The Power of Influence

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Ford's Jim Farley Says Recession Was a Blessing for Digital

NEW YORK (AdAge.com) -- That severe nosedive the economy took wasn't all bad for Detroit. Jim Farley, group VP-global marketing at Ford Motor Co., told attendees at Advertising Age's Digital Conference today that it was actually the best thing for automotive marketing, especially on the digital front.

 "Everything has to work in this economy," Mr. Farley said. "If the economy hadn't dropped the way it did, we would have been on auto pilot and not experimented the way we did. Our production quality online is better than our broadcast."

That experimentation is led by what Mr. Farley calls the democratization of marketing. "It's the most important transition we are making," he said. Ford has been a big advocate of turning the brand over to consumers, and not just in the digital space. The automaker's TV spots featuring real Ford owners have been well-received.

"I can tell a story in 15 seconds now on TV, but I want customers to tell our story," Mr. Farley said. "That's what digital has shown us: how to earn credibility among consumers."

Mr. Farley said the company is also rethinking the way it approaches media planning. "If you look at a normal traditional media spend, it involves using traditional media when our cars are ... arriving at dealerships," he said. "Then we spend big on traditional broadcast media to get frequency." Mr. Farley said the more involved he got in making upfront media buys the less "right" it felt.

Spending shift
The Ford marketing chief said the new paradigm that media owners and clients have to get used to involves spending a lot more money in post-launch with new partners. "Yes, we still need traditional media partners and integration will become more and more important," Mr. Farley said. "But then post-launch we can't just go away. We have to allocate [social and digital] resources because these different resources change the content and the dialogue of the product after the launch. It's much more manageable, and it impacts how we build the product."

Mr. Farley said it also completely changes the company's relationship with its media partners as well as the creative process. He said if an agency wants to partner with Ford, it needs to think differently because the car maker launches products in a different manner.

"We're about the person, not the website or channel. I'm not interested in advertising on a little box because what's important is what's in the box, not the box itself or wherever it is," he said. "The idea is to impact the experience. The box is just a window into a whole other world of experience if you do it right. We want to take that stupid little box we were forced into as advertisers and blow it up and change the way we interact with the customer, and we want it to be around the experience."

The company is also focusing on "executing" the brand globally. He said Ford sold all of its other brands including Volvo so that the company and consumers would focus solely on Ford-branded products. He noted that Ford has been losing market share for 14 years straight in the U.S. but managed to gain some back in the last 24 months.

"We shrank the company to make it grow, and to do that we transitioned our marketing, especially in the digital space," he said. "One out of every four dollars we spend is on digital, but we totally transformed how that money is being spent. We spend it mid-funnel. We're transitioning most of our digital spend to convincing consumers they should put Ford on their shopping lists. And the evidence shows we have made some great strides, and we are starting to see consumer sentiment change. We have a long way to go, but the quality sentiment is changing."

[via Advertising Age]

Heavy Drug Ad Spending Doesn’t Pay Off

The pharmaceutical brands which spent the most money on TV advertising in 2009 did not make the biggest impression on viewers, according to data from The Nielsen Company.

Despite the recession, the top 10 prescription drug brand spenders invested $1.1 billion on national TV commercials, compared to $1 billion in 2008. The top six brands spent more than $100 million in TV advertising last year, led by cholesterol drug Lipitor. Erectile dysfunction drug Cialis by maker Eli Lilly was the second-highest spender followed by Abilify, an add-on treatment for depression from Bristol-Meyers Squibb, and Cymbalta, a drug for major depression disorder.

Top Four Most Recalled Ads Weren’t Top Spenders
Nielsen data on consumer recall of 2009 TV drug advertising indicates that the drug brands which spent the most money airing TV commercials did not get the most return on their advertising dollar. The top four most recalled ads were two spots from Flomax, a drug designed to combat urinary difficulty associated with enlarged prostate, HPV vaccine Gardasil, and anti-depressant Pristiq, a newcomer.

