How Digital and Measurement Innovation Are Changing Marketing Accountability

July 29, 2009

Digital and measurement innovation are making Marketing more accountable. And it can’t happen fast enough. Why do Chief Marketing Officers last only 28 months on average? Why, according to a recent Ernst & Young study, do less than 20% of Fortune 1000 companies have a Chief Marketing Officer? As Advertising Age noted:

A study conducted by Ernst & Young…found that 13% to 15% of Fortune 1,000 companies employ some sort of marketing position with a chief or senior-executive-level title, such as chief marketing officer or chief revenue officer…The absence of a head marketer in public filings is evidence of their potential lack of say within organizations, said Ed See, a consultant in Ernst & Young’s advisory services practice…

Why such an uncomfortable state of affairs ? In part, it’s because the return on marketing has often been insufficient, that’s why. That’s an easy thing to say. The more uncomfortable part is asking why? Are Marketers simply incompetent? Or does the rest of the world really not appreciate Marketing, as some would have you believe?

Return on Marketing Investment -- Insufficient ? (visual courtesy of peoplesuccess.com)

Return on Marketing Investment -- Insufficient ? (visual courtesy of peoplesuccess.com)

Why Return on Marketing is Insufficient

  1. Measurement – Large parts of the Marketing budget have not been measurable. Cause and effect in the marketing mix were poorly understood. Even in great Marketing driven organizations investments were often made on good faith. Why? Because the basic data and measurement capabilities simply didn’t exist or were too costly.
  2. Organizational Accountability – It pains me to say this. But, many Marketers adhere to a kind of voodoo faith in marketing. Creativity and branding are believed to be beyond data and metrics. It’s sad but true; too often Marketing organizations have not been disciplined and accountable for their spending.
  3. Marketing IQ– Many organizations don’t really understand the value of a brand. CMO’s can’t just take for granted that people understand and value brand building activities and their impact on profit. Part of their  job is evangelizing the benefits of Marketing and helping the organization understand how Marketing makes a financial difference.

But things are about to change—in a big way. Marketing is in the midst of the most transformational period since the invention of the 4P’s.

Two Tectonic Changes — Digital & Measurement Innovation

  1. Digital Convergence – As more Marketing is delivered digitally, more of your plans become measurable. And when your plans can be measured, they can be analyzed, drivers can be quantified, and success becomes more knowable. The inexorable drive to digital, across all mediums, means more transparency. And with transparency comes greater accountability for your Marketing organization.
  2. Measurement Innovation – New measurement tools are changing what can be measured and when. Marketing mix modeling, real time evaluation of advertising effectiveness, viewer engagement and the realization of single source data—the Holy Grail in marketing—are closer than ever. And the convergence to digital is turning tool theory into reality.

These changes mean that Marketing investments and their impact will be more transparent, and Marketing organizations will be held to greater accountability. And the current challenging economic environment guarantees continued and unrelenting scrutiny of marketing spending.

What You Can Do — Play a Leadership Role

  1. Set Clear Objectives and Demand Measurement – Create and use Marketing metrics. Focus on marketing efficiency and impact. A great post on this topic is Nichole Kelly’s “Return on Marketing Investment Measurement that Works.”
  2. Embrace Digital Opportunities– Explore the use of digital measurement in your plans. Stay on the cutting edge of new technologies and frameworks. Learn more about digital measurement in Jonny Longden’s “How to Build a Digital Measurement Framework.”
  3. Explore New Measurement Tools – Stay abreast of the newest measurement tools. Appoint an expert in your organization to follow trends and identify new opportunities. Learn how they might impact your business. Experiment.
  4. Evangelize Marketing– Talk to internal stakeholders. Share information and build understanding of cause and effect marketing. Convince people that Marketing should be an investment, not a cost. Help people understand that the brand is more than Marketing, as I did in a related post “Leading Your Brand Beyond Marketing.”

