Thursday, September 26, 2013

Smart Brands - Economic Depressions 1-0

An economic depression affects everyone. During the Panic of 1857, the Post World-War I Crisis, the Wall Street Crash of 1929, the Great Recession of 2008-2009 or even the "Greek Crisis", the basic mechanisms of consumer attitudes were similar. Both the value perceived by consumers and shareholder value were heavily influenced by brand. Brand can drive growth in an up market or protect the company’s value in a down market. But, what really happens we enter a recession phase and what are the impacts? Actually:

• Investors become very risk-averse. They are quick to criticize companies’ performance, resulting in decreasing share prices.
• The labor market is easily depressed causing employees to regard the organizations they work for with a more critical eye.
• Falling consumer confidence leads to heralding either lower prices or sales, but in either case falling profits.

Just steal

Brand development reaches far beyond traditional forms of consumer advertising. However, most still confuse the discipline of branding with ad communications. This interpretation ignores that:

• Brands are strategic assets rather than purely symbolic tools.
• Effective branding is a matter of profit, not just market share.
• Competitive advantage branding is a matter of sustainable investment rather than cost.

During a recession, brands that focus on value, rather than price, can reassure consumers with greater confidence. The moral support that is provided by brands during a recession helps to rebuild that enduring bond between brand and former consumer. As consumers begin evaluating their purchases on a different set of priorities, heritage brands can use the emotional connections that already exist to regain past consumers that have moved on to “higher end” brands. A recession can unlock the relevance trapped within the brands of people’s youth.

The necessity for a clear brand proposition is more important than ever as consumers recognize the need for new ways to work within their shrinking budgets. The companies who recognize and seize the opportunity to steal market share while others are in shutdown mode, will find the benefits far outweigh the costs.

The Buy Down Effect

A comScore survey revealed that one in five shoppers converted to less expensive, generally private label brands to save money. The figures below show the change by market segment after the end of the Great Recession of 2008-2009. Housewares realized no net shift for buying less expensive brands, but a prominent 6 point gain in buying other brands on sale. It is possible that in the case of durables consumers are more hesitant to try a cheaper brand but are still looking to save money by buying premium brands when they are on sale.

comScore, SymphonyIRI
Losing money to other brands? Invest in your brand. Decisions should be focused on spending wisely, but too often companies do nothing at all. A company’s typical reaction to a slowing economy is to cut back and wait things out. Ironically, those companies end up damaging their most valuable assets—their brands. Actually, research concerning economic depressions reveals some interesting findings:

1.5 point increase in market share among businesses increasing ad spending during recessionary periods (Cahners)
2.5 times increase in market share vs average of all businesses in post-recession period for those who aggressively increased media expenditures during last recession (CARR Report)
256 percent relative sales growth for businesses which maintained or increased media spend over those who did not (McGraw-Hill research analysis)

In times of recession it is better to tighten the belt and cut marketing and branding expenditures. However, when companies cut their outreach, they also begin to cut the ties that bond consumers to those brands. For smart companies, opportunity beckons. As we see competitors cutting back, we must now recognize that is the time to strike. If funds are too tight to make an all-out attack,we should just cut less than the competitors. Remember, in a recession both our marketing money and our message go further.

Consumers and Cost Control

Recessions usually trap brands between low priced competition and rising raw material costs.  Faced with narrowing margins, such brands may consider raising their unit prices, reducing the quantity or size of the product, or reducing the quality of the ingredients used.  Consumers-respondents in the aforementioned survey by comScore were asked to choose between these three options.  Specifically, they were asked, "Which action would you most want your preferred brand within each category to take, if it had to take a cost controlling action?"

Consumers prefer, if necessary
Consumers  indicate a preference for quantity reduction vs the other stated alternatives.  However, this strategy is not without risk. One additional question in the survey explored the reported effect that this downsizing of products had on consumers‘ buying behavior.  Four out of five respondents indicated they had noticed product downsizing in the categories they regularly shop. Perhaps more concerning, more than half of the respondents reported occasionally changing their behavior.  Thus, while consumers claim to prefer product downsizing, it does appear to have at least an occasional effect on brand choice for many shoppers and should be approached with caution.


Finally, brands can win economic depressions by successfully differentiating their product versus lower priced competitors in order to maintain preference and reduce price sensitivity of consumers. Decades of research on advertising have demonstrated that the use of brand differentiating messages is highly effective at increasing preference for the brand. Therefore, to optimize the impact of continued marketing support during hard economic times, advertisers need to make sure their efforts are effective at differentiating the brand from the competition. Yes, i know, Porter is always right!

