Generation Generosity

There is a profound change in the consumer mindset that few brands are effectively addressing. A multitude of forces have empowered individuals to be more willing and able to give, share, collaborate and be more generous in many ways. Given this trend, consumers are going to be expecting the same thing from brands, particularly in this economic environment. Discover why social responsibility programs are no longer enough.

Access the entire article HERE.

Source - Trendwatching.

Is Innovation Obsolete?

In the face of economic and social turmoil the concept of innovation is said to be dead, killed by a number of factors including misuse, narrowness and failure to evolve. The death of this boardroom buzzword is making way for a "deeper, more robust concept" known as "transformation" which is said to be the appropriate cognitive framework for the post consumerist, networked society. Are "innovation" and "transformation" one in the same or is "transformation" a quantum leap for innovation?

Innovation” died in 2008, killed off by overuse, misuse, narrowness, incrementalism and failure to evolve. It was done in by CEOs, consultants, marketeers, advertisers and business journalists who degraded and devalued the idea by conflating it with change, technology, design, globalization, trendiness, and anything “new.” It was done it by an obsession with measurement, metrics and math and a demand for predictability in an unpredictable world. The concept was also done in, strangely enough, by a male-dominated economic leadership that rejected the extraordinary progress in “uncertainty planning and strategy” being done at key schools of design that could have given new life to “innovation. To them, “design” is something their wives do with curtains, not a methodology or philosophy to deal with life in constant beta—life in 2009.

In the end, “Innovation” proved to be weak as both a tactic and strategy in the face of economic and social turmoil. It couldn’t get us safely through the troubles of 08 (indeed, financial innovation was to large degree responsible for the economic trainwreck). Most importantly, “innovation” cannot guide us into an uncertain and tumultuous future. It is too narrow to generate radical alternative options and build risk-taking frontier skills needed to remake and restructure our lives, our economies and our countries.

We need a deeper, more robust concept. “Transformation” captures the key changes already underway and can help guide us into the future. It implies that our lives will increasingly be organized around digital platforms and networks that will replace edifices and big organizations (students already know this, university presidents still have edifice-complexes, which is why so many of them are getting the boot). Check out Jeff Jarvis’ new book, What Would Google Do, on platforms and networks.

Global networks of trusted relationships working within ecosystems/platforms (think iTunes/iPod/iPhone, Nike Plus, Facebook, Threadless, Zipcar) will make up our socio-economic and political worlds. It is already underway. The concept of “Transformation” takes these changes much further. It implies radical transformation of our systems—education, health-care, economic growth, transportation, defense, political representation. It puts the focus on people, designing networks and systems off their wants and needs. It relies on humanizing technology, not imposing technology on humans. It approaches uncertainties with a methodology that creates options for new situations and sorts through them for the best quickly.

Most importantly, “Transformation” accepts the notion that we are in a post-consumer society, defined by two groups of economic players: manufacturers and consumers. “Transformation” deals with a new Creativity Society, in which we are all both producers and consumers of value. Look around and you can see Gen Y in particular creating practically from birth, mashing music, designing Facebook or MySpace pages, doing videos and podcasts—creating value. Check out futurist Paul Saffo on the subject.

My good friend Frank Comes, ex-Business Week and now at McKinsey, puts it this way: In the past, economic value was generated by transaction. Increasingly, economic value is generated through interactions. The key is monetizing those interactions. That’s the heart of an economy built on social media.

“Transformation” takes the best of “design thinking” and “innovation” and integrates them into a strategic guide for the unknowable and uncertain years ahead.

As a concept, it needs more detail and texture. What do you think we should add to it? Does it work for you?

Source - Business Week

Augmented Amazingness

In an earlier edition of Firestarter we shared an article about augmented reality and provided an example of a brand experience based on this technology. The following is an example of augmented reality being used as a new form of media in Germany. Needless to say, the use of this technology as media doubles as an experience in and of itself.


We've seen webcam-based augmented reality before, like in NSFW Japanese dating games and the PS3's Eye of Judgment. But in a publicly distributed Mini Cabrio ad? A realtime 3D rendering is actually useful.

