Monthly Archives: August 2007

They're Talking About You

They’re Talking About You
A massive 80 per cent of people who use social networks have either chattedabout, commented on or reviewed a brand or product on an online forum or social network. That’s one of the key (and most alarming) findings of the 2007 Social Media for Brands Report, conducted amongst 698 UK adults aged 18-35 in June 2007 by search conversion agency Tamar.

The report also reveals that two thirds of 18-35 year olds in the UK are actively engaged in social networking and almost two in five (38 per cent) are members of two or more online forums or social networking sites. There is a clear correlation between age and social network use, with usage figures increasing amongst younger age groups, peaking with eight out of ten 18-20 year olds actively engaged in social networking.

They’re Listening To What’s Being Said

The 2007 Social Media for Brands Report indicates that negative comments posted on online forums and social networks put off customers, with more than half (52 per cent) admitting that’s how they respond.

Travel brands are most at risk

Travel products and services were identified as the sector most at risk from negative comments on social networks, with 58 per cent saying that negative comments would lead to them abandoning a purchase. This was followed by consumer electronics (e.g. TVs and computers) with 51 per cent, financial services with 44 per cent and communications brands such as broadband and telephone providers with 40 per cent.

Neil McCarthy of Tamar commented, “The rapid growth of social networks and user generated content is shifting the online balance of power away from marketers towards the consumer, and the effectiveness of traditional online marketing channels is decreasing. With so many consumers actively commenting on brands through social networks, online reputation is becoming even more important. Social networks are a large and unregulated channel with a massive user base, through which brands could see their good reputation built through other channels, undone very quickly.”

Befriend, don’t banner

The 2007 Social Media for Brands Report noted that nearly 1.5 times as many 18-35 year olds would rather accept a friend request from a brandthan have banner adverts on a social networking profile page. The best way to get users to accept friend requests was identified as through offering special offers and discounts (60 per cent). In contrast only 5 per cent said that they would be enticed by previews of forthcoming services, and only 10 per cent by exclusive products or services.

18-35 year olds are most receptive with more than half (51 per cent) stating the they would even be willing to act as a brand advocate (e.g. set up groups for brands, encourage friends to join and participate) on social networks in exchange for offers and discounts. This rose to almost two thirds (64 per cent) in the 18-20 age group, who are also the biggest users of social networks.

McCarthy concluded, “There is a clear need for brands to get their foot in the door of social networks, as these sites epitomise a new way of life for today’s consumers. However, users of social media are increasingly indicating that they don’t want to be advertised to by all and sundry, but would be happy to choose to have a closer relationship with advertisers they like.

“The first step is to understand how your brand is talked about in the social media space, and then decide on the best way of targeting a certain group of consumers. The approach preferred by the consumer is clear: brand owners must look to ‘befriend’ consumers on social networks rather than advertise to them, and the best way for them to do this is by offering discounts and special offers.”

Handle with care

The research results above fall into the “nice thought, proceed with caution” territory, in our humble opinion. Audiences circa 2007 don’t tolerate fools gladly.A recent example illustrates the peril of grown-ups trying to be cool: giant retailer Wal-Mart, has already racked up two failed attempts at trying to be Web 2.0 (their own social network, The Hub, closed after ten weeks; and a pro-Wal-Mart blog supposedly “written by two independent consumers” was later revealed to be part of a Wal-Mart PR initiative).

Wal-Mart launched its own “Roommate Style Match” group on Facebookearlier this month. The theory: that students heading to college would log on to Facebook to design their dorm room with their roommate.

As Wired notes on its blog network, so far the Facebook page has been hijacked and turned into a missive on the evils of Wal-Mart’s labour and business practices.

Of the more than 200 posts, only a handful relate directly to dorm decorating. And instead of color coordinating with roommates, users seem to prefer talking about how the retail giant “destroys communities” and prevents unionization.

To be fair, there was one comment on a 4-pack of men’s environmentally friendly organic socks for $4.

Reaching the Influencers

As the world spins ever faster, it’s proving ever more difficult to grab the attention of those we might wish to reach. It’s tough enough to get through the protective barrier surrounding consumers – connecting with influencers is far harder.

The medical profession are amongst the most elusive. Findings presented at April’s ‘Online Marketing and eDetailing’ conference in Berlin reinforced the difficulty of getting in front of physicians. Pierre de Nayer of Citobi presented figures showing that growing numbers of US doctors are either refusing to see sales representatives, actively putting up barriers to seeing them or, when they did see them, restricting the time allowed for the rep to pitch his or her case. Sound familiar?

Possible solutions? One which is gaining currency is e-detailing. Huh?

