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.

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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

Modern times: The end of dissent?

Contemporary corporate fantasy imagines a world of ceaseless, turbulent change, of centers that ecstatically fail to hold, of joyous extinction for the craven gray-flannel creature of the past…

The new businessman quite naturally gravitates to the slogans and sensibility of the rebel sixties to express his understanding of the new Information World. He is led in what one magazine calls “the business revolution” by the office-park subversives it hails as “business activists,” “change agents,” and “corporate radicals”…

What we understand as “dissent” does not subvert, does not challenge, does not even question the cultural faiths of Western business… What’s happened is not co-optation or appropriation, but a simple and direct confluence of interest… The problem with cultural dissent in America isn’t that it’s been co-opted, absorbed, or ripped-off. Of course it’s been all of these things… It is no longer any different from the official culture it’s supposed to be subverting. The basic impulses of the countercultural idea… are about as threatening to the new breed of antinomian businessmen as Anthony Robbins, selling success & how to achieve it on a late-night infomercial.”

Source: The Baffler

Modern times: The fruits of mechanical progress?

There is really no reason why a human being should do more than eat, drink, sleep, breathe, and procreate; everything else could be done for him by machinery. Therefore the logical end of mechanical progress is to reduce the human being to something resembling a brain in a bottle.”

 

Source: George Orwell, The Road To Wigan Pier