IPA Excellence Diploma 2014

I believe

Seven inspiring essays on the future of brands and brand communications from the IPA Excellence Diploma delegates class of 2013-14

5 September 2014

Chairman’s introduCtion

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Contents The judges

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A year of deep diving How to crack the Diploma

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Roll of honour 2013-14

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en years of IPA qualifications and its “jewel in the crown”– the IPA Excellence Diploma.

Ten years, 105 delegates, 663 essays and 29 Distinctions, 45 Credits, and 31 Passes.

Ten years of hard work by everyone involved: the IPA team; the module editors who volunteer their time; the agencies and the mentors who “volunteer” their brightest and best; and the delegates themselves. To all I offer my eternal gratitude.

Ten years in which the IPA Excellence Diploma has earned its soubriquet (first awarded by the delegates themselves, importantly) as “the MBA of brands”.

Ten years in which the Excellence Diploma has become a gold standard for both brand learning and, as a happy by-product, original brand thinking.

Much has changed over ten years, but the final “I believe…” essays that have featured in these Campaign supplements have anticipated and explored much of it.

The rise of behavioural and neuroscience learning, the rise of data. New definitions of “what is a brand?” – the brand as a game, as a religion, as engaged community or as something literally owned by the people (long before Kickstarter, this one).

Explorations of what a modern creative idea is – meta-ideas in a networked world,long ideas in a world of small fires, or “spectacular” ideas in a crowded over-content-full world. The “I believe…” pieces have touched on all of these and more.

So it is fitting that in this celebratory year that we have seven distinction papers worth celebrating – more than ever before. Reflective of what the judges (many of whom have been part of the ten-year journey, so a special thanks also to you all) felt was a vintage year.

The papers continue the tradition of original –but, equally – critical, applied thinking… “I believe… and therefore…”.

The variety of these papers is what is inspiring, as well as the depth. Like those before them, they tackle the one big “uber” question of

the decade – how brands, ideas and organisations need to adapt in a fecund, democratised, connected, transparent, digital world, but each come at it from fresh perspectives.

Their answers range from “going supergnova” and grasping the role of brands as knowledge centres, to a controversial piece to drive behind luck rather than strategy; a call for brands and ideas to be superhuman (not merely “real” and human) and a piece of gravitas advocating we shape ourselves and our processes around creating value to clients. These sit alongside a piece rooted in original research on where that value might lie and how to exploit it (and the answer, for all those “Sharpites” out there, is loyalists). And, finally, a wonderfully illustrated exploration of that simplest yet hardest of questions: how does creativity actually engage?

However, the President’s Prize was awarded to a beautifully written and compelling answer which spoke to the challenge for simplicity in world of complexity: “When we simplify the complicated we make it better. But when we simplify the complex we make it wrong.”

So where will we be after the next ten years? What will be celebrating in 2024?

In Spring next year our intention is to publish a book of “the best of” these “I believe…” papers from the past ten years. But this will not be just a sentimental journey.

The book will act as the launch vehicle for this “MBA of brands” globally, building on the global interest in the IPA Foundation Certificate and Eff test. Our objective will be to become the gold standard in brand learning and R&D thinking, not just for UK industry but for the industry worldwide. And, in so doing, cementing our role in the UK as a centre of brand-building excellence.

Ten years: that does not feel like a long time for such an ambition. I had better get my skates on and leave you to read these pieces that inspired the judges so much.

These pieces certainly encourage me to believe that, with talent and commitment like this, it is certainly worth it.

Nick Kendall IPA Excellence Diploma chair of judges; founding partner, Bro-Ken

PResidenT’s PRize i believe in confronting complexity

by Gethin James, head of planning, Lowe Profero

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AwARd foR ouTsTAnding body of woRk 16 i believe the future of brands must be superhuman

by Emily Fairhead-Keen, business director, MEC Thriving in uncertainty: 24 i believe it’s time for brand managers to get lucky

by Erik Arnell, global communications strategist, Carat Global Management i believe that the future 32 of brands lies in making loving fun

by James Boardman, director, client and communications, MEC Sydney i believe brands should go supergnova

by James Borrodell Brown, senior strategist, Zone

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i believe that in the future 48 brands will have to earn the right to communicate

by Richard Bradford, group strategy director, MEC i believe in moving from 56 vanity to value

by Matthew Philip, strategy director, Manning Gottlieb OMD

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The IPA excellence diploma The Excellence Diploma emerged from Stephen Woodford’s 2003 presidential agenda to raise professional standards within the industry. It is the highest-level IPA qualification – “the first MBA of brands” – with the aim to equip a new generation (with five or more years’ experience) with the key shared texts, theories, learning and case histories on brands and brand communications.

The programme consists of three modules of reading and workshops. At the end of each module, delegates are asked to write a “think-piece” incorporating a personal perspective. Following this, they are asked to submit a 7,000-word essay on the future of brands and brand communications.

These pieces are marked by a team of experienced examiners for original points of view, application, clarity and presentation, and referenced support of argument.

The judges

Nick Kendall chair of judges, IPA Excellence Diploma; founding partner, Bro-Ken

Louise Ainsworth chief executive, Warc

Tess Alps non-executive chair, Thinkbox

Paul Bainsfair director-general, IPA

John Bartle non-executive chairman, Dare

Karen Buchanan chief executive, Publicis

Pete Buckley strategy director, MEC Global (and President’s Prize winner of IPA Excellence Diploma 2012)

Mark Earls independent marketing and advertising professional, HERDmeister

Peter Field independent marketing and advertising professional

David Hackworthy chief strategy officer, Fallon

Tom Hampson marketing director, Netto UK

Janet Hull OBE director of marketing and reputation management, IPA

Mark Lund chief executive, McCann UK Group

Sophie Maunder-Allan chief executive, VCCPme

Craig Mawdsley head of planning, Abbott Mead Vickers BBDO

Patrick Mills director of professional development, IPA

Steve Parker co-chief executive, Starcom MediaVest Group UK

Ian Priest international managing director, Chime Communications

Gurdeep Puri founder, The Effectiveness Partnership

Leo Rayman head of planning, Grey London

Gideon Spanier media editor, Evening Standard

Stuart Sullivan-Martin chief strategy officer, MEC Global

Sue Unerman chief strategy officer, MediaCom

David Wilding planning director, Twitter UK; co-chair, IPA Excellence Diploma

Stephen Woodford chairman, Lexis Recommendation Agency

This supplement In these pages you will find summaries of all 24 of the essays produced this year (see overleaf), followed by full versions of the seven that were awarded distinctions by the examiners.

The numbers in the text are the academic referencing system – see www.campaignlive.co.uk for the full reference list for each essay.

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

5 September 2014

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a year of diving deep and believing in brands

David Wilding, the co-chair of the IPA Excellence Diploma, explains how the Diploma is structured – and how to get the top marks

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here are probably two things about the IPA Excellence Diploma that make it unique: its structure and its content.

Structurally, the Diploma is made up of three “Deep Dives” and one final essay spread over a period of a year.

The mechanics of each Deep Dive are broadly consistent, with each made up of three parts: a comprehensive reading list of the most important and influential thinking related to the topic; a two- day workshop with the Deep Dive leaders, external speakers and fellow Diploma delegates; and a written piece summarising the delegate’s take on the subject of that Deep Dive.

This structure is intended to allow delegates to first immerse themselves in the topic, then to discuss, build on and further develop their thinking with other delegates, and, finally, to form and express their own opinion on the subject via the oh-so-important “I believe…”. Many delegates have fed back that while this latter part can seem particularly daunting at first the process of committing an opinion to paper at the end of each Deep Dive is incredibly valuable.

The written pieces for each Deep Dive are individually scored so that each delegate receives a mark for Deep Dive in the form of a Distinction, Credit or Pass (and, in rare cases, a fail – although we prefer not to dwell on that) along with feedback on why they received the mark they had and areas to think about for the next Deep Dive.

The content of each Deep Dive is designed to reflect the Diploma’s ambition to act as the “MBA for brands” by giving delegates a fully rounded perspective on what brands are, how they work and how to bring them to life.

Deep Dive 1 – What is a Brand? – seeks to understand this most fundamental of questions. It com-

“The final pieces are judged by a panel of client and industry leaders who are looking for thinking that treads the line between the originality that the Diploma demands and the practical applicability to be relevant to our industry at scale.” bines classic texts on the subject from the likes of Stephen King and Jeremy Bullmore with the very latest thinking on brand development. It was hosted this year

by David Hackworthy and Mark Earls and – as you might expect if you know or have worked with either of them – it’s provocative, thought-provoking and goes to the heart of how people genuinely behave around brands.

Deep Dive 2 – The Value of Brands

to Business – is a rigorous journey through evidence-based thinking, understanding the chief executive’s agenda and building the value of brands to business. It was hosted this year by Peter Field and Daryl Fielding and designed to ground delegates in the reality of brands from the perspective of business and the boardroom.

Deep Dive 3 – Bringing a Brand to Life – is rich in inspiring brand and communications thinking and features case studies exploring how some of the most successful modern brands communicate. I had the pleasure of co-hosting Deep Dive 3 this year, but if it was any good it was due to the input and invaluable client perspective of my co-host, Tom Hampson of Sainsbury’s. The workshop element to this Deep Dive was a team exercise where delegates worked on developing a new product or service for an existing brand.

And then, of course, there is the famous and much discussed (among the delegates at least) final essay – a selection of which you can read in this supplement.

Delegates are given up to 7,000 words to crystallise everything they have learned and thought about during the Diploma into a piece which asks them to state “I believe the future of brands is…”

These final pieces are judged by a panel of client and industry leaders who are looking for thinking that treads the line between the originality that the Diploma demands and the practical applicability to be relevant to our industry at scale. While this may seem like a difficult line to tread, I can honestly say the judging panels never fail to be impressed by both the quality and the diversity of thinking it produces.

All that’s left after that is the final celebration in the form of a graduation dinner to congratulate delegates, along with the new friends made on the course who inevitably now tend to go by the name of “diplo-mates”.

And at that final celebration clear themes tend to emerge Yes, the Diploma is hard work and challenges delegates to really think about roles and brands and can be quite intensive at times – but it is also incredibly rewarding and useful and – surprising as it may sound – very good fun.

As somebody involved in helping to run the Diploma I would echo exactly these themes (while perhaps being fearful of scoring low marks for originality…).

It is a privilege to be exposed to the brightest emerging brand thinking that genuinely challenges my own assumptions and tackles with intelligence and enthusiasm the complex landscape in which brands are operating.

David Wilding is the planning director at Twitter UK

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

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roll of honour 2013-14 I belIeve…THe dISTIncTIon Thriving in uncertainty: I believe it’s time for brand managers to get lucky Erik Arnell global communications strategist, Carat Global Management

My essay sets out to defy industry convention by exploring how acting rationally in an increasingly convergent and unpredictable world can actually decrease brands’ chances of survival. It further argues why luck will become a more important strategy than prediction, the implications of which demands a paradigm shift in thinking about how we manage brands and structure ourselves as an industry.

Mentors: James Hart, strategy director, Carat; Graeme Wood, strategy director, Carat Global Management

Emil Bielski business director, MEC

…in future, brands should develop a Superego

Pete Coates head of online performance, Carat Leeds

Many brands today are psychopaths; incapable of communicating with or understanding what their communities want from them. Brands that continue to behave in this way will be ignored and see their commercial value eroded as networked communities evolve further.

Brands need to understand what personality development looks like in human terms and apply the same principals to their own culture and communications to ensure survival.

Mentors: Kevin Cunningham, managing director, Dominic Geary, managing partner, Carat Leeds

Martin Harrison planning director, Huge

Georgina Cottle senior planner, The Red Brick Road

Waqar Riaz head of effectiveness and lead director, social media, global strategy team, Cheil Worldwide

In the brand-driven business model, the brand acts as a compass that guides not only consumer perceptions but drives the direction of the business as a whole. In an increasingly disruptive market, the brand – more than the fixed business – can drive innovations and pivot into new areas that answer consumer needs.

Mentor: Marc Pearson, managing partner, MEC

The scale of the complex truth about loyalty to brands has often been matched only by marketers’ desires to ignore that complexity. Yet for the concept of loyalty to be useful we must embrace this rich variety. We might even have to jettison the word completely. Loyalty is not monolithic but is built from a series of biases, all of which pose different challenges and present exciting opportunities for brands.

Mentor: Shula Sinclair, strategy partner, MEC

James Boardman director, client and communications, MEC Sydney

For the best part of a century creativity has been at the heart of the advertising industry and a great deal has been invested in proving its value. However we now live in a world where creativity is a highly valued commodity in almost every industry. This paper explores the challenges the advertising industry face in the fight for attracting and retaining the best creative talent, and the consequences the industry faces if we fail to fight for the talent.

Mentor: Ben Mitchell, planning partner, The Red Brick Road

Emily Fairhead-Keen business director, MEC

John Jones strategist, Bartle Bogle Hegarty

Brands have come to perform many different functions in our society. They are symbols, trust marks and utilities. But one of their primary functions has been to help us edit choice. I believe the coming era of artificial intelligence will enable brands to not only help us edit choice but more profoundly go one step further and actually make decisions for us. Welcome to the era of the conscious brand.

Mentor: Jim Carroll, chairman, Bartle Bogle Hegarty

…the future of brands is algorithmic

Richard Lamb head of search, Performics ZenithOptimedia Group

…the future of brands begins with some Scandinavian sensibility

Mike Roberts strategist, Carat UK

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

As brands strive to be more like people, it’s important to consider the sorts of people brands can learn from. In a time when we’re seeking more trust, meaning and cohesiveness, my hypothesis is that brands need look no further than the people who set the standard when it comes to modesty, prosperity and community. When looking north for this almost perfect group we discover the behaviours and cultural norms that brands can benefit from.

Mentor: Graeme Wood, strategy director, Carat Global Management

dISTIncTIon IPA AwArd for ouTSTAndIng bodY of work …in a Marketing Age the future of brands must be Superhuman, to compete against everything and everyone, truly delivering the extraordinary I believe man has entered The Age of Marketing, where everyone and everything communicates with a marketing filter, mimicking brands. As brands seek to be human, the solution I offer is for brands to be Superhuman, delivering extraordinary fiction, performance and control.

Mentor: Stuart Bowden, joint chief executive, MEC

… in the conscious brand: re-engineering brand engagement through Artificial Intelligence

…imagination is our future The belief “Imagination is our future” introduces a new way to build stronger relationships with the consumers of the Information Age. It reveals the 20th century theories and practices of brand-building are no longer relevant for the 21st century.

It argues that this increasingly ineffective approach is causing depression for brands, and concludes that great brands of the future will imagine relentlessly to deliver value through the product, its experience, and its applied-cloning to reap the benefitsof the Information Age economy.

Mentor: Chris Chalk, president and global chief strategy officer, Cheil Worldwide

dISTIncTIon …that the future of brands lies in making loving fun

…we must fight for creative talent

…the future of brands is tribal Our shared interests are much better indicators of our future behaviour than our shared attributes. Digital communications give people unparalleled freedom to join and observe tribes, meaning brands are prized not for their use but for their connective value. Identifying, understanding and amplifying this connective value is the route to marketing success in the 21st century.

Mentor: Richard Dunn, chief strategy officer, Wunderman

…the future belongs to brand-driven businesses, not business-driven brands

“Algorithm is gonna get you.”

I believe that the future of brands is algorithmic. Brands must not only understand the principles that power our lives within the context that they work, but also learn to apply those principles to everything they do.

Mentor: Jo Arden, head of strategy, 23Red

…the future of brand communication agencies is a fundamental restructure around the principles of scientific progress Rohan Tambyrajah global innovation director, Unilever, PHD

Marketing has become insular. It has created its ideologies in a vacuum. Shifts in the dominant paradigm of business have created the conditions for agencies to restructure around the emerging needs of brands. I believe they can build an effective and profitable model for the future through the application of the scientific principles of incrementalism and step-changing.

Mentors: Toby Roberts, global head of strategy, Unilever, PHD

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eSSAYS In 30 SecondS bY THe AuTHorS

James Borrodell Brown senior strategist, Zone

dISTIncTIon …brands should go supergnova

…the future of advertising is bicontextual

Our new ability to instantly access the world’s knowledge is a game-changer for society and brands. Knowledge is now our primary identity signal – what we choose to know personally is key to who we are.

Brands, however, are busy pumping junk knowledge into the world. For a brand today to claim it stands for something, it must create new knowledge that can’t just be looked up and give it away.

Mentor: Jon Davie, managing director, Zone

Traditionally, advertising has been tuned in to macro context – the society, market and culture surrounding an ad campaign.

Newer forms of advertising are adapted to micro context – the immediate and specific details surrounding individual ad exposures. Unfortunately, few advertisers are able to operate at both levels simultaneously. In order to do so, we need to create a new bicontextual approach to advertising.

Mentors: Ross Farquhar, brand leader, 101; Alex Dunsdon, founder, The Bakery London; Minal Saigal, partner and managing director, EMEA, Essence

Alastair Boyle partner and head of strategy, Essence

… in the rise of the machines: in the future, intelligent automation systems will displace all human roles in brand communications as they exist today Joanna Foyle worldwide planning tools manager, Initiative

Tony Mattson managing partner, strategy, UM London

Automation systems have become an increasingly important part of brand communications. As big data gets bigger, the potential for these toolkits to supersede humans becomes ever more obvious. In this essay, key disciplines that have seen impressive developments in automation are examined and what the future holds for them is discussed.

Mentor: Russell Marsh, chief data officer, Mediabrands

Gethin James head of planning, Lowe Profero

Diversity in our thinking will open up our minds to the value of the novel interconnection of new ideas and bring a fresh proactivity to the planning process. I believe that the world has always been complex, but we convinced ourselves it was only complicated. This has had a profound impact on the way we think about brands: from our bias for analysis rather than action, to our preference for simplification.

The paper proposes a way for brands to confront the complexity through probing, sense-making and system building.

Mentor: Dale Gall, UK chief executive, Profero

…we need to stop looking out of the window and start looking in the mirror

…the future of brands will be brighter if they behave in more socialist ways

Our economy has a productivity problem.

Addressing the engagement gap will help solve this problem and I believe marketers are best placed to lead this. However, they will need to change their focus to achieve this from external, demand-side growth to internal, supply-side performance. By embracing this opportunity, they will help themselves become the business leaders of tomorrow, improve their organisations performance and make the UK economy healthier.

Mentor: Russell Place, managing director, UM London

Brands have attempted to increase the prominence they occupy in people’s lives through attempting to mean more. One way of meaning more is to enhance consumer welfare, but I argue that brands have been lopsided in this approach. I propose that brands need to behave in more socialist ways to reflect the lives consumers are now living, and to deal with the likely legacies of this epochal economic crisis.

Mentor: Catríona Campbell, head of client services, The Social Services

Understanding. Consumers want it and brands want to convince them they have it.

But I believe there are many contradictions with their current approach. Taking the principles of emotional intelligence, I propose a ‘brand intelligence’ model that allows brands to determine the right type of empathy for them and their consumer.

Mentor: Ann Wixley, creative director, OMD UK

Richard Bradford group strategy director, MEC

dISTIncTIon & PreSIdenT’S PrIze …in confronting complexity

Kenneth McKenzie strategic planning director, Publicis Dublin

…the future of brands and brand communication will be determined by their ability to demonstrate the right type of empathy John Tippins strategy director, OMD UK

dISTIncTIon …in the future brands will have to earn the right to communicate

Matthew Turner strategist, Wunderman

Brands compete for attention with a range of communications, not just other brands.

The imperative is to make communications that are compelling to the viewer. But how?

Epistemic vigilance is already an important part of the way people deal with communications. It’s always on, sensechecking every communication and shining attention on things that don’t make sense at face value. Attention is increasingly scarce. Brands need to find a way to create compelling communications, or risk not communicating at all.

Mentor: David Fletcher, head of analytics and insight, MEC

…the future for brands relies on behaving in an emotionally intelligent manner as set out in a new model of brand behaviour ‘brandeQ’ James Hankins head of integrated planning, Vizeum

The importance of emotions in decisionmaking is well known but underutilised. I propose a new model for brands called “brandEQ”, using the principles of emotional intelligence. The paper identifies techniques and principles that have been proven to drive competitive advantage when applied to brands.

Mentors: Ian Edwards, head of strategy, Vizeum; Richard Morris, managing director, Vizeum

dISTIncTIon …in moving from vanity to value

Matthew Philip strategy director, Manning Gottlieb OMD

I believe that brand communications agencies are out of touch with the ideas that underpin modern business, leading brand communications to be treated as an accounting cost rather than an investment.

By embracing Brand Value Analysis – a way of thinking about where brand communications can create real difference to businesses – we can uncover new opportunities for planners, agencies and marketing as a whole, safeguarding a bright future for brands.

Mentor: Paddy Adams, head of strategy, Manning Gottlieb OMD

…the future of brands: open source brands

…the future is software as brand communications

Centrally owned brands will need to reinvent themselves to understand where their strengths as organisations lie. In doing so, I call for change that adopts learnings from the open source movement.

These changes will allow brands to harness the power of connected groups to maximise the participation consumers can have with the brand. An open source brand will be more efficient by outsourcing parts of brand building to the committed community.

Mentor: Annie Gass, strategy director, Wunderman

The Jolly Green Giant, the Marlboro Man, Tony The Tiger. Brand personas are a timehonoured and effective brand-building tool in traditional media. But online, brand personas have proved impossible to scale.

Meanwhile, the wide use of digital media channels means marketers need to speak to people in more places, in real time, than ever. Marketers need to think of brands as software, using data analytics, artificial intelligence and programmatic media buying to create personalised digital brand communications.

Mentor: Arif Haq, senior consultant, Contagious Insider

Ed White editor, Contagious magazine

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

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distinction, president’s prize gethin james Diversity in our thinking will open up our minds to the value of the interconnection of new ideas and bring a fresh proactivity to the planning process, Gethin James says

i believe in confro W

hile most people understand firstorder effects, few deal well with second- and thirdorder effects.

Unfortunately, virtually everything interesting lies in fourthorder effects and beyond” – Jay Forrester1.

AbstrAct In a survey of 1,700 chief market­ ing officers, the consensus was that their world is getting more complex and fewer than half felt prepared to handle it2.

I believe that the world has always been complex, but we convinced ourselves that it was only complicated. This has had a profound impact on the way we think about brands: from our bias for analysis rather than action, to our preference for simplicity and simplification.

This paper proposes a way for brands to confront the com­ plexity through probing, sense­ making and system­building.

“For every complex problem, there is an answer that is clear, simple, and wrong” – HL Mencken3.

Down the rAbbit hole We discover the mechanisms that structure the markets in which brands operate and how small the

difference between success and failure really is “When asked, most IPA agencies would say that they are in the business of helping their clients create brands.”4 “Brands help businesses build and maintain market share.”5 “In most categories, a given brand’s market share is stationary, showing remarkable stability over long time horizons (ten years).”6 In the UK, we spend £16 billion on advertising each year7. And, despite this huge expense, in most categories, each brand’s market share remains unchanged8, 9. This is not a stalemate between equals, but the entrenching of a deeply unequal hierarchy. In each of these categories, there are usually a few brands winning the lion’s share and a long tail of losers fighting over scraps10, 11.

More precisely, the distribution of market shares among these brands follows a power law10.

Typically, each brand is around two­thirds the size of its next larg­ est competitor11. And no matter how hard they try to break this pattern, there appears to be a hidden force pulling them back in line. These markets “are in a long­run equilibrium where the relative position of the players is only temporarily disturbed by their respective marketing activities”12.

These patterns are so common and so enduring that there must

be something going on behind the scenes to create them. How can there be so much similarity across such a wide variety of categories, brands and tactics? These pat­ terns are not imposed top down or by design, so what is it that causes them to emerge so often?

In fact, all it take for these macro­ structures to emerge are two sim­ ple and related micro­motives13: l We are more likely to buy what we have already bought l We are more likely to buy what others are buying “There is some evidence that the probability of choosing a brand is increased if, first, the same brand has been chosen before (habit) and if, second, it is seen to be chosen by other people (conformity).”14 These two rules are simple shortcuts we all use to avoid ex­ erting an enormous mental effort every time we want to buy some­ thing. But the consequence of these two rules is that people behave in a way that reinforces any inequalities between brands.

They create a cumulative advan­ tage where the rich get richer and the poor get left behind.

“When people tend to like something that other people like, differences in popularity are subject to what is called cumulative advantage, meaning that once, say, a song or a book becomes more popular than another, it will tend to become more popular still.”15

Mentor’s coMMent

“Gethin refutes the very tenet we have built our client pitches on: the world is complicated but we can make it simple.

He counters that the world is complex and this requires a different approach to marketing: one of rapid testing and learning, flexibility and the pursuit of new habit loops. I cannot work out if this is a brilliant argument or a brilliant excuse as to why he sometimes gets his planning predictions wrong.”

Dale gall For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

5 September 2014

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COlIn STOUT

nting complexity The existence of cumulative advantage is well­documented.

In Eating The Big Fish, Adam Morgan has catalogued some of the many ways in which large brands gain an advantage over smaller brands. large brands have to spend proportionately less to maintain equilibrium.

They have both more customers and more frequent customers.

And their higher total spontane­ ous awareness results in expo­ nentially higher top­of­mind awareness and preference16.

But while the existence of cumulative advantage may be familiar, its implications are not.

In the absence of cumulative advantage: “If we were to imagine history being somehow ‘rerun’ many times… explanations in which intrinsic attributes were the only things that mattered would predict that the same outcome would pertain every time.”15 But when cumulative advan­ tage is present, we end up in a strange world where “even tiny random fluctuations tend to get bigger over time, generating po­ tentially enormous differences in the long run”. The upshot being that “even identical universes, starting out with the same set of people and objects and tastes, would nevertheless generate dif­ ferent cultural or marketplace winners”.15 How can this be? How can a brand’s intrinsic attributes not be the ultimate source of per­ formance? As an industry, our language betrays a belief in the value of the things a brand has: “We talk of brand essences (un­ changing), brand values (abid­ ing), brand architecture (surely built to last).”17 Brands are sup­ posed to succeed because of the properties they have built in.

Of course, intrinsics are not entirely irrelevant. High quality rarely does terribly and, con­ versely, low quality rarely tri­ umphs. But, for the vast majority

in the middle, almost any out­ come is possible each time history is rerun15.

We can see this in action by the fact that a brand’s market share depends more on the order it en­ tered a market than on its utility.

(Pioneers have an average share of 29 per cent versus late entrants with a share of 13 per cent18.)

Once a brand establishes itself as the market­leader, its position becomes difficult to dislodge. It is inherently self­reinforcing.

This is the first clue that brands operate in a world that is more complex than we treat it. Ignoring the self­reinforcing effects of cumulative advantage can put a brand at a serious disadvantage.

“Many business strategies fail because they rely wholly upon the intrinsic qualities of the product to build market share and neglect the importance of creating the conditions, particularly the perception of the product’s popularity, that favour contagion and addiction taking hold.”18

how Deep Does the hole go?

We take a closer look at human behaviour and find complexity everywhere “For the first time, we can precisely map the behaviour of large numbers of people as they go about their normal lives.”19 “Digital breadcrumbs… when pulled together, offer increasingly comprehensive pictures of both individuals and groups, with the potential of transforming our understanding of our lives, organisations and societies in a fashion that was barely conceivable just a few years ago.”20 “The web becomes a gigantic informational ecosystem that can be used to quantitatively measure and test theories of human behaviour and social interaction.”21 In 1969, the sociologist Morris Zelditch asked: “Can you really study an army in a laboratory?”22 At the time, the conclusion was

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

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Add a tendency for homophily into a network and it separates like oil and water into clusters of like-minded people. And wherever like-minded people cluster, they often end up with more extreme versions of their prior beliefs. “Social networks… operate as polarisation machines because they help confirm and thus amplify people’s antecedent views.”32 (Figure 4)

Figure 1: 40 Seconds Of Twitter Mentions by Isaac Hepworth (@isaach) that you couldn’t. Half-a-century later, and researchers have realised they don’t have to. Now, they can observe everything they need from the “digital breadcrumbs” each of us leaves behind.

For example, your mobile tracks your location but also, through all the calls and messages you send and receive, your social network.

This information is much better than personality tests at predicting your behaviour23.

“What makes the social world complex isn’t individual complexity but the way people go together, in often surprising ways, to create patterns.”24 The more we look at how people really behave in society, rather than how they say they behave or how they behave in isolation, the more we realise that it is the interactions between people that really matter. And this makes the world complex, not complicated.

Something is complicated when it lacks simplicity. Something is complex when it lacks independence: when the sum is greater than its parts.

A jumbo jet is complicated; mayonnaise is complex25.

“If you want to study a river, you don’t take out a bucketful of water and stare at it on the shore. A river is not its water and, by taking the water out of the river, you lose the essential quality of river, which is its motion, its activity, its flow.”26 Complex systems are characterised by: l Interconnectedness l Feedback (both reinforcing and balancing) l A memory of the past that impacts on the present l Self-organisation and spontaneous order l Emergence of behaviours that are more than the sum of their parts l Non-linearity, such that small changes can produce disproportionately larger results l Tipping points and thresholds l Ambiguity surrounding cause and effect:A causes B and B causes A l Predictable looking back, unpredictable looking forward27 The more people study mass human behaviour, the more they come across the characteristics of complexity.

Our attention is bursty The patterns hidden in our phone call, e-mail and movement data have shown that power laws are also at play in much of what we do. Our activity is not distributed evenly through time. We work, live and play in short bursts of activity, followed by long gaps of nothing28 (Figure 1).

We interact in flocks The forces that govern flocks of birds, schools of fish and swarms of insects also apply to groups of people (Figure 2).

The rules of interaction are simple: separation (don’t tread on any toes), alignment (follow those around you) and cohesion (stick together). But from these three simple rules, a wide variety of complex and unpredictable behaviours emerge29.

We organise around hubs Cumulative advantage is at play once more in the networks we create. Networks often grow through a rich-get-richer mechanic called preferential attachment.

As new nodes join the network, they make connections with the existing nodes. But, rather than making these connections at random, they prefer to attach to nodes already well-connected.

The most well-connected people tend to become even better-connected. The most linked webpages tend to become even more linked. The result is a few very well-connected hubs coexisting with many poorly connected nodes30 (Figure 3).

Source: Joe Simkins, TED talk

Figure 2a:The rules of interaction that govern birds can be applied to people For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

And separate into cliques and communities Alongside a tendency for connecting with the betterconnected, people also have a tendency towards homophily – “the conscious or unconscious tendency to associate with people who resemble us”31.

Networks act are amplifiers This illustrates a wider emergent property of networks: “Social networks tend to magnify whatever they are seeded with.”31 “Social influence determines to a large extent what we adopt and when we adopt it.”34 Our chances of picking up on something circulating through the network increase as more of our connections also pick up on it.

But this “doesn’t generate any new information, it only amplifies the consequences that a little bit of information can have, whether it is real information or not”24.

Allowing rumours to find a life of their own During the 2011 London riots, the Twitter rumour mill sprang into action. Rioters had released animals from the London Zoo. People had broken into McDonald’s and were cooking their own Big Macs. The London Eye was set on fire. A children’s hospital had been attacked. And the army had been deployed at Bank.

None of these rumours were true, but that didn’t stop many users passing them on as fact35.

Rumours start “when a group of early movers… say or do something and other people follow their signal”36. As a rumour is passed on, it gets modified. Some form of “evidence” may be added or it may be reformulated and reexpressed. Others may challenge its credibility through argument or new information. As the rumour evolves, the “fittest” forms of the rumour spread the furthest and longest.

“Ideas don’t spread because they are good. Social media acts as a Petri dish for ideas; the variants best-suited to selection pressures win.”37 “Ideas get transformed, repurposed or distorted as they pass from hand to hand, a process which has been accelerated as we move into network culture.

