Showing posts with label Marketing. Show all posts
Showing posts with label Marketing. Show all posts

Friday, August 22, 2014

What Marketers CANNOT Learn From The #IceBucketChallenge

Credit: slgckgc via photopin cc
I love internet memes, but I hate the way each one gets turned into fodder for advertising publications and agency bloggers to (try to) turn the event into a "teachable moment" for marketers. While a trend is hot, news sites and agencies strive to build more attention and traffic with a form of newsjacking, leveraging interest in a trending topic to create attention for themselves. Right now, this is happening with the Ice Bucket Challenge, with dozens of news, blog and LinkedIn posts telling marketers what they can learn from this meme. I do not agree with much of what has been written, so at risk of engaging in newsjacking myself, I am going to write about this program and hope that it encourages more dialog and consideration about this craze and what it may or may not mean for marketers.

Sometimes, a meme can furnish a few lessons that marketers might consider when developing their marketing strategies. At other times, the connection between the event and brands is tenuous, at best. And on occasion, the effort to turn current events into something relevant for brands and marketers blows back.

Many recently criticized PR agency Edelman for publishing a blog post immediately after Robin Williams' suicide suggesting brands "Seize the day" and use the tragedy "as an opportunity to engage in a national conversation." While the Edelman blog post was worthy of criticism, it was really just a symptom of a larger issue: Marketers' and agencies' continued promotion and use of dubious tactics such as "real-time marketing" and "brand newsrooms." These schemes attempt to hijack consumer emotion and interest in a current event to make otherwise irrelevant brands more relevant.

Business leaders must recognize that companies build relevance not by hopping from one trending topic to another but with concerted and ongoing effort in specific and discrete issues that resonate with consumers. Edelman should know--better than most--that the time for a company to demonstrate care for depression and suicide is before a celebrity death brings these topics to the forefront and not after Twitter is abuzz. One way tells consumers that your organization stands for something more than profits; the other tells consumers your brand is a vulture willing to exploit any tragedy or event to try to boost the bottom line.

It is happening again--while the world is busy dumping buckets of ice water over their heads, ad industry news sites and agency blogs are lighting up with posts about what marketers can learn from the #IceBucketChallenge. Alas, I believe many of these posts and articles are simply wrong, drawing arguable connections between what worked for this charitable effort and what will work for brands. Here is what I believe marketers can (and cannot) take from the success of the Ice Bucket Challenge:

  • The #IceBucketChallenge demonstrates the power of social media, not the power of social media marketing. (Tweet This): Almost every article and blog post I have read calls this a "campaign." It is not. A campaign is a planned series of marketing events launched by an organization to achieve a goal, but the ALS Association did not plan, launch or manage this (although they have eagerly jumped on the bandwagon). The Ice Bucket Challenge was a spontaneous and viral happening created and spread by individuals; in fact, had the ALS Association attempted to launch this themselves, they likely would have been criticized for manipulating and asking too much of people. The Ice Bucket Challenge succeeded not because it was a carefully crafted campaign but because it wasn't.
     
  • The Ice Bucket Challenge didn't succeed because it is easy but because it is difficult. I have read several times that brands can learn from this program that making participation easy for consumers is vital. Excuse me--the Ice Bucket Challenge was easy?! Most brands would do backflips simply to get 15 seconds of consumers' time to post a rating or positive comment. Meanwhile, the Ice Bucket Challenge required people to find a bucket, fill it, lug the heavy bucket somewhere convenient, fill it with ice, set up a smartphone to capture everything, lift the heavy bucket, douse themselves in ice-cold water, dry off, change clothes and post the video online. And, oh yeah, donate money! If that is your idea of easy, I wonder what a difficult activity might be!

    Ironically, had the challenge been something easy--"I dare you to post a video doing a duck face!," for example--it would not have worked. Because the Ice Bucket Challenge was difficult, it gave people an opportunity to demonstrate their willingness to make the effort--and no, your brand probably cannot get people to do heroic activities in support of your product or service. 
      
  • Credit: gwen via photopin cc
    The Ice Bucket Challenge was not a program about caring but about pride and shame. Before you react negatively to me calling out ego and humiliation as drivers, let me point out that this is not a criticism. The program succeeded, and there is nothing wrong with a charity with using the human emotions of pride and shame to achieve a positive end; after all, those are exactly the same mechanics that work in many charitable programs. Take, for example, the VFW fundraising program where volunteers stand with cash buckets in front of store entryways and give away little flowers to those who donate. If you cough up cash, you get a Buddy Poppy to wear around that day, showing pride in your small sacrifice; but if you make eye contact and walk past without donating, you feel shame. (You know you do!)

    The fact that people could show off how creative they were (with Bill Gates building a dousing contraption and Stephanie Izard doing an ice bucket Flashdance) was a big part of the success of the Ice Bucket Challenge. So was the part of the program that demanded people call others out by name; this was the charitable equivalent of a chain email, but because of the social media elements, people could not break the chain privately and quietly but only by humiliating themselves with silence and inaction. While some have claimed this program was about pulling at the heartstrings, I can recall seeing just one video that was legitimately emotional. The lesson of the Ice Bucket Challenge is that pride and shame are powerful human emotions, but brands should be very wary of trying to activate these emotions as part of a for-profit marketing campaign. 
     
  • Lou Gehrig's farewell speech, when he declares himself the
    "luckiest man on the face of the earth," moves me to tears.
    The Ice Bucket Challenge was not successful as a cohesive marketing effort, but it was a great first step. As I write this, the ALS Association has received $41 million of donations thanks to the Ice Bucket Challenge, more than double what the organization raised in its last fiscal year. But while this clearly had a terrific fundraising impact in 2014, will it build future success for the ALS Association?  For example, I would suggest the Ice Bucket Challenge did little to raise awareness. Most people had heard of Lou Gehrig's Disease before the Ice Bucket Challenge, and afterwards, how many of the participants would be able to identify its symptoms, when it strikes, its prevalence or anything else about ALS? Very few of the Ice Bucket videos made even passing reference to ALS, and without awareness and knowledge, this one-time event cannot be turned into a lasting driver of success in the fight against ALS.

    Of course, the ALS Association now has the names and contact data for more than 700,000 new donors. If the charity fails to educate those individuals, few will donate again and the association will not build upon this success for future fundraising benefit. With additional concerted effort, the ALS Association may convert this successful acquisition program into an effective awareness, loyalty and repeat donation effort. The point that marketers should take from this is that no single campaign or program can be a soup-to-nuts success delivering on every marketing goal; instead, building deep, strong, and long-lasting consumer relationships takes a cohesive brand journey. 

