The Warc Blog

The Good Brand Spokesperson

Posted by: Robert Passikoff, President, Brand Keys, Inc

Blog author L'Oreal announced a new addition to their roster of celebrity spokespeople this week, signing actress, Julianna Margulies, as a new ambassador and celebrity face for the brand. Ms. Margulies currently stars in the critically acclaimed series "The Good Wife,” for which she won a Golden Globe and SAG award for her portrayal of a loyal yet betrayed wife of a politician.

Does it surprise you that L’Oreal (and most other beauty brands, both luxury and mass merchandiser) went the expected route and found a high-profile beauty to front for their brand? We weren’t. But just because it’s predictable doesn’t mean it isn’t practicable, and there are two basic ways a celebrity can positively affect a brand.

The first is by creating what might be called “borrowed equity,” when the celebrity causes more attention to the brand than otherwise might be the case, an approach usually used when a brand is seeking high levels of awareness. The second is when the spokesperson association actually increases the brand’s equity—that is, when the values inherent in the spokesperson significantly reinforce brand values. If successful, the brand is then seen to better meet, and can even exceed, expectations consumers dream about for the ideal in the category.

That measure – the brand versus the real, unconstrained-by-the-marketplace Ideal – is the very best measure of brand engagement and loyalty because it takes into account real emotional values, something that imagery and good-looking celebrities can’t bring about on their own.

Ms. Margulies won’t appear in advertising for L'Oreal Paris until 2011, but until then, we turned to our 2010 Loyalty Leaders List to see which cosmetic brands were currently engaging loyal customers. Here’s the top-10 ranking:

1. Mary Kay
2. Maybelline
3. Estee Lauder
4. Clinique
5. Avon
6. Lancome
7. L’Oreal
8. Covergirl
9. Chanel
10. Max Factor

Coco Chanel is said to have offered this bon mot: Women have two weapons – cosmetics and tears. Happily, these days beauty brands can arm themselves with something more than outdated clichés: the loyalty driven by real emotional connection.
30 September 2010, 17:43
Absolutely the Most Loyal Customers in America

Posted by: Robert Passikoff, President, Brand Keys, Inc

Blog author Here are a couple of brand absolutes:

1. Loyalty is absolutely driven by emotion and
2. This year consumers are absolutely looking for emotional connections – more than ever before.

This year the list of top-50 Brand Keys Loyalty Leaders is made up of 8 categories. Cosmetics and moisturizers account for 30% of the brands; technology brands – primarily smart and cell phone brands – account for 26% of that list; and these two categories together account for nearly 60% of the brands with the most loyal customers.

Surprised? You shouldn’t be. Not when you consider that the ‘emotional engagement’ that women share with beauty brands is very powerful, and that there are few things consumers take more personally than the technology that keeps them connected.

Sixteen percent (16%) of the top-50 Loyalty Leaders represented retailers (bricks, clicks, and catalog), and 12% of the brands were alcoholic beverages, principally vodka, with only one beer brand in the top-50 ranking. On the other side of the bar, Dunkin Donuts and McDonald’s coffees were the only other beverage brands to make the top-50 loyalty rankings.

Of the 501 brands in 70 categories on this year’s list, here are the 10 brands with the most loyal customers:

1. Apple iPhone
2. Samsung cell phones
3. Wal-Mart
4. Grey Goose
5. Apple Computers,
6. Hyundai
7. Amazon
8. J. Crew
9. Blackberry
10. Avis.

Who had the greatest gains in loyalty this year? Progressive Insurance (+78), Avon (+53), and Domino’s Pizza (+38).

Who showed the greatest losses in loyalty: Palm (-407), Tylenol Allergy (-199), and BP (-326).

For the complete ranking of the 501 brands, click here.

Some brands have, of course, suffered loyalty losses because of the economy. But brands that understand how real emotional connections serve as a surrogate for added-value will create stronger loyalty bonds no matter what the economy is like.

The good news: Unlike economic use models, which rely heavily on historical data and profitability conjecture, the Brand Keys Loyalty Model and rankings are 100% consumer-driven; are predictive leading-indicators of corporate profitability; and are eminently understandable.

