Growing up digitally: change drivers in marketing

'We have been talking about change for at least 10 years now, but my belief is that in the last two years marketers have really started to take notice. The imperative to change has become far more dramatic. Now you don't have to tell me anymore about the trends; I just need to watch what my kids do.'

So said Thom Braun of Unilever, highlighting the fact that the next generation is growing up 'digitally'. Major developments in the media landscape are changing the way we reach consumers, and children and young people are using new technology to create, edit and communicate their own media.

However, these changes are not restricted to youth. Mass audiences are not only difficult for marketers to reach, they are now busy producing their own output. The BBC, originally seen as the epitome of traditional broadcasting, has been an important agent of change in new media and is creating a forum for 'user created content'.

New media owners are emerging. We have a relatively recent global player in the form of Google, and Microsoft has declared its intention to be a 'media powerhouse'.

The current changes in marketing communications are apocalyptic stuff. We will have to wait and see how much of it is hype. But these changes are no longer just the stuff of interesting agency trends presentations.

The question this article sets out to answer is this: how are the big brands really changing (or not, as the case may be)? This is a debrief of interviews conducted exclusively for Market Leader among senior marketers, agency people, trainers and academics, all of whom have been generous with their insight and time (see the box on the next page).

From these interviews three major trends emerged:

• The drivers: the business fundamentals that are causing companies to change.
• The enablers: skills, practices and knowledge that make change possible.
• The importance of the 'big idea' and the fact of barriers such as structure, skills, risk and measurement.

THE DRIVERS

1. The Service Business Driver

Most businesses now can be described as service businesses.

Patrick Barwise, Professor of Management and Marketing at the London Business School, explained, 'They account for the majority of the economy and are growing. The best of these companies, like Tesco and Toyota, focus on excellent execution.'

For these companies, good communication is an extension of excellent service rather than simply just a 'marketing activity'. They are particularly alert to the opportunities of new media for three reasons: greater speed, greater accountability and lower costs. These can be represented as benefits to the consumer in terms of flexibility, quicker, better service and keen prices.

Organisations such as these also know that there is a gap between how good service is currently in the eyes of customers and how good it can be, and are working on closing this gap all the time.

These issues put integrated communications planning and delivery at the centre of what a service company has to do. It is essential that everything is coherent and consistent at the execution level. (See Table 1)

According to Barwise, achieving this aim is highly challenging: 'Successful service companies are obsessive about excellent execution, so they have to do the integrating themselves and it has never been so difficult.'

Charlie Dawson of The Foundation, which works with Volkswagen and Marks & Spencer, also reflected on this trend: 'For a service business today, it is essential to join up the promises that a brand makes in its marketing activities with the practicalities of service delivery. Marketing communication is really about every way a brand contacts its audience because that is how the business is either built or undermined.'

A key change driver is the day-to-day ambition of big service companies to provide better service, of which marketing activity forms an integral part, rather than acting as a separate function.

For Barwise, 'It represents a return of Kaisen – the Japanese concept of continuous improvement in lots of small ways that add up, over time, to a revolution.'

If this can be summed up by a brand, then Tesco encapsulates it with the promise 'Every little helps' – an idea that unites marketing communications and in-store delivery.

2. The Customer Satisfaction Driver

Growth comes from satisfied customers who tell their friends about the excellent service they have received.

The economics of winning a new customer versus keeping an existing one is generally well known. A healthy and mature service business should get most of its trade from existing customers; this keeps costs down. Added to this is the realisation that keeping customers happy is one of the best ways of winning new ones.

Steve Barton, CEO of Keevill Barton Kershaw, explained: 'Consumers have great choice in most markets, which partly explains why the recommendation of a friend or colleague is important. Too much choice can paralyse decision making so people increasingly turn to friends.' (See Figures 1 and 2.)

Brands are therefore concerned with whether they are getting good or bad word of mouth marketing from their customers. 'If you want to spot a brand that is set to grow through word of mouth, then the true measure of this is that an existing customer says 'yes' to the question 'Would you recommend this to your friends?', because it is a test of whether you would be prepared to put your reputation on the line,' says Steve Barton.