Arguably, those ideas which survive are those which can be most easily appropriated and reworked by a range of different communities.”38

5 September 2014

Different forms of the rumour may thrive among different groups of people, each variant finding its own niche36.

Where a rumour is false,“it may nevertheless resurface as latecomers pick up the original Tweet and join in”39.

Bringing it back to brands “Brands will need to find a place in this swirling, memetic media system where all sorts of information freely flows: word of mouth, fashion, trends, imitation, flattery, truths, half-truths, rumour, panic, entertainment, news, deals, alerts, brands, friendships, passions, tastes, memories, moods – pretty much everything that makes up our personal and professional lives.”13 It is clear that this is a system where “the whole becomes not merely more, but very different from the sum of its parts”40.

“Non-linear complex dynamics are around us: unpredictable variability, tipping points, sudden changes in behaviour, hysteresis – all are frequent symptoms of a non-linear world.”41 This isn’t how we usually think about the world brands occupy.

Source: Joe Simkins, TED talk

Figure 2b

ImplIcatIons for how we approach brands We learn why we need to analyse less and probe more I believe that people (and therefore brands) operate in a complex world. And I believe that, as an industry, we have mistaken this complex world for a complicated one.

The Cynefin (pronounced “kuh-nev-in”) framework42 usefully illustrates the difference between complicated and complex worlds. It also sets out the difference in how we should respond to each (Figure 5).

Our history with sense-analyserespond Account planners originated as the analysers of the agency world.

A planner “was charged with ensuring that all data relevant to key advertising decisions should be properly analysed, complemented with new research and brought to bear on judgments of the creative strategy”43.

The classic planning cycle44 follows the sense (“where are we?”), analyse (“why are we here?” and “where could we be?”) and respond (“how could we get there?”) approach. It assumes that a direct link between our planned actions and desired effects can be found.

Source: Joe Simkins, TED talk

Figure 2c Research is commissioned.

Agency expertise is applied, because we believe the right analysis will uncover the way forward.

It will allow us to take the complicated and make it simple.

If, for some reason, we don’t succeed, our failure must be due to improper analysis: “I suspect that our weakness… is more often failure to analyse fully the data we’ve got.”44 And so we call for yet more research and better experts to turn things around.

But if we are actually operating in a complex environment, then forecasting “where we could be” is futile.The relationship between cause and effect can only be knowable in hindsight. And more analysis won’t help anybody. No amount of prior analysis can provide certainty that doing A will lead to the occurrence of B. “When you make the complicated simple, you make it better. But when you make the complex simple, you make it wrong.”45

The pitfalls of sense-analyserespond “Failures [are] caused by… flawed executive mindsets that throw off a company’s perception of reality [and] delusional attitudes that keep this inaccurate reality in place.”46 In a complicated world, we should sense, analyse and respond. In a complex world, we should probe, sense and respond.

If we treat a complex system like it’s a complicated system, then even the best possible analysis is likely to lead us astray.

Michael Raynor calls this the Strategy Paradox: “Organisations that embody what would seem to the best practices in strategy planning… can also be the most vulnerable to planning errors.”47 To illustrate his point, he provides a new take on the failure of Sony’s Betamax. Sony expected people to use their VCRs to record their favourite TV shows.

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Every decision Sony made, it made with home-recording TV shows in mind (eg. higher-quality, shorter-play-length tapes).

But consumer demand shifted towards watching renting movies.

And, when it shifted, it shifted far more rapidly than anyone in the industry anticipated. Matsushita (and its lower-quality, longerplay-length VHS tapes) was handed an early advantage. Sony moved quickly to close the gap, but to no avail.

Raynor argues that the main cause of strategic failure is not a bad strategy but a plausible strategy that turns out to be wrong.

It’s tempting to think that more or better analysis could have saved Betamax. Looking back, it is obvious that people would want to rent movies at home. But, at the time, no-one could be that certain.

Both Sony and Matsushita’s strategic choices were plausible.

In a do-over, we can’t be sure that Sony wouldn’t have come out on top. In fact, many of the choices Sony made with Betamax (eg. closed format, quality-focused and priced at a premium) Apple also made with the iPod. Only, that time around, things played out very differently.

In a complex world, planning only provides the illusion of certainty and control when, in fact, neither exists. And this can be especially dangerous when it blinds us to other possibilities.

The alternative: probe-senserespond If we are to dismantle the traditional planning process, what should we replace it with? If we can’t make predictions about the future, how do we increase our odds of success?

Returning to the Cynefin framework, how should we behave when “the world can only be grasped by action, not by contemplation”48?

I believe there are three key shifts in our thinking that we need to make: l From planning to searching l From reacting to proacting l From simplicity and consistency to diversity Searching beats planning We need to openly acknowledge that there are limits to what can be planned and predicted. At the same time, we must not start thinking that anything goes. If we are to consistently improve our odds of success, we need to find a way to act systematically and strategically in this new world.

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“A planner thinks he already knows the answer… a searcher admits he doesn’t know the answer in advance.”49 Searching acknowledges that we don’t know what we don’t know. It keeps us open to alternatives and primed for the unexpected. Searching is optimistic that there is a way forward, but pessimistic about the map we are holding.

Proaction beats reaction Traditionally, research provides the fuel for the planning process.

But, in a complex world, market research cannot be predictive, it can only be descriptive. As searchers, we will be less interested in describing how the world is and more interested in finding ways to change it.

In his book Culturematic, Grant McCracken cautions: “More responsiveness is always a great idea. But it’s a passive response. It waits for the world to act, and only then does it react, trapping the corporation in a feverish game of catch-up.”50 He urges us to be “more aggressive and proactive”.

We are not reacting to the world, but “poking the world with a stick”51 to see what happens.We can’t do this by taking measurements first. We must proactively engage the world and track everything that happens as a result.

Diversity beats simplicity When Instagram was acquired for $1 billion, it became a poster child for both simplicity of execution and simplicity of strategy.

Its co-founder Kevin Systrom put the app’s success down to “focusing on one thing and doing it really, really well”52.

This makes intuitive sense in hindsight because we know that Instagram focused on the right thing. In reality, though, Instagram actually started life as the far-from-focused Burbn. Burbn was a check-in app geared around making future plans with friends and earning points for hanging

Source: Joe Simkins, TED talk

allowed to fail. The focus is on matching the size of investment to the assumed size of the expected gain.

In contrast, small bets can be safe-fail42. They limit the initial investment so that both success and failure can be entertained.

The focus is on how much the organisation can afford to lose in pursuit of ideas of indeterminable value. If the ideas show promise, then initial success can be amplified; if they don’t, then any damage can be minimised.

The small bets approach is necessarily resource-light, but is also ideas-intensive. It demands a quantity and diversity of ideas that most organisations are not geared up to deliver.

Figure 2d out with them. Pictures were something it did on the side52. If Instagram had only done one thing from the start, it never would have stumbled on to the potential of social photo-sharing.

The purpose of probing the world is to learn something about it. We learn by exploring widely rather than deeply.“The only way to get a good idea is to get lots of them, even to let them proliferate independently and compete for primacy.”50 Track everything and move on from anything that does not seem valuable.

Simplicity is fragile: it succeeds if it happens to be focusing on the right thing at the right time, but it also leaves the brand open to Betamax-esque failures. In contrast, diversity is robust: it can withstand rapid changes in tastes and behaviours. All bets are hedged.

Launching a brand into a compLex worLd We apply this new way of thinking to getting a brand started “Most marketing funds are spent on tit-for-tat rivalry rather than pioneering market-making.”18 This is understandable given the

Judge’s comment

“The essay brings clarity for brands.

You’ll learn the difference between ‘complex’ and ‘complicated’.

Mayonnaise is one and a jumbo jet the other – read the paper to find out which is which, and which one describes the world we live in.” stephen woodford For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

high risks involved. Thirty-five to 45 per cent of fully commercialised product launches fail53.

However, the rewards of successfully pioneering a new market are not incrementally higher; they are exponentially higher: “A study of Unilever would suggest that around 70 per cent of its profits come from brands that created the category in which they are generally brand leader.”54 Pioneers enjoy both sales dominance and sales resilience in the face of competitive challenges.

Other brands may enter later with a better product and a lower price, but they will be destined to play catch-up.

How do we approach the challenge of pioneering a new category if analysis cannot be relied on to show the way? How should we now probe our way forward?

“Most brilliant entrepreneurs don’t begin with brilliant ideas – they discover them.”55 Google leaves its investors with no doubt about its approach to funding speculative new ventures: “We will not shy away from high-risk, high-reward projects because of short-term earnings pressure. For example, we would fund projects that have a 10 per cent chance, [placing] smaller bets in areas that seem very speculative or even strange. As the ratio of reward to risk increases, we will accept projects further outside our normal areas, especially when the initial investment is small… most risky projects fizzle, often teaching us something. Others succeed and become attractive businesses.”56 The key here is small bets. Big bets and big ideas need to be failsafe. So much is invested in them at the outset that they must not be

Generating options In the early 90s, the psychologist Kevin Dunbar set up cameras in four scientific labs to study where breakthrough ideas came from.

He found that “the ground zero of innovation was not the microscope. It was the conference table.”57 Steven Johnson examined this research in his book Where Good Ideas Come From.

He found that: “The trick to having good ideas is not to sit around in glorious isolation and try to think big thoughts. The trick is to get more parts on the table.” “We are often better-served by connecting ideas.”57 This works best if we can find a way to make long-distance connections between distant and divergent ideas. To do so, we will need to consciously replace our natural homophilia with a hetrophilia. We will need to cultivate diversity in both our personal and professional networks.

At the Account Planning Group’s Battle of Big Thinking in 2008, Graham Fink took inspiration from the birth of the Guggenheim Museum – an idea born out of the meeting of “two seemingly opposite minds”. He proposed pairing each one of the 250 audience members with “someone from outside their industry/profession, eg. a speedboat designer with an advertising creative; an air-traffic controller with a marketing strategist” to see what valuable new ideas might be created58.

In 2014, we don’t need Graham Fink to help us. We have all the digital tools we need to create our own social networks of opposites.

Prototype On their own, ideas are ethereal; if they are to engage with the world, they need to be given form:

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dIstInctIon, Ipa award for outstandIng body of work emIly faIrhead-keen

I belIeve the fut must In the new Marketing Age, brands need to compete for attention with everyone and everything, so must rise to the challenge by delivering extraordinary performance using Superhuman powers, Emily Fairhead-Keen says

I

believe that man has entered a fourth cultural phase: the Age of Marketing, where everyone and everything communicates with a marketing filter, mimicking brands and jumping up on their stages. Whereas one solution the advertising industry has offered to brands on the same stages as people is to be more like people – and more human – I believe a shift away from this thinking is needed, and the solution I offer is for brands to be truly extraordinary and Superhuman, delivering the extraordinary in fiction and performance, while exercising extraordinary control in doing so.

The Age of Marketing “Men want, say, rain. They begin by performing a rain dance, which often does not work. This is the Age of Magic. Then, baulked of success, they do the next best thing and fall to their knees and pray.

This is the Age of Religion. When prayers do not work, they set about investigating the precise causes of the natural world and, on the basis of their new understanding, attempt to alter things for the better.

This is the Age of Science.”1 I believe that civilisation has entered a fourth cultural phase: the Age of Marketing. By this, I mean whereas once marketing was a skill reserved for professionals, and stages and certain signals and semiotics, reserved for brands, now everyone is a marketer and everything communicates verbally and visually in marketing terms on the same stages as brands.

This has occurred because people are more aware of how they are seen by others as a consequence of technology beaming their identities around the globe to millions. This has effectively given rise to the foundation of a new understanding and hyper-

conscious state of self-awareness.

Becoming a marketer in an effort to win in this world is the fourth cultural phase’s equivalent of the rain dance.

I shall explore in more detail: l Why this has come about. l What people have become. l What culture has become.

I will then look at what this ultimately all means for brands.

Why this has come about New cultural phases appear to coincide with humanity’s increase in self-awareness and a new type of consciousness of both their nature and limitations. We saw this with the early civilisations of the Historic Age2, 3 and of the Axial Age where people became more “conscious of their nature, their situation and their limitations with unprecedented clarity”4 and just as civilisation “began to discover quite a different basis on which to look at the world”5 following the Middle Ages, people are now looking at the world and themselves quite a lot more and in quite a different way.

Technology is hosting and, arguably, creating a hyperconscious state of self. Once confined to the living room, on the bookshelf was where people were judged by how interesting they were, where they had travelled, what they had read. Now the living room is “on screen” to millions of people who can see and judge what people stand for and what they think about the world.

The UK takes 35 million selfies a month6, “creating an image of you for the world”.7 What people have become In the same way people looked to magic, prayed for rain, looked to God for answers or used science to try and understand the world they lived in, people have become

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

5 September 2014

campaign 17

colin stout

ure of brands be superhuman marketers to understand how the modern world works and, indeed, win in it. They now tailor their identities in a way they never could, changing themselves with a filter, baking fiction into their timelines. On Twitter, they sell “current”, “witty” and “smart”.

On Facebook, they hang their lives in photographs and in taglines. On LinkedIn, they become the person everyone wants to employ. They create brand names, logos, photos, language, all giving off their own social semiotic code.8 They hire third parties to reputation manage and miniteams of PR entrepreneurs to brand their identities online.9 As marketers, people are interested in how to market better and have become marketing experts.

Marketing books make it onto the bestseller lists10 and they watch programmes about it: The Gruen Transfer, a television programme that airs in Australia is about marketing, with segments entitled “How do you sell?” and “The Pitch”. It sees high viewing figures every week and its debut drew in 1.3 million viewers, the highest for an entertainment programme in the ABC’s history.11 Marketing is now a professional skill amongst non-marketing professionals. As we’ve seen with what Chris Anderson terms the “maker generation”12, there is a whole generation of entrepreneurial talent who market to make a living with readily accessible stories and products for all to see online. He argues that “the most successful makers are also the most successful marketers”.13 As marketing experts, these Marketing Age consumers understand the game brands play and are willing participants in the fiction. As David Ogilvy quite rightly said, “the consumer is not a moron. She is your wife. Don’t insult her intelligence”.14

Mentor’s coMMent

“Working against the orthodoxy that insists brands befriend, accompany and impersonate consumers, Emily makes a case for a return to the values and behaviours of the brand as Superman. After you’ve read it, it’s tempting to pop into a phone booth, slip your brand into a cape and lycra and get ready to save the world.” stuart Bowden

Whilst Guy Debord in Society Of The Spectacle argued: “All of life presents itself as an immense accumulation of spectacles. Everything that was directly lived has moved away into a representation.”15 Jean Baudrillard, too, suggested that the world we live in has been replaced by a copy world. I believe people are more switched on than ever and able to distinguish clearly between what is real and not, in a world where the true rubs shoulders with the false:“The websites, the blogs, the search engines and encyclopedias, the analysts of urban legends and the debunkers of the analysts.”16 Evidence of this sophistication is in the appreciation of complex concepts of reality in mainstream box office hits: The Truman Show, Inland Empire, The Matrix, and Synecdoche New York.17, 18 I believe that while people are sophisticated and get the game, they are also willing participants in it, accepting the copy world; comfortable with this permeable fourth wall, willing to adopt Kayfabe19, to suspend reality. In the same way people get that reality TV is not real but still enjoy the entertainment, the same is true in marketing.

Living in a marketing society,20 in this Marketing Age, we see the

duality of marketing man:21 the Marketing Age consumer willingly suspends reality, plays the game brands play, while at the same time being sophisticated in their critique of them. Marketing Age Man analyses the Super Bowl ads at length across the world22. Of the 20.9 million Super Bowl-related Tweets sent during the game in February 2013, 30 per cent were about the ads.23 Marketing Age Man joins the critique of the annual UK Christmas campaigns in the national press, not just the industry. From the Daily Telegraph to the Daily Mail24, he interrogates the art direction, judges the aesthetics, dissects the stories and analyses the strategies of brands.25 He has strong appetite to do so: interest in “Christmas advertising” as a search term has been rising since 2010.26

What culture has become Whereas the marketing world once borrowed from culture, now culture is borrowing from brands.

Everything now copies how brands communicate with a marketing filter and usurps the physical and virtual spaces where they do so. We are effectively seeing the commercial colonisation of culture27 in reverse.

Culture speaks to people now in

marketing terms. Journalists bounce around marketing patter, describe naming your child as “branding”28 it, in the weekend papers. Marketing terms have become a generation’s diction, not just reserved for marketing specialists. Culture plays with the “long tail”, and “content is king” in articles. “Specialised jargons are developed and added to, altered and refined to the point of mutual’’29 comprehensibility.

Culture presents to people visually, with marketing signals.

Editing tools, once the sacred possession of the production houses, now come as standard on phones. People now rarely see images that haven’t been cut, edited and a treatment applied.

Politicians are chief marketers.

None more so than Barack Obama, his marketing victories were well documented in real press, not just trade. Time magazine tells the world that the 2008 election was all about social media, and that 2012 was down to use of data in media targeting.30 Politicians aren’t simply asking people to vote anymore, but asking people to share and indulge in their social currency in the same way Oreo does.

Even the physical spaces brands have traditionally occupied are under threat from non-tradition-

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This “human” Clark Kent trend has permeated brand communication and we see a kinder, gentler, more sensitive ad product with an inbuilt sense of vulnerability. “Boy next door” rather than “Super” in tone. For example, NatWest’s “helpful banking” executions41 and the Milk Tray Man who was effectively emasculated when he became a more “human”, “lighter in love” version, or what Julie Burchill terms “castration with cuddles” .42 Let’s look a little closer at this human doctrine of thinking:

Figure 1: From Mormonism

Real We see “real people” in ads, we see “real people” talking from behind the ads, we get a sense these brands aren’t trying necessarily to evoke emotion in the consumer, but to show that they have feelings.We even see it with packaging, bananas are labelled “eat me”… salad packs invite the buyer to “wash me thoroughly”.43

Figure 2:To Jesus

Flawed We see a trend for admitting imperfection and being “flawsome”44. For example, TD Bank admits: “Of course, we want everything to be perfect. But we’re only human. So if there’s ever an issue, we’ll keep working until we get it right.That’s what it means to bank human.”45

Figure 3: To John William Waterhouse’s The Lady Of Shalott 31 al brand marketing, from Jesus to John William Waterhouse, all jumping up on the physical and virtual stages brands have traditionally performed on, and all now occupying the same spaces in which we sell dog food in this Marketing Age. (Figures 1, 2, 3) This new Marketing Age has presented brands with two critical challenges.

First, brands no longer compete for the precious real estate of the consumers’ mind32 against other brands in category or, indeed, cross-category, but with everything (and everyone). Everything and everyone is communicating as marketers in the “swim lanes”33 and on the same stages. Unless brands find a way to cut through, they risk becoming invisible.

Second, everyone has become a marketing expert, interested in it, and an analyst of it. We are now living in the midst of an “I Can Do That Too” generation of marketers. Everyone got better at the brand game, the bar was raised

and expectations grew. Critiquing now comes from the streets, not just the boardroom.

While everything and everyone is trying to be more like brands, one solution the industry has offered is for brands to be more like people. Because people and brands are on the same stages, in the same swim lanes34, one industry mode prevails around a central thought: brands must be more human35 in order to connect with consumers and build trust.Thinking centres on getting closer to people in this Human Era,36 brands relinquishing control, brands being more “flawsome”37, real38 and transparent39.

Brands beg for love and attention:“like me”,“engage with me”, “play with me”, effectively trying to form synchronised swimming feats with the consumer as best friends and getting “close enough for contact to happen, like Michelangelo’s God assuming the form of a man to touch Adam’s extended finger”.40 (Figure 4)

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Transparent46 We see brands desperately trying to show people their honest nature. From asking for people’s opinions to showing the product journey and just how committed to sustainable growth they are.

For example, Starbucks gives its customers their say on products found in-store47 and McDonald’s has its ongoing battle to try and prove it isn’t evil, and that it does put more back in the world than it takes out.

Relinquishing control In being transparent, we often see

brands explicitly relinquishing their power, coming down to meet people on people’s terms: From Barclays’ “Your Bank.

We’re listening” campaign to The Co-Operative’s latest “Have Your Say” campaign.

I believe the solution lies in a fundamental shift away from current thinking: “Go pricke thy face, and over-red thy feare,Thou Lillyliver’d Boy.”48 While this doctrine can work for some brands and some categories, for example, new brands such as Jack Wills and Patagonia who build brand myths by using transparency as a way to enhance their story, and where brands actually have sexy underwear worth seeing underneath, it isn’t the ultimate solution.

Instead, I believe the solution to the challenges brands face; competing with everything (and everyone) and in the face of sophisticated Marketing Age critique, is a shift away from this rather lily-livered behavior.

The solution lies in a Superhuman belief system.

I believe brands have got to be truly extraordinary and Superhuman to beat Jesus and Mormonism, the Lady of Shallot and Joe Bloggs in his bedroom and be truly Super to cut through and impress these Marketing Age consumers.

By “Superhuman” I mean one who can deliver the extraordinary through: l Extraordinary fiction: has a compelling fantastical, mythical story and is both opaque and mysterious. l Extraordinary performance: is from another world and brings the spectacular from his world to earth. l Extraordinary control: is in fierce control, living on his terms, exercising military jurisdiction.

I recommend three shifts away from current human thinking. I will explain why Superhuman is right, exploring the audience,

figure 4: The clark kenT belief sysTem The Fourth Cultural Phase: The Age of Marketing.

Everything and everyone communicating as marketers.

One solution from the industry: The Clark Kent Human belief system.

For brands to become more like, and closer to people.

Communicates to Mimics people

Brand People Mimics brand

Same worlds, same stages

Brand

People Mimics brand

Same worlds, same stages Source: Author

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brand, cultural and business reasons, while highlighting some dangers in the current human doctrine. (Figure 5)

The firsT shifT: from real To ficTion A deep cultural need for fiction “Despite my childhood wishes to the contrary, I live in the real world.

It’s no Metropolis. The skyline is free from flying men or flashes of inexplicable light… they were missing from the real world but there must have been a parallel world, a possible future.”49 A desire for stories, fictional heroes a “social need for extraordinary action”50 and, indeed, myth is deep within humanity. People have always put fictional Superhumans on pedestals, be it gods, goddesses51 or subsequently Superheroes as immortals.52 Humanity looks for “taboos”, ways of “insulating certain people from harmful social contact”53, for fictional “beings” with “mystical charges… operating like an electrical current”.54 They have a history as old as the establishment of human socialisation.

Theories why are rich and well documented; they range from religious studies to anthropology to literary criticism.55 For example, Freud and Jung argued we look to stories to help us understand the world and give it meaning,56 Joseph Campbell argued that “the images of myth are reflections of the spiritual potentialities in every one of us. Through contemplating these, we evoked their powers in our own lives”.57 I believe that myths “give order and narrative structure to the way humans contemplate the world around them”58 , they are both escapist and explanatory solutions to the world around us.

While this is not a paper about the theory of fiction, myth and fictional powers, it is one that rests on the importance of them. As Karen Armstrong in A Short History Of Myth argues, while we might “be more sophisticated in material ways, we have not advanced spiritually beyond the Axial Age”.59 People have always wanted superpowers to do things mortals can’t, so we buy into their stories and still do.

A cultural need for escapist fiction in complex times “The modern man emerged from giant ignorance like a butterfly from its cocoon. Where there was darkness, now there is light, but also where light was there now is darkness.”60

Escapist fantasy thrives in times of social complexity: Superman was born61 in the midst of the Great Depression, on the cusp of World War 2.62 In the 19th century, people looked to fairies and Gothic revival as an escapist solution to the rapid industrialisation that had left them confused.63 We are now seeing the revival of the superhero in popular culture.64 A “Golden Age of the Superhero”65 has dawned, from comic books to blockbuster movie extravaganzas. Interest in “Superheroes” has risen exponentially.

People want fictional escapism in this overly transparent, information-heavy world, “traumatised by war footage and disaster clips”,66 where the internet has revealed everything, and where the daily grind of Facebook presents us with darkness: from open mourning, to calories consumed at dinner on someone’s latest diet, all pouring out into the newsfeed. People don’t want more emotional baggage from a brand.

We are living in a “world of information glut and gluttony”.67 Five hundred billion images were captured in 2010; people now encounter “zettabytes” and “yottabytes”.68 Brands’ informationheavy transparency can add to this information overload and be a burden, resorting in what Corey Mull terms “consumer cognitive overload (a condition where consumers have absorbed so much information that they’re incapable of mentally sorting it all and making an optimal decision)”.69 Whereas John Grant argues that in the absence of the formal and traditional societal structures, brands are simple ideas we look to help us navigate a complex world,70, 71 I believe that the Marketing Age consumer wants brands to provide simple escapist fiction in these complex times.

Real can feel ‘faux real’ to a Marketing Age sophisticate I believe that brands are not real and the Marketing Age consumer gets this.What we see with current human doctrine is “reification”,72 that is the application of concreteness to an abstract idea.

Instead, I believe a brand is authentic in its abstraction, not in being a concrete thing. Brands are slippery73, weird, and abstract74 and it is in the abstract and the ambiguous that people find them attractive, in the “mystery box, a container of infinite possibilities [which] continues to fascinate because it remains unopened”. 75

campaign 19

figure 5: The superhuman belief sysTem The Fourth Cultural Phase: The Age of Marketing.

Everything and everyone communicating as marketers.

One solution from the industry: The Clark Kent Human belief system.

For brands to become more like, and closer to people.

My solution: The Superhuman belief system.

For brands to be Superhuman, delivering extraordinary

Superhuman worlds, Superhuman stages

Brand

Communicates to

Impressing Marketing Age consumers from a transcendental spot.

Mimics people

Brand People Mimics brand

Brand

People Mimics brand

Extraordinary Fiction

Same worlds, same stages

Same worlds, same stages

Extraordinary Performance

Extraordinary Control

People Source: Author

In trying to be real, admitting their flaws, it can feel false because it is in perfection that they are authentic. Quite literally, a brand’s history lies in the stamp of approval, a promise of better.76 On a deeper level, they have always offered utopian possibilities:77 More sex (Lynx), the acceptance of any body shape (Dove), happiness (Coca-Cola).

They have always promised Superhuman powers in the product itself: Nike trainers for Superhuman speed, Pantene for the locks of Wonder Woman. A brand isn’t real but feeds upon it:“Publicity is effective precisely because it feeds upon the real. Publicity begins by working on a natural appetite for pleasure.”78 Marketing Age consumers want fictional brand heroes and worlds. Ones who come from the sky and occupy transcendental spots: The Marlboro Man,79 the Milk Tray Man and even Hello Kitty, their “complex simplicity”80 fascinates people. They buy into “mytho-symbollic worlds”81 that brands create, such as McDonalds, “a wondrous, magical place, where everyone is welcome, safe, happy. It does not matter that sometimes when we go there it feels more like a cafeteria food fight”.82

A business case for fiction People don’t pay for the real, they pay for the fiction and this is one of the ways a brand can implement a price premium.83 Take Poilane bread, exhibited in selected and exclusive retailers such as Selfridges. It has people paying considerably more than the price of a standard loaf because it bakes a fictional mystery in with its closely guarded “recipe from 1932”.84 Take Field Notes stationary, able to charge considerably more than a standard Ryman’s notebook, because it bakes fiction into its brand, or Moleskin, “the pad which the novelists choose”, but

really a replica of the 19th century Parisian writers’ choice, again charging astronomical price premiums.

We see this repeatedly with blind taste-testing where ownlabel brands repeatedly beat named brands and where85 consumers buy into and pay for the myth but often prefer the base product when myth isn’t in the mix. For example,Aldi’s own label gin recently won out against Hendrick’s and Bombay Sapphire.86 As Trout argues, the consumer “tastes what [they] expect to taste”87 and they taste the fiction and are willing to pay for it.

The second shifT: from This world To specTacular performance An appetite for extraordinary performance in culture Given the “pervasive impact of entertainment in our economy today”,88 and the “number of entertainment options [which have] exploded to encompass many new experiences”,89 culture is delivering unforgettable performances in an effort to woo more demanding audiences.

In theatre, sensually intense experiences such as Fuerzabruta or the Punchdrunk theatre company wow audiences. In the fashion world, designers compete to stage the best show, not just the best collection: Chanel takes its shows to the extreme (Figure 6);90 Prada too, and its shows claim to be a “celebration of the transformative theatre of fashion and the performative power of clothing”.91 In music, visual spectacular is now as important as the audio, with Superhumanly performances coming from the Gorillaz to Lady Gaga. In film, moviemakers find innovative ways of using surround sound and hyper-framed realities, and Secret Cinema provides immersive intoxicating experiences.

The Sydney Fireworks, the Olympics, each time more spectacular.

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

20

campaign 5 September 2014

Figure 6: Chanel takes performance to the extreme in its catwalk shows

An appetite for spectacular performance in advertising We see this with the Super Bowl where more than two thirds of viewers pay attention to the eventised commercials and 50 per cent tune in just for them.92 We see this with the UK Christmas annual advertising fest. On TGI, people professing to love the cinema ads93, and we see spectacular creative performance in Cadbury’s “gorilla” and the Red Bull famous “jump” accumulating views years after the event.

People love lavish advertising display so much they buy into the commercial merchandise from the adverts themselves. From baby (Comparethemeerkat) Meerkats, to Nat West pigs and John Lewis alarm clocks to songs from ads making to the number one chart position94.

The all-Lego adbreak on 9 February on ITV to promote The Lego Movie is a great example of successful advertising performance.95 Tweets went through the roof, as did Google Search vol-

umes on the Sunday it went live. 96 There was also a peak in the Lego break performance as people tuned in to watch the ad.97 People apply the same expectations they have in theatre and the arts to advertising and enjoy spectacular advertising performance.

A business case for spectacular advertising product While we must be careful, in the absence of regression modelling, to apply a direct correlation to the movie’s phenomenal Box Office success98 from the Lego adbreak, we can assume the exponential increase in awareness as a result of the ad did, in part, contribute in some way to converting awareness to sales.

As we have seen with the Cadbury “gorilla”, spectacular advertising product can generate £5.2 million incremental sales, deliver a 5 per cent margin improvement, bring to life a more profitable model, re-energise the company, delight the investment community and maybe even contribute to

judge’s commenT

“In an age of marketing micromanagement, analytic rigour and celebrity/consumer-led conversations, the willingness to think differently and to set out a stall based on fiction and performance delights me.” louise Ainsworth For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

shareholder value.99 Arguably, it can also reap benefits long after the ad has aired, driving long-tail awareness and cost efficiency.

We also know from past research papers that highly creative advertising can drive market share and profitability. The Link Between Creativity And Effectiveness, published in 2011, concluded that creatively-awarded campaigns are more efficient than non-awarded ones in terms of the level of market share growth they drive.100 While Advertising’s Greatest Hits: Profitability And Brand Value by Karl Weaver and Paul Dyson concluded that after market size, creative execution is the second mostimportant factor in determining advertising profitability: a profit multiplier of ten.101

The Third shifT: AwAy from relinquishing conTrol To exerTing miliTAry jurisdicTion

Successful brands are ruled with an iron fist In order to deliver extraordinary fiction and performance, brands need to be ruled with military jurisdiction.

The world’s most valuable brands adhere to strict processes, guidelines, rules and procedures in order to ensure perfection goes out the door every time. For example, Coca-Cola is notorious for its books on process, what can be done with its brands and what cannot, from a strict recruitment process, to how global creative is unpacked locally. Sometimes

they are ruled by one iron fist. For example, Apple, with its dictator style-puppeteers, from Jobs to Cook.102 This is often true for luxury brands, where frequently the person is the brand. For example Karl Lagerfeld is Chanel, ruling the brand like a cartoon superhero, “collar is high… hair powdered… glasses dark... fingerless gloves”,103 and as we saw with Angela Ahrendts at Burberry,104 with the right superhero director in the director’s chair, the control of the individual can have enormous benefits to the brand.

