The case for evidence-based marketing

(This article, originally published online in 2010, is excerpted from Ray’s recent book Digital Disruption & Transformation: Lessons from History)

One of the big buzz phrases in healthcare these days is “evidence-based medicine”. In a nutshell, it means relying on a combination of the best research evidence along with the experience doctors have treating patients as a way of achieving the best outcomes when diagnosing and managing illness.

Serious medical research began only in the late 19th century, when healthcare professionals started to collect scientific evidence on the effectiveness of bloodletting, a technique that had been used for centuries to cure a multitude of ills. Of course, once the evidence was collected it was determined that transfusions, the opposite of bloodletting, were a much more effective way to save lives.

Well, a South Australian marketing academic has compared modern marketing managers to medieval doctors, and he’s doing what he can to take marketing out of the dark ages.

Professor Byron Sharp, Head of Ehrenberg-Bass Institute at the University of South Australia, has spent his career collecting evidence to support (or refute) traditional marketing theories, and his results stand many traditional beliefs on their head. His new book, How Brands Grow, lays out these theories.

It’s not ‘differentiate or die’

In his book, Byron takes aim at many traditional marketing assumptions. He says most marketers have based their beliefs on untested theories, in the same way doctors believed in bloodletting. “Doctors worked using their impressions, assumptions, commonsense, accepted wisdom and scattered bits of data,” according to Byron. “This is similar to the working practice of marketing managers today.”

“The marketing equivalent of humoural imbalance theory (a discredited theory of the makeup and workings of the human body adopted by Greek and Roman physicians and philosophers.) may be the Kotlerian ‘differentiate or die’ world view, where marketing success is entirely about creating superior products, selling these at a premium price, targeting the most likely buyers and advertising to bring people’s minds around to the product’s superiority.”

Byron’s work at the Ehrenberg-Bass Institute has been to, as he puts it, “support research into repeatable patterns.” He compares research into marketing today to the study of chemistry in Victorian era, though instead of Florence Nightingale and Marie Curie, the data is coming from Nielsen-type data. It’s setting up, as he says, “Scientific laws for the social sciences, to cut down on the mysticism around business.”

One of the fundamental principles that a careful study of marketing research has uncovered concerns the role of brands. Brands, Byron says, are used to simplify our lives, providing heuristic (experience-based) shortcuts to make decisions on our purchases.

We know some brands, he says and keep buying them, as long as we are reminded by advertising. Advertising’s main role is not to persuade, according to Byron, but to “refresh memories, so we’re not thinking too much, and to signal to people things like ‘this is expensive’.

“Ads are not changing your mind, but catching your attention, to nudge and remind memories that are starting to fade.”

Target at your peril

Byron Sharp also takes aim at the current emphasis on target marketing, particularly as the use of the Internet by consumers makes it harder to get broad reach and easier to reach niche audiences. While targeting, is useful, he says, “Thou shalt target goes too far. More targeting is not necessarily better.”

He says research has shown that the 80/20 rule, where the top 20% of your customers account for 80% of your business, is fallacious. He says the true figure is more like 60/20 – the top 20% of customers account for just over half of your business. Under those circumstances, he says, “Not talking to 80% of your customers is ludicrous.”

He also warns against relying on a specific person as a brand’s target market. “Talking about your customer as one person is not sophisticated – it’s the dumbest way to market. Adopting the idea that your customer is one person, of a particular gender and age, is dangerous thinking.”

Byron holds up the example of Burger King in the US (branded as Hungry Jack’s in Australia), which focused nearly all of its marketing effort recently on its most important target group – 22-year-old men, who were already visiting Burger King seven times a month.

They succeeded in lifting share with that group, but their edgy advertising, such as the Subservient Chicken website, anti-diet rappers and a creepy costumed Burger King character, alienated all its other customers. Meanwhile, during the same period main rival McDonald’s continued to target all age groups, and lifted their overall market share at the expense of Burger King in other demographics.

(As a teacher of marketing, I don’t necessarily agree with everything Byron Sharp says, but he provides great food for thought!)

Find out more about the book and/or buy it here.

