How Brands Grow – Blowing Up Marketing Shibboleths

January 3, 2014

How Brands Grow by Dr. Byron Sharp

If you’ve never read it, you should. Dr. Sharp, from the Ehrenberg Institute of Marketing Science, takes aim at many well established marketing beliefs and systematically demonstrates with data that they are often much overblown hype. If you’re a real Marketer, you owe it to yourself to read this book.

I particularly like his concepts of “mental and physical availability” as the most important drivers of brand growth. Advertising’s role is to create greater mental availability, and this is why real world “breakthrough” and memorability are such crucial gatekeeper metrics to advertising success.

I wrote a blog post book review on How Brands Grow some months back, but I recommend you read the book.

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Brand InEquity – Making Brand Equity Work

August 3, 2010

I recently came across an interesting Q&A with Professor Byron Sharp from the Ehrenberg-Bass Institute for Marketing Science. Byron was commenting on the validity, or lack thereof, of various brand equity measurement approaches: 

Professor Byron Sharp Talks Brand Equity

Interviewer:
But you don’t like these brand tracking services ? 

Byron:
There is an industry that provides special scores on brands, based on surveying customers.  These services mostly claim to be measures of things like brand loyalty or brand equity.  They usually have exotic names like commitment model, brand esteem, brand voltage, brand asset evaluator….Essentially they claim to be able to predict whether the brand is about to gain or lose market share. 

I think any claims made for these proprietary products should be subject to independent examination.  It’s the job of academics to do this testing. Some of the claims are so extraordinary, and so important that they deserve to be checked out.  If they turn out to be true that would be fabulous. 

Interviewer:
And do these proprietary brand health surveys, these metrics, work? 

Byron:
Well that’s just the thing.  No-one knows… 

This is pretty strong stuff. It’s an article of faith for almost all well-trained Marketers that building your brand’s equity is one of the most important things that you can do. But, the question is: is brand equity really important and if so, how are we doing at measuring it? 

How Are Marketers Measuring Brand Equity?

Brand Equity — Important or Not ?

I have to admit, it’s hard to summon any kind of rational argument that Marketers shouldn’t care about brand equity. Fundamentally, Marketing is about understanding consumer needs–articulated or not–and then delivering and communicating products and services that meet these needs better than competitors. 

If this is the core of Marketing, then it’s self-evident that brands will want to stand for the equities associated with the consumer need and how their brand addresses it better than competition. Can anyone seriously argue this point? I think not. Rather, I think Professor Sharpe’s point is not that brand equity is unimportant, but that people are just not very good at measuring it. 

Brand Measurement: Linking Equity & Consumer Need

What’s Wrong With Equity Measurement

As Professor Sharp points out, there are many different approaches to measuring brand equity or brand health. But, I have two fundamental issues with virtually all of them: 

  1. How Advertising & Media Exposure Impacts Brand Equity — On the front end, Marketers develop advertising and other communications programs to convince consumers that their brand is better than competitors. Hence, they need to understand whether and how these programs are working. Only by understanding this can they optimize advertising and media plans to improve equity impact. Currently, equity surveys generally tell us whether equity scores went up, down or were flat. But, as for what caused the changes, who knows? There’s no easy way today to see the cause and effect relationship between advertising and media exposure and changes in brand equity.
  2. How Brand Equity Impacts Business Results — On the back end, wouldn’t it be great to know that there’s  actually a relationship between brand equity and business results? It’s just assumed by most CMO’s that higher equity scores are better. I too assume they are, but then where’s the evidence? What’s needed is a more direct cause and effect quantification of how changes in brand equity actually cause changes in sales or market share. This would go a long way toward helping inform the debate that CMO’s often have with their CEO’s and CFO’s as to the value of “brand” marketing. And today, this is sorely lacking.

Brand Equity & Market Share

What’s Needed: An End-to-End System

In talking to many senior level Marketers, I hear over and over again that people are looking for an end-to-end system that links key communication and business metrics together. They want to: 

  • Link copy testing scores to real-time in-market tracking of advertising and media effectiveness
  • Connect in-market tracking results to brand equity scores
  • Have brand equity metrics that connect to revenue and share outcomes

CMO's: Chartering The Path From Brand Equity to Business Results

End-to-End Communications — Just a Dream ?

