It will come as no surprise to marketers in almost every business category that 2008 will be a difficult year. The economy appears headed for a recession, whether we use the “r” word or not. The credit industry is facing the repercussions of too many years of questionable decisions on credit-worthiness, and we’ve all discovered that the keyword “sub-prime” doesn’t really have anything to do with the prime interest rate. Fuel prices continue to rise, with no relief in the immediate future, no matter how much more corn we grow. The healthcare industry continues to be a mess, and the current political discourse hasn’t revealed any plausible solutions to the issues.
But even with all of these caution flags waving high, opportunities are still available for marketers that are willing to try new things and take advantage of the changes that continue to occur in our media consumption habits and attitudes toward marketing.
Here are some of the key trends that we believe will play an important role in marketing during 2008 and beyond:
1. The shift from traditional media to online and other new media alternatives will accelerate to the point that online will become a traditional medium. For several years, marketing giants like P & G, Kraft and Unilever have simple dipped their toes in the water of online marketing, with less than 10% of their marketing budgets (and their marketing efforts) devoted to alternative media. I believe that advertising in traditional broadcast and print vehicles will continue to be a staple for many advertisers, but the astounding growth of social media and the availability of broadband connections in the home environment will shift online advertising from being a secondary, or even tertiary, afterthought to one of the most important elements of a marketing program. The Internet is now used extensively by every major demographic group for information, communication and entertainment. According to Forrester, online marketing spending will triple to $61 billion over the next few years, and experts predict that online spending will account for 25 -30% of all marketing dollars by 2015.
2. The integration of off-line support for online campaigns will continue, with television playing a major role in developing that synergy. Over the past two years, we have seen an increasing use of television and other off-line media to drive customers to a web site where they can find more in-depth information. Once there, a longer form sales message can be used to tell the story and build customer loyalty. A great example of this is the current Burger King Whopper Freakout campaign. Thirty second television commercials and selected print ads direct consumers to a special web site http://www.whopperfreakout.com/, where an eight-minute, documentary-style video tells the story of how real customers reacted to a staged situation of a Burger King that no longer offered the Whopper on its menu. It is a very creative way to demonstrate a taste preference for the Whopper versus the Big Mac and other alternatives, and according to Burger King has received over 1.5 million views in its first month, about five times what a company spokesman said is considered successful.
3. E-mail marketing will continue to grow in importance, but will evolve from its current context. Consumer fatigue from mailboxes overloaded with too many unsolicited and irrelevant offers will force marketers to focus their efforts on delivering relevant messages when they are most willing to listen to them. In order to avoid consumer shutdown and rejection, marketers will need to take advantage of increased use of behavioral targeting and other analytic tools to deliver e-mail that is triggered by consumer actions, not their own promotion activity.
4. Brand loyalty and customer retention will eclipse brand awareness and customer acquisition as primary marketing goals and evaluation metrics. Past marketing tactics have focused on building broad scale awareness with a resulting belief that the more people you reach, the greater chance you have of converting a sale and acquiring a new customer. In today’s multiple-choice world, simply knowing that a product or service exists isn’t enough. In this environment, product relevance to niche market segments is a much more powerful marketing tool, and marketers should focus their efforts on building loyalty and retaining the customers they already have.
5. Word-of-mouth marketing will become more intentional as a primary marketing tool. While marketers have always hoped to achieve positive word-of-mouth due to its presumed greater credibility, word-of-mouth can no longer be a happenstance event but rather an important part of an integrated marketing program. Deliberate efforts to generate beneficial consumer conversations through viral marketing and other buzz marketing tactics will grow in importance. WOMMA, the Word-of-Mouth Marketing Association, reported the results of a national survey in their November conference that identified word-of-mouth marketing as the "fastest-growing segment of the $254 billion marketing services sector," and reported that "Brand marketers are responding, and have begun to increase their WoM media budgets, moving from test phase to implementations that support their integrated marketing campaigns." We caution marketers, though, to be transparent and honest in their efforts, or they will face the wrath of the FTC who has announced they will pay close attention to "unfair or deceptive acts or practices" such as the recently reported scandal created by John P. Mackay, co-founder of Whole Foods Market. Mr. Mackay has admitted that he used a pseudonym to log more than 1,100 entries on Yahoo Finance’s bulletin board to champion his company’s stock and to blasting a rival – Wild Oats Market. In an era where corporate greed and ethics are so top-of-mind, this was not only illegal, it was stupid.
