Category: Digital

Brand building in a digital age: A compass for uncharted waters

great-wide-ocean

 

“It is very difficult to study history-in-the making, but what is occurring right now is the most powerful influence on the economy, the consumer and brand marketing since the Industrial Revolution. We are witnessing The Great Marketing Revolution. Our job is to be aware of it, its pattern and its destination so we can take sure, methodical steps to capitalize on it”

William T. Moran, 1956

 

[You don’t have to read this. It is an edited and slightly improved version of an older and longer post, written for the 50th anniversary edition of Admap. I reproduce it here only in so much as this place is also my notebook. The anniversary edition of Admap by contrast, IS very much worth reading in its entirety]

 

Has everything changed? Have all the old lessons and practices been rendered obsolete? Is marketing as we knew it really dead? And is it possible to move beyond rhetoric and ground the necessary speculation in at least a semblance of empirical evidence?

Yes… and no. 

No. 

No. 

Yes.

But let’s start with a simple framework for enquiry, something that gives us a starting point for thinking about how brands are built.

***

The levers of growth

It’s over a decade old, but that provided by the marketing consultant and former adman William Moran – a version of the 4Ps model – gives us a framework for evaluating marketing’s outputs, and for thinking about how marketing has changed, is changing, and must change. 

For Moran the two fundamental processes which can produce change in sales, are a change in perceived Value and a change in Presence.

Change in Value he argued, can come about from a change in perceived utilities (attributes), and a change in relative price.

Presence Moran regards as “the lubricator which simply facilitates sales by reducing the mental friction in the consumer’s decision-making process.”

Moran distinguished between physical presence (being visible and easily buyable) and mental presence (being easily thought of).

Thanks to the the work of Les Binet, Peter Field, and the IPA we can identify some vital multiplying factors, namely time, investment and creativity.

We know that advertising’s ability to create value is most keenly felt in the long-term. Time, in other words is vital to success.

We know that the most profitable campaigns are those that drive both volume and pricing. 

We know that campaigns require time for their effects to be felt, for while volume increases are relatively easy to achieve in the short-term, price increases take longer.

And we know that longer-term goals such as share growth or reduction of price sensitivity demand sustained brand building.

The creation of memory, brands, and sustainable business growth in other words takes time. And as such it is, like it or not, at odds with one of the defining characteristics of our age – immediacy.

This is not to deny the value of brands being responsive in the here and now. 

Nor is this to suggest that short-term activity is without value. As Binet and Field note, the data suggests that the optimum balance of long-term brand building and short-term activation expenditure is on average around 60:40.

But simply delivering short-term activity does not lead to success in the long term, and long-term effects are not simply an accumulation of short-term effects. They are different kinds of effects. 

Coupled with time, investment levels are a vital multiplying factor.

We know that the critical metric that determines the level of a brand’s market share growth is the degree to which its share of voice exceeds its market share (excess share of voice, or ESOV).

We know that an average of 0.5% points of share growth can be expected per 10% points of ESOV. 

We also know of course that new, ‘earned’ methods of distribution marketing content have allowed marketers to extract new efficiencies. 

But there is little evidence to suggest that the paid media investment and business results have been completely and irrevocably decoupled. 

As Binet and Field conclude: “It is often asserted that share of voice is irrelevant in the digital era: this is not true. The correlation of SOV with market share growth is getting stronger and the returns on investing in SOV are also increasing as the level of brand choice continues to grow and the internet becomes more crowded with commercial activity.”

So to some degree, market share can be bought. However, we know that the unfair advantage that any marketer can choose to leverage is the power of creativity.

We know this from the IPA’s analysis of the 257 IPA Effectiveness cases studies for which Gunn Report scores were all available.

Creatively-awarded campaigns generate on average 5.7 points of share growth per 10 points of ESOV, compared with just 0.5 points of share growth for non-awarded campaigns.

So if the levers of brand building have been utility, price, and presence, and their multipliers have been time, investment, and creativity, where do we find ourselves today, in this, our digital age?

New forms of utility

We are seeing the malleability of software allowing for marketers to evolve, iterate and improve the product experience in response to consumer interactions in the real world, not the laboratory.

In some markets we are seeing the emergence of new models of product ownership, in which access to goods and services is rented, rather than outright ownership of goods given over to consumers.

The access, interactivity and immediacy that technology now affords us means we are able to directly involve consumers in the creation, iteration, and indeed running, of products and services.

We are seeing utility being used as a vehicle for publicity and promotion. Whereas product development and publicity occupied very distinct silos, marketing is now being “baked into” products and services.

Of course more intangible utility has not gone away. We all live and work – skilfully and effortlessly – within two worlds; the world of objects and the world of meanings. And we need this imagined world to give our identities, lives and experiences depth, significance and meaning.

But we are also are seeing new forms of utility. We are seeing new business models, new businesses, and new brands. And we are seeing product functionality being used to build and sustain the meaning and emotional component of brands.

So perhaps this new world of utility is teaching us marketing to value the sausage as much as the sizzle. And in as much as what people really need from marketers is not communications, but better products and services, it suggests that far from being ‘dead’, marketing’s original mission is very much alive and well.

New avenues of availability

Sharp, like Moran, has rightly underscored the importance of physical availability: “Being easy to notice and buy is essential, because buyers do not have strong preferences even for the brands they are loyal to.”

There was a time of course when physical shelf space and availability was the crucial factor in the quest to make brands easy to buy. 

Today we are seeing digital availability being used to enhance physical availability, and we are seeing digital availability being used to replace or bypass physical availability. 

We are seeing brands responding to and anticipating people’s need or interest.