What appears to be little more than a black and white advertisement in three recent German automotive magazines becomes a 3D holographic model of the Mini Cabrio through a webcam and the Mini website. Sure, it still takes a good deal of effort on the user's part (they have to go somewhere other than the main ad to really see the ad), but I'd do it for the next year or so before the novelty wears thin.

Video HERE

Source - Gizmodo

S.O.S

The role of marketing is morphing from messaging to involvement, from looks & feel to experience and from passive to interactive. In order to maintain relevance in the face of a massive shift in the way consumers interact with media your brand must work hard to inspire more than mass consumption.

Is Advertising Worth Saving?

Exec Summary: Yes, advertising is still a valuable discipline, but what it needs is a higher purpose. Advertising needs to inspire more than mass consumption, it needs to communicate ideas that inspire action, and participation. The good news is the internet is one of the best mediums ever for the propagation of remarkable ideas, and at their best ad agencies create great ideas that inspire above and beyond the act of passive consumption…

Advertising, as an industry is going to get hit very hard in 2009 as it’s caught in a perfect storm. A combination of the economic downturn combined the massive shift in how people, formerly known as consumers, interact with and experience media, is going to put enormous pressure on an industry already in trouble. Look at the industries that support traditional advertising, retail, auto industry, financial services, you see where I’m going with this. WPP is rumored to be cutting ’several thousand’ jobs and Omnicom is letting 3,500 people go.

Now the problem advertising has is very similar to the challenges of the record companies have had over the last few years, not so much that people are stealing their content, but the shift in culture is disrupting their business model. The music business thought it was in the distribution and promotion business, and a large part of it’s business model was built around that. Suddenly distribution and promotion was solved by peer to peer and the music business had to change how it ‘added value’ and it’s slowly figuring that out.

A large part of the advertising industry is IMHO in the awareness building business, and if you think about it the internet is very quickly solving the awareness problem much faster than advertisers can. Right now with my personal network I hear about products I might want even before they are built. Not only that, if it’s a really interesting product I might even get connected with the founders of the company and give them immediate feedback via twitter, facebook, or their blog. Now, as Renny Gleeson of W+K points out one of the problems ad agencies have is the investment they have in current ways of doing things:

“it irked me recently at the DLX Summit to hear interactive media agencies and publishers focused on teasing efficiencies out of their systems - “oh, we need a streamlined IO process”, “oh, we need a streamlined RFP process”, “oh, we need a GRP equivalent”.

Bullpuckey.

That’s navelgazing incrementalism.
…
But it’s hard for media and creative agencies to imagine a landscape that doesn’t look like the one they just spent all this time and money building. Frankly, they aren’t incented to. They’ve invested as heavily in the communication delivery systems and techniques as brands are in the pseudo-science of “brand management” perched precariously atop reams of best guesstimates about media effectiveness.”

So the question is if advertising needs to reinvent it’s business and business model, what is the business it should be in?

I think the answer to that question depends on where you think the future of business is going. IMHO I believe the future of all business will be based on what Lawrence Lessig calls a Hybrid Economy, where a business co-creates value with it’s customers, and the businesses that win in that case will be the ones that not only have a system to capture and share that value, but inspire their customers to create more and more valuable things and ideas. Sounds quite utopian I know, but look at Yelp, Threadless, Etsy, Amazon, Ikea, South West, Dell and TechCrunch; these are organizations that engage their customers in co-creating value, these are the pioneers of this hybrid economy. Now, I don’t just believe that’s the future of business because the internet is allowing it, I believe that people are ready to step up, ready to be led toward something more valuable and more meaningful. As Clay Shirky says there is a cognitive surplus ready to be used, in one weekend Americans watch enough commercials to build a complete wikipedia. So I believe that’s the future of business, so what is the role of advertising in that?

First of all I think advertising has a massive role in the future of business but, as the best agencies do, it needs to get back to the job of inspiring people, inspiring them to be part of something bigger, helping them understand how they can participate in increasingly valuable ways with companies and organizations. This also has nothing to do with the medium, they can use TV, the web, facebook, twitter, whatever, but the important thing is ‘what’ they are doing, as opposed to ‘how’ they are doing it. Now, one important dependency here is the businesses themselves, they have to shift their strategy from just shipping products, to stand for something bigger, something more important, something that customers can believe in. They should look at companies like Patagonia who get 36,000 resumes for every open position, that’s a company that is inspiring action above and beyond the act of consumption.

