Monday, June 29, 2009
So if I "expect great things" from Kohl's, it's only because they themselves have set the bar so high. This is why I was disappointed to learn about the lack of transparency exhibited by one of their marketing executives and an agency exec on Kohl's Facebook Fan page.
Based on his activities in Kohl's Facebook community, Ed Gawronski seems to be a big fan of Kohl's. Two weeks ago he noted, "Less then 4 hours to get a great deal at Kohls.com. I just hit the jackpot and saved 30% on some ASICS sneaks. Cost me almost nothing." And a couple days later he had another scoop for Kohl's Facebook Fans: "make sure to give your email to kohls.com. I think they give you $5 when you give it in. The deals get even better too. I've seen special online promotions every week."
You might think Ed is just a helpful guy and a big supporter of Kohl's, except a visitor to the Facebook page outed Gawronski as a Kohl's marketing executive. In a reply to one of Ed's posts, the anonymous visitor notes, "Interesting. Ed Gawronski is the VP of marketing for Kohl's. http://www.linkedin.com/pub/ed-gawronski/8/b1b/875 Masquerade much?"
Marketing executives certainly have a right to post about their organizations on Social Media sites, but the first rule of Social Media participation is to be completely and totally transparent. This means being honest and disclosing any relationship to the brand. Gawronski, with his chummy recommendation that others furnish their email to Kohl's and his boast about his shoe savings, attempts to pass himself off as a helpful consumer when in fact he is the Vice President of Digital Marketing at Kohls.
Gawronski isn't the only Kohl's stakeholder posting to the Kohl's Facebook wall without full disclosure. In the last two weeks, Marjorie Sklar Corbett has shared a couple of deals on women's apparel and praised Kohl's for an environmental honor, saying "It's so important, I'm glad Kohl's is getting the recognition for all the good they do!" While I can't be sure Marjorie works with Kohl's, she is a Group Director at McCann-Erickson, Kohl's ad agency; at best, the relationship between her employer and Kohl's ought to be revealed.
Social Media is no longer new, and we've seen enough embarrassing transparency mistakes to know better by now. In 2008, a Burger King exec was caught using one of his daughter's online accounts to spread rumors about critical labor advocates. In 2007, Whole Foods' CEO was embarrassed to be found praising his own company and bashing competitors via an anonymous alter ego on finance boards.
There are two primary reasons to be transparent and to completely reveal business or financial relationships when blogging, posting, or tweeting. First, getting caught being anything less than authentic is damaging to the brand. It is embarrassing, reflects poorly on the brand, undermines trust, calls into question the objectivity of others participating within the community, and discourages participation by the very consumers whose involvement, influence, and praise is desired and necessary in our increasingly social world.
But being transparent in Social Media is more than just a good idea--it's also the law. The FTC has always discouraged false or deceptive practices. It's advertising guides have long required that "When there is a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement, such connection must be fully disclosed."
The FTC is currently considering changes to its guides to demand even more transparency and disclosure in today's more social environment. In a recent MediaPost article, Michael Lasky, senior partner at Davis & Gilbert LLP, suggests, "Agencies and clients, especially those working in the social media space, must understand that the FTC's efforts to address deceptive practices can create liability and exposure."
Gawronski and Sklar Corbett's failure to disclose their relationship to Kohl's isn't likely to result in significant brand or legal harm, but they are failing to live up to consumer and FTC expectations in Social Media. They and other Kohl's employees are certainly welcome to participate in the Facebook discussion, but only with full disclosure about their vested interest in Kohl's success.
This is a lesson everyone must learn throughout the organization, from the top of the marketing career path to entry-level customer service reps and sales associates: Anything less than total transparency in your actions on Facebook, Twitter, or other Social Media communities can result in very serious, costly, and embarrassing consequences. The way employees and stakeholders should learn this is in explicitly stated and written rules of Social Media engagement and not by being outed in embarrassing and public fashion.
Thursday, June 25, 2009
I considered sending him links to blog posts that were my most popular ever--a four-part series that began with Twitter 101, Part 1: What Twitter is and ended with Twitter 101, Part 4: Tips for Being Successful on Twitter. I realized, however, that these lengthy blog posts were crammed with more information than was needed by a person who just wants the essentials. My dad needs to know how to see replies and find followers, not how to establish his Social Media persona.
So, here is what I told him. I thought you may find it helpful for the Twitter newbie in your life, be they a CEO who wants to know what "all that damn buzz is about" or your parents, trying to figure out why you're always typing on your mobile device. ("OH: What's this twutter thing you're always talking about?")
Here are the three essential lessons anyone needs to know to use Twitter:
- A Tweet is a message directed to no one in particular, and everyone sees it. Simply type the message in the "What are you doing?" box at the top of Twitter, click "Update," and everyone who follows you will see the message.
- A Reply (or @reply, as it is sometimes called) is a message directed toward someone in particular, but everyone can still see it. A reply begins with the "@" symbol immediately followed by a user name (@augieray, for example.)
- A Direct Message (or DM) is private message sent via Twitter to one person, and no one else can see it. A DM begins with the letter "D", followed by a space, followed by the user name of the person to whom the message is directed ("d augieray," for example.)
- Tweets posted by the people you follow will be visible on your Twitter home page. Every tweet created by a person you follow will appear in reverse chronological order on your home page at http://twitter.com/. As you amass followers and want to do a better job of tracking tweets, there are many free tools you may use to monitor Twitter, but using Twitter.com itself is a fine place to start until you get the hang of it.
- Replies: If someone sends you a reply, you may see it on your Twitter.com home page. Remember, @replies are publicly viewable messages and are not private, so they appear on your home page just like any other tweet.