We are seeing brands connect directly with customers, rather than via third parties.

We are seeing brands exploiting the interconnectedness of all things digital to create shelf space and make it easy for people to buy.

We are an explosion in the ways in which brands can create memory and meaning. Creativity is now properly unbounded, no longer constrained by media formats.

We are of course, able to give consumers the opportunity to interact in all manner of ways from the undemanding and lightweight to the participative and immersive.

We are seeing brands customize their content for different consumer segments.

We are certainly seeing brands relentlessly stalk consumers as they travel across the internet

We are able to employ consumers as advocates, ambassadors, co-creators, publicists, and media channels.

And increasingly, we are able to customize the content, timing, and targeting of our content.

New models of pricing

The economics of digital goods are allowing brands to offer consumers goods and services for free. As Chris Anderson first wrote in Wired magazine: “It’s now clear that practically everything Web technology touches starts down the path to gratis, at least as far as we consumers are concerned.”

We’re seeing brands able to employ the minority of paying users to support the majority of non-paying users, because the cost of serving that majority is close enough to zero to call it nothing.

We’re seeing brands employ ‘freemium’ pricing models in which they offer free version of their product or service as a vehicle for recruiting users, and charging for advanced features, functionality, virtual goods, or an ad-free experience.

We’re seeing some brands test dynamic pricing.  

Mobile technology has of course liberated consumers from having their choice limited by what’s in front of them on shelf. Consumers are now able to treat physical stories as showrooms in which they search for a cheaper option online.

***

Back to the future

Even a cursory survey such as this brings home the scope depth, and velocity of change we are surrounded by. These are indeed exhilarating times. But viewed through the lens of Moran’s simple model, they remind us of two essential things. 

First, the fundamental brand building mechanics of value and presence, the subprocesses of utility, pricing, and the creation of physical and mental presence – together with the necessity of time, investment, and creativity – have not evaporated. Marketers struggling to keep up with and make sense of the blizzard of change, evolution, disruption, advice (good, self-serving, and idiotic) and opinion need not despair. Look beneath the veneer of rhetoric, and one sees that the old imperatives still hold true.

But this is not an excuse for complacency. While the fundamental outputs of marketing have not been rendered obsolete, how marketers deliver value and presence is most certainly being reworked.

Connectivity, interactivity, immediacy, sociability, transparency, collaboration, prediction, responsiveness, targeting, automation, disintermediation, customization, mobility… all of these phenomenon (and more) are fundamentally remaking how brands connect with consumers. Though our choice of how is, of course, always contingent. On the nature of the task, the competition, the audience, and the brand. 

There is then, as much to unlearn as there is to relearn. And as technology and code continue to remake our lives, there are inevitably, new abilities to acquire and add to the old ones. For both the individual, and the corporation.

But lest we take too much comfort from this, Moran’s model also provides us with another vital reminder. One might even call it a wakeup call. Namely that marketing is not, and has never been, synonymous with advertising. Its remit and output is far broader and more far-reaching than merely the development of communications.

So when publicity can be baked into the product, product design can be a means of meaning manufacture, distribution can be baked into the product, physical products are assuming a digital life, social channels are becoming means of delivering customer services, pricing models are being used as distribution mechanics, marketing content is no longer a dead end and is becoming just the beginning of a customer journey, the gap between publicity and purchase can be compressed, the consumer is a distribution channel, and the consumer can no longer be held at arm’s length, it really is time to let go of the antiquated (and ill-founded) notion that marketing is synonymous with ‘messaging’.

And it is high time that we blow up the mental and organisational silos that still bedevil us – story versus code, advertising versus product, utility versus image, etc.

Perhaps if we all thought of ourselves in the business of creating connections - in the mind, between people, companies and brands, and between people and other people – then we’d find ourselves better adapted to the new environments and possibilities of our age.

In an age defined by its connectedness – people to people, people to things, and things to other things – that seems a far more accurate and useful perspective on what we all do.

“Only connect”, as E.M. Forster wrote.

***

 

 

Your brand is software, not a person: A new metaphor for changed times

The-Matrix-slave

“The price of metaphor is eternal vigilance”

Norbert Wiener

It is a truth universally acknowledged that consumers find it natural to imbue brands with human personality characteristics, such as ‘honest’, ‘optimistic’, ‘cool’ or ‘tough’. 

That brands are like human beings, that they have differentiating personality traits, and that consumers have relationships with them remains still, largely unchallenged dogma in marketing circles.

And yet – the legend of Ernest Dichter, and the acres of subsequent academic theorizing notwithstanding – the fact remains that personality traits are poor at differentiating brands, within any given category different brands do not attract different kinds of buyers, and people are not that attached to brands.

Surely it is time to retire the brand-as-person metaphor.

Indeed perhaps it’s time to find a metaphor (if we must have one) more suited to our times. For while much of our inherited brand theory baggage values the intangible, as Guy Murphy has noted:

The democracy of information has allowed consumers to focus hard on the more rational and ‘real’ aspects of the product itself. Social commentary and ratings have particularly brought tangible product performance itself to the fore. The most emotionally rich brands can be undermined by a one-star product rating. This is as true for products as it is for the companies that make them… There is a shift occurring from adding intangible value to adding tangible value. Instead of adding emotion to function, brands are beginning to add function to function. We don’t have to play out a brand as a metaphor any more, when we can do it for real. Brands will seem more valuable not just because they feel better but because they work better, or serve you better. This is not a denial of the emotional component of brands, it is just a different way of generating it. It is not about the power of associations, it is about the power of reality”

In such a world, perhaps we should be seeking a metaphor and perspective that more consciously attempts to reconcile the invisible, mental dimensions to a brand’s existence with its practical, and concrete manifestations in the world.

