By Mike Fromowitz
What’s happening to branding?
Today, Internet search engines have made products and services easily accessible enabling customers to zero in on brands they desire most and branding is a powerful tool that simplifies the decision making process. Product and service companies that fail to brand themselves will be at a decided disadvantage. You also have to bring your target customers to ‘your’ website—and that requires strategy, branding, marketing and advertising to create that awareness factor. As the number of Internet users and web proficiency accelerates around the world, marketing and communications professionals are exploring how to harness the power of all types of media both online and off-line. Although the pace of change in the digital world has been rapid, the advertising industry continues to grapple with the changes created by this new virtual world. Those who succeed in understanding these issues may very well define the next era of marketing, branding and advertising.
Marketing and messaging overkill.
No matter where you look these days, you can’t get away from advertising messages. We have entered into a state of marketing and messaging over-kill. Too many messages. Too little relevant content. Consumers are feeling increasingly bombarded by chaotic visual messaging. They are craving more simplicity and clarity. Fact is, they are tuning out most of it and beginning to talk quite negatively about it: “It’s invading our privacy”, It’s polluting the environment”. These tactics are turning off consumers rather than turning them into brand advocates. Marketers need to recognise that they must rapidly adjust to a world that is evolving from a “push” to a “pull” landscape. Since the advent of modern day advertising, marketers have used one-way mass communication and imprecise customer segmentation to deliver their message. The internet has, for the first time, made it possible to have precise targeting and personalisation, and consumers are increasingly expecting that advertisers not just communicate, but engage and pull them in with tailored and highly relevant messaging and activities. Fact is, this also holds true with traditional media such as radio, television, newspapers and magazines.
Consumers aren’t tuning in, they’re switching off.
Much of the advertising we see today has become a wall of noise, much of it being broadcast to a lot of deaf ears. In Malaysia, for example, when we consider the impact and noise levels of telecommunications advertising, specifically from the big three telcos—Celcom, Maxis and DiGi—their combined noise levels must surely be confusing consumers. Their advertising messages are very similar. Their services and products have all become commodities, as have their messages. For them, it’s all about price and coverage: who has the lowest prices this week?; who has the best coverage this month? They are fighting a never-ending battle to switch subscribers. Their style and imagery may look different, but that’s only on the surface. Their branding has become entrapped in fancy graphics. They are spending millions on media in a marketplace that is becoming more and more confused by their commoditised messaging and service offerings. Sure, consumers have learned that each company has its own unique colour— that DiGi is yellow, Celcom is blue and Maxis is green but I’m sure there’s more relevant messaging to get across than that? Branding is more than slapping your logo up on a huge billboard or on the end of a TV spot. Besides, today’s customer no longer wants to be dragged into what they are told they should buy; they are now masters of their own decision making processes. Consumers are becoming more than just a sales “target”. They are becoming brand advocates for the brands that they associate with and the brands that they want in their lives. This in itself is a major paradigm shift, and requires marketers to think differently than they have before about how to win over customers.
Are big ad agencies out of touch with consumers?
Years ago, you couldn’t survive as an ad agency if you didn’t have some knowledge about consumers. Somewhere along the way ad agencies have lost that unique ability. Today, things have grown worse: most of them don’t know about consumers and don’t know much about social networking and web 2.0 technology either. Mainstream ad agencies seem to have one message to their clients— social networking. 20 and 30-year olds in ad agencies are sending their clients to online spaces that they and their friends play in—YouTube, Friendster, MySpace, oh you know the list. They are also advising their clients to create social media. That’s much of the same thing. The middle aged ad agency executives are sending their clients to the social media spaces that their teenage and 20-year old children spend time in. The big ad agencies are making a huge mistake. They are pushing their clients to chase technology, not their consumers. Today, you must be one with your customers because more and more, they demand to be participants in your product/service/experience/brand. You just can’t send a 45-year-old to facebook or Second Life. It’s nutty thinking. Sadly, many traditional ad agencies still don’t get it. You can’t just send every client to the same social media sites or create similar kinds of social networking vehicles. What you have to do is get to know the customer culture first.
That’s why smaller, innovation consultancies are springing up. Rather than an office filled with agency ‘generalists’, they are lead by entrepreneurial experts who collaborate with best-of-breed thinkers, communicators and activation companies that bring insights and ideas to the table. They’re talents go beyond those of most ad agency staff. They are expert at examining the life cycle of products, conceiving and designing new products and services, rethinking and improving business processes, and optimising customer engagement models. These consultancies know how to observe and understand customer cultures. Their entrepreneurial model surrounds a client’s business issues and creates branded solutions as opposed to advertising concepts.
The paradigm shift.
