The ad:tech Playground

I was lucky enough to attend and speak at the recent ad:tech event in Sydney. It was an immersive experience. Something like IT in the early ‘90’s, summed up by this elegant quote: “One strategy is worth 100 tactics”. It captured endless discussion on a blamange of tactics and tools. But a worrying dearth of strategy.

Brand thinking with the structure of real strategy was clearly not the focus. More so fun new tools that spew out metrics to a hungry audience wondering what to do with them. Wondering how they could potentially create new business value, if they had some kind of plan in which to interpret them. Where were the measures of brand equity anyway and how did digital contribute to lifting them?

Then the reason dawned – these were creatives in a playground full of new toys. Can we really expect them to work to a strategy?

Enter the seasoned architects. They remind us that exchanges of value are based on trust. Trust is created by relationships with people behind the brand. People that operate on principles and values, not scripts or rules. This blends across touch points in the business. At its core is communications – co-ordinated across functions, beholden to a bigger strategy. A strategy that in this new world is not set and forget. It is iterative and fluid. And who drives that, when so few senior people understand the medium?

Do not be alarmed, we are passing through the twilight zone and will shortly arrive…somewhere! More soon…

How a Common Currency Helps

The common currency that many communications professionals seek is the effect on an audience. This is brand. It is a measure of attitudes, an understanding of reputation amongst key publics or market segments. But why are attitudes important? Because we know from consumer behaviour theory that attitude change must occurs before behaviour can change. And behaviour change is generally what marketers want. Whether its product trial, brand shift, increased usage or brand advocacy. It could even be social change, such as socially responsible drinking. Finally, by knowing where attitudes sit we know more about planning relevant communications. So the steps can be mapped as follows:

• Social (& other) communication activity occurs
• Attitudes are changed in some way
• Brand shifts
• Behaviour changes toward that desired
• Advocacy status shifts

The other important thing about a common currency is its a universal success measure. Universal across all your communications activity. So if you keep track of the activities you did and your brand health resulting then you can relate the two together. Its just cause and effect. More often its probably 'causes' plural, reflecting multiple activities and thats good because integrated communications is all about synergy. Where it gets tricky is separating the causes to help understand what to do more or less of. But its worth the effort because that understanding can save you big chunks of budget and/or precious time that would otherwise be wasted. Simply put understanding drives good planning and good planning creates new value.

So the question becomes "What was my return on each communications activity?". Over time this can be answered if you are systematic about your tracking. In fact, simply charting the communications activities against brand preference scores can be very revealing. Even better, if you can evaluate acitivites to convert them into outputs like reach and tone of media or blogs and number of people attending events. Building up that collection of metrics creates an asset to improve decisions and prove your results. Also, you then have the option of using more sophisticated statistics. These can show how strongly each activity drove brand or sales. And even what type of content to focus on. For more how-to info see this document.

Imagine how it would change your comms planning if you knew, for example, that the Trust brand attribute drives 22% of your brand preference result! Or that for every $1 you spend on PR you get back $5.50 in Sales but only $2.70 for advertising. There's a compelling value proposition.

Need Market Traction - Get it with Attitude!

Understanding attitudes is the next step. Traditionally this has been done by market research and in particular qualitative research. A semi-structured exploration of thoughts, feelings and ideas is an incredibly valuable reality check for marketers and communicators. It enables you to test and explore in an organic way with rich insights resulting. In the social media, many of these opportunities exist already in the conversation stream. Whilst you don’t get to select your respondents, the feedback could be nonetheless valuable. On the upside it is a ‘clean read’ by observation in a ‘natural’ environment. On the downside, strong opinions may crowd out others and Distance bias may also inflate persona’s. The bottom line is that understanding is created from a unbiased position and assembled in a systematic way. By either method, the resulting insights should contribute to a structured set of frameworks and guidelines.  


Armed with this valuable understanding, we then set out to change attitudes with appropriate communications. But how do we know that we have succeeded? And there is no common currency to measure communications anyway, is there? Yes, there is! The problem is many don’t get to see that currency measured properly or at all. So there is no accurate yardstick. No diagnostic if things don’t come out as expected. And thats the topic for next time!

The Mechanism of Social Media

In preparing for the upcoming ad:tech 2010 conference, I drafted some initial thoughts around a session that seeks to explore how we can create and identify more business value from social media. There are several threads to consider in that discussion so here are some thoughts on each of those over the next few posts.

Firstly, an understanding of the mechanism of how social media works creates a very useful foundation. Social media is a lovely, unstructured channel for communications and feedback. The session appropriately highlights that its value potential comes from how it is used as a three-way messaging channel. Three-way because people either seek opinion, offer opinion or observe opinion. This blog captures and defines that concept with Australian market research.

In the commercial world, messaging either drives or erodes business value. But how does it do that? Specifically, how does social media do this? That question is at the core of understanding how to build more value.

Essentially it’s a special kind of WOM. The research confirmed what many suspected: WOM that pans is more powerful than WOM that praises. This is because more people are told and the advice is weighed more heavily from friends. There is also a status gain at play whereby good advice boosts status of the advice giver.

So in sharing advice and opinion freely, peoples attitudes are being influenced. Its fair to say that not all communications will change attitudes. Much of it will be neutral or reinforce existing attitudes. But lets say we are seeking to understand and change people attitudes so we will focus there.