It takes nothing away from the generosity of many or the rewards accruing to the ALS Association to point out that this was not an effective marketing program but another example of the way social media lightning can strike unexpectedly. This is what brands can learn: Consumers are fickle and crowds are hard to predict or motivate. They can ignore your carefully-crafted and expensive viral video campaign then turn around and make the Harlem Shake the next big thing. 

Kudos to the ALS Association for seeing the Ice Bucket Challenge rising out of the crowd and being agile enough to capitalize on the opportunity. In the end, that may be the most important message of all for brands--your brand succeeds not with what you plan and post but with what consumers think and do. If brands did more worth talking about and concentrated less on broadcasting content, they would have a better chance of building relevance and loyalty in the social media era. 

Tuesday, April 1, 2014

The Problem With Social Media Case Studies

We all love a good case study, don't we? Especially in the social media business, where results can be difficult to measure and prove, there is nothing more validating than knowing someone else has succeeded and can show us the way.

Problem is, despite years of experience and thousands of case studies promoted by agencies, consultants and speakers, most companies are still struggling with their social media strategies. How is this possible when there are so many good case studies to be found?

One problem with case studies is the way marketers use them. There has been a tendency to latch onto any successful case study as an archetype for success, but case studies are not best practices. For example, I can present a case study on how dropping out of high school led to success for people like Walt Disney, Sir Richard Branson and David Karp, but that does not make skipping school a good idea. The same is true for many social case studies; social media professionals may love to learn how Coke or Starbucks succeed in social media, but how many brands can leverage the existing marketing spend, reputation and consumer affinity of brands such as those?

Several years ago, a consultant was pitching my team at a financial services company and offered Dell Outlet's Twitter strategy as a relevant case study. I stopped her and asked how Dell's use of Twitter to sell refurbished hardware was pertinent to us in the banking and insurance business. The consultant was unable to answer that, and it made me wonder how many times that case study had caught the attention of marketing professionals who had absolutely no opportunity to use that knowledge within their own business or vertical. Who cares how much money Dell Outlet made on Twitter if your company cannot promote reconditioned product via a Twitter account?

Aside from how they are used, many case studies suffer from one or more problems that limit their value. First, most are produced to promote an organization's or person's products or services. This is not necessarily a bad thing, but it should cause us to approach the information with a healthy dose of caution and to question if we are getting the full and complete story.

Second, most case studies, particularly in social media, do not close the loop in terms of both costs and benefits. It is rare to see case studies with dollar signs--either for investments or returns--and this means most case studies are less business examples than they are entertaining stories. After six years dedicated to social business, I cannot stand to see one more case study measured in new fans or retweets. (And neither should you!)

My greatest concern with case studies, however, is that most simply do not hold up to any sort of scrutiny. Hungry for evidence of social media success, marketers have been far too eager to drink the social media Kool-Aid.

Take, for example, Dell, which everyone widely recognizes as an organization that has transformed itself into a model social business. The brand famously initiated social listening and customer care in response to the firestorm created by Jeff Jarvis's June 2005 blog post "Dell Lies. Dell Sucks." Since then, the organization has been a model of social innovation--Dell made millions with its @DellOutlet Twitter handle; it launched Dell Ideastorm to co-innovate with consumers; it deployed a social listening command center; and it used social listening to recognize and immediately resolve concerns with XPS 13 pricingIn 2011 when Forrester went looking for the most socially mature "Empowered" companies, Dell was an obvious choice for the short list.

Just one question: Where is the evidence of Dell's success? Since June 2005 when Jarvis posted his criticism of Dell until October 2013 when Dell went private, the company's stock dropped 66%. Over the same period, other tech stocks performed much better: Hewlett Packard stock was even, Cisco was up 17%, IBM up 138% and Apple (one of the least social businesses around) was up 1249%. What, exactly, makes Dell such a worthwhile and repeatable example of social success (other than really, really good PR)?

Many other well-known case studies collapse pretty easily when you dig a little deeper. I was quite critical of Esurance's Super Bowl sweepstakes a few months ago because so many bloggers and journalists went gaga for the big numbers reported by the brand. (Why is it when accountants see suspiciously high numbers, they question them, but when marketers do, they immediately tweet, share and blog about them?) I questioned the business and brand value of the tweets made to enter a social sweepstakes, but some people criticized my analysis by pointing out Esurance boosted its follower count from 10,000 to more than 260,000.

It's worthwhile to look at how the brand is doing almost two months later: The account has since lost half its new followers. Even more damning is this: Esurance started promoting its upcoming sweepstakes via its Twitter account on January 27. In the prior seven days, with just 10,000 followers, the company tweeted 12 times and received an average of 14 replies, 9 retweets and 71 favorites. In the last seven days, despite having 1300% more followers than before their sweepstakes, the account has tweeted 25 times and received an average of 4 replies, 3 retweets and 3 favorites. Following the brand's $5 million program, the Esurance account is getting less engagement. Why? Because those new followers are not prospects, advocates or customers; they were nothing but random people who wanted to win an easy $1.5 million!

It isn't just positive case studies that suffer from problems; some of the most well-known negative case studies do not stand up to evaluation, either. As I have written in the past, some of the most famous "social media crises" left no signs of adverse business impact. United Breaks Guitars has been cited thousands of times as proof of how a social media PR crisis can damage a brand, but if it did, there is little evidence to be found; in the six months following the release of the "United Breaks Guitars" video, the company's stock outperformed competitors Delta and US Airways by more than 150%.

How about the backlash that Chick-fil-A faced after people objected to comments from its CEO about the biblical definition of the family unit?  Consumer use of the chain was up 2.2 percent in the quarter following his comments, market share rose 0.6 percent, and total ad awareness was up 6.5 percent.

Or what about the Bank Transfer Day backlash against Bank of America's debit card fee? While credit unions reported picking up $4.5 billion in new deposits, Bank of America saw average deposit balances rise 500% more--an increase of nearly $25 billion in the same fiscal quarter as Bank Transfer Day. As for BoA's stock, in the six months following Bank of America's disastrous fee announcement, shares rose 51% while the Dow Jones increased just 22%.

United Breaks Guitars, Chick-fil-A and Bank Transfer Day are oft-cited examples of social media crises that damaged companies, but as case studies, they are pretty toothless. When in the midst of a social PR problem, it is easy for bloggers and journalists to attract clicks, make unsubstantiated conclusions and declare the situations to be cautionary case studies for others, but how many of these same authors go back months later and look for the short- or long-term impact?

Good case studies are woven from reality and facts and do not disintegrate the moment you pick at one thread. Demand and question more, and we can begin to separate the wheat from the chaff.