In 2007, the Hewlett-Packard Company (HP) sponsored an online contest to design HP’s new special-edition entertainment laptop. Their contest ran in 13 countries via the television, Web, and mobile channels of its media partner, MTV Networks. When word spread virally, more than 8,500 entries poured in from 112 countries in just over a month. Their contest web site got more than 5 million hits and HP’s sales grew to five times its original estimate. The design process underwent a paradigm shift. HP opened the doors and engaged customers to design their products. Most Asian ad agencies allocate about four to five percent of their media budgets to digital and other non-traditional media. Internationally, that figure averages about 13.5 percent according to Zenith Media Services. These alternative platforms and capabilities are transforming the ways in which consumers experience advertising. What’s more, they are dramatically reshaping the relationships among marketers, advertising agencies, and media companies. In this ‘new world’ of branding, advertising agencies and marketers need to pick up the ball, revitalise their often conventional, “me-too” approach to the market if they are to see major gains in sales. It’s not about how many ads you run or how much noise you can create in the marketplace. It’s about being smarter than your competitors, and disrupting the way things have been done before.
You won’t find the best-of-breed all under one roof.
For far too long in, marketers have expected their advertising agencies to do everything under one roof—to do more than make advertising; to stretch beyond their capabilities. They are expected to do branding and marketing, and to create and design everything from packaging to logos, from exhibition design to events and channel marketing. But these are not their areas of expertise, and quite often the end product is very unprofessional, adding further to a client’s brand looking inferior to their more sophisticated competitors. Still, the ad agency sees this as a source of revenue and is willing to take on the job rather than tell their client to seek the services of experts in these areas. The problem with many agencies is that they view a client’s needs through their own needs, and through their own set of capabilities and fixed resources. No matter the client’s complexity and set of challenges, their answer is always a print ad or a 30 second TV spot, one that brings the ad agency the greatest profit. No surprise here, since agencies are really agents of the media. The more media you buy the more the agency profits. The objective of the exercise however is not to buy more media, but to create ideas that sell more products and to get the job done right the first time.
What marketers want from their ad agencies.
Adweek magazine reported on a recent international study by the Advertising and Marketing Communications Roundtable which conducted about 150 interviews with the heads of advertising and marcom departments at international companies across North America, Europe, South Africa and Australia. The study confirmed a shift by some marketers away from a single agency working on their brand to a flexible project team of specialists. In this model the marketers hired numerous disparate marketing partners—sometimes on a project basis—to leverage their special talents and expertise as needed. According to the report, Adweek also recommended that clients build the capability to manage dynamic groups of marketing partners or move to the ‘network’ model by hiring on a consultancy of experts who can orchestrate a total marketing, branding and communication plan. Clients are hungry for more innovative marketing ideas. An agency that can add value and fuse together an amazing community of best-of-breed talent will be in a position to offer its clients innovative thinking beyond that of the traditional ad agency. After all, innovation, ideas, and change, springs from the collision of different experiences and perspectives.
Innovation is the Silver Bullet.
In 2000, the Proctor and Gamble company (P&G) found itself sliding into decline after years of numerous breakthrough technologies in consumer products from its innovative team of scientists, manufacturing and technology experts. When A.G. Lafley took the helm that year as chairman and CEO he integrated both technology thinking and design to create better engineered products which in turn, would offer consumers a better experience. By infusing this thinking into the DNA of the company, and having research, technology and developing teams work alongside design and marcom teams, he was able to focus on the strategy and where to search for the next big opportunity. He turned technology and design into a revolutionary and transforming business building tool and brought P&G back to its leadership positioning and tripled its sales from nine years ago. In an increasingly competitive marketplace companies like P&G and others like Apple and Google will continue to lead because these companies understand that to drive business success you do not ‘maintain it’ or ‘manage it’, you have to continuously build it by combining new technology innovation, design and marketing, and growing by creating new value.
Risk and Reward.
Think it’s time for a unique perspective on the role of the ad agency in today’s marketplace. Ad agencies need to become the risk and reward-sharing partners with their clients, helping them to navigate marketing and advertising projects as a real partner—taking on a share of the responsibility required for success. By taking on the risk and engaging as a true partner, the rewards to the agency should be commensurate with the risk. They have to take on a proportion of that responsibility and risk to achieve the desired result. They need to create and deliver brand assets that add value to the bottom line. Sure, they need to be creative in everything they do, but their responsibility is not just in creating advertisements or buying huge amounts of media. It’s all about creating awareness and driving sales.
Most advertising agencies today know they have to change because the market is changing consumer attitude towards advertising—thanks in a large part to the Internet. Trouble is, some agencies are looking to change, but they don’t exactly know what they need to change or to become and if you don’t know what it is you are looking for, you won’t find it.
