Brand marketing: From media to capability 

The facades of empires always look most impressive just before they fall.

The same goes for industrial giants and even whole industries.

The Roman Empire didn’t disappear. Neither did the British. But the centre of power in the world shifted, first chaotically, confusingly and then all of a sudden when the fog of revolution cleared.

Newspapers haven’t disappeared. Record labels haven’t disappeared. But there was a storm of change, a half-decade or so of intense uncertainty in each industry as it was ravaged by digital disruption. And then… new power structures and new masters emerged.

Media companies won’t disappear either, but their place at the centre of the brand marketing system is ending.

To Google and Facebook the advertising revenues, away from the media owners, at an expanding an inexorable rate. To automation and in-house teams and consultancies go the muscle and the influence once held by the media buying agencies.

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Image: Scott Galloway/L2Insights

The CMO’s closest advisor ten years ago, maybe even five, would have worked for a media agency. Now, it could be a chief digital officer, a management consultant, a creative technologist, even an author or similar species of seer.

The new order has yet to emerge, but the days of the media agency as the centre of the brand marketing system is ending.

Little by little. Then all at once.

The levers that improve the fortunes of a brand – its awareness among target consumers, their proclivity for it at the right moment – are more complex now because consumers are changing their media habits and the way they find and buy things they want. The big lever you used to pull was called media.

Now, as things move faster and more unpredictably, brands want the tech and the know-how to be closer to home, something they can call on in the moment, without a day rate or delays. In-house.

What makes the difference in a global brand marketing organisation isn’t the ability to pull the trigger on media – it’s the capabilities to think and act at the speed of the digital consumer. Capability – from technical and data know-how to a digital mindset – more than media muscle alone, is what will set leading brands apart in the coming decade.

Marketing, then, is moving from media to capability as its focus.

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Brands on the edge of a cultural breakdown

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Let’s connect a few dots around the idea of brands.

After the Forrester Marketing Leadership Forum in London, I finally caught up with this James Surowiecki article from February’s New Yorker, Twilight of the Brands. The gist of it – consumers need brands less than the brand marketing industry thinks they do…

It’s a truism of business-book thinking that a company’s brand is its “most important asset,” more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos. “Absolute Value,” a new book by Itamar Simonson, a marketing professor at Stanford, and Emanuel Rosen, a former software executive, shows that, historically, the rise of brands was a response to an information-poor environment. When consumers had to rely on advertisements and their past experience with a company, brands served as proxies for quality; if a car was made by G.M., or a ketchup by Heinz, you assumed that it was pretty good. 

Connect this with The Economist piece on the collapse of trust between people and advertisers, as the industry continues to optimise for interruption marketing that no one really wants…

Havas Media, a big marketing agency, says trust in them has been declining for three decades. Last August it published the latest in a series of worldwide surveys, in which 134,000 consumers in 23 countries were asked what they thought of 700 brands. A majority of those taking part would not care if 73% of them just vanished. In Europe and America 92% would not be missed. Only in places like Asia and Latin America, with lots of newish consumers, is there a bit more attachment to brands, though Havas Media reports that it is declining there too.

Fracking the social web, as John Willshire calls the relentless chasing of consumer attention by any and all technological means, is part of all this.

And meanwhile brand marketing is losing the brightest and best talent to adjacent, more digital, agile and innovative industries, as agency CEO John Winsor wrote in post at The Guardian:

Every day the best and brightest young talent leaves the industry to join (or just bypass the industry all together) digital alternatives from start-ups to established digital players and other, more innovative established players in other industries (IDEO is an example). They might think of themselves in the marketing and advertising businesses but they don’t want to take the traditional path. Working their way up through the creative ranks not only seems too slow but much too political and bureaucratic.

In a couple of weeks’ time the Cannes Lions festival of advertising will kick off. The last day, Saturday, is innovation day. Maybe next year, that should come at the beginning.

Connecting some dots around social, earned and satisfaction

Working through the connections between these things…

Oliver Blanchard says:

If you treat earned media like paid media long enough, you will teach it to act like paid media.

