MAY / JUNE 2012 | PDF | Subscribe | Home

Little Big Data
Don’t confuse digital dialing for dollars with building brands.

The last days of a very warm winter brought new heat to the digital frenzy when Procter & Gamble announced it would cut $1 billion from its traditional media spending and replace it with digital marketing over the next few years. It used to be as P&G goes so goes the marketing and advertising industry. P&G isn’t as omnipotent and prescient as it once was, but it still creates at least a 5.4 on the industry Richter scale when it announces a radical change, especially one with so many zeroes.

Is P&G simply responding to the digital hype and the pressure from the finance department to move more marketing into digital? Or, has P&G decided that even if it doesn’t have a good digital plan, the $1 billion was not generating a good return using traditional media anyway? Obviously, traditional broadcast and print media are reaching fewer people and doing so with less frequency.

The question is, can digital marketing replace the effectiveness of traditional media, even at a reduced level? Will digital marketing create more and better brand-building methods, tools and success stories? Or, is brand building at risk in the digital world, like a sixty-second spot in a TV soap opera? As the digital options multiply, can client organizations stretch their bandwidth to absorb, determine and direct the digital activity?

The digital discussion involves so many options: blogs, websites, email, search, social sites like Twitter, Facebook, LinkedIn, YouTube, in addition to app-based opportunities. The standard marketing department needs to clone itself to even begin to think digital given the decisions that need to be made, each requiring a different sensibility and approach, always keeping in mind that the message will reach the customer in an instant ... and before you can count the clicks there will be feedback or blowback everywhere.

Perhaps a large portion of P&G’s $1 billion will not go into execution but into the staffing that will be required to manage and monitor digital. There should be a smartphone drum roll or alarm bells should go off every time the “send” button is clicked. Not only should the communication be vetted for sense and accuracy, but for whether the message has a real brand purpose. Is it consistent with the brand in terms of positioning, attitude and style, or is the medium being used because it’s fast, cheap and easy?

There is a tendency to use each medium tactically rather than strategically. There are few established precedents for the best way to use any of the digital media, and there are limited, if any, measurements (non-anecdotal) that describe the efficacy.

Fortune 500 companies and their agencies spent the last half of the previous century honing the lessons learned about marketing and branding and how each medium could be used effectively to raise the bar for the brand. Agencies and client marketing departments were organized, trained and ingrained with processes that were industry-wide, accepted best practices. It was rare that a brand made a misstep of major consequence, because there were disciplines in place and many brakes on the process. Now there are none and none.

When it comes to digital, there is often a lack of disciplined thinking, unlike the built-in discipline that comes with spending a lot of money on a commercial or print ad. The idea that digital is inexpensive allows decision-makers and users to be cavalier and superficial. Email is cheap; social media can be cheaper yet.

Therefore, sending irrelevant emails or repetitious Tweets is of no consequence, because the cost is trivial (so the thinking goes). Yet the real cost is the lack of brand building and the disrespect for the customer’s time and patience, which will inevitably lead to customer fatigue, lack of interest, spam - folder overflow and unfollow. All of this is already occurring, as email response rates continue to decline and Facebook marketing has yet to prove viable.

There are digital ways to control the message and reinforce loyalty to the brand. Neiman Marcus, for example, is testing NM Service, an iPhone app designed to connect customers with their favorite sales associates. When the shopper walks into a store, NM Service alerts the designated associates. With access to purchase history, the salesperson can then text the customer a message, such as “I found the perfect scarf for the suit you bought last week.”

Data, Data Everywhere

The other danger in thinking all digital all the time is the availability and assuredness of data, lots of data, now called “Big Data.” The problem with data and digital is that it begins to control the dialog about marketing and selling. If you have data about what people bought and what they responded to and therefore you can calculate the return-on-investment — you’ve found the Holy Grail. If you can predict what people will buy and therefore what the offer should be, why does it need to be creative? Why does there need to be any branding?

These questions don’t necessarily come up in meetings, but here is what happens: The marketing is designed as a branded communication containing offers. As data become more important, the offers begin to dwarf the message. The brand becomes a secondary element. After a while, it’s all about the offer, the item, the price and the customer segment.

The New York Times recently ran an excerpt from Charles Duhigg’s book, The Power of Habit, which described the power of analytics: Target’s predictive modeling team was able to identify signals from purchasing behavior that indicated when a woman was pregnant and would begin sending maternity and baby offers to women who fit the pattern. In one case, a father complained to Target about sending coupons for maternity items to his high school daughter. He apologized a few days later when he learned his daughter was pregnant.

Will P&G send a Tweet when our dishes are dirty?

How do you create long-term loyalty and devotion to the brand when the majority of your communications are offers? When your competitor’s predictive analytics are better and their offer is lower, what do you do? The reason to shop the brand over time has to be more than price — if not, wait a few minutes and watch a competing brand lower the price and win the customer in real time.

This is a strange marketplace, with both too much emphasis on data and not enough emphasis on how to use data. Many think that you click a button and data spill out describing customers, prescribing offers and guaranteeing results. Branding and creativity is losing its seat at the table.

If it’s true that traditional media are reaching so few with brand messages, how is the concept of branding and creativity being replaced? Applying data to marketing is an art — just as it has always been. The difference in the digital world is that it is instantaneous and doesn’t have the patience to be vetted — it is therefore mostly machine-made — with less interest in winning the hearts and minds and more in delivering the right offer quickly.

It will get harder and harder to convince marketers that branding and creativity is as important as offer and audience. Certain brands, like retailers, have an advantage. Through their bricks and mortar they can elevate, entertain and invigorate their brand differences in their stores and as a result, their clout will grow: Whole Foods, Apple, Trader Joe’s, Target and Macy’s are but a few good examples.

Brands with fewer resources and without a brand experience to leverage will be at a disadvantage — trying to use digital marketing to maintain cost competitiveness and using data to drive their business without many of the necessary brand hooks and creativity.

Perhaps the best way to think about maintaining core brand principles in a digital world is the way Clive Sirkin, the new senior marketing officer at Kimberly-Clark, described his philosophy in a recent Ad Age interview, “The other thing is, we don’t believe in digital marketing. We believe in marketing in a digital world, and there’s a huge difference.”



SPENCER L. HAPOIENU is president and co-founder of Insight Out of Chaos, a database and direct marketing company. He can be reached at spencer-@-iooc.com or (212) 935-0044.

MAY / JUNE 2012 | PDF | Subscribe | Home