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How Relevant are you?

// February 15th, 2011 // No Comments » // Uncategorized

A new book by David Aaker, “Brand Relevance: Making Competitors Irrelevant”, argues that success in the marketplace is no longer about winning the brand preference battle but rather the brand relevance war.

According to the author (Vice-Chairman of Prophet Brand Strategy and Professor Emeritus of Marketing Strategy at the Haas School of Business, UC Berkeley):

In brand relevance competition the goal is to develop offerings so innovative that competitors are simply not relevant. In contrast, brand preference competition, where the goal is to be superior to other brands in an established category, is a context in which there is ongoing pressure on margins and profits.

In other words, if you want to achieve substantial success, you need to change the playing field and the rules. Otherwise you risk being blindsided when some out-of-left-field competitor does precisely that to you. A particularly current example which tends to reinforce Professor Aaker’s thesis: Nokia.
Recently-appointed Nokia CEO Stephen Elop penned a brutal internal memo which underlined just how irrelevant the brand is in danger of becoming:

“The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.”

Elop goes on to suggest that his company is “standing on a burning platform” and must “change [its] behaviour.”
Some further quotes from that now infamous memo:

“…there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.”

“They changed the game, and today, Apple owns the high-end range.”

“Google has become a gravitational force, drawing much of the industry’s innovation to its core.”

“Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem.”

“We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally. Nokia, our platform is burning.”

If your R&D people aren’t working on products that will render your existing brands irrelevant, it’s time to worry: somewhere out there (probably in a garage), some unexpected competitor is hard at work shifting a few paradigms.

Are you an Early Merger or a Late Merger?

// February 15th, 2011 // No Comments » // Uncategorized

When you’re just driving onto the motorway (or are in a lane that’s about to merge into another), do you look for an early opening in the traffic that’s zooming past you and then quickly move over, happy to be safely ensconced in the Lane That Will Not End?

If that’s you, you’ll be familiar with this subsequent sensation (as described by Tom Vanderbilt in his book “Traffic”):

“… as the lane creeps to a slow halt, you notice with rising indignation that cars in the lane you have vacated are continuing to speed ahead, out of sight. You quietly seethe and contemplate returning to the much faster left lane — if only you could work an opening. You grimly accept your condition.”
Vanderbilt goes on to relate the time when he resisted his natural urges (and the cringing of his wife) and drove on in the soon-to-be-discontinued lane:
“After passing dozens of cars, I made it to the bottleneck point, where, filled with newfound swagger, I took my rightful turn in the small alternating ‘zipper’ merge that had formed. I merged, and it was clear asphalt ahead.”

In subsequent days, overcome by a creeping guilt and confusion, Vanderbilt used an anonymous website to ask an audience of “overeducated and overopinonated geeks” whether being rewarded for merging at the last possible moment was right or wrong.

The responses came quickly — and seemed equally divided, pro and con. What was puzzling was the sense of moral righteousness each person attributed to his or her own highway behaviour, and the vitriol each person reserved for those holding the opposite view. For the most part, people were not citing traffic laws or actual evidence but their own personal sense of what was right.

The author concludes that the differing behaviours inherent in lane merging is not merely a traffic problem but a human problem: “there is no other place where so many people from different walks of life — different ages, races, classes, religions, genders, political preferences, lifestyle choices, levels of psychological stability — mingle so freely”.

“Traffic” takes us on an entertaining journey through the history of the conveyance (whether car or chariot) and thence to the nub of the issue: we behave differently in the anonymity of traffic than we might when observed by friends or family. We are free to be ourselves, to sing, and cry and do all sorts of things that social conditioning might otherwise discourage. But anonymity also gives us the freedom to be aggressive (as in the oft-cited 1969 study that showed that hooded subjects were willing to administer twice the level of electric shock to others than those not wearing hoods).

In other words, take away human identity and human contact and we act inhuman. Why not cut that driver off? You do not know them and will likely never see them again.

Who knew the simple act of driving onto the motorway was so laden with psychological import?

