Published on June 7, 2008
liberté, égalité, fraternité Scholz & Friends Strategy Group on brands and communication in the era of media democracy 01.05.2008
Advertising in the pre-mass-media era: from one person to another. local, slow, not measurable 01.05.2008
Advertising in the mass-media era: from one brand to many people. global, fast, measurable 01.05.2008
The most fundamental technological change today: digitalisation of media. devices channels content information (e.g. CNN online) VoIP conversation (e.g. e-mail) Broadband Internet entertainment IPTV (e.g. MP3) UMTS 01.05.2008
The result: media democratisation - anyone can create, broadcast and receive content today. 01.05.2008
This abandonment of the central control over media content is an irreversible shift in power. „Technology is shifting the power away from the editors, the publishers, the establishment, the media elite. Now it‘s the people who are in control“ Rupert Murdoch, Wired Magazine, July 2006 01.05.2008
In this new media world - for the first time - consumers participate in the world of marketing. consumer participant person producer community consumer multiplier Source: David Armano „ Micro Interactions + Direct Engagement“ 2008 01.05.2008
This means: for the first time people influence brands and their perception in both, positive and negative ways. Consumers are beginning in a very real sense to own our brands and participate in their creation … We need to begin to learn to let go. A.G. Lafley, CEO and Chairman of P&G, October 2006 01.05.2008
And: this content and information is not transitory - it remains forever, for anyone. 01.05.2008
This leads to people being far more informed and hereby far more critical today. 76% of consumers do not believe companies are telling the truth in their advertising. Yankelowich Monitor Pundo3000.com 01.05.2008
This is why advertising becomes less accepted as a trustworthy source of information about products. In 2002 78% of US households stated that advertising helps them to fnd out about new products. In 2006 only 52% were of that opinion. In 2002 29% of US households stated that advertising is a deciding factor for buying a product. In 2006 only 13% felt this way. Quelle: Forrester‘s NACTAS Q2 2006 Survey 01.05.2008
Today people rather trust in recommendations and judgements of other people than in brands or ads. Quelle: F.A.Z., 06.11.2006, Nr. 258 / Seite 19 01.05.2008
Result: Today ‚Word of mouth‘ is the most influential and most effective marketing medium. ranking of the most influential marketing media Quelle: BIGResearch‘s SIMM VII Study 12/2005 Quelle: SMG/100 + MCA Studies (influence of media on purchase decisions), 15.000 respondents, all ages 01.05.2008
Therefore effective communication occurs, in contrast to before, in between two dimensions: high attention via mass media: global, fast, measurable Share of Voice The S&F Brand Presence Matrix ® conversation via social media: low global, fast, measurable low Share of Talk high 01.05.2008
The quality of communicative presence of brands can be located in this matrix. high visible brands magnetic brands Share of Voice The S&F Brand Presence Matrix ® invisible brands remarkable brands low low Share of Talk high 01.05.2008
An exemplary location of the communicative presence of brands. visible brands magnetic brands high Share of Voice low invisible brands remarkable brands low Share of Talk high 01.05.2008
The 10 most valuable brands worldwide: Most of them are still located in the upper left quadrant. 3. visible brands magnetic brands high 9. 6. 2. 10. 7. 5. Share of Voice 4. 8. 1. low invisible brands remarkable brands low Share of Talk high Quelle: BrandZ Top 100quot; 2008, Millward Brown 01.05.2008
But: The pressure on „Share of Voice“ is increasing. visible brands magnetic brands high 7. Share of Voice low invisible Brands remarkable Brands low Share of Talk high 01.05.2008
The reasons: today‘s people have access to more and more different media channels. „The media industry has beeen rather static for 40 years. Now, even in just the last year, there has been more change in media behaviour than at any time since the invention of television.“ Financial Times, May 23 2006 01.05.2008
That means: people are dividing their limited budget of time on more and more different media. e.g. men‘s media usage (age 18-34) internet 22% TV 22% video games 22% cinema 9% music 4% DVD/VHS 6% reading 6% Quelle: Jupiter Research/Ipsos Insight 01.05.2008
And people are increasingly using different types of media at the same time. Quelle: Burst Media, „Online Insights“; Oktober, 2007 01.05.2008
Digitalization leads also to a higher portability of equipment and content. 01.05.2008
Media and content are used more and more independently from location and time. 01.05.2008
The effect: „liquid“ media consumption. The era of predictable, large media prime time is over. US Prime-Time Ratings (Millions of Viewers) Quelle: Veronis Suhler Stevenson, PQ Media LLC, AC Nielsen Corp; Universal McCann 01.05.2008