Marketing will always be a complex and exciting blend of analytics and creativity. What’s changed is that the advent of digital and measurement tool innovation will create a new era of transparency and accountability in your Marketing world. Marketing will become an investment—not simply a cost.

Marketing exists for one and only one reason – to drive economic value for the business. In the past, there were plenty of excuses as to why return on marketing was insufficient. Not so in the future. Shame on us if we miss this singular and epoch making opportunity.

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6 Steps for Turning Digital Chaos into Brand Equity

July 23, 2009

From my July 21 guest post on Branding Strategy Insider:

The marketing landscape is increasingly chaotic and getting more so. The old world of command and control marketing messaging is dead. And marketers are woefully unprepared to deal with this new reality. In a recent survey, over 70% of CMO’s surveyed said they feel ill-equipped to manage their brands in this new digital environment.

The explosion in new media channels, and the increasing ease with which consumers can react to, create content about, and generally discuss brands is challenging even the best marketers. How do you manage your brand in such a chaotic consumer empowered world ? How do you ensure that consumers understand your brand equity and that you drive a single minded understanding of your brand promise ?

Explosion of Media Channels

Media channels — paid and otherwise — are increasing exponentially. YouTube, Facebook, Twitter, webinars, forums, reviews, etc. are only the beginning. Everyday brings new options. Who had ever heard of Stumble Upon a year ago ? Consumers ability to access these new channels, engage with other consumers, and talk back to companies has radically changed how Marketing organizations need to behave. And it’s going to get worse before it gets better. The Social Map below by Brian Solis shows how many different options there are–and the pace of change is fast.

The Increasingly Chaotic Digital Landscape (courtesy of Brian Solis)

The Increasingly Chaotic Digital Landscape (courtesy of Brian Solis)

6 Steps for Turning Digital Chaos into Brand Equity

Here are 6 steps you can take to ensure your brand effectively engages consumers with your brand promise in this increasingly complex and chaotic environment:

  1. Be Different, Special and Better — Let’s start with a basic truth. Your brand equity is what consumers think it is–not what you think it is. Unfortunately, too many brands have brand equities that are identical to competitors. So, the starting point is to have a brand promise, and delivery of it, that is truly differentiated–a basic truth too often ignored in today’s frenzied world of media and digital innovation.
  2. Know Your Target’s Media Habits — Consumers consume media content differently. Know your targets media habits–traditional and new, and don’t be seduced by the latest media innovation if your target isn’t participating. Map their usage. Then, listen to the communities that are conversing about your brand, understand their priorities and beliefs, and identify respected opinion leaders.
  3. Measure Marketing Contact Point Impact — Understand not just what your target is doing, but the impact of different contact points.  Quantifying the relative impact of contact points provides a data-based framework for deciding where to focus your limited resources. Word of mouth has always been important, and digital is making it even more so. Thus, it’s critical to identify your categories “amplifiers” who drive it.
  4. Equip Your Organization to Deliver the Brand Promise — Knowing your brands key contact points, you can then map organizational ownership to each of these. Many “old line” functions are being impacted by new media–e.g. PR, Customer Service, etc. Ensure that they — not just Marketing — really understand your brand promise, what it means, and how to deliver it.
  5. Organize your Team to Engage Key Media Channels / Amplifiers — Establish teams to engage with consumers across your most important digital channels. Equip them with the talent and skills to publish, respond, and engage–whatever is required to focus the discussion on your key brand equities.
  6. Create Value-Added Content — Consumers want more from brands than just a restatement of the brand promise. They want relevant and creative content that surrounds and supports it. Sometimes, they even want to create it. Do your homework to understand what kind of content your consumer wants, whether and how they can contribute, and how it can support and reinforce your brand promise.

Reactive, Proactive or Engaging ?

It’s natural to feel that some of your Marketing communications are reactive and some are proactive. But engaging your target audience over time in an intelligent dialogue that drives your brand promise is key:

  • Lead with your brand promise in new and creative ways. Engage with consumers to interpret it based on their values and needs.
  • Give consumers a voice about your brand and brand promise by enabling feedback, comments and user generated content.
  • Guide consumers back to your brand promise, even when they have a negative experience or point of view. Ask “how could we do better?”
  • Use value-added content that surrounds and supports your brand promise to make it easier to engage consumers.