Tuesday, February 19, 2013

The Secret Door--One Brand's Way to Spark Dialog and Attention

Enter the Secret Door
Every now and then, an online marketing program grabs my eye and is worth sharing. "The Secret Door," from window and door company Safestyle UK, is one such program. It is earning media and consumer attention not by begging for likes on Facebook but by giving them something to talk about.

The concept is really quite simple--give people a door through which they pass to arrive at random and interesting places on earth, all thanks to Google Street View. The locations have been carefully curated to be interesting and invite exploration.

Your experience will be different than mine, but I entered the Secret Door and found myself at a rave in Stockholm. Another click brought me to the floor of the ocean. Then I was standing in a comic book store. The experience invites engagement and makes it easy to share through social networks.

So often, I hear from people who are struggling to make their brands talkable in the social era because their vertical or product is "boring." There are dozens of ways to do overcome this challenge and spark dialog, from making a difference in the community to taking a stand on an issue to developing bold products to empowering employees to creating engaging events to turning your brand over to your community. But don't overlook the old standby: Creativity. "The Secret Door" demonstrates that even a company in the relatively mundane category of home supplies can still become buzzworthy with a little creativity.

"The Secret Door" succeeded in getting people talking quickly after launch. Within a day or two, the site had generated 350 tweets, over 1,500 Facebook Likes and over 250 Google +1's, and it is still trending upward thanks to articles in Venture Beat and Technorati. I will be curious to see if all this sharing amounts to additional business for Safestyle UK, but the links and traffic certainly are boosting the firm's SEO.

Most brands and categories are more interesting and relevant to consumers' daily lives than a company that makes double-glazed windows. "The Secret Door" shows how to overcome attention challenges and create conversations by bringing a bit of creativity and furnishing a worthwhile experience with which consumers want to engage.

Click below. Where will you end up?

The Secret Door
The Secret Door is presented by Safestyle UK

Monday, November 5, 2012

The Complete Facebook Success Formula Every Marketer Should Know

At the f8 Developer Conference in April 2010, two Facebook engineers shared Facebook's EdgeRank formula, and since then most marketers have misinterpreted how to apply it to their own brand challenges. Simply put, this is Facebook's equation, not your brand's. This formula reveals how Facebook determines what will appear in users' newsfeeds, but it does not tell your brand what is needed to drive business success on Facebook.

What Facebook shared about EdgeRank is important for marketers to understand, but it is merely a portion of the Facebook brand success formula. It is a little like the owner's manual for your car, which is helpful for learning how to operate the vehicle but does not tell you how to successfully, safely and efficiently get from point A to point B. Marketers must recognize EdgeRank, both for what it is and what it is not.

What is EdgeRank? 

Source: http://allisterfrost.com
EdgeRank is Facebook's secret sauce. It is designed to make the site as useful, engaging and sticky as possible. Its purpose is not to enhance marketers' experiences but users' (which ultimately benefits Facebook itself with more traffic and ad revenue, of course.)

You are probably aware that when you sign on to Facebook, your newsfeed is not simply a stream of every friend's and brand's posts in reverse chronological order. Facebook knows that you would not find a raw stream of posts very interesting--you are fonder of some friends than others, and not everything your friends post is equally appealing-- and so Facebook filters your newsfeed. Based on your past interactions on the platform, Facebook knows who and what you find most relevant, and it applies this knowledge to make your newsfeed as interesting as possible. (For the record, I think Facebook's current EdgeRank formula does a good job, but it has a long way to go before its filtering feels as natural and accurate as it should for users.)

To understand how EdgeRank works, you first must realize that everything that occurs on Facebook is an "edge" in the parlance of Facebook. Which of your friends' edges you see in your newsfeed and which ones Facebook omits depend on three factors:

Ue: Affinity between user and edge creator: Facebook monitors how much you interact with friends and brands. Those people and brands that earn your engagement--liking, sharing, commenting and so on--are more likely to appear in your newsfeed. The people and brands you tend to ignore eventually disappear because Facebook (correctly) interprets that you simply do not find their content interesting.

Right off the bat, you can see the enormous challenge for brands: How can a brand possibly be as interesting to a user as his or her own friends? You can see this challenge demonstrated within your own personal newsfeed--you are presented with posts made by your friends much more often than from brands you have liked. In fact, many of the brands you have "liked" never appear in your newsfeed. This is not (just) Facebook's way to encourage brands to use paid sponsored posts to increase visibility; instead, it is the reality of your own Facebook habits. You find the people in your life more interesting than brands, and Facebook recognizes and reflects your authentic affinity.

We: Weight for this edge: Every one of us reacts with different types of content differently--you may love videos, I may enjoy photos and someone else may prefer text. This means each content type has a different "weight" for each user. In addition, as an "edge" gains comments and likes, it gains more "weight;" thus, as others interact with an edge, it increases the likelihood that edge will appear in other people's newsfeeds. The more your brand posts match topics and content type to users' interests, the greater the weight of your content and the higher the likelihood your content will appear in fans' newsfeeds.

De: Time decay factor for this edge: The last of Facebook’s EdgeRank attributes is a simple one: The more recent the post, the more likely you are to see it. You do not often launch Facebook and see something posted a week ago. Facebook knows that we are all real-time junkies--if a band is hot, a TV show is great, a meme is growing or our friends found a great party, we must know now!

Facebook's EdgeRank is not rocket science--the more affinity an individual has for your brand, the more interest he or she has for the types of content your brand posts, the more others find your content engaging and the more timely your posts, the greater your brand's chances of being included in a fan's newsfeed. While this all seems obvious, marketers must take note of several vital things about EdgeRank:

  • Facebook does not exist to give your brand the opportunity for free earned media. Its purpose is to give users a great social experience, which may include the brands that authentically earn their attention.
     
  • The same rules apply to people as to brands. If your brand posts interesting content that gets people engaging, the content is seen in more users' newsfeeds. If not...
     
  • A brand that fails to engage fans can disappear from fans' newsfeeds. If this happens...
     
  • Your brand can become invisible on Facebook. Consumers rarely visit brand pages; in fact, Facebook reports that fans are 40 to 150 times more likely to interact with brands on their newsfeeds than going to a brand page. If you disappear from consumers' newsfeeds, you disappear from Facebook.
     
  • EdgeRank is Facebook's formula for keeping users' newsfeeds as interesting and relevant as possible, but this is far from the entire equation for brand success on Facebook. Two key components for Facebook marketing success are missing, and far too many marketers overlook these.

Missing Facebook Attribute #1: Fans that matter

What is missing? Well the first thing should be evident:  Fans, but not just any fans, the right fans.

