I wanted to share with you a document I recently prepared that attempts to both summarize the current challenges facing brand managers in France together with some ideas of how these challenges might be met. I believe the analysis makes sense for companies in many markets, so thought I would share it with you. To frame it for you: this paper was written as something that could be taken to a senior executive, so has an overall strategy (vs tactical) approach. It was inspired, in part, by a final exam question given to students in one of my international PR courses this spring. As always, I would be interested in your comments. In the coming weeks I will be digging into some of the ideas contained in this analysis, and will share the results with you.
Confronting the Upcoming Challenge in Achieving Brand Awareness in France
French brand managers are facing a serious problem today: How does one achieve similar audience reach (as compared to traditional channels, especially TV) on new media/internet platforms for the purpose of brand awareness? The short answer is, one can't. As Shelly Palmer, a US-based expert on television advertising said in a recent presentation, nothing beats the scale of TV. It is the only place one can achieve large audiences presumably watching the same thing at the same time, including ads. Now we can debate whether people are actually watching the ads, but in terms of traditional measures of reach, TV is the only place to find it. Given that there may soon be fewer options on French television to purchase ads (all ads may soon be prohibited on French public television), plus an increase the cost of advertising on TV, this means a potentially dramatic cut in brand awareness among target audiences. As of today, there is no replacement that can deliver reach on the same scale, not even online.
Perhaps – and only perhaps – it might be possible to achieve the same raw numbers by buying ads across an extremely large number of websites, portals and so on. This is a primary driver behind the proposed buyout of Yahoo by Microsoft. In Microsoft's public letter to Yahoo, they wrote, “The online advertising market is growing at a very fast pace, from over $40 billion in 2007 to nearly $80 billion by 2010. The resulting benefits of scale along with the associated capital costs for advertising platform providers make this a time of industry consolidation and convergence. Today this market is increasingly dominated by one player [Google]. Together, Microsoft and Yahoo! can offer a competitive choice while better fulfilling the needs of customers and partners.”
Even if scale in advertising platforms can be reached, there remains the problem of the fragmentation of the brand exposure. This, combined with a documented lack of success in online ad viewing, means that the raw numbers don't necessarily add up to a similar level of brand exposure quality (to put it awkwardly). People simply don't have the same reaction to online banner ads as they do to television ads. The 30-second spot, the core of TV brand advertising, doesn't exist online and probably never will. There is nothing that replaces it in terms of effectiveness (even if, as we are starting to see today, this effectiveness is declining).
Major consumer brand companies, such as Unilever, Proctor & Gamble (P&G) and J&J are all experimenting with online media, social media and so forth. There have been both documented successes and failures, and there is much to be learned from them. But it is clear that the efforts underway are still viewed as relatively experimental at the companies, with executives publicly stating they aren't or cannot measure their success in terms of traditional ROI. While some of them are indeed achieving the gain of a large “audience” -- and I use that term advisedly – it is through very different mechanisms than advertising.
Clay Shirky wrote back in 2002, that one can't get both scale and interaction online. “Communities are different than audiences in fundamental human ways, not merely technological ones. You simply cannot transform an audience into a community with technology, because they assume very different relationships between the sender and receiver of messages.” If you look at examples of brand “communities” online, it is clear that the difference between those that succeed and those that fail is the human relationship issue. This is another roadblock to preventing scale along former audience-driven/reach-driven lines. With the explosion of social networks, it is becoming clear that the only way to achieve scale is to turn over all control of the community to its members, and keep a light touch on the branding lever. Efforts by J&J, Purina and Pepsi offer examples (Pepsi is in the early stages) of this type of community.
One of the other lessons being learned is that the communities that brands develop really can't be about the brand. Rather, they are about some kind of “object” to which the brand is related, more or less obliquely. For example, J&J's Babycenter.com is about sharing information about babies and toddlers for the benefit of, mostly, moms. Purina's Petcentric.com is about people's pets. P&G's beinggirl.com is about the issues growing girls face in their lives.
What is tremendously interesting here, is that consumer brand companies are finding themselves becoming media companies. Not in the traditional sense of media 1.0, but in media 2.0, or participatory/social media. This shift flies in the face of the old “core competency” business strategy where companies focus on what they do best, shedding or outsourcing the rest. But the shift in technology and audience expectations is driving a major evolution in marketing, which, at least initially, is leading companies to develop, purchase and/or maintain/support media properties, be they online forums, blogs, and social networks. (This is already starting to result in brands competing with traditional media, the very places they have supported by their advertising over the past decades. With large consumer products companies in better financial shape than media companies, this might result in some odd marriages in the next few years.)
There is a very interesting presentation available on the economics of Media 2.0, by Harvard Business Online/Director of the Havas Media Lab's Umair Haque that sheds a light on some of the strategies that media 2.0 companies should pursue. He identifies three mechanisms that allocate scares attention efficiently, the “holy grail” of media 2.0, and I would argue, marketing: revelation, aggregation and plasticity. The first relates to people sharing information, the second to the aggregation of this information into buckets that are more easily digestible (this aggregation happens both automatically and through voting platforms like Digg.com), and the third to the inevitable mashups that occur during this process. What is interesting, is that the profit here comes at the end of the cycle, not the beginning. It is after the information is disseminated, commented upon, processed and acted upon that someone is willing to pay money for the results of the “act” or, I would argue, the resulting “object”.
