Archive for April, 2009

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Adding Sustainability to the Value(s) Equation

Wednesday, April 29th, 2009

(In June I will be going to Rome for the P&G Global Alumni Reunion. My parent company, WPP, will be preparing a small magazine for the event, and I was asked to write an article around sustainability. I have to turn it in next week and figured that I would share it here both for your enjoyment and feedback. Please let me know what you think in the comments below.)

In September 2008, Advertising Age challenged the practitioners of green marketing by raising the possibility that support for sustainability would decrease with the imploding global economy. A study by Duke University showed that CMOs ranked marketing that is “beneficial for society” as the last of five priorities over the next year. Meanwhile, in boardrooms and multiagency brand summits around the world, “value” has risen to the top of marketers’ concerns. While most think this is a clear shift from one priority to another, I believe both goals are achievable by shifting to a model of meaningful marketing that adds values to consumers’ brand decisions.

With the meltdown in the global economy, many marketers have given themselves a refresher crash course in the Marketing 101 definition of the “Value Equation”: (Product Benefits + Brand Equity) / Price. This formula naturally leads many brands to refocus their advertising efforts on long-ignored product benefits. Product demos and narrow superiority claims are back in vogue. Results in many cases are mixed.

I believe this textbook formula is due for a new edition—in the form of an addition to the numerator that recognizes the benefit that marketing itself can bring to the value equation. Let’s admit it: Historically, marketing has been dominated by unwanted, interruptive ad messages that hope to gain consumer attention for a few seconds. But with 3,000 ad exposures per day and technology such as DVRs and iPods that have little use for our messages, we are now forced to earn consumers’ attention by adding value through the marketing itself. We call this “Marketing with Meaning”—and examples include the Nike+ system that helps runners track their workouts, Samsung’s laptop-recharging stations in airports, and mobile cold and flu alerts from Vicks. These brands are putting marketing into the value equation:

Six months after Advertising Age raised the question, new studies show that consumers’ interest in buying green has not withered with the economy. A study of CPG/FMCG categories by IRI and TNS found that buying habits have continued a five-year shift toward sustainable spending, and that 30% of U.S. consumers feel it is important to purchase eco-friendly products. Overall, sustainability is still valued by a broad and growing share of the market.

Brands that are making the most gains through the economic crisis have closely tied sustainability between the product and marketing. The SunChips snack brand, for example, delivered on its brand promise to “grow the best snacks on earth” by moving to a completely solar-powered manufacturing plant; and it recently announced that it would release the first compostable bag by Earth Day 2010. Sales in 2008 were up 18%. Clorox worked with the Sierra Club to earn an endorsement of its new Green Works line of cleaners, and quickly rose to 42% share of this growing category.

Promotional efforts can also have a big impact when they allow the consumer to change behavior with help from the brand itself. For example, my team at Bridge Worldwide developed a program for the Kroger grocery chain in the U.S. that allows shoppers to go online and design their own reusable grocery bag. For each bag designed, Kroger offers a free disposable bag. This small step taps consumers’ creativity, encourages them to share, and saves the equivalent of more than 12 million plastic bags each day. The program is driving traffic to stores and increasing registrations to its loyalty-card program.

At the end of the day, the overarching story that encompasses both value communication and sustainability marketing is that consumers demand more than ever before from the brands that they choose to buy. For too long we have failed to turn our marketing itself into part of the value equation that consumers consider.  We need to make marketing itself more sustainable. As Jim Stengel said recently, “If the money we spent on marketing can be spent in a way that brings joy, help, and service to people… the industry will be far better off.”

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Posted in Conferences, Sustainability, Value | 5 Comments »

Results Update from Previous Posts

Monday, April 27th, 2009

On Friday afternoon, I was trading blog war stories with my friend Jonathan Richman (check out his fantastic healthcare marketing blog, Dose of Digital). We agreed that it was unfortunate that some great posts that we wrote early on in our blogging days were basically unseen because they came before we had a critical mass of readers. That’s a shame because there’s some good content back there. At the same time, I don’t want to simply republish old work. But today I have a solution: I will bring new data to two older posts that can add value for recent and longtime readers alike.

Hyundai’s Assurance Program

Back in January, I wrote about Hyundai’s novel promise to allow customers to return cars if they lost their jobs during the time of a lease or loan repayment. Some of the reasons I loved the program include:

  • New and novel idea at a time when people need economic insurance the most
  • Plays on the insight that a lot of people really are delaying big purchases such as this
  • Differentiates a small player in a big market
  • Draws enormous free PR coverage
  • Builds a very positive long-term equity for Hyundai, a brand that has struggled to break through

Even within its first weeks, Hyundai spokespeople claimed that the results were encouraging and traffic to their dealer lots was up.

Today, just about everyone knows that this program has been a grand slam for Hyundai. Sales for Hyundai were up 14% in January 2009 compared to the previous year, while the entire industry’s sales are down dramatically, including GM and Ford down 32% and 42%, respectively. Meanwhile, not a single customer had returned a car through March!

The only downside of the program is that it was quickly copied by others. GM and Ford now have programs that match it, and Hyundai has added an Assurance Plus program that will fund your car payment for 90 days if you lose your job. Meanwhile, many other companies have been inspired by the economy and Hyundai’s example, including Pfizer, JetBlue and the Minnesota Timberwolves. And there’s now a parody ad of the Hyundai program.

Gatorade’s “Got G?” Campaign

In another post from January, I wrote against the raft of new equity campaigns from brands such as Honda and Coke—my point being that these brands under pressure are simply using the old playbook of hiring a new agency and trotting out another meaningless and interruptive TV campaign. I saved my biggest dose of venom for Gatorade, which has just launched a campaign called “Got G?” The screenshot below pretty much sums it up:

According to the Sarah Robb O’Hagan, Gatorade’s chief marketing officer, as written in Slate, “…the idea behind the new look and the new ad campaign is to make the brand feel more contemporary and to appeal to the next generation of electrolyte drinkers.”

