A Marketer Looks at Climate Change - Part 1: Diffusion of Innovation

Most people advocating solutions to climate change are technical or policy types, not marketers. Yet much of what we’re trying to do is to market new approaches to the public at large. Is there something marketers can teach us about how to go about reducing carbon emissions?

This three-part series presents some lessons I’ve learned from 30 years of marketing technical products and services. The first is to understand how new ideas reach the marketplace and develop mass appeal. (Obviously governments can just MANDATE specific solutions, but this rarely succeeds in changing behavior except in the short run – enforcement costs are just too high).

In graduate school, I got interested in how innovative technology enters the marketplace and discovered the pioneering work of Ohio State Professor Everett Rogers, who created a completely new field of study called “diffusion of innovations.” First published in 1962 as Diffusion of Innovation, the 5th edition came out in 2003, so you know the approach has validity. Rogers died in 2004, but by that time marketers the world over had seized upon the theory and made it their own.

Rogers’ work showed how the uptake of new ideas depended upon a relatively small cohort of “innovators” and “early adopters” that in total make up about 16 percent of the potential market. These are people whose mindset welcomes change and who are willing to work through the difficulties of using new products and ideas to gain some advantage in the marketplace.

Critical to getting new innovations adopted is to first convince Innovators and Early Adopters to use it. Only then will the rest of the people follow.

Critical to getting new innovations adopted is to first convince Innovators and Early Adopters to use it. Only then will the rest of the people follow.

If you were the first person in your group of friends to use a Mac computer, a fax machine, an iPhone or an iPad for everyday work, you are an innovator. If you are the innovator’s friend and adopted the product right after s/he worked out all the problems of using it, then you are an “early adopter.” And so on.

Four things are critical for this discussion:

1. The total addressable market needs to be defined. For Electric Vehicles, for example, is it all car owners, or a smaller group such as people who drive a lot (or a little)?

2. It typically takes 10 years or so to reach 50 percent penetration of the addressable market, at which time new adoptions taper off. It takes a generation (20 years) to reach 67% of the market.

3. There is a group of “laggards” that represent about 16% of the total market, who will NEVER adopt the innovation. Believe it or not, 10 years after Apple introduced the iPhone in 2007, only 67% of the US population owned a smartphone from ANY maker. It’s hard to see this number rising much above 70% until Baby Boomers (and those who are older) start dying out in large numbers.

4. The “network effect” comes into play when the innovation has clear economic benefits and is easy to adopt and use, AND when NOT using it has clear drawbacks. For example, if I can use my smartphone for mobile payments and every merchant is equipped to accept it, then substituting a smartphone for a bank account, as many Millennials are doing, will drive adoption of the technology faster. Since smartphones and tablets now can double as your main computer and video recorder, especially in an age of social media, why would you spend $1000 buying a computer?

For example, can try to MANDATE that automakers only produce EV’s, but that’s unlikely to happen much before 2050. We should also “discount” the effects of various solutions on climate change by the 16 percent of laggards that will never use new technology, for both economic and personal reasons. So if we’re depending on EVs as a carbon reduction technology, we need to severely discount their impact.

What does all this mean? First, there is no “magic bullet” that will stop carbon emissions in the short run. Second, we have to have a multi-pronged approach that incorporates probably twice as much in the way of reducing greenhouse-gas emissions than we think we need. Third, new technologies are unlikely to have a substantial impact before 2050.

As someone once pointed out, the Stone Age didn’t end because we ran out of stones, and I would say that the Oil Age isn’t going to end because we run out of oil. We have to MAKE it happen, through conscious choices, both personally and socially. We also need to do it much faster than we have any right to expect, based on the last 100 years of technology adoption cycles.