Branding Strategy Insider

Accurate Ad Figures Require Openness

For a brief time in 2003 I ran away and joined a media circus. We had finally published the first results from a London Business School study on advertising viewing.

The study was based on eight different households that were videotaped for two weeks. We studied TV viewers' behaviour during every commercial break that occurred in the second week of the study in an attempt to understand what happens when programmes end and advertising begins.

With the analysis complete I wrote an article for the Financial Times. I explained that while many households did watch the ads, other activities such as social interaction, reading, flicking and advertising interaction often took precedence. I also described how the peoplemeter system was flawed because measuring the number of people in the room had a variable correlation with the number watching the ads. Indeed, in many instances, increasing numbers of people in the room led to significantly less people watching the ads.

I thought that this was the end of the story. But then all hell broke lose. After the space shuttle and Saddam it became the week's most downloaded article on the FT's web page. The story was then picked up by The Guardian, The Independent, and The Daily Mail. It was featured on Five News and, most importantly, on Richard and Judy. As the story went further afield, I even found myself in the rather bizarre position of doing a major Australian breakfast show live from my bed, drinking Horlicks.

This kind of media exposure created quite a response from the ad industry.

It seemed to revolve around two key methodological criticisms. The first was based on the sample size. Clearly eight households was inferior to BARB's 5000 or more. Well this depends. Eight households can never be representative, but it is better to have eight measurements of the phenomenon you are interested in (advertising viewing) than 5000 measurements of something you are not (people in a room when the ads are on). It seems that much of the ad industry has become obsessed with quantities rather than the qualitative nature of what is being measured. Good research always combines the qualitative 'what' with the quantitative 'how much'.

Overcoming Common Brand Problems - 41

Today we're adding a new entry to our list of Common Brand Problems, though the problem itself is quite timeless.

Common Brand Problem Number 41: Branding decisions are ego- versus analysis-driven.

Analysis: I have seen this happen many times. One company acquires another one and forces its name on the acquired company’s products when the acquired company’s brands have much higher awareness and positive associations than the acquiring company’s brand(s). Or, the CEO doesn’t care what the research says or what his experienced chief marketing officer says. He wants to do it this way. Or, a new marketing VP is hired and changes something just to put his own mark on it regardless of whether the existing logo or tagline or marketing campaign was working well or not. Or, he does not want to back down on his decision regardless of what the new research study says because he would look like a fool if he did. Better to “bury” the research study than to look bad. Or I have even witnessed top managers sabotaging each other’s marketing decisions and approaches just to gain “the upper hand.” It’s all about maintaining control and the perception of invulnerability.

Key Point: Buddhism and other religions focus on transcending the ego. Many psychotherapists help their patients do the same. Maybe you should suggest to the offending party that he might enjoy exploring Buddhism or seeing a therapist – or maybe not.  At least always try to bring the conversation back to the facts and maybe subtly influence the offending party to think that the most logical course of action was his own idea for which he will receive much admiration.

Click here to explore 40 other most common brand problems.

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How are Brands Impacted in Economic Downturns?

Craig, an executive with a brand acquisition company in New York City writes...

"I've been a reader and fan of your blog for some time now.  I've occasionally commented on some of your entries and I've found your discussions very interesting. My question is timely - Do you think that brands are more or less - important - during down economic climates in general ?  Do you think brands are more or less - valuable - during down economic climates in general?  Is there anything about this climate in particular that effects those answers in general?  Have you ever seen any deep datasets about customer behavior in relation to brands for changes in economic climates? I'd love to get reactions from other BSI readers as well."

Craig, thanks for the compliment and for a very interesting question. I have not poured through deep databases regarding brands, customer behavior and changing economic climates. Your best bet for that type of data and analysis is to peruse the Nielsen website. For instance, I know that they recently published a report entitled Advertising Builds Confidence for Financial Brands in Crisis. Having said that, here is what I have come to believe about brands and economic downturns:

* the asset value of most brands will decrease as the stock market declines
* those brands that continue to invest in brand building during the downturns will have more momentum coming out of the downturns than those who don't
*luxury brands (such as Neiman Marcus or Nordstrom's) typically are harder hit than other brands during economic downturns, but that depends on which consumer segments are buying those brands and to what extent the economic downturns are affecting them personally
* small indulgence brands (such as premium ice cream brands, Starbucks coffee, etc.) tend to do better than higher ticket luxury brands during economic downturns
* downscale and discount brands (such as Wal-Mart) tend to fare better than many brands during economic downturns
* brands with which people are very familiar and comfortable do better than newer, unproven brands during economic downturns

Given the breadth and depth of this economic downturn, including the breadth and depth of the socio-economic segments affected, it is quite likely that most brands are suffering to one degree or another. Interestingly, our business is doing as well as it ever has. For that, I am quite grateful.

