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Dear Friends: A very Happy New You and an extremely Happy New Year to you and yours. 2018 sowed the seeds of tectonic changes in the world of branding and marketing and the hedge is that 2019 will take it a few notches higher. The excitement is palpable and the issue on hand is feature packed. We look back and look ahead. Like the Influencer Marketing Trends to Keep Your Eyes on or the Most Watched Videos of 2018. We head into a Conversation with CEO of Microsoft Satya Nadella and see where he is taking the organisation to cloud and beyond. AI is the unofficial toast of the town and our feature on how Marketers can start using AI will be a good primer to soak in. A blast from the past is the process of Brand Valuation that has now transcended 30 years. Take a dip into that in this issue. You will be fascinated to know how Advertisers use Psychology tricks to get us buy things in the article featured in this issue. We often hear that your best brand or product is ‘ Customer Experience ‘- we unravel some secrets of great customer service! If you are keen to understand how brands can survive(and then thrive)amidst and inspite a crisis, then the article based on insights from the BrandZ study with special emphasis on Volkswagen and Facebook is a must read. We have also very clearly distilled the key priorities that CMOs should latch onto and the ones they should ignore. There is bagfuls more as usual and I hope you find value and enrichment in the content we curated. Till the next…
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Managing Editor: Suresh Dinakaran Creative Head/Director Operations: Pravin Ahir Magazine Concept & Design/ New Media Specialist: Mufaddal Joher Business Development Director: Rishi Mohan Senior Hustler-Digital Marketing & Brand Development: Nikhil Thekkumkoottathil Brand Research & Creative Engagement Specialist: Anushka Kartha Country Head, Australia: Norbert D’Souza Country Head, UK: Sagar Patil Regional Director: Krishna Chugh Country Manager, India: Vinit Chugh Business Development Director, India: Kenneth Extross Video Content Specialist: Mikhaela Cena Content Development Specialist: Abijith Pradeep
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CONTENTS 5 Sneaky Psychology Tricks Advertisers Use to Get Our Business The problem with invisible branding Most watched videos of 2018 Insights from BrandZ: How Volkswagen and Facebook have survived crises and thrived Be very aware when marketing to generation alpha How Millennials are Marketing to Gen Z Exclusive CEO Interview: Satya Nadella Reveals How Microsoft Got Its Groove Back The Three Areas of Marketing That AI Will Reinvent First Confessions of a data scientist: ‘Marketers don’t know what they’re asking for’ Why competitive gaming is the next big opportunity for brands How Savvy CMOs Can Leverage Location In Their Marketing Mix A Marketing Disaster Is a Terrible Thing to Waste: 3 Lessons From Recent Big Brand Fails Podcast: How Music Can Change Our Mood Are Influencers Overrated? How To Use Siri To Automate Every Step Of Your Daily Grind Would You Treat Your Mother That Way? The Secrets of Great Customer Service CMOs Need to Focus to Survive: Three Priorities to Ditch and Three to Latch On To Did a slave make your sneaker brand? Probably, yes! How Marketers Can Start Adopting Artificial Intelligence Tomorrow 10 Influencer Marketing Trends to Keep Your Eye On An Exceedingly Good Solution: Looking back on 30 years of Brand Valuation Book, Line & Sinker
5 Sneaky Psychology Tricks Advertisers Use to Get Our Business PAY ATTENTION TO THE TRICKS THAT ‘GET’ YOU. THEN REPLICATE THEM IN YOUR OWN BUSINESS. By Pius Boachie
Today’s consumers have become more observant than ever in the face of clever, and sometimes deceptive, marketing tactics. That’s why advertisers have had to morph into masters of applied psychology, always on the hunt for new ways to capture our interest and get those all-important clicks from us as consumers.
How can brands get the most consistent exposure to ensure this phenomenon takes full effect? Start by putting your product in front of everyone with a hyper-localized strategy. Surround your relative community with your brand over a long period of time; this will encourage word of mouth and make the brand the only one being talked about.
As new research emerges from psychology and the social sciences, advertisers are learning new ways to gain our interest and persuade us to click and buy. But I try to stay a step ahead! That’s how I can describe the following five sneaky tricks I’ve found advertisers using to get consumers’ attention.
An impressive example is Absolut Vodka’s famous print advertising campaign, which ran for many years. It took off from the United States and quickly spread to other parts of the world. Rather than creating standard ads, the brand found a way to make its ads alive and relatable. The vodka brand chose to create experiences with its ads.
These are steps that you, as an entrepreneuur, can use, too.
Takeaway: This effect ignites the idea that the customer cares about the brand’s local businesses, and customers begin to unconsciously see and hear your brand everywhere.
The Baader-Meinhof phenomenon Say that you need a new car and someone mentions a certain kind of car -- one you’ve never heard of before -- but you’re interested. Suddenly, the car is everywhere.
The power of anecdote
It’s parked in front of your house. Your boss has one. You see two of them next to you in traffic on your way home from work. What you’re experiencing is the Baader-Meinhof Phenomenon, also known as the Frequency Illusion.
An anecdote is a short story that can be used to support a debate. Anecdotes can be useful in illustrating the effects of a discussion; however, they are not conclusive evidence, because they are limited in scope and not necessarily representative of the norm.
Using this technique has become handy in terms of marketing. We see it every day, out of our car windows, plastered on giant billboards. The consistent and repetitive marketing typical with the phenomenon becomes seared into our brains and we find ourselves seeing this product everywhere we go.
Quite a number of marketing departments use anecdotes aggressively to their advantage. Testimonials, videos of happy customers and glowing case studies are examples of marketing materials that tap the brain’s love for stories and reliance on anecdotes as “evidence.”
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Nike has always excelled at brand storytelling. One of its best campaigns is Equality. This made a strong statement about the brand as a force for positive social change, offering athletes something more than just a pair of sneakers and branded workout gear. The Equality campaign was, and is, an example of using brand anecdotes to connect with audience members, inviting them to become a part of a collective movement by wearing Nike products, or at the very least, by engaging on social media, sharing one of the brand’s always inspiring videos. Takeaway: Anecdotes give meaning to a product that is otherwise impersonal. Even if brands present evidence that their product is superior to competitors’, buyers might still choose the competitor’s simply because someone they know recommended it.
Anthropomorphism “Anthropomorphism” happens when someone assigns real or imagined human characteristics, intentions, motivations or emotions to nonhuman animals or objects. Over time, people have inculcated fictional creatures and animals with human traits and motivations. Marketers have capitalized on this tendency by creating a variety of anthropomorphic animal mascots for commercial products and services. The “Michelin Man” and “Mr. Peanut,” by Planters, are some examples of anthropomorphic animal mascots. When a brand has a persona, it becomes “human”; it triggers the perception of intentional action as well as the desired action itself. In other words, customers might connect with the brand, as they feel it represents them in a way. However, be forewarned: Any problems with the products or services or with the brand itself will be treated as a human problem with equivalent consequences. Takeaway: Brand anthropomorphism can be a doubleedged sword; while making brands more human, anthropomorphism creates connections and engagement with the customers. So, it can leave more room for judgment, as the brand will be viewed as human. The best approach is for brands to emphasize the best of the human part.
Decoy pricing The decoy effect is a result of cognitive biases. A cognitive bias is the tendency of the human mind to make inaccurate judgments or believe distortions or other fallacies. Every cognitive bias has a cause. In marketing, the decoy effect occurs when consumers tend to have a specific change in preference between two options when presented with a third option that is inferior to one of those two original options. Decoy pricing is a tactic that boosts sales of high-profit items by creating another version of the product solely to make the pricier version seem economical by comparison. Decoy pricing encourages people to compare the pricing options. As a result, sales of the more attractive, higher-priced item increase.
Have you ever noticed how often products come in three options? This may be the business trying to offer different options to customers. But smart marketing also takes advantage of the decoy effect to lead customers to the most expensive purchase rather than to the one they might have ordinarily made. Think about your last visit to the cinema and the temptation to buy popcorn. If there was a small and a large size of popcorn, and the small one was $3.50 and the large one $7.50, most people probably bought the small size. However, if the theater added in a medium size at, say $6.50, most people would buy the large because it’s only $1 more than the medium. The $6.50 option is the decoy. Takeaway: The decoy effect is subtle, yet powerful. The process is simple: Pick the plan you want to sell. Provide two more choices. Jack up the decoy, and watch the sales pour in.
Loss aversion Loss aversion is based on the idea that shoppers feel good when they gain something, but also bad when they lose something. Our feelings toward loss and gain are not equal; we feel a stronger negative feeling toward losing something then the positive feeling we have when we gain something Loss aversion, simply put, calls for averting the loss of something we own. Ever wonder why companies offer free trials? A 1990 study conducted by Nobel-winning psychologist and behavioral economist Daniel Kahneman and his colleagues found that people are more likely to act when they have something to lose, as opposed to when they gain the same thing. That’s why companies offer free trials, so customers will want to keep their connection to the product even after the trial period is over. Loss aversion can be a powerful conversion-driver for your brand. The key is to avoid inciting fear: instead, offer users constructive information. Guide them through their decision process and provide a compelling reason for them to take action. Advertisers use every human sense we have, including our subconscious senses, to convince us to buy things, and they’re very successful at what they do. But of course we’re consumers as well as entrepreneurs, so even with this knowledge of the tricks advertisers use, we’ll likely still find it hard to resist being influenced by our own subconscious. The point, though, is to be aware: The next time you stroll through a grocery store or shop online, pay attention to the tricks that “get” you. Then try to replicate some of them in your own business.
Pius Boachi Founder, DigitiMatic | Content Marketing Agency
The problem with invisible branding AVERAGE CONSUMERS TYPICALLY HAVE NO IDEA THEY’RE INTERACTING WITH–OR BEING MANIPULATED BY–AN ALGORITHM. THAT’S A BRANDING PROBLEM. By Jason Brush
Artificial intelligence is the most ubiquitous innovation you never see. It quietly powers automatic translation and closed captioning, automated media manipulation, search results, social media filtering, medical diagnosis, shipping logistics, and targeted advertising. There is likely no aspect of human industry and society that AI will not eventually touch–for better or for worse. Consumers, however, have few ways to understand when and how AI is being used, and to judge for themselves if they see it as a benefit or not. It’s simply not a recognizable element of a brand. If AI is to become a meaningful facet of society, identifiable and understandable by consumers, its value must be articulated. And for that to happen, designers of AI-driven experiences must make the invisible visible; they have to give AI a good, old-fashioned brand identity.
THE CASE FOR BRANDING AI A skeptic might wonder why AI needs branding in the first place. If it’s meant to silently toil away in the background of our lives, why does it need to announce itself? Why give consumers yet another thing to think about? But brand-building has always been key to making impersonal industrial processes, technologies, and corporate organizations relevant and relatable to people–especially in cases where there’s little functional difference between one corporation’s products and services and its competition’s. Brands are the human face of an industry and the primary mechanism businesses use to make unique, differentiated promises to their customers.
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Every successful brand articulates itself to people both through familiar visual branding assets–a logo, typeface, color palette, and so on–but also by crafting distinct experiences that make products and services tangible. The cushioning of shoes, the sound of a car engine, and the closing of its door, the color of a pill’s coating, the login mechanisms of a phone, the hidden chipset in a computer, the coating and insulation of a jacket, and the alert sounds of a digital device can all be meaningful (and trademark-able) elements of a brand experience.
WHEN INVISIBILITY IS A LIABILITY However, it’s a mistake to think that all applications of AI should aim for Netflix’s model of invisibility. The way AI shapes people’s experience of Netflix is surprisingly atypical: Invisibility works for Netflix primarily because the vast majority of time enjoyed with the service is spent watching long-form content during which the AI-supported interface is completely irrelevant. While AI is an indispensable part of Netflix’s service, it is not fundamental to the most important part of the experience: watching TV and movies. Contrast that to YouTube, which has an AI-based algorithm that may guide people to two-dozen or more pieces of content. In a fundamental way, YouTube’s AI is its experience. And because the content can be anything–unlike a TV network such as HBO with stringent editorial controls, for which the quality and tenor of their programming is a fundamental part of their brand–YouTube’s AI is its brand.
INVISIBLE BY DESIGN The key obstacle that AI faces, from a branding perspective, is that it has been engineered to be invisible. AI is often deployed as a way to eliminate friction and to reduce people’s awareness of technology. Unlike other familiar brand elements–color, typography, logos, texture, sound, tone of voice, photography style–AI is often seen as being most successful when it’s completely invisible. Consider the role that AI plays in creating shopping or content recommendations within products and services today as opposed to, for instance, a sommelier at a Michelin-starred restaurant: a sommelier’s job is to converse, inspire, and educate; diners’ experience with their sommelier’s unique human intelligence is everything artificial intelligence isn’t: It’s highly visible, opinionated, and slows down a process rather than speeds it up. In contrast, Netflix’s celebrated, AI-based recommendation engine–which Netflix has estimated being worth $1 billion to its business–succeeds entirely by virtue of its invisibility and the way it reduces rather than amplifies interaction: if the very first thing you see on the Netflix home screen is exactly what you want to watch, Netflix’s AI has done its job. In this case, AI has succeeded in Netflix’s goal of directing people toward relevant content, which is the only real reason why people pay for their service in the first place. Despite its UI being an indispensable part of the product, nobody in all likelihood buys a Netflix subscription because they enjoy hanging out in the UI, flipping through box art without ever watching anything. Netflix’s AI is valuable because it’s invisible; if it somehow interrupted you–remember Microsoft Word’s Clippy?–you would get annoyed and perhaps consider joining another streaming service.
YouTube has come under significant criticism for the way the invisible hand of its recommendation algorithm can amplify hate and ignorance–watch a single white supremacist, antivaccine, or chemtrail conspiracy video and you get sent down a rabbit-hole of racist or baseless anti-science propaganda, all on auto-play. YouTube’s AI-based algorithm amplifies the message of whatever you watch. The dangers for young people, for whom YouTube is an indispensable educational tool, are especially acute. Is this the experience that YouTube, which in its brand mission claims that its goal is to “give everyone a voice and show them the world,” wants people to associate with its brand? Does “everyone” really mean Nazis, too? In this context, you can see how the invisible aspect of YouTube’s AI is more of a liability than an asset. The same could be true for many other companies. Unless they make AI’s positive potential part of their brand strategy, they risk being associated with the alienating risks of AI.
LOOKING AHEAD So how should companies brand AI? For some companies, it could mean embodying AI-generated experiences in unique personalities (think: more C-3PO or R2-D2 than HAL). For others, it might mean actively marking AI-enhanced experiences as such so that a consumer understands their behavior and benefit–and can take manual control when she doesn’t like what she sees. For still other companies, perhaps branding is a matter of empowering people to be active participants in the machine learning used to train AI systems. Imagine a service that lets consumers retrain an AI-based system when they get undesirable results. Branding AI is a formidable design challenge, and there is no one-size-fits-all solution; as YouTube and Nextflix demonstrate, companies use AI in myriad different ways. But given the newness of AI, and the extent to which it is poised to reshape society, design-led companies should consider its branding among their top priorities. Jason Brush is global executive vice president of experiences and innovation at Possible.
