How do you build brands post-Google?

As the recession begins to bite, brands are finding that getting through to customers is tougher than ever.

Offline advertising is showing diminishing returns. McKinsey predicts that by 2010, traditional television advertising will be one-third as effective as it was in 1990.

This is partly because online media is growing at the expense of offline. A UK survey by Media Week showed that time spent for both live/realtime TV and teletext tv decreased by 1% and 2% respectively between 2006 and 2007, while internet usage by 50%; an IDC study of U.S. consumer online behavior found that the Internet is the medium on which online users spend the most time (32.7 hours/week). This is equivalent to almost half of the total time spent each week using all media (70.6 hours), almost twice as much time as spent watching television (16.4 hours), and more than eight times as much time as spent reading newspapers and magazines (3.9 hours).

It is partly because of the rise in ad avoidance strategies. DVRs owners (according to an IBM survey) watch at least 50% of television programming on replay, thus avoiding television advertising. It is partly because of a major decline in public trust in brands. People trust people more than they trust the media. In a 2006 survey of U.S. consumers, Forrester found that 83% of respondents trusted friends’ opinion, but only 75% trust product reviews in a newspaper, magazine or TV. (Groundswell, Charline Li and Josh Bernhoff).

The answer would seem to be to move the business online. More than half of the world’s Internet users have made at least one purchase online in the past month, according to Nielsen. The web also seems to offer promising growth for advertisers: Nielsen estimates that spending on online advertising will escalate at 19.2 per cent annually till 2012 and will surpass the TV advertising budget in the US in the next decade.

But advertising on the web poses challenges. Online banner click-throughs on Yahoo!, Microsoft and AOL have declined from 0.75% to 0.27% according to ad monitoring firm Eyeblaster.

Paid search ads now represent the lion’s share of online ad spending. Contextual search ads are great for selling specific factual propositions (flights to Malaga, hotels in Brussels) but they are less effective at communicating emotion. In a recent report from The Wharton School, marketing professor Patti Williams observes that it’s unclear how a company like Crest can leverage search advertising: “How many people are going online to search for toothpaste? It’s not [obvious that] a little ad on the screen is going to attract them. For the biggest bulk of media spending, online is just hard to figure out. The Internet is not that good at big brand-building objectives, so there are a lot of companies struggling with a way to take advantage of the tremendous opportunity Google and other searches offer.”

A 2007 global Nielsen survey found that consumer recommendations are the most credible form of advertising among 78 percent of the study’s respondents. And there are perhaps clues for advertisers in the shift of online consumers to social networking sites. In the UK, social networks overtook webmail by percentage of visits in 2007, with social networks accounting for 5.17% of all Internet visits compared to 4.98% for email services. Advertisers want to follow consumers but that’s difficult. When you are chatting to a friend the last thing you want is to be interrupted with a clumsy brand message. Privacy settings in most networks preclude direct marketing. Facebook recently announced that it was opening up key pages to allow for contextual advertising.

So how do Brands engage with the consumer in a way that provokes conversation and endorsement? The most successful strategies for engagement with social media is for a brand do something which allows people to pass on a key message about your brand.

People can talk about you for three reasons:

You have given them useful information.

H&R Block set out to build awareness of their online tax return offering by creating content customised for channels. The budget was 5% of their annual digital spend only 0.5% of their total ad spend. They grew awareness 52%, and saw an 11% growth in tax services business, feeding net income which rose to $544m from an $86m loss the previous year.

Giant Food Stores increased monthly consumer website visits by 400% after lauching a “Super Shopping List”, which lets customers easily browse recipes, view weekly specials, and create a personal shopping list.
Brand discussion goes beyond the product itself. The entire process and value system around which a product created is also a source of conversation.

You have entertained them.

The hugely popular Cadbury Dairy Milk campaign which featured a gorilla playing the drum solo of Phil Collins’ “In the Air Tonight” received 7m views online, more than 6,000 comments and boosted Cadbury revenues by 5% for that year. (Gorilla ad works its magic on sales of Cadbury bars ).

This jokey video from Philips Norelco Bodygroom raised the issue of persuading men to shave “below the neck” in the summer 2006. The video (cross-posted at youtube.com and at heavy.com) has been viewed 1.8m times, it boosted unaided awareness 8% and contributed to year-on-year growth of 17% for the DAP division (of which shavers represent 45%) to Q1 2007.