From the archives: The link between personal and corporate branding

(This article, originally published online in 2009, is excerpted from Ray’s recent book Digital Disruption & Transformation: Lessons from History)

As the name implies, social media is about people – not just your customers, but also you and your colleagues. As such, it’s as much a personal branding tool as a corporate branding one.

When you set up a Twitter account to build relationships and (gently) talk about your company /product/service/event, you’re also building your own profile. If you’re writing for your corporate blog, you and your company are in a symbiotic relationship that benefits bothof you; if you broadcast your company connections on your Facebook account or are the admin for a Facebook fan page, you’re blending your corporate and personal image on several levels (which is why a lot of people choose not to do it).

The most obvious social media tool where this blending occurs is LinkedIn. LinkedIn has variously been dubbed an online resume, an online contact list and Facebook for business people. The idea of forming networks to advance business aims online is a powerful one, and hundreds of millions of people in hundreds of industries in more than 200 countries have bought into the concept.

Unlike most businesses, LinkedIn has experienced enormous growth during the global financial crisis as redundant or worried individuals join to extend their reach in the search for possible employment opportunities.

It’s also being used by more and more businesses as they encourage their senior employees to sign up (following the lead of junior employees who’ve already registered) and connect with potential customers (as well as potential future employers – such is the double-edged sword of social media).

Linking tips

The top social media experts use LinkedIn as a key component of building their personal/corporate brand online.

Chris Brogan, who has built a vicarious interest into a career as a strategist and commentator on social media and whose blog is ranked in the top 10 of the Advertising Age Power 150, says that the most important thing to remember when putting together your LinkedIn profile is to think about who’s going to be reading your profile.

“The first horror show I see when reading other people’s LinkedIn profiles is that they’re written completely dry, as if robots are the only thingthat will read them. Though one should write with (search) robots in mind, this is still a human network, so write as if you want someone to actually read your profile.”

He goes on to say that, “Make sure that when people read your job description, they are thinking about how to put you to work on their issues. I state my company’s primary functions in the first sentence of my current role, so that people can see what I’m bringing to the table alongside my own personal skills. Thus, my job description states what I’m doing, but also what I can do.”

Connecting – stay local, or go big?

LinkedIn’s official position on building your network is that you should only connect with people you know well personally. Chris Brogan says, “You’re welcome to take their opinion on that. I’ve chosen to accept with anyone who connects with me, and I’ve only had to drop one person ever for abusing that connection.

“In my view, expanding my network means that you will find the person you need by searching through my network, and that I, at least in theory, can help you get to the person you need for your business efforts.

“Your mileage may vary. I will do it my way, as most folks who connect with me eventually come calling to reach someone else that I’ve added, and I feel good every time I can be helpful.”

Guy Kawasaki, a former Apple executive who has also built a successful career as a social media pundit (132,000 followers on Twitter (editor’s note: 10 years later this was more than 1.5 million) and a top-rating blog), agrees, writing that, “By adding connections, you increase the likelihood that people will see your profile first when they’re searching for someone to hire or do business with. In addition to appearing at the top of search results, people would much rather work with people who their friends know and trust.”

Helping networks

So how do you conduct conversations online? It’s not really different from doing it face-to-face.

“If you know how to network, you know how to social network,” Lori Gama, owner of DaGama Web Studio recently told a US newspaper.

She said the online realm is all about creating relationships and the “help thy neighbor” mentality. Gama believes up to 90% of the time spent interacting on Twitter, Facebook and LinkedIn should be “dedicated to helping and listening to others”, leaving only 10 percent for shameless self-promotion. She said others “will appreciate the help that was offered in the past and even help with the promotion side.”

Someone else who has taken the idea of using LinkedIn to help others and elevated it to an art form is Chuck Hester, communications director at email marketing services company iContact, based in Raleigh, North Carolina.

Chuck, interviewed for a recent podcast, has, like Lori Gama, taken the ‘social’ in social media and attached it to the word ‘good’. A natural networker in the face-to-face world, he uses LinkedIn to help people without immediate thought of gain and encourages people to ‘pay it forward’ and help others rather than reciprocating to the person who helped them.