The key point is this: focus your limited resources. Focus on the most impactful, highest consumption media channels. Focus on building relevant, value-added content to surround and support your brand promise. And then focus your organization on engaging with your consumers across the key media channels in a conversation that continues to reinforce, develop and deepen your brand promise. Why ? So that when consumers think of your brand, they think of one thing — how you’re different, better and more special than the other guys.

What is your brand doing to turn digital chaos into brand equity ?

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Will Pruning Your Business Build Your Brand ?

July 20, 2009

Nothing is more sacrosanct in Marketing than never giving up a customer. But is keeping all of your customers always the best way to build your brand? Here’s a possibly controversial view:  in the future it will become even more important to gracefully remove dissatisfied customers from your franchise–and this will be key to maintaining a healthy and growing brand.

Build Your Brand by Pruning Low Value Customers (visual courtesy of AdWeek)

Build Your Brand by Pruning Low Value Customers (visual courtesy of AdWeek)

This is because “recommendations from known people” is the most powerful form of advertising, and your detractors are likely hurting your brand more than you think. And as my recent blog post “How the Future Social Web will Transform Marketing” pointed out, word of mouth from friends will become vastly more important in the future.

Are all Customers Equal in Value ?

Not all customers are equally satisfied. Whether you’re using standard satisfaction metrics or Net Promoter Score, a customer satisfaction metric popularized by Fred Reichold in his book ‘The Ultimate Question,” it’s important to not just look at overall satisfaction, but to understand differences in customer satisfaction across products, channels, customer groups, acquisition channels, etc. to identify potential problem areas.

Net Promoter Scores -- Identifying High and Low Value Customers

Net Promoter Scores -- Identifying High and Low Value Customers

Customers are also not equal in economic value. Some are more valuable and some are less. Measuring the profitability or life-time value (LTV) of a customer is a complex, but important marketing metric.

Customer Lifetime Value -- Some Customers Are Unprofitable (courtesy of Pear Analytics)

Customer Lifetime Value -- Some Customers Are Unprofitable (courtesy of Pear Analytics)

Not surprisingly, customer satisfaction and lifetime value are related. More satisfied customers are generally more loyal, more willing to pay a higher price, less likely to switch brands based on promotions and price deals, and are more likely to generate positive word of mouth that positively benefits your brand. Conversely, less satisfied customers are likely to generate negative word of mouth. This is critically important because “recommendations from people known” is the single most trusted form of advertising based on a recent Nielsen study.

Building Trust -- Recommendations From Friends Count Most

Building Trust -- Recommendations From Friends Count Most

Measuring your various customer groups on satisfaction and customer profitability is the starting point for understanding whether pruning customers will build your brand. Slice your data to identify groups of customers with low satisfaction and/or profitability, understand why, and then determine whether the problem is economically solvable. If not, you have to ask whether it makes sense to prune the customers.

“De-Recommending” Your Brand

Because if you don’t, dissatisfied customers will be “de-recommending” your brand and eroding your hard earned brand equity. Research has shown that only about 5% of customers will complain, but of the balance 95% that don’t, they’ll not only remain dissatisfied but also tell an average of 9-10 people each about their poor experience. They are, in Net Promoter terms, brand detractors that hurt your brand.

 Examples Where Pruning Could Make Sense

  • Channel Experience — Customer satisfaction by channel — web, phone, retail, etc. is often significantly different. Should you shut down a channel ?
  • Product Variant — Product satisfaction frequently differs by product variant, with some variants having much lower satisfaction. Should you eliminate a product or product line ?
  • Acquisition Channel— Some acquisition vehicles deliver lower satisfaction and lower profit customers than others. Should you de-emphasize an acquisition channel or tactic ?