Tuesday, September 17, 2013

A Facebook for my Brand : Fan Pages and KPI's

Facebook fan pages can be regarded  as a virtual brand community. They are specialized, non geographically bound communities and they are based on a structured set of social relations among admirers of a brand. Therefore the theoretic explanations for a brand community are also suitable for explaining the fan page phenomenon. Social identity and  symbolic interactionism theories show that interaction with members of a reference group can lead to a strong feeling of belonging to this group (in this case the brand community) which in turn can lead to stronger buying behavior and positive brand attitude.

But how can we be sure that being a member of a facebook fan page has an impact on a brand admirer's buying behavior and brand attitude? Researchers from the University of Mannheim actually designed an experiment and assumed that members of the BMW fan page show stronger buying behavior and brand attitude than non-members and that within members, buying behavior and brand attitude are even stronger for active members than for passive ones.In order to carry out the experiment they conducted an online survey among 840 BMW admirers.

The BMW Fan Page Survey

Membership and interaction were expected to influence psychographic dependent variables (brand loyalty, brand commitment) and economic dependent variables (purchase intention, willingness to cross-buy and  positive word of mouth). Willingness to cross-buy was polled in three categories, which were lifestyle products (e.g. apparel), financial services (e.g. leasing or insurance offers) and original BMW spare parts. Purchase intention was polled in two categories, which were automobiles and BMW car repair services. In order to analyze the influence of membership and interaction, two separate experiments were carried out. In the first study, respondents were split into  members (n=210)  and  non-members (n=630) according to the membership of the German BMW fan page. The non-members became the control group and members became the experimental group.

Furthermore, members had to answer questions about their usage of the BMW fan page . Using these responses, a weighted interaction level was determined for each member. A cut-off value was then applied to the weighted interaction level to classify members of the BMW fan page either in passive or active members. While passive members don't or rarely interact with the fan page, active members display a higher level of interaction.

Influence of Membership

In order to analyze the influence of membership on the dependent variables,  the nonmembers and members of the Facebook fan page were compared with each other. Non-members (n=215) were recruited in BMW internet forums to make sure they are admirers of the brand. In order to be able to analyze variances of members and non-members, the groups need to be about the same size (max factor 1.5). That is why a sample of n=315 was randomly drawn out of the total number of the BMW fan page members (n=630).

Then the data was analyzed using a multivariate analysis of variance (MANOVA) in order to examine differences between the responses of the two groups. The mean values were calculated and compared between the groups to evaluate whether membership and interaction do have an influence on the dependant variables. The F-Values of MANOVA indicate that there are differences between the groups. These values ranged from F = 23,608 to 89,195 woth significant values of p=0.00, allowing to proceed with the interpretation of MANOVA.

A comparison of the mean values of the two groups proved that there are significant differences between non-members and members  of the BMW fan page for all 10 dependent variables. Specifically, membership has a strong positive influence on the affective variables brand  trust, brand  loyalty, brand commitment and positive word of mouth (∆ between +0.646 and +0.733, average ∆ = +0.675). Its influence on the conative variables brand satisfaction, purchase intention (for both product and repair services), and willingness to cross-buy (for lifestyle products, financial services and spare parts) is also strong (∆ between +0.395 and +0.985, average ∆ =  +0.682). The highest difference of mean values exists for  purchase intention (∆ =  0.985)  and willingness to cross-buy (∆ = 0.923).

Influence of Interaction

Having analyzed the influence of membership, the next step was to look more closely at the members of the BMW fan page, with the objective of determining whether the level of interaction on Facebook fan sites has any impact on the dependent variables. For this purpose, the four types of interaction with the fan page (writing posts, clicking the “Like” button, uploading photos or videos and sharing photos or videos with other users) were weighted to determine the level of interaction. Based on this level, members of the BMW fan page with a low level were then classified as passive and with a high level of interaction as active members.

The two groups were also analyzed using a MANOVA. Unlike the first pass, the second one did not deliver significant F-values for all 10 constructs. While most of the constructs had values between F = 4,815 to 23,668, purchase intention (for both product and repair services) and brand satisfaction failed to deliver satisfying p-values (p = 0.065, 0.758 and 0.425).

The comparison of the mean values of the two groups makes it clear that the significance of the MANOVA F-tests stem from the differences between the groups. Specifically, interaction has a positive influence on the affective constructs brand trust, brand loyalty,  brand commitment and positive word of mouth (∆ between +0.160 and +0.316, average ∆ = +0.233). Its influence on the conative variable willingness to cross-buy (for lifestyle products, financial services and spare parts) is  also positive (∆ between +0.164 and +0.379, average  ∆ =  +0.248). An influence on brand satisfaction and purchase intention (for both product and repair Services) was not observable as can be seen from the p-values. Highest mean value differences were seen in willingness to cross-buy for lifestyle products (∆ = 0,379) and brand loyalty (∆ = 0,316).