None of these four brands made the top 10 list for TV advertising spending last year. Erectile dysfunction drug Viagra, which was ranked number nine for TV ad spending, got its money’s worth by tying for fifth place in viewer recall with blood clot inhibitor Plavix.

In turn, Plavix, which had the fifth-highest spending total, came close to breaking even on its spending by obtaining the number six ranking for viewer recall. The only brand among the top four spenders to make the top 10 viewer recall list was Cialis, which tied for fifth place with Alzheimer’s disease drug Aricept and rheumatoid arthritis drug Orencia. No other drug brand on the top 10 list for TV ad spending in 2009 made the top 10 list for viewer recall last year.

Drug Ads Get Longer
Due to stricter Food & Drug Administration (FDA) regulations, TV ads for prescription drugs have been getting longer in recent years, which has slowed the rate of increase in TV advertising spending by prescription drug companies. However, the prevalence of 60- and 75-second ads on the most recalled list demonstrates that a properly designed longer ad can still resonate with viewers.

Few Consumers Trust Pharmaceutical Ads
In addition to attempting to improve viewer advertising recall, pharmaceutical brands should also work on improving consumer trust, according to a recent Harris Poll. Only 18% of poll respondents 18 and up found pharmaceutical advertising most trustworthy compared to ads from four other major US industries. In contrast, 29% of all respondents 18 and up ranked pharmaceutical ads as least trustworthy.

[via Marketing Charts]

Is Luxury Dead? Maybe Not.

Guess who says the following attributes are most influential in making "important purchases" today: value, price, overall quality, good design and functionality?

A clue: 84% of this group texts from cellphones; 78% use social networking; 66% use the mobile web and 57% use mobile apps.

It's not who you think it is. In fact, it's a group whose median age is 45, not 19.

According to "The New Face of Affluence," an in-depth study from Dwell Strategy and Research, San Francisco, these are the attributes that drive purchase decisions of the "New Affluents." Indeed, the median household income of the more than 1,000 survey respondents is nearly $200,000. They're the same people who have the economy and the environment top-of-mind when making these purchase decisions.

Using 2009 Mendelsohn Affluent Survey psychographic data, and with the help of DJG Marketing, New York, Dwell identified a segment of nearly 9 million Americans who have household incomes of $100,000 or higher. They represent less than half of 1% of U.S. households, spend $303 billion annually on their favorite brands and have a whole new take on what it means to be wealthy.

According to the survey respondents, "luxury" brands, per se, are no longer important to them, or even relevant; neither is "overall social status," they say. This generation of nouveau riche is shunning "conspicuous consumption" in favor of brands that represent quality, aesthetics and authenticity. These attributes, along with uniqueness, integrity, design and performance, represent today's "prestige" for these high-end consumers. And their emerging values and brand motivations make these consumers a more diverse group than one might assume.

A brand does not have to be expensive to attract New Affluents. What they're now demanding from brands is a new and different kind of relationship. And, as supported by these findings, the days of controlled, top-down brand marketing are over, especially for this sector. These wealthy and would-be elites are actually looking for brand interaction -- a dialogue -- based on integrity, authenticity and performance. And not only are they equipped for interaction, they're demanding it.

So what brands do New Affluents find meaningful, authentic and relevant? Apple, Sony, BMW and Ralph Lauren, unsurprisingly. But Crate & Barrel, Ikea, Whole Foods and Levi's, too. Porsche, Lexus, Chanel and Viking. And Target, North Face, Volkswagen and The Gap. Missing from this segment's 75 favorites list are classic luxury brands like Cadillac, Gucci, Louis Vuitton, Armani and Versace.

These New Affluents are smart (85% graduated from four-year colleges; 52% did post-graduate work) and hard working (50-plus hours per week -- both at home and in the office); their families are their No. 1 priorities (40% have children at home). And, at a median age of 45, they are well-off. But they got there through careers that for them are a means to an end (only 4% rated "career" as a No. 1 priority). Success for them is having the independence to involve themselves in family -- and their well-being. The qualities they most associate with "prestige brands" are aesthetics, innovation, integrity, originality and authenticity. They don't buy anything "to impress others."

