Cambridge Marketing review - Issue 4 by Cambridge Marketing College

CAMBRIDGE MARKETING

FEATURES

Godfather vs Gamechanger Philip Kotler Social Media: ROI REPORTS

Cookie Law: are you up to date? VIEWS

A view from inside: Facebook COMMENTS

Marketing Philosophy Case study: mobile marketing

Marketing stands the test of time

ISSUE 4 AUTUMN 2012

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CONTENTS

CONTENTS 5 Editorial FEATURES

6 thE GodfathEr and thE GamEchanGEr Peter Fisk describes his “battle for the future of marketing” with Philip Kotler. 12 crackinG thE Social roi codE: Social mEdia PErformancE indicatorS dEmyStifiEd 15 iS it all about thE cuStomEr? 18 Global Social nEtWorkinG: VErSion 2.0 Update on a fast changing world wide web. VIEWS

23 communicationS and rEPutation manaGEmEnt An insight into Facebook. 26 thE “cookiE laW” What should businesses be doing to ensure compliance?

34 it takES a VillaGE The Realities of Social Media Hiring and Management. 39 undErStandinG thE SPhErE of influEncE REPORTS

43 thE imPact of Ethical conSumEriSm on thE uk faShion and clothinG induStry An abstract from Vidyani’s submission, which was awarded a distinction in the CIM’s Postgraduate Diploma. COMMENTS

50 QuStodian caSE Study Paper and case study prepared by Qustodian, a company formed in 2009 to allow users more control over what information they receive, when and how. 52 PhiloSoPhy of markEtinG Why do we need Marketing? 54 QuEStionS that lEaVE a mark By Don Moyer

32 SEminal articlES – PricinG The second in a series of seminal articles that all Marketers should read.

Publishing Editor: Emma Garland Chairman: Charles W. Nixon Contributors: Charles Nixon, Peter Fisk, Birserka Anderson, Nigel Clark, Paul Woodhouse, Debbie Frost, James Grace, Paul Fifield, Jay Baer and Amber Naslund, Neil Cooper, Vidyani Warnakulasooriya, John Roberts, Terry Nicklin, Don Moyer, Melissa Nixon and Shane Minett. Contact: Cambridge Marketing Press 1 Cygnus Business Park Middle Watch Swavesey Cambs CB24 4AA Tel: +44(0) 1954 234944 Fax: +44(0) 1954 234950 Email: emma@marketingcollege.com Issue IV Autumn 2012 ISSN 2047-962X

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Front cover illustration “7ps of marketing”: Amanda Barrett

The views expressed in contributions to Cambridge Marketing Review are not necessarily those held by the publishers.

©2012 Cambridge Marketing College. All rights reserved. You may photocopy this magazine for collaborative study purposes. Individual images under licenses listed below: Page 37 cartoon © Robert Barrett-Sprot

Most Cambridge Marketing Review articles are accompanied by a word cloud from wordle.net. You can use our clouds to assess swiftly the themes of the article: the larger the word, the more times it appears in the text. If you would like to comment, please contact the editor, Emma Garland: Tel: +44(0) 1954 234941 Email: emma@marketingcollege.com

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CONVENTIONS: • We are marketers not marketeers; we are not cavaliers. • We practice marketing not advertising or PR. • When we refer to products, we mean products and services. Otherwise we refer to offerings.

EdITORIAl

A WElCOME TO ThE ANNIVERSARy EdITION From Charles W. Nixon, Chairman of Cambridge Marketing College

s publisher of Cambridge Marketing Review, it gives me great pleasure to welcome you to this anniversary edition. It is a year since we published the first edition and the journal has gone from strength to strength. I would like to pay tribute to our previous editor ChARlES W. NIXoN Craig Stone, who has put tremendous effort into this edition, and welcome our new editor, Emma Garland.

“Understand your customers and from this everything else will follow”. With oriental simplicity, Kenichi Ohmae in his seminal work ‘The mind of the Strategist’ crystallises the essence of marketing as it used to be. However, new themes and times have emerged over the thirty years since it was written. Now, the democratisation of markets through the worldwide web and the empowerment of the consumer through social media and the education, mean that the world has changed significantly. What we have tried to do in the last four editions of the journal is to bring marketing into the 21st century to identify the issues and trends that will affect marketers and to discuss and consider the role of marketing in the economic process of society. In this global era of marketing, all companies, large and small, can engage in the international market, all have the availability to engage with their consumers in a dialogue all have the ability to surf the marketplace for ideas and indeed for funding. However, does this mean that everything now becomes ‘crowd sourcing’. What is the role of the entrepreneur? Where is the role of the ideas person? Where is the role of the innovator? These are issues that will be considered in the fifth edition which will be dedicated to the role of the entrepreneur. As ever, we look forward to your comments, feedback and suggestions for new articles, I hope you enjoy this edition. For comments and feedback, please email: editor@cambridgemarketingpress.com Charles W. Nixon Chairman

ThE gOdFAThER ANd ThE gAMEChANgER Peter Fisk describes his “battle for the future of marketing” with Philip Kotler – and what he learnt about, and from, the grand old man of marketing

une in Cairo… You imagine great

pharaohs standing before the pyramids, but in the midst of the first democratic elections (in 7,000 years, some locals say), the choice for Egyptians was more polarised than ever, a choice in some ways between the future and the past. PETER FISK Whilst the 1,000+ audience pondered their future, Philip Kotler and I were here to explore the future of marketing, in an event that was (slightly embarrassingly!) billed as “The Godfather versus The Gamechanger”. And here, in the midst of the Arab Spring, I was to play the “gamechanger”. I lIkE PhIlIP kOTlER Yes he had just celebrated his 81st birthday, wrote his best books 40 years ago, takes a fairly narrow, academic, and USA-centric view of the world (although his latest books are collaborations with Asian and European authors)… but over the decades he has articulated the principles, rules and frameworks on which much of our marketing, and most of us marketers, have built careers. Having started out as an accountant, he has added rigour and respect to our profession. He still talks about 4Ps (with a bit of customer-centricity thrown in, I was pleased to note), but he commands authority and audiences because of his great belief in the primacy of marketing. We talked at length. About the increased professionalism of marketing, about the impact of digital and social technologies, about ensuring that marketing has creative and commercial edge, its evolving role in the boardroom, and the differences in attitudes of marketers that we have experienced as we travel around the world. Kotler started by reminding the audience how marketing was born out of the need to provide leads for salespeople, moving to the necessity to align sales and marketing today, and now to think again about how marketing adds value. He questioned Kevin Roberts’ notion that “marketing is dead”, although I think the “Lovemarks” author is really just provoking us to think beyond pushing logos and messages at people, and start engaging them. He talked about the increasing distrust of consumers in brands, and the need to reconnect with them. He talked about the huge potential of databases, social media and technology in general, and how we are just at the beginning of how we can use them. And he talked of marketing’s need to re-establish itself with the leaders of business, and with customers. He described his solution as “Marketing 3.0” – the title of his latest book (which was actually only one diagram in the last 5 minutes!).

FEATURE - FISk

yES hE hAd jUST CElEbRATEd hIS 81st bIRThdAy, WROTE hIS bEST bOOkS 40 yEARS AgO… bUT OVER ThE dECAdES hE hAS ARTICUlATEd ThE PRINCIPlES, RUlES ANd FRAMEWORkS ON WhICh MUCh OF OUR MARkETINg, ANd MOST OF US MARkETERS, hAVE bUIlT CAREERS

“Marketing 1.0” (product-centred) was largely about the mind, “2.0” (customer-centred) about the heart, and now “3.0” (valuescentred) is about the spirit, he suggested. He based this largely on Jag Sheth’s book “Firms of Endearment” although most of the examples (including British Airways, “Children in Need” and Levi’s supporting AIDS awareness) involved charitable initiatives rather than fundamental business change or marketing innovation. This was Kotler’s big message, but was preceded by many others – useful reminders, but little new – and supported by rather conventional stories of Blackberry and Dell, GE and P&G (and surprisingly, Cherry, the Japanese car brand!). He talked about: • The 3 buckets for marketing investment – manage the present (cut the fat, drop unprofitable products); selectively forget the past (new products already there); and create the future (develop a new strategic intent). • The 6 tasks of a CMO – represent the voice of the customer, monitor changing markets, be the steward of the corporate brand, upgrade marketing technology and skills, add insight to the corporate portfolio, measure and account for marketing financial performance. • The 4 tasks of marketing – relationship marketing (customers, channels and partners), integrated marketing (communication, products, channels), responsible marketing (ethics, environment, legal), and internal marketing (function and organisation).

CAIRO’S TAhRIR SqUARE… FOCAl POINT OF ThIS yEAR’S “ARAb SPRINg” SyMbOlISINg ThE POWER OF CROWdS ANd dESIRE FOR ChANgE

Mission

Deliver satisfaction

Realise aspiration

Practice compassion

Why

Vision

Profit -ability

Return -ability

Sustain -ability

What

Be better

Differentiate

Make a difference

Marketing 1.0

Marketing 2.0

Marketing 3.0

How

Spirit

Values

Heart

Values-based Marketing … adapted from “Marketing 3.0”, by Kotler, Kartajaya and Setiawan

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Mind

The 5 marketing shifts – from creating marketing strategies to driving business impact, controlling messages to galvanising networks, managing investment to inspiring excellence, operational to customer focus, improvement to making change. He finished with his description of the marketing process (he clearly believes marketing is more process than function). He talked about the four stages of “plan, manage, execute and measure”; and the primacy of brand management, customer relationship management and integrated communications. Whilst this might sound like marketing 101, and frankly most of the audience felt that too, it’s amazing how many companies still ignore some of these fundamentals. SO WhAT dId I MAkE OF ThAT? Kotler has inspired a generation, or more, of marketers and can still attract huge audiences (rumour has it Qatar even offered him $10m to only ever speak in their country!). Indeed, as demonstrated by his current travels, stopping off in Cairo between Tehran and Skopje, it is often the emerging markets who pay the most, and hang on to his every word. But his ideas, materials and delivery are outdated. What we really need is to be able to command his authority but with fresh, innovative and practical concepts, messages and inspiration for the next generation of marketers, and for entrepreneurs and leaders seeking to win in a new business world. What really surprised me, was Kotler’s complete omission of what I valued most. This wasn’t based on disagreement, but I think a symptom of a superstar wrapped up in his old world, and not having the opportunity to see what today’s new generation of innovative companies, experts and practitioners – particularly those beyond the marketing mainstream – are thinking and doing. Words like business model, collaboration, and innovation weren’t mentioned once.

FEATURE - FISk

lEgO... WINNINg by bUIldINg COMMUNITIES OF CUSTOMERS WhO CO-CREATE ANd ShARE ThEIR bRANd ExPERIENCES

I deliberately started from a different place. The incredibly dramatic and exciting changes we see in our markets today – from technological disruptions and new possibilities, borderless markets and empowered consumers, to economic crisis and political revolutions. These present the biggest challenges and opportunities for marketers as markets are shaken-up. Business needs marketers more than ever – not just to create new products, and communicate brands, but to make sense of new opportunities, to navigate the new global and digital worlds, and to bring rethinking, refocus and reinvention to business and brands in general. Marketers are in the future business, the change agents, the catalysts and facilitators. There’s never been a more important, or exciting, time to be a marketer.

Worldchanging, gamechanging… marketers are the change agents, finding new directions for success in a volatile but vibrant world

Or as I called the new marketers, the “gamechangers”… Whilst I hugely respect the experience and intelligence of Kotler, and his peers, we all need to creatively rethink how we apply these enduring disciplines to today’s volatile and vibrant markets. This is not to say we should abandon the analytics, break all the rules and become social media junkies. We need a bit of both – analytic and creative, physical and digital, strategic and tactical. We need to ensure it all works together. And most significantly, we need to get even better at delivering the right results, for customers and business, whilst also considering how we make the world a slightly better place. In exploring “gamechangers” I discussed some of the new attitudes and capabilities demanded of marketers, and their businesses. However, rather than politely move on from “Marketing 3.0” I did feel we needed to get into where we agreed, and where we didn’t. What I should say first, is how much we had in common – the importance of marketers in business, the need to integrate marketing beyond a narrow communication view, the latent power of digital technology, and the need for strong process and capabilities. We share a passion for the profession, and how it can be a force for good. However I do believe “Marketing 3.0” could be a much stronger concept, particularly by definition it should articulate the future of marketing. I totally support the shift to more human, emotional values, but in parallel with a more strategic, innovative and systembased approach too. Of course we had limited time, and this was an artificial situation, but I did feel Kotler was missing some of the most important areas of marketing today. These, in my view were his “black spots”, concepts which just weren’t on his radar: • Strategy… Kotler talked about investment and focus, positioning and segmentation, but which markets should you be in anyway?

SPOTIFy… WINNINg by dEVElOPINg NEW bUSINESS MOdElS bASEd AROUNd “FREEMIUM” ANd SUbSCRIPTION MUSIC

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In a world without boundaries, the choice of categories and geographies is bewildering. As Kodak and Hewlett Packard have learnt the hard way, these choices can determine business success or failure. Marketers need to develop a “market strategy” and maybe a “customer strategy” too, before thinking about the executional aspects of marketing delivery. Innovation…Kotler talked about product development still being the central axis of marketing, but without applying that same creativity to the wider business and market model. If marketers don’t champion innovation across the whole business, then who does? Ideas into concepts, brands into propositions, new channels, new processes, new experiences… marketers should be the innovation drivers, innovating processes and experiences, but also creating the future, and therefore at the top table. Collaboration…Kotler referred to “an embryonic idea of co-creation which some companies are exploring”. Indeed crowdsourcing and open-sourcing, collaborating with customers or partners, and more generally, networks are fundamentally changing the relationship between customers and brands. As Coke and MTV will now tell you, it’s the trust and loyalty between customers that is most powerful, and it is their ideas and participation that can really move you forward, as Lego and Threadless have found. Sustainability…Kotler describes a more values-based, spiritual approach to marketing. And indeed customers are more emotional, and marketing more intangible than ever. But he described CSR as essentially being about brands donating to good causes, being charitable. What about sustainable innovation? Using the power of brands and business to rethink how we can still achieve success, but to do good for people and the world at the same time. Creating better products that

The Gamechangers… the new generation of brands and business seizing the best opportunities out of disruption and change

are good for the world, and make money too. Look at Grameen Danone or Nike Considered as transformational examples. • Business models…Kotler seemed a little defensive that marketing was still being treated as a support function, with tactical impact. He agreed we needed to think bigger, and influence the organisation. But the mention of business models caused a puzzled look. Did we mean industrial engineering? No, we mean mapping out how the business works – conceptually and commercially. And then embraced by companies like Alibaba and Skype, Spotify and Zipcars to revolutionise their markets. Interestingly he’d never come across the term. But to his credit, he was inquisitive, and wanted to learn more. Looking at that list, you might say – as I did – that they are the most important drivers of change and growth in many of today’s leading brands. Going further, I’d argue that they are some of the most valuable dimensions of “gamechanging” brands… the

FEATURE - FISk

MARkETERS NEEd TO dEVElOP A “MARkET STRATEgy” ANd MAybE A “CUSTOMER STRATEgy” TOO, bEFORE ThINkINg AbOUT ThE ExECUTIONAl ASPECTS OF MARkETINg dElIVERy

Peter Fisk is a bestselling author and inspirational speaker, combining the most inspiring ideas and practical action, and an in-demand advisor to business leaders around the world. he is currently writing his new book “The Gamechangers” about the new generation of businesses – from Alibaba to Zipcars, Abercrombie to Zynga – who are transforming markets with bolder brands, smarter innovation and clever marketing. They play by different rules, embracing the growth of emerging markets and power of digital networks, human design and social entrepreneurship, and they win with better results. If you would like to contribute ideas or case studies, email him at peterfisk@peterfisk.com

new generation of brands and businesses, who are seizing the opportunities of change to redefine the rules of marketing, reshape markets in their vision, and win in new ways. Whilst large, established companies struggle to respond to the speed of change – and instead prefer to optimise the efficiency and performance of what they already do, this new generation of companies (typically small, some of them start-ups, and increasingly from east not west), are thinking bigger and acting faster. Air Asia has brought a new model to airlines, combining the efficient networks and scheduling of low-cost airlines, with the premium service of Singapore Airlines… similarly Current TV disrupts MTV with a user-generated model and engaging content… cloud computing innovators Rackspace are rapidly disrupting Microsoft’s software dominance… frugal innovation at Tata is fundamentally challenging the production mindset of BMW, whilst lithium oxide fuelled Tesla is even putting Porsche to shame… In gaming, Zynga displaces Electronic Arts (and maybe Facebook too), new financial brands like Zopa challenge HSBC, and drug giants like Pfizer are being replaced by the likes of Epocrates and Wuxi Pharmatech. These companies, brands and marketers, are playing a new game. They see their markets differently, and they win in new ways. They don’t win through power and push, measured by size or share. They win through vision and focus, engagement and value creation. “Marketing 3.0”, defined in a broader sense, will be a brave new world of marketing. Of course, your challenge as a marketer is not to simply imitate the latest ideas and emerging practices, but to “mash-up” the best of the best, to connect and align them into relevant and distinctive propositions for your business, and to apply them in creative and magical ways.