These two KPI's

The results show that being a member of a Facebook fan page has a strong influence on both affective and conative variables. Non-members show lower brand attitude and buying intention than members do. Membership as a key performance indicator can thus be used to assess intended buying behavior (conative component) and emotional affinity of customers to the brand (affective component).

Interaction has an influence on the affective dependent variables as well as partly on willingness to cross-buy. But while membership has an influence on all dependent variables, an influence of interaction on purchase intention and brand satisfaction was not observable. Interaction lacks a significant influence on the conative dependent variables. It can be assumed that interacting with a Facebook fan page does not influence such variables like purchase intention and brand satisfaction since there are other factors playing a more important role in buying a car or being satisfied with it. In the case of brand satisfaction, it is likely that whether a  customer is satisfied with the brand or not depends on the  performance  of the  brand  and not necessarily by how he interacts with the fan page. If the brand performs above the customer's expectation then brand satisfaction will follow. Interaction as a key performance indicator can thus only be used to assess emotional closeness to the brand BMW but not intended buying behavior of members.
The findings of this survey also show that membership and interaction do have a strong influence on brand admirers. The number of members of a fan page and the level of their interaction can therefore be considered as key performance indicators which actually have an economic value for the company using them. The findings also have implications for companies wanting to use a fan page on Facebook. Companies need to implement and monitor these two KPIs in order to evaluate whether their efforts on Facebook are successful or not. This means that companies need to follow these two KPIs closely when conducting a marketing campaign on Facebook in order to evaluate whether said campaign was successful or not. Companies should also focus on acquiring new members for their fan pages since it has been shown that membership has an impact on brand attitude and buying behavior.

Sunday, September 08, 2013

5+1 Latest Viral Video Ads

The latest successful video ads that really went viral!

5. Guinness

4. UGG

3. Samsung

2. Nike

1. LG


Lucky Star: Volvo

Tuesday, September 03, 2013

5+1 mistakes B2B marketers should avoid


Many marketing campaigns are simply targeted at the wrong people. Completely understandable, given that the companies we are marketing into may have a hundred thousand employees or more. Being a "data junkie” is the key here – make sure you’re obsessed by the data the campaign will be sent out to. Its relevancy and its quality.
In a B2B company, LinkedIn and sometimes Facebook and Twitter are necessary; these channels are so popular that most people assume a company doesn't exist if they are not on social media.
Also, take the time to build a brand strategy. You may be on all the right channels, but you may not have an identity consistent enough for people to relate to. A brand strategy will help you decide who your target audience is and how to best speak to them.


With all the talk about the importance of engagement, many marketers get so caught up in sharing that they forget to speak for their own brand.  Yes, we need to engage, but we also need to have an identity. Think of it as a conversation. You want to contribute to the conversation by listening and talking, not just one or the other. Make sure that you, and every other employee, are clear on what your brand identity is and start promoting it.


Sometimes, the sales team will commit to follow up on your campaigns themselves. As they get busy, or as other leads turn into bids, the salespeople can become distracted and drop the lead follow up. We need to have a plan if this starts happening. Furthermore,develop a strategy for “slow burners”, also known as the people who have expressed an interest but are not ready to move forward yet. How will the campaign keep them warm until they are ready to buy?


Personalization has always been a very effective marketing strategy to nurture and relocate potential customers. If a potential customer and the brand have a relationship, then personalization is helpful and thoughtful.
However, personalization should be voluntary. Making personalized outreaches to a customer who does not give permission destroys trust and invades privacy. A recent study shows that before a relationship is built up, if the dissemination of information of a brand is too personal, it will do harm to the brand.


Partnerships are marketing gold and yet many businesses fail to take advantage of them. Let's partner with a charity, a like-minded company or local businesses and both parties will reap the benefits. With social media, B2B partnering is easier than ever. Simply create a place on your website that talks about your partnership and then both parties will use social media to promote one another. This will lead to greater exposure for everyone and showcase that our company is committed to helping others succeed.


The convenience and low cost of social media offer the most advantageous opportunities for cost-effective, high-performance customer service and customer relationships since the inventions of the internet and customer relationship management (CRM) software. Companies can offset the cost of social media implementation by re-engineering.

Sunday, September 01, 2013

Synergistic Marketing Campaigns

There are probably two important developments that helped evolve the media mix concept into what we now think of as multi-channel synergistic marketing campaigns:

 A transition by marketing and advertising professionals toward integrated communications. 

