Posts Tagged ‘marketers’

Brand Value: Measuring All the Angles

June 13, 2012

Measuring Brand ValueAh, the L.A. Dodgers, a team whose recent woes under the leadership of Frank McCourt resulted in a purchase that rocked the baseball world. In 2011, Forbes estimated the Dodgers to be worth $800 million, more than the average value of a major league baseball team team. Thanks to a TV deal in March 2012, Forbes upped that number to $1.4 billion. One month later, news erupted that Guggenheim Baseball Management, a consortium lead by Magic Johnson, would acquire the team for a whopping $2.15 billon.

Many questioned the rationale behind this dollar amount, exclaiming the consortium vastly overpaid for a franchise with such a comparatively low net worth. David Carter, executive director of the USC Sports Business Institute, tells Fox Business, that it’s not solely about buying an organization at face value. “It’s purchasing a baseball team that is an anchor that allows you to make money off other revenue-rich opportunities.”

Chief executives that agree with this see the value of a brand. However, many CEOs, CFOs, and accounting teams still see marketing and communications as cost line items rather than buttresses that sustain brands and lend book value to companies.

Columbia Business School recently published two studies related to varying perspectives organization’s have about the value of marketing. The first, “Accounting for Marketing Activities,” found that part of the problem is internal communications. Experts feel that marketers don’t clearly articulate the impact of their expenditures on bottom lines to finance officers. The second, “Marketing ROI in the Era of Big Data,” adds that there’s a need to develop a better understanding of how marketing creates financial returns for companies. Attributing value to marketing is a common struggle.

Marketing’s role, in its most basic form, is to get the word out to the right people through a range of channels. But an integral part of this is communicating a brand’s core message and relevance to its audience, demonstrating value for consumers, which in turn adds value to a company. The foundation of a strong brand is built by delivering on a promise—providing quality and dependable products and/or services. But intangible items like brand persona, experience, and reputation are also largely influential when it comes to actual purchase and loyalty, generating sales and revenue. Much of this process can be attributed to the emotional connection formed between brand and consumer.

Developing meaningful relationships with a brand’s audience is a vital part of path-to-purchase, advocacy, financial growth and longevity. Humanizing brands leverages such relationships. In addition to products and services, they offer distinct images, feelings, experiences, thoughts and perceptions creating differentiated value in the mind of its audience. In fact, a brand is, in essence, an extension of one’s self. Consumers are more apt to buy products from a particular brand that reflects their personality and aligns with their interests and personal values, subsequently raising the net worth of a brand.

Apply this notion to the Dodgers. Another factor contributing to the high-priced offer is that they’re the… L.A. Dodgers, a well-known brand that officially acquired its name over 70 years ago. There’s history behind these “boys of summer,” a term that’s not only in a Don Henley song, but the title of a book based on this very team. More than ticket sales, sponsorship, and TV deals, the bid amount stemmed from relationships with devoted fans and the iconic value of the Dodgers brand in and of itself.

Coca-Cola Ad (1938)

Coca-Cola ad from 1938
Click to enlarge

Another prime example is Coca-Cola. In CNBC’s documentary, “Coca-Cola: The Real Story Behind the Real Thing,” Donald R. Keough, former president of Coca-Cola, discussed the implications of its 1985 debacle, the launch of the now-defunct “New Coke.” He received a tearful call from a stranger, an elderly woman. She was heartbroken by the reformulation of its trademark beverage. Interestingly enough, she hadn’t sipped the soda since the 1940s, and therefore not tasted this new iteration. However, the Coca-Cola brand held memories for her, ones that she strongly associated with her childhood. She told Keough that they were playing with her youth. When Coca-Cola decided to lay the original Coke to rest, it took a piece of her past with it.

A CFO may say this is a nice story, but she hadn’t been a consumer in years. Though she may not have spent a nickel on Coca-Cola in decades, the brand clearly resonated with her. And there were plenty of present-day consumers who also protested New Coke. Value to her and the millions of others was emotive. For those who did not like the taste, had the emotional connection not existed, they wouldn’t have expressed such outrage over the new formula. Instead, they simply would have ceased buying it. Keough noted to CNBC, “We did not understand the deep emotions of so many of our customers for Coca-Cola.”

BY ALLIE ABODEELY

New Study: Marketers Struggle with “Big Data” & Digital Tools

March 21, 2012

The Center on Global Brand Leadership and the New York American Marketing Association (NYAMA) are pleased to release the results of a major new study on the changing practices of large corporations in:

  • data collection and usage,
  • marketing measurement and ROI, and
  • the integration of digital and traditional marketing.

