The Power of Influence

Brand marketing is dead, reputation is king and the CMO should run the business.

Nonsensical? Not really. Here’s why …

Let’s put some markers down to work from. Lets, for the moment, describe brand marketing as the process of communicating the attributes of the brand to the market and this is typically done through mass media tools such as TV & print, websites, eDMs banners etc.

Fact: people are increasingly screening out ads that interrupt their consumption of mass media (TiVo), or are creating their own media (eg listening to their ipods rather than the radio), if the ads make it through, the clutter means that a very few are remembered, and if they do, then people are increasingly distrustful and cynical of the messages received. These are all facts with substantial evidence to support them.

Fact: in the days when brands like Coca-Cola etc were created the only people with access to the means to speak to thousands of people at once were big corporations who could afford the costs charged by the media owners; who needed to charge high costs to deliver a return on the large capital investments made to create the media

Fact: today’s entry cost to a media to reach 800 million people (approx internet population, 295m in English and 110m in Chinese being the top 2 languages) is the cost of a PC and an internet connection. And 800 million people have that.

Fact: Unlike a TV or a newspaper each consumer of content on the internet is now empowered to be a creator of content. And the currency that gets eyeballs is creativity, not capital.

So where does that leave us?

It means that a creative individual with an interesting story to tell can reach as many people as the brand can. And that through that reach, this individual is as powerful as the brand. (eg the Kryptonite lock picking blogger , or Neistat Brothers with Apple’s dirty little secret site )

Since consumers are more likely to trust each other than the brand (checkout the links above for examples why) the stories that consumers tell each other about the brand (reputation) are far more important than the story the brand tells (brand marketing).

Fact: Reputation comes from people’s experience of the brand.

Ask an Australian what they think of Qantas (airline) or Telstra (telco) – they both spends millions advertising that they value their customers, but when you call them you have to wait on hold for 15 mins, and their staff are frequently brusque to the point of rudeness due to lack of motivation. You can guess the answer, they have a reputation of not caring.

So, if reputation is the new brand marketing, then the CMO should have a bigger role in making sure that the band attributes are being communicated throughout the business.

For example: If you’re brand is about being young, fresh and friendly you’d better make sure that the people you hire to deal with customers reflect that position. Who wants to get served by a grumpy grandma when you are expecting young, fresh and friendly.

QED: CMO’s should be running the business, should be spending less on talking the talk (mass media advertising) and more on walking the walk (creating a better experience for people to spread through word of mouth – reputation)

Ps: if you, as a consumer, agree with this ... email a link to this post to the CMO’s of the companies that over promise and under deliver the worst. Maybe, if they get enough emails, they might get the message!

Is viral the poor cousin of Word of Mouth?

When I speak at conferences I tend to ask the audiences a lot of questions, its not true research but it can be interesting.  Here are some rough averages

How many of you have heard of the Subservient Chicken?  About 50%
How many you of you know what it was promoting? About 10%
How many know which brand? 5%  (I have a hunch most guess)

How many of you have heard about Paris Hilton’s new saucy ad?  About 30%
How many know what product it is for? 5%
How many know the brand? 0%

So, whilst the ad agencies maybe keen to flex their creative muscle and do something viral for you, remember that the recall of the ad does you no good at all unless they can remember the brand as well.

In this quote from Marketing Sherpa, Las Vegas’s Hard Rock Hotel & Casino's Internet Marketing Manager Bethany Swain talks about her viral game.

"The Rehab viral game is hosted by a third party, so Swain doesn't include that data as a percent of overall site stats. However she can say, "it was getting insane volume and usage." So insane, in fact, that her host began to complain about the huge amount of server use they were dealing with. The management team agreed to up their hosting investment because it was worth it.

The email campaigns to the names collected from various Cam and game registration forms get a slightly lower-than-average open rate of just under 17%.

This makes sense because the names aren't always very qualified as buyers. "

So viral can be a good way to get an invitation to start a relationship in front of someone, but it seems a lousy way to deliver content that sticks.

Motto: It’s a bit like the definition of the difference between Jazz and classical music that I heard Miles Davies once used.  With Classical the composer is generally more important than the person playing, with Jazz it’s the other way round.