Peter leads GeniusWorks, a strategic innovation business based in london and Budapest, Istanbul and Dubai, that works with senior management to “see things differently” – to develop and implement more inspired strategies for brands, innovation and marketing. Gamechanger is a strategy accelerator for leadership teams, Innolab is a facilitated innovation process based on deep customer insights and creative thinking, and BrandOptima is a platform to develop better brands and brand portfolios. his previous books included: Creative Genius which brings together entrepreneurs and artists, rockstars and rocket scientists, in “the essential guide to innovation for leaders, visionaries, and border crossers”. Marketing Genius which explores the left and right-brain approaches to competitive success (translated into 35 languages), Customer Genius which describes how to build a customer-centric business, Business Genius which is about inspired leadership and strategy, whilst People Planet Profit which explains how to grow, and be good. Peter grew up in the remote farming community of Northumberland, in the North East of England, and after exploring the world of nuclear physics, joined British Airways at a time when it was embarking upon becoming “the world’s favourite airline” with a cultural alignment around customers. he went on to work with many of the world’s leading companies, helping them to grow more profitably by becoming more customer– centric in their structure, operations and leadership. he works across sectors, encouraging business leaders to take a customer perspective, and learning from different types of experiences. his clients include American Express and Aeroflot, Coca Cola and Cooperative Bank, hSBC and lastminute.com, Marks & Spencer and Microsoft, o2 and orange, Philips and Red Bull, Shell and Tata Steel, Teliasonera and Turkcell, Vitra and Virgin, Visa and Vodafone. he was also the transforming CEo of the Chartered Institute of Marketing, the world’s largest marketing organisation. he led the strategic marketing consulting team of PA Consulting Group, was MD of Brand Finance and partner of The Foundation, before founding his own business, the Genius Works. he was recently described by Business Strategy Review as “one of the best new business thinkers” and is in demand around the world as an expert advisor and speaker. Find our more at www.theGeniusWorks.com

CRACkINg ThE SOCIAl ROI COdE: SOCIAl MEdIA PERFORMANCE INdICATORS dEMySTIFIEd

ocial media ROI has long been one of the biggest marketing conundrums – a tough nut that businesses have tried to crack, with varying success. And now, with social media losing its initial “new shiny object” lustre and marketers coming round from a period of euphoria surrounding the BISERKA ANDERSoN social media hype, the time has come to sober up and delve into more hefty issues. Simply put, social media marketing has moved from a period of experimentation into a period of predictive evaluation. A CEO and a CFO will normally ask: “Social media sounds great… but what’s the ROI? And how can we ensure it is worth the investment?” Are marketers prepared to answer these questions in a definitive way? Judging by the overwhelming majority of industry opinions, determining the monetary value of social engagement is one of the biggest challenges for brands. According to a recent study by Lenskold Group, cited by Radian6, a mere 20% of marketers feel they can measure social media ROI. The same report found that 48% of marketers for whom measuring social media is a high priority say their focus on analytics stems from “the pressure to report quantified incomes”. Meanwhile, 19% of those for whom social media measurement is not a priority say that they don’t have defined metrics or objectives. These stats indicate two central themes to the current social ROI debate – on one hand, the rising pressures on marketers to prove the business value of social media in the Board Room, and on the other – a crisis in the concept of social metrics and KPIs, making social ROI look dauntingly immeasurable. ThE bIg METRICS dEbATE: FINdINg ThE RIghT kPI ‘COCkTAIl’ Naturally, companies have different business objectives and social media business goals, and therefore, any attempt to apply a broadbrush approach to social performance measurement is doomed to fail. If a business is driven by sales, viewing social activities in the context of the sales cycle is critical. In this instance, social conversion rate may be the most prominent metric whose value could be used to inform predictive analytics – and future social engagement strategies, in turn. If, although highly unlikely, a company is interested in nothing more than raising brand awareness, boosting its social reach or creating a community of loyal followers, social media engagement metrics, such as number of fans and followers, number of interactions, audience response rates and rate of fan growth, are the best KPIs to determine social media value. (Table. 1)

Sources: Unlock the ROI of Your Marketing with Analytics, HubSpot

Achieving influence in the digital space, a concept taken from the domain of PR and comms, is becoming an increasingly prominent approach not only among brand-awareness-focused brands but also those driven by sales. Mark Shaefer, author of Return on Influence, for example, argues that social media actions such as retweets and likes are a testament to a brand’s influence, and that those “effects” are proving to be measurable and cost-effective. Of course, going back to business objectives, the picture is usually never black or white so it is incumbent on an organisation to find the right “cocktail” of social KPIs by closely aligning metrics with the company’s specific social media goals and broader business objectives. A brand that has famously succeeded in determining the right “mix” of metrics of performance indicators to evaluate performance is Procter & Gamble. According to its chief marketing officer, Marc Pritchard, cited in Marketing Magazine, the company has been using a proprietary Market Mix Modelling system for more than ten years, with more and more resources being invested in social channels. The monetary return on marketing spend is then calculated through econometric analysis by measuring sales and spending, and competitor comparison. So ensuring that a company tracks the right metrics and has the right measurement tools in place is a paramount prerequisite for measuring social media performance. This means understanding the specifics of the customer journey and acting accordingly with the view to meeting prospect expectations. A sales-pipe focused view of the user experience with a brand, for instance, indicates the following milestones: • Raising brand awareness (top of the funnel)

TAblE 1 SOCIAl MEdIA METRICS Social media engagement (influence) number of interactions, likes, retweets, replies, comments Pros

Indicates reach

Cons

No direct correlation to sales

Solution

Enable conversion directly on the social channels themselves

Traffic from social media (SEO value) the percentage of unique or returning web visitors that comes from social channels to blogs and landing pages Pros

Potential for lead generation, which could be measured

Cons

Impossible to gauge brand sentiment

Solution

Place social sharing buttons on your website to enable content sharing, which indicates brand endorsement

Social conversion rate (the sales metric) the percentage of visitors from social media that converts Pros

Direct correlation to the bottom line

Cons

Impossible to track top of the funnel to bottom of the funnel activity through traditional marketing methods

Solution

Closed-loop analytics, which shows a 360-degree view of the customer journey – from the top to the bottom of the funnel

USINg lINgUISTICS TO MEASURE ROI In its attempt to solve the social media measurement challenge, Bottom-Line Analytics has come up with a predictive modelling approach based on an algorithm devised by (!) linguists. The metric, called Social Engagement Index collects social data in four steps:

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Prospect engagement and lead conversion (middle of the funnel)

•

Sales conversion (bottom of the funnel)

These stages are equally critical, as they all lead to the coveted goal – generating quality leads and turning them into customers. But it is the bottom of the funnel performance indicators that have a direct link to ROI. Using closed-loop analytics offered by marketing automation tools helps estimate the exact ROI of any marketing effort, including social media.

FEATURE - ANdERSON

ThEy All lEAd TO ThE COVETEd gOAl – gENERATINg qUAlITy lEAdS ANd TURNINg ThEM INTO CUSTOMERS

All social media channels are mined for brand context conversations, e.g. brand mentions. Conversations are parsed into positive and negative review groups and further divided into key topics. Engagement index is derived using 30 linguistic rules to score mined brand/topic social media conversations. Metrics are aggregated and time-coded by week.

The figures are then linked to client sales and demand, and thus, the correlation between brand sentiment and sales is estimated.

METRICS≠ROI There are numerous blog posts dealing with social media ROI that erroneously equate the business value of social media to the metrics used to measure it. To accept this as a truism would be tantamount to focusing on the business benefits and forgetting that there are any costs of investment involved in the social media endeavour. While there are lots of “universal” formulae for measuring social ROI out there, to recommend any one of them would be to oversimplify the whole social ROI debate. Every company has its own way of calculating costs and there is no one-size- fits-all solution for determining the right mix of social media KPIs. Just as social media performance indicators are a variable that is unique to each brand, so should be the ROI formula a company applies. ThE kEy TO EFFECTIVE SOCIAl MEdIA ROI MEASUREMENT: FUll INTEgRATION The process of measuring social ROI can benefit from the use of a unified marketing automation tool, backed by a lynchpin holistic strategy, which views social media activity and performance in the context of the broader business objectives. An inbound marketing strategy, for example, allows you to approach social media analytics with an integrated mindset and to “de-silo” marketing and sales to work around a common goal that is aligned with a business’ short-term targets and long-term objectives. This will not only give the two teams a “bigger picture” view of what it is the respective organisation is trying to achieve, but it will also help encourage a collaborative approach to identifying the right metrics, taking into account what are usually the two sides of the same coin. Research by PulsePoint identified embracing full-funnel inbound marketing thinking based on a 360-degree view of the customer journey as the key to bridging the gap between the consumer and existing digital marketing practices. To achieve that, marketers need real-time intelligence that only unified marketing automation platforms, with their all-in-one tracking, testing and conversion capabilities, can offer. So for effective measurement of social media ROI you need the integrated nature of an inbound marketing strategy combined with the granular analysis provided by an all-in-one marketing automation dashboard, such as those offered by SaaS (software-as-a-service) providers like HubSpot, Eloqua and Marketo. As the demands for relevant social content increase, an integrated approach to marketing and sales, an inbound marketing strategy and the use of a unified marketing automation tool are the key to tailoring your content to your specific audience and identifying the right metrics to track. Armed with this intelligence, you should be confident next time you have to face tough ROI questions in the boardroom. The benefits are multifarious – not only does this prove the business worth of your social media efforts but it offers critical

intelligence for future social engagement, thus making your social offering more relevant to your audience, boosting social engagement and ultimately, sales.

hubSpot marketing automation tool automatically tracks metrics such as visit-to-lead and lead-to – customer conversion rate, while also gauging social reach by channel.

Biserka Anderson, Mlitt (Dist.), is Content Marketer at Brightfire, an inbound marketing company and a hubSpot Gold partner with offices in london and Glasgow. She has worked as a journalist, editor and marketing professional for the better part of a decade.

FEATURE - ClARk

IS IT All AbOUT ThE CUSTOMER?

e all love a definition don’t we? Primarily so we can refine, tweak or rewrite it completely. For Marketers of course, there is no definition that receives so much attention as that of ‘marketing’ itself. The UK Chartered Institute of Marketing (CIM) NIGEl ClARK has settled on “the management process responsible for identifying, anticipating and satisfying customer requirements profitably”, although it prefaces this with some cautionary words that “in the fast-moving world of business, definitions rarely stay the same” and “Marketing has been described as…”. Both sentences suggest the CIM is saying ‘we feel we need to give you a definition, but don’t blame us if you don’t like this one and don’t worry because it’s bound to change shortly anyway.’ However, having implied the CIM doesn’t have the courage of its convictions to pin a clear definition of Marketing to its mast, I can sympathise with its reticence. Marketing is not an exact science, so it should elude clarification in a neat and snappy sentence. And isn’t ambiguity so much more intriguing and current than clarity anyway? I can see #ambiguous more likely to trend on Twitter than #simple (without the ‘s’ on the end, of course)! The aspect of being a Marketing professional that constantly challenges me is the dogged focus on the customer: the premise that a marketer should obsess about the customer, almost to the exclusion of anyone else. I do not doubt that the customer is my primary concern, but to the exclusion of any other stakeholder in my business? Do I keep both eyes fixed firmly on my customer or do I let one wander lazily to see who else is impacting my business’ fortunes? I have spent most of my career working in services marketing, and more specifically professional services – financial, legal, consulting and engineering – although I did spend a short, halcyon period designing a Marketing strategy for a UK crisp and snacks manufacturer. If you read many Marketing textbooks and journals, that latter position would qualify as ‘proper’ Marketing: a role where Marketing ‘owns’ the customer, even though they are too numerous to know any of them individually and they are all carved up into ‘segments’ using the latest algorithm. A position where you feel, or at least act, like a master of the universe as you tweak, hone and optimise your Marketing Mix with the expectation that even more people will respond instinctively by munching on another bag of your latest exotically-flavoured potato snack. In professional services marketing it has always been more uncertain or maybe just more ambiguous. Your customer – I will persevere with customer, but professional services colleagues will

ThERE WAS PRObAbly A gOldEN AgE OF MARkETINg WhEN All A PROdUCT MARkETER NEEdEd TO dO WAS dESIgN A WINNINg TV COMMERCIAl now be screaming ‘client’ at me – are not that numerous, certainly not compared to crisp eaters, and you have a good chance of meeting and even befriending one. You know the customer probably objects to the idea of being ‘owned’, but either way it is probably not your concern. Partners, managers, consultants, etc. ‘own’ the customer, which leaves you as a marketer to manage the corporate message, but always worrying more that what is coming out of your colleagues’ mouths influences the customer far more than any of your carefully constructed communications. So then your understanding and influence over that cadre of customer managers – please don’t call them a sales force – becomes more significant than anything you do directly with the client, doesn’t it? But is it really your colleague that the customer is listening to? As they are more likely to be representing an organisation rather than an individual, are they not more influenced by what their shareholders are telling them to do or even a government regulator? And in these days of staff engagement and being a good corporate citizen, how influential are their own people or their local community? It leaves me wondering who I should ‘identify, anticipate and satisfy’ (using the CIM terminology) and wouldn’t it be a whole lot easier if I went back to potato snacks? Of course, I am doing a huge disservice to the marketing gurus who persuade us we really want to try BBQ Kangaroo crisps. There was probably a golden age of marketing when all a product marketer needed to do was design a winning TV commercial, push it out on the one commercial channel and wait for the customer to sweep their product off the supermarket shelf. But everyone knows it isn’t now just about a one-way, hard-wired line of communication from the marketing ‘god’ to the respectful consumer. We are all dealing with media proliferation, the influence of social networking and growing consumer confidence that they don’t just have to take what companies offer them. The marketing communication channel has to be two-way at least and then the marketer is frequently neither in nor aware of the conversation. And it is overly simplistic to say for product marketing that it is all about the item itself, whereas for services marketing it’s just

about people. I’ve always been a big fan of Michael Dell’s concept of customer service ‘moments of truth’: the idea that even if you’re buying a laptop online and you never meet or encounter a Dell employee, it doesn’t just matter how great the product is. A customer will never buy a Dell product again if someone has forgotten to include a power lead and then receives a slovenly response from customer services. People matter to any business, product offering, value chain, etc., so if some part of your marketing mix is not making sure all your people are as passionate and on message as you are, you’re not on your ‘A’ game. As another example confirms, I’ve often joked that it must be much easier for a product marketer to terminate or delist an item if it’s not selling well, in comparison to me suggesting to a senior partner that his service is no longer wanted by a client. But, in truth, I’ve been party to a conversation between marketing, sales and production on the flavour mix for a packet of salt and vinegar crisps, and I can assure you the conversation was no less passionate or forthright than any a lawyer could construct. So yes, of course the customer matters and their satisfaction should be your primary concern, but whatever you market, think of yourself as the customer’s voice within your organisation, not their owner. And don’t forget that there is a range of stakeholders you need to add into your marketing mix if you’re going to achieve the best outcome both for the customer and for you. Let that other eye wander and embrace ambiguity!