The majority of New Affluents agreed completely that "technology is indispensable to the way I communicate." So, just like the Gen Xers so many marketers seem obsessed with, these New Affluents text, tweet and post on social networks. "They are powered by 21st century technology" -- all of which came of age when they did. It's an integral part of their lives. Google and Dell are among the most frequently cited brands as meaningful to them.

The study's takeaway will be no surprise to successful brand marketers, except perhaps that now it applies to this heretofore stratospheric source of revenue, too: Define an integrated, consistent and positive interaction that reflects your brand's values, and understand that these consumers depend on mobile connections and social networking just like their mass-audience counterparts.

In other words, cultivate a relationship, don't just sell a product. "Great brands create experiences, not products," say the majority of the study's respondents.

It may be time for more brands to consider this sector as a source of revenue. If you're authentic, functional and design-centric, and you know how to cultivate a genuine relationship between the brand and these New Affluents, then it may be time to consider some targeted, interactive communication with them. If you can generate a "personal connection" like their other top brands do, and engage them in a meaningful way, 86% are even willing to pay more for a brand they like. They are classic early adopters, and willing to embrace brands that heretofore might be considered unworthy. Some of their emerging top brands have already figured this out and are breaking new ground creatively and are using new media.

Many of their top brands eschew traditional advertising forums to focus on web outreach. Nordstrom is one of their many favored brands posting banner ads online. For some, targeted catalog distribution is a core marketing vehicle: Design Within Reach and Room & Board both distribute impressive catalogs on a regular basis, in addition to aggressive online marketing.

Other brands have maintained and even enhanced their cachet through a reliance on long-standing brand attributes that are now even more important to this sector: quality, design, functionality and innovation. These brands include BMW, Mercedes, Bosch, Nike, Hans Grohe, Volvo, Bose, Porsche, Rolex, Canon and Viking.

Even a big-box retailer has earned its way into New Affluent-favored status as one of these "authentic," "meaningful" brands: Target. In part through its bold "Expect More. Pay Less" positioning and advertising, Target has turned a seeming contradiction into a compelling design-driven platform -- one that has direct appeal to New Affluents. Target is once again realizing net earnings growth and increased margins, no doubt in part because they've added incremental appeal to a high-spending sector without losing their base. Target has successfully extended its customer relationships through ancillary programs such as "Dream in Color" and "Democracy of Design," and their many museum and theater partnerships, including the Target National Design Center at the Cooper-Hewitt Museum, New York.

Target has helped make good design accessible to everyone.

In fact Target has taken a page out of Russell Wright's mantra, "the importance of the value of good design in everything and for everyone." Wright, who preceded Martha Stewart's retailing to the masses by 50 years, extended modernist design to the masses in furniture, accessories, dishes, glassware and table linens. Now, the study shows, there are a number of collectible, retro brands that are also among the New Affluents' top choices: Herman Miller, Knoll and Eames.

So, is luxury really dead?

No. But it has been redefined by those in the category who have clearly rejected "social status" as a contributing factor to purchase decisions. They're buying fewer things of higher quality; they're shying away from disposables when they have a choice. They have replaced older values with contemporary new qualities such as the economy, sustainability, the environment and current cultural trends as top-of-mind issues affecting these decisions.

They're using new language. Attributes like uniqueness, know-how, design and performance have redefined "prestige." Now it's "self expression," not "status." The New Affluents' brand choices evidence at minimum the demand for a new dialogue with them. Don't sell them a product. Offer them a brand. Better yet, a brand experience -- just like astute marketers have been doing for years. The difference now is it's 24/7. This newly defined segment is up late, surfing the web, taking the time to learn about products and what appeals to them. And once they're in, they'll stay with you -- as long as you maintain the relationship.

The internet has created a way for people to connect at every level, and the New Affluents are taking advantage of it like everybody else. The brands that are connecting with them know it. And now these well-to-dos are attracted to many of the same brands that other segments are. They're wearing some of the same kinds of clothes, driving some of the same cars and shopping at many of the same retailers.

Got a brand that has these kinds of values but isn't on their list yet? Ask yourself, why not?

