Marketing News: January 2017

American Marketing Association

ama.org

january 2017

The s t o b Ro are

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table of contents AMERICAN MARKETING ASSOCIATION

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anSwerS in aCtion • Snapshot • Core Concepts • Seven Sages

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aMa intelliGenCe • The Middle Market • Scholarly Insights • MBa Perspectives

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eXeCutive inSiGhtS • Rice University’s Vikas Mittal • Prophet’s David aaker

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Career advanCeMent • On the Record • Personal Branding

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#offiCeGoalS

“If a machine can think, it might think more intelligently than we do.”

The Past, Present and Future of aI in Marketing Artificial intelligence has dominated popular culture for years. It may soon dominate marketing.

Marketing’s Mind Readers researchers are using neuroscience to find the predictive holy grail.

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44 See Me, Feel Me, Watch Me

consumers are finding a deeper connection with brands through video content—and technology allows them to grow ever closer.

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aMa .org

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Cover: Photograper: Lisa Predko (lisapredko.com). Model: John o’brien.

Stylist: Sasha Hodges. Assistants: Jacqueline Ayala, tom Michas. retoucher: tom Michas. catering: Andrea Donadio.

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January 2017

Vol. 51 | No. 1

Letter from the Editor

American Marketing Association

The Future is Here

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e’ve all been waiting for it—the moment when the robots will descend upon our daily lives and perform all of the duties we don’t want to do. In the business world, we’ve seen that moment creep closer and closer, as computers mine and analyze data, act as cashiers and communicate with our customers. In this issue of Marketing News, we look into the future of marketing through the lens of science and technology.

Hal Conick begins his exploration of how artificial intelligence is shaping marketing with a thought posed by Alan Turing, the father of modern computing, in a 1951 talk on BBC Radio. “If a machine can think, it might think more intelligently than we do, and then where should we be?” This fear of human intelligence being overtaken by “technology with a soul” is nothing new, but Conick finds that there is still a shred of humanity that machines can’t mimic.

Valarie Zeithaml Chairperson of the AMA Board 2016-2017 Russ Klein, AMA Chief Executive Officer rklein@ama.org Andy Friedman, AMA Chief Content Officer afriedman@ama.org Editorial Staff

Most marketers wish they could read consumers’ minds. Once an impossibility, now researchers at Nielsen are getting pretty damn close. The company’s chief neuroscientist sat down with Zach Brooke to discuss how, through a combination of EEGs and facial tracking tools, he’s peering into consumers’ subconscious to predict what they like, and why.

Sarah Steimer looks at how marketers are using video to speak to consumers at a personal level—a level that’s “accessible—and maybe even familiar,” she says. And just as marketers are becoming comfortable with video, virtual reality is gaining speed. “Live video and virtual reality may be the apex of where the audience and the brand come together,” Steimer says.

What is your company doing to embrace the future? Have your robot call my robot.

Molly Soat Editor in Chief @MollySoat

Phone (800) AMA-1150 • Fax (312) 542-9001 E-mail editor@ama.org Molly Soat, Editor in Chief msoat@ama.org Michelle Markelz, Managing Editor mmarkelz@ama.org Zach Brooke, Staff Writer zbrooke@ama.org Hal Conick, Staff Writer hconick@ama.org Sarah Steimer, Staff Writer ssteimer@ama.org Vince Cerasani, Associate Art Director vcerasani@ama.org Advertising Staff

Fax (312) 922-3763 • E-mail ads@ama.org Sally Schmitz, Production Manager sschmitz@ama.org (312) 542-9038 Michael Gay, Account Executive mgay@yourmembership.com (727) 329-4421 Nicola Tate, Account Executive ntate@yourmembership.com (727) 329-4437 Jordan Berthiaume, Media Sales Representative jberthiaume@YourMembership.com (727) 497-6565 x3409 Marketing News (ISSN 0025-3790) is published monthly except July/August and November/December by the American Marketing Association, 130 E. Randolph St., 22nd Floor, Chicago, IL 60601.

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Marketing News welcomes expressions of all professional viewpoints on marketing and its related areas. These may be as letters to the editor, columns or articles. Letters should be brief and may be condensed by the editors. Please request a copy of the “Writers’ Guidelines” before submitting an article. Upon submission to the AMA, photographs and manuscripts will not be returned unless accompanied by a self-addressed, adequately stamped envelope.

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Brian David Johnson

Lisa Predko

Johnson is the Futurist in Residence at Arizona State University’s Center for Science and the Imagination, and a Fellow at growth consulting firm Frost and Sullivan.

Lisa Predko is a Chicago based commercial and editorial photographer who specializes in conceptual and narrative work. Shooting characters and creating her own vibrant world, Lisa loves using light and color to evoke emotion and hero her subjects.

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Pinterest is Shoppers' Social Media Platform of Choice

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hen it comes to shopping via social media, which platforms do U.S. users most depend on? According to a report from KPCB, Pinterest is shoppers' social media platform of choice with 55% of its users finding/shopping for products on it in 2016. For Facebook and Instagram, that figure is just 12%.

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How to Post on Social Media Without Getting Sued Legal counsel from BuzzFeed, Twitter and Wells Fargo give some dos and don’ts for branded and copyrighted images on social media

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f a company is looking to join big conversations on social media, such as the Emmys, the Super Bowl or the Olympics, it’s a good idea to check in with a legal team first.

At the 2016 ANA/BAA Marketing Law Conference in Chicago, legal counsel from some of the biggest names in social media discussed whether they’d allow their teams to join discussions, post pictures or use hashtags from other companies or events.

Here are five tips for navigating the waters of branding, copyright and trademark clearance on social media from prominent attorneys from Wells Fargo, BuzzFeed and Twitter.

1. Copyright clearance doesn’t change on social platforms.

Looking to include a picture of a Grammy, Emmy or Oscar statue to make your social media feed more relatable? Think twice, says Craig Moore, general counsel at Wells Fargo. The law remains the same, whether a company is using copyrighted material in a Super Bowl commercial or a tweet, even if there is a lower level of risk on social media.

Greg Brehm, assistant general counsel at BuzzFeed, agrees with the heart of the point but disagrees slightly: brands may have a more difficult time on the internet because of the long tail of the post, he says.

Images and posts get archived and have a longer life than they might while being played during a commercial.

“You may have the correct license today,” Moore says, “but three years down the line, that Facebook post or that tweet is still on your account, and you could run into licensing problems at that time.”

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2. Riff with care.

Eric Fleisig-Greene, associate director of legal at Twitter, says that companies and brands often feel strongly about their assets.

Businesses that use images from other companies must take care to not make an undesirable association.

Robert Newman, partner at Winston and Strawn LLP, gave the example of a Honda Odyssey commercial that featured a firebreathing dragon. This image, he says, upset those who own the copyright for Godzilla and led to a lawsuit.

Moore says companies cannot stop other organizations from suing them, so worrying too heavily about something benign may be a waste of energy.

3. Know who you’re taking from.

The Beastie Boys’ song “Girls” was used by Goldie Blox in a commercial

that changed the lyrics from sexist to empowering. This move is one that would have been in line with the evolution of The Beastie Boys’ lyrical content over their career, but Brehm says this is a great example of a company needing to know who they are taking from.

“I don’t think it would have taken a lot of research to know The Beastie Boys don’t do creative licensing,” he says.

Artists put up a fight when it comes to using their material online, Brehm says—much more of a fight than a random person on Twitter or Facebook would. The latter may be honored to have their art used in an ad campaign or social media post, whereas artists tend to be very protective of their material.

A different side of this is using a copyrighted image that a brand won’t mind seeing spread around.

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Moore uses the example of Chicago businesses using The Chicago Cubs “W” flag in advertising and in storefront windows to congratulate the team on its World Series victory.

In this situation, the Cubs won’t likely sue a company that uses their imagery in a convivial way.

4. Don’t use memes for branding.

Organizations may be excited to post memes, a jokey image, video or piece of text that goes viral.

BuzzFeed’s Brehm knows the feeling: “My company would not exist without memes.”

However, Brehm says BuzzFeed would never use memes as branded content. For example, the star of the Grumpy Cat memes is a real cat named Tardar Sauce. The cat’s owner makes money from Tardar Sauce’s

image, so it would not be a good idea to use this particular meme for branding purposes.

Outside of the legal problems memes can bring, Brehm says companies do not want to step on any toes of online communities built around memes.

“They don’t like outsiders messing with them or taking advantage of them,” he says, adding that companies don’t want to one day wake up to a list of comments chiding them for stealing. “It’s not the brand association you want.”

5. Hashtags and Dead Celebrities Using a hashtag on Twitter, Instagram or Facebook may seem like a great idea, but hashtags are now being trademarked, and many names used within hashtags are

copyrighted. For example, Brehm says the #Oscars hashtag would be a nonstarter for him.

Businesses must also be careful about using a hashtag just to hijack a conversation. Not only is this rude, but it may not be looked upon kindly by the owner of the hashtag.

Using images of dead celebrities is also an area where more eyes may be watching than one would imagine.

“Keep in mind that just because they’re dead, it isn’t over,” Newman says.

Brehm says that California has laws against using dead celebrities in ads without the estate’s permission.

If BuzzFeed can’t use an ad in California, he says this is a good indication that they shouldn’t be running that ad anywhere.

—Hal Conick

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Is Cable Media in Decline?

Whether it’s fair or not, cable companies are battling a public perception of decline and obsolescence

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icki Lins, CEO of the Cable & Telecommunications Association for Marketing (CTAM), says rumblings of the medium’s death are unfounded.

Previously a senior vice president of marketing and communications for Comcast, Lins has been around the industry long enough to recognize the rules have changed for the better. Those changes are leading to tech and service innovations that are more mindful of consumer preferences than ever before, she says. As Lins tells it, the story isn’t what happened to cable. It’s where cable is going.

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What are some lessons that you learned as a marketer that guide you as a CEO?

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In this day and age, CEOs need to be more marketing-centric than ever before with consumer choice, consumer engagement and consumer empowerment. I would say the No. 1 thing I bring as a marketer is that customer-centricity, which remains at the core of what CTAM does but is certainly applicable to businesses across the board.

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What are the common goals of CTAM, and how do you use marketing to achieve them?

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CTAM is unique as a marketing organization. Although we are an industry association, we actively market with and for our members.

We’re providing a large-scale focus to support industry-wide success. Along those lines, we positively position the collective brand, strengthen the overall pay-TV business model and market best-in-class consumer experiences. Those things are really

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no different than what I would be doing in another CMO role.

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This seems like a challenging time for cable companies. A recent report by the Convergence Consulting Group found 1.1 million Americans cut the cord in 2015. With the rise of streaming options, how can cable companies sell their value amid this disruption?

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We’re always looking for unifiers.

Our members include cable companies, broadcast and cable television networks, movie studios, agency and technology companies, so our membership is actually very diverse. Our membership is configured of companies that, years ago, might have considered each other competitors, but now consider each other colleagues, and the lines are really starting to blur.

Comcast and Time Warner—the two largest cable companies—recently

reported growth in their earnings calls.

So not only do I think that the press is largely overblown and a somewhat inaccurate reflection of the state of things today, it’s also important to remember that cable companies are broadband providers as well. So when you talk about consumers accessing and consuming content in different ways, very often they’re doing so via their subscription service.

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How are cable companies adapting?

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People would be shocked at the amount of innovation that is going on within cable companies today. There’s a lot of history and baggage there, so reputationwise that segment of the industry continues to be challenged, and in many cases unfairly so. The press likes to write about cord-cutting; they don’t necessarily like to write about the new interface that is curating an improved viewer experience.

Or the portal that allows cable

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subscribers to access all of their programs on-demand across multiple screens. Or the industry initiative around TV everywhere, which happens to be a CTAM-led initiative, where we’re driving an improved customer experience by ensuring that consumers can tap into the many options available for controlling their many viewing opportunities anytime, anywhere across multiple screens.

Those types of experiences are becoming ubiquitous today.

I think the industry reputation that surrounds cable is grounded in history and the old realities of a business that was trying to catch up. It’s not reflective of the state of the industry today that has become very customer-centric, very innovation-driven, and is, in many cases, leading—not playing catch-up

or keeping pace with—the state of change in the paid-TV business model and content universe.

At the center of all of that are the consumers, and they’re in control.

They’re going to configure their content consumption the way that works for them, whether it be on different screens or through different providers, or whether it be a streaming solution or a paid-TV solution, and in many cases both.

Keeping our eye on consumers and building incremental value for consumers is absolutely due north for us.

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Do you think there will ever come a time when channels will be offered à la carte? Is that good from a marketing perspective?

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It’s so much more of a policy hot potato than a marketing question. The economics of that are challenging, and I think that it sounds really good because we all want to put consumers in control, but the reality is that it would impact the diversity, quality and quantity of content and so we have to be careful. We’re clearly headed in a direction of consumer choice and consumer control. I think we will be reactive and responsive as an industry to that consumer input and direction. But I don’t know enough at this point, nor does anyone, to know whether or not we’ll go to the extreme, and whether or not that would be economically feasible, even if consumers want it.

—Zach Brooke

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The Secret to Loyal Customers Brands must manage expectations and experiences to earn customer loyalty

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ames Kane author of The Loyalty Switch and an expert on customer loyalty, contends that there are four types of relationships that brands have with consumers: 1. A small portion of your relationships are hostile. They are dissatisfied and will tell everyone.

2. Most of your relationships are transactional. With every promise you make, all you’re doing is setting up an exchange.

3. Your best relationships are predisposed. Your customers have no complaints, but when something better comes along—and it will— they’ll leave you in a second.

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4. The only safe relationships are loyal. They have formed a nearly unbreakable, emotional bond with you.

Speaking at the AMA’s 2016 Symposium for the Marketing of Higher Education, Kane addressed how and why humans develop relationships and what that means for marketers attempting to accumulate as many loyal customers as possible.

The difference between loyal and satisfied customers, Kane says, is the difference between cats and dogs. While a dog anxiously awaits your return, a cat is only bothered by you because it knows you’re the one who’s given it food. “Satisfaction

is about the past. Loyalty is about the future,” says Kane. “That doesn’t mean you don’t have to satisfy your customers. It just means that those who are satisfied aren’t loyal.”

How marketers develop loyal relationships is both simple and complex.