Source - The Social Media MBA Blog By Karl Long

Branding - Google & The Brain One In The Same

Our brains choose brands from our memories using predictable unconscious rules, much like Google ranks sites using an algorithm. Based on a recent study, this article raises some interesting findings about the way our brains unconsciously select one brand over another. Although not identical, our cognitive process turns out to be very similar to the Google search methodology.

Not long ago a press release went out with the provocative title, “Brain Works Like Google, New Study Finds.” More specifically, the news release claimed that the study showed that our brains choose brands from our memories using predictable unconscious rules, much like Google ranks sites using an algorithm:

“Brand choice turns out to be a largely unconscious process,” says Tjaco Walvis, who led the one-and-a-half-year study. “But in that process, the brain behaves much like Google. It seems to use a set of rules called an algorithm to pick the brand from our memory that best and most reliably fits our functional and emotional needs at that particular moment. It behaves rationally, but in an unconscious way…”

Based on the study, Mr. Walvis concludes that the brain’s “algorithm” for brand choice has three elements.

Firstly, the brain selects the brand it has learned is best able to satisfy our biological and cultural goals. We unconsciously select the brand that is the most uniquely rewarding, based on its associations with our goals and the brain’s reward centers (e.g. the dopamine system).

Secondly, the brain selects the brand that has shown most frequently in the past that it is able to fulfill these needs. Coherent brands that repeat their promise are more likely to be chosen. Volvo, Coca-Cola and Disney are examples of coherent brands.

Thirdly, the brain selects the brand it has interacted with most intensely in the past. Brand participation creates numerous new connections in our brain, facilitating that brand’s retrieval. Nike Plus is an example of strong participation concept. [From Marketwire.]”

Given my dual interests of neuromarketing and search engine optimization (SEO), I can hardly avoid discussing this topic. The actual paper that the press release is based on was published by the Journal of Brand Management: Three laws of branding: Neuroscientific foundations of effective brand building. Tjaco Walvis is the sole author. Walvis’s paper is an attempt to survey a wide variety of neuroscience-based studies on branding and form some conclusions from the common themes uncovered by other researchers.

Do We Choose Brands Like Google?

So, is the Google comparison apt? The concept certainly has an appealing simplicity to it. Perhaps an even better question is whether brand selection comes down to three rules.

My take is that there IS some similarity to Google’s process for ranking pages, but perhaps not exactly in the way suggested by the press release.

First, I think that branding is just a part of an overall purchasing decision process. Product differences, pricing, convenience, and myriad other factors go into a buying decision. Branding can be a huge factor, of course, particularly when the products may be fairly interchangeable.

So, back to Google: they reportedly use up to 200 variables in their ranking algorithm. Some of that claim may be intended to make the algo seem more formidable than it actually is, but there is little doubt that the algorithm weighs a large number of factors of varying importance. The process for combining these factors in the brain vs. on Google’s servers may be quite different, but superficially one can say they are similar.

One difference is predictability. At the moment, given the same set of facts, Google spits out the same results just about every time. Our own human decision making processes are less predictable and might vary if repeated. Interestingly, if Google starts taking behavioral data into account in delivering results, those resuls might become more brain-like. For example, if Google remembers the last few sites you visited and uses that information to make your results more relevant, that might mimic the way our brain’s process is constantly affected by newly-acquired data.

One thing about analogies: they can be beaten to death. Before I get too far down that path, I’ll acknowledge that there are some superficial similarities to Google’ multi-variable algorithmic ranking process and the way our brains rapidly weigh a variety of remembered and current factors to choose a brand or arrive at a purchase decision. You can decide how far to push the analogy…

Source - FutureLab

Search Marketing - Seek It Out

With eighty three percent of online Canadians searching on a regular basis your marketing plan might be disadvantaged if you haven't allotted a portion of your budget to search marketing. Search marketing is extremely targeted, has proven high ROI and is an excellent tactic, particularly during these economic times as consumers are heading online for the best deals.

The world of advertising is one of constant evolution. Where once television and direct marketing was king, now over 23.6 million Canadians are online – opening up a host of opportunity for those looking to target online consumers (comScore October 2007).

