Branding Strategy Insider

Engaging Influentials: Twitter and Beyond

With the rapid adoption of social media, we have accelerated into a network economy.  In a network economy, connectivity enables value to be created and shared by network members.  The larger the network, the greater the potential benefits.   In the digital world, network activities take place on an open platform that enables participation and cloud computing (think Wikipedia and widgets).

In networks, some members are more connected and active, and therefore have more influence.  These influentials are important members because they add significantly more value to the network.  In the digital world, they blog, twitter, upload videos, experiment with new gadgets, and create widgets.  As early adopters, they tend to be trendsetters that are followed by their friends and sometimes the masses.  The book, the Whuffie Factor, talks about Social Capital, and how our society is increasingly motivated to become more useful and creative.  Today, more people want to be influencers, and they want to be enabled.

In 2009, Twitter has emerged as one of the most talked about platforms in the network economy.  Indeed, there is a simple network exchange on Twitter:  influencer creates bite-size content, and follower discovers new information.  Here are a few examples of the exchange:

•    Gavin Newsom, mayor of San Francisco and California Governor Candidate, has over 500,000 followers.  He keeps his followers informed about upcoming events and fundraising, and enables them to interact with him directly.

•    Mike Massimino, a NASA astronaut, has over 400,000 followers.  He combines his human life story with a behind the scenes look at being an astronaut.

•    And of course there is Oprah, approaching 1.4 million followers.

Twitter makes it easy to share your voice and build your presence in the community. 

Digital Marketing and the New Push / Pull Dynamic

Consumers are bombarded with more messages than ever before. Refining and clarifying your target segment is becoming evermore important as mass-messages are falling upon deaf ears. Specific, tailored and relevant messages, combined with consumer engagement and empowerment are elemental in the new marketing era. Less and less are market leaders dictating consumer needs through “push” advertising. By way of digital networking and publishing tools, consumers are creating consumer needs. To identify the key forces driving this marketing shift, we synthesized insights from over 40 industry professionals.

From Company Push to Consumer Pull
What is push and pull marketing? Push is the 30-second TV / radio spot. Push is the billboard and web banner. Push is the full-page magazine / newspaper spread. Push is becoming evermore difficult to push. The converse of push, is pull. Pull marketing is engaging; interactive; a two-way line of communication. To illustrate the push / pull marketing dynamic 15 years ago, if you were in the market to buy a TV, what resources would you have at your disposal? TV, radio, billboard, direct mail advertisements might have influenced your decision. Those messages are finely crafted to be persuasive. In essence: they’re bias. For a more objective view, you might turn to your friend that knows something about TVs. Or, you can go to Best Buy and they might be able to educate and inform your decision. In short, advertisements and a handful of “experts” were your resources. That was the push / pull dynamic then.

In the digital era, we can better manage and prioritize the influence of each resource. With the ubiquity of the internet, resources are seemingly endless; therefore you can choose which are more important as you refine our decision. Where in the past your decision was constrained to a limited number of resources, in the digital age, there are countless information hubs to help you choose one product over another. With the extensive consumer conversation on social media sites and product pages, what weight does the mass message—pushed from TV, billboard, radio, etc—carry when you’re making your decision? Though consumers will still soak up push marketing—and factor those impressions into their spending decisions—the internet and its vast networking reach typically bypasses traditional push media. In the past, the number of resources was limited—therefore each opinion meant more and consumers were just consumers. In today’s age, consumers are researchers, advocates, creators, promoters and marketers.

Building Brands Online in the Post-Sales Market

Customers will talk about your company, its products and services, whether you want them to or not. And online there are a multitude of places to do so. The question is, do you as a brand facilitate or participate? I will argue that you should do both, and tell you why.

It is not unheard of for customers to eulogize - one only has to browse Trip Advisor to see that. It is most definitely not unheard of for customers to complain, or to seek answers to questions or solutions to problems. Consider Apple and BMW. They collaborated on the first proper integration of the iPod and the automobile, and are the only two brands I would consider getting tattooed, were that my thing.

Apple provided a forum for their customers back in 2000. Duane, who has posted 113,365 posts so far, is a 'Level 5' and the number one poster. A blogger said of Duane, "I'm guessing that if you play "Apple Related Trivial Pursuit" with Duane, Duane first kicks your ass and then takes your name." Apple describes the service as a user-to-user support forum where experts and other Apple product users get together to discuss Apple products. You'll find a wealth of information about your favorite Apple hardware and software products that will help you get the most out of your purchase. You can participate in discussions about various products and topics, find solutions to help you resolve issues, ask questions, get tips and advice, and more.