As Chuck explains, “I live the pay it forward lifestyle – if you are helped, don’t help that person, instead pay it forward to someone else in need. The blessing will come back to you!”

On LinkedIn, the blessings have come back to Chuck in the form of 9,000 connections, he’s now published a book about the philosophy: Linking in to Pay it Forward: Changing the value proposition in social media.

According to Chuck, it’s important to make sure you use tools like LinkedIn to meet people face-to-face wherever possible, or, as he puts it, “put the social back into social media”.

He’s used his network to set up dinners in every city he visits (including a recent visit to Sydney) and has set up the LinkedIn Live Raleigh networking event, drawing on his 1,500 LinkedIn connections in a city of less than a million people (it’s like having 1,500 connections in Adelaide) to run networking events regularly attended by more than 350 professionals.

His advice for businesses coming to grips with social media tools such as LinkedIn, Facebook and Twitter is to “remember that it’s not about the tool, it’s about the person behind the tool – social media is about talking one to one.”

His top tips:

  • Spend time understanding what the different tools are, what they look like. Just hang out in these communities and watch what goes on for a couple of weeks before jumping in.
  • Be transparent.” You can’t sell yourself, you need to be very subtle about that aspect.”
  • Be helpful. “You need to come into social media saying ‘How am I going to help you?’, as opposed to ‘How can you help me?’.
  • Don’t push any agendas. This may sound counterproductive to conducting business through social media, but as Chuck points out, “The social media highway is littered with the bodies of companies who have tried to sell through social media and have failed miserably in the process.”

It’s not rocket science, but it’s based on good old-fashioned politeness and embracing the true meaning of the word ‘community’. In the long run, it will improve your business through relationship-building, but just as importantly, it’s also a great way to help make the world a better place.

Especially in these tough times, that’s got to help you sleep better at night.

fast_company_cover_the_brand_called_you_sm

 

From the archives: More than just a disruption

(This article, originally published online in 2009, is excerpted from Ray’s recent book Digital Disruption & Transformation: Lessons from History)

People have been chronicling the disruptive influence of the digital media on traditional media and advertising ever since the World Wide Web first appeared. But no one has articulated the effect so comprehensively or so bluntly as Bob Garfield, ad critic and columnist for Ad Age.

After publishing a piece on the future of media entitled “The Chaos Scenario” four years ago, the curmudgeonly critic became a poster-boy for the doomsayers. Here was someone who’d worked closely with the advertising industry for 25 years (albeit as an observer, not a participant), someone whose livelihood depends on the success of traditional media, and he was using his column in the advertising industry’s bible to declare that advertising was in its death throes.

He has now turned that column into a book – one that balances the bad news with a prescription for surviving the chaos, including examples from around the globe of companies that have successfully embraced digital marketing.

As to Bob’s bluntness, in a video presentation connected to the book, he says the book has two parts, and the message of the first part is “You are doomed.”

“I say doomed,” Bob drolly tells the camera, “because ‘totally and completely f***ed’ didn’t fit on the slide.’” Here is a man who tells it like it is, and he told it like it is in our recent podcast.

Supply, demand and cobblers

“The Chaos Scenario” had its genesis in a presentation Bob made to colleagues at an Ad Age editorial conference. Fuelled, he says, by a night of heavy drinking at the conference, he had an epiphany while preparing his presentation.

After years of observing the rise of the digital media and the reaction to it by traditional media and advertising, he realised that “If these trends continue, it’s not just a disruption, but the doom of the industry.

“It was an end of times story. It wasn’t just the industry – it’s also my own job.  I thought, ‘I’m going to lose my job – and probably earlier rather than later’….This is like the Industrial Revolution, and I’m a cobbler.”

A big part of the problem, Garfield says, was the way traditional media dealt with the web when it first appeared. “In the early days, we simply moved our business model onto the web. We didn’t think about the fact that the advertising dollars don’t make an equal transfer.”

“We ignored the law of supply and demand – if there is an endless reservoir of content (and therefore advertising inventory), it will depress the price of advertising.”