Gracefully cutting business lines and exiting dissatisfied and vocal customers from your franchise in these and other similar situations is important to building your brand. Why? Because exiting dissatisfied, low value customers will reduce negative word of mouth, improve your average satisfaction, and improve profitability. And not doing so will become ever more risky as the future social web enables customers to bring the opinions of their friends with them as they traverse the web and interact with products and services like yours.

Are you bold enough to build your brand by pruning your business ?


Build Your Brand with Content Marketing

July 13, 2009

Building your brand with content Marketing is becoming increasingly important. In the good old days before the web and social media, it was enough to simply communicate your brand’s value proposition in a highly memorable and convincing manner and watch the sales roll in. No more. Relevant content can be an approach to engage your customers and smartly differentiate your brand. In an earlier post “Publishing — The Future of Marketing?,” I described why the importance of content marketing is increasing. And Joe Pulizzi of Junta 42, in his excellent post “The Decline of Advertising and Rise of Content Spending,” explains more about the rising tide of content in the future.

Subway -- Smartly Using Content Marketing

Subway -- Smartly Using Content Marketing

Subway has gotten a lot of attention recently for their “fresh and healthy” positioning and impactful $5 foot long subs campaign. But equally deserving in my opinion is how they’re using Content Marketing in their Subway Kids program. This program has taken the core Subway value proposition — “fresh and healthy” — and extended it to kids. Subway Kids adheres to a couple of basic tenets that are important to good Content Marketing.

First, they’re clear about their target(s). The quick serve category serves two masters — parents and kids. And Subway Kids markets effectively to both. Check out the recent Subway Kids TV commercial showing creative kids outdoor games and see if you, as a parent, can resist feeling good about the Subway brand and what they’re trying to do for kids.

Second, Subway Kids stays true to the “fresh and healthy” core value proposition of the parent brand. Many brands line extend into secondary benefits or segments and conveniently forget the core focus of the brand or fail to reinforce it sufficiently. Not so with Subway Kids.

Subway Kids -- Using Marketing Content to Extend & Deepen the Brand

Subway Kids -- Using Marketing Content to Extend & Deepen the Brand

4 Smart Ways Subway Kids is Using Content Marketing

Here’s four smart ways Subway Kids is using content to engage their customers and deepen the relationship — all of which support “fresh and healthy.”

  1. Suggest Activities — Subway Kids “Get Your Family In Motion” adds relevant and meaningful content about activities that families can do together — which are healthy and active. All of the activities  surround and deepen the “fresh and healthy” positioning.
  2. Explore Choices — The “Meet the Subway Kids” program provides the opportunity for kids to choose a Subway Kids friend on-line to hang out with. They can then follow the kid and see how they’re feeling, what decisions they make, and how this relates to their food choices–another route into the fresh and healthy value proposition.
  3. Engage Schools — Subway Kids “Random Acts of Fitness” program  extends their core benefit to schools with calendars, stickers, educational programs, etc. designed to help teachers and parents reinforce healthy and active behaviors.
  4. Educate and Inform Parents — Subway Kids offers a convenient widget which provides parents with daily nutition tips and activity suggestions .

What’s Right About Subway Kids Marketing

The “red thread” throughout the entire Subway Kids proposition is easy to see and follow — healthy and active kids. And the Kids programs all relate directly to and are mutually supportive of this theme. Now, remember the Subway core value proposition — fresh and healthy ? It’s obvious how the Subway Kids “healthy and active” proposition surrounds,  enhances and deepens the core “fresh and healthy” Subway value proposition. My only complaint is that it’s a bit difficult to find Subway Kids on their website.

Is it working ? Well, I don’t have access to Subway sales vs. target, but at least one recent book, “Brand Bubble,” by Gerzema and Lebar, identifies Subway as one of the few brands that are growing both brand market value and consumer brand equity ratings. What’s not to like about a brand that delivers compelling, relevant content that’s supportive of their core brand promise and “good for you” food ?