Most watched videos of 2018 VIEWERS SOUGHT ADVICE FROM IBM’S GINNI ROMETTY AND FORMER CIA DIRECTOR DAVID PETRAEUS, AS WELL AS INSIGHTS FROM FACULTY ABOUT WHAT OUR EMAILS REVEAL ABOUT US. By Shana Lynch
Sitting through a long train commute or heading off on a holiday vacation? Spend some time with Stanford Business. We gathered the top-watched stories of 2018 for your free time. Here, learn how IBM’s CEO creates a startup mentality and what our work emails say about us. Visit Stanford GSB’s YouTube channel to learn more from our faculty and guest lecturers.
Ginni Rometty: Steering a Tech Giant Like a Startup In this speaker series event, the CEO of IBM discusses the challenges of leading a 107-year-old company, what impact AI will have on society, and why you should have a purpose and passion for what you do.
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Jeffrey Katzenberg: How Failure Makes a Better Leader Katzenberg, cofounder and former CEO of DreamWorks Animation, shares what he learned from getting fired — twice — in this intimate conversation with GSB students at the Knight Management Center.
What Our Emails Reveal About Us Stanford GSB Associate Professor Amir Goldberg analyzed years of internal company emails and found the language we use determines whether we’ll move up — or out.
Making First and Lasting Impressions Research shows that it takes merely a second for people to form an impression of you. In this classroom conversation, four GSB students offer tips on how to make a strong first impression and build on that to ensure that ideas stick during presentations.
David Petraeus: Four Tasks of a Strategic Leader In this View From The Top conversation, the retired U.S. Army general and former CIA director discusses adaptive leadership, how to recognize opportunities, and how to handle personal setbacks.
Ken Frazier: Understanding the Free Market Merck CEO Ken Frazier discusses how we can improve the global health care system, why we shouldn’t lower drug prices in the United States, and what leaders can do to provide dynamic mentoring.
If Diversity Is So Important, Why Don’t We Have More of It? Despite huge cultural shifts in the workplace, even the best are still failing at diversity. Stanford GSB Professor Margaret Ann Neale says the creative benefits of cultivating diversity are clear, but “time and time again, we see evidence that Silicon Valley firms are in fact very homogeneous, mostly male, and mostly white.”
Insights from BrandZ: How Volkswagen and Facebook have survived crises and thrived By Peter Walshe
There are brands that die when things go wrong and there are those that bounce back. Volkswagen is a case in point. Many thought the emissions scandal would seriously damage the German auto giant. But after an absence of two years, the brand returned to the BrandZ Most Valuable Automotive ranking, taking the number 10 spot with a brand value of around $6 billion. What helped it recover was the power of the VW brand. Years of consumers having positive experiences of owning and driving a VW, as well as strong communications to its target audiences, ensured that brand recommendation and brand trust scores were never dented. Readers might also be forgiven for thinking this has been a brutal year for Facebook, given the long string of global scandals. Nevertheless, Facebook remains a must-have digital utility around the world. Trust scores for Facebook are 113, well above the average brand score of 100. The ability of consumer trust to insulate brands from their actions extends to every sector. Shell, for example, which has worked hard to build consumer trust, has seen its brand value grow 34% in the past eight years. Other global players in the oil and gas industry, excluding Shell, have decreased 16%. The fast food story is very similar. High trust brands such as McDonalds, KFC and Dominos have seen their value rise 26%, while low trust ones are down 6%. Building trust is a long-term process but what drives growth in trust is the experience that consumers have with the brand, whether it’s a vehicle brand, a digital-only service, a retail fuel supplier or a fast food chain. Because a quality experience, beautifully communicated, is directly linked to rising trust in a brand. When we rank average trust scores for the 192 brands featured in the 2018 BrandZ Global Top 100 report and compare them to their experience scores we see a direct correlation. Those delivering a brand experience that consumers perceive as good have a trust score of 117, where 100 is the average brand, those delivering an average experience score 105, while those delivering a poor experience manage just 98. Those brands among the 192 perceived as delivering high experience have an average value of $50bn compared to just $14bn for those with a poor experience.
Of course, some brands have always delivered an amazing experience. It’s at the core of the Amazon proposition, for example. But others have taken dramatic steps to improve their experience in recent years and the impact on consumer trust has been dramatic. Let’s take 10 brands that have made smart improvements to consumer experience in the years we’ve been tracking their performance: Alibaba, Apple, Chanel, Facebook, Gucci, Ikea, Lidl, Netflix, Nike and Starbucks. Average experience scores for these 10 brands are now 121, compared to the 111 average across the BrandZ Global Top 100. Trust scores have risen 16 points to 114 from an average of 98 when we first started tracking them. As a result, they’ve also grown their brand value faster than rivals. Average annual growth for these 10 brands has been 70%, compared to the 17% averaged by the top 100. The steps that build positive experiences will, of course, be different for every brand. Chanel and Gucci have taken greater control of their licensing, ensuring customers only get the real thing, for example. Starbucks has redeveloped its whole offer to reinforce the premium barista promise. These actions should be designed to deliver on three key fronts, ensuring the product or service meets needs, it stands for something unique in the eyes of the consumer, and is able to deliver that experience online as well as offline. When brands deliver on all three they build a positive experience and hence trust. The reason why this is so powerful is that consumers fundamentally don’t like change. A brand that delivers on experience can be trusted and remains a safe choice, often at a level that is not even conscious. That experience and the trust it builds keeps consumers coming back, even when the company is facing a crisis. High consumer trust is an insurance policy that ensures companies get the time they need to change tack when things go wrong. Because without trust they simply disappear. Consumer trust means VW and Facebook will survive where Northern Rock, MySpace and Compaq did not.
Peter Walshe, Global Account Director, Millward Brown
Be very aware when marketing to generation alpha By Andrew Blustein
This holiday season, kids everywhere will be pestering their parents and anyone else who might listen for toys, tech, and more. But their influence on purchases goes well beyond the holidays. In a global survey of 8,000 parents from communications company Hotwire, 65% of participants said the habits and needs of their children influenced their last purchase. That number increased to 81% in the US.
is by saying..., ‘Your kids live and breathe technology, but that doesn’t mean they have to be the ones that have more knowledge than you. You need to upskill and understand what’s important, what safety features you should be using, why you should be concerned about privacy.’ “Help parents. That makes you a brand that’s worth talking to and building relationship loyalty with,” said Hazan.
The survey also showed that 27% of parents across the globe ask their kids’ opinions before buying technology such as a new tablet, laptop, or phone. That number rose to 38% for British parents.
When marketing to children, brands need to balance brand safety with reach and influence. According to the survey, 36% of parents say their kids are influenced by their friends’ possessions and 14% say their kids are swayed by online influencers.
Today’s fast-paced, connected world means generation alpha — kids eight-years-old and under — are digital natives. Their comfort with the online world and all things tech pushes their requests beyond pester power to palpable influence.
Brands undoubtedly have concerns over breaking the rules when marketing to kids, but there is still significant value in working with kid influencers, some of whom have millions of subscribers on YouTube.
As a result, kids aren’t just influencers; they’re often decision makers when it comes to buying the latest technology. Brands need to realize this, but they also need to go about marketing to generation alpha safely.
“How do you engage a kid influencer who reviews toys? You send them a toy, say you’re a big fan and tell them they’d love you to review it. [To] activate kid influencers, you just throw your hat in the ring and hope for the best,” ANA’s Berberich said.
Michael Berberich, director of content innovation at the Association of National Advertisers (ANA), said it’s smart for brands to treat children like CEOs. “It’s almost like they’re a B2B decision-maker. You’re never really trying to sell them. You’re trying to educate them and get them talking about your brand, your product, your channel, whatever it is. They’re a major decision maker, but they’re not necessarily the buyer,” said Berberich. Making education a central theme to a campaign is a valuable way of engendering trust among parents and children while avoiding the possible pitfalls of advertising to minors. According to the survey, 26% of parents believe their kids value their mobile devices more than any other possession, and 48% of parents think technology is having a negative impact on the amount of exercise their kids get. However, 75% of parents think the technology their kids are using will benefit their future careers. When marketing to parents, brands will find success by tapping into these concerns and attempting to bridge any skill gap between parent and child, Hotwire’s global head of consumer Emma Hazan asserts. “Brands need to help educate. Where they can tap into parents
He added that companies need to clearly explain to kid influencers that they don’t expect anything in exchange for a product review. This focus on education, brand awareness, and content marketing is similar to the strategies for marketing to millennials that confounded advertisers in years past who were caught flat-footed reacting to the behaviors of a new set of consumers, Berberich explained. As marketers look to get ahead of understanding how to reach this next generation of spenders, and as campaign strategies make ROI less provable, there will need to be a shift of mindset in the C-suite. “How do you show the ROI before giving away a bunch of toys? The unfortunate thing for brands is you don’t,” said Berberich. “This is a bigger conversation. There needs to be a recalibration across the C-suite into what’s reasonable, where we can expect to see things go… I think that it’s going to take some discipline by the C-suite because [marketing to generation alpha] is in the very beginning. This isn’t murky waters. This is you can get in serious trouble very quickly. There’s no walking it back.”
How Millennials are Marketing to Gen Z TRADITIONAL MARKETING IS USELESS. By Jon Feagain
Although millennials are continually classified as being between the ages of 18-34, the reality is, they are likely older than that. Millennials are more accurately those between the ages of 26-42, making them the largest percentage of working age adults. In the United States, 2010/16 statistics counted the number of millennials as being well over 70 million people, preparing to surpass the total number of the baby boomers. If the majority of working adults can be classified as millennials -- and they are often described as being able to think outside of the box -- how are they marketing their businesses to the next generation? Those born after 1995, known as Gen Z, have grown up completely surrounded by technology, making traditional marketing efforts relatively useless. In order to capture the attention of the next generation, you have to be creative. Here are a few examples of the ways millennial business owners are capturing the attention of today’s young adults:
1. Building cult brands. One similarity between millennials and Gen Z is that they believe in brand loyalty. If a company is able to push beyond brand loyalty into cult brand territory, there’s no stopping them. Apple is an example of a brand that has managed to do this. They have gained the ability to create a “need” for what’s coming next. The Apple Watch, for example, is very popular with Gen Z, and has not once been truly marketed as a timepiece. It is obvious that you can check time on your phone, so Apple had to find a way to appeal to trendy and tech savvy individuals by creating a convenient smart watch. Creating cult loyalty to a brand means your customers will care more about your brand than they do about most other things. To get there, you must build a solid relationship with your audience, paired with excellent tracking, to meet and anticipate the needs of your buyers. If you are able to give them what they want, you can bet they will return to you in the future.
2. Social media ads and influencer marketing. If you are trying to get the attention of Gen Z, stop focusing your efforts on television and magazine ads. This generation does not consume media in this way. They live online, and that’s exactly how we grew a 7-figure business. If you can build a creative ad that pops up in their social media feeds and captures their attention in a split second,
you might secure a few purchases. If you can have an “influencer” prove your product’s worth to thousands of followers, you might just find yourself a goldmine. Influencer marketing involves using an individual who has gained a cult following due to their job, posts and infectious personality. These individuals share content, potentially including your product, service or business, with their thousands -- sometimes millions -- of followers, influencing the purchases these followers make. Because influencers are not necessarily Hollywood celebrities with millions of followers and dollars, Gen Z feels they can relate with these real people and aspire to be them. The easiest way to accomplish this is to use the products they use. A good influencer will not make it feel like an advertisement, instead, they will create something more like a sneak peek.
3. If it’s not fast, it’s broken. Ask a Gen Z what DSL is and you might get a blank stare in return. Devices continue to evolve into faster machines and the minds of Gen Zers are moving just as fast. If a page takes more than a few second to load, chances are that the young viewer has moved on to something else. Millennial business owners are creating new products and adapting old ones to make them faster and more attractive to younger audiences. It’s not just about how you are marketing to the younger generation, it is about creating a product and brand that they can love and grow with. Many businesses are still targeting youth by promoting their products on mediums that don’t even reach this audience. Marketers who treat their audience like they still have the values they did in the 90s and early 2000s, will do little more than waste money and ideas. Millennials grew up when the internet and its related technologies were beginning to boom, so they have a profound understanding of it. They know the appeal of the digital age to Gen Z, and they know how to quickly adapt their efforts to reach this growing generation. In order to reach a younger generation, you need to think like one. One of the best ways to do this is to employ some of these methods that have been successfully adopted by millennial marketers.
Jacky Chou is founder of Indexsy, an enterprise SEO agency. He is a proud native of Vancouver, BC, who has been featured on Forbes, Oberlo and GoDaddy.
Exclusive CEO Interview: Satya Nadella Reveals How Microsoft Got Its Groove Back By Alex Konrad
n early 2016, two years into running Microsoft, CEO Satya Nadella needed advice from one of his newest employees, the cofounder of an app-tool maker Microsoft had just bought. Nadella was close to pulling off his blockbuster $27 billion acquisition of LinkedIn, but he wanted to talk about another company he coveted: GitHub. “Can we do it?” Nadella asked the executive. “Have we earned the trust?”
its financial statements. Revenue, at $110 billion, is growing at a double-digit percentage after slumping for most of the past decade, in large part because of the hard-charging— and high-margin—cloud suite the company has built around Office and Azure, Microsoft’s challenger to Amazon’s cloud juggernaut.
Back then, the answer was no. GitHub is the virtual watercooler of software development, a site where millions of programmers talk shop and share code across company boundaries. Microsoft had earned a reputation during its 1990s heyday as its polar opposite, an insular software belligerent, and GitHub was seen as wanting nothing to do with it. But after watching Nadella lead the Redmond, Washington-based giant for two years, GitHub made a surprise move, choosing Microsoft over Google as its acquirer this past June. Net profits are at $16.6 billion, an increasing share of which is attributable to Azure, which is growing at 91% annually with multiyear contracts only just starting to boost the bottom line. Microsoft ended November as the most valuable company in the world, eclipsing Apple and Amazon. The consensus among analysts is that it will hit $1 trillion in market cap sometime next year.
It was the latest coup for Nadella, 51, who’s breaking free of Microsoft’s recent past by returning it to its roots under cofounder Bill Gates. “Bill used to teach me, ‘Every dollar we make, there’s got to be five dollars, ten dollars on the outside,’ ” Nadella tells Forbes, in his first sit-down interview since the $7.5 billion deal closed. Great companies were once built on Microsoft’s code, Nadella says he was reminded by Gates. Nadella’s mission: Rebuild Microsoft brick by brick until it can happen again. “That’s what I want us to rediscover,” he says. Signs of Nadella’s progress are found everywhere. From a Microsoft voice assistant that integrates with Amazon’s Alexa to a deepening alliance with Samsung and, most crucially, in
Much of the credit belongs to Nadella, a Microsoft nearlifer who took the reins from Steve Ballmer in 2014 and immediately started knocking down walls. The former engineer says he has focused the company around a simple concept: “equitable growth.” “People are finally coming around to saying, ‘It’s not just the surplus you’ve created for yourself. What’s the state of the world around you?,’ ” Nadella says. “That’s where I feel like we’re at our best.” Nadella signaled his intentions with the help of an iPhone. Weeks after his start as CEO, Microsoft opened up its Azure
cloud service to make it easier for developers to create iOS apps. The following year, Nadella used an iPhone onstage at an event—unthinkable for a company that had brewed up the market-lagging Windows phone in 2010 and then blew more than $7 billion in 2014 buying Nokia’s mobile division to support it. When Nadella took over, he wrote off the whole deal as a loss. Behind the scenes, Nadella got to work on Microsoft’s culture of infighting and of treating competitors as if it were “straightup war,” as a former Oracle exec puts it. With its rearwardfacing obsession with Windows, the cash-cow operating system, CEO Nadella is Microsoft was caught unawares returning to a core by the cloud boom (exemplified by Amazon Web Services) and by Bill Gates lesson: subscription software businesses like Salesforce.