Strict control enables Red Bull to deliver extraordinary fiction and performance by being tightly controlled in the right places, at the centre: Its brand plot. It allows consumers closer to the events but controls the big performances, e.g. the space jump. Strong brands like Red Bull are expert at wearing a mask of easy going but are really ruled with an iron fist, also true of Lynx, which appears to have a “fly by the seat of its pants” kind of attitude but is rigidly organised.105

Relinquishing control can humiliate brands With the advent of social media, the errors businesses make receive far more attention now than they might have in the past. There are almost too many examples to list. From Qantas in Australia in 2011, who after months of negative publicity stemming from industrial disputes, promoted the #QantasLuxury hashtag as a chance to win a first-class experience. But it was made a mockery of with Tweets condoning pay rises and offshore job placement.

106 Likewise, Waitrose in the UK107 which asked its consumers why they shopped at Waitrose, and met with only a handful genuine responses, the majority taking the opportunity to mock: “I shop at Waitrose because Clarrisa’s pony just WILL NOT eat ASDA Value straw.”

Just as people don’t want to have to advise a needy Superman on how to save Lois or direct Batman on how to put out Gotham City’s fires, Marketing Age consumers prefer the robotic efficiency of a superhero to simply deliver the goods and entertain them on the way. If brands relinquish control, the consumer finds entertainment their own way.

Relinquishing control can be very rational Asking what a person wants their bank to look like, or what the next

5 September 2014

figure 7: The superhumAn creed Superhuman

Human The shift away from the Human solution

Delivering the Superhuman solution

The Superhuman Creed

1

Real

Fiction

1

Extraordinary Fiction

2

This world

Spectacular Performance

2

Extraordinary Performance

3

Relinquishing control

Military jurisdiction

3

Extraordinary Control Source: Author

Starbucks product should be are very rational lines of communication and I believe this is dangerous when there is a business case for the emotional rather than the rational in communication.

We know this from Les Binet and Peter Field’s robust analysis which states that emotional campaigns’ profit effects build more strongly over time compared with rational ones108, Robert Heath adds: “Rational messages require attention and can be easily filtered out and ignored whereas emotional communication requires no attention or conscious effort and therefore cannot be filtered out.”109 In summary, there are many audience, brand, cultural and, indeed, business reasons why Superhuman is right for brands in this Marketing Age, and why there are dangers in the human doctrine.

The prAcTicAl ApplicATion of A superhumAn: A superhumAn creed I believe the practical solution lies in a Superhuman Creed, with a three paneled framework. (Figure 7) I shall explore how brands must implement this in the Marketing Age.

extraordinary fiction

“No idea too bizarre, no twist too fanciful, no storytelling technique too experimental.”110 Brands have to tell fantastical stories which are as addictive as cocaine,111 as unforgettable as the classics and as entertaining as the childhood stories we all remember.A brand’s story has to be unforgettable, not just memorable. Just like when comics went colour, “they must have seemed hallucinatory, as potent as dreams,”112 brands must make their storytelling superior to that of the Marketing Age consumer and be more elaborate in their telling of it.

Explicit and expected fiction They must do this by treating each communication as if it is a new episode in the story, with a clear narrative for the audience to follow, explicit in execution. For example, the Nescafé couple of the 90s or the current Comparethemeerkat narrative. The audience looks forward to each execution, discussing it like the latest episode of a soap opera.

Brands must look to own spaces and media where they can narrate the fiction, each campaign a new chapter in the drama, on the same stage each time. In the same way that Jack Daniel’s repeatedly buys the same London Underground hoardings, telling its story in the same expected places, week in, week out, with consumers following each episode daily.

Brands must repeat their origin story again and again. Innocent is a super example of this, where it reminds consumers of its narrative in interesting and entertaining ways from its website to its YouTube vignettes, all repeating the same tale, becoming as familiar as Goldilocks And The Three Bears.

For example, Parker Pen (Figure 8) could reinvigorate a depleted pen industry in the same way Moleskin has the notepad by explicitly telling the tales of the famous writers and artists who have used them over the years and the famous work which has been possible because of the Parker Pen. Now that the pen, like the wristwatch, is primarily decorative, fiction and myth is even more critical in the sell. It could sponsor the British Library’s manuscripts and host spectacular limited exhibitions from across the globe. The pen should have novelist limited editions people want to be seen with – for example, the Dickens Pen or the Vonnegut Pen.113 Playful fiction “It is more fun to talk with someone who doesn’t use long, difficult

words but, rather, short, easy words like ‘What about lunch?’”114 Brands must be fun and funny and have fun. They must learn from the childhood tales, the simplicity and stickiness of The Very Hungry Caterpillar and Winnie The Pooh. Stories must be told with a sense of childish playfulness, executed with a simple playful energy. Brands must tell tales and look like they are enjoying telling them, appealing to the consumer’s inner child.

Brands must use their magic powers and play to the irrational in people. Just as round tea bags and smoothies with bobble hats excite people for no logical reason,115 they must dial up the nonsensical and the ridiculous116 and make guinea pigs talk117, bounce balls down hills in San Francisco118, get babies to roller skate119, teach ponies to sing120 and make gorillas play the drums121. They must champion the stuff humans

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can’t do and offer entertaining escapism in this overly transparent society.

For example, Toys ‘R’ Us could use fantastical playful fiction around how it gets its Christmas deliveries to children. It could turn its delivery vans into liveried Rudolph sleighs, and then excited children and parents could track where their delivery was leading up to Christmas online with a Santa Tracker122 and spot them on streets of England. (Figure 9)

Bigger fiction Brands must subvert other people’s big myths and make bold claims. In doing so, they emotionally put themselves on pedestals, as the protagonist in the story, elevated from people.This signals their powers of temporal duplication and timelessness, which Marketing Age consumers can’t exercise. For example, with CocaCola owning Santa or, indeed, sponsoring Jesus in Rio de Janeiro. (Figure 10) They must also own the biggest concepts, telling fictional stories around them, for example, Lynx and sex; Procter & Gamble and mums; and Dulux and colour.

(Figure 11) By doing this they are demonstrating they can do things the Marketing Age consumer can’t, impressing them with their Superhuman confidence, with the ability to pull Santa’s strings, turn Jesus red, paint countries and stimulate mating behaviours, albeit all with the knowledge that

Figure 8: Parker Pen could exploit its associations with famous authors For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

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campaign 5 September 2014

consumers get the game but play along anyway.

For example, Johnson and Johnson Baby could go bigger by owning “The Beginning”. It could make Child Of Our Time-style documentaries about children’s beginnings. It could write children’s’ first books and create books where mums can document their child’s beginning. It could build Intel Museum of Mestyle virtual experiences, collating all the Facebook memories and photographs around their child’s beginning: the scan, the first photo, and the comments from friends. Literally owning the beginning with scale.

Extraordinary performance “Your advertisements should establish in the reader’s mind an image she will never forget.”123 In the same way the cycle of superhero movies moved away from the real world approach in 2010 to “expansive, fantastical” movies such as James Cameron’s Avatar124, brands have got to stop sucking on “the lollipop of mediocrity”125 and deliver mentally unforgettable performances, not just be mentally available126.

They have got to create fireworks, and construct spectacle “with its power to demand obedience”.127

Blockbuster advertising performance Brands must do this by constructing awe-inspiring event performances such as the Red Bull space jump and advertising event performance like the annual John Lewis Christmas treat. People are everywhere; a brand’s arrival should be special and built up, like Superman appearing in the sky.

The performance must be appointment-to-view with a campaign built around the ad itself, as with the trailers for the Superbowl ads.128, 129 The ad must be supported with product merchandise consumers want to buy just as they buy Spider-Man pyjamas for their children.

In the same way, “audiences respond to big-name actors, special effects and in-your-face advertising”130 for movies, and brands have got to not spread money out in a series of smaller, safer bets, but invest in event creative like the studios are investing in event blockbusters, making the big bets.

This means pooling monies into high-production, headline-star ads, not a series of low-cost, mediocre creative. The ad industry has to follow the movie studios, which now succeed by sinking extra resources into a handful of super-

hits, and the public responds by flocking to them. Harvard Business School Professor Anita Elberse’s book Blockbusters shows that this strategy has also worked for book publishers, music labels, TV networks and video game companies.131

Awe-inspiring physical theatres “A new type of aerialized spectatorship… conquering the laws of gravity, physics and biology.”132 I believe brands have to impress people and be unforgettable by doing things, and existing in impressive physical Superhero spaces such as Burberry’s “theatre” on Regent Street or The Guardian’s King’s Cross lair.

In a world where everyone is trying to own virtual, we mustn’t forget the power in the physical.

Figure 9: a Santa Tracker offers a playful opportunity to toy retailers

With physical materials, the brain is processing both visual and spatial information and we know from research that additional engagement of spatial memory results in a stronger memory.133 We also know from research that bigger is more memorable134 and brands must scale up the spectacle and not be simply physically available135, but physically intimidating in their performances. They must put themselves on real physical pedestals, like the trapeze artist, occupying that transcendental spot,136 bigger than the Marketing Age consumer could ever be.

This means investing in new stages and worlds to perform on – whether it be stores, existing property (the O2) or sponsoring other peoples’ giant stages, for

Figure 10: Coca-Cola shares the billing with Jesus in Rio

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

example Honda’s sponsorship of The Turbine Hall at the Tate Modern.

For example, Odeon Cinemas should make more of its estate.

As a brand built on bringing film to people but also theatre, “With their cloud-piercing towers and sweeping lines… [people] disappeared into a shining world of futuristic dreams, a whole dimension away from the grim economic and political reality.”137 It should take lessons from Secret Cinema and put “theatre” back into movie theatre. For example, by capitalising on when people want to dissect the film post-screening and that after film high, warm to wanting to see more films, and make its foyers places people want to dwell. It should give people opportunities to engage with the previous film in review booths where opinions get uploaded to their social profiles, and give them the option to book again for their next visit.

Masked actors and extras in the show To stimulate fascination, brands must remain as actors in the show, keeping their masks on, and encouraging speculation around the characters and narrative in the same way a superhero comic allows the reader’s imagination to run wild joining the frames.138 Brands must empower Marketing Age consumers to be mysterious extras in the show through consumption of the brand. In this Marketing Age, people like brands that allow themselves to appear mysterious. Brands have to bake mysterious ritual into the

5 September 2014

campaign 23

product and act of consumption, allowing Marketing Age consumers a part in the show.

For example, Guinness drinkers love the mystery of the product. Their colloquial term for a “pint of the black stuff” illustrates a muted sense of pride that they are requesting some dark art only Guinness drinkers are in on, a magical concept that mysteriously takes longer than their friend’s pint to pour, while they wait theatrically, their friends wondering where they are and whether they have scored with the barmaid.

Extraordinary control I believe that in order to deliver extraordinary fiction and performance, brands have to exercise extraordinary levels of control over a brand and its communication. I believe there is also mystery in this fortress behaviour which is attractive to Marketing Age consumers. Brands must maintain control of the critical bit of the brand: the plot.They must do this either with an individual or a team and deliver it with military organisation and process.

Explicit brand rules Brands take back control showing the Marketing Age who is boss in how people interact with them.They must set the consumer explicit rules, making them play the game on their terms. For example the Bourke Street Bakery, a tiny corner bakery in Sydney, an institution famous for its divine pastries, has been a phenomenal success139. It’s also a place that has rules: it commands people pay in cash only and if a product runs out, “there are no buns more, mere mortals”. (Figure 12) Another example is the current London restaurant scene with eateries such as Polpo which commands not being able to book as just one of its rules. Here we see brands toughening back up, standing out and putting their code of observance first.

Pseudo democratisation We see this with rigidly controlled brands – for example, Coca-Cola asking people to name their can and Walkers getting people to choose their favourite crisp flavour. These are brands which don’t truly relinquish control but successfully implement strictly controlled, tightly managed processes where people are kept at arm’s length, merely acting out a pre-directed script, with readymade choices and template visuals. This can be entertaining for

Figure 11: Dulux demonstrating it has the power to tell big fictional stories this Marketing Age consumer and adds to the escapist entertainment, as long as the strings are held tight.

Brand as teacher on stage Brands should be standing up and explicitly expressing their authority as the superior Superhuman, teaching the Marketing Age consumer a thing or two. Just as The Guardian puts on its Masterclasses, performances which signal its superiority to its readers – a teacher, one who exerts control;

the tired book industry and what is left of the music retail industry should be doing this and advertising that they are doing so.

For example, Waterstones should be opening its doors week in, week out, charging for lessons from novelists and writing classes.

HMV should be hosting masterclasses with musicians, making podcasts to purchase on how to write music, form a band or play the drums.

In order to deliver Superhuman, the industry must practice Superhuman “Don’t bunt, aim out of the park. Aim for the company of immortals.”140 Like brands, the ad industry is also under threat in this Marketing Age. Once admen were distinctive, unique and different in the work we produced, in our eccentricity, now we are under

Figure 12: Bourke Street Bakery in Sydney

threat from the belief that everything and everyone can and will do our job: From Obama, to clients, to Joe Bloggs in his bedroom, all equipped with the latest technologies and seeming expertise to do so.

Whereas once we were confident in our value – “‘Ring the bell,’ I said, and walked out…Too many masters, too many objectives, too little money,”141 the proliferation of agencies has now made us Yes Men, where we accept mediocrity, bland middle ground, and turn out turgid pieces of work. We, too, have championed a lily-livered set of behaviours for too long.142 Instead we must remember, “like Hollywood and Disney, Madison Avenue is in the myth making business,”143 and Superheroes need courageous Superhero artists and powerful controlling directors to construct these extraordinary fictional performers. We must practice what I have preached to brands and adhere to the Superhero Creed. I illustrate two examples of how we must implement this:

Exert extraordinary control In the same way brands indulge in pseudo democratisation, this should be true of the creative process where agencies use “pseudo beta” in that only the best prototypes see the light of day before they are ready. The best agencies in the world rarely, if ever, send work down the “catwalk” which isn’t perfect, isn’t outstanding, isn’t the best.144 The most successful agencies out there now, the Bartle Bogle Hegartys, the Drogas, the AKQAs and the R/GAs, exercise control at the right points with the military jurisdiction of a Mark Rylance or Andrew Lloyd Webber.Agencies have to follow these Superhuman agencies and truly

deliver on being clients’ mosttrusted business partner by bravely saying no to JFDI prescriptive145briefs, staying true to our own rules in a battle for extraordinary work.

Hire Superhuman performers If we are to compete effectively against everything and everyone in this Marketing Age and be unforgettable we have to not just be like the Hollywood masters and West-End legends, but steal talent from them.As artists, we must hire superhero artists to up our game, “the job of the artist is to deepen the mystery.”146 We must hire supreme myth makers, storytellers, screenwriters, movie men, literally taking talent from other entertainment professions from Lady Gaga’s wardrobe team to the Sydney Fireworks’ choreographers and designers to write our myths and direct the extraordinary performances.

Conclusion If brands are to compete against everyone and everything in this Marketing Age, communicating to Marketing Age man in need of impressing, they cannot afford to lower themselves to earth as mortals and fellow humans, but instead must rise high above as Supermen, with Superhuman powers, delivering extraordinary fiction and performance, exercised with an extraordinary level of control.

Jesus and Mormonism must be left intimidated, the Lady of Shalott belittled, and mortal Marketing Age man left awestruck, necks crooked, goose pimples pricked at the sight of Superhuman brands swooshing across the night sky. Just as Lois Lane looks up to Superman: “Wondering why you are... all the wonderful things you are. You can fly. You belong in the sky.”147

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24

campaign 5 September 2014

distinction erik arnell

thriving in uncer

i believe it’s time for brand

I

t is not the brands with the best foresight that will succeed, nor the most intelligent.

Instead, it will be the ones that are the most adaptable to luck.

This essay sets out to defy industry convention by exploring how acting rationally in an increasingly convergent and unpredictable world can actually decrease a brand’s chances of survival.

It further argues why luck will become a more important strategy than prediction, the implications of which demands a paradigm shift in thinking about how we manage brands and structure ourselves as an industry

Introduction

“There was only one catch and that was Catch-22, which specified that a concern for one’s safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions.

Orr would be crazy to fly more missions and sane if he didn’t, but if he was sane he had to fly them. If he flew them he was crazy and didn’t have to; but if he didn’t want to he was sane and had to.Yossarian was moved very deeply by the absolute simplicity of this clause of Catch22 and let out a respectful whistle.

‘That’s some catch, that Catch-22,’ he observed.” 1 The premise of Joseph Heller’s 1961 satire Catch-22 is that the only way to deal with the irrationality of war is to be irrational yourself. The people who survive tend to be the ones with the least regard for their own safety. Pilots have to fly unless they are mad; but as soon as they ask not to because they are mad, they are deemed sane because they are concerned for their own wellbeing.

I believe there is an important parallel between the dilemma facing Catch-22’s main character,

Captain John Yossarian, and that facing the modern brand manager – in that acting rational in an increasingly irrational and unpredictable world will decrease brands chances of survival.

This paper argues for brand managers to take a different approach – an approach not based on just analysing, planning and predicting what is going to happen to the world, but one based on something that will become more important as our world is growing increasingly complex.

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

I believe that missing something is the magic ingredient we call luck. By understanding the role of luck in the context of brand management I will demonstrate how we can: l Create a more effective way of managing brands in uncertainty. l Increase brands chances of encountering success. l Justify the existence of a new role within client organisations. l Understand why the discipline of strategic planning is failing and what we can do about it.

Part 1: Why brand managers need to aPPrecIate the value of IrratIonal thInkIng In an unPredIctable World Our world is becoming increasingly complex In today’s environment, things that were once isolated from one another are now constantly bumping into each other, often with unexpected results. In our industry, this accelerating phe-

5 September 2014

tainty:

campaign 25

In a world of conditions that will outpace us and make fools of our predictions, the time is right to redefine the role of strategic planning by preparing to take advantage of luck, Erik Arnell writes

colin stout

managers to get lucky fIgure 1: the arab sPrIng Mohammed Bouazizi sets himself on fire in protest at the unfairness of Ben Ali's government.

His family and friends capture videos of the following protests using their smartphones.

These videos are uploaded to Facebook. But Tunisians know that viewing dissident material on Facebook would be monitored by Government intelligence.

Nawatt, a digital group of Tunisian dissidents, translates and spreads the videos across the internet.

Al Jazeera, banned from reporting in Tunisia but watched all over the country, picks up Nawatt's reporting and amplifies it.

The ability to safely protest against the Ben Ali regime inspires copycat protests across Tunisia.

This global coverage prompts protests right across the Middle East, leading to the overthrow of dictatorships in Tunisia, Libya and Egypt (twice).

With the fear of using social media diminished, more on the ground reporting from Tunisia is published on Al-Jazeera, which in turn focuses global media coverage.

Source: Author

The combination of these changes has caused an interesting predicament for our industry because when once separate things become interconnected and interrelated, it becomes far more difficult to predict what is going to happen next4.

Just ask Hosni Murbarak.

nomenon is referred to as “convergence”2 and it has come about because of a host of technological and sociological changes that occurred after the 80s:3 l Decreasing cost of computing power. l Drastic increase in computing power. l Increasingly wealthy human population. l Digitisation of massive amounts of information. l Increasing ease of communicating rich content across distances.

The Arab Spring In 2011, a young Tunisian street trader named Mohamed Bouazizi set himself on fire in protest against the confiscation of his goods, as a result of his inability to pay police bribes. On the day of his funeral, protests broke out in his home town of Sidi Bouzid.

These types of protests were a regular occurrence in then-president Ben Ali’s Tunisia and had effectively been shut down through the implementation of military force and media cordons5. However, this time, what followed is an example of the unpredictability of our world when once separate things become interconnected.

There was a linear progression of events that led to the happen-

ings we now know as the Arab Spring6 (Figure 1). Like the butterfly that flaps its wings in Brazil and causes a tornado in Texas7, the actions a young street trader from Sidi Bouzid toppled more dictators than Che Guevara did in his entire lifetime.8

What you put in is no longer what you get out What this illustrates is how convergence has created a more interconnected world where small changes in the input can result in a huge variation in the output.

In his book The Signal And The Noise, Nate Silver refers to these sets of interacting components as “complex systems”. Their omnipresence is the reason why we struggle to predict everything from the timings of earthquakes, to next week’s weather, the world economy9 or the spread of [brand] ideas within cultural markets.10 In this convergent world where small things can have a big impact, big things can, equally, have a small impact. Brands are therefore agents in a world void of what

Karl Marx coined “the labour theory of value” – ie: the value of a thing is related to the labour needed to produce that thing.11 The thought that there is a linear relationship between effort and success simply no longer holds true in a convergent world.12 So, in the future, brands can no longer use their effort, skill and determination to predict and reach success. Our world is far too unpredictable and irrational for this type of rational behaviour.

Our world is complex, but our brain is on a quest to make it simple “Everyone thinks he knows what is going on in a world that is more complicated (or random) than they realise” – Nassim Taleb.13 In his book The Black Swan, Taleb introduces the concept of “narrative fallacy”, which addresses our the limited ability of our brains to look at sequences of facts without weaving an explanation into them.

The predisposition to impose narratives is an ingrained, biologically based behaviour that

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26

campaign 5 September 2014

figure 2: The randomisaTion of success Success in a complex world (Convergence)

Success in a complicated world (Labour theory of value)

Dynamic linear

1/10

Outcome

Brand Growth

Brand Growth

Non-dynamic linear

10/10

1/10

Outcome

10/10 Source: Author

helps the brain assimilate information. By creating patterns and – by extension – narratives, we are able to condense a collection of individual details into a single, unified story.

Condensing information also results in a loss because by assigning a narrative to events, we oversimplify them and discard information that does not support our narrative. By eliminating information we effectively trick ourselves into believing that the world is easier to understand than it really is.13 According to Daniel Kahneman, the Nobel Prize-winning economist, this illusion is comforting and helps reduce the anxiety we would experience if we allowed ourselves to fully acknowledge the complex systems that govern our world. Our minds have a need for the reassuring message that our actions have appropriate consequences and that success rewards hard work, not luck. In other words, we are evolutionarily programmed to subscribe to Marx’s labour theory of

value and to underestimate the prevalence of luck within success – a trait that exposes a chink in the armour of modern brand management.

“Luck plays a large role in every story of success; it is almost always easy to identify a small change in the story that would have turned a remarkable achievement into a mediocre outcome” – Daniel Kahneman.14

The fallacy of thinking we are in control Our minds’ belief in “the labour theory of value” feeds a further illusion that we can accurately plan for success in the future.14 Applying this belief, brand owners and agencies have built entire management systems on the back of a simpler pseudo-reality that only exists in our mind.

In years gone by this was of relatively limited concern, as in most cases the success of marketing ideas was directly linked to the amount of money spent to promote them.15 Though through the acceleration of convergence, suc-

menTor’s commenT

“Erik’s obsession with the industry’s over-reliance on what can be measured has led to a thoughtprovoking view of how the industry needs to change. This paper transforms a set of loosely connected ideas on the role luck plays in our lives into a compelling argument for brand managers to change behaviour.”

James hart For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

cess has become far more random than our models account for.16 “We used to be able to think of success as a chess game, but in today’s world the rules of the game are no longer locked – new players are being introduced all the time and, before you know it, we are playing checkers” – Frans Johansson.17

The ‘risk’ of risk aversion The problems of rational models in an irrational and complex world are many but, to illustrate the point, I have focused on an example around risk aversion.

Taking risks in a hyper networked world can be extremely beneficial for brands. However, the current management of organisations makes many of today’s marketers incredibly risk averse. Why would they accept a risk with an uncertain payoff when they believe they can predict a possibly lower, but more expected, ROI? This is particularly the case with the career path of brand managers, where if you do a couple of decent years on one brand you get promoted; but if you fail, you lose your job.

The rational predisposition in some of today’s organisations thus enforces practices that error on the side of caution. However, this shows a distinct lack of understanding how success works in a complex and uncertain world.

Once we move into hyper-networked distribution, as witnessed during the Arab Spring, the potential for success become amplified exponentially (Figure 2).18 Contrary to popular belief, a 6/10 outcome therefore doesn’t result in 30 per cent higher ROI than a 9/10, it results in 300 per cent higher ROI. Research into the IPA Databank further strengthens this exponential relationship, as creatively awarded campaigns have been proven to generate 11 times the share growth of non-recognised campaigns.19 This means that the potential for success is dramatically limited by caution and this is the problem with rational brand management models such as creative pretesting and econometrics.

Case in point: Yeo Valley’s rapping farmers20 Consider the following: would Yeo Valley only have bought 120-second spots in The X Factor for its rapping farmers if it had followed the econometric models suggested as part of today’s rational way of managing brands?

No. The data would have most likely favoured 20 or 30-second

spots, a mix of terrestrial and multichannels for a higher +1 coverage and a more intense flighting to generate cut through.

The problem with econometric models is that they are great at understanding the past21, but, as we saw in Tunisia, in a complex world small changes in the input can have a huge effect on the output.

This perpetual novelty of outcomes makes historical data unreliable in predicting the future.22 “History is opaque. You see what comes out, not the script that produces events, the generator of history. There is a fundamental incompleteness in your grasp of such events, since you do not see what’s inside the box, how the mechanisms work” – Nassim Taleb.13 So how did Yeo Valley fare by taking a risk and not trusting econometrics? It became Britain’s fastest-growing dairy brand within three months and its yoghurt outperformed the market by 250 per cent.23

The flaw of rational brand management in an irrational world “When you make the complicated simple, you make it better. But when you make the complex simple, you make it wrong” – Dave Gray.24 What the Yeo Valley example demonstrates is how rational models are ill-equipped to deal with the increasing complexity and the randomisation of success in a convergent world. Their underpinning justification – that the world of brands acts in accordance to “the labour theory of value” – is a mere illusion of our minds’ quest to simplify the world.14 Rather than mitigating risks, these pseudo-models impede our chances of success and can reduce the ROI on marketing capital.

Sadly, this issue is by no means related to just risk mitigation.

Overall, rational brand management creates a subculture in which brands believe they can control their environment and that success can be predicted and planed for. However, by not recognising the uncertainty that surrounds them, brands heavily overestimate the accuracy of their predictions while underestimating the importance that luck played in their success .14 The flaw of rational brand management is simply that our quest for certainty in predicting outcomes becomes in part an enemy of success9 – something that causes a real reason for concern, as the debated practice of big data is proliferating within our industry.

5 September 2014

figure 3: The lack of piraTes is causing global warming

plete our datasets are, they will always be selective and partial” – Dr Mark Graham, Oxford Internet Institute.28

16.5

Global average temperature (C)

16

1980

15.5

1940 1920

15 14.5

2000

1880 1820

1860

14 13.5 13

35,500

45,500

20,000 15,000 5,000 Number of pirates (approximate)

17

400

Source: Church of the Flying Spaghetti Monster

figure 4: The lack of piraTes is indeed causing global warming Interest over time

Average

Global Warming

Jan 2014

The Pirate Bay

Feb 2014 Source: Author

The danger of big data Big data is touted as the saviour of predictions in our new, data-rich, world. Five years ago, Chris Anderson wrote an article in Wired titled, “The End of Theory: The Data Deluge Makes the Scientific Method Obsolete”.25 He claimed that, given enough information, “correlation is enough” to make robust and informative predictions. The proliferation of this belief has caused a growing amount of confidence in the accuracy of our predictions.

Big data, therefore, puts our industry on a knife edge. If it creates better prediction, hurrah. However, if it doesn’t and at the same time our confidence in our predictions increases, it can further reduce our chances of success.

The tragedy of big data “Speaking with well more than a 100 experts in over a dozen fields over the course of four years,

reading hundreds of journal articles and books, and travelling everywhere from Las Vegas to Copenhagen in pursuit of my investigation, I came to realise that prediction in the era of Big Data was not going very well” – Nate Silver.9 Each day we now produce one million times more data than our brains can store. That means we have to trawl through 2.5 quintillion bytes a day to search for a relative constant amount of objective truth.As this ratio between available data and objective truth grows, many more spurious relationships will appear.26, 27 This causes a huge problem for big data since it cannot speak for itself. These huge quantitative sets of data still require human judgment to build algorithms and to interpret their results28 – and where there is human intervention, there will also be biases.

“Irrespective of how big or com-

Our mind x spurious relationships = problems Human beings don’t have many natural defences. We don’t have impenetrable body armour, sharp fangs or incredible speed.

Instead, we survive by means of wits. Our minds are quick. We are wired to detect patterns and predict opportunities and threats without much hesitation.9 This is an ability we have inherited from our forefathers; a newborn baby can instantly recognise the pattern of a human face, suggesting it is something learned by evolution, not by the individual. However, these evolutionary instincts also lead us to see patterns when there are none.

We simply find non-existing patterns in random data as our biological instincts are not well adapted for this new information-rich world9, so when our mind meets big data we become very susceptible to spurious relationships, particularly as fake statistical relationships tend to rise to the surface.26 Consider (Figure 3)29, a spurious relationship made famous by the Church of the Flying Spaghetti Monster. This states that the lack of pirates are the reason behind global warming, an utterly senseless correlation. However, in five minutes I was able to find a statistical relationship to support this argument (Figure 4).30, 31 This example is, of course, absurd and so is my comparison, but the point is that less obvious false relationships are omnipresent in a world of big data – and when a more believable relationship confirms our already existing beliefs, our minds tend to confirm the correlation as causation.32, 33 In 1970, Alvin Toffler wrote a book called Future Shock in which he predicted that one of the consequences of information overload would be that we would simplify the world in ways that confirm our biases34. This is exactly the type of behaviour that is emerging through the exponential growth of spurious relationships. Ironically, while Toffler’s prediction did come true, the chances of brands accurately predicting their future anytime soon are slim.

“The scientific enterprise is probably the most fantastic achievement in human history, but that doesn’t mean we have a right to overstate what we’re accomplish-

campaign 27

ing; we could solve much of the wrongness problem if the world simply stopped expecting scientists to be right” – Dr John Ioannidis, professor of health research and policy, Stanford School of Medicine.33

I believe…

“No one will ever buy a Swedish vodka”.

This was the advice of leading marketing consultants in 1978 when Swedish state-owned Vin & Sprit AB had decided to export a 100-year-old vodka called Absolut Rent Brännvin. The scepticism on the other side of the Atlantic was high.The product was a long shot. The major distributors turned it down. The budget was tiny and famous ad agencies all declined the account35. Absolut seemed destined for failure.

But enter Michel Roux, a small importer with big ideas. In little more than a decade, he defied the brightest minds in our industry and transformed Absolut from a generic vodka brand into one of the most iconic brands of our generation.

So how did Roux manage to pull off one of the greatest success stories our industry has ever seen?

“If I knew that, I would have done it again and again” – Michel Roux.36 Let’s try that again, I believe… …that if our ability to predict won’t improve anytime soon and convergence continues to make our future increasingly unpredictable – then the pseudo-models that brands have developed will become even more inadequate in predicting whether our ideas, campaigns or strategies will work out as planned. This means that brands can no longer rationally plan their way to success and, in the future, success (as in the story of Absolut) will increasingly be the result of something unexpected – something brought about by luck.

Luck will therefore become a more important strategy than prediction, which obliterates every common-sense notion we have about planning, strategy and management within our industry today. We like to think that success comes from predicting trends, analysing past data and planning out strategies, but if it was that simple we, like Roux, would have solved the mystery of success a long time ago.

So as counter-intuitive as it might seem to our minds and organisations, like Captain Yossarian, our best chances in an irra-

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campaign 5 September 2014

tional world might actually be to respond with irrationality – and plan for luck.

Contrary to many beliefs, planning for luck will not render us powerless as there are a number of actions brands can take to thrive in the uncertainty that surrounds us – a style of brand management that I call “get lucky”.

