PUNCH & KISS

Prism was revealed yesterday as a program created by the National Security Agency whereby they requested user’s data from companies including Verizon Wireless in a phone surveillance program and Apple, Google, Facebook and others in an internet surveillance program which collected data from online providers including e-mail, photos, videos, log-ins, file transfers and stored data. These programs have been deemed by the government as legal and vital to the security of the United States in a post-9/11 world and one in which social media is increasingly being used as a tool of communication for terrorists.

However legal these programs may be, there is still a breach of trust and the feeling of an invasion of one’s civil liberties when we hear that our data has been accessed. What effect however intentional or subconscious in the consumer’s mind, will these brands that complied with Prism incur remains to be seen; how each one handles the news and their response can have a huge effect on consumer trust and their relationship with that brand, either positive or negative.

Clearly this debacle has many implications, especially as Verizon Wireless (VZW) isn’t likely to be the only Telco involved. The facts strike at the very core of increasing concern among Americans that our privacy is open territory for the Government, one that President Obama promised to operate as the most transparent administration, but what is the impact on these major brands?

To minimize the damage CMOs need to be in the driving seat of crisis as they’re more in tune with consumers; they are using social-media tools to interact with them, and they can harness those tools along with marketing in a time of crisis, maintaining their most loyal consumers as brand ambassadors. If a company handles a crisis well, reinserting strong values of trust and a can-do culture, they will likely recover their reputation. To do so CMOs like VZWs CMO, Tami Erwin, need to marshal a crisis team with a response plan to lead the charge of a company that’s likely in shock, initiate decentralized decision-making across the business (and store management) and create a multi-platform response strategy that aims to hold the ‘fears’ of customers at this sensitive time.

To plan a response program there are key factors CMOs need to include in the preparation to avert leadership struggles and the in-ability of managers to advise staff:

·      Identify audiences (including unions, work councils, etc.)

·      Develop key messages internal and external

·      Integrate communication terms

·      Plan a multi-channel communications strategy (with a priority online and in-store)

·      Devise a timetable of actions

·      Create activities, materials and online response

·      Agree responsibilities of team

·      Establish an approvals process

·      Structure information sharing (those you Report, Advise, Communicate or Inform)

·      Hire external consultants – who, why and what

·      Build immediate communication branding

·      Launch a contact program between management

·      Coordinate reporting news internally and externally

·      Provide a process for feedback

The order for this massive sweeping data collection might be legal and could be the most widespread surveillance order ever given, but it’s the breach of transparency that is most stressing for Americans. Of course the Obama administration will be dragged though the coals on this, but the impact trauma on VZW (and Verizon because of its name association) could be substantial and erode reputation. Then there’s the reputation of Apple, Google and Facebook that’s also on the block. How much of a hit do they take and how will they ease the public if they’re not to blame? What will be the damage if other Telco businesses are involved; some of these brands are amongst the biggest brands in the world? How Verizon Wireless responds will decide whether the Telco category wins or loses in the court of public opinion.

One thing is for sure this surveillance approach is unlikely to change in the war against terror. The scandal is also a matter of international importance and clearly it will have repercussions for even Vodafone who own 49% of Verizon Wireless. At the end of the day even though we may end up losing more faith in our Telco provider I guarantee customers will still be using their phones, Facebook, Google and Apple products as normal, but what are they searching and talking about?

For over 175 years P&G has been the leader in consumer products, smart innovations and new products marketed with style that always generated healthy profits. So what happened to P&G? Has it lost its luster? Instead of gliding on top of success they’ve wound up falling down revealing a different and slower company than it was made famous. To change the tide, Marc Pritchard, P&Gs CMO needs to impact simultaneously seven factors that are essential if they are to pull themselves out of this wreck.

Shared values: Without non-financial goals P&G is rudderless and Marc Pritchard needs to know that if employees do not share rock hard beliefs then they’re not coming. P&Gs credo is “we are committed to delivering products and services that make everyday life better for people around the world.” P&G clearly need to reinsert into their culture a sense of shared values as these seemed to have come adrift from their halcyon days.