“Every dollar we make, there’s got to be five dollars, ten dollars on the outside.”
Nadella, who immigrated to America from India in 1988, was an insider who led the company’s nascent cloud business before taking the top job. He quickly installed new leaders and smashed the barriers between Microsoft and open-source rival Linux, which had been famously called a “cancer” by his pugnacious predecessor Steve Ballmer. Nadella and Scott Guthrie, the new cloud boss, welcomed Linux onto Azure’s IT framework, where it’s now used by half of all computer systems operating on Microsoft’s cloud. “When we achieved our success, with that success came out the classic hubris that I describe as being the know-it-alls,” Nadella says. “I said, ‘Let’s shed that.’ ” To chip away at Amazon’s massive head start in cloud (Amazon Web Services is on track to make $27 billion in revenue a year, compared with an estimated pace of $10 billion for Microsoft’s Azure and $3 billion for Google), Microsoft turned to its partners. Sales reps are now compensated when a deal with a key ally of Microsoft leads to more activity on Microsoft’s cloud. And companies working with Azure find
themselves brought into million-dollar deals at the one-yard line. “All of us have been stunned they are doing it,” says Bob Muglia, CEO of San Mateo-based data-warehouse software maker Snowflake and a 23-year Microsoft veteran, who left in the Ballmer years. “Satya’s recognized this is a serviceoriented world.” Starbucks, which uses Microsoft to help power its ordering app, sent a dozen engineers to the world’s largest inviteonly hackathon, hosted by Microsoft—another Nadella-era idea. “It’s a different approach from a traditional software company,” says Gerri Martin-Flickinger, Starbucks’ CTO. But there are asterisks attached to this new exuberance. Much of Microsoft’s success has come from moving existing customers onto its cloud services and its revamped Office 365 work software suite, raising concerns that the company is simply harvesting lowhanging fruit, says Dan Ives, an analyst at the Los Angeles investment firm Wedbush. And while the breadth of Microsoft’s portfolio, which also includes gaming, search and devices like Surface tablets, is a great strength, it could still get tripped up again by success. “The risk is they go back to the old days,” says Raimo Lenschow, an analyst at Barclays. (Both are bullish on the stock.)
“People are finally coming around to saying, ‘It’s not just the surplus you’ve created for yourself. What’s the state of the world around you?’ That’s where I feel like we’re at our best.”
Now with GitHub in the fold—following acquisitions of the maker of Minecraft ($2.5 billion, 2014), appbuilding-tool provider Xamarin (reported as $400 million, 2016) and LinkedIn—Nadella’s team needs to avoid falling into bad habits such as restrictive long-term contracts. How the company integrates all these purchases—and history suggests it will be difficult—will also test Nadella. To navigate these challenges, Nadella relies on his broader vision that happier employees, customer and partners—even prickly coders—have to do well for Microsoft’s business to flourish. “A successful product is one that fosters more success around it,” Nadella says.
To pull it off, Nadella will lean on new leaders like Nat Friedman, the Xamarin cofounder whom Nadella asked about GitHub in 2016 and then tapped to run the business for Microsoft once the deal closed. As Friedman, whose new job entails evangelizing that message to GitHub’s 31 million developers, puts it: “People are giving Microsoft the benefit of the doubt.” Alex Konrad, Covering venture capital, software and startups. I’m an associate editor at Forbes covering venture capital, cloud and enterprise software out of New York. I edit the Midas List, Midas List Europe, Cloud 100 list and 30 Under 30 for VC. I’m a Fortune Magazine and WNYC alum.
The ‘safest’ ads are at greatest risk of going unnoticed!
Play Unsafe: Get Attention! Marketers are prone to this flaw. There’s a tendency to overestimate people’s interest in our brands. Perhaps because we’re so interested in the minutiae of our brands, we assume others share that enthusiasm. Psychologists call this the ‘false consensus effect’, the finding that we overestimate the prevalence of our own behaviours and views. This overestimation of the level of interest manifests itself in ads being created that take being noticed for granted. – or advertising copy that fixates on the second-step problem of perfecting its message rather than the first-step problem of grabbing people’s attention.
Get your advertising noticed. Attract attention. Talk to us to see how we can get your brand the attention it seeks and desires!
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The Three Areas of Marketing That AI Will Reinvent First By Michael Bertini
Artificial intelligence promises to bring change to nearly every industry— and digital marketing, in particular, will undergo major upheaval from AI sooner rather than later. Why is online marketing poised to be heavily influenced by AI? Already, many marketing initiatives are automated. And automatable processes can be managed by AI technologies relatively easily, as long as those systems have large data sets from which to draw inferences. In addition, companies will eagerly drive the adoption of AI-powered marketing tools. That’s because AI promises to improve the performance of marketing campaigns across all channels, accelerating the enterprise sales cycle and boosting revenue. Find marketing how-tos relevant to you in our resource library. The effect of AI will be so profound that in the near future “intelligent” digital marketing will be the default and today’s status quo will seem clunky and cumbersome. Here are the three areas of marketing that will be affected first.
1. Campaign Optimization Digital marketing campaigns are already deployed at scale. Enterprisegrade campaign management tools let marketers place thousands of ads across multiple ad networks—but doing so requires significant manual effort.
here that AI can have a major impact on the bottom line. Soon, AI technologies will be able to optimize campaigns with minimal human involvement. Simply define 10-15 parameters—such as which sites to place ads on or how much to spend—and the AI will figure out how much money to put where. The result would be greatly increased efficiency and return on ad spend. Google is already incorporating some deep-learning technologies into its small-business marketing suite, having just released a “Smart campaigns” feature aimed at local advertisers. By automatically optimizing the placement of local search ads, Google claims Smart campaigns delivers three times the performance of the AdWords platform it replaces.
2. Personalization Personalizing marketing messages is about identifying who the prospect is, what message will resonate with that person, when it should be presented, and which channel should be used. As with campaign and bid optimization, orchestrating all of this demands a lot of input. AI will automate those elements of marketing personalization, speeding decision-making and helping marketers act faster on the data they have available.
What will change, as AI becomes infused into enterprise software, is that these programs will effectively run themselves, learning over time what works and what doesn’t.
Today’s enterprise-grade marketing platforms already automate outreach, depending on persona, funnel stage, account actions, and many other triggers. When AI is fully infused into marketing automation tools, those tools will optimize for each of these factors in real time, constantly testing and iterating to maximize conversion.
Expect AI to not only uncover new tactics and methods for campaign optimization but also lower the cost of running campaigns. Today, campaign optimization demands the talents of at least one marketing analyst; as a result, 8-10% of a big brand’s media spend will typically go to management. It’s
All marketers will have to do is define the touchpoints involved in the purchase path and the parameters that describe the target customer; AI will then take over to define what kinds of personalization works best for different segments, and then automate outreach completely.
3. Data analysis Marketing, website analytics, and monitoring tools provide enterprises with millions of data points to analyze. That wealth of information can unlock better decision-making, but the sheer volume of data makes gaining insights a challenge. AI promises to influence data analysis for the better. It will take over the process of ingesting, cleaning up, and parsing enterprise data, throwing out exceptions and enabling faster, more accurate analyses. AI tools will completely take over journey analysis and mapping, and they will make recommendations to optimize individual journey steps. Because it works at scale, AI can deliver recommendations nearly instantaneously. Large websites— such as those in e-commerce—stand to benefit the most from this kind of AI-driven decision-making. The laborious process of site optimization, involving painstaking page-bypage improvements, will be greatly accelerated because businesses will know which changes will have maximum impact. AI will even be able to show marketers what they don’t know that they don’t know. By unlocking previously hidden insights, AI will help enterprise marketing teams develop strategies that are fully informed by data. *** The primary challenge for companies in the age of AI will be training their AI systems. AI needs feedback to “learn” patterns and optimize processes, and developing meaningful feedback loops demands large data sets. Which is why businesses like Google and Facebook, with their huge data troves, are today’s AI leaders. Still, as artificial intelligence proliferates across the marketing landscape, even small companies will benefit. Keep an eye on AI in marketing: It’s coming sooner than you think.
Confessions of a data scientist: ‘Marketers don’t know what they’re asking for’ By Ilyse Liffreing
Like artificial intelligence or blockchain, data science is a popular buzzword in the industry. Marketers are often confused around the distinction between data scientists — those who design and test experiments using statistics, calculus, linear algebra — and data analysts — those who use spreadsheets to implement strategy around data. In the latest installment of our Confessions series, where we exchange anonymity for honesty, Digiday spoke with a data scientist inside the marketing department of a company who says marketers are still lost when it comes to the science and are wasting money on data scientists.
Do marketers understand data science? Marketers don’t know what they’re asking for when they ask for a data scientist. It’s the Wild West, especially if a company has never dealt with data. Companies that aren’t ready for a data scientist, hire one and end up wasting $100,000 a year. Most small businesses don’t need a data scientist; they need someone to handle a spreadsheet or a data analyst. Marketers are often confused about whether they want data analysts or data scientists and interchange the terms. If you look at the variety of analysts jobs available on Linkedin, if a company asks for a person who can work in Excel, they’re looking for a data analyst, but if they are talking about R, Python or machine learning, they’re looking for a data scientist, regardless of what they call the job.
What confuses marketers? Data science is such a vague, meaningless word in the industry. It’s a buzzword, and because it’s such a buzzword, it’s easy for anyone who touches data on a day-to-day basis to call themselves a data scientist. There’s a lot of people trying to hack their way in. It’s like bitcoin. Everyone wanted to buy it. Everyone wants to be a data scientist right now, but you have to know what you’re doing. Even the word “model.” Depending on whether you are talking to a data scientist or a marketer, you could be talking about very different things. It’s not just the industry’s fault.
What else is fueling the confusion? Schools popping up around us, like coding bootcamps, are
perpetuating the idea that you can do data science without knowing statistics. That is bullshit. Coding bootcamps will take people and put them through a class where they’ll learn code formulas and then call them data scientists, but they’ve never taken a statistics course or a linear algebra course so they don’t know what they’re actually doing. Anyone can type LM into an R terminal and get a linear model, but that doesn’t mean they actually understand what a linear model is doing or how predictive it actually is.
How does this hurt companies? There’s a disconnect between the extra level of complexity done at the data science level, what large companies are really looking for, and the kind of analysts being pumped out by non-academic institutions. Whenever you find places that say how little math you have to do to become an analyst, they’re pretty much turning out pretty weak analysts. Anyone can look at any company’s performance for the past six months, take the average and say next that month, you’re going to do this. That’s not a real prediction; that’s about as weak as it gets and that’s the basic level of analyst they are getting. So if a company is missing its KPIs month over month, it’s probably because their data scientist didn’t know as much.
Is it strange being inside a marketing department? Would you rather be working at a tech company? For me, I’m doing my job right if I can give my company and stakeholders the data they need to make decisions. It’s a great thing to be part of, no matter where you are at. You’re solving a puzzle every day. How can I predict future behavior? That’s kind of cool. Throughout the history of mankind, people have loved fortune tellers.
Are you satisfied with what you make? I get paid a little less than the median, but it’s because I have about five years less experience. Companies recognize how competitive it is, so it’s a well-paying career. I make $90,000 and the median salary is $120,000 and could go up to $300,000.
Why competitive gaming is the next big opportunity for brands By Albert Kugel
When we think of esports, we picture filled arenas with flashing lights and big viewer and player numbers, the next big marketing opportunity to reach millions of Gen Zers and Millennials. But the pro scene is just the tip of the iceberg to a much larger competitive gaming ecosystem. Every day, millions of people are logging on to game servers to play multiplayer games with their peers. Just like going outside to kick around the soccer ball with friends, Gen Z now hops on a gaming device to compete and connect with friends playing games like Grand Theft Auto Online, Fortnite and Clash Royale, or watch professional gamers and streamers compete on streaming platforms like Twitch. According to a recent WaPo study, a whopping 73% of 14to 21-year-olds in the US identify as a competitive gamer. Additionally, this same group just isn’t as male-dominated as it used to be: 56% of American 14- to 21-year-old females identify as competitive gamers. And not every player is doing this with the intention of one day filling a stadium at Worlds, the League of Legends’ international finals. Much like traditional sports, they view it primarily as a social activity. According to the same WaPo study, 80% of Gen Zers play online multiplayer games to “have fun with their friends,” while just 35% play for the chance to win championships or compete for cash rewards. The explosion of Discord’s userbase is another measure of the meteoric rise of competitive gaming. Discord is a free
app that gives players and their friends an uninterrupted voice channel to communicate across any game server they decide to play on. The app’s userbase tripled in just a year: from 45 million in May 2017, to 130 million in May 2018, according to Variety. Discord speaks not only to how crucial team communication is in many esports titles, from Blizzard’s team-based Overwatch to battle royale titles like Fortnite and PUBG, but also to the desire to connect with one another. Discord in itself is a social network. As marketers, we need to not only pursue fans of esports and those with pro aspirations, but also factor in the broader competitive audience that’s there for social reasons -- they are playing to have fun and compete with their social circles, not to become the next esports phenom. That means the actual marketing can simply focus on the fun of playing games and competing with one another. When you step back, you start to realize that there are a lot more similarities between esports and traditional team sports. Both are social activities that bring people closer together than any social network has ever done.
Albert Kugel is the strategy director at Giant Spoon and leads the brand and esports content strategy for Omen by HP.
How Savvy CMOs Can Leverage Location In Their Marketing Mix By Eric Hadley
It’s hard to believe it’s only been about a decade since ads made the leap from TV screens and billboards to iPhones in the palms of our hands, and a new era of marketing began. New digital technologies gave marketers a new signal of customer intent and new ways to convert this intent into business.
missing out on real, everyday moments of purchasing inspiration that location data provides. Effective marketing needs to be about end results (e.g., sales) and not just buying impressions and clicks. New performance-based advertising models, such as cost per visit, can get the marketer one step closer to the transaction.
As far as advertising and marketing have come, many brands still struggle to harness these new intent signals in a way that customers embrace and appreciate. We’ve all heard consumers complain about irrelevant and irritating ads. People expect digital content to be meaningful and personalized to them -- and they won’t be happy unless that’s exactly what they get.
Take this scenario: Imagine you’re a high-end car brand trying to reach luxury car buyers in a particular neighborhood. Targeting someone based on their online behavior and IP address might help you find a cluster of consumers searching for luxury automotive brands nearby, but how can you be sure they aren’t teenagers dreaming about owning a fancy car? Likewise, a consumer might spend hours a day scrolling through pictures of Ferraris and Bugattis on social, but if they also shop at discount and dollar stores, they probably aren’t your ideal target audience.