In a time when consumers can simply turn the page past magazine ads or drive by billboards while listening to commercial-free satellite radio, the online space is becoming an increasingly attractive option for advertisers. Savvy marketers recognize that digital advertising solutions present new opportunities to engage online consumers who, according to a recent Canadian Inter@ctive Reid Report, now spend more time using the Internet than they do watching television or listening to the radio.

Search advertising in particular offers marketers clear and compelling ways to reach these consumers and to track the success of their programs. Targeting audience demographics and tracking conversion rates is easy online, making pay-per-click advertising (PPC) accessible and relevant for companies of all sizes.

Despite this, some reluctance remains among marketers to engage consumers online. For those who are ready but looking for the ‘how to,’ here are five reasons to kick-start your online search strategy.

1. Get in the game

Search is the second-most popular online activity after email, with 83 per cent of online Canadians searching regularly (eMarketer Canada Online 2006). Every day, millions of people type keywords into a search engine to find the information, products and services they are interested in. At the same time, online purchases are expected to grow at a rate of 20 per cent in 2007 (Comscore, 2007).¹

By adding online search to existing marketing programs, companies can access the growing number of Canadians living online. Specialists such as database management and search engine marketing (SEM) agency Cornerstone Group of Companies have found success online, even for their clients that typically focus on direct marketing and subscription fulfillment.

Recently launched online advertising strategies for Cornerstone clients The Hockey News and Reader’s Digest magazines were a great success, with results including an increase in subscriptions and a decrease in cost per acquisition when compared to direct marketing alone.

2. Get more bang for your buck

A recent Ipsos-Reid survey of Canadian SMBs found that of those currently advertising, half are investing in the online space to drive their business growth. With cost effective pay-per-click (PPC) programs, companies of all sizes are finding it easy to reach motivated consumers interested in their product.

Solutions Credit Counselling Service Inc., a credit counselling and debt management service based in Surrey, British Columbia, recently launched their own web marketing strategy. Working with SEM experts SearchWerx, Solutions Credit was able to leverage online advertising tools to grow their business leads. Today, more than 80 per cent of Credit Solutions’ business originates from the Web.

3. Get to know your audience

Relevance is key to success in PPC advertising. When ads are generated based on carefully selected keywords and online behaviour, campaigns can be optimized to target your ideal market based on specifics such as gender, location and purchasing trends. It is also possible to track how consumers search for specific terms and when they search, which is sometimes just as important. For example, we had a consumer packaged goods clients who was in the process of launching a new bleach detergent and wanted to use paid search as part of the overall marketing plan. We wanted to know who is searching on the keyword “bleach.” We expected it to hit our target demographic but the results were somewhat unexpected. The data showed that it skewed heavily towards younger males online at night—because “Bleach” was the name of Japanese anime character popular with that group.

By building better consumer intelligence capabilities into online search services, companies have greater insight to their audience, are better able to judge the success of a given campaign, and have the tools they need to adjust campaigns on the fly in order to maximize results.

4. Get more

Marketing experts are finding that using search and display together can significantly enhance an advertiser’s marketing efforts, resulting in better conversion rates. Among the benefits cited by brand advertisers is the ability for a consumer to have a consistent brand experience through a coordinated online display advertising campaign that includes rich-media experiences.

In a 2006 study, the Atlas Institute examined groups of consumers divided into three different segments: display only, search only, and search plus display. According to the study, those users exposed to both display plus search advertising converted at an average rate that was four times greater than users who saw only display advertising, and 22 per cent higher than those exposed to search alone.

5. Get over the fear

The Internet can sometimes feel like the Wild West, but that doesn’t mean you can’t strike gold. There are benefits to an online world, such as having customers only one click away from your ad to your retail site. Harnessing all that opportunity doesn’t need to cost a lot either. Pay-for-click programs are very cost effective and can often return significant results for as little as $25 a month.

An internal review of recent analyst projections suggest that the overall spend on online advertising will reach $35 billion dollars.² While the online share of advertising has been steadily growing over the last few years, it still represents less than 10 per cent of the overall dollars spent on advertising. When you consider how much time consumers are spending online versus traditional media consumption (reading, watching TV, listening to the radio), there is still a large gap between consumption and spend.