Research: Value or Cost?

I’ve been spending quite some time recently immersed in results from tracking research. Firstly it was brand health tracking which for this particular client was rich and insightful. Next was a reputation study, different from brand health in its depth exploring attribute association across specific stakeholders groups.

One of the most important things to do in market research is to present findings in context of their importance. Imagine if research suggests your brand was low on the Market Leading attribute. The first question you should ask is yes, but

How important is “...<>...”

To which audience?

How are our competitors performing on “…<>…”

One of the great benefits of statistics is that used correctly they can prioritise things. To be more specific, they prioritise drivers that cause some outcome. For instance, if your company is listed then you would understand the focus on improving shareholder value, and in turn share price. But you would also be likely to see plenty of debate about what drives share value. And that debate would probably vary from emotional rants to well informed opinion. 

But what is fact?

Knowing these drivers is valuable because it helps you focus on what makes a difference. Also knowing how strong the driver was adds yet another layer of value – it allows you to invest appropriate amounts of effort. That appropriateness is like finding the right balance. Put simply the statistics are helping you understand what to do how much of.

It is not always easy to couch findings in terms of importance but it almost always avoids wasting effort where there is no reward.

So if your tracking is done well and you know both the importance and performance of attributes then there is only one step missing.

Taking action.

Remember you are now on very solid ground – you are armed with facts. Numbers not supposition. So you have a licence to argue with conviction and have people listen.

Building Brand AND Saving Budget

Here is a simple diagram showing the steps from marketing activity to business outcomes:



Sales here is used to represent a direct, financial business benefit. Whilst some communications may never lead to that I believe most will – sooner or later, via brand.

Brand equity is like a bridge connecting marketing actions to customer buying behaviour. Its role as the pre-cursor of sales has been proven in key studies, such as:
When a product is associated with a high equity brand then customers…
• …see it more favourably; as higher quality; as more reliable and they are more likely to buy it (Footnote/endnote source: Larouche, Kim & Zhou 1996)
• …are less price sensitive and more responsive to marcomms (Footnote/endnote source: Simon 1979)
In fact, financial benefits also arise from brand equity with proof that it…
• …reduces financial risk and is related to a lower cost of capital (Footnote/endnote source: Srivastava & colleagues 1997)
• …can be tapped to reduce marketing expenditure in times of ‘cashflow crunch’ (Footnote/endnote source: Srivastave, Shervani & Fahey 1998).

The problem is advertising often takes credit for all brand equity ignoring the contribution of PR. In turn, PR generally sees only a small fraction of available budgets and commensurate status in many organizations.

PR and advertising are both communications. They both interact and relate, particularly with increasingly sophisticated integrated campaigns. Yet they are often managed separately and external agencies may not plan together.

There seems a distinct lack of thought leadership on how to find the optimum balance of PR and advertising. So, what’s the answer? Post your views now.

Recession-Busting Top 10

The various ‘war/s on terror’ of recent times have almost conditioned us to fear - a type of addiction. The dictum, 'be alert but not alarmed' usually meant 'look over your shoulder at all times’. That appetite continues to be satiated by media but now, with a new fixation on the GFC (Global Financial Crisis).

Going against the tide, as I like to do, it's fascinating to analyse the media because it raises the question of how to create antidotes to such things as the GFC. This has been the topic of discussion of clients lately with many themes emerging from the media we analyse. Here is a summary of my broader research and also some of the ideas coming from conferences. These are blended into my top 10 Recession-Busting ideas below:

1. Humour brings relief – good playwrights understand that humour is the best relief to tragedy. Having fun works similarly.

2. Familiarity and safety – the human instinct to retreat and cocoon oneself is foremost in many minds right now. Stay-at-home is the new going out. Be sure to synch that within a context of comfort.

3. Trustworthiness – consumers and the media are now ultra-sensitive to rip-offs or inequities. Note the important role of CSR here.

4. Value focus – expect that consumers will shamelessly price-shop, so be the consumer champion and demonstrate value in your offering. New pricing options can help by giving back a sense of control to the consumer.

5. Rally for the Underdog – perhaps it's our convict heritage but Australians like to support the underdog and media love to use leverage on that concept. Ensure your brand truly respects this and doesn’t create underdogs! (Monitor service and satisfaction closely).

6. Be Genuine – more than doing what you say you will, being genuine also brings in authenticity. And that is also about heritage.

7. Continue CSR activity – when done well, it can tick many of the boxes above and recent US surveys show customer expectations of companies acting responsibly are not much lower in an economic downturn.

8. Use Research & Analysis – to set and refine your approach. A key step is linking your communications to your brand using metrics. Adding diagnostics at each step helps answer the ‘why’ (see more below).

9. The Opiates – analysis of past recessions suggests gambling, alcohol and tobacco benefit from recessions but perhaps this just highlights the human need for escape into a different world that has a few little ‘luxuries’.

10. Thought Leadership – lead and inspire, it is what everyone needs but few provide.

It is no mistake that most of the above are emotional in nature. Skillfully addressing attitudes and emotions is almost always more effective at driving purchase behaviour than rational arguments.

Look forward to any comments.