And in world which as Marc Andreessen has argued, is being eaten by it, we could perhaps, do worse, than think of brands as software.

After all, as he puts it :

In many industries, new software ideas will result in the rise of new Silicon Valley-style start-ups that invade existing industries with impunity. Over the next 10 years, the battles between incumbents and software-powered insurgents will be epic. Joseph Schumpeter, the economist who coined the term “creative destruction,” would be proud.”

No, a brand is not a person.  But it is software. Both of the mind. And in the world.

***

This much we know. Brands are memory structures in the mind.  They are the sum total of all our memories, encounters, impressions and associations connected with a brand. 

And consciously or unconsciously accessed, they work to make a brand thought of in purchase and consumption occasions.

In this way, they operate as heuristics, rules of thumb that by-pass the necessity to conduct an elaborate cost-benefit analysis of all the options available every time we are faced with choice.

Viewed through this lens, brands are decision-making software.

***

This of course, has always been the case – it is the oldest and indeed original function of branding. But today we are now subcontracting our mental processes to software. 

For now we have technology that can remember, find, anticipate, recommend, remind, analyse, compute, manage, measure, monitor for us. And in the wake of this technological – and with it, cultural – upheaval, brands are evolving into software that resides in the world.

Brands can now can remember what we like, and what we bought.

They can anticipate when we need to restock, repurchase, or renew.

They can suggest purchases, content, and experiences we will probably like.

They can compare and recommend purchase options.

They can respond to our service, upgrade, and replacement needs.

And of course as brands become more like software, unshackled from the constraints of the physical world, they and their functions can inevitably flow through our lives with ever greater ease.

So the brand is software. Of the mind. And in the world.

***

The brand-as-software metaphor certainly feels better aligned than the brand-as-person metaphor to the real role of branding role in consumer decision-making.

And it certainly appears better able to encourage us to take advantage of the new opportunities technology opens up for us.

Indeed the brand-as-software metaphor is much less of a metaphor, much less than a just figure of speech than the brand-as-person metaphor. It better reflects how brands actually operate, in the mind, and in the world.

***

So what might thinking of brands as software actually encourage us to do differently?

Perhaps it will encourage us to think of brands as fluid, adaptable, responsive, upgradable, and permeating.

Perhaps it will encourage us to think how utility (not just storytelling) can create meaning.

Perhaps it might encourage more of a rapprochement and productive relationship between those who make products and services, and those who tell stories.

Perhaps we might demand that brands be just as useful in the mind as they are in the world.

Perhaps we will grant equal status to the creation of memory structures, and to the creation of utility in the world, rather than set them in competition with each other.

And perhaps thinking of brands as an external manifestation of human mental processes will encourage us to think of software in human terms,  rather than think of humans in machine terms.

***

So far, so good, possibly. But we cannot talk about the brand-as-software without talking about the OS or platform. If brands are indeed software, then what do they run on?

In a multi-platform, multi-device, multi OS world, the brand-as-software must of course be able to run effortlessly on, by way of example, both iOS and Android. If brands wish to be part of the fabric of the world, then they must be able to adapt to and run on all the dominant platforms out there. And that demands a new degree of adaptability of what we build.

But there is a more important OS the brand-as-software must run on.

The human OS.

That sounds easy and obvious, but the fact of the matter is that most brand builders don’t give enough of a damn about creating for the human platform. They ignore being interesting and pursue difference. They fail to work back from human drives, needs, wants, and interests back to strategy, and instead insist on working forwards from brand and product. They either fail to reinforce and sustain long-term memory structures, or they fail to refresh them.

Brands must work on the human OS, or fail. For the human OS always takes precedence over platform-level OSs, and is the one that we should all be designing for. Always.

***

Sources

Special thanks to Ben Malbon for prompting me to ask some hard but good questions.

Guy Murphy, ‘Brands in the digital age: The opt-in age of brands’, Admap, December 2013

Marc Andreessen, ‘Why software is eating the world’, The Wall Street Journal, August 20, 2011

Brand building in a digital age: Old thinking for new times

Peas_in_pods_-_Studio

A good question

Last year Admap set the marketing community a rather excellent essay question – ‘How brands are built in the digital age’.

(Given that most of what follows is not my original thinking , contains content from previous posts, and is twice the designated word limit, I chose not to submit it).

It is a great question, not least because it refocuses our minds on brands.  Guy Murphy has put it well: “I like this question. It rightly assumes that brands will remain important in future, and doesn’t invite any silliness about them being a quaint marketing concept that can’t survive the rise of technology. The question also raises the current industry debate up from ‘communication engagement’ to ‘brand-building’.”

However in truth it is really a question with two parts.

For it first demands a perspective on how brands have been hitherto built, before the offering of any opinion and hypothesis as to what (if anything) is different in our digital age.

The temptation with Admap’s question is of course to concentrate on looking for differences what is different today. And indeed if we are not to stumble into the future walking backwards, then understanding what has changed and is changing is  a necessary and important exercise.

But it cannot be the only one. For as Shane Parrish (of farnhamstreetblog.com fame) has recently written:

When we look at situations we’re always looking for what’s unique. We should, however, give more thought to similarities. This time is different could be the 4 most costly words ever spoken. It’s not the words that are costly so much as the conclusions they encourage us to draw. We incorrectly think that differences are more valuable than seeing similarities. After all, anyone can see what’s the same but it takes true insight to see what’s different. We’re all so busy trying to find the differences that we forget to pay attention to what’s the same….  If you catch yourself reasoning based on “this time is different” remember that you are probably speculating. While you may be right, odds are, this time is not different. You just haven’t looked for the similarities.”

