Category Archives: Marketing

Better Ways for Marketing People to Get Paid

As Tim Williams, author of TAKE A STAND FOR YOUR BRAND explains on this week’s episode of BRANDING BUSINESS (hosted by Ryan Rieches of OC’s biggest branding firm RiechesBaird here on www.OCTalkRadio.net), “for people who are supposedly creative, we don’t spend much time considering alternative ways to get paid beyond some hourly rate….as if creative work and manual labor were somehow both the same”.

Hear his ideas on alternative ways in which ad agencies, marketing people and other creative talent can get paid that more closely matches their corporate contribution and the true value of their work.  Definitely a conversation starter.

How to you pay for creative ideas in your company?

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We’re All Marketers Now

Courtesy of McKinsey Quarterly

For the past decade, marketers have been adjusting to a new era of deep customer engagement. They’ve tacked on new functions, such as social-media management; altered processes to better integrate advertising campaigns online, on television, and in print; and added staff with Web expertise to manage the explosion of digital customer data. Yet in our experience, that’s not enough. To truly engage customers for whom “push” advertising is increasingly irrelevant, companies must do more outside the confines of the traditional marketing organization. At the end of the day, customers no longer separate marketing from the product—it is the product. They don’t separate marketing from their in-store or online experience—it is the experience. In the era of engagement, marketing is the company.

This shift presents an obvious challenge: if everyone’s responsible for marketing, who’s accountable? And what does this new reality imply for the structure and charter of the marketing organization? It’s a problem that parallels the one that emerged in the early days of the quality movement, before it became embedded in the fabric of general management. In a memorable anecdote, one of former Chrysler CEO Lee Iacocca’s key hires, Hal Sperlich, arrived at the automaker in 1977 as the new vice president of product planning. His first question: “Who is in charge of quality?”

“Everybody,” a confident executive replied.

“But who do you hold responsible when there are problems in quality?” Sperlich pressed.

“Nobody.”

“Oh, shoot,” Sperlich thought. “We are in for it now.”1

To avoid being “in for it,” companies of all stripes must not only recognize that everyone is responsible for marketing but also impose accountability by establishing a new set of relationships between the function and the rest of the organization. In essence, companies need to become marketing vehicles, and the marketing organization itself needs to become the customer-engagement engine, responsible for establishing priorities and stimulating dialogue throughout the enterprise as it seeks to design, build, operate, and renew cutting-edge customer-engagement approaches.

As that transformation happens, the marketing organization will look different: there will be a greater distribution of existing marketing tasks to other functions; more councils and informal alliances that coordinate marketing activities across the company; deeper partnerships with external vendors, customers, and perhaps even competitors; and a bigger role for data-driven customer insights. This article provides some real-life examples of these kinds of changes.

Marketing’s cutting edge is being redefined every day. While there’s no definitive map showing how companies can successfully navigate the era of engagement, we hope to help senior executives—not just marketers—start to draw one.

The evolution of engagement
More than two years ago, our colleagues David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik unveiled the results of a research effort involving 20,000 customers across five industries and three continents.2 Their work showed how collaborative the buying process has become and how difficult it is to influence customers by relying solely on one-way, push advertising. In the words of American Express chief marketing officer John Hayes, “We went from a monologue to a dialogue. Mass media will continue to play a role. But its role has changed.”

Over the past two years, that evolution has only accelerated. More and more consumers are using digital video recorders to fast-forward through TV commercials and are consuming video content on Web sites such as YouTube and on mobile devices. Billboards alongside train lines and bus routes struggle to capture the attention of people absorbed by the screens of their smartphones. Meanwhile, today’s more empowered, critical, demanding, and price-sensitive customers are turning in ever-growing numbers to social networks, blogs, online review forums, and other channels to quench their thirst for objective advice about products and to identify brands that seem to care about forming relationships with them. Individuals even are posting their own commercials on YouTube. In short, the avenues (or touch points) customers use to interact with companies have continued to multiply.

The problem for many companies is that the very things that make push marketing effective—tight, relatively centralized operational control over a well-defined set of channels and touch points—hold it back in the era of engagement. Many touch points, such as calls to customer service centers and interactions between the sales force and customers, sit outside the traditional marketing organization, which has little or no permission to reach into other business functions or units. Companies have traditionally divided responsibility for touch points among functions. But a comprehensive strategy for engaging customers across them rarely emerges and, if one does, there’s often no system for executing it or measuring its performance.