[via Advertising Age]

Twitter Predicts Box-Office Sales Better Than a Prediction Market

 

Researchers at HP Labs discover that Twitter can predict, with astonishing accuracy, how well a movie will sell.

We've all got the vague intuition that Twitter allows you track, in real-time, what people are concerned about or obsessed with. But this is a little freaky: Two researchers at HP Labs, Sitaram Asur and Bernardo Huberman, have discovered that you can actually use Twitter mentions to predict how well a movie will do in it's first couple weekends of release. What's more, the method works even better than the most accurate method currently in use, the Hollywood Stock Exchange (HSX).

Asur and Huberman started by monitoring movie mentions in 2.9 million tweets from 1.2 million users over three months. These included 24 movies in all, ranging from Avatar to Twilight: New Moon.

Then they took two different approaches, dealing with two very different performance metrics: the first weekend performance, which is largely built on buzz and the second weekend performance, which is largely built whether people actually like the movie.

To predict first weekend performance, they built a computer model, which factored in two variables: the rate of tweets around the release date and the number of theaters its released in. Lo and behold, that model was 97.3% accurate in predicting opening weekend box office. By contrast, the Hollywood Stock Exchange, which has been the gold standard for opening box-office predictions, had a 96.5% accuracy.

Meanwhile, to predict second-weekend performance, the authors created a ratio of positive tweets to negative ones. Then they blended that with the Tweet rate metric in another prediction algorithm. This time, the method was 94% accurate.

Is this B.S.? Stats guru Nate Silver, of FiveThirtyEight.com, told FastCompany.com, "There is some promise here. Twitter is going to provide a more tangible gauge of excitement and engagement than something like a traditional survey, and it's obviously much more in real time." But he added a caveat: "I imagine it would do better for more upmarket films, since its users tend to be highly educated, and for films with older audiences, since Twitter will skew a bit older relative to what are often *very* young opening weekend demos."

He has a point: Asur and Huberman didn't release correlations for individual films, and it's not clear to what extent their findings are being driven by whales such as Avatar and Twilight: New Moon.

Still, it's astonishing that the Twitter data is so basic but powerful, when compared to the teeming complexity of the HSX prediction market; there, bettors typically rely on lots of variables, such as Hollywood's voluminous exit polls and focus group results, and intuitions about past performance, which the market then aggregates.

Of course, you'll note that performance difference between the Twitter method and the HSX is tiny. You won't see any Hollywood executives running for data mining software for Twitter anytime soon. But it does suggest another use: Why not use Twitter to forecast results for sales of products, video games, and everything else? In those cases, polling data and prediction markets don't exist and Twitter might just be the best predictive data set out there. According to Huberman, "The limits are getting enough of a conversation on  topic." So just because something doesn't exist on Twitter doesn't mean it doesn't exist in the real world. (Hear that, Twitter freaks?) And in practice, only huge, buzzed about events might be open to this sort of analysis.

But what should be even more alluring to marketers: As Tech Review points out, Twitter might be more than just a mirror of mass sentiment--the service might also influence it. In other words, could you actually make a product launch far more successful with a really smart Twitter strategy?

[via Fast Company]

Running 2nd Social Media & WoM full day workshop 7th April

Back by popular demand the organiser puts it .... blush blush

Anyway - I'll running my Social Media & WoM Marketing workshop in KL again - details here Download Social Media & WoM Workshop by Ian McKee

How Much Do We Really Know About the Influencers?

Catharine P. Taylor , Thursday, March 25, 2010

Social media is a land of many holy grails - if it's not completely antithetical to have more than one - but probably none is more prized by marketers than the Influencer, that person who can sway opinion, get people to buy products and otherwise, well, influence the hearts and minds of dozens, hundreds and thousands of other people.

So far, in social media, this has been a relatively rudimentary exercise. Lots of Facebook friends? Thousands of Twitter followers? Scads of traffic to your blog? Great! Let's sign you up in the name of selling lots of product!

