6/30/2010
Posted by Soraya Eltomey, Corporate Communications Associate, Draftfcb
Draftfcb today announced the launch of its Institute of Decision Making. What’s this all about exactly? Well it has to do with understanding the instinctual triggers that influence consumer decisions and applying that expertise to attract new business and build better brand value for clients.
To find out more about what’s to come from this global group and its academic partners at Stanford and Berkeley, check out the video below from the Institute’s director, Draftfcb San Francisco Director of Strategic Planning Matthew Willcox.
MW
Also, see today’s New York Times (http://www.nytimes.com/2010/06/30/business/media/30adco.html) and the Institute’s POV on neuroscience marketing (http://www.draftfcb.com/content/engage/pdf/Engage_Neuromarketing.pdf) for further insights. 10/21/2009Posted by Michael Fassnacht, Global Chief Strategy Officer
We always knew that Credit Card Companies were very sophisticated in utilizing consumer data to be smart in new card member acquisition and monetizing them as ongoing members. But even I was surprised to read in the latest Fortune magazine that Ken Chenault, CEO of American Express, mentioned the utilization of card member data as one of their most promising revenue streams in the near future:
“Another area that we feel strongly about is that we have information we can use in very effective ways for a range of partners. So, for example, what might be surprising is that the Darden restaurant (Red Lobster, Olive Garden, LongHorn Steakhouse, and other brands) relies on us to help with site selection for its restaurants. We believe that our information, which h we use in our own business and marketing, can be used by retailers, restaurateurs, and other corporations to improve their business, and that’s an increasing focus for us.”
Most interesting is that companies like Amex are not just utilizing their own data to improve their own business but that they are more and more experimenting in building an incremental revenue source. Over the next few years, most companies with data volume that is representative enough to draw meaningful conclusions will attempt to monetize their data intelligence.
Data Intelligence becomes a vehicle for revenue growth by selling smart intelligence to other parties. Quite a few retailers tried to pursue a similar path by packaging intelligence from their frequent shopper programs and attempting to sell it to manufacturers. There are some success stories (e.g. Tesco), and some stories of failure with such an approach (e.g. Safeway). The three most likely industries to pursue such a path are:
- Retailers (selling intelligence to manufacturers)
- Financial players (selling intelligence to card issuers and merchants)
- Travel companies (selling intelligence to non- competitive travel partners).
Everyone playing in this field of building an incremental revenue stream by utilizing proprietary consumer data will be smart in analyzing the up- and downsides of such a move. A retailer might be more interested in leveraging consumer intelligence in attracting incremental trade dollars from the manufactures instead of attempting to sell data driven marketing programs. The pay-back could be much larger.
9/8/2009
Posted by Michael Fassnacht, Global Chief Strategy Officer
Any marketer faces daily the same question over and over: “What is your opinion on X?” My unscientific observational research over the last months leads me to the conclusion that everyone has always an opinion on everything. I rarely experience the moment of silence when the asked marketer pauses for a few seconds and says quietly but confident: “I don’t know, I don’t have an opinion.” I call this phenomenon of constant and never ending opinions “The dictatorship of opinion.”
It has all the symptoms of a dictatorship:
- There is a clear behavioral norm. When asked for your opinion, you better have one, independent if you have any knowledge, insight, or anything meaningful to utter.
- There are clear sanctions for refusing to follow the norm: Marketers who don’t have a lot of opinions will be slowly excluded from any meaningful discourse, any important discussion or any executive position. The definition of an executive marketer includes the capability of expressing endless opinions with a emotional mood continuum from presidential to passionate. Most important is the sole utterance of opinions, the quality of the expressed opinion is secondary.
- Expressing opinions is a self feeding mechanism: Every expressed opinion as part of a marketing discussion will generate up to 10 additional opinions. It is less relevant if these uttered opinions bare any connection to the first mentioned opinion, it is all about feeding the monster that can get reignited with the simple question: “And you, what is your opinion?”
