Archive for Brand Marketing

What does media and technology convergence mean for marketing?

I went to the Future of Media conference at Stanford University’s Graduate School of Business today. It was a fascinating discussion among people on all sides of the media industry, about the changes currently underway in the media space. Some of my key takeaways were:

  • Content has now officially won out over distribution as the most powerful element in the media mix
  • Media brands that were initially tied to amateur-generated content (e.g. YouTube, Facebook) are now carrying so much professionally-generated content they have become primary sources for professional news.
  • Given the explosion in the volume of content due to the popularity of user-generated content, audiences are having a harder and harder time finding the information they want and can trust, thus there is an important role for aggregators/editors as well as creators of content going forward. One of the great lines from David Cohn, founder of spot.us was that “you can be a linker or a thinker, and either path can be successful in the new media.”
  • Quality will remain the key differentiator of content going forward. As the content explosion continues and audiences become more and more overwhelmed by the volume, they will learn to associate certain media brands with quality content, and gravitate to those brands, leaving the unknown or lesser brands behind.
  • Following the current period of chaos and displacement, marketers can expect a whole new world of opportunity in media going forward. That new world will be populated by content developed and edited in both old and new media industries. And it will be powered by the convergence of diverse technologies that we today associate with disparate platforms: broadcast and cable TV, online streaming video, gaming, mobile applications, etc.
  • I’m ready for the new world. Are you?

    Comments

    TV advertising taking a turn for the better lately

    I don’t normally feel the need to comment on the consumer marketing I see on TV, but it occurred to me the other day that we are currently seeing some of the most fun, positive, helpful brand advertising that I’ve seen in a long time. The Target “Frugalista” ad series is a perfect example. The message of these ads is that cheap is now fabulous, and you can revel in your cheapness without shame in the current economy. As a viewer, I am enjoying watching the series unfold, trying to guess ahead of time what they’ll position as fabulous cheapness in the next ad. I haven’t eagerly anticipated a TV ad in a long, long time. Assuming that others are reacting as I am, I’m thinking Target has hit a home run with this campaign.

    Comments

    Resources needed for a world-class social media program

    I mentioned a Wetpaint/Altimeter study I had read in an earlier post, and thought I would post on one more topic from this report. At the end of the report, there are case studies from four firms whose social media programs were ranked highly in this study: Starbucks, Toyota, SAP and Dell. They represent a diversity of approaches to social media, but all provided their best practices that might be useful to other firms.

    Key Learnings from these 4 World-Class Social Media Marketers

    Significant internal advocacy is necessary to successfully launch a social media program. Starbucks, the highest ranking firm in this study, had the CEO introduce and advocate for its new program, along with an “everyday” advocate.

    Engagement, by definition, needs to involve many people in the firm at different levels and in different functions. If you delegate it to a few social media experts, they aren’t credible to the audience, and their programs aren’t scalable. SAP, the 9th ranked firm in this study, has 35 employees dedicated to social media, and also 1500 employee bloggers and 400 employees actively publishing content in other forms, including personal Twitter accounts that discuss the activities of the firm. Starbucks has 6 employees in its social media group, and they reach out to others for input, rather than empowering the others to engage personally. Toyota does the same with 3 employees. Dell delegates some social media responsibility throughout the firm so that those employees have direct exposure to what is being said in that channel, rather than having it filtered through a central group.

    Different channels require different resources. Programs in certain channels, like Twitter, are organized around a concept of immediacy that requires full-time attention from a dedicated employee. Other channels, like blogs, can be attended to with less frequency, and with more than one voice, and so lend themselves nicely to delegation throughout the company.

    World-class firms largely started with one channel and built confidence and skills there before moving on to the next channel. For every one thing they did right, there were likely one or more that they didn’t do right, and had to take down.

    Once you’re engaged in social media, you can’t pull out. Unlike traditional media, where you can walk away from campaigns that aren’t working for you, you’ll need to stay engaged in social media and figure out how to make it work for your firm.

    If you would like to read all about these four companies’ approach to social media, the report is here.

    Comments

    Is social media driving revenue?

    I read an interesting study yesterday produced by Wetpaint and Altimeter that showed that a company’s use of social media is highly correlated with its financial success. The study started with a group of 100 companies found in the BusinessWeek/Interbrand “Best Global Brands 2008.” After eliminating the private companies from this list, and any other companies for which the researchers couldn’t get financial data, there were 66 top brands left in the study.

    The researchers counted the number of social media channels that each of these companies were involved in, and assigned an engagement score to their level of involvement in each channel. The methodology for how the engagement score was calculated wasn’t really spelled out in this report. I suspect it’s the “secret sauce” they are selling as consultants. They then plotted each of these companies on a graph showing the depth and breadth of their involvement in social media. This suggested that there were four sub-groups in the study population:

      Mavens: brands that are engaged in seven or more channels and have an above-average engagement score.
      Butterflies: brands that are engaged in seven or more channels and have a below-average engagement score.
      Selectives: brands that are engaged in six or fewer channels and have an above-average engagement score.
      Wallflowers: brands that are engaged in six or fewer channels and have a below-average engagement score.

