Relevance: A new marketing paradigm

When I was learning how to be a good marketer a millenia ago, we never really talked about relevance, at least in terms of media placement.  Did we care about relevance?  Of course.  The problem was that we didn’t have the capability to place media so that it only reached audiences for which it was relevant. When you bought women age 18 – 34 that’s exactly what you got.  And consumers didn’t really expect to only see relevant advertising, because they knew that it wasn’t possible.

Of course, with the digital revolution, things have changed.  Or so I thought. Last week I was online on a Canadian website (you know, the ones with the .ca instead of the .com in the address).  This should be a strong indicator to advertisers that the audience for this website is Canadian.

Part of the price I pay for using a free website, is occasionally being exposed to advertising.  Usually I ignore it. But that particular day I saw an ad for Swiffer, brought to me by the kindly people of P&G. The ad offered some high value coupons, so I clicked on it.

After several clicks, I finally found the coupons in question.  Sure enough, the coupons were clearly labelled, valid only in the USA.

So now I’m annoyed.  I’ve been promised something, and I can’t get it. Because of the digital age, I now expect marketers to provide me with relevant advertising, because they can. And when they waste my time with irrelevant stuff…. well you see my point.

Today, we expect relevance.  We get bored when we believe something isn’t relevant.  (Believe me, I see it in my classroom everyday).  Being able to deliver the right message, to the right audience in the right way always was a marketing core competency.  And technology has just upped the ante.

What have you done recently to improve your marketing core competencies?

Is it Smart to Call Your Customers Stupid?

I just read a provocative post about smart and stupid customers on the Harvard Business Review blogs.  It argues that information asymmetry (one party having more knowledge than another) is justification for “savvy” pricing which creates more profitable customers.  In other words, it’s okay to gouge customers as long as they don’t know they are being gouged.

The only problem with that strategy is eventually the customer is going to find out that they were being gouged. In 2004, General Mills found out that they were being gouged by Saatchi and Saatchi New York. While Saatchi has remained on General Mills’ agency roster, they have lost significant chunks of GMI business over the years.

As I have said before in this blog, marketing is about relationships, it is about persuasion, not manipulation. When there is an asymmetry in a relationship, they don’t work.  Relationships based on a pricing strategy that banks on a customer’s lack of knowledge, or lack of market pricing transparency is not sustainable in the long run.

Behaviour like this is why my relatives call me an “evil marketer” at family get togethers (when they aren’t calling me the Nutty Professor).  And this is why we have a culture of mistrust of corporations. Maximizing profit seems like a smart thing to do.  Until the relationship crumbles.  And then, you’re left with nothing.

Branding Horror Story: SunLife

SunLife has launched a new advertising campaign in Canada. Because I couldn’t find it online, I’ll briefly describe it to you. A couple sitting in their kitchen start singing “If I only had a plan” to the tune of the song, If I Only had a Brain, from the Wizard of Oz.  Then their financial advisor joins them singing and dancing.

It reminds me of an old advertising saying, if you don’t have anything new to say, sing it.  There is no point of difference, no target market, no clear positioning, no evidence of an advertising strategy at all.

Whenever I see or hear this ad, all I think is that SunLife is for brainless people. And, because they used music so effectively, this is firmly wedged in my mind. (FYI, music has been shown to increase recall, so you need to be very cautious when using it.) 

Does SunLife think its customers are brainless? Probably not.  The nature of the financial advice business revolves around the relationship between advisor and customer.  If the company doesn’t respect you, you’re not likely to work with them.

Yet I now think that SunLife believes that I’m brainless. Maybe other people don’t think like me.  All I can say is that I hope they tested this spot before airing it.  It has all the earmarks of a branding disaster.

The Facebook Movie

Image via CrunchBase

It’s funny how a movie can be interesting, even if you know how the story ends.  That’s the case for the new Facebook movie, written by Aaron Sorkin, which I saw last weekend.  It’s a great movie, even if it exaggerates everyone’s character, especially that of Mark Zuckerberg, one of the founders of Facebook. One of the characters says to Zuckerberg, “every creation myth has to have a devil”, and that is indeed how Zuckerberg is played in the movie. 

There are a lot of lessons for would-be entrepreneurs in the movie:

1. Get your own lawyer
2. Make sure you have anti-dilution protection
3. Be ware of venture capitalists bearing money
4. Friendship means nothing when billions of dollars are at stake
5. An idea is intellectual property

But the most intriguing question in the movie from a business perspective is the question of monetization.  That is, how can Facebook make money?  According to Reuters,  FB made almost $800 million in revenue, and in the tens of millions in profit in fiscal year 2009. 

 Let’s start with FB’s much vaunted 500 million users.  If we used the traditional 20/80 rule, that is 20% of the users account for 80% of the activity, we would have 100 million active users.  I suspect that this rule might be a bit off here, so I’m going to be generous and suggest that its more like 40% of users accounting for 80% of activity.  That leaves us with 200 million users.  Not bad.  According to the Lubin School of Business, 84% of the millennial generation don’t notice advertisements on social network sites. But if only 15% of users notice the ads on FB, that leaves advertisers with an audience of 30 million users.  Which is a respectable number of users, but, as an advertiser, certainly isn’t something that is the next new thing.

According eMarketer, 73% of millennials see social networking as entertainment.  In this environment, advertising is going to be a more difficult proposition.  When people do a Google search, they are open to being advertised to, since they are searching out information.  When we’re on FB, we’re communicating with our friends, not looking for info about products.  Just because you know a lot about my interests, doesn’t mean that I’m interested in hearing about them when I’m on FB. 

That said, for certain types of products, FB might be just the thing. Millennials are hot to jump on a trend, especially if it is a technological trend.  FB might be the ideal venue for these types of products and services.

While I’m sceptical about the impact of FB, the jury is still out on it as an effective advertising method.  My recommendation?  Engage with social media.  Test it and measure the results.  Social media is a very labour intensive marketing tool.  Make sure that it is generating results that reflect the effort and money required to support it.