…This is connected with the idea we explored that editors should be in charge of paid digital media (or at least have control of their own budgets) m- treating paid like earned could be a lot more useful than the other way around.

…It’s another angle on what John Willshire discusses in his series of presentations on the idea of “fracking the social web“. The race for Likes and shares and and views leaves depleted culture and relationships in its wake.

…Andy Whitlock says in this deck that creating noise (chasing attention) isn’t always the best approach. Platforms and products are ways of creating long term value, long term relationships, he says.

…This connects with why at Brilliant Noise we’ve talked more about earning advocacy than earning media, or even earning attention. The media’s not the point, the customer is… and they couldn’t give a fig for brands, most of the time.

Which also reminds me of an interesting Twitter conversation yesterday between Mat Morrison, Jon and Professor Byron about brands and satisfaction:

 

Hat tip to Anne McCrossan for pointing me to the Oliver Blanchard article.

R/GA’s disruptive trends

Most predictions and trends articles are glib headline-grabbers that cue clueless nodding, but no real grasp of what they mean (variations of “digital is over” or “Snapchat is the new Facebook”) or shallow and obvious (“wearables will be big” or “mobile is getting bigger”) – but Bob Greenberg of R/GA gets down to disruptive trends and what they will mean for the agency business in an piece for Campaign Brief Asia.

Here’s my re-mix/commentary on the five trends he mentions.

Clients will change their businesses to be less reliant on advertising. This is the crumbling of the pack ice beneath the feet of the old-model advertising. The more customer and innovation focused you are, the less important advertising becomes. The more you have in-house teams and tech for media buying, or put them under the supervision of editors, the less you need an ad agency.

Wearables (and other devices) have engagement built in… This is a much more useful train of thought than “how do I build me some wearables” (successor to the “how doI build me some apps/websites/microsites” impulses of old. What will be possible – not in the sense of Groupon tattoos that vibrate when there’s a two-for-one offer on in a nearby shop – in terms of how you engage with the customer.

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Greenberg uses the example of R/GA client Nike’s Fuelband. I don’t have one, but I do sport a Jawbone Up and I can say that I check in and engage with that brand at least a few times a day as I log calories and check on progress. Up have earned (see below) my attention by being useful again and again. It’s an excellent app.

A much more expensive, advanced and yet less connected device – my DSLR camera – might get used a lot, but I never interact with that brand other than to subject myself to ten minutes painful form-filling to try and get the cash-back I was promised at point of sale. (The sales promotion is actually damaging my perception of the brand, feeling as I do now, a little bit conned.)

Similarly awful is the Blu-Ray Disc player and indeed disc, which every time I try to access services online with (say downloading the movie I have paid for as part of a triple-play offer disc from the company). I resent each poorly designed stage of the experience and each grubby grab for my personal data that is requested for the thing I have already paid for.

Both of the latter brands – Sony and Nikon, since you ask – appear to see digital, online, as a bit of promotion on top of their product. Jawbone and Nike see the digital experience as part of their product and an opportunity to bond with their customer.

Agencies will get into the transformation business. Yep. “Transformative digital” is one of the three key elements of our strategy – the others being “customer first” and “earn advocacy”. If you put the customer first and commit to earning their advocacy in your marketing and your business, the result is transformative.

Big data = earned data. Earned data is a lovely thought – you earn the right to gather customer data, both by implicitly by earning their attention and engagement and – esepcially as people begin to control more of their personal data – explicitly by asking for their trust both in your organisation and that giving you data will give them some value in return. Brilliant Noise’s second strategic pillar is “earn advocacy”.

Sustainability is growth. At Brilliant Noise we talk about long-term value as the focus for our work with clients. Sustainability isn’t something we have talked about in this context, but at a strategic and practical level, it needs to be part of the conversation. In fact, if it absent we aren’t really talking long-term at all.

Greenberg mentions the rejection of non-sustainable brands by millennial consumers. I’m not sure this is true, however much we wish it to be the case. Sustainability needs business leadership as much as it does consumer pressure on governments and corporations.

Samsung’s massive ad spend

This year Samsung spent a lot on advertising.

