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BBDO Connect - Advertising Dead or Alive 2.0

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In Fons' latest book “Advertising: dead or alive”, he wrote about the (new) role of brands, marketing and advertising in a changing environment. Based on the newest research results, Fons will now …

In Fons' latest book “Advertising: dead or alive”, he wrote about the (new) role of brands, marketing and advertising in a changing environment. Based on the newest research results, Fons will now talk about the real value of worth of mouth. He will give you the formula of success to develop the most creative campaigns. And he'll reveal to you why people really like brands on Facebook.

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  • Advertising investments are responsible for 72% WOM on- & offline
  • BBDO New York Starbucks
  • Transcript

    • 1. BBDO CONNECT OCTOBER 25, 2013
    • 2. RECAP FIVE MAJOR CHALLENGES 1. 2. 3. 4. 5. The digital revolution The disloyal customer The brand bubble The rise of private labels The growing irritation about advertising
    • 3. RECAP ‘ADVERTISING IS DEAD. LONG LIVE ADVERTISING.’ 1. 2. 3. 4. 5. Focus on the ‘light buyer’ Penetration above Loyalty The two-step-flow of communication Time for an ISP Creative is King
    • 4. AGENDA 1. Creativity in Advertising 2. Word of Mouth 3. Social media: Friend or Foe?
    • 5. CREATIVITY IN ADVERTISING
    • 6. WHEN IT WORKS AND WHEN IT DOESN’T Tested on 437 TV advertising campaigns for 90 FMCG in Germany from January 2005 to October 2010 REINARTZ (Werner), SAFFERT (Peter). Creativity in advertising: when it works and when it doesn’t, Harvard Business Review, June 2003, p. 107-112.
    • 7. FIVE DIMENSIONS OF ADVERTISING CREATIVITY 1. Originality 2. Flexibility 3. Elaboration 4. Synthesis 5. Artistic value
    • 8. WHEN USED IN COMBINATION, CREATIVITY HAS WIDELY VARYING EFFECTS
    • 9. MOST EFFECTIVE COMBINATIONS
    • 10. ORIGINALITY + ARTISTIC VALUE Dove
    • 11. ORIGINALITY + ELABORATION Mercedes-Benz
    • 12. A EURO INVESTED IN A HIGHLY CREATIVE AD, HAS NEARLY DOUBLE THE SALES IMPACT OF A EURO SPENT ON A NON-CREATIVE CAMPAIGN
    • 13. CREATIVE ADVERTISING DOUBLES THE SALES DECREASES THE AIRTIME BUDGET
    • 14. IS MORE CREATIVITY ALWAYS BETTER? When categories are associated with highly creative ads, adding more creativity do not always give a big boost With categories associated with low creativity, more creativity is in some cases a good idea
    • 15. UNORTHODOX APPROACHES LESS REQUIRED WHEN PRODUCTS ARE FUNCTIONAL AND ORIENTED TOWARD CLEAR CONSUMER GOALS
    • 16. OUT-OF-THEORDINARY APPROACH WHEN PRODUCTS ARE EASILY UNDERSTOOD, SIMILAR AN TIED TO PERSONAL PREFERENCES
    • 17. WORD OF MOUTH
    • 18. TWO-STEP-FLOW OF ADVERTISING Brand DIRECT Effect Effect INDIRECT Advertising Opinion makers WOM Consumers Source: adaptation of Lazarsfeld and Katz, 1955 Advertising
    • 19. INFLUENCE OF ADVERTISING ON WOM Used studies: of POETIC half a million data for 36 brands across three marketing categories – retail, finance, and drink - and data from: Keller Fay, YouGov’s Brandindex, Social media monitor Brandwatch, and data directly from brands MORTENSEN (Neil). Tv’s influence on word of mouth,Thinkbox, September 2013 (ONLINE) (www.warc.com)
    • 20. ADVERTISING INVESTMENTS ARE RESPONSIBLE FOR 72% OF ADDITONAL WOM ON- AND OFFLINE (90 % OF WOM IS REAL LIFE)