“It’s not about brand; you can’t be loyal to the brand. It’s not about reward programs or any version of them,” says Kane. “And it’s not about satisfaction.” Rather than the metrics that marketers traditionally measure customer satisfaction and engagement on, Kane suggests the true indicators of a loyal customer are found in the experience, not the outcome, and in those touchpoints

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millennial or Gen Z. And purpose allows both your company and your customers to strive for something bigger than themselves.

Loyalty answers three questions, according to Kane: 1. Do you make my life safer?

2. Do you make my life easier?

3. Do you make my life better?

that are important to the customer, not the marketer.

Basic analytics will suggest measuring time on page, clickthroughs and bounce rates, but which of the events in your Google Analytics report notes that you helped a customer send a last-minute anniversary bouquet? And which one sends that same customer a reminder the next

year? That’s the data, says Kane, that is gathered insightfully, and is the key to truly knowing your customer.

“Loyalty is about fostering a sense of trust, belonging, purpose,” he says.

Trust is engendered by managing expectations. Giving your customer a sense of belonging involves knowing them as more than a segment or a demographic buzzword, like

Marketers who can answer, “Yes,” to those questions have a winning combination, but Kane cautions that there isn’t only one formula that will have all your customers responding positively. The key is to understand them so well that you can manage their experience and earn their trust in a relationship with you.

—Michelle Markelz

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SNAPSHOT

AARP is Talking to Millennials? Obvi. young media buyers and marketers don’t have regular—if any—exposure to AARP, so AARP Media decided to approach them with an “epic” campaign

by Sarah SteiMer | StAff WrIter

 ssteimer@ama.org GOaL The last thing publishers want is to be out of sight and out of mind to media buyers.

Yet by its very nature, AARP was invisible to millennial media buyers. The company isn’t really relevant to people until they reach the age of 50, but AARP couldn’t wait for buyers to age before they sat up and took note.

“Millennials are such a key decisionmaker in media today and have been for

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quite a long time,” says Patricia Lippe Davis, vice president of marketing for AARP Media Sales. But some of the oldest millennials are only in their mid-30s, meaning they have another 15 years before they may ever encounter AARP in their daily lives.

AARP needed to actively seek out these buyers rather than wait for the millennials to find the organization.

The nonprofit consists of almost 38 million members, many of whom have massive buying power. AARP Media needed to communicate just how “obvi” it would be to advertise with them. aCTIOn In November of 2015, AARP Media debuted its campaign push targeting millennial media buyers and marketers, urging them to consider the AARP demographic when planning their advertising efforts. The campaign’s components were intended to reach the audience at home, on their commute and in the office.

“It was ‘go big or go home,’ ” Davis says. “It was also fourth quarter, so we really wanted to make an impact before all the holiday noise started to happen.

We had also discovered there was a tipping point that just occurred where 51% of all consumer goods are bought

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SNAPSHOT

by people who are 50-plus. It just moved from under 50% to 51%.”

As Davis describes it, the campaign started in the morning, over a breakfast read: AARP ran ads in The Wall Street Journal and The New York Times.

The audience was targeted on their commute, with AARP Media ads running via Captivate Network in elevators at ad agencies across the country. This was in addition to the ads AARP ran in trade publications and other media outlets.

“We [wanted] to be unexpected,” Davis says. “There might be an assumption that we are not as hip as we think we are, so we also broadened out into BuzzFeed because we knew it was a profound millennial media channel. It was a way to have humor in the campaign, that we weren’t taking ourselves too seriously, but also reaching people where they were in a consumer media platform as well.”

orGaniZaTion

AARP heaDQUarTers

Washington, d.C. CaMPaiGn TiMeLine

Initial push ran Nov. 16 to 23, 2015 resULTs

4.7 million impressions; 5,400 visitors to AARP.org during this period; 2,500 visitors to the online media kit; more than three times the usual sessions on Advertise.AARP.org; 643% increase in e-newsletter signups in the month of November 2015; 47.28% open rate for LinkendIn InMail

The ads were playful and simple, featuring white text on a red background.

AARP Media used millennial lingo to put its message across, with phrases such a “50+ accounts for 51% of consumer spending. OMG” and “Are AARP Media Sales the experts on the powerful 50+ audience? OBVI.” “Sometimes less is more,” Davis says.

“We wanted to show people that we had a sense of humor about ourselves, but nonetheless, we did ask a question and then answer it. Does AARP Media reach 50-plus better than anyone? For us, that’s a serious question, but by answering it with, “Duh,” … we said almost everything we wanted to say in the question and then in the answer.”

Because it is a well-known entity, AARP Media kept the information on the ads short and punchy, so a lot of explanation wasn’t necessary, Davis says. In addition to the ads, AARP Media also sent about 5,000 cookies to 50 ad agencies across the country with its message on them.

“I’m not at all surprised that they’re feeling a need to do this, because the industry tends to be extremely young in terms of those making those tactical decisions,” says Bob Porcaro, executive vice president and managing director at media planning and buying agency GRP Media. “You just don’t have any personal exposure to AARP until you’re close to 50 years old. There’s so much ‘out of sight, out of mind’ in this business. A lot of people gravitate toward things they’re more familiar with.”

Porcaro says the channels and amount of information provided was the right fit, and he argues that being very brief and unique creates a better chance of getting the audience to sit up and take notice.

“They have a better chance of breaking through and getting people to think, ‘Wow, this is really a unique way for AARP to come at me,’ ” Porcaro says.

“They took the approach of [being] really succinct with a really simple idea and seeing what it does.”

Porcaro says this younger generation of buyers and marketers may not spend as much time as previous generations with the trade publications, so communicating on platforms such as BuzzFeed in their

answers in action

language could be a win. This could come dangerously close to feeling cliché or pandering, but worst case scenario, he says, is that it just doesn’t have an impact.

“If they don’t do anything, though, they don’t exist to this group,” Porcaro says.

RESULTS The week-long campaign ended with a total of 4.7 million impressions. There were 5,400 visitors to AARP.org during this period and 2,500 visitors to Advertise.AARP.org, the AARP online media kit. During the campaign, there were more than three times the usual sessions on Advertise.AARP.org.

AARP Media also reported a 643% increase in e-newsletter signups in the month of November, compared to the prior average over five months, along with a 47.28% open rate for LinkendIn InMail.

Anecdotally, Davis says AARP Media received numerous positive notes about the campaign. For example, marketers e-mailed photos of the ads taken on their commutes and told AARP the cookies were “epic.”

“The best thing for an advertising campaign is when the people start playing your own campaign back to you,” Davis says. “That one-week campaign has kicked off the next level of our branding, and we are continuing that.”

Porcaro calls the campaign a great start, and it will likely have to be a longterm plan to catch and maintain younger media buyers’ attention. The biggest risk, he says, would have been making it a one-campaign effort, getting some buzz and then losing any momentum.

The campaign has continued since its week-long intensive effort in 2015, and AARP Media refreshed the campaign in the spring with new phrases and questions. It also added “wearable collateral,” a collection of zip-up hooded sweatshirts and t-shirts that say “yaas,” “boom” and “epic.” The campaign has continued via platforms such as Taboola, eMarketer media posts and LinkedIn InMail. Regardless of the channel, AARP Media’s message remains succinct.

“We’re explaining less because we don’t, at this point, think we have to,” Davis says.

“But we’re landing harder.” m JAnuAry 2017 | MaRkETInG nEWS

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core concepts

Turning Big Data into Big Insights Companies are expected to spend $92 billion on Big Data by 2026, but will they see ROI? If they focus on actionable insights, they can.

By Hal Conick | Staff Writer

 hconick@ama.org

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ig Data is everywhere in the world of marketing. Symposiums, staff meetings, articles and reports. It’s easier to list business functions where Big Data is not mentioned by marketers at every turn. Numbers cited in a recent blog post by Brian Hopkins, vice president and principal analyst at Forrester Research, lead one to believe that many companies’ focus on Big Data isn’t getting the desired results. Hopkins writes that while 74% of firms say they want to be “data-driven,” only 29% say they are able to connect analytics to action. Worse still, business

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satisfaction with analytics dropped 21% between 2014 and 2015.

Although companies seem unsatisfied by their Big Data capabilities, they continue to swell the budget with new tools, software and capabilities.

Worldwide revenue of the Big Data market is expected to skyrocket from $18.3 billion in 2014 to $92.2 billion by 2026, according to Wikibon.

Irfan Kamal, vice president of marketing at Aspiration, wrote a 2012 post for Harvard Business Review, titled “Metrics are Easy; Insight is Hard,” that

noted how difficult it was for companies to find insights among large swaths of data. Has anything improved in 2016?

Kamal isn’t sure many companies are making progress.

Brent Dykes, director of data strategy at Domo, writes in Forbes that actionable insights are the “missing link” between data and business value, the very link Forrester says 71% of companies are missing. This link will be important to advance use of data, as companies are likely going to want to see good ROI on that reported $92 billion Big Data bill.

Kamal says though Big Data is a huge part of how Aspiration makes decisions, finding value in that data can be time consuming. “Getting to that level is one of the most difficult parts of being a datadriven organization,” Kamal says.

Here are six tips for marketers to help their companies generate usable, databased insights.

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Determine what’s actionable.

Before hunting for insights, Kamal says marketers must have a clear idea of what is actionable in their business.

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core concepts

Companies that travel down the rabbit hole of data exploration will lose time and waste employee energy unless they can set parameters on what they want to achieve. Kamal suggests starting with the problem before searching for insights to improve productivity.

“Let’s say we’re trying to understand customers or trying to improve some aspect of our conversion funnel,” Kamal says. “We have a pretty clear idea of what we want to do. Then, we look for data that can help us achieve that.” Insights can be very interesting, he says, but to apply them, start with a solid idea of your core business problem and how you think you might be able to solve it.

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Simplify the process by focusing on decisions.

Marketers can simplify their search for actionable insights by focusing on the important decisions stakeholders or customers will make, according to Bill Schmarzo, CTO of Big Data practice at Dell EMC Global Services.

“Our focus is on the decisions, not the questions,” he says. “Questions are informative, but decisions are actionable.

Improving decision making is the best immediate-term way to monetize the organization’s data. Think about the power of improving customer acquisition decisions, such as who to target, with which messages, at what times of day, with what offers, through which channels.”

After marketers identify decisions stakeholders need to make, Schmarzo says companies must identify the metrics that might predict performance. This, he says, is the definition of data science and is critical for success. Companies must remember to focus on the word “might,” he says. There will likely be a large amount of ideas that come from these predictions; emphasizing “might” gives license to be wrong and suggest other ideas that others “might find stupid.”

“During this process, all ideas are worthy of consideration,” Schmarzo says. “Once we have brainstormed the variables and metrics that might be better predictors of performance, then the data science team will apply their techniques and algorithms to actually determine

which variables and metrics are better predictors of performance. If you don’t have enough ‘might’ moments, then you’ll never have any breakthrough moments.”

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Be mindful of stored data.

Ninety percent of data will never be used, according to a prediction from Martin Kihn, research vice president at Gartner. The peril of this over-storage is that marketers lose a level of discipline about what they should be collecting, what they shouldn’t be collecting and why.

The idea of collecting data in these data lakes is the same idea behind having a single view of the customer, or a comprehensive view of customers including their behavior and attributes.

“As with Big Data stores, trying to put everything into the customer record can create a kind of overwhelming mess,” Kihn says. “Always start with the end in mind. What do you need to know? What data do you need to answer this question?

How can you put it in an available store that is fast enough and query-able for your team? Lead with the question and not with the database.”

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Keep smart humans employed.

The age of artificial intelligence, machine learning, Big Data and automated processes are giving hope that actionable insights will automatically appear, as if by magic. However, Kamal says finding actionable insights is driven as much by smart humans as it is by actual data.

“The technology we use is fairly basic,” Kamal says. “In the end, humans end up as the most valuable cog in the wheel.”

Kamal has yet to find a magic tool that produces incredible insights, but technology can be helpful to operate in a machine world where things often don’t make sense to humans. However, automation is still riddled with errors and may end up creating more problems than it solves if there are no humans in the loop.

Technology is useful, but Kamal says there needs to be creative personnel to develop new ideas, think intelligently about who the best audience is and consider that audience’s receptiveness to new products and services. “That’s very hard to automate.

Machines tend to be great at optimization,

answers in action

but at least for now, not as good at coming up with the bigger ideas that can really move the needle in business.”

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Understand consumer and business needs.

Marketers looking for actionable insights must better understand the challenges faced by customers, Kamal says. This means speaking with those who use the product or service—otherwise known as qualitative insights—before digging for data-based insights.

“We spend a good amount of time using [and] checking accounts and investigating products. And we spend time using our own products,” Kamal says. That means signing up for accounts, looking through sites where Aspiration places ads or organic social and being immersed.

Other ways to get into the customer’s mindset include focus groups, studies and improving the product or offering.

The customers’ point of view can also be perceived by looking at the company’s ads with an unbiased eye, using the product or service and trying to figure out where problems may stem from. If the sign-up or log-in process is slow, for example, that’s likely an area where customers will have difficulty.

Organizations must also understand key business drivers inside their own walls by digging into data and business propositions. Kamal encourages understanding the key differentiators of your business as well as the key barriers preventing people from working with you.

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Find a data balance.

More data is not always better data. Kamal says companies must use high-quality data to find actionable insights. This means not getting lost in the quantitative data swamp, stepping back and doing “sanity and gut-checks” or speaking with customers for more nuanced, qualitative information.

Companies must also cut away silos that keep departmental data in feedback loops by getting different people from different disciplines involved. Solving issues as a team, instead of departmentby-department, will likely cut down on mistakes and make solving easier. m January 2017 | marketing news

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seven sages

INNOVATION

SeVen eXPertS WeIGH In on tHe AMA’S

Seven Big Problems Problem Seven: balancing Incremental and radical Innovation

diana o’brien CMO at Deloitte

Today’s marketing landscape is rapidly transforming. Change that once happened in months, years and decades now often happens in days, minutes—even seconds.

CMOs should stay ahead of marketplace trends, new technologies and evolving customer needs, but they can’t be distracted by them.

Trends come and go, but your people are what really matter. The most effective organizations view talent as a competitive differentiator.

They create the environment and experiences so their people can be their best. One of the most important investments any organization can make is in nurturing the capabilities, organizational energy and wellbeing of its people.

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lukas bower

north american CEO at etventure Inc The biggest challenge is culture. Most organizations are focused on key performance indicators involving top-line growth or bottom-line savings. Shifting the organizational culture to an innovation mindset is difficult, as the collaboration and risk-taking required can put kPIs at risk. One effective way to incorporate design principles is to create a protected space away from the core business that is unaffected by the kPIs driving business as usual.