Here’s what I disliked about the Gatorade solution to its rising challengers and a crowded market:

  • Overall, the new generation isn’t watching television, and they don’t respond to an advertiser’s slick message jammed in their faces. I believe this ad is what a group of 30-year ad-agency veterans would think that the next generation wants.
  • People won’t spend their time searching Google to figure out what your new TV campaign is about.
  • Pure equity ads that add no value won’t work anymore. You can no longer tell and sell.
  • Gatorade missed an opportunity to add value to athletes’ lives, like Nike has with Nike+ and countless events and training websites.
  • The star-studded lineup of actors in the ads signifies only that the client had a big budget; consumers see through this today.

Well, Gatorade spent millions on expensive actors, high-end commercial production, and heavy media weights during major sports events. The brand also underwent packaging changes that focused on the “G” of the brand. This was the brand’s big move to regain momentum. A second ad with Kevin Garnett and others offered a mock-up of Monty Python’s Holy Grail. Again, more sizzle but no steak.

The results are now in: Gatorade sales were down 13.7% in the first quarter of 2009. Yep, that’s in a quarter in which it likely spent well north of $50 million on media and commercial production. About half of the sales decline can be attributed to a 6.3% drop in category sales, but Gatorade also lost 6.4% share. Gatorade’s only strategy now seems to be suing Powerade for product disparagement. That’s just another old-school strategy that won’t work either.

I actually like the Gatorade brand a lot as a consumer. I first got turned onto it while running 10k races as a 12-year-old in Atlanta. Back then it was really like a secret formula for athletes. Today it’s my drink of choice at the convenience store. But the brand could be so much more, and the solution is sitting in front of it in the form of case studies from brands in its own (Pepsi) holding company, such as Doritos, Mountain Dew, and SunChips. All three brands have created marketing that people choose to engage with—marketing that itself improves people’s lives. And all are seeing sales increase despite tough competitors and a sagging economy.

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Posted in Marketing Without Meaning, Solution | 2 Comments »

Ad Agencies to Blame for Recession?

Friday, April 24th, 2009

There is no shortage of people to blame for the economic crisis that we find ourselves in today. Rogue traders, greedy i-bankers, poor government, and credit-card companies just to name a few. But yesterday I discovered the latest group in the bull’s-eye of angry public opinion: those of us who work at advertising agencies. It’s yet another shot against a group that is traditionally rated alongside lawyers and used-car salesmen in terms of public respect, and another example of how we need to collectively get our act together.

A Harris Poll released on April 15 asked more than 2,000 people, “How much responsibility, if any, should the following groups take for the current economic crisis because they caused people to buy things they couldn’t afford?” As you can see in the chart above, advertising agencies received the highest share of the blame among the group, with 66% of people assigning us at least some responsibility for the country’s troubles.

Interestingly, I tweeted this survey result yesterday and got back some interesting responses. (Side note: This proves another real benefit of Twitter; you can get instant feedback and create a “micro-discussion” at any time). Some of the responses were:

  • @leighhouse: “Could be that 66% of consumers are just looking to blame someone, anyone to blame”
  • @caffeinatedkate: “That article makes me think of someone blaming the baker for making the donuts they can’t stop eating”
  • @adamkmiec: “We share part of the blame. We don’t have to do the work. Are agencies doing cigarette ads part of the prob?”
  • @LeighGeorge: “Sounds like the Twinkie defense to me ;)

Three of the four responses here show a very rational defense of our industry. I would also throw in there that the survey is pretty slanted toward putting ad agencies in the worst light—after all, where are the other groups that bear a lot of the responsibility? The people at the Harris Poll even admit that, “Americans are angry and upset about the state of the economy and need someone or some group to blame.”

I feel this survey and this view of advertising agencies is unfair. But then again, everyone was warned at an early age that life is not fair. We as an industry have to accept society’s judgment: We’re currently seen as part of the problem.

But we can choose to do something about this perception and strive to be part of the solution. Every person in our industry can choose to shift away from the activities that anger consumers, and embrace the meaningful-marketing mantra that I’ve been dedicated to sharing with you here.

Years ago agencies started to shy away from certain products that fell across the moral line as judged by the court of public opinion; the biggest example is cigarettes. Many passed on the chance to collect millions in fees because it was not worth the ethical cost. It’s going to take a lot longer, but what if account planners, creative directors, and client service managers around the world woke up tomorrow and decided to begin dedicating themselves to more meaningful marketing—and started driving their clients and teams to accept the reality that interruption is no longer working, nor is it responsible.

And if I get off my earnest high horse for a minute, this is not just about doing work we feel more proud of—it’s plainly about doing the kind of work that consumers will choose to engage with and tell their friends about. It’s the kind of work that is going to keep meaningful-marketing practitioners employed.

So let’s admit the reality that we’re part of the problem, and start striving to lead the world to a much more meaningful solution. In the next few months, create a community for like-minded marketers. It’s going to be a kind of tribe that I hope will become much bigger than me and much bigger than Bridge Worldwide. And I hope you will choose to join us.

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Posted in Marketing Without Meaning | 2 Comments »

Testing a Twitter Business Model

Wednesday, April 22nd, 2009

A few weeks ago I shared in a post here that I was working with a small group at Bridge Worldwide to develop a business model for Twitter. Quite a challenge, of course, but we came up with a very compelling idea that fits with our belief in meaningful marketing. At worst, it is giving us a nice strategy-plus-technology learning exercise. Since we started this R&D project a few weeks ago, I’ve been paying more attention to other developers’ attempts to wring cash out of the mighty growth of Twitter. Over the weekend I discovered a service called “Featured Users” and wanted to share my experience here. Overall, it looks compelling at first glance, but my results suggest this is not a big idea for marketers or investors.

