Last week I wrote a piece on AdAge revisiting Stock and Flow. If you’re interested you should read the whole thing, but here’s a snippet:
To answer that question, let’s start with what’s changed. The core social platforms, Facebook and Twitter, have continued to explode. Mobile has enabled a host of new social platforms such as Pinterest and Snapchat to grow at breakneck speed. LinkedIn has added informational content like LinkedIn Today, LinkedIn Influencer and sponsored updates. Google has built a massive social system with the deepest mobile integration of any platform we’ve ever seen (thanks to Google’s Android mobile operating system). “Native” advertising has come to the fore. And search and social have crashed together: According to SearchMetrics, seven of the top eight signals in social now come from search.
Meant to post this last week, but didn’t get to it. Felix Salmon wrote a great post on how wine is one of the few things in the world you can buy for happiness. I’m fascinated by stuff like this:
The more you spend on a wine, the more you like it. It really doesn’t matter what the wine is at all. But when you’re primed to taste a wine which you know a bit about, including the fact that you spent a significant amount of money on, then you’ll find things in that bottle which you love. You can call this Emperor’s New Clothes syndrome if you want, but I like to think that there’s something real going on. After all, what you see on the label, including what you see on the price tag, is important information which can tell you a lot about what you’re drinking. And the key to any kind of connoisseurship is informed appreciation of something beautiful.
This is the messy part of branding. All those factors play into how we feel about brands, products, and just about everything else.
I’m sure you’ve all seen this quote. It’s attributed to Robert Stephens, founder of Geek Squad, and goes something like: “Advertising is the tax you pay for being unremarkable.” (I was reminded of it most recently reading Josh Porter’s blog, Bokardo.) It sounds good and, at first blush, correct, but it’s not for lots of reasons.
Broadly, the line between advertising, marketing, branding, and communications has always been a blurry one. Depending on who you talk to they have a very different definition. For the purposes of the quote, let’s assume when Stephens was talking about advertising he was specifically referring to the buying of media space across platforms like television, magazines, and websites.
With that as the working definition, there are lots of complicated reasons big companies advertise their products. Here are a few:
- Distributors love advertising: If you’re a CPG company you advertise as much for the supermarkets as your do for your product. The more money you spend the better spot they’re willing to give you on the shelf (the thought being that people will be looking for your product). I don’t think there is anyone out there that would argue shelf placement doesn’t matter. At the end of the day supermarkets are your customer if you’re a CPG company, so keeping them happy is a pretty high-priority job.
- Advertising is good at making people think you’re bigger than you are: Sometimes a company or brands wants to “play above its weight,” making people think they’re bigger than they’re actually are. When we see something on TV or in print, we mostly assume there is a big corporation behind it. Sometimes that’s more important than actually selling the product.
- Sometimes you’re not selling a product at all: There are many companies who advertise for reasons wholly disconnected from their product. GE, for example, isn’t running TV commercials about wind turbines to solely try to communicate with the thousands of people who are potentially in the market for a multi-million dollar purchase. A part of why they do it is to communicate with the public at large who is both a major shareholder for the company and also the end consumer of many of their products (many planes we fly on run GE engines and our electricity probably wouldn’t reach our house without GE products). How remarkable their products are has no bearing in this case, since we would never actually be in the market for the vast majority of the things they produce.
Broadly, though, the point I’m trying to make is that while many write off advertising as having no purpose (or being “a tax”), it’s just not true. What’s more, as advertising becomes a more seamless part of the process of being a brand in social, I think this will only become more true. If you see a piece of content performing well on Twitter or Facebook why would you not pay to promote that content and see it reach an audience beyond the core? At that point you’ve eliminated the biggest challenge traditionally associated with advertising (spending tons of money to produce something and having no idea whether it will actually have an effect on people). Seems to me if you’re not willing to entertain the idea you’re just standing on principle.
I really like situations that help describe the fact that lots of factors ultimately go into the way you feel about a brand/design/marketing. I wrote a bit about how Jony Ive feels about it last week and I thought this was another interesting example from a very different place. In the early 90s a designer named Alexander Juilian was given the opportunity to redesign the UNC Tarheels basketball uniform. He was a huge Tarheels fan and thus felt a ton of pressure to deliver something amazing. Not wanting to leave things to chance, he looped Michael Jordan into the decision (Jordan, at the time, was just starting his ascent to the greatest player in the history of the NBA but he was already UNC royalty). Ultimately Julian sent all the designs to Jordan to let him sign off on his favorite:
“And guess what? As soon as Michael [Jordan] said that [the argyle design was his favorite], then the entire team also liked the argyle best. So we made the first uniform in Michael’s size, sent it to Chicago, he worked out in it, then we sent it down to Chapel Hill. There was near frenzy, I’m told, in the locker room as to who was going to be the first Carolina player to put it on after Michael because they wanted Michael’s mojo. Hubert Davis (photo, above right) won, he was the same size and he was the model. Now he’s a great sportscaster.
