New Brand Assets: Where are we going?

"We show that easily accessible digital records of behavior, Facebook Likes, can be used to automatically and accurately predict a range of highly sensitive personal attributes including: sexual orientation, ethnicity, religious and political views, personality traits, intelligence, happiness, use of addictive substances, parental separation, age, and gender. The analysis presented is based on a dataset of over 58,000 volunteers who provided their Facebook Likes, detailed demographic profiles, and the results of several psychometric tests."

Kosinski et al. 2013 (The Psychometrics Centre, University of Cambridge)

Like. Comment. Engage. Sponsored post again? Uhm.. Is your behavioral targeting ok? No?It's fine. Don't worry. Numbers are fine.
How have brands embraced digital ecosystems like Facebook as a key marketing channel to drive engagement and brand awareness? Let's use FB like waveforms as a metric of brand engagement and let's illustrate some examples of FB like pages:

Multinational retail corporation with 35M likes

Ivy League management magazine:

A worldwide branded commodity

A multinational sports company

Leading Telecommunications company in Greece-edited

Leading retail operator in Greece

It seems that these waveforms are similar to a manipulated oscillograph signal where the peak comes in "Sponsored Campaigns" periods and then to zero, till the next paid campaign. 

There are tons of examples like these. Off course, some of these effects could be explained by deeper analysis of econometric advertising models, mentioned here, but is this the best we can do with these new media? Where is organic traffic? Does paid traffic have a decent ROI in terms of brand engagement?

It depends.

I believe that the virtual digital economies which are developing as we speak will reshape the landscape of marketing as we know it. But do marketers do their best in order to engage with the customer, as brand ambassadors? The images above indicate that apart from the times that we press the button "Boost Post", things do not go very well in terms of brand engagement. Further KPI's, like numbers of comments and shares, retweets and favorites, per brand page, analyzed with statistical tools, should easily verify this hypothesis. I understand that perhaps, the higher the numbers, the higher is the brand perception and other key brand assets, but are the results discrete and measurable? 

In the long term, does the world have enough strategists to make optimum use of the new technologies and channels of communication?

For the time being we have:

• Google, Facebook, Twitter charging and gaining billions for "awareness" and "engagement".
• Overvalued IPOs, overnight millionaires, questionable business models, startups offering frivolous services, fake engagement tools and similar services.
• Marketers trying to deliver actions with ROI but frequently unable to achieve optimum brand engagement, let alone incremental sales or other corporate goals.
• 3B customers who are now online but have the same purchasing power that they would have if digital marketing wouldn't exist in a parallel universe.
• Academics trying to follow up and model consumer behavior versus both real-life and digital marketing stimuli as technology advances.

A nice bubble? I think, yes.

How would Aristotle structure his philosophical pillars if he was writing his "Athenian Constitution" in his free time while working as a Chief Marketing Officer for Facebook or Google?

21st century. Who will pay for the news?

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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.

Conclusion

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!

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