The better news: Real customer loyalty can be quantified and predicted. And in these economic times, knowing what’s making loyalty happen gives a brand an extraordinarily powerful advantage.

29 September 2010, 18:38
Asian Shoppers Visit Stores Not Just for Products But Also for the Experience

Posted by: Grey Group Asia Pacific

Blog author Asia is a diverse market and the way its retail channel works from one country to another in the region is unique to each individual market. However, there are some common traits that describe the behaviour of Asian shoppers.

In our Grey and G2 Asia Pacific Eye on Asia – Retail study, we interviewed around 2,100 adults in Australia, China, India, Indonesia, Japan, Korea, Malaysia and Vietnam to gain valuable insights into the Purchase Decision Journey of an average Asian shopper.

The survey was unique and threw up a lot of interesting findings, which force marketers to look at the retail channel quite differently across the region.

One such interesting eye-sight is the fact that Asian shoppers visit stores not just for products, but also for the experience.

What does this mean?

This means that at the very basic level, Asian shoppers are not treating the retail space as a place to fulfill their immediate need but also as a place to get educated. It is at a store that they compare products and decide on their purchase. A shopping journey is not just about ‘purchases’ but gaining ‘experiences’ that they can talk to their friends and relatives about.

“Once I see new things, I have new topics of conversation with my friends.”

This is true not just for hypermarkets/supermarkets, but also true for pharmacies and provision shops/mom & pop stores. However, depending on the maturity of the market, the association with different formats is different. For example, in hypermarkets/supermarkets, the novelty of experiences makes shopper moods in China and Indonesia (59% and 80% respectively) more relaxed, as compared to developed markets like Japan and Australia (19% and 32% respectively.

In India, 69% of the people surveyed agree that a journey to the store is one that is adventurous, even if it is just a trip to the provision shop.

Asians describe their moods while shopping to be fun, relaxed, happy, excited, exploratory and adventurous. Only 4% of Asians mention that they are bored when shopping.

Additionally, not only are Asian shoppers looking for unique experiences whilst shopping, they also spend quite a bit of time in each of their journeys. For example, the average Asian shopper spends over 52 minutes in hypermarkets/supermarkets and what this means is that a lot of prior research happens at the shop level before deciding on what they would purchase.

As such, these findings open up a varied set of implications.


This interesting eye-sight opens up two sets of implications – one for retailers and the other for marketers.

Let us first look at the implications for retailers. As shoppers are not just visiting the store purely for product purchase, retailers should be looking at providing shoppers with both a unique shopping environment and experience which will help increase their interest to explore the store and return for further purchases.

This is where sensory branding techniques used by retailers can often help create the ‘perfect’ environment through the use of ambient lighting and carefully chosen fragrances. Provide Asian shoppers a reason to stick by your store and chances are that they will visit you again.

Now let us look at the implications for marketers. Since it is the experience that Asian shoppers are looking for, marketers can give them experiences through product demonstrations and other kinds of promotions that bring the brand to live.

The store environment is extremely important for Asian shoppers in hypermarkets/supermarkets, with 61% of them considering this to be a key driver that influences their purchase. However, as mentioned previously, depending on the maturity of the markets, the importance of drivers vary. For example, in emerging markets like India and China, 75% of shoppers agree that the store environment is a key driver for hypermarkets/supermarkets as well as pharmacies.

So the challenge lies in the fact that as a marketer, how can you help Asian shoppers to experience your products?

If you are a tea marketer, how can you provide your customers with a taste of your product? Or if you are a shampoo brand that is looking to launch a new variant, how do you make your consumers experience you? Perhaps marketers of shampoos can give consumers a free hair wash and through this experience, consumers might purchase your products.

The other bit of ‘experience’ also derives from the fact that Asian consumers use the retail space as a place to learn. It is here that they compare products and brands and read about the ingredients in the items that they want to buy.

And this is the reason why a whopping 80% of Asian shoppers in emerging markets consider product range to be a main store driver in hypermarkets/supermarkets. In future, this could well emerge as a key point of intervention for retailers as well as marketers – through sales staff or leaflet activities. If stores can make it easier for shoppers, they may gain more than a fair proportion of shoppers’ mindshare.

