How marketers can exploit the full power of stories for brand and business strategy alignment
March 8, 2012
Storytelling in marketing is a hot topic, with a growing and well founded belief that legendary brands like Apple, Nike, Coca-Cola and Harley Davidson have been successful building great stories around their products that people naturally want to be part of.
Books for marketers are appearing by people like Seth Godin and Laurence Vincent which instruct the marketer on how to build a company’s brand using stories. But this is only half the story! Everyone is focussed on storytelling while there is huge potential for storylistening.
The power of collecting stories
Marketing professionals have known for some time the power of collecting stories. Dupont collected stories about women’s thoughts on wearing panty hose, and eventually discovered (after first hearing disdain expressed about these garments) that wearing panty hose made women feel more sensual, sexy and attractive to men. Dupont modified its brand image to match these feelings.
Kimberly-Clark collected stories from parents who were toilet training their children, and discovered tremendous stress associated with having children ‘still in nappies’. Pull-ups were introduced, and a new $400 million per year market segment was born.
In both cases the marketeers understood that they were unlikely to discover the telling factors through formal interviews and focus groups. Stories, on the other hand, provided a natural way of expressing what was actually happening. It provided the context required to get at the heart of the issue.
The best form of research is storytelling
Listening to stories is one of the best ways to understand what is happening in a complex and dynamic situation. Analytical methods are great when the issue can be divided into its components but much of life is not that simple. The issues facing marketers involve unpredictable outcomes, ill-defined problems, going with your gut.
Stories help us see the established and emerging patterns from which interventions can be designed. So for marketers there are three skills required to become an effective storylistener:
- Be able to elicit stories from whoever has relevant stories to tell (customers, staff, stakeholders, shareholders)
- Be able to make sense of the information contained within and across all the stories collected; and
- Be able to design interventions that account for the complex nature of the issue being tackled.
Aligning brands with customers
Let’s take the specific example of aligning brand promises with customer service. Companies spend millions on developing a brand image yet this can be significantly eroded if staff misunderstand the brand and deliver contradictory service.
Take this instance of how customer experience contradicts the brand message: ”Dave … saw an ad by Tweeter that emphasized it’s staff’s “boatload of knowledge”. He needed a DVR and walked into a Tweeter HiFi Buys store wanting to take advantage of that knowledge. “Hi, I want to buy a DVR and accessories if someone can show me how to use it.” He was told, “I don’t know how it’s used, but they’re supposed to be really easy.” Dave says, “The boatload of knowledge just capsized.” (Barlow and Stewart 2004: 49)
The role of storytelling in marketing
Imagine this situation being played out in your organisation hundreds, if not thousands of times. The result is a total undermining of your brand position, a position in which you have invested heavily and which you are pinning the future of the company on. In this case you would go out and collect anecdotes from the staff which they think illustrate on and off-brand service.
These stories are then used in a workshop environment to extract the key themes, values and archetypes. The workshop participant (the organisation’s decision-makers) is forced to gain new perspectives and uses the insights to develop interventions designed to improve the brand to customer service alignment.
Narrative is a powerful technique.
So far marketers are only making use of half its power. Become a storylistener as well as a storyteller and reap the rewards. If you want to find out more, we have been working with an Australian based company that is a world leader in storytelling and story listening – Anecdote.
What is the best media buying strategy – buy early or buy late?
March 6, 2012
Recently John Steedman, Chairman CEO of WPP Group M Asia Pacific, said at the AANA Congress that “a conservative approach from advertisers has created the shortest advertising market he has seen in a long time”.
So while the cost penalties for short-term bookings are well documented, media reports of softer markets confound, confuse and frustrate the marketer that plays by the rules. While book your TV early to avoid disappointment remains the catch cry of the vast majority of media agencies wherever you turn there seem to be discounts on offer.
So is this the truth or ‘media fuelled’ fallacy? Well there is no quick answer. Late commitment can work for some marketers but severely penalise others. It depends very much on what you are trying to achieve and against whom.