SO yES, OF COURSE ThE CUSTOMER MATTERS ANd ThEIR SATISFACTION ShOUld bE yOUR PRIMARy CONCERN

Nigel Clark is the European head of Strategy and Marketing for Sinclair Knight Merz, a leading projects firm, with global capability in strategic consulting, engineering and project delivery. he has worked in professional services marketing for more than twenty years and is a former director of the Professional Services Marketing Group. In that role he worked with Cambridge Marketing College to establish the first CIM accredited qualification for professional services marketers and remains a tutor on that programme.

glObAl SOCIAl NETWORkINg: VERSION 2.0 Update on a fast changing world wide web. INTROdUCTION ssue Two of the Cambridge Marketing Review included a feature I wrote about social networking, in which I surmised that Facebook was not a suitable option as a one-stop-shop for social marketing globally. PAUl WooDhoUSE Although Facebook dominated in terms of coverage in the world map of social networks, its lack of visibility in highly populated countries like China and Russia meant that using it as a global marketing tool would not be as effective as one might assume. That was back in late 2010/early 2011 and as is so abundantly obvious technology waits for no man. Time and trends move incredibly fast and the social media landscape has changed dramatically. New players are finding a niche place in the market and marketers are utilising these platforms to engage and build relationships with their stakeholders using an integrated approach. Marketers have social marketing plans and employ specialist digital experts and agencies to compete in the social arena. Facebook’s phenomenal rise from a juvenile prank to the most visited social networking site in the world is well publicised, but how exactly has the landscape of global networking changed over the last year?

ThE CURRENT SOCIAl MEdIA lANdSCAPE Cavazza (2012) has, for four years, produced an interesting infographic on the Social Media landscape. His 2012 iteration (Figure 1 on the opposite page) shows that Facebook, Twitter and Google+ are now the core central networks due to their mass appeal, ease of use and large amount of functionality. However, there are also many peripheral groups, smaller players but with a specific niche based on interest, interactivity and media platform. Although Cavazza’s graph is useful for comprehension of the complexity of social media, it is not an exhaustive list of available services. One of the key issues in my earlier article in determining that Facebook was not a one-stop-shop for global social marketing was that it had a lack of presence in Russia and Asia. Cavazza’s

look to the web: read more on social networking trends at: http://www.fredcavazza.net/2012/02/22/ social-media-landscape-2012/ and http://vincos.it/world-map-of-social-networks/

FEATURE - WOOdhOUSE

ThE CURRENT glObAl SOCIAl NETWORkINg lANdSCAPE Facebook Facebook is still the largest and most influential social network. It has added a robust advertising platform to the site and is also helping organisations to track their social marketing activity. As an engineer-focused company it has also not lost sight of developing technologies and the growth of competition, and as well as continuing to innovate it has also been in acquisition mode. After acquiring the mobile photo sharing application Instagram for $1 billion, Facebook bought another mobile start-up called Glancee, underscoring the importance of mobile to its growth strategy.

Figure 1 – Social Media landscape, Source: Cavazza (2012)

graph only reflects western countries’ social platforms; it does not take account of eastern markets like Russia or Asian markets like China or Japan. Another blogger, Vincenzo Cosenza, periodically produces a world map of social networks and this gives a nice visual of the coverage that the largest social networks have globally. When we last looked at the landscape, coverage was predominantly Facebook-led although not in Brazil, Russia and Asia (see Figure 2). The main difference over a year has been the contraction from 17 different top social networks to just 6, and the Facebook blue is even more dominant than it was before, significantly in South America, (see Figure 3). For the past 18 months Facebook has been in acquisition mode. With more than 800 million active users it has established a leadership position in 127 of 136 countries. Its presence is strengthened by its ability to overtake Orkut in Brazil, increase its user-base in the Netherlands giving it domination in Europe, and utilising the high use of mobile networking in Japan to compete more effectively there. Facebook has, however, continued to struggle in the Russian market. There is still an ongoing battle between the two main local platforms: VKontakte and Odnoklassniki. Vincos uses Google Trends to analyse the landscape and this indicates that VKontakte is winning but Alexa rankings disagree.

Figure 2 – World Map of Social Networks (as of December 2010) Source: Vincos

Figure 3 – World Map of Social Networks as of June 2012 Source: Vincos (2012)

June 2012 Countries

SNS #1

SNS #2

SNS #3

Australia

Facebook

Twitter

Austria

Facebook

Badoo

Twitter

Belgium

Facebook

Badoo

Brazil

Facebook

Orkut

Badoo

Canada

Facebook

Twitter

China

Qzone

Tencent Weibo

Sina Weibo

Denmark

Facebook

Badoo

Finland

Facebook

Twitter

France

Facebook

Badoo

Skyrock

Germany

Facebook

Wer-kennt-wen

Xing

India

Facebook

Orkut

Italy

Facebook

Badoo

Twitter

Japan

Facebook

Twitter

Mixi

Netherlands

Facebook

Hyves

Twitter

Norway

Facebook

Twitter

Portugal

Facebook

Badoo

Orkut

Sweden

Facebook

Twitter

Russia

Odnoklassniki

V Kontakte

Facebook

Spain

Facebook

Tuenti

Badoo

United Kingdom

Facebook

Twitter

United States

Facebook

Twitter

Figure 4 – Top Three Social Networks by Geography (as of June 2012) Source: Vincos (2012)

Glancee is an app that tells you when friends or people who share a common interest are nearby by pulling information from Facebook. Glancee has racked up around 30,000 downloads and has around 20,000 users having been one of the most talked of applications over the past year. The Instagram purchase gained a lot of mainstream media attention and with 35 million users it was a large move from Facebook to add to its photographic and visual technology. We’ll come back to Instagram later. Facebook revenue generation has been one of its major success

factors based on increased advertising revenue, which accounts for 85% of its income. However, according to O’Reilly (2012) “many marketers feel they are being under served by the world’s largest social network when trying to analyse how their campaigns boost their own revenues.” Also, on 18 May 2012, Facebook launched one of the largest technology stock sales in history. By becoming a publicly traded company listed on the NASDAQ stock exchange, it aimed to raise $16 billion. An article on MSN (2012) in May showed some interesting statistics on Facebook at the time of its launch onto the stock exchange: • $104 billion: the valuation of Facebook at the time of its IPO • 421.2 million: the number of shares Facebook is selling in its IPO • $38: how much a single share in Facebook will cost you at the time of its IPO • $24 billion: how much Mark Zuckerberg’s shares will be worth • $1: how much Mark Zuckerberg’s annual salary will be, starting from 2013 • 901 million: the number of active users Facebook has around the world (as of April 2012) • 488 million: the number of Facebook users accessing the service on a mobile device • $1 billion: the amount of profit Facebook made in 2011 • $5.11: how much money Facebook made from each user in 2011 • 3,027: the number of days from Mark Zuckerberg first launching ‘The Facebook’ on 4 February 2004, to the company’s IPO on 18 May 2012 As we now know Facebook’s flotation was anything but smooth and the brand took a battering. It is still feeling the bruises from that experience and discontent continues to grow among businesses about the effectiveness of the company’s advertising platform. It will be very interesting to see this time next year where Facebook stands as a ‘likeable’ platform for advertising and marketing. With over 465 million accounts tweeting 175 million times a day, Twitter’s rise over the past 12 months has been astonishing. It is stated that 1 million accounts are added every day at a rate of 11 per second. Twitter’s presence is truly global, with the highest number of users being in the United States, Brazil and then Japan. The Netherlands has the most active Twitter user base, according to Semiocast, and it is the second most popular social network in the UK. As is so often the case, many countries still have an influential presence from their own regional social networks. Although Facebook has broken many of these trends, Twitter will need to do the same if it is to increase its growth. The numbers read very well for Twitter though, with its projected

gOOglE+ What about the fourth most valuable brand and the most visited website in the world? Surely Google would not allow all of this to happen without getting in the act?... well it hasn’t! Google+ was launched in July 2011 and according to its own statistics is the fastest growing social network with 90 million active users, as of January 2012. According to a statement from the CEO of Google, Larry Page, “full year revenue was up 29%, and our quarterly revenue blew past the $10 billion mark for the first time.” The figures quoted would mean that Google+ increased its growth by double those quoted three months prior. These figures were widely criticised by some who said that quoting registered users did not show a true reflection of popularity. In fact one journalist went as far as to say: “Think of the millions of people who’ve registered for Google+ but never use it. Second, given the huge popularity of Google search, Gmail, and YouTube, it’s actually surprising that so few people who have registered for Google+ are using those more popular services on a daily basis – only 60%. After all, remember that a lot of Google+ users accidentally became Google+ users only because they were already attached to another Google service”. (Agrawal, 2012). ThE NEW PRETENdERS Track Social’s Social Media Zone is a portal for assessing the activity of all Social Media Brands on the major platforms. In terms of growth, there are some interesting new networks and platforms that marketers may or may not already be aware of. The leader board that this is taken from changes daily but as of mid-May 2012, the top five were:

Source: http://twittercounter.com/pages/100

1 Instagram 2 MyYearbook 3 Pinterest 4 Bebo 5 Scoop.it Source: http://tracksocial.com/

FEATURE - WOOdhOUSE

advertising revenue for 2012 at $259 million. This is estimated to increase to $540 million by 2014. It is still very much a relationship tool and for marketers, too much heavy promotion will not be tolerated. Where advertising has become reasonably accepted on Facebook now, Twitter users are still influenced more by friends. Sixty-nine per cent of users will “follow” a feed based on recommendations by friends. 47% of users find and follow feeds through an online search, 44% based on Twitter suggestions and only 31% based on promotions. Celebrities are still the most followed entities with the top five followed accounts all being celebrity accounts including (as of May 2012): 1 Lady Gaga (@ladygaga) – 27,500,719 followers 2 Justin Bieber (@justinbieber) – 25,510,161 followers 3 Katy Perry (@katyperry) – 23,803,669 followers 4 Rihanna (@rihanna) – 23,093,088 followers 5 Britney Spears (@britneyspears) – 18,928,604 followers

SOCIAl MARkETINg IN 2012 The evolution of social networking is not declining, far from it; its acceleration has been aided by diversification across mobile networks and other technological innovation. Top visited websites globally according to Alexa rankings (as of May 2012): 1 Google 2 Facebook 3 YouTube 4 Yahoo! 5 Baidu.com 6 Wikipedia 7 Windows Live 8 Twitter 9 QQ.COM 10 Amazon.com 11 Blogspot.com 12 LinkedIn Facebook, Twitter and LinkedIn are in the top 12 visited websites in the world. This growth is giving marketers increased opportunities. Although the understanding of social marketing has increased, it is important to remember the core objective is relationship building and not as a sales tool. With so many platforms available and usage across social media ever increasing, it would be easy for marketers to assume that a presence is essential. Installing your brand on social media is not about choosing one or several social platforms and opening profiles, it is about defining objectives and allocating resources accordingly. The platform choice should be made based on your strategic approach. As has been shown, the social media ecosystem is not a stable one so mass marketing is not a sensible approach. Choosing one or several platforms is not a long-term strategy; it is a short-term tactic. Of course, using one single platform, like Facebook, has its limitations too. Forgetting geography for a second there is demographics, specialist interest groups and other ways to segment each networks membership. Competition is something else to monitor, Facebook is by far the most popular social platform but it is also the one where competition is the most intense. If there are much bigger and more successful brands already with a strong presence, does your brand have the resources and compelling strategy that will impact, or are

Source: onlinemba (2012)

SUMMARy OF SOCIAl MEdIA USAgE STATISTICS FOR 2012

FACEbOOk: 1 Facebook has 845 million active users 2 The average Facebook user has 130 friends 3 The average Facebook visit lasts 23 minutes 4 46% of Facebook users are over the age of 45 5 57% of Facebook users are female (43% male) 6 57% of Facebook users report having been to “some college” (24% bachelors or graduate degree) 7 47% of Facebook users report making between $50,000 – $99,000 annually (33% between $25,000 – $49,999) TWITTER: 1 Twitter has 127 million active users 2 13% of internet users also use Twitter 3 54% of Twitter users use Twitter on their mobile devices 4 36% of Twitter users tweet at least once a day 5 The average visit on Twitter lasts for 14 minutes 6 59% of Twitter users are female (41% male) gOOglE+: 1 Google+ has had 90 million unique visitors 2 Google+ users are 71% male 3 The most common occupation of a Google+ user is an engineer 4 44% of Google+ users are “single” PINTEREST: 1 Pinterest has had 21 million unique visits 2 The top locations for Pinterest users are Mississippi, Alabama, Kentucky and Tennessee 3 The top interests of Pinterest users are crafts, hobbies, interior design and fashion 4 82% of Pinterest users are female (18% male) 5 The average Pinterest visit lasts 17 minutes lINkEdIN: 1 LinkedIn has 150 million registered users 2 75% of LinkedIn users use it for business purposes 3 There are 2 million companies on LinkedIn 4 50% of LinkedIn users have a bachelors or graduate degree

results going to be limited? Think about the return and think about the objectives before jumping on the bandwagon. A long-term, successful conversation-based engagement platform is a much more ambitious project, which will require more time and energy but can achieve strategic goals, while shortterm campaigns may be useful to test the effectiveness of different platforms. WhAT dOES ThE FUTURE hOld? The evolution of mobile marketing and the integration of this into your strategy is a sensible approach as 2012 will be the year to strengthen an existing presence or mobile applications. It may be worth experimenting because there are numerous opportunities at a marketer’s disposal. Like all marketing projects, measurement and control of social marketing is essential so that we are always learning from what we are doing. Diageo’s Phillip Gladman, may think social media is all about numbers and ‘likes’ but are these true measurements of success, or is an integration of objectives with longer-term strategy going to bring true return on investment? It is an easy assumption to make that Facebook’s continued rise to global dominance means that it is now becoming a onestop-shop to global social marketing. But when we remember the ethos and values behind not just social marketing but the marketing discipline as a whole, then we must ask ourselves if Facebook is the right platform to truly engage with your stakeholder, and does its coverage really provide value to your brand? This is a question only you can answer in your respective roles. lINkS: Semiocast http://semiocast.com/publications/2012_01_31_Brazil_ becomes_2nd_country_on_Twitter_superseds_Japan Vincos Blog http://vincos.it/world-map-of-social-networks/ Cavazza http://www.fredcavazza.net/2012/02/22/social-medialandscape-2012/

Paul Woodhouse is a Marketing Executive for Vindis ltd. With a career spanning many sectors on both agency and client side, Paul has a passion for writing, and freelances for Cambridge Marketing College and other organisations.