Brands, who can play at all three levels, should especially focus on providing value towards the end of the cycle, where, instead of having people pay for the object with cash, people pay with attention to brand messages.
As Haque's presentation indicates, the economics of Media 2.0 also tells us that popularity is driven hyperefficiently by quality, not marketing. This has two major implications. First, it tells us that niche markets are incredibly valuable and they are winner-take all markets, meaning if you can own it early on, you will totally own it. In terms of brand communities, for example, it would behoove brands to figure out what their niche is and investing in building objects in that niche. This is what Petcentric.com has accomplished. There are other examples, from social networks for skiing to running and so on. These latter ones aren't owned by brands, but they are increasingly active. The second implication is that investment has to come in production, not attention. Brands have to ask themselves where production opportunities lie and move marketing budgets there. (There is a meme online now that products themselves have to have marketing built into them – the iPhone is an example.) The challenge is, of course, that it takes time to realize audience scale and ROI; we are talking years vs. months.
The new book Groundswell, written by Forrester analysts, states that “Awareness remains crucially important, so don't expect the groundswell to change that part of your marketing.” In other words, brands will still use traditional marketing techniques, including, especially, the 30-second TV spot. Which brings us back to the original problem. If the opportunities to advertise are disappearing due to regulations and cost pressures, where does this leave us? In an awkward transitional phase where falling brand awareness is a very real possibility.
Another challenge brand managers have to deal with in this changing world is, as alluded to above, the potential for brand fragmentation. It becomes ever more difficult to express what the brand stands for over the astonishingly wide variety of formats and channels online. From search ads and banner ads, to Facebook widgets and YouTube video channels, it is easy for brand ablation to occur. Not only is it difficult to keep brand consistency in terms of look/feel across all these different channels, the very messages of the brand itself will work better in some places and formats than in others. Success in one place is no guarantee of success in another. This is, of course, complicated as consumers start talking about and mashing up your brand. So what stable point remains in all this upheaval? For one, the product itself. Quality has to remain consistently high. And, as I mentioned above, marketing is ideally “built in” to the product itself, so it therefore effortlessly matches the brand messaging. The second opportunity is working to have a similarly effortless link between the marketing object, which I have mentioned a couple of times, and the brand. To put it another way, it is as if two products are being produced, the one sold on the market (bought with cash) and the other “sold” to a community (bought with -- or perhaps “traded for “is a better phrase -- attention).
In France, there is another significant challenge, which is the low participation online of key demographics, particularly women between the ages of 25 – 44, according to the social technographics tool provided by Forrester. Women's participation is below average in all categories of online participation. What is particularly clear, is that women, for the most part, are not creators, nor are they joiners (which, as Forrester has stated, may mean that the opportunities for joining have been scarce, for example, Facebook has only recently provided a French language interface). If a brand is seeking to set up a brand community to create new relationships with its customers, particularly around awareness, this is a major challenge. They cannot simply build a social network and turn it on. They are going to have to provide large amounts of content up front that women can comment upon and collect. This is going to require significant time and financial investments.
The numbers of participants for French women increase for the late teens/early twenties, and for males, across the board, the numbers are higher. However, as is the trend across Europe and the US, the number of creators remains in the minority. So even if you are expecting to target teenage males, providing strong community management and content will be critical to success. At some point, the brand will likely be able to decrease its hands-on participation and/or support in terms of content creation (if they choose to do so), but this is a point probably measured in terms of years.
This double whammy of decreasing opportunity for advertising combined with a relatively low participation rate for new media for key audiences will be a tremendous challenge for brands in France over the next 3-5 years. There is no easy solution. A combination of media buys across both traditional and new media will likely not meet raw reach targets, and the results of new media advertising (search and banner, particularly) may not give the hoped for results, given people's resistance to advertising online. And yet, it is not all bad news, as we know that the effectiveness of social media marketing may be higher than traditional advertising. The value of the conversation, the value of the engagement (even though this remains difficult to measure today), may result in enough brand awareness and goodwill among engaged audiences that it makes up for the lack of sheer reach in terms of numbers. At least that is the social media marketing hypothesis, which, while it is as yet unproven on a large scale, offers some impressive results for early experiments.
Another option for French brands is to think about in-person marketing or event marketing. While expensive, it might offer a way to bridge the gap over the next few years, particularly in terms of generating awareness. Sponsoring sports teams, art groups, flash mobs, or school/community events are a few examples. Being physically present among the communities of people you are trying to attract to your online properties may provide the needed impetus for people to join. It would be ideal to tie offline world activities to the creation of the “object/s” of your online efforts. In fact, all offline marketing efforts should have a strong connection to online efforts.
Brands in France may be forced to adopt new media strategies and techniques uncomfortably early in the adoption cycle. In the end, however, most brands will have to move in this direction worldwide given global trends in technology, marketing and so on. By being forced to move online faster than they would have liked, it might give French brands a competitive advantage (or at least knowledge/practice advantage) in the long term. Brands will have to learn alongside their customers, which, while it will almost certainly result in some awkward missteps, in the end, it might result in stronger relationships, greater brand loyalty, and increased profits on the bottom line.