Google “the future of advertising” and you’ll likely get a plethora of articles on the death of the AOR (or why the AOR model will never die), ad-blocking, cord cutting, the rise of crowdsourcing content, ego killed the advertising star/creative director, or how traditional agencies have reconciled (on paper at least) with crowdsourced content providers and other programmatic / content-at-scale platforms - among other things. Private conversations with ex-agency types who have jumped the fence and come over to the client/brand side (and current agency friends in confidence) have all told me a similar story: the brand advertising model is changing (fast) and not all big box agencies (or clients) are ready/willing to embrace the change...to their own demise.
As I wrote in my last post, from the client/brand perspective, external macro & micro factors are applying unrelenting pressure on P&Ls, forcing brands to heavily scrutinize advertising budgets while concurrently increasing share of voice, content, and reach across a multitude of platforms in real time (i.e. mobile, always on, immediate, targeted). This brand-advertising disruption often puts clients and advertisers at odds. And like all disruptions, the us versus them relationship has to go through the familiar phases of denial, denigration, distinction, and then finally partnership. Some forward-thinking agencies embrace the disruptions and are making adjustments, partnering with crowdsourcing platforms and more “agile” (probably the most over-used word in 2015) vendors to develop creative, content, and commercialization tactics at scale. From the client/brand side we similarly have to challenge ourselves to embrace higher degrees of risk and uncertainty; challenge ourselves to build flexible frameworks where experimentation is institutionalized, measured, and financially supported in the quarterly marketing & business planning process.
Institutionalization not Bureaucratization
If you believe that execution is the only strategy/innovation consumers see then I proffer that only through iterative experimentation can you illuminate consumers' desires in real time. But how does a CPG brand institutionalize media/advertising experimentation in an industry that does not explicitly place a value on experimentation? A symbiotic industry where upfronts, risk avoidance and predictable quarterly earnings growth are paramount? A measured approach toward systematic experimentation, I believe, is the key. We measure innovation with metrics like Return on Investment and Return on Innovation; is there now a need for Return on Experimentation (RoEX)?
There’s plenty of case studies on how higher levels of empowerment lead to higher levels of employee engagement. I’m suggesting that a measure like RoEX can similarly lead to higher levels of engagement while also providing a repeatable, measurable rubric for downsizing risk into quick-turn snackable experiments. No need to eat the brand-disruption-risk-elephant in one bite.
“Inspiration without allocation is meaningless” - B. Bonin Bough
The good news is that some large scale traditional companies are investing in start up Labs, Incubators, Innovation Centers, and Foundries within their company walls with the goal of experimenting outside their internal processes to unlock value and deliver breakthrough “digital” or “shopper” innovation. There’s even a whole crop of players that specialize in developing brand accelerator programs within traditional CPG companies; promote intrapreneurism if you will.
The challenge then is how do these internal accelerator / incubators not fall prey to the same old corporate bureaucratization that led to their development in the first place? How does the work of the internal accelerator link back to the day-to-day grind of selling cases? Said differently, how can experimentation be institutionalized on a daily basis versus being the sole proprietorship of these accelerators / incubators? As a recovered corporate financial analyst, I can tell you that unless it’s built into the annual / quarterly business planning cycle, experimentation doesn’t get noticed or prioritized.
Net, whether through an internal incubator or through quarterly marketing planning (ideally both), regular, snackable (read “fast”), and funded experiments are the key; RoEX can be the measure of success.
Next: The changing nature of a CPG brand.
Last month, I had the honor of being named to Brand Innovators 40 under 40 (Midwest) alongside some fantastic digital "thought" and "do" leaders. As part of our selection, we were asked "to look ahead and identify top trends – things that will influence the market and impact the quest to connect to the ever-elusive consumer." I highly recommend taking a look at all the Brand Innovators' proposed trends as I found the insights illuminating in that they are at once unique yet thematically similar, even across the years that Brand Innovators has been tracking. For this particular post, however, I’ll be speaking only about my submission.
My Brand Innovators 40 under 40 trends:
I’m arguing that it will, it has to. The business/economic world is replete with examples of seemingly non-disruptable, deeply entrenched, and embattled with high fixed cost industries that were, of course, disrupted (music, print, phone, cable, taxi cabs readily come to mind); so why not the agency-advertiser model?
Consumer attention spans are fleeting (and getting flightier); advertisements are being ignored; CPG brand budgets - even the “big dogs” that big agencies typically anchor their contracts to - are tighter and being scrutinized for every penny (nevermind every dollar); retailers are prioritizing store brands and mimicking traditional brands’ go-to-market strategies; mobile, mobile, mobile…this is what is happening now. So while I’m not arguing for the outright dismantling of the traditional AOR model (yet), we need an evolution now (or an accelerated timeline at the very least) to meet the demands of a changed landscape for brand managers. I, for one, don’t want my brand(s) to fade away into the world of obsolescence.
Next: How to accelerate the timeline.
“I really want to be an advocate for individuality and encourage people to be sensitive to their own needs and to stand up for their own truth, even if someone else is telling them what they should do or how it should feel - to own their own experience above all others.” Sadie Nardini
Today’s Lens: How will a brand determine its marketing mix as consumer segmentation races to a consumer-of-one?
Enough has been written about how the advent of the internet and social media has enabled consumers to interact with brands on-demand and in real time - where every consumer matters (or at the very least has the tools to behave as if they do). This rise of the “consumer-of-one”, as I’m proposing here, presents brand managers with several questions (not exhaustive): Which of the multitude of touchpoints (media vehicles or platforms) best capture eye-share? For which product/brand does “it” work best? For whom and when does “it” work best? And ultimately, will the resulting engagement translate to sales at the register (physical or online)?