Structure: The cleansing fire of restructuring that aimed to streamline and simplify P&G has faltered. Marc Pritchard needs to decide if P&Gs portfolio is structurally led or strategically led. At present P&Gs master brand endorsement policy has made P&G structurally led (and slow) across hundreds of brands, including P&Gs biggest brands, Ariel, Olay, Joy, Pampers, Safeguard, Whisper, Pantene, Tide and Downy. Whereas being strategically led would enable P&Gs brand managers more freedom to make major decisions with alacrity that can positively affect profits and P&Gs corporate reputation.

System: P&G need to adopt new systems to manage its innovation pipeline and brands globally. Therefore, greater viability and accountability measures need to be incorporated into their brands and reporting systems. One example is their ramped up investments into marketing and innovation that have not yielded the sales boost that it used to. Many analysts are complaining that even though P&G has increased investment it’s merely renovation innovation and P&G need a new system for doing things differently with alacrity.

Skills: The once venerable P&G is accused of being too slow to react to the trading down of the west, the trading up in Asia, social media and the swelling middle class in emerging markets — all areas where P&G is struggling to keep up. Therefore, P&G first need new skills to cope with the fast moving world by enhancing greater flexibility across divisional lines of communication that stop P&G from flailing around like a loose fitting part in a machine that could eat itself up. Ultimately building the appropriate skills to tap growth with P&Gs diverse product portfolio.

Staffing: The market wants to see a senior management team free to make major decisions that show P&Gs global brand management is gaining momentum and outperforming Unilever and Colgate; last week’s results demonstrably showed that parts of P&G are doing neither. However, P&G might be struggling, but it’s not folding — its portfolio represents some of the biggest brands in the world that attract top talent, but staffing and succession plans are essential, especially as P&Gs CEO might not survive.

Style: Success is not about skills it’s about attitudes and P&Gs culture is accused of being too insular, a culture that has been created from the top down evidenced by the ragging P&Gs CEO Bob MacDonald has been receiving from investors and analysts. Bob MacDonald has accepted that P&G’s cost base was bloated and its processes too bureaucratic — clearly P&G needs a new style of approach to break out of the malaise. The other area that needs a style change is P&Gs pedestrian marketing that is perceived as old school. 

Strategy: P&G is spending more, but growing less and P&Gs corporate ‘Credo’ has been weighed, measured and found wanton. Consequently matters are at a division of deep regret and to stop the spreading sore P&G need a succinct master brand strategy for P&G and each of its portfolio brands that can act as lens for the businesses to make decisions and a compressed management tool — something their one page Credo is evidently lacking.

The humbling descent of the famously disciplined P&G needs to remember former CEO, AG Laffley’s strategy — when times are tough you build share — and accomplish growth with determination, self-reliance and a degree of success that is particularly notable to investors. In these choppy waters one thing is for sure if P&G is to reclaim its leadership status and achieve a level of success that satisfies a vituperative Wall Street: P&G need an imaginative and audacious response that turns the tide.

Believe it or not the IRS is a brand: it has a public mission and vision statement, a prolific identity and image, targeted communications, a plethora products and services and a unique style of operations from any other type of service provider in the category. And in this disconsolate period of scandal, accusation and evidence of “inappropriate” targeting of conservative political groups by the IRS, it’s not so much about the why it’s about the moment and the IRS needs to respond boldly with precision to reinsert its mission:

“Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.”

Clearly in light of recent events matters are at a division of deep regret from the top down. Therefore, marshaling a crisis team and a response plan are critical with a unified leadership approach given that the web crawlers are in frenzy over this story that has T1 pipes rattling with all the feeds. This is why in this case the IRS needs to centralize decision-making in light of the voracious appetite of the media and blogosphere. The problem isn’t resources; it’s about managing the crisis with a can-do culture and strong values of trust that the leadership team (at the time) broke and now threatens to exacerbate Washington’s deeply entrenched partisan atmosphere.

When you need to be impactful, strong and rapid to answer the massive sense of anger from the public, hide nothing and tell all is the key lesson. Right now the IRSs reputation is shattered, US media is rabid, the current leadership is in tatters, the country is in rage, politicians are split, and our trust (even if most of us dislike the IRS) has been abused causing a widening sense of despair and desperation.