US$14 billion.

To give you some perspective, Coca-Cola spent about US$2.5 billion in 2012, across all of its brands, globally.

Want some more perspective? US$14 billion is more than Iceland’s GDP and more than Google paid for Motorola, according to an article from Reuters, which goes on to suggest that Samsung is spending a lot, but not necessarily seeing a return. It quotes Oh Jung-suk, a business school professor at Seoul National University.

“Samsung’s marketing is too much focused on projecting an image they aspire to: being innovative and ahead of the pack. They are failing to efficiently bridge the gap between the aspiration and how consumers actually respond to the campaign. It’s got to be more aligned.”

Apple spends a fraction of Samsung’s budget (about US$1 billion). Horace Dediu, an Asymco analyst says the lower spend is down to product strength:

“The stronger, more differentiated the product, the less it needs to be propped up by advertising.”

We’ve heard that before, haven’t we? Designer Yves Behar said “Advertising is the price companies pay for being unoriginal.”

To borrow from football, you could say Samsung is trying to do a Man City rather than a Manchester United – short-circuiting its rise to tech brand royalty with brute force spend. Following that logic, it won’t be concerned with the odd frosty reception for product placement or sponsorship.

New ad models for indie content?

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After a comprehensive analysis of the state of display advertising (worth a read in itself), John Battelle is agitiating for a new advertising model for individual bits of content can be monetised, which…

…attaches value to an individual piece of content, such that the piece of content is monetized as it travels around the web, getting reposted, tweeted, shared on Facebook, pinned on Pinterest, and so forth. Such a model is incredibly difficult to create, but not impossible. I promised a follow up post. (more…)

Forrester on paid content

A new Forrester report says that people paying for ad-free content is undermining the efficacy of advertising still further. 

I’ve blogged about it on the Brilliant Noise blog

There are no shortage of opportunities to buy media space – the real estate, as it were is increasing – it is just that the attention you will find there is dwindling -as in, there’s less people looking at it – and shallow people avoid the ads (skipping, blocking) or shift their focus three quarters have another screen right in front of them while they are watching TV, for instance.

The conclusion? Brands need to invest in their ability to create, curate and distribute content, or “content capabilities” as Forrester puts it.  

“Gravity-defying” TV advertising in danger of a crash

Business Insider editor Henry Blodget reckons that what happened to newspapers in the last decade is about to happen to TV: an advertising collapse.

Decline was worried about by newspapers for a long time, but denial and hope prevailed until things, well, fell off a cliff:

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Against this picture of doom, you could offer a number of statistics that seem to point in the opposite direction. People still spend more time with TV than any other medium, much of it with live TV. It occupies so much of our time – on average – that it looks unassailable as our preferred medium.

And yet… we could be still approaching the edge of that cliff, if the advertising budgets are about to switch away.  (more…)

The flawed optimism of digital advertising models

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“Do you do any work on how annoying you are?” – Peter Day to an ad re-targeter…

In Business, the podcast by the BBC’s Peter Day, is something I have enjoyed for years. Every now and again he does a programme which is so exactly pertinent to things I’m working on that I listen to the whole thing with a broad grin, while a sort of Hallelujah chorus jangles about in the back of my mind while I am listening…

For Your Information was one of those. I’ll be coming back to some of the trains of thought that departed this particular station in some future blog posts, especially its focus on information overload’s effects on productivity and organisational effectiveness, which connects directly with the web superskills theme I talked about at TEDx in January.

For now, the thought I want to share is one sparked by a comment that Peter Day made to a online advertising re-targeter: “Do you do any work on how annoying you are?”

He was talking about the irritation he might feel when an ad for something he searched for days ago followed him around for days afterward.

The response wasn’t convincing. Of course you don’t want to annoy your potential customers, said the re-targeter, and they provide tools to help you not blitz people.

I wonder how many users of the system calibrate in that way?

Re-targeting is just the latest in a long line of advertising technologies and innovations – latterly mostly in digital – which promise – and often deliver – “uplift”, greater click-throughs, sales, awareness etc. than previous methods.

