Caution: Digital advertising and Big Data

Caution: Digital advertising and Big Data

‘Brands under threat’ is one of those regularly occurring headlines that alert marketers to a new development in the business environment.

The retail revolution of the ‘70s and ‘80s where retailers turned themselves into brands gave FMCG brand owners a scare but succeeded in concentrating their minds and the best emerged stronger. Recessions typically called for this hardy perennial headline as marketers cut budgets refusing to learn from the acres of research that shows that brands which maintain advertising budgets emerge healthier from a recession than the cutters.

Listening to the new CEO of Diageo the other day on the radio I was interested to hear him describe the alcoholic drinks world as ‘premiumizing’. Diageo, as one of the world’s great brand builders, is in a perfect position to reap the benefits. Nothing is more subjective than alcoholic drinks – no moving parts, no expensive ingredients, minimal craftsmanship. Research often shows that drinkers often can’t tell the difference between expensive and cheap brands in blind tests. The value is in the mind and that comes from skilful positioning, communication, packaging and all the other tools that marketers bring to the job. And Diageo with Johnny Walker and others do this brilliantly.

But two developments threaten to distract marketers from this essential brand building job.

Brands face a double whammy of digital advertising and Big Data; both of which exert such a siren call that marketers may forget the distinguishing feature of a brand – which is its equity that produces the margin, which reduces price elasticity and makes the major contribution to profit. Manufacturers make products but people buy brands – for their added value, their emotional appeal and results of careful positioning and a consistent presence.

As Les Binet and Peter Field write in their seminal article in the September issue of Market Leader, it is the long term effects of advertising that contribute most to brand equity. And those long term effects must have a strong emotional component. Their analysis of the IPA database makes it clear that digital advertising provides important short term boosts – like old fashioned sales promotion activity. But a series of short term effects don’t add up to a long term effect. In fact, ultimately the reliance on digital’s short term boosts may in fact underline the equity. A long term commitment to an emotionally-based proposition is essential and that may be what is endangered.  

As for Big Data – as described by Colin Strong also in the September issue of Market Leader - the threat may be even more serious, if only because of the complexity of the analytics now possible with the various data streams that can be fused together. The kinds of systems analysts now being employed to engineer all this can be a danger to the traditional marketing function, already showing signs of being marginalised by technology. But, like digital advertising, Big Data with its obsession with correlations and model building results in an increasing distance from the flesh and blood experience of the consumer; and also has the potential to undermine the emotional core that distinguishes a brand from a product.  

This is a critical period for marketing and one where the threats are just being recognised.


Read more from Judie Lannon.

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