There is something in your product that they respond to.

Jeep’s “Have fun out there” website aggregates communities from where they already exist, such as Facebook and Flickr, to create its own uber-community where members drive the content.

The t-shirt company Threadless has used community as a mode to build its business by allowing members of the website to submit and vote on t-shirt designs. The top designs are selected for printing and sold through an online store with winning designers getting a cash prize and store merchandise. What started as a hobby in 2005 by founder Jake Nickell has been growing quickly with annual sales on track to hit $5 million in 2008.

The last is the best because it means that consumers have engaged with your brand and are doing your marketing for you. With the additional benefit that they are marketing to people who are inclined to believe their testimonials. It is also the hardest to achieve. New online measurement techniques (such as those used by Market Sentinel) offer the opportunity to chart how effective brand building in online by directly measuring response to creative campaigns, by gauging consumer engagement and by changing the creative to take account of live consumer responses. But how do you measure such responses. A consensus about this is only now beginning to emerge and we will deal with this in our next post.

Market Sentinel were lucky enough to be selected to take part in the UK department of Trade’s “Digital Mission” to New York’s Web 2.0 exhibition. We will be in New York throughout the coming week 14-19th September, contactable via Crowdvine or on the normal email addresses.

Mark Rogers recently did a podcast for the company Knexus looking at the next generation of social marketing. We looked at how to do social marketing using case studies from Cadbury, Sony, Avis and H&R Block, and assessed how to measure the results. Here is the deck to accompany the podcast.

Today I interviewed a job applicant who had recently completed a stint at a well-known financial public relations company. I asked whether she had used any tools to understand online conversations. To my astonishment she said that not only was this not the case, but that the PR company in question actually banned their employees from using Facebook.

A new survey bears out that banning social media applications is pretty common amongst UK employers. Comprehensible behaviour for some businesses maybe, but for a PR business whose major interest is in communication, in creating links between people, in understanding opinions and trying to shape them, this is strange behaviour indeed. Understanding Facebook, and applications like it, is a key part of the public relations function as it should exist in businesses today. PR practices that don’t engage with these media will find over time that they are addressing a smaller and smaller part of the market.

Web monitoring throws up anomalies. When is a story marked as new and date-stamped? When the page is updated? Or when it is crawled?

Since the process is totally automated errors can occur. For example when an old news item about United Airlines filing for Chapter 11 bankruptcy protection got picked up from The South Florida Sun-Sentinel’s website by a financial newsletter it got pushed into the “most-viewed items” section”. Google news gave it a current datestamp and courtesy of the Bloomberg wire service it was syndicated to the markets. The stock briefly crashed from $12.30 to $3 before the error was spotted.

[Update Saturday 12th September] The Times of London has a good follow-up to this story, tracing the exact sequence of events and drawing attention to the role played throughout by automated systems. Automation caused the story to be listed as the most popular on the South Florida Sun-Sentinel website, Google News picked it up automatically, traders responded to the headline, Bloomberg cited the headline when the stock started moving and automated selling programmes did the rest. Anyone who stopped to actually read and understand the story (complete with references at the stock price of $0.97 which clearly signalled its inaccuracy) would have known the story was old. But they would have been the losers, because every other system was in full “sell” mode.

When we first started pitching to institutions in the City of London a few years back a big fund manager said: can’t the analysis of stories be totally automated? We replied that it could only ever be semi-automated because human intelligence was required to interpret the patterns of sentiment, volume and authority. Part of their questioning leaned on the idea that automated tools for understanding conversations could be linked to automated trading tools. This is a dangerous idea - as the United Airlines story proves.

Penguin books have teamed up with Match.com to allow book lovers to find others with similar tastes. It adds value and shrewdly targets UK readers, who are predominantly female. Congratulations on a neat idea. It could be the start of a terrific online community - the best idea since the London Review of Books opened a tea shop.

Cadbury have announced the momentous decision to bring back the Wispa bar permanently. The Wispa was originally reintroduced in a limited edition in 2007 after Cadbury’s responded to an online campaign for its return*.

23 million bars were sold in seven weeks and the success of the revival has encouraged Mars to rebrand Snickers as Marathon and Starburst as Opal Fruits.