'The next generation of developments in digital media are making word of mouth even more dynamic. A site like MySpace.com has become huge by offering a place to network and chat for teens. Famously, the band Arctic Monkeys got to number one in the UK singles chart through the agency of MySpace,' says Gray Sycamore, Director of Digital at The Marketing Store.

He added, 'Services like RSS (Really Simple Syndication) will bring automatic updates to your desktop rather than you having to decide to visit a site. This triggers more and more spontaneous networking and word of mouth.'

A changing role for communications planners

The focus on keeping customers happy as a growth driver is changing the definition of what a communication planner should be doing.

HOW TO INVOLVE PEOPLE

In the Real World: The Value of the Human Touch

As media fragment and attention becomes harder to win, a human encounter of can have disproportionate effect. This can be particularly true of a technology brand that needs to demonstrate new products and applications.

The Apple store is a temple to the brand where people can go to play with products, see demonstrations, consult 'geniuses' and generally soak up the whole ambience. It helps turn users into enthusiasts and advocates: the Apple store has become a destination that loyalists also tell others about.

In the Digital World: Broadband and Mobiles

Most digital interactivity is a by-product of the rapid penetration of broadband and the mass penetration of mobiles. Broadband doubles the amount of time we spend online and causes us to do more on the internet. (See Figure 3, right). And everyone carries a mobile. Even if most of us have yet to take advantage of what a next generation mobile can do, we have certainly learnt to text as a way of responding to promotions.

In 2005, Walkers put codes on 600 million packets of crisps and gave away nearly 9000 iPods to those who texted in a lucky code.

Reality shows such as Pop Idol and Big Brother have taught the nation that the mobile is great way to get involved in big entertainment and that, in turn, has fed the marketing world. Mobile-led marketing campaigns are now bigger, more entertaining and more involving. There is great interest in the potential of mobiles because of their ubiquity. In the pipeline are – viewing video clips, capturing barcodes, making payments, mobblogging, listening to radio and more besides. The vision is mobility in all things, not just a device for calls, text messages and snaps. There are technical difficulties and cost issues to overcome, but the message on mobiles is watch this space.

McDonald's new promotion, Global Casting Call (Figure 4, left), encapsulates these themes: you can win the right to be famous for a bit more than 15 minutes and have your face featured on a McDonald's cup or bag. Hopefuls go to a website to enter their photo and a hundred words about something they love in any of16 languages. The brand is tapping in the emerging flickr/youtube/MySpace generation that sees the web as a place for their creative content. Global Casting Call links packaging and retail media, online and celebrity in a big idea for consumer engagement and interaction in digital and real world media.

For Jim Taylor, Planning Partner at Mediaedge CIA: 'It is no longer about coverage and frequency, the communications planner today really is a relationship planner in the broadest sense. If we were to call what we do “a relationship plan” rather than “a media plan” then we inevitably ask different questions such as “How can I win your attention? How and where should we interact? How can we keep the relationship fresh and so on?” We need not to just think about the scale and width of our activities but how deep they need to go with individual customers.'

THE ENABLERS: WHY IS CHANGE NOW POSSIBLE?

1. Interactivity is now Widespread

The power of true loyalty and word of mouth underpins two developments that appear to be in opposition, but are in fact part of the same trend. Brands are using more real world interactivity as well as more digital interactivity – see Figures 5 and 6.

The challenge is to pitch the interaction at the right level so as to win time and attention at one extreme (typically in a high-interest area), or simply to be in the right place at the right time and making things easy at the other (typically in a low-interest area).

2. Interactivity Enables 'People Power'

The citizen creative artist or citizen reporter is an unpredictable force, as all artists and journalists tend to be. A visit to youtube.com might make you ashamed to drive a gas guzzling; nature-crushing SUV for you will find SUV drivers' values derided in short video clips. For every fun loving spoof of Budweiser's 'Whassup' you will also find a subculture of No Logo-inspired, anti-capitalists eager to show that brands and business leaders have feet of clay.