6. SEO and SEM will become SOP. A recent study by Anderson Analytics ranked search engine optimization as one of the more significant tools to create bottom line impact for a company. As more marketers become aware of the power of complementing organic search with a proactive use of keywords and keyword ads that link to specific landing pages on their website, this use of search engine optimization and search engine marketing will become standard elements of their marketing program.
7. Social marketing will continue to grow dramatically as targeted consumer networked communities become more popular. Web 2.0 has opened the door for unprecedented interaction and consumer-generated content, and marketers should pay attention to new ways that consumers are interfacing across the web. Facebook was the darling in 2007, grabbing attention from MySpace and YouTube, but the real growth in social marketing will come from social network sites that are targeted to consumer niches from teens (e.g. Pizco and Tagged) to seniors (e.g. Eons) to photographers (e.g. Flickr) to mothers with children (e.g. momseasychair) to business networking and job seekers (e.g. LinkedIn and Plaxo).
8. Blogging may be right for some companies, but only if they do it right and are willing to accept the consequences. As we noted earlier, transparency will be crucial to avoid any backlash from disgruntled consumers who can smell manipulation a mile away. Companies must be careful when using tools like blogs, vlogs and Podcasts or face the wrath of a networked audience that can love you one minute and hate you the next. Some forward-thinking companies have created a new executive position of Blog Monitor to be able to respond quickly to new issues as they arise, or to correct misinformation that can damage a company unfairly.
9. Going Green is no longer a luxury or an option; it must be addressed by every marketer in every category. Since the original Earth Day in 1967, marketing periodicals have been saying that green marketing was the next big thing. It wasn’t then, but it is now. Every day, another brand finds both direct and indirect ways to commit to a sustainable future. A recent national study among marketing executives at a VP-level or higher listed “green marketing” as one of the most important emerging concepts. Once again, we want to caution marketers to avoid over-hyping any half-hearted efforts. If you are committed, flaunt it. If you aren’t, don’t try to fake it.
10. Consumer engagement will displace the traditional interruption-disruption model as the order of the day in all categories. For decades, consumers have understood that if they wanted to experience free content in the form of television entertainment, radio broadcasts, and news and weather reports in their daily newspaper, they would have to put up with ads. Ads were seen as a necessary evil to support the content consumers really wanted to see. But the rise of broadband connections, satellite radio, cell-phones, TIVO, and other forms of digital communication now allow consumers to control their media content and easily avoid advertising they don’t want to see. When this is combined with less trust in advertisers and their messages, and a greater ability to create their own content with the help of blogs, social networks, wikis and other digital-communication platforms, irrelevant content will not be tolerated. This doesn’t mean that advertising is doomed. It simply means that as marketers we must do a better job of engaging consumers with content that is so compelling, relevant and entertaining that they will seek it out and even share it with others. As Geoff Ramsey, CEO and co-founder of New York-based eMarketer.com put it in a recent article, “the new ad model is about creating great content and finding clever ways to embed it in the fabric of communities and content platforms where consumers are hanging out and actively participating”.
Understanding and responding to the aforementioned trends will have little effect if we, as marketers, can’t find better ways to truly engage our customers. 2008 offers great challenges, but will also offer unprecedented opportunities. A.G. Lafley, chairman – CEO, Procter & Gamble had this to say about 2008, “We need to reinvent the way we market to consumers. We need a new model. It does not exist. No one else has one yet. But we need to get going now.”
For marketers to answer that call-to-action challenge, they must “get going now” to look for new ways to connect with their customers. The future belongs to those marketers who can out-smart their competition rather than out-spend them.
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Thursday, January 31, 2008
Wednesday, December 12, 2007
It's Time To Wake Up and Smell the Digital Revolution
Why is it that some of advertising’s best and brightest still don’t get it when it comes to appreciating the impact that the web is having on the advertising business?