Therefore, in a crisis that deracinates your heritage it’s essential to know what makes you special, wrap up the past and blast in to the present: People often don’t know what they want until you show it to them. The IRS brand has relied on its authenticity and people are more likely to change perception in response to swift and certain actions rather than waiting for severe ones that likely won’t be peremptory.

In the IRSs advantage, brands who immediately admit they’re not invincible tend to fall lighter or not lose their reputation so dramatically. The IRS has dragged itself into war it created, its recent history needs an injection of tomorrow and that needs to happen today to ratify who they are and what they believe longer term. This is a sinister moment for the IRS to be ambitious, a moment where we will see what they’re made of, and determined leadership is required that has cold contempt for those involved in this debacle and emphasizes that the IRS was led at the time by a Bush administration appointee!

The IRSs leadership team needs to turn the hard into the possible with an ambitious ‘public’ program. Hopefully they have already set up a special group that has no ties or involvement with the case and ‘no comment’ rules whose focus is solely on the publicized efforts of the IRS. To do so the IRS needs to find their True North that will grow new, bold and exciting ways to entice the peoples trust back without all the morass of information and chatter. It’s easy to lose sight of strategy: those involved must be jettisoned and the IRS needs to choose a lane – highway or mountain pass.

The pinnacle of a brand is when it becomes an experience and in this unchartered territory one thing is for certain, the difference between mobile advertising and mobile marketing is fairly straightforward: mobile advertising happens before the click and mobile marketing happens after the click focusing on the more long-term process of driving value from mobile customers. However, knowing and doing are two different things.

Even though tablets and smartphones account for 10% of Internet traffic today the mobile market is a fragmented landscape with few shared protocols and standards along with multiple industry layers CMOs have to sift through. On the bright side mobile is no longer a testing ground, it’s a budget item and while mobile advertising only accounts for over 1% of total advertising spend ($4.5B), 90% of big brand CMOs will be allocating digital ad budgets to mobile in 2013/14. And here’s the kicker for agencies, mobile marketing can create more revenue than mobile advertising.

In this age of digital primacy mobile makes the impersonal personal with tremendous cross-generation appeal. Therefore, after all the rumination, mobile marketing represents an opportunity for CMOs to engage the consumer in multiple ways that were not possible before. Consequently, CMOs are embracing the concept of weaving mobile seamlessly throughout the purchase pathway and all other touch points to entice awareness, interest, engagement, purchase and loyalty. Ultimately moving from static banner ads to more rich interactive full-page units where sight, sound and motion are a critical component.

Mobile marketing offers new territory for CMOs to orchestrate, motivate and facilitate increased time spent with the brand by the consumer from ambient accessibility that offers connected and branded presence to customers friends and family; mobile personalization with user selected preferences that enables connected pleasure through to the advent of media sharing such as passing the tablet. Mobile professionals are also increasing as they buy more apps that make their lives easier and at the other end of the spectrum digital Moms are heavy users for show rooming, health and as the miraculous pacifier for kids!

Local advertising is difficult for mobile and it lacks the technical synergy that enables ad targeting, delivery, and analysis to work fairly seamlessly across the sprawling desktop world. Therefore, event participation, check-ins, loyalty points and geo-fencing – where the promotional proximity is targeted where the customer is – are going to be powerful components driving mobile marketing. Simultaneously, physical proximity of something is going to influence the customer experience. For example, one powerful tool for CMOs and retailers is augmented reality as it allows brands to pluck the benefits of physical stores without incurring the costs.

Retrieval of real time, valid, relevant and actionable behavioral data and analytics is made possible by Apps that are now mainstream. Therefore, mobile’s greatest untapped resource is its morass of customer data, but the gulf between hype and fraud is best shown in the numbers: 40% of click rates are fraudulent and 60% of mobile ad clicks are accidental besmirch the credibility of the category.

“The mobile ad market is just not fully formed yet,” said KC Estenson, Online & Mobile business executive for CNN.

Answering the CMOs need for valid and relevant data is RTB (real time bidding), but for media agencies RTB threatens their profit model and therefore, response has been desultory as they quietly fulminate over its looming presence. However, as RTB provides munificent real time data it will be important to CMOs, especially as post-installation events are far more important for brands including the third of customers who order online pick and up their goods in stores.

