April 2010
April 23, 2010
April 16, 2010
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]
April 13, 2010
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]
April 09, 2010
Is Luxury Dead? Maybe Not.
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]
April 08, 2010
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]
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