The best approach to “failing fast” is to create minimum viable products.

MVPs are not fully featured, and may even involve human activity behind the scenes to make them work. The whole point of the MVP is to validate your idea with real customers. Once you get the MVP in front of real customers, you will quickly see if your assumptions are correct—and you can pivot if needed.

brian david Johnson

Futurist in Residence at arizona State University’s Center for Science and the Imagination; Fellow at Frost and Sullivan The future is built every day by the actions of people.

Ask yourself what kind of future you want and what you want to avoid.

Innovation is a dangerous thing. The trick to balancing two types of innovation is to create a culture that supports both. Incremental innovation is easy. do you have an organization that rewards grit and results, and that rigorously plans and holds each other accountable? do you have a culture that supports stupid and crazy ideas? The crazy ideas are only crazy until someone realizes that they are genius, then disrupts an entire industry.

Mark randall

VP of Creativity at adobe Creativity and innovation are skills that are critical to businesses today. However, the fear of failure can suppress creativity. At Adobe, we’ve eliminated that fear with kickbox, our grassroots innovation process. By investing a small amount of time and money in customer testing a large group of risky, divergent ideas, we can remove traditional obstacles and discover breakthrough opportunities that a more traditional process would have never found.

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innovation

Georges Nahon CEO at Orange Silicon Valley We use a framework for evaluating innovations that may be organic or come about via investment.

We call this framework the “3Ns�: Now, New and Next. Now is the most incremental—a more efficient way of performing an existing process or asset. New is anything more forward-looking but still tied to an existing profit and loss statement. In these two, stakeholders are easy to identify, and they are more tactical. For the next, which is radical innovation outside of business, a champion not tied to existing operations is needed, whether for organic or inorganic investments.

The next is more strategic and represents nonlinear innovation.

Cait Smith

Director of Digital Strategy at PointSource Start incorporating design principles into your organization through incremental behavioral change. Begin by encouraging employees to ask a simple question: why? The answer should help them build a problem statement, an important design tool that creates clarity of purpose. This shared view of the problem gives teams the freedom to build hypotheses on how to solve it. Encourage teams to test those ideas through small-scale experiments and then learn and adjust.

Experimentation is critical. The organization that learns the fastest also adapts and innovates the fastest. This means turning off autopilot, testing ideas and nurturing an unending appetite for learning.

Ramon Chen CMO at Reltio Our marketing, positioning, branding and content is structured in a way that aligns with target industries and use cases that are emerging in complex regulatory and competitive landscapes.

For example, we used personalized video for the first time as an innovation, and incorporated it into our foundational marketing outreach. It was tremendously successful, but we had always planned to extend that innovation to make it self-service and on demand. Now we are taking it even further with POV personalization. This would not be achievable without a reliable data foundation and platform from which innovation can springboard.

seven sages

Shifting the organizational culture to an innovation mindset is difficult, as the collaboration and risk-taking required can put KPIs at risk.

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ama intelligence

the middle market

Middle Market Companies are Going Global As a new administration prepares to enter the White House with an eye toward revising trade agreements, research shows half of all middle market firms do business abroad

By Zach Brooke | staff writer

 zbrooke@ama.org

E

xperts have said that middle market companies don’t have the same level of exposure to the global economy as the largest firms. Though that’s generally true, it doesn’t mean U.S. middle market companies operate entirely within the domestic economy.

Recent research from the National Center for the Middle Market found that roughly half of all middle market organizations have an international presence, up significantly from two years ago.

A survey of 400 C-level middle market executives found that 54% of respondents export to foreign markets while 48% import. The number of exporters is particularly notable, as it shows a 14% increase from a 2014 survey by the National Center for the Middle Market and the Brookings Institution. Of those companies that either import or export, 58% said they do both. Overall, middle market exporters derive 33% of total revenue from international sales.

“I expected the figure for middle market exporters to be smaller, perhaps 30-40%,” says Kati Suominen, founder and CEO of Nextrade Group, which helped conduct the survey. “This may mean that middle market companies have diversified their markets after the Great Recession so as to spread their exposure across more markets. It may also indicate that middle market companies are using more technologies, like e-commerce, that tend to increase the odds for a company to become an exporter.”

It’s easy to see why middle market companies are looking abroad for suppliers and markets. Businesses that import say they do so to leverage the

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buying power of the strong American dollar and to secure raw materials and product components at lower costs than are obtainable stateside. Respondents say they sell internationally to meet demand for their products and services, to gain access to more consumers and more lucrative markets and as a guard against negatively trending economic conditions in any single country.

These lines of thinking appear to be paying off. The research found that heavy international traders are generally the fastest-growing middle market companies. “Research over and again shows exporters outperform nonexporters across metrics: productivity, wages, skillintensity, etc.,” Suominen says. “Bestperforming companies self-select into exporting. These companies then grow even better by virtue of scaling and diversifying globally.”

The survey also found that not all regions of the globe are created equal with respect to middle market trade.

The top destination for middle market goods and services is Canada, with 62%

of exporters naming America’s northern neighbor as a market. Mexico was second at 39%. The main source of imports was China, with 37% of middle market importers bringing in goods from the country. Overall, the study shows the best growth opportunities are located in the Western Hemisphere, rather than in Europe or Asia.

“Many markets in the region are growing. We have free-trade agreements with many Latin American markets, and in many ways doing business for U.S. executives is easier in Latin America than it is in Asia,” Suominen says. “It is also far easier to set up elaborate supply chains within the Americas than with far-flung Asian economies. Research also tends to show companies typically internationalize by starting out in their own region, such as the NAFTA zone [for American companies] or the EU for many European companies, as they venture to learn about exporting and as a springboard to further nonregional markets. Our work corroborates that.”

Trade issues were a dominant topic of debate in the 2016 presidential election, and the incoming presidential administration has already put the nail in the coffin of one proposed agreement— the Trans Pacific Partnership—while signaling the terms of NAFTA will be under review. The end results of these strategies are impossible to predict. But the uncertainty makes analysts nervous.

Revoking trade agreements might return the global economy to the period where every nation imposed tariffs on international business and granted favored-nation status to key allies.

“Research over and again shows exporters outperform nonexporters across metrics: productivity, wages, skill-intensity, etc.

Best-performing companies self-select into exporting. These companies then grow even better by virtue of scaling and diversifying globally.”

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the middle market

“Most favored national tariffs are quite low in the region, so I imagine we can do business without [free-trade agreements] as well. However, I do not see how we would ever cancel deals like NAFTA, CAFTA or U.S.-Chile, U.S.Colombia or U.S.-Peru FTAs,” Suominen says. “Our middle market companies and their employees benefit enormously from the market access and investor protections those deals offer, as this research shows. It makes no sense for the United States to cancel these hardwon deals our companies now leverage to win new customers and streamline their operations.”

Some industries may be more susceptible to changes in global trading conditions than others. Previous research found that middle market companies are disproportionally composed of manufacturers. According to James Cassel, cofounder and chairman of investment banking firm Cassel Salpeter & Co., these companies are highly dependent on market conditions existing as a result of trade agreements now in place.

“Most of the companies that manufacture in the U.S., part of their components come from abroad. It’s rare that they would be manufacturing with 100% U.S. components. The potential of broad-based tariffs will certainly affect their ability to buy components,” Cassel says. “We are a global economy. We talk about it in an abstract sense, but it’s reality.”

Cassel is suspicious of calls to renegotiate free-trade agreements, but does concede that there are areas of the status quo that can be improved for middle market organizations involved in the global economy. But, he says, it’s the enforcement of existing agreements that needs to be revisited, not the terms.

“Most people I do business with think the U.S. does have some unfair trade agreements,” he says, “[but] I think it’s the implementation of those agreements.

China is not supposed to dump products on the U.S. (Look at the solar industry.) Or you’re supposed to have certain [market conditions] that are equal. But they subsidize. What Trump is trying to explain is that we need a level playing field.”

ama intelligence

Even if existing trade agreements are not touched, results from the National Center for the Middle Market survey show some middle market companies are leaving chips on the table. Specifically, the survey found there are several publicsector resources that are untapped by middle market businesses that would most benefit from their assistance.

The U.S. Commercial Service maintains a regional presence through Latin America to identify potential foreign customers and partners. The U.S. Export-Import Bank and Small Business Administration are available to help secure capital for export transitions. And the District Export Councils train executives about the logistics of exporting, in addition to multiple very qualified consultants and advisors, including at local and regional chambers of commerce.

“There are so many outstanding and affordable resources available,” Suominen says. “It takes CEO-level commitment to exporting and dedicated staff to identify and put all these resources to use.” m January 2017 | marketing news

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ama intelligence

scholarly insights

Why ‘Gamifying’ an Innovation Can Boost the Bottom Line New research shows consumers who can apply innovation in a playful setting are more apt to adopt it

By Lance A. Bettencourt | contributor

 lance@liftphd.com

I

f you were Ford Motor Co., would you give serious consideration to a new way of presenting information about a vehicle innovation if it could generate an additional $235 million in annual sales?

An experiment reported in the paper “Gamified Information Presentation and Consumer Adoption of Product Innovations,” to be published in the Journal of Marketing, demonstrates that this scenario is entirely plausible.

The Power of a Game The research team of Jessica MüllerStewens, Tobias Schlager, Gerald Häubl and Andreas Herrmann, all affiliated with the University of St. Gallen in Switzerland, found that presenting a new automobile innovation—“a multi-feature assistance system package that automates tasks that drivers would otherwise have to perform themselves (e.g., automatic distance regulation with the vehicle in front and automatic assistance in maintaining the lane)”—as part of a game led to 65% higher adoption of the innovation compared with those who learned about the innovation by simply reading about it.

After that, it’s some simple math.

Customers in the game condition spent, on average, 219 euros ($235) more. Ford sells about 1 million trucks each year. If the innovation being considered were introduced as an option on all new truck sales, the higher rate of spending would yield $235 million more in annual sales.

It’s worth serious consideration, right?

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There are a couple of impressive things about the study. First, the experiment was done with an actual innovation in cooperation with a large European automobile manufacturer. Second, the approach to “gamifying” the innovation information was not particularly strong. In this case, a random sample of visitors to the manufacturer’s website were asked if they’d like to play a quiz game in which they tried to correctly answer three questions in as few attempts as possible. The quiz questions were related to elements of the multifeature assist innovation.

While results may vary, the findings of this study are impressive.

Why Gamification Works The research team didn’t stop there.

In other studies, they determined that gamifying the presentation of product information led to higher adoption intent and behaviors for other product categories, such as bicycle accessories and tennis balls.

In addition, they showed that experiencing the benefits of an innovation via playing a video game led to desired adoption intent and behaviors. For example, in one experiment, participants (who were unaware that they were participating in an experiment) played a game in which they rode a bicycle at night. The goal was to ride as far as possible in a set amount of time. In the game, the innovation (a real product) made it easier for riders to detect obstacles that could lead to a wreck.

The researchers also explored why gamifying information about a new product innovation works. In a series of

studies, they found that gamification led to higher curiosity about the innovation and a stronger belief in the relative advantage of the innovation. The key driver of higher curiosity was an increased level of consumer playfulness, and the key driver of higher perceived advantage was an increased perception of information vividness.

Making Gamification Work for Your Innovation The implications of this research transcend gamification. More broadly, the researchers make it clear that any efforts to make new product information

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scholarly insights

more vivid (i.e., enabling the customer to better visualize features and benefits) or playful (i.e., making learning fun and exploratory) should have a positive impact on innovation adoption.

It goes without saying that playing a game that incorporates information about a product innovation is a great way to achieve these two objectives.

Your first inclination may be to simply list the benefits of your innovation. It’s a great innovation, after all, so that should be enough, right? No doubt a great innovation will get a certain amount of traction from such an approach. But the point of

this research is that even greater traction can be gained if marketers are willing to step outside the typical way of doing things to explore new ways of presenting information about an innovation.

It takes more mental energy and creativity to adopt this approach. And, yes, it will also take more time and money to gamify a new product innovation.

But the research makes it clear that the rewards are likely to be well worth the extra cost and effort.

Ford Motor Co. can come up with a list of reasons for not pursuing gamification.

I’m sure your company can as well. But I

ama intelligence

have 235 million reasons why Ford should pursue it. It may be less for your company, but I am confident it is still a substantial number. m Lance A. Bettencourt is a co-founder and managing partner of LIFT PhD, a service that matches corporate decision-makers with the expertise of business school professors. He is a distinguished marketing fellow at the Neeley School of Business at Texas Christian University, and author of Service Innovation: How to Go from Customer Needs to Breakthrough Services.

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ama intelligence

mba perspectives

and family about the content they’re watching. These network effects are the designs that will make Netflix a part of our daily schedules—a luxury that television used to enjoy. We have become a part of the Netflix subculture.

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Creating a need to make the right choice

With a plethora of options, Netflix marketers convinced us that it is the right choice for utilizing our time.

It’s not a random strategy to release content in one batch and promote binge watching, as opposed to the week-byweek model of television. Customer experience designers understand that because consumers are watching the shows continually, the psychological benefit of remembering the plot points helps with constant engagement.

3

Creating a need for having social experiences

The End of TV By making itself an entertainment disruptor, Netflix has expertly mixed emotional and cultural branding

By Martina Boni, Amrita Jambavalikar, Samvit Roy, Julien Naggar, Shikhar Shah

Move over television, your days are numbered. You will not survive the Judgment Day. Twenty years from now, kids will find television sets in museums and ask their parents, “This ‘idiot box,’ seriously?” Television is going to bite the dust, and all of it will be attributed to the usual suspect: the internet.

Online streaming has moved visual content from television to online platforms.

Online customer experiences are continually being designed by marketers to create the cultural and emotional bonds that ensure higher degrees of engagement and social acceptance.

Think about Netflix. Why would a consumer choose Netflix over television?

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Traditional attribute-oriented strategic marketers would say that the reasons include the absence of advertisements, easy access and mobility, pause and play features, HD quality and multiple screens.

Sure, everyone loves these features. But is that all to this story?

We, as customer experience designers, see deeper aspects of experiential marketing that shape the social elements at play here:

1

Creating a need to be accepted by your network

The non-Netflix watcher has become a social pariah. Between hours of binge watching, Netflix encourages people to share, connect and tell their friends

A shortcoming of television is the opportunity cost of missing social experiences. But customer experience designers have positioned Netflix in a way that hours of streaming content on Netflix is seen as a point of social association in networks. An example is the popular “Netflix and chill” phrase, where social experiences such as dating can be practiced while sitting in your home and watching television shows or movies on Netflix together.