I believe the future of brands is irrational and it is time for brands managers to “get lucky”.

Part 2: a brand manager’s guide to ‘get lucky’ – brand management for a convergent world The traditional view of luck, as described in the Oxford English Dictionary, is “success or failure apparently brought by chance rather than through one’s own actions”.37 Many people hold this very same view of luck inhabiting only one property: randomness. Yet despite the prevalence of this belief, in almost all cultures around the world we still refer to some people and entities as luckier than others.

This begs the question: is randomness really the only property of luck, or can we design a new way of managing brands that creates the conditions for brands to get lucky?

The anatomy of ‘get lucky’ “It is a mistake to think that luck is a primitive, backward-looking concept. In fact, recognising luck as a factor in success is inherently civilizing” – Ed Smith.

The first law of ‘get lucky’ A few years back, Professor Richard Wiseman gave a fabricated newspaper to two groups of people. One group contained people who deemed themselves very lucky, the other one saw themselves as the complete opposite.

The task was for each group to count how many photographs were in the paper. On average, the “unlucky people” took about two minutes to count the photographs whereas the lucky group took just a few seconds. Why? Because the second page of the newspaper contained the message: “STOP COUNTING – THERE ARE 43 PICTURES IN THIS NEWSPAPER”. It was staring everyone in the face but the unlucky people tended to miss it whereas the lucky people saw it straight away.

For fun, there was also a second large message halfway through the newspaper saying: “STOP COUNTING, TELL THE EXPERIMENTER THAT YOU HAVE SEEN THIS AND WIN £150”. Again, the unlucky people missed the opportunity because they were too busy looking for the photographs38.

Through a decade of experiments, Wiseman’s findings suggest that there are various types of behavioural traits that can increase one’s “probability of luck”39. In contrast to the commonly used definition, his research suggests that luck can be brought on by “one’s own actions” – and if we can engineer the probability of luck then randomness can’t be its only property.

The first law of “get lucky”

figure 5: get lucky brand score – serendiPitious brand score (sbs) High

ive hr ty t at i n th erta s d c an un Br in

Law 2: Return on luck (ROL)

28

re Se

Law 1: Probability of luck (POL)

Law 2: Return on luck (ROL)

Rational brand management

Random brand management

Law 1: Probability of luck (POL)

therefore states: to thrive in uncertainty, brands must maximise their Probability of Luck (POL).

High Source: Author

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High Source: Author

High

Get lucky management

u ito

s

L PO

le gg rt u ty t s in ha erta t ds nc an in u r B

figure 6: get lucky brand – strategic road maP for brand management

Attentive brand management

ip nd

d ran b s

S SB ( re co

=

) OL R x

The second law of ‘get lucky’ “Life offers no guarantees. But it does offer strategies for managing the odds, indeed, even managing luck” – Jim Collins.40 In the book Great By Choice, Jim Collins and Morten T.Hansen look at how some companies manage to thrive in uncertainty, chaos, even, while others don’t.

Through extensive research into what they term “10x companies” (companies that beat their industry index by more than ten times), they uncovered a fascinating insight: highly successful entities are far superior in not just recognising luck but also creating what they refer to as a high “Return on Luck”40 – an output that according to Collins can be manipulated by “one’s own actions”.

For brands to thrive in uncertainty it is therefore not enough to just have a high “Probability of Luck”; they also need to implement practices that increase their ability to capitalise on luck.

The second law of “get lucky” therefore states: to thrive in uncertainty, brands must look to maximise their Return on Luck (ROL).

The guiding principle of ‘get lucky’ “Luck is not a magical ability or a gift from the gods; instead, it is a way of thinking and behaving” – Professor Richard Wiseman.39

According to the two laws of “get lucky”, brand management can set up the conditions for luck by maximising the combination of a brands POL and ROL. In (Figure 5) I have illustrated the relationship between these two laws and their resulting product.

A product called Serendipitous Brand Score (SBS).41 SBS indicates a brand’s overall propensity to encounter and reap the rewards of luck. It’s the maximisation of this measure that is the guiding principle for “get lucky” management, as brands with a high SPS are much more likely to thrive in uncertainty.

My hypothesis (although partial and speculative) further suggests that if luck is a more successful strategy than prediction, then SBS becomes a more important measure than ROI.

The ‘get lucky’ framework The maximisation of SBS is a guiding principle and not a strategy. For brands to devise a management strategy they need the context of how their brand is currently being managed in relation to luck. By researching how brands can boost their POL and ROL, I have managed to identify three such relations outside of “get lucky” (Figure 6).42 l Rational brand management A goal-oriented management style in which strategies are planned far in advance of execution. People, resources and concepts are carefully scripted

5 September 2014

through standardised planning frameworks that don’t expose brands to the moments that enable them to uncover ideas that others have not.

Verdict: Needs to boost SBS through both POL and ROL. l Attentive brand management Practitioners of this style create emerging strategies over time based on an internal culture of hypothesis and experimentation.

This means that they are very attentive to capitalise on luck due to a flexible infrastructure surrounding their brands. However, they need to boost their POL by creating external networks that increases their chances of encountering unexpected moments.

Verdict: Needs to boost SBS through POL. l Random brand management Random practitioners manage brands less by strategy and more by intuition.They create a culture of execution that involves a large network of partners which increases their POL. However, due to the many partners, they often lack a flexible infrastructure to quickly deploy their own resources when encountering luck.

Verdict: Needs to boost SBS through ROL.

How to ‘get lucky’: a steP-by-steP guide towards a luckier brand “I’m a greater believer in luck, and I find the harder I work the more I have of it” – Thomas Jefferson.

law 1: How to maximise a brand’s Probability of luck (Pol) Practise the art of ‘goal deviation’ One characteristic of lucky entities is that they constantly encounter what innovation thought-leader Frans Johansson refers to as “click moments”.

They achieve this through a method that will seem counterintuitive to rational brand management. Rather than relying on

the guidance of strategic planning to achieve a specific goal, lucky entities often explore things that are not directly related to their immediate goals.

Consider, for instance, the following exercise43. Assuming aces are worth 11, quickly double the value of each card in (Figure 7) and add them up.

The answer is 50, right? Well,

figure 7

campaign 29

figure 8: successful entities/PeoPle witH a strong culture of execution Google

Southwest Airlines

“Our goal is to “We have a have more strategic at-bats per plan. It’s unit of time called doing and effort things.” than anyone else in the - Herb world.”

Kelleher, Southwest - Eric Schmidt, Airlines Google

GE

Amazon

“Size either “You need to liberates or set up and paralyzes. organise so We tried that you can every day to do as many remember experiments per unit of that the time as benefit of size was that possible.” it allowed us to take more - Jeff Bezos, Amazon swings.”

Pablo Picasso

Rovio

Bob Dylan

Pablo Angry Birds Bob Dylan Picasso was the has released created over game-maker 541 songs.

50,000 Rovio’s 52nd artworks game. You throughout have his lifetime. probably never heard of their 51 earlier ones.

- Jack Welch, GE Source: Author

yes, but that’s not the point. The point is that you probably missed the fact that the four of hearts is black. Similarly, if brand managers keep their eyes firmly on the goals set through prediction, it becomes difficult for them to expose themselves for the moments that enable them to uncover ideas that others have not.

Strategic planning with expected outcomes simply doesn’t generate the chaos and randomness necessary to discover unique ideas – the type of ideas that make brands lucky.

Consider the following: if you combine an ice-cream brand with luxury, it is going to be tough to stumble across a unique insight because the two ideas have such strong commonality. However, if you combine ice-cream with the extinction of honeybees44, the situation looks very different. So, to boost their POL, brand managers need look at how their organisations could create practices that allows them to search for inspiration away from their immediate goals.

Case study: Mondelez’s Mobile Futures Mondelez International has recently launched an initiative that

judge’s comment

“A fascinating and highly original piece of thinking that challenges the rational models of marketing in an increasingly irrational and complex world.” sophie maunder-allan

pairs brand managers with a venture-development firm called Prehype. Through the initiative, Mondelez executives spend up to 20 per cent of their time creating starts-ups that are independent from the goals of the company’s brands. Once the start-ups are up and running, they are then positioned against Mondelez brands to see how they can aid their overall marketing efforts.45

Create and maintain ‘networks of luck’ In his 2008 RSA speech “Changing Paradigms”, Sir Ken Robinson refers to a longitudinal study in which a range of kindergarten children were asked how many uses they could think of for a paper clip. Surprisingly, 98 per cent of the subjects reached genius levels, but when the same children took the test five years later their capacity for lateral thinking had been severally reduced.

According to Robinson, this is because the current education system causes a disjunction between people and their natural learning environment – that of learning through collaboration.

This naturally occurring behaviour of collaboration therefore makes kindergarten children much more likely to come up with ground-breaking ideas – the type of ideas which increase their chances of luck. So POL is partly a product of social ties.

Professor Wiseman, whom I mentioned earlier in this essay, refers to the collection of these ties as “networks of luck”. He found that the chances of encountering luck are far greater when collaborating with a larger number of varied people39. The reason for this is that when we are part of a densely interconnected

network, the chance of something unexpected, such as a good idea or piece of stimulus, coming our way is much greater.46 To “get lucky”, brands managers therefore need to create interventions that not just enable brands to capitalise on their own strengths but also allow them to harness the advantage that might be derived from the capabilities of others.47 These practices can both be internal- or external-facing. For instance, media agency PHD has created an internal “collaboration operating system” called Source. Just like in kindergarten, this tool works by way of “gamification” and connects more than 1,500 planners across 74 countries48. Not only is this a great collaboration tool, it also acts as a serendipity engine that increases a planner’s probability of stumbling upon groundbreaking ideas.

Case study [external facing]: Democreativity Visit Sweden, the Swedish Institute and Business Sweden have teamed up to launch Democreativity, an online platform to leverage the power of networks to create a truly groundbreaking game. The site allows consumers to submit ideas in three categories – environments, characters and ways to win.The top picks will then be summarised and synthesised into a brief for what the project’s creators hope will be the “most unlikely game ever”49 – or the most lucky?

Create a culture of execution “My dad told me, ‘It takes 15 years to be an overnight success’, and it took me 17-and-a-half years” – Adrien Brody.50 Since the emergence of a hyper-

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30

campaign 5 September 2014

connected world almost all brands have, to some extent, an expressed intent to become part of culture. Modern creative ideas are heavily researched, developed and chosen based on their propensity to spread within networks to create a collective regard among a specific group of people.

Yet any research looking into this subject, from Duncan Watts to Paul Ormerod, shows that predicting the spread of ideas within cultural markets is an almost impossible task51, so asking how we can accurately predict the spread of our ideas is the wrong question.

What we should instead ask is: why do we think the spread of our ideas can be predicted?

To “get lucky” brands must shatter the illusion of being in control and abandon pseudo-models such as creative pre-testing. Instead, brands managers need to foster a culture of execution by increasing the spectrum for viable ideas and simultaneously reducing the stakeholders around them.

To quote Ajaz Ahmed and Stefan Olander:“No good joke survives a committee of six.”52 Ultimately, increasing a brands POL is not about having a greater understanding about the future than your competitors, it’s about creating a statistical advantage through launching far more ideas (Figure 8).53

Law 2: How to maximise a brand’s return on Luck (roL) Create a flexible infrastructure around your brand “The older and more organised institutions get, the less adaptable they become. That’s why the most resilient things in our world – biological life, stock markets, the internet – are loosely organised.” – Gary Hamel.

In today’s world there is far too much going on for a single person to comprehend all of the major trends impacting brands. Things change so quickly that the twostep process of goal formulation followed sequentially by planned strategy yields stumbling, not graceful, choreography36.

Further, this type of deliberate strategy also prevents brands from responding to the fast pacing conditions that surround them. So when a brand stumbles upon luck, even if they detect it early, they will struggle to unlock the resources to capitalise on it.

Therefore, to boost their ROL, brand managers need to adopt what Henry Mintzberg refers to as “Emergent Strategy”. This

Figure 9: deLiberate vs emergent strategy Deliberate Strategy

Emergent Strategy

Idea

100% of resources

Goals oriented e.g. what do we want to achieve?

Initial Goal

Updated Goal

Goal

Idea

100% of resources

Means oriented e.g. what is possible with the means we have at our disposal?

Source: Author

means that instead of setting a strategy up front, it emerges over time based on an ongoing culture of hypothesis and experimentation54 (Figure 9). This allows brands to alter their goals depending on their environment, so if a lucky event appears a brand can easily capitalise on it.55 According to Jim Collins, this ability to capitalise on luck is what sets successful companies apart from their peers. First, they increase their chances of finding luck by firing lots of “bullets” (small bets). When they register a hit they quickly capitalise on it with what Collins refers to as a “calibrated cannonball” (a larger bet) – something that heavily increases their ROL. To execute these types of cannonballs and generate a higher return on luck, it’s not enough for brand managers to just adopt an Emergent Strategy. They also need to implement practices that allow them to quickly deploy resources (e.g. cannonballs). These types of practices can be everything from faster approval processes, flexible budget models and adaptable distribution channels (both physical and digital).

Example of a brand with a flexible infrastructure “It was great to do this at Unilever… to have been empowered to just go for it and make it happen without getting so bogged down with the rules, processes and everything else” – Fernando Machado, Unilever.56 Dove is the perfect example that an organisation’s size is not a barrier to adopting the laws of “get lucky”. On 14 April 2013, Dove

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uploaded its “campaign for real beauty” sketches on to YouTube.

After noticing how an Australian TV show picked up the story overnight57, Dove quickly realised that it had struck gold.

To me, what’s particularly interesting after this point is not how the campaign transcended into culture but rather how Dove, within 72 hours, hijacked all its . com sites, translated the video into 25 languages, uploaded these on to 33 local YouTube channels, created a plethora of real-time content and launched its presence on Pintrest (six months earlier than intended).

Put simply, Unliever’s ability to act with the nimbleness of a startup heavily boosted its ROL on the back of a fantastic execution.

Figure 10: would Wonderbra’s iconic creative survived pre-testing?

Embrace risk “If you are not prepared to be wrong you will never come up with anything original” – Sir Ken Robinson.

In the first part of this essay I

showed how taking risks in a hyper-networked world can be extremely beneficial for brands. I also described how rational brand management tends to make brand managers incredibly risk averse, which shows a fundamental lack of understanding how success works in a convergent world (Figure 1).

Unfortunately, econometrics is far from the only pseudo-model in use today. Consider pre-testing, its purpose is to make sure that no ad will produce less than a 4/10 outcome. Just like the compression systems that Radio 1 applies to music to make sure that it can be played on any speaker, no matter how crap.What this also means is that it can’t be higher than a 6/10, which heavily reduces brands’ chances of success in a complex world.58 Consider the following example: would Wonderbra’s iconic creative (Figure 10) have remained untampered with had a risk-adverse client pushed it

5 September 2014

through creative pre-testing? No. It would most likely been deemed inappropriate by some, leading to the creation of a more “palatable” creative. But by not trusting pretesting Wonderbra’s sales skyrocketed by 41 per cent.59 In this scenario, a very likely hypothesis is that many of the negative discussions and unintended targets actually fuelled the entrance of “hello boys” into culture, a task impossible to spot in pre-testing as people don’t do what they say, or say what they do. This is a huge issue with many rational models as they isolate people from the complexity of their world and strip out factors such as social influence, which plays a huge role within cultural markets.60 “If you ask a kid what he wants in a cake, you will end up with a cake entirely of icing. And not only will the kid not like the cake, it will probably make him vomit” – Phil Knight, chief executive of Nike.61 Overall, taking risks heavily amplifies the success when encountering luck and they are therefore an essential component to create a high ROL. And if success is heavily dependent on luck, that also means that not taking risks is the biggest risk a company can take. So to “get lucky” and boost a brands’ ROL, brand managers must put pressure on their organisations to create a culture that encourages risktaking, while looking to reduce the rational management practices that mitigate it.

“Our company’s success rate runs between 50 and 60 per cent. About half of our new products succeed.

That’s as high as we want the success rate to be. If we try to make it any higher, we’ll be tempted to err on the side of caution” – AG Lafley, former chief executive of Procter & Gamble.62

How to incorporate ‘get lucky’ into client organisations “Ideas that require people to reorganise their picture of the world provoke hostility” – James Gleick.63 Incorporating “get lucky” into organisations governed by Newtonian laws is a formidable task, as it requires a paradigm shift in thinking about what constitutes success. By its nature, a shift in paradigm fundamentally questions any preceding practices, so “get lucky” is more than likely to be embraced with hostility.

So to increase the chances of adoption, an executive sponsor is needed as they have the exclusive

Figure 11: strategic pLanning vs dada pLanning Strategic Planning

Dada Planning

Reduces uncertainty

Embraces uncertainty

Rigid goal-oriented thinking

Practice goal deviation

Create deliberate strategies

Tinker with emerging strategies

Deals with specialisms who are best equipped to achieve the set goal

Creates and maintains networks of luck

Execute ideas based on confidence in predictions

Releases many ideas based on success being random

Validates choices through past data

Encourages risks and studies culture

Look to maximise return on investment (ROI)

Look to maximise serendipitous brand score (SBS)

Predict

Adapt Source: Author

ability to justify the changes externally, while bringing them about internally.

The chief information officer/ chief marketing officer, would be perfectly suited to enforce Law 1 by practising goal deviation and creating networks of luck. However, they are less capable of enforcing Law 2 through the creation of a more flexible infrastructure. Instead, this task is perfectly suited for the chief operating officer, who in turn will struggle with the irrationality and time required to enforce Law 1.

This shows a distinct gap in the skills required to incorporate “get lucky” into organisations, something that calls for a new professional within client organisations.

Enter the chief luck officer (CLO) “In a convergent world, aiming for success without a CLO, is the same as hoping for the jackpot without buying a ticket.”64 The purpose of a CLO is to unlock the ability for organisations to harness the randomness of success.This requires them to enforce the two laws of “get lucky” and incorporate luck into the heart of strategic planning and brand management.

A CLO therefore needs to exhibit a broad set of skills, which makes the role as demanding as it is rewarding.A CLO’s knowledge about the non-linear dynamics that govern success, coupled with

their experience in both innovation and operations, can significantly increase an organisation’s ability to transform the direst of brands into a global success story.

The principles of a CLO has always been intuitively understood among some of the most successful companies in the world, albeit is has never been formalised nor recognised as profession. But if organisations are serious about creating long-lasting and successful brands, they need to formally recognise the complexity required to incorporate luck into the heart of their organisation.

How to incorporate ‘get lucky’ into our industry In the early 20th century an art movement called Dadaism was born out of negative reaction to the horrors of World War I. Dadaists believed that the “reason” and “logic” of bourgeois capitalist society had led people into war – the ultimate irrationality.

Therefore, to protest against the war, Dadaists rejected any notion of reason and logic, instead prizing irrationality and chaos.

One half of our industry, “the arts”, adopted this notion of irrationality a long time ago. They understood that rational concepts like USPs were not always the best way to grow brands. Instead, sometimes all that is needed is a gorilla and Phil Collins. Our other

campaign 31

half, “the science”, still operates on the rational principles of strategic planning – that we can analyse, predict and plan for success.

Here is my point: the logic that once justified strategic planning has disappeared. We live in a fundamentally different world today.

A world of conditions that will outpace us, outwit us, belie our expectations and make fools of our predictions. To quote Frans Johansson: “In this world you have to be increasingly lucky, because our ability to plan out our success has dropped tremendously.”

The time is right to redefine the role of strategic planning within our industry. Planning today needs to be less about prediction and more about setting the conditions for luck. To achieve this, we need more Dadaist within planning. We need people who are willing to challenge this bourgeois discipline, which is guilty of creating a world of unlucky brands. It’s time for a new era within this profession, the era of Dada planning.

Planning for luck: Dada planning Dada planning is an irrational response to the failing logic and reason of strategic planning. Its premise is to incorporate luck into the heart of strategy and planning. In Figure 11 I have illustrated the practices and mindset we need to adopt in order to make that happen.

However, Dada planning is bigger than just a set of practices. It’s about achieving a cultural shift from the Bourgeoisie to the diverse. We need to embrace different cultures within our industry’s planning functions and stop the dominance of a homogeneous white middle class. Because luck is not just unleashed by ideas that intersect subjects, it’s also unleashed by ideas from the intersection of cultures.65, 66

FinaL words We only have one future: a future void of the labour theory of value; a future of perpetual novelty in outcomes; a future where predictions become the enemy of our success; a future where complexity is the norm.

This is our one future.

You can choose to navigate this future with a false compass, or you can take a risk and face it with POL, ROL, SBS, CLO, and Dada. Who knows, you might even “get lucky”.

“That crazy bastard may be the only sane one left” – Joseph Heller, Catch-22.

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32

campaign 5 September 2014

dIstInctIon james boardman

I belIeve that the fut Marketing’s debate about loyalty is fundamentally flawed. Therefore, a total reframing of what loyalty actually is and a better understanding of what it can do for businesses is critical, James Boardman writes

L

oyalty to brands is a lot like loyalty to bands.

Bands would love to believe that they are the favourite above all others.

Every Bono pronouncement, every John Mayer breakup, every Justin Bieber misdeed will be embraced or forgiven because “the Beliebers” or “Directioners” will forgive anything in their devotion. But that’s just not how the majority of music fans see it. Sometimes I’ll settle down with a beer and Bruce, sometimes it’s my running shoes and Girls Aloud, sometimes it’s fine wine and Ryan (not Bryan) Adams.

However, while it might suit Mayer’s ego to see me as a loyal fan, actually most people like lots of different music at different times.

They try new things out, rediscover old classics and exhibit every degree of loyalty in between.

Brands are not really all that different. Yet, when it comes to looking at things from a consumer’s point of view, brand managers and their agencies go all Bieber on us and start acting as if “loyalty” is a fixed thing that can be nurtured, grown, measured and used to set objectives against.

And, yes, taken for granted. As I will demonstrate, loyalty is much more complex than that, so much so that it might even be time to jettison the word altogether. Having unpicked this complexity, I’ll then attempt to deliver some solutions.

Part 1: the Problem with loyalty What is loyalty?

The concept of loyalty sits at the heart of the marketing industry.

The idea that people, through rational experience and emotional connection, weld themselves to particular brands is a very powerful one. The pursuit of loyalty has spawned countless strategies, initiatives and campaigns. People who are loyal to brands are supposed to be the bedrock, the foun-

dation of companies. These customers who will forgive the odd stumble by a brand and keep coming back time after time are supposed to ensure survival in a competitive world.

Unfortunately, the idea that there exists a safety blanket of loyalty that protects great brands is wrong. It is misguided and ignores some worrying truths at the heart of brands’ customer bases.

One of the greatest mistakes marketers have made is to think

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about loyalty as a monolithic construct, a binary state of either being loyal or not. Research by academics such as Byron Sharp and Andrew Ehrenberg has begun to open our eyes to the more complex nature of loyalty, but I believe we should be going even further.

It is possible to frame loyalty in numerous ways. I can think of at least six, all touched on, or at least alluded to, by Sharp and Daniel Kahneman.2

First of all is the overarching concept of loyalty: 1. Surface loyalty: the act of repurchasing.

But then there are numerous subsets, all of which have to varying degrees received attention: 2. Instinctive loyalty: tunnelvision loyalty where only one brand is considered.

3. Powerful loyalty: a strong likelihood to repurchase but with other brands used as benchmarks or reference points.

5 September 2014

campaign 33

colin stout

ure of brands lIes In makIng lovIng fun 1

loyalty is attractive in many ways.

It is easily quantifiable, for one thing. It is easy to set metrics against – “reducing churn rate”, “encouraging repeat purchase”, “deliver greater returns from existing customers” are all marvellously measurable and can be turned into lovely neat SMART objectives.

The problem is that this makes a very flawed assumption about loyalty. Surface loyalty looks at loyalty from a purely rational

perspective – did someone repurchase or not. To nurture loyalty, to encourage it, to use communications to create it, we need to fully understand the other types of loyalty. If we can do that, we’ll understand our consumers better, bring them back to brands more often, know how to use their loyalty to encourage others and, most important of all, know when it is time to risk letting them go by trying something new.

Figure 1: german customers made uP oF rePurchasers4 4. Polygamous loyalty: active consideration of (and, over time, purchase of) multiple brands.

5. Inert loyalty: repeat buying driven by lack of interest and apathy.

6. Safety-first loyalty: loyalty driven by a fear of losing what you already have – loss aversion. A desire to change but “chickening” out at the last minute.3 Historically, the marketing industry has been seduced too often by surface loyalty. Surface

45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Mercedes

BMW

Audi

Volkswagen

Ford

Category total

Source: MEC Momentum

A tender devotion to surface loyalty… and why it leads us astray You can see why, from an emotional perspective, the analysis of surface loyalty looks appealing. It tends to deliver some rather large numbers that make marketers and their agencies feel good about themselves.

In How Brands Grow, Sharp unearthed a retention rate of between 33 per cent and 53 per cent within the car market and this is borne out by analysis of a set of data from Germany, collected in mid-2013 (Figure 1).

So far, so good. All of Sharp’s rules appear to be coming true: 1. The brand with the biggest share of the market – Volkswagen – has the highest level of loyalty.

2. Two brands have managed to eke out a fraction more loyalty than their market share would suggest – Mercedes and Ford – but certainly not to the extent that they dramatically outpace their competitors. Following Sharp, one would conclude therefore that it is rare for a brand to deviate from the category norm when it

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34

campaign 5 September 2014

comes to inspiring loyalty and we should probably focus on rec­ ruiting new customers instead.

Right? Not quite.

The challenge with drawing conclusions like this is that repeat purchasing in this category is ac­ tually much more complicated than this. If we look at the differ­ ent types of loyalty as a percent­ age of all loyalty, we see a much more complex picture (Figure 2).

While surface loyalty for each of these brands may look similar, there are some marked differenc­ es in the nature of that loyalty.

For example: 1. More than 40 per cent of Ford’s loyalty is inert – that is that they had little noticeable bias to­ wards any particular brand but still repurchased Ford. For any­ one selling Ford motorcars, this is a pretty worrying statistic in the long term. A vast chunk of the loyalty to the brand is not born of anything resembling passion. It is the loyalty of inertia.

2. Compare this with the type of loyalty exhibited towards Mer­ cedes. From the data in Figure 1, you can see that, on the surface, Ford is doing better than Mer­ cedes – 41.6 per cent loyalty for Ford, 38.5 per cent for Mercedes.

But when you start to dig below the surface, Mercedes loyalty looks to be much more solid and useful for the brand. Whereas more than 40 per cent of Ford’s loyalty is “inert”, only 16 per cent of Mercedes’ fall into that catego­ ry. Mercedes’ lower surface loyal­ ty contains much greater levels of passion and what might be termed “true” loyalty than Ford’s seemingly impressive loyal base.

Surface loyalty is a flawed con­ cept that encourages the wrong conclusions.

Sharp is correct in asserting that it is, in most cases, difficult for a brand to dramatically outstrip the category in terms of the quan­ tity of loyalty that it inspires (the top six German car brands ranged from 33 per cent for Audi to 41 per cent for VW)6. It would be wrong, however, to suggest that within those numbers there is nothing brands can do. It is possible to out­ strip the category in the quality of that loyalty.

To take advantage of this, we need to develop a better under­ standing of the individual types of loyalty present within our brands’ customer bases. New ways of un­ derstanding and interpreting the customer journey now allow us to quantify the deeper levels of loy­ alty. Using a series of data collect­ ed across multiple markets in 2013­2014, I hope to show just

how complex but ripe with poten­ tial loyalty really is if we under­ stand it properly.

feeling that you’ll buy that brand right from the start of the pur­ chase journey.

2. Passionate bias: the act of re­ purchasing, having a strong idea before you start shopping that you’ll end up with that brand again but still having at least a brief look at other brands along the way.

3. Polyamorous bias: repur­ chasing but having at least a reasonable notion that you could have ended up with two or more other brands.

4. Inert bias: repurchasing through inertia, lacking any great passion or compelling reasons for repurchasing, but doing it anyway.

5. Safety bias: loyalty that is born from fear of the unknown or the safety blanket of the customary.

Time to abolish the word loyalty and think about bias instead To start to properly understand loyalty, it’s time to forget about loyalty. At least from a semantic point of view.

Thinking in terms of heuristics or biases would be more appro­ priate. The experience of using a product and experiencing it influ­ ences both our “System 1” and “System 2” sides.Too often, meas­ ures of loyalty, when only looking at surface behaviour, assume ra­ tional and logical, System 2­type decisions. When we start to break down loyalty into its component parts, we can see many more com­ plex biases and preconceptions coming into play: “Odd as it may seem, I am my remembering self, and the experiencing self, who does my living, is like a stranger to me.”7 Instead, what we have is likeli­ hood to repurchase being driven by biases. It’s time to update our thinking. Instead of creating loy­ alty, we need to start creating bi­ ases. The five subtypes of loyalty identified above should there­ fore be reframed: 1. Tunnel-vision bias: the act of repurchasing, only considering that brand (ie. there was one brand and one brand only on the shopping list) and having a strong

Tunnel-vision bias – is it real and how big is it?

Conventional wisdom is that lev­ els of loyalty vary dramatically by category. That is certainly true at the surface level. See Figure 3 for an example.

Surface loyalty doesn’t neces­ sarily follow value or purchase­ cycle length – flat­screen TVs have much lower loyalty than yo­ ghurt – but the critical point is that levels of loyalty vary wildly from category to category, thus making it difficult to look at any kind of cross­category norms.

But how real is this loyalty?

How committed is it? When we

Figure 2: diFFerential loyalties oF gerMan car-buyers5 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Instinctive loyalty Strong loyalty Polygamous loyalty Inert loyalty Safety-first loyalty

Mercedes

BMW

Audi

Volkswagen

Ford

Source: MEC Momentum

Figure 3: category custoMers Made up oF repurchasers8 70% 60% 50% 40% 30% 20% 10% 0%

Mobile Networks (IT)

Cars (DE)

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Yoghurt (UK)

Toothpaste (FR)

Face Cream (IT)

TV (DE) Source: MEC Momentum

start to pull this surface loyalty apart, we find that, actually, cate­ gories are in some respects more similar than it would otherwise appear.This is particularly true of the most passionate type of loyal­ ty bias: tunnel­vision bias. When people come to repurchase a product, they have a clear idea in their heads that it will be the brand they bought last time and they only consider that brand along the way. This is the purest and most powerful form of loyal­ ty. And it is very low. Look at this type of loyalty bias on the same scale as the total surface loyalty (Figure 4).

While surface loyalty looks very strong in many categories, the number of people who have this most pure form of loyalty is very low in most sectors. The process of buying or experiencing a product actually creates very little in the way of unconditional loyalty: on average, below 10 per cent of your customers are going to unconditionally repurchase your product.

What this means for marketers is that even if your brand is in a category where loyalty looks on the surface to be very high, the ex­ tent to which you can rely on that loyalty to sustain your business is very limited. Tunnel­vision bias represents on average only 27 per cent of a category’s loyalty base, as illustrated in Figure 5.

It is dangerous to rely on loyalty because it is overwhelmingly con­ ditional. In fact, the category with the highest level of overall sur­ face loyalty – mobile phone net­ works – has one of the leakiest loyalty bases of them all. Only 21 per cent of the mobile phone net­ work category’s “loyalists” have the kind of tunnel­vision bias that a brand could rely on.

The scale of this disparity be­ tween surface loyalty and tunnel­ vision bias is alarming for market­ ers and shows how dangerous it is to rely on apparently loyal customers. The Sharpian answer to this conundrum might be to forget all about loyalty as an ob­ jective altogether. Sharp argues very convincingly that recruit­ ment should be a brand manag­ er’s primary focus and, looking at these numbers, you can see why.