Marketing communications is at a transition point.
The term “ecosystem” might well be an appropriate metaphor for today’s marketing environment. It is a dynamic, complex, and interconnected community in which marketers, advertising agencies, and media companies depend on one another to survive and thrive. It is also a competitive arena and only those companies that possess certain preferred traits or that have superior skills are positioned to flourish in this ecosystem. Those without either, face almost certain extinction. Numerous developments have brought the advertising, marketing and media industry to an evolutionary transition point. Consumers have more control and choice. Their media usage has fragmented. Many more advertising platforms exist. And marketers are insisting on greater precision in targeting and accounting for their ad spend. The recent economic turmoil only accelerates this evolutionary transition. Companies across the ecosystem have to acquire or develop three dominant traits to survive: relevance, interactivity, and accountability. The traditional relationship between companies and consumers has been upended. The power of the consumer to shape perceptions on a massive scale is a dramatic and fundamental shift. It is no longer just about where businesses put their ad spend. A comprehensive media strategy across all forms of media, traditional and non-traditional is required. Marketers need to ask themselves, ‘How can we drive efficiency and stakeholder engagement in this new environment while still managing our reputation and risk to our brands?’ Marketers have an opportunity and a responsibility to drive change within their companies because all consumer touch points—increasingly digital, have an impact on brand and on revenue. Brands aren’t defined by campaigns anymore but by the consumer ecosystems put in place to support them.
The digital tidal wave.
Marketers are not alone in recognizing this digital tidal wave. Some of the media companies we interviewed said they expect their existing advertisers to shift more money online in the next two to three years. Many acknowledged that digital ad platforms better address marketers’ desire for accountability, and believe that traditional media needs to be supported by digital to effectively build brand equity.
Thirteen years into the online era, and still, very few marketers regard themselves as digitally savvy. Media companies see this as an advantage for them, beyond just being mere aggregators of eyeballs. They now offer marketers and agencies broader services such as performance marketing, e-mail marketing, and lead generation. The traditional marketing function, equipped to broadcast brand messages to consumers, has now become a center for dialogue, geared to gleaning what consumers want, and when and where they want it. Advertising is evolving from an interruption (grabbing attention for a service, product or brand) into an experience or a service that the consumer actually wants. This new marketing model doesn’t shout. It requires that the marketer listens and learns from the customer. Relevance, interactivity (2-way conversation) and accountability are its essential ingredients.
Collaboration is king.
The marketer–agency–media chain used to be simple, linear and straightforward. Now, that model must be morphed into a web of overlapping connections and interdependencies. Today’s marketing ecosystem is complex and marketers need to be more demanding if they are to get best-of-breed ideas and execution. Agencies and marketers need to develop better partnering skills to get things done and access new sources of data. We are certain to see more marketers partnering with media companies, large agencies having to diversify their portfolios, and media companies expanding the depth and breadth of their services. This is an erosion of the existing boundaries and is compelling companies to move in new directions.
Orchestrate your marketing efforts.
The savviest marketing companies will move from their traditional ad agency to that of appointing a smaller group of highly skilled, best-of-breed, senior marketing communications ‘integrators’—a collection of experienced, intelligent people who can work together at a strategic level alongside the client organisation. They will be the “Agent of the brand”, ensuring brand integrity, brand direction and brand strategy. They will serve as the “conductor”, influencing, controlling and integrating all the involved agency and media disciplines and elements necessary to orchestrate the brand’s marketing and communications efforts. This ‘conductor’ agency will be responsible for managing the brand, writing and managing the strategy, the budget, the time line, and the overall execution of the entire program. They will manage and integrate several outsourced resources made up of exceptionally talented, skilled and focused companies including retail, activation, events, promotions, interactive, B2B, channel marketing, branding and more. It gives a brand marketing team one point of contact, which saves a great deal of time, strain, and complexity.