    The most important finding of this study was that the firms that operated in the most social media channels and had the highest level of engagement in those channels, the Mavens, experienced the highest level of revenue growth, gross margin growth and net margin growth over the prior 12 month period, as compared to the other groups.

    One might think that this is merely a function of industry, and there were some industry differences, but there were many industries represented in the Maven group, and they all outperformed their industry peers whose involvement in social media was less. So, the researchers concluded that the difference is explained by social media activities and not industry.

    Of course, correlation is not causation, but I thought the study was interesting nonetheless. Clearly these firms are doing something right, to have experienced such consistent growth in this difficult economy.

    If you would like to read the Wetpaint/Altimeter research report, you can find it here.

    If you prefer a more interactive experience, or would like to see how your firm measured up in this study, you might be interested in visiting the website associated with the report, which is here.

    Comments

    What does Web 2.0 have to do with burritos?

    I have noticed lately that the expression “Web 2.0″ has died away. Marketers now talk about the various channels that were developed as a result of that concept (e.g. blogs, wikis, social networks, online games, virtual worlds, viral messaging, consumer generated messaging), more than the concept itself.

    Web 2.0 shifted marketing’s focus on the internet from firms sharing their best static information to virtual communities - some of which involve the firm, and some of which do not - creating new and better information and experiences by sourcing from throughout the community. This has historically been a “no go” zone for marketers, because they fear that they will lose control over their messages, and perhaps face some unintended consequences. But the improved applications, widespread consumer adoption of the technologies and challenging economy in 2009 has caused many marketers to overcome those fears and start down this path.

    To date, it seems the B-to-C companies have gone farther down this path, and been more successful with the tools, than the B-to-B companies, but that may be more a question of visibility than ability. Some consumer brands have tried virtually everthing in an attempt to learn the tools of the trade. Other consumer brands appear to be taking a more conservative approach, for instance encouraging their customers to produce user generated content, but keeping it in the form of a positive experience structured by the marketers, and at least somewhat in control of the marketers.

    For example, Chipotle is currently soliciting user-generated content about their customers’ favorite meals at the chain restaurant. They have set up a special section on their website, called www.mychipotle.com where customers can upload their content, and post comments on other user generated content. This positive structure, soliciting content on only the customers’ favorite meals, not on any aspect of the Chipotle experience, puts some control back into the hands of the marketers. I don’t work at Chipotle, but as a marketer, I’m guessing they would also not post, or take down after auto-posting, any inappropriate or negative content or comment submitted to this site. This further enhances marketer control, and likely gave the Chipotle marketers the confidence to go down this path.

    So, aside from being relatively safe, why is this a win? Well, Chipotle probably spent very little on this program, other than the store merchandising that advertised that they were doing this. They got a lot of great content, that is being used to promote their brand online. This content was not only cheap, but is also highly credible, because it comes straight from their customers’ mouths, without any editing by the company. All brands benefit fairly directly from positive testimonials from their customers. In addition to the direct benefits, there is likely also a indirect benefit of this program in terms of market research. I suspect Chipotle is mining the submissions for ideas for great new products, promotions and messages that they can leverage to further inspire their customers and attract new customers. That’s a lot of benefit for a fairly small upfront investment, so their ROI on this program is likely pretty high.

    I know I’ll be contributing to Chipotle’s ROI today. After checking out a bunch of their user generated content for this post, there’s no way I’m eating anywhere else today.

    Comments

    Reasons you want a strong brand

    In an economy like this, I know it is sometimes hard to convince yourself or your management that you should be investing in your company’s brand. It is often hard to a return on brand investment, and when revenues are falling, investments without a measurable ROI tend to be the first cut. No need to get discouraged, however. I am currently reading a great book that lists 10 benefits of a strong brand. These may not all be important to your company at the present moment, but I’m sure that some of them are key to helping your company emerge from this recession unscathed. They are:

  • The ability to grow faster than the market — by stealing share from competitors or by earning the trust needed to expand usage occasions.
  • The ability to price at a premium — particularly when your goods or services are functionally undifferentiated.
  • Lower customer acquisition and retention costs — which means you don’t have to bribe new customers to join you or existing customers to stay with you.
  • The ability to leverage your equity into new margin pools — customer permission to extend your brand into contiguous categories and beyond.
  • The freedom to reject less attractive customers — or at least price them according to their real value (net of the cost to serve them).
  • Greater influence over intermediaries — who must offer you their customers and collaborate with your strategies to be successful.
  • The ability to win the war for talent — attracting a stronger cadre of staff, who will in turn create superior value for the company.
  • The resilience to survive catastrophes — Tylenol is the classic example of a brand strong enough to rebound after an unexpected PR disaster.
  • Higher share prices — investors are willing to pay more to acquire your stock and are more likely to hold on to it despite temporary dips in earnings.
  • The ability to command a higher transaction multiple — creating either more value for shareholders or greater freedom to spurn unattractive suitors.
  • If you are interested in reading more about this, the book is The Marketing Accountability Imperative, Driving Superior Returns on Marketing Investments, by Michael E. Dunn and Chris Halsall, 2009. I took the list above from pages 37 and 38. You can learn more about their book here.

    Comments