Is this kind of system possible ? Time will tell, but I think it’s within sight. The advent of single source panels which connect what people watch and what people buy at the household level offer tantalizing possibilities.

Until then, Marketers should continue to focus on building brand equity, but keep in mind that higher equity scores are not an end in and of themselves. They ultimately need to drive better business results–otherwise who really cares about brand building? 

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Using the Tidal Forces of Category Dynamics to Build Your Brand

May 24, 2010

Momentum can be a powerful thing, especially when it’s on your brand’s side. I’ve worked on numerous brands over the years, and seen firsthand the effect of both positive and negative momentum.  

Almost every Brand building article or book I’ve ever seen focuses on the fundamentals: defining your brands positioning, delivering a product or service that’s truly differentiated, communicating effectively with consumers, etc.  

Category Marketing Insights Build Brands

However, virtually none of them address the effects of your category’s dynamics on momentum. These dynamics are like the tide and can either make your brand’s growth easy or challenging depending on their direction. Momentum comes not just from your brand, but also your category.  

Category Dynamics

1.  Category Growth Rate – This is the most obvious metric that people focus on. Is the category growing, flat or declining ? This factor alone has a huge impact on brand growth. The E-Reader category is growing fast, so most E-Reader products benefit. On the other hand, the Travelers Cheque category is declining, making it virtually impossible for American Express or any other brand to grow volume.  

e-Reader Category Grows: iPad & Kindle

2.  Category Penetration – Category penetration is the percentage of consumers who use the category. The absolute level of penetration, along with the penetration trend over time, provide a snapshot into the potential for growth or decline. A low, but growing penetration rate indicates lots of growth upside–a likely situation facing the e-Reader category. A high, but stable penetration level — like paper towels or laundry detergent — suggests little growth opportunity.  

Laundry Detergent Category: High Consumer Penetration

3.  Category Heavy User Momentum — Not all consumers are the same within a category. Understanding the status of “trend setter” and “heavy user” groups is particularly important for insight into category health. If the percentage of heavy users in the category is increasing, this signals a healthy category and suggests consumers are finding new and more useful ways of using category products. If heavy user category penetration is declining, it suggests consumers are finding preferred alternatives to your category and reducing share of requirements.  

Soap Category Characterized By Heavy Users

4.  Category User Concerns — What are category consumers concerned about? Are there non-brand specific concerns about the category that suggest future changes in category consumption? Category specific research can identify and isolate consumer concerns that are contributing to the exodus of households or heavy users. Examples would be food categories where consumers have growing health concerns, etc.  

User Concerns Such As Healthy Eating Impacts Category Growth

5.  Category Leakage — If the category is declining, and consumers are leaving the category, where are they going ? Every category is like a glass with a hole in the bottom; consumers are being “poured” into the category (usually as consumers age into the category), but consumers are also flowing out of the bottom thru the hole. The relative rate of pouring and leakage is a large factor in whether the category water line (e.g. volume) is rising or falling.  

Understanding which categories, if any, are benefiting most from category “leakage” is an excellent diagnostic which can sometime provide insight into new product opportunities. Conversely, if your category is growing, where are consumers coming from?  

Category Dynamics — An Overlay to Brand Building

Most brands spend all their time understanding their brand position and not nearly enough understanding category dynamics. Your category is like the tide; and ideally your brand is swimming with it, not against it. Understanding category growth, penetration, heavy users, category concerns and leakage provides an excellent diagnostic framework for understanding category health and your brands challenges and opportunities.  

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Put Social Context Where It Matters Most – Next to Your Advertising

May 10, 2010

I was in Bangalore, India last week, and it seemed that cell phones were everywhere.  Increased cell phone penetration — now estimated at over 500 million — and the ability to access the web cheaply and from anywhere, is driving rapid change.  In fact, a headline in The Economic Times read:  

“TWEET EQUITY:   Consumers are exchanging notes online, even posting complaints on the CEO’s Twitter page, leaving companies with no choice but to rethink strategies in a world where consumer behaviour is being driven by online exposure.” 