But before we totally walk away, we should look at some of the less extreme but potentially powerful types of loyalty – those biases that make up the rest of brands’ loyal­ ty bases.

Passionate bias While tunnel­vision bias makes up only a portion of a loyal base,

5 September 2014

that doesn’t mean that other repeat purchasers do not have a passionate connection to the brands that they rebuy. It just means that they are, at least theo­ retically, open to the idea of con­ sidering others.

What a purchase experience creates, for good or bad, is the ultimate point of reference. It is this that drives passionate bias.

Even when customers are strong­ ly minded to repurchase, they will still compare the brand with others.

Passionate bias typically ac­ counts for 20 per cent of loyalty, although, as with other types of loyalty, it does vary by category. It is in passionate bias that we see the scale of the purchase and the length of time between purchases really coming into their own as a driver of loyalty. For example, as percentages of the overall cus­ tomer base (Figure 6).

For clients with high value and/ or long­term purchase patterns, passionate loyalty is critical. Cus­ tomers who have strong desire to repurchase but who will still com­ pare the brand with another make up substantial volumes of the repeat purchase base. Any programme or campaign that is designed to target these custom­ ers must to be structured to help those people to get the very maximum experience from their purchases.

I would argue that these people are fundamental to growing brands.Those who have strong bi­ ases towards brands but who still make comparisons are the most active in researching products on­ line and are likely to be the most vociferous in blogs and forums.

They are also the most likely to be vocal in recommending prod­ ucts. For example, if we compare those who recommend their pur­ chase to others post­purchase, those with passionate bias are more likely to do so than those who had tunnel­vision bias to­ wards the brand they rebought.

For example, when expressed as

Figure 4: category custoMers Made up oF ‘tunnel-vision-biased’ repurchasers9 70% 60% 50% 40% 30% 20% 10% 0%

Mobile networks (IT)

Cars (DE)

Toothpaste (FR)

Yoghurt (UK)

Face cream (IT)

TV (DE)

TV (MY) Source: MEC Momentum

Figure 5: bias coMparison – cross-category10 Tunnel-vision bias

Other biases

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Cars (DE)

Toothpaste (FR)

Mobile networks (IT)

Yoghurt (UK)

TV (DE)

Face cream (IT) Source: MEC Momentum

indices (tunnel vision = 100), a pat­ tern starts to emerge (Figure 7).

It is in nurturing this group that brands have a powerful opportu­ nity. The key point here is that this group is often not the largest in terms of their loyalty but, to a busi­ ness, they are potentially the most valuable: they have made a rela­ tive choice, selecting one brand over another, but have displayed conviction while doing so. They are also more likely to talk posi­ tively about the brand than other loyalists.A potent combination.

Polyamorous bias There are a small group of people who maintain strong biases to­ wards more than one brand. The fact that these numbers are very small highlights two big issues for brands:

1. The concept of the “shopping list” and all that brands need to do is get on that list is flawed. Posi­ tion on that shopping list is much more important. Second really is first loser.

2. These biases are not created during an active purchase stage.

They are created by all of the other things a brand does when a consumer is not actively looking for a product. The most powerful one of these is actual product usage.

Within many categories, the concept of the brand shopping list is fairly well­grounded. The logic is that consumers will only active­ ly consider two or three brands and therefore the first job is to get on that shopping list. This is wrong. The ambition has to be to be first on that list. If people really

Mentor’s coMMent

“James shines a new light on brand loyalty that highlights how complacent we are as an industry about driving it. With his talent for asking the right questions, he has analysed MEC Momentum data across thousands of unique purchase journeys in order to credibly challenge one of the basic tenets of marketing theory.” shula sinclair

campaign 35

behaved like this, polyamorous bias – having a strong bias to­ wards more than one brand in­ cluding the one that customers actually bought – would be high.

But as you can see in Figure 9, it isn’t. In only a very few categories (face cream and mobile phone networks are the only two exam­ ple so far) does polyamorous bias account for more than 10 per cent of a brand’s loyalty base.

It is unlikely that a consumer will have a strong bias towards more than one brand when they start looking for a product. They will either have a bias towards none, in which case the active research phase becomes a free­ for­all or they will have a strong preference towards one particu­ lar brand.

This calls into question some of our traditional ways of measuring brand performance.

Metrics such as “brand prefer­ ence” and “brand consideration” as part of balanced scorecards of measurement are questionable barometers of how people will actually purchase. The lack of polyamorous loyalty in almost every category means that the only truly effective measures would be “brand first preference” and “brand first choice”.

Inert bias Bias born of inertia – “I’ll just renew and get it over with” loyal­ ty – is a marketer’s worst night­ mare. Unfortunately, in some categories, it’s large and, within a category, it can affect more brands than others (see the Ger­ man car example in Figure 1 above).

Sharp’s analysis highlights a “double whammy” that the big­ gest brands in the marketplace receive: the larger their customer base, the higher their loyalty lev­ els. However, hidden beneath this is potentially a significant problem. The biggest brands in the market tend also to suffer from the highest levels of inert bias affecting their loyalty bases.

On the surface, in Figure 10, Sig­ nal looks to be in the better place.

Its overall loyalty in terms of consecutive repeat purchase (ie. the last two purchases were the same) is 29 per cent compared with Sensodyne’s 14 per cent, but almost a third of Signal’s loyal customer base is inert – they are repurchasing Signal without hav­ ing a strong bias towards the brand or any other.

What we are seeing here is not loyalty. It is routine or expedient convenience masquerading as loyalty.When the analyst Andrew

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36

campaign 5 September 2014

Pole went to work at Target stores in the US and began working through their loyalty figures, he found a number of patterns of behaviour driven by inertia. For example: “Women who had infants were so tired that they would buy everything they needed wherever they could purchase bottles and formula.”15 Loyalty to those brands was being driven by factors far beyond the control of the brands themselves.

Turning that routine into a habit is an interesting opportunity for brands, but that requires the addition of rewards to the routine – creating more passionate and tunnel-vision bias. There are obvious opportunities in having this kind of information that Pole and Target were able to build on, but equally obvious is the danger to the brands concerned of relying on inert loyalty to sustain sales.

Safety bias When we start to analyse safety bias, we are seeing two classic behaviours in action. The first of these is loss aversion described

by Richard Thaler and Cass Sunstein in Nudge: “Loss aversion acts as a kind of cognitive nudge, pressing us not to make changes, even when changes are very much in our interests.”16 We’re also seeing at work here what William Samuelson and Richard Zeckhauser called “statusquo” bias: “Most real decisions, unlike those in economic texts, have a status-quo alternative – that is doing nothing or maintaining one’s current or previous decisions”17 The interesting thing about safety bias is that it has the potential to kick in, even at the very last minute. Traditional definitions of this, status-quo bias, have tended to view this behaviour as something that prevents decisions happening at all. In some sectors, however, this bias is powerful and, critically, it stops fairly wellmade decisions dead in their tracks, late in the day.

Within any client’s customer base, there will be a certain number of “loyal” customers who exhibit this bias. These customers are those who had a strong passive bias towards another competitor, had lost any strong bias towards the brand that they actually bought, but still rebought the product anyway.

In most categories, this number is very small – anywhere between 0.5 per cent to 3 per cent of a customer base will be made up of these “reluctant renewers”. In some categories, however, this

figure 6: category customers made uP of ‘Passionate bias’ rePurchasers11 16% 14% 12% 10% 8% 6% 4% 2%

0%

Cars (DE)

Mobile Networks (IT)

Yoghurt (UK)

TV (DE)

Toothpaste (FR)

Face Cream (IT) Source: MEC Momentum

figure 7: likelihood to recommend the brand just bought to others12 Passionate

Tunnel-vision

Leading Car Marque (DE)

Leading Toothpaste ( FR)

Leading Mobile Network (IT)

0 20 40 “index:tunnel vision =100”

group is huge. Huge and, I believe, problematic.

Within mobile phone networks, for example, up to 10 per cent of the customer base fall into this category. Take the figures in Figure 11 as an example.

These were people who renewed their contracts with their mobile network but had a powerful inclination to switch and moderate-to-little intention of staying. These aren’t people who, when given a list of options, opted to stay with what they knew best.

These are people who had strong thoughts about leaving and made a last-ditch decision to stay.

From a revenue perspective, to have up to 12 per cent of your customers teetering on the brink like this is potentially quite dangerous. Competitors have clearly done something to nearly get these people over the line – being highly recommended by friends, launching new handset partnerships or super-fast services, for example. At the last minute, brands have done something to keep them in the fold. Usually, this is either the current brand

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60

80

100

120

140

160

180

200

Source: MEC Momentum

dropping its prices or the prospective competitor letting the customer down at the last minute eg. by being out of stock of the new phone.

I would argue that treating these customers the same as any other customer exhibiting repeat purchase behaviour is storing up trouble for a brand. These customers need to be nurtured and convinced to look at the brand afresh. The brand has been given a second chance by default.

These people should be treated much more like new customers than existing ones. Mobile phone networks are lucky in one sense in that their contracts often tie their customers in for such a long time.

The networks have two years to make their customers fall in love with them again. In an ideal world, the safety-first loyalists of today would become the passionate loyalists of two years’ time. Given that these people have already experienced any loyalty schemes or bonuses that the brands have to offer, the brands need to rethink about how to engage these customers. How can brands be-

come present in their everyday conversations? Can they get their friends talking about the brands in a positive light? A loyalty programme that fixes the problem of safety bias might end up looking suspiciously like a recruitment campaign for switchers from other brands.

Although data is not available for them in the same way as it is for “business-to-consumer” brands, I would hypothesise that safety-first bias is a particular problem for “business-to-business” brands. For brands such as investment banks (eg. Schroders, JP Morgan, Investec), this kind of “safety first” bias creates a perfect storm of new clients being difficult to recruit but not emotionally invested once they finally are switched. Loyalty within business-to-business is driven by an incredibly powerful emotion: the desire to protect one’s own reputation. The challenge for brands operating in this space is that the emotional connection in this type of loyalty is primarily negative rather than positive, defensive rather than passionate.

5 September 2014

judge’s comment

“An important, engaging and warmly written take on the thorny subject of loyalty that leaves the mind racing with thoughts and possibilities. If you thought that Byron Sharp had shut the door to any more conversations about loyalty, you should read this piece and think again.” david wilding

Both inert and safety-first biases are especially vulnerable to advances in social media that make it easier for customers to find out about brands about which previously they would have struggled to find enough information to trust. Many observers have suggested that loyalty as a whole to brands is on the decline because of the speed with which consumers can now find out information that leads them to be willing to experiment with new brands.19 Inert and safety-first biases would seem especially vulnerable to this: “For consumers, this is ideal: they’re making better choices…

And they’re not the only beneficiaries; upstarts now find it easier to compete with the big boys. If you build a better mousetrap, people will soon know about it… For much of the 20th century, consumer markets were stable.Today, they are tumultuous, and you’re only as good as your last product.”20 The early part of the 21st century has seen a number of brands benefit from declining loyalty towards existing brands. I would hypothesise that the majority of those that have switched to Acer, Lenovo or Hyundai have come from their competitors’ inert and safety-first biased customers.

These are the two areas that established brands must be most focused on fixing.

proaches focused far too much on the 5 per cent of human action that’s conscious and spent not nearly enough time unlocking the 95 per cent of human activity that is subconscious.21 Marketers’ understanding of the purchase journey needs updating. A lot of work has been done in recent years to redefine what the journey looks like, but we marketers still need to better understand how consumers connect with brands at every single touchpoint and at every single stage in their lives.

As an industry, marketing in general has been very good at looking at collecting information in three silos.

1. We’re drowning in rich data about perceptions. A whole variety of large-scale brand health trackers tell us why people renew their purchases and gauge the extent to which they profess to love brands.

2. We can look in all manner of ways at what people do. In many sectors, we now potentially have data on an epic scale to tell us about how people behave, enabling us to unpick loyalty in unprecedented depth.

3. Agencies and clients have a huge amount of touchpoint data to play with – for example, econometrics and click stream analysis.

The challenge is joining all of these together. To do that re-

Part 2: an action Plan for dealing with this comPlex world of biases A new approach to customer journeys The need for a new approach to understanding customers’ purchase journeys is not a new one in the marketing industry. The groundbreaking work done by the likes of Kahneman, Sharp and the rest has shown us that the old model of a logical linear version of a customer journey is broken.

Traditional AIDA style ap-

Figure 8: Path to Purchase

quires a simple chassis of a customer journey that reduces complexity and allows marketers to develop a clear understanding of the path to purchase. Just one example of this type of framework is the recent MEC Momentum structure (Figure 8).22 1. Passive stage: daily life, when someone is not actively considering a purchase but is exposed to brands and their messages.

2. Triggers: needs or wants that move people from the passive stage to the active stage.

3. Active stage: when people are actively looking for a product to buy.

4. Purchase: The act of buying, followed by product usage and discussion post-purchase.

Understanding how consumers behave around journeys like this is critical. Pinpointing the power of existing product ownership and usage and understanding how different types of bias play out is critical. As we’ve seen, brands and categories may have very different levels of bias within their surface loyalty groups.

These need to be quantified, understood and acted upon.

In recent years, we’ve seen several steps in the right direction – for example, the McKinsey approach23 that advocates moving customers between two different types of active and passive loyalty.

Frameworks such as this, howev-

campaign 37

er, still too often ignore the complexity at the heart of consumer loyalty.

Separate loops that splice loyalists into activists who recommend and engage and passivists who do not are something of a cop-out for advertisers and agencies alike.

Because they divide people based purely on post-purchase behaviour, they too often assume that repeat purchasers miss out on the active evaluation that new customers undertake when they come to make their next choice.

With low levels of “tunnel vision” and “passionate” biases in most brands’ customer bases, this is quite a leap of faith to make. I believe it is time to stop treating our loyal customers differently to new ones. We need to keep them excited and treat them as if they were seeing us for the first time.

Brands need to be constantly surprising and innovating This is likely to be a function of both the rational and the emotional – for example, Les Binet and Peter Field recommend splitting budgets 60 per cent towards the emotional and 40 per cent towards the rational.24 In some categories, this means innovating around the way they create noise and conversation, building the “passionate” and “powerful” biases that lead to more sustainable and reliable loyalty.

In other categories, innovation may come in the form of pricing and product innovation. For example, in the utilities market where inert bias is extremely high, creating passionate bias will come as much from differentiated approaches to billing as distinctive approaches to brand building and emotional connection. For example, in the UK, major provider British Gas recently announced plans to offer free electricity on Saturdays to its most valuable customers. The expressed reason for this is to try to generate loyalty: “It’s not philanthropy. It’s a great retention device for electricity customers”25 – Ian Peters, British Gas This kind of initiative is exactly the type of thing I mean when we start talking about a shift in mindset. The mindset that leads to thinking imaginatively about innovation stops treating customers as husbands to be henpecked and starts treating them as potential lovers to be wooed. Orange Wednesdays, O2 Priority Moments and British Airways Rewards are all great examples of

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businesses wooing customers rather than taking their loyalty for granted. Some are better than others and all have their failings, but innovation in approaches to existing customers is critical: “Brands must… find new ways to reinforce loyalty. The ones that are most likely to succeed are those that create a positive consumer experience around their brands, during the entire length of their relationship with consumers.”26 This means constantly updating and innovating in so-called “loyalty schemes”. Loyalty schemes are potentially quite dangerous for big brands in that they become ubiquitous and something that starts out as a “passionate” or “powerful” bias builder recedes into a hygiene factor that fails to lift people out of inert biases. The Tesco Clubcard is a classic example of what happens when loyalty schemes stop innovating. Tesco recently announced a total review of the way it promotes and uses its Clubcard.27 It is right to do so. Schemes that reward existing users are potentially very powerful at turning inert bias into passionate and powerful bias, but they have to keep pace. Loyalty cards aren’t a marriage contract, rather an embossed invitation to another date.

Build daily life biases rather than relying on loyalty As we’ve seen, relatively small amounts of a brand’s customer base are likely to reach the benchmark of being truly, truly loyal – the tunnel-vision loyalists.

I don’t believe, however, that it is time to give up on loyalty altogether. Other types of loyalty, especially the passionate and powerful, can be extremely valuable for brands. This not least because actually having powerful or passionate loyalty makes one more likely to recommend a brand to a friend or colleague than having absolute, tunnel vision. Having a bit of leakiness in your loyalty is a good thing. It just means brands have to work harder at it.

Both passionate and powerful biases are created in the “passive stage” of daily life, not in the active stage of consciously researching products to buy. All of the things that brands do, from brand advertising to shop frontage, to sponsorships to staff, from packaging to posters, has an impact. In many categories, the power of being “overheard” cannot be understated. This is particularly true of categories where

Figure 9: customers indicating polyamorous bias across categories13 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Polyamorous bias

Other biases

Pic to fill Cars (DE)

Toothpaste (FR)

Mobile networks (IT)

Yoghurt (UK)

TV (DE)

Face cream (IT) Source: MEC Momentum

Figure 10: inert bias among French toothpaste-buyers14 Signal Inert bias 29%

Sensodyne Other bias 71%

Inert bias 14%

Other bias 86%

Source: MEC Momentum

the purchase cycle is long but lacks seasonality – for example, mobile phone networks.

As we’ve seen, the mobile phone network category has one of the highest levels of surface loyalty but struggles to create passionate and powerful biases.

Loyalty is often driven by “inertia” and “safety first biases”. Yet, for mobile phone networks, a powerful opportunity exists.

Conversation is one of the most important touchpoints for those actively researching a new mobile phone to buy. Yet it is also a topten touchpoint for those who are simply hearing about the brands in daily life.

Everyone overhears conversations about mobiles all the time and these build the powerful heu-

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

ristics and biases that later play out in purchase behaviour. Making existing customers feel warm about their purchases by making sure that they overhear positive things about their brand as they go about their daily business is a powerful way of building a positive emotional connection to go with their user experience. This is especially important for those brands that sit within the “you only notice when it goes wrong” categories such as mobile phone networks, tyres, utilities and credit-card provision.

In fact credit-card providers have generally done very well at this in recent years.American Express’ Small Business Saturdays is a particularly good example of a brand putting in place activities

that raise everyday positive conversations and, hopefully, build biases around the brand. In a category with high levels of retention but low levels of passionate bias, activities like this should become a benchmark for others looking to turn inert bias into powerful and passionate biases.

Orange Wednesdays are another cracking example of a brand building powerful and passionate biases by being positively present in everyday conversation. This type of activation, I would suggest, is in many categories more likely to turn inert bias into passionate or powerful bias than yet another price promotion.

Binet and Field suggested as a result of their work in Marketing In The Era Of Accountability that

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“fame” was the optimum objective for achieving success in advertising campaigns. After analysing a huge volume of loyalty data (over 12,500 people in the surveys mentioned in this paper), I firmly believe that they are right when it comes to applying metrics that will generate loyalty. The fact that polyamorous bias is so low suggests to me that being at the very top of the list before customers even start thinking about looking to replace an existing product is critical. A balanced scorecard of metrics that puts fame at the very heart of it seems to me to be the best way to do this.

A balanced scorecard of loyalty If we are truly to understand loyalty, we have to be able to measure it. That means adjusting our approaches to setting objectives and assessing the results of campaigns.

While Binet and Field argue for a balanced scorecard of metrics, I believe that we need to think about setting specific scorecards for loyalty too.

At the heart of this scorecard of metrics should sit greater precision about what we mean by loyalty and that means throwing out and refining the ways we currently seek to measure loyalty.

“Churn rate” as a metric has had its day. It measures surface loyalty, which provides information rather than insight. Churn rate needs to be replaced with measurement of “inert bias level”.

Brands need to be on a mission to convert inert bias into passionate and powerful bias. Understanding the percentage of inert bias within a brand’s loyalty structure is more impactful than measuring surface loyalty. As we saw in the German car market, a brand may actually be in a healthier position with lower surface loyalty if that loyalty is of better quality, as I firmly believe Mercedes is than Ford.

This is particularly important for market-leading brands in cluttered FMCG markets packed full of variants. Sensodyne has a much more solid foundation in the shape of its loyalty base than Signal does, because Sensodyne has offered its customers reasons to be passionately and powerfully loyal, whereas Signal’s repeat buyers do so from inertia.

Brand preference is another metric that has served its purpose but which, when used as a way of understanding loyalty, offers information rather than insight.

The lack of polyamory within loyalty bases shows that brand preference is no longer a good enough

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Figure 11: customers oF italian mobile telecoms brands exhibiting saFety-First bias18 14% 12% 10% 8% 6% 4% 2% 0%

Brand1

Brand2

Brand3

Brand4

Category total Source: MEC Momentum

benchmark. Being “on the shopping list” or “in the consideration set” is broken as an objective. Second is first loser. Brands need to start caring about being first choice and first choice only.

Finally, we should stop setting objectives for campaigns like “increase loyalty”. Loyalty, as we’ve seen, is far too complex. When campaigns have been shown to increase loyalty in the past, I’d wager that they have successfully improved one part of loyalty.

How Brands Grow demonstrates that it is tough to grow loyalty beyond category averages. Only some specific brands, in some specific situations (eg. Walkers crisps in the UK) have been able to do so. I believe, however, that it is possible to grow specific elements of loyalty beyond category norms. As brands such as Sensodyne, Mercedes and Nivea have shown, it is possible to get passionate and powerful biases to outstrip the category. Rather than setting objectives that are aimed at increasing loyalty, we should be aiming to increase passionate and powerful biases.

Abolishing the idea of loyalty as a monolithic construct will set brands and those that work with them free The complexity that hides behind measures of loyalty and the concept of loyalty to brands requires above all one massive shift.That is not a shift of product or communications; it is a shift in mindset, driven by a semantic overhaul of the way the marketing industry talks about loyalty. As I have tried to demonstrate in this paper, the idea that vast swathes of people are unconditionally loyal to brands is misguided.

A whole new construct for the way that people view brands, even

(and especially) the ones they own already, is needed. A simple analogy is one of dating. Traditional thinking and prioritisation of surface loyalty as an objective and metric has led us to believe that people “marry” brands.

That is true in very few cases – below 15 per cent of customers in every category surveyed so far have tunnel-vision bias towards their brands. What appears to happen is that people go on multiple first dates with brand. Every repurchase is essentially a first date. Of course, sometimes that is a date that a customer enters into with a good feeling – a strong premonition, in fact, that you and the brand are going to settle down and have babies and a house in the country together. Sometimes it’s a date that customers enter into thinking about the guy they met last night or the one lined up for tomorrow. And sometimes it’s a date where, despite having strong feelings for that other girl, a guy settles for the “devil he knows”.

But it’s a date nonetheless. People go on multiple first dates with multiple brands. Very few settle down and marry them.

The change that brands and those that work with them (both in client businesses and agencies) need to make is to start behaving like they are always on first dates.

On first dates, we do the following: 1. Look our best at all times.

2. Talk about the other person as much as possible, appearing interested in their lives more than our own.

3. Think of new and exciting things to say and meet in new and interesting places.

Those that invest all their hopes in loyalty behave like old married couples:

1. Stop making an effort, believing that “because you love me”, you’ll forgive or even embrace dull or wearily familiar appearances.

2. Drone on about ourselves believing the opposite party is interested.

3. Repeat the same patterns of behaviour over and over again until the routine grinds the relationship to a halt.

Treating every contact with a consumer as a first date is the key to success. Brands need to match the first three behaviours and stamp out the latter. Thinking that consumers are loyal to us encourages the second group of behaviours at the expense of the first.

Understanding what makes people keep buying brands again and again is a critical part of marketing. It is wrong to reject it entirely, as some have suggested, but equally too simplistic to suggest that loyalty is a binary state – being loyal or not. People are rarely uncritically loyal to brands.

Even if strongly minded to repurchase, shoppers will still look at others by way of reference. Some may even be strongly minded to move elsewhere before changing their minds and sticking with the devil they know. With all this clearly laid out before them as new research techniques enable them to do, those who manage brands can now see just how complex the world of loyalty is and, in so doing, begin to develop solutions that build the right types of bias, keeping their repurchase levels strong and their customer bases healthy.

“We shall not cease from exploration, and the end of all our exploring will be to arrive where we started and know the place for the first time.” – TS Eliot

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

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dIstInctIon james borrodell brown If we say we care about something, we are expected to know about it. But brands are busy pumping out junk knowledge – instead, we must create knowledge that can’t just be looked up, and then give it away, James Borrodell Brown explains

I

don’t want you to read this essay. It’s not meant to be read like this. Because today, knowledge simply doesn’t work very well for us when it’s constrained by a piece of paper. We explore and we look things up. We search and browse, and follow our noses when things intrigue us. We demand multiple sources and perspectives. In a store, a third of us would choose to consult a smartphone rather than talk to a store employee.1 That’s why this was originally created as a website. If you visit http://gosupergnova.com, you’ll find an essay that’s full of links, and has interactive comments and sidenotes, and audio clips, and YouTube videos and a couple of animated gifs.

You can still read this version.

But you can also open your laptop or your phone. You’re in control, which makes sense: today, we make our own decisions about how we consume knowledge.

gnostic Adjective Relating to knowledge, especially esoteric knowledge. Late 16th century (as a noun): via ecclesiastical Latin from Greek gnstikos, from gnstos “known” (related to gignskein “know”).

Most brands today are what i call agnostic brands They don’t understand the knowledge space they are in, they don’t keep up with knowledge that consumers expect of them, they don’t contribute any new knowledge to the world, and they make false claims about what they know and believe in.

In short: they are weak brands, and they have little to offer consumers today outside of the functional, ie. as an aide-memoire and choice shortcut.

Some brands, however, have gone “supergnova”, and are finding ways to do the exact opposite.

They understand what knowlFor further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

colin stout

I belIeve brands sho

5 September 2014

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uld go supergnova Mentor’s coMMent

“James’ approach to this brief says a lot. Instead of submitting a written essay, he submitted a URL. He didn’t just use words, he used an interactive platform to create an immersive narrative. It perfectly embodies his thesis.”

Jon davie edge consumers want and expect of them and are giving it away.

These brands are creating and providing new knowledge that consumers can’t get any other way, which helps them to understand and signal their identities.

This kind of knowledge is the new value-add, the new “functionplus” that brands can help deliver, and to which customers can emotionally connect.2 “Knowledge is of two kinds. We know a subject ourselves, or we know where we can find information upon it” – Samuel Johnson 1775.3 Smart move: the British Library (Figure 1) has placed this quote in huge lettering by its entrance. I looked it up online because that is easy to do these days, and it seems that Johnson uttered these words out loud on a Tuesday in April 1775 while visiting the villa of the poet Richard Owen Cambridge.

Ignoring his art collection, Johnson “ran eagerly to the library, intent on poring over the backs of the books”. He didn’t want to read them. He was cataloguing them in his head, so he might return to them when needed.

I believe the most significant recent development in society is our easy, instant ability to access these catalogues and the knowledge within them. Led by the rise of personal, internet-connected de-

vices, anyone knows where to find information upon any subject.

And they can access it whenever and wherever they want.

Within the context of Johnson’s quote, with access to this evergrowing trove of information, we are approaching omniscience.We have what I call “bottomless knowledge”.

Anecdotally, this absolutely rings true. Consider the pub arguments we used to have about what year a film came out, or whether it won an Oscar. Just look it up, stupid! Bottomless knowledge is a tap away. “Hey Siri, what’s the capital of Honduras?”

This has now reached the point that if you ask the world a knowledge question, it will roll its eyes and look at you with disdain. Try out www.useTheFuckingGoogle. com on your lunch break.

Bottomless knowledge is a game-changer for society Access to bottomless knowledge has happened so quickly, and its consequences are so deep and diverse, that I don’t think we as a society (let alone the marketing/ advertising industry) have really processed it all yet. It’s fluid and happening around us right this moment.

It has deeply changed our understanding of privacy (see Edward Snowden), copyright and intellectual property (see the Electronic Frontier Foundation), politics, activism and democracy (see the Arab Spring), trade and the economy (see the rise of collaborative consumption) and more. It has profound effects on the nature of trust, lies, authority and expertise.

How we got Here: a brief History of knowledge 1. Protected knowledge – the age of elitism, pre-17th century During this time, knowledge is grounded in tradition, faith, superstition and myth. Held tightly by authorities that fight to control its distribution, they keep power by withholding access.4 2. scientific knowledge – the age of enlightenment, from the 17thcentury A revolution: the promotion of personal knowledge, through

Figure 1: At the British Library, you can explore the world’s knowledge

reason, logic, the scientific method and the search for truth. All accessible within an individual’s own mind.

3. Knowledge society – the age of know-how, mid-to-late 20th century Another breakthrough in access to knowledge, led by rapid expansion of the academic system, globalisation and technology, particularly the internet. Our economy’s key resource is no longer labour, raw material or capital – but knowledge.

The ability to create and disseminate knowledge is now freely available to everyone – for example, the rise of blogs, how-to shows and self-help books over this period, the increased use of the term “knowledge society” to describe modern culture, and the invention of the term “brain drain”.

4. Bottomless knowledge – the age of access, today As the number of internet-connected personal devices on the planet rises into the billions, we begin to see a feedback loop. As access to knowledge becomes more of a fundamental part of our lives, so more goods and services are created to take advantage of it, thus making our access even easier, cheaper and central to our lives, thus worthy of investment from businesses, and so on.

Access to knowledge has become a utility – and when we have the internet in our pockets, or spend time with people who do, then we have bottomless knowledge.

Knowledge is now our primary identity signal Back to that Samuel Johnson quote at the top. You can know a subject yourself, or know where to find information on it.

Knowledge is a moment away, and increasingly comes to us without asking. There is only so much time in a day. So the subjects we choose to know intimately have become key to who we are.

With such a super-abundance of

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bottomless knowledge available, what do we choose to keep in memory, and say that we know personally?

To describe our identity is to describe what we know Today we experience a general pressure to be on top of knowledge, and to have perfect, upto-date knowledge wherever possible. “Oh, didn’t you know?” is a cruel and embarrassing question to endure. The urge to check our e-mails, to check the score, and to know what’s happening is addictive and strong.

That’s because if we say something is important to us, then we are expected to know about it.

You say you love West Ham United, but you didn’t know the final score from a couple of minutes ago? You didn’t even know that the manager changed last week?

Be real.You’re no fan.

In truth, because knowledge is bottomless, we can’t even keep up to date with the things we care about. So we have found shortcuts to quickly signal that we have knowledge.

The data scientists at traffic analysis firm Chartbeat found that, across the web, there is zero correlation between sharing and reading. Just because we tweeted about a news article, doesn’t mean we read it properly.5 If social media has taught us anything about ourselves as a species, it’s that the human impulse to share trumps everything else.6 With knowledge as our primary tie to identity, it’s critical to keep up with it and show that you get it.

effective medium for bottomless knowledge. Metro has been impressively agile as a newspaper, finding ways like this to join the conversation the morning after.

The film critic Adam Batty calls it “a culture of spoilerphobia”. When new knowledge is created, the world wants to access it, which means it’s discussed, distributed and copied to multiple places.

If you personally want to delay your access to knowledge – such as watching a show the day after it’s been aired – then “the onus and responsibility falls on you” to disconnect yourself from the world appropriately.11 This is harder than ever in an age of context-sensitive push notifications on your smartphone.

Siri, Google Now and Android Wear are all examples of trying to anticipate your knowledge needs, and get it to you before you realise you wanted it.

How can brands add any value in a world where knowledge is bottomless and super-abundant?

What kind of comms cutsthrough in this kind of culture?

And how can brands help people to navigate more skilfully?

most informative identity signal, other people are busy trying to understand what you know about. They will find it by looking at what you say and do, and what others have said about you too.9 So it has become vital to keep a handle on what knowledge signals exist about you, and manage them appropriately.