Meanwhile, while media outlets increased their audience, they didn’t generate any income from it. And now, Bob says, there is a growing group of consumers who “believe that ‘content wants to be free’. Ridiculous! Toasters, paper towels, etc. don’t want to be free – why should content want to be free?”

Regarding the plans of publishers including News Limited and Fairfax to start charging for their content, Bob says that “In some pockets, people will make paid content work. Whether they can put the toothpaste back in the tube is questionable.”

He cites the American HBO model, where the pay television network has specialised in high quality content that people will pay for. That contrasts with the broadcast TV model, which has been “to throw mud at the wall and see what sticks – 90% crap and 10% quality.”

Ironically, he says, the pay television model is being undermined by people streaming free video using the same cable that brings cable TV into their house. “People are now using broadband to find programs they used to pay their cable bill for, so the cable companies have been hung by their own co-axial noose.”

From shouting to collaborating

But it’s not all bad news, according to Bob. Out of the chaos is coming a re-birth of marketing.

“Mass is gone, micro is the new reality. Micro offers extraordinary opportunities.”

Bob says businesses need to stop thinking of customers as passive recipients of information and start treating them as “stakeholders, fellow travellers. You need to deal with people as individuals.

“Drop the megaphone – the conversation is no longer about you – and get used to aggregating a community.”

“You’ll be able to get intelligent loyalty and even evangelism from the crowd. You’re not just forging an ongoing relationship, you’re getting collaborators.”

Brands, he says, offer a conundrum in the digital environment. “On the one hand, brands will be increasingly insignificant. They’re a proxy for information  – they signal that they will be there tomorrow, and the product will be approximately as good. In the digital world, we have an infinite amount of information at our fingtertips and we don’t need a proxy, we have the info.

“But the other way of looking at this, there’s so much information out there, that a brand becomes an aggregation tool – suddenly brands have a different function – they save you the trouble of sifting through everything.”

Bob points out that there is an enormous amount of data on customers now available via the Internet – much of it surrendered voluntarily by people. Unfortunately, the skill sets needed by advertisers and marketers in this data-intensive environment are different from those currently running the industry.

“I don’t care how creative you are, in your t-shirt and sneakers. If you’re 30, you better work out what you’re going to do at 35.”

Apologies, Content Pressure and Training: Digital Marketing in the News This Week

More new developments of interest:

Facebook and the price of tech utopia: Greatest piece of hyperbole about the Facebook/Cambridge Analytica story that I’ve read: “What has since transpired from those early moments of millennial innocence is as tragic as it was inevitable. The cost of utopia, we are now seeing, may be too high…”

The hunger for content is feeding Australia’s creatives well: The double-edged sword of digital content – the demand is increasing, but clients want more for less money, putting stress on content producers.

How Australia’s PR and comms industry can overcome the talent drought: Companies need to take chances on new hires, and universities need to push internships harder. Point taken!

Mark Zuckerberg’s Facebook apology is the linguistic equivalent of ‘shit happens’: An interesting take on the use of language and emotion in getting your message across – not strictly digital marketing, but very applicable.

Content Marketing 03/04/18

I come across heaps of interesting and relevant material on digital marketing and media convergence. Here are just a few from the past week:

The WIRED Guide to Memes: If you ever wondered what Chuck Norris, Rick Astley, Pepe the Frog and Dramatic Chipmunk had in common, here’s your answer!

10 Awesome Aussie Content Marketing Examples: Look past the cheesy headline and read about how several Australian companies are successfully using content marketing.

Once Upon a Digital Time: How to be an Amazing Storyteller When Everyone is a ‘Storyteller’: An illustrated ebook from LinkedIn about how to survive in today’s ‘short attention span theater’.

The 50 Blogs Every B2B Marketer Should Follow: It is exactly what it says it is! If you’re serious about working in this industry, you should start reading some of these blogs. The list includes several experts whose podcasts I listen to regularly, including the Content Marketing Institute, Jay Baer and Mark Schaeffer.

Top Takeaways from Intelligent Content Conference: Presented by the Content Marketing Institute, this deals with content in the context of artificial intelligence, including chatbots. Good preparation for discussions about technology and the future of digital marketing.

Powered by WordPress.com.

Up ↑

%d bloggers like this: