Driving Desirable Digital Behaviors with TV Advertising

December 6, 2010

Things are not always what they seem. Two TV ads score the same—in copy testing or in market—so they’re equally effective, right? Not always.

TV: Driver of Consumer Digital Experiences

TV ads don’t just deliver awareness, message recall, etc. They drive behaviors—some of which are digital–and good for your brand.

Cross Platform Ad Effectiveness

Marketers increasingly want to understand how advertising works across mediums—particularly TV and Digital. Some of the more frequent questions I hear from CMO’s are the following:

  • What’s the value of a Facebook fan?
  • What’s the role of search in the customer journey?
  • How I use the web to drive greater engagement with consumers?
  • How can I drive more word of mouth and buzz for my brand?

These are all great digital questions. And lots of people have tried to answer them with digitally focused analysis—some effectively, some not.

Building Brands & Online Buzz

Another Way to Think About TV Ad Effectiveness

Here’s a different tack:  what if we analyzed these questions, not from a digital only perspective, but from a TV advertising perspective? Or, to say it differently, what if we were to ask the question as follows:

“What role does TV advertising play in driving desirable digital behaviors?”

TV & Digital Viewing Behavior

This has been a tough question to answer. Who’s going to keep a diary of what they watch on TV and then the myriad of things they do on-line? The fact is that our understanding of TV and Digital viewing behavior has been mostly limited to knowing how many people did what.

Just as important is understanding not only what people are doing, but in what sequence. And after viewing what ads? New single source viewing data opens up new possibilities for understanding media behavior:  it’s now possible to observe (with viewers permission) both what they watch on TV and what they then do on-line.

Next Generation TV Ad Effectiveness

So, back to the opening question. Two TV ads score the same—in copy testing or in market—so they’re equally effective, right? The answer: not always. Why?

Here are 4 new ways that TV advertising can drive positive digital behaviors.

1.  Drive Consumers to Your Facebook Fan Page – Many brands have embraced Facebook and are building Fan pages as opposed to their own branded websites. They see the advantage of “social” currency and a key objective is building the number of Facebook fans.

TV advertising has a role to play here:  more effective ads can drive more consumers to your brands fan page than less effective (or no) ads. Seen in this light, TV can play an essential role in your digital plans–even when the messaging doesn’t explicitly have a call to web action.

Facebook Fan Pages & Brands

2.  Drive Consumers to Search for Your Brand – Companies across all industries have embraced search, even in CPG, and for good reason. It works. Of course, paid search costs real money. So, how to drive more organic search for your brand? Well, one way is with your TV advertising. What portion of consumers seeing your TV ad go on-line and search for your brand?

3.  Drive Consumers to Your Brand Web Site – Like Facebook Fan Pages, many brands have their own website to engage and deepen the relationship with consumers. Question: is your TV advertising driving consumers to your website? Which ads are more versus less effective in doing so?

4.  Drive Consumers to Talk About Your Brand – Research from Keller-Fay has shown that approximately 1/3 of word of mouth is about TV advertising. How effective is your TV ad at driving word of mouth? Are two TV ads which score equally well on traditional ad effectiveness metrics driving different conversation levels about your brand? If so, one is clearly more valuable than the other (assuming the conversations are positive).

Capital One Mascot Challenge: Driving Consumers to Website

Driving Desirable Digital Behaviors

All of the above represent new ways of thinking about TV ad effectiveness. Traditional measures of TV advertising performance around breakthrough and branding will continue to be important.

But increasingly, Marketers need to think about how TV advertising drives other behaviors—particularly digital ones—that benefit their brands.

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Guest Post: Rude Awakening— Only 15% of Word of Mouth Marketing Campaigns Show Positive Results

October 18, 2010

This post is part of a continuing series of guest posts and was originally posted on MENG BLEND. Christopher S. Rollyson is founder of CSRA, Inc., Architect of The Social Network Roadmap(sm) & Managing Editor at the Global Human Capital Journal.

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Word of mouth marketing is seen by many marketers as the economic engine of social business (or media) because people recommend products and services to each other: all marketers have to do is give them the right information to share and make it easy for them to recommend things, right? Wrong.

Rude Awakening— Only 15% of Word of Mouth Marketing Campaigns Show Positive Results

Or, in popular parlance, “It’s complicated.”

Here, I’ll identify some of the flawed concepts that underlie word of mouth marketing (WOMM), so you can avoid being part of its 85% casualty rate. I’ll show in general how you can tweak the idea and succeed with social business initiatives more often.

Word of Mouth Marketing Is Flawed

At Alterian’s user conference, Don Peppers shared this arresting statistic in his keynote:  only 15% of WOMM initiatives show positive ROI. Shocking—at least until you start thinking about it. Loosely speaking, WOM (sans “marketing”) happens when a trusted and relatively unbiased “friend” shares her experience with a product/service with someone close to her. “Someone like me” who isn’t tainted by sales commissions or quarterly revenue targets.

Marketing, on the other hand, is generally about creating need or driving sales. Do you see the problem?

In this context, WOM and marketing are mutually exclusive: the latter’s purpose is to serve the company by moving product; the former serves the person first. It’s a conflict of interest, and it will rarely work. Ever.

93% of Word of Mouth Is Offline

In a second data point, Keller Fay Group’s latest TalkTrack study revealed that the overwhelming majority of WOM (as defined by them) takes place offline and face to face (via e-consultancy and @stefanw), not online through social business. This is not surprising when you stop to think about what traditional WOM is, largely a conversation between family or close friends. Tight ties. However, neither of these references dives into WOM or WOMM deeply enough to understand why and how they can work or not.

WOM among Loose Ties

Digital communications significantly reduce the cost of many kinds of interaction, so WOM among loose ties will continue to grow. However, marketers should recognize that loose ties and tight ties have important differences because the motivations and level of trust are different.

Loose ties are not just inferior tight ties; people form loose ties for many reasons, but the online many-to-many environment enables people to manage their reputations and influence by leveraging the network effect. Tight tie relationships are limited in number, multidimensional and high investment.

How Marketers Can Succeed with Word of Mouth

Having led marketing for several firms, I can appreciate why marketers would love the concept of word of mouth marketing. Given that they are in conflict, it’s important to focus on WOM while avoiding WOMM. I’ll wager that the majority of the 85% of failures result from not understanding and honoring their differences. The good news is, WOM drives sales—when companies honor and nurture it. Here’s how:

  • First—and this is a leap of faith—accept that WOM serves the customer, not you. Trust that, if you don’t interfere, positive results will often result. There is no halfway here, intent and honesty are WOM’s key differentiators. Don Peppers shared Staples’ “Speak Easy” fiasco as a warning (“sponsored” tweets and bloggers are other traps). All companies say that they put the customer first, but many aren’t being honest with themselves or their customers.
  • Second, the company must put itself first to be congruent with itself as a business. It shouldn’t try to do WOM. But the company, acting in its self-interest, can support WOM. Marketers must safeguard these boundaries if they want to succeed because they form the foundation of trust among the three principal actors: company, friend and customer.
  • Third, accept that your products and services are not a great fit for most people. In a pervasive transparent network, the market will figure out what works and what doesn’t. Don’t try to “make markets” by convincing people to buy unless you have a valid value proposition for them. Focus on serving people for whom you have a superior value proposition. This is the key to thriving in a transparent environment.
  • Fourth, trust customers’ friends to engage with WOM—for their own motivations. Remember, they are there to serve their friend, not to move your product. WOM is their role, not yours. Campaigns like Staples’ fail because marketers don’t understand their role and unknowingly turn WOM into shilling. Sorry.

Remember Miracle on 34th Street? It was breakthrough to send customers to other stores when they had a better value proposition for the customer. It increased WOM because it surprised people and exceeded expectations. But it was Kris Kringle (a “friend”) who started it based on his personal integrity. Later Macy’s turned it into a tactic, but Kris never did.

Accepting WOM transparency is difficult because it requires significant culture change. Firms that don’t accept this new reality will fight and lose. The market will expose them in the end.

On the other hand, those that take this road will be more successful because they will be aligned with customers and their friends. Moreover, focusing on valid value propositions and customers will tend to lead the company to innovate more successfully.

Do you agree? Disagree? Please share your thoughts and insights in the comments…

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Christopher S. Rollyson has been a marketing and technology pioneer for over twenty years. As a consultant and marketing executive, he has had a leading role in launching such game-changers as: Java with Sun Microsystems, e-business strategy with PricewaterhouseCoopers Management Consulting Services, and SOA, Web services and architecture solutions with nVISIA and IBM. He can be found on Twitter as @CSRollyson.

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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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Learning From the Dynamics of Viral Marketing

January 25, 2010

In what context do viral marketing strategies work? How do on-line product recommendations develop, multiply, spread and ultimately, dwindle and die? And, can Marketers influence any of this?  

These were important questions posed by Leskovec, Adamic, and Huberman in their 2008 study “The Dynamics of Viral Marketing.” This is one of the few studies I’ve seen to actually study how on-line recommendations grow virally and how this growth impacts purchase behavior throughout the viral network.  

Viral Marketing -- When and Where Does it Work?

 

Admittedly, the study had limitations, notably that it was only four categories, just measured on-line viral activity, and included a discount incentive to help motivate purchase. But, even with these limitations, it uncovered deeper insights into the systematic patterns in knowledge sharing and persuasion online—all of which are of high interest to Marketers.  

What Did the Study Entail?

Lescovec et al. examined an online recommendation network composed of 4 million people who made 16 million recommendations for 0.5 million products. Each time a consumer purchased a book, music, or movie, he or she could  send e-mails recommending the item to friends. The first person to purchase the same item through a referral link received a 10% discount.  

What was Measured

  • When and at what price a product was purchased
  • If the product was recommended to others
  • Whether the recommendation resulted in a subsequent purchase and discount

They then modeled the effectiveness of recommendations as a function of the total number of previously exchanged recommendations.  

Recommendation Networks Grow Slowly Over Time.

 

Important Viral Network Learnings & Insights

Finding #1:  Consumers recommended a large number of products to the same group of people. As a result, recommendation networks became heavily locally-based. For example, in the DVD recommendation network there are 182,000 pairs that exchanged more than 10 recommendations.  

Consumers Tend to Recommend Products to the Same People

 

Finding #2: Recommendation networks centered on a specific product category. That is, the people tended to focus on recommending a particular product category and thus created a “community of interest.” Having said this, most all networks shared recommendations for all types of products.  

Finding #3: Trust, influence, and perception of “spam” affected purchase. As people exchanged more recommendations, the likelihood they would purchase the product increased due to a growing foundation of trust. However, purchase likelihood increased, peaked, and then fell as consumers received additional recommendations for a specific product. A few recommendations built credibility; too many appeared as “spam.”  

Finding #4:  Most recommendation chains didn’t grow very large. In fact, most terminated with the initial product purchase, and even the largest connected networks were very small as a percentage of the total population.  

Recommendation Chains Don’t Typically Grow Very Large

 

Finding #5: 20% of recommendations accounted for 50% of sales. This is not far from the usual 80-20 rule, where the top 20% of products account for 80% of sales.  

What are the ‘Viral’ Implications for Marketers?

1. Identify the “Amplifiers.” Given that 20% of recommendations generate 50% of sales, it’s key to figure out whom the amplifiers are and focus your efforts on them.  

2. Determine Where the “Amplifiers” Congregate. Where do they exchange product information? On what platforms do they consume media? Web behavior can be linked to off-line purchase panels to quantify the effectiveness of recommendations (see “What Really Drives Web Advertising ROI”).  

3. Take Online Recommendation Networks to the next level Through Social Media Marketing. Marketers should explore development of models to measure recommendation systems on Twitter, Facebook, Foursquare, and the larger online arena. Through broader web 2.0 outreach, marketers can quantify consumer engagement on recommendation networks by volume, reach, tone, and source.  

Marketers can optimize paid media and earned media with viral marketing.

 

4. Be Wary of Creating “Recommendation-Fatigue.” A fine line exists between trust and influence in recommending a product and what is widely considered “spam.” Consumer engagement via any online channel must be done with careful consideration of earned media and buzz promotion.  

Viral Marketing: Limitations…

What’s not yet so clear from the research is how to minimize transmission “breakdown” – e.g. how do you minimize the likelihood that a product recommendation is the last one. As the research showed, most viral networks don’t grow very large. Marketers will only invest significant money if they can truly scale viral marketing programs.  

…And Future Opportunities

With the right tools and metrics, marketers can diversify their marketing plans to incorporate viral marketing strategies. The research clearly shows that viral marketing can build unique and niche recommendation networks, bolster consumer engagement, and lift sales.  