The BRITE-NYAMA Marketing Measurement in Transition Study was authored by David Rogers, Executive Director of BRITE, and Columbia Business School Professor Don Sexton. Results were first released at the Center’s fifth annual BRITE conference on May 5, 2012. The findings have been reported in numerous publications, including the top front-page story of Ad Age.

The study’s results focused on 3 main findings:

  1. The failure of “Big Data” for marketing
  2. Marketers are quick to adopt the newest digital tools, but struggle to measure them
  3. ROI – marketers know they need it, but cannot agree on its meaning and implementation

The full report can be viewed at http://j.mp/MarketingROIstudy.

FINDING: THE FAILURE OF BIG DATA FOR MARKETING SO FAR
The researchers found that marketers’ desire to be data-driven is not yet matched by a consistent effort to collect the data necessary to make these real-time decisions. 29 percent report that their marketing departments have “too little or no customer/consumer data.” When data is collected by marketers, it is often not appropriate to real-time decision making. 39 percent of marketers say that their data is collected “too infrequently or not real-time enough.” Furthermore, marketers today are still much less likely to collect new forms of digital data like customer mobile device data (19 percent collect it), and social media data (35 percent), than they are to collect traditional customer survey data on demographics (74 percent) and usage (60 percent).

 39% of marketers say they can’t turn their data into actionable insight

FINDING: MARKETERS ADOPT NEW DIGITAL TOOLS, BUT STRUGGLE TO MEASURE THEM
Marketers are also struggling to measure the impact of the newest digital tools, despite the widespread adoption of these applications. 51 percent of marketers said they use mobile ads (in-app, or SMS); 85 percent use social network accounts (brand accounts on Facebook, Twitter, Google+, and Foursquare). Yet these tools are among the least likely to be measured for ROI despite their profusion of data. Only 14 percent of the social networking users are tying them to financial metrics, and only 17 percent of those using mobile ads are tying them to financial metrics. By contrast, 41 percent of email marketers measure their results with financial metrics. In addition, as number of marketing tools expands, the challenge of measuring and comparing them grows. 60 percent of companies report that comparing the effectiveness of marketing across their different digital media is “a major challenge.”

Marketing_ROI_Table3

Click image to enlarge

FINDING: ROI – MARKETERS KNOW THEY ALL NEED IT, BUT CAN’T EVEN AGREE WHAT IT IS
The study also revealed that there is confusion about the meaning and significance of ROI among marketers. Specifically, 31 percent of respondents said that they believe simply measuring the audience you have reached is “marketing ROI.” 57 percent are not basing their marketing budgets on any ROI analysis, and 28 percent are basing marketing budgets on gut instincts. 21 percent are using financial metrics for “little” or “none” of their marketing budget and seven percent are spending most or all of their marketing budget with “no metrics” at all. However, marketers are under pressure. 70 percent say that their marketing efforts are under greater scrutiny than in the past.

Marketing_ROI_Table6

CONCLUSIONS: FIVE IMPERATIVE ACTIONS FOR CMOS
After its analysis of the dynamic and challenging environment for marketing today, the report recommends that Chief Marketing Officers should focus on five key leadership imperatives: Set objectives first; Design metrics to ensure marketing is linked to these objectives; Gather the right data for those metrics; Communicate to the entire organization what your objectives are and how they are being measured; and Evaluate and reward employees in part on how well objectives are achieved.

Read the complete findings and conclusions at http://j.mp/MarketingROIstudy.

# # #

METHODOLOGY
253 corporate marketing decision makers, director-level and above, were surveyed online between January 27 and February 8, 2012. These professionals are employed at large companies (90 percent have a global annual revenue of over $50 million; 45 percent are over $1 billion). Respondents were from b2c and b2c companies in diverse industries. The study was made possible with support from Research Now and GreenBook.

ABOUT THE RESEARCH PARTNERS:

The Center on Global Brand Leadership was founded at Columbia Business School in 1999 and has grown into the leading global forum on brands. The mission of the center is to turn the research and intellectual capital of academia’s foremost thinkers on branding into practical tools and insights for real-world application. The Center has worked with a wide range of sponsor companies to develop a variety of thought leadership including: conferences, case studies, videos and webinars, and sponsored research. The Center’s flagship BRITE conference on brands, innovation, and technology presented was founded in 2008 and is presented each spring at Columbia University. BRITE ’12 speakers included John Hayes (CMO, American Express), Marc Speichert (CMO, L’Oreal USA), and Bob Garfield (host of On the Media, editor for Ad Age).