Avoiding knowledge is a skill For the last few years, a small group of sports fans in the US have been playing a game they call “Last Man”. The objective: to go as long as possible without knowing who won the Super Bowl.10 They call it “running from the knowledge”, and the best they’ve been able to manage is four days, two hours and 49 minutes. Knowledge that is culturally important seeks you out like a heat-seeking missile.

Have you been watching Game Of Thrones? When the penultimate episode of the third series – the one with “the red wedding” – was shown on UK TV last year, well, let’s just say there was some plot development. (Figure 2) I had recorded it to watch the following evening, and had avoided “the knowledge” by keeping contact with friends to a minimum. Alas, when I picked up Metro on my commute that morning, every detail was splattered across page 3.Ah! A little ironic, I know, given that I’m rallying against paper as an

Managing our knowledge signals There are around three hundred billion (300,000,000,000) e-mails, messages and updates made, sent and read every day.7 People growing up with this mind-boggling quantity of information, for whom knowledge is a critical identity signal, are figuring out how to control and wield it for their own purposes.

Teen Facebook users have invented the practice of “super-logoff.” When they’re going out on a Friday night, they don’t just log out, but they delete their entire account, reactivating it the following morning.

Youth researcher Danah Boyd describes the strategy: they are “minimising risk when not present to address it. It’s a great strategy if you’re worried about people who might look and misinterpret.”8 Since knowledge is now the For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

Figure 2: spoiler alert – avoiding culturally important knowledge is a skill

THE OPPORTUNITY FOR BRANDs For a business, a brand can provide strategic focus,12 pull staff together,13 give customers a reason to remember the purchase,14 command a financial and psycho-

logical premium,15 and create the environment for an easier purchase decision.16 They provide the means for consumers to connect with a business emotionally,17 and by defining a business as more than the sum of its products, a brand provides the flex to adapt their offer to the market when necessary.18

What do brands offer consumers?

They have functional benefits: an aide-memoire for that thing we liked once, a shortcut to purchase when we’re time poor, an assistant when we don’t know how to choose.

But deeper than that, brands are a way of signalling to others (and ourselves) what it is that we stand for. Like the sports teams we support, the music we listen to, and the company we keep, our affiliation with particular brands is a way of understanding, adding to and communicating our identity and status in the world. Brands and identity have forever been tangled up in complex ways.

So sharp brands, and us sharp brand managers, know that if our brands can’t add any value to customers’ identities, then we are making a critical misstep.

And yet, I believe that is exactly what has happened. Access to bottomless knowledge has changed the nature of identity signals, but our industry has not yet adapted.

Tacit knowledge is the richest signal There are many ways of categorising knowledge. The most useful distinction is between explicit and tacit.19 l Explicit knowledge is anything that has been articulated, written down or stored somewhere.

Classic examples include assembly instructions for a bookshelf, textbooks, manuals and newspapers. Modern-day examples are live stock tickers and sports scores, a photo album of a holiday, or a social media comment. Explicit knowledge forms the vast majority of knowledge available to us at any time, and it has grown at an extraordinary rate. Ninety per cent of the world’s explicit knowledge was created in just the past two years.20 l Tacit knowledge is knowledge that can’t be easily communicated or obtained. It is highly personal, and very difficult to capture.21 For example, I could read 100 books about karate, but that wouldn’t make me a sensei. I can’t

5 September 2014

speak Russian by rote-learning the grammar and the vocabulary.

And I can look at plenty of photos of the deep jungle, but as long as I haven’t spent a week in a tent surrounded by spiders, I can’t say that I truly know it.

Acquiring tacit knowledge takes time, experience, and close contact with people who already have it. It might take days, years, or even a lifetime.

In a world where explicit knowledge is super-abundant, tacit knowledge has scarcity value and is a much richer identity signal.

It’s the stuff that you can’t just Google and look up.

This distinction should seriously worry us.

Our industry is in the habit of creating explicit knowledge and paying to put it in front of people.

But like the invention of the photograph dealt an existential punch to the painted portrait,22 so a world with access to bottomless knowledge, and its superabundance, is throwing our traditional brand communications model into crisis.

Tacit knowledge is where we can help consumers to understand and signal their identities.

But it cannot be transmitted via a one-off broadcast campaign.

Agnostic brands For a brand to assert today that it stands for something, that it thinks certain matters are important, or to claim that it is associated with particular values, then it absolutely must possess and then show off the relevant knowledge. Agnostic brands are failing to fulfil this basic hygiene factor. They make false claims about the knowledge they possess, and have little to offer the world other than a quick choice shortcut.

In contrast, brands that have gone supergnova are doing the opposite. They are adding value to consumers’ lives by creating and sharing new tacit knowledge for them to use themselves.

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Figure 3: Pepsi’s sexist campaign for Amp Up simply proved it had zero knowledge

GO sUPERGNOVA So here’s how to actually do it. l Step 1: prove you get it. l Step 2: cut down on your junk knowledge. l Step 3: create new knowledge and give it away.

sTEP 1: PROVE YOU GET IT To say that your business stands for something greater than your products – to even have a brand at all – now means proving you’ve got the knowledge.

Getting this can wrong can be fatal. A few years ago, Pepsi launched an app for its Amp Energy drink (Figure 3) called Amp Up Before You Score. It claimed to advise men on how to pick up 24 different “types” of women, such as “aspiring actress” or “rebound girl”. Once conquered, users could add women to their “brag list” and post it to social media.

Anger and criticism followed – from men, women and college students of all types.23 Pepsi backed down and removed the app, wasting thousands of dollars in resource and marketing spend.

jUDGE’s cOmmENT

“An outstandingly written and presented paper about ‘knowledge’ and the different kinds of knowledge brands have and need. As challenging and provocative as these papers should be.” john Bartle

I found one smart question among the outrage. Here’s the marketing student Jack Jorg: “Pepsi have been objectifying and stereotyping women in their ads for years without causing the level of controversy this app did.

Advertisers have been selling sex for decades and will continue to do so in the future… why did it cause such an uproar?”24 The difference is that past sexrelated campaigns from Pepsi – like the “dare for more” campaign with Britney Spears – were agnostic. They were not trying to claim that they had any knowledge. For better or worse, it was simply trying to make you associate Britney Spears’ body with a can of Pepsi. (If you can’t remember what the grossly sexist work looked like, you can always Google it.)

Amp Up, in contrast, claimed to know what it’s like to be a male college student. Instead, it proved they had zero knowledge of the language, tone and values of their customers. It was awkward, clumsy and inappropriate. Zero knowledge equals zero brand equity.

A better approach from an energy brand targeting students is Pro Plus. Its “stay alert” campaign showed that they knew what it was like to be a student.

They also launched a Student World website with revision planner spreadsheets, stress advice and coursework tips.25 More recently, it launched sponsored Spotify playlists with music to get past your hangover and get on with your day.26 Sometimes proving that you’ve got the knowledge is less about what you say and more about what you leave out. Danish sci-

ence writer Tor Nørretranders invented the term “exformation” to describe the idea.27 Unlike information, exformation is the stuff you leave out.

Sometimes just a few words carry an enormous amount of knowledge. This keeps communication succinct, but it also creates a personal connection. It’s like having a private joke.

Many forms of cryptography work to a similar principle. Both the sender and receiver possess a public key, which can be accessed by anyone and is used to turn the initial message into a coded one.

But they each also have a secret key. Only when these keys have been combined can the message be decoded and understood.28 For brands, this means understanding the language and knowledge space of your consumers (acquiring the public key) and then using communications that shows that you get it (creating a secret key).

For example, when Budwesier first began sponsoring the Premier League – the first US brand to do so – it ran ads openly admitting its lack of expertise in the beautiful game: “You do the football, we’ll do the beer.” By claiming to have no expertise with football, and acknowledging that it could not possibly have acquired true tacit knowledge about football in its short time as sponsor, it actually proved it had the knowledge. Slick.

Last month Budweiser announced it was ending its UK football deal, which has paved the way for bigger things. It sponsored the Fifa World Cup in 2014 and will do so again in 2018 and 2022.29

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Similarly, Thomson’s recent campaign proved it gets just what holidays mean to families. Consumer reaction has been hugely positive, with many online comments along the lines of, “This is exactly how I feel!” (Figure 4) The ad was accompanied by a website that continued to show it understood the realities of working life for fathers (the primary audience target). It included a stress test, to examine your mood and need for a rest.

This could have easily been a throwaway feature, but Thomson continued to demonstrate that it did have the relevant knowledge about psychology and anxiety: it included several Rorschach tests, a language-mapping exercise and a sophisticated model based on colour theory.Agnostic brands still think they know best, and are trying to set the agenda by forcing their messages in front of consumers.30 To go supergnova and prove you get it, we must turn this on its head. Start with the customers who really care about your category, find out what knowledge these people want, and let customers set the agenda.

Nordstrom, the US department

store, took an early interest in Pinterest as a form of trend-spotting. It now displays its “mostpinned” items in stores, and has begun rolling this out more widely to create the world’s largest wish-list.

Sales advisors on the floor use a management app that matches popular Pinterest items with Nordstrom products. It shows customers that Nordstrom is keeping up with the latest knowledge – as consumers we expect nothing less – and that it is genuinely using it to inform its products and services.31

STEP 2: CuT down on your junk knowlEdgE One of the oldest and most abused tropes in TV and film is that of infinite ammo.

Our hero always seems to have a bottomless supply, although they may run out just before reaching the boss (perhaps with just one bullet left). Reloading only exists for added suspense.32 As marketers, it’s easy to think that we also have infinite ammo.

As the third IPA Datamine report put it: “There are few hotter

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

Figure 4: Thomson’s campaign came with a website that proved it knew about stress

topics in marketing these days than how to make best use of all the communications channels available to us.”33 With an increased number of consumer touchpoints, well orchestrated multichannel campaigns do have better cutthrough and effectiveness (on the whole) than single-channel ones. But it’s misleading to conclude that we must therefore pick up the machine gun and hold down the trigger.

Indeed, I believe much of our communications to consumers is giving them what I call junk knowledge. Just as it is possible to add sugar, caffeine and fizz to a glass of water, so the same can be done to knowledge.

Witness the meteoric rise of news magazines such as BuzzFeed and Upworthy, who have found ways to sprinkle sugar on the light knowledge that they’re giving away.

By turning articles into top-ten lists, photo galleries, or animated gifs, and using competitively emotive headlines, they have created a copywriting arms race. “9 Out Of 10 Americans Are Completely Wrong About This

Mind-Blowing Fact”. “Baby Polar Bear’s Feeder Dies”. “25 Really Engaging Images About The Minimum Wage (as part of our series sponsored by the AFLCIO)”.And so on.34 But it’s a very short-term hit.

You read it, and you’re on to the next. It only works because they’re publishing hundreds of articles a day.

The songwriter John Roderick puts it nicely. “As a culture, we’re satisfied with worse, because there’s so much more of everything. Nowadays, with everything we do, we’re just flipping through index cards.”35 This is a warning sign for our industry. Many of our techniques for achieving cut-through (ramp up the emotion, the weirdness, the number of channels used etc) are based around conceits, exaggerations, or outright lies.

We need to cut down on junk knowledge and remember that we have limited ammo. We’re focusing on recall, but a better, longer-term goal is to focus on creating and sharing quality knowledge.

Debunking is easy, so stop making false claims Consider the runaway success of near-live fact-checking services such as Factcheck.org, an independently-funded group that monitors the factual accuracy of what is said by political players in the US.36 Now consider the impact of this on brands who are making untrue or exaggerated claims about themselves.

In Mandarin, there is a character that is used especially for comparisons based on a conceit or an unnecessary embellishment, as in the sentence: “It’s sooo good, you’d be crazy not to buy it.”If this character existed in English, you’ would see it in much of our advertising.

If customers can debunk any of our claims at any time, doesn’t that make us look a bit stupid and vain for trying to win them over in this way?

Agnostic brands, seemingly unaware of this problem, are ploughing ahead regardless.

Grey Goose’s recent “fly beyond” spot (Figure 5), with Francois and the bartender, is a good example. There weren’t actually any riots in France, we assume.

Isn’t Grey Goose run by an US billionaire? And if the barman is an actor, is that the real Francoise, or an actor too? After this mixup, the claim that it is “the world’s best tasting vodka” surely falls on deaf ears.

5 September 2014

Figure 5: The real Francois or an actor? Grey Goose risks customers debunking its claims

Know when you are full It is easy to tell when we have run out of money, time, or space on a poster. But, like junk food, it is very difficult to figure out when we are full up with knowledge.

A few years ago, in an awardwinning experiment, Professor Brian Wansink sat people down with a tasty bowl of soup and asked them to eat until they felt full. For a select group of subjects, however, his team had drilled holes into the bottom of the tables, pressure-feeding soup into the bowls, effectively making them bottomless bowls of soup.

On average, these people ate 78 per cent more.37 Wansink calls it “mindless eating,” and to change it requires putting in place physical constraints and visual cues, such as switching to smaller plates and silverware.38 We could do the same, to cut down on the junk knowledge that we’re broadcasting. As the saying goes, you can’t change what you don’t measure.

So let’s try creating a running tally of every message we’re sending out to consumers. Every Tweet, every e-mail, every banner ad, every TV spot and press advertorial. Post it to the wall for everyone on the team to see, and make it visible to everyone who is working with the brand.

Similarly, in our consumer research we should ask potential customers about their knowledge habits. What’s overwhelming?

What feels like junk? At what times and in what contexts are they keen to learn, and what do they wish they knew more about?

“Cabinet minister resigns”. You had to buy the newspaper to find out what had happened. “Here’s what went on today while you were at work” – a brilliant editorial strategy. But today, it’s absurd to think that you wouldn’t already have that knowledge by the time you reached the station.

When the horsemeat scandal broke, all the supermarkets scrambled to get ahead of the news, apologising in one breath, then claiming to be the most transparent in the next.Tesco probably did the best, and is still regularly publishing its DNA results.39 But in those first few days, as facts, rumours, gossip and scandal all swirled around together, knowledge was changing second by second. Every moment that they spent preparing for a press conference, they were losing brand equity.

It’s difficult for a brand to lead when knowledge is changing in real time. When the context and culture is shifting constantly, how can we build up a clear picture or an association in consumers’ minds?

In the age of the ephemeral, things that last stand out. While

still keeping up with the latest knowledge in their particular area, brands going supergnova are finding appropriate subjects where they can go deep, like investigative journalists. We can look to innovative publishers for best practice here – part of a great newspaper’s value is in slowing down when everything else is speeding up.

Let’s imagine how this might work for Tesco Food. While absolutely keeping up with all the latest knowledge relevant to them (think recipes, health food, discussing whether Jaffa Cakes are a biscuit or a cake ) they could “go deep” on food provenance, or food science, or food logistics, and give away knowledge that only Tesco could create.

It looks like its Eat Happy Project (Figure 6) is well on the way to achieving this, with teaching toolkits, virtual classrooms and knowledge about how food gets to the shelves.40

‘We know more than we can tell.’

That’s the scientist and philosopher Polányi Mihály, 195841 Polányi was something of a polymath. In between his work on

STEP 3. CrEATE nEw knowlEdgE And gIVE IT AwAy The London Evening Standard used to feature headlines such as

Figure 6: Tesco’s Eat Happy Project creates new knowledge and gives it away

campaign 45

x-ray diffraction and atomic reactions he invented the concept of tacit knowledge and became a prominent philosopher.

He argued that tacit knowledge was intimately personal and stuck in our heads. It’s knowledge that we know we have, but struggle to describe – like catching a ball, or picking out a rug that pulls a room together.

Tacit knowledge should be a fascinating concept to the communications industry. We spend our working lives working out the best ways to convey indistinct information. No doubt some of the brands we work on have been building up tacit knowledge for generations.

But we hit a problem right away.

A defining feature of tacit knowledge is that it cannot be comprehensively articulated. How can it be transmitted at all?

Craftsmen and women regularly deal with this problem, as veteran workers are required to pass on their skills. Factories often attempt to do this by trying to write it down, or filming a mechanical replication. But this always seems to lose its “feel” – a simulation just isn’t good enough.

Academics, philosophers, management consultants, teachers and HR specialists have spent considerable time working on this puzzle. Here follows five different techniques, A-to-E, with suggestions for applying it to our discipline.

A) A close interaction over time Transmitting tacit knowledge requires the close involvement and co-operation of the two subjects involved, over an extended period of time.42 For example, to truly say you know Berlin, New York or Tokyo, you really need to live there, or stay over with someone who does.

Airbnb has captured this brilliantly with its recent campaign (Figure 7) aimed at Londoners who crave that knowledge. As an Airbnb customer, you get to stay in a real Berlin house, and meet a real Berliner. By being so close to the real thing for a whole weekend, it says that tacit knowledge is going to filter into your brain by osmosis.

FMCG brands, despite typically being purchased and used without too much thinking, are actually well-placed to use this technique.Think how many hours you spend with Colgate or Kellogg’s every day, over many years.

Imagine a campaign about the knowledge that you can only get by sitting round the breakfast

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table, however briefly, with your family every morning. Those fools who get a snack bar on the run are missing out.

B) Build up a shared understanding When a subject is so complex and thorny that talking about it seems impossible, teachers, diplomats, negotiators and lawyers begin by agreeing some basic terms of reference.43 I know I’m not meant to use Dove as an example in a marketing paper, but… I believe one of the unexplored reasons for its “real beauty” campaign’s success is that it provided a new language for us all to talk about feminism and the female body.

In its own little way, it articulated something that a huge number of us had felt, but weren’t sure how to express. It gave us a way to signal our knowledge.

A number of other “classic” adverts, which have become cultural touchstones, have also succeeded by putting words to our feelings.

Remember the multi-award-winning “whassup” ad from Budweiser in 1999. It was followed up by another video (from the same director and with the same actors, though not from AnheuserBusch) endorsing the Obama campaign – a full nine years later.

Rather than trying to find a quick bit of added reach in earned and shared media, we should be measuring our performance by

the extent to which the language of our marketing becomes longterm vernacular.

C) Come at it from a dozen angles To impress somebody who already thinks they’re an expert, you have to surprise them. Connoisseurs are promiscuous, and want different forms of gratification at different times.

To engage someone who already believes they have tacit knowledge, we need to really up our game and go to the edge in a myriad of ways.44 Paddy Power is the archetypical example of this. With its wry, ironic, knowing tone of voice, it has applied its trademark wit to every single opportunity that has come its way.

During the horsemeat scandal, for example, it didn’t skip a beat.

Announcing that customers could now bet on which animal contamination would be found next, it then said: “Talk about product innovation; not only can you back horses with Paddy Power but now you can also eat them. This is something our punters can really sink their teeth into.”45 It then took to the streets of Dublin to give away free burgers during lunch.

D) Design an apprenticeship Polányi speaks highly of apprenticeships and mentoring. “By watching the master, and making

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Figure 7: Airbnb’s recent campaign suggests that customers will gain tacit knowledge by using its service

efforts in the presence of his example, the apprentice picks up the rules of the art.”46 Whether it realised it or not, Nike Football has created an apprenticeship scheme for us to learn from the masters.

It shows us what the dream is like, what the masters do, what their incredible life is like. It’s the kind of tacit knowledge that we can never attain, but Nike Football gives us a glimpse.

In 2009, it created the Nike Football Academy – a real-life, pro-level training programme that helps unsigned under-20 players find a club, organised by Nike.Who else could get Mourinho, Rooney and Ronaldo to pop over and coach for a weekend?

Their online shop follows this model right the way through to purchase. Not sure what to buy?

Well, have a look through a Barcelona player’s kitbag, or what the pro players use just for their boring, everyday training.

E) Ex novo: build it from scratch Sometimes there is a business opportunity that means having to educate consumers – here’s something you didn’t even realise you could know about. New knowledge can be captivating, and “transforms the entire slate of the knower’s mind.”47 We can learn from inventive broadcasters, who have helped set the bar in this area.

Classic FM, for example, has spent twenty-two years teaching a generation the tacit knowledge of classical music. Reading a book about classical music only gets you so far, and it has found success by framing it as a relaxing hobby.

Channel 4’s brilliant Paralympics teaser campaign, “thanks for the warm-up”, accompanied its moving “superheroes” spot. It followed it up with a round-up show called The Last Leg (Figure 8), featuring chat and stand-up from a one-legged man. It regularly pulled in more than one million viewers each night of the games, and is now in its fourth series.48 This witty, self-deprecating take on disabilities gives viewers the knowledge and confidence to talk about inclusiveness, resilience and sport in a new way. Channel 4’s willingness to trailblaze has improved our society, and has been rightly praised for its commitment to communicating this complex tacit knowledge. 49

MAKING IT HAPPEN Let’s create a new job to get this going: a knowledge strategist.

Sensitive to both traditional brand performance and cultural understanding, they can help brands lead in a world of bottomless knowledge. Here’s a job ad for you to use. (You can download it as a Word document or PDF from http://gosupergnova.com.)

5 September 2014

SENIor KNowlEdGE PlANNEr Role profile As senior knowledge planner, you will oversee the brand and communications strategy for one of the UK’s leading brands, as we help them to go supergnova.

Working closely with our research, creative and editorial teams, over three to five years you will guide this brand to a category-leading position. By discovering what this brand should care about, and uncovering the knowledge spaces that it must understand and keep up with, you will work out how to show customers that this brand “gets it”.

And by discovering where this brand can be an expert, you will help them create and lead new knowledge spaces, and ensure that the team creates brilliant communications that customers want to learn from.

Skills required Training in a human-centred social science – eg. sociology, anthropology, psychology, cultural studies, linguistics, etc. What knowledge do our customers want, and how do they signal it?

Expert using social, semiotic and data tools/analysis to uncover and describe knowledge spaces. What explicit knowledge must our brand keep up with, and where is there too much junk knowledge?

Ability to conduct or commission qualitative and quantitative studies, both with consumers but also with our clients. What tacit knowledge do we already have?

And what tacit knowledge should we be learning?

At least five years’ strategy/ planning experience in brand communications across multiple channels. How do we communicate our knowledge to consumers, and give it away so they can use it?

Innovative business thinker – where can our brand lead and how will it affect profits and shareholder value?

A NEw TyPE of crEATIvE brIEf Often all it takes is some new documentation to change the way an agency behaves. So here’s a new way of thinking about the creative brief: the knowledge brief.

(Also available as a Word document or PDF template from http://gosupergnova.com.)

As an example, I’ve filled it in using a category which hasn’t done any brand communications work for many years: housebuilders such as Persimmon, Taylor Wimpey and Barratt Homes.

crEATIvE/KNowlEdGE brIEf What knowledge does our audience want and why?

For no other high-value product are consumers expected to spend so much but know so little. Often they are expected to buy before the house and neighbourhood has been built. Our customers want to know how to buy a house without getting cheated. And they want to know how to turn a house into a home.

How/where will they be signalling this knowledge? l To friends, pre-purchase: via messaging/social media, usually photography.

l To friends, post-purchase: at a housewarming. l To family: tagging along to showroom visits / come round for cup of tea. l To others: advice-giving/tipsharing.

What explicit knowledge do they expect of us?

Materials and engineering (eg. brickwork), design and aesthetics (eg. interior design), project management (eg. building on time), finance (eg. mortgages) and local amenities (eg. supermarkets).

With so much junk knowledge, how can we be expert?

Everyone in the property market, especially estate agents, talks in a special coded language – “charming, tidy, bijou, boasts a family bathroom”. We could be experts in converting these buzzwords into plain English, and gain their trust by making things clear.

Who else is giving away knowledge (our competitors)? l Newspaper home supplements: area guides and cheat sheets. l Aggregators, such as Rightmove: customer reviews, house prices, local schools. l Friends and family: previous experiences, practical tips. l Banks, lenders, government: financial advice, buying schemes. l Estate agents: local area guides, competitive landscape. l Blogs, forums, social media: design inspiration, how-to guides.

What tacit knowledge do we have, to give away?

Many of our staff live in nearby neighbourhoods and know the

Figure 8: Channel 4’s The Last Leg has been praised for communicating complex tacit knowledge about disabilities

campaign 47

locals. We know the best pubs, the best running circuits, the best place to walk the dog, what it’s like on a Friday evening and a Tuesday afternoon. We’ve got a feel of the place that you can’t get by reading about it in a brochure or looking it up on the internet.

Some first ideas that come from this brief l Use local slang wherever possible. l Video diaries from customers moving in and making it their home. l Local interviews – the butcher, the teacher, the pub landlord. l Live Q&A sessions with finance and/or design experts on social media. l A style manual for using plain English and avoiding buzzwords. l Walking/cycling routes and tours from our staff. l Stay the night in a showroom – we’ll provide breakfast. l Fifty simultaneous housewarmings across the country.

A fINAl THoUGHT Brands help us to see, feel, know and signal our place in the world.

This hasn’t changed. But access to bottomless knowledge has changed the nature and content of these signals, and as brand managers we must adapt.

There is a small company in Worcester called BeerBods who, for a small subscription fee, will send you 12 beers in the post every 12 weeks. It’s not like the Wine Society, though. Everyone drinks one beer a week – the same beer, often at exactly the same time on the same night – as the story behind the beer is revealed.

It has quickly turned into a remarkable community of (mostly) blokes, chatting online about the beer and whatever else comes to mind.

The whole concept is based on a brilliant insight. These 30-yearold-ish guys are settling down, aren’t going out to the pub with their mates as much, and are losing their knowledge about beer and the latest banter.

Wait. Actually, it’s much more than that. They worry they are losing knowledge about being a man.

And this brand is helping them to get it back, and to grow it anew.

It’s guiding them to the kind of knowledge that is profoundly personal to their lives, and giving them ways to signal it.

Today, that kind of brand behaviour has a deep power to it. That’s what it means to go supergnova.

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dIstInctIon rIchard bradford

I belIeve that In the future

brands wIll have to earn Brands need to create compelling communications – or risk being ignored. One way to do this is to appeal to consumers’ ‘epistemic vigilance’, which is always on, sense-checking every communication for sense, Richard Bradford explains

B

rands compete for attention with a range of communications, not just other brands. The imperative is to make communications that are compelling to the viewer. But how? What is it that makes one communication more compelling than another?

You might not have come across “epistemic vigilance” before, but it is already an important part of the way you deal with communications.

It’s a critical faculty that is always on in the background, sense-checking what is being communicated to you. It’s the reason you are hard to lie to. It’s the reason you don’t believe everything you’re told. It’s the reason you take notice when something feels wrong in a communication.

Epistemic vigilance is also one of the primary reasons people pay attention: it compels a viewer to investigate any communication that they cannot accept at face value.

Attention is increasingly scarce.

Brands need to find a way to create compelling communications, or they will risk having their communications ignored altogether.

INTRODUCTION In 1955, the poet Jaques Prévert walked past a homeless man holding a sign on a busy street.

The sign read: I’m blind, please help The homeless man didn’t have many donations. So after walking past the sign and the empty hat too many times, Prévert took the sign and changed it:1 It’s springtime and I can’t see When Prevert wrote that sign he created something very different.

Instead of presenting the passerby with a statement it created a question. Why does it matter that it’s springtime? What can I see that he can’t?

That question leads the passerby to an understanding of what is important about the sign. The passer-by sees what the blind man doesn’t see: springtime.

From then on, the blind man’s hat was full.

There’s a lot we can learn from Prévert and the blind man’s sign.

Anything that communicates can challenge people. Challenge creates questions, and those questions lead people to a new under-

standing of what is important about the communication. In our man’s case, a hard question about what we see that others don’t, and a full hat.

If all our communications were like that homeless man’s sign, in a busy street with people engrossed in other things, would we have to think differently about how brands communicate too?

1. HOW COME I CAN’T PAY PEOPLE TO LISTEN ANYMORE? “In an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence, a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it” – Herbert Simon.2

There is high competition for attention I bought a clicker to count the number of communications I consume in a day. After an hour and a half it broke: I had received 1,822 pieces of communication.3

MENTOR’S COMMENT

“Richard’s dissertation speaks to the reality of fragmented attention, moving quickly from the challenge to a new, compelling and practical approach to drawing attention for brand benefit. It may not roll off the tongue in quite the same way as ‘behavioural economics’ does, but ‘epistemic vigilance’ is every bit as revolutionary.”

David Fletcher

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I saw 87 individual pieces of communication pulling into a tube station.

Absorbing so many communications forces the mind to filter and it does it well.4 Is this communication a risk? Is it pertinent? Is it interesting? I see a small clock half a kilometre away over a sixsheet next to me when I’m late.

People receive an increasing volume of communications on a daily basis.5 That includes advertising messages but isn’t limited

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colin stout

the rIght to communIcate

to them. There is high level of information, and that demand creates a paucity of attention.

There are more brand messages competing There is more competition for messaging in out-of-home environments. There are 1.5 million out-of-home sites in the UK, growing at 2 per cent per year.6 There is more competition for messaging in internet environments. People see 16,000 digital

brand adverts per year: that equals 35 for every hour spent on the internet.7 In 1986, there were 44 beer brands. By 2012 there were 2,751 on the market.8 More brands are competing for a smaller share of attention.

Fame drives business success for brands.9 But competition for attention means it’s harder to appear famous – brands are increasingly one of many competing voices.

There are more ways to opt out There is another problem. People can opt out of brand communications. The problem of an alternative focus of attention prevails everywhere because there is one screen that half of people always have with them and that’s a smartphone.10 It is something that’s potentially more interesting than brand communications. People have it with them when they’re walking down the street, when they’re sat

in front of a laptop watching prerolls, when they’re reading Metro on a commute.11 With more than one source of information present, interest is the key factor driving attention.12 Having a mobile phone has created a new dynamic in communications. If people aren’t interested in communications they don’t have to pay attention to them.

Opting out isn’t just about skippable ads and PVRs. It’s about whether someone feels

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50

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FIGuRE 1 : PRImARY AND SEcONDARY ScREEN ATTENTION SWITcH 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2

TV only

2nd screen Social Media

Post-SM lull

research points to “meerkatting”, where the viewer intermittently flicks their attention back to the TV momentarily to check for high interest communications.24 All evidence shares a common point of view: we seldom remain focused on the TV when distractions are available, digital or physical. In those situations, a third of brand communications are misattributed.25 The ubiquity of second screens means distractions are always available. Only communications that are compelling on an instinctive level are able to retrieve and retain attention when there are other options.

Return TV

Source: Neuro Insight, The Myth of the Distracted Second-Screener, May 2013

compelled to pay attention to you or not.

People can opt out of brand communications with their attention by turning away to a mobile phone and sending a text, or browsing the internet for something else.13 If that seems like a niche behaviour, two-thirds of everyone has done it at some point.14 Half of people regularly opt out of communications to use a smartphone, laptop or tablet. Weekly, daily, sitting in front of the television and just ducking out into a secondary device.15 Smartphone penetration is increasing consistently by ten percentage points a year.16 But it’s not just smartphone users.

The two most prominent secondscreen activities are messaging and calling.17 It’s becoming more difficult to buy people’s attention.This isn’t a phenomenon unique to television advertising. The same rules of the second screen exist in all brand communications. In a cafe, on a bus, walking down the street trying to figure out where I’m going: attention has shifted from being in the viewer’s world to being in their hand.18

From low attention to no attention “Attention is monopolistic, we cannot “attend” to more than one thing at a time. We can only attend to a number of things by switching our attention from one thing to another” – Robert Heath.19 The second screen is such a compelling activity that you are either involved in it completely or not. If you’re sitting in front of the TV and you’re looking down to your mobile phone or your tablet or your laptop, your attention isn’t half on the television any more, it has gone.