Featured Users is an advertising network for Twitter application developers. The home pages of services such as Friend or Follow and Twibes.com agree to place a Featured Users ad unit prominently in their pages. The general idea and hope is that users of these free and valuable services feel compelled to repay them by visiting their sponsors. I decided to test the service because of the lost cost of trial ($10) and the chance to learn something for our work and this blog.

Setting up an account and program takes just minutes. For $10 on PayPal, I was able to buy 1,000 impressions. In the screenshot above you can see what that unit looks like. It is automatically generated by your current Twitter account, and thus includes your regular icon, Twitter address, account description, and the three most recent tweets. The results-tracking interface is basic but effective, showing the number of impressions, which sites they appeared on, and information on clicks (who clicked, when, and from which site).

My going-in assumption was that I would get something like a 2% click rate, or 20 clicks. This is far higher than the industry average for banners, which is about .1% and falling, and the rate on Facebook ads, which I have found to be as low as .02%. My rationale for believing in better results was that: (1) the ad placement is front and center; (2) Twitter users tend to be very interested in finding new people to follow (and getting followers in return); (3) this type of ad unit is novel, which means people haven’t learned to fully tune it out of their visual fields yet; and (4) I felt that there would be some “karma power” as people felt compelled to pay attention to sponsors for this free service. I believed that my Twitter account description, above, was fairly interesting. While my guess was higher than most ad units, I also went in believing that the results could be a lot worse. As a marketing investment, $10 for 20 new followers, or $.50 each, “felt” like a pretty good result.

The Results

My 1,000 ad impressions were exhausted within about 24 hours. This is the first lesson: It takes a while to burn through a very modest media buy. This suggests that the traffic on these affiliate app sites is fairly low. According to Featured Users, I received 6 total clicks on my ad. That’s a click rate of .60%, which falls below the service’s total average of .87%. That means the cost to me is $1.67 per click. That’s far less than my gut opinion.

Now, what I don’t know for sure is how many of these clicks resulted in followers. But if I look at my email account for messages about new followers, and compare them to the time on the clock that people clicked on my ad, then it looks as though I recorded zero new followers among my 6 clicks. Again, I might be wrong, but the evidence I have does not look good.

There are many reasons why results are so poor. First and foremost is the fact that people are just not interested in clicking ads—period. They are on the sites for a very direct purpose, and cruising off to a sponsor’s page is not on the agenda. Second, the ad units are completely untargeted. My marketing-related Twitter ad goes out to every single user, and I am guessing that click results would be better if I could, say, choose to show it only to people who have “marketing” or “social media” in their profiles. This would actually be simple for Featured Users to do, but it would mean far fewer opportunities to show my ad. This, in a nutshell, is the main reason we don’t see much hyper-targeting on the Web.

Now, there are probably a few things I could have done to improve my results slightly, of course. Featured Users suggested a few things such as ”include the words ‘if you follow me, I’ll follow you’” and “original and odd bios tend to fare better.” Yes, yes—this might help a little bit, but these “tips” are fairly gimmicky, and a slight improvement in the click rate would not have helped my total results much.

My Take

Featured Users is difficult to justify as a marketing investment. I love the fact that I can see clearly the cost of each new click at $1.67, but I likely gained zero new followers for my money. And even if I picked up a few followers, it is difficult to put a dollar value on the type of person Featured Users sent my way. We all still have a difficult time estimating the benefit of a subscriber. For me, the goal is to attract people who may be interested in buying the services of my company (Fortune 500 marketing employees), or those who buy my book when it comes out in October. It is certainly possible that new followers will somehow drive revenue, but it’s not clear enough to keep investing confidently.

The best way to attract Twitter followers is to create great content and work with your social network to spread the word, and this is a microcosmic example of what’s going on in the marketing world today. I attract dozens of followers on Twitter, for free, when I share a thought-provoking comment that my existing followers choose to “re-tweet” to their own networks. I received 18 new followers yesterday alone because people discovered my blog (more content) or found me through other search and recommendation services. People don’t see, want, or trust traditional “telling and selling” ads, but they will heap attention on those that provide valuable content—in other words, Marketing with Meaning.

Finally, I believe Featured Users is not a big idea as a business model for Twitter, either. On paper it’s a great way to bring a service to marketers and a business model to many app developers. Like Google AdWords or Amazon affiliate programs, it attracts some money for sites that have zero today, but the traffic isn’t high enough and results are not strong enough to attract a critical mass of opportunity.

So we’ll keep our Skunk Works R&D project on a meaningful business model for Twitter going—and I’ll keep creating content here and on Twitter to earn your attention and word of mouth.

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Posted in Banners, Social Networking | 3 Comments »

Social Media for Auto Sales

Monday, April 20th, 2009

Last week I drove the 90 miles from Cincinnati to Lexington, Kentucky, to present Marketing with Meaning to the local Ad Club. The lunch-and-learn session drew about 60 people in all.

During the Q&A session after my speech, one of the people in the audience asked me how her company, a local BMW dealer, might better use social media. I answered her on the fly but wanted to explore the question here as a way to show how to start strategically, rather than jumping on the bandwagon of what’s hot today.

For the exercise I’ll use a simplified version of the step-by-step model that comprises Part Two of my upcoming book. Let’s assume that the BMW dealer has a gut instinct and interest in social media but is looking to test the rationale and do it the right way. Also let me make it clear that I have never had a car dealership as a client and did not conduct extensive research solely for this blog post. So please take this as a guts-and-opinions strategy.

