We’re all loved up but we’re not making any cash. Who will be the first to build a portfolio of next generation marketing communications capability

November 30th, 2007

In a business week article Struggles of a Mad Man Kevin Roberts CEO of Saatchi & Saatchi regales us with how he won the business of JC Penny. It seems by getting the Chairman drunk and then telling him his real secret of success… ahem Lovemarks

Lovemarks reflects a long-held notion on Madison Avenue that the consumer is a woman who must be seduced. In his 379-page coffee table book, Lovemarks: The Future Beyond Brands–an ornate read with a decidedly ’60s vibe–Roberts explains that a Lovemark is a brand consumers don’t just trust, but love. “Think about how you make the most money,” he writes. “You make it when loyal users, heavy users, use your product all the time…. So having a long-term love affair is better than having a trusting relationship.”

This is pure Schlock and I am not the only one. Many a senior Saatchi person has groaned about Lovemarks and how much they hate it. Jouko Ahvenainen has some interesting comments on this too

In truth, Lovemarks is a little bit like slapping “New and Improved!” on a familiar box of laundry detergent. After all, Mad Ave has been claiming an emotional connection to the consumer at least since the Leo Burnett agency invented the Pillsbury Doughboy in 1965. But Lovemarks resonated with Ullman, and on Aug. 31, 2006, Penney named Saatchi its creative agency, an account worth over $20 million in annual revenue.

Great TV work was done however there was a snag. The commercials weren’t working. The retailer’s analysts had concluded that, against spiking gas prices, the campaign was doing little to compel shoppers to visit Penney’s stores.

The article discusses who is best suited to guide brands towards consumer Nirvana – it certainly in my mind is not advertising agencies anymore. Not unless they go through some miraculous overhaul and from my direct experience it won’t happen fast or easily. But for gods sake who? I say this with an open mind and a heavy heart as I did spend many years in Ad Agencies all over the world. My honest experience is that over the last 10 years they have stuck their head somewhere? But also they have existing agreements, business models, infra-structures. It ain’t going to be easy to change that lot. Then of course you have all those human emotions, greed, avarice, arrogance, blindness, fear… Not that I have put them in any particular order

The process and method we need is Engagement Marketing, why? Well we explain that well in CDB, Business Week ads

For most of the 20th century the so-called creatives ruled the industy. They didn?t worry about where and how an ad run. They didn?t analyze market niches. They were about Big Ideas what would connect a brand, emotionally, with millions of consumers. Today, you might say, the Small Idea is ascendant. Ads are targeted at individuals or communities of consumers. That?s because the media universe is so fragmented – into blogs, social networks, television, magazines, and so on – that finding the right medium is fast becoming more important than the message itself

And so the Marketer of the 21st Century and the network that works alongside him or her will be working in a very different manner. We also know that brands are working now directly with broadcasters rather than going via their media agencies.

Marketers are stampeding online, where Saatchi lacks the tools and talent to compete. Digital boutiques are proliferating, staffed with ?90s tech vets and Gen Y video artists dedicated to making ads for social networks and whatever comes after them. Meanwhile, chief marketing officers are looking for data to justify their ad budgets to the bean counters.

The Big Idea of just in case you might be interested Vs. highly targeted and valuable information delivered to people who see commercial $$$ as something of value to them. This can only be done through Social Marketing Intelligence

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Such refined intelligence derived through massive data flows can do the following

1). Average ad income increased from 11 cents to 20 cents (+82%)

2). Higher premium for highly valuable audiences in Internet community. Personalise advertising & engage users

3). 90% increase in sales by using Social Marketing Intelligence and Alpha Scoring

4). Estimated annual gain of ?7.5 Million. 21% better accuracy in predicting churn

5). New customer acquisition grew by 25% compared to 4% with using previous marketing methods

6). 30% better response than previous similar mobile campaigns

Analogue advertising cannot achieve such results. It is the The end of the “Belle Epoque Social Marketing Intelligence becomes Social Advertising Intelligence.

The smart companies will be building a portfolio of next generation marketing capability, and combining that with data refining capabilities that can capture data of multi-platforms as all advertising will be digital by 2015 and turn that into highly valuable intelligence.

By 2015 all advertising will be digitalized – Raw data has no value as such, it needs to be refined – Peer-to-peer flow of communications is 2 to 10 times greater than all other web or mobile traffic – Traditional media is searching for effective advertising solutions in the digital age, so where is the missing link?

  1. One Response to “We’re all loved up but we’re not making any cash. Who will be the first to build a portfolio of next generation marketing communications capability”

  2. By Matt Cronin on Dec 3, 2007

    Great article and I particularly like the illustration.

    Digital channels are breathing new life into word-of-mouth and giving us the data to prove it’s influence. But as with all digital marketing channels, the data can be overwhelming to those with a broadcast mentality. The narrowcast approach often proves to be more effective on the bottom line but requires significantly more effort, such that many agencies have struggled to make money doing it. It’s far easier to produce a TV spot and mark it up.

    Digital agencies are beginning to demostrate how this can be done – it’s these agencies whose portfolios should be watched closely for the services you seek.

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