(Credit:
Element 22)
There seem to be three (non-mutually exclusive) models for marketers tasked with building brand equity: marketing scarcity, marketing artificial scarcity, or marketing relevance.
Scarcity seems to be at the core of all marketing: an exclusive, unique value that can be reproduced; an original idea replicated for many. That's how markets work, how marketing works. Branding is effective when it keeps the aura of an original idea intact despite its mechanical reproduction. Apple's original idea, for instance, could be described as "technology must be fun and human," and it has not lost an inch of its integrity. That's the trait of a strong brand: the idea remains scarce while its distribution becomes abundant. The scarcity of all branded, manufactured products is of course artificial. If it wasn't, these products wouldn't need to be branded. That's the whole point (and the difference between water and bottled water.)
Some brands have taken this concept a step further by creating a special type of artificial scarcity: "democratic exclusivity." Sounds paradoxical? Well, it is. But it works. Gmail has pioneered it: An (exclusive) invitation-only service that pretty much everyone can get invited to (democratic). As another example, take Apple's strategy with the iPhone app store. It is a closed system (exclusive) but principally open for third parties (democratic). Look at the Kindle that Amazon purportedly shares as an app for other mobile devices. It shows that it's certainly good to have recognizable hardware (exclusive) but the true value lies in the software that you own and that you can use to extend the reach of your brand (democratic). Or Radiohead's pay-as-you-like release of "In Rainbows": Buyers could determine the price (democratic) but the offer only stood for a limited period of time (exclusive). The album - online and physical distribution combined - sold more than Radiohead's previous releases, and the radically democratic way of pricing created a significant amount of brand equity for the band. Democratic exclusivity at its best: artificial scarcity in abundance.
The third and perhaps most game-changing model for marketers is selling relevance rather than scarcity. Jeff Jarvis points to Digg's new advertising system that enables users to vote on ads. Techcrunch calls it a "self service advertising product" that is "somewhat similar to Google Adwords, but with a twist." The twist is essentially a reversal of the traditional advertising paradigm: The most popular ads, as voted on by Digg users, will get more prominent placement and a lower cost-per-click. In other words: The more users digg an ad, the less the advertiser pays. "The Digg system rests on a Cluetrainy need to deliver authentic value and relevance - like Google's ads," Jarvis notes, and he argues "that's the way advertising probably needs to go: The better your relationship (which springs from a better product and service), the more your customers will market it for you, the less you'll have to pay to market it." Jarvis is right: "The future of advertising needs to be selling - that is, enabling - relevance instead of selling scarce space, time, or eyeballs. The future needs to be about adding value - relevance - rather than selling scarcity (extracting what the market will bear)."
Equity is the accumulation, the repeated occurrence, of actions, interactions, and transactions that add value. The best way, then, to build brand equity is to repeatedly and consistently add value through all your interactions with customers. Advertising doesn't add value; branded content does (information). Promotions don't add value; branded entertainment does (entertainment). When you brand something, you don't just market scarcity and advertise your products and services, you market your ability to add value that is relevant.
The web, and the social web in particular, reconciles artificial scarcity with relevance, and that's why more and more branding dollars are moving online. It is the ideal forum for creating an abundance of scarce moments, thousands of small great ideas instead of one great big one. These small great ideas come to live in brief moments of attachment with customers that are personalized and truly relevant for them.
"Advertising is failure," says Jeff Jarvis, and he thinks "media only get in the way of customer relationships." And indeed, how will you make more friends at a party? Showing up with a big banner around your neck that says "I am a great friend" or engaging in a handful of conversations with strangers, listening to their stories and detecting affinities whilst accomplishing a sense of privacy that gradually becomes intimate? Right. In the end, that's what we should be doing as marketers to build real, sustainable brand equity - creating publicity through intimacy, loyalty through decency.
I saw an interesting article in the New York Times this weekend titled "Put Ad on Web. Count Clicks. Revise." The premise of the article goes something like this: because the web provides functionality to test every variation of a banner ad for effectiveness, the next big thing is tailoring advertising in the moment, and leveraging findings from click-thru rates to construct more relevant offerings for consumers.
If I had to construct a tag-line for the so-called "data practice" services cited in this article it would be "downstream solutions to upstream problems." From the media-buying perspective I understand the argument: if the chosen vehicle for the ad is wrong, the advertiser will recognize it faster and will be able to adapt on the fly. Quick changes in placement and timing make ads more effective at targeting particular populations. But from the standpoint of advertisers and brands trying to understand the consumers they serve, this service misses the boat.
Coming from a research-heavy design consultancy, I believe this effort represents not a huge step forward but a band-aid placed over a much larger issue. Ad agencies and the companies that hire them should be doing a much better job understanding their consumers before they ever put their banner ads out there.