Ran across an interesting quote (reportedly) by Jony Ive about the difference between measurable (speed, hard drive size, etc.) attributes and the non-measurable ones:
But there are a lot of product attributes that don’t have those sorts of measures. Product attributes that are more emotive and less tangible. But they’re really important. There’s a lot of stuff that’s really important that you can’t distill down to a number. And I think one of the things with design is that when you look at an object you make many many decisions about it, not consciously, and I think one of the jobs of a designer is that you’re very sensitive to trying to understand what goes on between seeing something and filling out your perception of it. You know we all can look at the same object, but we will all perceive it in a very unique way. It means something different to each of us. Part of the job of a designer is to try to understand what happens between physically seeing something and interpreting it.
I think about this a lot. One of the things that inspired Brand Tags originally was a similar quote from my friend Martin Bihl’s 2002 AdWeek article: “The way I look at it, a brand only exists in the consumer’s mind. That other product isn’t a brand yet because consumers don’t really know about it. It’s still a product.”
I find stories of how new products and technology get adopted quite fascinating. While propaganda is much more associated with politics than brands, there’s a long history of companies using some of the same tactics to sway public opinion in favor of their product. The two examples that come to mind for me are stories like the diamond myth and Listerine’s introduction of halitosis.
Anyway, a podcast I’ve been listening to recently, 99% Invisible, recently covered one of these public relations campaigns that ultimately lead to the acceptance of cars (and invention of “jaywalking”). At the time, in the early 20s, cars were killing lots of people who weren’t used to sharing the streets with them. The car industry had to do something so they pushed a campaign that has now become familiar to us by way of the NRA: Cars don’t kill people, bad drivers kill people. But more interesting, to me at least, was where jaywalking came from:
In the early 20th Century, “jay” was a derogatory term for someone from the countryside. Therefore, a “jaywalker” is someone who walks around the city like a jay, gawking at all the big buildings, and who is oblivious to traffic around him. The term was originally used to disparage those who got in the way of other pedestrians, but Motordom rebranded it as a legal term to mean someone who crossed the street at the wrong place or time.
Excuse this bit of bragging, but this makes me incredibly proud. Today, Christa Carone, CMO of Xerox, wrote this about Percolate on Forbes.com:
As an active Twitter user and scanner, I’m constantly prowling for Tweet-worthy articles and insights to share with my followers. But, like every multi-tasker, over-committed, “not-enough-time-in-the-day” person I know, there are always competing demands for time that keep me from heeding the call of the little blue bird.
Thank goodness for Percolate, a small but fast-growing company that recognizes that marketing on the “social scale” requires content, content and more content, but only if it passes the relevancy test. Through algorithms, filters and other tools, Percolate scours the web and serves up content tailored to my specific areas of focus that I can review and easily share.
I’m grateful for and a tiny bit envious of this start-up. I marvel at how its founders quickly spotted a need and last year created a company that has scored a slew of clients and, in November, $9 million in funding. Besides that, everything this company does is on-brand, from its business cards and its Daily Brew email to the—yes–perkiness of its staffers.
One of my resolutions for 2013 is to spend more time learning from small companies like Percolate. Big organizations can be great marketers but often find it hard to act fast. Frankly, “seize” isn’t something that is easily said or done. But there are lessons that Goliaths like Xerox can learn from more nimble David-sized enterprises.
Beyond it being incredibly flattering, there are two things that make me especially happy reading this: First, it’s just the recognition around the brand. I spent a lot of time working with large companies with unbelievable brands and its fun to get a shot at building your own. I still believe deeply that there’s an opportunity within tech, especially on the enterprise side, to take advantage of the lack of thoughtful brands in the space. Second, and more importantly, it’s the recognition of people as part of the brand. When I worked for Naked Communications the tagline (or whatever you want to call it) was “everything communicates.” Brands aren’t built with collateral and style guides, they’re built through interactions and, for us and many other companies, those interactions are with people just as much as they’re with software. Your brand is the total of all those parts and interactions and the responsibility for it sits with everyone in the organization, whether they’re on the front lines dealing with clients or they’re just out at a bar talking about their jobs.
It makes me incredibly proud to read something like this.