This marked a shift in focus from transactions to customer relationships. Even outside the marketing arena, engineers and statisticians were contributing by following the lead of successful Japanese industries that re-engineered business processes around customers’ needs. Power was then shifting to the consumer and the management of  communication processes was being elevated to strategic levels to help build customer relations and drive business results.  In addition, other market realities continued to fuel the trend toward relationship marketing through expanded communication and sales channels, such as:

  1. Competition increased while the cost to acquire new customers soared, making it increasingly important to establish solid customer relationships, especially with those who projected high lifetime values.
  2. Customers in a satisfied business relationship became clearly recognized as the best source of new business.
  3. Privacy concerns and governmental actions placed greater focus on establishing true relationships rather than trying to blindly attract buyers with hit or miss, mass-communication tactics.

 The number of channels available to marketers increased. 

Not only was there now recognition of the importance of building customer relationships and integrating communications, but new electronic media such as web sites and e-mail also added channels. What’s more, there was less distinction between pure communication channels and sales channels. Increasingly,the two were becoming one and the same. What is evident is that consumers prefer personalized communications:


The New Era of Marketing: Personalization Über Alles

New methods of marketing are emerging that seek to more effectively use prospect and customer data to filter target lists, construct personalization rules and produce and execute marketing campaigns across and among the full range of media  channels available. The most successful campaigns reach consumers in a sequenced and extremely consistent manner. This creates an indirect benefit of enforcing and enhancing corporate branding.Therefore, organizations that can harness the power of other marketing channels and produce more personalized communications could put themselves in a good position to capture market share from those that don’t. There are two critical components to effective multi-channel marketing campaigns: Creating relevant offers via personalization and coordination and management of multiple marketing channels.

In a multi-channel marketing context (emails, newsletters, printed brochures, social media, etc.) personalization means using what is known about the recipient to create the offer, customize the messaging and deliver it to them in the form at requested. For channels other than telemarketing, this can include personalized greetings, relevant messages based on demographics and compelling graphics. Actually, response rates increase dramatically with an increase in the number of personalization elements. As the number of personalization elements increases from one to seven ,the click through rate more than triples, increasing from 4. 7% to 14. 8 % .

The other critical element lies  in the design and execution of campaigns that coordinate among the full breadth of channels available to reach prospective buyers. Much like personalization, this requires strategic and tactical planning. When marketers can sequence communications and “hit” prospective customers with consistent communications through various media channels, the effectiveness of campaigns increases greatly.

Data and Content Management

More than half the battle in effective marketing campaigns is acquiring and maintaining good prospect and customer data. It is important for sellers to build a repository that allows them to effectively utilize unique attributes to segment prospects and customers. Using these attributes, marketing managers can build the personalization rules and determine which prospects should receive proscribed offers, and more specifically, which messages. Once the campaign is designed, in many cases the seller (and often a third-party service provider such as an advertising agency) creates the content to support the marketing campaign.

Traditionally, sellers have created content specifically for each campaign in a tactical fashion, failing to leverage the messaging and graphical elements for other channels. Sellers are increasingly developing and managing content in a more strategic, collaborative fashion that enables content to be shared not only among media channels, but also across campaigns.

Strategies for Synergistic Marketing Campaigns

The Customer is King 
Just as an oil company would not blindly drill small holes in the earth in search of oil, your organization shouldn’t contact millions of consumers blindly, banking on a very small portion accepting your offer. Rather, seek out or build a repository that identifies which consumers are more likely to find your offer compelling.

Get Customers to Opt-in  
Companies that can build their own opt-in lists, or use qualified industry opt-in  resources, are  in  a  better  position to  communicate  and  market to  both  consumers and businesses. Explore methods, such as periodic e-mail newsletters, that provide valuable information and purchase opportunities simultaneously.

Invest in Personalizing Communications
The overwhelming response to the “do not call” registry underscores consumer frustration with intrusive, irrelevant communications. Research shows that by a ratio of over 3:1, recipients prefer personalized communications. Research also shows that the more personalized an offer is, the higher likelihood of response. It will require an increased investment in creating content and designing campaigns, but you can expect double-digit response rates.

Leverage More Effective Customer Channels 
Design and execute new marketing campaigns that leverage the full spectrum of marketing channels. Personalized direct mail, permission-based e-mail and Int e r n e t technologies can be employed to dramatically increase the returns on the marketing dollar. Coordinate marketing  campaigns using multiple  channels and take advantage  of the “multiplier effect.”

Simplify the Transition by Using Service Providers 
Personalizing communications and running multi-channel campaigns can be a challenge for those selling organizations that do not currently have the technology or process infrastructure to develop multi-channel strategies, manage customer data, manage marketing content and execute integrated campaigns. Sellers will find that there are several service providers that can help them transition from their current practices to leverage more effective marketing practices.