Not all fans are created equal, although you would not know this given some of the relatively desperate methods brands use to accumulate "fans." EdgeRank tells us that brands must collect signals of affinity as quickly as possible, so the primary goal in your brand's fan accumulation strategy should not be raw numbers of fans but collecting the right fans--ones that arrive with some level of affinity or immediate potential for affinity.

An interested customer is likely to interact with your brand, which tells Facebook he or she wants to see more from your brand. On the other hand, a disinterested fan fails to interact, resulting in the expulsion of the your brand from the fan's newsfeed.

I have never understood why brands turn to general-interest sweepstakes and contests to earn "likes," for this seems to offer no path to Facebook success.  The theory is that a fan acquired through these means will move up the value ladder--he or she may start as a disinterested prospect, but soon this person will become so enamored with the brand's wonderful content that the individual will rise to prospect, then customer and finally loyal advocate. This is the traditional advertising funnel view of the brand journey, and applying it to Facebook is, in the words of the immortal Joe Biden, "Malarkey!"

Facebook's EdgeRank prevents disinterested prospects from gaining value. A new fan who was seduced by a contest or sweepstakes will see a few posts from your brand, and if they ignore these posts (and they will), your brand is gone. When this happens, your marketing investment will have incremented a number at the top of your fan page but delivered nothing else, least of all a prospect with an opportunity to see your brand's content within his or her newsfeed.

Brands are treating Facebook "likes" as if they are email subscription requests, but EdgeRank tells us this is not an effective strategy. Instead, you must find fans with affinity and keep that affinity to remain part of fans' Facebook experience. The path to greater brand awareness is not to collect disinterested fans and hope your content reaches them, because it won't; instead, brands achieve awareness on Facebook by collecting fans with existing or immediately available affinity and giving them content and interactions they will share with others (either purposely or inadvertently through Facebook's platform.)

In my Facebook success equation, I call this "Fans to the power of Affinity." Affinity does not grow your brand's Facebook success mathematically but exponentially. A fan with zero affinity stands almost no chance of seeing your content; a fan with modest affinity may or may not interact sufficiently to keep your brand present within his or her newsfeed; but a fan with strong existing affinity or the opportunity to gain it immediately can be a regular receiver, engager and sharer of your content.

To affinity and beyond! (Sorry, the Disney fan in me came out there.)

Missing Facebook Attribute #2: Brand Vector

The second component that we must add to Facebook's EdgeRank equation is brand vector. This means that your content and interactions must move people closer to the brand.

Engagement for engagement's sake may get your brand on fans' newsfeeds, but your brand must drive marketing value and not merely be seen. It is not enough to capture attention; you have to capture hearts and minds. If you collect "eyeballs" but fail to change perception or behavior around your brand, you've failed, no matter what your fan count or "talking about this" number says.

Brands have long fallen into the trap of settling for mere likeability and engagement. One of my favorite pre-social-era examples of this is Taco Bell's Chihuahua. For years, Taco Bell ran ads with the popular pup telling people “Yo Quiero Taco Bell.” The dog abruptly disappeared from airwaves because the Chihuahua was more effective at selling T-shirts and plush animals than he was at selling tacos. In the language of the social era, Taco Bell settled for engagement but lacked brand vector.

For a more recent example, look at Progressive's recent social media PR event. Angry customers flooded into Progressive's fan page to protest the company's handling of a claim. Progressive has the most popular fan page in insurance, at least as measured in simple metrics--4.7 million likes and 30,000 people talking about the brand--but despite those amazing numbers, Progressive saw little to no advocacy in the midst of the company's negative PR event. It is easy to see why: Flo posts lots of fun and games, but where is the discussion about risk, protecting families, the value of insurance or why Progressive is worth consideration? There is little brand vector evident in the engagement Flo creates, so Flo is just another popular character. That's great if Progressive produces sitcoms but is of dubious value if Progressive wishes to change awareness, consideration and intent around its financial products.

Here, in its complete form, is the entire Facebook success equation for marketers. Not just Facebook's EdgeRank formula, but also the inclusion of the right fans and the right messaging. What do you think? Have I missed anything? Your comments are welcome and appreciated.





Tuesday, January 24, 2012

The Role (and Death) of Marketing in the Social Media Era

Copyright Warner Bros. Entertainment
The other day I noticed that my December 2009 blog post, "2010: The Year Marketing Dies," was my blog's most popular article. Here it is, 2012, and CMOs are still employed and Marketing Departments still exist. Oops!

Should I be embarrassed? Before you answer that, I would like to make the case that Marketing is already dead, but marketers just don't know it yet. Like Wile E. Coyote after he has dashed off the edge of the cliff but before gravity has kicked in, I think the profession of Marketing is hovering and waiting for a fall.

I will cop to employing some hyperbole in both my December 2009 blog post and the one you are reading now, but less than you might think. Exaggeration aside, the discipline of marketing has some profound and painful changes coming.

Just this week, we witnessed yet another in a long string of marketing blunders. McDonald's promoted the #McDStories hashtag as a way to get people talking about their McDonald's experiences. People talked, all right--they used the hashtag to vent on everything from poor service to the chain's treatment of animals. Marketing observers can add this faux pas to a long list of recent marketing missteps:

It is important to note that I am not citing cases of mistakes or service blunders that became social media disasters (a la PayPal/Regretsy, Chrysler's F-bomb or GoDaddy's Elephant-Killing CEO). Nor are these examples of consumers taking to social media to rail against corporate policies (such as Greenpeace/Mattel or Bank of America's debit fee). Rather, all of these blunders are something entirely different--companies deploying marketing strategies and tactics that consumers reject, resulting in brand damage.

Prior to the social era, it was damn near impossible to have a marketing campaign head south. About the worst that could happen was nothing--a brand might waste its marketing budget on a campaign that fell flat and failed to move consumers. Nowadays, every month brings another story of a marketing campaign that not only fails to help the brand but bites it.

It is at this point in similar blog posts about the state of marketing that the blogger usually says something like, "In the social media era brands cannot control the message, but in reality brands never could." That is a nice narrative--and it is complete horse manure. Whether it was the power of mass media, unsophisticated consumers or a society more willing to trust authority, the truth is that marketers wielded incredible power back in the day. Thanks to pervasive and often misleading marketing, consumers thought smoking was safe and pale skin was unhealthy for decades before the dangers of cigarettes and suntanning were revealed.

Just look at Kodak. They were the poster child for how marketing can create a brand. More than ten years ago, I read an article on branding that contained a line I still recall: "Kodak is memories; the other guys are just film." That was pure, marketing success--a generic product with a powerful brand that delivered decades of protected market share and higher margins.