More pervasive marketing
To engage customers whenever and wherever they interact with a company—in a store; on the phone; responding to an e-mail, a blog post, or an online review—marketing must pervade the entire organization. Companies such as Starbucks and Zappos, for which superior engagement has been a critical source of competitive advantage from the beginning, already exhibit some of these traits. But these companies aren’t our focus, which instead is the kinds of actions everyone else can take as they strive for world-class customer engagement.

The starting point is a mind-set shift around customer interaction touch points. Companies typically think of them as being “owned” by a given function: for instance, marketing owns brand management; sales owns customer relationships; merchandising or retail operations own the in-store experience. In today’s marketing environment, companies will be better off if they stop viewing customer engagement as a series of discrete interactions and instead think about it as customers do: a set of related interactions that, added together, make up the customer experience. That perspective should stimulate fresh dialogue among members of the senior team about who should design the overall system of touch points to create compelling customer engagement, and who then builds, operates, and renews each touch point consistent with that overall vision. There’s no need to worry about traditional functional or business unit ownership: whoever is best placed to tackle an activity should do so.

Design
Designing a great customer-engagement strategy and experience depends on understanding exactly how people interact with a company throughout their decision journey. That interaction could be with the product itself or with service, marketing, sales, public relations, or any other element of the business.

When the hotel group Starwood sought to enhance its engagement with customers, for example, the company pored through data about them and identified clear demographic groups staying at its more than 1,000 properties. In 2006, the company unveiled a specific new positioning for each part of its brand portfolio, ranging in affordability from Four Points by Sheraton to its Luxury Collection and St. Regis properties.

Each brand seeks to deliver a different customer experience, on dimensions ranging from how guests are greeted by staff to the kind of toiletries offered in rooms. Crucially, for each type of property, Starwood sought to design not only the desired experience but also how it would actually be delivered. It therefore had to decide what coordination would be necessary across functions, who would operationally control different touch points, and even what content customers wanted in the company’s Web site, in loyalty program mailings, and other forms of communication.

Starwood’s experience underscores the fact that, despite the growing impact of digital touch points such as social media, effective customer engagement must go beyond pure communication to include the product or service experience itself. “At the end of the day,” says Virgin Atlantic Airways chief executive Steve Ridgway, “we fly exactly the same planes as everybody else. If we get our customers off the plane happy, and they go on to talk about that and get others to come and then come back again themselves—that’s a huge marketing tool.”

Build
Once a company designs how it will engage with customers, it needs the organizational capabilities to deliver: adding staff, building a social-media network infrastructure, retooling customer care operations, or altering reporting structures. Functions far removed from marketing often have important roles to play, so one or more marketing teams at the center may have to build skills in other parts of a company. A global energy company took that approach and then largely dissolved the group when those capabilities were in place.

Allocating responsibility for building touch points is increasingly important because of the degree to which Web-based engagement is requiring companies to create “broadcast” media.3 Some have built publishing divisions to feed the ever-increasing demand for content required by company Web sites, social media, internal and external publications, multimedia sites, and coupons and other promotions. Many luxury-goods companies, for example, have built editorial teams to “socialize” their brands: they are transforming the customer relationship by producing blogs, digital magazines, and other content that can dramatically intensify both the frequency and depth of interactions.

Last year, LVMH Moët Hennessy–Louis Vuitton, for example, launched an online magazine, NOWNESS, that offers what the company calls “information reference” about its luxury brands. The site presents a daily multimedia story with little pure advertising and (in conjunction with LVMH’s efforts on Facebook, Twitter, and YouTube) seeks to deepen the engagement customers have with the company’s brands. British luxury brand Burberry has undertaken a similar venture with its Art of the Trench site. France’s Chanel has for years used its own creative and artistic directors to develop content, without any need for help from external agencies.

Content-oriented strategies like these require creative employees who can feed the customer’s ever-increasing need for timely, relevant, and compelling content across a variety of media. They also provide an opportunity for productive dialogue within companies about the role of marketing versus other functions in building critical touch points that drive engagement.

Operate and renew
For companies in industries as diverse as consumer packaged goods and financial services, digital technology has upended the engagement expectations of customers, who, for example, want one Web site to visit and a relationship seamlessly integrated across touch points. Meeting such expectations requires extraordinary operational coordination and responsiveness in activities ranging from providing on-the-ground service delivery to generating online content to staying on top of a customer care issue blowing up on YouTube.

Behind the scenes, that new reality creates a need for coordination and conflict resolution mechanisms within and across functions, as well as budget procedures that allow flexibility and rapid action should the need arise. PepsiCo, for example, has sought to provide a single point of contact for its digital-marketing efforts by creating the role of chief digital officer: an executive without line responsibility who drives the application of best practices across the beverage group’s global digital efforts.

