 Day two: from Rocky to Stonyfield Farm Carlos Grande 4 June Digital media and David v Goliath brand case studies dominated the final day of the 2008
A common theme across the sessions was the potential economic returns for brands which, over the long term, authentically tapped into consumers' passions, no matter how niche-seeming, and stuck pugnaciously to this view.
Or if you prefer the conference host's salty idiom – borrowed from the Rocky movies – marketers were urged to "eat lightning and crap thunder".
Always on
Twenty-four hours into a marketing conference and we had not seen one slide on fragmentation of media and the end of marketing as we know it. Clearly, this could not be allowed to continue.
Christopher Vollmer, a VP in the media unit of Booz Allen Hamilton, now known as Booz & Company, came equipped to rectify this. In his presentation, there were slides galore on the changing media habits of US and
These included familiar patterns such as the reduction in numbers of UK TV broadcasts with audiences of 15 million or more (in 1999, there were 153; in 2007 there were none), and the shifts in US consumers media consumption towards the internet.
Christopher Vollmer shows how consumer media habits are changing
There were also some less often-aired data on the fragmentation even among web audiences. This suggested that large portals are seeing little increase in their page views or in the average time spent on visits to their sites. Instead, the internet's growth is largely coming from blogs and social networks.
Having co-authored a recent book on the impact of digital media, entitled Always On, Vollmer was well placed to supply up to date figures on the gap between digital media's increasing share of consumers' time and its often modest proportion of brand media advertising budgets – especially in the
He argued that marketers trying to increase their use of effective digital campaigns faced four main challenges:
More generally, there was also sense among respondents polled by Booz that advocacy had overtaken awareness as a more important goal for advertisers.
Worryingly, perhaps, for agencies, Vollmer also presented survey data and some examples which suggested media owners expected to work more directly with brands in future, cutting out the agency middleman. In some cases, this was already happening. For example, Meredith, the North American publisher, runs relationship marketing for Kraft.
It was suggested that media owners would in future directly provide a greater share of services such as contextual and behavioural targeting, performance marketing, email marketing and lead generation which are today often supplied by agencies.
Avid networkers
The next two speakers took more of a practitioners' approach to the issue of growth in online social media and its implications. Brian Smith outlined the experience of Within3, a start-up which runs social networks connecting health professionals, mainly in the
Its business model is that individual users (medical researchers, doctors, hospital executives etc.) use its sites for free but organisations pay, especially for bespoke channels created to aggregate users with similar interests in niche medical conditions or for specific purposes such as recruiting physicians for a drugs trial).
The topic might have appeared relatively specialised. However, Smith made some general points about the uses of social networking websites for any type of B2B marketing. He argued profession-oriented social networking sites could be used to:
Traffic or targeting?
Jason Weaver of Sway, a consultancy which specialises in advising on uses of social media, gave a more mainstream take on similar issues. He argued that marketers were often concerned with driving traffic to their websites rather than directing their messages to target audiences already available in large numbers across different websites, blogs and social networks.
Weaver contended that tools such as RSS feeds and social bookmarks were relatively under-used as ways of directing content to audiences without intrusively trying to force them to visit brands' own sites.
He argued that too often clients were keener to launch Facebook applications, podcasts or Second Life features which may not be appropriate for the budget, size and goal of the brands in question.
Waste not, want not
The theme of inappropriate marketing spend moved centre stage in the next presentation – from Rex Briggs, CEO of Marketing Evolution.
Briggs is co-author of What Sticks, a book which gained a lot of coverage partly because it provided a media-friendly precise figure on the vexed question of how much advertising expenditure is "wasted". It estimated that $112 billion a year, or 37%, of all paid-for media advertising in the
By the term "wasted", we're meant to understand here that spend has been continued beyond the point of its maximum efficiency in terms of return on investment, rather than has not generated any value. According to Briggs, wastage was due to a combination of the wrong consumer insight, wrong message, the wrong media mix and wrong initial budget setting.
While such precise, large figures and sweeping statements can prompt a sceptical response, Briggs provided concrete examples of marketing gone awry including from Colgate and Chrysler, and made a forceful case for the need for marketers to revaluate their own evaluation processes in the light of shifts in consumer behaviour, such as greater usage of digital media.