According to a recent Adobe survey, 60% of consumers believe it’s important for brands to create content that’s timely and relevant, while 42% are annoyed when content doesn’t relate to their situation. That goes for mobile as well. In fact, in the U.S., spending on mobile location-targeted ads is expected to top $38 billion by 2022, more than double that of 2017. At GroundTruth, we’ve identified location marketing to be a game-changer for brands, and we provide locationbased services to help them reach the right customers with relatable and relevant content.
Are You Reaching The Right Audience? From my perspective, running advertising purely using online data is like shoveling buckets of money down the drain. This method chases after people’s aspirational wants and dreams,
Oftentimes, online is where we turn to get inspired, but offline is where we go to live. As a marketer, you want to reach people who are physically walking into the car showrooms of your nearby competitors -- these are the audiences that are actually in the market to buy a high-end car. And probably in the market for auto insurance as well.
How To Leverage Location Marketing Location can assist consumers in many ways, from helping them navigate a new city to finding a movie or their rideshare driver. One aspect of location targeting that many do not consider is the weather. Weather forecasts incite
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customers to stop at coffee shops to get out of the rain and buy sunscreen and bottled water when it’s hot outside. These are the obvious ones, but any deviation from the norm causes changes in buying behavior. This can be driven by up to 20 different weather measurements -- the most obvious is temperature; the least is changes in barometric pressure. Smart marketers can tap into this and see positive sales lift. By coupling location targeting with local weather forecasts, you can deliver tailored and contextually relevant ads. For years, I have seen major big-box retailers utilize weather data for a range of marketing and merchandising opportunities, specifically adjusting in-store end caps to highlight products and stock keeping units (SKUs) that sell better during nonobvious weather conditions. In looking at sales data on specific SKUs in specific locations and weather conditions, you can spot and leverage the nonintuitive opportunities and see the results in the sales figures. Location data like foot traffic patterns in your target area can also reveal a wealth of user insights about where, how and when your customer shops -- information that can be applied to create more effective media campaigns. For marketers, location marketing used to be “where your customers are,” but today, with data, technology and optimization, location is now more “who your customers are.” This new insight into customer intent based on location is a critical signal that marketers can use to drive business results. For example, if you’re looking to attract new customers, try serving ads to the mobile devices of those who have not
visited your business but share similar location behaviors as your target audience or live nearby. Or even more impactful, use location targeting to steal share from your competitors. By tapping into location-based audiences, you can reach groups that over-index for cross-shopping in your vertical, including your competitors’ locations. Serve them ads tailored to their particular location or audience group for maximum relevance.
What’s Next? If you think about it, the fact that both marketers and consumers value mobile personalization makes perfect sense. Consumers understand that opting in for location services is helpful for weather, directions and more. When they receive a location-based ad that includes a coupon they can use in a nearby store, their location data turns into tangible savings on a purchase that benefits the customer and marketer alike. Meanwhile, incorporating location data can help marketers make smarter advertising decisions, stretch ad budgets and improve the performance of campaigns. As has always been the case with advertising and marketing, this method of connecting with consumers will continue to evolve. I believe that marketers who learn how to leverage location marketing today are likely to find that their understanding of this tool will put them well ahead of the game for tomorrow. Eric is CMO at GroundTruth, a platform focused on driving business results through the innovative use of location data and insights.
A Marketing Disaster Is a Terrible Thing to Waste: 3 Lessons From Recent Big Brand Fails THROUGH WATCHING THE STUMBLES OF NATIONAL BRANDS, SMALLER BUSINESSES CAN LEARN WHAT TO DO -- AND NOT DO -- TO MOVE UP TO THE NEXT LEVEL. By Jennifer Kem
It’s never been easier to build a brand. Right now with a little effort you can build a following on Instagram or Shopify, start selling stuff and create a nice small business for yourself. But, if you want to move things to the next level and become a real enterprise, you need to learn to market like the big guys. Ironically, one of the best ways to do that is to watch what happens when they screw up. Branding failures aren’t just entertaining. By illustrating just how terrible the fallout can
be if you get things wrong, they illustrate the importance of having the right principles and systems in place. Through watching the stumbles of national brands, smaller businesses can learn what to do -- and not do -- to move up to the next level. Helpfully, some of America’s biggest companies have obliged with some pretty spectacular brand fails lately.
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1. Amazon selling sugary cereals at Whole Foods Like lots of other people, I was excited when Amazon bought Whole Foods. The whole premise of the deal was that the scale of Amazon would enable more people to access the quality, healthy food on offer at pricey Whole Foods. But, then recently I spoke to a few friends who reported seeing things like Honey Nut Cheerios on the shelves of their local Whole Foods. Let me be clear: You’re not supposed to be able to buy Honey Nut Cheerios at Whole Foods. The brand experience is all about health and quality, not processed, sugar-laden junk. Opening up a premium brand to more consumers can be a great move, but that’s not what Jeff Bezos and Amazon appear to actually be doing with Whole Foods so far. Instead, they’re violating the basic promise of the Whole Foods brand, and risking diluting it beyond all recognition. This isn’t just a temptation for behemoths like Amazon. Smaller brands face similar questions all the time as they start to grow and add new revenue streams. Is that new sponsorship or partnership actually in line with your values? Are you broadening the appeal of your brand or are you selling out? Adding new customers is great. Losing your own core identity isn’t. Lesson: Never forget your core mission. Filter all new revenue streams and partnerships through the lens of your values.
2. IHOP’s half-baked IHOB stunt I’m all for clever, disruptive marketing. Stunts can get people talking about your brand. But, not if you do them in the halfbaked way IHOP recently did when it briefly changed its name to IHOB (for International House of Burgers) to highlight its new menu options. I understand what IHOP was going for -- these days lots of carb-conscious customers aren’t excited about sitting down to a giant stack of starchy pancakes and IHOP wanted to get the word out that they offer alternatives. But, its execution of the idea was just really weak. If you’re going to go and disrupt the market in a radical way, you need to go all in.
Wendy’s is a good example of a brand that succeeds. Its logo might be a sweet looking little girl, but on Twitter that little girl deals out some serious shade. It’s outrageous, hilarious and consistent. You get that level of execution the same way you do in any other area of business -- you know what you’re aiming for and then hire the right people to execute it. If you’re going for humor, bring in a stand-up comedian, for instance. Don’t rely on the same old advertising agency. Lesson: Wishy-washy won’t get you anywhere. Go all in on your concept and make sure you hire the right people to get you there.
3. Starbucks’ one-day diversity training When a national scandal erupted over a racist Starbucks barista who called the cops on two black customers who were just sitting in a store waiting for a meeting, the company actually did a lot of things right. Chairman Howard Schultz immediately came out with a strong and unequivocal statement that the company doesn’t tolerate racism. He didn’t hedge his words and he didn’t delay. Second, the company demonstrated a real commitment to change by closing its stores and missing out on a day of revenue to train its employees to avoid bias. Again, bravo. But, the problem is that brand building isn’t about oneoff gestures. It’s about creating structures to make sure you brand is executed consistently over time. A crisis is an opportunity not just to make an authentic apology but also to change the way you do things long-term. Update your website underscoring your values. Develop a crisis response plan for the future. Create new training that happens not just once but on an ongoing basis. Set up policies that nudge your customer-facing employees to always behave in ways aligned with your brand. To the best of my knowledge, Starbucks hasn’t done any of that. Which creates a huge risk of a similar incident happening again in the future, and if it does there will be no way to rebuild a brand that’s all about community and safe spaces for people to gather. Lesson: Responding to a crisis isn’t just about on-off gestures. The more important work is setting up an architecture that ensures problems don’t happen again in the future.
Jennifer Kem Brand Strategist and Leadership Expert
Podcast: How Music Can Change Our Mood A BROADWAY SONGWRITER AND A MARKETING PROFESSOR DISCUSS THE CONNECTION BETWEEN OUR FAVORITE TUNES AND HOW THEY MAKE US FEEL. Based On The Research And Insights Of Derek D. Rucker, Loran Nordgren, Kris Kukul
Music can be powerful. It can change our mood, and, research shows, even change our behavior.
LOVE: Welcome to the Kellogg Insight podcast. I’m your host, Jessica Love.
In this podcast, we talk with professor Derek Rucker about his research on power songs and how they might shape the way we behave after we listen to them. Then we talk with Kris Kukul, a Broadway music director and orchestrator, who helps us understand how music is crafted in order to elicit an emotional reaction.
Today we’re exploring the intersection of music and emotion.
Podcast Transcript [Music Introduction]
Jessica LOVE: All right, podcast listeners! We are jumping around the office right now, feeling energized and ready to go! Because who can resist that song, right? But how exactly is this song affecting us—beyond an office dance party? How is it changing how we feel and how we act? Sure we’re pumped up, but does that feeling actually change our behavior? The answer is yes, according to research from Kellogg’s Derek Rucker and Loran Nordgren. Derek RUCKER: We found, indeed, some types of music did in fact lead to people saying, “Yeah, I felt more powerful after listening to this music than others.” LOVE: That’s Derek Rucker, talking about his research. It’s all about the feeling of power. We’ll be talking about this and more on this month’s Kellogg Insight podcast. [Music Interlude]
First, producer Emily Stone talks with Rucker about his research on power songs and how they might shape the way we behave after we listen to them. Then she talks with Kris Kukul, a Broadway music director and orchestrator, who helps us understand how music is crafted in order to elicit an emotional reaction. Because if you’re not crying in Les Mis or laughing in The Producers, then something has gone wrong. So stay with us. [Music Interlude]
RUCKER: Does pumping up the jam essentially evoke within you a sense of power? Can it make you feel more powerful? How does that affect our behavior as human beings? Emily STONE: That’s Derek Rucker again. He’s a professor of marketing at Kellogg and has long been interested in power. Specifically, he studies what feeling powerful, or powerless, does to our psyches and to our behavior. The idea to take this line of study into the realm of music came from a shared interest among the researchers—in football. RUCKER: As players come out of the tunnel, you see this massive eruption from the crowd, but that’s also accompanied by a lot of music. What we wondered is, well, that music, what role does it have? We’re all football fans, so that’s where we started. But it’s true of soccer matches. It’s true of hockey. Music is part of all those venues and we wanted to know, what does that do
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to the psyche?
communicated with.
STONE: Rucker teamed up on the research with Nordgren, an associate professor of management and organizations at Kellogg, as well as Adam Galinsky, formerly of Kellogg and now at Columbia University, and their then PhD student, Dennis Hsu.
RUCKER: People who are more powerful or experience a state of power, they’re more likely to focus on communicating competence like why things will work, how they will get done. And they’re more receptive to messages that emphasize competence.
First, they identified some songs that were associated with a sense of power.
STONE: In contrast, the researchers found, people who feel powerless are more likely to emphasize sincerity and warmth in their communications. And they respond better to messages that have these qualities, too.
They asked students to rank songs on a scale of 1–7 based on how powerful, dominant, and determined the music made them feel. The winners were Queen’s “We Will Rock You,” 2 Unlimited’s “Get Ready for This,” and 50 Cent’s “In Da Club.” Those three songs compiled the researcher’s highpower playlist. They also picked three other songs that were enjoyable and similar in style, but not associated with power. Those became the low-power playlist.
RUCKER: That’s an example where this sense of having power or not directly affects our behavior, transforms us, because it affects what we care about. When we have power, we feel that we’re advantaged, and therefore we can act with agency and act with regard to our own beliefs. When we lack power, we actually are dependent on others, almost definitially. The idea is that it turns us to others and makes us want to be inclusive of others.
Then the researchers had a group of participants listen to either the high-power or low-power songs while completing a word task. Participants were given fragments of a word—for instance, P_ _ ER—then told to complete it.
STONE: Moving back into the realm of power and music, Rucker says there is still much to learn. To start with, how do these findings translate from the controlled conditions of the lab into the real world?
The songs in the background? They made a difference.
RUCKER: Because now it’s going to be competing with lots of other factors. I suspect it’s not a matter of, it always does or it never does, but are there sweet spots in which it makes a difference? When you go to the gym and you’re not feeling like working out, can that be the differentiator that pushes you: “Okay, now that the song is playing, I am going to work out,” or, “You know, now that it’s playing, I am going to spend a couple extra minutes and finish up my routine because I’m finishing the song”?
[Music]
Those listening to high-power songs were more likely to spell a word related to strength and confidence, like POWER (“power”), while those listening to lower-power songs were more likely to spell an unrelated word, like PAPER (“paper”). In another experiment participants were asked if they would rather go first or second in a debate. Those listening to the high-power songs opted to go first almost twice as often. So music—at least in the lab—can make some people feel more powerful. But what does that mean in terms of behavior? RUCKER: Where we’re fascinated is, well, how does that change the psyche? How does it feel to experience, “I have the ability to command,” versus, “I have to take orders”? We’ve looked at a number of different behaviors. I’ll start with one of my favorites that I didn’t do, but Adam Galinsky did, and I thought was fantastic. He looked at the notion that when we’re empowered, we are more likely to take action. STONE: In this experiment, participants are told to either write about a time they felt powerful or a time they felt powerless. But while they are writing, there’s something else going on, too. A small fan has been positioned to blow directly and annoyingly in their face. What they didn’t know is that the fan is the key to the experiment. RUCKER: What he found is that people who had simply written about a time they were powerful as opposed to powerless were more likely to push away the fan and move it of their own accord. It’s this notion that power triggers action. STONE: In other research, Rucker and coauthors have looked at how feeling powerful or powerless changes the way we communicate with others, and how we want to be
STONE: Other factors to consider, Rucker says, include what our intent is in listening to a certain power song. Perhaps the song is even acting as a placebo when you decide whether to gut it out on the treadmill. RUCKER: the music may not even do anything. You might still be feeling doubtful, but in your head, you’re like, “Okay. Now that I’ve played the music, I’m committed.” That’s a very different reason for an outcome, but may still be equally important. STONE: Another topic for future research is when people can—and can’t—use these power songs strategically. RUCKER: What kind of behaviors can it affect and what kind of behaviors can it not affect. For example, if you said, “All right. I’m on the fence. Should I go to the gym today?” All of a sudden, the right song comes on. As opposed to more long-term things like, “Okay, let me try to plan my fitness regime,” it’s like, well then you’re going to sit down and you’re going to think about it. The music that happens to be going on when you’re planning that may have far less consequence. [Music interlude]
STONE: So music can make us feel powerful. But music has a much broader emotional range than that. And where better to explore that idea than in musical theater.
[Music Interlude]
that thing, but the rest of the song is its own animal.”
STONE: Part of Kris Kukul’s job is to make sure that the songs in musicals elicit the right emotions from the audience.
STONE: Of course, what sounds emotionally familiar to an audience can vary quite a bit by culture or geography.
Kukul works as a musical director, arranger, and orchestrator. Those are actually three different jobs, but all work in conjunction to create songs and determine the music’s feel and structure—then bring it all to life for an audience.
KUKUL: I worked in Greece for many years, and Greek music is very sad, and there’s a lot of melodrama wrapped up in their culture and in the theater and in the music. And there’s a sort of contained emotionality that happens in America that if you try to do that in the Mediterranean, they don’t understand why you’re not screaming and crying and singing big high notes, and singing with every muscle of your body.