These needs were always there, but Netflix has created a direct link between need and its own value proposition through a hybrid branding model of cultural and emotional branding, thereby creating the superior online customer experience.

Our recommendations to marketers for the future of successful online experiences: accept this trend and come onboard. Attributes can be imitated, but the value of the emotional connection and cultural acceptance will stay unique. Online experiences are getting more personal, and that’s something that television was inherently unable to achieve. m

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executive insights

Martech

The Downside of Marketing Dashboards Like the data they display, dashboards alone do not provide value; it’s up to marketers to distill insights

By Vikas Mittal

 vmittal@rice.edu

C

ompanies rely on dashboards to improve customer value—about 40% of the large U.S.U.K. companies report efforts to build and use a dashboard. In some ways, dashboards are an evolution from the earlier practices of using control charts, scorecards, tracking studies and metricsbased snapshots. Fueled by advances in data analytics and visualization, marketing dashboards are becoming integral components of a company’s decision support system.

There are advantages to using a dashboard: • A dashboard visually displays a consistent set of metrics that can be monitored at a given point in time (crosssectional) and over time (longitudinal).

• This enables management to communicate trends in inputs, processes and outcomes with key stakeholders.

• A dashboard may also be used for planning purposes; key metrics that are part of the dashboard can represent goals to be achieved.

• Management can develop plans around measurable goals and further use a dashboard to monitor progress.

Don’t let dashboards make decisions tactical and reactive.

Many marketing dashboards capture an increasingly smaller slice of time, space and experience. Annual tracking of

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customer satisfaction became quarterly, then weekly and has become daily, even hourly, in some firms.

This all sounds great. Presumably, armed with more information, more data, more visibility into the customer experience, marketers can make better decisions, become more strategic and provide a competitive edge. The risk is that managers who are using detailed and elaborate dashboards may make suboptimal decisions due to information overload.

More importantly, the smaller slices of information that populate dashboards can make them more susceptible to outliers. Compared to yearly data, daily data—within a single retail outlet, based on a few customers—can be quite volatile. One or two customers—ecstatic or irate—can spike the daily average for an outlet. Focusing on these spikes can make managers reactive.

To avoid the “more is better” trap, step back and carefully delineate the role a dashboard should play in marketing decisions. A useful dashboard can help set goals, monitor performance, provide implementation metrics and help to provide strategic insights. How often do you need it and at what level? Answer these questions before you decide on the frequency and granularity of data used in your dashboard.

Don’t let dashboards mask strategic trends.

Dashboards that focus only on crosssectional information can mislead. The cross-sectional information in a dial should be supplemented with long-term longitudinal trends to provide a strategic overview. Good dashboards should also display longitudinal trends relative to a control group (industry average, select competitors and aspirational firms outside your industry). From 2010 to 2013, the administration at a business school in Texas continuously showed a dashboard with increasing average salary of its MBA students as a KPI. Without a control group, no definitive conclusions could be drawn. Was the increase higher or lower than the increase experienced by other MBA programs in Texas? Was it higher or lower than the salary growth in the Texas region?

Don’t let dashboards focus on analytics at the expense of insights.

Due to their emphasis on quantifiable information, dashboards can push users to focus on analytics—trend lines, bar graphs, pie charts and dials. Is a metric increasing or decreasing, and by how much? How did an opinion or an attitude change since the last period? What percent of people engaged in a specific behavior? How does one subgroup compare to another on key survey items?

Answers to these questions may seem important but are not necessarily insightful. At worst, a focus on answering these types of questions can be utterly misleading. Recall the “dashboard mentality” exhibited by many in the media during the 2016 presidential

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Martech

election. Focused on analyzing the results of day-to-day polls, many in the media failed to gain insights. Every little change in day-to-day polls was overanalyzed. The media gurus became analysts—focused on analyzing one variable at a time: What percentage will vote for the Republican or Democrat candidate? Which issue is more important to which subgroup? Wading deep into analytics, they were unable to provide insights.

What is an insight, and from where does it originate? A practical way to answer this question is to distinguish between the what, why and how of a phenomenon. The “what” pertains to analytics, while the “why” and “how” provide insight.

What is the state of affairs? This can be answered using univariate data analysis— analyzing one variable at a time and comparing it among different subgroups: What percent of people say something?

What is the level of agreement, satisfaction or intent based on some survey or behavioral metric? Dashboards adeptly answer “what” questions by displaying dials, trend lines, bar charts and pie charts.

Why is the state of affairs occurring?

Why are the people saying something?

Why is the level of agreement, satisfaction or intent relatively low or high? To answer these questions, you have to conduct qualitative research—in-depth interviews and prolonged observations—with your customers, coupled with multivariate analysis to understand how multiple variables are related to one another. In most cases, it is a combination of multivariate analysis and in-depth qualitative research that provides the insight—answering the “why” behind the “what.”

How can the state of affairs be influenced? A clear understanding of the “why” helps influence key processes that change future outcomes. A focus on how—by design—is forward-looking and requires an attention to detail to understand the drivers of the desired outcome and an understanding of the process. Companies that can supplement their dashboard with a process to answer the “how” create an enduring and unique capability. Doing this requires employee engagement through discussion forums.

Don’t let dashboards become an end, make them a means to facilitate discussion.

Dashboards, in a rudimentary form, were introduced in the early 1950s by W. Edwards Deming, Joseph M. Juran, and Walter A. Shewhart within the context of total quality management (TQM).

TQM used complex statistical tools and experimental methods to generate data that were summarized and visually presented to front-line employees in the form of quality control charts.

The genius of the TQM approach was not in visual analytics. It centered on using visual analytics to generate insights.

TQM did that by embedding the analytics in discussion forums such as quality circles. After presenting the dashboard analytics, discussion forums encouraged employees at all levels to elaborate upon the information. The insights generated helped address decision making, enhance manufacturing processes, frame the goalsetting process and develop incentives.

Frequently, it was not the metrics, but the discussions facilitated by the metrics, that led to quality improvement suggestions by employees. Dashboard analytics are important, but insights based on a discussion of the analytics are paramount.

executive insights

Dashboards replete with numbers will not provide insights. To gain insights, embed the dashboard metrics within forums that facilitate discussions, generate ideas and motivate employees to more systematically use the “what” to move into the realm of “why,” and “how.” Do this at all levels frequently, and consider involving a core group of other stakeholders—customers, suppliers and investors—to broaden the pool of insights.

An exclusive reliance on marketing dashboards can be counterproductive for strategic thinking and decision making. To get the most out of your dashboard, use them as facilitators of discussions that yield insights. Keeping the dashboard simple, graphical and forward-looking will help the discussion. Provide a decision support system that can bridge the journey from analytics (what) to insights (why, how).

Only by making your dashboard a vital part of a broader decision support system can you extract the most value from it. m Vikas Mittal, Ph.D., is a member of the faculty at the Jones Graduate School of Business at Rice University in Houston, Texas.

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executive insights

CUSTOMER LOyALTy

The Satisfied vs.

Committed Brand Loyalist and What drives Them dependability is key to both types of customer, but to earn the committed, brands must show they are superior to others

by david aaker and andrew MarCuM

 daaker@prophet.com  amarcum@prophet.com

A

mong the major challenges marketers face in the year ahead will be creating and retaining a loyal customer group. It is a challenge because of the difficulty of brand building in an era with fastchanging media, much under audience control, and because e-commerce and digital communication make it difficult to integrate messages and deliver on-brand customer experiences.

How do you create, manage and leverage a loyal customer base in this environment? To empirically address that question we leveraged the database associated with Prophet’s Relentless Relevance 2015 study in which 400 brands from 29 categories were assessed on more than 20 measures of brand relevance. The goal was to determine what drives two loyalty levels: the satisfied and the committed.

The satisfied are those who buy regularly, often out of habit, because they are satisfied with the brand’s performance over a long time period. They perceive the brand to be familiar, dependable with consistently good experiences and easy to buy. The brand has become a comfortable habit and there is no reason to change.

For some low-involvement products, the satisfied are the core loyalty group.

The committed have a more intense, involved relationship to the brand. They

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are more likely to have an emotional attachment, to receive self-expressive benefits and to have a use experience that goes beyond merely functional benefits. They are also more likely to be brand supporters, even telling others about the brand and its use experience. For some high-involvement products, a brand should aspire to have a committed group.

How do these groups differ with respect to what drives their formation and nurtures them over time? From the Prophet study, indicators of the two loyalty types and five potential drivers of loyalty were identified. The extent to which each of these five indicators impacted (explained variation in) the two levels of loyalty were explored statistically.

The “satisfied” group was represented by the phrase, “one of my favorite brands,” which reflects satisfaction and a lack of motivation to change to

another brand. The “committed” group was represented by the phrase, “I can’t imagine living without,” which suggests there is a functional or emotional attachment that is so intense that the absence of the brand would be upsetting.

There are five variables that have been uncovered to be potential drivers of brand loyalty; several have multiple indicators that are combined. These variables are: • Dependable: described as “always deliver to expectations,” “I can depend on,” “I trust” and “consistent experiences” • Better: described as “better than others,” and “only brand that does what it does” • Social media: described as “has interesting and engaging content online” • Light emotional connection (LEC): described as “makes me happy” • Heavy emotional connection (HEC): described as “connects with me emotionally,” “makes me feel inspired” and “has a purpose I believe in” Consider the satisfied model. The “dependable” variable has more than three and a half times the explanatory impact as does the “better” variable. This confirms the hypothesis that satisfied loyalists are driven by habit, familiarity, comfort and satisfaction, and being better is not as important as delivering the brand promise. They are instead going to stick to the brand as long as it delivers. Controlling for “dependable” and “better” (perceived superiority), the “light emotional connection” variable has a meaningful role, about equal to that of the “better” variable, while the “heavy emotional connection” variable has zero impact. Finally, the “social media” variable, as expected, was not a driver, essentially zero.

The satisfied group included brands that do not engender much passion or emotional connection. Of the top 50 brands of the Relentless Relevance 2015 database, 15 were classic brand names that largely delivered functional benefits and were extremely high on the dependability measure. Leading the way

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customer loyalty

with positions in the top 25 were Betty Crocker, Band-Aid, Clorox, KitchenAid and Folgers. All were extremely high on the “dependable” and trust dimensions as well. That reinforces the hypothesis that delivering to expectations may not be glamorous, but it can drive a brand’s ability to create and keep a loyal segment, which can be the basis of a healthy longterm business. There’s also likely some emotional benefit linked to the nostalgia of growing up with these brands. They become part of the fabric of people’s lives.

Next consider the committed model. The “better” variable has a large impact, about equal to that of the “dependable” variable. The “heavy emotional connection” variable has an explanatory power equal to the “better” variable and more than twice that of the “light emotional connection” variable. Finally, the “social media” variable is now more of a player, albeit smaller than the other variables.

The committed customer group is necessary if you want to be a leader in more involving categories. This is the group that can deliver social buzz and net promoter scores. And it can defend you when you have an unfavorable

incident. But to create and nurture this group, it is clear that brands must get beyond “dependable” to “better” and get beyond happy to deliver a meaningful emotional feeling that connects and inspires. The top brands on the committed scale such as Apple, Microsoft, Netflix and Chick-fil-A, also score high on the emotional connection, inspiring and having a purpose. Apple, in fact, is in the top two on each of these dimensions. They are clearly more than functional, high-use brands that deliver satisfaction. Social media also became relevant. The committed will likely include people that are influencers on social media, and they have an impact far beyond their number.

The strength of the “dependable” dimension to explain the committed status of a brand is noteworthy. Many of the top brands on the committed scale such as Apple, Netflix and Microsoft ranked extremely high on dependability and ease of use. Amazon, added to the study in 2016, was also extremely high in the committed and dependability measures. The ability of these hightech, innovative brands to deliver an astonishing level of performance on the

executive insights

dependability dimensions is a crucial and largely unrecognized element of their brand strength. In general, they deliver on their brand promise without frustration or disappointment.

Patrick Barwise and Sean Meehan argue in their book, Simply Better, that success is determined by simply delivering basic category benefits better than others. Even for complex products or in high-tech settings, it is not just about strategy and innovation, it is about execution, consistently making customers satisfied.

Loyalty is not a simple concept; it has levels. How to develop and leverage a loyalty asset very much depends on whether you are after the satisfied or committed group or both, but in either case, the brand does need to deliver the basics. m David Aaker is vice chairman of Prophet, the author of Aaker on Branding and a member of the NYAMA Marketing Hall of Fame. Andrew Marcum , an insights and analytics engagement manager for Prophet, designed and executed the research underpinning Prophet’s Brand Relevance Index.

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Model: John O’Brien.

Stylist: Sasha Hodges.

Assistants: Jacqueline Ayala, Tom Michas.

Retoucher: Tom Michas.

Catering: Andrea Donadio.

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t n e s e r P , t s a P e h T f o e r u t u F d n a g n i t e k r a M n i AI A rt if icia l in t ellig en ce h a s d o m in a t ed p o p u la r c u lt u re f o r yea rs ; it m a y s o o n d o m in a t e m a rk et i n g.

S cien t is t s , res ea rch ers a n d m a rk et ers a re lo o kin g f or t h e n ext s t ep t o m a k e d a t a s elf- a wa re.

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a e n i h c a m can , k n i h t

“ If

do, e w n a th y l t n e g elli we t f n i i e n r e k mo e? Ev n b i h e t w t ent i v r e s it migh here should sub a n w i n s e e he n t i h f f c o a and th he m ning t a r u p s t e a e y , k b d l e d hou anc s coul t s e n i w , r , fo ents n m o i o t i m s po egic t a d.” r e t l s b t m a u ly h t C Radio a power B e B r n o g talk eel f a 1951 , n s i e , g i n omputi spec odern c m ther of a f e h t , Turning – Alan

IBM’s artificial intelligence (AI) platform, Watson, is loquacious; it can tell jokes, answer questions and write songs. Google’s AI can now read lips better than a professional and can master video games within hours. MIT’s AI can predict action on video two seconds before it begins. Tesla’s AI powers the company’s innovative self-driving car. All seem to propel us closer to Turing’s world of machines with more intelligence than humans.

If Turing’s words now ring true, should we feel humbled or anxious? For many marketers, the anxiety and existential fear has given way to hope and excitement for a new tomorrow.

