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Brand Marketing Derrick Daye

Marketing Is Changing, Are You Ready?

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It is no surprise that academics and professionals alike are calling for new approaches to marketing, because the old approaches are inadequate to the challenges. New forms of media are showing up all the time. Consumers are faced with a turbo-charged range of choices, and an array of new technology is available to support marketing decisions and programs. According to Phillip Kotler, new marketing requires new financial IT mindsets as well as some additional skills so that systems will better support marketing decisions.

As we continue the drive toward making marketing more accountable and scientific, it is important to look at what has changed and what remains of the old model. While marketers enjoy new media and technology enabled tools, the fundamental marketing model itself has not changed. People and businesses still want useful products and services and relevant and entertaining messages. Marketing is still about identifying needs so that people line up to buy. The change is in how consumers learn about products and services and receive the messages. We are entering a ‘post-mass media’ marketing world.

Consumers have new tools, too.
Consumers have always wanted to avoid poor or overpriced products and intrusive messages, but now they are empowered to act on those feelings in unprecedented ways. These consumer-empowering technologies promise to eliminate the concept of ‘mass markets’ once and for all. Proof is everywhere, from declining audiences across most media, to the penetration of TIVO and the explosion of DVD sales – of TV shows no less!

My experience of the past three years teaching sophomore Marketing at University of Notre Dame illustrates just how profound are the coming changes may be. Although they are thought to be the most marketed-to generation ever (and perhaps because of this), most business students don’t easily relate to marketing. They have few favorite brands, and little brand loyalty, they see very little television advertising, and they view most commercial messages with cynicism, something to be avoided. Even blogs and podcasts have barely penetrated their consciousness. (Which makes me wonder who is actually using these media other than those who write about them?)

What my students understand very well is how to connect to information they want. Cell phones and iPods are ubiquitous. Virtually 100% of students use Instant Messaging, email is a way of life and nearly all my students participate in social networking via facebook.com.

From Quantity of Viewership to Quality of Engagement
Reaching and influencing this generation of students with advertising messages over the course of their consumer lifetimes will be more than a challenge, it may be impossible. What is more, it may not be worth the effort. Even when they see ad messages, they are unlikely to believe them.

In the impending ‘post-intrusion’ world, people-to-people connections, not commercial advertising, will be the way persuasive messages find their way into consumers’ consciousness; word of mouth will be the way marketers make an impact on behavior. Forrester reports that more than half of young consumers rely on their friends and families for purchase advice, and 65% tell others about products they like. Electronic communication tools favored by youth 18 and under are IM, mobile phones, and email. 94% own some device. This phenomenon goes well beyond technology-enabled young people. NOP World has been tracking the influence of Influentials in making recommendations about everything from products to political candidates. They find that "despite widespread technology adoption, marketers must understand that the majority of word-of-mouth is still done at the coffee house, in the mall, over brunch or at the gym."

Is this advertising? I think so, although much more work is needed to really understand what makes these messages effective. What makes a message relevant enough to be passed on? What makes it persuasive enough to impact behavior? How can marketers stimulate the whole ‘C2C’ process?

Brand Building as the Foundation
At the center of this work will be the concept of ‘brand’. Marketing has always been the means and method for building a strong brand. Marketers that do a good job of marketing get a brand. Those that don’t get a brand as well, but it isn’t a very good one. A strong brand is the reward for effective marketing, the prize. The benefits of a strong brand are well documented, in terms of customer perceptions and reputation, marketing efficiency and price premiums and profitability. All things being equal (and they usually are), the company with the strongest brand wins.

Despite predictions to the contrary, brands have become more, rather than less, important to understanding the impact and mechanisms of marketing. I see this being even more true in the future. In fact, existing brands may be worth more than ever. There was only one successful cigarette launched once tobacco advertising was banned. Strong existing brands such as Marlboro and Virginia Slims were worth more post-advertising than they would have been if TV advertising had continued.