We talked to Kukul about his work via Skype. Kris KUKUL: In terms of eliciting an emotional response, the optimal situation is that the actor provides the emotion, and the music responds to it. The thing that we try to avoid is that the music tells the actor what to feel. If there’s some sad music playing, and then that character becomes sad because of the music, that’s not the best-case scenario. STONE: Kukul has worked with David Byrne on “Joan of Arc: Into the Fire,” and he’s also worked on the theatrical adaptation of “Shakespeare in Love.” He is currently the orchestrator on the forthcoming Broadway adaptation of the Tim Burton movie “Beatlejuice.” When it comes to eliciting emotions, much of what an audience hears in a song is pretty universal. A lullaby will sound calming or mournful to us all, just as a John Philip Sousa march will feel rousing. KUKUL: It’s the choice of tempo; it’s the choice of what instruments you want to play the song. You can play a song on a guitar and cello that is a beautiful, sweet, simple song, and you can take the same melody and the same chords and stick it on a bunch of trumpets and a timpani, and all of a sudden it becomes a vastly different animal. STONE: But it’s not quite so easy. Each of us is aware of the songs we’ve heard in the past and our emotional response to a new song sometimes hinges on that set of associations. That can leave us emotionally unmoved if what we’re hearing simply sounds like “the same old song.” KUKUL: It’s trying to approach something that has been done before, but to do it in a new way. So if somebody has a moment that is a mother singing to a son about growing up, that moment has been done a thousand times. So how do you approach it differently, and how do you make the guitar sound different than it did when you saw it in that one other musical that you saw it in? You know what I mean So maybe cynicism can play a part. So if there’s a song that maybe is sentimental, everybody recognizes the emotion that it’s supposed to be or to give, but you can either go with it and “buy it,” or you think it’s phony.
STONE: But even within a single culture, knowing how an audience generally reacts to music does not mean there’s a perfect formula for conjuring up a specific emotion. KUKUL: There isn’t really a magic recipe. I mean, there are elements that you could put in things to elicit responses. You can put in a driving guitar that can make you feel excited, and there are chord progressions that you can follow that build up the anticipation and build up to the release of that big note or that moment in the song where it all comes together. But again, part of the task is finding a way to elicit that response in new ways. If somebody took “Let It Go” right now as a model and just tried to have a song that did the same thing, it would seem like an imitation. Because we’ve already felt that from that piece of music. STONE: Full disclosure: I’m the one who brought up “Let It Go.” My kids love that song, so I listen to it a lot. And even fuller disclosure: I love it, too. It makes me feel GREAT when I hear it. But, Kukul cautions, there are limits to those feelings from an audience. You can’t just hammer home one emotion over and over again. “Frozen” would not work if it was all “Let It Go.” KUKUL: If you’re feeling bombarded, people have a tendency to shut down. So that the thing you’re looking for, for people to open up and let that emotional thing in, if you’ve reached a point where the music has been a thousand percent for like 25 minutes and people are just done, they’re never going to let the next thing in. And it’s never going to settle in, and they’re never going to really connect with the emotion the way you want them to, if they’ve gotten to a place where they’re like, “Eh, I’ve had enough.” [Music interlude]
LOVE: This program was produced by Jessica Love, Fred Schmalz, Emily Stone, and Michael Spikes. It was written by Emily Stone.
STONE: But that sense of familiarity can work to a composer’s advantage, too.
Special thanks to our guests, Derek Rucker and Kris Kukul, as well as to Scott Brown for putting us in touch with Kris.
KUKUL: If you want to write a song that is like a Beach Boys song, how do you do that without actually writing a Beach Boys song? You have to give enough information so that the audience can recognize, “Oh, I hear that instrument; there’s a guy singing in falsetto for that little bit that sounds just like
You can stream or download our monthly podcast from iTunes, Google Play, or our website, where you can read more about power dynamics and creative processes. Visit us at insight.kellogg.northwestern.edu. We’ll be back next month with another Kellogg Insight podcast.
Are Influencers Overrated?
A NEW STUDY QUESTIONS THE EFFECTIVENESS OF TARGETING “HUBS” AT THE CENTER OF SOCIAL NETWORKS. By Dylan Walsh
How does information spread? How do you encourage its spread? These are fundamental business questions. If you introduce a new product or service, how will customer word-of-mouth travel? And they are questions of equal importance for policymakers and nongovernmental organizations. How do you get entrepreneurs in small villages of developing countries involved with microfinance? Or how do you best spread HIV awareness among homeless youth? Convention and intuition point to one solution: Find people who hold the most influence, typically those who sit at the center of a social network — the hub in a wheel — and “seed” them with the new information. From there, the idea will efficiently reach new ears through word-of-mouth.
Unfortunately, finding these hubs can be a lengthy and expensive process. Picking the five best seeds in a 200-person network requires checking 2.5 billion variations. Consider, then, a network of 1,000 people, or 1 million people. Does a simpler approach to spreading information exist? While tackling this question, a team of Stanford researchers found a remarkable result: Simply seeding a few more people at random avoids the challenge of mapping a network’s contours and can spread information in a way that is essentially indistinguishable from cases involving careful analysis; seeding seven people randomly may result in roughly the same reach as seeding five people optimally. (The results are available in their online working paper, “Just a Few Seeds More: Value of Network Information for Diffusion.”)
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“Network information can be super expensive to collect, and finding precisely the right people to help something go viral is unpredictable,” says Mohammad Akbarpour, an assistant professor of economics at Stanford Graduate School of Business and one of the paper’s authors. “You might be better just ignoring the network altogether and seeding a few more people.”
Questioning Convention When they set out on this project, Akbarpour, along with Suraj Malladi, a PhD student in economics at Stanford GSB, and Amin Saberi, an associate professor of management science and engineering at Stanford, knew from random graph theory that random seeding might perform well in getting a piece of information to go viral. Curious about how it compared to targeted seeding, they built a model and ran it alongside three past experiments from development economics that used deliberate seeding methods. “These earlier studies describe how, from a statistical perspective, central individuals in a network help diffuse information, but they don’t necessarily tell you whether this is economically meaningful,” Akbarpour says. “They also often assume that you can perfectly observe the social network of who talks to whom about some particular piece of information. But suppose you have some noise in the data, which is always the case.” When the authors compared the results of their model, which used random seeding, to results that relied on careful network analysis, they found that random seeding with one to three additional seeds performed nearly as well as targeted seeding, both in terms of speed and extent of diffusion. In some cases, their results proved even better.
Network information can be super expensive to collect, and finding precisely the right people to help something go viral is unpredictable. You might be better just ignoring the network altogether and seeding a few more people. Mohammad Akbarpour-
Why Randomness May Be Better Deliberate seeding efforts rely on the degree to which somebody sits at the center of a network. They look for the people who are most highly connected and thus best positioned to spread information. But this approach can create redundancy that leads to rapidly diminishing returns. “The interesting thing is that if you use an algorithm that targets people with the most friends, then you are going to pick people who are likely connected to the core of the network,” Saberi says. “And once you’ve talked to a few of these people, the next one will
not be as valuable, since you’ve already saturated the core.” In the meantime, you’ve ignored a bunch of so-called “small communities” — satellite networks on the periphery that are loosely connected to the main network. “This is not to recommend random seeding as a universal policy,” Saberi says, “but to show that central individuals do not always maximize diffusion.”
Virtue of Randomness: The Rule or the Exception? The effectiveness of random seeding with a few more seeds depends on the nature of the network. And how information spreads depends on what is being talked about. For instance, how farmers decide whom to speak with about new corngrowing techniques may be totally different from how they decide whom to gossip with. “Careful seeding may matter for reasons not captured in our models,” Malladi says. “If, for instance, farmers adopt a new technology only after a sufficient number of their friends adopt it, then you are probably better off being strategic with whom you seed.” Or
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problem, understanding the structure of the network and its most influential components — who is infected and who is likeliest to spread the infection — is essential for effective intervention. “If someone attacks a network with a virus or a piece of fake news, random vaccination is unlikely to stop the spread, and vaccinating central individuals — or informing them about the truth in the case of misinformation — is absolutely necessary,” Akbarpour says. “In some sense, this is troubling, because the attacker does not need the network data, but the defender does.” Finally, if the process of seeding is expensive — for example, seeding requires extensive training in how to use a new technology with the hope that the trainees subsequently teach their friends — then it makes sense to find the most influential people within a social network. “In the end, the main tradeoff that companies or policymakers face is in costs — whether it is more expensive to seed a few more random people or to collect and analyze the network data,” Akbarpour says. But when uncovering the structure of a network is expensive, as it very often is, “then you may as well just forget network theory and pick more people based on common wisdom — go talk to the village shopkeeper, the teacher, or a random person in the street.”
HOW TO USE SIRI TO AUTOMATE EVERY STEP OF YOUR DAILY GRIND By Pia Ceres
FOR THE PRODUCTIVITY-OBSESSED, a more joyful and efficient life starts with good habits. Our sensible routines prepare us for success: plan your day, wash your face, early to bed, early to rise, etc. If you have an iPhone and you’ve updated to iOS 12, you can streamline those routines on your phone across apps, and maybe even create new habits. Shortcuts (née Workflow) was introduced to iPhones and iPads in this fall’s software update. The feature allows you to create an ordered series of steps, called “actions,” and consolidate them into a single shortcut. For instance, you can use Shortcuts to create a bedtime routine shortcut that turns on Do Not Disturb, sets a timer for you to brush your teeth, then plays the latest episode of the New Yorker fiction podcast for easy listening as you wind down. The shortcut will set off all of these actions for you, in order, so you don’t have to switch tediously between apps. You can choose to prompt the shortcut with custom Siri command, like “Hey Siri, get me ready for bed.”
then your phone vibrates and displays the notification “One more minute!” Another time is set for 60 seconds, your device vibrates, and you get one last notification: “All done!” No more wondering if you’ve brushed for the full, dentistrecommended two minutes. Your phone, with the precision and dependability you wish your brain possessed all the time, has done all the thinking for you.
Create Your Own Don’t stop there. You can program Siri to send you an additional reminder to floss, or to cue up the two-minutelong pop gem “Waterloo” every time you brush. Shortcuts can be customized for all of your strange, ritualistic quirks. To customize a shortcut like the “Tooth Brush Timer,” tap to expand the search bar on the bottom to add more actions like Find Music or Show Notification. Long press the actions in your workflow to shift the order.
You can do all kinds of things with Shortcuts. Here’s how you can use the feature for bedtime, work, school, and anywhere else you could use a few more seconds, and more peace of mind.
See the switch icon on the upper right? Tap on that to make even more customizations: rename the timer, add the shortcut to your home screen, and “Add to Siri” with a custom voice command.
Just Ask Siri
For some third-party apps optimized to work with Shortcuts, more sophisticated in-app functions can be used as actions. For example, if you’re creating a shortcut that you’ve designed to calculate tips and split bills, you can also add the action “Request payment” from Venmo.
You can use some shortcuts without downloading the Shortcuts app. Navigate to Settings > Siri & Search to see suggestions for simple shortcuts, like “Edit Bedtime” or “Show weather in San Francisco.” Some apps are already optimized to work with Siri Shortcuts. For example, if you have meditation app Headspace, you can add the shortcut “Open today’s meditation.”
Mix It Up If you want to create more complicated tasks across apps, download the free Shortcuts app. Once you’ve opened it, you’ll see two tabs. The Library tab contains all the shortcuts you’ve added or created. The Gallery tab suggests Apple’s pre-created shortcuts. In the Gallery, explore some of the more complex shortcuts, like “Home ETA.” This shortcut integrates features from Maps, Messages, and Contacts. If you start the shortcut, it uses your home address and estimated arrival information from Apple Maps. Then, it generates a text updating a contact (a roommate, a parent, a partner) with your ETA. “Brush Teeth Timer” is a simple one, and one of my favorites. Let’s break down the actions that make up this shortcut: When you first start the shortcut, your phone shows an alert that says “Get your toothpaste!” Then, a timer is set for 60 seconds,
Sometimes, Siri will “learn” shortcuts on its own. If you order the same coffee every day from the Philz Coffee app, Siri will suggest turning that routine into a simple, one-tap shortcut.
No Shortcut to Success Keep in mind that some apps’ functions are more integrated with Shortcuts’ API than others. So if you want a shortcut to show your upcoming events on Google Calendar, tough luck. At least for now, you have to use Apple’s native Calendar app. Prefer Starbucks to Philz Coffee? Sorry—you can’t automate your frappuccino fix with Shortcuts quite yet. If you’re just starting out with Shortcuts, getting to know the variety of your options and stringing them together into custom shortcuts can be daunting. It’s a good idea to add shortcuts from the Gallery and toy with them, while you figure out the best shortcuts for you. Feeling ready to graduate from the Gallery? A community of inventive efficiency devotees on Reddit has sprung up on r/shortcuts, with ingenious tricks you can try. After you’ve mastered the art of routines with Shortcuts, there’s little that can stop you and the brain in your pocket.
Would You Treat Your Mother That Way? The Secrets of Great Customer Service By Knowledge@Wharton
There was a time when most companies followed the Golden Rule out of the belief that treating customers right created brand loyalty and repeat business. But many firms have lost their service component, especially as automation replaces human contact. As a customer service expert, Jeanne Bliss has spent her career helping major companies learn how to behave in the best interests of the consumer. She’s put her expertise into a new book, Would You Do That to Your Mother? The “Make Mom Proud” Standard for How to Treat Your Customers. She joined the Knowledge@Wharton radio show on SiriusXM to explain how increased competition makes customer service more important than ever for businesses that want to grow.
End. I started peppering Gary Comer, the founder, with questions about what we needed to do for customers and employees. After a year of that, he said, “Look, you come and report to me. You’re the conscience of our company. We’re growing 80% a year. We need somebody to help us all as a leadership team to keep ourselves together and united.”
Knowledge@Wharton: You have spent more than two decades working as a chief customer officer. Tell us about your career.
I deliberately moved industries. I went to Mazda Motors of America; the Miata and the RX-7 had just come out. They were trying to wrap an experience around those vehicles. Then I went to Coldwell Banker Corp. I was the senior vice president of franchise services, supporting a business-tobusiness model. Then I knew I needed to go really big, so I went to Allstate Corp. I reported to the president. I was the
Jeanne Bliss: I’ve been doing this work since 1983, and my entire career began because I answered an ad in the Chicago Tribune to train 2,500 phone operators at Land’s
That was the first version of doing what I call being “the human duct tape of the organization.” I stayed there for 10 years. The company grew and went public. We were wildly successful back then, and I decided I love this work. It’s rightbrained, left-brained. It’s uniting an organization unlike any other role.