It seems perhaps only fair then,  that I should get the caveat and the apology out of the way before you, dear reader, find yourself having wasted your time.

No great revelations are to be found in what follows. Nor will the reader find any grand universal theory of How Everything Changed. No predictions and diagnoses are made for seismic changes in the consumer landscape and the marketing industry. No obituaries for any discipline or practice are offered up. Nobody will come away feeling that they have been handed some golden key of new and privileged insight. And there will be not a whiff of currency, coolness, Zeitgiest or marketing avant-gard-ness about any of it.

For all these reasons, I hesitated to even write this this piece. We are afterall – and understandably perhaps – fixated as an industry on what’s new.

Then I stumbled upon an old post from Helen Edwards. She writes:

The ‘everything-has-changed brigade has garnered a cache of stories to bolster its cause.

They might point to the waiting lists achieved by Lancôme, which seeded its DreamTone serum with influential bloggers to foment “must-have” desire. Or to Ford, which loaned pre-launch Fiestas to 100 fashionable young drivers for six months, to earn the kind of buzz advertising can’t. Or Kellogg, which has built a teen fanbase for its Krave cereal through a series of quirky videos from YouTube vloggers. At this point, doubters could be forgiven for capitulation: if even the straight-laced marketers from Battle Creek are embracing the trend, perhaps it’s time to get on board.

Not so fast. When euphoria meets anecdote, that is precisely the moment when sane marketers need to hold their nerve and insist on answers to some very basic questions.”

“When euphoria meets anecdote”.

Helen’s words convinced me that there is some worth to going back to basics. What follows is as much an effort to work out my own thoughts as anything else.

And there are surely few more basic questions than – what do we know about how brands brand built?

My answer and argument is simple. The fundamental processes that build and sustain brands have not changed.

It’s just that everything else has.

A framework for inquiry

In his 1990 paper ‘Brand Presence and the Perceptual Frame’, marketing consultant and former adman William Moran provides us with pragmatic and commercially-attuned starting point for thinking about brands are built:

Screen Shot 2014-01-24 at 11.51.00 AM

Moran’s framework is in truth nothing more that a slightly more sophisticated rendering of the very familiar ‘3Ps’ of marketing.

Except that (echoing the four Ps advocated  by McCarthy back in 1960) to the familiar three Ps of Product, Price and Promotion, Moran added a third – Presence.

Wearingly familiar, isn’t it?

Perhaps.

Except that marketers of every hue are now on the receiving end of all kinds of misconceived advice. The kind of advice that suggests that ‘growth hacking’ means marketing is dead. Or that the existence of consumer reviews and sharing means that paid for publicity is done for.

Familiar it might be. But Moran’s framework gives us a robust framework for evaluating marketing’s outputs, and for thinking about how marketing has changed, is changing, and must change.

For Moran the two fundamental processes which can produce change in sales,  are a change in perceived Value and a change in Presence.

Change in Value he argued, can come about from either of two subprocesses:

A change in perceived utilities (attributes) as the result of the brand’s actions or those of a competitor.”

and

A change in relative price, either briefly or longer.”

Presence Moran defined as being “constituted by all marketing actions which produce changes in sales without any change in perceived value. Presence is the lubricator which simply facilitates sales by reducing the mental friction in the consumer’s decision-making process.”

Moran distinguished between physical and mental presence:

Distribution, shelf space, and displays can be termed physical presence because the physical product is a necessary part of the marketing action”

Mental presence is created by communications… Salience… is the degree to which a given brand comes to minds in the context of a particular purchase occasion or consumption occasion.”

So for Moran, Value (utility + price) + Presence (physical + mental) = sustainable profit.

Which is after all, the whole point of branding.

As I said, all very wearingly familiar.

Thanks to the the work of Les Binet and Peter Field in analyzing the IPA’s DataBank, we can add some other vital multiplying factors for successful branding.

Namely time, investment, emotion, and creativity.

The necessity of time

In The Long And The Short Of It: Balancing Short- And Long-Term Marketing Strategies, Les Binet and Peter Field report on their of analysis of the IPA Effectiveness Databank. The data held therein is the product of 30 years of the IPA effectiveness Awards – numbering some 996 campaigns, for 700 brands in over 80 categories.

Their analysis makes it clear that (contrast to our culture of immediacy) advertising’s ability to create value is most keenly felt in the long-term:

The total number of business effects rises steadily as the campaign length increases… This is largely as one would expect: the longer a campaign runs, the more investment has been put behind it and the more time it has to generate effects.”

This picture is replicated with the profit metric, though with a notably greater increase between 1 and 2-year campaigns.”

Most profitable of all are campaigns that drive both volume and pricing… Their principle characteristic is that incremental volume is achieved whilst strengthening margin.”

No 3-month campaigns report major pricing effects.”

Volume effects are quick to achieve but pricing effects take much longer.”

The creation of memory, brands, and business growth takes time. And as such it is, like it or not, at odds with one of the defining characteristics of our age – immediacy.

This is not to deny the value of brands being responsive in the here and now. Or the value of a brand demonstrating its currency, of surfing the ever-changing waves, fads and currents of popular culture. Or of providing short-term bursts of interest and fame.

Nor is this to suggest that there is no value in short-term activity. As Binet and Field comment:

The IPA data suggests that the optimum balance of brand and activation expenditure is on average around 60:40, though this may vary by category and is driven by how category expenditure divides (typically 60:40): the objective is to achieve equal share of voice within brand and activation.”