Step 1: Setting Business Objectives

A local BMW dealership could choose from many key business drivers across the purchase funnel, from Awareness to Consideration to Purchase to Repeat business. Let’s leave Awareness and Consideration out of the picture, as I believe most people who arrive at the dealership already have narrowed down their choices based on national marketing from BMW and word of mouth from friends. I also believe it’s difficult to focus on the point of purchase at the dealer level, as people increasingly come armed with facts and look at the dealer conversation as if they are entering a battle. I believe improving Repeat is probably the single biggest business opportunity for a BMW car dealership. People are increasingly drawn to lease deals, which means they are shopping for a new car in less than three years after purchase. For buyers, there is also a large opportunity to benefit from revenue through maintenance and aftermarket add-ons. Let’s classify all of this as Repeat revenue and focus our efforts here.

Step 2: Uncovering the Insight

Here we work to understand the question of why people do or do not return to their previous dealership when it is time to buy a new car. In theory, people should almost always go back to their last salesperson; after all, each car brand increasingly has a wide variety of models and prices, and many dealerships sell multiple car brands. I believe one of the reasons this is more rare than expected is that car buyers often suffer from buyer’s remorse. In such a large purchase, which is intense and stressful, they tend to feel like they didn’t get the best deal after the sale was done. High-pressure tactics by sales and finance people don’t help, of course.

Based on my personal experience, this could be solved if salespeople could develop personal relationships with their customers. Salespeople of big-ticket items such as luxury cars should treat each completed sale like the start of the next sale, and work to cultivate a personal connection that will last for years. There is nothing as powerful as relationships in life. They create trust, loyalty, and mutual benefit. In the agency business, we have a saying: “Clients don’t fire their friends.” What that means is that if you have a good relationship with your client, they will feel more comfortable giving you the feedback you need to improve when they are unhappy, rather than picking up the phone and ending the relationship. The same goes for cars, thus our key insight: Personal relationships with the salesperson are the key to Repeat.

Step 3: Developing Meaningful Ideas

It is certainly not a new approach for salespeople to try to build personal relationships with their customers. I remember a salesperson at Macy’s who used to call me when there was a sale on suits at her store, for example. But developing relationships can be difficult. They are long-term investments at a time when short-term sales pressure is always high. Writing letters and making phone calls to each individual contact also can be extremely time-consuming, and when done tend to be focused on making the next sale. Personal relationships need some space to talk weather, sports, and family.

But new technology is allowing people to build stronger relationships with more people. This is where Facebook can play a huge role. The tool helps people create, maintain, and strengthen personal relationships. We can log in at any time and see what our broad network of connections is doing, and with a few clicks and words we can “touch” them and strengthen the bonds. And in the business world, Facebook is helping people share a little bit about who they are and how they tick. By understanding who we are as people, versus just clients or sales guys, we become closer.

So my suggestion is for car dealerships to encourage their salespeople to become active on Facebook and use it to build personal relationships with their customers. At the close of each sale, the salesperson should ask the customer to connect on Facebook. The pitch should be that it is a great way to keep in contact and allow for follow-up service questions. Once connected, the salesperson should use the service to “touch” the customer every few weeks. This doesn’t mean continually pitching the weekly oil-change special, but rather even adding things such as a quick comment on an uploaded photo, or a line that reads, “Did you get to drive your 5 Series in the great weather this weekend?” Not every customer will be on the service yet, which is actually a good thing to allow for some time to become comfortable and efficient.

Step 4: Measuring Meaning and Business Results

I believe that marketing should be measured both for its impact on customers’ lives as well as the bottom line. In terms of measuring meaning, this idea would be successful if customers are accepting salespeople as Facebook friends and responding positively to the “touches” that are made. Any outreach from customer to salesperson is a big win, as are referrals from customers’ friends. These are all numbers that can be clearly observed, tracked, and compared across individuals.

Business impact is simple to measure because we focused on a single core score, Repeat revenue, and because individual customer names are known and tracked. The dealership owner can track the specific number of maintenance appointments, follow-up sale rates, number of cars per household, and the overall price of each car.

Conclusion

I believe social media is an incredible tool that marketers are just now barely understanding and applying. One of the biggest barriers is the pressure to “go do something on Facebook or Twitter.” My hope for this post and the upcoming book is that you see how a strong business objective and insight can help your brand understand the opportunities for social media, and the right way to execute ideas and measure results.

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Posted in Connection, customer service, small business, Uncategorized | 3 Comments »

Update on the Upcoming Book

Friday, April 17th, 2009

As regular readers of this blog are likely aware, I am in the process of publishing a book around the concept of “Marketing with Meaning.” And although I usually use this space and your time to share a case study or analysis, I thought I’d have a little different approach this Friday and share an update of the work around bringing my baby to market.

The Writing

At this point in time, the actual writing of the book is nearly complete. I turned in the first draft to my editor at McGraw-Hill on March 1. We spent about a week working edits together, and now the book copy is in the hands of a proofing editor. McGraw-Hill was actually so pleased with how the book came together with little rework that they decided to move the publication date up a month to October 1. Upon finishing this first draft, I was happy to be done, but at the same time I was a little sad to just stop writing cold turkey. I discovered that I really loved spending time in my office turning research and notes into useful, clever writing. I actually can’t wait to write another book already. (I hope my wife doesn’t read this.)

The book itself is coming in at just more than 300 pages. This is actually way above normal for a business book, as most authors are happy to barely squeak past the 200-page mark. But I wanted to make sure to use this book as a complete guide for marketers who want more than a keynote speech put to text. Instead, buyers will find a text that includes step-by-step instructions for how to make a shift to meaningful marketing in their own brands.

Actually I haven’t totally completed the writing process, as I will have another chance to make final-final edits in a few weeks. And it’s a good thing, too, as since I turned in my first draft I have continued to collect scraps of information and insights around many of the case studies and examples that I have included. For example, I’ve had a chance to interview executives at Sears and Luxottica, and have gotten great new insights at conferences from companies such as Denny’s and OfficeMax. This will help make the book even more relevant and recent.

