“Wat hebben de mensentoch tegen reclame,Wouter?”(gvds)
People don’t like ads (anymore) -‐ for various reasons. That’s why adver<sing works less and less. But many ad-‐people are s1ll in the denial phase.
Prof. Dr. Gerard Tellis 1980-‐1990:Adver<sing +10% = +2.2% marketshare 2008:Adver<sing +20% = +2.2% marketshare “ …. the authors conduct a meta-‐analysis of 751 short-‐term and 402 long-‐term direct-‐to-‐consumer brand adver1sing elas1ci1es es1mated in 56 studies published between 1960 and 2008. the study ﬁnds several new empirical generaliza1ons about adver1sing elas1city. the most important are as follows: the average short-‐term adver1sing elas1city is .12, which is substan1ally lower than the prior meta-‐analy1c mean of .22; there has been a decline in the adver1sing elas1city over 1me.” Gerard Tellis, PhD Michigan, is Professor of Marke<ng, Management, and Organiza<on, Neely Chair of American Enterprise, and Director of the Center for Global Innova<on, at the USC Marshall School of Business. He is Dis<nguished Visitor of Marke<ng Research, Erasmus University, RoZerdam and has been Visi<ng Chair of Marke<ng, Strategy, and Innova<on at the Judge Business School, Cambridge University, UK. Tellis specializes in the areas of innova<on, adver<sing, global strategy, market entry, new product growth, promo<on, and pricing.
Why the hell then is adver<sing (in the US) growing faster than BNP or the median salary?
Which brands will con<nue to pay that? Media rates set to increase by 14% in China in 2013. Media spending was expected to grow by 7% on an annual basis in 2013. • Digital: +18% • Outdoor: +6% • TV: +5% • Radio: +5% • Newspapers: +3% • Magazines: +2%
Less and less brands are willing to sponsor the media. Hence the growth of the recommenda<on phenomenon.
Recommenders directly inﬂuence 20-‐50% of all purchase decisions.
Oﬄine! Thè method of recommenda<on. ‘Hoe meer ze over dat schandaal spreken, hoe meer paardenvlees we verkopen
Oﬄine beats online. Everywhere in the world. Look at the Chinese example.
At the moment we move from impressions to expressions, ZO broadens brand experience to …the “good old impressions”. Holaba Zenith Optimedia“the brand experience that has real Broadens “Experience” toinfluence on other consumers has to “Impressions”: opportunities to bebe limited to the actual, physical seen, heard .experience with the product/branditself. Older experiences and "hearsay “a sum total of the actions and scale inexperiences", or "nice advertising" the market – and since large amountsonly play very little role in influential of dollars still go behind mass media –WOM. the impressions (or experiences) from these tend to overwhelm the earned space.”
Our 2007 (!) research in China made clear that experience is more powerful that hearsay.
But here again friends&family recommenda<ons @ the top.
Who’s inﬂuencing? Is all that buzzing trustworthy? “… while consumer electronics buyers pay more aTen1on to other consumers’ reviews than to editorial reviews – by a margin of more than three to one (77 percent vs. 23 percent) – a majority are concerned about the authen1city of consumer reviews (80 percent), leading them to conduct considerable analysis before making their decision.”
Recommenda<on measurement started with Reichheld in 2003
How do you measure your recommenda<on score? How do you iden<fy recommenders and detractors? De éne vraag die nu door meer en meer bedrijven gesteld wordt. In dit geval op de site van Klout.
Where does this recommenda<on phenomenon come from? Why is it growing? Where can it lead us too? Back to China and history.
“Gini = 0.61 for 2010” Southwestern University of Finance (Chengdu) in 2012 0.469 0.474 or 0.61?