Buzz Builds the Social Media Ecosystem

The social media phenomenon is global, there’s no doubt about it. “Earned” media (e.g. user generated reviews, blogs, organic search, Facebook fans, Twitter followers, etc.) continues to increase in importance, no matter where brands reside.  And as I’ve written about before, traditional “Paid” media (e.g. traditional TV, Print, paid search, etc.) is still viable.

So the bigger challenge for Marketers today is how to integrate the two into one larger Marketing communications interlocked plan. To do so, Marketers need a much better understanding of how they influence each other.

Questions About Earned Media

I talk to leading CMO’s, Media Heads, and Heads of Research and Insights at major CPG companies on a frequent basis. Virtually all of them believe that earned media is growing in importance, and probably impacts other paid elements of their Marketing mix, but few have the research to really know for sure.  

Questions I routinely hear include:  

• What’s the real value of a Facebook fan?  

• Do positive blog posts make my advertising more effective?  

• Does advertising drive more positive buzz?  

These are great questions, but unfortunately, they’re mostly just that–questions without answers. This is changing, however, as new research sheds light on how social media affects traditional paid advertising.  

Facebook Fans: Build Value through Social Media

Measuring the Impact on Paid Advertising

One recent example is the initiative by Nielsen and Facebook to study the impact of social context on ads placed on Facebook (Disclosure: I work at Nielsen).  

Nielsen and Facebook surveyed over 800,000 users, about 125 Facebook ad campaigns and 70 brand advertisers. Users were grouped into a control group (no ad exposure), a standard ad group (exposed to the ad only), and an Ad + Social Context group (exposed to the ad and the fact that their friends were fans of the brand–see below).  

The Value of Facebook Ad Impressions (image from Nielsen Wire)

Key Learnings – Where’s the Biggest Impact ?

The basic Ads on Facebook drove higher recall, awareness and purchase intent than the control group not exposed to ads. And, as you would expect, the ads with social context around the ads drove better results than the ad only group.

 

   

No Ad Control  

   

Ad on Facebook  

 Ad on Facebook with Social Context

 Index Context Ad vs. No Context Ad  

Ad Recall

100  

110  

116  

1.6x 

Awareness

100  

104  

108  

2.0x 

Purch. Intent

100  

102  

108  

4.0x 

What’s more interesting to me is this:  the results from having ads + social context improve as you move down the Marketing funnel from ad recall to purchase intent. That is, the ads with social context achieved 4x the purchase intent of the ads with no social context, while they recalled only 1.6x better. 

It seems that positive earned media, in this case knowing that “your friends are fans of the advertised brand,” makes more people notice your advertising, but has the greatest impact on the most important metric prior to purchase: Purchase Intent. It’s the power of an indirect recommendation from people you know. 

Putting the Learning Into Action

So, now we know that social context makes advertising more effective. The next obvious question is how brands can get more of it. And then CMO’s will have a new challenge: getting positive earned media where it matters most–next to their brands advertising.  

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Linear TV vs. On-Line Video Advertising — Which is More Effective?

April 5, 2010

Did You Know That:

  • On-line video ad spending grew +41% in 2009 — even during a down advertising year?
  • 72% of all internet users in the U.S. viewed on-line video last year?
  • More U.S. consumers watch video on the web than watch recorded TV on DVR’s?

All of this adds up to something very interesting: On-Line Video advertising is growing like a weed. Which raises another question: how does On-Line Video advertising work versus Linear TV advertising? 

On-Line Video Ads -- How Do They Compare to Linear TV Ads ?

My colleague David Kaplan of Nielsen IAG (disclosure: I work for Nielsen) partnered with Beth Uyenco, Global Research Director from Microsoft, to compare the effectiveness of Linear TV advertising and On-Line Video advertising in a recent presentation to the Advertising Research Foundation (ARF). 