Today, Kodak is bankrupt. Branding expert Al Ries believes Kodak's problem was not that they failed to adapt to the digital era but that "Kodak means 'film' photography; Kodak doesn't mean 'digital' photography." I believe Ries is wrong--if brands were that inflexible, then Apple would be a defunct desktop computer manufacturer instead of the company that just reported a record quarterly profit of $13 billion derived mostly from sales of music, music players and phones.

The comparison between Kodak and Apple is instructive. Almost every single person who reads these words owns an Apple product, I'd venture, but what about Kodak cameras? I am a photo buff who bought thousands of roles of Kodak film in my lifetime, but I'm on my fourth digital camera and have never once been tempted to purchase a Kodak camera. They were never as small, fast, affordable or feature rich as comparable Nikon, Canon and Fujifilm models. In fact, look at ZDNet's annual holiday buying guides for compact digital cameras in 2008, 2009, 2010 and 2011: out of the thirty cameras listed, just one is from Kodak.

The problem that Kodak faced--that all brands face today--is that marketing in the social era increasingly works only for brands that first furnish a positive experience. In the social era, marketers can amplify brands that create positive experiences with products and services, but great marketing cannot save mediocre products and services.

If the company is unable or unwilling to differentiate the product or service experience, what is left for marketers to do? For brands with little positive sentiment to amplify and an army of empowered consumers ready to pounce at disappointing products and clueless marketing, the best marketers can hope for is to build buzz not about the product or service but about the marketing itself. "Don't like our burgers? Then here's a free social game that will get you buzzing about something other than our burgers." Marketers for undifferentiated products and services can create retweets, likes, comments, engagement and shares--everything except actual improvement in consumer consideration, intent or purchase behavior.

Certainly, there are some great recent examples of marketing that works. I've been impressed with the work being done by P&G, RadioShack, USAA (my employer) and others, but their success begins with the right product and service. P&G's Let Her Jump campaign would not have soared if women didn't trust Secret antiperspirant; RadioShack's #UNeedANewPhone hashtag campaign would have backfired if the retailer didn't carry the phones consumers wanted; and my employer's evocative TV ads wouldn't create trust if our service failed to earn trust in the first place. In recent weeks, USAA has been named the top firm in Forrester's Customer Experience Index, ranked by JD Power among the top auto insurance companies in customer satisfaction, and named a People's Choice insurance company in a study by Insure.com. At USAA, marketing is the icing on a cake baked with great products and services.

Marketing is creaking like an aged man leaning on a cane. The real power to create or destroy brands now rests with product managers and service leaders. If marketers are unable to influence the strategies, investment and staffing that impact customers' product and service experience, they are (much like Wile E. Coyote) running in place in thin air, hoping to gain traction.

I've argued my case. Now I'll repeat the question at the top of this blog post: Should I be embarrassed by my December 2009 blog post, "2010: The Year Marketing Dies"? Feel free to shame me in the comments of this blog post.


Postscript

There is a little story behind my post, "2010: The Year Marketing Dies," that you may find interesting. Shortly after accepting my offer from Forrester's Interactive Marketing team, I received a call from my new boss about a change in their blogging policy. The research firm wanted analysts' content and wisdom in one place rather than spread across hundreds of personal blogs, and so they asked me to give up my personal blog and instead write for Forrester's Interactive Marketing blog.

The strategy made sense, but I was concerned Forrester might not appreciate some of my wilder material. My new boss assured me that Forrester had no interest in censuring bloggers, so to test the waters, I decided to write a blatant provocation: as my first blog post as Forrester's new marketing analyst, I announced marketing would die in the coming year.

I shared my proposed blog post, confident a speedy rejection was forthcoming; instead, the blog post was approved without edit. It was a terrific sign as I started my new job that Forrester would be a great fit. And it was!

That blog post may have been intended as a deliberate affront, and I admit I was exaggerating the point, but I'll still stand by that article. Marketing professionals need to help firms build their brands first with products and services and second with advertising, influencer programs and imaginative social media marketing campaigns.
   

Sunday, January 8, 2012

Social Media Marketing is Broken

"I am going to Germany for seven months," announced my friend on Facebook, and her confused, concerned and excited friends erupted with a dozen urgent questions. An hour later came the explanation: "It was a cancer awareness meme. Sorry to have put bad info out there." Well, I feel so much more aware about cancer now, don't you?

This is just the latest example of how social media marketing has become (or always was) broken--a chase for memes for memes' sake. Social media marketing is an insular and largely meaningless game where the perceived winner is not the brand that gains awareness, consideration or purchase intent but the one with the most retweets and likes.

The problem rests not with social media but with marketers. I blame marketers for focusing on quick fixes and easy metrics rather than appreciating that--as always--brands gain customers' trust, usage and loyalty through hard work and not button clicks.

The problem isn't only in social media, of course. Too many marketers have been lazy, focusing more on saying different things about the brand in paid media rather than helping the brand to be different in meaningful ways. These marketers continue to invest in lookalike ads, hoping the right headline or creative imagery will catapult the brand forward, ignoring the preponderance of evidence that validates people are drawn to brands for deeper reasons.

For example, the 30 companies featured in the book "Firms of Endearment," selected because they are driven by purpose rather than quarterly earnings, grew their stock by 21.06% annually compared to 3.3% for the S&P. These "firms of endearment" advertise, but not like everyone else. Take Patagonia--while other retailers were using Cyber Monday ads and emails to pump discounts, Patagonia used the same channels to tell its customers "Don't Buy This Jacket." Patagonia won not by telling customers "Pick me! Pick me! I've got the best discounts!" but by encouraging customers to "buy less and to reflect before you spend a dime on this jacket or anything else."

IKEA, another "firm of endearment," is again demonstrating why it belongs on the list. IKEA could've had a sweepstakes for a Fado lamp or given away a virtual Klobo loveseat for Farmville farmers; instead, the company listened to the people who launched their own fan page entitled, "I wanna have a sleepover in IKEA." VoilĂ , a perfect combination of PR, social media and fan-building loyalty program with a 100-person sleepover in an IKEA store.

In social media, marketers suffer from the classic problem of failing to understand cause and effect: "Starbucks is a social media success with 26 million fans on Facebook, so all I need to do is gain fans by giving things away in Cityville and I'll be a success, too!" I am not suggesting Starbucks hasn't done some savvy marketing in social media (more on this later), but Starbucks does not succeed because they have Facebook fans, they have Facebook fans because they succeed at providing a product and experience with which people connect.

