The world has changed, but marketing is still applying the principles I learned in business school. This needs to change and this presentation is an "open source" call to help achieve this change.
I have given it on April 23, 2009 in Helsinki at the F Word event. It is an unfinished piece of work in which we don't have all the answers either. So I invite you to join us at www.futurelab.net to help make it better.
1. FUTURELAB
THE ARCHITECTS
We assist
Marketers to maximise the return
on their investments
Innovators to create more
successful propositions.
CEO’s to grow profits through
customer-centricity.
Athens Some Credentials Special
Brussels Astra Zeneca Relationship
Bucharest Deloitte
Hamburg Fortis Investments
Iasi Heineken
Kiev Hewlett Packard Gemalto
Moscow Lego Lexus
Shanghai Mobistar Philips
Pireaus
4. The traditional marketing
model is being challenged, and
(CMOs) can foresee a day
when it will no longer work.
McKinsey Quarterly, 2005, Number 2
FUTURELAB
6. FUTURELAB
US media fragmentation and the demise of the “big 3”
Over one-third of US consumers are watching TV shows online
Source: Deloitte – State of the Media Democracy Survey, 2008
7. FUTURELAB
TV Ads are being “tuned out”
DVR Growth by Region UK DVR owners who fast-forward the adverts
(millions of units) (% of recorded programmes)
Never ; 6%
48.2 Hardly
ever, 3%
About half
2008 the time, 7%
2013
8.6 9.4
Always &
1.1 almost
always; 88%
Europe West Europe East/ME
Source: Informa Telecoms & Media, Q4-2008
Source: Ofcom Research, February-March 2008
8. FUTURELAB
In Europe, Internet will soon be bigger than TV
European Internet vs. TV consumption
Hours/week
37% of french consumers
already listen to radio via the
internet (IT,UK,DE = ca. 1/3)
Internet usage on PC will
drop from 95% today to 50%
in 5 years time as people
switch to other methods
Source: Europe Logs On, Microsoft, April 2009
9. FUTURELAB
And it ain’t just the kids
Internet vs. real world population by age group
United States, December 2008
30%
26% % of total population
23% 22% % of internet population
20% 20%
13%13%
9% 9%
7%
4%
18-32 33-44 45-54 55-63 64-72 73+
Source: Pew Internet and Americal Life Project December 2008 Survey
11. FUTURELAB
After all, there is an ever expanding universe to play with
“The workers
should
appropriate
the means of
production”
12. FUTURELAB
And engagement goes deep ... very deep
84% of Germans under 30
would rather give up their car or
partner than live without internet
or mobile telephone.
Source: Bitkom study via Onlinekosten.de – March 2, 2009
72% of British male gamers
would avoid having sex for a
chance to try their hands on a
brand new PS3-game.
Source: PS3 Price Compare study, via Itproportal, March 3, 2009
13. The Sad Reality
Many digital
marketing herd
activities just don’t
cut it either ...
FUTURELAB
14. FUTURELAB
Different Channel, Same Problem
78% of consumers consider in-stream advertising as
“intrusive”. Half of viewers stop watching an online
video once they encounter an in-stream ad.
Source: Burstmedia, January 2008
29% of consumers leave a website that appears to be
cluttered with advertising.
Source: Burstmedia, December 2008
BANNER/AD BLINDNESS
Only 13% of UK consumers pay attention
to ads on social networking sites.
NEW !!
Source: Ebay Advertising, March 2009
TWITTER SPAM
15. FUTURELAB
Different Channel, Same Problem
Reality Check
What does this
mean for the
business???
“If I tell my Facebook friends about your brand, it’s not because
I like your brand, but because I like my friends.”
Mike Arauz
16. FUTURELAB
“Informed” consumers
are much less reliant
on advertising for
product information
Out of 20 media
company blogs are
“least trusted” sources
of information.
Consumer product
ratings/reviews are the
second most trusted
source.
(Forrester, Q2-2008
“The problem is not the [online] medium, the problem is the message, and the
fact that it is not trusted, not wanted, and not needed”
Eric Clemons
17. FUTURELAB
Across the board (including digital) ...
MarCom Needs A Reboot
18. Image: (c) Adambooth
The Core Issue
People who live near
train lines adjust to
the noise.
They do the same
with advertising.