The article cites a Vespa campaign of 27 web-based ads, with variations in messaging ranging from "Pure fun. And function" to "Smart looks. Smarter purchase." The second message, combined with a no money down, zero-percent interest offer, attracted 71% more responses than the average of other Vespa ads. The two underlying value propositions ("Vespa, all about the fun" vs. "Vespa, it's a prudent financial decision") represent wildly different core assumptions about the product and its users.
It seems like a no-brainer to assume that doing a little research before designing the ads, speaking to customers and employees in-store, conducting contextual inquiries into existing owners and trend-scrapes tracking the rise of couponing and price consciousness, would yield the same results as the results of click-thru rates, as well as revealing additional deeper data that could be leveraged to fill out the campaign and adapt the product offering itself.
I'm not saying that tracking click-thrus isn't sensible and smart; it's just reactive. Only after you put something out there can you judge the validity of your messaging and when you do, your tool for judging that response is relatively blunt and binary (and the product, if off-base, is fundamentally unchanged).
By taking a proactive approach instead—i.e. talking to people and testing your assumptions before ever constructing an ad, and then altering the product to more closely align it to your findings—allows you to build your offering holistically. Now your banners reflect your product, and vice-versa, and there will likely be less need to retrofit the argument around a leap of faith.
The rise of data practices in digital advertising appears to be more of an effort to retain relevancy on the part of the agencies than something that fundamentally creates value for the consumer. And calling it new is a bit of a misrepresentation. Many of the old lessons of direct marketing are simply being ported over to the web by advertisers. Like the good-old days of 800-numbers and rebate codes, I'm sure it'll be successful. But calling it a "radical new approach" may be an overstatement.
Nice clip from the German ad agency Scholz & Friends. Nothing new but good ammunition for convincing the few who have yet to see the light...
Via Federated Media
I was interviewed by BrandWeek the other day for a story on the recent hype around “Design Thinking” in marketing. They were looking for a skeptic and found me. First of all, it is worth noting that the term “design thinking” is of course a clever marketing buzzword. It’s ironic that marketers themselves embrace it as the next big thing as it doesn’t create a new marketing paradigm so much as it proves that marketers are prone to being persuaded by their very own tricks. “Design Thinking” has become a brand, and brands are all the more powerful when they present themselves as memes.
But what does “design thinking” actually mean? Let’s rely on the wisdom of crowds and see how Wikipedia defines it: “Design thinking is a process for practical, creative resolution of problems or issues that looks for an improved future result.” Wow. Isn’t that what every single task in business is about? Or, for that matter, every single action in life? The rest of the paragraph adds some more specifics: “Unlike analytical thinking, design thinking is a creative process based around the ‘building up’ of ideas. There are no judgments in design thinking. This eliminates the fear of failure and encourages maximum input and participation. Outside the box thinking is encouraged in this process since this can often lead to creative solutions.” Hmm…ok.
Some Design Thinkers herald Design Thinking as the ultimate problem solver for business, social, and political challenges. The current financial meltdown? A lack of design thinking. Our health care sytem? Design Thinking can fix it. The HIV crisis in Africa? Make sure to apply Design Thinking. Granted, design is a fundamental responsibility for organizations in all sectors of our society, and it is absolutely critical in addressing problems of all kinds. But the quest that everybody should think like a designer is not the non plus ultra formula. Or, as Raymond Loewy, the famous industrial designer, pointed out wryly: “Design is too important to be left to designers.”
Today’s marketers need to be experts in what Design Thinkers may define as “a creative process based around the ‘building up’ of ideas.” But the trend towards more participatory product development, consumer engagement, crowdsourcing, etc. goes far beyond just a trendy label – it marks a significant shift in consumer culture and in the way we do business. Good marketers know that and are masters in outside-the-box thinking by definition. In this respect, marketing was design thinking long before Design Thinking was even thought of. As a marketer, you need an in-depth understanding of your audiences, their needs, habits, and desires; you need to develop a storyline and a conversation that engages them; and then you need to establish the channels of interaction. Ultimately, it’s all about desiging interactions between brands and consumers. It has become much more complicated in a highly fragmented, digitized, and fast-paced world of social media, but that’s what it’s still about. Yes, as a marketer you benefit from a holistic, cross-disciplinary view. And you better be creative. The big idea is still big, no matter what.
For marketing is an art, not a science. It is a multi-dimensional, dialogic (or even multi-logic), multi-lateral activity that, at its best, encompasses all touch points with external audiences across all business functions. Marketing is the big integrator, a diplomat within the organiziation but the partisan friend of customers. Marketing needs to innovate or it is just manufacturing. It needs to put customers front and center and give them a say. They hold the truth about your brand so let them design it. You might call this Design Thinking. I call it Marketing 101.
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