In the second part of his talk, he applied this thinking to social networking websites by highlighting campaigns for Adidas and Electronic Arts on MySpace. The campaigns have received a fair degree of coverage, but are worth considering again in the context of this larger argument about new ways of evaluating marketing spend.
Both campaigns featured a mixture of paid for web banners and branded viral material (such as screen wallpaper) which could be downloaded from a custom branded page and tracked for a pass-on effect.
The company argued that for each campaign there were two, separate categories of effect: a business-to-consumer (B2C) effect tracking exposure to the banners and value created when users visited a branded page, and a consumer-to-consumer (C2C) effect when users passed on the material to their friends, or referred to it on their own web pages or in postings.
Under an initial evaluation, the business-to-consumer impact appeared solid, but unspectacular; for instance, 75,000 people downloaded the wallpaper from the Adidas-branded MySpace page, and 85% activated it.
However, much larger value, it claimed, was created by a momentum effect sparked when consumers passed on material or referred to it. Briggs argued that the ability to unleash this momentum effect at scale is in general what distinguishes social networking from other media channels.
In the case of Adidas and EA, the combined benefit of B2C and C2C effects brought the return on marketing investment generated by the campaigns well ahead of that normally achieved by traditionally measured television and press campaigns.
He concluded his presentation by arguing that the rise of social media would require marketers to employ new evaluation methods which were unlikely to prove that traditional media no longer worked.
Instead, the trend would underline the strength of TV advertising for certain goals, such as raising awareness, and its weakness in others such as closing sales (harvesting, he called it). For the latter goal, channels such as search and instore had more impact.
In sum, it was a detailed, wide-ranging and coherent presentation all the stronger for not over-stating the claims of social media. (Though we could have done without the “wise saying" of the Dakotan Indians with which Briggs chose to conclude.)
Thank heavens for little girls
After lunch, Ellen Brothers, president of American Girl, told the story of the
What began as an attempt by a
This year sees the brand's first cinema release and the continuation of a rollout of select, wholly-owned concept retail sites. Several points were emphasized throughout as ingredients behind the brand's success:
Bulls-eye
A less niche variation on a similar theme followed from Eric Erickson, vp creative director of Target, the discount chain which aims to combine the cheap and the chic with its slogan "Expect More. Pay Less" (see the creative below).
Speaking the day before Target announce a decline in same store sales during its first quarter, Erickson acknowledged these were tough times for US retailers. However, he argued that brands which had forged deep emotional connections with shoppers were better placed to withstand a recession. He also began with some corporate history. Started in the same year as Wal-Mart, Target was initially the discount clearance offshoot of a department store. Its early emphasis on fashion later widened to include homewares, grocery and electrical items.
Although there had been periods when Target had emphasized every-day low pricing similar to Wal-Mart's, Erickson argued that at least for the last 14 years the chain had positioned itself as providing a balance of "need" purchases (low price groceries, household goods) and more aspirational "wants" (affordable designer-created apparel and homewares).
This was embodied in its slogan "Expect More. Pay Less". Its key brand attributes were 'fast, fun and friendly', which were emphasized in an upbeat, pop-video style of TV advertising. In practice, key marketing tactics included:
In summary, he argued that in order to create genuine customer loyalty, retailers needed to forge emotional bonds with shoppers that went beyond merely offering them low prices. If Target had not done so, it would have been steam-rollered by competition from Wal-Mart.
Save the planet: eat more yoghurt
The final speaker, Gary Hirshberg, was introduced as the president and CE-Yo (natch) of Stonyfield Farm, the leading
He then detailed how Stonyfield, which began as a not for profit and was markedly unsuccessful when it first went into business, had put its green principles into profitable practice, and recorded compound annual growth in sales of 26% over the last 19 years in a category which grew by little more than 6% during the same period.
Hirshberg argued that the company's commitments to recycling and carbon footprint reduction had left it with costs which meant its gross margin points were on average 1,000 basis points higher than its rivals.
