “natural selection,” marketers need to constantly be prepared to adapt rather than stay with what is familiar and safe… even if it currently works well. Five, ten, or fifteen years down the line, our current system of ratings and trust-based marketing may be replaced by something better, which could alter the entire landscape of the sharing economy.

Some Things to Think About

With technology evolving as rapidly as consumers develop new ways to make use of it, marketers need to constantly adapt and keep pace of an ever-changing landscape in order to effectively reach their desired audiences.

Understanding precisely who you are marketing to, and effectively employing strategies that can be utilized by those groups and demographics, is a key factor in remaining relevant as one decade slips into the next.

With an increasingly broad number of services and apps available to people’s pockets through the advancement of smartphones and their related technologies, data gathering and feedback methods need to strive to keep pace, or risk becoming obsolete. Long gone are the days where you can base your marketing strategies on quarterly reports and test groups. Today, the people you are marketing to are participants in the business model themselves, stimulating the network effect and providing the framework of trust needed for a successful business in the sharing economy.


The Business of Sharing, Alex Stephany

Generational Generalities. (2005). America’s generations. Retrieved November, 2015. PKF California Accountants and Business Advisers study 2014

Marketing Future & the work place

Millenials get connected and its effect on marketing

Forbes article (Generation of the lucky few) marketing related

Uber Protests and strikes planned- effects of the on-demand economy in reality–333401381.html

Endo of the laptop, Smartphones become more popular

The review system and how it can be manipulated (Amazon sues false reviewers)

Paris, Uber Incidents 2015

Marketing & understanding your target audience,

Coastal urbanites and marketing capture explained (

Shopping habits by generation,

Airbnb, growth and popularity (

Metrics and feedback on marketing campaigns (

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