Stop Following Me

// February 15th, 2011 // No Comments » // Uncategorized

Earlier this month, the US Congress introduced a bill that spells trouble for behavioural-tracking companies (and organisations such as Yahoo and Google that offer advertising based on consumer behaviour online) — and also for anyone operating a reasonably successful website (even over our way).

The Do-Not-Track-Me-Online Act allows people to opt out of being tracked by clicking on a Do-Not-Track button in their browser (in late 2010 the US Federal Trade Commission asked browser makers to add a Do-Not-Track button to their toolbars). The law is generally presumed to be aimed at controlling the tracking of online behaviours.

Behavioural Targeting, applied in an advertising context, enables marketers to serve advertisements to consumers based on their recent web visits. For example, those who search for new car information on Google in the morning might later in the day be served car advertising when visiting a participating general news site.

The US bill (which still has the usual legislative hurdles to jump before it becomes law) risks causing significant collateral damage because of its low threshold – attract more than 15,000 visitors per year to your website and you will be affected by this new prohibition.

The problem: even the most basic website-analytics software collects information which would fall afoul of the legislation. The bill gives the US Federal Trade Commission the authority to allow exemptions such as website analysis; but there are no guarantees.

The most glaring exception to this new law is Facebook, whose information-gathering is arguably more intrusive; the social network offers highly-targeted advertising based not on behaviour but rather on what users declare about themselves (on their profiles and on their pages). Whether permission has been given for Facebook to use that information for commercial gain remains a hotly-debated topic.

Will the Do-Not-Track-Me-Online Act become US law in its current form? In the end, that may not matter. As a result of the FTC request, the Do Not Track button is making its way onto the browser toolbars (it’s already available in the latest beta builds of Firefox, and will soon be integrated into Chrome and Internet Explorer). Some of the information currently available about online consumer behaviour will disappear; and the new constraints may well impact on marketers’ ability to deliver tightly targeted messages to those who would most appreciate them.

Facebook and the way we’ve changed

// February 15th, 2011 // No Comments » // Uncategorized

If you’ve seen the movie “The Social Network”, you’re likely to conclude that the founders of Facebook had a minimalist agenda when they set out to create a centralised database of students — and that agenda had nothing to do with stimulating social change (except on a very, very personal scale, perhaps).

Nonetheless, Facebook has changed our lives — and the lives of some 500 million others around the world. Here are just some of the implications of this ubiquitous social network:

1. What we reveal about ourselves to the world
There have always been those who we’ve met at a party or a bar — and within five minutes we’ve learnt far too many deeply revealing secrets that no-one should share. Facebook accelerates that (often inappropriate) sharing, with consequences that are mostly trivial but sometimes extremely serious. Privacy has been totally redefined, not just by what we tell the world about ourselves but also but what our friends and acquaintances blurt out about us (eg by tagging us in a photo we’d have burned before developing).

2. How we stay in touch with people
In the old pre-FB days, after you left school, you tended to lose touch with most of your old schoolmates (especially if you moved out of town). There might have been a few old friends who you missed, but by and large you were happy to leave behind those whose perceptions of you were shaped by how you behaved in Year 11 or whether you made the rugby team. You were free to carve out a whole new reputation without the sins of the past constantly before you.
Pity today’s youngsters, no longer able to escape (at least not without shedding the rest of their digital connections). Will they be able to reinvent themselves so easily?

3. What we can influence
Look no further than Wael Ghonim, the Google executive who helped organise the youth-led protests in Egypt that toppled a President. We no longer need to be Oprah Winfrey to have a voice and make ourselves heard — if the cause matters to enough people, the technology will help it spread more quickly than we could ever have imagined.

4. How we kill time
Farmville. Checking our wall every 33 minutes. Posting pointless status updates way too often. No wonder Facebook is banned from many workplaces.

5. How we share stuff we like
It’s suddenly so easy to share a link, or a video, or anything we find online. Sometimes, though, all we’re doing is adding to the information overload — how do our friends tell the trivial from the truly important, if we’re constantly broadcasting everything? Some restraint required.

6. How we sell our allegiance
It’s now so easy to “like” a brand on Facebook — or follow it on Twitter. But are we really demonstrating undying loyalty to the brand — or simply hoping for a deal? More often than not the latter, according to the research — which devalues the relationships (perhaps terminally) between brands and their fans.