Sometimes we test the abilities of very talkative children to hold silence for five, ten, or fifteen minutes, just to demonstrate that silence can be a refreshing and meaningful space between human beings. What would I give for a group of marketers that would try not to express an opinion for a few hours? Yes, it could be a torturous experience for any marketer, me included.
8/31/2009Posted by Michael Fassnacht, Global Chief Strategy Officer
Robert Capps has a close to brilliant article in this month’s Wired Magazine, writing about the phenomena of things and services that don’t strive to be perfect but just good enough. It’s the old but highly relevant story of creating value stories instead of striving for perfection. His examples are covering a wide area: From traditional phone to Skype, from high end video cameras to the Flip, from military jets to drones, from books to the Kindle, from the traditional television to Hulu and from computers to netbooks.
Why is the principle of “Good enough” so successful? A few reasons:
- Over- Engineering: A lot of consumers never use all the functionalities that a particular product or services offers. In most usage occasions they only use a fraction of the overall offering. Today’s consumers have realized the myth of over-engineered products and are willing to get for a “Good enough” alternative.
- Accessibility beats Complexity. For a lot of consumer it’s more important to have an easy to use and ready available product or service, instead of spending a lot of time and energy to unlock all the different potential functions that a product might have.
- Value = Low price + sufficient quality. Consumers are more price conscious than a few years ago, so they are thinking twice before making a high price tag purchase decision. These “Good enough” products lower the threshold for a purchase, and they still provide good quality.
It seems that there is a strong parallel to today’s approach of designing marketing programs. The programs that require a huge amount of money and time will be more and more replaced by a larger number of quickly developed and quality wise sufficiently produced programs. These programs will cost only around 10% of the previously large scale generated programs, enabling a brand to launch 10 of these programs to the same prize. And these programs will be less placed in highly paid media locations but in the brands owned (e.g. Website, Store, Packaging) or brand earned (e.g. Social Media, Buzz) spaces.
It would be an interesting research exercise to count the number of all marketing programs that a particular brand is launching in 2009 versus 2005 or 2000. My hypothesis is that most brands have a significant higher number of programs with a dramatically reduced expense number per program. The principle of “Good enough” will enter the marketer’s vocabulary faster than we can say ‘Web 2.0”.
4/14/2009Posted by Michael Fassnacht, Chief Customer Intelligence Officer, Draftfcb
In a very recent meeting with Paul Banas (check out his very well written blog at www.insightbuzz.com ) we discussed the latest trends and concepts within the Web Analytics space. In the midst of the discussion we came upon the synergy of using the methodologies of Behavioral Targeting in the Analysis of User Generated Content (UGC). Huayin Wang, one of the truly innovative minds in this space, described the concept of this application as a four step process and methodology. He suggests calling this kind of approach “Micro Analytics”, where one performs analysis on an individual level-type data versus “Macro Analytics” where one is looking purely at aggregated data elements:
- Treat UGC as the raw gold of data information. Find the right methodology to score the individual UGC pieces by relevance and relationship to each other. This kind of quantitative exercise will enable one to decipher patterns within the large universe of UGC, either on Flickr, YouTube, on blogs, etc.
- Identify the right UGC content clusters to understand marketing opportunities. This will enable one to isolate potential opinion leaders within a certain content grouping as well as unveil unleveraged perception spaces for a particular brand.
- Build a persuasion platform that uses the different attributes of each UGC element for an interactive program, all based on the principles of behavioral targeting.
- Analyze the modified UGC landscape after a sufficient period of time to understand if the interactive marketing program has created any positive impact for the brand.
Over the last year the whole Web Analytics space has moved so fast from the pure measuring of Web Metrics into a much more complex and interesting area of mining and influencing the ever increasing and changing landscape of consumer intentions, either in form of UCG, Search Behavior, or expressed written opinions.