And as consumers continue to favor a digitally-based, social network-centric world, it’s critical that Marketers become more expert at viral marketing. Key to this will be identifying amplifiers, focusing on congregation points, leveraging social media opportunities—all without overdoing it. As importantly, Marketers must discover new approaches to spread and scale viral marketing just as effectively as the flu seems to proliferate every flu season.  

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The Ultimate Marketing Ecosystem: What Marketers Need To Know About the Super Bowl

November 23, 2009

Ever hear the saying that the Super Bowl is just an excuse to watch the ads? Well, this year the game will become even less of the focus as Marketers move beyond simply driving ad recall via their Super Bowl marketing activities, and more toward driving consumer conversations and brand interactions that “feed” off of their ads and brand integrations.

In a recent Nielsen Wire post, Pete Blackshaw, EVP Nielsen Digital Strategic Services, and I discussed how the Super Bowl is the ultimate marketing “ecosystem’ of paid media and earned media (Disclosure:  I work for The Nielsen Company).

The Super Bowl is getting real about real-time.

For Marketers, 2010 will mean not only a Super Bowl mega-media buy, but also a new focus on how to leverage that investment into earned media that provides a long tail of consumer driven buzz and brand equity building activities.

Super Bowl Paid Media: How Does It Really Work ?

What should marketers keep in mind when planning their spectacular media-buy?

  1. The entertainment halo matters – Over the last three years, Nielsen IAG research has found that Super Bowl spots achieved +31% higher break-through and +93% higher likability than the typical TV ad. Why? Partly because the Super Bowl has higher than average TV program engagement, but mostly because the ads really are part of the show.
  2. Timing is everything – Ad recall across the game shows that 1st and 2nd quarter spots yield more yardage than second half spots. Fourth quarter spots have the lowest recall and are about comparable to a “normal” TV buy. It’s clear: advertisers should play early and sit on the sidelines in the 2nd half. 
  3. Consumers get finicky – The viewer’s ability to associate the correct brand with the ad as well as reported likability levels wane over the course of the game: 1st quarters are best, 4th quarters are worst. Super Bowl refreshment fatigue, perhaps?
  4. …But as the game continues, good spirits abound – Surprisingly, in-program product placement scores are just the opposite–they grow over time. Branded entertainment recall and brand opinion are lowest pre-game, moderate during the game, and highest post-game.

The bottom line for Marketers? Focus on ads early, and branded integration efforts late. Perhaps most importantly, the Super Bowl is a “touchdown” for brands: the average ad’s purchase consideration increases +13% in the week after the game versus pre-game.

Earned Media: Great Advertising Finds Life in Other Places

How does the Super Bowl shine light on free media and consumer conversation? A Super Bowl  ad may trigger a web site visit, a Google search, a Tweet, fan-page sign ups, or DVR rewind. Or it could bleed over into the Twitter stream of a New York Times or Ad Age reporter. My Nielsen colleague Pete Blackshaw provides another take on maximizing paid and earned media in an Ad Age article “Earned Media May Be Efficient, But It’s Far From Free.”  This whole paid vs. earned issue raises two important questions:

  1. The Impact of Earned Media – Positive playback about Super Bowl ads can provide brands with an almost endless stream of conversation — a “digital trail” of echo-like activities. This free media needs to be considered when brands try to calculate their return on Super Bowl investment. The question is: how can brands best design their “paid” marketing efforts to drive this free digital trail ?
  2. Trail Measurement – Marketers can quantify earned media by volume, reach, tone, source, or even depth of brand advocacy. Much of this can be understood in real-time. Marketers need to understand not just how much, but also how effective it is. And, what effect does “earned” media have on future paid efforts? Is it possible that the digital trail after effects actually produce better ad performance in the future?

Paid Media & Earned Media: Put To The Test

So in the end, it’s not as simple as “buying” high-impact ads and branded integrations at the right time in the years largest media circus–the Super Bowl.

The broader ecosystems matter — and Marketers have to figure out how paid media drives earned, how earned media impacts future paid, and how both of them contribute to building consumer engagement and brand equity.