Companies also need a clear approach for monitoring touch points and renewing them as needed. At one major hotel chain, for example, a single group circumnavigates the globe acting as a “monitor and fix” SWAT team. It meets with hotel licensees, educates them about the company’s customer-engagement approach and management of key touch points, demonstrates new behavior, and trains the staff in new operational processes. Given the speed of information sharing today, constant monitoring and adaptation—indeed, continuous improvement of the sort that came to the operations world long ago—is bound to infiltrate marketing and grow in importance.

The marketing organization’s new look
As the chief marketing officer collaborates with the chief executive and other senior-team members to nail down a shared approach for designing, building, operating, and renewing customer touch points, he or she also will require a new kind of marketing organization. For marketing to truly become the customer-engagement engine that orchestrates the delivery of the end-to-end customer experience, it must evolve along four critical dimensions.

Distribute more activities
As marketing becomes more pervasive, the marketing organization will increasingly be defined by a core set of tightly held responsibilities, such as branding and agency relationships, and a set of responsibilities distributed among the functions and groups best placed to manage and use the information generated by customer interactions. Procter & Gamble, for instance, has created a group within the purchasing function to buy digital-media advertising space. The group spans geographic boundaries, reflecting the global nature of the medium, and while it sits within purchasing, it is staffed by people with marketing experience.

At companies where the marketing organization’s responsibilities will be split between core and distributed activities, CMOs will increasingly be held accountable for the performance of groups that don’t report solely to them. When CEOs ask for the marketing-org chart, they will see a complex web of solid- and dotted-line relationships showing the roles that marketing plays in designing, building, or operating touch points across the whole organization.

The chart will also show where marketing activities have been embedded in other functions. One major logistics company, for example, puts marketing resources within each sales district to adapt corporate-level marketing initiatives to local circumstances. This approach mutes complaints from sales reps who feel bombarded with marketing pushes from the head office by giving them simple, customized ideas for driving sales within their regions.

More councils and partnerships
While leading companies have long used marketing councils to boost management coordination, the new marketing organization will require many more of them, with greater representation from other functions. One global financial institution, for example, has created a digital-governance council with representatives from all customer-facing business units. The company’s goal was to ensure that data and analytics are shared, that customers receive the same experience regardless of channel (such as Web sites, branches, call centers, or automated teller machines), and that IT systems meet the customer’s digital-engagement needs.

More robust formal and informal external partnerships will be critical too. Customer forums, such as the one Virgin Atlantic Airways used to create a taxi-sharing app for smartphones, are one example. More structured relationships with distribution partners also can enhance engagement. The consumer-packaged-goods company Nestlé, for example, manages its relationship with retailer Wal-Mart Stores via what it calls the Nestlé–Wal-Mart Team. This unified cross-business, cross-functional group is responsible for everything from in-store activity to promotion, logistics, innovation, and product design. As a result, Wal-Mart has a single point of contact with one of its largest suppliers, Nestlé enjoys a stronger relationship with the retailer, and, critically, both companies gain a better understanding of, and engagement with, packaged-goods consumers.

Elevate the role of customer insights
Generating rich customer insights, always central to effective marketing efforts, is more challenging and important in today’s environment. Companies must listen constantly to consumers across all touch points, analyze and deduce patterns from their behavior, and respond quickly to signs of changing needs.

One implication is that the types of talent required to derive such insights will change. A premium will be placed on problem-solving and strategic-marketing skills, rather than on traditional market research capabilities such as designing surveys and commissioning focus groups. Some organizations also may need help from external partners, a pattern that’s already apparent at several insurers and health care payers that have neither the time nor the budgets to build the necessary data-gathering and -analysis capabilities in-house and at scale.

The insights group’s position in a company could even change. At one high-end hospitality business, for example, responsibility for generating customer insights has moved out of the marketing function entirely. The group now reports directly to the head of strategy, who uses information from it to redesign core business elements such as pricing, sales targeting, and the selection of properties for development.

More data rich and analytically intense
Reinforcing the importance of all these changes is an exponential increase in the volume of customer data and the intensity of the analysis required to process and act on it effectively. Without cross-functional collaboration and a clear delineation of roles, it will be impossible to gather, collate, gain insights from, and disseminate data that streams in from every customer interaction. The sheer volume of data is extraordinary: social-media gaming company Zynga, for example, generates five terabytes (the equivalent of about 1.5 million song files) of data on customer clicks every day.4 What’s more, “Marketing is going to become a much more science-driven activity,” says Duncan Watts of Yahoo! Research. In the trenches, this change suggests a shift toward sophisticated data analytics similar to the revolution that has already taken place in industries such as financial services, as well as in airlines and other industries where yield management is important. Some marketing organizations are already making their moves: to send targeted e-mails to customers, retailer Williams-Sonoma, for example, analyzes an integrated database that tracks some 60 million households on metrics including income, housing values, and number of children. These e-mails obtain response rates 10 to 18 times as high as those sent randomly.5 Such capabilities don’t necessarily have to be built in-house: many companies will enter into creative arrangements with outside parties to exchange data and run joint tests of alternative marketing tactics.