Wikipedia to the rescue:

E-detailing is the technological equivalent of the pharmaceutical representative’s traditional sales aid, used as part of their sales visits to healthcare providers. Either internet based or loaded onto a tablet PC, an e-detail is an interactive presentation which is backed up by robust CRM systems to allow for a tailored marketing approach for every single customer.

Internet based e-detailing is seen by some as a method to overcome the challenge sales reps face to secure physician meeting, the e-detail effectively replacing the face-to-face contact.

Tablet based e-detailing will be presented in much the same way as paper detail aids and require contact time, however the electronic detail aid is capable of providing interaction, video content, sound, and animation which are believed to increase engagement and therefore the messages have higher salience and retention.

Research presented at the Berlin conference by Fonny Schenck of Janssen-Cilag showed growing acceptance by physicians for e-detailing as a method of gathering information:

  • In 2001, only 25% of doctors had used e-detailing and a further 44% said they wouldn’t be interested in doing so
  • By 2006, 37% said they had taken advantage of e-detailing and another 41% said they would be interested in doing so. The number who said they simply weren’t interested had dropped sharply, to 20%.

As a result of this sort of research, Janssen-Cilag has increased its e-initiatives over recent years. The company’s contact with physicians has increased by 49%; however, whereas in the past 97% of those contacts were via rep interactions, now one-third of contacts are through other channels. E-marketing has been used to reach lower-value customers, enabling the sales teams to focus on higher-value customers; and frequency of contact has been increased without a consequent increase in resources.

It’s Not Just About The Medical Profession
Although the conference was indeed focused on pharmaceutical marketing, the lessons learned also apply to any industry where trade marketing is involved. Retail chain buyers, travel agents, supermarket category managers: all time-poor individuals whose decisions impact on manufacturers and suppliers. E-detailing – though it might go by a different title when aimed at more commercial enterprises, eg Electronic Sales Aids – could well provide worthy solutions.

Listen up, then, when we share some of the advice from the conference on how to make your e-detailing (AKA ‘trade marketing presentations’) as effective as possible. Firstly, from Frank Antwerpes of DocCheck:

1. Don’t Wait
Less than 5% of pharmaceutical marketing budgets have gone towards e-marketing in its various forms. Too many marketers seem to be waiting for some ‘divine proof’ that e-detailing works. Meanwhile, many of the more established methods of GP marketing have little measurable return. At the same time, over-testing of details can lead to paralysis by analysis, pushing out development times and frustrating marketers.

2. Don’t Push
Brand Managers, Mr Antwerpes observed, assume that the internet is there as a channel solely to deliver their product message to the doctor. Au contraire. On the internet, you have to be very polite.

Recruitment of doctors to an e-detail programme, for example, is often via email, which is a very sensitive medium one that you can close down very easily if you lose the trust of the physician (and, of course, you have to have permission to email as well, not just because of anti-spam legislation but because you respect the needs and wishes of the recipient).

3. Don’t Bore
The third element vital to getting e-detailing right is the content. Attention span on the internet is short – YouTube clips are usually no more than one to three minutes long. Keep e-details similarly short, but arrange optional links to more information. When they’ve made a conscious decision to invest time looking at your product information, the message delivered can be much stronger than if the physician is somehow coerced into doing so.

Far too many e-details end up looking like PowerPoint presentations. The physician needs to be both entertained and informed, so rich media and video should be used to get the user to interact fully and become immersed.

4. Don’t Get Lost
One apparent benefit of the electronic channels – its measurability – can also be a major drawback. You can measure so many different critera, you end up suffering from information overload. The best approach is to develop a series of key indicators that show how you’re performing against KPIs. Keep track of your customer, not your e-detail.

Finally, Nic Holladay of OnMedica Group suggests that the keys to success in e-detailing are:

  • Control the [recipient] experience. Ensure that systems are in place to ensure that all key parts of the presentation are viewed.
  • Use audio at least, to add to the overall user experience.
  • Develop the materials specifically for the internet, taking advantage of that medium’s enhanced capabilities. The worst thing you could do is to simply put the sales aid online.
  • Make it interactive and try to build in feedback for [recipients] on what their colleagues are thinking.
  • Don’t be blatantly promotional.
  • Integrate with sales force activities.
  • Finish with a clear call to action.

Our own clear call to action: take these learnings and translate them into your own industry and the influencers YOU need to reach.

Extra, Extra, Read All About It!

So Rupert just bought himself the Wall Street Journal? Millions do that every day. Of course, they don’t usually pay five billion dollars for their copies.