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Zapped by Zappos – Learnings from CEO as CMO Tony Hsieh

November 9, 2009

The best CMO is a CEO who believes in Marketing. By this definition, Tony Hsieh, CEO of Zappos.com, must be one of the best CMO’s around. Hsieh, known for his firm’s digital and social networking prowess, had over 870k Twitter followers the last time I checked. I recently talked with Tony after he participated in a “What’s Your Digital?” panel discussion. And what he had to say might surprise you.

TonyHsieh

Tony Hsieh -- The Zappos CEO as CMO

Zapped by Zappos

Before that, however, let me tell you about my own Zappos experience—which is instructive. Seeking a pair of dress shoes for my new job, I went on-line to Zappos, and saw a great pair of shoes on the Mezlan Zappos homepage. I searched for the shoes all over the site — to no avail. Exasperated, I sent Zappos an e-mail, asking: “where are those great looking shoes?” No response. I sent another e-mail, and waited…and waited.

Finally, I received a short e-mail:  “Yes, you’re correct; we don’t carry that particular pair of shoes and will remove the photo from our site.” And they did. In fact, here’s the new picture sans shoes:

Mezlan_Shoes

Mezlan on Zappos - Without the Shoes

This is great customer service? So, I related my story to Tony. He seemed mortified, especially after talking about how much Zappos cares about customer experience. He then followed up to have someone reach out to understand what happened so they could fix it, followed by an offer to send me a free pair of any shoes I wanted. Now, not everyone gets to talk to the CEO about their poor customer experience, but Zappos clearly IS different.

What Makes Zappos Different?

Simply stated, Zappos believes that customer service = marketing. Instead of spending loads of money on traditional (and non-traditional) marketing, they focus intensely on delivering a great customer experience—and recovering from mistakes with grace and humility. Tony believes that “the Zappos brand manifests itself through every employee/customer interaction,” and that brand is a lagging indicator of customer experience. His key points:

  • “The phone is a great marketing tool” – I’m not taking about mobile marketing here. Tony made the point that 5 minutes with a customer on the phone is far better Marketing than any web experience can ever deliver. He loves the phone and bricks and mortar touch points and thinks they are often undervalued by companies.
  • “Culture is our number 1 priority” – Many companies talk a good game about culture, but Zappos actually lives it and uses it as a core part of their business model. Zappos has 10 cultural norms that they instill in employees. They interview for these 10 norms, evaluate employees on them in their annual performance reviews, and let people go who don’t follow them.
  • “Authenticity and transparency are really important” – Tony sees authenticity and transparency (to read more on this topic, see my blog post) as a core part of the Zappos brand. When reporters show up at Zappos, they’re shown the bathroom and lunch-room and then told to roam around and talk to whomever they like. Tony’s daily Tweeting is less about Marketing than it is about him trying to make Zappos more authentic and transparent for followers.
  • “Zappos wants totally engaged employees” – Tony only wants people working at Zappos who are really passionate about the company and delivering great customer service. How much does he believe in this? So much that the company offers every new employee $2k to quit after two weeks on the job – they only want the truly committed.

What About Digital and Social Media?

But isn’t Zappos a social media icon? What about Tony’s almost 1MM Twitter followers? Well, get this: Tony hates the “social media” tag. He says they don’t even bother to measure the ROI of their digital and Twitter efforts.

Further, he’s not a believer in creating marketing “buzz.” Instead, he believes the primary role of every employee is to create “positive customer stories” about their Zappos experience. If they do this–everything else, including buzz, will take care of itself.

Oh, and one more thing. Tony does believe in the importance of “influencers,” but not necessarily the digital kind you might be thinking of. He noted that to this day, when his mom calls, he really listens.

Key Learning’s for Marketers

First, having a CEO who really believes in the brand and customer experience sets the tone for the whole organization. This job shouldn’t and can’t be left to the CMO; it’s the CEO’s job too. The CEO and CMO need to be partners in driving a truly customer-centric, marketing focused organization and business model.

Second, actually delivering a great customer experience, particularly in a service oriented business, comes down to employees delivering each and every time they interact with a customer. Building a culture that attracts the right kind of employee and fosters this kind of performance is just as important as any Marketing program.