The major barrier to engagement is organizational rather than conceptual: given the growing number of touch points where customers now interact with companies, marketing often can’t do what’s needed all on its own. CMOs and their C-suite colleagues must collaborate intensively to adapt their organizations to the way customers now behave and, in the process, redefine the traditional marketing organization. If companies don’t make the transition, they run the risk of being overtaken by competitors that have mastered the new era of engagement

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Courtesy of Media Post

We knew it was coming, and the Jan. 1 front page of the New York Times didn’t let us forget: “Boomers Hit New Self-Absorption Milestone: Age 65.”
Expect to see a full year of stories that begin with this announcement, some of which make no sense whatsoever. My hometown paper started one recent story with the following sentence: “Fueled by aging baby boomers, a growing number of Kentucky’s elderly residents are falling victim to physical abuse, neglect and financial exploitation — with no end in sight.”

Can anyone make sense of this sentence for me? Are Boomers changing the face of elder abuse because they have suddenly become abused elders? Or are they fueling the problem as elder-abusing caregivers as their own parents pass age 90?

The sentence makes no sense, and simply reminds us that when the mainstream media focus on Boomers, they often make generalizations that are either wrong or irrelevant.

Boomers all Share the Same Stage of Life

What is important about Boomers in 2011?

In 2011, the average Boomer turns 54, and the generation that still spends more dollars on more products than any other is now firmly and completely embedded in middle age.

Not old age — middle age.

What matters about Boomers is not that they are old (even assuming that people feel old at 65), but that no one in this famously youth-obsessed generation can still pretend that she is young.

Before now, marketers had been in denial about how to reach these consumers, assuming either that Boomers can be taken for granted to follow ads targeting their younger peers, or that they won’t resent being treated like seniors. Now that Boomers are so clearly neither young enough to justify the former nor old enough to appreciate the latter, marketers need to find new words and ways to engage the 78 million consumers who are in their own unique stage of life. How to start?

Lifestage marketing

To speak directly to Boomers, you need to find words and images that acknowledge this unique stage of life between being young and old (at VibrantNation.com we sometimes call this stage “post-minivan but pre-retirement”). People who find themselves in the unique life stage between 45 and 70 won’t listen to messages written for either 35-year olds or 70-year olds.

There are some marketers who are doing this well. Here are a few examples I can think of.

Not Your Daughter’s Jeans. I’ve always admired Not Your Daughter’s Jeans for a brand name that says: “You aren’t defined by the same goals (or body) you had in your 20s, but you’re still cool enough to deserve good-looking jeans.” That’s an example of life stage marketing that acknowledges there is an important and lengthy stage between being a young mother and “mature.”
Depends. A brand that has been a tagline for jokes about old age showed how to engage Boomers this year with a campaign targeting people in their 50s who also experience temporary incontinence. A television ad targeting women showed a respected orchestra conductor who also experiences post-menopausal incontinence. Kimberly-Clark did a great job acknowledging that age-related health problems and finding yourself at the prime of life are not inconsistent conditions.

And, finally, in a tech gadget survey we conducted in anticipation of this month’s Consumer Electronic Show, 13% of Boomer women told us they own e-readers, suggesting that Amazon, Apple, and Barnes & Noble should be paying particular attention to consumers whose life stage gives them the time, discretionary income, and interests to buy these new devices.

No matter what the media say, spend more time in 2011 thinking about the 54-year old Boomer than the 65-year old Boomer. You’ll gain more business with her, and you’ll be better positioned to serve Gen X when its first member turns 50.

Beyond Paid Media: Marketing’s New Vocabulary

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Courtesy of McKinsey Quarterly

Changes to the way consumers perceive and absorb marketing messages will force marketers to change not only their thinking but also the way they allocate spending and organize operations.

NOVEMBER 2010 • David Edelman and Brian Salsberg

Source: Marketing & Sales Practice

The rough guide to marketing success used to be that you got what you paid for. No longer. While traditional “paid” media—such as television and radio commercials, print advertisements, and roadside billboards—still play a major role, companies today can exploit many alternative forms of media. Consumers enamored of a product may, for example, create “earned” media by willingly promoting it to friends, and a company may leverage “owned” media by sending e-mail alerts about products and sales to customers registered with its Web site. In fact, the way consumers now approach the process of making purchase decisions means that marketing’s impact stems from a broad range of factors beyond conventional paid media.

