A New Way Of Approaching Communications Planning Part One: Creating Collateral

…because I believe brands should only invest in marketing communications through existing users of their brand

 

From media scarcity to abundance

People don’t consume advertising.  They really don’t.  Sometimes an ad is great enough to attain the position of demandable content; YouTube fame then beckons.  For a while.  But all in all we don’t consume advertising.  We consume content; and to get to that content, we consume media.

The most significant trend in our industry – a trend discussed by Rory Sutherland during a presentation to an IPA Outdoor conference in 2007 (see note 1) – is a shift from media (and therefore content) scarcity to media (and therefore content) abundance.  Media channel fragmentation, in conjunction with technology-driven control over content creation, distribution and consumption has created a new paradigm.

In his Excellence Diploma submission in 2007 Faris Yakob described how this new paradigm is already here, “it’s just not evenly distributed … young people today [as opposed to the ‘passive massive’] have grown up with digital media, and so they have an intrinsically participatory relationship with ideas” (see note 2); and by implication with brands.  Brands are, or should be, participatory.

 

 

 

 

The business of creating collateral that adds value to brands, from top; Pot Noodle the Musical, Innocent Bobble Hats, Honda Live Ad, Eurostar’s Somerstown and Nike’s Human Race

The importance of collateral

Creating a participatory relationship with brands is encouraging brands to go play (see left).  It’s why the BBC built the iPlayer.  It’s why Mother created a musical for Pot Noodle (see note 3).  It’s why Innocent put bobble hats made by the WI on their bottles.  It’s why Honda made a live ad.  It’s why O2 branded a dome.  It’s why Walkers are asking for help creating a new flavour of crisp.  It’s why Eurostar funded Somerstown (see note 4).  It’s why Ben and Jerry’s had a party on Clapham Common.  It’s why Nike encouraged to us run against the clock, then each other, then the world.  It’s why Contagious Magazine exists.

It’s also why clients demand big ideas and brand platforms; and why agencies went media-neutral and 360 degree.  It’s why all of us look for new, interesting, engaging and involving ways for the brands upon which we work to communicate.  We’re in the business of creating collateral that adds value to brands; investing today to generate cash flows tomorrow through the creation of brand equity (see note 5).

Ultimately we’re responding to a climate of media abundance by encouraging consumers to participate in our brands’ ideas.  The incentive to do so comes in the form of added value for customers; value which – as the examples above demonstrate – comes in the form of ‘collateral’: ancillary items or experiences created through the marketing function that add value to our consumption or appreciation of a brand.

Distribution of brand categories across product vs service axis and short vs long term consumption cycle axis.  Not all categories shown. 

A framework for collateral creation

Let’s return to our model of retention as a starting point; with the aim of making existing customers not want to defect, but rather generate word of mouth which in turn drives acquisition of new customers and ultimately profits and growth.

How can we go about systematically creating collateral which we can deploy to existing customers with the ultimate aim of growth?  We first need to appreciate that not all products and therefore brands are created equal.  Where a brand is best placed to deploy content – and therefore the most appropriate collateral to create – depends, I believe, on two factors (see above and note 6).  Firstly, whether you offer a product (generally tangible) or a service (generally intangible), and secondly how often your brand is consumed (see note 7).

Short-term products

Products consumed in the short term (eg FMCG) typically have less opportunity to create and maintain relationships through tangible customer databases.  They rely instead on panel data to monitor penetration rates and share of customer.

Collateral created for products consumed in the short-term (is primarily deployed through consumer touch points such as packaging (eg Radiohead’s packaging for it’s ‘In Rainbows’ album (see note 8), co-creation (eg Nokia’s Concept Lounge – see note 9), branded retail environments (eg Niketown or Glaceau vitamin water’s pop-up shop) as well as through experiences (eg Innocent’s Fruitstock).

Short-term product collateral: From top; Innocent Fruitstock, Radiohead’s ‘In Rainbows’ album, Nokia’s Concept Lounge and Niketown

Long-term products

Products purchased and consumed over the longer term (eg motors) have the double dilemma of being purchased infrequently and – because no ongoing financial relationship exists – of not necessarily having sustained contact with a customer once they do purchase.  It’s for this reason that customer identification processes such as product registration (eg in the case of many technology products) are often prevalent.

The collateral primarily created for long-term products are deployed therefore through consumer touch points such as clubs (especially in high-interest categories eg Mini2.com – see note 10), branded retail experiences (eg the Apple store), and product customisation (eg the Electrolux DesignLab (see note 11).