Some big brands have decided that if you can't beat them you had better join them and get involved. It means having the confidence to go the whole hog and be prepared for adverse comment.

One of the most radical ideas comes from Microsoft. For the 'digerati', the brand is a big bad monopolist crushing opposition and driving all before it. Optimistic ads and emollient speeches from Bill Gates will not win them over.

So Microsoft has sponsored a series of online video blogs in the form of a technology review called 10 (see www.on10.net). The contributors are Microsoft staffers but are free to say what they like including being very rude about their employers.

3. Interactivity Enables 'Co-Creativity'

Beyond people re-making your ads (which might be homages or satires) is the opportunity to harness individual creativity to improve your product or service or even invent something completely new.

BRANDED CONTENT: A DIFFERENT SET OF SKILLS

Other brands are creating entertainments that inspire interaction and involvement so that we pass them on and post them.

The famous first mover in doing this was BMW with a series of short films featuring among others Madonna that became a viral success. Adidas are launching seven new styles of training shoe with seven short films, and BMW has just commissioned audio short stories available free at www.bmwaudiobooks.com, at Classic FM's site and on a CD for new customers – 95,000 hours have been downloaded to date.

Success in 'branded content' requires a completely different mentality and set of skills than those of the traditional marketer. It means working with impresarios on entertainments rather than honing a message into a poster or 30 seconds. And the outcome is uncertain. It relies on generating interest rather than buying eyeballs.

The big brands are investing because they can afford to risk a small proportion of their budgets for the potential of a high interest and engagement. “Branded content” (which mostly means lightly or unbranded content) is a hot topic and is now regularly considered as part of the mix.

Software brands routinely put out prototypes (or 'betas') and invite developers to iron out the bugs before going to market. Now other companies are offering rewards in return for ideas, thus tapping into the collective brain of the internet. Nokia set up 'The Concept Lounge' in Benelux and ended up receiving bright ideas from many countries. It delivers a happy combination of fresh thinking and consumer loyalty. We cannot help liking (and championing to others) the things we have had a hand in creating.

4. More Interaction Enables More Data Capture

It adds to the other ways that companies can analyse our needs from, for example, looking at what we put on our credit cards or spend at the supermarket.

More database marketing is going online. In 2005, postal-mail volumes declined by 5% and many of us signed up to email alerts. (And quite a few of us signed up for too many and have stopped looking at them.)

Tesco, via clubcard, has become the most active user of customer data that is intelligently targeted at existing customers. Tesco acquired its own data analysis company, dunnhumby, so important is data to its customer communications.

How good you are at using the database is a test of how close you really are to customers, and closeness to customers is a test of how strong your brand is.

Janet Grimes, founding partner of the Joined Up Training Company, explains how customer information can be used intelligently:

'The credit card company that keeps trying to sell me a loan even though I always pay off the balance each month certainly doesn't understand me. Quite the opposite. They are being dumb, not smart and customer focused. By complete contrast, a colourful brochure or magazine from someone who knows what I have bought from them can be a treat and a reward. A timely promotional offer on (say) rum because I have bought barbeque coals is smart use of data and is the kind of little treat that keeps me loyal to the shop.'

The stakes and costs are high in database marketing today. Consumers have great choice so timeliness and relevance is at a premium. They are also more intolerant; bad direct mail is 'junk' or 'spam' and undermines reputations, especially of financial services companies.

The upside of good use of data is a direct relationship with customers, which puts the brand in a stronger position than those who don't. Most manufacturer brands are therefore disintermediated and it is the clever users of data who reap the rewards and profits.

WHY 'BIG IDEAS' ARE ESSENTIAL IN THIS NEW ENVIRONMENT

Big ideas are not a new theme, especially for ad agencies. However, the changed media and competitive context has altered the character of big ideas.

The definition of a 'big idea' is difficult, and there is no real consensus or shared understanding. One way to clarify this is to state what functions a big idea performs.

