“ Most television advertising is a waste of money and marketing has become little more than promotion…many marketing professionals are clueless about how effective their strategies are” Philip Kotler, Marketing Forum, London. 2003.
Until now advertising has always relied on ‘interruption’ This power is eroding… <ul><li>The economic landscape around media cost-efficiencies is changing </li></ul><ul><li>The escalation of property and sponsorship costs </li></ul><ul><li>The trifecta that is the fragmentation and proliferation of media, and the consolidation in media ownership -- soon to be followed by a wholesale unbundling. </li></ul><ul><li>The erosion of mass markets </li></ul><ul><li>The empowerment of consumers who now have an unrivaled ability to edit and avoid advertising and to shift day parts </li></ul><ul><li>A consumer trend toward mass customization and personalization </li></ul><ul><li>And the emergence of an experience-based economy, where cultural production is more important than physical production -- cultural production is where the traditional world of marketing communications meets the world of content. </li></ul>
Media Fragmentation. The reality of a static Mass Media is becoming an oxymoron. This chart does not include the impact of the mobile phone, gaming, or non ‘paid-for’ media.
Audience fragmentation: with the ease of access to programming that computers now have, mean that younger viewers in particular (a commercially very attractive group) may become increasingly infrequent television users. There is for example, already evidence that television has lost young male viewers to computers. John Ranelagh, editor TV2 Norway
Transformational change <ul><li>I am describing a magnitude and urgency of change that isn't evolutionary -- it's transformational. </li></ul><ul><li>Our shared challenge isn't just in overcoming the creative and economic tensions that are an inherent part of this convergence of content and commerce... it's about creating more value for the consumer -- as a way of creating more value for our business and shareholders. </li></ul><ul><li>Steven J. Heyer. CEO The Coca Cola Company. Advertising Age Conference 5th February 2003 </li></ul>
Transformational change It’s that simple and that tough. We must create more value for consumers, audiences, and customers. Steven J. Heyer. CEO The Coca Cola Company. Advertising Age Conference 5th February 2003
This was once the ultimate in brand communications
Our recent history has been deeply affected by the increased speed of technological development plus the convergence and proliferation of the audio-visual, mobile, IT, and personal computing industries, increased internet and bandwidth penetration, and media choice. These developments have impacted businesses and the marketing community. As a result of these developments, business itself is faced with a tougher job when innovation and flexibility are the markers for competition.
“ Consumers are now challenging this corporate logic of value creation. Spurred by the consumer-centric culture of the Internet — with its emphasis on interactivity, speed, individuality and openness — the consumer’s influence on value creation has never been greater, and its spreading to all points in the value chain”. “ The Co-Creation Connection” by C.K. Prahalad and Venkatram Ramaswamy,
Some facts about mobile phones <ul><li>Countries beyond mobile phone subscription rate of 90% </li></ul><ul><li>Austria, Finland, Hong Kong, Iceland, Israel, Italy, Sweden, </li></ul><ul><li>Taiwan (over 105%) . </li></ul><ul><li>Mobile phone penetration will reach 120% </li></ul><ul><li>In the recent American Pop Idol 7.5 million people texted into the show. The biggest ever. 30% of these people had never texted before in their life. </li></ul><ul><li>American Idol gave people a reason to use their phones. </li></ul>
“ If I lost my mobile phone I’d go into a panic”. She happily confesses her mobile phone is her lifeline, and 21 year old Helen Searle, a PR consultant, says it would be a disaster, if they were separated. “ I use it for everything”, she said. “If I lost it I would go into panic mode. I would lose all my reminders, my calendars, all my pictures and contacts. That would mean I wouldn’t know how to stay in touch with anyone and wouldn’t know what I was supposed to be doing — especially in my social life. It’s essential.” Evening Standard Thursday 27 November 2003.