Evidently we’re also close to the end of fixed place marketing and appointment content consumption, but even though we’re amidst new rituals and desires no one wants a half page of advertising plopped on their mobile device. Further compounding the issue for CMOs are that the rules of mobile marketing change with different operating systems and combinations of brands, device and wireless operators defending their turf along with manufacturers creating new form factors for mobile devices including tablet, flexible, wearable and hybrid designs.

Competitiveness in this category needs regulation, innovation and infrastructure, but as consumers spend more time and undertake more research than ever on their mobile devices (40% of emails opened on mobile devices) competition will escalate. Even brick and mortar retailers are paring space and building up on mobile technology to focus on how to win competitive advantage. So any CPG brand or retailer that stands still on Main Street and doesn’t like change will like irrelevance even less. To break out of the pack CMOs brand building communications will have to work harder. Therefore, it’s foolish for the CMO to communicate a single Omni-channel message across all mediums – it needs to be designed for mobile.

Mobile marketing is something you do not something you wait for, but many CMOs have shown a pusillanimous response to mobile advertising and still haven’t fully caught onto mobile marketing because it’s a train wreck of decentralization; it’s okay to be engaged by mobile marketing today and choose to test it for now, but to avoid mobile marketing and ignore it is dangerous strategy.

Success in mobile marketing is about attitudes not skills so even though budget allocation might be the picture, it doesn’t change the issues. To shatter the complacency, successful CMOs need to build mobile marketing initiatives in formats and with key words that are tailored for each consumer segment and device – not more ‘spray and pray’ like the mobile ad networks hitherto offer. Why? Mobile marketing should not be treated as a distinctly separate marketing channel (that can generate more revenue for agencies than mobile advertising alone), but the brand in the hand that can wield immense power for the CMO, i.e., don’t be frightened by Possibility, she makes a great mistress.

 Originally published as a contribution to the The Wharton Future of Advertising Program’s Advertising 2020 Project. 

‘Time spent with the brand’ will be advertising’s most sought after metric entering 2020 as the current concept of brand value, traditional marketing and retail outlets will have further eroded. With the convergence of TV, computers and the Internet, new century advertising’s bright lights and trumpets will unleash their sophistry in 2020 on the US Presidential election, Europe’s UEFA Cup Final and the Olympic Games. All massive media events enjoyed by billions around the world that will be empowered by the new normal in smarter advertising.

By 2020 we no longer subscribe to the old ‘sales funnel’ approach where consumers hold a large number of brand options and narrow their choices to an eventual decision aided by advertising. Consumers already limit their brand options at the first consideration stage, seeking out input from peers, reviewers, vendors and competitors. Increasingly consumers are delaying purchase decisions until they’re actually in-store or about to hit purchase – that opens up when and what touch points consumers are most open to influence and how to create positive consumer experiences at those points. Ever more powerful will be point of purchase and Near Field Communications (NFC) offers radical potential to push tailored content and brand offers to a customer’s specific location or share social coupons with their friends.

Encouraging customers to interact, manipulate, and engage with the product by proactively taking part in sharing the brand is the Holy Grail for advertising today: Bain & Co. found that the most recommended company in any given category grows 2.5x the category average. To ensure time spent with the brand, advertising needs to develop its social skills to a whole new level to exploit the huge shift in post-sale behavior. Boomers will be center stage for advertisers in Western countries, a hugely powerful consumer segment that has migrated online and adopted technology with alacrity. New mass audiences have also formed, including one billion young digitized middle-class, ‘Gen C’: connected, community-oriented and content-centric consumers for whom digital is second nature and by 2020 they make up 40% of the world’s population.

Consumption patterns will be tied to the exponential increase in social networking threaded throughout our day, mostly using mobile devices. Six billion “Broadcast Braggarts” will be sharing their lifestream offering hyper personalized information from friends, online status, location, preferred communication, hobbies and shopping habits. This will transform social media advertising opportunities with how we work and how we consume. ABI Research estimate over 136 billion apps will be downloaded worldwide by 2017, much of which is currently unverified. This represents a huge opportunity for advertising to enable content creation by inviting ideas from consumers via co-creation, collaboration and crowdsourcing as viral marketing and peer reviews amongst consumers will be essential to entice ‘shareability’.