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first person in charge of the customer experience there. Then finally I said, “You know, technology is the thing. I need to do technology.” I went to Microsoft and was the first general manager of worldwide customer and partner loyalty. And that kind of gave me my chops. Knowledge@Wharton: What are some blatant examples of companies that don’t treat their customers like they would treat their mom? I’m thinking of Wells Fargo, most recently. Bliss: You’ll notice that throughout the book that I do give the bad examples, but I’m not naming the companies because the point is you live your life through this book. If you go through the 32 case studies, it’s the story of our lives as customers. What’s interesting is that our human condition as customers, unfortunately, is what binds us. We’ve all been through waiting four hours for our cable guy or something. We’ve all seen a pen chained to a bank and go, “Really? I gave them my money and they’re chaining this pen.” What I wanted to do was give people a toolkit that offers them action items and is organized in a very simple way. You’ve got to get out of the way of the good people you hire. We don’t let our employees do the right thing. We lock them into rules and regulations, and policies. Would you turn your mom’s warranty claim down two days out of warranty?
“We’re finding that the more high-tech we get, the more humanity we need.”
Knowledge@Wharton: The title of your book reminds us of the level of respect we are taught to have as we’re growing up, then something happens when we enter corporate culture. It’s like a switch is flipped and things are totally different. Bliss: Good people get stuck inside of a corporate environment, where we’re not able to have what I call congruence of heart and habit. It sounds kind of Pollyannaish, but it isn’t. Everybody comes to work, but things take over — silos, short-term priorities, red, yellow and green dots, saluting the flag of the board, short-term financial pressure. Those things come before long-term growth, or what I call strings-attached growth. The companies that somehow find a deliberate way to grow [show] why the “make mom proud” question is a conscience question. That whole theory of REI closing on Black Friday is a deliberate move that says, “Look, here’s who we are. … Because if our whole foundation is around being outside, we’re not going to make money on a day where you should be outside and with your family.” Knowledge@Wharton: How prevalent do you think that “make mom proud” mindset is at the C-suite level where the core decisions are made? Bliss: I spent the majority of my career coaching the C-suite on this work. What’s happened in the past 10 years is we finally have this understanding that three things have shifted. No. 1, in most cases the C-suite recognizes now that organic growth is 10 times more profitable than simply going out [and acquiring] new customers. No. 2, social media is a burr in the side of C-suites who aren’t delivering an experience that customers want. … You can say what you are, but your customers are speaking what you really are. They’re speaking
your values. The third thing is the silos don’t organically unite. We’ve got something that we do with C-suiters all around the world that I call customer math. Did you bring in more customers than you lost? Are you keeping more customers than you’re losing? What we’re finding is that if we can make the metrics simple and around the growth or loss of the customer assets, it then drives them to [adapt] the behavior to grow and honor that asset. But you’ve got to start with the customer asset from a growth standpoint. Otherwise, it starts to feel too much like “kumbaya” to many of them. Knowledge@Wharton: Anybody who has stayed at a hotel has lived this story: You get to the hotel, you’re thirsty, you’re hungry. You want to go to the minibar, but you know that the prices are insane. In the book, you talk about Virgin Hotels changing that practice so the price of a candy bar is the same price that you find in your local convenience store. Bliss: Raul Leal, the CEO of “It doesn’t do you Virgin Hotels, and [Virgin Group founder] Richard Branson made any good to hire the a deliberate decision about how they would and would not make smart, energetic, revenue. That’s leadership. innovative human if [Leal] said, “We don’t ever want our customers to feel like [they’ve you lock them into been had],” so they created blanket policies.” this thing called street pricing. In fact, their managers walk around with note pads to make sure that they’re [charging] the street pricing of the local 7-Eleven or the mom-and-pop store down the street. They also don’t charge for delivering your meal, nor do they charge for WiFi. Raul Leal says, “We consider WiFi a right, not a revenue stream.” There’s another great example in that same chapter about the Columbus Metropolitan Library. They are the first urban library in the world to get rid of late fees. It’s this kind of very deliberate choosing of how you will grow. Those fine print, ‘gotcha’ moments are the things that may get your customer short-term, but you’re not going to earn their love and admiration long-term. I also think there’s something to be said about the times we’re living in. We’re finding that the more high-tech we get, the more humanity we need. Yes, you can possibly now have your refrigerator repairman indicate to you on an app when he’s going to show up, but it’s the man and how he shakes your hand and how he cares for your furniture that tells you the kind of mother he’s got. Knowledge@Wharton: How do companies go about hiring people that share this philosophy? Bliss: It changes everything. Wegmans waits until they find people that meet their core values before they open a market area. The Container Store only hires 3% of people who apply. We’re seeing more and more deliberateness around hiring to core values and hiring the human behind the resume. We’re walking away from reading the piece of paper. We’re watching behaviors. We’re putting people in situations.
Southwest Airlines for years has had this whole role-playing exercise you go through for a full day so that they can see the human. These companies are changing how they hire, whom they hire, and making the employee experience as deliberate a path and priority as customer experience. “You can say what you are, but your customers are speaking what you really are. They’re speaking your values.” Knowledge@Wharton: These companies are trying to build a specific culture of camaraderie, which should have a positive effect on the bottom line. Correct? Bliss: That’s right. That’s why I focused on that in the first chapter, which is titled, “Being the Person I Raised You to Be.” It doesn’t do you any good to hire smart, energetic, innovative humans if you lock them into blanket policies. Instead, you give them information, data, knowledge, and then trust them to make judgment calls that are right for the customer standing in front of them, which elevates them to ‘customer-rescue artists’ and customer development people versus policy cops and phone-answerers. That diminishes their spirit.
“We’re finding that the more high-tech we get, the more humanity we need.”
Knowledge@Wharton: Give us an example or two of companies that have been transformed by following these ideals for customer service. Bliss: What I’ve tried to do in each of these case studies is give an impact in terms of what drives the growth of the company. CenterPoint Energy is a utility company. What’s interesting about energy companies is that we’re captive to them. But these companies are recognizing that there’s an imminent competitor in solar and other things. CenterPoint has created this experience that when your power goes out, it doesn’t mean that you’re in the dark from a human standpoint. They have set up a whole series of communications, responses,
alerts. And they have put as much money into the product of communication as they have put into their power grids. They just won the top award for their market area and for their division around customer satisfaction and customer support. There’s another example that’s super fun. All of us have had that experience of going to get our car repaired, then we bite our fingernails to the quick, waiting for the phone call for how much it’s going to cost. That $20 oil change is suddenly a $2,000 bill. There’s a garage in San Francisco called Luscious Garage. They mostly take care of hybrids, but I love their model because what they’ve done is they have gotten rid of that service adviser in the middle who basically plays telephone between you and the technician. Instead, you go in and meet your service technician right away, faceto-face, eyeball-to-eyeball. They have a mobile app where you stay in contact with them throughout the total time that they’re looking at your car. They’re sending you pictures. You’re communicating with them. They moved it from a oneway, fearful relationship to a two-way communication and partnership. Knowledge@Wharton: Do you believe more firms will adopt this approach? Bliss: Absolutely. We’ve got this younger group of people, whether you call them millennials or whatever, who are expecting Amazon Prime service no matter what you do. They’re expecting even higher value congruence in the behaviors of the companies that they will and will not work with because they are so fast to click “goodbye.” What we’re recognizing is that you’ve got to embed these things. You’ve got to make communication a product. You’ve got to make transparency a core value. And then you need to operationalize that — not only in your human beings, but also in the mobile apps and the other things that you do to communicate with them.
CMOs Need to Focus to Survive: Three Priorities to Ditch and Three to Latch On To HERE’S THE HARD TRUTH: MOST CMOS (INCLUDING ME, ADMITTEDLY) WILL NEVER BE ABLE TO GET ALL THEIR WORK DONE. By Sophie Vu
That may sound discouraging, but it’s simply the nature of the job. As Deloitte notes in a new study, many CMOs have found their plates loaded with a myriad of additional responsibilities as more and more tools and techniques have emerged. Those responsibilities may include social media campaigns, market research, digital marketing, direct marketing, advertising, and PR. Ours is a challenging job with big responsibilities... but also big rewards: Our efforts play a critical role in the success (or failure) of businesses. So when things get too busy, the most effective recourse is a rigorous focus on the things that matter most. Unfortunately, though, that’s where many top marketers struggle. In this article, I’ve laid out three areas for CMOs to prioritize, and three to let go of (as hard as that might be).
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Focus on... 1. Getting in touch with the customer The modern CMO is increasingly responsible for shaping the end-to-end customer experience. Many, if not most, organizations lack the structures and processes to operationalize a unified approach to customer experience, in no small part because it requires that disjointed teams collaborate. Marketers need to be working with the customer service team, receiving information about customer behaviors and problems to continuously refine focus as well as solutions. Beyond building bridges, CMOs can empower their teams to develop cross-functional relationships themselves and to build shared processes and resources. Pro tip: Two-way communication between marketers and the customer service team is key: They need to understand each other’s KPIs to provide a holistic customer experience. Marketing teams focus on customer loyalty, acquisition, and retention; customer service teams concentrate on reducing the volume of customer inquiries, responding in a quick and timely manner, and customer satisfaction. For example, if a customer service team is receiving multiple inquiries about a certain coupon offer, the customer service team can share that feedback with the marketing team, so that it, in turn, in its customer communications, can provide clearer instructions of how and where to use the coupon.
2. Recruiting a multilateral team Multichannel and cross-pollination are not just buzzwords; it’s critical to build teams that map to those respective goals. If you’re struggling to nail down a multichannel strategy and enable responsiveness, where is the best place to begin? It all starts with your team. Recruiting and hiring team members who think about the customer experience—such as determining customer intent based on collected data, strategizing about content that will connect with these customers, and implementing said content—will lead to a holistic and robust organization. Pro tip: Target people who have multichannel expertise and can analyze and optimize all the customer engagement touchpoints. For example, the optimal team member will understand the nuances of email marketing and SMS and can optimize the number of messages per day a customer receives from a brand to achieve the most impactful result.
3. Getting (trusted) help As marketers, our overarching goal is to increase brand awareness and improve the customer experience. But new developments—like the Telephone Compliance Protection Act (TCPA) and General Data Protection Regulation (GDPR)—can create extra cycles of work, eating up a CMO’s valuable time and energy. You can’t do it all, which is when developing trusted relationships with third-party partner and vendors is
key. Strong partners are experts in these areas and can help decrease the CMO’s burden. Pro tip: Rely on peers, industry events, and social communities to learn about what issues are keeping fellow CMOs up at night and how they are finding solutions. CMOs also build teams of experts and specialists, so listening to them and what they need to hone their craft and continue learning will provide direction on what is needed throughout a business to fill any gaps of knowledge.
Stop trying to... 1. Get too granular The introduction of new technologies and strategies that focus on data-driven insights call for an evolving set of skills. But that doesn’t mean you need to be a data scientist in order to tread onto new territories that blend the traditional with the evolutionary. Instead of poring over what specific data points could mean, a CMO must be open to using tools that are purpose-built and designed to provide marketers with actionable information.
2. Develop one brand voice Though it’s important to have key messages, not everything needs to sound the same. Really. Practice differentiating your verbiage across various channels while still communicating your key messages. Every piece of digital content—from newsletters to blog posts to tweets—can have a different audience. Remember the importance of personalization and authentic connection, and put down the megaphone.
3. Rely on platforms that claim to do it all It doesn’t matter whether you’re managing customer retention, mobile engagement, or mobile marketing, there are platforms for each of those areas that have a solution to give you with their own type of measurement and analysis. Don’t hamstring yourself by going with all-in-one solutions that will provide uninspired results.
Success is possible Few senior-executive positions are subject to as much change as that of the chief marketing officer. Being a CMO today means managing a lot of things. The range of skills and the tasks required of a CMO are dramatically different from even a few short years ago, leaving a CMO no choice but to consistently broadening her scope and role to encompass the latest trends and technology. That makes this job both demanding and powerful. But with the right prioritization, today’s CMO can prosper. Sophie Vu leads worldwide marketing for Vibes, a mobile marketing platform leader that helps marketers engage one-to-one with mobile consumers at scale. As CMO, she works with 200+ global brands.
Did a slave make your sneaker brand? Probably, yes! PRADA, HERMES, AND LOUIS VUITTON FARED POORLY ON A NEW REPORT ABOUT FORCED LABOR. MEANWHILE ADIDAS, LULULEMON, AND GAP HAD THE MOST SLAVERY-FREE SUPPLY CHAINS. By Elizabeth Segran
We often talk about slavery as if it was a thing of the past–a horror from another era, perpetrated by people who have no resemblance to us. But the truth is that slave labor is still alive and well. And a new report produced by the nonprofit KnowTheChain points out that your closet is likely full of clothes made through forced labor. Today’s slave labor doesn’t look the way it did a hundred years ago. Instead, it involves poor people in developing countries trying to find work at clothing and shoe factories and finding themselves exploited. Take the case of one woman in India. KnowTheChain found that she had left her rural village in search of a job in
Bangalore, a major city in South India. An agent found her a job at a clothing factory in exchange for a recruitment fee, although the details of how much it would be were murky. The agency then proceeded to take her entire paycheck until she had paid the fee back. Six months into the job, she still hadn’t received a single wage slip. And to make matters worse, the agent had promised her free room and board, but when she arrived, she discovered this was not the case. Many clothes sold in the United States are made in India. It’s possible that you or I bought a piece of clothing that she made. Yet few of us have any idea about the misery, exploitation, and forced labor that go into the clothes we wear every day.
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WHY CLOTHING AND SHOE FACTORIES USE SLAVE LABOR Across the world, an estimated 24.9 million people are victims of forced labor. The lion’s share of them–16 million people–are exploited by companies for a profit, rather than by private individuals, such as in the case of sex trafficking. And according to KnowTheChain’s report, one of the largest sectors that relies on forced labor is the $3 trillion apparel and footwear industry. An estimated 60 million to 75 million people are employed in this global sector. And while most of us realize that these workers are paid very little, the reality is that some are not paid at all. There are many reasons that the manufacture of clothes and shoes tends to be so tainted by forced labor. One is that people in wealthy, developed countries, like the United States, the United Kingdom, Canada, and France, have gotten addicted to cheap clothing. This is partly because global free trade agreements have made it easy for brands to make their products in places where labor is cheaper, then transport them across the world. This also made it possible for fast fashion to become a trend. Brands like Zara, H&M, and Century21 built their businesses around making off-therunway looks available at rock bottom prices. As a result, KnowTheChain’s report says that “competition for low prices and quick turnarounds” has led to “globally complex and opaque supply chains.” KnowTheChain has developed a scoring system to identify how large, global apparel and footwear companies–from Gap to Louis Vuitton to Nike–fare in terms of worker treatment. Shockingly, out of 100, the average score remained low, at 37. In other words, many of the brands that we purchase clothes and shoes from are not paying close enough attention to the treatment of workers in their factories. Companies that are able to disclose their practices to reduce forced labor, like hiring workers directly rather than going
through a recruitment agencies, scored well. But many companies either do not have policies, or cannot disclose them, because they are not sure what they are. This happens because supply chains can be very complicated: A brand may work with a factory that outsources part of its work to other factories, and so forth. But ultimately, KnowTheChain makes the case that these companies are culpable for their role in the exploitation of workers no matter where it happens in the supply chain.