Therefore today‘s classical advertising needs more and more money and time to reach the masses. In the US a coverage of 80% in the audience of “In 2002 it took 117 prime-time spots to 18-49 year olds could be established with only reach the same result.” three 60s-TV-spots in 1965. Jim Stengel, Global Marketing Officer, P&G 01.05.2008
In order to reach the same coverage as before, brands try to turn up the volume of advertising. „That doesn't feel like advertisement anymore, but like a war that the economy fights against the people. Peter Glaser, Vanity Fair 21/08 01.05.2008
e.g. high advertising volume through cost-intensive omni presence (Toyota). booking: more than 200.000 surfaces in Germany cost: 20 - 25 Mio. Euros pre tax result: only 18% unsupported adrecall Quelle: Universal McCann + Toluna, „Next thing now“; März 2007 01.05.2008
e.g. high advertising volume by gigantomania (Adidas). 01.05.2008
e.g. high advertising volume through „creative“ exhaust of media formats (misc.). 01.05.2008
e.g. high advertising volume through polarising taboos (misc.). 01.05.2008
People are reacting more and more bored and refusing towards this increasing pressure of advertising. 65% of all people feel “continuously bombarded” by advertising. 54% of the consumer in the US avoid products & services who “shower” them with advertising. Quelle: Yankelovich Monitor 2004 78% of the German population are irritated by advertising, only 24% are still really watching advertising. Quelle: GfK Marktforschung 01.05.2008
People are upgrading technologically and are more and more avoiding advertising actively. Germans with a digital video recorder are watching more TV by 12%, but 88% of them are filerting advertising. Quelle: Big Six study 01.05.2008
Society is reacting as well: advertising is getting banned from public space. Since Jan. 2007, outdoor advertising is forbidden in Sao Paolo. Ca.13,000 outdoor ad spaces were removed. Quelle: SPON, 08.01.2008 Quelle: Werbeblogger.de, Jan. 2008 Quelle: FR-online.de, 13.01.2008 Quelle: RP-online.de, 02.06.2005 01.05.2008
In the end the increase of advertising volume does not entail rising sales anyway. 2006 367.600.000 1990 ad spendings 190.267.000 (euros per year) 1990 beer consumption 142,7 (liters per person per year) 2006 116 Quelle: Brand Eins, Heft 02 Februar 2008 01.05.2008
An inconvenient truth: classical brand-communication is getting more and more ineffective and inefficient. 82% of TV advertising in Germany is generating a negative ROI Deutsche Bank, 2004 In 2010 traditional TV advertising will only reach 1/3 of its effectiveness from 1990. McKinsey, 2006 01.05.2008
Another inconvenient truth: brand-communication is no longer dependent on classic media. „We‘re not in the business of keeping the media companies alive. We‘re in the business of connecting with consumers“ Trevor Edwards, vice president of global brand management Nike, New York Times, 10.14.07 01.05.2008
But classical communication is not dead. Any great conversation regularly starts with a great monologue. 01.05.2008
Today effective communication needs a new principle that combines both media-dimensions. MassMedia SocialMedia (communication-value is decreasing) (communication-value is increasing) + 01.05.2008
A new principle of communication has to maneuver brands into these two presence quadrants. high Magnetic Brands Share of Voice „Focusing on Engagement can double your ROI.“ Nate Elliott, Jupiter Research, next08 Remarkable Brands low low Share of Talk high 01.05.2008
No longer the classical principle of „Sender- Recipient“. 01.05.2008
No longer the classical principle of conditioning. A simple, clear message... ...repeated over and over again. 01.05.2008
No longer classical „Volume-Principle“. buy media coverage sell product become visible get attention Souce: Seth Godin „Purple Cow“ 01.05.2008
Brand designers (agencies and customers) have noticed that - also that they need to react. „The operating system for „The traditional marketing model marketers is now is being challenged, and fundamentally changing. It advertisers can foresee a day doesn't matter how big your when it will no longer work.“ market share is“ McKinsey Quarterly, 2005 Seth Godin at Meatball Sunday 2008 “In today’s media-rich world, „ The ad inventory that has been traditional advertising models sold for the last 50 years no are breaking down. Now, the longer works, and marketers have consumer runs the show.“ started to figure that out.“ Authenticity over Exaggeration: The New Rule in Advertising, HBS John Stratton, CMO, Verizon Wireless, 2006. Working Knowledge, Dez. 2007 01.05.2008
Brands need to change their „Fishing“-strategy and therefore revise three essential assumptions. 01.05.2008
1. Any product is replaceable. Nobody only cares for a specific brand anymore. qua up, “80% of CEO’s believe their brand provides a superior customer experience. 8 % of their customers agree.” Bain & Company 01.05.2008
2. Attention can no longer be enforced. Nobody is waiting on the other end of the line anymore. “You used to use your budget to buy an audience. Now you have to invent ideas to attract an audience.” Lisa Seward - Mod Communications 01.05.2008