The savings when booking early
It is universally accepted that the ‘ideal’ booking window is around thirteen weeks prior to the on air date and that as time shortens, so the premium in cost increases on an almost exponential basis.
Certainly, the pundits agree that a cost premium on CPM of 55-60% is very much the norm in the last week or two prior to activity. But reports of softer markets invariably imply that the best deals are being done now and that those with money still to spend are reaping the rewards of late commitment.
It depends on your audience
The more mass your audience the less defined your parameters of placement the greater potential you have to make the short term work. But in this age of fragmentation, segmentation and accountability, strategies with this level of flexibility are fewer and farther between.
With growing emphasis on ‘quality of engagement’ the importance of being in the right places is key. The more specific a target audience becomes then the smaller the total number of people who will fall into that target. Exacerbating this is that these tightly defined audiences tend to be over-represented in the most popular (highest rating) programs.
Choice of media properties
Famously, years ago one industry sales icon was heard to remark: “We’re in the business of selling s**t airtime, the good stuff sells itself!”
It is hard to believe that premium price inventory remains unsold. If the networks still have it, it is by design and destined to meet the inevitable late requests of a small group of favoured clients.
So in a soft market your average client stands perhaps an even chance of the odd premium spot if they give the network in question a decent slug of the money.
The skill of your media agency
If your media agency has bought ahead of time, they should be monitoring the market and pushing harder as it softens for additional value. If you have programming that is under-performing against expectation your buyer should be moving stuff around and compensating for any loss in value.
What remains questionable is whether perennially ‘understaffed’ media agencies are consistently doing this for their clients. Some have a habit of putting a campaign to bed and moving on to the next.
The secret of buying better
At TrinityP3, we have vast experience in this area and can examine and evaluate the current process in the context of industry best practice or assist in developing a buying process that works to provide the best possible value to meet the strategic requirements.
The impact of media fragmentation on television production budgets
March 4, 2012
Many people in agencies and the film production industry complain that production budgets are not increasing in line with CPI or costs, but what they fail to consider is the overall context of the production budget, primarily the media investment.
The traditional TV only model
The brand manager has an advertising budget of lets say $3 million per annum. Each year they spend $500,000 on production and the other $2.5 million dedicated to television media over the year. The production cost is 20% of the media investment.
The fragmented media model
The same brand manager is now following a strategy of using multiple media options to target their audience and create a media multiplier effect to increase the effectiveness of the media investment.
Now he has executions across a number of media including magazines, outdoor, internet, and television. The $3 million budget is now split $800,000 for production and $2.2 million for media.
The ad agency argues that the TV production cost should remain the same or increase. But with a production budget of $500,000 for television, the media investment for television is now only $1.5 million with the other $700,000 across outdoor, magazine and internet.
This means that the production cost for television is now 33% of the media investment and now much higher than their competitors.
The arguments for and against
The agency argues that the same or higher budget is needed to create the cut-through and that a decrease in budget will compromise the creative effectiveness.
Meanwhile the media agency is struggling to deliver the reach and frequency objectives across the duration of the campaign. It could be you end up with a highly creative television execution that your target audience may never see.
The problems with this argument:
- There is no direct correlation between cost and effectiveness. There is evidence to suggest that creative cut-through increases communication effectiveness, but need not impact production cost.
- If the media multiplier factor works, then why would you over invest in one medium at the expense of the other media productions and the media investment itself? After all, it only appears to be television production where this is critical.
- If the audience does not see your message, no amount of creative cut-through will make it work.
In briefing the creative agency, marketers should be very clear on not just the production budget, but give them the media budget and the marketing objectives this budget is to achieve.
While the budget split of media to production (often termed productive and non-productive expenditure) varies depending on category, brand and strategy, we can provide assessment of budget allocation based on our category benchmarks and we often assist in discussion on investment level.
How do you apportion your budget across the various agencies and outcomes?
When should agencies plan and buy media and when should advertisers
March 1, 2012
Media planning and buying are usually undertaken by the media agency, but in recent discussions with marketers here and with global marketers in Europe and North America, there is an increasing question on why media buying should be in the hands of the media agency.