Mark Borkowski is the legendary publicist employed by Cadbury to tell the world about the return of the Wispa. He comments: “A consumer campaign like this is a Godsend to a brand. It tells you that there are people out there who are passionate enough to badger their friends about your product. That means you have a large, unpaid sales force out there banging the drum for you.

“The temptation is to interfere, to market to those people. But they don’t want to be marketed to, they just want the product. The best thing you can do for them is to act. And that’s what Cadbury have done, by bringing the Wispa back.”

Borkowski this week publishes The Fame Formula a study of how celebrity is achieved and maintained. He has discovered that the natural lifespan of a celebrity from a standing start is 15 months. Are brands subject to the same law?

Borkowski thinks they have something in common: “The most long lasting brands are the ones that people bring into their lives, and make an emotional connection with. Some brands share the characteristic all celebrities aspire to: they achieve our loyal affection. The feeling for Wispa lived on even after the brand disappeared.”

*Full disclosure: Market Sentinel are retained by Cadbury and monitored the consumer campaign campaign for the return of Wispa on their behalf.

Two years we highlighted the UK government’s decision to shun social media and opt for magazines and television in educating the young of Britain about the dangers of Chlamydia, Gonorrhoea and other sexual diseases. This decision flew in the face of research showing that most young people took advice about sexual matters from their peers (=social networks) rather than from information campaigns of any kind. The decision has had disastrous consequences for many young Britons. A report now highlights that sexually transmitted diseases are running at their highest rates since the 1970’s, particularly amongst the under-25s.

[Update] More on the woeful uptake of Chlamydia testing. “The shortfall has been blamed on … problems engaging young people,” writes the BBC’s Nick Triggle.

It has long been rumoured that much of the success of the Bush campaign in 2000 and 2004 was down to their superior understanding of social networks. Now a chance remark (highlighted by Valdis Krebs) by Bush’s campaigning guru Karl Rove on Obama’s election campaign draws attention to this.

Barack Obama’s manager admitted to the New York Times that he wanted an “army of persuasion” modeled explicitly on the massive Bush neighbor-to-neighbor “Victory Committee” of ‘00 and ‘04. Those efforts deployed millions of volunteers to register, persuade and get-out-the-vote. Sen. Obama’s organizational emphasis wisely avoids the Democratic mistake of 2000, when Donna Brazille’s plea for a stronger grassroots focus was ignored by the Gore high command. It also avoids the mistake of 2004, when Democrats outsourced their ground game to George Soros’s 527 organizations. The latter effort paid at least $76 million to more than 45,000 canvassers – many hired from temp agencies – to register and turn out voters. It was the wrong model: Undecideds are more likely to be influenced by those in their social network than an anonymous, low-wage campaign worker.

The emphasis on social networks shows what many have long suspected, that the study of social network dynamics, including the mathematical models deployed by businesses like ours, was trialled in the war-rooms of the Bush-Cheyne campaigns of 2000 and 2004.

The key characteristics of these learnings were:

• Don’t rely on mainstream advertising to change hearts and minds - work through existing social networks;
• Identify issues that go to the heart of your targets preoccupations, and hammer your stance on these home;
• Organise in ways that empower the grass roots, not the central command.

It worked for Bush and Cheyne and now it’s working for Bush and for big brands. The key message that Rove is stressing is that paid-for messages are not as effective as recommendations from within a social network.

A key example of this occurred recently in the case of Market Sentinel client Avis. When they launched their blog one of the early commentators posted a comment highly critical of the initiative: what was the blog doing, he demanded, to make the company more effective, how would it address his specific customer service problem? The Avis folk responded to this challenge with a detailed explanation of how the blog was part of a broader initiative to do a better job with customers, to explain, to listen and to fix specific problems (and they fixed his). When on one of the better-trafficked forums used by international business travellers, a commenter highlighted a customer service issue with Avis the same previously hostile commentator responded - defending Avis and directing the complainant to the UK blog where the management had shown themselves so responsive. That’s grass roots advocacy in action. More effective than paid communication, precisely because it is unpaid for.

What Karl Rove knew yesterday, Obama and Avis know today: it is better to have others do the persuading for you. Understand and meet their needs and they are a better salesforce than money can buy.