To summarise, here are a few implications for marketers that emerge from this eye-sight:

1.    Keep brands current in the minds of consumers by conducting promotions and in-store activities.

2.    Provide information or conduct activities that are worthy of creating a buzz, making it the “talk of the town”.

3.    Have well-informed sales staff ready to assist in purchase decisions of consumers when they are in the product comparison stage. This helps in building on their shopping experience and improving the image of the brand.

4.    Have attractive displays that allow shoppers to interact with the product and give them a touch and feel experience that will help them in their purchase decision.

The possibilities are endless. What marketers need to understand is the mindset of consumers, and therefore create varied opportunities to entice shoppers to purchase when they are in-store.

Contributed by Sagnik Ghosh, Senior Planning Director, Grey Group India
29 September 2010, 11:21
Twitter unveiled new ad platform today in London

Posted by: Colin Grimshaw, Editor, Admap

Blog author

So, Twitter is bringing its new ad platform to the UK, with Promoted Tweets and Promoted Trends – sounds like the commercial strategy of a certain leading search engine.

I’ve just got back from the TBG Breakfast Club Seminar where Twitter’s director of sales Amanda Levy unveiled the ad platform to Europe. It will be rolled out over the remainder of 2010 in tandem with a redesigned Twitter site that will have two new features: Embedded media, allowing video to be incorporated into tweets for the first time from YouTube, Ustream and 14 other partners; and Contextual tweets that will enable linking to related tweets.

24 September 2010, 12:32
Pretesting, BE and neuroscience

Posted by: Manfred Mareck, Managing Director, Research Marketing

Blog author

Apart from interesting presentations, I find advertising conferences have another benefit: catching up on commercials that have otherwise completely passed me by. Sadly, the range of worthwhile examples seems rather narrow: a couple of years ago, no advertising conference would have been complete without numerous references to creative masterpieces from Lynx/Axe, Dove or Cadbury. All these clocked up millions of views on YouTube which, I guess, makes for a successful campaign.

The likely success of such campaigns can be significantly improved by rigorous pre-testing. This was the message from Peter Haslett (chairman of Ipsos-ASI) during the session on Tools and Techniques. Ipsos' pre-testing results, said Haslett, correlate highly with actual sales and CEP scores (cognitive emotional power) which help identify whether emotional or cognitive/rational forces drive impact. As is often the case, brand advertising that combines the right mix of emotional as well as cognitive power work best, but usually the purely emotive ads are the ones winning awards.

What's important when pre-testing is to understand the (big) idea behind the campaign, measure what really matters, factor in today's complex media environment and validate results.

Behavioural Economics

Dr Nick Southgate started his presentation on Behavioural Economics (BE) by saying that the success of this discipline in stimulating the creative industries is because behavioural economics is completely disinterested about those things. But it clearly has some value, as the IPA appointed him earlier this year as their BE consultant.

BE is an attempt to build a theory of economics out of principles derived from observed, rather than postulated, human behaviour and to go beyond the axioms of classical economics, such as rationality, preference, self-interest and so on. BE uses obliquity, i.e. the analysis of the most unexpected things.

Southgate uses the example of ordering pizza: one option is to build a pizza up from a bare base by adding ingredients, the other is to be offered a pizza 'fully loaded' and the customer removes unwanted ingredients. People 'choose' more ingredients in the second condition - clearly the promise of a mushroom you have to 'give up' is apparently more delicious than a mushroom you add.

BE asks this question whereas classic economic thinking simple assumes that preference is not distorted by the way you order a product. BE can teach advertisers that an offer of say 10% discount on a product will result in fewer units sold than an offer that says '10% off - maximum 5 tins/packs per purchase' - value, it seems, is more meaningful to shoppers when the offer is limited.