Research Approach — What Was Measured

Kaplan and Uyenco used Nielsen IAG’s U.S. on-line panel to measure TV and web video advertising data from November 2007 to May 2009, across 238 brands, 412 products, and 951 advertising executions.  For each ad, they measured the same effectiveness metrics: general recall, brand recall, message recall and likeability. Key measurement metrics were identical across the two mediums. 

On-Line Video Advertising -- Why Is It More Effective ?

Key Learnings — Linear TV vs. On-Line Video

1.  On-Line Video Outperformed Linear TV — Remember that this was an “apples-to-apples” comparison which compared the exact same creative execution across the two mediums. On-Line Video scored higher than Linear TV ads, on average, for: 

  • General Recall:        65% vs. 46%
  • Brand Recall:           50% vs. 28%
  • Message Recall:      39% vs. 21%
  • Likeability:               26% vs. 14%

2.  The On-Line Video Advantage was Largest Among 13-24 year olds — Among younger consumers, On-Line Video outperformed Linear TV advertising by greater than 2 to 1. On-Line Video’s advantage cut across all age groups, but was smallest among  50+ year olds. 

3.  Re-purposed TV Ads Outperformed Web Original and Flash Animation Ads — This was one of the most interesting learnings of the study. Even when controlling for prior TV ad exposure, a re-purposed TV ad shown on web video performed better than ads created specifically for the web. What does this say about Marketers understanding of digital creative ? 

4.  Linear TV + Web Video Ads are More Effective Than Linear TV Alone — Consumers exposed to ads in both mediums had higher general recall, brand recall, message recall and likeability than consumers exposed to TV alone. Once again, the data clearly shows the advantage of a cross-platform, integrated marketing approach. 

Why Is On-Line Video More Effective ?

There are a number of reasons which could explain On-Line Video ad superiority: 

  • Higher Program Engagement — As I’ve discussed in a previous blog post, Why Your Brand Should Understand TV Program Engagement, research shows that the more engaged consumers are in a program, the more likely they are to remember the ads in the program. Nielsen IAG research shows that on-line video program engagement is +13% higher than the broadcast TV primetime norm. So, this higher engagement naturally drives higher ad recall.
  • Inability to Skip Advertising — If you’ve watched any On-Line Video, you know that you can’t easily skip the ads. I think the impact of DVR ad skipping on ads is over-rated, but the lack of DVR like ad skipping has to benefit On-Line Video ads.
  • Reduced Ad Clutter — On-Line Video has about 1/2 the ads per hour than regular network TV. Various research studies over the years have shown that there is a small, but significant, impact of clutter on advertising effectiveness.
  • Presence of Companion Ads — On-Line Video ads are more likely to have companion ads in the same program. The presence of companion ads increases ad effectiveness versus a single exposure alone. However, even when they controlled for a single ad exposure, On-Line Video still significantly outperformed Linear TV.

Now, before you think about running out and building your next campaign around On-Line Video, consider this: the average consumer spends only2% of the time viewing web video as they do TV. The practical implication of this is that most brands can’t deliver a high reach media plan with web video alone. 

But the facts remain: On-Line Video ads are more effective than Linear TV ads, especially among 13-24 year olds. As well, On-Line Video ads work synergistically with TV, and perhaps best of all, TV ads can be re-purposed on-line and actually score better than creative that’s been created specifically for the on-line medium. 

Can It Last ?

Some of the factors contributing to On-Line Video’s advantage, such as higher program engagement scores, are unlikely to change anytime soon. But others, like reduced ad clutter, will probably erode over time. Content providers are not making much money with their content on-line, and some are experimenting with more ads per hour. So, any advantage due to less clutter is likely to be short-lived. 

Nonetheless, with it’s higher performance versus Linear TV and spectacular growth rates, I think it’s only a matter of time On-Line Video ads become a signficant part of every smart CMO’s marketing mix. 