“It’s exciting, isn’t it?” says Doug Dome, who has been studying data’s impact on marketing for 30 years. Dome, who works as a marketing consultant and adjunct professor at University of Chicago’s Graham School, grows excited as he talks about the possibility of AI: the time it could save marketers, how it can bring companies closer to consumers and its potential to catch customers in stride, saving effort on the business and consumer side. As an integrated marketing communications professional, his excitement about the potential of AI has given way to the belief that

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AI will completely change branding, marketing, advertising and perhaps the world.

“Just think about all the innovations, all the promise of technology,” Dome says. “Is your life now really that much more convenient? Is it easier?

I don’t know that it is. … I think in order to be able to fully benefit from a data-driven marketplace, marketers will have to take a broader perspective on problem resolution, and the tribal approaches that Pedro Domingos has articulated are the solution.”

Dome is referring to Pedro Domingos’ book, The Master Algorithm. This is the future of marketing, he believes. Dome animatedly spins his fingers around a circular chart within the book that explains the need to bring unique tribes—or philosophies—of machine learning together, each with their own algorithm.

So certain is Dome that AI is the future of marketing that he has banked his time and money on it with Core7, what he calls his “entrepreneurial sabbatical.” Core7 is, in theory, a marketing platform that applies AI to marketing ecosystems via a “master algorithm.” The algorithm would be licensed to brands and agencies, which he says would create a hyper-speed version of a fully

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integrated marketing ecosystem. However, Dome has been unable to get the company off the ground; investors have not yet been on board with the idea. It’s an ambitious goal, he admits, and when he first started pitching the idea two years ago, it was downright audacious. The Core7 team was developing the platform and algorithm and ready to go further, but thus far, Dome has been left to study AI from the outside.

Dome still believes he’s on the path to finding marketing AI’s master algorithm. “It may not be me, but it will be somebody like me that will ultimately develop an applicable master algorithm in marketing,” he says. “I’m disheartened to some degree, but at the same time I know I am on the cutting edge of where the marketing industry is headed. I know that philosophically, I’m there.”

W h at I s Mar ket i n g A I ?

For many marketers, terms like AI, machine learning and master algorithm may seem akin to a foreign language. In Domingos’ words, the “master algorithm” would work much like a key that could open every lock. A professor of computer science at University of Washington, Domingos says this is the big difference between the machine learning he writes about—which functions as the limitless key—and traditional programming. To keep the comparison consistent, new keys must be created for every lock in traditional programming; if marketers want to track a certain subsegment of customers, they must create a new algorithm for each.

“The beauty of machine learning,” Domingos says, “is you don’t have to program the computer to do any of these things. The same algorithm will learn to do all of them depending on the data you give it.”

Domingos describes AI as a subset of computer science, in which computers can undertake reasoning and common sense tasks—such as vision and knowledge—which were formerly only undertaken by humans.

Stuart Russell, professor of computer science and Smith-Zadeh professor in engineering at University of California, Berkeley, describes AI a bit differently on his website: “It’s the study of methods for making computers behave intelligently. Roughly speaking, a computer is intelligent to the extent that it does the right thing rather than the wrong thing. The right thing is whatever action is most likely to achieve

the goal, or, in more technical terms, the action that maximizes expected utility. AI includes tasks such as learning, reasoning, planning, perception, language understanding and robotics.”

Machine learning is a subset of AI that allows computers to learn the same way people do, only faster, without being explicitly programmed, Domingos says. Machines can rapidly change, grow and create when new data is inputted into the system. In theory, this means a program might be able to do years of work in the span of days or even moments. It is, Domingos says, the fulcrum of AI and what gives computers potential to learn, hold conversations, seem human and potentially create their own marketing algorithms.

“AI is the goal; AI is the planet we’re headed to,” says Domingos. “Machine learning is the rocket that’s going to get us there. And Big Data is the fuel.”

The central idea for Domingos’ “master algorithm” is to take algorithms from the five machine learning schools of thought (Bayesians, Evolutionaries, Connectionists, Symbolists and Analogizers) and meld them into one. The Core7 concept would shrink this down to an industry-specific basis, Dome says. For example, the automotive industry could have a single master algorithm, as the customer journey is essentially the same at each company.

This master algorithm would, in theory, add efficiency, increase ROI and allow brands to develop a customized relationship at the consumer level that would revolutionize branding. While Dome’s dream has yet to be fulfilled, Domingos already sees an entryway within the marketing industry. He believes that in five to 10 years, machine learning will be used beyond marketing and across entire companies.

“The first can be segmentation … but then it spreads to everything else,” he says. “When you look at companies like Amazon and Google—the most advanced in machine learning—they use machine learning in every nook and cranny of what they do.”

In fact, Amazon has become so good at machine learning that a third of its business comes from a machine learning-powered function: recommended purchases. Similarly, Domingos says approximately three-fourths of movies watched on Netflix come from the company’s recommendation system, which also runs on machine learning.

“The recommended system is very famous at Amazon, but it’s one of many,” he says, calling

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nd a g n i hap s e r y ll nd a a c t i t e a k ar am r m d e s h i t ith y w l “A I n o o d t t no n g no a n i c n i r f re a an o rede c e s w e i ho an w p t m u o b c ce, n what e i r e exp .” r s e p u m o o t r cus nd g a s l a idu v i d n i as this “quintessential machine learning.” “They’ve become good enough at this that they’re starting to roll out what they call ‘predictive delivery,’ in which they send you stuff before you even order it. They’re so confident you want it that they just put it on the truck. I’ve asked them, ‘What happens if I get this and I don’t want it?’

They say, ‘Well, we’ll just let you have it for free.’ This is how confident they’ve become in their ability.”

While Domingos says Amazon has yet to pinpoint exact future purchases, the company is adept at stocking items on the delivery truck with the knowledge that someone will order that item within hours.

This concept could solve a real challenge marketers have: hitting the customer “in stride,” not just having them come to you, but knowing when they stop and start, where they travel and what they need. Knowing their desires, more or less, and having the ability to communicate with them via AI chatbot programs or automated messages without wasting employee time. The potential of AI allows companies to use data already at their disposal to measure in real time, learn more about the customer and anticipate what happens next.

“Today is very much a race to who can develop the master algorithm first,” Dome says.

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M a r k et i ng ’s Q u est fo r Si ng u la r i t y “ Ou r t e chn ol o gy, o u r machine s , ar e part o f o ur hu manit y. W e cr e at e d t he m t o e xt e nd ours elv es , a n d t hat is w hat is u niq u e ab o u t hu man b e i n g s . ” - R ay Kurz weil, futurist, co mputer scientist and inventor When Markus Giesler was a child, he was floored by the idea of the profoundly villainous HAL 9000, a conceptual AI from Stanley Kubrick’s “2001: A Space Odyssey.” He was so titillated by the idea that he and a friend tried to recreate a good-natured version of HAL in his own home. For weeks, Giesler would videotape his parents as they entered and exited rooms. He analyzed their language and noted their moods, realizing his AI would have to be tailored to his parents’ experiences to deliver the realism of HAL. “About a month or two later, we had finally established a constellation that worked: every time our parents entered the room they were able to have a one-minute conversation with a computer. Not really the most elaborate chat but enough to impress them— and the occasional guests,” Giesler writes on his blog.

Giesler, who is the chair of the marketing department at York University’s Schulich School of Business and director of the Big Design Lab, researches AI concepts further down the path of his childhood creation, such as smart homes and driverless cars.

However, humans were interested in AI long before his adventures with HAL, all the way back to antiquity before the Middle Ages, he says. There has always been a longing for what he calls “technology with a spirit.”

“It’s surprising to me that we’re only now beginning to see AI as a marketing construct and as something to look into from a marketing and customer experience design standpoint,” he says. “It makes sense for it to become more mainstream now when you consider the influx of AI algorithms, apps and mechanisms coming into everyday consumption, but artificial intelligence is not necessarily a new thing.”

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What has changed is the awareness of AI, particularly in marketing. This awareness seemed to begin with a bang in 2012 with the infamous story of Target accidentally figuring out a young woman was pregnant before her father did by automatically analyzing her shopping habits and sending her advertisements for baby necessities. Now, perhaps startled by the technology’s abilities, companies have convinced themselves of AI’s impact. In a June 2016 report, Weber Shandwick found that 68% of CMOs report their company is “planning for business in the AI era” with 55% of CMOs expecting AI to have a “greater impact on marketing and communications than social media ever had.” This change in awareness may go a long way toward marketing and other industries accepting AI. Giesler says a shift in the decision-making process takes as much change in humans as it does in technology.

“I am most fascinated with AI in marketing when it’s invisible,” he says. “It’s one thing to talk about AI as this [creation of] applications that totally immerse consumers into these extraordinary experiences. It’s another to see how AI has invisibly crept into some of the most taken-for-granted aspects of everyday consumption to shape who we are as individuals, who we are as families, how we think about safety, togetherness and all this. One level on which we see that is cellphones having become an extension of who we are.

“AI is dramatically reshaping and redefining not only the market and what companies can or cannot do with customer experience, but who we are as individuals and groups,” Giesler says.

W r i te r R o bots

In a towering office building off of the Chicago River sits a notable example of AI’s current and potential capabilities. Narrative Science, a natural language generator, has become well-known by marketers for its ability to produce written stories within seconds based off analytics. The company’s AI can use data from Google Analytics, for example, and write sentences like: “New users spent 16 fewer seconds on your site than returning users did last month. This could indicate that your new users didn’t find the information they needed or came to the site expecting something else.”

Katy De Leon, vice president of marketing at Narrative Science, says she couldn’t believe the company’s claim when she first read the job ad four years ago. “It just sounded incredulous to me,” she says. “I needed to talk to someone about it because I just couldn’t believe it.”

After four years of seeing AI in action, De Leon is a believer in not just Narrative Science, but in the potential for AI in marketing. AI has come at the right time with the explosion of Big Data, she says, and her company’s capabilities are especially mindboggling at first glance for those on the outside.

Narrative Science, born at Northwestern University as a collaboration between a computer science class and a journalism class, received coverage early in its existence when journalists at The New York Times and other publications were awed by a tool that could put together sentences from raw data— in this case, reports from sporting events. Now, the most lucrative customers of Narrative Science are in the government and the financial industry—think Fortune 1,000—as well as web analysts and small to medium-sized marketers.

Eyes across the industry are on the marketing tech landscape, which even De Leon admits is getting crowded and noisy. However, with increasing access to data, it’s never been more important for organizations to make sense of the noise. AI is another tool marketers can have at their disposal with potential for saving money, increasing efficiency and improving business.

“When you have 20,000 customers and you want to communicate with them as if you know them very well and … communicate something relative to them—something they care about—we can enable them to get to that level of personalization at a scale that wouldn’t be possible with people,” she says.

Wh er e i s M a r k et i ng A I G o ing ?

Marketers should expect quick changes with AI’s potential to build upon and grow itself, experts say.

Businesses and marketing departments are already vigorously moving ahead with the adoption of AI technology, according to Meabh Quoirin, co-owner and CEO of the Foresight Factory & Future Foundation. They are eager to see its promised benefits come to fruition.

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“It’s not just about automation for automation’s sake, but if we can go faster, there’s more money to be made,” she says of the average company’s mentality.

How humans view technology, especially in marketing, has progressed over the past five years, Quoirin says, and it’s likely to keep progressing at breakneck speed. There are many possibilities for AI in marketing, health, entertainment and business; the technology is just starting to bear fruit, she says.

One possibility sure to entice across industries is what Quoirin calls “beyond human” AI, which can be used to “cheat death,” as well as add human bio-enhancements, prosthetics or implants. This could work well in the medical field, of course, but she says it may also work from a customer experience perspective. Marketers could find interest in tools for performance improvements for the average person; ways to burn calories, eat well, work faster and move better, especially considering the success of gadgets such as the FitBit. “Broadly speaking, we tend to find that as soon as people are using [technology] like this in a context where it helps them get things done faster, they adjust to that convenience very quickly,” she says.

“What we see is that it is a question of ‘when’ rather than ‘if ’ with AI. But it will happen bit by bit. A lot of the things we worry about will just gently recede as we get used to being better humans.”

AI advancements may also change the concept of who we are and how marketers interact with humans and their technological extensions. Giesler says how consumers represent themselves online, how machines become an extension of who we are and whether marketers should market to these technologies once they gain a certain kind of sentience are all concepts he actively studies. “That’s wicked, right?” he says with a laugh.

Gieseler has done his own research on where humans end and where machines begin, which he says is an unbelievably fascinating and terribly scary new frontier to study. This inevitably leads to questions about how people live, how their habits are measured and how they’re watched by government-run AI technology, such as facialrecognition software—another budding AI concept. This brings to light existential fears of society becoming a bit too similar to George Orwell’s novel 1984, causing many to demur at the thought of AI’s rapid progress. Through all of

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do e w y wa e h t n e c es i a g p n s a h ech oc t t e s h d t a t in in s “A I l e , u j y l t l o a c n ng, hori i p t a e t k e r ds, ma om n s a l r a b t and , bu t y s l l r a e r d un lite e s.” w t n w e o m h of seg t e k r et r m s ma d n a ers m o t s u c these possibilities and theories, Giesler believes marketers can take center stage in redefining and renegotiating the boundaries of where the human ends and where technology begins. It’s an onerous duty filled with opportunity.

“We are the ones who best understand the human technological interfaces and how to design markets that are truly better than the sum of their parts when it comes to these redesigned interfaces,” he says.

Apple is the best example of this thus far, Giesler says. He’s assisted in Apple’s research and says Apple TV—a recent advancement that Steve Jobs called simply a “hobby”—is reshaping in-home entertainment and branding with AI concepts.

“For a long time, Apple adopted this top-box approach where you have the Apple TV box next to other cable boxes. That probably didn’t work,” Giesler says. “The difference came when Apple recognized that consumption is really more a matrix than an individual box with a person looking at a TV screen. If you want to conquer the living room, you really need to spread all through the home.”

By seeing the market as more of a matrix, he says Apple cleared the path for marketers to use interfaces that let consumers better navigate their lives. Enabled by AI, Apple and researchers made these advancements after looking through the lens of today’s technology-enabled world.

“AI leads to changes in the way we do marketing, not just in the tech space literally, but also metaphorically, in terms of how we understand brands, customers and market segments,” he says.

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WIll M a r k etIng Jo b s b e sa fe?