In the new marketing universe, ‘brand building’ is becoming a more useful way to frame marketing activities than the 4P’s or IMC. Brand strategy incorporates Consumer Behavior, Integrated Communications, Market Research, Pricing, and Business Strategy, Customer Relationship Management. Eventually, it may come to be seen as equivalent to Marketing itself. In fact, brand strategy concepts can easily displace the 4P’s, with improved focus (building the brand vs. building sales alone).

o ‘Brand Experience’ is displacing ‘product’. Product has become an almost quaint idea; what outside the supermarket does not have a hefty service component?

o ‘Brand delivery’ is displacing distribution’. How one achieves the service or experience is part of the brand experience, not a distinct function. Dell’s distribution system is the same as its promotion system. Overstock.com is the number three retailer behind Ebay and Amazon.

o ‘Brand value’ is displacing ‘pricing’. In a world where there is complete pricing transparency, pricing is more about sustaining brand value than establishing break even points.

o ‘Brand communications’ is displacing advertising and promotion. Many brand building activities go well beyond IMC as once defined. Four billion dollars a year is now spent making brands more conspicuous by placing them in venues (movies, festivals, celebrity portraits) that consumers will find credible and appealing. Enlightened marketers are focusing efforts on creating messages (content) that customers will want to share with others rather than simply endure in order to get to the ‘real’ entertainment. BMW showed the way, others (Burger King, Audi) have followed, with equal success.

Brand Building Programs vs. IMC
At a digital marketing conference, a smart person said, “In the future, the brands with the best stories will win”. Brand building is at heart about building superior brand experiences — or ‘stories’. Those stories are what define a brand and give it equity. Conversely, we are witnessing that the brands with the worst stories die by word of mouth faster than ever before. Just look back at Dell’s problems with bloggers for proof.

Building ‘communities of interest’ is becoming as important as advertising. Customer Relationship Management is becoming promotional function managed by marketers rather than an information technology managed by IT professionals Successful brands are actively encouraging customers to become brand ambassadors or ‘evangelists’, people who love the brand so much they want to wear it, tattoo it on their bodies and talk about it to others.

Of all the changes facing us, measurement will be the issue which will be the most difficult to resolve. What is measured drives results, so this is no small question. What do marketers want? To show financial ROI or stronger brands? Stronger customer equity or stronger brand equity? Two camps are forming and the debate is certain to be a lively one.

Where do we go from here?
For those who think a new model is imminent, the time to develop new approaches to marketing is now. Here are several ways to stop working under the assumptions of old model and embrace the new.

Stop vs. Start
Stop worrying about TIVO | Start developing content that consumers will go out of their way to find and share with others

Stop focusing on the average customer | Start focusing on the Influential customers and trend setters

Stop modeling the financial impact of advertising | Start measuring the brand equity impact of marketing activities

Stop trying to integrate sales with marketing | Start measuring both functions on the same metrics and let them figure out how to work together

Stop conducting research as if households watched media and buy products | Start conducting research to understand individual buying and media behavior

Stop pretending product placements and sponsorships aren't ads | Start making sure new media contributes to the brand experience or stop doing it

Stop differentiating on one P | Start using all the 4P's to create a differentiated experience

Contributed to BSI by: Carol Phillips, Founder, Brand Amplitude

Sponsored ByThe Brand Positioning Workshop

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9 Comments

Franklin Grippe
Twitter:
on January 28th, 2011 said

Marketing alone, as a school of thought, is not relevant anymore. And as much as this article tries to revitalize it my placing branding within it, branding conceptually engulfs it.

We need a “theory of everything” or “unified theory” to emerge that effectively synthesizes all the disparate ideas that branding represents, instead of being this netherworld, that is like the 7 1/2th floor in Being John Malkovich, or Narnia or something. The place that you never see in the real world where all the disparate ideas converge and nobody believes exists.

I think the reason why your business students dont relate to it, is because when it is done well, it is invisible. They don’t see it. Or at least they cant describe it in data points. They feel it. They experience it. You cant even test it or talk about it like you do everything else. It needs to be like a kind of voight-kampff empathy test (from bladerunner.see “do androids dream of electric sheep, philip k dick). It is a fundamentally different way of communicating. Perhaps by the shear volume of messaging. It may be neurologically more efficient for our brains to process all the info that way, and help us define ourselves in the context of the group.