VIEWS - FROST

COMMUNICATIONS ANd REPUTATION MANAgEMENT

ost of the marketing and communications professionals would both salivate and recoil at the idea of managing the reputation of a global Internet service, especially one that started small and grew to become a cornerstone of the web such as Facebook DEBBIE FRoST or Google. It is the rare intersection Director of International where innovation, growth, policy, laws Communications and Public Policy and communications all collide.

MOVINg FAST At many companies, new products and services are created or built over months or even years. At engineering-driven companies like Google and Facebook, new features and products are sometimes created overnight. There is rarely, at least in the early days, a thorough roadmap of soon-to-be-developed features that you can plan to communicate about. Nor can you have much control over the timing of when they go out. If it’s ready, it gets shipped. At that point, the communications and policy teams can only advise as to likely scenarios. The upside is there is always something to talk about to users and to the media. You can generate news almost constantly, and across all kinds of media from tech, to consumer, to business. Having a constant flow of improvements demonstrates innovation, and speaks to the very core of the company’s philosophy. You don’t need to drum up special ideas or roll out senior executives to advance your message of being innovative – the product cycle does it for you. The downside is that the time you have to get your ducks in a row is very limited. The majority of communications strategies I prepare are written in an email. There’s literally no point trying to set it out in a document and provide rationale. If you start writing anything, it should be the messaging, the comment for press, or a quick Q&A. At Facebook, moving fast is at the core of what we do. ‘Move fast and break things’ and ‘Done is better than perfect’ say posters on the walls. This makes for many challenges, as not only do features fly out the door almost daily, but occasionally products can have “bugs” – which you quickly learn is engineer speak for every problem from flat out broken to ‘doing something weird’ – and you have to manage the negative consequences. In 2010, a technical snafu made features we were supposed to be testing only to Facebook employees live to every Facebook user. The problems were so complicated that we had to turn off Facebook for several minutes to rectify them. This is the time when you wish that your press statement could just say: “Whoops, sorry!” And ours

WhEN yOU ARE MOVINg FAST, ANd yOUR PROdUCT IS USEd by MIllIONS OF PEOPlE WhO WIll NOTICE WhEN ThE SERVICE IS dOWN, yOU jUST hAVE TO own yOUR MISTAkES

did (in more words of course, we’re professionals!) When you are moving fast, and your product is used by millions of people who will notice when the service is down, you just have to own your mistakes. Fix the issue, explain what happened (unless it’s something that would affect the security of the site if shared), apologise, and move on. Problems that are self-created can be owned easily, and fixed. You can more easily communicate about an issue or manage your reputation reliably when the problems can be managed internally. Where managing the reputation of a service that organises or helps people share content that they – not the company – create, is where it gets harder. USER gENERATEd CONTENT ANd bRANd VAlUES Everyone loves a good puppy video. Or one where cats do silly things. The Internet created the opportunity for all forms of content, from the academic to the banal, to find an audience. Profound things can happen. Social media is often credited for its role during the Arab Spring. Creating tools for people to use to create change is a good thing for the world, and makes for a great place to work. Conversely, when the service your company provides enables people to share content they create, or helps people find content on the web created by others, there will inevitably be a time when your brand becomes linked with something offensive, unpopular or even illegal. There is no textbook way to manage this, especially when subjects are emotive or political. At Google, early on, a search for the word ‘jew’ yielded a hate site as the number one result. Headlines in dozens of countries criticized Google for being anti-Semitic. Communities and people of all faiths were outraged about the high ranking of anti-Semitic sites for this keyword, and Google was inundated with complaints and threats of boycott and legal action.

The search results – while disturbing – were provided by an algorithm. Not chosen by Google, but by machines. While the communications team were able to explain to media what was happening, they were not inclined to give as many column inches to our side of the story, and so media relations was ineffective at quelling outrage among the broad international user base. Deeply involved in the brewing crisis was Google co-founder Sergey Brin, himself Jewish. The team looked closely at the values of the brand – a brand built on an innovative, automated formula for the comprehensiveness of its search results. A brand people trusted to return results that were the process of the democratic nature of the web and not by who paid the most, or what the company itself thought. We would never change the results – not even in the face of such public outcry. Instead, the team came up with the idea to use our own product to make the explanation. Using the adspace at the time, we placed a link to an explanation of the search result for this term. Here, people could learn more about the search results being shown, and how the company felt about it. The communications team pushed out this story – giving media a fresh reason to write about this issue, but this time with the company’s explanation front and centre. Long after the headlines died down, we had all learned an important lesson of standing by the values of the brand, even in the face of outrage, to preserve the overall trust of users. The explanation (http://www.google.com/explanation.html) still exists today. It was about the 6th result for the same keyword search. One of the most interesting things about user-generated content on the web is how different governments deal with it. As a communications professional, I find this the most interesting and complex of all the challenges. It is complicated in part because it is not one where brand values can always be the foundation of decisions, and may not stand up to the cultural sensitivities or specific laws in a certain country. At Facebook, our goal is make the world more open and connected. We provide tools for people to share and connect with each other. Our brand is built on empowering people to express themselves. Its not as if there are no rules – there are many rules about what you can and cannot share on Facebook (see our Community Standards, Terms of Use) but the whole service is designed to help people share, as long as they do so while respecting the rights of others. Sometimes people share content that is just awful and it becomes tabloid fodder. News editors have admitted that putting Facebook or Google in a headline will get more views. Such is the downside of success. So when there is controversial content, headlines sweep the globe about a ‘Facebook child abuse video’. PR people everywhere would cringe at these headlines. You want to yell at a reporter: It’s not Facebook’s video! It’s all over the web! Why are you suggesting our service is rampant with videos of child abuse? And it is sadly a real example. This year, people worldwide were

VIEWS - FROST

WE hAd All lEARNEd AN IMPORTANT lESSON OF STANdINg by VAlUES OF ThE bRANd, EVEN IN ThE FACE OF OUTRAgE

appalled when media attention turned to the video of a Malaysian woman beating a child. At the time it “went viral”, people wanted Facebook to take it down. Aside from that being a really difficult technical challenge when millions of people were sharing links to it on other services, the video was not against our terms. Upon investigation, we learned that the woman in the video had been brought to justice – something that may never have happened had the video never seen the light of day. We explained to the press (without yelling): how would this woman have been caught if the video had been censored? While graphic imagery is hard to watch, how would PETA or the RSCPA highlight the plight of neglected animals if no one could see any pictures? How would people learn about the true nature of historical atrocities if you could only use words? We needed to explain, explain, explain. And find other examples where imagery was the piece that led to action, such as when TIME photographer James Nachtwey’s photos of the Rwandan genocide surfaced in 1994. Eventually, the media included our perspective, and the attention went elsewhere. That is it until next time. And ‘next times’ happen everyday because billions of pieces of content are shared daily on Facebook. Sometimes we find that people share content that is illegal in one country, but may even be protected in another. Flag burning is protected speech in the US, but in India, there are strict codes for how you may even wear a flag on your clothing, let alone burn it. Our approach as a company is to restrict access to content from countries where it is illegal. We blocked access to the ‘Everyone Draw Mohammed Day’ cartoons from countries such as India and Pakistan. However, this is a very hard problem. gROWTh ANd ExPECTATIONS Many of the reputational challenges that have faced both Google and Facebook came precisely because of their growth in popularity. Managing the reputation of a company as it goes from Internet

underdog to a cornerstone of the web comes with many challenges. In 2002, when ‘search was solved’, it was hard to get people to write about Google. Even though journalists liked the service because it aided in research, and were interested in new features and services, it didn’t sell papers. They were even less interested in the keyword advertising model because no-one had really done it, and no-one could tell if it worked. We had to work hard as a small team (6 of us) to get stories out about how useful the service was, or how it was helping advertisers. Not so today for either company. A blessing and a curse, both companies remain in the spotlight. Their PR teams are very busy with the evolving challenges of regulation, competition and being publicly traded.

Debbie Frost is Director of International Communications and Public Policy at Facebook, where she is responsible for developing and managing communications about products, advertising, policy and corporate affairs for Facebook outside of the United States. Prior to joining Facebook, Debbie spent more than four years at Google, where she built the company’s international PR team and led communications across Europe, Asia and latin America. Debbie spent her early career in the UK and Europe, managing communications at Nike Inc. During this time, she was responsible for communications supporting Nike’s $1bn European apparel business and led Nike’s communications team at the Sydney 2000 olympics. Before that, Debbie was a PR manager at BursonMarsteller, where she worked with clients such as Unilever, Nike, British Airports Authority, and West ham United Football Club. Debbie is an Australian, was born and raised in hong Kong, and has an honours degree in law (llB) from The University of Warwick School of law in the UK.

ThE “COOkIE lAW” What should businesses be doing to ensure compliance?

ost readers will not have failed to notice the blizzard of pop-ups that now confront users upon their first visit to particular websites. These pop-up requests for users’ consent to the usage of cookies and similar technologies represent the most visible impact of the so called “Cookie JAMES GRACE Law”. Despite the increase in the appearance of such pop-ups, it is clear that the majority of organisations are yet to get to grips with the implications of the new law. By way of example, KPMG has published the results of its analysis of 55 websites for compliance with the provisions. During its reviews of these 55 websites on 28 and 29 May 2012, KMPG found that only 10 were employing measures that could be said to be compliant. This is unsurprising given the general confusion in the marketplace as to the impact and extent of the new law. Indeed, both the government and the Information Commissioner have acknowledged that complying with the new rules is not a straightforward process. This note, whilst not exhaustive, seeks to clarify the impact and extent of the “Cookie Law” whilst providing some practical guidance as to the steps that organisations should be taking and the implications of non-compliance. The content of this note is largely based upon guidance issued by the Information Commissioner’s Office (the “ICO”) the independent authority responsible for, amongst other things, the enforcement of the new law.

WhAT IS ThE COOkIE lAW? The term “Cookie Law” is generally used to reference the new EU privacy legislation which stipulates that the storing and accessing of information on users’ computers and other devices is only lawful on condition that informed consent is obtained. These new provisions have been implemented in the UK through the Privacy and Electronic Communications (EC Directive) (Amendment) Regulations 2011, which amend the Privacy and Electronic Communications Regulations 2003 (collectively “the Regulations”). The new law came into force on 26 May 2011. However, the ICO granted a 12 month lead-in period prior to commencing enforcement, to allow website operators time to make the necessary changes and arrangements. Under the regulations, the use of cookies is only now allowed if the user concerned: • has been provided with clear and comprehensive information about the purposes for which the cookie is stored and accessed; and • has given his or her consent. The regulations apply to cookies and similar technologies used for storing information, such as Local Shared Objects, web beacons

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IT IS ClEAR ThAT ThE MAjORITy OF ORgANISATIONS ARE yET TO gET TO gRIPS WITh ThE IMPlICATIONS OF ThE NEW lAW

or bugs. Any reference in this note to cookies includes all of these similar technologies. Furthermore, any reference to websites covers all technologies that use cookies. Why hAS ThE “COOkIE lAW” bEEN IMPlEMENTEd? In short, the law has been changed as a response to growing privacy concerns over the collection and use of data relating to individuals’ behaviour, often in circumstances where the individual concerned is not aware of such collection and use. Regulators are concerned because cookies can be used to collect personal data about the user, which can then potentially be misused. Not all cookies are seen as problematic. The concerns relate primarily to cookies which are more intrusive, such as those used to create detailed profiles of an individual’s browsing activity. However, the new rules apply to all cookies, whether or not they are used to collect personal data (though what website operators need to do to comply will depend on how intrusive the technology is).

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List all cookies currently used on their website, including cookies set by third parties authorised by the website operator to do so, as the website operator may remain responsible for such cookies. Common examples of such third party cookies may be Google Analytics or other third party advertising software. Confirm the purpose(s) of each cookie. Website operators should consider the purpose for which each cookie is used. Cookies necessary to perform an essential function of the website or deliver a service requested by users do not require the user’s consent. Website operators should be aware that these exceptions to the requirement to obtain consent will be construed narrowly. By way of example, a cookie used in the context of an online shopping-basket facility where the website remembers which products the user chose on a previous page, would likely be deemed necessary to perform an essential function, third party advertising cookies would not. Identify what data each cookie holds and confirm whether the cookie is linked to other data the provider holds about a user. In the event that any data collected by the cookies may be linked to an identifiable living individual, consideration should be given to obligations under the Data Protection Act 1998. Confirm the type of cookie. Some cookies, for example persistent cookies, are likely to be more privacy intrusive than others, such as session cookies. Confirm the lifespan of each persistent cookie. If the lifespan is not necessary to fulfil the purpose for which the cookie is used, website operators should consider whether it could be shortened. Confirm whether the cookie is a first-party or third-party cookie. Website operators should liaise with any third-party cookie providers to ensure that compliance is achieved in respect of all cookies contained on their websites.

WhAT PRACTICAl STEPS MUST bE TAkEN by WEbSITE OPERATORS TO ENSURE COMPlIANCE? As set out above, under the regulations, the use of cookies is only now allowed if the user concerned has been provided with clear and comprehensive information about the purposes for which information gathered in these ways is stored and accessed and has given their consent. To comply with these provisions website operators should take the following steps, as outlined in the ICO guidance:

Step 2: Assess how intrusive its use of cookies is Website operators should then, using as a basis the information gathered through their website audit, consider how intrusive their use of each cookie is. Greater priority must be given to obtaining meaningful consent for their more intrusive uses of cookies, such as those that involve creating detailed profiles of an individual’s browsing activity.

Step 1: Check what type of cookies it is using and how it uses them Ultimately, website operators need to identify all files stored and accessed from time to time, without any exceptions. If an exhaustive list does not exist, a comprehensive audit of the website operator’s website(s) would be appropriate. In undertaking a cookies audit, website operators should consider taking the following practical steps:

Step 3: decide on the best solution for it to obtain consent Once website operators know what they do, how they do it and for what purpose, they need to consider the best method for gaining consent. This is a two stage process: website operators must first provide users with “clear and comprehensive information” as regards the purposes for which cookies are stored and accessed and then obtain consent for this usage.