Upon hearing about AI’s capabilities, many will ask, “What’s the catch?” There are the existential fears expressed by Bill Gates and Elon Musk that computers could become too smart and take over the world. There are fears that AI could occupy the citizenry’s space too heavily and be seen as an invasion of privacy. Then there are palpable fears of AI taking jobs away from marketing and many other industries. After all, robots and computers don’t make a yearly salary.

According to a June 2016 report from Forrester, AI, machine learning, robots and automation will mean a net loss of 7% of U.S. jobs by 2025.

The technology will mainly eat away at office and administrative support staff. New jobs, such as content curators, data scientists and robot monitoring professionals, will be created, but the losses will be greater than the gains.

“I think there will be an impact on jobs; we call this trend de-pop in the sense that working at large is going to change,” Quoirin says. “There will be competition for jobs. Equally, the new jobs will create new demands … We do see a shift in that.”

Even with fears of job loss looming in marketing and across other industries, Domingos says humans will still be necessary due to a paucity of data scientists, or those who automate the work of computer scientists and create AI algorithms. These algorithms have potential to take jobs—a factor of 1 million, when you talk about automating the jobs of computer scientists, Domingos says—from many people, but there’s a lack of data scientist talent.

“The war for talent is really raging,” he says.

“One reason the demand has exploded and the supply changed quickly is you need people with a Ph.D.; that takes five years. ... The irony is a lot of the professors are moving to the industry level, which is good in the short term but it’s actually eating the seed corn. There are not enough people to train the students.”

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This may come as a breath of relief for marketers, but Quoirin says marketers should expect the necessity for a transition of skill set and talent management to more creative and conceptual endeavors, areas where humans thrive over machines.

“Let’s not be too vanilla on this: If we take a sector like finance or retail baking, there will be an eye on how many tellers can be replaced,” she says. “Those numbers of cost cutting will have been done already. But let’s face it, without even a hint of what’s to come in AI, those jobs were under threat.

Simple computer processing and mobile banking have already threatened those kinds of things.

Artificial intelligence is much beyond that level of cost cutting. People are mostly thinking about how they can rechannel mundane jobs.” Although Quoirin believes AI will be “unstoppable,” she says humans will still be needed to interpret AI’s signals and numbers.

AI is expected to keep growing. Neuroscientist and author Sam Harris, who presented a TED Talk on humanity’s potential to lose control of AI, said on his podcast “Waking Up” that AI’s growth will keep advancing unless something much worse happens to society first. For this reason, Quoirin believes menial jobs will eventually be replaced by the robots, which may mean an alternate solution, such as a minimum salary for all, needs to be considered.

“There is, of course, also the future where we just work less,” she says. “And we get longer weekends.

Wouldn’t that be fantastic?”

th e Way fo r Wa r D : eXC IteM ent o r fea r ? “ s Ome pe Ople WOr ry t hat art if icial int e llig e nce W ill maK e u s f e e l inf e r iOr , b u t t he n, anyb Ody in his r ig ht mind s hOu ld have an inf e r iOr it y cOmple x e ve ry t ime he lOOKs at a f lOW e r . ” – alan Kay, cOmputer scientist AI’s marketing moment may be coming soon, if it isn’t already here. Domingos says Silicon Valley had its AI tipping point five years ago but kept it to themselves as a “secret sauce,” of sorts, for competitive advantage. Now, the proverbial cat is out of the bag and he says CEOs of Fortune 500 companies demand AI. “I don’t know what it is yet, but I know we need it,” Domingos says, doing his best CEO impression.

However, he believes adopting AI will be easier for digitally native companies—such as Facebook and Google—or industries like marketing or finance where data has been essential from the start.

“The companies furthest along also happen to be in sectors where they have profit margins large enough for them for afford machine learning efforts,” he says. “If you’re Google and you [essentially] print money, you can afford to spend money on machine learning and you do. If your profit margins [are 1% or 2%], then it’s harder. They can only afford to do it so much because they don’t have money to do more.”

For the Doug Domes of the world, this makes AI look that much more enticing. Dome believes AI has “limitless” potential for profitability and says the positives of the technology will be immense, even if there are some ethical and moral bugs to work out.

In Giesler’s view, the negative predictions of AI have always been around; he’s always heard that his beloved HAL 9000 would be created in real life.

However, despite advancement, he thinks AI is still far away from the ability to snuff out humans.

“There is something about being human that is unique,” he says. “There are simple mechanisms we can use to unmask the technology as what it is: a stupid series of algorithms that doesn’t really get it.

That’s still pretty much the reality of everything we have around us.

“All the beautiful things we associate with marketing, they are and will continue to be the human actors and the human participants, not so much the technology,” Giesler says. “The beauty of real technology is that it’s like a mirror: We look inside it and what we see is who we are as human beings. Markets are human. The technology helps us get closer to the beauty of that principle.” m

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One

of the big takeaways from 2016 seems to be that we ’ r e s t i l l b a d a t u n d e r s t a n d i n g o n e a n o t h e r. I t ’s a

The Holy Grail would be, which measures have value and in what combination. That was the big question that couldn’t be answered. The theory was that we were measuring different things. Therefore, if you group them all together, you would be able to capture more explanatory power of advertising creative than if you only had one or two.

considerable challenge for marketers, whose livelihoods depend on being able to know and influence others. The usefulness of self-reported market research stops short o f a g r a n d t h e o r y o f b u y i n g b e h av i o r. M a n y s u b j e c t s can’t explain why they responded well to a particular ad, or they can’t articulate their connection.

For years, marketers have been turning to n e u r o s c i e n t i s t s i n t h e i r q u e s t t o d r i l l d e e p e r. E a c h n e w tool sheds insights on what actually drives consumer response. Facial coding is able to account for 9% of e x p l a n a t o r y p o we r, w h i l e t h e E l e c t r o e n c e p h a l o g r a m (EEG) reveals as much a 62% of decision making. But w h e n D r. C a r l M a r c i , c h i e f n e u r o s c i e n t i s t a t N i e l s e n C o n s u m e r N e u r o s c i e n c e a t N i e l s e n C o m p a n y, c o m b i n e d t r a c k i n g m e t h o d s fo r t h e f i r s t t i m e eve r, h e d eve l o p e d a way to see further than anyone else.

The official name of the method he developed is the V i d e o A d E x p l o r e r . U n o f f i c i a l l y, h e c a l l s i t t h e “ H o l y Grail of marketing”—a penetrating probe of consumers’ brains that is able to measure results with up to 77% e x p l a n a t o r y p o w e r w i t h i n - s t o r e s a l e s . N o w, M a r c i t a l k s about the significance of his research and how it could reset that ad-making process.

You say you’ve found the Holy Grail of marketing. What do you mean by that?

There are different ways to measure non-conscious processing. EEG, biometrics, facial coding, [etc.]. Then there’s a component of self-report. How do people articulate what they like or don’t like about an ad and what they will or won’t buy? We had an opportunity here to compare all of those measures in one study that had a very strong sales outcome.

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How did you test that theory?

We looked at 60 ads across a wide variety of product categories—for instance, adult beverage, soft drinks, women’s beauty products, baby products, health and beauty and a variety of others—as they were airing and then simultaneously did testing over the course of five months. We recruited participants, and we measured EEG, biometrics, facial coding and with separate samples, self-report.

Aside from self-report, are all these measurements non-conscious?

Yes. By non-conscious, we’re talking about measures that we don’t consciously manipulate all the time. We passively measure them. Unlike self-report (which is after you’ve seen the ad you answer a bunch of questions), we collect EEG, biometrics and facial coding as you watch the ad. So it’s not looking in the mirror, it’s the actual experience moment to moment. We then analyze the data and create metrics for every second of the ad. Then, we put all those metrics into a statistical model to see how it relates to sales.

How do you measure sales?

Nielsen Catalina Solutions has an approach where they take home-scanned data and combine that with set-top-box data. We have data on households exposed to the ad versus houses that are not. You then follow them into the store in a four-week window.

Importantly, after the exposure, you look for the lift in the sales, in the product category and in the product itself. You control for the media spins. You control for the targeting, the size of the product and the timing.

When you control for all those things, you

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get a fairly pure measure of the creative’s effect on sales. It’s not just how much ad spin you bought or how many channels you were on. That’s what is really exciting.

With the pure measure of creative, which creative did best?

Which did poorly?

How did you pick the ads?

Based on availability in market. We started the test late last year, and we were looking for big brands that we knew were going to be hitting a lot of households. The major selection criteria were: “Are you a big CPG brand?” and “Could we get the ads to test it?”

It’s a good question. The study question was, “What technologies did the best job of capturing a creative affect?” We’re not out there saying this type of ad does better than that type of ad. It’s much more about which methodology captures or has the most explanatory power. It turns out that the highest explanatory power came from the EEG. The second was the biometrics.

Third was self-report and fourth was facial coding. In that order, and the range was as low as 9% and as high as 62%.

What about eye tracking?

We use eye tracking for diagnostics, so we can see where people are looking. Are they looking at the brand or not? We don’t use eye tracking as a performance measure. The reason is a little bit technical but I can show you ads that are very simple, where people barely move their eyes, and ads that are more complex, and people move their eyes a lot. They can be equally engaged and have equal results in market.

How was ad reactive measured before this study? If you wanted to know or try to access the impact an ad would have or the purely creative aspects of an ad, what did you have to look at?

The marketplace typically has self-report, which is still by far the most commonly used measure by itself. There are a number of companies that are adding facial coding to self-report. You might get two of the measures, but as I described, that’s probably the weakest. With the acquisition of Interscope, we were able to combine the EEG, biometrics and facial coding into one package. That had never been done before.

Nobody has the combination that Nielsen has right now.

You had to mount a theoretical defense for putting all these together. Why would there be opposition to that if it helps marketers better understand consumer behavior?

There’s a natural skepticism from clients who assume we’re going to charge more for more tools. Then, I think the research skeptics come out and say, “I get facial coding with this supplier and my selfreport. Why do I need anything else?”

Someone who expresses an emotion on their face—they smile, or they look surprised or they frown—that tells us something very important about that moment and the creative in the audience at that time. The majority of the time with video advertising, people aren’t actually expressing an emotion; they’re staring at the wall. This doesn’t mean they’re not having any emotional response. It just means they’re not expressing it on their

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face. We need other tools, like biometrics, to [understand] that emotional journey throughout the ad. EEG gives you more coverage of the brain. You can also get memory activation, emotional motivation and attention processing. When you think about it, you really have a nice combination of tools that, in theory, should complement each other. It turns out they actually do.

until you really see how these things shift.

I’ve learned to respect the 30-second video ad. You’ve got sight and sound. You’ve got a story with a beginning, middle and end.

You have to have relatable characters, bring people on some kind of a journey, integrate the brand product or service, make sure the brand’s prominent enough to engage their attention, their emotion, leave a memory trace and then motivate them at some future time in a story to make a purchase.

That’s a lot to ask for a 30-second video.

When you put all these measurements together, what do you know about how somebody is responding to an ad?

How so?

With EEG and its broad coverage, you’re getting the most experience covered and you’re measuring brain waves. We derive three different measures from that. That’s not something that facial coding captures, that’s not something that biometrics captures. It’s very unique to EEG. Memory activation is something that biometrics and facial coding can’t capture, but EEG can’t tell you if someone’s smiling or frowning; it can just tell you if they’re engaged. EEG can’t tell you if the energy level in the ad is high or low, and that’s where the biometrics come in.

How much can change on a second-by-second basis in the brain?

A lot. If you look at a 30-second ad, you can see anywhere between 10 and 15 peaks and valleys in the EEG spike, sometimes more than that. All within a 30-second ad. That’s a lot of journey going on within someone’s brain. It’s hard to imagine the granularity

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We’re able to … tell our clients whether this is an ad that has got great promise or this is an ad that needs some work. Then, because we can measure second-by-second, we can also find which areas of the ad are areas for improvement. Another thing that we do on a fairly regular basis is take that 30-second ad and help our clients turn it into a 15-second ad by taking just the most engaging parts. There’s some art as well as science to that, but we’re able to direct to keep these parts, and throw others out.

The results of your study showed that the integration of multiple neuroscience measures results in up to 77% explanatory power with in-store sales. Could you unpack that number?

That number comes from a statistical model where we’re looking at the in-store sales effects, controlling for all those variables I described (the media plan, the targeting, the size of the product). It includes inputs from the facial coding, the biometrics and the EEG. How much of the [creative effect on the consumer] does facial coding get? Between 9% and 12%, one little piece. How much does biometrics get? A bigger piece, almost a third. What does EEG alone factor? That’s the biggest chunk, upwards of 62%. Now if they were overlapping, in other words, they were all measuring the same thing, it bumps up to 77%. It goes from 62%, which is the highest you can get with one measure, all the way up to 77%, which is a pretty good job.

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Do you have any theories as to what the remaining 23% could be?

No. It’s in the ether. As good as these technologies are, we’re not capturing every aspect of people’s mind and body.

If we could add, say an FMRI—which we don’t because it’s very expensive and cumbersome—I could actually focus in on a few parts of the brain that none of these technologies capture very well. That might capture that last 23%.

Why does this work? Why do non-conscious responses to ads translate into predictive consumer behavior?

Between 50% and 99% of brain processing is occurring without our awareness. There’s a whole lot going on in our brain that we just aren’t aware of and don’t have access to.

There’re a lot of theories and evolutionary reasons for that. We can’t possibly think about every single decision we make. It would be exhausting, and we’d be paralyzed.

At the Shopper Brain Conference in Chicago, we’re hearing people talk about how [consumers] walk through retail stores.

When [consumers] describe how they walk through that store, and you actually measure how they walk through that store, the two don’t look anything alike. That’s just one of many examples of how our memories and our conscious awareness of our behaviors are very limited.

People aren’t very good at explaining every aspect of their life. If you only ask people questions like, “Do you like that ad?”, “Do you remember that ad?” or “Would you buy that product?”, you’re only talking to one part of the brain: the conscious part. That might be the smallest part, so you need tools that can capture non-conscious processing. We’re not making claims that we’re capturing 100% of what’s left, but we’re capturing enough to create a powerful explanatory model.

Did your results vary by product category or by target?

We included all of the categories in the data, and the data set’s not quite big

We n e e d o t h e r t o o l s , l i k e b i o m e t r i c s , to [understand] that emotional journey throughout the ad. EEG gives you more c o v e r a g e o f t h e b r a i n . Yo u c a n a l s o g e t memory activation, emotional motivation a n d a t t e n t i o n p r o c e s s i n g . Yo u r e a l l y have a nice combination of tools that, i n t h e o r y, s h o u l d c o m p l e m e n t e a c h o t h e r. I t t u r n s o u t t h e y a c t u a l l y d o .

enough to be able to say how baby care and adult beverages perform differently.