The real battle for consumers’ time spent with the brand will rage in the home. By 2020 consumers will enjoy over $1.5 trillion of global entertainment using superfast technology with wireless devices the dominant tool for business, entre­preneurship, and Internet access for billions of consumers. Technology will be intimately woven into our lifestream and with prices for ‘handheld’ smartphone technologies dramatically lower, mobile strategies in advertising will optimize the prevalent fast speeds, NFC, QR cards and RFID technologies across a growing multitude of digital interfaces and physical touch points, all seamlessly connected in the cloud.

Global media spend will be more than $1.6 trillion and endless varieties of curated advertising strategies would have evolved with the industry more intertwined. To fund budgets many big brands are piling down Madison Avenue looking for efficiencies they can add to their marketing budgets. Coke plans to strip out $550M of costs to fund future marketing and other major advertisers are following suit. To match the demand for fresh ideas, agency holding companies will devise new structures with their specialist businesses bundled under their main agencies with clients more involved and agencies forced to adopt pay-for-performance models that our archaic system of agencies employing a few creative teams to drum up category busting ideas simply won’t cut.

By harnessing communities across multiple platforms, advertising can create new value pools by placing consumers at the center of the brand experience: 1 in 3 people come to a brand through a personal recommendation. Advertising needs to create demand by being harbingers of change; whether online, mobile or televised, the experiences we have with advertising need to undergo big changes and we have the mind-set, skills and next-generation media to engage (4Screen) consumers who have more power than ever. Take 3D, it will be super efficient, enhancing the immediacy of the pictures and offering controls that allow the viewer to change their viewpoint or zoom in and out – watching from home will offer an experience never thought possible. And we’ve hardly seen the potential of technology to customize outdoor advertising and sponsors’ localized messages aimed at different segments and market sectors simultaneously.

Four consumer trends will have direct impact: ‘Nomad,’ the mobility of people to move to different places creating multiple opportunities for localized brand engagement. ‘Downsizing,’ the growing trend for calorific control and quantity, such as dosing, has diverse implications for interconnected advertising. ‘Back to the Farm’ speaks for our enchantment with all things green and will force big brands to open deeper two-way conversations with consumers as witnessed with Nestle and it’s poorly handled Palm Water debacle. Finally, ‘Bring it Home’ will have major implications for consumers’ time spent with the brand as a direct result of the ‘debtcade’ having forced billions of people back to their homes for entertainment and food – battle for the lounge.

In the battle for the lounge, advertising is facing the challenge of change by the click and becoming more interconnected. New century advertising must not try and compete as technology companies, or as social networks, or as mobile providers. Advertisers must compete as content creators with an understanding of how to deliver valuable content to the right audience at the right time, in the right place by deploying social media and mobile technologies. What does advertising need to do now for this future: be useful, enable sharing, be entertaining, provide knowledge, enable connections, enhance the experience, encourage community building and ultimately solve how to entice consumers to pay for their social media!

For many large brands item number two or three listed on the company’s Capex sheet says ‘Media’. Therefore, CMOs are constantly battling an imbroglio to demonstrably prove that marketing is an investment not a cost. Given the CMO’s charge is to build revenue and relevance, added value must be demonstrated beyond ROI and for this new normal in marketing there are new rules of engagement:

1. Answer the CMOs silent question, ‘Can I trust you with my business and marketing strategies?’ because succeeding target is not the only goal and pre determined goals undermine future success. However, that said, more than ever CMOs are vested in making the quarter and are primarily interested in the business outcomes of using services. Integrated marketing brings with it distracting challenges and by connecting the CMO to revenue, convincingly showing how the investment will move the needle north, an invitation to sit at the table will be forthcoming. Consequently sales discussions must focus on business drivers and strategy cannot be made from a sound bite nor can a single strategy work across the diversity of the business; simple solutions to complex problems are often simple, straightforward and wrong.

2. Follow the rules of engagement. How well you play in the sandbox might be a cliché question, but it’s often said that as a client needs more integrated marketing from its agencies, each agency’s competency grows, but their passion recedes. CMOs know they can create different vantage points for their business and achieve amazing results by approaching big marketing challenges as a collection of agencies who possess a willingness to participate and check ‘not invented here’ egos at the door. In the relentless pursuit of growth the simplest answer is to act by partnering with other agencies, client departments and taking a seat at the table, able to inform the CMO about their brand’s future.