Last week, I reported on the irresistibly titled Chief Happiness Officer Stephen Phillips (Spring Research) from the annual ESOMAR Congress. For Warc, his presentation focused on Emotions and Engagement. Emotions, said Phillips, guide most of our decisions and the marketing industry has somewhat neglected emotions and many of its models relied for too long on linear, AIDA-type concepts. Conjoint analysis also typically assumes too much rational decision making. Purchase decisions are driven by a complex interplay between emotional impulses and rational/practical considerations. TV often works best at the emotional level; print can be stronger to influence rational decisions - thus different media channels should be selected for each phase of the buying process.


Graham Page (head of innovations at Millward Brown) opened with some caveats: whilst neuroscience measures biological responses (thus overcoming the bias of direct questions), there are practical issues (size and cost of the scanner) and issues with the current hype (fMRI is provides a better, but still not full understanding of how the brain works). In other words, it is not replacing but enhancing traditional methods. Whether insights derived from neuro-science or biometric measurements are ultimately better predictors of human behaviour is also not clear at this stage, as there is simply not enough validation available as yet. Page then showcased three key methods/techniques:

1. Implicit association measurement (measuring reaction time/accuracy to ideas or concepts to infer emotional responses - for example, what ideas brands evoke in respondents).

2.Eye tracking (provides very detailed insight why individuals respond to ads, how they orientate themselves in a retail environment etc). Eye tracking results for advertisements, for example, show that, when asked, people tend to overestimate the attention they pay to brand/logo/strap lines etc.

3.EEG (brainwave measurement) - for ad/creative diagnosis. Uses a head cap (rather than full MRI scanners) to measure positive/negative feelings and establish whether respondents feel cognitively involved with what they see.

Dr Carl Marci (CEO of Innerscope Research) urged researchers that they need to dig deeper to measure where responses actually happen. Conscious responses represent only a small portion (somewhere between 5-25%) of what the brain is doing, while unconscious measures go beyond conscious measures by measuring emotions, which direct our attention, enhance learning and memory and ultimately influence our behavior. Biometrics and eye tracking are an important complement to existing research tools and a natural evolution of a movement toward ever higher sample rates and granularity of experience.

He sounded some caveats: EEG only measures brain wave activity within the outer part of the brain, i.e. it does not reach the deep brain structures where emotions are processed. Eye tracking can only show where people look, and is only of value if it also measures the points on which the eye fixates during the saccadic moves to provide not just conventional heat maps but also gaze plots. Measuring emotions is complex and requires multiple channels but when combined can provide a comprehensive picture of our emotional engagement.

24 September 2010, 12:30
Follow Their Dreams

Posted by: Robert Passikoff, President, Brand Keys, Inc

Blog author The concept of a card to be used for purchases was first described in 1887 by Edward Bellamy in his novel Looking Backward. It portrayed Bellamy’s dream of how an Ideal 21st century would operate.

It turns out Bellamy’s was ahead of his time. It was only 1984 that Brand Keys proved that consumers don’t just shop, but dream too. When it comes to brands, they dream about an Ideal.

The Ideal is a consumer-centric view of a category. It absolutely informs how consumers view, compare, and choose among category options. If you identify the Ideal, you not only possess a measure of consumer expectations, but also know what truly matters to them. Brands that best meet – even exceed – expectations for the Ideal always possesses the highest brand equity, engender high levels of loyalty, and, as this is business we’re talking about, posts profits. Very regularly and usually exceeding estimates.

When it comes to 21st century credit cards ubiquitous acceptance, competitive rates, and air miles don’t cut it any more. Those have become category ‘table stakes.’ What influences brand loyalty most is the reputation the brand has for service. According to our most recent loyalty assessments, here’s how the major card brands rank when it comes to what consumers dream about customer service:

1. Discover
2. American Express
3. Visa
4. Capital One
5. MasterCard

Discover recently aired a new campaign focusing on (ideal) customer service. Oh, and having the category’s most-loyal cardholders and this year’s Brand Keys Loyalty Award, a circumstance that most CFOs and CMOs also dream about.

All dreams may be answers to questions consumers haven’t figured out how to ask yet. But for marketers those dreams can be codified in a very practical, very predictive category Ideal.
23 September 2010, 16:30
Is buzz over-rated and social media ROI over-estimated?