Of course, unless you monitor your Twitter home page constantly, you may miss that someone replied or directed a message to you. Depending upon how many people you follow and how often they tweet, it's very possible for you to miss an @reply because it is hiding on page two (or page 20) the next time you sign in. Luckily, Twitter has an easy solution--just look on the right side of the home page for a link that is your username preceded by the "@" symbol. This will take you to a list of tweets that were directed to you or that mention you.
It's a good idea to check your list of @replies from time to time for several reasons:
- Someone may be asking you a question and is awaiting your answer.
- Someone may be commenting on something you said, so you might want to know and consider a response.
- Someone may be retweeting you, which means they are sharing one of your tweets with everyone who follows them. This would be indicated by a "RT @yourusername" at the beginning of the message. When people share something you've said, you may wish to consider thanking them with a Direct Message ("d theirusername Thanks for sharing my Tweet!")
LESSON THREE: Finding people to follow: This is both easy and complex, depending upon how assertive you wish to be in creating a list of followers. There are dozens of tools and sites to help you grow your Twitter list, but here are four simple ways to find new, appropriate, and interesting people to follow on Twitter.
- The easiest way is to follow the new people who follow you. As people find and follow you on Twitter, you'll get alerted via email. You can also see a list of your followers by clicking the small "followers" link that appears beneath your count of followers at the top right corner of your Twitter page. On that page, you can easily see who you are already following and who you are not, and following them can be accomplished with a click of the mouse button.
- You can also find followers by following the people who are followed by the people you follow. That sounds complex, but it isn't. For example, if you find someone particularly interesting on Twitter, you may wonder who they find interesting. Just go to their home page and click on the "following" link at the top right corner of their Twitter page. You can click the "follow" button next to the people listed on another person's followers page, which adds these folks to your own follow list.
- Searching for followers: There are several ways to seek out followers with interests similar to your own. For example, you can search Twitter; to do so, click "Find People" at the top of your Twitter page and search for people you know. You could also go to Twellow.com and search for terms of interest (such as "Disney," "Jazz" or "Social Media") to find Twitter users who mention those terms in their Twitter profiles.
- Use a tool to find followers: There are many sites and tools that promise to hook you up with like-minded Twitterers. Some of these tools are based on the idea of Twitter communities, where people can self-identify their areas of interest. For example, if you're interested in photography, you can find lists of people to follow at http://wefollow.com/twitter/photography or http://www.twibes.com/group/photography.
Another category of follower-finding tool will analyze your profile and tweets and then make recommendations of people to follow. For example, check out http://whoshouldifollow.com/ or http://mrtweet.com/.
As you gain comfort with Twitter, there are a huge variety of tools and software you can use to do everything from vetting followers to scheduling tweets to categorizing followers to shortening Web links so they'll more easily fit into the 140-character Twitter limit. But before jumping into the deep end of the Twitter pool, start by wading for a while until you're acclimated to the new waters.
Tuesday, June 23, 2009
The level of transparency in our culture struck me a couple of weeks ago while reading the funny pages. On the opposite side of the page from Marvin and Beetle Baily was an article about David Carradine's death by autoerotic asphyxiation. Just 71 microns separated children's comic strips from a description of how rope was found tied around the actor's neck and genitals. We've sure come a long way since Lucy and Ricky weren't permitted to use the word "pregnant" or show a single bed for the married (in both real- and sitcom-life) couple.
Growing transparency certainly has it's troubling aspects. Whether it's parents needing to explain an accidental death by fetish, a Disney starlet dealing with the ramifications of "sexting," or a stock sinking on unfounded rumors, the ease of information creation and dissemination presents its share of challenges.
Of course, our more transparent world also offers benefits. As we've seen these past weeks with the Iranian election, a government clamping down on the media no longer can stop information and ideas from flowing. Major media outlets are turning to the same Social Media tools as citizens to learn and report on what is happening in Iran following that country's contested election. Social Media sites like Twitter and YouTube have become major sources of news as the stream of images, video, and reports defy the Iranian government's best efforts to control communication.
At present, many marketers are concerned with whether or not (and how) their brands should utilize Twitter, but the lessons of David Carradine and Iran should cause us to consider how increasing transparency demands more than tweeting.
In Economics courses, a theoretical model seeks to understand the impact on consumers and firms of pure transparency or "Perfect Information." The same mental exercise is also helpful for those in marketing and communications: How would we change our enterprises and create a competitive edge if our company, consumers, employees, and competitors all lived in a world of pure transparency and perfect information?
- Consumer Focus: In a hypothetical world of abstract transparency, all competitors would know everything about consumers and each other, but knowing and using that information are two different things. The companies that succeed would be the ones who most effectively focus their products, marketing, and service on the needs and expectations of consumers.
- Speed and Effectiveness: In a perfectly transparent world, competitors would be aware of each others' product innovations and marketing campaigns before they come to market. In such a world, the organizations that execute more quickly and with greater effectiveness than their competitors would create valuable advantages.
- Emotional Brand Differentiation: Of course, another way to create value in a world where your competitors know your every move is to establish an ownable marketing advantage your competition cannot touch. This doesn't occur with product features, packaging, or promotions--which can be copied or improved upon by the competition--but instead is created by connecting with consumers on an emotional level.
Coke demonstrated the power of emotional branding over practical product benefits when they tried and failed to launch New Coke. As noted by Sergio Zyman, Coke’s CMO, in Guerrilla Marketing Research: "We reached out to consumers and found that they wanted more than taste when they made their purchase decision. Drinking Coke enabled them to tap into the Coca-Cola experience, to be part of Coke’s history and to feel the continuity and stability of the brand."
- Candor and Trust: In our imaginary transparent world, our mistakes would be as visible as our successes. Robbed of the ability to control or "spin" information, the organization that is most forthright--publicly embracing and learning from embarrassments as well as successes--will gain the most trust with consumers.