We share more on Recession Marketing here and here.

Have a question related to branding? Just Ask…

Sponsored By: Brand Aid

A Talk with Ogilvy, Bernbach, Burnett and Reeves

David Ogilvy, Bill Bernbach, Leo Burnett and Rosser Reeves left indelible marks on the advertising landscape. Their works influenced generations of consumers and marketers. Today on BSI - a virtual interview constructed with some of their most significant thoughts on the business and where it is headed.

What is at the core of advertising?

Bill Bernbach: “The magic is in the product… No matter how skillful you are, you can’t invent a product advantage that doesn’t exist. And if you do, and it’s just a gimmick, it’s going to fall apart anyway.”

Rosser Reeves: “The writer must make the product itself interesting. Otherwise, a great part of his ingenuity and inventiveness will be used in devising tricks which lower the efficiency of advertising, rather than raising it.”

David Ogilvy: “If you spend your advertising budget entertaining the consumer, you’re a bloody fool. Housewives don’t buy a new detergent because the manufacturer told a joke on television...They buy the new detergent because it promises a benefit.”

Leo Burnett: "The greatest thing to be achieved in advertising, in my opinion, is believability, and nothing is more believable than the product itself. We want consumers to say, 'That's a hell of a product' instead of, 'That's a hell of an ad.' "

But isn’t the most important thing to break through the clutter?

Ogilvy: “When you write an ad, I don’t want you to tell me that you find it ‘creative.’ I want you to find it so persuasive that you buy the product.”

Burnett: "If you don't get noticed, you don't have anything. You just have to be noticed, but the art is in getting noticed naturally, without screaming or without tricks."

A Wal-Mart Brand For The Ages

So, do you fancy yourself as an expert on branding? You should have no problem with the following question, then. What's the biggest fast moving consumer goods (FMCG) brand in America?

The answer isn't Coke, Gillette or J&J - it's Great Value, Wal-Mart's own-label range. Thanks to its presence in every one of Wal-Mart's 4100 US stores, and the fact that more than 5000 stock-keeping units are sold under the Great Value label, it is the biggest grocery brand in the US by both sales and volume.

And it's about to get a lot better.

Wal-Mart has announced the conclusion of a year-long project to improve the appeal of its own-label line. The world's biggest retailer doesn't do anything on a small scale, and has conducted 2700 consumer tests to guide the overhaul. The result is a range of product introductions, improved formulations and fresh packaging.

It's a massive strategic operation, but one that was long overdue. Own-label success has never been one of the items on Wal-Mart's astonishing list of achievements. Currently, only 16% of its sales come from this area. That's well behind other US food retailers such as Krogers and Safeway, which attribute about a quarter of their sales to own-label products. It's even punier when contrasted with Tesco, which earns half its sales from own-label, and Aldi, where the figure is 94%.

The Best Marketing is Fluid

When Jerry Springer: The Opera opened at The National Theatre in London almost every critic raved that this most unlikely of operas would become a worldwide smash.

Its success was surprising for two reasons. First, who would have imagined that an opera about Jerry Springer would prove so popular. Second, the way in which the opera was developed offers a best practice approach to product development.

A best-selling opera and a slice of marketing genius were unlikely propositions when Richard Thomas sat down at the piano at the Battersea Arts Centre in 2001. Thomas ran 'scratch nights' where he improvised around the ideas for imaginary and unlikely productions that the tiny audiences suggested.

An opera about Jerry Springer proved to be a fun and fruitful concept and slowly over these sessions the idea solidified. Comedian Stewart Lee attended one of the evenings and the pair agreed to co-write the opera.

Twelve months later the opera was performed at the Edinburgh Fringe.

It was a huge hit with audiences. Critics were not quite as impressed and despite the audience acclaim, Thomas and Lee read each and every review in great detail. They met with many of the critics to discuss their reactions and to collect suggestions for improvements. With a huge amount of input the pair revisited the script and made major alterations to the structure and content of the opera. One audience member who had been particularly impressed was Nicholas Hytner, artistic director of the National Theatre, and it was he who commissioned its London run.

Marketing is traditionally seen as duet of interactions with the potential consumer.

Marketers Losing Ground in the Clutter War

Before we can sell, we must build the brand. Before we can build the brand, we must generate awareness. Before we can generate awareness, we must break through the increasingly impenetrable obstacle known as clutter.