Despite the evolution of consumer behavior traditional CPGs, large-scale advertisers, and brand managers therein are struggling to gain traction generally due to two big obstacles: 1) How to segment the consumer-of-one and 2) how to efficiently structure media buys that engage the consumer-of-one?
Consumer segmentation has become even more critical, and infinitely more difficult, than before. Even as I write about it, the word “segmentation” may not work anymore. More aptly named “consumer individualization”: where each consumer is a segment of one, where every consumer is demanding a unique experience, and where every consumer has the potential to engage and disrupt the brand's originally intended message. And that is the challenge for brand managers and brand marketing professionals today: how do you “do marketing” at the individual level?
The short answer is that you can’t. It’s simply not cost effective to develop content or marketing campaigns for every single purchasing household in America; it’s even more frightening (or exhilarating) to think about the global consumer-of-one. The answer I believe is dispersed brand marketing: where content marketing matters more (yes, I’m jumping on the bandwagon), where user generated and crowdsourced content matter more, where brands generate the stimulus and then get out of the way.
Granted, the concept of dispersed brand marketing basically puts me out of a job, but since consumers are making up their own mind (or not) about brands anyway, why not "give" the brands to them? Let consumers use whatever platform they prefer to blast out the brand's promise, message, or character (aka brand communication strategy).
Unfortunately, before a brand is able to release control, own less, and influence more, big box brands often then run into an advertising system that is also grappling with the consumer-of-one digitized consumption model.
Cannonballs, Bullets, Rocks, and Darts
Today’s advertising system faces a problem of inertia where it “has erected an ecosystem with ingrained systems, relationships and methodologies that are ill-equipped to fighting the challenges of the digital era.” Traditional CPGs and large-scale advertisers especially struggle with how to invest in platforms and micro-targeted vehicles, versus the efficiency gained by large-scale bulk media buys recommended by their agencies of record.
For example, at an industry expo/conference I attended a while ago, the concept of “bullets then cannonballs” was posited. Marc Pritchard, P&G’s Global Brand Building Officer, instructed all of the marketing professionals and brand managers in the theater to “shoot multiple bullets (small marketing campaigns) to see if we get any hits, then when we do, blast them with cannonballs (big marketing campaigns, scaled across multiple brands)”. At the time, it made sense: test often, scale the winners. After reflection however, and given the rapid and constantly evolving consumer-of-one, I don’t think we need ever go to the cannonball phase for several reasons:
Net, brands don’t need cannonballs; to continue the analogy, instead brands need a steady stream of bullets, rocks, and virus-tipped darts. Furthermore, brands should consider giving the bullets, rocks, and darts to the consumers themselves. Big brands (and their big agencies) should carve out marketing dollars to experiment more with small campaigns co-created with and on platforms that the consumers dictate. Brands can explode the advocacy moment of truth by ensuring consumers are able to engage with (and possibly co-create) every piece of content the brand publishes (beyond adding a “like us” or “tweet this” or “buy it now” button). The empowered consumer-of-one will thank you for it figuratively (i.e. brand advocacy, amplification) and literally (i.e. sales).
Other thought nuggets:
There’s plenty of buzz around Google’s latest marketing framework called ZMOT and I’m hooked. Like others (here and here), I have been contemplating ZMOT and how it integrates into the existing FMOT & SMOT marketing concepts. As such, I’d like to build on the discussion and introduce a new element: AMOT.
Who’s got the MOT?
Circa 2005, A.G. Lafley coined the terms First Moment of Truth (win consumers at the shelf) and Second Moment of Truth (delighting the consumer at home when the product exceeds her expectation). This “stimulus -> FMOT -> SMOT” marketing process has guided the thoughts of many marketers over the years and has served as an excellent construct on how to engage and sell to consumers.
Fast forward to today and Google has introduced the concept of Zero Moment of Truth, codifying that consumers are engaging with brands or products digitally before they ever step into the store or see the shelf. “They learn from search results, user reviews, four-star ratings, text ads, image ads, news headlines, videos and even good old-fashioned official brand websites.”
Worth of Mouth = Advocate = AMOT
As Google illustrates above, consumers’ experiences (SMOT) and more importantly their ability to quickly share their experiences become the next person’s ZMOT; the cycle perpetuates and constantly influences purchase decisions – permanently changing the landscape for brands. I, however, propose that consumers can advocate at any point in the consumer engagement timeline; we all have the potential to advocate anytime, anywhere. McKinsey calls it “building touch-points”; Google calls it Word of MOT. I call it Anytime Advocacy or the Advocacy Moment of Truth.
Because consumers can be in AMOT 24/7, brands also have to think about their ZMOT perception, their FMOT & SMOT presence, their available digital tools, and overall message 24/7. I.e. advocacy doesn’t happen just after SMOT.
As Google states: brands can no longer control the message. I agree, brands are always "on air". At any given point during the timeline, consumers can choose when, how, where, and to what level they choose to engage in, co-create, influence and – ideally – advocate for and amplify a brand’s message. The question brands are now trying to figure out is how much to and when to listen, how to engage back, and ultimately, how to measure returns on those efforts.
Seems A.G. was equally prescient when he constantly argued, “the consumer is boss.” Now that the consumers can say whatever they want, when they want, about any brand in just about any forum...that sentiment rings truer today than ever before.
So, what else?
During my brief stint as an adjunct professor many years ago, I recall that half of my students had dreams of one day starting their own business. One of my favorite parts of the teaching night was when I presented a random idea and asked the students to put on the brainstorm lens - "what else could you do with this...". Most of the time we would end up in the realm of the zany. Sometimes, however, we would actually land on something achievable and plant the seed. This is an homage to ideas - zany or otherwise.