- Corporate Culture and Hiring Practices: Knowledge does not equal affinity; as individuals, we've all had the experience of liking someone less the more we've gotten to know him or her. In a transparent world, individuals and corporations cannot be anything other than they are, so the people we hire to represent our brand and the culture we nurture will have a tremendous impact on our organization's reputation and influence.
- Building and Nurturing Relationships: Perfect knowledge may create perfect brand awareness, but it doesn't mean squat to brand loyalty. Brands that connect to consumers, show interest in them, and create value beyond that naturally offered by the product or service will win in our theoretically transparent world just as they do today in our imperfectly translucent world. Moreover, in a world of perfect information, every consumer would know which brands are the ones listening and connecting and which are more interested in blasting one-way advertising messages.
- R&D and Intellectual Property: Finally, while it may be hard to imagine in the cloak-and-dagger domain of R&D, our imaginary world of pure transparency would mean perfect knowledge not just of upcoming product innovations but even of the research and findings that spur new product offerings. The need to rely upon the legal protections afforded patents and copyrights would be even greater than today. (Of course, in a world of perfect information, everyone would know when IP rights were breached, so catching violators would be a cinch.)
While the imaginary world we've conceptualized may be purely hypothetical, the lessons learned are not. First of all, today's digital and social world is far more transparent than we tend to believe; we live in a world where bands cannot release albums without them being leaked in advance, where leaked movies threaten box office weekend hauls, where the misdeeds of a couple dumb kids threaten the reputation of even the largest brands, and where seemingly trivial legal decisions can result in unintended PR disasters.
More importantly, if you reexamine the list of competitive advantages in our imaginary world of perfect information there isn't one concept that won't furnish benefits today in our real world of imperfect knowledge. Plus, the list is as interesting for what is not on it as for what is included--what good is mass marketing and spin doctoring in a world where everyone knows everything anyway?
While the abstract conditions we imagined will never exist in the flesh-and-blood world, there is no dispute the world is becoming more transparent. Each step toward greater openness, more fluid and dispersed communications, and less control brings as many opportunities as challenges to those who recognize and embrace the new reality.
Sunday, June 14, 2009
First Twidiot: In an AdAge.com article about Michelob's use of Twitter, George Hacker, director of the Center for Science in the Public Interest said, "Twitter is for kids, and this is a way to put these brand names in their faces." (Full disclosure: I do not work with Michelob, but I am involved with the marketing of beer brands; my client has an unwavering commitment and takes constant and proactive steps to target their marketing messages to the appropriate adult audience.)
Whether Hacker is simply misinformed or allowed his passion to get in the way of the truth, his contention about Twitter is demonstrably and thoroughly incorrect. I expect better from a guy who is a director at an organization with "science" in its name.
Quantcast's data cannot tell us specifically about the 21+ audience on Twitter because they divide age groups at 18 and not 21, the legal drinking age, but quantcast's data still paints a conclusive picture. Just 6% of Twitter site visitors are under 18. More than half are over 35 years old.
Other data reinforces the facts about Twitter's adult audience composition: According to the Pew Internet and American Life Project, the median Twitter user is 31, compared to 26 for Facebook and 40 for LinkedIn. And comScore reveals that adults 25 to 54 over-index on Twitter compared to the general Internet population. Children 12 to 17 under-index at just 59%.
Not only isn't "Twitter for kids," but we can confidently conclude the demographics of Twitter fit the conditions of the Beer Institute Advertising and Marketing Code, which requires that beer advertisements be placed only in media where at least 70 percent of the audience is reasonably expected to be at or above the legal drinking age. Mr. Hacker is simply wrong, and his statement is of the type that reinforces incorrect assumptions about Social Media participants.
While researching this blog post, I ran across twidiot number two: J.R. Davis, who writes for nwahomepage.com, the site for Arkansas radio station KNWA. Perhaps I shouldn't get bent out of shape about something said on an Arkansas news site--it's not as if a significant number of brand marketers visit this site--but I expect more care and attentiveness to detail from journalists. Plus, Davis' error is one common among many marketers--a failure to recognize how rapidly Social Media demographics are changing.
Davis wrote the article "Internet Fatigue," which states, "Here's the kicker... The 14-24 year old demographic represents over 65 percent of users (of MySpace and Facebook)." Davis' fact isn't so much wrong as it is terribly dated and thus not accurate or appropriate for an article published in June 2009. The statistic cited came from a Rapleaf study performed a year ago. Has anything changed in the period from June 10, 2008 (the date of the study) to June 11, 2009 (the date of the article)?
In January 2009, istrategylabs.com wrote that the fastest-growing demographic on Facebook was the 35-54 year old demo, with a 276.4% growth rate the past 6 months. The same report notes that the 55+ demo had a 194.3% growth rate and that users 21+ represent 66.3% of all Facebook users. Had Davis cared to do any up-to-date fact checking at all rather than repeat a statistic from the dark ages of Social Media--and yes, a year matters quite a lot when referencing Social Networking data--he or she might have visited quantcast and found that while teens 12-17 are the largest demographic, those over 18 account for almost three-quarters of Facebook.com's traffic. Over two-thirds of MySpace's traffic comes from those 18 or older.
With facts and information so easy to come by, it's frustrating to see comments like this, from Philadelphia 76ers’ communications director, Michael Preston: “We are not yet convinced that our target demographics for season ticket [buyers] and partial plans are totally dialed into the social networking scene.” Why not ask, find out where your consumers are engaged in Social Media, and become convinced?
The implications of incorrect assumptions and outdated information can be substantial to brand health. The failure to recognize the growth and changes in Social Media is resulting in a lack of urgency around this channel. For example, while “time spent watching TV is virtually unchanged" and "time spent social networking has grown 93% since 2006," marketers seem to be slow to increase Social Media in their marketing mix. According to one recent report, marketers still consider Social Media experimental and are said to be budgeting less than $100,000 for social media efforts over the next year.