    • 21. THANKS TO TV-COMMERCIALS On- & offline WOM lasts longer  47% more visitors on websites  Ensures 52% of the positive impact on reputation
    • 22. THE IMPACT OF WOM Data from a sample of 1035 consumers in 4 product/service categories, gathered in various shopping centers in northern spain VAZQUEZ-CASIELLES (Rodolfo), SUAREZ-ALVAREZ (Leticia), DEL RIO-LANZA (Anna-Belen). The word of mouth dynamic: how positive (and negative) WOM drives puchase probability: an analysis of interpersonal and non-interpersonal factors, Journal of advertising research, jg. 53, nr. 1, March 2013, p. 43-60.
    • 23. THE IMPACT OF WOM Positive (negative) WOM has a positive (negative) impact on the shift in the receiver’s purchase probability  Positive WOM is 14% more influential than negative WOM
    • 24. THE IMPACT OF POSITIVE AND NEGATIVE WOM ON BRAND PURCHASE-PROBABILITY • The greater the sender ‘strength of expression’, the greater the impact • The more intense the receiver’s active search (‘high involvement’), the greater the impact • The greater the loyalty with the brand, the weaker the impact
    • 25. KEY DRIVERS FOR WORD OF MOUTH • Senders are perceived as knowledgeable • The ties between sender and receiver are stronger (not significant for negative WOM) • The receiver experience is low and perceived risk is high
    • 26. WOM & ADVERTISING ARE TWO IMPORTANT COMMUNICATIONS CHANNELS THAT INTERRELATE AND COMPLEMENT EACH OTHER
    • 27. SOCIAL MEDIA
    • 28. THE PERILS OF COCREATION According to an experiment led by Rajneesh Suri of Drexel University VERHOEF (Peter C.), BECKERS (Sander F.M.), VAN DOORN (Jenny). Understand the persils of co-creation, Harvard business review, September 2013, p. 28.
    • 29. LAYS - VOTE
    • 30. #laysbe #bbdoconnect
    • 31. ETHIAS - BUURTFIKSERS
    • 32. BUT : HALF OF CO-CREATION FAILS
    • 33. EXAMPLE: MCDONALD’S McDonald’s set up a Twitter campaign to promote positive WOM  It became a platform for consumers looking to bash the chain
    • 34. THREE AREAS OF CONCERN • • Strong brand reputations might be put at risk • Quantity, quality and variety decreases as the frequency of engagement High demand uncertainty: in highly volatile markets increases It can be viable: Monitor and intervene where necessary
    • 35. FRIEND OR FOE? 1.1 million consumer responses gathered in the US between 2002 – 2012, the data cover 73 store categories and more than 1500 individual brands SCHULTZ (Don E.). Social media: friend or foe?, in Admap, May 2013 (ONLINE) (www.warc.com)
    • 36. IT IS NOT THE MASSMARKETING TOOL AS HOPED FOR
    • 37. TRIAL & TEST BEST APPROACH • 11% gives advice (average increase through years) • 30 - 35% has no brand preference • Since 2008 the influence of Internet has raised, and the influence of traditional media declined
    • 38. SOCIAL MEDIA RED FLAGS • Is it a powerful mass media form or just another niche media? • Is it building preference and loyalty, or is it commoditizing the brand? • Is the decline in consumer use of mass media, taking away the social value brands have created in the past?
    • 39. CONCLUSIONS
    • 40. • Creativity in advertising can double sales Look at the product and combine different dimensions of creativity. Originality + artistic value or + elaboration are the most effective ads • Paid Media drive Earned Media Advertising investments are responsible for 72% of additional on- & offline WOM • Social media work best with ‘heavy buyers’ Trial & test: do not overestimate
    • 41. QUESTIONS?
    • 42. Starbucks : 5 hours of ‘pledging’ VALUES TVC STARBUCKS - PLEDGE