To succeed, it had therefore had to adopt production and logistical practices which cut its overheads in fuel, packaging and other areas. By introducing such measures, Hirshberg said, the company had helped to create net margins which were in line with those of its competitors.
With the oil price hitting new records on an almost weekly basis, Mr Hirshberg argued that all companies would need to follow a similar energy reduction path.
Marketing-wise, he said Stonyfield spent less than 1% of its sales on advertising and lacked resources to advertise at similar levels to its rivals. It therefore relied on tactics such as:
With its dual emphasis on short-term cost measures and a commitment to a worldwide trend such as climate change, the session brought the conference's key theme – short versus long-term pressures on brand building – into a satisfying, final combination.
There were even jokes. Warning about over-population, Hirshberg said: "Every 10 seconds, there is a woman giving birth somewhere on the planet ... We have to find her and stop her!"
Day one: big brands boxing clever Carlos Grande 3 June 2008 “Boxing is just show business with blood” read one quote at the
With presentations from Harley-Davidson, P&G, Forrester, Philips and the Lindsay, Stone & Briggs agency (which organizes the event in Madison, Wisconsin), day one brought more show business than blood.
A session on the launch of a male body shaver (slogan: “optimize your assets”) could even be said to have delivered more “business” than “show”. For that, and much else from the opening day, one suspects delegates were grateful.
Day one
“How to drive short-term sales and long-term equity in a volatile economy” is the titular theme of this year’s event.
With delegates reminded that 56% of respondents in a recent survey of US marketers believed their profits and dividends will fall this year, the morning sessions tackled the question of whether short-termism was undermining belief in enduring brands.
Modesty, and a lack of comprehensive notes, prevents me from giving a full report from the initial panel session. This is because I was one of the speakers, along with representatives from the Advertising Research Foundation, the Association of National Advertisers, Piper Jaffray and San Francisco Equity Partners.
Joel Rubinson of the ARF (left) and Carlos Grande (WARC) during the panel discussion
Suffice to say, there was broad agreement among panel members that while the business context for brands had become more short-term – especially in a slowing
Fighting talk
That was also the theme of the presentation that followed from Marsha Lindsay, chief executive of Lindsay, Stone & Briggs.
Her argument was that in order to engage consumers better, marketers need to think like rapid-response retailers, addressing audiences with in-store media, merchandising, packaging and point of sale close to the point of purchasing decisions. At its purest, this thinking leads to the development of brand concept stores.
She cited ING, Scholl, Kohler, Apple and P&G as examples of brand owners already either trialing or operating physical retail sites (P&G’s Swash is a laundry site based in a university and developed to showcase P&G’s detergent products to young consumers) in a bid to offer their consumers richer experiences of their brands.
Conceptually, she argued that retailers provide shoppers not just with goods and services but with meaning, and marketers needed to follow suit.
She quoted Robert Deutsch’s analysis: “A brand is something I am emotionally and instinctively attracted and attached to because it helps me become more myself without any further explanation of attributes.”
Drawing on Jungian psychology, she also argued that successful advertising campaigns by the likes of Philips, Target and American Girl, the toy brand, use narratives employing archetypal figures such as the outlaw, the sage, and the magician to embody these meanings.
And in a session which ended with Ms Lindsay donning a pair of outsize boxing gloves, her practical advice included:
The following speaker certainly managed to do this.
Mark-Hans Richer, chief marketing officer of Harley-Davidson, rode into the “in the round” Brandworks staging aboard one of the brand's motorcycles.
Determined to maintain – and gently satirise – the conference's fight concept, Richer argued that many perceived conflicts in marketing were based on false dichotomies.
One, he said, was a tension between an emphasis on building sales and on building brands, with marketing departments frequently under pressure to “cut brand spending to make their numbers”. The latter, he said, was nonsense.
When the gap between a consumer considering buying and their actually buying a Harley could be ten or even 20 years, Richer asserted it was false to set up spending on brand building and target-hitting as somehow in opposition. He said: “Everything is retail. Everything is brand.”
He outlined how the company focused on communicating a core set of Harley attributes – edginess, freedom, embrace of the open road – to build brand equity, and maintain its connection with customers.