PRACTICAl WAyS IN WhICh WEbSITE OPERATORS CAN PROVIdE INFORMATION level and type of information Website operators should first consider the level and type of information that should be provided. Although the regulations are not prescriptive in this regard, the ICO has made clear that the text should be sufficiently clear and comprehensive to allow individuals to clearly understand the potential consequences of allowing the cookies should they wish to do so. The ICO’s guidance includes two main suggestions for ways in which information may be displayed. These are: • Table of cookies used The ICO suggests that it may be sufficient when dealing with technically sophisticated users to include within their privacy policies a table or list of cookies used and their purposes. • Broader explanations The ICO in its guidance also notes that levels of user understanding are likely to be low and so those using cookies will need to make a particular effort to explain the categories and activities of cookies in a way that people will understand. The ICO’s guidance includes the following sample description: “Our website uses four cookies. A cookie is a small file of letters and numbers that we put on your computer if you agree. These cookies allow us to distinguish you from other users of our website, which helps us to provide you with a good experience when you browse our website and also allows us to improve our site. The cookies we use are “analytical” cookies. They allow us to recognise and count the number of visitors and to see how visitors move around the site when they are using it. This helps us to improve the way our website works, for example by ensuring that users are finding what they are looking for easily.” Categories of cookies used In order to obtain informed consent it is important to have plain language explanations of the technical description of cookies, setting out in simple terms what they are and how they are used. The International Chamber of Commerce has published guidance on the use of cookies under UK law, which places cookies into four categories based on their functions. This guidance includes user-friendly descriptions of the four categories of cookies, which website operators may find useful when providing information to users. Given that certain cookies may fit into more than one of these categories, the way in which they are used should be tailored to the website in question. The four categories used by the International Chamber of Commerce and the suggested notice wording to be used in relation to each are set out in the table shown opposite. Visibility of information Although website operators will be loathed to impede the browsing experience, they must take care to bring information about cookies to the attention of users. In its guidance the ICO notes the importance of visibility in complying with the information requirements of the

ThE FOUR CATEgORIES OF COOkIES USEd ANd SUggESTEd WORdINg 1

Strictly necessary cookies “These cookies are essential in order to enable you to move around the website and use its features, such as accessing secure areas of the website. Without these cookies services you have asked for, like shopping baskets or e-billing, cannot be provided.”

Performance cookies “These cookies collect information about how visitors use a website, for instance which pages visitors go to most often, and if they get error messages from web pages. These cookies don’t collect information that identifies a visitor. All information these cookies collect is aggregated and therefore anonymous. It is only used to improve how a website works.”

Functionality cookies “These cookies allow the website to remember choices you make (such as your user name, language or the region you are in) and provide enhanced, more personal features. For instance, a website may be able to provide you with local weather reports or traffic news by storing in a cookie the region in which you are currently located. These cookies can also be used to remember changes you have made to text size, fonts and other parts of web pages that you can customise. They may also be used to provide services you have asked for such as watching a video or commenting on a blog. The information these cookies collect may be anonymised and they cannot track your browsing activity on other websites.”

Targeting cookies or advertising cookies “These cookies are used to deliver adverts more relevant to you and your interests. They are also used to limit the number of times you see an advertisement as well as help measure the effectiveness of the advertising campaign. They are usually placed by advertising networks with the website operator’s permission. They remember that you have visited a website and this information is shared with other organisations such as advertisers. Quite often targeting or advertising cookies will be linked to site functionality provided by the other organisation.

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IT IS UNlIkEly ThAT ThE ICO WIll ISSUE MONETARy PENAlTy NOTICES FOR VIOlATIONS OF ThE REgUlATIONS Figure 1: The website at www.ba.com uses implied consent for web users

regulations. It recommends a number of steps that website operators can take to help ensure that users can easily see information regarding cookies. These include: • Prominent links A prominent link on the home page or indeed every page of the website could be used to link to information about the cookies used. The link should have a title that makes it clear that this is where information about cookies can be found (for example “Information about cookies”) or could involve explanatory text (for example “Find out more about how our site works and how we put you in control”).Visit the web address http://www. number10.gov.uk/ for an example of this. • Using an icon Website operators could use a clickable image or icon to encourage users to seek further information. It should be clear to users that any icon used relates to cookies. Visit the web address www.virgin-atlantic.com/ for an example of this. • News items and blog posts News items or blog posts could be used to explain the provider’s policy on cookies and to link to the cookie information page. Given that website operators will often already use these tools to communicate with users, they may constitute a relatively easy additional measure in the short-term for drawing the attention of users to information about cookies. Visit the web address www.guardian.co.uk/info/cookies for an example of this. PRACTICAl METhOdS OF ObTAININg CONSENT Implied consent In the latest version of its guidance, issued only 48 hours prior to the end of the 12 month enforcement hiatus period, the ICO made

it clear that implied consent is a valid form of consent and can be used in the context of compliance with the revised rules on cookies. To rely upon implied consent the website operator must inform the user that a specific action on his part will be interpreted as him giving consent to the use of cookies. This information must be “clear and relevant” and should result in a shared understanding between the website operator and the user on the way in which and the extent to which cookies are used. The ICO gives website operators discretion to establish the extent of and ways in which they choose to provide this information, but sets out a number of factors which should be taken into account, including the way in which users generally expect to receive information from this particular site. See Figure 1 above. The website operator must also satisfy himself that the user’s actions are not only an explicit request for content or services but also constitute an indirect expression of the user’s consent to the setting of cookies. By way of example, if a website includes a clear and unavoidable notice that cookies will be used if the user enters the site, and if the user, on that basis, clicks through and continues to use the site, this would be sufficient to imply consent. Conversely, it is unlikely that reliance simply upon a privacy policy which is hard to find and/or understand would suffice. In some circumstances, for example where a website operator is collecting sensitive personal data such as health information, explicit consent may be more appropriate to ensure compliance. CONFlICT WITh OThER EU jURISdICTIONS Website operators should be aware that in adopting the above approach to implied consent, the ICO seems to have parted company with the majority of data protection regulators in other member states and the EU Working Party, which has clearly ruled

ThE ICO NOTES WIThIN ITS gUIdANCE ThAT ThE PERSON SETTINg ThE COOkIE IS “PRIMARIly RESPONSIblE FOR COMPlIANCE WITh ThE REqUIREMENTS OF ThE lAW”

out the use of implied consent. This of course may lead to difficulties for UK website operators that place cookies on the equipment of non-UK EU citizens relying upon the basis of implied consent. AFFIRMATIVE CONSENT The ICO has set out in its guidance several practical options that can be utilised to obtain prior affirmative consent. In most cases, these suggestions encourage providers to adapt existing techniques already used by online providers for other purposes like verification of age requirements or changes to their terms and conditions. The ICO has said it is up to individual website operators to establish which mechanism for obtaining user consent to cookies is appropriate for their websites. The options set out in the ICO guidance include: • Terms and conditions Consent may be obtained by using terms of use or terms and conditions that ask for consent from users when they first register or sign-up to websites. The ICO has indicated that consent cannot be implied where all information about cookies has simply been buried in a website’s privacy policy. Furthermore, website operators cannot rely on users’ previous consent to terms of use and terms and conditions when setting cookies. Users must specifically consent to the use of cookies after being informed of the changes made to terms in respect of the use of cookies. • Settings-led consent Consent may be obtained as part of the process by which users select website settings. In practice, it will likely be sufficient to make it clear to the user that the settings will be enabled by using a cookie (with a link to the more detailed cookie information). If the user then proceeds to choose ‘enable the setting’, consent to the setting of the relevant cookie can be assumed.

Feature-led consent Consent may be obtained at the point where a user chooses to use or switch on a particular feature of the site, such as watching a video clip. The practicalities of obtaining consent via this route would be similar to those outlined above in relation to settings-led consent. • Pop-ups and similar techniques Consent may be obtained through the usage of pop-up prompts on users’ screens that ask for express consent to cookies when the individuals access web pages. In this context, it is important to remember that consent need not be sought every time a user enters a website. Website operators should consider when using this technique that users who employ pop-up blockers will be unlikely to view any pop-ups. • Static header or footer bars Consent may be obtained through the display of text at either the top or bottom of web pages asking users to click their consent to cookies. The text boxes should also include links through to more detailed explanations about the operators’ use of cookies. This method is currently used by the ICO itself, although it has announced in its guidance that it may revise this approach in the future. Additionally, the Regulations suggest that browser settings may be one means of obtaining consent if they can be used in a way that allows the subscriber to indicate their agreement to cookies being set. However, the ICO, in its guidance, has confirmed that presently most browser settings are not sophisticated enough for websites to assume that consent has been given to allow the site to set a cookie. Consequently, relying solely on browser settings will not be sufficient. •

AN ExAMPlE The ICO’s website (www.ico.gov.uk) uses a banner at the top of the page displaying the following text, which also includes a tick box reading “I accept cookies from this site”, a button for users to press to continue and a link to its privacy policy: “The ICO would like to place cookies on your computer to help us make this website better. To find out more about the cookies, see our privacy notice.” Although the ICO has in its guidance confirmed that it has no objection to organisations considering whether this solution would work for them, it stresses that any solution has to be appropriate to an organisation’s own needs. WhOSE CONSENT MUST bE ObTAINEd? The regulations state that consent should be obtained from the subscriber or the user. In essence, the subscriber means the person who pays the bill for the use of the line, whilst the user is the person using the computer or other device to access a website.

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WhO MUST ObTAIN CONSENT? For ease this article has been drafted mainly by reference to the impact of the Regulations on website operators. However, readers should be aware that other organisations may also be responsible for ensuring compliance. The ICO notes within its guidance that the person setting the cookie is “primarily responsible for compliance with the requirements of the law” and that where third-party cookies are set through a website “both parties will have a responsibility for ensuring users are clearly informed about cookies and for obtaining consent”. The ICO has also suggested that companies designing and developing websites or other technologies for others should also carefully consider the requirements of the Regulations and ensure that the systems they design allow their clients to comply with the law. ThIRd PARTy COOkIES Advertising networks and other third parties that wish to place cookies on users’ equipment through a website that they do not operate themselves may find it difficult to obtain valid consent as they do not have a direct relationship with internet users. The ICO suggests that third parties may seek to contractually delegate the responsibility of obtaining consent for the use of third-party cookies to website operators. Website operators could in practice provide information on and seek consent for the use of third-party cookies by employing the same methods used in respect of their own cookies. Given that website operators may not be willing to accept this delegated responsibility, third parties should consider alternative means of securing consent. This could be achieved using certain methods set out above, such as using their own pop-ups. The EU Working Party has confirmed that consent to the setting of a thirdparty cookie accessed from different websites need only be obtained once. Third party providers may also consider collaborative approaches with other third party providers, whereby users are directed to separate websites through which they can consent to the use of cookies by a number of different third-party providers. IMPlICATIONS OF NON-COMPlIANCE ANd TIMESCAlES FOR COMPlIANCE The ICO has stated that a practical and proportionate approach will be taken to enforcement where organisations are making the effort to comply and that some discretion can be applied to the exercise of formal enforcement powers. The main enforcement options open to the ICO in this regard include: • Information notices requiring organisations to provide specified information within a certain time period. • Undertakings committing organisations to a particular course of action in order to improve their compliance. • Enforcement notices compelling organisations to take the action

specified in the notice to bring about compliance. Failure to comply with an enforcement notice can be a criminal offence. • Monetary penalty notices requiring organisations to pay a monetary penalty of an amount determined by the ICO, up to a maximum of £500,000. In the transcript of the video responding to frequently asked questions, as contained on the ICO website, David Evans, Group Manager of the ICO’s Business and Industry Group, describes the ICO’s approach to enforcement of the new regime. He stresses that the ICO will expect any website operator that has not yet achieved compliance to be able to show that it has taken steps towards compliance already (for example, by carrying out a cookie audit) and has a realistic plan to achieve compliance within a foreseeable timeframe. He further confirms that it is unlikely that the ICO will issue monetary penalty notices for violations of the Regulations. Instead, the ICO would most probably consider a formal undertaking or an enforcement notice. CONClUdINg COMMENTS As set out above, organisations not yet complying with the regulations should refer to the ICO’s guidance and seek specific legal advice about their individual circumstances. In order to minimise, as far as possible, the risk of enforcement action it is recommended that these organisations, as soon as is possible, conduct an audit of their websites and proceed with the other practical steps highlighted by the ICO.

For further information about the “Cookie Law” and its effect on your business, please contact a member of Woodfines Solicitors’ Company Commercial team, based in Cambridge, Bedford, Milton Keynes and Sandy, at www.woodfines.co.uk

James is a solicitor in the Company Commercial department at Woodfines Solicitors’ Milton Keynes office and practices in all areas of company commercial law. he obtained a first class degree in Ancient history and Archeology at the University of liverpool in 2004, before undertaking the Graduate Diploma in law and lPC at the BPP law School in london. James trained in the City and joined Woodfines in 2012. James lives in Woburn Sands, having grown up and attended school in nearby leighton Buzzard. In his spare time he plays football for two local teams and follows West ham United. he also enjoys playing golf and going to the gym.

SEMINAl ARTIClES – PRICINg This is the second in a series of seminal articles that all Marketers should read. These articles are based on the extensive research carried out by Dr Paul Fifield among practitioners, academics and consultants during the last few years. If you have any additional texts that you think should be added to the list please email: editor@cambridgemarketingpress.com

suppose we had better jump straight to the chase – you didn’t go into Marketing to deal with numbers! I know this but maybe I can change your mind. The Marketer’s irrational fear of numbers has set the profession back, putting us behind all of the other business functions PAUl FIFIElD and placing the role of Marketing at risk of being cut since we are now seen as a ‘cost centre’. That wasn’t how it was meant to be. Marketers and their companies both suffer this way so bear with me. Let’s start with the real basics – what is the purpose of Marketing? You can check the answer in the box below (not yet!) but I can tell you that it’s NOT to make happy customers, sell more, understand customer needs, communicate, go digital or any other ideas that people have. Alright you can look now (see box below). When you have finished arguing with me, we can continue. All of the really good things mentioned above are all ‘really useful’ – but they are not ‘the point’ of real Marketing. The point of understanding customer needs, building relationships, developing engaging communications etc so that we can get the price up. What other purpose can there be for commercial organisations? Still don’t believe me? Look at one of the companies who has done this really well… tell me (with a straight face) that the iPhone 4S is really worth £499.

A few key facts: • Every commercial organisation needs profits to survive • Profits come from revenues and revenues come from customers • Some 90% of the classic MBA syllabus (including Marketing) focuses on what happens inside the organisation – while ALL of the money is made (or lost) outside • Firms don’t go out of business because they have run out of cash but because they have run out of customers • Marketing is (or should be) closest to customers than anyone else in the organisation • Marketing is therefore responsible for generating the organisation’s profit • In the majority of organisations, finance sets the prices SETTINg PRICES Over 65% of B2B organisations use the ‘Cost Plus’ method of setting prices. This involves calculating the cost of the product

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(including allocated overhead) and adding a notional margin. Although it is the easiest method for companies to use, it has some serious shortcomings. It ignores market forces so that profit is not guaranteed. It’s fine for post analysis (contribution) but not for a priori pricing because it simply passes on inefficiencies. A far better method, although not as ‘easy’ as Cost Plus, is ‘Market Pricing’ as this requires the Marketing function to use its customer insight to set the price according to what customers are willing to pay. Obviously if Marketing is a cost centre, then customers won’t be willing to pay very much. Where Marketing is doing the job that it was created for, prices and margins will be the envy of competitors.

bElOW ARE jUST A FEW OF ThE qUESTIONS ThAT WE ShOUld bE FOCUSINg ON: 1 Are there any substitutes? Remember we are dealing with perceptions, not reality. If Coca Cola can convince enough people that it is the ‘real thing’, then so can you. 2

How necessary is the offering? Apple can convince people that if they don’t have the latest iPhone, they will be a laughing stock.