My next post – The value of "bran"d is evolving into the value of "reputation"
OR my review of the Datamonitor WOM piece (awsome)

Marketing effectiveness statistics from the June 2005 Harvard Business Review

Here is some information from Ben McConnell and Jackie Hubb’a excellent Church of the Customer blog.  See their post here.

It makes really quite shocking reading, but it is 100% consistent with the Deutsche Bank study that I posted a while ago (see it here)

Yet more evidence of the change that is on its way?

Quote from their post .... (my bolds on the last two points!)

"Some eye-opening statistics from the June 2005 Harvard Business Review (subscription req'd) on the effectiveness of 500 various consumer and B2B marketing programs:

* 84% resulted in less market share, not more
* Most customer acquisition efforts did not break even
* Fewer than 10% of new products succeeded
* Most sales promotions were unprofitable
* Advertising ROI was below 4%
* Doubling advertising expenditures for established products increased sales just 1% - 2%

While the article does not tell us explicitly, chances are many of the 500 programs were designed to goose quarterly results. It's the siren's call of  immediate customer traffic that steers so many marketers toward one-way advertising programs; as the results show, this usually leads you straight to the rocky shores of poor ROI.

Good benchmarks. Poor results. "

Datamonitor's Viral and Word of Mouth Marketing Research Piece

I’ve just received what looks like a really interesting piece of work by Datamonitor  (a premium business information company specialising in industry analysis) 

At 80 pages, their Viral and Word of Mouth Analysis is a truely in-depth study of word of mouth across Europe and the US. 

Here is the link to their page for the research piece (nb cost $5,695)

I will be reading it over the next few days and will post some of the key highlights soon! 

From the first glance that I took, it looks like a really excellent body of work.

Deep thinking and Paris Hilton wet and nearly naked

I think this is pure genius in self parody & pursuit of shock value (or it could be yet another demonstration of the dismal lack of imagination of the ad agency world.  Lets see what you think.)

The interest this ad has generated has crashed the server a number of times, and created a lot of dicussion.  Does that make it a success?

1st watch the ad itself, then the best bit, watch the corporate commentary where the ad boys talk about the deep thinking and strategy behind the ad

“well basically we have a burger that’s hot, and Paris is hot so we thought we’d make a video with Paris washing a hot car and eating the burger”    Yep, that's about it.

Check it out here

Reminds me of that wonderful clip .. Truth in Advertising .. if you have not seen it for a while, it is well worth a re-run. (nb those who might be offended by edgy dialogue should not watch) 

What do you think, parody or real?

Word of mouth key in promoting movies

From anecdotes to quotes and cold, hard, formally proven, facts; we have them all in this post.

First the anecdotes and quotes, in this article by Indiewire – the film-making industry site - Rania Richardson examines how important word of mouth is the film industry.  Especially for the smaller independent film distributors. 

We all know that Blair Witch and Big Fat Greek Wedding were made sucessfull by well executed word of mouth programs

Raina updates these stories with current examples of film where a word of mouth component is important,  such as Napolean Dynamite & Bend it Like Beckham  (Fox Searchlight) and Supersize Me (acquired by Samuel Goldwyn Films)

Even HBO's VP of corporate affairs, Michelle Boas is quoted as saying that she uses promotional screenings and word of mouth to reach an audience that may not be aware of her small screen programming.  She looks to partners to fill the room with the "right" people -- "key influencers and noisemakers"

And now to real, hard facts. 

Michael Zhang of MIT’s Sloan School (don’t say I don’t bring you the best sources!) has done a wonderfully thorough job of a formal analysis of the exact financial impact of word of mouth – both on-line eg review sites and blogs and traditional face to face recommendation. 

His analyse shows the exact percentage financial impact that each extra point of positive word of mouth has. Complete with the formula (the maths is beyond me but looks great!).  His paper is here.

My summary: If your product is an experience you cant afford to ignore word of mouth as a strategy.  Under this category I would include travel, leisure, entertainment, destinations (even countries – tourist boards please note), especially films, games, books, music, events, Spa’s, retailers  and many others.