Turning to specific campaigns, Mr Richer outlined Harley's attempts to offset seasonality in its sales and to win over younger consumers to its brand.
Richer showed television advertising which used a Biker Claus figure and the slogan, “Shop Harley for Badness Sake” to satirise cosy Yuletide marketing (see below).
According to Richer, the result was well received on social networking websites, and helped keep fourth quarter 2007 sales of Harley-branded clothing in line with those in 2006, despite a slowing economy.
Faced with discounting rivals and gloomy predictions about the economy, the company also sought to bond with its customers, with a press and online campaign entitled “We don't do fear” which shrugged off the burden of negative predictions about consumer spending.
In one online execution of this idea, Harley owners were invited to shrug off their own worries and pledge “Screw it, let's ride”.
As points to take away from his speech, Richer offered:
And with that, Mr Richer exited, executing a cautious three point turn on his Harley.
Now in store
The next speaker, Dina Howell, the general manager – marketing, global operations at P&G, immediately apologised for not matching Mr Richer’s showmanship.
Her presentation took the form of an overview of brand-building across P&G’s $76 billion of annual sales with a focus on three areas: shopper insight research, online communities and cause marketing.
Dina Howell, P&G’s General Manager – Marketing Global Operations, during her presentation
With 24 brands worth more than $1 billion in annual sales, P&G is not short of resources to fund research. Ms Howell estimated it had spent about $1 billion over the last decade on research, with about four million consumers interviewed every year.
Against this background, the PRISM project which has been backed by 24 retailers, 12 manufacturers and the Nielsen Company, promises to offer participating companies such as P&G much greater insight into how shoppers behave in store, Ms Howell said.
With a rollout in the US this year, PRISM purports to provide data on how many shoppers travel down aisles and make purchases, and break figures down by category, by day part and by retailer. It will be a “significant breakthrough”, she said.
Another idea whose time appeared to have come, at least for P&G, was the online community. Some of the company's community websites in the early part of this decade “failed to get traction”, Ms Howell said, because consumers were not ready for them. Now sites such as Olayforyou.com and Beinggirl.com delivered major audiences, providing information, services and community.
Finally, the company's attempts to associate with causes close to its female consumers' concerns – paying for a third-world vaccination for every Pampers pack sold for instance – again allowed it to build deeper emotional connections with audiences.
Such campaigns only succeeded if they were authentic, generous and experiential, she added. (One could say the same about lunch, which was next.)
Engaged
After lunch, Robert Deutsch, a cognitive anthropologist, gave a speech which included New Yorker cartoons, myths and anecdotes about shamen, which would be difficult to reproduce in any lucid way here. So I won't.
The next speaker, Brian Haven, senior analyst of Forrester Research, illustrated his work on a new model for consumer engagement, with the tale of Jen, the IKEA devotee.
A native of
Jen is passionate about IKEA, a brand advocate and brings people together about the brand. In other words, she is engaged, Mr Haven said. How can brands communicate with people like her?
In the Forrester model, engagement works from 4 'I's. These are:
With impressive detail, Mr Haven outlined how this model was put into practice by Alli, a weight loss product, and how it could be deployed by the likes of IKEA.
He also set out tactics for defining, measuring and encouraging engagement, as well as how to prioritize engagement metrics. The clarity of the presentation was highly welcome, and you can download the full paper here.
Buzz marketing
And so to body shaving...
The Philips Norelco Bodygroomer might not appear the most mainstream of products (see the creative below...).
Yet its successful US launch for a fairly modest marketing push of less than $1 million made this case study, presented by Arjen Linders, Philips Consumers Lifestyle VP of Marketing, among the most interesting of the day.
The challenge for Philips Norelco was to attract new customers and launch a new business segment with a small budget. Retailer support was limited and there were also concerns the product could damage Philips' overall brand reputation.
The product, a male body shaver, was set a target of 150,000 sales in the first year. Instead, a highly successful humorous viral campaign and microsite, some free editorial coverage from maverick radio DJ Howard Stern and select partnerships with media and retailers enabled the group to sell 350,000 items in its first year.
Mr Linders summarised his take-away points as:
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