Purple Cow – where’s the beef ?

There is a small, nay large, industry that makes claims like:

“consumer behaviour has changed radically”
“marketing doesn’t work anymore”

And yet then presents nothing more than a repackaging of the orthodoxy.

For example, Seth Godin’s “Purple Cow” says that marketing is “broken”, that advertising could once turn a sow’s ear into a silk purse but has lost its effectiveness due to clutter and ad avoidance. This is spite of research that shows advertising continues to perform as well as ever (1) (2) (3).

So says Seth, companies need to adopt his radical new marketing strategy which is…wait for it…. to produce remarkable products and market them in remarkable ways. Wow. I don’t remember my old Uni textbooks saying anything like this, they only used words like “great” not “remarkable”. What a step forward in thinking.

Seth’s a great story teller, his books are entertaining. But it is a sad reflection on our discipline that these best sellers are so shallow.

Professor Byron Sharp. July 2011

(1) Jamhouri, O., & Winiarz, M. (2009) “The enduring influence of TV advertising and communications clout patterns in the global marketplace”, Journal of Advertising Research, 49(2), 227-235.

(2) Rubinson, J. (2009) “Empirical evidence of TV advertising effectiveness”, Journal of Advertising Research, 49(2), 220-226.

(3) Hammer, P., Riebe, E., & Kennedy, R. (2009) “How clutter affects advertising effectiveness”, Journal of Advertising Research, 49(2), 159-163.

Footnote – Above I argue that Godin’s contribution to marketing theory is to merely replace words like “good” or “great” for “remarkable” so I had to laugh when I read this note in my dictionary about the word “remarkable”:

Properly, remarkable should not be used as a synonym for good. It is value-neutral and means only “worth being remarked upon.” Actually, what’s really remarkable is how many words, like this one, have lost their specific meanings as they’ve been corralled into the sterile confinement pen of synonyms for good, notably fabulous (literally, like something in a fable), fantastic (like something in a fantasy), wonderful (fills you with wonder), incredible (not to be believed). You help restore the richness of the language when you use these words in ways closer to their original meanings.
— DA

Digital Age Branding – You are spending your money in all the wrong places – or maybe not

I’ve written before about the army of consultants crying
“consumer behaviour has changed radically”
“marketing doesn’t work anymore”

Who then present nothing more than a repackaging of the orthodoxy. e.g. see my comment on Seth Godin’s “Purple Cow”.

There are many marketing assumptions that need to be changed. Yes, practice can be improved. So by all means let’s talk about this, but anyone advocating specific changes should offer supporting evidence, from serious research.

Harvard Business Review recently published a fairly shameless advertorial for McKinsey’s which makes the mundane observation that the digital age has meant some changes in how consumers learn about and buy brands. The article is all hype and assertion, based apparently on McKinsey ‘research’ that has produced results like “60% of consumer facial skin care products now conduct online research on the products after purchase”. Does anyone believe this ? I’d love to see an independent replication.

They boldly announce that advertisers are spending their money in all the wrong places. Gasp, how terrible. Where’s the evidence ?

They write things like “up to 90% of spend goes to advertising and retail promotions. Yet the most powerful impetus to buy is often someone else’s advocacy”. So what is the implication ? That we should spend more money on stimulating word-of-mouth, fine but research shows that advertising is the major stimulus for brand word-of-mouth (1), so that gets us back where we started.

They present a “NEW” model of the consumer decision making process, that starts with consideration, then evaluation, buying, then hopefully enjoying, advocating, bonding and repeat-buying. It’s a terrible rational, highly involved model, just as Howard & Sheth’s original one was back in 1969 (2). Yes with an audacious straight face they present this as new thinking. Their main thesis is that marketers need to consider all these stages and gain touch-points at each. 20 years ago my colleagues Caroline Rowe and David Corkindale presented a near identical idea, they considered it a useful teaching tool, nothing more.

McKinsey go much further to claim that marketers’ advertising spends are commonly hitting people at the wrong times. But they give no evidence. They seem to assume that advertising has no memory effect. There is an in-built assumption that hitting someone at the moment when they are thinking about the brand/category is the only advertising that works.