In a departure from Mr Murdoch’s recent strategy of adding digital expertise through acquisitions such as MySpace (pricetag a mere $580 million), the media mogul is instead paying nine times as much to buy one of the biggest companies in the slow-growing US newspaper sector.

As noted in the Financial Times, the five billion dollar purchase of the Dow Jones Company is a counter-intuitive investment in an industry on which many investors have given up. Recent auctions of other American dailies have drawn few bidders and trading statistics have been grim. In May 2007, compared with a year earlier, advertising revenue for US newspaper companies fell by more than 9 per cent - the worst month ever in a non-recession period. Classified advertising – from jobs to property – is shifting to the internet at a faster pace than ever, while profit margins are being squeezed because so many costs – such as paper and printing presses – are fixed.

Yet the purchase of Dow Jones is less of a bet on newspapers than a move by Mr Murdoch to acquire content which he can then use across the many different media sectors in which he plays: print, television and, increasingly, the internet.

As the FT article points out, the financial news and information that Dow Jones produces is regarded as more valuable than the general news on which many newspapers survive, both in its importance to trading and business decisions and in the appeal to advertisers of its readers, who are generally well-educated and wealthy.

Overall, demand for financial information is expected to grow, fuelled by the growth of financial assets themselves. In one estimate, the McKinsey Global Institute says financial assets worldwide will be worth $214,000bn by 2010, up from $140,000bn in 2005.

To manage these assets, the need for accurate, fast and in-depth financial information will grow around the world, especially in Asia - and, although individuals are used to getting information for free on the web, businesses do pay for information. Many continue to do so, especially when gaining access to information faster, or being able to analyse market trends better, gives users an edge over rivals and makes them money.

Newspapers in general, perhaps surprisingly, have been quick to embrace the internet as a distribution mechanism.

The problem, of course, has always been earning enough money from online offerings. The Wall Street Journal has been able to charge users a fee for online access, but it’s one of the few newspapers that’s been able to successfully sell paid subscriptions. Most other papers have been obliged to rely on advertising, but it’s a slow road. Goldman Sachs analysts recently predicted at least a five-year transition period before the newspaper industry recoups enough digital revenues to offset print’s decline.

On the internet, information just loves to be free. The challenge for any newspaper organization, whether a giant like Mr Murdoch’s News Limited or the local parish pump periodical, is to earn enough money giving away contentto pay for the journalistic processes required to assemble it in the first place.

Of course, the humble business of newsgathering has already evolved somewhat over the years. If we discount the creators of cave paintings, hieroglyphics and dead sea scrolls as inappropriate ancestors of journalism, thenthe earliest proto-journalists in the ancient world were travellers, who observed events in one place and then spread the word at their next port of call. Such methods were at best erratic, at worst embellished and unreliable (a problem that remains with us today).

Under the Imperial Rome of Julius Caesar and his heirs, news of the day (Acta Diurna, Daily Events) from the capital was painstakingly scribed for distribution to the farflung colonies. The reporters, servants of the Empire, were required to provide reportage which complied with their masters’ worldview; the penalty for disobedience was only too literally the editorial spike.

As BC gave way to AD and civilisation relentlessly marched its way towards the perils of our modern world, such handcrafted bulletins were supplemented by other mechanisms such as the wandering minstrel’s ballads (capturing contemporary events in singalong fashion) and the dulcet tones of the town crier. Almost inevitably, the earliest known printed newspaper appeared inBeijing in 748.

The first significant journalism breakthrough came with the arrival ofJohannes Gütenberg and his 1447 invention of movable type. From there to the tabloids was just a matter of time.

After Gütenberg, innovation started to break out all over Europe, and attribution gets a little messy – too many “Number 1 with an asterisk”claimants. Zeitung, a German news report, made its debut in 1502. Trewe Encountre became the earliest known English-language news sheet in 1513.Mercurius Gallobelgicus was the world’s first periodical, emerging from Colognein 1592 and published in Latin twice a year for distribution at book fairs.Germany’s Avisa Relation oder Zeitung, in 1609, became the first regularly published newspaper in Europe.

This collection of worthy European publications must have satisfied the demand of the times for “all the news that’s fit to print”, because it wasn’t until 1665 that the first regularly published English-language newspaper, The Oxford Gazette, started pumping out news twice a week. The Gazette owed its existence to the Black Plague, which saw Charles II and his court relocate fromLondon to Oxford as a precaution. The King and his courtiers wanted newspapers to read, but were afraid that any newspapers coming fromLondon might be infected. Because he could, Charles II promptly ordered theOxford University printer to bring out a local paper.

The earliest forms of news gathering and dissemination were typically performed at the urging of the establishment (Julius Caesar, Charles II et al.) and the notion of independent, objective reporting was not an option. Investigative journalism is an even more modern construct.