BMW, on the other hand, does not provide a forum for its customers. As a result, a plethora of home-grown forums have arisen from bimmerfest.com to model specific e46fanatics.com, meaning a time-consuming and sometimes fruitless Google search for information. It is still not too late for BMW to enter the fray, and provide value to its customers. Disenfranchising the people who have filled the void is not something I would do - rather BMW could provide:

Defying The Genericizing of Brands

As marketing budgets shrink and tip in favor of value messaging and cost incentives rather than brand-building, the absence of the latter in favor of the former is acutely dangerous. This type of price-driven activity has historically been considered a generic, low-level marketing practice, and normal branding rules have not applied. While that may have worked well enough during flush times—when larger branding efforts acted as a halo and compensated for generic activity—today all communications must incorporate brand-building. Otherwise,brands risk coming across as interchangeable, schizophrenic, watered-down and reactionary.

Take, for instance, the interchangeable messages that are coming from various U.S. fast-food joints. There’s Subway’s $5 Footlong, Arby’s 5 for $5 and Little Caesars $5 Hot-N-Ready. The simple message: Get more for less. Little is said about the taste or quality of the food. And little is said of Citroën’s technological prowess in a U.K.campaign that simply lists the prices and economic advantages (fuel-consumption data) of the automaker’s C1, C3 and C4 models. This is a real departure from Citroën’s previous long-running campaign for the C4, which starred a funky futuristic transformer that illustrated the tagline “Alive with technology.”

Even more problematic is when price-led efforts are disconnected from concurrent branded efforts—evident in an effort for the Morrisons supermarket chain in the U.K. In a clear attempt to stifle the ominous threat from discounters, Morrisons has ramped up its price-led advertising. A series of cheap-looking ads fronted by Nick Hancock—a fairly low-profile, low- cost TV face—highlight some worryingly low prices: all the ingredients for a family barbecue for just £4. Confusingly, a simultaneous campaign uses higher-profile celebrities (Helen Baxendale,Tara Fitzgerald, Lulu) waxing lyrical about their passion for fresh, quality British produce.

Schizophrenic behavior of this nature dilutes core brand equity. While it may help in the short term, knee-jerk reactions to the immediate environment can prove detrimental to the long-term value of the brand, especially if they don’t link up to what a brand represents or the bigger brand idea.

Brand Reactions To Anxiety

Brands have adopted a variety of tactics in response to changing consumer attitudes and behaviors. In the first quarter of 2009, JWT monitored more than 100 brand responses to the recession in our 16th installment to the AnxietyIndex. We found that most approaches fit into six buckets: optimism, humor, nationalism, nostalgia, consumer empowerment and value/price. (Some of these approaches overlap.)

Optimism
During crisis, people learn to live with losses (jobs, homes, savings) and uncertainty, making them more sensitive to what really matters. As in every extreme change and loss situation, people start pondering the meaning of their lives. Brands are taking part in this process by trying to inspire consumers with optimism. Coca-Cola Spain’s "Open Happiness" campaign tackles the meaning of life via the concept “What would you tell someone who has just arrived in the world in times like these? ”While the times might seem dire, Coca-Cola reminds us that the future always offers hope.

There are also two compelling case studies from Argentina that focus on optimism; both campaigns were executed after the country suffered from a period of high unemployment, high inflation and general social instability in the early aughts. Beer brand Quilmes debuted a stirring television spot for the 2002 FIFA World Cup that featured the country’s soccer players cheering on the nation, urging their fellow citizens to pull through and get past the crisis while Aerolineas Argentina’s 2003 campaign focused on the concept of “Argentine-ness”as a powerful social connector.

Humor
Trying to make light of a dismal situation, brands are resorting to all sorts of recession humor, some successfully (Jet Blue poking fun at those who seem most responsible for the financial crisis), others with a thud (Manhattan Mini Storage using recession wordplay to persuade those who must downsize to store their belongings; one ad highlights the “Storagista,”defined as a “city gal who downsizes to a studio and stores to save money”).

Great Moments in Branding: Neil McElroy Memo

After its successes with Ivory and Crisco, P&G developed a new business technique called "brand management." Because it focused attention on a product rather than a business function, brand management turned out to be similar in its effects to the multi-divisional structure introduced by Alfred Sloan at General Motors. And it had the same powerful tendency to decentralize decision making.

The shift to brand management began on May 13, 1931, with an internal memorandum from Neil McElroy (1904-1972), an athletic young man who had come to P&G in 1925 right after his graduation from Harvard College. While working on the advertising campaign for Camay soap, McElroy became frustrated with having to compete not only with soaps from Lever and Palmolive, but also with Ivory, P&G's own flagship product. In a now-famous memo, he argued that more concentrated attention should be paid to Camay, and by extension to other P&G brands as well. In addition to having a person in charge of each brand, there should be a substantial team of people devoted to thinking about every aspect of marketing it. This dedicated group should attend to one brand and it alone. The new unit should include a brand assistant, several "check-up people," and others with very specific tasks.