These expanding media forms reflect dramatic changes in the way consumers perceive and absorb marketing messages.1 As a result, some strategic-marketing frameworks—such as the popular “paid, owned, earned” one—are in serious need of updating. Many marketers use this framework to distinguish different ways of interacting with consumers, forms of financing, and measures of performance for each contact. Yet the paid, owned, earned framework increasingly looks too limited. How, for example, should a marketing strategist for a company react to requests from other companies to purchase advertising space on its product sites? How should a company deal with online activists when they take hold of a product or campaign to push a negative emotional response against it?

Two media types must therefore be added to the framework: “sold” and “hijacked.” These new forms of media, which demand sustained investment and attention, challenge the traditional strategies, structure, and operations of most marketing organizations. Yet marketers should view their expanding range of media options not only as a challenge but also as an opportunity worth grasping, to encourage readers to share content or even create their own.

Five forms of media

Too many companies view marketing plans as little more than an exercise in where and when to buy media placement. Yet as the number of digital interactions increases, marketers must recognize the power that lies beyond traditional paid media (Exhibit 1).

Paid,owned, earned

Paid media include traditional advertising and similar vehicles: a company pays for space or for a third party to promote its products. This market is far from dying; options for marketers are expanding exponentially with the emergence of more targeted cable TV, online-display placement, and other channels, not to mention online video and search marketing, which are attracting greater interest. The second category, owned media, consists of properties or channels owned by the company that uses them for marketing purposes (such as catalogs, Web sites, retail stores, and alert programs that e-mail notifications of special offers).

Earned media are generated when the quality or uniqueness of a company’s products and content compel consumers to promote the company at no cost to itself through external or their own “media.” Starbucks, for example, announced in July that its Facebook fan base exceeded ten million people, the highest of any US corporation. The company directly links its recent strong performance to its social-networking efforts and “crowd sourced” innovations such as “My Starbucks Idea,” a Web site where anyone can suggest ways to make the company better. Similarly, Honda Japan undertook a promotion on the social-networking site Mixi, where more than 630,000 people registered for information about the launch of its new CR-Z vehicle. The company automatically added “CR-Z” to these users’ Mixi login names (for example, “Taro CR-Z”) and gave them a chance to win a car. Nonregistered users wondered why people suddenly had login names incorporating CR-Z. Thanks to the buzz, prelaunch orders reached 4,500 units, and actual sales topped 10,000 units in the first month.

Sold

Paid and owned media are controlled by marketers touting their own products. For earned media, such marketers act as the initial catalyst for users’ responses. But in some cases, one marketer’s owned media become another marketer’s paid media—for instance, when an e-commerce retailer sells ad space on its Web site. We define such sold media as owned media whose traffic is so strong that other organizations place their content or e-commerce engines within that environment. This trend, which we believe is still in its infancy, effectively began with retailers and travel providers such as airlines and hotels and will no doubt go further. Johnson & Johnson, for example, has created BabyCenter, a stand-alone media property that promotes complementary and even competitive products. Besides generating income, the presence of other marketers makes the site seem objective, gives companies opportunities to learn valuable information about the appeal of other companies’ marketing, and may help expand user traffic for all companies concerned.

Hijacked

The same dramatic technological changes that have provided marketers with more (and more diverse) communications choices have also increased the risk that passionate consumers will voice their opinions in quicker, more visible, and much more damaging ways. Such hijacked media are the opposite of earned media: an asset or campaign becomes hostage to consumers, other stakeholders, or activists who make negative allegations about a brand or product. Members of social networks, for instance, are learning that they can hijack media to apply pressure on the businesses that originally created them. High-profile examples involve companies ranging from Nestlé (whose Facebook page was hijacked) to Domino’s Pizza (a prank online video of two employees contaminating sandwiches appeared on YouTube).

In each case, passionate consumers tried to persuade others to boycott products, putting the reputation of the target company at risk. When that happens, the company’s response may not be sufficiently quick or thoughtful, and the learning curve has been steep. Toyota Motor, for example, mitigated some of the damage from its recall crisis earlier this year with a relatively quick and well-orchestrated social-media response campaign, which included efforts to engage with consumers directly on sites such as Twitter and the social-news site Digg.