This divide can’t last. Eventually it will be imperative for advertisers and their agencies to follow their audiences in order to stay ahead. Your audience is increasingly online. Can you afford not to be?

Source - CMA Articles

Customize Me

In a world of mass production how do brands satiate the consumer need to be unique from their peers? Insert customization. Whether it's cars or candy, brands are adopting customization as a means of delivering on consumer centric strategies. Although customization strategies have been around for ages, particularly when targeting youth, the expansion of online and offline capabilities have taken this tactic to a whole new level.

“The end of this afternoon is warmful and sunny. I am cruising with my new BMW on the sea side. I can enjoy the multiple options that I have configured to get the car built according to my needs. It is now 5.00 pm on my beautiful Quai de l’Ile watch from Vacheron Constantin. I played the role of a watchmaker as I could choose from 400 different possibilities directly on a touch screen.

I had some fun this morning when I have associated my personalized tee-shirt with my Converse sneakers designed by myself. I am sure to impress my friends as I picked-up my own design out of a range of millions of different options. Anyhow, the killer at Tom’s party tonight will be my own branded M&M’s“

Personalization or customization is becoming the Holy Grail of consumer centric strategies.

Whatever the product or service you are looking for, you will get the opportunity to adapt the product/service to your needs.
The development of new technologies (internet, ADSL, Flash) has allowed user friendly interfaces and a better alignment between on & off line activities. The Build-On-Demand manufacturing process is the natural implication of offering such diversity to final consumers (and the other way round).
This option is usually ranked within the top preference criteria by consumers (e.g. ranked in the Top 10 for on-line buyers in France, source FIA.Net.com research, May 2008).

What is the best way to achieve customization?
As always, there is not a single answer and it depends heavily on the brand’s objective: acquisition, retention, cross-selling, image, awareness…

A review of current practices and initiatives across various product categories can give us a good sense of the most appropriate approach related to a specific brand building objective. This review is not exhaustive and some specific sectors could be further analyzed based on your comments and suggestions.

You can access each of the brands’ website by clicking on the links at the bottom of this page. There are 3 major dimensions
Design
This is the most common feature. It gives you the opportunity to design the product based on selected criteria (shape, color, accessories…). The level of customization could be limited (iPod, Louis Vuitton) or sophisticated (BMW, Converse, Vacheron Constantin).

Usage
The consumer is able to influence some core characteristics/functionalities of the product. The success of Dell and Firefox stems from their ability to define your product/service based on the functionalities you want. It is cool to blend your own wine with Elite Vintners.

Services
The objective is to provide consumers with personal recommendations in order to propose the most appropriate offer/product. It is more popular within sectors where standardization of production and deep portfolio of products are common practices.
Vichy cosmetics provides you with almost a dermatology consultation on-line which does support a credible products’ recommendation. The retail chain H&M offers the opportunity to design your own character according to your body’s shape and then try virtually different combinations of clothes.

What does make the difference vs competition?

Fulfilling the needs of consumers is nice but ultimately this approach needs to support a clear differentiation vs competitors within the same category.

Some highlights
- Personalization could be a generic proposition in some product categories (cars, computers and sport shoes) which is minimizing the impact of such initiative
- Personalization (and not tailor made) for some major luxury brands is not necessarily a major pillar (e.g. Louis Vuitton) or is not strong enough to create a significant gap vs competition (e.g. Lonchamps)
- A clear added value is brought by brands differentiating themselves through a personnalization based on 2 dimensions: design+usage (Vacheron Constantin or Elite Vintners) or usage+service (Vichy or H&M)

Overall Conclusions

• Personalization is extremely relevant in product categories where emotion plays a key role into the consumer’s decision process (e.g. cars, luxury goods…)
• Accessories can be an effective way to achieve personalization without impacting the integrity of the product (e.g. Harley Davidson, iPod)
• It helps to build image on the long term if there is an on-going up-date of personalization features (e.g. Firefox)
• Customization based on services is relevant for mass-products and retailers
• Personalization doesn’t mean automatically much higher price than standard products

My personal takeaways would define an effective customization as a balance between specificity to the brand, combining design & usage and new features released regularly!

Source - FutureLab