Thursday, July 12, 2012

Why publicize the house when you are a house of brands ?

EXECUTIVE SUMMARY:(for the lazy or time-challenged):
It might actually be a rather sensible strategic choice for some corporations to engage in the branding of the house even when you have been established as a house of brands in terms of portfolio organization...


That candid question formulated at a recent Brand forum sounds interesting and touches on much deeper elements...whilst already carrying a bias as it seems to suggest that there would have to be some inconstancy if a corporation chose one strategy or the other :

I would actually argue that this is an innate/ old conundrum and has always been a back & forth cycle or sort of balancing act between building brands & nurturing a masterbrand: from G.M. to Pernod Ricard or Tata , like it or not , the profile of the masterbrand has  at times been more emblematic or recognized than it’s brand portfolio: at the time when iconic companies were established in the 60 & 70’s, L’Oreal, Dupont or Procter actually meant as much to the general public than the Ellnet, Lycra or any of the “soap” brands Procter would launch through radio & TV early days sponsorship, these corporate names being emblematic of their product’s quality & reputation and often prominently signing vintage ads…

Then, a massive , natural brand extension phase ensued in the 80-90’s consisting of multiple launching of  brands across many product some point amidst that brand boom, marketers started rediscovering the virtues of central/common initiatives: cross-selling synergies (the Danone company, Nestle or G.M. initiated cross-brands promotional programs with Retail chains or dealerships), consolidation /economies of scale (Media buying, packaging, vendors, guidelines etc…); and more importantly, new rising categories/themes that were steming from evolving consumer needs & attitudes: those can become wider than what a single brand's perceived expertise would reasonably cover (ex. from breakfast Cereal/ fiber to healthy diet and energy supplements) and, if pre-empted, can offer much more long term growth potential (new brands in wider categories or existing brand extension etc…): hence the  “Let’s Make Today Great,” from Kelloggs ,  G.E.’s “Imagination at work” or a more complex “help farmers grow yield sustainably so they can be successful, produce healthier foods, better animal feeds and more fiber, while also reducing agriculture's impact on our environment…” from Monsanto.

In the early 21st century & through the downturn, marketers had to revert to more vertically-focused investments under the pressure of their board for more immediate, tangible/accountable top line growth & R.O.I.: keeping behind-the-scenes, centralized resources, exit the active/ direct corporate value proposition to consumers…

I am therefore not so surprised that top marketers are now rediscovering the virtues of nurturing a masterbrand:
  1. A. LONG TERM GUARANTEE: Obviously,  the investment made towards the masterbrand generally pays off one day or another, preparing to take a punch for the team, lend support to the brand in a given category when it needs back-up for awareness, differentiation or reputation through a less product-centric, more inspiring (credible ?) dimension or mission statement: this makes the brands less dependent on a narrow value proposition or just a single product crisis (i.e. Mattel (2005) or Toyota (2010) recalls) by throwing the weight & support of a higher figure, the go-to school principal, the mission statement that, as Kotler says “acts as an invisible hand” more accountable to shareholders, regulatory bodies, media & consumer scrutiny…Sub-brands fade or die , their giant corporate parents still stand perennial…
  2. A WHOLE NEW HOLISTIC MARKETING: deeper sign of the times, the advent of Digital and the direct consumer behavioral data that it allows has opened the door for much more powerful, consumer centric cross-selling & promotional branding opportunities: you can now associate a buyer pattern & attitudinal profile across several categories & design much deeper/ more targeted value propositions in terms of demographics but also in regards with purchase pattern & loyalty across categories, promotional drivers or in terms of affinity with the channel, the content of the message, its context & attached geo-location services etc…Opening this new scope of shared/ single-source resources opens more applications beyond the richer needs-driven / Lifetime Value potential management such as:  multichannel communications planning, wider integration of Digital as a driving force in the conversation with the consumer, consistent benchmark of marketing effectiveness, R.O.I. and budget allocation optimization across the portfolio etc…This IS the real REVOLUTION that a masterbrand revival brings…                                                                                                     Let’s also not forget that some times, within the world of corporate politics, getting high-profile, strategic consumer-centric status for these otherwise behind-the-scenes/cross functional logistics helps a lot to get appropriate sign-off & cross-funding … It is indeed a powerful transformational theme and a new holistic marketing culture more in line with the natural perspective that Retailers always got right with their single view of shoppers, beyond category management, pricing & shelving organization …so, if it make sense and adds relevance, why ignore these fundamentals ?
  3. THEY ACT AS BRANDS ANYWAY: I would finally point out that, as BrandZ top 100 shows, some of these quiet masterbrands G.E. (15th), Chrysler (never only a sub brand) or Volkswagen (which aggregates Porsche  & VW in the study) are actually resilient enough in terms of reputation & equity  as to rank in the brandZ top 50, among "pure concentrate" brands ! (I would even argue that a special ranking for “conglomerate” masterbrands should be now created & allow for tracking & valorization…).
          This is probably no stranger to the fact that, as BrandZ points out “Consumers have little patience      with brands—and corporations—that violate trust. They publicize transgressions immediately and widely on social media…”: yes, the new consumer is much more knowledgeable & empowered, has  easier access to information and exerts more influence on a corporate governance that, after the Enron, BP or Mattel incidents has become more top of mind for consumers… so why not acknowledge that new order of transparency, take charge & manage this new dimension as a real asset rather than just have it putting up fires and only endure liabilities in P.R. hardships… ?
Somebody said “Trust is the new black”: corporate reputation is no longer about creating a vague, warm glow around a brand. It has become an integral part of the customer consideration, acquisition & retention value chain. We now recognize that corporate reputation helps convince customers that a company is relevant to them in an approachable, personal way which can directly affects purchase behaviors: it is an essential strategic asset.