Direct campaigns [campaigns that use immediate behavioral triggers] work most efficiently over short time frames…  They are essential for short-term sales efficiency. But direct campaigns are not efficient drivers of long-term growth (over 3+ years).”

That said, simply delivering short-term activity does not lead to success in the long term. As Binet and Field observe:

The way in which long-term effects are generated is fundamentally different from how most short-term effects are produced. Although long-term effects always produce some short-term effects, the reverse is not true and long-term effects are not simply an accumulation of short-term effects.”

So however much it may be the spirit (for better and for worse) of our times, we cannot allow our expectation of immediate delivery and satisfaction undermine our ability to deliver value. As Binet and Field put it:

Without brand building (measured as major brand equity shifts – awareness, image and so on) there are no price elasticity improvements. The correlation between improved price elasticity and enhanced brand standing is strikingly linear. No amount of short-term sales activity will produce the broad brand strengthening necessary to enable firmer pricing. Brand-building activity may be slow but it is essential for the optimum profitability of most brands.”

The need for investment

The IPA 2009 report ‘How share of voice wins market share: New findings from Nielsen and the IPA databank’ contains two critical pieces of advice for those pursuing growth.

First:

The critical metric that determines the level of a brand’s market share growth is its excess share of voice (ESOV), defined as share of voice (SOV) minus share of market (SOM).”

In other words, if you want to grow your market share you need to over invest.

The second piece of advice it offers is this:

The corollary of this is that no agency or marketing client can guarantee to continue to deliver the same level of business performance for a brand is ESOV is falling as a result of underinvestment in media and marketing communications.”

In other words if you are under-investing, you can expect your market share to decline.

The Nielsen analysis included two years’ of media and sales data over the period ending August 2008, for 123 brands in 30 FMCG categories,

Nielsen investigated the impact of brands’ SOV in the first year on sales over the two-year period and used ‘base sales’ to exclude the effects of distribution changes, price promotions, and other in-store activity.

The key findings from the Nielsen analysis were:

    1. The relationship between ESOV and share growth was confirmed.
    2. An average of 0.5% points of share growth can be expected per 10% points of ESOV. Thus, a brand with a market share of 20.5% and ESOV of 10% points would expect to grow over a year to 21%.
    3. The levels of growth achieved per point of ESOV vary according to brand size

Binet and Field conclude (this really is the last time I will quote them) thus:

It is often asserted that share of voice is irrelevant in the digital era: this is not true. The correlation of SOV with market share growth is getting stronger and the returns on investing in SOV are also increasing as the level of brand choice continues to grow and the internet becomes more crowded with commercial activity.”

The power of creativity

So to some degree, market share can be bought.

However, the unfair advantage that any marketer can choose to leverage is the power of creativity.

In its report The link between creativity and effectiveness, the IPA has some fantastically valuable analysis of the relationship between creatively-awarded work and effectiveness.

The sample used for this study were the 257 IPA Effectiveness cases studies for which Gunn Report scores were all available.

As an aside, given that 257 represents less than 1% of UK advertisers, and around 1 in 7000 pick up the minimum major creative awards needed to be recorded in the Gunn Report each year, the fact that no fewer than 46 (18%) of the sample of IPA campaigns appear in the Gunn Report database already suggests that there is some kind of relationship between creativity and effectiveness.

Obviously this isn’t proof and so this study examined whether this 18% of creatively-awarded campaigns outperformed the 82% of non-awarded campaigns in hard business terms.

The short answer, is yes.

The IPA’s analysis reveals that that non-awarded campaigns, on average generate 0.5 points of share growth per 10 points of ESOV. Which is obviously very much in line with the findings from Nielsen’s analysis.

In sharp contrast, creatively-awarded campaigns generate on average 5.7 points of share growth per 10 points of ESOV.

In other words creatively-awarded campaigns generate around 11 times  (that’s right, 11 times) more share growth per 10 points of ESOV than creatively-non-awarded campaigns.

The levers of brand building

So at the risk of sounding as if I think I’ve cracked the code and am delivering some grandiose universal theory of marketing, it is nevertheless possible to make some confident generalizations.

The levers of brand building have been:

Utility

Price

Presence

And their multipliers have been:

Time

Investment

Creativity

Which brings us on the the second part of the essay question.

What, in this ‘digital age’, has changed?

Have the walls of marketing’s Jericho come tumblin’ down?

What do we seeing happening?

I should hasten to addd that what follows is intended merely a ‘taster’ – and certainly not as an exhaustive overview. That would be folly and arrogance beyond words. And I am sure that errors will be found that require calling out and correcting.

New forms of utility

‘Utility’ is a bit of an unhelpful moniker, as to many it might suggest only tangible, functional utility, when many of the satisfactions consumers seek (and which justify a price premium) are symbolic, emotional, and social in nature.

So let’s be clear that by utility we mean both the tangible and intangible.

Nonetheless  (and rather obviously), new technology allows for new forms of utility.

We are seeing the malleability of software allowing for marketers to evolve, iterate and improve the product experience in response to consumer interactions in the real world, not the laboratory.

In some markets we are seeing the emergence of new models of product ownership, in which access to goods and services is rented, rather than outright ownership of goods given over to consumers.

Services such as  Peugeot’s rental offering Mu and Zipcar  provide urban consumers with access to personal transportation without having to incur the burden of ownership.

The direct links between customers and products and the ability to track their usage that all things ‘digital’ enable, means we are able to involve consumers involved in the development and day-to-day running of products and services.