For that we owe a debt of gratitude, not to Woodward and Bernstein, not even to Lois Lane and Clark Kent but to nineteenth century pioneers such asHenry Demarest Lloyd who in the 1880s published a series of articles exposing corruption in business and politics. Nellie Bly, another courageous journalist in those perilous times, was a young woman who put herself at great personal risk going undercover to investigate social issues such as child labour, low wages and unsafe working conditions.

Neither Nellie nor Henry could have effectively practised their trade, of course, without the willingness and support of their editors and publishers. There was no blogging software in nineteenth century New York, no talkback radio, no Xerox®. Without an outlet, there was no story. Now-legendary publishers such as William Randolph Hearst and Joseph Pulitzer had to stand their ground in the face of considerable opposition from the entrenched interests of the day,permitting their reporters to publish and be damned. Only then could freedom of the press become a reality, not just a quaint constitutional aside.

Over the last century or so the honourable craft known as journalism has flourished, as newspapers and magazines have been joined by their electronic cousins, bringing news to the world on a minute by minute basis and demanding an increasing supply of journalistic talent to feed the insatiable media machine. The old six-monthly cycle of the Mercurius Gallobelgicus just might be a little too occasional for today’s 24-7 world.

As we lurch into the third millennium, the future of journalism is very much under debate – not because the profession is any less valued than before but rather because the traditional media on whose behalf journalists practise their trade are themselves under threat in this internet-changes-everything world.

Today’s audiences, with fingertip access to the news of the world from a million sources throughout the day, increasingly find evening television news bulletins irrelevant and out of date. Radio struggles to compete with the cult of the white earbuds. Newspapers, forced to migrate their content online, have yet to discover how to monetise their electronic outlets so as to earn the same revenues as their print editions. The writing is on the wall instead of in the paper.

At the same time, behold the rise and rise of citizen journalists. Unpaid, uncredentialled but on the spot, camera phones at the ready. When the bombs went off in London in July 2005, the BBC received 50 pictures from the public within the hour. Around 22,000 texts and e-mail messages poured in with personal testimonies on the first day. By the weekend the BBC had received 1,000 images and dozens of video clips sent by e-mail and direct from mobile phones.

When anyone can be a citizen journalist – thanks to blogs, podcasts, vcasts, YouTube and camera-phones – what future lies in store for journalism in general, and newspapers in particular?

Well, as we noted above, evolution is the order of the day. No doubt the grand and illustrious order of monks feared for their future when the damnable printing press made its debut, threatening to render intricate manuscripts redundant. And yet monks are still with us, their efforts turned to other enterprises.

As Fairfax Australasia’s CEO David Kirk noted in August last year, in his address to thePacific Area Newspaper Publishers’ Association (PANPA) conference, “Managing in a changing environment is about as endemic to media as you can get. The media industry is emblematic of change.

“In my business it’s very straightforward. There are two iron laws of media:Media always evolves. And audiences always fragment. Media, and the management of change are therefore synonymous. In the beginning, there was wireless. And now we have wireless back in a big way – except it carries broadband.

“If you have studied our industry, its history is a litany of change – of evolution and threat. Cinema was going to kill radio. Television was going to kill cinema. The VCR was going to kill television, Pay TV was going to kill television. DVDs were going to kill cinema and satellite radio is going to kill commercial radio. Now the internet is going to kill newspapers, ipods are killing radio … and the internet is also killing television.

“Media experts confidently predicted in the late 90s that newspapers would be banished to the memories of senior citizens and museums by the middle of this decade. Well it is now [2007] and I would be very surprised if a number of you have not read a newspaper recently.

Even though we have suffered some loss of audience in print, more people are reading our content - in print and online – than ever before in our history.”

Which pretty much sums up why Rupert bought the Wall Street Journal. For the price he paid, we hope his copy included a colour magazine insert

Omega Rules and Delta Moments

Why do consumers buy the same brand of coffee and mayonnaise over and over again, but will often purchase different brands of cold cereal and chocolates? It’s hardly happenstance, according to a recent US study by The Nielsen Company. Nielsen’s study of shopper behaviour shows that consumers exhibit distinct shopping modes at the supermarket that dictate what ends up in their grocery bags.

“Shoppers don’t waste energy on everyday decisions,” said Manjima Khandelwal, senior vice president, Nielsen Customized Research. “To simplify their lives, shoppers are often in grab-and-go mode, reaching for the brands they usually buy without reading the label or checking the price.”