SLAVERY STARTS AT RECRUITMENT The scoring system takes into account how these companies address many issues relating to the payment of workers. But one of the most critical areas of focus is recruitment, because this is the point in the process when poor workers are most vulnerable to being exploited. Unethical recruitment agencies often take advantage of poor, desperate people by securing them jobs in exchange for exorbitant recruitment fees, which will come out of the worker’s salary. They may withhold a worker’s passport or other official documents until the fee is paid. And if they compound interest on the fee, a worker may never make enough money to pay it back, rendering them a lifelong slave. One audit KnowTheChain examined found that an apparel company in Taiwan charged migrant workers US$7000 for a job at a fabric mill. Another Taiwanese factory audit found that 82% of workers had their passports withheld. Migrant workers are particularly vulnerable to being exploited, since they do not have strong social support systems–like families and friends–who can protect them. They may also not understand their rights, or how to report grievances. And in some countries, migrant workers make up the bulk of the apparel workforce. In Jordan, 77% of apparel workers are migrants, and in Mauritius, that figure is 44%. All of this is compounded by issues of gender. Two-thirds of
apparel and footwear workers are women, who already face discrimination in many developing countries. These women, who tend to be low-skilled workers from rural areas, are particularly vulnerable to exploitation.
ACTIVEWEAR BRANDS ARE GETTING IT RIGHT At the very top of the list were two athletic companies: Adidas, which scored 92, and Lululemon, which scored 89. These businesses stand out because they pay close attention to recruitment and migrant worker protections. Adidas, for instance, conducts training on ethical employment practices for 100 suppliers in Vietnam, Indonesia, China, and Taiwan. Lululemon has worked hard to ensure that workers in its supply chains get all of their identification documents, like their passports, returned to them. Both of these companies also eliminate recruitment agencies from their supply chains altogether, requiring factories to hire workers directly. Lululemon also established a hotline for workers to contact the company directly, rather than going through the factory. Nike and Puma scored 63 and 61 respectively. So, in general, large activewear brands seem to be more aware of labor issues than other industries. Again, this might be in response to consumer pressures. Back in the 1990s, there were many stories about companies like Nike and Adidas relying on sweatshops in Asia, which resulted in protests in the United States at the time. (There are still occasionally protests against these brands, including one that I wrote about last year.) All of this consumer pressure had its desired effect, which was to make these companies rethink their treatment of workers. Interestingly, fast fashion companies actually fared well, probably because they have been scrutinized by consumers and the fashion press for the last few years, including here at Fast Company. This may have prompted the company’s leadership teams to observe its supply chains more carefully. Gap Inc, the parent company of Gap, Old Navy, and Banana Republic, came in third on the list with a score of 75. Primark scored 72, while H&M scored 65. Walmart scored 44, which is a low score, but significantly better than many luxury brands. Many of these brands fared well because they have policies like training programs that help workers know their rights. H&M and Primark, for instance, both have mandatory
“modern slavery” training at the factories they use. Still, there’s a lot of room for these companies to improve. The report suggests that even brands that are doing well can dig deeper into their supply chain, to understand the labor that went into their raw materials. Cotton, for instance, is often linked to slave labor, so companies need to make their entire supply chain traceable.
LUXURY BRANDS ARE FAILING Many consumers assume that more expensive products are made ethically in high-quality factories. But the rankings revealed that luxury brands had among the lowest scores. Prada received an abysmally low score of 5, for instance, and Salvatore Ferragamo scored 13. The LVMH conglomerate, which includes brands like Fendi, Celine, Rimowa, and Christian Dior, scored 14, while Hermes was not much better at 17. Many of these brands make their products in Europe, but KnowTheChain says that European workers are also vulnerable to exploitation. In Italy, for instance, Chinese laborers are sometimes subjected to forced labor in textile factories, and in Bulgaria, Macedonia, Moldova, Romania, and Turkey, workers have been denied time off, and had to work overtime beyond legal limits for “staggeringly low wages.” Some luxury brands did better, however. Burberry scored 52, Ralph Lauren scored 58, and Kering, which owns Gucci, Balenciaga, and Saint Laurent, scored 45. But overall, KnowTheChain’s findings suggested that the luxury industry was riddled with labor issues. This might be because consumers assume that the high price they pay for products translates into decent wages for the workers, and as a result, they aren’t applying pressure to these brands to pay more attention to their supply chains. All of this suggests that we, as consumers, have a role to play in helping to reduce modern slavery. We need to hold companies to task for their their lack of oversight. This might mean writing to them, or using social media to hold their feet to their fire. And it also means supporting brands that are known to have better practices. Elizabeth Segran, Ph.D., is a staff writer at Fast Company. She lives in Cambridge, Massachusetts. Her work has been published in The Atlantic, The New Republic, Foreign Policy, Foreign Affairs and The Nation.
How Marketers Can Start Adopting Artificial Intelligence Tomorrow By Hal Conick
aul Roetzer couldn’t stop watching. It was 2011 and Watson, P a then-new IBM supercomputer, faced off against 74-time “Jeopardy!” champion Ken Jennings and the show’s all-time m oney leader, Brad Rutter. Watson, a question-answering a rtificial intelligence system, would buzz in within a second o f host Alex Trebek asking a question, giving what the AI d etermined to be the most probable answer. By the end of the game, Watson had dominated the show’s all-time greats by more than $50,000. B y late 2016, Roetzer had become so obsessed by AI’s potential in marketing that he founded the Marketing Artificial Intelligence Institute, a group with the mission of making AI approachable and actionable for modern marketers. Roetzer still runs his company, PR 20/20, but he says that his AI group n ow takes nearly all his time. He badly wants to figure out h ow organizations can pilot and scale AI tools to increase efficiency and reduce costs. S o far, he has nearly the entire marketing industry to work with. “ The vast majority of the industry is at what I consider the pilot phase,” he says. “Most are trying to understand what AI is, then how to apply it.” A 2018 report by Boston Consulting Group and MIT S loan Management Review—titled “Artificial Intelligence i n Business Gets Real”—finds that only 18% of companies a re “pioneers,” or organizations that understand and have a dopted AI. A third of companies (33%) are “investigators” t hat are in the pilot stage and know a bit about AI, while
1 6% are “experimenters” that are piloting AI without fully understanding it—they hope to learn about AI as they use it. The rest (34%) are “passives,” or organizations that haven’t adopted and barely understand AI. Over the past few years, many marketers have marveled at AI and wondered the same thing Roetzer did after watching Watson dominate its fleshy opponents: How does that work? As 2019 begins, marketers can move beyond passivity and into being AI pioneers.
Learn Now L ike Roetzer, Robert Redmond watched “Jeopardy!” in awe as Watson dominated the show’s legends. Redmond, a selfd escribed sci-fi geek, had been hearing about AI since he was a young boy, but the AI’s game-show performance was a glimpse at the technology’s capabilities. A t the time, Redmond was working as a creative director o f teamDigital Productions; by 2016, he worked at IBM w ith Watson Advertising as creative and strategy director. R edmond is tasked with figuring out how Watson can help brands have unique, AI-driven chats with their customers. W hen Redmond first learned that he’d be working with Watson, he says that he knew close to nothing about how A I worked, especially from an engineering perspective. R edmond calls the six months leading up to working with Watson his “baptism” into AI—he was already an AI convert, h e says, but he still had to fight to understand what was possible with the technology.
“ I read a lot and I asked more questions than most would p robably be comfortable answering,” he says. “There w as a lot of ‘Can we do that?’ And the learning came by u nderstanding the implications on the back side of those questions.” Marketers—most of whom likely don’t fully understand AI, let a lone its true potential in business—should also be asking a lot of questions. Redmond believes that businesses should l earn by digging into possibilities and seeing what AI tools a re available on the market. Both he and Roetzer have e ncountered some companies that use AI-based software without realizing it—this is likely the case for many companies searching for their first piece of AI-based software. F or marketers eager to learn about AI, Roetzer suggests r eading Human + Machine: Reimagining Work in the Age of AI by Paul Daugherty and H. James Wilson and Prediction Machines: The Simple Economics of Artificial Intelligence by Ajay Agrawal, Joshua Gans and Avi Goldfarb. “Most of the really valuable AI education has nothing to do with marketing o r sales,” Roetzer says. Even so, books like these can give marketers a window into AI and its business potential. M arketers should learn how their competition is using AI. They should also ask vendors pointed questions about the AI software they’re selling. “A lot of tech vendors are slapping ‘machine learning’ and ‘AI’ on their branding,” Roetzer says. “A lot of times, they don’t even know what that means. The sales and marketing teams can’t explain how their products use AI. They’re just told by the engineers that it’s AI.” Marketers can also play with online AI demos to get an idea of how AI-driven tools work. Google has many educational t ools on its AI landing page, Roetzer says, as does IBM’s Watson. One Watson tool—Personality Insights—allows users t o log into their Twitter account and receive a personality analysis based on their tweets. “There are a lot of resources out there, and you can connect the dots pretty quickly if you just consume the right resources a nd understand the ways you might be able to apply it in your business,” Roetzer says.’
Find Easy Wins and Tough Problems C ompanies without AI experience will likely have a steep learning curve, Redmond says. “There’s definitively going to be a training period, a modeling period, and probably a fail period if you’re stepping into a scenario where you are really starting from scratch,” he says. “It’s a difficult transition.” R edmond and Roetzer both say that this difficult transition will make early, easy wins essential. One potential easy win, Redmond says, is using AI-based programmatic advertising tools to bid on media buys. Another he suggests is naturall anguage processing tools that can quickly judge the tone a nd intent of business communications, such as emails, memos or marketing materials. “You can discover new ways o r new features that might be important that you didn’t r ealize or pressure points that may be bigger than you’ve been admitting,” he says. “You uncover the insights, and you can act upon them.” The simplest way to find easy wins, Roetzer says, is to make
a list of all the tasks in the business—from quick to timeconsuming—and measure how much time employees spend on each task, as well as how much money the company spends on software or outside services for each. Then, marketers can rate each task from one to five based on how much value AI could bring. A one would mean little to no value, a five would m ean a good AI solution would be transformative. Listing, measuring and rating may sound arduous, but Roetzer says that the process will give marketers an idea of AI’s potential value in cutting down time and costs. “If you’re the director of marketing, and you’re trying to get buy-in to try this, you can go and say, ‘Hey, I went through an analysis. Here’re the five use cases where I think we create the most value,’” Roetzer says.
The C-Suite Must Buy in, Time Must Be Given R edmond normally works with companies that have a mandate from the top to adopt AI, now. The chief technology and chief information officers with whom he tends to work are focused on a problem at a high level and want to solve it with AI; that desire spreads through the rest of the organization. B ut not every marketing manager will be so lucky. Roetzer s ays that even marketers who get the C-suite to buy into A I software often have executives quit on their AI project before it can prove its efficacy. AI systems, especially at small o r midsize companies, sharpen over time and often need months to learn—it’s hard work to get AI right, it likely won’t w ork right away and it may even fail during the first pilot. I f a CMO adopts an AI-powered media-buying tool, for example, and it doesn’t show lift three months and $20,000 i nto adoption, many executives will scrap the idea of AI altogether, convinced it doesn’t work. “It’s a hard thing to explain to the C-suite if they’re not the ones driving it,” Roetzer says. “Even at the pilot stage, there needs to be buy-in at the top level. [They need to know] that this is going to be an ongoing experiment, and it’s going to t ransform everything we do. But we have to have the right investment and the right patience to see it through.” Organizations must understand from the start that AI is not a magic switch, Roetzer says. Companies can’t just expect to adopt AI and—poof!—solve all their problems. Adopting AI is a lot of work and requires a lot of data to train its models; it takes a lot of strategy to prioritize what cases are helped by AI and what cases should be left for another day. “Some people may give up too easily,” he says. A lthough Roetzer knows that it may sound as though he’s t rying to scare people away or downplay AI’s potential, he believes that marketers who properly adopt AI will be given “superpowers.” “It’s going to fundamentally change the way we do marketing,” he says.
H al Conick is a staff writer for the AMA’s magazines and e-newsletters.
10 Influencer Marketing Trends to Keep Your Eye On THE KEY IS TO SUCCESS IS TO INTEGRATE INFLUENCERS INTO YOUR MARKETING TEAM. By Deep Patel
I nfluencer marketing is a hybrid of old and new marketing t ools. It takes the idea of the celebrity endorsement and reconfigures it to fit with today’s social media–driven world.
i nfluencers, or influencers who generally have fewer than 1 0,000 followers on social media. Micro-influencers are seen as more like “normal” people.
Unlike celebrities, influencers can come from any background or industry, and they can have varying amounts of followers. O ne thing they all have in common is that they’re social media figures who have gathered a defined audience around t hemselves. Their ability to influence others allows them to g ive a human voice to brands. Influencer marketing is less d irect than traditional forms of marketing, but when done well, it creates an authentic way of connecting with customers.
They engage and interact with their followers more frequently, and are viewed as more relatable and authentic. Meanwhile, “ mega influencers” and celebrities may have hundreds o f thousands or even millions of followers, but they aren’t always as interactive with their audiences and can seem less approachable.
And it’s growing by leaps and bounds every year. Influencer m arketing is poised to reach between $5 billion and $10 billion by 2022. As more businesses begin to experiment with influencer marketing, it continues to evolve and adapt to the market. So, before you set out to build your next influencer campaign, here are 10 trends you need to keep your eye on.
1. Increasing emphasis on influencer marketing. More brands are using influencer marketing than ever before -- and this trend is sure to continue in 2019 and beyond. The r eality is that old-school, traditional marketing centered on TV and radio just isn’t as effective as it used to be. So brands are focusing their efforts on the places where their audiences are spending their time -- online, and often on social media. B usinesses are finding a solid return when it comes to influencer marketing. According to the Influencer Marketing H ub 2017 study, businesses are making $7.65 on an average for every $1 spent, so it’s no surprise that influencermarketing platforms have more than doubled in the last two years. I nfluencer marketing is incredibly effective because we inherently trust the people we follow on social networks. After a ll, we wouldn’t be following them if we didn’t like them! S o when an influencer sincerely advocates for a service or product, their audience listens.
2. Micro-influencers are making an impact. A s it turns out, bigger isn’t always better when it comes to i nfluencers. Brands are homing in on the power of micro-
M icro-influencers tend to be knowledgeable about their n iche, and their followers are more likely to trust their r ecommendations. They’re also are more affordable than enlisting a celebrity as an influencer or brand ambassador.
3. Focus on storytelling. A t its core, influencer marketing is about storytelling. The best campaigns are crafted when a brand partners with an i nfluencer to create unique content that really engages the a udience. Storytelling connects with customers and makes t hem more likely to make a purchase. One study from ad agency Hill Holliday found that not only are customers more l ikely to buy from a brand with a good story; they’re also more likely to pay a higher price per item. F or the content to really resonate with a target audience, t he influencer needs to capture their followers’ attention in a compelling way. A simple photo featuring a product in the b ackground will no longer draw audience attention to the brand or elicit consumer sales. Video content is a natural fit to help a story come alive and resonate with customers.
4. Video content and live streaming are growing on social media. W e are short on time and attention, but we love to be entertained. This is why video marketing is growing across all platforms, and currently represents more than three quarters of all internet traffic. Videos feel more authentic and are fun to watch, which is why influencers will continue to experiment with video-marketing t rends. Influencers are tapping into the engaging nature of v ideo content, which can be more effective in driving sales than text-based content.