Waze for example, has built up a databank of maps and traffic reports through crowdsourcing. By tracking the GPS coordinates of its users and monitoring their traffic reports, it is able to divert users away from congestion.

We are seeing utility being used as a vehicle for publicity and promotion. Whereas product development and publicity occupied very distinct silos, marketing is now being “baked into” products and services.

For example, by placing a ‘Get free space button’ on their front page and offering users an additional get 500 megabytes of free space for every friend they invited and got to sign up, Dropbox managed to dramatically sign ups and achieve the critical mass it had been missing. Today, 35% of Dropbox’s customers still come to it via referral.

Of course more intangible utility has not gone away. We do not live in a world where our experience is limited to simply what we see. We all live and work – many of us skilfully and effortlessly – within two worlds; the world of objects and the world of meanings. And we need this imagined world to give our identities, lives and experiences depth, significance and meaning.

We are seeing “the power of reality” as Guy Murphy has put it, to build and sustain the meaning and emotional component of brands.

So we are seeing new forms of utility. And with it, new business models, new businesses, and new brands. It’s a new and exciting frontier.

And perhaps this new world of utility is teaching the marketing world something. Perhaps it is teaching us to value the sausage as much as the sizzle. As Jim Carroll has written recently written:

Tech brands spend the vast majority of their time and energy in the pursuit of innovation; creating astounding products is their main obsession. There is always something new to say, whether it’s a big breakthrough or a modest upgrade. Which is why their communications are so firmly rooted in product truth. This might be considered old-fashioned in a world of purpose-led brand building. But it provides a refreshing break from the pseudo-insights, hyperbole and overly-elaborate ideas which fill much of today’s communications landscape.”

So utility is very much alive and well.

Which serves only to underscore the rank stupidity (or shameless self-promoting) of anyone proclaiming marketing to be dead.

Perhaps they should read the words of Helen Edwards:

Look back at the classic definition of marketing, from the father of the discipline, Theodore Levitt. Its central tenet is that marketing must ‘work back from consumer needs’ Consumers don’t really ‘need’ communications; it is a commercial, rather than a customer, imperative. What consumers need is better products, improved service, easier lives, a cleaner world, and more health and happiness. The proper job of marketers is to identify, or better still, anticipate, these needs, and imagine ways to fulfill them that might lead to sustainable returns.”

New forms of availability

Byron Sharp has rightly underscored the importance of physical availability:

Physical availability means making a brand as easy to notice and buy as possible, for as many consumers as possible, across as wide a range of buying situations as possible… being easy to notice and buy is essential, because buyers do not have strong preferences even for the brands they are loyal to; they are happy to but alternatives from within their personal repertoires (and they regularly do).”

There was a time of course when  – apart from service brands – physical shelf space and availability was all that mattered in the quest to make brands easy to buy.

Needless to say, digital connections and interactions mean that physical structures are not the only way to win in the battle for availability.

Today we are seeing digital availability being used to enhance physical availability, and we are seeing digital availability being used to replace or bypass physical availability.

We all know the story of Blockbuster. And Barnes & Noble.

(Though we should beware of overstating the case. Take the UK, for example. While online spending is growing year-on year, the vast majority  – 90% – of retail sales still come from people doing their shopping in the physical world).

We are seeing – thanks to our new powers of surveillance – brands responding to and anticipating people’s need or interest.

We are seeing brands connect directly with customers, rather than via third parties.

We are seeing brands exploiting the interconnectedness of all things digital to create shelf space and make it easy for people to buy.

Airbnb for example, expanded its digital shelf space by gaining free distribution on Craigslist.

Spotify expanded its shelf space by being integrated into Facebook.

We are of course seeing an explosion in the ways in which brands can create memory and meaning. Creativity is now properly unbounded, no longer constrained by media formats.

We are able to give consumers the opportunity to interact in all manner of ways from the undemanding and lightweight to the participative and immersive.

We are certainly seeing brands relentlessly stalk consumers as they travel across the internet

We are able to employ consumers as advocates, ambassadors, co-creators, publicists, and media channels.

And increasingly, we are able to customize the content, timing, and targeting of our content.

New modes of pricing

The economics of digital goods are allowing brands to offer consumers goods and services for free.

As Chris Anderson first wrote in Wired magazine:

It’s now clear that practically everything Web technology touches starts down the path to gratis, at least as far as we consumers are concerned. Storage now joins bandwidth (YouTube: free) and processing power (Google: free) in the race to the bottom. Basic economics tells us that in a competitive market, price falls to the marginal cost. There’s never been a more competitive market than the Internet, and every day the marginal cost of digital information comes closer to nothing.”

We’re seeing brands able to employ the minority of paying users to support the majority of non-paying users, because the cost of serving that majority is close enough to zero to call it nothing.

We’re seeing brands employ ‘freemium’ pricing models in which they offer free version of their product or service as a vehicle for recruiting users, and charging for advanced features, functionality, virtual goods, or an ad-free experience.

Thus we see that in seven of the Apple App Store’s 10 largest categories, the majority of revenue comes from in-app purchases in free apps.

We’re seeing some brands test dynamic pricing.  And (as Amazon did) in doing so, occasionally test the goodwill of their customers.

We’re seeing brands such as ebay and Priceline allowing consumers to bid on items.

Mobile technology has of course liberated consumers from having their choice limited by what’s in front of them on shelf. Consumers are now able to treat physical stories as showrooms in which they search for a cheaper option online.

With all that in mind, let’s go back to Moran’s model and ‘traditional’ levers of brand building.

Back to the future

Whatever pattern of changes, evolutions and disruptions we might trace, it’s fairly clear that brand building still requires the delivery of value, and the creation of presence.