The Marketing

With the writing nearly complete, my mind has almost totally shifted toward marketing the book. The marketing process actually started in May 2008 when this very blog was launched. I took Seth Godin’s advice that authors need to start marketing an idea as early as possible, and the book is only one of many ways to spread the idea. More than 200 people per day visit this blog on average, a figure that continues to climb over time. A few months ago I added a Twitter account that is already up past 1,100 followers. For the book launch I’ll be tapping these new networks and hoping that there is pent-up excitement to power early sales.

This week I started working on asking for endorsements for the final book cover and inside pages. I have put together a list of various names from brands, agencies, and universities and will be reaching out to them over the next few weeks. I’ve gotten a couple of very good “blurbs” already from top leaders, and believe a good deal more will come in based on my networking thus far. What I think helps a lot is that the Marketing with Meaning concept fits very well with and builds upon the beliefs other authors and leaders have been saying and doing.

In the months ahead before the book launch, we’ll be doing some big upgrades to this site. We’ve got a video in the works and will have the usual book-site features such as downloadable chapters, PowerPoint presentations, and news coverage. But I am most excited about a “Tribe of Believers” that we will be creating totally separate from this space. I believe that the concept of meaningful marketing has a chance to be a real movement, one that becomes bigger than me and Bridge Worldwide. My vision is that marketers around the world declare themselves as “meaningful marketers.” So I want to create a virtual place for fellow believers to meet, share, learn, and work together to make our work more meaningful. I’m encouraged that a LinkedIn group we created and have done little to promote already has more than 300 members. There will be much more exciting news to share on this soon, and I will be much more public about soliciting your feedback.

Overall Impressions of the Process

One thing I’m actually a bit disappointed in is that I am unable or uncomfortable with sharing some major decisions and soliciting feedback along the way. For example, the final title and book cover are two things that I wanted to share more broadly earlier, but the publishing world is really not ready to totally open up in this way. One of the challenges is that I am a first-time author, so there tends to be less risk-taking along the way.

Working with a book publisher has been enlightening and a great learning opportunity. Sometimes it feels like they are my clients and I’m doing everything possible to please them, while at other times I’m in the client position and they are bending over backward for me. Either way, we’ve built up a good relationship in a short period of time and the closer we get to publication, the better we’re working together. At the end of the day we come from different perspectives but all share the common drive to make this book a best seller.

If there is one thing I most appreciate about the process is how kind fellow authors have been to me along the way. I’m a firm believer in seeking first to understand by sucking knowledge out of those who have come before, and I’ve been the annoying younger-brother figure to authors such as John Gerzema and Pete Blackshaw. Both of them remember what it was like to be in my shoes and have been incredibly helpful in showing me how to mimic their successes and avoid their mistakes. Lee Aldridge at Y&R brands has also been an incredible mentor. I’d like him to start his own book label some day!

Thank you all, dear readers, for keeping this blog on your reading lists, sending me comments, and re-tweeting it to your friends. If you have any suggestions, feedback, or words of inspiration, I’d love to read them in the comments below!

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Posted in book | 4 Comments »

Two Meaningful Campaigns That Fall Short

Wednesday, April 15th, 2009

When I first started blogging a few years ago, I read some advice that suggested that you have to be critical every once in a while. You can’t be a cheerleader for your pet cause, and you can’t make friends with everyone. Rather, you must stand for something and produce constructive criticism when it makes sense. I believe this is true, as my favorite bloggers and journalists don’t just spew roses.

I’ve mainly done this through periodic posts under the category “Marketing Without Meaning,” where I blast advertising efforts that completely fail to improve people’s lives. Today I want to do something different. Here I will critique two attempts at meaningful marketing that have missed the mark, in hopes that we all can learn lessons about mistakes to avoid.

Burger King’s Wallet Drop

Burger King is actually one of my favorite meaningful marketers. In my upcoming book I devote several pages to the story of Burger King’s turnaround, which was completely founded on building “connections” with a focused target of young men. An early example, Subservient Chicken, just turned 5 years old.

I learned about this “wallet drop” viral campaign from Burger King last week when I was presenting to a marketing class at Miami University. It seems that in a few cities across the country around November 2008, Burger King purposely dropped hundreds or thousands of wallets in public places for passersby to discover. Upon opening the wallets, people found cash ranging from $1 to $100 and other items such as a map of nearby Burger King restaurants and a fake “The King” driver’s license.

It is a clever idea, but the problem is that it does not seem to have generated the buzz the brand hoped for. I think it’s pretty obvious that the effort and expense of this campaign is a failure if the only outcome is a few thousand people finding wallets and feeling better about BK. Rather, the strategy was most likely set up to have a few finders and journalists spark a blitz of attention to the campaign. Unfortunately for Burger King, the viral fire never seemed to catch. There are only a handful of blog posts about the effort, and almost no traditional media covered the campaign. This is surprising based on the fact that Burger King’s constant supply of edgy advertising naturally attracts extra attention.

I think the biggest problem with the campaign is that it’s just not that interesting or viral. Wallet drop campaigns have been done before, and enclosing a couple of bucks and a coupon is not that clever. I think Burger King could have had more success if it did something to help generate news and make people aware of the chance to find a wallet. For example, create a simple website where people could post where they found the wallets, and where The King could say where he is going next.

KFC’s “Fresh Roads”

I’ll stick with the restaurant business and next review a recent example of cause-related marketing from KFC. The brand recently announced that it would be offering interested cities the chance to have potholes repaired at no cost… well, except for the right to paint a “Re-freshed by KFC” ad over the new pavement. The effort aims to help cities that are struggling to meet budget needs, while drawing attention to the KFC brand’s fresh-chicken campaign.

First, let me say that KFC, like Burger King, gets an “A” for effort. It’s a great first step to move away from another round of annoying ads and actually do something of value to society with the marketing budget itself.