Long-term product collateral: From top; The Apple Store and Electrolux’s DesignLab

Short-term services

Short-term service-orientated brands (eg airlines) are, by virtue of being in the service sector, often in the position to collect substantial information about their customers.  Online retailers know the purchase history and online behaviour of customers and can make recommendations for future purchases accordingly.  Amazon’s accuracy in knowing what I may wish to read next never ceases to amaze me.  Google knows more about me than my mother does.

Collateral created for short-term services are primarily therefore often in the form of ongoing transaction-based consumer touch points of clubs (eg Tesco’s Clubcard), and rewards (eg British Airways’ Gold and other cards).

Short-term service collateral: From top; Tesco Clubcard and British Airways’ Executive Club

Long-term services

Long-term service brands which include – amongst many others – mobile phone network operators (see note 12) and utilities have the duel virtues of being a service with an ongoing financial relationship.  These brands are arguably the most experienced in the creation and deployment of collateral for their customers (see left).

Rewards (eg the previously mentioned O2 ‘World that revolves around you’ campaign) and experiences (the mobile networks are all over this with the O2 and Orange Wednesdays) are both opportunities keenly deployed to minimise defections (increase loyalty) and ideally increase ARPU.

It is brands in this quadrant which are most likely to benefit from shift-inertia.  We (half) joke that it is more common to get divorced than change your bank account, but its essence reinforces the central belief of this essay – that it makes no logical sense to invest marketing time and money in a group who not only generate zero profit for a brand now, but who are unlikely to switch to doing so in the near future.

Long-term service collateral: From top; The O2 and Orange Wednesdays

creating collatoral however isn't enough - once you have it you have to tell people about it...  more on that tomorrow...

Notes

1. Rory Sutherland.  Adapted from notes taken at Delivering the Landmark Creative Campaign – a speech to the IPA Outdoor’s Seeing Digital Conference.

2. Faris Yakob.  I believe the children are the future.  Essay submission for IPA Excellence Diploma class of 2007.

3. There’s a great report which includes interviews of some of the people behind the development of musical at http://news.bbc.co.uk/1/hi/entertainment/7539377.stm

4. Interestingly the film was made without any overt Eurostar branding, something Marketing Director Greg Nugent refers to as ‘Unbranded Content’ – for more see: http://www.brandrepublic.com/InDepth/Analysis/808432/Close-Up-Live-Issue---Mother-Eurostar-abandoned-branding-embrace-feature-film/

5. Peter Fisk in his book Marketing Genius defines Brand Equity as “the sum of future cash flows driven by the investments of today”.

6. I find these two axes the best way to map consumer touch points with the aim of identifying where the most appropriate points of for the deployment of collateral.  Other axis were explored – specifically an axis that differentiated between contractual versus one-off transactions with a brand versus regular and occasional consumption.  However being able to separate regular versus occasional contractual relationships proved to be less useful to me that a clean split of tangible products versus intangible services.  This isn’t to say that there are alternative ways to map the touch points, indeed many planners will wish to play with alternatives depending on their own, or their agency’s, specific point of view.

7. Note that aggregator brands (such as moneysupermarket or uswitch) are ‘trending’ many brands left and down; left towards the shorter-term – ie changing supplier more often (especially in the utilities sector) and downwards through the commoditisation of historically service brands (for example in the telecoms sector.

8. The addition of packaging (as opposed to download only) increased the retail value of Radiohead’s recent ‘In Rainbows’ album more than nine-fold…  When originally released in October 2007 as download only – unpackaged – the value was determined by consumers; they could choose their own purchase price – the average price chosen to pay was £3.88 (source: http://www.whatpricedidyouchoose.com).  At the start of December 2007 the same content was released in the form of a three-format discbox (source: http://www.inrainbows.com/Store/index3.htm).  The asking price for a product valued at £3.88 with packaging?  ...£40.00.  Value goes both ways.

9. For more on Nokia’s concept lounge see: http://www.thesedays.com/conceptlounge/

10. Mini2 is an online hub for all things Mini maintained by its online members.  For more visit: http://www.mini2.com/

11. The Electrolux Design Lab is an annual global design competition open to design students who are invited to present ideas for home appliances.  For more visit: http://www.electrolux.com/designlab/

12. Note that I’m referring to contract only in this instance, PAYG would be significantly shorter term and more product-focussed

tomorrow: transaction planning - because creating collatoral isn't enough
Wednesday: why we need a new force of agency

Comments

[professional album design]

Quite interesting and informative post. keep posting. Thanks.