The key to reaching shoppers lies in understanding that auto-pilot mode can get disrupted by external stimuli such as advertising, buzz, new offers, price and promotions. When this happens, shoppers re-evaluate their decisions; they look at alternatives and consider new offers. Nielsen calls these disruptions Delta Moments and it is at these times that marketers have a brief window of opportunity.

Auto-pilot and Delta Moment dynamics vary significantly across Categories. A seemingly great strategy in one Category can fail to connect in other Categories. Marketers could be way off the mark by failing to read the ‘body language and mindset’ of shoppers.

Nielsen’s study, which reviewed consumer shopping behavior across 30 food categories, found that consumers adopt one of four different “shopping modes” as they cruise the supermarket aisles. Key characteristics of the shopping modes – auto-pilot, variety-seeking, buzz or bargain hunting – are:

In auto-pilot, or grab-and-go mode, shoppers are making everyday, habitual decisions driven by brand choices and they are usually not in the market to try anything new. Items such as coffee, cereal, cheese, margarine and mayonnaise are purchased in auto-pilot mode. For example, Nielsen’s research found that shoppers were quite particular about their coffee, choosing the same caffeine fix, flavor and coffee experience.

“The implication for marketers in auto-pilot categories is that if you are a leader, avoid radical changes to your brand message or packaging,” said Deepak Varma, senior vice president, Nielsen Customized Research. “Otherwise you may risk disrupting habitual behaviour driving brand choice in your favor.”

In the variety-seeking mode, shoppers are browsing shelves actively and on the lookout for new tastes as well as interesting product innovations or products offering “surprise” in their role as household chef.

“Consumers seem to get bored with the same choices in certain categories,” said Varma. “We found shoppers on the lookout for a change of pace when shopping in the frozen food and cold cereal aisles, as well as for biscuits, salad dressings and chewing gum. In this context, customers’ decisions to purchase products were greatly influenced by informative and exciting packaging.”

Energy and sports drinks, chocolate, ready-to-drink teas and yogurt drinks fall in the buzz-activated category. “Shoppers are most likely to be influenced by catchy advertising, new product introductions and the original packaging that leaps off the shelves and grabs interest and attention,” said Khandelwal.

Bargain-hunted categories are driven purely by price comparison and promotions. “Consumers in this shopping mode are on a mission and the mission is savings,” said Varma. Canned Tuna, Canned Tomatoes, Canned Fruit and Pasta Sauce all languish in this category, according to the study.

Beware Over-Promotion
Nielsen’s research revealed that even though some product categories are not bargain-driven, manufacturers continually offer in-store deals and promotions, resulting in some categories to be over-promoted.

“Consumers choosing sports drinks aren’t looking for a bargain,” said Khandelwal. “In-store deals for these products go largely unnoticed. Marketers would be better off redirecting their wasted promo dollars to investing in advertising and new product introductions.”

Omega Rules OK

“I always buy brand X …unless guests are coming!”
“I buy the cheapest brand on special, as long as it’s not X!”
“Brand 2 works for my family, but if Y is on special, I buy that!”

Underlying repetitive purchase patterns are a set of cognitive decision rules – the ‘programme’ behind ‘auto-pilot’ purchasing.  Nielsen (quick to brand such things) call these Omega Rules – the mental check-lists that keep consumers on-track and help them decide between alternatives.

Often these rules are quite mundane (e.g., pack shape) or social (e.g., acceptable to friends) and don’t represent deep emotional commitment to the brand.  Brand leaders need to understand Omega Rules as they provide guidance on key marketing tactics that will reinforce the habits that give them leadership.

Recent advances in cognitive psychology have revealed that although consumers have 10,000 brands in their heads, they waste little time thinking about them.  Instead, they evolve simple rules to navigate through the world of brands.  These rules tend to be simple, few in number and rather hierarchical. They can be rational or emotion based, and once they have been developed the consumer is on ‘auto-pilot’ when placed in a buying situation. Auto-pilot mode remains in force until interrupted by an external stimulus, a Delta Moment.

Delta Moments are different for different segments and at different stages; they’re ‘moments of change’ when habits are most likely to be reviewed, and they vary in their impact depending on the disruptive nature of the causative event.

At Delta Moments, consumers re-evaluate their habitual decisions and either:

  • Re-validate their rules
  • Change their rules

Omega Rules and Delta Moments apply to online marketing as well. Auto-pilot mode is clearly in evidence when web users head to their regular destinations online, less likely to try out new websites unless disrupted by Delta Moments.

The challenge for emarketers trying to get noticed online:

  • Understand how habits are formed in their particular category;
  • Identify the key criteria underlying ‘auto-pilot’ habits; and
  • Develop a range of Delta Moment triggers and motivators that will lead to change.

Easy, right?