Is information perfect? How much do the customers really know about what is available? The idea of a ‘level playing field’ is fine for economists but not for Marketers.

The purpose of Marketing is to be able to charge the highest possible price for your product or service.

Is it habit forming? Remember that feeling when you have left home and forgotten your mobile phone? How will you ever manage to get through the day? Do your customers feel the same about your product/service?

How different (or unique) is the offering? From Heinz beanz to BMW, different pays serious dividends. We know that customers hate relying on price when choosing, so come up with the irrefutable reasons why they should prefer you and be happy that the high price reflects the additional value they crave.

Is there a strong association between Price & Quality? How hard have you been working on this? If you haven’t then you will probably find yourself in a price war. Remember, its all about perception and that is Marketing’s job.

Is there a partnership/relationship with the supplier? I hope all that investment in CRM, CSR and Social Networking is paying off.

WhAT ExACTly ShOUld MARkETINg bE dOINg TO INCREASE PRICES ANd MARgINS ANd SO MAkE ITSElF INdISPENSAblE TO ThE ORgANISATION? So what exactly should Marketing be doing to increase prices and margins and so make itself indispensable to the organisation? Peter Drucker originally coined the term profit centre around 1945. He later recanted, calling it “One of the biggest mistakes I have made.” Later he asserted that there are only cost centres within a business, and “The only profit centre is a customer whose cheque hasn’t bounced.” OVER TO yOU The purpose of Marketing is to be able to charge the highest possible price for your product or service. REFERENCES WINKLER, JOHN (1983) “Pricing for Results” Butterworth heinemann, oxford MARN M & ROSIELLO R (1992) “Managing Price, Gaining Profit” harvard Business Review, Sep–oct

PETER DOYLE (2000) “Pricing for Value” (in Value Based Marketing) John Wiley & Sons, Chichester

Dr Paul Fifield holds a degree in Business Studies as well as an MBA and a PhD in Marketing Strategy, both from Cranfield University. he was elected a Fellow of the Chartered Institute of Marketing (FCIM) in 1988, an elected member of CIM Council 1999–2001 and the CIM International Board of Trustees 2002–2004. Paul was appointed Visiting Professor at Southampton University School of Management in 2006. he is currently President of the CIM Southern Region and a Fellow of the Royal Society for the encouragement of Arts, Manufacturers and Commerce (FRSA).

IT TAkES A VIllAgE The Realities of Social Media Hiring and Management

he kinds of people who are making huge impacts within their companies and who are driving brand impact from the outside do not necessarily share a common résumé or background. But they do share consistent characteristics that suit them for today’s business, no matter what JAY BAER role they have and no matter what level of seniority they have achieved. Curiosity You can find people with the desire to explore new ideas, in detail, and who do not need specific direction to do so. An interest in the intersection of human interactions and technology is a trait that is AMBER NASlUND helpful in social media, communications, and customer experience roles. Enthusiasm Regardless of whether you have a super sexy product, your team members should be enthusiastic about making your business better. You can find people with a positive outlook and a zeal for doing their job, whether it is at the reception desk or in the executive offices. Innovation Ignore the buzzy nature of this word for a moment and concentrate on what it really means: the introduction of something new. Succeeding today requires new approaches to existing processes, both internally and externally, across the entire organisation. You can acquire and nurture this attribute in the people you hire, both in their attitude and in the practice of their jobs. Motivation Because of the immediacy of this environment, having as many self-starters as possible is a goal. You are looking for people who tackle their work with gusto and look to not only check off the must-dos for a project but to make it even better through their own participation. Collaboration The online world and all of the tools within it are creating unparalleled opportunity for cooperation, shared wisdom, and collective success. Successful social media professionals are not likely to say ‘‘that’s not my job,’’ and they are quick to embrace the contributions of others and work within teams. Translation Look for people who work well across departments and who have the patience and clarity of explanation to teach others about the impact the social web can have. Today’s communications and online professionals should be adept at speaking the language of

both the executives and the people who are doing the day-to-day work on the front lines. Humility Great employees will elevate the entire company through their work. They will encourage and recognise their colleagues as contributing, valuable members of the business community and help their organisation on the road to industry leadership. They are not in it to score wins for their ‘‘personal brand’’ or flaunt their individual achievements. Diplomacy The people in social media roles are today’s change agents. These people are committed to the long-term vision, and are dedicated to delivering on a lot of legwork, communication, negotiation, discussion, education, and trial and error. Connectivity and Awareness These are people-focused jobs, inside and out, and not just in specific community or social media roles. Having employees who can talk to people, work with them, socialise with them, and connect with them in multiple places will help expand your reputation. These individuals can continually observe their company, the industry, and the online worlds they participate in and uncover opportunities to share more information, provide something useful, or educate internal people on what is happening ‘‘out there’’ to make the online-to-offline connection even stronger. SkIll SETS:ThE RISE OF ThE gENERAlIST Do you need public relations (PR) people? Marketing people? Customer service people? Perhaps. But what if rather than categorising your team members based on the industry they come from, you sought hybrid skill sets that are adaptable and elastic? Think in general terms with some focus on a key area of depth, instead of specialists that can be too specific and difficult to adapt or evolve. Search for well-rounded professionals with core business skills that can translate across roles and enable them to excel in an ever-changing environment. These are the skill sets you should seek: Business Process/Planning and Analysis People who understand financial frameworks for profit and

loss and strategic and long-range planning (including how to write goals and objectives and how to map out execution at a tactical level) will be best suited to fulfill high-level tasks. The key here is having the ability to think at a company level, not within a vertical function only, and not solely in a linear fashion. Social Media Anthropology and Participation Those responsible for spearheading social media should have some experience using it themselves, either for their personal use or on behalf of clients or other companies, to ensure that they fully understand its uses, customs, and overall implications. That means familiarity with the most widely known tools and technologies as well as an interest in what is new on the scene (while evaluating the trends with a discerning, editing eye). Academic knowledge is good, applied expertise is even better. People who have made mistakes in social media and learned from them can also provide valuable perspective. Hedgehog Management Real-time strategies that are well conceived have many moving parts to manage and drive. People who excel at jobs that involve social media or online communication can tackle projects that span multiple categories and keep all the pieces moving toward a larger, crystal-clear purpose. As introduced in Jim Collins’ bellwether book Good to Great, the Hedgehog Concept is the ‘‘big idea’’ that everything in a business pivots around: what you are great at, what you can make money doing, or what you are passionate about. Getting people who can manage execution toward this central vision is vital to realising the potential of real-time business. Customer or Client Mind-set Whether it is a formal title or not, it is essential to have an individual on staff with experience communicating with customers directly and fostering those relationships to meet business goals. Find people who care about working with and helping your customers and who understand how their contributions affect the overall customer experience. Written Communication Skills Remember, one of the core tenets of the Now Revolution is that social communication is replacing face-to-face and telephone communication in many cases. From 140-character tweets to e-mails, blog comments, and product reviews, the currency of the social web is largely the written word. It is important that your team can communicate clearly, coherently, and concisely this way.

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yOU ARE lOOkINg FOR PEOPlE WhO TACklE ThEIR WORk WITh gUSTO

NEW RESPONSIbIlITIES There are two major impact craters – and emerging opportunities – that have been created by social media on the humanscape of your business: new roles that are focused on the business of now and functions and responsibilities that need to be incorporated into existing roles. Social media and real-time business affects every employee in your organisation in some way. Your official social media team

– the people tasked with developing and maintaining your social outposts and real-time customer connectivity – are part of your approach. But the rest of your employees are equally important to consider, as many of them will have to incorporate some measure of new responsibilities into their existing job functions. The following are some of the tasks that your ‘‘unofficial’’ social media team members may have to tackle: Brand Immersion and Representation Once upon a time, the only people who really needed to ‘‘get’’ your brand were the ones who built its external facade: marketing, public relations, and corporate communications. But today, everyone is a spokesperson, or has the potential to be. Brand experience is the very lifeblood of many organisations, and a brand with depth and personality stands out online. Give everyone some guidelines, but also the freedom to articulate and represent your company in their own authentic way. Success Metrics Although only a small group of employees are likely to be responsible for specifically measuring the impact of your social media initiatives, the best programmes are those that share those metrics with all employees. (Imagine if the only person who knew the score of a football game was the coach.) Sharing that information can help people feel connected, feel invested in the outcome, and understand how their work is making a difference. Listening Having a finger on the pulse of how social media and the activity within it affects your company, your department, and your industry is a universal responsibility. This is a critical component of modern business success, as is determining who in your company will have listening as a part of his/her role. Internal Wiring and Story Harvesting Your company must be able to communicate stories seamlessly and whenever opportunities arise. It can be difficult to have enough breadth if just one or two people are seeking stories, so let everyone contribute, from the reception desk to the manufacturing floor and the information technology (IT) department. Build great internal communication, and give people the tools to share ideas, experiences, and expertise. Engagement Your social media representatives will do most of the online communication with your customers and prospects – but not all. The current is sometimes too swift and the river too broad for one or two social media specialists to manage all the online touch points. The rest of your team can help by knowing how and where and when to engage, too. Build education and training programs for those who want to get involved, and help them be part of the effort. Today, the anatomy and the makeup of your individual team members needs to be a bit different. The employee that thrives in today’s business – the Now Revolutionary – is a well-rounded person with a dynamic personality and skill set.

ThE REAlITy IS, ThE SPEEd ANd TRANSPARENCy OF MOdERN bUSINESS MAkES IT IMPOSSIblE TO FAkE ENThUSIASM OR ExPERTISE

SO lONg, FAREWEll: PREPARINg FOR dEPARTURES So you have worked hard to build an outstanding team. Perhaps you are even doing many of these things already, recruiting and cultivating talent, giving them a voice, and finding new and exciting ways for them to contribute. It is natural then to fear that you will groom, train, empower, and unleash these amazingly awesome workers, only to have them become too visible, and too valuable to lose. That is why the most important thing you can do for your company is not to create individual superstars but to create a superstar mentality and infuse it into everyone you can. This is the ‘‘what if she gets hit by a bus’’ thing: if your amazing social media pro leaves the company, are you going to lose ground? Or can your company pick right up and move on because you have got a bench full of outstanding team members already hard at work? One of your best and brightest might indeed head for greener pastures someday or branch out on his own. If headed to a competitor, that person might even take a customer or two to the new company. But if you are constantly building a team that includes well-equipped people, a mind-set for greater good, the ability for everyone to participate to their own degree, and an environment where anyone and everyone can excel, you will always be prepared. Also, keep the future top of mind. Always be interviewing and keeping an eye out for potential talent, even if you are not hiring. Think about every member of your team, and with whom you would replace that person, if necessary. Write down succession plans for key roles that include not only who might fill those positions but what skills or attributes are most critical to replace. Keep in touch with your bench so that you can move quickly if a departure occurs. You have probably got a good pool of the talent you need right inside your own organisation, on your existing teams. Keep an eye toward the horizon and do your best to empower the valuable people you have; then you will always keep your momentum.

01010100 01101000 01100101 00100000 01001110 01101111 01110111 00100000 01010010 01100101 01110110 01101111 01101100 01110101 01110100 01101001 01101111 01101110 00101110 00100000

Within minutes, ThinkGeek replied, also in binary. The reality is, the speed and transparency of modern business makes it impossible to fake enthusiasm or expertise. The Now Revolution will overthrow the charlatans and the dispassionate. Grove suggests that automobile manufacturers should have people who are really into cars working in every position in the company. ‘‘Social media favours the real. And the clever,’’ he says. The ThinkGeek corporate culture is intentionally addictive, a mixture of like-minded team members and an unceasing flow of engagement mechanisms where every employee can be the star. Some of the company’s most popular items are ‘‘ThinkGeek Exclusives,’’ products dreamt up and manufactured by the firm directly, most of them submitted by team members. When the ThinkGeek social media manager is on vacation, it is considered an accomplishment to be asked to take over as the designated Twitter and Facebook update artist. But, fill-ins do

Cartoon © Robert Barrett-Sprot, 2012

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dOINg IT RIghT:ThINkgEEk ‘‘Star Wars? Or Star Trek?’’ So begins the prospective new team member interview process at ThinkGeek, an e-commerce and catalogue company from Fairfax, Virginia, that exclusively offers goods that are the envy of the geeky. If you are in the market for a model figurine from the movie Alien that plugs into your computer’s USB port and menacingly flicks its tongue at you, then ThinkGeek is the website for you. And that is their genius. ThinkGeek has an incredibly good handle on who their customers are and what their customers want, partially because the company interacts with customers in every way imaginable, from e-mail to phone, to Twitter, to Facebook, to blogs, to YouTube and to Flickr. But more importantly, ThinkGeek understands their customers because they are their customers. ‘‘A geek is different from a nerd or a dork,’’ says Jamie Grove, the company’s Vice President of Evil Schemes and Nefarious Plans (marketing). ‘‘It’s hard to explain, but you know a geek when you see one, and when you are one,’’ he asserts. How much does ThinkGeek embody the lifestyle of their audience? A customer once posted a note to the company on its Facebook page in binary code (which looks like this, for remedial computer science students):

“ and finally... what type of video games do you like to play?’’

not use it as an opportunity to put their own spin on customer interaction. ‘‘The highest honour is when people say, ‘‘We didn’t know it was you,’’ or ‘‘We couldn’t tell the difference,’’ says Grove. It is a culture that operates with one mind. How aligned are ThinkGeek’s fifty employees? Every Thursday night is Dungeons & Dragons night at their offices. When was the last time you had a pack of Ogres, or a 4” gilded broadsword being discussed in your lunchroom? This esprit de geek is by no means accidental, according to Grove. ‘‘We hire for culture, period... Being geeky isn’t just an adjective, it’s a state of mind.’’ The company takes full advantage of the shared cultural and corporate understanding of its team by enabling them to operate in real time, eliminating obstacles and cumbersome processes. Although their social media manager is the official tweeter, nearly every employee monitors Twitter constantly, looking for opportunities to solve problems and delight customers. During the 2009 holiday season, marketing consultant Susan Baier had to return an electronic item she had ordered from ThinkGeek that had stopped working. William, the customer service representative she connected with during a live, online chat, noticed her mailing address and mentioned the Noah’s Ark Flood type deluge the weather channels were predicting for Arizona that weekend. Jokingly, he asked if Susan was aware that ThinkGeek also sells arks. Seconds later, she posted a Tweet about the great customer service she had received from William and got an immediate reply back from @thinkgeek on Twitter that the accolades had been passed along and that William had offered to fly out to assemble the ark and

‘‘FOR US, E-COMMERCE IS ThE gREATEST VIdEO gAME EVER INVENTEd,’’ says Grove ‘‘EVERyONE IS ENgAgINg ACROSS MUlTIPlE ChANNElS AT ThE SAME TIME, CONSTANTly INTERACTINg INTERNAlly ANd WITh OUR CUSTOMERS’’

hERE ARE ThE ElEMENTS TO kEEP IN MINd: 1

Hire for culture. Train for skills.