Seek social media marketing case studies and you will find a typical assortment of tired marketing promotion tricks ported into the social media era--brands that gained new "fans" by giving away a freebie or offering a sweepstakes. These tactics have been around for decades, so why is it we see them featured in so many social media case studies but so few brand marketing case studies? Because experienced marketers know these tactics do not (for the most part) work.

Freebies and sweepstakes accomplish very specific things--they help launch a new product, promote a new product feature, penetrate a new market or secure display space on retailers' shelves. They may raise trial and awareness, but they do not deliver repeat usage, loyalty and advocacy, the very building blocks of social media success.

If most freebies and sweepstakes are a mismatch for social media, why do social media marketers use them so much? The argument seems to be that providing an incentive to Facebook users to try your fan page is a first step toward building Facebook relationships, but that sort of thinking ignores how Facebook works. Thanks to Facebook's Edgerank, adding a bunch of disinterested "fans" who hide or ignore your posts does not help but rather hurts your brand's chances for success on Facebook. Running a real-world sweepstakes so that 3% of the participants become customers may or may not be a smart marketing investment, but running a Facebook sweepstakes so that 3% of the participants become engaged members of your fan page is a brand-killing play every time.

Is it possible to succeed with a freebie or sweepstakes in social media? Yes, if you focus on two things--the thing you offer has to encourage people to engage with the brand in a meaningful way and the audience on which you focus must be not the largest but the right audience. For most brands, offering an in-game freebie to Cityville's 43 million users makes as much sense as offering a new chess piece that devastates opponents' pieces in an entire rank of the board. Chess players of the world will take it; they will use it to enhance their chess game; but does it make them consider or buy your insurance or peanut butter brand? No, because it fails to provide meaningful brand engagement to the right audience.

I mentioned Starbucks earlier, so let's explore how this "firm of endearment" succeeds with freebies, ads and sweepstakes. It gives away free Wi-Fi in stores and offers free content for customers--meaningful brand interactions to the right customers. Starbucks used Promoted Tweets to serve ads to people who search for "coffee" and "Starbucks" to let them know about the free drinks available for those who use reusable cups--meaningful brand interactions to the right customers. And Starbucks has given away samples of a new coffee available in the aisles of grocery stores, not just to anyone but only to Twitterers who influence others and who tweet frequently about coffee--meaningful brand interactions to the right customers.

If I see one more headline about a brand that adds 100,000 new fans in a day because of a sweepstakes or freebie, I am going to throw my laptop out a window. I'm just tired of it. Not only is it frustrating to see so much attention lavished on poor social media marketing, it also is time consuming to constantly explain to others why there is no easy (and truly beneficial) way to add hundreds of thousands of fans to our own fan page, despite evidence to the contrary.

It is time social media marketers abandon the easy metrics and focus on the ones that matter. It's the NFL postseason and I'm a Packer fan, so I cannot resist the analogy: In the 2010 season, six quarterbacks threw for more yards than Aaron Rodgers did. Nine completed more passes than Aaron Rodgers did. Five threw for more touchdowns than Aaron Rodgers did. Seven even won more games. But Aaron Rodgers led his team to a Super Bowl victory.

Stop counting yards and start focusing on how your brand truly wins in social media. If most social media marketers shifted their attention to metrics and strategies that matter more, social media marketing would matter more.

Wednesday, December 16, 2009

2010: The Year Marketing Dies...

poor ned better off deadImage by yewenyi via Flickr
...(Subtitled) Or at Least Marketing as We Know It!

[Please note this blog article was posted simultaneously with my new Forrester blog at http://blogs.forrester.com/marketing/
2009/12/2010-the-year-marketing-dies.html
.]

It is that time of year when every blogger, reporter and analyst is publishing their 2010 Social Media and marketing predictions.  (It's a rather odd phenomenon--aren't we interested in what's happening in the next twelve months other than in December?)  Forrester's own Social Media prediction report will soon be released, but I'd like to make my own big prediction:  2010 will be the year marketing--as we know it--dies.  Let's explore the trends and what they mean to marketers.

Marketing's been under attack for some time, but in 2009 we witnessed the most profound evolution the marketing world has seen in fifty years or more.  The pace of change is not going to lessen in 2010.  Core elements that have driven marketing practices for decades--such as messaging strategy, mass media, PR, advertising, and others--will continue to change rapidly.

The latest news from the print world is unsurprising:  Average weekday circulation at 379 U.S. newspapers fell 10.6% during the six months ending in September--the steepest decline ever recorded by the Audit Bureau of Circulations.  And although a recent study found that consumer spending on subscription media increased 7% in the past year, that didn't mean subscriptions in the traditional sense--the number of households subscribing to magazines dropped two percentage points while subscriptions for home video and smartphone services were both up.

On the television front, households with DVRs tripled in just three years, more consumers are avoiding ads, and a majority feels there is "too much advertising."  One cannot help but feel sorry for networks and media companies worried about matching ad revenue to expenses, but their response is a bit hard to swallow. TiVo is showing ads to viewers as they are trying to skip other ads, and TNS Media Intelligence tells us that "marketing content represents 43 percent of a prime-time hour"--11:46 minutes per hour of in-show Brand Appearances (a 31% increase from a year ago) and 14:07 of network commercial messages.

Certainly, someone has to pay for Fringe, Glee, and The Office to be produced, but chasing down consumers and bludgeoning them with more advertising messages hardly feels like an effective strategy. (By the way, I selected those three shows for a reason: according to the latest Entertainment Weekly, almost one in five people viewing those programs is time shifting, and you can guess what that means for advertisers.)

The story on the Internet isn't much better.  Hulu is striving mightily to avoid being forced to go the way of TV and load their content with more ads.  Social Media sites like Facebook are so loaded with ads that a consumer spending ten minutes on the site might be exposed to as many as 90 easy-to-ignore ads.  To improve low attention and meager clickthrough rates, advertisers hope to enhance their targeting of consumers based on their online behavior, but the long-threatened intervention of the government may be at hand.  This year could finally be the year that the Feds change the way online advertising works; said  FTC Chairman Jon Leibowitz recently, "We're at another watershed moment in privacy, and the time is right for the commission ... to take a broader look at privacy."

Marketers have, of course, taken note of the power of Social Media, but they continue to struggle with what to do and how to measure it.  In a recent study, 64% of CMOs said they plan to increase their social media budgets next year, but "at least half of respondents expressed uncertainty about ROI."  It strikes me as quite concerning that the top metrics being utilized--mentioned by more than 80% of the CMOs--aren't deep measures of influence or attitude but shallow measures of presence, such as number of fans and page views.