The impact of the media revolution

The changing role of older media and the emergence of newer ones extend the marketer’s role well beyond the allocation of budgets and channels. Marketers today require a deep understanding of how consumers engage with different types of media at each stage of the journey toward a purchase decision. What’s more, these different kinds of media are related and interact with one another (Exhibit 2), so marketing plans and capabilities must adapt and evolve. Paid, owned, earned, sold, and hijacked media are evolving in four primary ways.

First, different kinds of media are becoming more integrated. The reach of paid media, for example, means that they will increasingly serve as feeders into owned-media hubs, where marketers can offer a more engaging experience, get consumers interested in products, and pivot into an ongoing and more targeted stream of contacts with users or members. New ways to connect with customers, for example, are transforming traditional relationship management by requiring marketers to interact with consumers through multiple forms of media in increasingly personalized ways. JetBlue has promoted its Twitter offering through many channels, for instance, and now has about 1.6 million followers seeking a regular feed of special deals for tickets. This approach has given JetBlue the ability to deliver timely coupons at a minimal variable cost, reducing its reliance on expensive paid media while fostering closer relationships with consumers.

Second, new publishing models are emerging because the increasing complexity of consumer needs and of efforts to address them means that marketers can’t do everything—and they are leaning on media providers for help. In what’s almost a throwback to the days of the soap opera,2 marketers are partnering with media publishers to create deeper marketing experiences for consumers and to obtain content and ad sales support. Computer maker Dell and automobile manufacturer Nissan, for example, worked with the Sundance Channel to create a television talk show hosted by Elvis Costello to attract their target demographic. With ads that seamlessly blended into the show’s content, Dell and Nissan not only gained exposure to a highly engaged audience but also shifted the perception of their brands to connect with late-stage baby boomers and with generation Xers.

In addition, applications on devices such as Apple’s iPhone are spawning tools that provide useful information. For example, eBay’s Red Laser generates a list of prices for any product whose bar code has been scanned by a mobile phone. Beverage companies show where their products are available by overlaying icons onto maps on the screens of mobile phones. In Japan, food manufacturers can increase sales across entire product categories through marketing collaborations with platforms such as Cookpad, the country’s leading online recipe site, with nine million members, more than 40 percent of whom are women in their 30s.

Third, marketing experiences are becoming more personally relevant. At first glance, personal conversations and experiences wouldn’t seem to be the best way of getting the scale and reach most marketers crave. But new kinds of media enable richer interactions and improve targeting, so they encourage consumers to share the things that make them happy. McDonald’s in Japan, for example, has developed expertise in the use of Twitter and other blogging platforms to promote new products and promotions by leveraging its huge fan base to talk about how much they love the company’s food. While this fan promotion is sometimes spontaneous, it’s often facilitated and encouraged by providing these fans with free meals. In this way, paid- and owned-media efforts (such as blog and Twitter campaigns) make consumers so enamored of McDonald’s products that the company generates a significant amount of earned media.

In a related phenomenon, the evolution of new kinds of media means that consumers are engaging more often in real-time conversations, particularly on social networks and other digital platforms. Helping consumers to express themselves is a scary and significant reversal of the control marketers have traditionally tried to maintain over brands. While most marketers are already exploring tools to monitor conversations in social media, they need to develop triage and action engines to ward off people seeking to hijack their media.

One consumer electronics company, for example, has recognized that every review or rating posted about its products creates the possibility of a hijacked conversation. It now responds to all comments within 24 hours: positive feedback gets a thank you, an invitation to become a Facebook friend, and special offers; negative reviews get explanations of how to fix issues, instructions on how to navigate an interface more easily, or follow-up questions to learn more about what the consumer didn’t like. Some hotel chains, recognizing the importance of travel sites (such as the popular TripAdvisor), likewise encourage satisfied guests to post comments online, while employing staff to follow and answer negative comments. These conversations become an interactive public-research project to gather information for future improvements. In effect, the evolution of media types means that a company’s marketers are now on the front lines of its efforts to deliver outstanding goods and services.