Some facts about mobile phones <ul><li>Camera substitution </li></ul><ul><li>In 2002 there were 15 million traditional film-based cameras sold worldwide (down from 17 million in 2001) And during 2002 there were 9 million digital cameras sold globally (up from 6 million in 2001) </li></ul><ul><li>Source: Economist the World in 2003 </li></ul><ul><li>Spending substitution: </li></ul><ul><li>Teenagers today in Finland spend up to 90% of their allowance on their mobile bill. Over 50% of this is on SMS. This group of society are spending less on clothes cinema and eating out. They are using text for chatting, sending jokes, sharing simple pictures, providing information on what where who and how to their friends and even dating over SMS. This trend is not limited to the Nordics. </li></ul><ul><li>Tomi T. Ahonen. </li></ul>
Some facts about mobile phones If you want to reach people get them using their mobile phone.
<ul><li>We are operating in a different landscape. One of multiple stakeholders: </li></ul><ul><li>- Business </li></ul><ul><li>- Media: audio-visual, mobile, web, press, live space, retail etc. </li></ul><ul><li>- Populations </li></ul><ul><li>- Communities </li></ul><ul><li>- Diverse cultures </li></ul><ul><li>Passion audiences </li></ul><ul><li>Who are all connected, via their mobile phone & or their PC. </li></ul>
Engagement Marketing at its most ambitious can respond to any combination of these. It can be a driver to greater revenues, and valuable customer experience. It is not exploitative and focuses on a co-creation principle.
Engagement marketing develops solutions that solve your marketing problems - from brand saliency right through to promotional and sales efficiency.
It does this by creating new types of multi-media content (or ‘properties’) through which your brand can engage its audiences - and thus deliver its commercial messages more effectively.
These properties might include creating your own TV programme, building innovative new web or mobile applications, or even developing a live 'bricks and mortar' solution for your brand (and probably a combination of a number of these.)
Creating your own multi-media property is capable of addressing your marketing objectives more effectively than conventional 'interruptive' advertising - delivering potentially bigger results, with wider commercial benefits, and at a fraction of the cost of tv advertising.
And it is not only you the marketer that needs to rethink the rules. With the proliferation of media, good content is in short supply. Broadcasters/media owners and distributors are desperate for great rating shows. All media distribution want “engaging stories” that will draw in audiences. They also need to rethink the Co-creation principle. If the 21st Century was about Interruption The the 21st Century will be about Engagement Engaging properties will bring audiences, create IP, and generate multiple revenues.
‘ Cross-platform branding and marketing communications’ 4E’s An opportunity to: Engage your customers Experience the product or service Enhance your company/customer relationship more Emotionally than traditional advertising.
The new ‘Engagement Marketing’ tools: <ul><li>Branded content </li></ul><ul><li>Brand related content </li></ul><ul><li>Entertainment properties </li></ul><ul><li>Media properties </li></ul><ul><li>Brand experiences </li></ul><ul><li>These are always; cross platform, built loosely around </li></ul><ul><li>entertainment, edu-tainment, info-tainment, experience, are </li></ul><ul><li>participatory and are: </li></ul><ul><li>IDEA DRIVEN. </li></ul>
‘ Engagement Marketing’ reaches right back to 1903 and the creation of the Tour de France <ul><li>Was designed by L’Equipe to increase revenues for its newspapers across France in 1903 </li></ul><ul><li>It has since grown into one of the worlds great sporting events </li></ul><ul><li>L’Equipe is one of the very few sports newspapers published on a daily basis </li></ul>
‘ Engagement Marketing’ reaches right back to 1903 and the creation of the Tour de France The Tour by numbers Course : 22 teams, 198 riders, 350 accompanying people, 15 members of the College of Stewards Media : 1,200 accredited journalists, 1,000 technicians or chauffeurs, 370 press titles or agencies, 70 local or national radio stations, 15 million spectators lining the roads, 2 billion TV contacts, 75 channels broadcasting the race (21 live), 170 broadcasting countries, 2,400 hours of TV programming
Super Stable: mobile horse racing game ‘ Super Stable’ is Hong Kong’s first mobile horse racing game jointly developed by New World Mobility and Imoeba. Customers can indulge themselves as virtual horse owners and enjoy the excitement of bringing up their horses to become the ‘King of Horse’. Using SMS or WAP service, customers can play the nurturing game and participate in horse races anytime, anywhere. Super Stable drove data revenues up by 50%. Normally Mobile operators would expect 10-15%
Twins Mobile Twins the famous music duo from Hong Kong were made into a mobile phone brand for Twins fans. Twins mobile transformed the mobile phone market in Hong Kong. Creating a high yield demand for the service. Twins mobile is based upon “reconstructing the value chain by creating services that would engage users, providing value both the telecommunications company the information providers and a passionate fan base.”