But there are two big problems with the KFC idea. First, it is a really poor link to the brand equity. There’s a touch of cleverness linking KFC and roads (Get it? Chicken crossing the road?), and an attempt to link fresh roads with fresh chicken, but it’s really a bridge too far. A dirty, disgusting street should in no way be linked to a fresh, great-tasting bucket of chicken. I have found clients in the food business to usually be extremely picky about how their product is represented, and I was really surprised to see the brand accept the bad taste that automatically enters people’s minds when you link roads and food.

The second issue really revolves around the placement of advertising in public places in exchange for a donation. Let’s face it: Citizens don’t like advertising shoved in their faces, and they really don’t like government “selling out” public spaces. We don’t look positively on the new trend of selling ad space on school buses or police cars, and McDonald’s was drawn and quartered for a local promotion in Florida where report-card printing costs were covered in return for a Happy Meal ad. These last-resort marketing gimmicks do nothing but remind us of the sad state of government leadership, and suggest that our society is worsening over time. So it’s not appropriate for KFC to remind us of this by splashing a logo across its freshly filled pothole.

Conclusion

I actually find that critiquing other brands’ attempts at meaningful marketing is about the hardest thing I’ve done in this blog. We are at the early days of igniting this revolution, and I hate to pooh-pooh the work of people who are genuinely trying something new. I’m sure that the brand team at KFC had to move mountains internally to try something different, and now they are getting “I told you so’s” across the board.

At the same time, for this next evolution of marketing to take hold, we need to have good, open discussions about what works and what doesn’t. And brands should understand that it takes time and a failure or two to finally figure out what it takes to succeed.

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Posted in Needs Improvement | 7 Comments »

The Marketing Power of a Red Cap

Monday, April 13th, 2009

Perhaps one of the best case studies in social networking and meaningful marketing comes from a brand that has been around at least since 1703. This brand creates incredible followers in a true community of shared passions. And it does it without blogs, Facebook, or Twitter. Welcome to the story of red caps from Mount Gay Rum.

More than two years ago in an offsite with the executives of Bridge Worldwide, I first introduced my draft thinking on this Marketing with Meaning concept. I had assigned our small group to bring in examples of marketing that had a personally positive impact on their lives. My idea was for this to help spark the conversation around marketing that people choose to engage with, marketing that itself improves people’s lives. I best remember the example brought by our Chief Operating Officer, Michael Graham. Michael brought in a red hat branded with Mount Gay Rum, and he couldn’t wait to tell me its story.

Michael told us about how Mount Gay Rum has a long history with sailors. The brand was first launched in Barbados when a trip to the island was challenging, and ship captains would bring back barrels of Mount Gay as proud proof that they had successfully landed at the island. Since then, Mount Gay has continued to be closely associated with sailing events. It is a sponsor of more than 100 regattas each year. What’s special is that at these regattas, Mount Gay distributes its iconic red hats with the specific regatta name sewn under the logo. Only regatta participants get the hats, so it is a modern-day proof of sailors’ skills. Instead of another piece of marketing swag, these hats are prized trophies from a very special event. And they become collectors’ items for the recipients.

Michael also described how these hats become a kind of social networking trigger as well. Fellow sailors use the hats as a way to broadcast their common interest in public places. Sailors who see someone wearing one at the airport, beach, or baseball game will just walk up and start a conversation.

What’s interesting is that every sailor knows and repeats the story of Mount Gay Rum, so not only does this core group of high-income, passionate people stay incredibly loyal to the brand, but they become walking, talking ambassadors to the general population, many of whom are attracted to the story. A quick Google search brought me to a blog (captured above) where an identical story is told. And when I shared this story with a marketing class at Miami University last week, one of the students talked about how a friend she went with on spring break wore her Mount Gay hat and ended up meeting a dozen fellow sailors on the trip.

I believe these are the keys to take from Mount Gay Rum’s success:

1. Embrace your brand’s history and backstory – or create a brand with a story at its core.

2. Focus on a very specific, core customer group that shares a common passion.

3. Go beyond focus; be selective and exclusive.

4. Do something to encourage social connections among your target customers.

5. Don’t just sponsor; add some unique value to the event itself.

My final takeaways from Mount Gay are that this kind of marketing doesn’t take a giant ad budget or rely on the spread of new digital technology. Instead, it comes from standing for something and creating meaning in people’s lives. And don’t you dare buy one of those hats on eBay!

UPDATE: I got a great email from one of our readers, John Irving, who shared the following story:

This weekend, our community had a picnic to celebrate the return of Captain Richard Phillips from his ordeal with the pirates off Somalia.  (He lives about 2 miles from me in Vermont).  When I went up to shake his hand and congratulate him, I was wearing my red Mt Gay hat from a race from Havana years ago.  He looked up with a big smile and said ‘Nice hat, that’s my rum’.”

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Posted in Achievement, Connection, Experience, Social Networking | 5 Comments »

Takeaways from the Ad Age Digital Conference #aadigi

Friday, April 10th, 2009

For the third time in the last four weeks, I had the chance to attend a marketing conference this week. I’m usually not this frequent of a conference attendee, but I have been fortunate enough to tie multiple objectives together with each trip. Naturally, one of those multiple objectives is to unearth insights that I can share with you, dear readers, in this space. So I’ve risen at 5 a.m. on a Friday to tirelessly record my takeaways from the very insightful Ad Age Digital Conference in NYC. As with my previous blog summaries of the Economist and iMedia conferences, I share the most memorable points from the speakers who stood out most in my mind. Enjoy!

Fred Wilson, Partner, Union Square Ventures

We started the day not with a marketing mind, but rather with a venture capitalist who sees significant opportunities in the “chaos scenario” that is the field of advertising today. Wilson focused his presentation on the concept of “earned media.” Earned media is the antithesis of paid media, and happens when brands do something valuable or useful that itself attracts attention, rather than relying on CPMs and GRPs. Wilson presented a few examples of brands that are winning here. One example he shared is “Men With Cramps,” a humorous “mockumentary” created for the ThermaCare brand’s menstrual SKU. Our agency actually helped put that together for the brand two years ago, and it won an Effie last year.