Budget airline Easyjet announce that load factors are up - that means they are selling more seats per plane than last year. Decoding this one gets the impression that the “recession” so far is pushing people to get better prices for discretionary spend items (like holidays) rather than making them cancel their plans. It is bad news for businesses selling high end products to those on a middling income (cf. Marks and Spencer’s trading statement last week). But may not be so terrible for others who can convince the market of their value.

Meanwhile Diane Clarkson at Jupiter Research points at the influence of “user generated content” in driving the decisions of travel buyers. Trust is flowing away from marketers towards peers. It points to a world in which the perception of value is mediated by online conversations, and by the ability quickly to compare prices. The consumer has never been more powerful.

Brian Stelter profiles Chris Hughes, the Facebook co-founder who has played a key part of generating the grassroots-up political support for Obama.

Microsoft has struggled to convince users of Vista’s superiority to XP. And there continues to be a demand for the old OS. As of 1st July Windows XP is officially no longer being shipped by PC suppliers, but Dell have announced on their small business blog an ingenious way of downgrading to XP Pro after buying Vista. Gamers can also access the “bonus downgrade” for a fee of between $20 and $50. [Story from Internet News] As Will Smith remarks on the blog: shouldn’t Dell offer consumers what they are asking for, the ability to keep using what they perceive as a “superior product” - XP? Both Dell and Microsoft are playing a dangerous game by ignoring this level of consumer dissatisfaction.

H & R Block have published impressive year end figures, driven by growth in the number of people using their software to file tax returns. Could this be linked to their success in using social media to boost their brand awareness?

Some scientists at Microsoft have applied to patent a method of recommending contacts in a social network. For social networking nerds it is worth looking at the claims and the prior art responses. Social networking is now close enough to the mainstream of web activity for this patent claim to represent a serious business opportunity. Some of the prior art appears persuasive.

We have just finished a disastrous six month flirtation with Vonage, the voice over IP (VOIP) telephony provider. VOIP providers offer a great solution for a fast-growing business. You can run your own exchange software - Asterisk - create conference call dial-ins, allow staff in different countries to share your switchboard - all very useful. Sadly Vonage has all the characteristics of old style telephony businesses: poor quality of service, an inflexible billing structure, hidden charges (they even charge you for the privilege of closing your account) and the appearance but not the reality of good customer service. Their customer service folk are (wearily) polite but all work to a script and know too little about their business to be helpful. They mimic, but don’t replicate the experience of dealing with human beings. Welcome to the revolution, intones the announcement as you reach the automated switchboard. The announcement - a taped British voice - sounds flat, perfunctory. You are talking to a machine with a human voice. And that’s what you get.

Unlike (e.g.) the excellent and reliable Zen Internet, Vonage have no “cancel account” functionality on the web interface. (Why not?) You have to call the company. As the billing lady tried to talk me through a script designed to find out why I was leaving I felt sorry for her. Customer service, I kept saying. Price, I kept saying. She started talking about new packages that were on offer. After five minutes of this I had to cut her off. Cheez! Trying to keep a customer from quitting by making it difficult to quit! I thought this sort of thing was on the way out …

Unless they change their ways the real revolution will do damage to Vonage. This ain’t the way to grow a business.

Roger Cohen writing in the New York Times points to the success of Barack Obama’s campaign as an example of the role of social networks in 21st century marketing. It is an example of the power of the many and shows up Hillary’s somewhat narrower base. Quoting from Joshua Green in the Atlantic Cohen writes:

“Obama’s claim of 1,276,000 donors is so large that Clinton doesn’t bother to compete.” [Green] gives some other Obama campaign numbers: 750,000 active volunteers and 8,000 affinity groups. In February, a month in which he raised $55 million ($45 million over the Internet), 94 percent of donations were of $200 or less, a number dwarfing small contributions to Clinton and John McCain.

via Valdis Krebs.

H&R Block used social media marketing to boost their profile and raise awareness of their digital accounting product, reports Ad Age. The lady responsible was Amy Worley (Photo: Jonathan Fickies). They used YouTube, Facebook, MySpace, Twitter and Second life. As AdAge comments, this kind of marketing in social media is “about stacking up many small ideas to create a big total impact”.