The challenge for marketing organizations

Marketers offer rich and complex experiences. But the consumer’s standards for the consistency of information encountered in different venues, the way it is provided in each of them, and its usefulness are becoming more stringent daily. Likewise, publishing, the brand experience, cultivating advocacy among customers, and generating personalized leads are now more important. These realities create four priorities for marketing organizations:

  • Think strategically about the role of each media type. As companies move more aggressively into, for instance, owned and earned media, the role of paid media should change: it may be used to drive consumers toward a company’s owned media or, more sparingly, as a “booster” for new-product launches and other promotions. That may require tighter coordination with ad agencies regarding the design and placement of marketing content. To reflect the influx of traffic to owned media, companies may also need to change their budgets and operations.
  • Rebalance time and resources. Owned media require patience, cultivation, and sustained engagement. Like the products of any good online publisher, a marketer’s owned media need a steady stream of traffic-building programs, fresh content, and optimized design. Focused management, sufficient budgets, and appropriate performance metrics are needed to build owned-media platforms, whether they’re foundational search or social-media efforts, site hubs, alerts, or feedback-gathering communities, to name a few possibilities.
  • Develop a clear community or social-networking strategy. Companies need an agreed-upon set of rules and principles for managing and responding to single or coordinated attacks against the brand. It’s imperative to appoint an experienced community or social-networks manager who knows in advance how to coordinate with marketing, public relations, legal, and other relevant units and has the required authority and decision-making rights. The cost of failing to respond effectively can be high. One multinational company, for example, responded to accusations about its business practices by arguing with its accusers on its Facebook page, even blocking and deleting posts. That move only heightened public interest in the dispute, in effect hijacking the page until the company apologized.
  • Improve both the art and the science of marketing. Debates among pundits of marketing typically focus on whether it is an art or a science (and thus on the relative importance of creativity and analytics). Actually, the bar is rising for both art and science, and a third dimension—execution—is growing in importance as the complexity of marketing escalates and its practitioners seek to deliver a richer consumer experience. This goal calls for teams that can design campaigns for a number of very different kinds of channels, from TV to social networks to search optimization. Data must be used more effectively to reach decisions and to apply them. Technology must make the spending of each dollar more efficient in the face of greater complexity. Quality must be defined and measured, and risks mitigated and managed.

Of course, the investment in hiring staff to answer every social-media posting may be tough to justify at first, but this approach will probably become critical for mitigating the threat of brand hijacking. And to deny negative reviews and comments legitimacy, companies must be able to make the justifiable design or service improvements consumers seek.

The list of challenges is long, and priorities will vary dramatically, depending on an organization’s competitive dynamics, willingness to experiment, and skills. Few of the necessary changes can be made through mandates from on high; they must happen organically. Ideally, chief marketing officers and other leaders would put together fresh, well-crafted pilots and get the support to invest in breakthroughs that can be applied at scale.

The proliferation of media types gives marketers a dramatically richer arsenal to deepen the engagement of consumers with brands cost effectively. Stepping up to meet the high bar of expectations, however, requires a renewed focus on execution, coordination, speed, and performance.
 

About the Authors

David Edelman is a principal in McKinsey’s Boston office, and Brian Salsberg is a principal in the Tokyo office.

Understand the Lens Thru Which People View Their World

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by Kaila Colbin , Courtesy of Social Media Insider.

I had the good fortune today of having a conversation with the visionary John Marshall Roberts, whose focus is on igniting inspiration and overcoming cynicism. By understanding the lens through which people see the world, Roberts suggests, we can better appreciate each other, communicate with each other, and connect with each other.

To understand those lenses, Roberts has built a psychometric tool, based on the work of the late psychologist Claire W. Graves. The Gravesian framework explores different lenses through which people see the world; Roberts categorizes these lenses by color for reference purposes.

“Copper” thinkers, for example, have an individualistic, success-oriented worldview, one that thrives on the legend of the self-made man and belief in the auto-regulating nature of unfettered free markets.

“Jade” thinkers are humanistic, experiencing, as Roberts puts it, “the source of all life as the benevolent spirit of one’s fellow man.” In contrast to the copper folks, jade thinkers might reject materialism altogether in the name of love or spiritual connection.

And “Gold” thinkers take a systemic approach. These are the people who recognize money is great, but you still have to be able to look at yourself in the mirror — and, conversely, that group hugs are wonderful but that you still have to pay the bills. They’re the folks who embrace the “power of and” described by Collins and Porras in the book “Built to Last.”

For decades, we’ve looked at traditional marketing from a copper framework. The only questions we asked ourselves were how we could better succeed: how we could reach a bigger audience, get more leads, grow more market share, sell more product. The purchase of AdWords is a copper purchase, a straight financial transaction: I puts my money in, I gets my clicks out. We don’t have to bring no relationship into this.

In and of themselves, those things aren’t bad. AdWords isn’t bad! But it is certainly a different framework from the one through which social media operates.

Companies looking for success in social media must start with a different set of questions: “Why would anyone care? How can I better serve this audience? What can I do to make an authentic contribution to this community?” As Eric Qualman said in his Socialnomics video, today’s successful companies “act more like Dale Carnegie and less like David Ogilvy: listening first, selling second.”