And it still benefits from the the multipliers of time, investment, and creativity.

So Moran’s model serves to remind us of two things.

First, it reminds us that the fundamental brand building mechanics of value and presence, the subprocesses of utility, pricing, and the creation of physical and mental presence, together with the necessity of time, investment, and creativity have not evaporated.

Marketers struggling to keep up with and make sense of the blizzard of change, evolution, disruption, advice, and opinion need not despair.

It may not make for sexy headlines (or even win essay competitions), but the fact of the matter is that the old imperatives still hold.

Which exposes the hollow, self-serving, unevidenced, link-baiting, self-aggrandising rhetoric of ‘marketing is dead’ to be precisely what it is. Total and utter bullshit.

Yet while the fundamental outputs of marketing have not been rendered obsolete, how marketers deliver value and presence is most certainly being reworked.

Connectivity, interactivity, immediacy, sociability, transparency, collaboration, prediction, responsiveness, targeting, automation, disintermediation, customization, mobility… all of these phenomenon (and more) are fundamentally remaking how brands connect with consumers.

(That said, our choice of how is always contingent. On the nature of the task, the resources available, the competition, the audience, and the brand. Without that knowledge, it is impossible to legislate what is right and appropriate. Declaring it’s the age of this or the age of that, makes for fun headlines.  But it’s a long way short of being sound, pragmatic business advice).

There is then, as much to unlearn as there is to relearn.

And as technology and code continue to remake our lives, there are inevitably, new skills to acquire and add to the old ones. For both the individual, and the corporation.

Blowing up the silos

Moran’s model provides us with another useful reminder.

Marketing is not and has never been synonymous with advertising – its remit and output is far broader and more far-reaching than merely the development of communications.

So when publicity can be baked into the product…

When product design can be a means of meaning manufacture…

When distribution can be baked into the product…

When physical products are assuming a digital life…

When social channels are becoming means of delivering customer services…

When pricing models are being used as distribution mechanics…

When marketing content is no longer a dead end and is becoming just the beginning of a customer journey…

When the gap between publicity and purchase can be compressed…

When the consumer is a distribution channel…

When the consumer can no longer be held at arm’s length…

Then it really is time to let go  of the antiquated notion that marketing is synonymous with ‘messaging’.

And it is high time that we blow up the mental and organisational silos that still bedevil us.

Perhaps if we all thought of ourselves in the business of creating connections, then we’d find ourselves better adapted to the new environments and possibilities of our age.

If we wish to be effective, we are about creating connections in the mind, we create connections between people, companies and brands, and we help create connections between people and other people.

I’ve said it before – in an age defined by its connectedness – people to people, people to things, and things to other things – that seems a far more accurate and useful perspective on what we all do.

So as digital continues blurs the old distinctions between product, publicity and distribution, marketers that insist on thinking in silos will fail to prosper.

Or simply fail.

As Laurence Green has recently written, “That our siloes, meanwhile, remain somehow untouched, integrated seamlessly behind a genuinely common agenda only by the brilliant or in times of crisis, is an ongoing source both of mystery and irritation.”

With all this in in mind, it is worth revisiting words from twenty five years ago. From the father of account planning Stephen King. In his essay ‘The anatomy of account planning’, he posed a challenge to agencies and clients alike. Never have his words seemed to prescient:

Marketing companies today… recognize that rapid response in the marketplace needs to be matched with a clear strategic vision. The need for well-planned brand-building is very pressing. At the same time they see changes in ways of communicating with their more diverse audiences. They’re increasingly experimenting with non-advertising methods. Some are uneasily aware that these different methods are being managed by different people in the organisation to different principles; they may well be presenting conflicting impressions of the company and its brands. It all needs to be pulled together. I think that an increasing number of them would like some outside help in tackling these problems, and some have already demonstrated that they’re prepared to pay respectable sums for it. The job seems ideally suited to the strategic end of the best account planning skills. The question is whether these clients will want to get such help from an advertising agency.

What agencies, and the account planners in them, would have to do is above all, demonstrate that they have the breadth of vision and objectivity to do the job; apply ‘how marketing communications work’ thinking and R&D to a much wider area; probably bring in more outside talent, from marketing companies or other fields of communication; make more efforts to ‘go to the top’ in client contact (the one great advantage of the various specialists); and make sure that they get paid handsomely for the work. I very much hope that this can happen – I wouldn’t like to think of the best strategic planners leaving for the other sorts of company or of agency planners shifting wholly to advert-tweaking.”

The question is (still) whether clients want to get such help from an agency, and whether agencies for their part have the desire and ability to demonstrate that they have the breadth of vision and objectivity to do the job.

Old thinking for new times

If we want to live up to King’s hope and vision, then we could do worse than not lose sight of some seriously good ol’ fashioned Ps.

It’s not cool, it’s not radical, it doesn’t make for great headlines, and it predates the internet.

But as a means of staying sane amidst the flux and uncertainty, of staying focused on what matters, and of assessing how to make best and most profitable use of all that is new, I think we could do a lot worse.

And if we were to think more often about all the Ps, we might just do a lot better.

***

Postcript

Admap is essential reading. If you don’t, I suggest you do  – in bridging the gulf between academia and practitioners, it’s pretty much required reading. I’m looking forward to reading the winning essays.