Meanwhile, it's possible (although not likely) that the Social Media landscape could change yet again if Facebook stumbles in 2010. (Don't think it could happen?  Remember that 13 months ago MySpace was drawing more visitors than Facebook;  today Facebook draws 150% more than MySpace.)  Facebook is facing potentially serious challenges.  Some are predicting that young people could soon stream off the site to avoid status updates from mom and dad; by one report, just 50% of the 15-24 crowd is checking Facebook regularly, compared to 55% last year.  More people are complaining (and suing) about being caught in scams from third-party developers on Facebook.  And faced with the growing privacy concerns of its users, how did Facebook react?  By implementing changes that many feel make it not just more difficult to protect their privacy, but actually remove privacy protections from some sorts of data.

Facebook seems unlikely to go the way of Friendster (if for no other reason than a serious competitor has yet to emerge), but even if Facebook finds itself being MySpaced in 2010, Social Media is here to stay.  The influence of the masses will only continue to grow as Social Media tools improve and more and older consumers climb the Social Technographics Ladder, moving from Inactives, Spectators, and Joiners to Collectors, Critics, and Creators.

Social Media has just begun to change the way marketing and business operates. The coming year will see advertising put under the microscope by a connected, savvy, and critical consumer (just ask Motrin and Unilever).  Consumers will use Social Media to exert more influence over marketing and business decisions (see Tropicana and EA).  The best practices for brands in Social Media will continue to evolve (and woe be to brands caught violating consumer trust, as demonstrated by recent missteps by individuals at Honda and Belkin).  And some multi-million-dollar marketing budgets will be challenged and undermined by simple consumer-generated videos (see the Domino's employee video--or better yet, don't!)

As we enter 2010, consumers have new partners that will help to expand the reach of Social Media dialog even further--the big three search sites.  Bing, Yahoo and Google recently made changes to the way their search engines index the real-time web, and status updates and tweets are rapidly finding their way into top search results.  This means that consumers searching for brands and campaigns are increasingly likely to see results that include blogged and tweeted criticisms as they are links to official brand sites.

The search engine changes mean that 2010 will be the year when brands can run but they cannot hide.  Gone are the days when marketers could carefully craft messaging and then broadcast that message in a few channels to huge portions of their audiences.  Oh, you can still spend money that way if you want to but in our transparent world, no marketing budget can possibly overcome the actual experience consumers have (and share with friends, followers and Google) with the product, service, or organization.  It no longer matters what you say;  in 2010, your brand will be more defined by what you do and who you are!

Of course, if marketing burns to the ground in 2010, a new and more powerful marketing will rise from the ashes.  The role of the new marketer:
  • Won't be simply to focus on outbound messaging but to consult with sales, customer service, and human resources on how the brand must be communicated in every consumer interaction, every tweet, and every touchpoint,
  • Won't be merely to imagine creative messages but to fashion programs that are seamless with the actual product and service experience,
  • Won't be to plan bursts of communication on a yearlong calendar but to respond to and be part of the ever-changing dialog with consumers, 
  • Won't be to count friends, page visits, eyeballs, readers, or viewers but to measure changes in consumer attitude and intent,
  • Won't be merely to talk at consumers but to listen and engage one to one,
  • Won't be to build campaigns but relationships,
  • Won't be to create impressions but experiences, and
  • Won't be buy media but to earn it.
To some of you, these changes sound easy, but they represent painful transitions for marketing organizations.  In 2010 and the years that follow, everything will change:  job expectations, skills, metrics, structure, budgets, agency demands and compensation, and the role of the marketing function within the organization.  While the changes will be difficult, they will also be extraordinarily exciting.  In the end, the marketing organization will be integral partners in everything the enterprise does, living up to Peter Drucker's famous quote:
"Business has only two basic functions -- marketing and innovation."

Marketing is dead.  Long live marketing!

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Sunday, September 13, 2009

HR is the New Marketing and Employees are the New Media

For too long, Marketers have been content to focus on messaging and media while considering activities like recruiting and training to be the concern of support or operations departments. In our newly social world, in which employees create or cause interactions that can impact the perceptions of many, Marketers cannot ignore how brands are altered by employee actions and communications. In 2009, brand management isn't about what you say you are, it's about who you are, and this is what makes HR the new Marketing.

We've already seen plenty of instances where the careless and irresponsible actions of individual employees have been shared with millions of consumers, harming the organization's reputation, moving the brand off message, distracting leadership, requiring urgent PR response, and forcing organizational reconsideration of management processes. Examples include Domino's kitchen workers soiling ingredients placed onto pizzas, an ill-advised kitchen sink bath by a Burger King employee, and a Honda product manager embarrassing his organization with a lack of transparency on a brand's Facebook page.

I sometimes get asked why my blog more frequently spotlights negative examples of Social Media rather than positive best-case examples. The problem is--not just for me as a Social Media observer but also for brands--that the damaging and shocking are much more likely to go viral than the helpful and constructive. An employee placing ingredients on a pizza in a hygienic and appropriate manner just doesn't grab attention like an employee transferring a slice of cheese from his nostril to a customer's pizza.

So, I am pleased to get an opportunity to present a positive example to contrast the headline-grabbing antics of dimwit employees. As reported on AZCentral.com, Mary Moss has worked at the drive-thru window at a McDonald's for four years, and over that time her upbeat attitude and desire to connect with her customers resulted in quite a fan base. She didn't even know what Facebook was until a customer told her she had her own fan page on the Social Network. Mary's fan page had 260 friends back when the article was published on August 11th, but it now has over 800 members.

I think this positive example demonstrates several important things of note:
  • Negative goes farther and faster than positive: Mr. Unstable gets 460,000 views on his video while Mary Moss earns just 260 friends (prior to the mainstream media attention). As noted, there is an innate human fascination with the gross, stupid, and humiliating, and this combined with Social Media's speed and reach present risks that brands must take seriously and manage.

  • Authentic Social Media success starts with positive consumer experiences: Brands can pay for tweets, reach out to bloggers for Social PR, and launch and moderate their own fan pages, but authentic, groundswell success is based on the experiences brands provide to their consumers. The brands that were Word of Mouth powerhouses before today's Social Media existed--such as Harley-Davidson, Disney, Apple, Google, Starbucks, and Honda--have known this all along.

  • Every employee is a marketer: A friend recently raved about the assistance he received from an employee in a Costco wine department (and he's eager to find time to blog about it). In his one-minute story about this employee, my friend impacted my awareness and perception of Costco more than all of the organization's marketing efforts. As Nielsen reported back in July, consumers place far greater trust in the opinions of people they know, and even have more trust in the opinions of strangers, than in official marketing communications. If HR is the new Marketing, than employees are the new media.

