The Bolin Marketing Blog

My account team recently fielded research to determine the optimal messaging to elicit purchase interest in our client’s new product. We labored for WEEKS developing just the right wording for alternative positioning statements.  Considerably less time was spent on selecting assorted product-related images to accompany the positioning statements.

The research results were markedly decisive – the images drove consumer preference for a specific positioning; not our meticulous wording of benefits or taglines, not even the brand name choices.   I shouldn’t have been surprised – a picture’s worth 1000 words and all that, but I admit to being disappointed.

I’ll be straight with you – I like words.  As a foreign language major, I loved crossing the “frontera” into a new culture that command of the language allowed.  Nothing beats a well-written work of fiction for immersion into fantasy.   I even kvetch about tonality in emails.

However, at the risk of being the word dinosaur, I turned to my daughter Beatrice for counsel; I figured a sharp millennial can teach a boomer the new tricks of the trade, possibly giving some insight into this documented dominance of imagery.

Beatrice reports, “Millennials respond to pieces of information that convey the most meaning in the least amount of words.  Marketing tools such as Twitter and Facebook represent one way; information can be clearly presented and require no effort by the reader.  If I see an ad with large blocks of print or confusing lines, I am either going to focus on the image or I’ll disregard the ad entirely. The images need to both get my initial attention and hold it.”

Dios Mio!  Are we destined for new-age hieroglyphics as our primary marketing communication? Would you want to still use words in your advertising? Do you think this is a trend specific to the Millennial generation or will we still get this feedback in subsequent generations?

Take a stroll down the aisle at your favorite mercantile or peruse the Sunday FSIs and you will be bombarded with “new” products. However, you will be hard pressed to find many that bring innovation to their category or the consumer. Many new products are simple flavor extensions to existing brands; these products require little R&D and companies will continue to churn them out as long as retailers continue to accept them as evidenced by Pomegranate Fruit-O’s, Hot Dog flavored potato chips, etc. Okay, those aren’t real items that I know of but that’s not far off. Most of these new flavors are just replacing last year’s new flavors.

When a retailer is determining its shelf set, they are looking for what is new and different. They want to provide customers excitement (and, preferably, charge a premium for it). However, some manufacturers shy away from innovation because of the perceived difficulties (research & development, consumer testing, etc.) and risks. Full disclosure: developing an innovative product is riskier, but the rewards are higher. An innovative product may secure wider distribution more easily and may command a higher profit margin than a simple flavor extension; or its retail acceptance may be incremental rather than replacing last year’s flavor.

One way to minimize risk and still innovate (pragmatically) especially in the CPG world is to step out of your category and look at what is happening in others, e.g., delivery systems, ingredients, etc. Look for things that would be useful for you in your category. You don’t have to invent the wheel to be innovative – you just have to come up with a new use for it. For example, foaming action gel is a staple in the shaving category but it was unknown in the toothpaste category until recently. GlaxoSmithKline created a line of foaming action toothpastes (under their AquaFresh and Sensodyne brands) that claim to help clean between teeth in ways that other toothpastes can’t. It’s a simple concept with believability that manages to bring something new to its category.

There is (and likely always will be) a place for simple line extensions, but if a manufacturer wants to be a category leader; they need to innovate or be prepared to be left behind.

As I travel the world for both business and personal reasons, I am always fascinated by cultural differences and how they play into proper communications – which is at the heart of any successful business relationship.

At the beginning of my very first business meeting in Japan, I was greeted by over a dozen staff from the client – all properly lined up in order of seniority, each anxious to present their business card to me and to receive mine.  Yes, I said ‘present’ as the exchange of business cards in Japan is similar to a ceremonial ritual.  In Japan, business cards are called meishi and Japanese give and receive meishi with both hands.   Ideally yours should be printed in both English on one side and Japanese on the other.  And of course, present your card with the Japanese language side up.  A business card is viewed as a representative of the person and should be handled with special care.  I learned this during that first meeting when – in order to help remember each individual- I jotted a little note on each card.  I looked up to see all of my new associates staring at me in disbelief as – I later found out – one does not write on a business card, nor stick it in your pocket or wallet, as these actions are viewed as defacing or disrespecting the business card and therefore showing disrespect to the owner of the card.  I of course apologized later that evening at dinner where I learned that new employees at the client go through a 5 hour orientation on proper business card and greeting etiquette!