3. People only talk about interesting topics. Nobody really cares about clear messages. „The whole industry is obsessed with the idea of a simple message, endlessly repeated, but It’s not about one big, simple hook... What people actually want is stuff with some complexity, some meat, some richness...Not stuff that’s distilled to a simple essence or refined to a single compelling truth. No-one ever came out of a movie and said “I really liked that. It was really clear“. Clarity is important to our research methodologies, not to our consumers.“ Russel Davies, darth strategist Wieden & Kennedy 01.05.2008
Ultimately communication has to answer the customer‘s one question: Why should I spend my time voluntarily with your brand and not with all the other interesting offerings I can choose from at any time? It's limit wo per adver to ad 01.05.2008
The response: Supportive, topic-centric communication. Why should I spend my time voluntarily with your brand and not with all the other interesting offers I can choose at any time? Tools, services or content that matches with the products to deliver interesting additional value for the consumer, by bringing fun and benefit. 01.05.2008
To the point: We belive that topic-centric, supportive communication works better. „If it‘s not worth talking about, it‘s not worth doing“ Andy Servovitz 01.05.2008
The Difference: Communication offers a counter-value for attention instead of just enforcing it. Interruptional Communication: Supportive Communication: Buy it `cos we are great. Buy it `cos we want you to be great! 01.05.2008
And: communication is more attractive and has more WoM potential through interesting topics. Brand-centric Communikation: Topic-centric Communication: People People Pe Pe ple ple op op eo eo le le P P Message Topic Pe Pe ple ple op op eo eo le le P P People People 01.05.2008
Four rules for supportive and topic-centric communication. Voluntariness Deepness Exchange Counter-Value 01.05.2008
Voluntariness: The most important aim of communication is the voluntary dispute with the brand, not to enforce attention. Give people a reason to talk about you voluntarily and be part of that conversation. 01.05.2008
Deepness: In future outreach will be achieved by qualitative relevance instead of quantitative wideness. Be relevant by contributing to topics that do interest people and that suit the brand at the same time. Surprising, many-faceted content is interesting for people. Consistent, easy predictable messages are not. 01.05.2008
Exchange: It is not only important where I say something but also that people are willing to listen in that moment. It is not any longer about filling bookable oneway media with content, the idea dominates the interactive mediamix. Do not see the consumer as a recipient but as a co-creater. Be open, share, give, receive. 01.05.2008
Counter-Value: Not only the product but also the communication has to add value. Be an enabler. Offer benefit and fun. 01.05.2008
Therefore: Changes in the principles, structures, processes and tools of an agency. 01.05.2008
Where it starts: People voluntarily conglumerate around topics that are interesting for them and talk about it. BMW Audio-Software Making Hip-Hop Hip-Hop Culture ipod Listening to Hip-Hop Sneakers Dancing Hip-Hop Adidas Apple 01.05.2008
Brands have to find topics that suit them and their target group and contribute to relevant content. „Social Media is all about conversation. Brands only have a role if they can make the conversation more interesting. Advertising can’t succeed against the conversation but it can influence and contribute to the conversation.” Richard Huntington, Planning Director, United London 01.05.2008
A new S&F communication mechanism: The „Topic-Circle“ principle.® Topic of Interest Topic- Idea 01.05.2008
Change of structure: convergent operations because choice of topic and choice of media are no longer mutual dependent. From: Linear operations To: Convergent operations with seperated tasks with over-lapping tasks Consumer Media Creation Strategy Creation Company Media Strategy Source: David Armano 01.05.2008
Change of process: Alignment not only into sending but also into listening and reacting. From: „One finished Solution“ process To: „Always in Beta“ process 01.05.2008 „We've been voted the best marketer of the 20th century.
Change of Tools: For being able to react you need a „Live Conversation Tracking“. From: Primarily pre- To: Additional, continuous and and post-offline analysis dynamic online ‚Buzz‘ analysis ? ?? ? ? ? 01.05.2008
® The S&F TopicTracker: Tracking and evaluation of discussed topics within defined communities. Permanentes Buzz Level Tracking von Themen Beiträge 1.200 1.000 Weight Watchers 800 600 400 200 Metabolic Balance Monate 0 Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb 06 06 06 06 06 06 06 06 06 06 06 06 07 07 07 07 07 07 07 07 07 07 07 07 08 08 01.05.2008
For any questions please do not hesitate to contact us. Vincent Schmidlin Michael Zorn Managing Director Senior Strategy Consultant email@example.com firstname.lastname@example.org 01.05.2008
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