Bear in mind, though, that selling is still in there. The jade approach — the one that puts relationships above all else — tends to fall a bit short when it comes to making payroll. It’s the systemic, gold thinkers who can tackle both imperatives simultaneously: How can we contribute to this community in an authentic way while maintaining our company’s financial sustainability?

What’s interesting is that frameworks evolve iteratively. We begin with a framework, which then gets reinforced or inhibited based on the feedback we receive. There have been plenty of companies that have approached social media marketing from a copper worldview. These are the ones taking the exact same commercials and messages, putting them up on Facebook or YouTube, and wondering why nobody’s following them. The responsive ones are learning from this reaction, and evolving their approach to be more inclusive and systemic — to apply more gold thinking.

Is it ironic that, with gold thinking distinguishing successful social media players from Whole Foods to Gary Vaynerchuk, everything we know about Mark Zuckerberg from the media puts him squarely in the copper camp? Different lenses create different types of success in different types of environments. It is up to you to choose your worldview.

2010 State of Marketing Report

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I pass along this report from ResearchandMarkets.org about the State of Marketing in 2010.

The report covers trends in strategic marketing progress and performance, marketing plans of influential organizations, priorities and intentions of industry leaders. State of Marketing is also a bellwether projecting where marketing resources and expenditures will be allocated and applied.

The 2010 report, our fourth edition, has grown and is deeper, richer and more diverse than ever. We examine essential areas of interest including:

– Top accomplishments in the preceding year and management mandates for the year ahead

– How current economic conditions and business factors and forces are impacting plans and budgets

– Areas of expenditure and shifts in where and how marketing dollars are being allocated

– Strategic initiatives and investments to increase marketing efficiency, proficiency and effectiveness

– Evaluation and integration of digital marketing systems, programs and alternative media channels

We are certain you will find the 2010 report both revealing and revitalizing as you pursue marketing excellence and best practices across your organization.

This year’s comprehensive audit (involving 46 questions) of more than 500 senior marketers worldwide contributed extracted a wide range of insights and views. Participants were drawn from every major region of the world and were representative of most vertical industry sectors and company sizes. Almost 63 percent of respondents said they reported directly to the CEO, president or COO, while another 21 percent said they were accountable to a regional vice president, general manager or division/business group head. Only three percent reported to a chief sales executive..

For more information please click on:
http://www.researchandmarkets.com/product/601d95/2010_state_of_marketing_report_and_outlook_au

Engage Boomers By Making it Experiential

The 18-to-49 age group has been the Holy Grail since the 1950s. Today, the baby boomer generation makes up about one-third of the U.S. population but it controls three-fourths of the wealth. It wields $2 trillion in annual buying power. Nevertheless, frustration is mounting because the $275 billion ad industry still gears only 10% of ads toward 50-plus customers.
So How Do You Connect?

Marketing communications should be easy to read and be experiential in nature. They should reflect and understand the values of this demo and positioned as a gateway to desired experiences. Values and motivators for this group include:

Autonomy and self sufficiency (independence/participation)
Social connectedness (relationships/friendships)
Altruism (opportunity to share wisdom and ability to do for others: family, community and country)
Personal growth (gain knowledge)
Revitalization (need to rejuvenate)
The more ads and sales approaches that reflect the product or service is in harmony with these values and motivators the higher the success rate.

Aging-related changes like reduced vision need also be considered. For example, as we age, we need more light to see, pastel colors become distorted and blend to dark, etc. Large font, serif type, vivid colors, etc. are recommended.

We See What We Want To See

There is also evidence that communications that take a “less is more” approach to this demo are more effective. Presenting your company or product in a manner that is more suggestive than descriptive allows the target demo to subjectively interpret the message based upon his/her needs, values and motivators.

Most marketing and sales center on customers’ objective identities (demographic and psychographic) and research shows that a product’s message succeeds when it connects with a customer’s subjective identity (allowing for individual interpretation). Brilliant messages and sales presentations not connecting with the subjective mind are usually unproductive.

Stories Work Well

Another good communication tactic is the greater use of story-telling techniques. Stories are generally quicker to arouse emotions than straightforward propositions about a product’s features. Think Hallmark cards. They surpass most in using stories to present its products.

Today’s customer universe is age-weighted toward midlife values. Resistance to emotionally neutral information (mainly processed in the left hemisphere of the brain) increases in midlife. Receptivity to emotionally enriched information — such as stories — increases in midlife. Storytelling has become an important part of market strategy. Whoever tells the best story and tells it best will most likely win.

Courtesy of Jim Gilmartin, President of Chicago-based Coming of Age, Inc. (www.comingofage.com) and Media Post.com