And they write as if search advertising doesn’t exist. As if marketers don’t already offer ways for consumers to access their brands during active search.

As I said, a fairly shameless advertorial for McKinsey’s services in social media advertising, which could be excused if only they offered some new insight.

References:

(1) Keller, E., & Fay, B. (2009) “The role of advertising in word of mouth”, Journal of Advertising Research, 49(2), 154-158.

(2) Howard, J. A., & Sheth, J. N. (1969) “The Theory of Buyer Behavior”, New York: John & Wiley Sons, Inc.

Other reading:
Jamhouri, O., & Winiarz, M. (2009) “The enduring influence of TV advertising and communications clout patterns in the global marketplace”, Journal of Advertising Research, 49(2), 227-235.

Rubinson, J. (2009) “Empirical evidence of TV advertising effectiveness”, Journal of Advertising Research, 49(2), 220-226.

Hot blood emotions are seldom the route to loyalty

For more evidence why lovemarks don’t matter see “How Brands Grow“.

Recently, I attended an “emotions in marketing” conference in Amsterdam to hear Tex Gunning, Managing Director of AkzoNobel Decorative Paints (global owner of brands such as Dulux). Unexpectedly Tex invited me up on stage to talk briefly about “How Brands Grow” which he praised.

I was followed by Kevin Roberts, CEO of Saatchi and Saatchi, who presented for an hour on LoveMarks. He started by saying what I said was “scientific claptrap” – I was delighted.

What did I say that perturbed Kevin? Well a few things, here is an account I found by someone in the audience.

The Amsterdam conference had the theme: “emotions in marketing”. And I was asked what I thought about this. I replied that emotions were important but that I felt marketing was grabbing the wrong end of the stick – instead of thinking about the subtle emotive reactions that result in the processing of advertising (rather than screening it out) all the talk was of hot-blooded emotional commitment to brands. These strong emotions are thought to underpin loyalty but we’ve known for decades that that isn’t true.

And then, I illustrated with a little experiment. I noted that there were about 200 chairs in the room and everyone had just got up and then returned from a coffee break. So then I asked for anyone to put their hand up if they had returned to exactly the same chair they were sitting in previously – nearly everyone did. “Amazing loyalty” I said, “but not presumably due to your strong emotional commitment to that particular plastic white chair” :-)

This and other loyalty phenomena have been documented by social scientists, (and more research is underway at the Ehrenberg-Bass Institute).

Kevin Roberts didn’t like any of this. Obviously.

So what was Kevin’s talk like ? Well he has the gift of the gab, an animated speaker, although he flagged towards the end. His content…… half or more was TV ads, over and over. Great creative but it got exhausting, it was too much, for too long. Don’t ask me what brands the ads were for, I can’t remember – says a lot doesn’t it.

Kevin, at heart, is a story teller, a classic ad man, which is an important skill. That said, he is someone who never lets truth get in the way of a good story. And that was his message, that ads that told stories would build lovemarks that would engender loyalty beyond reason and premium profits (no evidence needed). He constantly praised Apple, who interestingly largely don’t tell stories in their advertising, they show product (iPad 2 – thinner, faster, lighter, smart covers, 10 hour battery life). Ah well, as I said, why let the real world get the way of a good story?

www.MarketingScience.info

Conceptualizing and Measuring Brand Salience

I’m not sure why but the article by Jenni Romaniuk and I published in Marketing Theory is available free on the web, in two places including one which seems to be the official Sage Publications server.

So please do read:

http://www.sagepub.com/clow/study/articles/PDFs/05_Romanuik.pdf

http://www.udec.edu.mx/BibliotecaInvestigacion/Documentos/2009/Julio/Mercadotecnia%20medición%20de%20la%20marca.pdf

Links between music artists and brands – micro targeting nonsense

There are lots of people trying to sell all sorts of things to unsuspecting marketers.  Here is one I came across today, NPD Group offer a product called ‘Brand-Link’ which on their webpage says “Sheryl Crow fans are more likely to drive Jeep… which means that both Jeep and Sheryl Crow could benefit from partnering on promotions!”

