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The Post-Promotional Paradigm

2011 October 19
3-pillars-of-the-brand1

We’ve entered a new marketing paradigm.  Social media, co-creation and mobility are all part of it, but the greater whole is a new understanding of how consumers and brands interact in a digital world.

As I’ve written before, paradigm shifts do not automatically nullify time honored principles, but must adapt old wisdom to new facts.  Therefore we must not only innovate forward, but integrate back.

Therefore, the post-promotional age does not eschew promotion, but embraces it.  Firms are in business for profit and ignoring that fact risks either throwing money away on silly “conversations” or alienating consumers by patronizing them.  However, brand centricity is giving way to consumer centricity and that makes all the difference.

The Brand Trinity

There has been a growing awareness that something important has changed and various frameworks such as the path-to-purchase and McKinsey’s consumer decision journey have arisen to adapt to the new reality .  However, in practice, we need to adapt the general principles to differing brand needs.

That means we will need to expand some aspects of consumer experience and compress some others depending on the specifics of different types of businesses.  Therefore, I think it’s best to start from three pillars and work out from there:

These are not meant to be conceptual, but practical.  At the very least, every brand should continually track these three metrics against their competitive set.

Awareness: Top-line awareness has been dismissed by many (and was foolishly neglected in the McKinsey framework), but make no mistake: it matters.  Consumers are more likely to buy products that they are familiar with.  However, just asking consumers what brands they know is rarely sufficient.

Business in categories with high general awareness might also want to track awareness of brand attributes, such as quality, features and price with methodologies offered by companies such as Millward Brown and GfK.  In categories with high involvement or long sales cycles, measuring brand consideration in addition to awareness is crucial.

Awareness problems are generally easy to fix.  Simply spending more money will do the trick, but if you are clever you can save some cash if you are able to come up with sharp campaigns that cut through the clutter.

Sales:  Tracking sales is a no-brainer and every company does it.  However, there’s more to it than merely adding up register reciepts.  You need to track market share and repeat purchases as well.  A business that sells more in an up-market isn’t necessarily performing just as declining sales in a down-market don’t necessarily mean you need to change your strategy.

Another key thing to look at is how efficiently a brand converts awareness and consideration into sales.  If you’re lagging your competitors in this regard, you need to focus on the point-of-sale.  Firms increasingly recognize this and shopper marketing has been a key area of innovation over the last decade.

Advocacy:  We have long referred to the nebulous concept of “word-of-mouth,” but didn’t really have a way to track it until recently.  That changed significantly when net promoter came on the scene in 2003 and the rise of social media has driven the point home further.  Now most major marketers do some form of advocacy tracking.

What’s crucial to understand is that none of these metrics work in isolation, but must be viewed in context of each other.  High awareness won’t do you much good if it doesn’t result in sales, just as a business with high sales will suffer without repeat purchase and advocacy.  Finally, even if your customers love you, you’ll lose sales if nobody else has heard of you.

Paid Owned and Earned Media

Historically, we’ve separated promotions into two categories:  above-the-line (ATL) and below-the-line (BTL).  There never was a hard and fast definition, but generally speaking ATL focused on mass media and awareness while BTL was oriented towards sales promotions.

As digital promotion became more pervasive, that classification made less and less sense and a new model of paid, owned and earned media has come to the fore:

The model makes intuitive sense and aligns quite well with the brand trinity.  Paid media is mostly focused on building awareness and driving traffic.  Owned media, such as web sites, store fronts and product packaging drive sales while earned media such as tweets, likes and mentions in popular press and blogs help promote advocacy.

However, as the arrows in the above diagram suggest, the relationships are not absolute and the three work best when integrated into a holistic strategy.

Seed – Share – Convert

While the model of paid, owned and earned media has become popular, it suffers from a crucial deficiency in that it is more of a taxonomy than a framework.  Put another way, it’s helpful in that it classifies well, but is less effective in guiding action.

A more actionable framework would involve seeding, sharing and converting:

Seeding:  When social media first appeared, its advocates claimed that it would mean the end of traditional media.  That never happened and it doesn’t look like it every will.  It soon became clear that marketing without paid media simply doesn’t work.  Nothing can replace the speed and efficiency of mass media.

Even more importantly, mass media feeds right into social media and much of the buzz on Facebook and Twitter centers around more traditional outlets.  Regular readers of this blog know that I’ve long advocated a big seed strategy along the lines formulated by network theorist Duncan Watts.

Share:  In the new paradigm, sharing is the most problematic because, quite frankly, we don’t really know how to do it.  There are many agencies that can buy media efficiently and many others that can create great advertising, yet nobody has demonstrated that they can promote sharing consistently.

Nevertheless, we’re learning and brands are building large communities on social media. As we get better at it, sharing will play an increasing role in amplifying brand messages.