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Should Your Brand Focus on “Energy” To Drive Growth ?

July 7, 2009

What if I told you that one of your core beliefs about brand equity is wrong? If you’re like me, you were trained to believe that as a brand manager, you should define your key brand equities, develop marketing programs to communicate these to consumers, and over time, “own” these attributes. If you believe that, you’d be right, but not totally so. It seems there’s a special kind of equity your brand needs to own these days. And one that very few brands understand, much less drive.

Brand Market Value vs. Brand Consumer Value

In recent years, brand value has climbed inexorably higher, as measured by Millward Brown’s Brand Z Most Powerful Brands and others. Using the Millward Brown data, brand value climbed from 5% to 30% of the S&P market cap over the past 30 years. Brand experts cheered; it was an implicit endorsement of the great brand building efforts across companies.

Brand Market Values Rising vs. Consumer Brand Equities Falling -- A Brand Bubble ?

Brand Market Values Rising vs. Consumer Brand Equities Falling -- A Brand Bubble ?

But, a curious thing was happening. Brand equity measures, as measured by consumers, were falling.  Traditional measures such as awareness, trust, etc., were eroding based on surveys by Y&R Brand Asset Valuator (BAV). How could this be? How could market driven brand values be going up, while consumer driven brand equity scores were going down?

Causes of Declining Brand Equity

John Gerzema and Ed Lebar of Y&R think they know the answer. The markets were wrong. Brands and branding are in a serious state of disrepair. In their excellent and well researched book, “The Brand Bubble,” they cite the following for the deteriorating health of brands. They are declining because of:

  • Excess Capacity– There’s been an explosion of choice. Consumers are drowning in more products and services than ever. There is less differentiation and greater commoditization.
  • Lack of Creativity – With more choices, consumers increasingly look for creativity and unique experiences from brands. Yet most brands today are highly similar, and deliver modest incremental improvements.
  • Declining Trust – Brands considered trustworthy have eroded from 52% in 2007 to 25% in 2006. Why? Public scandals, corporate misdeeds and institutional crises. Perhaps more important is transparency of information on the web—no brand can hide or say things not consistent with reality – authenticity counts.

You may or may not agree with these causes. What seems inarguable is this – key brand equity measures have generally declined over the past 20 years.

Growing and Successful Brands

There is a small minority of brands that are growing both market brand value and consumer brand equities. Companies as disparate as Google, Subway, Lego, Dove and Axe have shown it can be done. When Gerzema and Lebar searched the data to understand what was driving this growth, they identified a new factor – “brand energy.” They describe energy as “the consumer perception of motion and direction in a brand.” They describe brands with energy as being irresistible and differentiated because they:

  • Move with innate purpose and conviction
  • Constantly reinvent themselves
  • Engage consumers on their own terms
  • Compel devotion
  • Move culture and categories

Branding Implications – From Current to Future

What’s interesting about their learning is the following: it refocuses marketing from what the brand currently delivers—a static state–to where the brand is going. Motion and direction mean the brand is going somewhere. Consumers want to be with brands that are on a compelling journey. They want brands that:

  • Create a sense of mission. Dove is about redefining beauty.
  • Continually surprise and delight them with new products and services. The iPhone and apps.
  • Engage them in a conversation, not talk at them. Subway’s fresh, healthy tips for parents.
  • Creatively use new communication channels. Best Buy people on Twitter.

These are behaviors consumers expect from great brands—now and in the future. There’s an implicit “contract” these brands have with consumers that says: we will be dynamic and ever changing in meeting your needs. And the brand is as much about the future as it is about the present.

This change in orientation from the current to the future is a huge mindset change for most Marketing organizations. Going forward, brands will still need to stand for important functional and emotional equities – bigger, faster, better, etc. What’s different is that to be successful, brands will need to spend an equal amount of time and effort communicating and delivering what they’ll be in the future. Because the most successful brands will provide energy–direction and motion that helps take consumers forward to where they want to go—not just stay where they are.

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