My favorite story was the example of a business in L.A. called Kogi; it is a few trucks that drive around the city, park every so often, announce their locations via Twitter, and collect dozens of customers at each stop for their killer cuisine. The marketing plan involves the owners and operators blogging and tweeting their life experiences as they run the operation throughout the city. It’s winning because of a combination of great product (spicy Korean barbecue is novel), a unique and valuable service (traveling restaurant you can track around town), and an open, social brand that people can personally connect with. To me, this is the only model of brand building that will increasingly survive and advance.

Fred tossed out a few other valuable tidbits. He mentioned that CareerBuilder’s Monk-E-Mail viral earned 300 million users who spent 8 minutes each on the site and cost only $250,000 to build. That’s less than the production cost of an average 30-second ad, and got huge results without the multimillion-dollar media buy to go along with it. He suggested that this was a key change of the “earned media” model: less money to media, but likely more time and money toward getting a killer idea. Wilson talked about how he had read data that suggests “clicks from social media convert at 2x to 4x that of paid search,” which makes sense. He ended with examples of the kinds of companies he is investing in within the advertising space; his first question in reviewing a business model is: “Is there some kind of valuable service being provided?” I couldn’t think of a better fit with Marketing with Meaning. You can check out Fred’s presentation on his blog.

Josh Weiss, Managing Director, Delta.com/Self-Service/CRM

On a panel about how technology changes your company, Weiss provides some interesting perspective. First, he shared the good news that Wi-Fi will be available on the entire Delta fleet by the end of 2009. In terms of marketing, he shared the story of how Delta was close to putting open consumer comments on the front page of its website redesign as a way to visibly show that it is a new kind of company, post-bankruptcy. But after much debate at the highest levels of the company they admitted that they were not quite ready for it, and instead launched a separate site, blog.delta.com. It’s a good admission and probably the right call for now. Weiss also admitted the challenge of deciding which mobile platform to design for; he shared that he personally has an iPhone and BlackBerry. Each phone has different benefits, and the fact that he has both is proof that no single option is prevailing.

Bob Kraut, VP of Marketing Communications, Pizza Hut

Who knew that Pizza Hut was taking digital so seriously? Well, with nearly a billion dollars in online orders, it now has to. Kraut shared the experience of his company seeing these sales spike, and increasingly shifting pizzahut.com from a branded vehicle into its largest single “store.” I enjoyed hearing that the company has moved from trying to have a “sticky” home page that keeps people around as long as possible toward a “slippery” page that gets online orderers in and out quickly. Kraut has found that people ordering online are higher income, less price sensitive, and very picky about the right to choose. Kraut also told the story of Pizza Hut’s recent April Fools’ prank, in which it leaked plans to change its name to “Pasta Hut.” The effort earned a lot of buzz and Pizza Hut was a Top 10 in Google Trends (a very interesting new media gauge of success in itself).

Steve Rubel, SVP, Director of Insights, Edelman Digital

Rubel hosted a panel on “What’s Next, Before It’s Too Late.” To be honest, I didn’t hear any breakthroughs from the panel, but Rubel provides some good quotes. He called Second Life “digital marketing’s Vietnam War.” Rubel also captured a key insight, that most brands that edge into social media are only doing it in support of a limited-time creative campaign. He said that “social media is like soylent green; it’s made out of people,” and called on brand marketers to personally get in the social media space on an ongoing basis. The recent Skittles story, for example, was less effective as a one-time stunt, and missed the opportunity to forge a relationship.

Mark Sapir, VP of Marketing for Sports & Entertainment, Topps

Sapir revived many memories of collecting, sorting, and trading baseball cards as a kid. He shared the story of how Topps is evolving its entire approach to a new generation. Baseball cards used to be the main way that kids connected with athletes; at a time when there was no TV or stats in the sports sections of the newspaper, the baseball card was the only way for a kid to really “see” the players. Fast-forward a few decades and kids can watch SportsCenter 24-7 and look up live stats online. So Topps needed a new way to stay relevant and add value; in other words, it needed Marketing with Meaning. So the company has launched ToppsTown.com, which essentially mirrors the Webkinz model. A special code in each card allows kids to unlock virtual cards on the site. Once there they can view their collection, trade with people, read real-time stats, and play games. In the early days of the site and new baseball season, ToppsTown already has 200,000 members.

Simon Clift, CMO, Unilever

Clift had one of the most-discussed presentations of the two-day event with Wednesday morning’s keynote address. I was most pleasantly surprised by his story of Greenpeace protests against the company’s use of palm oil from rain forests. The group created a viral video mocking the company’s “Onslaught” viral video with its own version called “Onslaught(er),” which showed the effects of deforestation. Clift admitted that his company needed to listen and respond to the protests, and ended up working with Greenpeace on a plan to develop more sustainable sources. I believe it took remarkable emotional intelligence for Unilever to partner with the group after a fairly unfair campaign.

I also enjoyed hearing Clift talk about how smaller efforts seem to be more successful in this world of connected consumers and social media. He threw out three of my favorite quotes of the event, all of which point to a new way of approaching marketing: with less media-budget bang and more meaning:

  • “It is possible to become famous on a dollar and a dream. Imagine what’s possible to do with our brands and our resources.”
  • “We may be ahead of some of our competitors. But we’re most definitely behind consumers.”
  • “I’m convinced fat media budgets help make people lazy, and we’ve thought about [whether we] should cut media budgets on some specific projects in order to force people to come up with better ideas.”