From watching a human being’s brain when they switch to a secondary device, we see that attention moves from the TV to the secondary device like a switch. It intensifies around the secondary device for 50 or 60 seconds then

it’s focused on the TV again (Figure 1). 20 Viewers dropped out of programming to use a second screen for more than three minutes over the 35 minute test period, with a bias towards advertising. They dropped out of between 10 and 20 per cent of ad breaks.21 In the past, low attention has been defended by the models of “Low Attention Processing”.22 Second screens have created a new problem: not low attention but no attention. If an audience is not compelled to pay attention, most consumers in most situations now have an opportunity to opt out.23 Opinions differ on the level of residual attention that remains with the TV when a person drops out into a secondary device. Some

2. WHAT DO PEOPLE PAY ATTENTION TO? “Even at a very early age, children do not treat all communicated information as equally reliable. At 16 months old, they notice when a familiar word is inappropriately used. By the age of two, they often attempt to contradict and correct assertions that they believe to be false” 26 – Dan Sperber.

Communication is so important people don’t sleep if they don’t have it: human beings will wake up intermittently in the night if they are deprived of social contact.27 To have social contact, humans need to be able to establish relia-

FIGuRE 2 : THE PROcESS OF bEING TRIGGERED Unconscious

ble communications. Most importantly, we need safeguards in place to ensure that we’re getting an accurate picture. It’s a risk not to: we could be missing something important, or the messenger could be wrong.28 We do this by sense-checking everything that is communicated to us against our beliefs. If the communication does not match with our beliefs we are triggered into working out why not.29 That mechanism is called “epistemic vigilance”. Simply put, it means checking what we’re told against what we know.

Epistemic vigilance is a subsection of a body of work called “Argumentative Theory” which was developed to explain how and why humans reason. Its chief finding is that reason isn’t reasonable: humans have developed not to reason abstractly but to contend with problems. Humans are hardwired to defend their beliefs against contradictory ones they presented to them.30 Epistemic vigilance is always on, subconsciously monitoring communications in the background to check that we’re not being led astray.31 If a communication doesn’t fit our expectations, it becomes our number-one priority to establish why not.

These anomalous communications are called “epistemic trig-

Communication received

Communication scanned for beliefs

Beliefs in communication sense checked against own beliefs

Anomaly found, epistemic vigilance triggered

High attention focused on problem until anomaly is resolved

Low attention as new beliefs is saved down to memory

Conscious

Source: Author

FIGuRE 3: FOuR bELIEFS, FOuR TRIGGERS Dissonance “They don’t go together.”

Explicit: understanding challenged

Automatic: simple assumptions about the world

Absence “There’s something missing here.”

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Challenge “I’m not sure I buy that.”

Learned: complex beliefs about the world Implicit: expectations challenged

Unexpectedness “That doesn’t usually happen.”

Source: Author

5 September 2014

gers”. They are problems in a communication that the receiver is forced to solve. And they are an evolutionary imperative. Humans cannot help but deal with a communication that contradicts their beliefs. (Figure 2) Whether the communication is missing something, contradicts itself, contains unexpected information or simply states a belief that we cannot accept at face value, epistemic triggers are a priority for human attention. Not dealing with a communication that conflicts with our beliefs could be an evolutionary risk.32 As a result, there are types of communication that trigger an irresistible urge to engage. When our beliefs are challenged we cannot help but focus our attention squarely on whatever communication has challenged our belief until it is resolved.

can create incongruence too. In Volkswagen “lemon”, we see a picture of a car and a descriptor that says “lemon”. (Figure 4) This is a wonderful epistemic trigger because it replicates an epistemic trigger that could exist in everyday life: the viewer is being presented with something that is not a lemon and being told it is a lemon.

There are many reasons why “lemon” is brilliant, which have been pored over in great detail.37 My reason is because it creates a compulsion in the viewer to deal with an epistemic problem. One thing is being shown and another thing is being described. It’s quick to solve and gets the viewer to a strongly branded belief: that Volkswagen’s not a lemon.

3. WHAT TRIGGERS ATTENTION? “The system is a pattern detection device. The rule that the pattern better be coherent is at the heart. If we do not achieve coherence we are made to feel uncomfortable” – Daniel Kahneman.33 Epistemic vigilance depends on us challenging the beliefs of the person communicated with. To challenge the beliefs of the person and trigger epistemic vigilance we need to present a view of the world which cannot be accepted at face value.

To understand how to trigger attention, we first need to understand what kinds of beliefs we hold that can be challenged.

Human beings have simple beliefs – like lemons are yellow – and more complex beliefs about our identities and values – like it’s important to be an individual.

Both of these challenge our explicit understanding of the world.

Others challenge our implicit expectations of the world: you never go to church on Sunday; or the subconscious feeling that there’s something you’re not telling me. (Figure 3) Although very different, all of them can be used to create epistemic triggers that compel the user to engage. Anything that we hold as a belief can be challenged to compel attention.

TRIGGER ONE: DISSONANCE Incongruent information The simplest situation that triggers epistemic vigilance is incongruent communication: the communication is telling me two contradictory things. The communication is saying one thing

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Figure 4:Volkswagen ‘lemon’ compels the viewer to deal with an epistemic problem but doing another or it is presenting one thing and describing it as another.

There is an evolutionary instinct in us to solve contradictory communications.34 It could be dangerous to us to be told that something is a lemon when it looks like something else. These logical gaps in communication between different parts of the communication create a question: which is correct?

This desire for congruence is felt unconsciously. To experience

this visceral reaction first hand, listen to “the Tristan chord” from Richard Wagner’s Tristan And Isolde.35 It contains communicative dissonance – sounds that should not go together. It is experienced instinctively by any listener, and creates a desire for resolution. Research has shown that the incongruent facial expression of the Mona Lisa has the same effect.36 Communications that are incongruent compel the receiver to engage.

Marketing communications

Figure 5: viewers form their own branded beliefs in Heinz Tomato Ketchup ‘bottle’

TRIGGER TWO: ABSENCE Something is missing Is there a piece of information that is obviously missing from this communication? If you give a person a communication that is incomplete, they are compelled to fill in what it is that you haven’t told them.

Absence of information triggers epistemic vigilance because it is a clear sign that there is either something I don’t know, or I’m being deceived.

Heinz “bottle” 38 has a series of people interacting with a mass of air. It is visual ellipsis. People who are watching this scene are forced to ask themselves what it is that is missing from this picture.And the answer is It’s Heinz Tomato Ketchup that’s missing. (Figure 5) It’s not an answer that Heinz tell us in their advert; it’s an answer that the viewer figures out because all of those behaviours are unique to Heinz.

The viewer is forced to ask what’s missing and, in answering their own question, they form a branded belief about what’s going on.

TRIGGER THREE: CHALLENGE Statements of belief Statements of belief challenge not just the facts of the world but the values we hold dear. Statements of belief trigger epistemic vigilance because they call into question whether we should trust our own beliefs and values or trust the communicator. Both are important decisions.

Guinness “sapeurs” does this with its opening statement: “You can’t always decide what you do but you always decide who you are”.39 (Figure 6) It’s a challenging belief which the reader is forced to process. It

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can’t be evidenced or decided instantly from memory. It challenges our beliefs not just about the product but ourselves. It requires attention and thought. The viewer is forced to ask: why can’t I decide what I do? How can I decide who I am?

From the challenge to the actions of the people throughout, the answer to that challenge is this: in situations where you are forced to make the same choices as everyone else you can be different.

That is the fundamental truth of Guinness. What Guinness is, above all else, is the different choice. When everyone else is drinking lager, you can have a Guinness: you can decide who you are.

TRIGGER FOUR: UNEXPECTEDNESS Unusual patterns Unexpected information creates an epistemic trigger when we see something in communication that we do not expect to see.

It is a deep evolutionary principle that helps people spot when danger is coming. It is an epistemic trigger that alerts people to the possibility that something important may have changed, triggered by a communication not experienced before.

Innocent has done something to its product that doesn’t make sense. It has put a knitted woolly hat on all of its bottles.

Anyone who sees the bottle is compelled to ask what a drinks bottle is doing with a woolly hat on. Woolly hats are for things that

Figure 6: Guinness ‘sapeurs’ challenges beliefs not just about the product, but ourselves

juDGE’S COMMENT

“Like ‘a small piece of ivory’ this essay picks out the single biggest question we face as an industry: how does creativity work to engage us? The answer is detailed and with real colour and life.”

Nick Kendall

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create their own heat through metabolism.

The answer is left up to the viewer. When they interact with the product or ask someone they will find out that the reason an Innocent smoothie has a woolly hat on is because Innocent cares about the world we live in.

4. HOW TO CREATE EPISTEMIC ADVERTISING A three step dance In the examples of the four epistemic triggers we begin to see a common pattern. A belief is challenged, that challenge creates a question for the user to solve, and the answer creates a branded belief. It gives us a simple understanding of how we can create our own epistemic triggers: l Challenge beliefs. l Create a question in the mind of the receiver. l Use the answer to create a branded belief. (Figure 7) All these examples create questions quickly. Those questions lead us to branded beliefs. Those branded beliefs feel like they come from us.

How can brand communications ensure that a question gets created? And that the answer feels compelling? And that the new belief is branded?

5. IMPLICATIONS FOR PLANNING Create a question in the first five seconds Epistemic triggers can happen in the first 0.493 milliseconds of a person noticing a communication. That’s how long it takes to assess a communication.40 Simple epistemic triggers can create questions very quickly: dissonance and absence require low cognitive demand to realise something is wrong. That means communications have to start creating epistemic triggers from the first contact.

There is a finite amount of time to create the question. Research into digital out-of-home recorded an average dwell time of 11 seconds.41 Static posters are looked at for three-to-five seconds.42 With pre-roll, there’s a grace period of five seconds.

Epistemic triggers need to create questions quickly.

Let them answer the question (messenger is me) “The artist rules his subjects by turning them into accomplices” – Arthur Koestler.43 Good advertising does not put out messages, it creates them in the listener, or the viewer, or the watcher.44 This may seem counterintuitive.

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Because humans have a critical faculty, it is more effective to create branded beliefs that come from the user. In epistemic communications, this means letting the user answer the question themselves. None of the four examples ever state their branded belief explicitly. Volkswagen does not tell us that its cars are not lemons. Heinz does not tell us that Heinz is missing. We tell ourselves.

Letting the person answer the question themselves bypasses their critical cognitive processes that occur when people receive a communication.45 “Low Attention Processing” is effective for the same reason, but epistemic communication lets brands do that with conscious communications – as long as the user answers the question themselves.

Getting the viewer to answer the question changes the messenger from the advert to the user.

Acceptance of communications depends heavily on the levels of trust for the communicator.46 A person’s most-trusted beliefs come from themselves.47 Communications which feel as if they have come from the person rather than the advert are much more likely to be accepted.

Finally, messages which come from the user are more likely to be deeply encoded as memories and recalled later. Questions create an action for the user – they require cognitive processing to be resolved. It’s in processing that memory is created: the higher the level of processing, the more likely it is that the branded belief will be recalled by the viewer.48

Make it simple to answer Humans find solving problems rewarding.49 Resolving problems releases dopamine, which makes the experience rewarding and makes memories more likely to be encoded and recalled later.50 Epistemic communications need to stack the odds in favour of the audience solving the problem.

The communication needs to lead the audience to a solution. Heinz showed seven different sequences of someone getting ketchup out of a bottle. If one of them doesn’t land, another will. It needs to be clear and simple for the audience to figure out what’s going on.

Despite answering the question, epistemic triggers are still effective on subsequent exposure.

This is because the mechanism for epistemic vigilance is instinctive. Innocent’s “big knit” campaign triggered the same uplift in interest in its second year.51 Con-

campaign 53

FIGuRE 7: THE THREE-STEP DANCE IN ACTION Communication

Volkswagen “lemon”

Guinness “sapeur s”

Heinz “bottle”

Innocent “woolly hat”

Belief challenged

Lemons are fruits

Question instigated

Why is that car being called a lemon?

How can I choose who I am?

What’s missing?

Why is that bottle weaing a hat?

Branded belief created

Volkswagens aren’t lemons

I can be an individual by drinking Guinness

It’s Heinz that’s missing

Innocent cares about the world we live in

You can’t choose Something should who you are be there

Bottles don’t wear hats

Source: Author

sciously knowing the answer does not stop the person being triggered because beliefs are still challenged: people still don’t pour ketchup out of thin air.

Brand throughout “‘When I want a good recall score,’ says my partner David Scott, ‘all I have to do is show a gorilla in a jockstrap’” – David Ogilvy.52 Epistemic triggers instigate intense reading of a situation while the brain seeks to understand the problem presented by the communication. Once the problem is solved the brain starts writing as the person remembers the new belief about this situation.

There is an inherent risk here. If the viewer solves the problem before the brand is introduced, they will remember the answer without the brand.

We know this from looking at response to an epistemic advert in a neural scanning machine.53

FIGuRE 8: MEMORY ENCODING BEFORE AND AFTER A SITuATION IS REVEALED Build-up Anticipation Curiosity The joke What’s this?

Why?

The answer The punchline The “high note” I can hear, feel or see the end!

The processing pause OK, thanks, I’ve got it!

1 0.8 0.6 0.4 0.2 0 Source: Neuro Insight, The Myth of the Distracted Second-Screener, May 2013

An advert creates an inexplicable situation. This triggers a high burst of attention (red line on the neural scanner) until the situation is explained. (Figure 8) Once the situation is explained, attention falls away as the brain begins recording.

Two seconds later, the advert shows the brand. The ad suffers poor recall because the brand is shown too late – while the brain is recording. Read/write capability in the brain is a switch too.When it is remembering, it’s not listening.

To experience this first hand, try to remember what you’ve just driven past when you’ve been daydreaming while driving.

Epistemic advertising creates the same burst of high attention, but once the situation is resolved there is low attention while the answer is recorded. If branding is left until after the resolution it won’t be remembered.

Using your emotional benefit to brand throughout In “sapeurs”, Guinness use product imagery to create visible branding throughout. It does something else as well.

The answer to the Guinness question: how can I be different when I’m doing the same things? creates an inherently branded answer. The answer is branded not around the product but around the emotional benefit of Guinness. Guinness is not just burnt ale. It’s a drink that allows people to be individuals in situations that seem to afford them no individuality.54 If you want to find ways to brand throughout that are not just showing your packet every three seconds, find your emotional truth and make that the answer to your epistemic trigger – to the question you ask in the first five seconds.

Using visible cues to brand throughout The simplest way to brand throughout is to use visual cues.

Colours and visible consumption are effective ways to do this.

Cadbury is lucky enough to own a distinctive colour. Road signs coloured purple and the small moments of product consumption in James Corden’s lip-sync mean that the statement about “joy” becomes a branded belief.

(A purple street sign is itself an epistemic trigger).

Epistemic advertising changes the rules of branding: we need to brand throughout the answer because once the epistemic problem is solved the viewer will stop paying attention.

You don’t need to own a colour to brand throughout. Heinz has a distinctive bottle shape and a set of behaviours – any recognisable physical attribute can be used to brand throughout.

6. APPLYING THE THEORY: NEW EPISTEMIC TRIGGERS Anywhere there is competition for attention, epistemic triggers give brands a way to create compelling brand communications.

Audi created an epistemic trigger in its shop front by leaving out the cars. Instinct tells us that car garages have cars in them; Audi challenged our beliefs by making a store that’s about something else: service.

Grey Goose created an epistemic trigger with its pricing strategy. Vodka was perceived as a cheap spirit. Grey Goose challenged beliefs about the category by charging too much for vodka.55 It created the question: why is it expensive? and then filled the vacuum with stories about pure French grain. The conclusion?

Grey Goose must be the world’s best tasting vodka.

Native advertising and content

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approaches need to earn people’s attention too, since they are directly competing for attention against unbranded content. In “Can you crack the code”,GCHQ created an trigger by posting unsolved code on hacking forums and leaving users to crack the code. Successful crackers were eventually led to a branded page and the belief that they should really be doing it for a living.

Jacques Prévert created an epistemic trigger with a homeless man’s board. Snickers created one with search terms. Anything that communicates can challenge someone’s beliefs; anything that challenges someone’s beliefs can earn a disproportionate share of attention by compelling the viewer to engage with an epistemic problem. Epistemic triggers matter because they lead consumers away from the distraction of other communications and towards branded beliefs.

But the critical test of a theory is whether it can be used to create new work. The four types of trigger – absence, dissonance, challenge and unexpectedness – should allow us to create new epistemic triggers in brand communications. The following are two examples from very different brands – detergent and blood donation – which I’ve used to create new epistemic triggers in different communications moments.

Discounting is a problem for FMCGs.56 What if we can use epistemic triggers instead of offers to drive share for our brands in the supermarket? (Figure 9) Fairy “twinpack” creates a problem for the viewer to solve.A twinpack should have two bottles in it. When doesn’t a twinpack need two bottles? When it lasts twice as long. In proximity to a supermarket this drives more salience and memorability than a straight product ad.

The role for epistemic advertising does not stop at the supermarket door – as shelf space is a competitive environment. Prominence is driven by discounting and discounting will damage profitability.59 In Fairy “buy one don’t need one free” I created a multipack that challenges the assumptions that good value means carrying an extra product home. It creates a question: why don’t I get something free? It leads to the answer: because I don’t need to.

Epistemic advertising doesn’t stop with the question. The answers to our epistemic triggers should feel positive. To avoid the risk that the consumer feels that

the bargain is all on the side of Fairy, we donate the money saved from not producing the second bottle to a charity. To avoid the risk that supermarkets will want to delist Fairy for not producing an offer, we give that money to their charity of choice – in this case Sport Relief for Sainsbury’s.

There’s a fifth step in the purchase journey: beyond the purchase. People make their decisions about whether they have done the right thing after purchasing, and become a potential beacon for the brand. Not enough brands do this well.60 Epistemic triggers can reinforce draw a consumer’s attention to the fact that they have made a great choice.

Plasters are for sick people. But not always: we can challenge that assumption to create branded beliefs. By adding the words “Something Amazing” to a plaster we can create the question – why is wearing a plaster amazing? Because if you’ve just given blood, that’s something amazing.

All blood donation plasters should be branded, since peer groups are trusted messengers.61 But by creating an epistemic trigger instead of simply saying “Give Blood” we create a messenger in the viewer too. By viewing that plaster the passer-by tells themselves “Giving blood is something amazing.” It might even be something people take a selfie of.62 I’m not a creative, but using the four triggers and the three-step dance it is possible to create epis-

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Figure 9: an example of how Fairy could use epistemic triggers to challenge assumptions about value 57, 58

temic triggers that earn attention by challenging people’s beliefs.

When not to get in the Way: epistemic vigilance and behavioural economics Behavioural economics introduced the idea that the brain has two systems. System 1 is quick, unconscious, instinctive. System 2 is conscious, methodical and reasonable.63 System 1 scans communications for challenge to beliefs and alerts System 2 if it finds incongruence. It’s System 2

FIGURE 10: GROWTH IN BONDING: EPISTEMIC CAMPAIGNS VS NORM 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

All brands

Epistemic trigger brands Source: Author-amended Brand-2 data

that takes care of investigating and resolving the challenge.

System 1 has traditionally been seen by behavioural economics as a biased instrument. System 2 has its biases too. Reason isn’t reasonable: people want to confirm their own beliefs. Once System 2 becomes suspicious of a communication, it will remain engaged until it understands why.

This is epistemic vigilance.

There may be times when it’s inappropriate to create epistemic triggers. Where brand communications need to be accepted at face value, epistemic vigilance creates unnecessary problems.

Epistemic triggers derail default behaviour by instigating high attention. When the default behaviour is already what the brand wants, epistemic triggers are counterproductive. A mortgage application, a transaction page or a cash machine are no place to trigger vigilance.

An understanding of what triggers epistemic vigilance is still useful. Epistemic thinking can be used in user experience design to avoid creating any of the four epistemic triggers. Don’t leave missing information or unusual patterns mid action. Don’t challenge beliefs. Don’t deliver unexpected information. These triggers set off alarm bells in a human being that say “I should question what I’m being told.” When we want someone’s attention, that’s great; when we want them to finish a transaction, less so.

5 September 2014

There is a simple parameter for using epistemic triggers: when someone’s already engaged in a transaction, don’t get in the way.

When someone’s attention is flowing away from you, use epistemic triggers to get them back. A payment confirmation page is no place to create uncertainty.

7. EPISTEMIC TRIGGERS AND EFFECTIVENESS We would expect epistemic campaigns to impact on three important metrics: salience, since the epistemic vigilance drives memorability; bonding, since the brand beliefs are generated by the user; and sales, since epistemic campaigns generate high fame, recall and bonding.

We can use the campaigns already identified to examine the effectiveness of epistemic communications. IPA Effectiveness Awards data shows that campaigns which used epistemic triggers increased salience 87 per cent more than prior campaign approaches.64 For Snickers, this benchmarked against a competitor norm of 4 per cent.65 A similar pattern appears in bonding scores. Campaigns using epistemic triggers show a strong effect on bonding compared with norms from all brands. Brand tracking norms show average growth in bonding of 2 per cent per annum. For years where brands ran campaigns using epistemic triggers, bonding increased 45 per cent.66 (Figure 10) Finally, IPA Effectiveness data shows that epistemic campaigns increased sales 12 per cent across the brands discussed in this paper.

This was not at the expense of profitability: Cadbury was able to reduce promotional reliance and increase profitability at the same time as driving sales growth of 4 per cent.67 This impact on salience, bonding, promotional reliance and sales is in line with the effects we would expect from epistemic campaigns. This range of data gives us evidence that campaigns using epistemic triggers are effective in driving a range of significant metrics.

8. IMPLICATIONS FOR PLANNING “Nobody counts the number of ads you run; they just remember the impression you make” – Bill Bernbach.68 1. Rethink the competition Start thinking about the competitive set not as other brands that sell the same things but messages

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FIGURE 11: OLD MEASURES AND NEW MEASURES Inputs

Outputs

Comprehension

Attitudes

Business

Old Measures

Share of voice

TVRs

Communications diagnostics: qualities

Consideration

Sales

New Measures

Communications awareness

Top of mind

Communications diagnostics: beliefs created

Bonding

Price, elasticity, ROMI Source: Author

around the message you’re trying to put out.

Look at the context of the environment the communication is going to be put out in – whether it’s a supermarket shelf, a pre-roll in a busy environment or someone watching a TV ad with their laptop. What are people doing when our communications are going to be played out in front of them?

That demands good media understanding up front. For advertisers, that demands earlier dialogue between creative and media planning. Media context means more than “they listen to the radio in the morning and they watch TV at night”. Advertising that works within its context needs richer understanding of that context, and that level of understanding comes not just from tools but ethnography and experiencing the attention environment. Media planners should be proactive about providing that information and painting a picture of what the competitive attention set is.

2. test in attention-competitive environments That same attention-competitive environment needs to be reflected when we test communications.

Rather than sitting around a table and devotedly looking at the only attention source, epistemic triggers need to be tested for their ability to capture attention when there are other options and distractions available. Copy needs to be shown among other copy, products among other products, to see if they land in their native environment.

3. Check the three-step dance is happening Does the communication challenge beliefs? Does it create questions in the recipient? Are the answers creating branded beliefs?

There are four ways brands can

test epistemic triggers in order of difficulty and expense: l The acid test: asking ourselves what the question created in the first five seconds is. Do we feel compelled to stay with the communication? If I could skip my own advert, would I? l Creative pre-testing: showing people the first five seconds and asking them what the question is.

Showing them the remainder and asking them what the answer is.

Getting clarity on whether we are creating clarity in people’s heads. l Using digital pre-rolls to test whether it’s a skippable ad by seeing if people skip it. Launching in digital gives us a real-world test of whether the ad is ignorable. l Using neuroscience to measure read/write performance.

Neuroscience lets us know objectively if we are creating epistemic triggers or not.

4. Measure effects, not intentions Communication sent no longer equals communication received.

Measurement needs to reflect this. Measurement needs to stop looking at what has been spent and said and start looking at the effect it has on consumers.

Share of voice does not necessarily mean the ad has been received.An attention deficit means moving from measuring SOV to share of attention – are people aware of the communication? If we spent, was it remembered?

Are we top of people’s minds? Of course we told them about our qualities but what do they believe about us? We are on the consideration list but have those beliefs bonded people to us?

Finally, epistemic triggers reduce reliance on promotions: business measures should focus on return on marketing investment (ROMI), not just raw sales.

Great communications take responsibility for the effect they have on people, not just what they say and how loud. (Figure 11)

Outcomes are what matter to businesses.69 Creating harder metrics around the effect we have on consumers can only strengthen epistemic communication’s role in business success. Showing that brand communications are thinking their way around the attention drought rather than spending around it can only develop a stronger case for investment.

The four epistemic triggers give brands a broad range of techniques for earning attention that still allow room for the kind of creativity that is so imperative to effective work.70 With the right measures in place, epistemic advertising is primed to bridge the gap between delivering the creativity we need to drive consumer behaviour and the hard-as-nails metrics marketing departments need to take the business with them.71

CONCLUSION “A person with experience is never at the mercy of a person with a theory” – Anon.

This is a paper about the communications we make and what makes them interesting to people.

It’s exciting when communications put an irresistible question in your head. The communications we make should put an irresistible question in people’s heads too. The blind man’s sign tells us something important about communications: challenging people’s beliefs can make believers out of passers-by. Our communications are a lot like that blind man’s sign: many passers-by but few takers.

It’s not enough to rely on promotional spend to buy attention any more. There is no corner of brand communications left where attention isn’t heavily competed for. Brands will have to earn people’s attention by creating compelling communications, or risk not communicating at all.

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dIstInctIon mattHeW PHIlIP Brand communications is seen as a cost rather than an investment, partly due to our industry’s focus on short-term sales and revenue targets. Matthew Philip proposes Brand Value Analysis, an approach that aims for long-term effectiveness

I belIeve In movIng fr

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5 September 2014

campaign 57

COLIN STOUT

om vanIty to value I

believe that brand communications agencies are out of touch with the ideas that underpin modern businesses, leading brand communications to be treated as an accounting cost rather than an investment. Therefore, if we stop thinking about how we can strip out spend and start thinking about where brand communications can create a real difference to business by embracing Brand Value Analysis, we can uncover new opportunities for planners, agencies and marketing, and safeguard a bright future for brands.

IntroductIon The markeTing millsTone “I’d rather take my money and set fire to it” – James Watt, co-founder, BrewDog1.

We should be enjoying a golden age of marketing and branding.

Today’s companies are more consumer-centric than they have ever been2. Revolutions in data, production and supply mean that we can understand and fulfil customer needs like never before.

But, if anything, the influence of marketers and branding is waning. Only 17 per cent of FTSE 100 chief executives have marketing experience and just 14 per cent of companies have marketers represented at board level3. Put simply, it’s because the marketing and branding community has a massive lack of credibility when it comes to business; marketing departments are routinely seen as “unaccountable, expensive and slippery”, with poor commercial and financial understanding4.

Marketing assets are seldom – if ever – recorded on the balance sheet5 and thus brand-building expenditure is seen by many companies as a cost rather than an investment. The industry has tried to counter this by showing how communications can increase a company’s earnings based on ratios such as return on investment,

Mentor’s coMMent

“Matt’s essay is a well-argued call to focus on how brands work and the long-term contribution they make to our clients’ businesses.

It’s a compelling argument for a new way of thinking about how we position brand communications.”

Paddy adams but the logic of “return” makes this approach invariably unproductive, as cutting – rather than increasing – communications spend will almost always boost short-term profits6. This might explain the increasing importance of procurement departments as clients ask how they can strip out uneconomical costs from the bottom line.

But I believe brand communication is an essential – and even underused – investment for a company. And because it’s commonly treated as an accounting cost rather than an investment, we could be spending too little on brand communications. If we stop thinking about how we can strip spend and start thinking about where brand communications can create real value, I believe we can uncover new opportunities for planners, agencies and marketing. Specifically, I believe greater understanding of brand communications will help us: l Understand and exploit the greater value that brands can create for companies. l Recognise the importance of brand-building as an investment and convince chief executives of the effect it can have on other elements of a company. l Safeguard – and even increase – communications investment. l Make brand planning a more professional, accountable and valuable discipline.

l Build and maintain profitable long-term client relationships.

This essay examines this problem in three chapters: l Part I looks at where we should be aiming to create value in the modern business world and how brands can make a contribution. l Part II analyses where we have lost our way and the bad habits we need to break. l Part III introduces Brand Value Analysis, a new way of thinking about brand communications to get us back on track.

Part I Where We should be aiming “Revenue is vanity, profit is sanity, cash is reality” – Hilary Devey, Dragons’ Den7.

Company managers are putting less importance on absolute revenue as a measure of success.There has been a shift in focus from quantity to quality: where new revenue is coming from, if it is sustainable and whether it affects margins8. If it is not sustainable, then revenue is simply an attractive number with no bearing on business performance.

Understandably, a greater focus is being put on profitability.

Good, solid and sustainable profits give access to the capital required to grow and sustain businesses9. But profit is susceptible to short-term distortion and is most easily increased by manipu-

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lating costs. Aggressively upselling existing customers, reducing product quality or even reducing product size can all increase profit10. So it’s no surprise the easiest way to make marketing appear more profitable is by slashing communications budgets.

A focus on profitability leads us to worry about more marginal, tactical issues in brand communications – such as shifting campaign timings to periods where media is slightly cheaper (suggested by Dyson as one of the greatest drivers of campaign profitability11!) – instead of the bigger questions of how brands drive business success.

Free cash flow – the cash generated after a company has paid for operations and growth – is a better focus to gauge business performance as it’s more difficult to manipulate for accounting purposes12. Cash is the lifeblood of any organisation: decent cash reserves or access to cheaper credit and equity are essential to growth and provides a competitive advantage against the sector13.

The central task of those running a company, then, is to drive sustainable profit growth14. This is best done by increasing the discounted value of its future free cash flows – a concept known as Net Present Value, which is calculated by taking the stream of expected cash flows and estimating their current value by applying a discount factor. Because we’re looking at cash flows realised over an extended period (often ten or more years), the discount factor is vital to account for: l The time-value of money, as a pound received today is worth more than a pound tomorrow. l The opportunity cost of capital.

FIGUrE 1: SIMPLIFIED FOrMULa FOr NPV OF a cOMPaNy Or aN INVEStMENt Net present value

Year one

Year two

Cash flow revenue - (costs + investment)

Cash flow

Discount factor (risk, cost of capital)

Discount factor

Year three

Year n

...

...

Source: Adapted from Doyle, P (2000)

l The risk attached to the certainty of return15.

The Net Present Value of cash flows can be expressed as the formula shown in Figure 1.

What’s apparent from it is that the majority of a company’s value will come from profitable sales made in the future. From a financial point of view, even if the payback will take many years, it’s worth making an investment if it increases Net Present Value. This explains why many companies are valued at well in excess of 20 times their annual earnings16.

But in brand communications agencies, we’re a long way off reflecting this in our work. Even among the very best examples, too few show a link between communication activity and business effects; less than 5 per cent of IPA Effectiveness Awards show a validated return on investment17.

Beyond this, the overwhelming business effect claimed is based on sales or revenue. Even the most standout brand campaigns show an unhealthy focus on short-term revenue return on investment and little understanding or analysis of how communications drive cash flow. In many ways, we’re stuck in the past with our thinking and analysis – even the IPA admits that many Effec-

tiveness Award authors seem confused about the difference between revenue and profit18!

Like it or not, our continued focus on revenue means we’re a vanity industry. No wonder we have lost a degree of credibility.

If cash Is kIng, brand Is the kIngmaker “If this business were to be split up, I would take the brands… and you could have the bricks and mortar – and I would fare better than you” – John Stuart, chairman, Quaker Oats19.

Over the past four decades, the intangible assets of the world’s biggest companies have grown exponentially20. BrandFinance estimates that intangible assets make up more than 70 per cent of the value of some of the world’s biggest businesses21. This isn’t restricted to luxury or FMCG companies. Comparing BrandZ’s top global brands’ values with their market capitalisation (Figure 2) shows that brand makes up a significant amount of company worth across a whole range of categories and industries.