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The 2010 Marketing Landscape – Social Media & Business Predictions for Marketers

March 1, 2010

Marketing is in a state of change perhaps unmatched since the invention of TV advertising and brand management. As marketers consider how to better utilize the social web to build their brand in this rapidly changing environment, one good read is “17 Visionaries Predict Social Business Impact on the Enterprise.” At the start of 2010, Christopher Rollyson asked his colleagues, including me, from the LinkedIn Group CSRA Innovation Group to contribute their thoughts to this “crystal ball” gazing initiative.   

2010 Web 2.0 Predictions

What were some of the predictions from the group on the impact of web 2.0 on the future of Marketing?   

Marketing — More Real Time and More ROI

  • Marketing Will Become More “Real Time” —  My prediction  focused on a seismic shift in Marketing, with  marketers beginning to view  social networks as a significant marketing contact point with broad implications for how marketing is managed and measured. Dri­ven by dig­i­tal and Web 2.0, Mar­ket­ing will increasingly move from an annual marketing planning exercise focused on one-way communication, to a real-time, dynamically planned function focused on interacting with and responding to consumers in real-time. Mar­ket­ing effec­tive­ness will increas­ingly be mea­sured in real-time, and adjust­ments will be made “on the fly,” based on brand equity and ROI met­rics.
  • “Earned Media” Will Become More Measurable — And More Relatable to Paid Media —  The “greater focus for most com­pa­nies will be on demand creation through use of social media & Web 2.0 tech­nolo­gies,” according to Rob Peters.  Marketers will increasingly focus on the creation of “Earned Media,” and will build their measurement capabilities to better understand factors of success. As well, Marketers will increasingly think of media in a more holistic “Blended Media” framework, e.g. the mix of traditional paid TV, Web, etc. and earned media such as Twitter, blogs, organic search and such. This is important since TV viewership continues to increase, and TV advertising seems to work about as well as ever. Understanding the relationship and interaction of paid and earned media will continue to evolve and become more sophisticated in 2010.

Social Networks Will Become Increasingly…

  • More Able to Drive Relationship Marketing — Christopher Rollyson affirmed the increasingly important role of global social networks in “discovering, building and maintaining relationships.” Network theory shows that the more people who are in a network, the more powerful it becomes for all members. As social networks continue to grow and combine in new forms, this network effect will only increase the potential impact of social networks. And continued social media technical innovation will accelerate brands ability to build new and more interactive relationships with their customers.
  • More Cost Effective — On the topic of the growth of social networks, Suzy Tonini points out that Web 2.0’s “reach and cost-effectiveness have been a huge plus” in the midst of the recession. While not free, social media will continue to offer the potential to drive improved results at lower cost. The key will be for brands to understand what aspects of earned and paid media drive word-of-mouth, viral marketing and create a long tail of positive brand impressions on the web that continue to build the brand long after the initial effort is finished.
  • More Mobile with Greater Ability to Share Trust Based Information — Recommendations from people you know is consistently rated by consumers as a top marketing contact point. The continued adoption of Facebook Connect will drive this to a new level as consumers can increasingly log in to their favorite sites with their Facebook ID, and then access their social networks opinions and recommendations as they traverse the web. 
  • More Location Aware — Alvin Chin poses that “location-aware” geo-social networks will allow the recording of “social interactions in real life.” This will allow Marketers to increasingly “map” consumer engagement by geographic location, serve up relevant content, and interact in novel and interesting ways.

Geo-Social Networks Take Twitter and Facebook to the Next Level

Will the Predictions Become Realities in 2010?

Not every prediction comes true. Social media pundits predicted the death of TV and there’s just no evidence yet that it’s dying. That said, there’s no question that web 2.0 and social media will only expand in 2010.

Any marketer who questions the likelihood that these predictions about information sharing, the expansion of social networks, and brand building should consider the advent of Google Buzz. With the ability to share status updates to selected groups, interact with others via location-based software, and find answers via mobile search engines, Google Buzz takes the offerings of social media players like Facebook, Twitter, and Foursquare to the next level. And that’s one digital phenomena that started out as a prediction.   

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Social Media Marketing: Do The Same Marketing Rules Apply ?

February 15, 2010

This is the 5th in a series of periodic guest posts. Catherine Davis is a marketing executive with extensive experience at Diaego, Harris Direct Online, Morgan Stanley, Discover Card, and Leo Burnett. 