FUTURELAB
19. FUTURELAB
Also in the digital space
BRANDS HAVE TO STOP BEING NOISE
21. FUTURELAB
• Harry Potter Books ( + 3000 pages)
• General Hospital (11,800 episodes)
• The Matrix
• Star Academy
• Fan Protest Save Jericho
It can be done •
•
Harrypotterfanfiction.net (54,000 stories)
Of Gods and Men
25. FUTURELAB
To make me pay attention, stop looking at yourself
BRAND-CENTRIC HUMAN-CENTRIC
COMMUNICATION PLANNING COMMUNICATION PLANNING
Starts from what the brand wants to say and Starts from what the customers want to “hear”
how to efficiently get it to pre-defined and and being relevant to their
homogeneous audiences. situation, environment, interests and needs.
28. FUTURELAB
relevance = f(personality, need, situation)
Human Centric Communication Planning
What would this man want to hear?
29. Human Communication Planning
A World of Opportunity
I consume a massive amount of media every moment of my day … it’s just not yours.
But as a brand, there is no reason why you can’t change this.
Mobile Audio/Video Books & Mobile Social Story Busstop
Games Podcasts Magazines Television Applications Posters Conversations
FUTURELAB
30. FUTURELAB
relevance = f(personality, need, situation)
Also in digital/web
Don’t look at the box, look at the person
31. Project Battlecry: Challenge 1
Introduce Human-Centric Communication Planning
STRUCTURAL SOLUTION TODAY:
Establish a “human driven” communication Take your existing plan
planning model and ask yourself
“what’s in it for the
customer to give me
his media-time?”
How can I make it
more relevant and
interesting?
And if you don’t
know, go into the street
and ask.
FUTURELAB
34. FUTURELAB
• Seduce & Forget Campaigns
But in Reality they behave like a • Loyalty Scams
• The New Customer is Prettier
One Night Brand •
•
Join This Week’s Community
You are just a segment
35. FUTURELAB
After the lies, the forgetting, the disregard, the customer promiscuity
Would you still “engage”?
36. Project Battlecry: Challenge 2
Start Building Individual and Lasting Relationships
STRUCTURAL SOLUTION TODAY:
Shift from campaign based, mass-comms to life- For every of your
long personalised messages: current
initiatives, validate how
• Think microsegmentation or even individual customers can “really”
customers talk back (and who
listens).
• Build customer life-time communication
plans rather than campaigns Look at the explicit and
implicit promises you
• Change your budget and people structure to make, and check
accomodate this changed reality. whether they are kept.
Force your team and
business to “talk to the
customer” (cf. P&G
India).
FUTURELAB
37. Windfall: The Mass Market is an Illusion
Of 1,365 CPG brands studied
Only 2.5% of shoppers
made up 80% of Sales
Only 25 had a shopper base of over 10% driving
80% of their respective volume
FUTURELAB
38. Your windfall
Many CPG’s “could” know every customer
Imagine these figures travel to Finland
5,250,000 inhabitants
X 90% = 4,725,000 Shoppers
X 2.5% = 118,250 people representing 80% sales
FUTURELAB
40. FUTURELAB
To Illustrate the value of a reputation
Imagine that I want to convince you of my skills as a lover.
DIRECT SALES ADVERTISING BUILD A REPUTATION
www.greatlover.com
I’m a great lover ... He’s a *great* lover !!
41. FUTURELAB
It’s the same for any brand
% of people who trust companies less in 2009 than in 2008
Source: Edelman Trust Barometer, 2009
When it comes to company Word-of-Mouth is the #1 Nearly 70% of consumers
information, a “peer” is as influence on business- surveyed thought that
credible as an industry to-business buying pharmaceutical information from
analyst and only decisions peers was credible and
preceeded by an “expert” believable, even if the peers
were not experts.
Source: Keller Fay, July 2008
Source: Edelman Trust Barometer, 2009 Source: Keller Fay, 2006
42. FUTURELAB
The value of a reputation
Show Me the Money !!
Net Promoter Score is a registered trademark of Fred Reichheld, Satmetrix and Bain & Company
43. Net Promoter Score is a registered tradmark of Satmetrix, Fred Reichheld and Bain & Company
How likely are you to recommend ?