3. Do not assume the brand idea is the agency’s, undertake half-baked efforts or simply not care enough about the bigger picture and all involved is a recipe for disaster. CMOs are determined, to the point, efficient, precise, careful, reserved and logical and need to be convinced because they’re highly suspicious of generalities – even the noblest of ideas sometimes do less for them than a siesta or an Advil. Therefore, in the world of creating and sustaining stories, clarity and a shift in thinking that recognizes the difference between truth and fiction is that the fiction has to make sense.

4. Much a do about nothing: the difference between expecting and inspecting lies in the execution. Therefore, avoid ocean boiling and conjuring up strategies out of sound bites; agencies need to create, fashion, execute or construct according to a plan that reflects the CMOs needs, e.g., shareholder value is a result not a strategy.

5. Failure to edit work. The CMO is vested in making the quarter so there’s constrained bandwidth for actionable insights that can move the needle north. The success of contrarian marketing strategies might require CMOs to table prevailing marketing theories and embrace experimentation, but it’s about short-term performance for the client not long form presentations by the agency. IQ is one thing – emotional conviction that comes from experience is another far more powerful and rapid component. To be erudite it’s best agencies apply Rudyard Kipling’s five honest men: who, what, why, where, when and then show the CMO ‘how’ it can be done.

6. Presenting other people’s work. An idea is as real as a bullet and great artists are famous for stealing ideas and extracting something unique – adaptive strategies are what’s called for, but making assumptions about a specific program’s success and the agency’s ‘role’ in its accomplishment is a mistake that can get a firm shot down.

7. Lack of follow up and a slow response like some species of corporate bureaucrat causes a morass. The more an agency wants to achieve the more it achieves. Agencies can find win-win solutions – but a majority of the time, they’re just arranging the budget, time, people levers around to accomplish strategic objectives. Therefore, viability and accountability are critical and prospective proposal writing by the agency is more an attitude than a skill. One consulting firm reported increasing their fee business with P&G by 50% solely by listening to clients and proactively making suggestions.

8. Attacking a competitor. Agencies must avoid vituperative attacks on a competitor; it’s unoriginal and a somewhat sleazy course of conduct. For a CMO and his team it can feel like shoveling up road kill and leaves a bad taste. Agencies would do themselves a favor if they heeded, Machiavelli, the rapacious Fourteenth Century prince’s advice to deliver good news oneself and bad news through others.

9. Taking advantage of the CMO. Whether it’s bulldozing the CMO to make decisions in the agencies favor through to agency partners ganging up to twist the arm of an approach, many CMOs feel they’re paying too much. Therefore, once vaunted high switch out costs are no longer an agency advantage holding onto the client, as clients now view that as an opportunity to streamline efficiencies. Ultimately CMOs buy ideas to make a gain or avoid a loss so ‘Why should I care?’ is the client’s (real) question that agencies should be asking themselves before the big reveal.

10. Team Chemistry. For the elegant exchange of value in the client relationship fielding the right team is critical. CMOs sit through countless meetings with (supposedly) ‘the smartest team’ in the room, so the best approach for the agency is to work for applause with the team that’s going to do the work. The CMO needs to know there’s good chemistry as they have to spend much of their time with their agency partners - developing roadmaps, writing requirements and business plans, supporting sales and marketing, interacting with partner agencies – all depends on good chemistry. The better the agency is at knowing and communicating what needs to be done and why, the more they will add value and excel in front of the CMO.

At the end of the day, CMOs want actionable advice on growing their business that secures their role. Across the brandscape, CMOs are focused on generating organic growth and achieving innovation. These two are the key drivers for business growth going forward in 2013. Therefore, belief, optimism, courage and preparation might rule the day, but in this new normal in marketing, when it comes to building revenue and relevance agencies should remember what they say in the military, ‘amateurs focus on strategy while professionals focus on logistics.’

According to Money News and “Aftershock” author, Wiedman, “despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.

Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.”

For more: Billionaires Dumping Stock