While companies like Dell are creating revenue and positively impacting their brand in Social Media, most others have barely gotten started. As noted in an April 2009 article on Adweek.com:
"Thousands of brands from large, medium and small companies... crossed that hurdle a few years ago of making a Web site. But they are not yet waking up to the fact that the Internet is not just about parking your information somewhere and hoping people stumble across it somehow. You have to be active for anyone to notice.... Companies obviously know Twitter and blogs and Facebook. They just don't know how they fit in. "The facts are out there. There is no longer any excuse to be a Twidiot. The time has passed when being unsure of where Social Media fits for your audience was merely a casual problem to be solved as priorities permit. In late 2009, failing to understand how our increasingly social world challenges and benefits brands has become an act of shortsightedness or deliberate ignorance that threatens consumer perception, brand value, market share, and the bottom line.
Wednesday, June 10, 2009
In the last post we explored how marketers have alternatively broken or relied upon the communications versions of Sir Isaac Newton's First and Third Laws of Motion. Newton established these inviolable physical laws in 1687, and they still stand today for simple mechanical motion; however, from a marketing perspective, the laws of communication motion have been rewritten in recent years due to the growth of Social Media tools and consumer adoption of Social Networks.
Perhaps I am stretching my Newton analogy too far, but I believe we can prepare and protect our brands by considering Newton's Second Law of Motion: Force equals mass times acceleration. In scientific terms, it is expressed as:
Fnet = m * a
Acceleration: Social Media Buzz or Buzzkill?
Since we marketers care about the Acceleration (a) of our brand in Social Media, we can alter Newton's equation to account for Force (F) and Mass (m) in the following way:
a = Fnet / m
What this tells us is that our (or others') ability to accelerate a brand in either a positive or negative direction is proportional to the force exerted and inversely proportional to the mass of the brand.
The little "net" in the equation is important. Newton realized that objects in motion are subject to all sorts of opposing forces. He determined that motion wasn't caused by force but net force--the difference between contrary forces. If you nudge a pen across a table, you are giving it applied force, and since your finger pushing in one direction has greater force than friction pushing in the other, the pen moves--the applied force (your finger) minus the friction force is the net force that sets the pen in motion.
As much as I enjoy sounding like Bill Nye, let's focus on what this means to brands in Social Media. What is acceleration in Social Media? When advancing in a desirable direction for the brand, you might call it Word of Mouth, impressions, or buzz. But acceleration can also push a brand in an unwanted direction--buzzkill.
For example, Twitter's Trending Topics, displayed on the right side of Twitter profile pages (such as on my profile page) or on the Twitter search page, can change hour to hour. The Trending Topics list reveals the brands or topics that are accelerating on Twitter, but the list alone doesn't tell you whether that motion is positive or negative. For example, this evening Adam Lambert is one of the top trending topics. The former American Idol came out of the closet, and a cursory review of the thousands of tweets referencing Lambert show a great deal of support of the "I love Adam Lambert" variety.
"iPhone" is also trending on Twitter tonight, but not in the direction you might expect. The normally buzzworthy mobile phone platform is drawing gripes and complaints tonight (or at least AT&T is). While some on Twitter are excited about the new iPhone hardware, many are complaining about the price and the lack of an upgrade discount for loyal iPhone owners. Twititions (the Social Media version of petitions) have been launched to demand AT&T offer reasonable upgrade prices.
Acceleration and deceleration are the name of the game in Social Media, but what causes changes in Social Media momentum?
Applied Force and Friction in Social Media
A brand is never acted upon by just one force--a myriad of forces are always pushing and pulling brands in one way or another. We can draw an analogy between the two primary physical forces and their counterparts in Social Media:
- Applied Force/Active Brand Participation: In the physical world, applied force is a force that is applied to an object by a person or another object. In Social Media, this is the force exerted on the brand by the participation of those within the company (such as marketers, customer service, etc.) and those outside.
If your brand is not participating (or under-participating) in Social Media, then it is subject to the whims of others who are applying force on the brand--both the positive force that comes from loyal customers, vendors, and other stakeholders and the negative force that comes from critics, activists, dissatisfied customers, and others. It is hard to imagine why a brand would want to opt out and leave its reputation in Social Media to the forces applied by outsiders, but some have been slow to engage in Social Media due to a fear of a loss of control, concerns about transparency, and uncertainty how to proceed.
Aside from the obvious reasons for brands to engage in Social Media, here's another: Remember that it is net force that matters. A brand that is at rest in Social Media can easily face negative momentum with the slightest adverse force applied in the form of a damaging rumor, embarrassing video, product problem, or similar Social Media PR issue. Conversely, a brand with constant positive force applied by marketers and others within the enterprise maintains positive momentum that helps to combat any unexpected negative occurrences.
Constantly engaging with consumers and fans permits brands to build positive momentum in the form of improved reputation, greater trust, and wider networks of supporters who are less inclined to believe or listen to attacks and more apt to speak on behalf of the brand.
- Friction/Consumers Waning Attention: In the physical world, friction will cause a moving body to slow to a dead halt. The equivalent in the Social Media realm is the friction of waning consumer attention. A brand that once had momentum can lose it if the brand fails to maintain engagement in Social Media. If you give consumers a reason to care today but fail to do the same tomorrow, friction sets in--consumers lose attention, turn elsewhere, and begin to disconnect from your brand.
Brand friction isn't new or unique to Social Media. Even before Web 2.0, brands that were neglected would grind to a halt--Woolworth's, Chiclets, Gimbel's, Brim, and Burger Chef, for example. In Social Media, friction is even greater and momentum is lost more quickly.
Brand Obama used Social Media, including Twitter, to build a fan base and win the US Presidential Election in November; according to The Nation, 25% of those who voted for Obama were linked to him via one or more of his online networks. But what happened after Candidate Obama became President-Elect Obama? Many of his Social Media accounts went silent, and his Twitter volume dropped from over 100 tweets in the four months before the election to three in the four months after.