Martin Sorrell, CEO of WPP and a man whose impact on the architecture of the modern advertising agency is unparalleled, recently wrote an article for The (London) Times on the digital revolution. In it, he tried to calm the fears of those in the traditional advertising business by comparing the impact of the Internet to that of television in the 1950’s. Here’s the lead paragraph from that issue of The Times:
Sir Martin Sorrell, chief executive of WPP, the British advertising giant, believes that the internet will not prove the death knell of traditional advertising channels. Writing exclusively for The Times, the advertising guru says that, despite “constant competition between the old and new”, the emergence of the internet will not “displace” other platforms. He likens the internet advertising threat to that posed by the advent of television in the mid-1950s.
To Mr. Sorrell, the Internet is just another new medium –albeit a very powerful one- and eventually the Internet will settle in along with other media as part of an integrated media buy. Unfortunately, his view on the subject is inflicting a grave injustice on those in the business who are uncertain about what the internet and the digitization of media will mean for them, their work and their jobs. The digital revolution unfolding today is about much more than the introduction of a new medium into the advertising mix. There is no question the internet as a medium is quite powerful and growing rapidly every day. Studies from Forrester, the Interactive Advertising Bureau, and many others chronicle this fact on a regular basis. But the advertising business is in for a much bigger storm than most, including Mr. Sorrell, can even imagine.
Consider if you will, the undeniable fact that marketers are continuing to shift monies away from advertising, which favors media, to direct marketing and promotion, which do not. While this has been happening for decades, the digital revolution has helped accelerate the shift. This means less advertising in the future and less money for media -- all media. Consider that all media are going digital and that this will fundamentally change how they operate and are consumed. We all know the impact that TIVO and VOD are having on the world of television. Its effect on the print medium is becoming more apparent everyday. I vividly recall a recent occasion when my daughter and son-in-law were visiting. Each morning I got up early, had my morning coffee, and read the local newspaper. My son-in-law also got up early, but along with this cup of coffee he powered up his laptop to read a digital version of the same paper.
The traditional definitions we use for magazine or newspaper or television or direct mail, will become meaningless to most consumers. To them, it will just be news or information or entertainment or games or great offers. Most folks in traditional media are not prepared for this -- and they are powerless to stop it. Yesterday, the media controlled the time, place and message. Today, with the digitization of media, the consumer does. It’s that simple. This new “consumer-centric” world makes traditional advertising and media very uncomfortable as they are used to talking to, or shouting at, consumers. Now, it's about marketers having a conversation with one consumer at a time. But the consumer determines when and where that conversation will take place.
Here in Seattle, this may not seem like news, because we are the most wired city in the U.S., and everyone is directly, or indirectly, involved with this new digital world. But believe me when I tell you that to the majority of the country this is still a foreign concept. Mr. Sorrell’s attitude and understanding of the digital revolution reminds me of a book I read several years ago by David Halberstam, titled The Reckoning. The author chronicled the rise of Datsun (now Nissan) and the concurrent decline of Ford, and attributed much of the blame to Luddites in Detroit who refused to believe that Americans would buy an ugly little box from Japan over an American made car just to save gas. Automakers in Detroit all drove American cars, lived next door to someone who drove an American car, and simply didn’t realize that the world was changing until it was too late.
I fear that Mr. Sorrell must live in that same sheltered environment if he believes that the Internet is just another medium. Digitization of media and communication means real-time interactivity and two-way conversations. Traditional media and advertising agencies that don't embrace this way of operating will go away. Consumers will leave them behind, and marketers will eventually refuse to fund them.
Sir Martin, it’s time to wake up and smell the digital revolution. The Internet is about much more than a new medium, it’s about the end of advertising and media as we have known it!
Martin Sorrell, CEO of WPP and a man whose impact on the architecture of the modern advertising agency is unparalleled, recently wrote an article for The (London) Times on the digital revolution. In it, he tried to calm the fears of those in the traditional advertising business by comparing the impact of the Internet to that of television in the 1950’s. Here’s the lead paragraph from that issue of The Times:
Sir Martin Sorrell, chief executive of WPP, the British advertising giant, believes that the internet will not prove the death knell of traditional advertising channels. Writing exclusively for The Times, the advertising guru says that, despite “constant competition between the old and new”, the emergence of the internet will not “displace” other platforms. He likens the internet advertising threat to that posed by the advent of television in the mid-1950s.