I expect that this sub domain “Social Media Analysis” within Web Analytics will get further attraction and go beyond purely trend and insights reporting. The core challenge will be of how to combine Behavioral Targeting principles within Social Media Analysis to create successful marketing programs. 3/30/2009Posted by Michael Fassnacht, Chief Customer Intelligence Officer, Draftfcb
Over the last years accountability has been a dominant topic in most marketing discussions. But over the last 12 months of ever deteriorating economical situation the discussion around “Efficiency” has gotten more attention. The pressure to cut costs is as strong as rarely before. Therefore more and more marketing organizations, on the client as well as on the agency side, are discussing of how to reconfigure their marketing processes with one goal in mind: reducing costs.
Most of these cost cutting activities are hastily designed and miss the bigger picture of redefining the business. In yesterday’s NY Times Steve Lohr writes about the changes in management thinking and strategies in the lens of today’s crises:
“The sharp downturn will force companies to go beyond simple cost-cutting to take a hard look at the economics of their business. Most companies are actually bundles of three different businesses: Infrastructure management, product and service development and commercialization, and customer relations.”
Translating these three areas of activities into the marketing field, we could conclude that we have the following three core domains of value generation in most communications centric marketing organizations:
- Production: Creating of all executional elements of marketing programs
- Idea and Strategy: Generating the right data driven and consumer-centric ideas
- Client Management: Managing all the relationships with clients and 3rd parties.
It would be a good exercise for any marketer to dissect their organizations, processes, and value generation into these three components. It would enable them to find out how they can truly redefine of where they generate the real value of their organizations and where they are wasting time, money, and resources. It is not all about non-strategic cost cutting but about reconfiguring the business model of marketing around production, ideas and strategies, and client management. It is amazing of how many old bad behaviors und unnecessary tasks have survived over the last 20 good years within marketing. And most marketing organizations, both on the client and on the agency side, react by just reducing headcount without analyzing deeply of how they work. It’s time to redefine where and how a marketing organization can truly generate value.
Our business will continue to focus on accountability and how to build the most impactful marketing programs. But the need for efficient marketing will rather increase over the next years. And the so called good old times will not come back. This recession will continue to change dramatically our field. It’s a time of opportunity for marketers who are willing to be brutally honest with how and what they do. 2/24/2009
Posted by Michael Fassnacht, Chief Customer Intelligence Officer, Draftfcb
One could make quite a fortune by understanding and utilizing the right metrics that would indicate when the US economy has finally reached bottom, the moment in time when it would show again some decent growth numbers. I have a suspicion that we don’t consider the right metrics that we need to follow (beyond Consumer Confidence and other long established indicators) to understand this turning point. Consumers have fundamentally changed their consumption behavior, therefore the underlying metrics need to be adjusted, too.
Let’s take car sales. We always assume that US car sales have to reach sooner than later a positive upswing. Currently people don’t buy too many cars anymore but they will buy again after their cars are getting older and less reliable. In 2006 (the best car sales year ever) almost 17 million cars were sold in the US, last year it was much lower, this year will be even worse. So, we are all waiting for the sales curve to move upwards again. Why? Because we expect the future to behave like the past, at least sometime in the future.
But when we look at an interesting metric from Japan, we might realize that we are looking at the wrong thing. Sunday New York Times writes in article about the mentality changes of Japan’s consumers:
“A survey last year by the business daily Nikkei found that only 25 percent of Japanese men in their 20s wanted a car, down from 48 percent in 2000.”
This means that no one in Japan expects that the annual car sales will ever reach again the good numbers from a few years ago. It is irrelevant to look at total car sales from the past but it is more important to understand consumers’ intent in today’s world.