The exclamation mark is theirs not mine.  I’m underwhelmed.  Because if 5% of Americans are Sheryl Crow fans then an index of 142 for Jeep would mean that almost 7% of Jeep owners are Sheryl Crow fans (or 93% aren’t).

And the index for Sheryl Crow says  that more of her fans drive Jeep than in the normal population, but not many people drive Jeep so again that index means that if she teams up with Jeep that might communicate something special to only a tiny proportion of her fan base.

Actually more Sheryl Crow fans drive Ford than Jeep.

Who cares about the index.  What Sheryl Crow should ask is which car do more of my fans drive ( i.e. in total number)?  And the answer will be Ford, Toyota or GM because that’s what more Americans drive.

Oh dear, indicies can be very misleading.  One might have hoped for more from a market research agency, after all they are supposed to be experts in presenting and interpreting data.

 

 

 

 

www.MarketingScience.info

2011 has been a good year for StarBucks – but where were the guru’s predictions ?

20011 has been good for Starbucks.  It’s stock-price has been rising.  Last month it reported that its growing customer base has driven Q2 profits up 20%.  And Advertising Age now reports that “Last week Starbucks blasted past Wendy’s and Burger King to become the No. 3 restaurant chain, posting $9.07 billion in domestic restaurant sales last year, up 8.7% from 2009.”

I find this interesting because consultancy Brand Keys offer a Starbucks case study as the main evidence of the predictive power of their ‘Customer Loyalty Engagement’ metric, a survey that you can (only) buy from them.  I previously examined all the predictive claims within their Starbucks case study and found nowhere did they ever manage to predict a change in the firm’s fortunes (either sales or profits) before it happened, only afterwards.

So Starbucks has had almost two years of rebound now but I haven’t heard lots of positive news from Brand Keys (or anyone else for that matter).  In fact in February 2011 they once again listed Dunkin Donuts as the coffee shop with highest ‘loyalty’.   See here for  Dunkin Donuts’ proud announcement.  I’m guessing that they are a client of Brand Keys, and that Star Bucks is probably not.

Where were the gurus in 2010, or better yet 2009, predicting the resurgence of StarBucks ?  Does anyone know of any prescient predictions ?

Don’t limit your advertising to the heavy swing purchaser segment – all category buyers matter

Jack Wakshlag (Chief Research Officer of Turner Broadcasting) asked me to comment on a finding from TRA that the largest advertising sales response comes from a group of consumers TRA call “Heavy Swing Purchasers” – who are defined as “category heavy purchasers who have bought the brand previously, but not loyally”.

My comment is in light of what is known about how brands grow, and how advertising affects sales (thanks to 40+ years of single source based research).

Promotional literature from TRA reports a repeated finding that “Heavy Swing Purchasers” buy the brand more in response to advertising And even more importantly it is a large segment, so 80% of incremental sales come from this group – after all, ROI is a dumb marketing metric, it’s total response that matters.

The TRA finding fits with a known empirical generalisation that the largest sales uplift come from the brand’s lightest buyers, who are by far the brand’s largest group of customers. By the way, the same happens when TV shows increase their ratings, it’s largely because the program’s most infrequent viewers watch slightly more often.

The only twist here is that TRA don’t just say “light buyers of the brand” but “light buyers of the brand who are also heavy category buyers”. I suspect, however, that they merely mean people/households who buy the category more often than the average person. I hope so because category buying rates follow a skewed (Gamma) distribution with most buyers buying less often than the category average. This means that any brand’s lightest buyers are made up of two groups:

1) there are people who buy the category often but that particular brand is small within their repertoire – these are the easiest to nudge (and gain sales from), i.e. high ROI.
2) there are people who don’t buy the category very often, so even if the brand is quite large within their repertoire they don’t buy it often.

This second group matters too. Especially in the long term.

They matter a lot for market share growth. One of the things that distinguishes large brands from small is that a greater proportion of their customer base is made up of light category buyers (see ‘Natural Monopoly Law’ page 97). Ignoring these people might boost your advertising ROI, but will prevent you from moving to a higher market share position.

Professor Byron Sharp, June 2011.