***

Sources

Chris Anderson, ‘Free! Why $0.00 is the future of business

Les Binet & Peter Field , ‘Brand success in the digital age’, Market Leader, Quarter 4, 2013

Les Binet & Peter Field, The Long and the Short of it: Balancing Short and Long-Term marketing Strategies

Jim Carroll, ‘Talk like a tech brand’

Laurence Green, ‘Precisely the opposite of what we now know to be true’, Contagious. 28th January 2014

Helen Edwards, ‘Too many marketers ignore their primary task’

Helen Edwards., ‘Amid social media euphoria marketers ask basic questions’

IPA, The Link Between Creativity and Effectiveness: New Findings from the Gunn Report and the IPA Databank

Daniel Kahneman, Thinking, Fast and Slow

Stephen King – The Anatomy of Account Planning, 1989

‘Freemium is the most profitable pricing strategy for apps’, Mashable, December 20th 2013

Patricia McDonald, ‘The winter of our discontent’

William T. Moran, ‘Brand presence and the perceptual frame’, Journal of Advertising Research, October/November 1990

Guy Murphy, ‘Brands in the digital age: The opt-in age of brands’, Admap, December 2013

Shane Parrish, ‘This time is different’

Byron Sharp, How Brands Grow

Time to get out of the message business

jh0868_bottle

If there is one thing guaranteed to relegate a marketing to both ineffectiveness and obsolescence, it is the belief that its primary form of influencing consumer behaviour is through messaging.

Messaging doesn’t reflect how people consume advertising and make sense of brands.

We know that the brain is not some rigid filing system in which memories reside as fully formed recordings. It is something altogether more dynamic and malleable.

Indeed it’s more accurate to think of memory as a process, not a thing. Our brain’s networks of nerve cells or ‘neurons’ are not fixed entities, but rather, are dynamic and continuously modified by experience. What people experience results in new connections in the structure of our brains.

While parts of marketingland still believe we’re in business of transmitting of information, of ‘communicating’ abstract, intellectual ‘messages’ or propositions, advertising doesn’t work through filing verbal messages and propositions in people’s mental filing systems.

Memory actually works through the creation of connections.  A brand is simply a set of connections and associations in the brain. We form and access memories of brands by creating and activating these networks of associations.

So people don’t consume and file away abstract ideas and propositions. They consume (as Robert Heath has shown, they often with fairly low levels of attention) all the visual, verbal, audible, tangible characteristics of our content – and these create new connections and in the brain.

Judith Williamson in her wonderful, essential, hostile and demanding book Decoding Advertising: Ideology and Meaning In Advertising demonstrates how advertising’s real work lies in its aesthetic wholes, and how it operates larges silently, through its codes and signals, rather than messages:

What an advertisement ‘says’ is merely what it claims to say; it is part of the deceptive mythology of advertising to believe that an advertisement is simply a transparent vehicle for a ‘message’ behind it. Certainly a large part of any advertisement is this ‘message’: we are told something about a product, and asked to buy it. the information we are given is frequently untrue, and even when it is true, we are often being persuaded to buy products which are unnecessary… a criticism of advertising on these grounds is valid, and I would support it. However such a criticism is in many ways the greatest obstacle of all to a true understanding of the role of advertisements in our society, because it is based on the assumption that ads are merely the invisible  conveyors of certain undesirable messages, and only sees meaning in the overt ‘content’ of the ad rather than it its ‘form’ – in other words, ignoring the ‘content’ of the ‘form’.”

So the consumption and decoding of marketing content is something altogether fuzzier than we often allow for. As Stephen King in JWT’s Planning Guide noted back in 1974:

An advertisement as a stimulus is a combination of medium, words, pictures, movements, symbols, associations, tones of voice, etc. The stimulus is received as a totality; the receiver does not separate content and form. The individual elements of an advertisement have no meaning on their own. They can only be judged in combination.”

Feldwick has similarly done much to remind us that advertising, like art does not work through reductionist concepts, but through the experience of aesthetic wholes.

So the What and How are inseparable. We exercise brand impressionism – rather than ‘taking out messages’, we are left with general impressions from what we’re exposed to.

Treating creativity merely as a means of tricking or bribing the viewer into paying attention to the message within it profoundly undervalues and undermines the both the nature and the value of creativity.

Creativity isn’t some kind of distraction tactic, bait or bribe. It isn’t a wrapper or envelope for a message.

It IS the content.

But there is another pressing issue with the idea of messaging.

For aside from the fact that the marketing-as-message model of influencing consumer behaviour doesn’t reflect how people consume communications, it’s singularly ill-suited to adapting itself to people’s digital interactions.

Searching, browsing, searching, tagging, uploading, downloading, sharing, linking, commenting, buying, playing, liking… To varying degrees of involvement and intensity, these are behaviors.

And messaging in an environment characterized by behaviours obviously struggles.

It either gatecrashes, misses out on vast opportunity, or is simply rendered impotent.

Small wonder then, that those charged with creating and leveraging digital behaviors should regard those who believe they are in the business of issuing messages with such bafflement or suspicion. And indeed vice versa.

The messaging school of marketing misunderstands the human mind, misunderstands the nature of creativity, and opens up a deeply unhelpful schism.

It really is time to let get out of the message business.

We need, to borrow the words of Jaron Lanier, a palette cleansing, a broadening of horizons.

Perhaps if we all thought of ourselves in the business of creating connections, then we’d find ourselves better adapted to the new environments and possibilities of our age.

And perhaps we’d begin to see how absurd are the solios that we’ve insisted on operating in.

For if we we wish to be effective, we are about creating connections.

Connections in the mind.

Connections between people, companies and brands.

And connections between people and other people.

In an age defined by its relentlessly blooming connectedness – people to people, people to things, and things to other things – that seems a far more accurate and useful perspective on what we all do.

“Only connect”, as E.M. Forster wrote.