To Mr. Sorrell, the Internet is just another new medium –albeit a very powerful one- and eventually the Internet will settle in along with other media as part of an integrated media buy. Unfortunately, his view on the subject is inflicting a grave injustice on those in the business who are uncertain about what the internet and the digitization of media will mean for them, their work and their jobs. The digital revolution unfolding today is about much more than the introduction of a new medium into the advertising mix. There is no question the internet as a medium is quite powerful and growing rapidly every day. Studies from Forrester, the Interactive Advertising Bureau, and many others chronicle this fact on a regular basis. But the advertising business is in for a much bigger storm than most, including Mr. Sorrell, can even imagine.
Consider if you will, the undeniable fact that marketers are continuing to shift monies away from advertising, which favors media, to direct marketing and promotion, which do not. While this has been happening for decades, the digital revolution has helped accelerate the shift. This means less advertising in the future and less money for media -- all media. Consider that all media are going digital and that this will fundamentally change how they operate and are consumed. We all know the impact that TIVO and VOD are having on the world of television. Its effect on the print medium is becoming more apparent everyday. I vividly recall a recent occasion when my daughter and son-in-law were visiting. Each morning I got up early, had my morning coffee, and read the local newspaper. My son-in-law also got up early, but along with this cup of coffee he powered up his laptop to read a digital version of the same paper.
The traditional definitions we use for magazine or newspaper or television or direct mail, will become meaningless to most consumers. To them, it will just be news or information or entertainment or games or great offers. Most folks in traditional media are not prepared for this -- and they are powerless to stop it. Yesterday, the media controlled the time, place and message. Today, with the digitization of media, the consumer does. It’s that simple. This new “consumer-centric” world makes traditional advertising and media very uncomfortable as they are used to talking to, or shouting at, consumers. Now, it's about marketers having a conversation with one consumer at a time. But the consumer determines when and where that conversation will take place.
Here in Seattle, this may not seem like news, because we are the most wired city in the U.S., and everyone is directly, or indirectly, involved with this new digital world. But believe me when I tell you that to the majority of the country this is still a foreign concept. Mr. Sorrell’s attitude and understanding of the digital revolution reminds me of a book I read several years ago by David Halberstam, titled The Reckoning. The author chronicled the rise of Datsun (now Nissan) and the concurrent decline of Ford, and attributed much of the blame to Luddites in Detroit who refused to believe that Americans would buy an ugly little box from Japan over an American made car just to save gas. Automakers in Detroit all drove American cars, lived next door to someone who drove an American car, and simply didn’t realize that the world was changing until it was too late.
I fear that Mr. Sorrell must live in that same sheltered environment if he believes that the Internet is just another medium. Digitization of media and communication means real-time interactivity and two-way conversations. Traditional media and advertising agencies that don't embrace this way of operating will go away. Consumers will leave them behind, and marketers will eventually refuse to fund them.
Sir Martin, it’s time to wake up and smell the digital revolution. The Internet is about much more than a new medium, it’s about the end of advertising and media as we have known it!
Saturday, December 1, 2007
Branding 101: Building a Strong Brand Identity
Every marketer accepts the power of branding, but not all know how to do it well. So here some tips on how to build the power of your brand.
1. Building a strong brand identity starts with knowing who you are, who you want to be, and who you can be.
Knowing who you are is the first step, but you must also know who you want to be and who you can be. Your vision for who you want to be must be consistent with what you can deliver to your customers. Promising without delivering is the kiss of death.
2. Building a strong brand identity means aligning your external messaging with internal awareness and action. An important part of “inside-out” branding is to ensure that your internal audiences are in sync with your external communications. Too many marketers fail to nurture an internal awareness and passion for that external promise. One great example of this are banks who want you to believe they are friendly, but don’t deliver. When was the last time you saw a branch manager rush out of his chair to greet you? Or had a teller stop and smile and ask how you are doing today? Now I am sure that there are some friendly tellers and managers out there, but if your brand strategy is “we’re friendly and we care about you”, then your customer interactions must live up to that claim. All day and every day. If the expectations you create aren’t delivered, you may lose a customer for life.
3. A good branding strategy addresses these four elements – it is unique or differentiating; it is believable; it is relevant; and it is true.