This sudden loss of Obama's constant attention to Social Media caused some questions and complaints. For example, the day before his inauguration, a blogger posted an article, "Barack Obama’s Web Wasteland," in which he noted "Neglecting the vast social media networks he built up during the campaign seems like a bad way to start." The New York Times recently reported on a memo about the White House's use of Web 2.0, noting that "a lot of us have grown a bit restless, looking at how slowly the White House is adopting Web 2.0 tools." A brand or person that is established in Social Media with continual and positive interaction will quickly lose steam when that engagement ceases.
(For the record, the memo cited many reasons for Obama's diminished presence in Social Media, including that his campaign team dedicated over 170 staffers to new media while the White House New Media team has fewer than 10 full-time employees.)
Brand Mass and Social Media
If marketers' and others' ability to accelerate a brand in Social Media is directly related to the force applied, then it is inversely proportional to the brand's mass. In this case, "mass" means the scope and breadth of understanding about the brand. In other words, a brand with little awareness or understanding is easy to accelerate in any direction, while a brand with great affinity is more difficult to move.
This is really no different than in the real world, of course. A small brand like a restaurant can add tablecloths and alter the menu to foster a new brand that--if appropriately targeted and executed--will quickly alter consumers' perceptions. On the other hand, larger brands with widespread recognition can take considerable effort and time to redirect.
Tropicana attempted to rebrand their orange juice with new packaging this year but didn't succeed in changing anyone's perception of the brand except negatively; the new direction was quickly scrapped after complaints and a 20% plunge in sales. In 2006, Walmart (then Wal-Mart) attempted to alter their brand to include upscale goods; but, as noted on Ries' Pieces, the largest retailing giant in the world, "was unable to change any minds when it used advertising to try and move the brand upscale to sell expensive wine, clothing and jewelry."
The downside of a strong, widely recognized brand is that it is difficult to move, even when you want to do so. The upside is that it is difficult to move--a strong brand in Social Media can survive the occasional and unexpected PR blows that are prone to occur in Social Media. While the famed Mr. Unstable incident was hardly cost-free to Burger King, the brand was able to survive unscathed through careful PR response and thanks to a strong, established brand.
We don't really need Newton's three-century-old Laws of Motion to tell us that brands need to positively engage in Social Media, keep engaged, and strive to build brand mass that yields positive results and protects against the unexpected and uncontrollable. That's just common sense.
But while the need to gain a foothold in consumers' brains is obvious, the ways to do it are less so. Even Sir Isaac Newton, among the greatest minds ever to grace the human race, recognized that discerning physical laws were nothing compared to the complex and improbable ways of the human mind. He said, "I can calculate the motion of heavenly bodies, but not the madness of people."
Friday, June 5, 2009
Although Sir Isaac Newton was focused upon physical interactions and not marketing, it might be observed that the discipline of marketing is dedicated to violating his famous Third Law of Motion: To every action there is an equal and opposite reaction. Marketing is the art and science of aiming the right message or crafting the right experience for the right audience via the right media in order to create an unequal result that exceeds the sum of the effort.
While striving to break his Third Law, marketing and PR executives had come to rely on the communications version of Newton's First Law: A body at rest stays at rest unless it is acted on by an external force. Companies attempted and often succeeded to control the release and spread of unflattering or undesirable information pertaining to their enterprises and brands. With the means of mass communication available to a select set of advertisers and PR professionals, messages that companies wanted broadcast were easily (if not cheaply) disseminated, while news and information they wished to control remained at rest and thus tended to stay quiet.
Social Media is rewriting Newton's Laws of Communications Motion. His Third Law might be restated: To every action there is an unpredictable and possibly disparate opposite
reaction. Who could have predicted that a music video by an American Studies grad student would become a phenomenon viewed tens of millions of times? How many people could have foreseen that a tongue-in-cheek video designed to endear a pain medicine to mothers would instead become a lightning rod for thousands of angry and critical blog posts?
The Social Media effect isn't only negative, of course--today brands strive to tap into our new hyper-word-of-mouth culture, and some find the right recipe. For example, McDonald's cheesy Filet-O-Fish commercial has been viewed over a million times on YouTube. You might think that pales in comparison to the 28.8 million people who tune into American Idol each week, but keep in mind the YouTube count is of people who actively sought out and watched the message rather than fast forwarding past the ad. Plus, the media cost for YouTube was $0 compared to the approximately $600,000 Fox gets for a 30-second spot on Idol. Action and reaction are no longer related in the world of Social Media.
If Social Media has made Newton's Third Law of Communications Motion a bit unpredictable, it's more or less destroyed Sir Isaac's First Law as it applies to PR. Nowadays, no corporate decision or news can be counted upon to stay at rest, no matter how much the organization may want it contained.
In the age of Social Media, there is no assurance that small decisions and actions will remain small. When Social Media professionals speak of "transparency," it means (among other things) that business operations are subject to scrutiny, corporate choices may be the topic of wide-spread debate, and that people outside the organization have the ability and right to determine what is newsworthy and will be broadcast through the Twitterverse and blogosphere.
P&G brand Pringles provides a case study of how a rather simple business decision can find surprising life in Social Media. Back in July 2008, I wrote a blog post, "Pringles: Social Media and PR," about a seemingly trivial legal claim by Procter & Gamble UK that was getting attention within social networks. The company, seeking to reduce a tax levied against Pringles, went to court and argued that their product is not a potato chip or a potato product. The judge agreed, announcing that Pringles were not "made from the potato."