If we can have a business where significant value can be robustly attributed to intangible assets like these, we have to conclude that it is the brand that is responsi-

FIGUrE 2: tHE WOrLD’S MOSt VaLUaBLE BraNDS $200,000

70%

$180,000 Brand value

% of market capitalisation

60%

50%

BrandZ value, $’000

$140,000 $120,000

40%

$100,000 30%

$80,000 $60,000

20%

Brand value as % of market capitalisation

$160,000

$40,000 10% $20,000 $0

Apple

Google

IBM

CocaCola

AT&T

Micrsoft

Visa

GE

Wells Fargo

Amazon

UPS

Walmart

BMW

HSBC

0%

Source: Adapted from Millward Brown (2013) and www.google.co.uk/finance

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

ble for a vast amount of this future value. This isn’t an asset bubble that is set to burst, as John Gerzema and Ed Lebar suggest22, but a growing realisation of the power of brands to drive future cash flow. But our existing approach to brand communications massively underplays the contribution that brand-building can have in securing and growing this cash.

As we have seen, brand communication investment can increase the value of a company when it creates assets that generate future cash flows with a positive Net Present Value. Our formula gives us an expanded view of how brands can create value and shows four principal ways they can help deliver cash-flow changes for a company23: 1. Increasing the level of cash flow now – raising revenues, cutting costs or reducing investments (Figure 3).

2. Accelerating cash flows – because cash has a time value, Net Present Value is increased if cash flows can be generated sooner (Figure 4).

3. Increasing the continuing value of cash flow – increasing the level of cash flow in later periods (Figure 5).

4. Reducing risk – lowering the company’s cost of capital by reducing the risks and volatility of projected cash flows (Figure 6).

As brand communications practitioners, we put far too much focus on a narrow part of the first area: seeking to boost sales (through mass-media campaigns, direct response and promotions) and increasing value (through enhancing desirability). While only a handful of IPA Effectiveness Award entries prove a validated marketing payback, even fewer delve convincingly into these longer and broader effects.

But this myopia ignores many other areas where brand can arguably deliver greater business returns (as shown in Figure 7). In fact, there are few areas of a business where brands can’t positively boost cash flow. Surely, a valuable outlet for our selfaggrandised creativity should be spotting these opportunities?

To illustrate the opportunities we might be overlooking, I set up an experiment showing some recent communications campaigns to a group of brand planners and a group of fund managers and investors, asking how they felt the campaigns might help increase company value (Figure 8).

Perhaps we should start thinking more like investors and focus our energy around the areas

5 September 2014

where brand can deliver the biggest business results.

From this mindset, the control brand communications gives us makes it a vital tool; we can determine weight, timing, message and, increasingly, the context of reception, in addition to who and where. There are few comparable inputs into the business system a company can treble or quadruple overnight. What is clear is that few valuable effects of brand communications have directly measurable short-term outcomes, such as sales or immediate price changes – and, for the most part, this might explain our inability to further the influence of brand thinking in the boardroom.

It is the brand that drives a large proportion of valuable future cash flows, and investment in brand communications is one lever we can reliably pull. Given this, we can propose a wider definition of brand based on its contribution to business: “A brand is a set of intangible perceptions and assets designed to drive future cash flows.”

So if we are brand planners, by default we are business planners too and our central task is to maximise the Net Present Value of those future cash flows.

Part II Why We fall short “Every form of addiction is bad, no matter whether the narcotic be alcohol, morphine or idealism” – Carl Jung42.

Brands are a phenomenally powerful tool to drive long-term value for a business, but there is a lack of understanding and practical application of this in marketing and branding. For the most part, we’re stuck in an antiquated way of looking at things; Peter Doyle describes how accounting earnings (focused on the shortterm revenue or profit on the balance sheet) still form the basis for valuing intangible business strategies43. Nowhere is this more present than with marketing and advertising budgets.

Stephen King lamented this approach as accountants’ marketing44. In simple terms, it looks at brand-communications expenditure’s relationship with business success in a linear way: communications spending drives incremental sales, which drive incremental profits within a limited window (typically the immediate response after a campaign).

Unfortunately, most marketing departments and communications agencies are stuck in this

FIGUrE 3: BraNDS caN INcrEaSE tHE LEVEL OF caSH FLOW Obtaining higher prices

Customers are willing to pay a premium for strong brands. This lower price elasticity allows companies to increase margin without 24 negatively affecting sales .

Higher volume growth

The flip side of price elasticity is that a more desirable product, service or experience selling at a competitive price may increase the volume sold.

Lower costs

Strong brands can negotiate better deals with suppliers and distributors as consumer demand is likely to be greater25. In the case of FMCG companies, it may allow them to agree to fewer promotional deals with suppliers, increasing sales margin.

Higher asset utilisation

Larger brands can typically spend less per point market share to 26 maintain size . Dyson and Weaver show how strong brands in bigger markets typically see much greater return on the same communications investment27.

Source: Author

FIGUrE 4: BraNDS caN accELEratE caSH FLOWS Generating cash flows sooner than otherwise

Speed of cash flow can be the difference between a profitable investment and a potential loss.

Understanding and aligning with the wider business context can create powerful new roles for communication.

Faster access to distribution channels

Stronger brands enable swifter increases in physical 28 distribution – a big driver of market penetration .

Source: Author

manner of thinking. And I would argue that it is getting worse, leaving us more out of touch with the business reality, causing us to commit five cardinal sins.

1. brand communications should drive immediate sales Our industry has an overriding interest in tweaking communications’ ability to create short-term interest. It explains our reliance on pretesting. While pretested campaigns tend to perform better in the short term (less than six months), they lose out over nonpretested campaigns over time45 – this may be a clear indication that focusing on communications that is meant to elicit a sales reaction destroys value.

This illusion of accountability also comes at odds with what we know about purchasing behaviours. Most incremental sales in the wake of last night’s ad did not come from the people who saw the ad46 – and even if they did, it’s a virtually impossible job to unpick the effect of one piece of brand communication from the mishmash of other effects.

Ignoring this truth can quickly destroy value. Byron Sharp quantitatively shows how promotions and loyalty schemes effectively destroy value by primarily selling – and giving a healthy discount – to those who would buy your product anyway47.

But all brand campaigns have short- and long-term effects,

right? Shouldn’t we just multiply the short-term effects by four (or even more, as some suggest48)?

Clearly not; this approach would be as likely to destroy value as create it because, according to value analysis, we’re aiming to maximise the wrong thing.As Les Binet and Peter Field find, shortand long-term growth are different; while long-term success may include short-term growth, it’s not simply a cumulative series of these accomplishments49.

The fundamental job of brand communication is to create value, and simply increasing sales in a short-term window appears to be a very ineffective way of doing this. Shifting our thinking to embrace the numerous ways of increasing cash flow is essential.

2. the brand exists as a series of dials “Management,” Paul Feldwick writes, “demands measurement.”50 But too often we measure the wrong things. While traditional models such as AIDA have been widely discredited51, we are still guilty of treating the customer relationship with brands as a series of dials to turn up – a kind of graphic equaliser marketing. At a fundamental level, this may be a pure articulation of the importance of understanding the reservoir of brand equity that is being built up; but, in practice, we either look at the wrong measure or mix up cause and effect.

campaign 59

Most of our measures of brand strength might actually be tautologies for brand size. Just as Andrew Ehrenberg described the “double jeopardy” effect of greater penetration boosting loyalty52, there might be a triple jeopardy effect where usage also drives positive attitudes: Sharp and Jenni Romaniuk show that brands with more users tend to show more – and superior – brand attributes than smaller competitors53. Therefore bigger brands will appear better in the eyes of the public. Even when looking at non-customers’ perceptions, the law of buyer moderation means they may well have been a customer in previous periods54.

This might go so far as to explain the placebo effect of brands55. It’s true that more people prefer cola branded as Coke, but it may be because that is what they typically drink most often. This isn’t to underplay the effect of brand and preference on purchase, but it may suggest that explicitly measuring brand perceptions might tell us more about the size of our brand than the efficacy of our communications strategy. Therefore, simply focusing on improving brand perception might not be the best objective.

But, instead of dispensing with these dials and returning to vital business measures, the recent data and communications revolutions have given us a host of new intermediate metrics to explain the success of communications and obsess over, from clickthrough rates to Facebook“likes”.

3. brand communications should solve a problem Most planning processes hinge on a problem to be solved56. This is usually a business problem (such as dropping sales) or a customer barrier to overcome. It is not limited to short-term campaigns either – a quarter of IPA Effectiveness Award winners tell a turnaround story57. While it helps us tell a good tale (something we love as an industry58), it focuses our attention, resources and understanding of communication around short-term issues and sources of value, not the longterm gains that could be made.We should set up our thinking to spot these opportunities instead.

Is it any wonder that clients take this view into the pitch process?

When there is a sales issue, the knee-jerk reaction is to put the account up for pitch, creating further disruption to the brand.

Refocusing our approach on the advantages and opportunities

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campaign 5 September 2014

FIgure 5: brands can Increase tHe contInuIng Value oF casH Flow The residual values of a company (the returns projected outside of the current planning period; typically five years) account for in excess of 70 per cent of a company’s total worth29. Thus the majority of brand effects may be seen well beyond our conventional planning horizons.

Brand longevity

A strong brand can dramatically extend a company’s ability to generate high levels of profit beyond conventional planning periods and increasing 30 customer loyalty .

Increase success rates of brand extensions and new product development

Existing users are more likely to purchase new versions of a product or 31 addition services .

Recommend to other potential users

Recommendation and word of mouth from your custmers can be a 32 powerful driver of new users .

Staff engagement

Brands create an image for staff as well. In the best examples, this can lead to increased job satisfaction, better service for custmers, better recruitment (potentially saving on recruitment costs, wages and volatility 33 created by staff turnover) and even a source of future ideas .

Owned platforms

Ongoing value can be created by establishing brand platforms, from frequently visited social media pages to real-world experiences such as The O2.

Habit

Brands help us shortcut decision-making processes and we’re more likely 34 to buy familiar brands as a matter of habit .

Future customers

We typically draw target audiences and measure perception from a narrow group of current buyers. The biggest opportunities, Doyle argues, come 35 from anticipating emerging market segments . Binet and Field’s findings reflect this, showing that the biggest business effects tend to come from 36 long-term prospects .

Source: Author

that brand-building can provide could help safeguard our client relationships and brands at the same time.

4. Communications work in discrete campaign periods It might be, as Tim Ambler suggests, that our annual cycle of brand communications planning is so embedded into our processes that it attracts no real critical review59. But this implies that the brand is a cyclical entity, where we build and see returns over a certain period, reinforcing the notion that brand communications should show specific short-term returns. Again, most IPA Effectiveness entries cover a single campaign, or merely a few years60. But the best brands are enduring, are built over time and, as we have shown, create business value far into the future.

As the most valuable aspects of a brand are only apparent in the long run, we should adjust our thinking to look at brand as a structural entity – with a distinct past and future – and build according to a long-term strategy.

brand valuation. Clearly, brands do have an intrinsic value but, from a planning point of view, trying to put a financial value on brands is simply a vanity project, at best a distraction and mostly unnecessary.

The best view of the value of brand is in the market’s assessment of the intangible assets of a company – reflected by the price-to-earnings ratio; investors’ perception of the ability of the company to deliver future cash flows – not in taking a snapshot of its fiscal value at a single moment in time. We should put our energies into working out how brands deliver value and what we can do to increase this – not get overly hung up on attributing a sale value to them. If we’re putting a number on something, value the strategy, not the brand.

But accountant’s marketing is

5. Putting brands on the balance sheet Back in the 80s, a similar discussion on the financial contribution of brands was being had. While this left us with a handful of useful econometric approaches, we are also left with the discipline of For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk

addictive. It provides solace to the directionless planner and appeals to our vanity. It justifies spending on communication in the short term (even if it will rarely create value). And it allows us to think we are constantly doing something, hooking us on instant gratification. But if your plans are based on any of these myths, it is likely that you are trying to maximise the wrong things and might actually be destroying value.

Much of this is driven by our desire for immediacy. Sales response. Real-time uplift in brand metrics. Instantly overcoming a barrier to purchase. A start and end point for communications. A snapshot of the value of a brand.

But this growing addiction to the here and now is the single biggest threat to the future of brand communications. Consider this fictional scenario on the future of brand planning from James Best: “2012: Google launches gplan, its online ad-planning service, automating the process and generating an infinite number of original briefs for creatives to execute through behaviour-targeted online campaigns. It’s cheap and instant. Agencies worldwide shed planners like autumn leaves.”61 But as investment continues to shift online, this dystopia might not be too far away. Online now accounts for 30 per cent of ad revenue in the UK62, with the majority going straight to optimised search advertising63. Outside search, the picture is getting more pronounced: sources suggest that, by 2017, more than 80 per cent of online display spend (including the fast-growing markets of online video and mobile) will be automatically bought and optimised to response64.

Beyond this, shifts in more traditional media channels, such as migration of print media to tablets and addressable TV advertising, will appeal to accountants’ marketing, promising to cut wastage and speak to those just in market. And it’s not just media

judge’s comment

“This riveting paper brings Peter Doyle’s thinking about value-based marketing bang up to date. Brilliant in its articulation of how to make the financial case for brand investment, it sets a radical template for a new type of planner.” janet Hull

buying; marketers are showing an increased appetite to bring a programmatic approach to everything from audience segmentation to insights and content65.

Back in the 60s and 70s, company managers were driven by a mandate of growth for growth’s sake, chasing market share through unprofitable customers and launching products that were doomed to fail66. Companies saw customer bases grow quickly, but failed to create value. We are making similar mistakes today: searching for immediate justification of our activity at the expense of the value that brands can really create. Perhaps, in our effort to be more accountable and effective, our misconceptions might actually be causing us to destroy value.

If we truly believe in the value that brand can create for a company, we should be taking the lead and championing this approach to brand communications: Brand Value Analysis. Therefore, we first need to shift our thinking from vanity to value. This means moving from: l Sales, revenue and profit payback to sources of cash flow. l Immediate accountability to long-term effectiveness. l Solving problems to spotting opportunities to increase business value. l Planning cyclical campaigns to a structural view of the brand. l Valuing brands to understanding and exploiting their power.

Part III How we can get there A shift to Brand Value Analysis has implications for the way we structure our industry, planning process and relationships. We need a roadmap for a brand communications industry that looks to build value (Figure 9).

Brand Value Analysis helps us aim in the right direction At the heart of this professional discipline will be a new charter for forward-thinking planners and brand communications agencies to sign up to in order to inspire understanding, success and progress within our discipline.

Listed in Figure 10 are the founding beliefs of Brand Value Analysis, explaining our mission and commitments.

But these beliefs are not fixed in stone – they can be revised based on observations as and when new evidence emerges.

These principles should not just be an empty promise; window-

5 September 2014

FIgure 6: brands can HelP comPanIes decrease rIsK

dressing to make us sound more professional. At the very heart of Brand Value Analysis is establishing brand planning as a professional discipline: the Chartered Brand Planner. This certification will cover the core knowledge base, essential skills and techniques needed to build valuable brands, in addition to a code of ethics and beliefs.

At the heart would be a solid grasp of the true nature of finance and growth for our clients, in addition to the key measurement techniques, econometric analysis and core craft skills gained during a comprehensive study course and assessment.

This could be split into three levels. Level one would be mandatory for new planners to give a solid grounding in the concepts and techniques of Brand Value Analysis. Level two would expand on the knowledge and tools, allowing planners to apply and develop their expertise. Level three would move into more exploratory space, with candidates undertaking academic and research-based study in order to shape the direction of their clients, agencies and the Brand Value Analysis community.

But, as professionals, learning should never be confined to a course. The purpose of Brand Value Analysis is to advance theory, learning and practice so it will be vital for chartered planners to keep on top of emerging evidence and approaches.

This isn’t a vanity qualification; there is a need to add a genuine element of trust and professional standards to a sometimes schizo-

Managing risk is as important as managing return for a business37. A Harvard Business school study found that strong brands not only generated significantly greater returns, but reduced risk by 20 per cent38.

Reduce risk

There are multiple ways brands can reduce risk, from increased loyalty to better success of extensions, or retailers being more likely to keep strong brands in stock, reducing the threat associated with 39 sudden changes in distribution .

Barrier to competitor entry

Strong brands create a distinct barrier to entry, reducing 40 vulnerability to competitive attack or copying . This reduces the volatility of cash flow and can lower the discount factor, projecting stronger returns, and reduces cost of borrowing.

Lessen effect of negative communications

British Gas found that negative PR was much less likely to have an 41 effect on consumer after a brand campaign . In a transparent world where one little horse burger can destroy untold value, effects like this could become an increasingly important area in safeguarding success.

Source: Author

FIgure 7: some oF tHe ways brands can Increase casH Flow Command higher prices Increase level of cash flow

Higher volume growth Lower costs Generate sales quicker

Accelerate cash flows

Increase continuing value of cash flow

Faster access to distribution channels

Increase customer loyalty

Boost earned media

Increased success rates of new products

Form habits

Greater recomendation

Create future customers

Better staff engagement

Build owned platforms

Lower cost of capital Reduce risk

Create barriers to entry Reduce effects of negative PR Source: Author

phrenic discipline. Jeremy Bullmore, for one, laments the distance between theory and practice in brand communications67; finally linking the two will produce untold advances.

FIgure 8: brand Planner Vs Fund manager’s VIew oF comms camPaIgns Brand planner view

Fund manager view

“Typical halo strategy – increases perception of Audi being a sporty brand against premium competitors and helps justify a hefty price premium.”

[Command price premium]

Audi R8 TV ad

“Probably setting the scene to launch a new car or two.”

[Accelerate rate of sales or new launches]

“It’s about knocking people out of their routine and persuading them to cross the street to see how much better Starbucks is than their usual coffee.”

[Increase sales]

Starbucks free latte offer

“I guess they want a short-term spike – maybe the demand will give them a better negotiating position with the supermarkets.”

[Reduce cost of extending distribution]

“Creates buzz and controversy to persuade people to tune in.”

[Increase programme viewers]

Higher asset utilisations

“It shows that they’re a champion of Channel 4 risque programming… maybe it makes ‘Bigger. Fatter. them more attractive for out-there Gypsier’ programme-makers.” outdoor ad [Increase continuing value/reduces risk]

“Typical end-of-pathway stuff – tries to get those in market to consider Dacia Duster rather than the 4x4 they’re thinking about.”

[Increase sales]

Dacia Duster press ad

“It makes them feel more legitimate, more like a reliable car marque. That will help the other models they’re launching.”

[Accelerate speed of cash flow] Source: Author

The Brand Value Analysis Planning Process For this to be successful, it is clear that we need to rework major elements of our approach to planning in line with Brand Value Analysis thinking. Figure 11 summarises some of the significant changes to current wisdom that Brand Value Analysis will necessitate.

Defining THe TAsk Principle: Brand Value Analysis looks for opportunities to maximise cash flow, not business problems to solve.

To help define the task, we create a Brand Value Hypothesis that lists where we believe brand investment can increase Net Present Value and where the greatest value can be added (Figure 12). The key to this is a subtle shift from thinking like an adman to thinking like an investor. But financial acumen is just the starting point – this technique, if anything, should allow for greater creative input, spotting new opportunities where brand communications can build value.

Once the potential sources of

campaign 61

value have been established, they can be put through the Net Present Value equation to identify their potential to create value, forecasting the potential cash flow from each area and creating a discount rate from the associated risks and cost of capital.

Existing econometric techniques could be easily adapted to help us forecast the size and duration of additional cash flow, analysing past activity for a brand.

For example, we could isolate the usage of Specsavers’ “should’ve gone to Specsavers” tagline in popular culture and its effect on driving ongoing customers, then forecast the cash flow that may come from it.

Analysis of past activity can enlighten us to likely ranges of effectiveness and thus forecast a potential risk. Beyond this, there is a wealth of literature on wider approaches to analysing risk in this area – for instance, Malcolm McDonald, in Marketing Due Diligence, lays out a comprehensive framework for assessing risk of marketing investments68.

Although we are unlikely to have concrete assumptions, at least in the short term – the mechanics of creating value are far too complex to be solved by a simple tool – this technique will give us a much greater understanding of our brands and which strategies could create the most value.

It will take time to build up learnings but, in the long run, we will be able to better estimate the wider effects of communications and understand the financial impact on other investments.

seTTing THe BuDgeT Principle: Budgets should be set according to the available opportunity, not ratios.

Brand Value Analysis puts a greater focus on budgeting Budgeting is a severely underrepresented technique in the world of communications. Robert Shaw and David Merrick find that, even in marketing theory textbooks, generally less than a page or two of text is given to discussions on budgeting69.

Where we have investigated in more detail, simple ratios tend to be given, such as the analysis pioneered by John Philip Jones70, who suggests setting budgets so that share of voice exceeds share of market by a certain amount is key for growth. But this method has several critical failings: l It assumes a market is a zerosum game – your increased share has to come from a competitor

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FiGuRE 9: BRAnD PlAnninG RooTED in FinAnCiAl unDERsTAnDinG Build confidence in the discipline of brand planning Establish a set of principles defining our beliefs Adjust our beliefs based on observation, not preserving them based on faith

Establish professional qualification: Chartered Brand Planner

Create a clear framework of how brand communications builds market-based assets that increase value Test and evaluate strategies

Align new thinking back to principles

Build an independent evidence base

losing out, while we know that the biggest gains tend to come from new market segments71. l It measures sales increases, not value increase. l It typically looks at communications performance over a oneyear period (further reinforcing the notion of communications as a cyclical phenomenon). l It assumes the market is broadly spending the right amount.

Treat acquisition budgets as separate As we can link short-term gains to extra spend more closely, it may be that “acquisition” budgets are at a broadly optimal level, but we shouldn’t treat brand-building and acquisition as a ratio to balance72. Instead, brand investment should be budgeted separately according to the opportunity.

Shift to a long-term, task-based investment If we treat brand communications as an investment, it means expenditure on developing brand assets makes sense if the sum of the discounted cash flows they generate is positive. Valuing the aspects of the Brand Value Hypothesis allows us to do this and compare potential return to other investments, as well as analysing the effect brand-building can have on other capital projects.

The chartered brand planner’s skillset will also allow us to combine all of this to create a viable board-level proposal. If we understand the value of brand communications as an investment, it may tell us that greater value can be created by spending more.

SeTTing objecTiveS Principle: The Brand Value Hypothesis should lead directly to clear, value-based objectives.

Effective Brand Value Hypotheses should be translated into clear objectives. For example,

communicaTionS model Principle: Brand communications is a comparatively weak but pervasive force.

Martin Weigel equates it to gravity73 – gently pushing us towards an increased likelihood of purchase through building and refreshing appropriate memory structures, creating what Sharp terms “distinctive market-based assets”74. It is the quantity and quality of these assets in people’s minds that allow increased, faster and continual cash flows, in addition to creating a substantial barrier that reduces risk.

Source: Author

audience Principle: Target everyone in a category – potentially even future customers – rather than those currently “in market”.

Binet and Field’s findings support this, showing that a broad approach to targeting generates greater efficiency and effectiveness75. This insight could liberate us from a myopic focus on overdefined target audiences and allow us more resource to focus on the best long-term direction to create value.

It also has a distinct impact on the way we plan media. While individual and in-market targeting may be in vogue, Brand Value Analysis would suggest that the volume of impacts created by broad, traditional channels are key to successful communications, and our biggest area for concern is how we continue to use

Specsavers may bet that growth of their hearing centres might be a significant business opportunity.

The Brand Value Hypothesis might suggest that the best way to increase the Net Present Value of the investment is to increase the speed of distribution by getting more partners to sign up to offer hearing services. The most valuable objective for communications in this case could be to demonstrate to potential partners that Specsavers will dominate the hearing-aid landscape as they have done in the opticians market by significantly over-investing – a hypothesis that could be supported by econometric modelling from the growth of their opticians. While they may not see a profitable return for many years, Brand Value Analysis might show it to be an effective strategy.

FiGuRE 10: BRAnD vAluE AnAlysis PRinCiPlEs We believe your brand is an investment We believe that brands create future sources of value

We believe that brands are unique, evolving structures with a past, present and future

We believe that brands are assets built within people’s minds

We believe that brand communications should be a professional discipline

We believe in the contribution our advice can make to long-term business value

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By investing, we are growing your future sources of cash flow.

Therefore we are committed to looking to exploit opportunities, not simply solve problems – ensuring our strategies and plans are organised around avtivities that create long-term value.

Therefore we plan on an iterative, ongoing basis, not in neat planning windows.

We are committed to using communications to create and refresh these memory structures in a sustainable way to everyone in the market.

Therefore we are committed to understanding the true power of brands to business success and passing this learning through our industry accordingly, setting high standards and upholding them.

Therefore we commit to being remunerated based on long-term gains, not short-term performance.

Source: Author

these channels to successfully build and refresh our marketbased assets.

meaSuremenT Principle: Test hypotheses and learn about strategy.

Different tasks and objectives will require different approaches to measurement. However, I would suggest measurement frameworks take a hierarchical approach, linking changes in mental structures through to individual behavioural shifts to increased business value: Brand measurement should focus on measuring a brand’s market-based assets – not simply reaction to communications.

While we need to keep it from becoming overly complicated, it may need to be different for varying brands. Emerging implicit tools may give us a better understanding than explicit research methods and allow us to answer questions such as:“What does the map of people’s existing mental associations around the brand look like?” and “What has communications done specifically to build, develop and refresh these?” The quantity and quality of these relevant brand-based memories should be linked through to behavioural measures.

We should look at individuals’ buying behaviour via singlesource data – tracking the gentle shifts in individuals’ purchasing behaviour over time, allowing us to more clearly understand the effect of brand communications on future purchasing habits. If big data can aid us most in brand communications, it is in understanding the behaviour of individuals, not targeting sure-fire buyers via automatic bidding.

The ultimate metric for success should be increased cash flow.

Developing econometrics (still a “minority sport” among even leading-edge brands76) to test for certain scenarios can help here.

For instance, we may have a Brand Value Hypothesis that suggests years of consistent brand communications helps new Specsavers stores acquire customers quicker after opening, therefore increasing Net Present Value by accelerating cash flow. By looking at the average growth rates for new stores while accounting for other factors, we might be able to isolate the effect of increased brand salience on the speed of customer acquisition.

The underlying point of measurement is not necessarily to prove that a particular strategy was successful but to build learn-

5 September 2014

ings that can allow us to understand the value that may be created by alternative strategies in the future and identify new areas where we believe that brand communication investment can create value.

Brand Value Analysis takes these learnings to build up an evidence bank by feeding it back into the chartered brand planner community, allowing us to continually shape our beliefs and best practice for the benefit of the industry.

brand value analysis aligns all our thinking back to core ideas Beyond our internal planning process, there are certain shifts we need to make within the industry in order for this approach to gain recognition. awardS Principle: Celebrate the true value of brands, not an agency.

Too few awards celebrate the true value of brands; most are focused on a very limited period and promote the short-term value that a new agency can create. The IPA Effectiveness Awards should take the lead and establish a category immediately that seeks to recognise the value that long-term brand-building creates, focusing specifically on quantifying the longer and broader effects.

Crucially, these award entries would supplement existing longterm studies and marketing science in our evidence bank to help us understand sources of value created by brands, better forecast cash flows and adjust our approaches accordingly. remuneraTion Principle: fee structures based on long-term business contribution.

Brand Value Analysis would suggest that remuneration should be weighted towards value created over the long term. I propose that we focus on two core elements to agree compensation: 1. Cash flows relating to brand activity. The agency would take an agreed commission on cash realised from communications activity. As cash flows increase, so too would the agency’s remuneration.

2. Incremental future flows created. The agency would take a commission based on the increase in Net Present Value from communications activity, encouraging the agency to identify new areas where brand activity can build value.This may be lagged or based on performance over sev-

FiGuRE 11: CuRREnT APPRoACh vs BvP Current approach

Brand Value Planning

Business problems

Cash flow opportunities

Budget

Simple ratios

Net present value analysis

Objectives

Short-term dial-tweaking

Long-term value-based objectives

Comms Model

Rational/ persuasion

Building and refreshing memory structures

Audience

Narrow, targeted, in-market

Broad category and future customers

Immediate comms/sales response/ROI

Long-term memories, purchasing behaviour, cash flows/NPV

Task

Measurement

Source: Author

eral years to ensure a long-term view of success, much as many investors’ bonuses sensibly are.

In the first year of the contract, an agreed base fee would cover basic expenses (staffing costs, overheads etc.).As the incremental effects were being felt in year two, the base fee would drop and

the agency would take a commission based on the cash flow attributable to the communications activity. In subsequent years, the base fee would be phased out and a long-term incentive introduced based on the incremental future flows created.

The ratios should be adjusted to incentivise the agency based on the client’s long-term goals. For example, a client with strong immediate cash flows may want to put a greater emphasis on securing future sources of cash and increase the future flow bonus element. A client looking for accelerated cash flows may wish to base remuneration around validated cash.

While the total earning potential of an agency might be significantly greater, the account may only become valuable after several years’ work. This means that we would have to align our business models to the same value principles, sacrificing revenue in the short term (a symptom of our pitching culture, perhaps) but dramatically increasing our potential future earnings based on our ability to create value.

Clearly, this approach needs trusting clients in addition to a patient, focused agency. However, if followed correctly, this process could foster longer, deeper and more collaborative relationships

FiGuRE 12: sPECsAvERs BRAnD vAluE hyPoThEsis Short

Increase level of cash flow

Expected timeframe of effect

Long

Higher volume growth Remind people to have an eye test Higher assest utilisation Less spend per point of market share

Lower costs SHGTS boosts efficiency of earned media

Generate sales quicker Generate sales quicker in new store openings Accelerate cash flows Faster access to distribution channels More partners signing up to Specsavers

Increased success rates of new products Growth of Specsavers Hearing Centres Increase continuing value of cash flow

Boost earned media Increase cultural relevance

Create future customers Boost saliency to those who don’t currently need glasses

Better staff engagement Improves in-store service and ability to recruit opticians

Reduce risk

Create barriers to entry Reduce risk of new competitors in the market Source: Author

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where all parties are seeking to maximise the same objectives.

new Thinking If we are going to advance thinking in the industry, we have to advance it in the right direction.

We are awash with new ideas that over-promise and under-deliver.

Brand Value Analysis gives us a framework to test hypotheses and ideas, allowing us to judge new ideas more objectively.

Where we do look beyond our industry to fresh new ideas to build mental structures (as we should) – such as Henry Jenkins’ thoughts on convergence77, or Jane McGonigal’s ideas on gaming78 – our challenge is to draw them back to a value hypothesis before embracing them as a tool to create sustainable growth. This approach will allow us to objectively weigh up the value of a new idea before embracing it, and escape the curse of metaphor that plagues so many new approaches.

But stemming these grand brand pronouncements is not a barrier to creativity. Creativity remains enormously, overwhelmingly important in the creation and curation of brands. What Brand Value Analysis can do is help aim it in a better direction so we can create a genuine difference to our clients’ businesses.

ConClusion As brand planners, our focus is too often in the wrong place. Pandering to the accountant’s view of marketing leads us to position brand communications as a cost to be minimised rather than an investment to be maximised.

Therefore, if we shift our focus to understanding – and exploiting – the longer and broader contribution that brands make to a business by embracing Brand Value Analysis, teaching our industry to be fully fluent in the language and concepts that drive companies forward in the modern world, we can create a revolution in the way brands are built.

This should not, however, be perceived as anything new.

Stephen King imagined his planners as “almost economists”79.

What we might be painting a picture of here is of his original grand strategist, with the financial foresight to look beyond the immediate to see the myriad potential in brands and root their thinking in the value that can be created. But, to paraphrase the great man: perhaps brand planning hasn’t failed, we just haven’t really tried it yet…

For further information on the IPA Excellence Diploma, please contact erika@ipa.co.uk