Convert:  Turning prospects into paying customers is another thing marketers generally know how to do well (albeit some better than others).  Whether it’s in-store promotion or web page optimization, there are fairly well understood principles that can be deployed to solve problems as they arise.

That’s not to say that conversion is not an area ripe for innovation, it is. In addition to the shopper marketing alluded to above, mobile marketing technologies such as near field communication will revolutionize how people will buy products and services.

What the Post-Promotional Age Means to Marketers

Of course, the post-promotional age hasn’t really changed consumers, they always talked to each other, advocated brands they liked and panned those they didn’t.  The difference lies in what we can measure and act on.  Digital media and net promoter scores have changed our capabilities so dramatically that we’re struggling to keep pace.

So the point is not that we should stop promoting in favor of conversations, rather as Rishad Tobaccowala recently wrote, the future of advertising will not fit in the containers of the past.  We need to change not only our activity, but the way marketing organizations recruit, train and operate.

We like to talk about change, but very little has actually occurred.  While our environment has become increasingly integrated, we have the same old modular ways of working. Career paths go in straight lines.  To zig or to zag invites suspicion, even scorn.  Expertise is sequestered and individual experience is limited to a small fraction of the consumer experience.

So the great challenge of the post-promotional age is not to stop branding, but rather to build the skills necessary to integrate brand experience.

– Greg

6 Responses leave one →
  1. October 19, 2011

    This is a very detailed and comprehensive input and I can’t help but nod while reading your article.

    [Reply]

    Greg Reply:

    Thanks Maybelle! Glad you liked it.

    – Greg

    [Reply]

  2. November 8, 2011

    Hi Greg, Another eloquent well argued post! I agree with the point that Paid Owned Earned is a taxonomy – the struggle with making it work practically is illustrated by the attempts to mutate it, note that some are trying to add Promoted or Shared into the mix too. However, I don’t think it needs to be so complicated.

    The key is in realising that the graphic is actually an amalgamation of two principles – Always-on and campaign. The struggles that many are having have been based around trying to shoe-horn campaigns and big ideas into an always-on infrastructure. What do I mean? The Facebook Page is Owned and is Always-on. The skills needed to build effective pages and manage the associated community 24/7 are very different to the skills needed to create and execute a (short-lived) big campaign idea – though the Page can host the big idea and the campaign can deliver specific objectives (sales etc) whilst charging up the page fan base.

    Super Bowl is always a good example of this. The ads lead to the page and try and grow the fan base. The page hosts the big Super Bowl idea, but after the event moves on to host other tactical content. It’s all Owned but the Always-on page is a platform for the campaign big idea.

    When you start thinking like this you realise that all of Paid Owned and Earned can be split out this way. Always-on Paid Search=brand terms, campaign Paid Search is based around a special offer. Always-on is the website / Facebook Page / YouTube channel, campaign is the micro-site (do these still exist?) / the Facebook tab / the YouTube video and so on. A utility app is always-on, a campaign based app is for a moment in time. This also helps to deal with Earned. Long-lasting ambassador programs that drive product advocacy are different to campaign based blogger outreach and so on. The always-on hub fosters advocacy and relationships that can be tapped into periodically to grow sales, drive awareness etc during a specific campaign.

    I still believe that Paid Owned Earned fulfils a useful structural role, but I think it’s only when it is split into Always-on vs campaign that it becomes useful against your pillars of Sales, Awareness and Advocacy.

    Always interested to hear your thoughts, Nick.

    [Reply]

    Greg Reply:

    Nick,

    I agree with you that Paid, Owned, Earned fills a valuable structural role and didn’t in any way mean to suggest that providing a clear taxonomy isn’t a worthy purpose. In fact, it’s essential. I also agree that “always on” is a good descriptor for the distinction between old and new marketing.

    However, as I described in the article, I do think that we need a more actionable approach laid on top of that and believe that Duncan Watts’ ideas on Big Seed Marketing is an important part of the puzzle. I also feel strongly that although we have pretty good ideas about how to buy efficiently and how to convert consumers, we’re largely still in the dark about how to get them to share.

    Greg

    [Reply]

  3. November 9, 2011

    Agreed! The idea of expression not impression – which TV spots are most effective at delivering sales AND / OR Facebook fans / conversations? I also subscribe to the idea of lighting many fires / using critical mass to drive incremental attention, but think the unpredictability in fire-starting can be aided if an always-on platform can provide a base – Facebook Pages provide a scale which can enable the flames to be fanned and critical mass to be achieved more quickly. The always-on platform / community provides fuel for the campaign fire. Nick
    Nick Burcher´s last blog post ..Paid Owned Earned – a love story based on engagement

    [Reply]

    Greg Reply:

    Always glad to hear your views Nick!

    – Greg

    [Reply]

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