• It solves a brand problem or brand challenge and is therefore rooted in an accurate definition of what the brand does.
• It sits between 'the brand vision' and 'the communications plan' and is the creative glue that links the two.
• It gives a brand new meaning and inspires expression and delivery in an organised and coherent way.

1. Big Ideas are Essential for Organising Communications

Campaigns are now made using specialists from different companies who have different areas of expertise.

Marketers have more media to choose from and, in general, use more types of media in combination (evident in recent IPA Effectiveness Award winners).

The consequence of this is that the big idea needs to be simple and broad enough to be capable of reinterpretation by different specialist in different media for different purposes.

An example of this is the launch of the Toyota Corolla on a big idea of 'pride', which encompassed ads, events, sponsorship, direct mail and promotions (See Figure 7). It was not so much the distinctiveness of the idea that mattered but the conviction with which all disciplines got behind it.

2. Big Ideas are Essential to Identify Values

A discernable trend is for ideas that express 'a higher purpose in our lives' – a phrase used by Rod Connors while he was at Nike. Examples such as Dirt is Good (Persil), The Campaign for Real Beauty (Dove) or Run London (Nike's mission to get Londoners fit) are inspiring case histories, which have been a catalyst for change within the wider marketing community.

These big ideas are more like the mantras of political parties. As parties talk about values and big ideas in order to contain different elements within 'the big tent' or 'broad church', so brands need to inspire distinctive and powerful work from the different specialists that now serve them.

But the reasons for brands behaving more like political parties go deeper. A brand that expresses strong beliefs invites its audiences to share those beliefs. They don't just buy the brand; they see it as an extension of their own views and values.

Brands that achieve this happy state have less need to incentivise their audiences. People who identify with a brand may even be moved to tell their friends about it. And, as we have seen, there are few more effective ways of winning new customers than positive word of mouth. (See Figure 8)

Of course a brand's 'higher purpose' does not all have to be high-minded. Some are very down-toearth, such as 'Every little helps' from Tesco, or Sainsbury's new campaign, 'Try something new today'. Yet these brands are still expressing a 'higher purpose' and a point of view on life, and so are seeking an identification of shared values with their audience. It also explains why some big brands are now going public on their corporate social responsibilities such as Marks & Spencers with 'look behind the label' (fairtrade) and Tesco with a set of detailed commitments to be more environmentally friendly.

3. Big Ideas are Essential to Make Execution Easier

Obsessive attention to the details of execution is the mark of a great service brand, as Patrick Barwise has pointed out. At a simple level it is a demonstration that the brand has got its act together, which is important in building confidence.

O2 has been transformed by a big idea that enables both flexible and coherent execution. Each piece of communication sells an offer but also has a consistent identity – the bubbly underwater world of O2 – which leaves positive and subconscious associations in our minds, even if we are not actively interested in the offer.

O2 has recognised that most communications are passively processed (and are therefore different types of big ideas from 'higher purpose ideas' that aim for more interaction and engagement).

4. How to Brief for Big Ideas

The easiest way to get a big idea is to brief all the agencies to develop one and then accept that that it can come from anyone. Media neutral briefing is a growing but far from universal practice:

'A lot of briefs still start with “this is the ad, find a way of bringing it to life", but now we are seeing more and more briefs that ask for an idea first. It is a good development but there is still little consensus about what exactly is meant by that,' states Graham Kemp, Chairman of the MCCA.

Charlie Hiscocks travels the world for SAB Miller and has developed a system called BIBA (Big Idea, Brilliant Activations). He explains, 'The first step is to ask for an idea with illustration of how that idea can be expressed including the poster that sums it all up. The next step is activation briefs with defined audiences and objectives. It is an iterative process. The test of the bigness of an idea is that it can be used in brilliant activation. How it is activated can cause the big idea to become more sharply crystallised and better expressed.'

Patrick Collister, author of a new joint industry guide, notes, 'When you say big idea it sets off different things in people's heads – one person's big idea can be another's smart media idea. So if you are going to ask for a big idea, it is very useful to have a shared session with all your agencies to understand what you mean by the term.'