The concern of these managers would be the brand, which would be marketed as if it were a separate business. In this way the qualities of every brand would be distinguished from those of every other. In ad campaigns, Camay and Ivory would be targeted to different consumer markets, and therefore would become less competitive with each other. Over the years, "product differentiation," as businesspeople came to call it, would develop into a key element of marketing.

GM: Titanic of Brands

The collapse of GM and the problems they face going into bankruptcy cannot be overstated. It is amazing how a company that was once the cornerstone of American industry could decline unimpeded over such a long time without any solution being adequate to the task of saving the company.

The scale of the decline can be examined in the brand equity dollar value of the corporate brand (the portion of market cap attributable to the GM name):

2003
General Motors $4.86 Billion
Toyota $19.05 Billion
Industry Average $6.19 Billion

2008
General Motors $0.32 Billion
Toyota $21.85 Billion
Industry Average $5.43 Billion
Source: CoreBrand's Directory of Brand Equity

The squandering of brand equity at the corporate level is just the tip of the iceberg. The collapse of individual product brands despite recent improvements in product quality proves the dysfunctional quality of GM management.

Branding Lesson Found In GM's Rubble

GM's financial quagmire and bizarre labor and bureaucratic practices notwithstanding, branding (or lack thereof) was a big part of their problem.

However many MPGs your car gets, or what quality ratings it receives, cars, like most products and services (perhaps even more so), have a large emotional component that isn't an optional extra. Your brand either stands for something in the mind of the car buyer or they walk away from your brand and drive another home.

We're not just jumping on a fallen giant. We've been saying this for years and as loyalty metrics are leading-indicators of consumer behavior and profitability we weren't surprised to see GM steadily lose market share, from 54% to 19%.

GM lost touch with car buyers, but that shouldn't have been surprising to folks either. They had too many brands, many of which had neither emotional resonance nor meaning. Everyone knew them (so much for awareness ratings), but nobody knew them for anything other than "cars." Experts have pointed out that GM practiced "launch and leave" branding, i.e., companies spend billions upfront to introduce a vehicle, but then fail to support the brand with sustained, meaningful advertising. And to complete the self-fulfilling marketing loop, with a shrinking market share GM couldn't possibly give its multiple brands and models the individual attention they so desperately needed. That explanation's fine as far as it goes. If you really pay attention to what GM did you'll find that they weren't really very good at branding or marketing. Not when they had to actually compete.

Perceived Quality: Critical Asset For Brands

Perceived quality is a brand association that is elevated to the status of a brand asset for several reasons:

* among all brand associations, only perceived quality has been shown to drive financial performance.

* perceived quality is often a major (if not the principal) strategic thrust of a business.

* perceived quality is linked to and often drives other aspects of how a brand is perceived.

Perceived Quality Drives Financial Performance

There is a pervasive thirst to show that investments in brand equity will pay off. Although linking financial performance to any intangible asset (whether it is people, information technology, or brand equity) is difficult, three studies have demonstrated that perceived quality does drive financial performance:

* Studies using the PIMS data base (annual data measuring more than one hundred variables for over 3,000 business units) have shown that perceived quality is the single most important contributor to a company''s return on investment (ROI), having more impact than market share, R&D, or marketing expenditures. Perceived quality contributes to profitability in part by enhancing prices and market share. The relationship holds for Kmart as well as Tiffany: Improve perceived quality, and ROI will improve.

Obama, McCain: A Political Brand Analysis

With less than 7 critical days before the November 4th U.S. Presidential Election, we turn to some of the world's savviest marketers - our readership, to help secure a better understanding of each candidate's brand.

Purpose
This brief survey is designed to identify the dimensions and qualities of the John McCain and Barack Obama brands. It will explore how different customer segments perceive each of these two presidential candidates differently. It will also explore the alignment of these candidates with the qualities that are most important to the people registered with the parties that they represent.

Neutrality
This survey is not supported by any political party or interest group. It was created by our chief brand strategist Brad VanAuken, author of Brand Aid, for the sole purpose of exploring the presidential candidate brands. Individual responses will remain confidential. All responses will be explored at a group level (men versus women, Democrats versus Republicans, etc.).

Incentive
Anyone who takes the survey will have the opportunity to win one of the following: a copy of Brand Aid, an Amazon.com gift certificate or a Starbucks gift card through a random drawing.

The average time to take the survey is less than 10 minutes. Please click here and help us make a difference.

We will report the results and the winners here on Branding Strategy Insider prior to election day.

Thanks in advance.

Derrick Daye and Brad VanAuken

Sponsored By: Brand Aid