Here are a few other notable cultural considerations in Japan:
•    The customary greeting is the bow (and yes, they go through training on this as well).  However, some Japanese who are used to doing business with ‘westerners’ may greet you with a handshake – albeit a weak one.  However, do not assume a weak handshake is an indication of character as we would in our culture.
•    They do not like to deliver bad news and so prefer not to use the word ‘no’.  If you ask a question they may respond with ‘perhaps’ or ‘we will see’ or even simply respond with a ‘yes’ – all the while actually meaning ‘no’. Understanding this is critical in the negotiation process.
•    And then there is the whole concept of gift giving in the Asian business world.  It demonstrates friendship, respect and admiration.  However, there are key things to remember.  Don’t give lavish gifts; never 4 of anything (signifies death); try to give something that represents your home area (Minnesota Twins baseball caps, wild rice and Bob Dylan CDs are some that I have used to represent Minneapolis/St. Paul) and always properly wrap them.  And wrapping is a whole other area of customs and etiquette as colors have different meanings and some most definitely should be avoided.  Most business hotels in Asia have staff to assist in gift selection and wrapping and I have learned to take full advantage of their services.

Those are just a few of the cultural issues that one needs to be aware of in Japan.  Each country’s local customs and cultures need to be respected and generally understood as they are vitally important to creating successful business relationships.

Have you experienced any cultural issues in your business dealings?

CPG marketers know that slotting costs have skyrocketed over the last five years.  That has made the risk of introducing a new item in traditional channels much higher.  At the same time, retailers have been pushing for fewer flankers and more real, differentiating innovation as they manage their shelf sets smaller to either be more competitive or to attempt to reduce inventory costs.  So although brands still need to introduce new products to stay relevant and drive sales, it is more costly for them to do so, and retailers can be less incented to take them.

One pragmatic approach to mitigate the potential cost of a failed new product introduction is to first test a product in a non-traditional channel where slotting costs are not a factor.  Partnering with a major Convenience or Club chain or online seller who takes products directly or is self-distributing is one approach.  What channel option or partner that would work best will depend on the nature of the product.  Another approach is selecting one key partner to test the product with by offering them an exclusive introduction period on a new product, but in an agreement that comes with no slotting, and includes strong retailer support of the launch.  Retailers can be very responsive to this approach, because of the exclusivity of an item it gives them.  As there are fewer major players in retail, exclusives keep growing in importance to draw consumers in the door with a unique item that doesn’t compete on price.   The brand benefits from a low cost test market and gives them time to make adjustments before a national launch.

Have you tried this approach? What other pragmatic ideas have you used?

The hurdles can be high but the rewards significant. That’s the reality facing small to mid-sized consumer companies considering whether to expand their brand beyond the U.S. The decision demands the same entrepreneurial vision and pragmatic approach that helped create the brand in the first place.

The hurdles to international expansion are many. Questions such as how do I register my products? What regulatory authorities have a say about my products and what I can say about them? What’s the best way to go to market—distributors? Will the trade demand too much and erode my margins? What changes and languages will be required on my packaging? Can my logistics systems handle the increased complexity? Will my brand message resonate elsewhere? Do I have the right people to manage the international business?  These are just a few of the issues that will make even the bravest marketer ask another question, “Why bother?”

With the right approach, however, an international business can become an important part of any P&L. Here are a few “watch outs” to keep in mind as you approach the idea of international expansion.

Scale matters. Do you have a solid U.S. base that will allow for consistent brand support, even if it’s an investment spend for a while? Avoid a trader mentality unless you compete solely on price and you have the best price. Even then, brands matter and can allow for the realization of better margins.

“Where” matters. You can’t chase every single export opportunity; a focused approach and carefully crafted expansion strategy probably looks at North America first and possibly the developed Asia/Pacific and Western European markets first. There’s no need to leap frog ahead to smaller, generally more challenging markets first.

Commitment matters. Going international should not be an “opportunistic” exercise. If it is, make sure you’re willing to lose your entire investment as you’ll have a tough choice to make when the inevitable tough decision has to be made. Within reason, are you willing to see your international efforts through to the end?

In the end, going global is not for the faint of heart or the inexperienced. There’s no substitute for “been there, done that” and taking a measured, pragmatic approach has the potential to prove itself out many times over.

Every marketer, desperate to be (or at least, feel) current, wants to create a dialog, to build a fan page.  I applaud this quest for transparency, and agree that in this age of hyper-reality, where the most banal aspects of life have become entertainment, old world advertising seems contrived.