Pop Idol Pop Idol is built upon participation for both players and the audience. A combination of 19 Management, BMG, Freemantle Media, ITV, and O2. A virtuous circle, creating entertaining television, high audience figures, music publishing and an entire new revenue stream for all partners. Pop Idol can travel across countries generating more ROI. Advisers to the programme believe Pop Idol is likely to be worth up to £70m by the time television, recording and other performance rights have been exploited around the world. Ask for the SMLXL paper on Pop Idol
Guinness Visitor Centre Dublin <ul><li>Firmly established as Ireland’s No. 1 Tourist Attraction, now known as Guinness Storehouse (The Guinness Visitor centre) attracted 570,000 visitors in 2001- </li></ul><ul><li>a remarkable accomplishment for the venue in its first year of business. The continuing success of the Visitor Experience is reflected in the fact that the Storehouse will be welcoming its millionth customer in the coming months. </li></ul><ul><li>- Aine Friel, the Storehouse’s marketing manager: “Everything we do must be aligned to the global brand and increasing awareness and driving sales of Guinness.” “We can prove that we recruit 45,000 new Guinness drinkers per year, who’ve never drunk Guinness before and have their first pint in the Storehouse,” </li></ul><ul><li>In its first year, Guinness Storehouse became Ireland’s leading tourist attraction, visited by 570,000 overseas visitors. </li></ul><ul><li>At at cost of £35 million. The Guinness Visitor Centre broke even in its first year. </li></ul>
The Requirement of clients <ul><li>A genuine commitment to a very different type of marketing advice </li></ul><ul><li>Ability/insight to integrate business and communication objectives </li></ul><ul><li>The potential to develop strategy before any creative development </li></ul><ul><li>Clients prepared to commit to a lead strategy developer </li></ul><ul><li>Understanding of the drivers/potential within the media market </li></ul><ul><li>Existing structures neglect the mutual potential </li></ul><ul><li>Opportunities for “win win” exploitation </li></ul>
SMLXL Multi-media Entertainment Properties Engagement Marketing Media Partners Content partners Commercial (brand) Partners Revenues Sponsorship/ Media Fees Media Revenue Prevs Syndication TV Partners Web Partners ‘ Live’ Partners Mobile Partners
Common Goals Divided By Different Terminology <ul><li>Coverage </li></ul><ul><li>Frequency </li></ul><ul><li>Awareness </li></ul><ul><li>Cut through </li></ul><ul><li>CPT </li></ul><ul><li>Share </li></ul><ul><li>ROE </li></ul><ul><li>EBITDA </li></ul><ul><li>ROCE </li></ul><ul><li>WACC </li></ul><ul><li>SKU </li></ul>Unified knowledge would drive gains for all
What are the benefits of engagement marketing? <ul><li>Solution-driven, not format-driven </li></ul><ul><li>Increased marketing productivity and cost efficiency </li></ul><ul><li>Increased accountability </li></ul><ul><li>Scaleability </li></ul><ul><li>5. Engage a ’disillusioned’, over sold to, media saturated population </li></ul>
Final Thoughts <ul><li>Today there is no leisure — brands are what people ‘do’. </li></ul><ul><li>Companies today have no choice but to engage. </li></ul>
If companies spent the 20th century managing EFFICIENCIES
they must spend the 21st century managing EXPERIENCES