liberté, égalité, fraternité
Scholz & Friends Strategy Group
on brands and communication
in the era of media democracy
01.05.2008

Advertising in the pre-mass-media era:
from one person to another.
local, slow, not measurable
01.05.2008

Advertising in the mass-media era:
from one brand to many people.
global, fast, measurable
01.05.2008

The most fundamental technological change today:
digitalisation of media.
devices channels content
information
(e.g. CNN online)
VoIP
conversation
(e.g. e-mail)
Broadband Internet
entertainment
IPTV
(e.g. MP3)
UMTS
01.05.2008

The result: media democratisation - anyone can
create, broadcast and receive content today.
01.05.2008

This abandonment of the central control over media
content is an irreversible shift in power.
„Technology is shifting the power away
from the editors, the publishers,
the establishment, the media elite.
Now it‘s the people who are in control“
Rupert Murdoch, Wired Magazine, July 2006
01.05.2008

In this new media world - for the first time - consumers
participate in the world of marketing.
consumer participant
person
producer community
consumer
multiplier
Source: David Armano „ Micro Interactions + Direct Engagement“ 2008
01.05.2008

This means: for the first time people influence brands
and their perception in both, positive and negative ways.
Consumers are beginning in a very real sense to own our brands
and participate in their creation … We need to begin to learn to let go.
A.G. Lafley, CEO and Chairman of P&G, October 2006
01.05.2008

And: this content and information is not transitory -
it remains forever, for anyone.
01.05.2008

This leads to people being far more informed and
hereby far more critical today.
76% of consumers do not believe companies
are telling the truth in their advertising.
Yankelowich Monitor
Pundo3000.com
01.05.2008

This is why advertising becomes less accepted as a
trustworthy source of information about products.
In 2002 78% of US households stated
that advertising helps them to fnd out
about new products. In 2006 only 52%
were of that opinion.
In 2002 29% of US households stated
that advertising is a deciding factor for
buying a product. In 2006 only 13% felt
this way.
Quelle: Forrester‘s NACTAS Q2 2006 Survey
01.05.2008

Today people rather trust in recommendations and
judgements of other people than in brands or ads.
Quelle: F.A.Z., 06.11.2006, Nr. 258 / Seite 19
01.05.2008

Result: Today ‚Word of mouth‘ is the most influential
and most effective marketing medium.
ranking of the most influential
marketing media
Quelle: BIGResearch‘s SIMM VII Study 12/2005
Quelle: SMG/100 + MCA Studies
(influence of media on purchase decisions), 15.000 respondents,
all ages
01.05.2008

Therefore effective communication occurs, in contrast
to before, in between two dimensions:
high
attention via mass media:
global, fast, measurable
Share of Voice
The S&F Brand Presence Matrix ®
conversation via social media:
low
global, fast, measurable
low Share of Talk high
01.05.2008

The quality of communicative presence of brands can
be located in this matrix.
high
visible brands magnetic brands
Share of Voice
The S&F Brand Presence Matrix ®
invisible brands remarkable brands
low
low Share of Talk high
01.05.2008

An exemplary location of the communicative presence
of brands.
visible brands magnetic brands
high
Share of Voice
low
invisible brands remarkable brands
low Share of Talk high
01.05.2008

The 10 most valuable brands worldwide: Most of them
are still located in the upper left quadrant.
3.
visible brands magnetic brands
high
9.
6.
2.
10.
7.
5.
Share of Voice
4.
8.
1.
low
invisible brands remarkable brands
low Share of Talk high
Quelle: BrandZ Top 100\" 2008, Millward Brown
01.05.2008

But: The pressure on „Share of Voice“ is increasing.
visible brands magnetic brands
high
7.
Share of Voice
low
invisible Brands remarkable Brands
low Share of Talk high
01.05.2008

The reasons: today‘s people have access to more and
more different media channels.
„The media industry has beeen rather static for
40 years. Now, even in just the last year, there
has been more change in media behaviour than
at any time since the invention of television.“
Financial Times, May 23 2006
01.05.2008

That means: people are dividing their limited budget
of time on more and more different media.
e.g. men‘s media usage (age 18-34)
internet 22% TV 22% video games 22%
cinema 9% music 4%
DVD/VHS 6% reading 6%
Quelle: Jupiter Research/Ipsos Insight
01.05.2008

And people are increasingly using different types of
media at the same time.
Quelle: Burst Media, „Online Insights“; Oktober, 2007
01.05.2008

Digitalization leads also to a higher portability of
equipment and content.
01.05.2008

Media and content are used more and more
independently from location and time.
01.05.2008

The effect: „liquid“ media consumption. The era of
predictable, large media prime time is over.
US Prime-Time Ratings (Millions of Viewers)
Quelle: Veronis Suhler Stevenson, PQ Media LLC, AC Nielsen Corp; Universal McCann
01.05.2008