And the science we need to help define it, is more on the level of high level math or physics. Like what is going on towards an AGI. Keeping the college algebra version of marketing doesn’t do the trick because we end up with conclusions like, “the green one did better”, or “people liked the bigger logo”. Which is almost comically ridiculous. Unfortunately, that level of math/physics is probably out of reach of most people in “marketing”. (see ben goertzel, the hidden pattern).

I think the solution to “unified theory” of branding at least begins where it started. With the thinking of the great general agencies. They have always been the best storytellers. And they have always been the best at synthesizing different schools of thought, best practices, skill sets, design thinking, etc.

On youtube there is a great old video of steve jobs talking about the think different campaign. Search “steve jobs oldie but goodie”. It is what it is all about. Still.

Chris Wren on January 28th, 2011 said

Such insightful points yet again by Carol. Tim Williams over at Ignition suggested taking a look at “The Manifesto for Agile Software Development” (link to ignitiongroup.com) as a model agencies should repurpose for themselves when creating and deploying teams to solve marketing challenges. The manifesto itself is a fun read, and to imagine which principles of the agile manifesto might work in the agency biz. (link to agilemanifesto.org) I love “individuals and interactions over process and tools”.

Franklin Grippe
Twitter:
on January 28th, 2011 said

“The digital revolution and the rise of web conversations will result in “the death of ‘the line’”, a white paper commissioned by the Royal Mail has claimed.

According to the report, authored by marketing expert Martin Hayward with academic Patrick Barwise of London Business School, distinctions between above-the-line and below-the-line channels will blur until the divide becomes redundant.”

link to warc.com

Timo Platt on January 28th, 2011 said

Nice analysis, Derrick, Brad and Carol. You’re spot on with observations of how GenY regards advertising, particularly mobile ads.

The new mobile social media must: blend with the consumers’ real-life activities; respect their privacy; enhance shared experiences; and offer new and improved features to capitalize on existing behaviors, such as texting and IM.

The best and most effective mobile marketing will tell a story, keep the conversations real, bring people together, create shared experiences around the brand’s story, and deliver these results.

Carol Phillips on January 28th, 2011 said

Franklin, it’s funny you should mention the Steve Job’s vision video as I shared that with my students last week in the second session of my MBA Brand Strategy class at Notre Dame. I love how he dismisses earlier work on the ‘brand’ citing the sizable investments Apple had made with the remark – “you’d never know it”. A man ahead of his time in so many ways…but especially in marketing.

I agree with you that the old agencies certainly knew a lot about brand building, but unfortunately, they were not able to describe what they do so that it was replicable without ‘creative geniuses’. Old school branding had a black box quality to it – like the old cartoon, “and then a miracle happens.” I have more appreciation for the efforts by Keller, Kotler, Aaker, Kapferer and others to articulate a conceptual ‘unified theory of marketing’ now that I am charged with teaching it. Marketing and branding may not be a science yet, but every discipline needs a language and models or it’s hard to have a conversation about it, research it or teach it. We may never get there, but it’s still a conversation worth having. Thanks for your comments!

Carol Phillips

Tim Redpath on January 29th, 2011 said

Thanks Carol,
Very insightful.

It’s certainly true that the new generation is treating old media with disdain and opening up new communication channels.

I am not sure that the fundamental requirements of good marketing (understanding why people buy your product, what differentiates it, who it is targeted at, what is its price point what it competes with etc.) have changed. But the tools we have available to open up a dialogue and build a relationship with a potential client have changed dramatically. And, they’ll probably change beyond recognition in the next 20 years.

I work in a slightly different space, mostly, B to B, and change is slower there. If you are selling technology in to a bank, marketing gets you in the door and keeps you there. But it can be a long sales cycle after that as Sales work through their programs to convert prospects in to leads in to sales.