What does this mean to marketers? Focusing on advertising and PR while ignoring the ways in which employees are recruited, onboarded, trained, evaluated, and supported is like paddling a sail boat when you've yet to hoist the sails. Sure, you can get the boat moving with a lot of paddling effort, but why not create velocity by setting the conditions and exploiting natural circumstances?

How might marketers and others within organizations better influence and care for the power of human resources in Social Media?
  • Personality Testing for All New Employees: We all know that inconsistency kills brands; if brands are increasingly reliant upon employees communicating, networking, and sparking dialog in Social Media, how can a brand's personality arise from all those different voices?

    In an age when authenticity matters and people are expected to reflect their personal as well as professional selves in Social Media, it is much easier to find employees whose personalities fit the brand than to expect employees to be something they're not. Many organizations already conduct personality testing as part of their hiring process; in how many of these organizations do you suppose Marketing professionals have contributed to or vetted these tests?

  • Selection Criteria for Key Social Communication Roles: Any employee can (inadvertently) become a viral media star, but those placed on the front lines of Social Media by their employers have a particularly important role in brand perception. For this reason, the criteria used to select Social communicators deserves special consideration.

    Some organizations are selecting employees based on the fact they are already active in Social Media. Knowing Facebook doesn't seem like a particularly helpful criteria for critical and visible positions moderating discussion groups, listening and responding to criticism and praise on Social Networks, and offering customer service via Twitter. It's not that experience with Social Networks hurts, but there are more important communication and relationship-building skills to be considered. Twitter and Facebook processes can be easily taught; it is more difficult to instill listening skills, judgment, empathy, patience, time management, problem solving, and the other abilities necessary to succeed in Social Media.

  • Brand Training: Marketers spend a great deal of time crafting messages and broadcasting them to consumers, but how much time is spent ensuring employees know and can reflect the brand in their daily interactions with others?

    Brands have personalities, a voice, points of differentiation, and other attributes that create the expectations and experiences that forge the brand in the minds of consumers. These attributes cannot be reflected by employees in their Social communications unless those employees are intimately familiar with the brand platform; furthermore, brand information cannot be conveyed to employees in the same manner marketers communicate to each other and to agencies, but must be shared in practical ways that help front-line employees understand how to communicate and act.

  • Setting Expectations of Employees: Every employee, no matter how self-motivated, wants to know what is expected and how their performance will be evaluated. Setting an employee loose to Tweet for the brand should be no different than assigning him or her to a call center job--the quantitative and qualitative expectations of the position must be clear.

    Every brand and organization will have different expectations, so it's important to communicate rules and performance measures. In Social Media, this might include standards for the personal versus professional information conveyed, who to follow, topics appropriate for public dialog, criteria for alerting management of potential PR crises, and the like.

  • Monitoring and feedback: Monitoring employees' interactions with consumers has always been vital, but consider the increased urgency of doing so in a highly-networked world where a single incorrect or frustrated tweet or post can be shared with thousands of current and potential customers within minutes. Real-time monitoring may not be realistic for any but the largest of organizations, but implementing some form of periodic and ongoing monitoring is vital for performance evaluation, employee feedback, and brand management. Companies cannot afford to wait for a complaint or, worse yet, a viral crisis before recognizing the need to listen to employees as carefully as they listen to consumers.
Employees have always had an important role in managing brands, but Social Media has made this role even more vital. How else should organizations ensure they are proactively tapping their human resources and protecting their brands in our highly networked world? Your feedback and ideas would be appreciated--just click the "Comments" link below.

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Thursday, July 2, 2009

Do our Marketing Metrics Undermine Long-Term Brand Value?

Several weeks ago, I wrote a rather long diatribe about the marketing world's obsession with short-term sales metrics (Restoring Marketing and Finance Balance: How Marketing Can Save the (Corporate) World). My fear is that brands are increasingly being viewed not as sources for long-term competitive advantage and value but instead as short-term assets to be exploited for immediate quarterly profits.

Given my fear, it was exciting to read Ad Age's article "Unilever, Walmart, P&G Buck the Short-Term Trend." The piece hints at how marketing and business leaders are complicit in encouraging the markets' and C-suites' fixation on short-term results. If we want to advocate for more attention to the long-term value of brands, then we should consider whether the data and reports we furnish encourage the desired long-range thinking.

Clearly in this economy marketers cannot afford to ignore today's sales as a primary KPI, but as I wrote in my earlier blog post, "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."

Companies that deliver persistent above-market results view brands as "a long-term operational commitment or way of working, not a short-term initiative." So it should come as no surprise to marketers who instead view brand spending in the same way they do the cost of pens--something that produces usefulness only in the short term--that their brands end up being as disposable as those pens.

The Ad Age article is a great read and hints at important cultural shifts necessary to keep marketers' (and investors') focus on the long term. For example, "Walmart stopped feeding financial markets a steady diet of short-term metrics -- monthly sales figures -- in part to help it focus on the future." And Paul Polman, Unilever's new CEO, scrapped earnings guidance, which "he embraced as a longer-term strategy that will give the company financial flexibility to maintain marketing support as needed regardless of quarterly financial pressures."

There's a very smart lesson here for marketers: If your bosses are always demanding short-term results, maybe it's time to consider whether the data you're feeding them encourages this myopia. Do your reports focus significantly (or exclusively) on sales, shipments, and other current metrics, or do they also address Net Promoter Score, awareness, consideration, and other measures of long-term brand health?

In the end, long-term brand consideration can only come if it is reflected within the culture of the organization. The ways to shift from short- to long-term thinking are as diverse and varied as are companies, so the key is to find the right appeal for your own unique enterprise.

Stephen Quinn, Walmart U.S. chief marketing officer, saw an organization with little care for brands but still found a way to encourage long-term brand consideration: "Brand thinking was not really part of this culture, but it's a great fit with a culture that wants to be around for generations to come."

If we want our brands to be around for generations to come, then we have to focus on measuring the results that deliver on that lofty goal. Studying last month's sales to today's consumers furnishes little insight into the likelihood the brand will be around and delivering value to those consumers' children.

Monday, June 1, 2009

Restoring Marketing and Finance Balance: How Marketing Can Save the (Corporate) World

In my last blog post, "Welch, Drucker, CFOs, CMOs, and the Yin and Yang of Corporate Culture," I suggested that corporate culture was not in harmony--too much focus on quick returns, not enough on building brands; too much demand for the quantitative, not enough for the qualitative; and most importantly, too much finance and not enough marketing.

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 Quantity

Some 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 Enterprise

It'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 Experimental

We 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-Term

Finally, 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."