So, why publicize the house when you are a house of brands ?
Well, because -not much less than for a branded house- the reputation of the house, its “brand" still has a life of its own, has much deeper repercussions than the simple sum of personalities /lives of the various family members that it harbors -children misbehaving , just growing up or leaving the nest, parents moving on to a new “empty nest” lifestyle or just seniors gently fading out of the picture: the house /family values (governance, corporate business principles) has to exist & stand strong for family members to gather, seek shelter in time of a crisis, help fund some of the kid’s misadventures…
In short: providing a guiding marketing culture and support system that remains relevant, alive & strong as the “pater noster” that once stood for the clan , well on top of the commerce stuff…

Friday, July 6, 2012

Why Facebook has to make such a compelling case for the monetization of social Media

There has been so much buzz from marketing, finance & social media pundits in the past month following Facebook's IPO that as things have not settled but still open for future prediction, I thought I might bring my own take & forecast:
Even if FB is overvalued & overhyped, it has 3 fundamental assets that many other social media or even traditional media don't always have: critical mass/captive audience, major brand recongition/equity. buzz /influence power.
  1. critical mass/reach: with more than more than 800 millions users worldwide, whilst 200 million accounts were added in 2011 , even if FB was churning more than Telco, Credit card or Media companies, this captive audience will still have prominence for the next decades over the still overpriced SuperBowl or Olympics TV iconic platforms...More importantly, it has become an integral part of a day in a life for hundreds of millions of teen agers, head of household/parents, opinion leaders or marketers who spent an average 700 mins per month actively engaging with their peers , family and friends: no other less than 5 years old medium can boast that kind of captive/regular , involved & deeply interconnected audience.
  2. major brand recognition/equity: even before the iconic Social network movie & cool J. Timberlake acting , FB had already reached  household name status that even LinkedIn or Twitter were not able to achieve , a brand that now ranks in the top 20 global brands (BrandZ 2012) among the Google, Coca-Cola, Apple, right behind WallMart & ahead of is the top riser (74%) in brand equity in 2012 -stay tuned in the next years!
  3. buzz / influence power: what people read on FB, either real, accurate facts or not, just counts: like oe not, as on Twitter or YouTube, messages, it amplifies & make any information become a public opinion trend or potential social wave.As Twitter starts flinching under a few blunders from celebrities or politicians who showed how tricky it can get to manage public opinion at global scale and from a 10 words billboard, FB still remains the trusted source where people go check the accuracy or details of a story: either a celebrity's daily life or a job seeker crosschecked by its future employers, it stands as a credible & true picture of what happens in everyday life.That's where FB still seems to hold a more trustworthy power than glossy spreads stories on E.T. or traditional print magazines or decidedly scripted "reality-shows" on Bravo.
So the key question is now: how will FB be able to monetize this in the best way without alienating its main asset: its members ?
The answer to this question has nothing to do with any behavioral vs attitudinal data are more relevant, any Display vs Search debate, nor how many or which brands should preempt it...

It is a case of HOW to: how to reinvent a new marketing game or way of subtle, interactive branding in storytelling:  more inspiration and service or deal driven than classic product show & tell: and that's exactly why old advertising patterns won't work: what only counts is that FB designs its monetization model and develop its commercial policies to advertisers, in real game-changing ways that both:
  1. bring a legitimate and relevant value: either in terms of interest, knowledge access, community building or activities: be a club, a forum, a polling or expression platform, bring real concrete benefits & advantages attached to a given community of interests or values... 
  2.  don't invade our privacy or comfort zone to a point that it would become intolerable like today's telemarketing or email Spam...sharing personal data with third party marketers might be fine as long it's then utilized in a way consistent with FB founding philosophy and values and not all over the map: that's where it would see the crumble of its very own initial asset & value at the very same incredible rate of that we saw in its growth...
We are being told that revenue stream will primarily stem from selling behavioral & attitudinal data to marketers & agencies: provided it is done in a way that brings value & relevance to the audience segment it targets and in a mature, intelligent manner, it might actually reinforce the strength & reach of the social network and finally seal its 100 billion market valorization and fate as THE most powerful media of the 21st century.