Therefore today‘s classical advertising needs more and
more money and time to reach the masses.
In the US a coverage of 80% in the audience of “In 2002 it took 117 prime-time spots to
18-49 year olds could be established with only reach the same result.”
three 60s-TV-spots in 1965. Jim Stengel, Global Marketing Officer, P&G
01.05.2008

In order to reach the same coverage as before, brands
try to turn up the volume of advertising.
„That doesn't feel like advertisement
anymore, but like a war that the
economy fights against the people.
Peter Glaser, Vanity Fair 21/08
01.05.2008

e.g. high advertising volume through cost-intensive
omni presence (Toyota).
booking: more than 200.000 surfaces in Germany
cost: 20 - 25 Mio. Euros pre tax
result: only 18% unsupported adrecall
Quelle: Universal McCann + Toluna, „Next thing now“; März 2007
01.05.2008

e.g. high advertising volume by gigantomania
(Adidas).
01.05.2008

e.g. high advertising volume through „creative“
exhaust of media formats (misc.).
01.05.2008

e.g. high advertising volume through polarising
taboos (misc.).
01.05.2008

People are reacting more and more bored and refusing
towards this increasing pressure of advertising.
65% of all people feel “continuously
bombarded” by advertising.
54% of the consumer in the US avoid
products & services who “shower” them
with advertising.
Quelle: Yankelovich Monitor 2004
78% of the German population are irritated
by advertising, only 24% are still really
watching advertising.
Quelle: GfK Marktforschung
01.05.2008

People are upgrading technologically and are more
and more avoiding advertising actively.
Germans with a digital video recorder
are watching more TV by 12%, but 88%
of them are filerting advertising.
Quelle: Big Six study
01.05.2008

Society is reacting as well: advertising is getting
banned from public space.
Since Jan. 2007, outdoor advertising is
forbidden in Sao Paolo. Ca.13,000 outdoor
ad spaces were removed.
Quelle: SPON, 08.01.2008
Quelle: Werbeblogger.de, Jan. 2008
Quelle: FR-online.de, 13.01.2008
Quelle: RP-online.de, 02.06.2005
01.05.2008

In the end the increase of advertising volume does not
entail rising sales anyway.
2006
367.600.000
1990
ad spendings
190.267.000
(euros per year)
1990
beer consumption
142,7
(liters per person per year)
2006
116
Quelle: Brand Eins, Heft 02 Februar 2008
01.05.2008

An inconvenient truth: classical brand-communication is
getting more and more ineffective and inefficient.
82% of TV advertising in Germany
is generating a negative ROI
Deutsche Bank, 2004
In 2010 traditional TV advertising
will only reach 1/3 of its
effectiveness from 1990.
McKinsey, 2006
01.05.2008

Another inconvenient truth: brand-communication is
no longer dependent on classic media.
„We‘re not in the business of
keeping the media companies alive.
We‘re in the business of connecting
with consumers“
Trevor Edwards, vice president of global brand management Nike,
New York Times, 10.14.07
01.05.2008

But classical communication is not dead. Any great
conversation regularly starts with a great monologue.
01.05.2008

Today effective communication needs a new principle
that combines both media-dimensions.
MassMedia SocialMedia
(communication-value is decreasing) (communication-value is increasing)
+
01.05.2008

A new principle of communication has to maneuver
brands into these two presence quadrants.
high
Magnetic Brands
Share of Voice
„Focusing on Engagement
can double your ROI.“
Nate Elliott, Jupiter Research, next08
Remarkable Brands
low
low Share of Talk high
01.05.2008

No longer the classical principle of „Sender-
Recipient“.
01.05.2008

No longer the classical principle of conditioning.
A simple, clear message... ...repeated over and over again.
01.05.2008

No longer classical „Volume-Principle“.
buy
media coverage
sell
product
become
visible
get
attention
Souce: Seth Godin „Purple Cow“
01.05.2008

Brand designers (agencies and customers) have
noticed that - also that they need to react.
„The operating system for
„The traditional marketing model
marketers is now
is being challenged, and
fundamentally changing. It
advertisers can foresee a day
doesn't matter how big your
when it will no longer work.“
market share is“
McKinsey Quarterly, 2005
Seth Godin at Meatball Sunday 2008
“In today’s media-rich world,
„ The ad inventory that has been
traditional advertising models
sold for the last 50 years no
are breaking down. Now, the
longer works, and marketers have
consumer runs the show.“
started to figure that out.“
Authenticity over Exaggeration: The New Rule in Advertising, HBS
John Stratton, CMO, Verizon Wireless, 2006.
Working Knowledge, Dez. 2007
01.05.2008

Brands need to change their „Fishing“-strategy and
therefore revise three essential assumptions.
01.05.2008

1. Any product is replaceable. Nobody only cares for a
specific brand anymore.
qua
up,
“80% of CEO’s believe their
brand provides a superior
customer experience. 8 % of
their customers agree.”
Bain & Company
01.05.2008

2. Attention can no longer be enforced. Nobody is
waiting on the other end of the line anymore.
“You used to use your budget to buy an audience.
Now you have to invent ideas to attract an audience.”
Lisa Seward - Mod Communications
01.05.2008