Just a thought.
Tim Redpath

RM Pitts on February 02nd, 2011 said

At a digital marketing conference, a smart person said, “In the future, the brands with the best stories will win”.
SO HOW IS THIS NEW….it’s always been that way….great conference speaker he probably also said “They have few favorite brands (really based on what research), and little brand loyalty(again based on what research), they see very little television advertising(Isn’t tv dead?), and they view most commercial messages with cynicism, something to be avoided. (what commercials or cynicism?)

Even blogs and podcasts have barely penetrated their consciousness(could that be because of beer and weed and sex…gawd college was grand.

We are entering a ‘post-mass media’ marketing world.(This has been flung around for at least 20 years…I tried to find out when that phrase first appeared and have it back to 1986)

Proof is everywhere, from declining audiences across most media (except TV)

Chris Boak on February 03rd, 2011 said

Interesting I’ll bet you don’t post this as disagreement with any of the social media/world has changed gasbags don’t want to hear this.

1. At a digital marketing conference, a smart person said, “In the future, the brands with the best stories will win”. Brand building is at heart about building superior brand experiences — or ‘stories’.

Comment: Nothing has changed. The best stories (A truth well-told) have always won. Nothing new here.

2.Marketing is still about identifying needs so that people line up to buy.
The whole world was not beating down the door for the ipad, or the ipod for that matter. Apple built a product that people didn’t need, but they had to have. Big distinction.

3.Brand communications’ is displacing advertising and promotion.

They are one and the same. And the death of promotion,like the death of TV is simply untrue. Look at Groupon, Village Vines, etc.

4.Although they are thought to be the most marketed-to generation ever (and perhaps because of this), most business students don’t easily relate to marketing. They have few favorite brands, and little brand loyalty, they see very little television advertising, and they view most commercial messages with cynicism, something to be avoided. Even blogs and podcasts have barely penetrated their consciousness. (Which makes me wonder who is actually using these media other than those who write about them?)

Meanwhile who controls the spending, who has the wealth in the country. Not college students. So let’s create a marketing program, for every product, for every brand based on the potential of a group that has no money. And please don’t mention the lifetime value equation or some such rot…..student have always been difficult to target and always will be, especially when those creating the marketing are 20 years removed and are writing blogs about it.

As far as the unified theory letter….please buying a product is based on emotion as much as anything else. And emotion is subjective, shifting and inherently that which makes us human….it is therefore outside the realm of science.

A brand is a truth Brands that get this win.Those that don’t, don’t.

As Einstein said Not everything that can be counted, counts. And not everything that counts, can be counted.

Franklin Grippe
Twitter:
on February 05th, 2011 said

Carol,

Thank you, for writing the article in the first place! And thank you for responding to my comments. This is definitely a discussion worth having.

When I talked about ad agencies and branding, i stated that the discussion should START there. I was not trying to suggest we return to someplace.

Just wanted to make that clear.

However, I also believe the best examples of branding and branded activities, still, reside within the context of the “ad agency”, because after all, they do everything, not just ads. And there model, people, practices, whatever you want to call it….seem to work as a whole, more than most, in my opinion. They are the best examples of business/branded thinking from management consulting to creative direction, and everything in between. This is also where I think the future of branded thinking also resides.

I think its about non-linear, design thinking. Being able to squint and see everything, without over-focusing on a specific thing.

Unfortunately, it seems that business school not only does not teach that, it encourages linear thinking.

And frankly, the kind of replicable thinking this represents, will be the first to be turned into an algorithm. Along with the CEO. “Isn’t there an app for that”?

And understanding why and how to visualize something in an other than predictable way? Emotionally. In terms of “the experience”. That is a whole other discussion.

I don’t think that the kind of thinking that great branded thought and visual execution represent, reside in some “black box” either, but to linear thinking styles, it surely must.

I suspect, however, that you DO get it. And hopefully you will be one of the thought leaders that figures out how to elevate your field/school of thought, perhaps into a great new form. A result of boundaryless synthesis, non-linear, and design thinking.

Go Irish!

BTW, check out these guys. One of my favorites and a great example of people who “get it”:

link to taitsubler.com

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