Key stats:

H&R Block boosted overall brand awareness by 52%.

They spent 0.5% of their ad budget in doing so.
…

Yes, 0.5%`

[UPDATE] More details on the H & R Block campaign including an interview with Paula Drum, VP of Marketing on Podtech’s Marketing Voices talking about how the campaign played on YouTube and SecondLife. Here is their social media site Digits.

For the casual person, the more emails you receive, the more popular you are: normally be a boost to your ego. You’d expect that popular bloggers will be thrilled by this as a recognition of their popularity but 300+ “PR Spam” emails a day can be a little much.

Chris Anderson, author of The Long Tail, is one journalist/blogger that has got fed up. In addition to filtering and blocking out emails, he has made the addresses and domains of these ’spammers’ public in the bid to shame them. This sparked a wave of imitators the most recent being a wiki of PR Spammers by Gina Trapani, of Lifehacker.

Tom Foremski has announced he will only accept pitches via Facebook as has Robert Scoble. Both went as far to say they’ll only listen to their list of friends on Facebook. Bad news for hopeful PRs. On the other hand short ‘twitpitch‘ messages on Twitter are being hailed as the new way of getting bloggers attention without infuriating them.

Stowe Boyd, who coined the idea term twitpitch, has certainly found it effective for him during his recent visit to Web 2.0 Expo. Together with Brian Solis, they are pushing for the idea of MicroPR, where PR and marketing pitches get more personal.

The trend suggests PR will have to change tack in getting their message out. As Jeremy Toeman observes, “relationships are more important than ever”. Knowing who to target with your message will be key to the success of future PR campaigns.

The scene is the playground at my wife’s school in Oxford in the 1980s. Two children put their arms around each other’s shoulders, they start chanting: “Anybody want to play kiss-chase?” As each child joins they put their arms around the shoulders of a child at either end of the line they join in with the chant: “Anybody want to play kiss chase?” The chant gets louder, so more of the other children can hear. Finally enough people had gathered for a game of kiss-chase. The line breaks up and the game begins.

This is a nice emblem for social marketing.

You try to find a group of people who like what you like, do what you do. You belong to the group not for itself, necessarily, but perhaps because you want something to happen. You want to bring back the Wispa chocolate bar. You want Dell to carry on shipping PCs with Windows XP. But you could simply be celebrating your love of Van Morrison or Rock Band.

Of course Dell and Cadbury and Van Morrison may want to join in - not as members - but they may think - we should talk to these folk, they want to talk to us …

How to start that conversation? How to sustain it?

Facebook has real challenges for marketers. Brands can’t join as individuals. It is expensive to open a channel and very hard to measure the impact of what you do. Marketeers - including in our own client base are reviewing alternatives like Twitter. So how do the channels compare?

How effective Twitter is depends what you are trying to do. Twitter is best viewed as a channel through which to reach an existing audience - one that has formed spontaneously elsewhere.

Facebook manages the cohesion of people around an idea or interest - the forming of that playground group - Twitter simply allows it. In principle that makes Facebook the superior option, but its high price and the opacity of the metrics it offers make other options attractive.

The attraction of monitoring existing conversations about you and marketing your Twitter feeds to these groups is that you can track your following and the direct responses to your messages. You have control; no one is taxing your ability to talk to the market. So in the long run, for marketers, Twitter wins.

Steve Jobs of Apple doesn’t employ a sales force to persuade corporations to switch to Apple. Nonetheless Apple market share in this area is growing, driven in part by the consumer’s liking for the iPod and iPhone. In an intriguing Business Week survey Peter Burrows highlights that employees, sick of a PC by day, Mac by night existence, are pushing their firms into switching to Apple.

Mark Slaga, chief information officer of Dimension Data , a large computer services firm based in suburban Johannesburg, says he has received 25 e-mails recently from employees who want permission to use Macs at work. So far he has refused, because he doesn’t want to hire people to provide Mac tech support, but “it’ll happen someday,” he concedes. “Steve Jobs doesn’t need a sales force because he already has one: employees like the ones in my company.”

It’s a neat example of word of mouth advocacy in action. It is driven by the consumer, not the salesman and in this case the company (Apple) does not even explicitly support it, preferring to cater for the needs of the consumer and the education market and to concentrate on making the product desirable.