But two bits of intelligence I've read over the last few days show me that we still have a long way to go in understanding influence. Before I go on, here are some of the counterintuitive data points I've come across about the people that everyone wants to friend:

From ReadWriteWeb: That some of the most influential people on Twitter don't do a lot of retweeting. According to January and February data from Tableau Software and TwitterStats, @scobleizer (Robert Scoble) with more than 118,000 followers, retweets one percent of the time (though a quick look at his Twitter account indicates it may be somewhat higher); @stevecase however, retweets 28 percent of the time. He has more than 340,000 followers.

From ICOM (as reported by Mediapost): The idea of the universal influencer is a myth. Individuals can be influential in certain, siloed categories, but don't tend to have influence across all categories. Further, having influence has less to do with demographics or connections than it does with behavior. As the white paper about the study says: "No demographic similarities emerged in the data; there was no skewing toward age, gender or income. Influencers may be grandfathers or twenty-somethings, working mothers or stay-at-home dads. They could be the well to do or the up-and-coming."

What's at issue when you look at these data points is not whether the role of influencers is overplayed though that could be a knee-jerk takeaway. This data underscores it's crucial to understand the nature of influence, and only then will it be possible, as a marketer, to really influence the influencers.

Take the retweeting data above. What this should mean to a marketer is pretty straightforward: that people with true Twinfluence (that's Twitter influence, for the uninitiated) don't spend much time taking other content from the Twittersphere and sharing it. However, that data point shouldn't be extrapolated to the larger thought that they are lacking in influence and aren't worth a marketer's time. The data shows that 71 percent of @scobleizer's tweets in the first two months of the year contained an @sign. That says - and following him on Twitter bears this out -he is constantly conversing with other Twitter users. That certainly is influence; it just takes a different form than retweeting does. @stevecase's tweets contained @ signs 51 percent. Thus, his twinfluence expresses itself differently.

That loops back neatly into the ICOM data, which emphasizes how important behavior is in determining the nature of influencers, not for instance, the number of Facebook friends. Data-mining types will not like to hear the following: most influencers like to spread their influence via non-keyboard initiated word-of-mouth that can't be tracked using an algorithm. Compared to the average user, they don't even spend appreciably more time on Facebook than the average user does -- five hours per week as compared to 4.5 hours, though it, along with texting, appear to be their primary social channels.

I could throw out more data points all day long, but they would point in the same basic direction: toward the knowledge that although we seem to have gotten a pretty good bead on who influencers are, we need to know more about how they operate, in both online and offline channels if we are to truly harness their power.

Catharine P. Taylor has been covering digital media and advertising for almost 15 years. Contact her here.

Facebook and Twitter Making a Major Impact on Purchase Decisions [STATS]

A new study shows that those who are fans or followers of a brand on Facebook or Twitter, respectively, are significantly more likely to buy products and services or recommend the brand to a friend.

Specifically, the study by Chadwick Martin Bailey and iModerate Research Technologies found that consumers are 67% more likely to buy from the brands they follow on Twitter, and 51% more likely to buy from a brand they follow on Facebook. Moreover, they’re 79% more likely to recommend their Twitter follows to a friend, and 60% more likely to do the same on Facebook:

Of course, those findings might be a bit overstated — many people actively seek out the brands they’re already fans of and follow or fan them on Twitter and Facebook. But there’s still much to be said for the mindshare that engaging those existing brand enthusiasts on social media sites creates, in turn keeping them active. Plus, the study also found that many consumers across a wide variety of demographics have negative perceptions of brands that aren’t using social media.

Overall, the study is another sign that social media is becoming a competitive advantage for those that are participating, and an increasingly major weakness for those that aren’t.

[via Mashable]

Nestle in social media firestorm

What started as a PR battle with long-time nemesis Greenpeace has turned into a social media catastrophe for food manufacturer Nestle. Today, its heavy-handed reaction to online critics has been described as a “public relations nightmare”.