The reaction was not nearly on par with the famed Social Media PR embarrassments suffered by Dominos or Burger King, but it's still interesting to consider how this small story took a life of its own. Back in July, writing just a day after the news broke, I referenced hundreds of Pringles-related tweets and blog posts, none of them complimentary. This mundane tax issue had become the topic of debate and consideration for thousands of people who--in the words of one Twitterer--wondered, "If Pringles are less than 50% potato, what's the other 51%+ made of?" While many speculated on the non-potato ingredients of the non-potato chip, other bloggers took a more strategic and critical look at the business decision. Syndicated columnist Jim Hightower wrote, "Corporations commonly try to dodge their tax responsibilities, but it's unusual for one to dis its own product in order to avoid paying."
Obviously, the great Pringles Tax Scandal of 2008 didn't bring P&G to its knees, but it did present a PR challenge that required attention, consideration, and some investment of time and expense to assess the risks, respond to inquiries, and proactively manage the brand's message. Furthermore, the brand did not merge completely unscathed; the headline on AdAge.com tells the story: "Branding Work Undone as Details of U.K. Tax Case Spread Across the Web."
Having won the case, it seemed the negative buzz would quickly quiet, and it did--until this week when Britain’s Supreme Court of Judicature legally and officially announced that Pringles are, in fact, potato chips. The New York Times notes, "The decision is bad news for Procter & Gamble U.K., which now owes $160 million in taxes."
The news is also bad because, once again, the information has not stayed at rest and is newly ricocheting through Social Media. On Twitter there have again been dozens of tweets reaching thousands of people. Google's blog search once more reflects over a hundred blog posts from this past week, all calling attention to the “potatoness” (a term used in the Supreme Court ruling) of Pringles. And as the blog did with last year's Pringles' news, The Consumerist has again put a spotlight on P&G's legal and consumer issues in an article that has been read over 6,000 times in three days.
One understands why P&G thought this was a legal argument worth mounting. With $160 million of tax dollars in play and a legitimate claim that Pringles are "crisps" and not potato chips--the operative distinction in the tax case--it must have seemed a simple legal and economic decision to go to court. But now that we can observe not just P&G's loss of their case but also the social and brand costs associated with their effort, it is easy to see how business decisions must be reached with a different set of criteria than in the past.
No decision can be made without some consideration for how it might play in Social Media; every decision is a brand decision, to one extent or another; and everyone in the organization is responsible for brand stewardship. Whether it's a cable installer who falls asleep in a consumer's house, a poorly maintained bathroom, an overzealous PR flack offering to pay consumers for positive reviews, or management's handling of a round of layoffs, anyone or anything can become fodder for the Social Media gristmill.
If any action can result in an unequal and frequently unexpected reaction in Social Media, and if information doesn't stay at rest and cannot be contained, what does this mean to marketing and communication professionals? First of all, we should learn from the experiences of P&G, Motrin, Comcast and others. Like Sir Isaac Newton, who famously came to a scientific revelation about gravity after observing an apple falling to the ground, we can observe the gravitational pull of Social Media and develop plans and procedures that prevent our brands from getting sucked into the same vortex of criticism and negativity.
How? We'll explore this in the next post when we apply Newton's Second Law of Motion to the world of Social Media.
Monday, June 1, 2009
Corporate success may be measured in dollars and cents--the realm of the CFO--but that success is delivered by brands that connect emotionally and logically to consumers--the domain of the CMO. Shareholders, consumers, and other stakeholders benefit when finance and marketing are in balance and collaborative, but it is apparent these functions are more competitive than they are united. More importantly, in today's business culture, one has become the dominant force in the enterprise, setting the tone, establishing the rules, and defining the language.
Adweek, for example, offers the biting headline, "CFOs Aren't Big Fans of Marketing." You can read the article to find out what CFOs think of marketing budgets, but ask yourself if you can conceive of the shoe-on-the-other-foot headline, "CMOs Aren't Big Fans of Finance." It would be laughable if it weren't such an obvious reminder of the unequal stature between these two functions.
Want more evidence of the finance function's jurisdiction in the realm of marketing? If you search for the term "CFO" on Adweek, you'll get 589 results. Over on CFO.com, the term "CMO" appears just six times.
If you're still not convinced, let's call to the stand CMOs themselves to testify as to their place in the corporate world. The CMO Club recently polled its own members about who has the most credibility to the CEO. The results? Of the CMOs surveyed, 31% said the CFO, 24% said Head of Sales, and just 13.8% felt the CMO was most credible.
If CMOs aren't credible, it should come as no surprise they don't retain their jobs for long. In 2007, a study found it "astonishing" that average CFO tenure had slipped under five years, but that kind of job stability would be welcome to CMOs, who currently average barely two years in their position.
And marketing's PR problems aren't limited to the executive offices and boardrooms. A recent study found that "66% of Americans believe advertising agencies bear at least some responsibility for the recession because they 'caused people to buy things they couldn’t afford.'" We are in the midst of a crisis caused by financial institutions, abusing complex financial derivatives, with poor financial standards, exacerbated by financial rating agencies with effects spread by investor actions in financial markets, and people blame marketing?!?
The discipline of marketing is ailing, and this should be a concern not just to marketing professionals but to anyone who cares about financial performance and stock prices. Strong marketing creates strong brands that yield strong results. Below is a comparison of the stock price performance of Interbrand's Top 10 Brands for 2008 compared to the Dow Jones and S&P 500. Both year to date and in the past 365 days, top brands were not immune to the problems plaguing the overall economy, but these strong brands have produced better value for stockholders.
Those of us in the marketing profession have our work cut out for us. We must change the conversation within our enterprises. But before we can restore balance to business, we must first restore balance to the discipline of marketing. Here's how:
Measure Quality Along with QuantitySome marketing is Direct Response Marketing. It has an offer, a call to action, and an immediately measurable response. For brands that sell directly to consumers, Direct Response Marketing is a science that yields accurate calculations of ROI. Online retailers, for example, can calculate the financial impact of changing a Pay Per Click (PPC) ad headline or offer with great precision. In this case, the connection between a specific medium, offer, consumer, and purchase is tangible.