Zappos Secret Weapons

These are Zappo’s true secret weapons—their CEO as CMO and their unique culture. So what about my Zappos experience? I like Tony’s description of what employees are supposed to do: “Create positive customer/employee stories.” But what I love most of all is that Tony, as the CEO, does what he says. After all, you just read a story about how Zappos recovered brilliantly from a terrible customer experience. Clearly, Tony knows how to create a good story, too.

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Is Your New Product Buzz-worthy ?

October 28, 2009

Positive and impactful new product “buzz” is something that every Marketing executive aspires to, but few achieve, particularly in the CPG space. Much has been written about word of mouth (including my previous post “What’s Wrong with Word of Mouth Marketing“) but too little has been focused on the more narrow topic of what is known about buzz and how it contributes (or doesn’t) to CPG new product success.

dm_090507_blogbuzz

New Product Buzz -- What Really Drives It ?

I recently read an insightful Nielsen white paper on this topic:  “The Origin and Impact of CPG New Product Buzz” (disclosure:  I now work for Nielsen).  For this purpose, “buzz” was defined as product specific mentions and discussion on blogs–positive or not. Nielsen researchers reviewed buzz and sales data to better understand and isolate the key drivers of new product buzz and it’s impact on sales. What did they learn ?

Key Learnings — Buzz in CPG New Product Launches

  • A very few CPG brands account for most of the buzz.  Only 10% of products account for almost 85% of the buzz within a category. Many new products experienced little to no buzz whatsoever. This raises an important question for Marketers: are there some categories and brands that are simply un-buzzworthy? Is it just a waste of time and resources to try and build buzz in some categories? Or is it just that many new products failed to go to market with an effective buzz generating plan?
  • Ad spending and distribution play a significant role in driving buzz.  This learning defies conventional wisdom, as many people think of buzz as being more “pure” than paid media. On closer inspection, it makes sense, though. Advertising and distribution are both key factors in driving awareness, and consumers must be aware of a product to talk or blog about it. So, it’s not entirely surprising that buzz is driven to some degree by advertising and distribution.
nielsen-buzzmetrics-buzz-level-ad-spend-relationship.thumbnail

Buzz Levels -- Directly Related to Ad Spend

  • Buzz can be predicted to some extent by category purchase frequency and distinctiveness.  The more frequently consumers buy the category, the more likely they are to experience your new product. Perhaps even more important, the more distinctive and unique your product is, the more likely people are to talk about it. This is especially true if it solves for a very important consumer need that other products haven’t solved.
  • Buzz tends to peak before sales.  Does sales drive buzz or vice versa? Obviously, there is some interactive effect that works in both directions. However, the data clearly shows that buzz builds and peaks in advance of sales, which you would expect if buzz is truly driving consideration and purchase.

Most important of all, the research also demonstrates that the level of buzz directly impacts sales. Statistical analysis showed that the quantity of buzz was a key variable in predicting sales. And, new product volume forecasts with buzz included were more predictive of actual sales results than the same models without buzz included.

Implications for CPG Marketers

The learnings above have several important implications for Marketers:

  • Launch new products that provide distinctive solutions against unmet needs. This sounds so obvious and basic, but it needs to be stated. Too often, firms are guilty of creating and launching undifferentiated products. Products which are different, special and better than competitive offerings are more likely to generate strong buzz.
  • Not every new product should be striving for buzz with their product launch. There are some low involvement categories and products which are simply unlikely to generate buzz no matter how much the Brand Manager would like it to be otherwise. If your category is low involvement, and your new product is a very close in concept to the parent brand and/or doesn’t score high on uniqueness in concept and use testing, you should think twice before investing in a strong buzz program.
  • A buzz only Marketing program is unlikely to succeed. Of course, we can all find examples of new products which have launched successfully which didn’t invest in traditional advertising. But the facts show that advertising and distribution are significant contributors to buzz levels. Category purchase frequency, uniqueness and solving for important unmet needs are all prerequisites for generating buzz. In turn, these are amplified or not by the amount of awareness creating advertising and distribution.

What the learning doesn’t address is the key role of “influencers” on the web, and how Marketers should engage highly influential bloggers who can have disproportionate impact on a brand or new product launch.

Every brand should seriously consider a buzz inducing program as part of their new product launch plans. Key to success, though, is having a distinctive product focused on solving an important need, significant investment in advertising and distribution, and development of plans which leverage early momentum in the new product launch.

What do you think — is your new product buzz-worthy ?

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