The trouble started when Greenpeace produced a video campaigning criticising Nestle’s use of palm oil from unsustainable sources – the oil is used in several Nestle products including KitKats. This was part of a long-running Greenpeace campaign against Nestle’s sourcing of palm oil; Communicate magazine covered its demonstration against Unilever in January 2009 (see ‘When NGOs go ape’).
Greenpeace’s latest video pastiches KitKat’s ‘Take a break’ campaign, and features a bored office worker biting into an orang-utan’s finger and smearing blood over his face.

Nestle's response was to persuade YouTube to remove the video (although it can, for the moment, still be viewed at http://vimeo.com/10236827). Armed with this free publicity, Greenpeace managed to gain coverage in several of this morning’s papers.

Cue a torrent of public criticism on Nestle’s Facebook page. Its wall was soon plastered with negative comments and requests to stop using the oil.

That’s when the social media furore really began. Nestle began to delete comments from fans who used altered Nestle logos as their profile pictures. Meanwhile, although it sought to participate in the debate, its responses – or rather those of the employee in charge of its Facebook page – began to betray a noticeably irritable tone; often getting drawn into what can only be described as bickering.

“And what part of 'Nestlé encourages breastfeeding' is not clear?” it said at one point. At other times, it mocked users’ spelling errors.

When this tone was questioned, it replied: “So, let's see, we have to be well-mannered all the time but it's perfectly acceptable to refer to us as everything from idiots right the way down to sons of Satan?”

Users were quick to leap on this. Tom Rafferty, responded: “If you genuinely feel that way, then may I respectfully suggest that you should not be working in corporate communications.” Thomas Walker said: “To the person who is speaking on behalf of nestle. STOP! You're causing yourself a public relations nightmare right now and are seriously damaging your reputation!”

Communications practitioners have expressed disbelief at Nestle’s handling of the criticism. Chris McCrudden, creative director at Speed Communications said: “Sadly, this is a textbook example of how putting the wrong communicator in charge at a difficult time can make a bad situation worse. They just left the wrong person in charge. It's not often you see a $195 billion dollar company behave like an 11-year-old during a playground brawl, but we did today. Its tactical comms response was breathtakingly bad."

Robin Grant of social media specialists WeAreSocial said: “What Nestle did in removing the video was naive. The legal recourse inflames the situation, and brands need to be aware of this. People are acting as a mob today, and the key thing is not to inflame the mob. Nestle’s stance has changed as the day has gone on. They exacerbated the situation by baiting the crowd, but have learnt as the day has progressed.”

That much seems clear. Nestle’s latest status update says: “Social media: as you can see we're learning as we go. Thanks for the comments.”

Tracy Frauzel, head of digital communications at Greenpeace, was understandably pleased. “They’ve made it so easy for us,” she said. "Nestle just don’t seem to have a good understanding as to what happens on the social space."

Nestle declined to comment.

[via Communicate Magazine]

Facebook ousts Google as most popular U.S. site

 

Facebook is now the most popular site in the U.S., according to analytics firm Hitwise. In the week ending March 13, 2010, Facebook surpassed the previous most popular site, Google, in terms of overall traffic for the week.

Facebook sat at 7.07 percent for all U.S. web traffic, whereas Google was at 7.03 percent. Looking at the graph above, it’s clear that Facebook has seen a steady rise in traffic since last year. Traffic to Facebook increased 185 percent compared to the same week last year, whereas visits to Google increased only 9 percent.

In early 2008, there were reports of Facebook’s traffic plateauing, but now it doesn’t seem like the site needs to worry about that too much. I would attribute the major rise in Facebook’s traffic in 2009 to the release of Farmville in June, and similar social games throughout the year.

Looking at the graph above, there’s a distinct rise in traffic starting in June. In late August, we reported on Zynga’s claims that Farmville was the fastest growing social game ever. In little over two months, Farmville had acquired over 11 million active users. As of today, the game has over 83 million active users.

Compared to the rise of social games on Facebook, there was little happening at Google to encourage traffic growth.

Comscore, another analytics firm, still ranks Google ahead of Facebook. Google is the top site by reach at 81 percent of the U.S. population. Facebook sits behind Google, Yahoo, and Microsoft at 53 percent, according to TechCrunch.