5. Big Ideas Require Sophisticated Skills and Taking Risks

Finding a big idea and then executing it in painstaking detail in can be a daunting task.

Says Thom Braun: 'You are 28 years old. You have been told that you need more than a TV ad. It has got to be 360 or 3D. You have the task of coordinating a cast of different specialists and you have got to justify all your bright new ideas after the event. It is not easy and you can't expect it to happen unless you build confidence and skills through training.'

The skills required can be more akin to being an executive producer on a big film production – a blend of creative judgement, passion for the big idea, great team leadership combined with a keen eye for commercial results. Not many people have a natural talent for this.

The film analogy is instructive. Film productions all start out with high hopes and the best of intentions but few are big hits. It is risky stuff, especially if you work for a risk adverse organisation that is not too tolerant of failure.

HOW SHOULD YOU EVALUATE?

A classic way of reducing risk for marketers is through research. vSheila Byfield of Mindshare says there has been a boom in media research at two levels.

'There is more widespread use of innovative observational research that analyses how we are influenced to make decisions. This is genuinely media neutral and enables clients to build different models for the effective use of communications.

The other level is evaluation where there is investment in single-source studies, new technologies that measure the buzz behind a brand on the web, as well as media neutral currencies.

But, with the best will in the world, it is difficult to untangle all the individual elements of a campaign. Research methods based on what people claim influenced them may not be the same as what actually happened inside their brains. Neuroscience offers the prospect of more advances in this area but it is not at an advanced stage.'

However, Jim Taylor, points to the potential of data analysis. 'The beauty of good data is the ability to draw a relationship between activity and sales in real time rather than having to use intermediate measures. It holds out the prospect that Tesco can help you with your communications planning.'

There is also a budget problem. Moving to a new media-neutral tracking system, commissioning a big single source study, or investing in data gathering and analysis, can be a big investment and research budgets have their limits.

But evaluation is arguably the most critical area in the changing communications world. Proof of effectiveness is a big issue, which, if addressed, will win attention in the board-room and accelerate change.

SUMMARY: SO WHAT IS REALLY CHANGING?

At one level, marketing communications is undergoing a many-faceted revolution in the detail of how campaigns are structured.

Service companies are looking to improve in many little ways, every day. New media are a focus of investment; interactive marketing expenditure showed a cumulative growth of 70 percent between 2001 and 2004 (London Business School MET study). Interactive media can deliver big consumer benefits quicker and cheaper, as well as creating timely advertising, consumer information, data capture and CRM.

At another level, marketing communications is undergoing an ideas-led revolution. A greater diversity of activities requires greater simplicity and coherence.

So, strong, well-expressed ideas provide both the creative glue for marketing activities as well as positive associations for brands. Big ideas also have meaning for the individual and exist in the collective mind of the web.

It is also a revolution driven by generational change. One-to-many communication has been supplemented with many-to-many communication and the power of networks to influence opinion and choice. Word of mouth, which has always mattered down at the pub and at the school gate, can now cross continents in minutes.

Web services that enable many to many communications have burst onto the scene with amazing speed. So much so, that Rupert Murdoch is buying them up.

Well, some things don't change.

This article featured in Market Leader, Summer 2006.
 

NOTES & EXHIBITS

TABLE 1

FIGURE 1

FIGURE 2

FIGURE 3

FIGURE 4

FIGURE 5: CONSUMER CREATED CONTENT, THE INSPIRING NOKIA CONCEPT LOUNGE WEBSITE. ALTHOUGH CREATED FOR THE BENELUX AREA IT HAS RECEIVED DESIGNS FROM AROUND THE WORLD.

FIGURE 6: INTERACTIVE MARKETING, XBOX MARKETING IN A NIGHTCLUB TOILET.

FIGURE 7: AN IMAGE FROM THE TOYOTA COROLLA 'PRIDE' CAMPAIGN.

FIGURE 8: O2 BRANDING.