• Strong brands offer something unique or differentiating to their customers.
Most business categories have too many choices. Customers need to see you as not merely a good choice, but the best choice to meet their needs. The challenge of a good
branding strategy is to find out what makes you unique, and then communicating that difference to your key target audience.
• Strong brands make claims that are believable to their audiences.
Customers should have permission to believe that your brand promise can be met. Today’s consumer is more knowledgeable . . . and more skeptical, than ever. Make sure you can give them enough logical rationale to justify their brand decision.
• Strong brands highlight their most relevant benefit.
This seems obvious, but this is often missed by marketers who forget to ask these basic questions. Does this really matter to my customers? Is this the most motivating way to present my brand? Our creative strategy for Puget Sound Blood Center is a great example of the power of communicating a more motivating benefit. Most blood centers simply say “please give blood” on the assumption that people will automatically understand the importance of their action. We highlight the benefit of giving blood with our theme “Imagine Saving a Life” and the Blood Center rarely needs to issue a distress call for donors.
• Strong brands make sure that what they promise to deliver is true.
Making an unsupportable claim may get you a onetime sale. But if you don’t live up to that claim, you will probably lose that customer. Plus all of the others they will tell about their bad experience. A Yankelovich study found that, on average, people with a positive experience tell three others, while people who have a bad experience tell eight. With the Internet’s easy access to thousands of potential customers, a bad experience can be devastating.
Whatever you do with your brand, remember this: Brands that thrive reflect their core culture and unique character, solve relevant needs, and provide a consistent experience for their customers.
Good luck with your branding development. I hope these thoughts help you along the way!
1. Building a strong brand identity starts with knowing who you are, who you want to be, and who you can be.
Knowing who you are is the first step, but you must also know who you want to be and who you can be. Your vision for who you want to be must be consistent with what you can deliver to your customers. Promising without delivering is the kiss of death.
2. Building a strong brand identity means aligning your external messaging with internal awareness and action. An important part of “inside-out” branding is to ensure that your internal audiences are in sync with your external communications. Too many marketers fail to nurture an internal awareness and passion for that external promise. One great example of this are banks who want you to believe they are friendly, but don’t deliver. When was the last time you saw a branch manager rush out of his chair to greet you? Or had a teller stop and smile and ask how you are doing today? Now I am sure that there are some friendly tellers and managers out there, but if your brand strategy is “we’re friendly and we care about you”, then your customer interactions must live up to that claim. All day and every day. If the expectations you create aren’t delivered, you may lose a customer for life.
3. A good branding strategy addresses these four elements – it is unique or differentiating; it is believable; it is relevant; and it is true.
• Strong brands offer something unique or differentiating to their customers.
Most business categories have too many choices. Customers need to see you as not merely a good choice, but the best choice to meet their needs. The challenge of a good
branding strategy is to find out what makes you unique, and then communicating that difference to your key target audience.
• Strong brands make claims that are believable to their audiences.
Customers should have permission to believe that your brand promise can be met. Today’s consumer is more knowledgeable . . . and more skeptical, than ever. Make sure you can give them enough logical rationale to justify their brand decision.
• Strong brands highlight their most relevant benefit.
This seems obvious, but this is often missed by marketers who forget to ask these basic questions. Does this really matter to my customers? Is this the most motivating way to present my brand? Our creative strategy for Puget Sound Blood Center is a great example of the power of communicating a more motivating benefit. Most blood centers simply say “please give blood” on the assumption that people will automatically understand the importance of their action. We highlight the benefit of giving blood with our theme “Imagine Saving a Life” and the Blood Center rarely needs to issue a distress call for donors.
• Strong brands make sure that what they promise to deliver is true.
Making an unsupportable claim may get you a onetime sale. But if you don’t live up to that claim, you will probably lose that customer. Plus all of the others they will tell about their bad experience. A Yankelovich study found that, on average, people with a positive experience tell three others, while people who have a bad experience tell eight. With the Internet’s easy access to thousands of potential customers, a bad experience can be devastating.
Whatever you do with your brand, remember this: Brands that thrive reflect their core culture and unique character, solve relevant needs, and provide a consistent experience for their customers.
Good luck with your branding development. I hope these thoughts help you along the way!
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