Let me explain. Under marketing hardware I file the static, robust marketing framework long established in theory and practice: brand architecture, trademarks, direct mailing, loyalty programs, trade show booths, traditional print collateral, print ads, billboards, sales brochures, feature lists, etc. -- basically any programs and artifacts that operate in campaign cycles targeting a segmented audience.
In contrast, marketing software encompasses knowledge, point of views, conversations, social networks, partnerships, entertainment, etc. -- in other words, any content and connections flowing through the hardware and filling it with life. Like the PC, marketing hardware is meaningless without software. As with the iPod or any other mobile device, the primary value of marketing lies in the software and not in the hardware. The flow of information outweighs the channel. The water is more powerful than the rock. While marketing hardware relies on programs, marketing software is all about the programming. While marketing hardware is inert and hard to adjust, marketing software is agile -- open-sourced, upgradeable at any time, and highly customizable. While marketing hardware is proprietary and can be owned, marketing software is in constant flux and free for all. It is harder to control and almost impossible to protect and defend. That's what makes it so valuable. The following chart may further illustrate this paradigm shift:
I suspect that in most marketing organizations the ratio of hardware to software will approximately be 70 to 30. If marketers are serious about their new mantra of adding value for consumers rather than just promoting a product or brand, then they must alter this ratio and shift their investments. Take a critical look at your own organization: What's your ratio? Do you over-invest in marketing hardware? Are your marketing efforts bogged down by that? Does it compromise your agility? Which marketing software elements do you have in place? Which could you add?