Posted by: Manfred Mareck, Managing Director, Research Marketing

Blog author

According to the latest findings from the UK TouchPoints survey, social media still only plays a small (albeit growing) role in consumers' lives. Still, social networks and the buzz they can generate are becoming an increasingly attractive channel for advertisers to connect with their customers or to create brand advocates. And this brings new challenges to advertising researchers - some of which were the topic of WARC's morning session of this year's Future of Advertising Research Conference.

With half a billion users globally (and around 28m in the UK) Facebook is clearly a force to be reckoned with. The rules of engagement need to learnt and are still developing. Facebook's Kathy Dykeman (EMEA Insight Specialist) suggested distinguishing between standard ads (those that drive traffic to a destination) and engagement ads (such as event ads, polls …).

23 September 2010, 15:34
Why neuroscience?

Posted by: Joseph Clift, Product Manager, Warc

Blog author

Neuroscience is here to stay - and the insights it provides can be far more compelling than those from the traditional focus group.

That's been the message from many researchers over recent years, as they use techniques from eye-tracking to FMRI to track the brain's unconscious reactions to various stimuli. And it's a message that was brought home once more by Gemma Calvert, founder of Neurosense, at a meeting of the Account Planners Group in London last night.

16 September 2010, 11:57
Emerging markets and listening brands: A perfect match?

Posted by: Joseph Clift, Product Manager, Warc

Blog author

Societies are always changing - and being able to predict accurately how societies will change in the years ahead is a matter of acute concern to advertisers. GfK Roper offered some forecasts of its own in its 'The World to 2020' seminar, held in London this week, based on the years of data they've been gathering from over 30 countries in five continents.

In developed nations at least, people are now interacting with brands more directly than they did before, whether through saying they "like" it on Facebook, through leaving product reviews on Amazon or CNET, or through saving money by using mobile services like Voucher Cloud and shopping around for the best deal via price comparison websites. These interactive tools have stimulated a shared hunger for "listening" brands as well as an explosion of online conversations about goods and services: 54% of consumers have made a specific recommendation to somebody else about purchase choices over the past year.

15 September 2010, 12:05
Throwing in the Towel

Posted by: Robert Passikoff, President, Brand Keys, Inc

Blog author
It turns out that Robert McDonald, CEO and President of Procter & Gamble, is a former military man with two missions: win back ground his company has lost as thrifty shoppers opt for cheaper products, and to invade foreign markets currently dominated by CPG rivals Colgate and Unilever.

Supported by massive ad budgets and ubiquitous distribution, P&G has in the past managed to persuade consumers to pay more for household basics. But a combination of the recession, consumers’ ability to engage with brands in the absence of traditional advertising, and increased brand commoditization has severely undermined that strategy.

More than two-thirds of consumers say they switched to a cheaper brand for at least one basic household product this year alone. And while consumers’ day-to-day spending more-and-more reflects persistent penny-pinching and a search for added-value that only a truly resonant brand can deliver, P&G’s response was to slash prices. Among the premium brands P&G has discounted were Tide, Charmin TP, and Bounty paper towels.

Is this surprising? Well, maybe. But the problem is more than just the recession. Or the habituation of frugality. Certainly the current economy gives people a reason to look for savings where they see no discernible differences, but the development of brand meaning, engagement, and loyalty to a brand shouldn’t be discounted either. Yes, yes, there are always those who will buy purely on price, but a loyal customer is six times more likely to rebuff competitive offers, especially price-based offers.

We track two of the price-promoted categories in our Customer Loyalty Engagement Index and here’s how brands currently rank when it comes to the value of the brand itself:

Paper Towels:

1. 7th Generation / Bounty
2. Viva
3. Basic / Brawny
4. Scott
5. Mardi Gras

For Laundry Detergent, there’s a bit more differentiation:

1. Cheer
2. Tide
3. Wisk
4. Gain
5. All
6. Purex
7. Era / Bold
8. Arm & Hammer

So is a price war the way to go? Getting consumers used to paying less for more makes it very difficult to compete and make a solid profit, unless you can really provide differentiation and value. But ultimately investing in what drives loyalty is where a brand can clean up.
14 September 2010, 14:38

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