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Brands are also sponsoring influencers’ live feeds on social platforms, including Instagram and Facebook. Live-streamed i nfluencer collaborations can include real-time product u nboxing, Q&As, activity and destination promotions, and b ehind-the-scenes footage at events -- there are countless possibilities. The key is to keep it authentic and engaging, and include creative brand mentions throughout the broadcast.
5. Transparency in advertising. There has been growing concern from government agencies and watchdog groups about the blurred lines of sponsored s ocial media posts. In fact, the Federal Trade Commission has sent out letters to influencers and marketers asking them t o “clearly and conspicuously disclose their relationships to b rands when promoting or endorsing products on social media.” T ransparent advertising also levels the playing field, so influencers and brands are all playing by the same rules. So make sure you disclose every paid piece of content. Even if the content seems like an obvious ad, you need to disclose the partnership in each paid post. One option is to use hashtags such as #ad, #sponsored or #paidpost to make it clear that a post has been sponsored.
6. Influencer authenticity and honesty is a must. Audiences have zero tolerance for content that comes off as fake or halfhearted. Influencers should honestly connect with t he brands they’re endorsing. This type of marketing only w orks if an influencer is authentic in how they promote a product; they must genuinely like the product or brand, or the campaign will fall flat. I n fact, many brands look for influencers who are already using their products. And when possible, brands should get t heir influencers to give feedback on the products they’re p romoting and talk about specific things they like about it, how they use it in everyday life and share any other interesting tidbits or insights they have about the product.
7. Influencer fraud and fake followings. A s influencer marketing increases, a shady side of the b usiness has begun to rear its ugly head: influencer fraud. This happens when influencers artificially inflate the numbers o f their followers and likes. Influencers sometimes use automation and bot-backed services to increase the number of likes their posts get. Some influencers grow their followers based on the rule of reciprocity, a “follow for follow.” But it’s not always a clear-cut situation. Some influencers who never paid for followers may still have f ake followers on their account. That’s because so-called “ like farms” have to follow more than just their customers t o bypass filters designed to catch them. Up to 20 percent o f mid-level influencers’ followers are likely fraudulent, according to a Points North Group study. What this means is that brands need to vet their influencers t horoughly and hold influencers accountable. They need to look beyond the raw number of followers and likes, and e valuate the quality of influencers’ engagement with their
audience.
8. The rise of virtual influencers. One emerging trend to keep an eye on is the use of carefully curated avatars as influencers. This trend was kicked off by t he creation the internet’s first “fictional it girl” and virtual influencer, Miquela Sousa or Lil Miquela. S he’s a 19-year-old model living in Los Angeles and her Instagram feed is filled with posts highlighting her fashionista outfits. She has also released a number of her own songs on Spotify, and has amassed more than 1.5 million followers on Instagram. H er very virtual existence is drawing both awe and ire as m arketing trend watchers try to decide if they love or hate this new development in influencer marketing. Her creators are shrouded in secrecy, but we know she’s one of the most f ollowed influencer ambassadors for Ugg footwear, who enlisted her for its month-long 40th-anniversary campaign. Stay tuned to see how this trend develops.
9. Instagram is still king, but don’t overlook emerging platforms. Instagram continues to reign supreme as the most important s ocial network for influencer marketing, largely because of i ts enormous user base and easily digestible video content. But it’s not the only platform out there. YouTube is also full o f potential influencers -- especially if you’re targeting a younger demographic. F acebook, Pinterest and Snapchat influencer marketing is growing, too. Blogs still lag behind Instagram and Facebook, b ut they have risen in popularity in recent years. Many influencers on social media are embracing the blog form for m ore word-heavy content. These blogs showcase products and more informative, in-depth content.
10. Expand your pool. B ecause most micro-influencers have a relatively small audience, brands need to find ways to multiply their influencer i mpact. To do this, they often look to expand the pool of influencers they use. To put it simply, you don’t want to put all your eggs in one i nfluencer basket. Using multiple influencers increases product mentions and audience engagement with the brand. A nd using different influencers will allow you to reach different audiences, as well as tap into different influencers’ unique ways of framing a product. The more influencers a brand uses, the more complicated a campaign can become. The key is to incorporate influencers as part of the marketing team. Get them on board and excited a bout a project, and set clear expectations, but give them room to work their creativity and engage with their followers. D eep Patel is the author of A Paperboy’s Fable: The 1 1 Principles of Success. The book was dubbed the # 1 best business book in 2016 by Success Magazine and named the best book for entrepreneurs in 2016 by Entrepreneur Magazine.
An Exceedingly Good Solution: Looking back on 30 years of Brand Valuation HO W TO MEASURE THE TRUE VALUE OF A BRAND? BACK IN 1988, WE DEVELOPED A GAME-CHANGING SOLVE. By Interbrand
It ’s 1988 and the world looks very different to the world of 2018. Dell Computers have only just been rolled out to the market, Blackrock Asset Management has just been founded, Di e Hard is the year’s biggest blockbuster and the concept of a World Wide Web has been talked about for the first time at the European Organization for Nuclear Research (CERN). It is also the year that Interbrand made a pivotal move that would go on to alter the global business landscape forever— for the first time putting a tangible value against an entirely intangible asset—a brand. To mark the occasion, we decided to take a look at the 30ye ar journey of Brand Valuation: its origin, its impact, and its future. Th e story begins in the United Kingdom at the boardroom of a company called Rank Hovis McDougall (RHM). Back then, RHM owned a portfolio of some of Britain’s best loved food brands, each of which had benefited from some serious ad vertising investment and spawned a range of characters an d catchphrases that most Brits alive in the 1980s could
still repeat today. There was Mr Kipling (the friendly chef who made ‘exceedingly good cakes’), Bisto Gravy (with its happy fa mily exclaiming ‘Ah Bisto!’) and Hovis Bread (home of good, wholesome northern characters, from bakers to hardworking farmers), among others. An asset-stripper called Goodman Fielder Wattie (GFW) em barked on a hostile bid for RHM. Believing the offer wa s too low, RHM’s execs approached Interbrand for help. In terbrand applied the financial and creative minds of its to p people to solve the problem, designing a methodology that provided a way to value not only the business’ tangible assets – like its production facilities and equipment – but its intangible assets. This was the world’s first Brand Valuation and demonstrated that GFW’s offer did not take into account the significant value of RHM’s brand portfolio. As a result, the takeover was rebuffed. This was a quietly iconic moment for brands and the wider branding, advertising and marketing industries. The following ye ar, the London Stock Exchange endorsed the concept of
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Brand Valuation, as designed by Interbrand. This became the impetus for a wave of major goods companies to recognize th e value of brands on their balance sheets. Now, analysis fr om Ocean Tomo shows that the business value paradigm has shifted to 80% intangible and 20% tangible. According to The Economist book ‘The Financial Value of Brands’, this first valuation marked the beginning of that trend. Th ere are three key overarching components to all of our Brand Valuations at Interbrand: an analysis of the financial performance of the brand’s products or services, the role the brand plays in purchase decisions, and the brand’s strength fa ctors. Interbrand’s Brand Strength factors consist of 10 internal and external factors: • Clarity: be clear on what your brand stands and who you’re selling to • Commitment: a shared belief in the brand proposition that encourages people to invest time and energy • Governance: key to keeping the execution of your brand strategy on track across your organization’s business units and regions • Responsiveness: anticipate changing market needs, have the agility to adapt and respond to these changes, and fuel constant innovation • Authenticity: focus your brand around an internal truth—a well-defined story and set of values • Relevance: rooted in robust insights, this understanding will help you make the right choices as you expand • Differentiation: a distinctive proposition, creative expression, and unique experience set you apart from the competition • Consistency: if a brand is a promise, then lack of consistency means breaking your promises • Presence: maintaining presence in all aspects of people’s
lives is how you expand in terms of both reach and influence • Engagement: showing a deep understanding of, active participation in, and a strong sense of identification with, the brand Today we conduct Brand Valuations for a wide range of purposes, from strategic brand management to dispute resolution to informing commercial negotiations. We have devoted the last 19 years to promoting the value of brands as powerful business assets through our widely recognized and anticipated Best Global Brands report. In 2010, we were the first company to be certified as compliant with ISO 10668— the new international standard on Brand Valuation that we also played a leading role in developing.We have learnt that the key to an effective valuation is to make sure it gives clear direction on how to grow brand and business value. In order to tackle that challenge, we bring together different disciplines—strategy, design, analytics, and business analysis to generate insight and create the recommendations. With clients like Samsung, we use brand value as a lever for creating change. Having conducted valuations with them year-over-year since 1998, we have helped to reinforce the importance of building a world-class brand, as well as innovative and superbly engineered products, and provided recommendations to steer their strategy, plotting their path to becoming a Top 10 Best Global Brand (they ranked 6th in 2018). Of course, as the world becomes more customer- and clientcentric than ever, we continue to evolve and recalibrate our methodology. To keep ahead of a fast-changing world, our clients are looking for constant monitoring of market trends, competitors and technology. They need to stay connected to customers on an ongoing basis and continuously improve the brand experience where it matters the most, making ROIdriven decisions with a solid fact base of quantitative and qualitative data. The need for ‘always on’ brand management is the next frontier that we are about to pioneer all over again.
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Subscription Marketing: Strategies for Nurturing Customers in a World of Churn Kindle Edition
My Blogging Secrets: A guide to becoming a pro-blogger Kindle Edition
By Anne Janzer
By Amber McNaught
Subscription Marketing offers creative marketing strategies for sustaining the customer relationships that build long-term success. This book is a practical guide for marketers, start-up executives, customer success management professionals, and executives of establishing businesses adopting or transitioning to a subscription-based model.
Want to make a living simply by writing about your life? Here’s how one woman does it... On a sunny day in April, journalist-turned-PR Amber McNaught walked out of her well-paid office job, and started a blog.
This Is Marketing: You Can’t Be Seen Until You Learn to See
Bigger Than This: How to Turn Any Venture Into an Admired Brand Kindle Edition
By Seth Godin For the first time, Godin offers the core of his marketing wisdom in one compact, accessible, timeless package. This is Marketing shows you how to do work you’re proud of, whether you’re a tech startup founder, a small business owner, or part of a large corporation. No matter what your product or service, this book will help you reframe how it’s presented to the world, in order to meaningfully connect with people who want it.
By Fabian Geyrhalter, Elaine Pofeldt (Editor)
How Cool Brands Stay Hot: Branding to Generations Y and Z
How to Style Your Brand: Everything You Need to Know to Create a Distinctive Brand Identity
By Joeri Van den Bergh, Mattias Behrer The book reveals how Millennials think, feel, and behave, and discusses how recent developments such as the recession, mobile marketing and purchasing, and the adaptation and evolution of social media, have impacted Generation Y. All the chapters offer new case studies and interviews, from companies such as H&M, Forever 21, and Converse, as well as updated facts, figures, and research.
In “Bigger Than This,” Geyrhalter analyzes brands that are based on commodity products – watches, socks, shoes, fish – yet they quickly turn into beloved brands. He emphasizes the importance of storytelling, encouraging brands to embrace 8 simple traits these brands showcase and offers specific, actionable commandments that any brand can implement – story, belief, cause, heritage, delight, transparency, solidarity and individuality.
By Fiona Humberstone In How to Style Your Brand, Fiona shares with you the secrets behind using colour to create an emotive connection; how to use pattern and illustrations to add character and personality and how to carefully select typefaces that add a distinctive and intentional edge to your designs.
Story Driven: You don’t need to compete when you know who you are
Talk Like TED: The 9 PublicSpeaking Secrets of the World’s Top Minds
By Bernadette Jiwa
By Carmine Gallo
Every one of us—regardless of where we were born, how we were brought up, how many setbacks we’ve endured or privileges we’ve been afforded—has been conditioned to compete to win. Ironically, the people who create fulfilling lives and careers—the ones we respect, admire and try to emulate—choose an alternative path to success. They have a powerful sense of identity.
In his book, Carmine Gallo has broken down hundreds of TED talks and interviewed the most popular TED presenters, as well as the top researchers in the fields of psychology, communications, and neuroscience to reveal the nine secrets of all successful TED presentations. Gallo’s step-by-step method makes it possible for anyone to deliver a presentation that is engaging, persuasive, and memorable.
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Brands in Glass Houses: How to Embrace Transparency and Grow Your Business Through Content Marketing By Dechay Watts, Debbie Williams, Said Baaghil (Contributor) Brands in Glass Houses shines light on businesses that are revealing themselves authentically, not just as a marketing tactic, but also as a way of doing business. It shows you how to provide interesting content so that customers can connect with your brand on an emotional level...
Unleash the Power of Storytelling: Win Hearts, Change Minds, Get Results Kindle Edition By Rob Biesenbach Unleash the Power of Storytelling offers a practical roadmap to crafting and delivering more powerful, persuasive stories that you can use to get more of what you want out of your career and your life.
Friction: Passion Brands in the Age of Disruption By Jeff Rosenblum, Jordan Berg Friction argues that brands don’t simply need clever messages or new, shiny technologies. They need a fundamental change in strategy. Friction provides a system for embracing transparency, engaging audiences, creating evangelists, and unleashing unprecedented growth. The authors of Friction have worked on some of the industry’s most innovative assignments for the world’s most successful brands.
Brand Thinking and Other Noble Pursuits By Debbie Millman, Rob Walker (Foreword) This book elevates the discussion to the level of revelation. Each chapter is an extensive dialogue between Debbie Millman, herself a design visionary, and a different leader in the field. By asking questions deeply informed by her own expertise, Millman coaxes lucid, prescient answers from twenty-two interview subjects, among them Malcolm Gladwell, Tom Peters, Seth Godin, and godfather of modern branding Wally Olins.
Brand Mascots: And Other Marketing Animals By Stephen Brown (Editor), Sharon PonsonbyMcCabe (Editor) Featuring case studies and empirical analyses from around the world – here Hello Kitty, there Aleksandr Orlov, beyond that Angry Birds – the book presents the latest thinking on beast-based brands, broadly defined. Entirely qualitative in content, it represents a readable, reliable resource for marketing academics, marketing managers, marketing students and the consumer research community.
The One Hour Content Plan: The Solopreneur’s Guide to a Year’s Worth of Blog Post Ideas in 60 Minutes and Creating Content That Hooks and Sells Kindle Edition By Meera Kothand Unlock Countless Content Ideas. Sell Your Products And Services With Ease. Get Your Content to Work Harder For You.
Storyworthy: Engage, Teach, Persuade, and Change Your Life through the Power of Storytelling Kindle Edition By Matthew Dicks, Dan Kennedy (Foreword In this compelling book, storyteller extraordinaire Matthew Dicks presents wonderfully straightforward and engaging tips and techniques for constructing, telling, and polishing stories that will hold the attention of your audience (no matter how big or small).
Social Media Explained: Untangling the World’s Most Misunderstood Business Trend Kindle Edition By Mark Schaefer The book provides insights into: * The five foundational strategies behind social media success * A six-step path to discovering your social media strategy * Battle-tested tips and ideas you can apply today * Case studies illustrating social media successes * Answers to the biggest questions about measurement, organization...