The New York American Marketing Association (NYAMA) helps marketing professionals navigate to success in today’s dynamic business environment. We serve the marketing community by giving members opportunities to push the boundaries of marketing, expand their skills and exchange ideas with other experienced professionals. The BRITE/NYAMA study is one example of how we are contributing to the advancement of marketing.

Research Now is the leading global online sampling and online data collection company. With over 6 million panelists in 38 countries worldwide, Research Now enables companies to listen to and interact with real consumers and business decision makers in order to make key business decisions. Research Now offers a full suite of data collection services, including social media sampling, and operates the Valued Opinions(tm) Panel and e-Rewards(r) Opinion Panels. The company has a multilingual staff located in 24 offices around the globe and has been recognized for four consecutive years as the industry leader in client satisfaction.

GreenBook® brings stimulating, practical, and timely resources to marketers and market researchers on both sides of the table. Through its targeted multi-media platform, GreenBook offers effective marketing and lead generation opportunities to businesses that communicate with buyers and users of market research.

Beware of Marketers Bearing Plans to Reach “Influencers”

November 17, 2009

Opinion leaders have always been a subject of interest for marketers who hope to build awareness and credibility for their brands. Whether it is Oprah Winfrey, the editors of Vogue, or a successful blogger, earning the recommendation of a third party with an established audience is a well-known route to building brands.

More recently, however, some marketers have been extolling the value of catching the eye of another kind of “influencer.” These seemingly average consumers lack any media platforms or measured audiences of their own.  Yet they are thought to act as anonymous opinion leaders who wield outsize influence in shaping the choices of friends and colleagues who turn to them for advice.  The iconic example of the influencers in the crowd is the East Village hipsters who began wearing Hush Puppies in the 1990s and may have helped spark a return to popular fashion for that dormant shoe brand.

Many consumer trends do spread by word of mouth, and in a break-out trend, there may indeed be some mouths that turn more heads than others.  The problem, however, comes in assuming that you can identify a trend’s influencers in advance and target them for marketing. That was the warning in a speech given Friday to the Marketing Association of Columbia by Duncan Watts, principal research scientist at Yahoo! Research and director of their Human Social Dynamics group.

Watts called the pursuit of unnamed influential consumers the “Holy Grail” of modern marketing and, much like the original grail, the object of an impossible quest.  Based on recent scientific research into social networks and consumer influence, Watts raised several critiques, including:

“Influencers” are hard to define. The term “influencer” is used interchangeably to describe mass media voices like Oprah, celebrity brand endorsers, and anonymous opinion leaders (three very different models of influence). Without being defined, the term becomes a catch-all for any fan of a well-liked brand.

Many different factors may give weight to an “influencer.” A customer may wield influence due to their expertise in a subject, their gregarious personality, their ample network of relationships, or their social status.  In different contexts and for different brands, almost anyone might become the “influencer” in a crowd.

Cognitive bias causes us to give too much weight to “influencers.” We all remember how East Village hipsters started a craze for Hush Puppies; no one remembers the dozens of other fashions that hipsters adopted which never became popular with others.

Consumer influence may, in fact, spread more like a forest fire. Small fires start in wilderness every day. When one of them turns into a raging forest fire, the difference is not in the type of spark that ignited it, but in the conditions of the forest (recent drought, density of fallen timber, angle of slopes, prevailing winds). Similarly, trends that spread quickly may do so because of broad conditions within customer networks that are receptive to the trend – not because of a special type of customers who were the first to adopt.

So is all hope lost for influencing customer networks?

Not necessarily.  Watts and his colleagues continue to research the rich data on social influence now becoming available thanks to technologies like Twitter.

In the meantime, he advocates that marketers pursue a strategy of launching many ideas into the marketplace at once, measuring the response in networks carefully, and being ready to respond in real-time if one of your ideas starts to catch fire.  Clothing retailer Zara, for example, makes no effort to divine what will be “the” color for each upcoming clothing season.  Instead, Zara starts producing products in every color it can imagine, measures what catches on in its stores, and uses its famously nimble supply chain to instantly shift gears and pump out more of that season’s hit.

As the availability of real-time customer data grows, more and more businesses may be able to follow Zara’s approach.

In the meantime, remember that customer advocates are a powerful driver for any brand.  Just don’t base your strategy on thinking you can figure out in advance who your most influential customers will be.

BY DAVID ROGERS

This post originally posted by David on the DavidRogers.biz blog at: http://davidrogers.biz

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