But 24-7 transparency is not for everyone.  Let’s face it: few people’s lives are interesting enough to warrant non-stop play-by-play reporting. And few companies can generate the kind of passion that sustains an ongoing dialog. They have not had the courage to differentiate, to segment, to innovate. And now, in an attempt to be transparent, they run the risk of exposing what traditional advertising carefully covered up:  that underneath a thin layer of brand veneer their service is no more than a commodity.

This is an exciting time: Transparency means marketers have to reach out across their organization: they can’t limit themselves to  creating  a promise (or illusion) of innovation and differentiation, they have to lead the delivery!

As everyone has probably heard by now, the famous “Become a Fan” button on Facebook will soon change to a “Like” button. This seemingly insignificant label change is presumably aimed at helping lower the barrier for interaction among Facebook users. No longer are people posed with the internal question “Am I really interested in a page’s content so much as to  become a FAN of the page?” Rather, they probably only will ask themselves “Hey, I LIKE this content and I find it interesting.” The perception change for users probably encourages interaction with content. Facebook has been reportedly notifying agencies of the change and is recommending that they use “Find us on Facebook” or “Like us on Facebook” for the changed verbiage.

But what does it mean for Marketers within Facebook? One could argue this is Facebook’s attempt to better serve users and build user communities, thumbing its nose at what has likely become a key engagement measuring point for brands and companies. It seems people will generally be more inclined to “like” content than become a “fan” of content, because “liking” something is far less committal than becoming a “fan” of something.

This linguistic change poses some interesting depth-of-engagement questions. How does this simple label change affect key performance indicators for a company or brand? More importantly, how does it change the perception of their value to brands and companies? Does it have detrimental or positive effects on the engagement metrics used by Fan Page administrators? And for users, should “Fan Pages” now become “I Like” pages?

When the words “Pragmatic Innovation” first came up in a recent agency management meeting as a way to describe what we do for our clients, the group fell silent for a minute, each person around the table deep in thought as to whether the words made sense or not. The words individually fit; but together, was it an oxymoron? 

 One the one hand, innovation, while such a broad term meaning different things to different people, makes perfect sense because Bolin is all about bringing new ideas to our clients. Ideas for leveraging their current assets, for bringing new partners to the table, for doing more with less, for how to think about their business differently, possibly even borrowing what worked in one industry and applying it to theirs.

 Being pragmatic, on the other hand, is all about doing what works, being bottom line oriented and realistic. And that’s certainly what our focus is as a marketing and business consultant. So are the two words polar opposites?  Or could they truly communicate the value we as an organization provide for our clients?  As we worked through our thoughts, the answer became increasingly clear that innovation that isn’t pragmatic isn’t very useful. And being pragmatic without bringing fresh and innovative solutions to the table doesn’t add much value in moving a company’s business forward.

 How Bolin brought together Radisson Hotels with Select Comfort to put Sleep Number beds in every Radisson is a great example of pragmatic innovation. Radisson needed a way to differentiate from the competition; Select Comfort needed a new distribution channel, one that allowed consumers to “try before they buy.”  The partnership Bolin forged created an innovative win-win combination that gave Radisson a point of difference and a whole lot of exposure for not a lot of money while Select Comfort sold a lot of beds to a new channel and a new set of pre-sold customers that had already tried out the bed on their last trip. Clearly both innovative and pragmatic at the same time!

 As we thought through other examples of the work we do for clients, we realized that this tends to describe most of the work we do, bringing clients innovative new ideas that ultimately work and move the needle.  What do you think of the concept and can you think of some other high profile examples of pragmatic innovation?

The other day, during my office “spring cleaning” I ran across an article in Ad Age titled, “Why metrics are killing creativity in Advertising”. That was right after I got this hilarious email. It got me thinking – is creativity inevitably doomed? Every day, there are so many enemies, obstacles, traps, and assassins of the creative idea, that their survival rate after birth is becoming dangerously low. Metrics. Mandatories. Brand Guidelines. Focus Groups. Multi-layered agency approvals. Multi-layered client approvals.  Shrinking budgets. And of course . . . Legal (don’t get me started). Like it or not, creativity is fast becoming labeled a “commodity”. Something anyone with a computer and some slick software can do. But run of the mill, computer generated creativity is everywhere. It doesn’t stand out. It doesn’t grab you by the heart and make you feel. Or act. So here’s my plea. Next time you see a really great idea, take the time to really appreciate it. Then send it on to your co-workers for inspiration. Maybe put a little extra in that budget for brainstorming, original music, or to hire a great new photographer. And don’t be afraid to take a chance. And when someone says, “Let’s run this past legal”, just run the other way. Push your client’s comfort zone. Then push your own. Sure it’s daring, and a little scary. But in the end, it will be well worth it.