0 1 2 3 4 5 6 7 8 9 10
44. FUTURELAB
Those who speak well about you are more profitable
Case: Lifetime customer value Customers that are so happy
Disguised they recommend are the most
€42,000 profitable of all…
-They spend more
-They negotiate less
€ 9,000 -They stay longer
-They are easier to service
€ 3,000 -They upgrade quicker
-They bring their friends
Detractors Neutrals Promoters
45. Case in Point: Apple
Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008
FUTURELAB
46. Case in Point: Apple
Total Customer Value of an Apple advocate is almost twice that
of the industry average, mainly driven by referrals
FUTURELAB Source: Net Promoter ™ Economics: the Impact of WOM, Satmetrix, 2008
47. FUTURELAB
Above all, your reputation drives your profit
Share of Wallet (B2B-markets)
“at the point of delight, there is
an exponential increase in the
share of wallet”
Source: http://www.ipsos-ideas.com/library/dl.cfm?pdf=IpsosLoyalty_WP_Delight.pdf
48. FUTURELAB
Project Battlecry: Challenge 3
Focus on it
Build a reputation TODAY: RECESSION DIGITAL PLAN
Prove to your business that reputation matters and
can help create or safeguard 2009 sales
Helping your business
create promoters by High
Nurture to promotion Nurture &
delighting them Leverage
Helping these
Share of Wallet
promoters spread the
word …
Build business
Abandon
Low
Low Customer Score or NPS High
49. Relevance
€
BATTLECRY Reputation Engagement
AN OPEN SOURCE MODEL
Relevance: Introduce human-centric communication planning
Engagement: Start building individual and lasting relations
Reputation: Use digital marketing to create/leverage promoters
50. In which we should recognise
that we are all addicted
IN STEAD OF WE THINK
Relevance Our Brand
Engagement Standardisation
Reputation Doing cool stuff
FUTURELAB
51. … and that we are hostages of our own
making
Media-centric planning & buying systems
“Big Idea” creative execution
Efficiency-driven compensation systems
“Mass”-based orthodoxy
FUTURELAB
52. FUTURELAB
Challenge your agencies – your business – yourself to Customer Centricity
Profit
Help invent a new marketing reality Innovation
Last month, after a Procter & Gamble exec said “I really don’t want to buy any more banner ads in Facebook,\" the New York Times's Randall Stross went to Facebook and P&G to find out more about the relationship.It's an important one because P&G spends $300 million a year marketing branded packaged goods and if it can find a way to make advertising work on the site, the money will start pouring in for Facebook.Stross reports back: \"Neither [company] was inclined to say much.\"P&G would, however, let Facebook talk about one campaign, for Crest Whitestrips -- \"presumably its most successful to date,\" says Stross.For a success story, it's not very impressive. Stross reports:The promotion began in fall 2006, when P.& G. invited Facebook members in 20 college campus networks to become Crest Whitestrips “fans” on the product’s Facebook Page. Facebook said it was a great success, attracting 14,000 fans.One could argue, however, that with the additional enticements that Crest provided — thousands of free movie screenings, as well as sponsored Def Jam concerts — a brand of hemorrhoid cream could have attracted a similar number of nominal “fans.”Becoming a “fan” required nothing more than a single click. When Facebook talks about its 130 million members worldwide, it’s careful to include only active members, defined as those who have logged on within the past 30 days. But when it shows the total number of “fans” on a sponsor’s page, it treats all fans as active.Without endless investment, these sorts of promotions sputter out. More than 4,000 of the onetime 14,000 Facebook fans of Crest Whitestrips have left the fan club.One problem is that Facebook likes to sell itself as a way for brands to interact with potential customers. This rarely leads to success and often leads to silliness. More Stross:The P.& G. spokeswoman pointed me to its “2X Ultra Tide” page. Here one finds an 11-month-old campaign, “American’s Favorite Stains,” where members can post their “favorite places to enjoy stain-making moments!” When I checked last week, it displayed a grand total of just 18 submissions, including two from P.& G., two from someone at The Onion and one-word posts like “Tidealicious!”Facebook has large revenues in its future as a advertising-supported Web site. But it needs to get out of its own way first. Facebook's newest product \"engagement ads\" -- which allow users to comment on banner ads and then puts those comments in other users' News Feeds is just more of the same hokey brand/user interaction.Instead, Facebook must allow advertisers to seem like they're providing financial and technological support for cool new features on the site. Facebook's best parts must seem \"brought to you by\" brands.For example: Facebook's Video application should be sponsored by Pure Digital Technologies, the makers of the Flip, or Sony's CyberShot line.
As a result, the number of Apple Advocates trends well above that of the B2C technology companies