Joe Rospars, Founding Partner, Blue State Digital, and Former New Media Director, Obama for America

The story of Team Obama’s success with social media has been told many times in many places, but I still pulled a few new takeaways from Joe’s interview on stage. I found it interesting to hear that a key early decision in the campaign was to create a specific New Media team that was separated from the IT group. Traditionally campaigns had lumped digital marketing into IT, but this separate group helped elevate the discipline, and the team had its own seat at the strategy table. I also learned something new about the power of small donations; it seems that many of the 3 million people who donated gave around $5 each. The campaign looked at small donors less for their actual gift, but more as a way key to binding them personally to the brand. This reminds me of why we participate in the General Mills Box Tops for Education program at my children’s school, where I am president of the board; these box tops add up to only a small amount each year, but every time parents cut one out and bring it in they are building a stronger bond with us. But these small donors did add up for Obama: The 3 million online donors ended up making 6.5 million donations that totaled a half-billion dollars.

Sheryl Sandberg, COO, Facebook

I’ve had a love-hate relationship with Facebook over the past few years. I love the service as a user but hate the overpromises on its advertising platform, which is literally invisible to users. But Sheryl Sandberg earned more love with her fascinating story of how the service is improving people’s social networks in a session titled, “How Many Friends Can You Have?” She broke down various types of networks that people have as follows:

  • Our brains can handle about 150 personal relationships at any one time, which is called Dunbar’s number.
  • Most people know 500 to 5,000 people.
  • Facebook members have 120 friends on average.
  • The majority of our communication is with 10 people on average.
  • We have a close support network of only two to three people.

Sandberg claims that digital technology, especially Facebook, is creating a new concept called the active social network. She defined this as people who: (1) you know something about what they are up to lately; and (2) you communicate with them somewhat regularly. She claimed that Facebook is proven to double the size of people’s active social networks.

She went on to describe the four types of relationships that people have on Facebook: friends, family, coworkers, and “public profiles” (brands and celebrities); and she shared the three distinct types of communication on Facebook: inbox, chat, and wall-to-wall.

Overall, it was interesting to see that Facebook is really getting scientific about its study of human social interaction. It suggests to me that the company aims to become much more meaningful, rather than just waiting to cash out on a new ad model and IPO. In fact, I was blown away that Sandberg admitted that Facebook has realized that traditional banner ads will not work for the firm or advertisers. Rather, they must create marketing that fits with the core idea of the social network itself. Sandberg ended with the example of Honda’s “give a heart” program, which got 1.5 million interactions and 100 million impressions in four days.

Lucas Watson, Global Team Leader, Digital Business Strategy, P&G

I’ve gotten to know Lucas well over the years that we have worked with him at P&G, so it was great to see him represent the world’s largest advertiser on the digital stage. On a panel about “Redefining the Media Mix,” Lucas suggested that the key for brands is not to choose a cutting-edge media innovation first (i.e., “let’s do something on Twitter”), but rather to start with a killer idea, and then see where all kinds of media, both old and new, can make it come to life. He also had a good suggestion for brands thinking about social media: The key is to create a “social media framework” early in the form of a good database that you communicate with regularly. Then, when your idea is ready to go, the network is available for your launch.

So, overall, another good conference where I’ve learned a few new tricks to apply to our clients’ businesses and our Marketing with Meaning concept. My next blogging/tweeting conference will be at the Mobile Commerce Summit in Las Vegas June 3. I’ll be presenting a workshop on mobile+financial services. See you there!

(Here are some of the best Ad Age articles on the event.)

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Posted in Conferences, Uncategorized | 5 Comments »

Adding Marketing to the Value Equation

Wednesday, April 8th, 2009

Every business in the world right now is talking about how to better communicate value to its customers. Our agency, along with many others, is briefing clients on value case studies and preparing projects that aim to convince consumers that top brands are relevant and worth the price premium over store brands and lesser competitors. There is a lot of talk about what “value” really means. Elements include product performance, of course, and even some mentions of terms such as ”brand trust.” But what has been missing from far too many calculations is consideration of how brand marketing itself can add value.

At his m-cause blog last week, Ryan Jones writes about the idea of a value equation, beginning with a great quote from Ron Shaich, CEO of Panera Bread: Value is about the totality of the experience. This got me rethinking about common value equations from the marketing textbooks. The common formula for customer value is (Product Benefit + Brand Equity)/Cost.

But this formula fails to consider one large source of value that should be added to the numerator of this equation: the added value of the marketing itself, where applicable. I’m talking about Marketing with Meaning, of course. By creating marketing that people choose to engage with, marketing that itself improves people’s lives. Of course the textbooks and company trainings don’t include this (yet), because they are used to a world in which advertising is a cost of delivering eyeballs to a product offer and brand equity. It has always been a necessary expense, rather than a valuable investment. It’s time to evolve the value equation.

Panera Bread’s offer of free Wi-Fi service in its restaurants is clearly an example of added value marketing. When Pringles allows buyers to create their own decorative labels, or Doritos creates a mystery flavor and invites buyers to create a name for it, people get more enjoyment for their $.99. When Vicks offers cold and flu alerts, or Similac provides a pregnancy guide, people receive valuable information that store brands fail to offer. When Home Depot teaches people how to install plumbing, or ConAgra Foods helps people make more balanced life choices, the brands are actually delivering value far beyond the products that either sells.

And so, here we have yet another reason to shift your business model to the method of Marketing with Meaning. In this space, I have shared how meaningful marketing grows short-term sales, builds long-term equity, and allows for more efficient cost savings. Now add “improving the customer value equation” to the list.

My dream is that marketers in conference rooms around the world begin asking themselves: “How is our marketing plan improving the value equation?” Suddenly that annoying TV ad or useless sports sponsorship looks a lot more “costly” than ever, and meaningful marketing becomes the most logical direction to turn.

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Posted in Concept, Organizational Behavior, Value | No Comments »

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