Challenges ahead for marketers
One of the many challenges mass marketers will face going into the future is, how capable are their advertising agencies and media companies at helping to keep your business at the forefront of competition? Regardless of the company size, no business can afford not to seek a balance between offline and online marketing. To turn a blind eye to a trend that is emerging is to risk your bottom line. The landscape of traditional marketing through mass media is clearly evolving from what businesses were comfortable knowing and understanding. Michael Mendenhall, CMO of Hewlett-Packard, sees what’s going on. He talks about how his organization looks at brand building, “Many companies continue to look at marketing in conventional ways -- from a mass-market point of view. Branding today is not about the media; it’s about the idea. You need to dismiss the conventional way of thinking and start with an understanding of the value of each communication channel and how — or whether — it will ‘engage’ people. The idea should be the organizing principle, and it should inform everything you do to help consumers grasp your brand promise in whatever channel you’re reaching them: the television, the blogs, the banner ads or the word of mouth.” In a recent editorial, a noted advertising consultant said that “In 3-5 years the whole ad industry will be in crisis mode just like the automobile industry in the USA, and this may happen sooner rather than later thanks to the accelerating power shift to Social Media and not to mention the downturn in the economy. Advertising, marketing, PR agencies and brands that shift their thinking and models can avert the crisis but many will be too slow to react and will not survive. There seems to be very little doubt in this consultant’s mind that the advertising agency will be pushed further down the commodity chain. Marketers will see greater advantage of working with new ‘integrator’ units headed by knowledgeable, skilled and talented agents of the brand and outsourced professionals from a variety of communications disciplines, to head up a client’s integrated marketing needs.
The Painful Truth
A recent blog article by Adoi Magazine (adoimagazine.com) titled “The painful truth for ad agencies” said: “As competition builds up in a tough economy, agencies find themselves becoming increasingly irrelevant!” The article goes on to say that “agencies have painted themselves into a corner and shortchanged the industry by undervaluing their expertise and contributions to the advertising process.
“Consumers dislike advertising because of its irrelevance, interruption, and clutter. And still, marketers are deploying the same formula they’ve been using for years: Buy exposure to reach as many eyeballs as possible; place the message in a spot where it can’t be missed; and repeat the same message as often as possible”. The article continues to say that “in Malaysia alone, more than half the population spends a few hours a day online. Media fragmentation —the number of media channels available to marketers, agencies and consumers has exploded. Proliferation of choice offers marketers new opportunities beyond traditional advertising media, such as social networks, mobile, and branded entertainment. Each of these has its own success metrics and dynamics.” Little wonder then that the traditional ad agency structure has a difficulty in coping with all these market and media changes and trends. Most agencies are set up in departments or “silos”: the creative department, the account services department, the interactive department, the DM department, all fighting to get a piece of the clients’ marketing budgets with truly little integration. Adoi also states that “Marketers turning to agencies for help have found that most of them don’t have the proper skills or structures to assist”. On the other hand, the ‘new’ ad agency will be an animal of a different stripe, smaller, leaner, run by a body of experts, not over-staffed by generalists. These specialists and entrepreneurs will have the ability to unite strategic insight with endless imagination. Marketers will be turning to other options as they look for alternatives to the over-staffed, unwieldy, slow, and expensive ad agencies that survive by ‘maintaining’ client relationships rather than by growing the business. The new agency will be a collaborative of experts specifically chosen for each discipline, with proven track records. These are qualified professionals and innovative entrepreneurs with cutting-edge experience who have what it takes to help your brand succeed.
Economic turmoil—a marketer’s advantage
Rather than see it as a threat ad agencies and marketers should look at the present economic turmoil and use this to their advantage. They should ideally be looking at their business models, re-defining their strategies, and defining new sources of revenue. Perhaps its creating a new product in your product line, or simply repackaging a product to reach a new level of customer, or open new markets.
How you promote and brand your products and services are essential during hard times like this, and the costs to do so now, may never be better. This is also a great time to gain market share. While your competition is running scared and cutting back on marketing and advertising spend, you have a far better chance to gain share, outsmart them and build more consumer awareness. To do this, you need to consider alternatives to the common advertising agency package of “all-under-one-roof” services. You need to seek a different approach; not the conventional, status quo services offered by most agencies, but a compelling, more innovative one, that can bring together the ’best-of-breed’ skills specifically chosen for your marketing needs. They have the ability to achieve far greater results for your brand.
Where do I go from here?
For those marketers who have read this far, and who may be considering change in their marketing efforts, your answers to the following questions may be a good way to start.
1. This past year, was my advertising a bridge or a barrier?
2. When the consumer was confronted by my advertising, did they find it exciting?
3. Did everyone notice it?
4. Did anyone notice it?
5. Am I convinced that my present agency is capable of creating effective campaigns that can accelerate my company’s growth and profitably?
6. Do I have a nagging feeling that my competitors are getting better advice from their ad agency than I am from mine?
Quotes:
1) ...Marketers need to recognise that they must rapidly adjust to a world that is evolving from a “push” to a “pull” landscape...
2) ...For them, it’s all about price and coverage: who has the lowest prices this week?; who has the best coverage this month? They are fighting a never-ending battle to switch subscribers. Their style and imagery may look different, but that’s only on the surface...
Found at:
http://www.adoimagazine.com/newhome/index.php?option=com_content&view=article&id=4512&catid=23&Itemid=2
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