Pay attention to the new résumé elements, such as social graphs, that can help you find like minds (and avoid misfires).

All roads lead to customer experience. Everyone is a potential spokes-person today, so hire with that in mind.

Be willing to rethink traditional responsibility-based job descriptions and locations in favour of finding the right fit for your company’s mind-set and attitude.

Think superstar mentality, not just superstar individuals.

Consider adding new roles that have social media and

Cultivate an approach that can be taught and scaled. real-time web responsibilities at their core. Look beyond tools, but toward outcomes. 7

Analyse your existing roles, and outline how and where those social media areas intersect and affect them.

Educate your teams with goals, vision, and purpose, not procedure manuals. Let them see the flag and find the path themselves.

Realise that people want to work for something more than a salary. Give them a sense of contribution and purpose.

bring her replacement item with him. That is turning the speed of now to your advantage by seamlessly connecting customer service and social media. ‘‘For us, e-commerce is the greatest video game ever invented,’’ says Grove. ‘‘Everyone is engaging across multiple channels at the same time, constantly interacting internally and with our customers.’’ No surprise then that the second question you are asked when being interviewed for a job at ThinkGeek is, ‘‘What video games do you play?’’ gETTINg ThERE: FINdINg TAlENT yOU CAN TRUST There are not only new roles emerging but also new expectations and functions for the people already on your team. You may or may not need brand new social media jobs in your organisation, but without question, speed and social media will touch the job of everyone you have already got (if it has not already). The time is now to look at the way you are put together and how you empower the human engine of your organisation.

Jay Baer is a hype-free content strategist, speaker, and author. he founded the social and content accelerator firm Convince & Convert in 2008. It is the fifth marketing services firm he’s started or managed. Jay is a renowned and popular social media keynote speaker, delivering as many as 100 insightful, memorable, interesting and hilarious presentations each year to groups as large as 5,000. he’s also co-author of The NoW Revolution, 7 Shifts to Make Your Business Faster, Smarter, and More Social (Wiley, 2011) a leading book on social business, and an Amazon category best-seller. Jay has consulted with more than 700 companies on digital marketing since 1994, including Caterpillar, Nike, Visit California, Billabong, and 29 of the Fortune 500. he was named one of America’s top social media consultants by Fast Company magazine, and his Convince and Convert blog is ranked as the world’s #1 content marketing resource. he’s also co-host of the popular weekly Social Pros podcast. Amber is a business strategist with a strong focus on social, communication and community initiatives. her expertise spans professional fundraising, corporate communications, marketing, professional services, and social business strategy. She’s successfully run multimillion dollar fundraising campaigns, built and led executive communication teams, and helped launch international brands. As the VP of Social Strategy for Radian6 (successfully acquired by Salesforce.com in 2011), she advised Fortune 500 companies on social business strategy, and built a renowned community and social media team.

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UNdERSTANdINg ThE SPhERE OF INFlUENCE

arketing is all about influence. We use various tools and tricks to influence somebody into doing something, whether that is going online, downloading a report, making a phone call or simply following somebody on Twitter. Sometimes we influence directly NEIl CooPER through PoS, direct marketing campaigns and email. And a lot of the time we influence through third parties that help to reach a lot of people and provide a level of endorsement, such as the media. If I polled 100 marketers about what influences their customers I’m certain that 95 of them would come back with ‘the press’. It is the most obvious and understood source of influence, however, it isn’t the only one. I think that by putting our customer in the centre of our world and then trying to understand everything that influences their decision we end up with something that achieves two things. Firstly, we focus our efforts on what is important. And secondly, we have a powerful tool to help explain marketing’s role to our organisation.

SOURCES OF INFlUENCE As I touched on above, the press is an obvious influencer and a significant one at that. However, there are tens of other sources of influence from your business cards and staff, to the Google search results page. The key to identifying them is to think about every touch point that enables your customer to form a negative or positive opinion of your company, brand, staff or services. In the table below I’ve identified a few. It isn’t an exhaustive list, instead just a starting point. Table 1: Potential sources of influence Online

Events

Collateral

Media

Your website

Conference

Your business card

National press

Google’s results page

presentation

Your literature

Journals

Exhibition stand

Email marketing

Trade magazines

Twitter

Awards ceremonies

Case studies

Business magazines

Facebook

Hosted workshops

3rd party websites

In-house event

Peers

Staff

Publications

Other

Colleagues

Their knowledge

Analyst reports

User groups

Ex-colleagues

Their ‘likeability’

Directories

Lobbyists

Competitors

Their appearance

Blogs

Charities

Comparable companies Their confidence

Industry bodies

Peer networks (like

Venture Capitalists

Their expertise

LinkedIn groups)

UNlESS yOU ARE INCREdIbly lUCky IN yOUR CAREER yOU WIll hAVE WORkEd FOR A COMPANy ThAT dOESN’T VAlUE MARkETINg

Most of these are straight-forward and obvious. There might be a few that aren’t, such as Google’s search results. With this I don’t mean whether you appear or not, but instead what that first page says about you. If your customer is searching for you by name and you appear in the top three you might think that is job done, but it isn’t. People want to read about companies on other websites, they don’t trust the propaganda that we feed them on corporate websites, instead they want to feel they have found the truth (this is why reviews on Amazon are so powerful). As well as being on the top of Google’s results you also need to make sure that the other results are relevant to your company and present a positive picture of your brand. This is achieved through increasing the size of your digital footprint outside of a single website, such as Slideshare/ Youtube/Vimeo channels, Facebook pages, blogs, Twitter feed, etc, as well as ensuring other websites are talking about you. Seeing lots of different sources talking about your company boosts your credibility and builds trust. There is also the danger that negative information could have a terrible impact on your business. For example, search for ‘Meltwater News’ in Google. This is a company that provides a good online clippings service (I’ve used them before), however, at the point of making a decision I Googled them and on the first page, alongside the corporate propaganda was a link to negative content about how the company works and treats its staff. Rather than me calling them up and arranging a trial period I spent the next few weeks digging around before asking them to explain this negativity. I went on to become a customer, but our brains don’t forget negative memories, instead we build them up over time. I always had it in the back of my mind. If I had found a competitor that delivered the services I was after I would have gone with them. Some sources of influence are within our control (at least most of the time), such as staff corporate website and collateral that we produce. However, many sources are outside of our control and this makes us all very uneasy. There is a new example every week of a company falling foul on social media as people poke fun or vent

their anger. Look at the recent Mountain Dew campaign to rename their new drink. They had to pull it in the end at great expense. But this lack of control is not down to just social media. The most significant source of influence on our customers is their peers, colleagues, friends and family. In the B2B context our customers rarely reach decisions on their own – unless the value of services or products is low. Instead they seek opinions of others, whether that is their boss or colleagues they trust. The larger the organisation, and the higher the costs of goods and services, the more people that are involved. So whilst you’ve spent thousands of pounds targeting and communicating with your target customer, somebody that you don’t know has influenced your customer’s final decision. We don’t get to meet these influencers but they have opinions. Which situation is ideal – the one where the unknown internal influencer knows all about your brand and feels positive towards you, or the unknown internal influencer who has never heard of you or maybe has a negative or neutral opinion of you? The impact of this is that whilst targeting the end-user is vital, it is also important to open up the field of communication to the wider customer organisation. For example, should part of your strategy be about communicating with the C-level suite about big strategic issues as well as communicating with your target end-user? Thinking about all of the different sources of influence enables you to build your own ‘sphere of influence’ (see figure 1). In it you can represent a complete view of how your customer reaches decisions. You can assign weighting to each category, or channel within, and it can also be used to assign resources and monitor success. It is best illustrated as a sphere around your customer because the idea is to surround your customer with positive messages no matter where they turn to be influenced. This customer-centric view of the world gives the marketing team a clear picture of what needs to be done, or at least aimed for. By identifying the most important sources, which you can crossreference with a bit of customer research, you can focus attention on the parts of your marketing plan that have more impact. When building your own sphere of influence it is important to include all touch points, including things within marketing’s remit as well as the vital touch-points – the staff. This could be sales staff, customer services, service engineers, consultants, analysts, etc. Of all the sources of influence above they are the most significant in their ability to generate a positive or negative impression of a company. A POWERFUl TOOl At the beginning of this article I talked about this approach having two benefits. The first is, I believe, better marketing communication strategies. However, the second benefit could be even greater – the ability to communicate marketing’s role in the modern organisation. Now unless you are incredibly lucky in your career you will have worked for a company that doesn’t value marketing. It might

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Your website Directories

Twitter

Publications

Online

Analyst reports

Award ceremonies

3rd party websites

Events Webinar

In-house event Exhibition stand Conference presentation Journals

National press

Facebook

Workshops

Their knowledge Their ‘likability’

The Customer

Their expertise

Staff

Their appearance

Blogs

Media Trade magazines Business magazines

Google results

Their confidence

Your business card Your literature

Collateral Email marketing Case studies

User groups Lobbyists Colleagues Charities Ex-colleagues Competitors

Other

Industry bodies Venture Peer networks (like Capitalists LinkedIn groups)

Peers

Comparable companies

Figure 1: The sphere of influence is unique for every company and sector

be that they just fundamentally believe that it isn’t necessary or that they do it because they think that it is better to do it than not do it. Why are we in this position? Marketing has been a recognised profession for generations, yet we are still seen as ‘nice-to-have’ by some of our employers. I’ve worked in many companies just like this, although I must point out that my current employer doesn’t fit into this category. I think we are in this position because we as a profession have failed. We’ve failed to explain it clearly and in some cases we’ve promised the earth and fallen far short – not because we lack the skills, but because trying to influence people and market to them is hard work. Many of the organisations that don’t value marketing do value sales people. It is a simple equation, you pay them, they bring in money and as long as they make more than they cost, then they are successful. You can even compare different sales people, promote

the best performers and ditch the worst ones. Marketing has always had a difficult relationship with sales functions, but by including them in the above sphere of influence we can explain to people that the two functions work together. For example, when a sales representative finishes a meeting with a potential customer, the customer instantly does a bit of due diligence. If they do a Google search and find positive messages, then that helps. If they then pick up a copy of their chosen trade magazine and your company is mentioned, then that also helps to form a positive impression. If they attend a conference and one of the speakers is your CEO, then again the number of positive messages is building. They may then ring the sales representative and place an order. The sales rep gets the credit for winning the business, quite rightly, but this ignores the vital role that marketing has played in expanding its online footprint, feeding stories to the press or lobbying the conference organiser to let your CEO speak.

The sphere of influence enables you to show this relationship and also highlight some of the areas where it is impossible to measure true return on investment. I’ve been using this model since 2009 and I’ve found it to be incredibly useful when talking about marketing’s role. In the end this has helped increase marketing’s influence and credibility within the organisation. bUIldINg yOUR SPhERE The process of building your sphere is as useful as the end result. The best approach is to involve different people – ideally from all of the departments within your organisation – as well as the entire marketing team. The ideal process is shown below: ThE IdEAl PROCESS

Capture all of the different inputs – either through an open brainstorm or by following the typical process that customers could go through

Put them into groups that make sense to you and your organisation

Weigh up which groups and particular influencers are the most powerful. At its most simple level, this could be primary, secondary and tertiary. For example, the Economist, BBC, FT and Wired could be primary influencers within the media, whereas the local business paper could be secondary. It could also be much more complex.

Test your assumptions and only include sources that you think are credible. Be careful not to leave out or overlook colleagues who play an active role. But also try and avoid listing everything.

MARkETINg hAS bEEN A RECOgNISEd PROFESSION FOR gENERATIONS, yET WE ARE STIll SEEN AS ‘NICE-TO-hAVE’ by SOME OF OUR EMPlOyERS You can go as deep and detailed as you want (which publications, associations, websites, etc). Although if it becomes too complex it may be difficult to bring everybody along with you. Now that you have mapped out your customer’s sphere of influence you can think about related aspects, such as: • Measurement – always a challenge, but in each segment there are ways of providing some form of analysis, whether that is web stats, press coverage or Klout score. For each segment think about measurements and then communicate their limitations to the management team. The metrics are then limited to each channel and tool, rather than trying to link them back to actual sales, which is difficult unless you have the right systems in place. • Resource focus – are there any benefits of re-arranging your team around these influences? • Budget – how do your budgets map on to these influences? Are there any obvious gaps, maybe room for improvement? I think that the biggest challenge we face is explaining our role within organisations, ensuring that we gain more credibility and then using this to use our own influence within the organisation. This approach enables us to be clear about what marketing can do and, importantly, what it can’t.

Talk to customers. It doesn’t have to be a quantitative survey of thousands; instead it could be a quick chat with a handful about the typical process they go through. It will help you to challenge your decisions.

Present back to the team involved, questioning everything. Then update as required.

Present the concept to your company. It is important to take people through a few scenarios as you explain all of the different influences.

Neil is the host of Another Marketing Conference, which takes place on october 18th 2012 in Cambridge. For more information, visit www.another.uk.com. he is also the head of Marketing at Team Consulting, a leading Cambridge-based medical product development consultancy.

The following is an abstract from Vidyani’s submission, which was awarded a distinction in the CIM’s Postgraduate Diploma

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ThE IMPACT OF EThICAl CONSUMERISM ON ThE Uk FAShION ANd ClOThINg INdUSTRy ThE RISE OF EThICAl CONSUMERISM ver the past twenty years society has grown increasingly concerned about the story behind the products and services that they purchase. Consumers have become increasingly conscious of VIDYANI the ethics of the business processes that WARNAKUlASooRIYA companies adopt including minimising harm to the environment and avoiding exploitation of labour. This emerging trend of “ethical consumerism” is a major driver of a diverse range of ethical approaches to businesses and trades. Although there is no exact definition for ethical consumerism, it includes a number of behavioural characteristics such as buying fairly traded or environmentally friendly goods, boycotting or avoiding certain goods or companies which do not comply with ethical practices, ethical consciousness, and understanding ethical choices (Szmigin & Carrigan, 2006). Ethical consumerism has been described by related terms such as “ethical purchasing”, “green consumerism”, “moral purchasing” and “sustainable consumerism”. It is a form of consumer activism in which the consumer is taking responsibility for their purchase decision. According to a recent global survey on corporate ethics and fair trade, 51% of global consumers perceive that the implementation of environmental programmes by companies is a very important factor (Nielsen, 2008). Similarly 78% of global consumers are concerned about whether the raw materials used in the products they buy are environment friendly, putting considerable pressure on companies. This is an indication that ethical consumerism has become a global trend and is forcing companies to reassess their business processes.

A FUNdAMENTAl ChANgE IN ThE Uk FAShION ANd ClOThINg INdUSTRy The ethical movement in the UK first appeared in the 1980s (Newholm & Shaw, 2007) and grew strongly during the 1990s (Cowe & Williams, 2000). Since then ethical spending has become more mainstream and evident in many sectors including finance, travel and transport, food and drink, personal products and energy. The “Ethical Consumerism Report” published by the Co-operative Bank has followed ethical spending in the UK for more than a decade. In 2011 this reported that the sale of ethical goods and services in the UK had increased by 9% (from £43bn to £46.8bn) between 2010 to 2011 despite the ongoing global economic recession.