It’s diﬃcult to trust the Chinese numbers. Give it a try. ”Verdienen deze 10% “rijken” maar 7.000€ / jaar of … 15 à 16.000?” Meer dan 40€ per dag 9% 9% 1% For 2012, the na<onal G.D.P. ﬁgure is es<mated to be nearly 52 trillion renminbi (about $8.3 trillion,) while the provincial total was nearly 58 trillion (about $9.3 trillion.) “Media exposes total G.D.P. of all provinces exceeds na<onal G.D.P. by over 5 trillion renminbi,” (the exact ﬁgure was 5.76 trillion,) a headline announced in the 21CN News. The gap is getng bigger, fast: in 2009, total provincial G.D.P. was nearly 2.7 trillion more than na<onal G.D.P.; in 2010 it was more than 3 trillion; in 2011 it was 4.6 trillion, Minder dan 2€ per dag the Beijing News reported. In a chain of exaggera<on that begins at the village or county level, the ﬁgures pile up un<l they overreach any possible na<onal total, the ar<cles indicate. 10% 10% 10% 10% 10% 10% 10% 10% 10% Weinig verdieners Veel verdieners
This is how the rich get richer. Nothing stops them. http://online.wsj.com/article/SB10001424127887324906004578287182123200020.html?mod=djemITPA_t
Chinese trust their media. They at least cover the scandals. hZp://www.slideshare.net/EdelmanInsights/global-‐deck-‐2013-‐edelman-‐trust-‐barometer-‐16086761
Chinese trust Big Companies. Small is not beau<ful. ”The winners take it all”.
Our own numbers from the daily deal industry prove the “magnet of Big”
Chinese (even)(s<ll) trust their banks. Haven’t they done anything wrong yet?
Banks in China (only in China?) are appreciated. Hence the trust
At the top of the Chinese brands: plenty of banks, insurances …
These Chinese topbrands are also top-‐users of social media. hZp://www.resonancechina.com/2013/02/06/chinese-‐valuable-‐brands-‐more-‐present-‐in-‐social-‐media/
Don’t trust the topshots in these big ins<tutes.
Trust the ins<tutes and corpora<ons. Not their leaders.
Moments of truth. All 3 are crucial. 1st moment of truth 2nd moment of truth 3rd moment of truth Buying Consuming Evalua<ng (Neutral) Consumer Promoter><Detractor 15% are 85% are Selec<ng Selec<ng “inﬂuencing” being shop brand inﬂuenced others
Back to the Reichheld ques<on. And the Holaba-‐site in China.
Not only we ask clients whether they will/will not recommend a brand… 8 8 8 NPS
We ask non-‐clients too. They too judge, talk and inﬂuence. That’s why we ask them. NPS
Your recommenda<on-‐score is “only” meaningful, when you know the score of your compe<tors.
This is what the social consumer will buy …based on recommenda<on
Add recommenda<on scores in your tradi<onal RFM marcom-‐planning (recency, frequency, monetary value) and turn it into RRFM.
From RFM to Recency, frequency, monetary value (RFM) of RRFM to decide about clients are decisive for investment in RFM -‐ axis marke<ng communica<on. Therefore lots of money spent (wasted) in this group of heavy what to invest and recent buyers where. Light and non frequent buyers are ozen “neglected”
The recommenda2on power of clients becomes the decisive tool to decide on marcom-‐investments RFM -‐ axis Does not mean they all give posi1ve +RFM & -‐ REC +RFM & + REC recommenda1ons RecommendaKon axis Frequency and intensity of recommenda2on. -‐ RFM & + REC -‐ RFM & -‐ REC
Use it also to analyze your retail performance: Shops with a high recommenda1on power sell beZer. Measure their recommenda1on power too.
“Uit onze gegevens blijkt dat u het toestel heei aangekocht op 14-‐07-‐2011 op naam van xxxx. Omdat dit een bedrijfsaankoop is (met BTW nummer) geldt hier 1 slechts een garan1e van één jaar, het toestel valt dus momenteel buiten garan1e. Indien we het toestel omruilen buiten garan1e (voor hetzelfde toestel) dan zou de repara1eprijs komen op ongeveer € 494.”
1 iPhone Repeat Purchase Inten<on Drops 13 points in Western Europe. Likely to buy next iPhone from Apple? • 88 % in 2011 • 75 % in 2012 Strategy Analy1cs Wireless Device Lab Report-‐ oct 2012
3 “Als geste van goede wil en in de hoop uw vertrouwen in onze maatschappij enigszins te herstellen, wil ik u graag 5000 Flying Blue mijlen aanbieden. De mijlen worden binnen enkele dagen bijgeschreven op uw Flying Blue rekening.” J. Viel Customer Care Europe 26.10.2012