3. People only talk about interesting topics.
Nobody really cares about clear messages.
„The whole industry is obsessed with the idea of a simple
message, endlessly repeated, but It’s not about one big, simple
hook... What people actually want is stuff with some complexity,
some meat, some richness...Not stuff that’s distilled to a simple
essence or refined to a single compelling truth.
No-one ever came out of a movie and said “I really liked that. It
was really clear“. Clarity is important to our research
methodologies, not to our consumers.“
Russel Davies, darth strategist Wieden & Kennedy
01.05.2008

Ultimately communication has to answer the
customer‘s one question:
Why should I spend my time
voluntarily with your brand
and not with all the other
interesting offerings I can
choose from at any time?
It's
limit
wo
per
adver
to ad
01.05.2008

The response:
Supportive, topic-centric communication.
Why should I spend my time
voluntarily with your brand
and not with all the other
interesting offers I can
choose at any time?
Tools, services or content that
matches with the products to deliver
interesting additional value for the
consumer, by bringing fun and
benefit.
01.05.2008

To the point: We belive that topic-centric, supportive
communication works better.
„If it‘s not worth talking about,
it‘s not worth doing“
Andy Servovitz
01.05.2008

The Difference: Communication offers a counter-value
for attention instead of just enforcing it.
Interruptional Communication: Supportive Communication:
Buy it `cos we are great. Buy it `cos we want you to be great!
01.05.2008

And: communication is more attractive and has more
WoM potential through interesting topics.
Brand-centric Communikation: Topic-centric Communication:
People
People
Pe
Pe
ple
ple op
op
eo
eo le
le P
P
Message Topic
Pe Pe
ple ple
op op
eo eo
le le
P P
People People
01.05.2008

Four rules for supportive and topic-centric
communication.
Voluntariness
Deepness
Exchange
Counter-Value
01.05.2008

Voluntariness:
The most important aim of communication is the voluntary dispute
with the brand, not to enforce attention.
Give people a reason to talk about you voluntarily and be part of
that conversation.
01.05.2008

Deepness:
In future outreach will be achieved by qualitative relevance instead of
quantitative wideness.
Be relevant by contributing to topics that do interest people and that
suit the brand at the same time.
Surprising, many-faceted content is interesting for people.
Consistent, easy predictable messages are not.
01.05.2008

Exchange:
It is not only important where I say something but also that people
are willing to listen in that moment.
It is not any longer about filling bookable oneway media with
content, the idea dominates the interactive mediamix.
Do not see the consumer as a recipient but as a co-creater.
Be open, share, give, receive.
01.05.2008

Counter-Value:
Not only the product but also the communication has to add value.
Be an enabler. Offer benefit and fun.
01.05.2008

Therefore: Changes in the principles, structures,
processes and tools of an agency.
01.05.2008

Where it starts: People voluntarily conglumerate around
topics that are interesting for them and talk about it.
BMW Audio-Software
Making Hip-Hop
Hip-Hop Culture ipod
Listening to Hip-Hop
Sneakers
Dancing Hip-Hop
Adidas
Apple
01.05.2008

Brands have to find topics that suit them and their
target group and contribute to relevant content.
„Social Media is all about
conversation. Brands only have a role
if they can make the conversation
more interesting. Advertising can’t
succeed against the conversation but
it can influence and contribute to the
conversation.”
Richard Huntington, Planning Director, United London
01.05.2008

A new S&F communication mechanism:
The „Topic-Circle“ principle.®
Topic of Interest
Topic-
Idea
01.05.2008

Change of structure: convergent operations because
choice of topic and choice of media are no longer mutual
dependent.
From: Linear operations To: Convergent operations
with seperated tasks with over-lapping tasks
Consumer
Media Creation
Strategy
Creation
Company
Media
Strategy Source: David Armano
01.05.2008

Change of process: Alignment not only into sending but
also into listening and reacting.
From: „One finished Solution“ process To: „Always in Beta“ process
01.05.2008
„We've been voted the best marketer of the 20th century.

Change of Tools: For being able to react you need a
„Live Conversation Tracking“.
From: Primarily pre- To: Additional, continuous and
and post-offline analysis dynamic online ‚Buzz‘ analysis
? ?? ?
? ?
01.05.2008

®
The S&F TopicTracker: Tracking and evaluation of
discussed topics within defined communities.
Permanentes Buzz Level Tracking von Themen
Beiträge
1.200
1.000
Weight
Watchers
800
600
400
200
Metabolic
Balance
Monate
0
Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb Mrz Apr Mai Jun Jul Aug Sep Okt Nov Dez Jan Feb
06 06 06 06 06 06 06 06 06 06 06 06 07 07 07 07 07 07 07 07 07 07 07 07 08 08
01.05.2008

For any questions please do not hesitate to contact
us.
Vincent Schmidlin Michael Zorn
Managing Director Senior Strategy Consultant
vincent.schmidlin@s-f.com michael.zorn@s-f.com
01.05.2008