But what about brands that don't have such a direct relationship with consumers? The association between a CPG brand's marketing investment and sales lift is nowhere near as direct when consumers purchase products in the aisles of a supermarket or convenience store. This is not only because of the diffuse nature of the distribution but also the breadth of marketing messages to which consumers are exposed prior to purchase.
How can you know that billboard, that print ad in that magazine, that visit to a microsite, or that iPhone app contributed to a purchase? More to the point, when marketers envelope consumers in a fog of marketing media and messages, how can you tell the extent to which any specific medium or message contributed to sales lift? Data collection and mining offer some insight, but it is nowhere near perfect.
There are several ways to solve this problem, including better definition of data needs, more thorough data collection and improved analysis. But it is also vital marketers measure the qualitative along with the quantitative.
Data that demonstrates increased purchase intent, improved awareness, or enhanced influence (such as the Net Promoter Score) are not embarrassing stand-ins when hard sales data is difficult to collect; instead, these metrics are vital marketing KPIs that evaluate the long-term health of brands and the outcome of marketing investments. Marketing professionals must champion qualitative metrics as no less valuable than the quantitative ones.
Increase Marketing's Reach Within the EnterpriseIt's time for marketers to start a turf war. In far too many organizations, the discipline of marketing has been narrowed to focus largely on advertising and media. We live in a much too complex and interconnected world to think that brands can be nurtured purely based on advertising.
For example, it might seem odd to suggest that the maintenance crew in a grocery store should be within the sphere of the marketing function, but in our increasingly social world, a dirty bathroom can be a brand and marketing issue. I'm not suggesting that those responsible for janitorial services report to the CMO, but if we agree a brand is a promise created by experiences across all touchpoints, then marketers must be aware of and influence the consumer experience at every touchpoint, even the bathroom.
Don't believe me? Perhaps you'd listen to Ray Kroc, who knew that "Having clean bathrooms was always... at the forefront of McDonald's image." The founder of the quick service restaurant chain--number eight on Interbrand's Best Global Brands list--"would often tell McDonald's insiders that kids can't tell the difference between the quality of one cheeseburger or another but mothers would always know and remember which bathrooms were clean and which weren't." That sort of wisdom could only come from a marketing mind that understands how consumers form bonds with brands and is capable of broadly defining and influencing the consumer's total brand experience.
Marketers should also care deeply about the hiring and training practices within their organization. We live in an age when employees throughout the enterprise have unprecedented power to affect brand perception, both positively and negatively. Today, two teen employees with a cell phone camera can create a PR crisis or a single employee can temporarily speak on behalf of (and harm) their employer's brand.
It wasn't that long ago that every brand message broadcast to consumers was vetted by lawyers and executives. Today respected and high-performing companies like Zappos and Dell have dozens of individuals speaking on their behalf to hundreds and thousands of consumers; these communications are monitored to be sure, but the conversations and messages are unfiltered and unapproved in real-time.
In our progressively more transparent world, how important is it to find employees who embody the brand and to train them how to represent the brand in their communications? Brian Kalma, the head of User Experience at Zappos, recently spoke at Fullhouse and was asked how much freedom employees should be given to speak on behalf of the brand in Social Media. He responded, "If you don't trust them to speak for you, why are they your employees?"
Advertising is still and will remain a valuable tool in the marketer's toolkit, but consumer opinions are formed by far more than just billboard and TV commercials. Experiences create (or destroy) brands, and these experiences occur every time a customer service rep answers the phone, a customer visits a bathroom, an employee tweets, an instruction manual is read, or a consumer visits a brand's Web site. All of these touchpoints must reflect the brand, and this means marketers must have awareness of and leverage over the consumer's experience in each channel.
Respect that Social Media is Innovative and Evolving, not ExperimentalWe are at a crossroads in the history of marketing. Much like in the mid- to late-90s when companies struggled to recognize the importance of the Internet, Social Media is challenging marketers. We should learn from the Internet adoption experience and not repeat the mistakes. The way in which brands adapted to the Internet age and the speed at which they did so created winners and losers. Social Media will do the same, so it is vital marketers move assertively to explore and embrace Social Media.
The shift in consumer behavior has been clear and undisputed. Three of the top five Internet destinations in the United States are now Social Media sites, Twitter grew at a rate of over 1,000% in the past year, and social networking among US broadband users has grown 93% since 2006.
These sorts of changes in consumer media consumption should be cause for action, yet marketers are treating Social Media more like an annoying diversion that a strategic imperative. Forrester found that 75 percent of marketers have budgeted less than $100,000 for social media efforts over the next year. (That would be less than the cost of a single 30-second spot in prime time last year.) The firm concluded that social media has not yet entered the marketing mainstream, but is largely relegated to "experimental budgets".
Since when did we marketers get to be such a conservative bunch? Marketing used to be a place for innovative and creative thinking! I'm not suggesting marketers shovel money at Social Media indiscriminately or that we rush into every Social Media tactic at once, but the time to call Social Media "experimental" passed around the time Facebook's traffic eclipsed CNN's (which is to say a year ago.) Today, even Twitter is drawing more traffic than CNN.com!
The need for marketing to move from mass to small isn't a new realization. Four years ago in a brilliant essay on AdAge.com, Bob Garfield wrote, "Quit playing for the three-run homer and amass the singles and doubles." After envisioning the "slow collapse of the entire mass media advertising market," he said the Holy Grail will be "to reach -- and have a conversation with -- small clusters of consumers who are consuming not what is force-fed them, but exactly what they want." We've had years of forewarning and plenty of time for experimenting; now is the time to be swimming in the Social Media waters, not dipping our toes into them!