7. How we treat stuff that’s not online
How do you share a stunning sunset (even if you have a cameraphone handy)? It’s no longer so satisfying to talk about an experience online if you can’t include a URL. As more and more people are discovering, if it’s not on Google it doesn’t exist, for the vast majority of us.
Facebook: it’s not real but it’s become really important.

The Hidden Influence of Social Networks

// February 15th, 2011 // No Comments » // Uncategorized

As we’re growing up, amongst the typical parental advice dispensed to us is a warning not to hang out with the wrong sorts of people, lest we be unduly and negatively influenced. It turns out that this particular piece of advice is more correct than we might have guessed and not just in terms of direct (or even negative) influence. Nicholas Christakis, a Professor of Medicine, Health Care Policy and Sociology at Harvard, has been studying connections between people for many years and his research has led to a surprising conclusion: how we experience the world actually depends on the people with whom we are in regular contact.

The Professor’s research, captured in a 2010 TED Talk and in his 2009 book ” Connected: The Surprising Power of Our Social Networks and How They Shape Our Lives” (co-authored with long-time collaborator, James Fowler), reveals unexpected side-effects arising from our social connections with others.

In a long-term study of obesity, for example, Christakis and his team found that:

You are 45% more likely to be clinically obese if a social contact of yours is obese

If a friend of a friend is obese, your risk of obesity is 25% higher

If a friend of a friend of a friend (probably someone you don’t even know) is obese, your risk of obesity is 10% higher

The research suggested three primary possibilities that might lead to this social clustering effect:

Induction: as I gain weight, my influence and example encourages you to gain weight (or changes your perceptions of acceptable body mass) Homophily (aka “Birds of a feather flock together”): I interact with you because our common body weights make us more comfortable in each other’s company Confounding: there are no obvious reasons why we should be connected but we share common behaviours as a result of our obesity (eg going to the same gym).

All three factors were in evidence to some degree or other amongst those who took part in the research. Other studies conducted by the Harvard group found similar clustering and relationships when it came to other topics such as smoking, divorce and even happiness or sadness. It’s human nature to be drawn to, and then influenced by, those who share similar characteristics. If these findings are not entirely unexpected (even our parents knew!), nevertheless they demonstrate the unexpected strength of our network connections, whether we’re consciously aware of them or not — and offer new insights for marketers keen to harness word of mouth to support their endeavours.

The CMO Top Ten

// February 15th, 2011 // No Comments » // Uncategorized

A recent white paper by the CMO Council (a worldwide network of Chief Marketing Officers) considered the challenges facing today’s top marketing executives and identified these ten opportunities to improve an organisation’s marketing effectiveness:

1. Mr Gorbachev, Tear Down This Wall
The biggest challenge to Marketing Directors today: the silos that exist in most medium to large organisations. Functional heads of departments – advertising, media buying, public relations, promotions/merchandising, CRM, interactive, sales, research/analytics – tend to resist the loss of control and the blending of marketing assets that would actually make it easier for companies to achieve their common goals.

2. Live or Die by the Numbers
Companies don’t usually lack data, whether it is transactional, behavioural, attitudinal or demographic. What they lack is the expertise needed to extract meaningful, predictable and actionable insight from the combined customer information that flows through the organisation.

3. They Want It Now
“End of the month” is no longer an acceptable timeframe for responding to customers and acting on information received (if it ever was). The marketplace has been transformed into an “always on, instant gratification” environment — consumers who want action will tweet and blog about company responses (or inaction). The price of excellent customer service is eternal vigilance.

4. Share the Smarts
Some of the cleverest solutions are likely to emerge from the outlying arms of your corporate empire, where inspiration and perspiration have to make up for a lack of access to organisational resources (and usually no budget). Make a special effort to gather and share those ideas across your organisation.

5. Synchronise Supply & Demand
Today’s Point of Sales Systems typically provide abundant data for tracking sales, managing inventory levels and forecasting product demand (although too many marketers are out of the loop and reliant on others to keep them updated on an occasional basis). Unfortunately, product supply data is seldom as sophisticated, which can cause problems such as out-of-stock or too much of the wrong product. Leading marketers are now looking to improve their organisation’s back-end business intelligence to streamline the process.