We should probably spend more time and energy to truly understand consumer intent metrics and compare them over time. It’s easier for a consumer to report his intent (despite all the bias of self reported data) in a particular category than an overall judgment of confidence in the economy of his personal situation. I am curious if any research company looked at “New car purchase intent” behavior by age group over the last 10 years and was able to correlate it to actual sales figures. 10/20/2008
Posted by Michael Fassnacht, Chief Customer Intelligence Officer, Draftfcb
When I travel through our agency network and get to meet so many different characters in our local agencies, I ask myself what makes a great Draftfcb office. I am sure that most of us would look at the creative work that the office has produced and judge the quality and impact of all the office’s output. Others might just ask if the office makes a lot of money. While both questions are reasonable approaches, I prefer to ask myself a very different question that requires more time to answer:
Does the office as a whole combine the right elements of artists and scientists to produce great marketing? Does the office practice a productive form of “ArtScience”?
Ok, what is ArtScience? David Edwards, the founder of “Le Laboratoire”, a new artscience center in Paris, writes in his book “ArtScience” that it is the productive collaboration and elimination of borders between the two different disciplines and discourses: Art and Science. His vision is to enable organizations to “integrate some organizational mechanism that selectively reduces barriers to idea translation between the arts and science.”
The best Draftfcb network offices feel more like labs where talent from different disciplines work together in an exploratory fashion to create insightful and impactful marketing. These offices have taken our “Wheel” philosophy and translated it onto a new and their own level. These offices live in a productive tension between Art and Science and mine this tension to create truly unique marketing. It’s a lot of fun to see “ArtScience” in practice in one of our Draftfcb offices. 10/2/2008
Posted by Michael Fassnacht, EVP, Chief Customer Intelligence Officer, Draftfcb
The great growth success in our Chicago office over the last 12 - 18 months allowed me to search and meet a lot of candidates for open positions across most of our divisions. It’s always interesting to ask incoming candidates why they would like to work in an agency like Draftfcb? Quite a few candidates are not able to have a direct or meaningful answer beyond the usual platitudes that “it sounds exciting”, “I want a new challenge”, “I heard you have great Mocha Frappuccinos at your coffee bar” or “A friend told me that you are the only agency in Chicago hiring people and I don’t want to move to Kansas”.
The right, or at least the most relevant, answer is closely linked to what it means to be a marketer in 2008. In my view, it comes down to the two fundamentals that any marketer should focus on: First, trying to understand consumers and their behavior. Second, creating something so unique, interesting, and relevant that it can change a consumer’s behavior, ultimately leading to the sale or usage of our clients’ products. A lot of people in our industry forget these two fundamentals; they forget what our industry is all about. They focus either on their own grandiose spotlight and brilliance at fancy industry events or their career survival in an environment of recession.
To pursue these two fundamentals in today’s world is more exciting than ever in the history of our discipline. First, the methodologies of and approaches to understanding consumer behavior are as multifold, diverse, and creative as never before. Just look at the ever growing discipline of behavioral economists or at the expanding practice of Social Media Analysis that mines the behavioral data of millions of consumers on the Web. We marketers should know and utilize them intensely and not solely rely on Don Draper’s brilliantly insightful moments at a smoke-filled bar after three martinis. These moments of individual brilliance are not gone but they are fueled and supported by a more rigorous and scientific approach that our discipline did not develop until a few years ago.
Second, the means of intersecting with consumers, driven by a deep consumer understanding, are broader and wider than ever. We marketers can build a small Web applet that transforms marketing from a communication to a service point used by millions of consumers, or we can put a sticker on an apple in a grocery store, spreading our message to tens of thousands of browsing shoppers, or we can design the environment of a new pop-up store introducing a new product to thousands of visitors.
We marketers have the full freedom to create whatever we believe will drive a true change in consumer behavior as long as we do our data and insights homework, increasing the probability of success. Done right, this truly liberates creativity in all of us across all disciplines and functions.
Being a Marketer today is more demanding, scientific, and creative than previously, but it still comes down to the two basics: understanding the consumer and creating something relevant for or with the consumer.
At the end of every single day, we should ask ourselves if we have done anything compelling or innovative in one of these areas. And we should only hire new colleagues who are striving to fulfill this demanding but simple mission of what it means to be a marketer today. Anyone else can go to Starbucks for their Mocha Frappuccino. |
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