This is a response to Adam L. Penenberg’s article “How Much Are You Worth To Facebook,” which can be found here: http://www.fastcompany.com/magazine/139/loop-de-loop.html

The article is focusing on what the author views as an opportunity for these large social media sites to begin making money off their massive audiences like the search engines have done with keywords and websites have done with banner ads.

We have addressed the value of banner ads and their role in a campaign, as well as clarifying several points the author makes in this article that may be misleading.

The Value of Banner Ads
Articles supporting or devaluing banner ads are released as often as articles that support or devalue all forms of media. It all comes down to what the objective is for your online advertising campaign. If your goal is to build brand awareness, you will want to spread your message quickly to as many users in your target audience as possible and at an efficient CPM, which is what banner advertising can accomplish. With banner ads, you generate reach and frequency quickly to tell people a message, including those who weren’t aware of your message before – which is especially important for a new product.

Many studies have been conducted that illustrate the effectiveness of banner advertising in increasing brand awareness along with sales, website visits and time spent/pages viewed on advertiser websites. For example, the Online Publishing Association did a study with Comscore in January of 2009, called “The Silent Click.” The study used a control/exposed methodology to measure behaviors of consumers post exposure to an online banner ad campaign conducted by the 20 top display advertisers across a variety of industries. In the area of Consumer Packaged Goods (CPG) the study showed:
• The exposed group spent 14% more on CPG ecommerce than the control group.
• Large lifts in online searches for advertised brands and visits to advertisers’ websites (not counting immediate banner clicks)
• Large increases in minutes spent and pages viewed on advertisers’ website.

Specific Media, a network with robust targeting capabilities that Bolin partners with often, recently did a study measuring retail impact post online advertising campaign for a CPG client, using nothing but banner ads. This study showed a 58.6% lift in offline sales in the post-campaign period, and a lift of 86.3% in share of customer dollars.

Why “Clicks” and “Click Through Rates” Aren’t Important
In Penenberg’s article, he details click-through-rates (CTRs) and asserts in the second to last sentence of his intro that “it’s not about click-throughs anymore,” which is true…and it hasn’t been for a long time. Not since the internet and advertising on it stopped being a novelty.

Clicks are important if you’re doing a traffic-driving campaign that is specifically designed to get advertisers to your website. The media strategy here is paid search or banners purchased on a pay-per-click vs. CPM basis. CTRs aren’t important here because you’re using a mass amount of impressions in order to get a desired number of users to your site – visits to the site is the goal, and it doesn’t matter how many impressions are used to achieve this goal.

CTRs are not important in awareness campaigns because the goal is to put your message in front of the consumer where they spend their time online, similar to running a TV spot in a consumer’s favorite show or a print ad in a consumer’s favorite magazine. However, when the author talks about banner ads annoying users, he uses pop-ups as the example which is only one form of a banner ad and one that we would never recommend in any of our clients’ advertising campaigns.

The Role of Social Media
Social media is all about connections – with friends, coworkers, passion points such as sports teams, and even preferred brands. The connection you make with a consumer who “friends” your brand on a social networking site is far different than the audience you may reach with a banner ad which is why social media plays a different role in a campaign. We believe social media sites should be used to forge strong relationships through conversations with brand advocates – not for driving mass reach quickly. Social media is a longer term brand building effort.

Under the section “What Are You Worth To Facebook,” Penenberg discusses compensating consumers for participating with brands on social media sites. Our position is that to do this would ruin what these sites are all about – connections. People connect with people, groups, brands, etc. that they enjoy. Peer to peer endorsements are strong, and to know that your friend is talking about X brand because they’re getting something for it, rather than simply because they really like it, would take away much of the value of that endorsement. Sooner or later, we’d run into the same problem mommy bloggers are having – lost sincerity (also, the possibility of the FTC getting involved).

Summary
If click-through-rate is the only measure of banner ads’ effectiveness we would agree with the author. However, we use banner ads to build awareness (not to drive click-through rates).