There are two broad responses to an ad following you around the web. The first is “Wow, that’s cool!” The second is a raised eyebrow, a suspicious sneer, a question: “Why is that happening? How do they know who I am? What elese do they know?”

Response one typically comes from, er, people in digital advertising. The second, in my experience, comes from anyone else.

The steady flow of privacy nightmare stories and Facebookphobia in the media and generally in people’s consciousness is raising a – probably healthy – scepticism about online media. The more digitally literate the average user becomes the more they question what is happening to their personal data and how it is being used.

Wishful thinking on the part of online media companies and digital agencies means that not enough work is going into thinking about this growing, fundamental user need.

Apart from the inconvenience of facing up to the possibility that people might not want to play exactly the role alloted for them in the great media/marketing ecosystem, the digital advertising industry is let down by a kind of fatal optimism. They only want to look at the good news in the data and not the bad.

The thing is, that the bad news might be as useful, even more useful than the bad.

To illustrate, take a look at “success” in a typical online display campaign. A clickthrough rate of  0.2%.

Doesn’t matter what happened to the other 99.8%, i.e. most people. They simply weren’t interessted enough to look.

When it comes to re-targeted ads, social ads, etc., the clickthrough rate improves over that of typical ads. I wonder if annoyance and negative feelings to brands using these techniques does too?

Clues about what people don’t like in ads – signals of dissatisfaction, if you like – abound, but it always the positive outcome on which paid media professionals are focused. Maybe there would be more use in looking at all the data, including the damage you may be doing your own cause?

 

 

 

Media in the age of networks: the decay/evolution of advertising models

The Association of Publishing Agencies first International Content Summit was a great event to attend, as a speaker and a delegate. As well as the many inspiring and useful speakers, it was the ambition and optimism of the industry there that was striking.

This is the contract publishing industry, the kinds of publishers that create the supermarket mag, the in-flight periodical, the car brand’s customer title. Largely due to this lack of reliance on advertisers (beyond the client) and cover-price revenue it was a different kind of publishing gathering to ones I’d seen before.

There was little of the web-denial, the over-obsession with iPad as a saviour for the industry, a way of porting old formats (and business models) into the age of the web. The sense I got was of opportunity, of openness to new ideas and possibilities.

As I said in the notes to my talk, the marketing and media sectors are wide open for new approaches, new business models Everything is up for grabs, from content formats to how advertising is sold.

On that last point, I was really impressed by the analysis of the decay of the traditional advertising model presented by William Owen of Made by Many (one of the most interesting firms in this new space). His slides are below, but I recommend taking a look at his blog post which walks through his arguments.

William was set the brief by the APA of answering the following question: “is the traditional [advertising] model dead?”.

His response was to begin with a sensible “no”. Obviously the media buying-centred model of advertising is alive and kicking multi-million pound behinds. But it is decaying, and evolving.

Walking us through possible stages of the advertising model’s evolution (or decay, depending on your point of view), William took us through mass, fragmented, earned media models and arrived at this networked model (I nearly stood and cheered at that point, but this was an English conference so resisted):

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The networked media model. This diagram is really a crude approximation of something much more complex: communities of customers becoming value producers in their own right, creating content, making recommendations, providing thousands of small services to each other. There’s an opportunity for brands to harness that power by adding services to products and creating communities of interest around social objects.

And of course there are also opportunities for still-powerful media channel brands in television and print to build direct relationships with advertisers and sponsors, using technology creatively to build applications that add co-branded services to content and facilitate direct transactions. This removes their reliance on ad networks and ups their margins.

He’s got it dead on, I think. That’s not to say I won’t be continuing to mull this presentation over for some time to come to challenge and build on the ideas, but for now I simply applaud…

William ended by quoting Russell Davies:

Experience Design will become the master discipline for businesses that want to be good at selling stuff.

That actually sounds obvious to a lot of us in this space, but it is worth repeating, rolling around the brain, and repeating again. That is experience design, not media buying, that will be at the core of the selling part of the media/marketing complex in years to come. Those experiences will be conceived in, of and through networks.