For whatever reason I’ve been listening to a lot of podcasts lately. One of my favorites is Planet Money from NPR. Their latest episode is a really interesting look at why Coca-Cola stayed 5 cents for 70 years. Turns out there are two primary reasons: First, the company got into a crazy deal with the bottlers where it was selling syrup at a fixed price of 90 cents a gallon. Because it was a dumb deal and Coke knew it they realized they needed a way to keep the price from spiraling out of control. Their solution was advertising. Because they couldn’t control the sale price they just went out to the market and told everyone it was 5 cents a bottle, meaning retailers were left with no choice but to sell it for the price consumers expected. The second reason is a little less exciting, but still interesting. Apparently Coca-Cola had an insane amount of vending machines around and they were all 5 cents. After getting out of their contract they could raise the price, but they didn’t want to double it and the machine couldn’t take anything but nickels. They tried (and failed) to lobby the government for a 7.5 cent coin, but eventually just kept the price as it was (with a brief period of giving every eighth consumer an empty bottle to artificially raise the price in a crazy way).
Go check out the whole thing.
I was going to write something in response to the post about Mark Cuban leaving Facebook for MySpace (he doesn’t like that you have to pay to reach 100% of your audience), but Dalton Caldwell beat me to the punch with a well-put take:
We can expect to see Facebook deemphasizing traditional advertising units in favor of promoted news stories in your stream. The reason is that the very best advertising is content. Blurring the lines between advertising and content is one of the most ambitious goals a marketer could have.
Bringing earnings expectations into this, the key to Facebook “fixing” their mobile advertising problem is not to create a new ad-unit that performs better on mobile. Rather, it is for them to sell the placement of stories in the omnipresent single column newsfeed. If they are able to nail end-to-end promoted stories system, then their current monetization issues on mobile disappear.
The only thing I’d add to this (which I tweeted yesterday) is why would brands be treated differently than people on Facebook? If any of us post something to FB it will only reach a portion of our friends, so why should a brand be able to reach 100% of their fans? It’s a filtered platform and that’s what makes it different than Twitter and Tumblr.
I’m going to write about NASCAR and marketing, if you don’t care about either of those things, you can quit reading now. I’m writing this for three reasons:
- I’m a big NASCAR fan (it’s more than just going around in circles, I’m happy to explain it sometime)
- I spent some time working with a NASCAR team and learned a lot about how the business side of the sport operates
- The New York Times had a story yesterday about how the NBA can learn something from NASCAR in regards to it’s thought about adding sponsors to jerseys. This article almost entirely missed the real point of NASCAR sponsorships. (I can’t say I find this shocking as NASCAR is hardly the number one beat for the Times.)
For some reason the article focused on how sponsors can affect the behavior of the athletes. This is sort of interesting, but pretty far from the real story of NASCAR sponsorships. While the business of NASCAR is struggling for a bunch of reasons (financial meltdown, arms race in technology raising the cost of fielding competitive teams, more competition than ever for ad dollars), what makes it work has not changed. When a brand buys into a NASCAR sponsorship (which goes for ~$20 million for a full season), they are buying two big things: Loyalty and activation opportunities.
Let’s start with loyalty. This is what the article really misses. When brands sponsor NASCAR they get a real understanding from the fans that they are responsible for the car on the track. The drivers get it, the teams get and the fans get it. This is hugely different from slapping your logo on something (whether it’s soccer where it’s displayed in giant form on the player’s belly or basketball, where they seem to be thinking about some little sponsorship patch). People in those sports think the sponsor is responsible for the team in the same way no one will ever walk into a Brooklyn Nets game and say “thank you Barclays for making this possible.”
The numbers in NASCAR back this up. I used to have them, but the league and teams generally trot around a number of 80%+ loyalty of a fan to its driver’s sponsor. If Jimmie Johnson is your guy you go to Lowe’s not Home Depot. That’s just how it works.
Okay, onto activation. Take a look at the official sponsors of NASCAR teams and you see a few different kinds of companies: Car-related companies (NAPA, Shell, Mobil 1), CPG (Budweiser, Mars, Miller Lite) and a lot of retail/franchise businesses (Burger King, Target, GEICO, Farmers Insurance, Home Depot, Lowes, Office Depot). The first set is obvious, the average NASCAR fan likes cars and car-related stuff. The second is about audience as NASCAR skews heavily male and sometimes guys are hard to reach. The last, though, is the most interesting to me.
What all these companies have in common is lots of employees (you could throw FedEx in this group too and UPS was a long-time sponsor of the sport). One of the more interesting things about how brands actually utilize their sponsorship is that they do fully integrated program where they use a sponsorship to reach not just consumers, but also employees. Target, Home Depot and Lowes have 900,000 combined employees (365, 331 and 204). That’s a lot of people to keep happy. One of the ways they do it is give them something to root for. It’s not shocking, or even all that interesting, it just sort of makes sense and means that the investment is offset into a few different departments.
Anyway, I don’t have a real conclusion to all this, just felt like writing a little bit about what I know about NASCAR. Hopefully it was relatively interesting.
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