6. Better, Faster, Stronger
Time-to-market is the new mantra as windows of market opportunity open and close more rapidly. Meeting new product launch demands and opportunistic promotional requirements has never been more intense. The pressure is on marketers and the creators of marketing materials to deliver effective, robust solutions faster than ever.

7. Protect your identity
The demand to project a consistent brand identity is putting pressure on marketing groups to create centralised online repositories of pre-approved brand assets and content elements (logos, identity guides, images, video, graphics, audio, digital art files, user guides, collaterals, PowerPoints, signage, merchandising systems, booth designs, campaign components, etc.). Ensuring consistency and uniformity of brand messaging, promises and claims; pricing, policies and programs – as well as visual identity, brand tonality and lexicon – is essential to rights management, customer experience, business compliance and risk reduction.

8. Feed the Channels
Increasing the quality, quantity and timeliness of leads, as well as delivering more sales ready opportunities to internal and channel sales teams, requires greater investments in technology. Better targeting, profiling, segmentation and personalisation through advanced customer data and audience analytics is central to this mandate.

9. Suddenly it’s all about Relationships
The rapid acceptance of Internet-based social media has engendered profound changes in customer markets and business cultures and processes, impacting and influencing every facet of the way companies communicate, innovate, cross-pollinate, engage and deliver support across critical internal and external audiences. The adoption of new social media and community platforms is spawning new practices in product and idea development, customer-driven support, market intelligence gathering, problem resolution and brand message proliferation.

10. Adopt the new ROI
ROI metrics are no longer just about reach, frequency, brand recognition and CPM rates. They are much more about relevancy, response, recurring relationships and business return. This requires disciplined and clinical approaches to improving information and list access, database management, market segmentation, customer profiling, audience value, content relevance, email deliverability, search optimization, website performance, traffic quality, channel strategy, alternative media usage and closed loop measurement and recalibration.
In other words, what are you measuring and is it still relevant?
Download the full report at http://www.cmocouncil.org/cat_details.php?fid=141 (free registration required)

Changes We’d Like To See

// February 15th, 2011 // No Comments » // Catalyst

More realistic assessment of the roles that Twitter and Facebook actually played in Egypt and Tunisia, rather than their uncritical depiction as weapons of mass democracy

Reams of paper that come with those silly little binder holes down the spine already cut out, so that you don’t keep destroying that urgent document you’re trying to assemble for that meeting that’s already started

Less naked greed by homeowners planning to cash in on accommodation shortages during the Rugby World Cup

Software upgrades that offer genuine productivity improvements instead of more complexity and confusion and incompatible file formats
Credit cards fitted with smart chips that self-decline because they know “you’ve already spent enough and I know you’ll hate yourself for this in the morning”

Job ads that meaningfully describe the skills required to carry out the role, rather than the usual collection of mission statements and generalities
A button on an electronic book reader that gives you a thirty-second summary of where you were at when you last read this particular book

From 6 to U

// February 1st, 2011 // No Comments » // Media

Perhaps it’s because numbers can be a pain to text? Whatever the reason, in March we will encounter yet another channel which (like C4>FOUR) is shifting from a numeral (6) to a letter (U).

First, a little bit of background. As we guess you know by now, New Zealand television is joining the rest of the world in going digital (and switching off analogue transmissions). To facilitate the changeover — and give Kiwi viewers some reason to invest in the equipment needed to receive digital TV – the government of the day agreed to spend $79 million to pay for five years’ worth of operations for two TVNZ channels (which became today’s TVNZ6 and TVNZ7). The plan at the time was that these channels would only be available on Freeview; and that the expected Freeview audience levels over the first several years would be insufficient to attract meaningful advertising support.

Time flies, and now those five years are nearly up (the use-by date of the funding is March 31 2012). Arguably, the two state-sponsored channels have achieved their intended purpose. Around a third of New Zealand homes are estimated to have Freeview capability; and perhaps two-thirds of all homes have digital television, either via Sky or Freeview. (more…)