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Do traditional marketing rules apply to Social Media ? Just before the holidays, I attended the CMO Club Summit in San Francisco, where the topic of discussion quickly turned to social media. Industry experts from Guy Kawasaki to Hewlett Packard’s Michael Mendenhall weighed in on whether marketers should incorporate social media as part of their overall strategy.  

Our conclusion? While social media marketing is driven by unique characteristics, the marketing evaluation process follows that of traditional media planning.  

 

When embarking on a social media marketing plan, marketers must consider the following points:   

1.  Social Media Marketing is Particularly Well-Suited to Building Brand Affinity

Estee Lauder created a powerful and actionable social media marketing campaign, where they encouraged women to try new products and have a makeover done at department store locations. Sounds ordinary? Well, post-makeover these women were photographed — and the photo was uploaded to the social networking site of their choice.  

Estee Lauder: Social Media Marketing to Women

There are fewer examples of social media driving sales.  Dell is probably the best known example.  Reuters reported that Dell attributes more than $3 million in sales to Twitter, where the company has  600,000 followers.  Considering these figures as a sole output of viral marketing, it is clear that  Dell will continue to make headway with its  integrated social media program.  

2.  Understanding  Your Target and Whether They Actively Participate in Online Social Networks are Equally Important

One of the best examples of understanding the target consumer comes from  Sears.com. The online retailer created a website for teenage girls called “Prom Premiere.” On the site, girls are encouraged to use Facebook applications and email to share photos of prom dresses with family and friends. This initiative demonstrates a concrete understanding of the target audience, as well as the purchase decision process for prom dresses.  

Sears: Prom Dress Sharing via Facebook

  

3.  Social Media Campaigns Require Scalability and Measurement

How do brands develop scalable initiatives? Take Nike’s  “Nike Human Race,” which leveraged Nike’s legacy of sponsoring local races and supporting running training programs.  By rallying an international community of devoted athletes, Nike converted 40% of previous non-consumers after only one year, and had 800,000 runners participate in the 2008 race.  

The “Nike Human Race” is clearly scalable and impactful in long-term brand building. The next level of scalability is understanding how the program translates into sales. Digital campaigns are more easily measurable, more timely, and therefore more usable in a yield management model. Put in place precise metrics to measure the marketing ROI on your social media initiative.  

4.  Make Sure There is a Strong Strategic Link to Your Product or Brand

Estee Lauder’s program works because their makeover inspires confidence in the picture a woman posts on LinkedIn or Match.com. Sears Prom Premiere made it interactive and fun to choose just the right dress for prom.  Each brand offered a product that was part of the solution and that made it ownable. 

5.  Nothing is Free – Budget Carefully

Marketers often think of social media as an inexpensive way to build a brand or promote a new product.  While there are a few high profile exceptions, that is generally false. Social media marketing requires the right resources, a budget to seed and then support the program, and time to build.  Like any other marketing campaign, maintaining realistic expectations and timeline will help lead to success.  

What’s the Bottom Line in Social Media Marketing ?

Social media can be an incredibly creative way to engage your customers and help define your brand.  If you haven’t done a social media campaign yet, begin monitoring any large or influential communities where your products or your competitors are frequent topics of conversation.  Identify the role your brand plays in their lives and how you can add value. 

Evaluate your in-house assets –many companies have a wealth of information that can be used to create and syndicate content on highly trafficked sites.  Start small and create a test and learn environment. You will quickly learn what works and should be scaled up.  If you are already actively involved in social media, take a step back and evaluate your program.   It needs to be assessed on it’s own merit and against the channels it is replacing.  It should be just one part of a fully integrated marketing program. 

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Catherine Davis was most recently SVP Marketing at Diageo, the world’s largest alcoholic beverage company including Johnnie Walker, Guinness, and Smirnoff.  She is a marketing executive who builds brands and creates new media and marketing models to drive business growth. Catherine is experienced in CPG, financial services, and online businesses and has demonstrated leadership across all marketing functions, including digital.  

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