Two main reasons are:
- Digital media buying, especially SEM / PPC is cost effectively being brought in house for those advertisers whose investment in this area warrants it.
- There is a growing concern over the lack of transparency in the relationships between media owners and the media agencies that is often difficult to clarify
There are many examples where major advertisers have effectively achieved this by setting up their own media agency or taken the media planning and buying in house. This has been done to provide greater focus and accountability in this area and is achievable when the media spend is significantly large enough to warrant the investment.
At this point it is important to differentiate the two functions provided under most media agency agreements and that are:
- Media planning or strategy – developing channel and media strategies and plans against specific briefs to achieve media, marketing and business objectives
- Media buying or trading – implementing those media plans through negotiation, both annual and campaign based, with media owners to achieve the objectives of the media plan.
There are already a number of services being taken in-house outside of media, such as:
- Social media management, which allows both corporate affairs and marketing to share responsibilities,
- Paid and natural search as mentioned earlier, as it allows for a dedicated and focused team to manage the category
- Video and film production to produce the increased quantity of content, especially for online use, quickly and cost effectively
- Studio and print services for those advertisers who have reasonable volumes to justify the investment.
So could you take media planning and buying services in-house?
The answer is of course, but should you?
There is a high profile regional retailer Harvey Norman who has taken all of their marketing and advertising function in house including media planning and buying. And at the other extreme many small advertisers also manage their planning and buying in-house, especially when they are using a small number of media. There are also quite a number of B2B clients such as pharma-companies who buy their trade or professional media in house because they often have close industry relationships with the media in the category.
The main considerations if considering bringing any services in-house are:
- Do you have the volume, not just in marketing, but across the whole business? Often there is a duplication of needs in the various areas of the business and these need to be taken into consideration.
- Does the company have head count limits, which could mean that you are unable to resource the requirements to the levels required? In one situation we saw cuts made to the marketing team to accommodate the “production insourcing”.
- Can you recruit the expertise from the market and hold them within the structure of the organisation? In the case of community or social network managers, it is often easy to recruit good implementation resources, but much more difficult to retain high quality strategic skills in this space.
- Will insourcing these skill sets deliver the savings, control, transparency and / or governance you require to justify the initial and on-going investment? Often what looks attractive up front can become unmanageable and costly if not closely managed.
In specific regards to media, there are definitely opportunities for large organisations to take over the management of their media trading. But they need to plan to resource effectively and put in place suitable measures against performance as they would for an agency. In regards to media planning, there is a significant investment required in proprietary media research and the benefit of the cross pollination of ideas and strategies that occurs in media agencies is hard to replicate within a single organisation.
In many ways this reflects the predictions of media agency PHD and their global strategist Mark Holden in “2016: Beyond the Horizon” where they believe technology will be used to make trading more cost and time efficient, while media strategy will be increasingly informed by data and analytics with insights being drawn by highly skilled practitioners.
Clearly, if this is true, the value is in the thinking, which means that the focus of media agency remuneration will need to change from a focus on buying efficiency to strategy effectiveness.
Strategic business alignment requires closing the gaps between the CXOs
February 28, 2012
Our Business Director in Melbourne, Tony Quail, sent me this article from CFO.com with the headline: Finance vs. Marketing - Why they still don’t see eye to eye on measures of return.
I have always been interested in the perception of misalignment between the CFO and the CMO or between the CEO and the CMO, because I believe, like many marketing professionals, that marketing has an essential role in business performance and success.
A study by Marketing Management Analytics (MMA), found just 7% of CFOs are satisfied with their companies’ ability to measure marketing ROI.
Yet 23% of CMOs think they are “doing a good job of measuring returns”.
Lack of cooperation is also hindering efforts to develop ROI measures.
Just 19% of CFOs reported “full cooperation”.
More than 8% report “frequent conflicts with marketing over budget and strategy”.
And 13% reported “no meaningful relationship at all with Marketing”.
Is the perception real? And what can be done to address this?
How important is it for the CFO and the CMO to be talking the same language?
Let me know your thoughts by leaving a comment.