All of the advertisers think their category is special, but across these measures, so far we actually haven’t seen big differences.

Engagement looks like engagement across these measures. When you look inside of categories, we have found with the biometrics you actually see more variants within categories than between.

With biometrics years ago, we looked across a couple hundred ads. We had two groups: One was entertainment, movie trailers. What could be more emotional?

We compared that to financial services, banks, things like that. What could be less emotional? When you compare the two, the difference on a 100-point scale was one point. That was because there were a lot of differences within each category, so I could show you movie trailers that actually weren’t very emotional at all and financial services that got people pretty lathered up. What we see is there tends to be so much variability within a category that it washes out any potential effects between categories.

Do you have any follow-up studies planned based on these results?

The next step is to look closer at the individual moments within the ads to build the data set bigger and also to look within the ads to see what everybody wants to know: how do you make a great ad? That’s the work of 2017. m

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Consumers are finding a deeper connection with brands through video content — and technology a l l o ws t h e m t o grow ever closer

By Sarah Steimer

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The employees at Greenhouse, Leo Burnett’s in-house production studio

ding opular

in Chicago, look relatively relaxed.

They wear jeans and decorate their work areas with bright cartoons. They can take their

y

breaks at a foosball table. The a t m o s p h e r e i s c o mf o r t a b l e , a f a r cry from the highbrow Madison

ound

Av e n u e d ay s o f a d v e r t i s i n g .

It’s a sign of the times. Admen and women of yesteryear spoke to their audience from on high, telling them what to do or how to think via print advertisements and television commercials. Greenhouse is quite literally more grounded, located on one of the bottom floors of the West Wacker Drive building.

The most successful marketing videos today— like those created by brands, agencies and studios such as Greenhouse—are representative of the people making and watching them: accessible, and maybe even familiar. The nearly instantaneous videos are intended to engage with the audience, not talk at it.

“The videos that work, work because there was strategy behind them and they have a purpose” says Sarah Gitersonke, business development director for Explore Media, a branded film and commercial production company. “There is a call to action or something that is leaving the viewer with a feeling. And that could be a feeling of, ‘I absolutely want to purchase whatever it is they’re talking about,’ or, ‘I feel like I connect with this.’ There are so many different ways that you can get to that point. But I think that point is what matters.”

and

nique

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Gitersonke says when she started in production a decade ago, a brand made a video, uploaded it to YouTube and waited to tally the “likes.” There was no real rhyme or reason to the video, she says, but now brands are sitting up and taking note of what the consumer yearns for online. They’re realizing that consumers want to see a story and feel a connection. They want to know why they should care.

For a long time, Gitersonke says, if producers were “doing content,” they were heading in the right direction. “That’s changing now.”

Just as the video medium itself can be used by amateurs and professionals alike, the agencies and brands that see the most success may be those with a flattened, flexible hierarchy.

Allowing team members who are relatively low in rank to run with an idea is the sort of dexterity that can really work with videos on the web, where the audience reacts in real time and seeks a connection with the publisher or brand.

“It’s innovating deliberately, allowing creatives at all levels to be accountable and to have a say in the work and to create the work and not to be micro-managed,” says Vincent Geraghty, executive vice president and director of production for Leo Burnett USA. “Because we have such a massive amount of content to fill, we can’t just rely on the old model of having it approved through a chain before it gets out. We’ve got to be OK—[albeit] a little uncomfortable—with people at very early stages in their careers actually making work and putting it out there.”

In the case of video marketing, the gap between the brand and its audience is starting to close, maybe more than ever before. The audience expects videos that are tailored to the channel, they expect authenticity and they expect the brand to move as quickly as they do.

M akin g th e L e ap F rom Pl at for m to Pl at form Video marketing thrives online, particularly on social media platforms, including YouTube

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Facebook, Twitter and Snapchat. Marketers can no longer create a single video—such as the traditional television commercial—and expect it to perform well (or even get noticed) on each channel.

“Nowadays, to take a YouTube video and put it on Facebook doesn’t work,” says Mark Robertson, founder of ReelSEO, now Tubular Insights, a resource providing analysis, tips and trends for the online video and internet marketing industries. “In addition to thinking about what your story and your content is about, you also have to think about the format of the video.”

Internet users don’t view videos on different channels in the same way. For instance, multiple publishers say about 85% of all videos on Facebook are watched without sound— making captions crucial and music less so.

Many people are watching these videos while on their commute, and Gitersonke says the first few seconds of a video are crucial for catching a viewer’s attention.

“You’ll have to know what formats and aspects work for each one and the lengths and time and the tone of each piece,” says Carla Marshall, editor-in-chief at Tubular Insights.

“We’re still hearing marketers say, ‘Video’s not working for us.’ Well, it won’t work for you if you produce a 10-minute clip and try to upload that in as many places as possible. You’re not investing in the research to find out what your audience is going to respond to.”

Tubular’s own research has found videos posted natively to Facebook generate more engagement than YouTube videos; however, it takes fewer views for YouTube videos to generate the same engagement rate.

The research also shows the engagement rate for Facebook video is a more reliable metric, compared to view count. In terms of engagement, short-form video performs better on Facebook, versus longer video on YouTube. Viewer engagement research from 2015 by Visible Measures says a video only has 10 seconds to catch a viewer’s attention, and 33% of viewers have been lost by the 30-second mark. Visible also found that online viewers on average watch about 54% of a typical video ad on major social platforms. The payoff for keeping a viewer engaged is critical.

Unskippable Labs at Google says the more time viewers spend on video ads, the higher the impact on brand favorability relative to control.

Which channels a brand decides to utilize depends on their goals. David Murdico, creative director and managing partner at online video and content production agency Supercool Creative, says that the benefits of each platform vary: YouTube is the go-to for posting because of its SEO benefits, and Snapchat wins in terms of timing and audience targeting.

Giv e th e Pe ople Wh at T h e y Wan t: A uth e n ticit y It isn’t, of course, as easy as hopping onto a channel and posting a video with the right length, with or without captions or inspiring music. Authenticity matters as well, Geraghty says, and young people especially will take note.

“Folks under 20, especially, will call B.S. on you pretty quickly if you’re ruining their experience online or what they’re seeing on Facebook,” Geraghty says. “If you have something that gets in the way and doesn’t really play in that space, it doesn’t work. When we’re creating things on Facebook, you don’t want to interrupt.”

Geraghty says marketers struggled with authenticity on the now-defunct Vine.

Companies were over-producing content for the video platform, which featured six-second clips from users’ cell phones. The high-quality clips from brands didn’t fit in with Vine’s homemade feel.

Brand videos need to meet consumers’ expectations for a channel. Shooting a highly produced piece of content on a smartphone can come across as inauthentic, as can a video that tries to tell the audience what to do rather than conversing with them on a social media channel. This two-way conversation began, to some extent, with comments on YouTube, and it has grown to include conversations between brands and their audience on social media videos, where consumers can choose to engage by simply “following” the brand.

“It’s a lot more work for a brand to keep up with that two-way street, even if it’s just managing the social media platform,”

Who, W h at, Where, Watch Knowing what videos to post and where comes down to a better understanding of the channel itself. Here is a breakdown of video on some of the most popular social media platforms.

(Content from AdAge and Veed.me)

Facebook What counts as a view: 3 seconds Auto-plays: Yes Auto-loops: No Default audio state: Muted Max length: 2 hours or 4 gigabytes Best for: Informative or fun videos that can play without sound

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YouTube What counts as a view: 30 seconds Auto-plays: Yes Auto-loops: No Default audio state: On Max length: None Best for: Educational content, FAQs, product demos, weekly series

What

the

Gitersonke says. “It’s important to have a two-way street. Video is a huge door to start that conversation.”

When watching videos online, viewers often have the opportunity to “skip” ads, which makes engagement and immersive experiences online crucial for brands.

“I’m in the industry, and I take any opportunity I have to skip a pre-roll ad,” Geraghty says. “I have an agenda when I’m online. I’m not a captive audience. I’m my own programmer, and I can watch whatever I want.”

What marketers are working to pinpoint is the “what I want” piece within their engagement with the audience, and the answer tends to be transparency. This could result in a change to influencer content in particular. Robertson says he doesn’t expect this type of marketing to disappear any time soon, but he does predict that audiences will expect more transparency in why influencers are promoting a product or brand.

Marshall says influencer marketing is a catch-all phrase, and the digital-first companies such as BuzzFeed have arguably become part of that culture—one that brands could be well-served by joining. As an example, Marshall points to Tastemade’s work with a variety of food brands. The video recipe publisher has incorporated branded products into its content fairly seamlessly.

Experts

Predict

“The audience belongs to those digital-first companies and not the brands; the brands are having to tap into that audience and then hopefully open the market up,” Marshall says.

“Influencer marketing has a horrendous name and some brands look at it so staggeringly wrong that they’ve damaged their campaigns.

But if done right, there’s a potential there to really win more customers.”

Partnering with publishers may be the first step some brands take toward becoming publishers themselves.

“The biggest opportunity I see marketers missing is the ability to become self-publishers by experimenting and creating a consistent stream of video content, rather than trying to hit it out of the park with one video here and there,” Murdico says. “I’d rather see shorter videos created at a more consistent pace, even at lower budgets if necessary, with a focus on how to get the videos in front of the right people—people in a position to buy their products and services or share the videos with the right people.”

D ata-bas e d an d Re action ary Approaches Staying conversational and engaged with the audience is time-consuming, but it also allows for real-time data collection and reaction.

for

2017

While most agree that video is king in 2017, there’s uncertainty as to what, exactly, the industry can expect. Here are some 2017 video marketing predictions.

Dav id Mur d ic o, Supercoo l C r eativ e • An increase in creativity put into experimentation with the types, lengths, messaging, styles and platforms of video production and marketing.

• An increase in planning for both paid and organic distribution/promotion.

• An increase in attention given to analytics and results.

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V in c en t G e r a g h t y, G r een hou s e , L e o B u r n ett • Continued push into virtual reality (VR).

• A continued push and a better understanding of programmatic and how that can be utilized and measured to benefit brands.

• A tighter connection between measurement, content creation and content strategy.

Mark Robertson, T u b ul a r I n s i g h t s • Increased investment in successful media.

• Increased authenticity to the platforms that marketers are distributing on.

• Live video and VR.

K e n G i l b e rg, G r e e n h o u se , Le o Burnett • Showing things on small screens and less so on big screens.

• Brands wanting more content for less.

• Creating video that can work anywhere in the world.

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Producing video content based on feedback can better resonate with an audience, compared to a more programmatic approach. But what does resonance mean for ROI? How does a “like” or a comment on a video translate into sales?

Often, it doesn’t.

“It used to be that you could make a video and not worry that much about the story. You put it on YouTube and it ranks in Google, you put annotation links on the video for your website and all of a sudden you’re seeing people buying stuff off your website from your organic success,” Robertson says. “I’m not saying that doesn’t still happen, but it’s certainly much harder than it used to be.”

Today the ROI for videos includes a stronger community and greater brand awareness. In fact, some channels’ formula for social success somewhat thwarts sales. YouTube’s algorithm, for example, is built on watch time, meaning the more a brand links off the channel and the more that people follow those links, the worse the video will perform.

Gitersonke, however, cautions against simply counting views to measure success.

When it comes to audience participation—be it views, comments or “likes”—quality can be more important for a brand than quantity.

She says 10,000 viewers from the target audience can be more valuable than 1 million people who may never buy the product or service.

Determining a metric for success is a top concern for many video marketers. Geraghty says the future of video marketing has a tighter connection between measurement, content creation and content strategy. He says brands feel as though they’re throwing a lot of content into the world, but they can’t quite get a sense of how it’s doing or how it’s influencing sales. A good starting point, he says, is determining the proof of performance.

Brands are looking for an opportunity to quickly tell if something is working, and replace or shift the strategy if it isn’t. As Geraghty explains, marketers need to start simple. They should ask, “‘What are we trying to achieve and how are we going to gauge whether it’s performing the way we want it to?”

Murdico says video campaigns are often launched for awareness, likes, subscribers, followers and other soft goals, but they do eventually need to positively impact the bottom line.

“By measuring video and social media analytics against sales increases, marketers are able to be more vigilant in determining what works and doesn’t work, developing better creative and focusing on promotion,” Murdico says.

Such an effort, he explains, means marketers will need to take note of current sales across all marketing initiatives for that product or

S n a pc h at What counts as a view: When tapped Auto-plays: Yes Auto-loops: No Default audio state: On Max length: 10-second clips or multiple clips as a story Best for: Fun, timely content such as behind-thescenes, unique events, day-inthe-life stories

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service before launching a video campaign, then define the parameters of the campaign.

Once the videos have run, marketers need to review the analytics to see where sales clicks and social media activity originated. Then they have to connect the dots.

“the biggest opportunity i s e e m a r k e t e r s m i ss i n g is the ability to become self-publishers by experimenting and creating a consistent s t r e a m o f v i d e o c o n t e n t. ”

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What Is This Going to Cost?

Marketers have two internet powers working for and against them in video: More content is now expected of them, but the most authentic of it can be simple and (relatively) inexpensive.

Brands are pressing Leo Burnett and others to produce more for less, says Ken Gilberg, vice president and executive producer at Leo Burnett. Clients that once farmed out 100 commercials a year now want 500 pieces of content at no greater cost. And immediacy is key. “They’re not going to wait eight weeks for a commercial … or six months to come up with a campaign.

It’s, ‘Hey, something just happened, and we need to react to it,’ ” he says.

Gitersonke argues that there’s a bit of a disconnect between what brands or agencies expect and what the final product can cost.

She says everyone needs to be on the same page with expectations and where they need to make amends.

Marketers have learned to play with their budgets, shifting some broadcast allocation over to web video production.

Web videos often fall under the social media

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resources of a company, and many companies have started moving funds in that direction as well. Marshall says a company can absolutely create one piece of video content and slice and dice it according to the platform, but expectations for unique content based on the channel and audience have caused many brands to rethink their budgets.

“When you have stats from YouTube itself that say more 18-to-34-year-olds are watching YouTube than they’re watching U.S. cable channels, then if you’re a smart marketer and that’s your target audience, you have to at least think about taking a chance and allocating some budget into reaching that audience,” Marshall says.