Of course, Social Media is a challenge for marketers because traditional display advertising doesn't work on social networks. And already there is growing evidence that consumers are growing tired of being asked to "friend" their brands on social networks like Facebook. But our response to these challenges shouldn't be to label Social Media experimental--that's the linguistic equivalent of hiding our heads in the sand.
Instead, marketers must embrace Social Media, discover what makes it tick for their brands, and dig deeper for marketing strategies that aren't about messages and campaigns but instead about dialog, connections, and transparency.
How important is Social Media to brands? The world of 2009 isn't like the world of just three years ago. No PR crisis will develop for consumer brands that won't occur, be detected, and combated in Social Media. No consumer survey will furnish insights into brand perception more accurately than can be found in the buzz of Social Media. And if not already then in the near future, consumers will learn more about brands from each other than from traditional advertising.
Different brands and different categories certainly have different opportunities in Social Media--some are immediate and huge, and some less so. But all brands have risks and benefits in the Social Media of today, and all brands will see these risks and benefits grow in the coming years.
The fact we experiment in a medium doesn't mean that medium is "experimental." Decades after television became the predominant ad vehicle for large brands, marketers continue to experiment with fewer ad breaks and shorter ads, but no one would label their TV budget as experimental. It is time to approach Social Media with the same maturity. Marketers should, by all means, experiment with different Social Media tactics and channels, but they must not consider Social Media experimental and relegate their attention or investment in this medium to the fringes.
Build Brands for the Long-TermFinally, if marketers are to change the conversation in their organizations, the change must start from within. To paraphrase the King James Bible, "Marketer, heal thyself." If we want our CEOs and CFOs to recognize the long-term value of brands, then we must do so.
Today's stock price is important, but not more than tomorrow's. Certainly, consumers must buy our brands today if our enterprise is to exist tomorrow, but we must never forget that a brand's primary purpose is to furnish value in the future. Evaluating our marketing efforts based only on how it sells product today without considering whether we're building or diminishing the brand's future is detrimental to the financial interests of all stakeholders.
If recent economic news should teach us anything, it is that focusing only on quantitative short-term results is not in the best interest of shareholders or anyone else. If fixating on stock prices quarter to quarter was a successful strategy, then Enron, AIG, and GM would be today's Wall Street darlings. (Ironically, moments after typing that last sentence, my cell phone buzzed with a CNN News Alert indicating that GM will be declaring bankruptcy tomorrow.)
Despite the obvious need for long-term thinking, marketers are sounding more like financiers than stewards of their brands; we speak more of the immediate return on our marketing spend and how it is moving product off of shelves and less of brand equity and how our marketing investment is increasing awareness, consideration, purchase intent, loyalty and influence.
The short- and long-term are not mutually exclusive, but they become so if we willingly concentrate on one to the detriment of the other. And if marketers won't champion the importance of long-term brand vitality, then no one else within the business will.
If we need models for the importance of long-term brand thinking, we need look no further than those brands that have rested at the top of Interbrand's Best Brands report for years. Brands like McDonald's, Disney, and Coca-Cola didn't build brand value worth billions of dollars by focusing only on those tactics that delivered immediate sales lift. Companies like these were built by business leaders willing to treat their brands as assets to be fostered, not as expenses that generate instant results. In the Interbrand report, Stephanie Colton & Carolyn Ray note that "leaders look at the branding process as a long-term operational commitment or way of working, not a short-term initiative."
One way for CMOs to restore the balance between immediate and future brand needs is to change the way bonuses and compensation are calculated. James Lenskold, author of "Marketing ROI: How to Plan, Measure, and Optimize Strategies for Profits," recognizes compensation plans as one of the key challenges standing in the way for long-term brand success. He says, "Compensation, recognition, and career advancement tend to motivate short-term gains over long-term gains and individually driven gains over collective corporate gains."
Another way for marketers to balance the long- and short-term is to set reasonable and varied goals for their agencies. Much like altering compensation for marketing employees, agency fees should be based upon the agency's ability to improve not just today's sales but to equip the brand for future success. The right metrics will depend upon the brand's objectives, challenges, and maturity. Setting incremental sales increases as a metric is certainly important, but so is measured growth of awareness for a newer brand, association with particular brand attributes for a brand in flux, or improvements in a brand's net promoter score for a mature brand.
Finally, to balance the demands of the now with the needs of the future, marketing and finance must collaborate and work together as equals. In "Vulcans, Earthlings and Marketing ROI: Getting Finance, Marketing and Advertising Onto the Same Planet," Rutherford and Knowles note the importance of developing a Causal Model "to explain how marketing and advertising effort contribute to business success," and they assert that such a model "must account not only for short-term effects--but also increases or decreases in Brand Equity."
"Sooner or later," warn the authors, "someone wonders if there is an off-the-shelf answer. The short answer is no, because each business is different and therefore has to identify its own drivers." Although a Causal Model "is not easy to generate or defend," Rutherford and Knowles offer encouragement: "The very fact of getting Finance, Marketing, and Advertising (and other disciplines) together to decide a Causal Model is itself valuable in creating common ground. Marketing and Advertising can show their business mindset, and Finance can get a closer look at what creates the added value of brands."
So there you have it--right back to where we started at the beginning of my last post: Corporate culture is out of alignment because "the equilibrium that existed between the marketing and finance functions has been disrupted." And the answer is so simple: work together.
It is not enough for CFOs to demand more specific measures of Marketing ROI from the marketing function; they must collaborate to build the models, measures, and processes. And it is not enough for CMOs to bend to the will of those who demand short-term results at all costs; they must seek models and metrics that value brand equity for the long-term as well as the short.
In the end, Rutherford and Knowles leave us with a call to action so simple it's something we all should have learned back when we were watching Sesame Street:
"It's not easy to get successful collaboration between Finance, Marketing, and Advertising. But think of the competitive advantage when you do achieve it."