Burt Swanson


ADVERTISING SUPPLEMENTS SPARK A STUDY OF INSTITUTIONAL ENTREPRENEURSHIP


Burt Swanson says publications from BusinessWeek provided a credible voice for CRM

In 2003, Professor Burt Swanson and Ph.D. student Ping Wang came across a special advertising supplement from BusinessWeek dedicated to Customer Relationship Management (CRM). Swanson remembers wondering, "'Hmm, how did this come to be and who's behind it?' It was essentially airing and promoting CRM - apart from any one vendor's product."

The supplement turned out to be the sixth in a series of nine issues produced by BusinessWeek over a period of five years starting in July, 2000. These publications presented a unique opportunity for a case study, according to Swanson, because they reflected what he refers to as, "institutional entrepreneurship."

According to Swanson, vendors promote a particular product, but institutional entrepreneurs promote the innovation. "They do it by helping establish its market, setting standards and identifying a dominant design - if there is one," he says. "They can be writers or consultants. They become gurus and gain a stake in the new innovation."

Institutional entrepreneurs help create what Swanson calls an, "organizing vision." When a new technology is introduced, it is frequently not clear what it can do or who will use it. "So a vision gets generated by enthusiasts and promoters to convey what it's all about and why it's a good thing.

"What interested us in this particular study," says Swanson, "was how this special advertising section originated; how it appeared to parallel the momentum that CRM had achieved; what its content consisted of and who the players were. In short, we wanted to understand the institutional work that is done by these other players - not the adopters and not the vendors - but these other players."

So Swanson and Wang began to investigate the origin of the advertising supplements, how they were created, how they evolved and how their publication corresponded with the momentum of CRM adoption in the business community. The study has been reported in a paper called, "Customer Relationship Management as Advertised: Exploiting and Sustaining Technological Momentum," soon to appear in the journal Information Technology and People. Wang is now a professor at the University of Maryland.

"This was a fairly narrow study," says Swanson. "We took each issue of the special advertising section over five years, interviewed the people that we could contact who were parties to this and looked at secondary sources to try to get the story together."

The study found that the institutional entrepreneurs who produced the supplements contributed fresh meanings to the organizing vision for CRM. They described its progress and responded to its critics. This can be important to an emerging technology, according to Swanson, because technical superiority and apparent economic benefits are not always enough to ensure widespread adoption. "The process of sustaining technological momentum is an important institution-building task," he says.

At the same time, it is not clear that the supplements had a direct effect on the momentum of CRM adoption during this period. When the supplements began, CRM had already begun to catch on. "For BusinessWeek to be interested in CRM," says Swanson, "the subject needed to have enough momentum to attract readers' interest. Managers need to have heard enough about it to want to be updated. And it needed to have established enough market potential for advertisers to spend money on it."

CRM sales actually grew 100 percent during the year the supplements started. But it still faced typical hurdles such as natural skepticism, implementation difficulties and resistance to change. "It was being implemented, but there was criticism that the money wasn't always being well-spent," according to Swanson.

So what impact did the supplements have on the momentum of CRM adoption? Swanson says that the study provides no clear evidence that momentum was actually affected. But he argues that the willingness of advertisers to fund the supplements over a five-year period indicates that they likely influenced CRM purchases and adoptions.

Swanson notes that institutional entrepreneurship typically helps new technologies gain momentum by legitimizing them and mobilizing support for them. Two of the individuals producing the ad supplements were well positioned to do this.

Frank Long had ten years of ad sales experience with BusinessWeek and was later involved with a magazine devoted to CRM. He proposed the ad supplements to BusinessWeek and then developed interest among advertisers.

Bob Thompson, founder of CRMGuru.com, served as the first editor of the supplements. Thompson chose customer loyalty as the theme of the first issue and solicited views from a variety of industry analysts, adopters and vendors. As a well-known CRM expert whose bio appeared in the supplements, he brought credibility to the project.

Thompson and fellow contributors proposed a definition for CRM, emphasized the importance of customer loyalty and proposed a framework for building it. Over the nine supplements, industry experts were cited 102 times to advance CRM's credibility. While Thompson and some contributors were compensated, others hoped to promote their services or gain exposure. While advancing their own interests, they called attention to CRM, articulated an organizing vision and proposed models for action.

The first supplement contained 18 ad pages, earned $1.3 million in revenue and was the most successful supplement in BusinessWeek's history. As the Dotcom bubble burst, however, ad sales declined. The second issue had 10 ad pages, the third had eight pages and the fourth, published in 2002, had seven pages. Ad support continued to decline through the final supplement in October, 2004.

Swanson says that the momentum of CRM adoption from 2000 through 2004 roughly paralleled the size of the ad supplements. But when the supplements ended, CRM adoption continued. One former advertiser noted that her firm was continuing to market CRM, but had decided to move its ad budget to newer technologies in an attempt to stay ahead of the curve.

"What was interesting here," says Swanson, "is the way in which, notwithstanding the collapse of the Dotcom era, CRM continued to have momentum during this period. We think it was sustained, in part, by the work of these and other institutional entrepreneurs, whose contributions to innovation have not been widely recognized."