Geraghty says campaigns with a large amount of media and paid impressions should have a lot of money behind them, whereas more real-time content that requires less time and fewer resources should have a far smaller budget. It comes down to remaining authentic to the channel.

Over-produced content doesn’t work on some channels, Geraghty says, because it may not fit that platform’s aesthetic. Snapchat, for example, can be a great format for quick behind-the-scenes shots that feel intimate. A few seconds of highly produced content feels less natural for the platform, but can fit much more comfortably on longer-format channels such as YouTube.

Aside from the initial cost of production, Murdico predicts an increase in planning for both paid and organic distribution and promotion.

“Marketers are realizing that counting on videos being shared with no plan to make that happen isn’t working” Murdico says. Instead, he predicts they’ll focus on distribution or promotion plans that get the videos in front of the right people. These tactics involve paid promotion on social media sites, paid influencers, increased use of their own social media communities, e-mail lists and more investment in media outreach to get videos placed on high-profile and niche blogs and publications to reach new audiences.

Th e F uture Is He re , and I t’s L iv e Video on the web is moving so quickly that some of the most popular content is being filmed and broadcast live. This mostly unscripted content is uncharted territory for most companies, but it lends itself incredibly well to the authentic voice consumers seek.

One of the easiest places for brands to begin with live video, which has been popularized on Facebook and is being integrated on Instagram and Twitter as well, is major events. Think of Apple releasing a new product or GM featuring new vehicles at a car show.

Geraghty says more of Leo Burnett’s clients are asking for live video, and it can be an impactful medium. Greenhouse produced a live video for McDonald’s during National Burger Month, during which an artist used condiments to paint pictures of McDonald’s hamburgers. In an entirely different approach, Greenhouse created a “live” animated video for Kellogg’s that featured a Keebler elf giving a tour of the cookie factory.

“Having the live video be a more authentic and spontaneous type of event, as opposed to reading from a script, is really important,” Robertson says. “It’s also a great place to play for brands that have a smaller budget. There’s a lower barrier to entry with live video.”

In addition to live video, some brands are even experimenting with virtual reality. While it’s currently out of reach for a great number of marketers, largely due to cost, the trend could explode sooner than later. Look no further than Google, PlayStation or The New York Times’ interest in the space. Geraghty says his young daughter spent about an hour in a virtual reality experience offered by the Times, roaming the family home as if on the streets of Paris.

Live video and virtual reality may be the apex of where the audience and the brand come together, sharing immersive experiences that strike at the heart of what consumers have come to expect from companies. To reference one viral Kleenex video featuring a dog and his adopter, brands and consumers are possibly becoming “unlikely friends.”

“It’s really not about one-way communication anymore, with, perhaps, the exception of paid advertising,” Robertson says. “It’s about having a conversation.” m

I n s tagra m What counts as a view: 3 seconds Auto-plays: Yes Auto-loops: Yes Default audio state: Muted Max length: 60 seconds Best for: Micro videos such as teasers, behind-thescenes and looping video

Tw i tte r What counts as a view: When clicked Auto-plays: Yes Auto-loops: No Default audio state: On Max length: 30 seconds Best for: Teasers to fulllength content or to a website

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on the record

How to Become a Marketing Leader You can market, but can you lead? And how is being a marketing leader different from being a general or CEO? Researchers Thomas Barta and Patrick Barwise answer these question in their new book, The 12 Powers of a Marketing Leader: How to Succeed by Building Customer and Company Value, based on original, large-scale quantitative research of successful marketers.

By Zach Brooke | staff writer

 zbrooke@ama.org

Q

Your book grew out of an interesting study on marketing leadership. Talk about that study and how it produced the idea for this book.

Barta: I was a marketer for many years.

Ever since I was six, my mother told me I was the only kid watching advertisements and not the movies, that something was wrong, so [I] had to find a job that fit [me]. I love marketing, but I was frustrated with the [lack of] power we had as marketers, even in the marketing organization where the finance people still called the shots.

The study came about by frustration over the lack of research on marketers’ success. There’s a lot of research on marketing, although very little on leadership. Actually, almost nothing on marketers, their careers and their impact.

I said, “Let’s create it then.”

Q

What is the definition of being a marketing leader? Are these innate talents, or can they be learned? If they can be learned, how do you hone them?

Barta: The leadership skills in [mobilizing

people who don’t report to you] are the ones that make a significant difference between a marketer or a technical marketer and a marketing leader.

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Barwise: If you look at leadership

books, they all talk about mobilizing your subordinates. The good ones also talk about mobilizing yourself and finding inspiration. Every marketing leader has a boss, and every marketing leader has peers.

Our data show that mobilizing the boss and the peers is every bit as important as mobilizing your team and yourself. When marketers say, “I’m starting to get a bit senior, I need to learn about leadership,” they go and get a generic leadership book. There are two problems with that: One is they’re less tuned to the specific issues about leading marketing compared to leading other functions. Second, in practice, they’re all about becoming a great CEO.

Q

What separates a marketing leader from a marketing follower?

Barwise: Doing marketing isn’t the same as leading marketing. One of the things that has increased the difference has been the growing complexity of marketing, mainly because of digital.

There was a time when, as a marketing leader, you were still likely the expert. If you were in consumer packaged goods, and the big thing that drove success was TV advertising, and you’d been involved

in TV advertising 25 years earlier, as chief marketing officer, people could still come to you for advice.

That’s no longer true. Half of what the 25-year-olds are doing didn’t even exist when the CMO was 25. This distinction between doing marketing and leading marketing is much more important than it was in the past. We say that the 21st century is the century of marketing leadership, and the difference is simply that marketing leaders are people who are doing the things that distinguish between senior marketers with high business impacts and career success, and the majority, who have only modest business impacts and/or career success.

Q

In your book, you’ve identified 12 marketing powers that

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on the record

leaders have, broken down into four groupings. How do you gain these powers?

Barwise: There are three gaps that

we talk about early in the book: The trust gap because marketing is about the future; the power gap because most of the people who drive customer experience don’t report to marketing; and this increasing skills gap. There are reasons for this lack of influence.

We’re providing recommendations, which are evidence-based, for things you can do about it. You do have one thing going for you: if you’re a good marketer, you’re really good at understanding other peoples’ perspective.

Q

What advice would you give to marketers in the early stages of their careers, who aren’t in executive positions yet?

Barwise: The sooner people start thinking about these issues in their careers, the better. If you’re a graduate trainee, and you just joined the marketing department, and you’re the youngest and most junior person, no one reports to you, but you have peers and you have bosses. The sooner you get a broader sense of general marketing skills, general business issues and the fact that you’re going to have to collaborate with colleagues in marketing and colleagues outside marketing, the better. Five years later you’re going to be a team leader if you’re any good. You

career advancement

probably won’t have the power to choose your team if you’re 27 years old, but you will have the power to inspire them and to make sure they’re aligned on the right business issues.

Barta: We are calling for a revamp of how we train marketers. You have to lead and mobilize internally. It shouldn’t come as a surprise to you once you are older. It should be something that you are aware of from day one. It will take significant frustration away. You could think about it this way: Marketing is a hobby. What we pay you for is the difficult work to get stuff done internally, and that’s just part of your role. The sooner people learn that, the better. m January 2017 | marketing news

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They Support Your Association.

Professor of Marketing and Leadership Role, Department of Marketing Eli Broad College of Business, Michigan State University The Department of Marketing in the Eli Broad College of Business at Michigan State University is seeking to hire a strong researcher who will play a leadership role in growing the reputation of our marketing department through collaborative research and mentorship of junior faculty and doctoral students.

Applicants should possess a Ph.D. in a relevant area of scholarship and should have a professional record consistent with an appointment to Full Professor with tenure at Michigan State University. Salary and benefits are competitive.

The Marketing Programs at Michigan State University have received numerous accolades in recent years (see http://marketing.broad.msu.edu for some of these rankings). For example, MSU’s Department of Marketing is among the top 15 in the world for research impact, with the full professors ranked #7 worldwide. Our Master’s degree in Marketing Research (MSMR) is ranked #1 and our undergraduate program is ranked 21st in the nation. We are also named one of the “Top Universities for Professional Sales Education” by the Sales Education Foundation. And, our international marketing/business program, housed in the Department of Marketing, has been among the elite in the world in both education ranking and research impact for some twenty years.

We offer a range of programs – a Ph.D. in Marketing, Executive and full-time MBAs, MS in Marketing Research (offered both face to face and online), online certificate programs, a large undergraduate program as well as extensive executive education programs. We provide research leadership in four areas – Marketing Strategy, Product and Brand Management, Relationship Marketing and Sales, and International Marketing.

Michigan State University’s Marketing programs have a heritage of leadership, recognized in both the academic and business communities. Current faculty members include a combination of well-known senior scholars with established reputations and respected research records along with impressive junior faculty. We are looking for another senior scholar, with the opportunity to also become department chair, who has the experience and aptitude to guide the group in both research and administrative leadership.

We hope to have sparked your interest and would very much welcome your application. Also, we will be happy to answer any questions that you may have. Contact Tomas Hult, Chair of the Search Committee (hult@msu.edu, 517-353-4336), for additional information. Submit materials through the MSU Jobs website: www.jobs.msu.edu, job posting #4578. To be eligible for full consideration, all application materials should be received by February 1, 2017, but the position will remain open until filled.

Michigan State University is an Equal Opportunity/Affirmative Action Institution. Applications from women, veterans, individuals with disabilities and people from diverse racial, ethnic, and cultural backgrounds are encouraged. Persons with disabilities have the right to request and receive reasonable accommodation.

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personal branding

career advancement

manner on white paper, on colored paper or with a creative/infographic-like format.

The formal résumé on white paper was significantly more likely than the others to win an interview.

Another study from 2014 reviewed video and paper résumés from eight MBA students. The résumés were reviewed by 238 psychology students, who reported being 81% likely to interview the MBA students based on their paper résumés, 79% likely based on both the paper and video résumés and 76% likely based the video résumé alone.

Various tactics have varying degrees of success, but traditional résumés appear to be the best-received.

Are Creative Résumés Risky for Marketers?

By Sarah Steimer | Staff Writer

 ssteimer@ama.org

A

young marketing professional named Lukas Yla was visiting San Francisco and, in an effort to land a dream job, posed as a Postmates delivery man and delivered boxes of donuts to executives at tech companies.

His résumé was located inside the box.

As of October, Yla—previously a CMO at a startup in Lithuania—landed 10 interviews out of 40 deliveries.

Getting the attention of busy recruiters is essential in the job hunt. Diane Domeyer, executive director of creative staffing agency The Creative Group, says hiring managers receive an average of 23 résumés for every open creative position.

“Given how challenging it can be to grab their attention, much less land a job interview, I would say his approach was a success,” Domeyer says of Yla’s tactic.

Being creative or clever in job searches can be a gamble, Domeyer says. She points to a survey of marketing executives

by The Creative Group that found 52% of the respondents consider unusual job-hunting tactics to be unprofessional.

The Benefits and Risks of Creative Résumés Getting creative with job-hunting can be risky, but it can also be rewarding.

Domeyer says creativity can sometimes help job seekers get a foot in the door, particularly in a competitive market. “In the marketing/creative industry, there is probably a greater appetite for creativity than in other industries,” she says.

Creative job-hunting strategies should be done in good taste, Domeyer says.

Anything that could potentially offend an employer or disrupt the office should be avoided. In other words, it’s best to not send a singing telegram.

Slowing recruiters down with something a bit more creative may be a useful tactic, as a 2012 report from TheLadders found recruiters spend six seconds reviewing an individual résumé.

In contrast, studies have shown traditional résumés are the best-received.

A 2010 study from Norway had 90 people evaluate 12 job-seekers’ résumés. These résumés were presented in a formal

Taking the Best Job-hunting Route Whether a job seeker decides to go the creative route or the traditional route, there are certain efforts that can win over many recruiters.

“No matter what your approach, always research a company before applying, put together a targeted résumé and portfolio and show interest during the interview by asking relevant questions,” Domeyer says.

She says applicants should focus first and foremost on their qualifications and consider ways to effectively convey their strengths to a potential employer.

“Ultimately, most employers hire for substance over style,” Domeyer says.

“Anything that would be considered overthe-top or that emphasizes the creativity of getting noticed over the substance of your qualifications should be avoided.”

Domeyer offers some tips for those considering a unique job-hunting effort: • Get in the know. Learn as much as possible about the company and the hiring manager to gain a sense of how much the organization values originality versus tradition.

• Create a cohesive campaign. A novel approach works best if it highlights your unique skill set and is consistent with your other self-promotional materials, including your portfolio and online profiles.

• Avoid clichés. Hackneyed gimmicks, (e.g. a shoe to “get your foot in the door”) rather than an emphasis on creativity, indicate a lack of originality. m January 2017 | marketing news

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advertisers’index

ADVERTISERS’ INDEX Quick source for contacting the suppliers in the January 2017 issue of Marketing News.

2017 AMA Media Kit ....................... inside back cover ttp://www.AMA.org/mediakit URL: h

AMA Members-only Webcasts . ............................. p. 9 Email: cbartone@ama.org URL: http://www.AMA.org/MOW

2017 Winter AMA Conference / Better Marketing for a Better World . ............................... inside front cover URL: h ttp://www.AMA.org/winter

AMA Whitepapers .............................................. p. 5, 55 Email: sales@ama.org URL: http://www.AMA.org/whitepaper

AMA’s Face to Face Training Series ........................................................ p. 54 ttp://www.AMA.org/FacetoFace URL: h

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AMA’s Marketing Resource Directory .................................................................... p. 7 Ph. 1-888-777-6578 ttp://marketingresourcedirectory.ama.org URL: h

Thank You to the Symposium for the Marketing of Higher Education Sponsors, Supporters & Exhibitors ..........................................p. 21 URL: http://www.AMA.org/highered

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#OfficeGoals A peek inside the marketers’ offices that make us drool

Leon Ephraïm, founder and designer at Yummygum “Yummygum is a design studio in Amsterdam. We help startups and other businesses refine, design and launch their digital products. One of our mantras is ‘simplify even more.’ Not only do we apply that to the mobile and web apps we design—we live it. That shows in our office design where we remove redundant elements while maintaining a warm place to get creative work done.

“Most design studios go for an industrial ‘laissez-faire’ type of look with a lot of unpolished wood from the hardware store.

We’ve always aimed for a white and clean design theme. Our office lets us focus on what’s important: translating creativity into usable and beautiful user interfaces.”

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