Clutter is created by the number of brands multiplied by the number of messages competing for a customer's attention. The current estimate of the result of this multiplication is 1600 commercial messages a day. That's about 500,000 messages a year.

As clutter increases, the efficacy of marketing communications lessens.

The relative share of voice of any one message decreases as the number of competing messages increases. And as clutter increases consumers switch off from the message source.

Two billboards in a town square will result in half the amount of exposure per billboard than one would have gained. Put up four billboards in the square, so that the consumer is surrounded on all sides by promotion, and it's likely that none will be noticed.

Logically, therefore, one would expect the marketing industry to control clutter. Unfortunately, market forces do not always operate on a logical basis. The response from marketers to clutter has been to increase the amount of promotional materials. In recent years the number of commercial minutes per hour of television has increased. So too has the number of print ads carried by most magazines and newspapers. Worse still, advertisers have attempted to beat clutter by extending their promotional messages into ambient media. Now ads reach out to us from all directions: from the floor, from above the urinal, from someone's forehead, from wherever we least expect to encounter commercial messages (and therefore still pay attention).

The direct marketing industry tried to learn from the lessons of advertising.

Unanswered Complaints Threaten Brands

In June 1996, Jeremy Cooperstock flew United Airlines from Toronto to Tokyo. He had such a bad experience that he decided to write a complaint letter to United. A month passed and he received no reply, so he penned another complaint letter. Finally, in late-August, he received a form letter that did not address any of his complaints.

Angered by this treatment and bolstered by messages from colleagues who had also experienced poor service with United, Cooperstock took action.

In September he set up a 'Poor Show' web page on the University of Toronto site.

The site described poor service and lack of customer orientation at United and encouraged other disgruntled passengers to share their experiences.

The page grew in popularity and finally United acted. In March 1997, United threatened the University of Toronto with legal action if the page remained on its server. Cooperstock withdrew the page, but set up his own site, untied.com. The page still exists and has attracted thousands of visitors. It provides hundreds of stories claiming United's incompetence and represents an independent, and therefore damning, indictment of the service levels at the troubled airline.

Anatomy of a Marketing Plan

A marketing plan is a request for funds in return for a promised level of incremental revenues, unit sales, market share or profits. One can develop marketing plans for products, services, market segments or brands. The critical components of a marketing plan includes the following:

•    Summary
•    Objectives (attract new consumers, create new uses, increase share of requirements, incent trial, encourage repeat purchase, encourage add-on purchase, increase awareness, increase loyalty, change value perception, increase emotional bond, extend into new product and service categories, etc.)
•    Situation Analysis
•    Market analysis
•    Competitive context
•    Customer profile (segments, needs, attitudes, behaviors, insights, etc.)
•    Strategies and tactics (touching upon all key marketing components that will be used: product, packaging, pricing, distribution, advertising, publicity, sales promotion, selling, etc.).  Be specific.
•    Operations considerations (impact on plant capacity, need for new assets, etc.)
•    Financial projections
•    Pro forma profit and loss statements, balance sheets, cash flows, etc.
•    Including funds required to execute plan
•    Supporting customer research (qualitative research, concept testing, volumetric modeling, market test results, etc.)
•    Risks and contingency plans

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Pre-testing Versus Marketing Instinct

Marketing's age of accountability began in the early-90s. Prior to this, marketing activities were widely seen as a cost and marketers were regarded as 'fluffy'.

These marketers espoused the idea that marketing was an art and an inherently creative endeavour. All a marketer needed to succeed was gut instinct, an extensive vocabulary and an unburdened imagination. They certainly did not need a qualification in marketing, because, hey, marketing is instinct.

With the age of accountability came a focus on metrics, measurement and evaluation. Leading marketers were told that if you cannot measure, you cannot manage, and they set about creating a more systematic and strategic approach.

It became relatively easy to identify whether a company had evolved or not. One classic means of identification was how a company approached its advertising planning. Marketers used to approach their advertising agency with a bundle of strategic goals - none of them derived from research - and then set about directing the agency to create an ad that they (rather than their target) perceived to be acceptable. Consequently, the first time a marketing manager found that their ad budget had been wasted was after it had been invested - sorry, spent.

Evolved marketers use their own research to brief their agency and then review its creative output using the voice of the customer. They do this through pre-testing. Pre-testing is a century-old tradition of taking a fraction of the total ad budget to test whether a campaign will actually work in its present form before that campaign is completed and aired.

In the US, pre-testing has effectively been the norm for decades. In the UK, it remains a contentious and much misunderstood activity.