Annual spend (£m) Ethical Clothing Personal Product (Total Sector)

2005 2006 2007 2008 2009 2010 9 2

9 8

1,464 1,390 1,449

172

177

171

1,760 1,792 1,931

Percentage change from previous year Ethical Clothing

–

79%

71%

93%

-3%

Personal Product (Total Sector)

–

-5%

21%

Table 1: The UK consumer spending on ethical clothing and personal product sector

INCREASEd AWARENESS lEVEl OF CONSUMERS Consumers’ interest in ethical practices has grown for a number of reasons including increased media coverage (Roberts, 1996), increased level of information (Smith, 1995) and the greater availability of alternative ethical products (Strong, 1996). The present change in attitudes and actions of customers can therefore be attributed to many factors including the availability of more information on global climate change, environmental pressure groups, and increased involvement in ethical issues by young people in the UK. These factors act as drivers encouraging the UK fashion and clothing sector to move forward with a genuine ethical commitment. Celebrity endorsement for ethical movements has also become one of the drivers which is increasing awareness of the need for an ethical change among retailers and fashion brands. Product promotion has become an integral part of many celebrities’ roles: Livia Firth, the Italian film director married to Colin Firth, works with the eco friendly fashion movement “Green Carpet Challenge” influencing fashion labels to operate under an ethical tag. She has been described as “the world’s most glamorous champion of

CElEbRITy ENdORSEMENT hAS AlSO bECOME ONE OF ThE dRIVERS WhICh IS INCREASINg AWARENESS OF ThE NEEd FOR AN EThICAl ChANgE “eco style” and has been dubbed “the queen of the green carpet” (Groskop, 2011). Consumerism has also been a tool for social change (Tallontire et al, 2001). This social change has resulted in national and international campaigners and pressure groups, with the support of charities and NGOs, creating a political climate for ethical trading in the fashion and clothing sector. Consumer boycotts as one form of ethical behaviour have influenced fashion brands like Adidas to rethink the production of kangaroo leather shoes (Siegle, 2011). As a result of this social change companies have started to find more ethical alternatives. ChANgE IN ThE NATURE OF SUPPly ChAINS The UK fashion and clothing market is linked with developing countries as 90% of clothing consumed in the UK is imported from China, India, Bangladesh and Sri Lanka (Department for Environment, Food and Rural Affairs, 2011). Consequently environmental and ethical improvements across the international clothing supply chains are essential. The fashion industry is characterised by high volatility, high competition and high impulse purchasing. This nature of the industry has resulted in clothing suppliers operating within tight deadlines. The sector comes under substantial criticism for worker abuse, forced labour and unethical environmental practices. These criticisms have influenced both high-street and luxury fashion brands’ supply chains. This is evident in the annual Ipsos Mori survey results which showed that 92% of the UK consumers expect companies to be responsible for their supply chain (Ramrayka, 2006). The nature of the fashion and clothing supply chains has changed dramatically during the last decade. Firms have identified the benefits of green supply1 implementation for purchasing and supply processes (Bowen et al, 2001) and these initiatives have occurred as a response to ethical consumerism. Bowen et al have developed a framework for evaluating Sustainable Supply Chain Management (SSCM) Capabilities (see Figure 1 on next page). They suggest that the implementation of green supply is derived by focusing on the development and deployment of an organisation’s

Source: The Ethical Consumerism Report , 2011

The trend of ethical consumerism has also influenced the fashion and clothing sector. As a result, different sub sectors such as fair trade, organic, and recycled clothing have been aligned with ethical clothing. Moreover, charity shops which sell second hand clothing obtained through donations have become a popular component of the ethical clothing sector (Carrigan & Pelsmacker, 2009). Total spending on ethical clothing was £5m in 2000 but had increased significantly to £172m in 2008 indicating a strong emerging trend in the UK, with the most notable increases from 2005 to 2008. However this trend slowed after 2008 almost certainly as a result of the global economic downturn. Spending for the total personal product sector, which includes the ethical clothing sector, has also experienced a similar setback during more recent years as shown in Table 1 (below).

Source: Bowen et al, 2001

Supply management capabilities Strategic purchasing and supply

H1 H3

H2 H6

Product-based green supply

Corporate environmental proactivity

H5 H5

Greening the supply process

Figure 1: Framework for Sustainable Supply Chain Management (SSCM) Capabilities

The Framework in Figure 1 represents hypothesised relationships between each category and the two main types of green supplies which are “Greening the supply process” and” Product-based green supply”. The model suggests a positive relationship between a firm’s supply management capabilities and the implementation of Product-based green supply (H1) as well as Greening the supply process (H2). Corporate environmental proactivity enhances Supply management capabilities (H3) and both types of green supply (Product-based green supply and Greening the supply process (H5)). Additionally, strategic purchasing and supply promotes supply management capabilities (H4) and both Product-based green supply and Greening the supply process (H6). Bowen et al found empirical evidence for H1, H3, H4 and H5. Table 2 (below) summarises key activities derived from the framework. Supply management capabilities Firms liaise between purchasing and other divisions. Policies and procedures are established for purchasing as well as improving the technical skills of professionals. Partnership approaches with stakeholders are also followed by most of the fashion brands. One industrial example: the UK supermarket retailer Tesco began to deal with dyeing and finishing issues in its supply chain and launched a green processors’ guide, which it has used to educate suppliers about every aspect of its green supply chain (WGSN, 2011).

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specialised internal resources and that the appropriate capabilities for green supply are developed by a proactive corporate environmental stance and by a more strategic purchasing and supply management process.

Source: Bowen et al, 2001

Table 2: Framework for SSCM Capabilities: Key Activities

Activity

Description

Corporate Environmental Proactivity

• • • • •

Always attempt to go beyond basic compliance with laws and regulations on environmental issues Corporate management gives a high priority to environmental issues Top managers in the business unit give environmental issues a high priority Lead the industry on environmental issues Effectively manage the environmental risks which affect the business

Strategic Purchasing

• • •

The Purchasing function has a formally written long range plan (e.g. 5–10 year plan) Purchasing functions’ long range plan includes the kinds of materials or services to be purchased Purchasing functions’ long range plan includes various types of relationships to be established with suppliers

Supply Management Capabilities

• • • • •

Liaison between Purchasing and other functions Detailed purchasing policies and procedures Partnership approach with suppliers Technical skills of purchasing professionals Advanced understanding of environmental issues and how they affect supply

Product-based Green Supply

• • •

Recycling initiatives which require co-operation with a supplier Collaboration with a supplier to eliminate packaging Efforts with suppliers to reduce waste

Greening the Supply Process

• • • • •

Environmental supplier questionnaire Supplier environmental award Scoring system to rank suppliers on their environmental performance Requirement on suppliers to have an environmental management system Selection of strategic suppliers

Corporate environmental proactivity enhancement Companies have identified the need to prioritise and manage environmental risks effectively beyond basic compliance. As an example, Tesco is aiming for a 30% reduction in its clothing carbon footprint by 2020, targeting “greener” garment production in its supply chain (WGSN, 2011). Strategic purchasing and green supply Companies are considering implementing sustainable sourcing strategies. Some luxury fashion brands have adopted ethical and innovative procurement strategies. This has also resulted in creating new elements in the fashion supply chain. For example Stella McCartney is one brand that introduced anti-fur fashion to the market. Product-based green supply Recycling is one initiative that firms implement as a way of adapting to ethical supply chains. Many retail fashion brands collaborate with their suppliers to eliminate waste. This has also created a new business entity in the fashion industry introducing “up cycling and recycling”. Donation based recycling, such as the initiative run by Marks and Spencer (M&S) in collaboration with Oxfam, is one of the best examples that reflects the reshaping of supply chains through innovation in waste management. greening the supply process Fashion retailers like M&S use ranking systems based on environmental and sustainability performance to select their suppliers: “Factories are allowed to move up the sustainability ladder, with the starting point categorised as bronze, followed by silver, gold and ultimately platinum performance level.” Mike Barry, head of sustainable business at Marks & Spencer (Nichols, 2010) These initiatives encourage suppliers to have an environmental management system integrated into their business processes. Despite the initiatives taken by the firms to change the nature of their supply chain several concerns remain: • Many fashion companies, with the exception of a few large retail fashion brands, find it difficult to develop sustainable supply chain initiatives because of the economic challenges – something which has become more significant during the prevailing economic recession. Small and medium sized fashion firms cannot afford the large capital investment needed to fund the initial implementation of sustainable supply chain processes. Even if these firms do manage to adopt more ethical initiatives they find it difficult to compete with big retail chains in terms of convincing consumers. • Although fashion companies highlight the need for responsible procurement processes some practical limitations can be observed in the industry. Companies are meant to be transparent with regard to their supply chain. However, the traceability of raw materials and the compliance with good labour practices

•

are still beyond the total control of retail brands due to a tendency for corruption over the results by supplier audits (The Economist, 2012). The product life cycle of a garment is becoming shorter. Replenishments ideally need to be back in store within a very short time – in some instances in less than four weeks (Just-style, 2011). These tight deadlines make it difficult for fashion brands to achieve elements of sustainability such as ethically sourced raw materials and unforced labour conditions.

CORPORATE SOCIAl RESPONSIbIlITy (CSR): A STRATEgIC MARkETINg RESPONSE A strategic CSR approach needs to be adopted as a response to the impact of ethical consumerism. As identified by Porter (2006), the most strategic CSR occurs when a company adds a social dimension to its value proposition, making social impacts integral to the overall strategy. CSR needs to be more widespread throughout the organisation. In general, companies should attempt to clear away the negative value chain impacts. This responsive CSR should be used as a way of mitigating the harm arising from firms’ value chain activities. Each business unit can use the value chain as a tool to identify the social impacts of its activities see Figure 2(on following page). A comparable distinction is also made by Halme and Laurila (2009) who categorise CSR activities into integration activities (which are are focused on improving the responsibility of existing business operations) and innovation activities (which are are focused on developing new responsible business operations). CSR can be integrated into innovative projects in order to create economic value for the company as well as benefits for society. Fashion companies need to think about CSR beyond the old concepts such as corporate philanthropy. A new strategic CSR concept “Plan A” implemented by M&S has resulted in better financial performance. Although the investment in “Plan A” cost £20m in 2007, M&S was able to achieve an extra £50m in 2010 (Barnett, 2011). However it is uncertain whether every firm can afford these higher investments even if the final outcome is a financial success. Therefore companies must identify deliverable social initiatives that could benefit society and its own competitiveness (Porter, 2006). Companies will be less successful if they attempt to tackle societal problems on their own (Porter, 2011). Successful collaboration needs to be data driven, clearly linked to defined outcomes, well connected to the goals of all stakeholders, and tracked with clear metrics. Business agreements on sustainability and codes of conduct with suppliers are initiatives that enable firms to track supply chain transparency. Strategic alliances and the acquisition of industry memberships increase a company’s corporate reputation. M&S, New Look, NEXT and Monsoon were all top retail brands who acquired a positive multi stakeholder approach with ETI2 by establishing and maintaining supply chain best practices (LBL

Support Activities

Human resource Management: Labour Compliance, Training on green supply

Technology Development: Software development on traceability, Recycling, Up-cycling

Social, Economic and Environmental Sustainability

Procurement: Responsible & ethical procurement

Primary Activities

Source: Adapted from Porter, 1985

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Firm Infrastructure: Key CSR policies, Transparency and traceability of processes

Inbound logistics:

Operations

Outbound logistics:

Marketing & Sales:

Services:

Development of sustainable sources of energy and materials

Reducing CO2 foot print

Minimising energy usage

Ethical marketing policies/ Promote sustainability

Support & share skills (Ex: Green guides)

Report, 2011). Collaboration approaches with suppliers on shared learning also enhance mutual relationships and assure continuity in sustainable supply. The global recession is creating an environment of cost cutting and streamlining. For fashion firms, as for every leading company, the current economy has created a particularly challenging environment in which to operate. It has also created a challenge for sustainability. Though fashion firms are moving to implement more sustainable approaches according to their CSR initiatives, they are increasingly unable to absorb the cost of switching to sustainable approaches. One example is the cost of raw material. Organic cotton is often nearly twice as expensive as regular cotton because of lower yields (Just-style, 2011). Even if big fashion retailers are better placed to absorb the cost of sustainable sourcing, small and medium retailers have yet to adapt to the situation. Last but not least, as Porter (2006) identified, a firm that views CSR as a way to placate pressure groups often finds that its approach devolves into short term defensive reactions, with minimal value to society and the business. Thus companies need to understand that CSR should not just be used as a reaction to external pressure: it must be seen as a way to build shared value not just as a PR campaign for damage control.

SkIllS, ATTITUdES ANd bEhAVIOURAl ChANgES ThAT NEEd TO bE AlIgNEd WITh ThE STRATEgIC MARkETINg RESPONSE As the UK fashion and clothing industry moves to become more sustainable there are significant implications for its marketing activities and the skills that will be needed. Building a framework to accommodate external environmental policies and regulations; leveraging and integrating new sustainable technologies to support business practices; and the development of productive, performance-based strategies to gain financial and social returns will all be increasingly expected from marketing professionals. They will need to change and develop attitudes, skills and behaviours to respond to a more strategic CSR approach. Attitudes Wood (1991) emphasised individual or managerial intentions as motivators of socially responsible behaviour. Marketers should initially motivate themselves for sustainable business. They should not perceive CSR just as an instant reaction to safeguard the company against external environmental pressure. They must possess a positive attitude from the outset and understand how strategic CSR impacts organisational financial performance. Critical thinking can help to resolve managerial problems by

operational transparency are the important behavioural actions that marketing professionals can perform. AN OVERVIEW OF ThE Uk FAShION ANd ClOThINg INdUSTRy The fashion and clothing industry is one of the most dynamic and challenging industries. It has become highly globalised. Clothes are often designed in one country, manufactured in another country, and sold world-wide. 90% of clothing consumed in the UK is manufactured in developing countries (Department for Environment, Food and Rural Affairs, 2011). Key figures and facts about the UK fashion and clothing sector: • The UK fashion and clothing industry is estimated to support 816,000 jobs • The direct value of the UK fashion and clothing industry to the UK economy is £21 billion • UK consumers spent £46bn on clothes and shoes alone in 2010 (BFC Value of Fashion Report, 2010). This was 6% of total consumer spending in 2010

3% 3%

Source: Office for National Statistics

18%

11%

17% 25%

1% 16%

Transport Health Recreation & Culture

Restaurant & Hotel Education Communication

Housing,Household Goods & Service Clothing & Footwear Food & Beverage

Consumer Spendings 2010

Uk ethical consumer spending Ethical consumer spending in the UK related to the fashion and clothing sector is summarised below: Ethical personal products

2008

2009

2010

2011

Ethical clothing

103

184

177

171

Charity shops

371

473

486

528

Buying for re-use-clothing

210

299

340

350

Clothing boycotts

360

402

387

321

Source: Ethical Consumerism Report , 2011

identifying stakeholder coalitions and issues (Maon et al, 2008). Managers need to think critically, analytically and innovatively in order to formulate strategic CSR policies. Thinking beyond the traditional CSR approaches is essential to face today’s challenging competitive marketing environment. Marketing professionals need to be strategic CSR initiators. Skills 1 Networking Managers need to carry out effective environmental scanning to identify future opportunities and threats. Professional and personal networking skills will facilitate this scanning process. Having built up better networking skills, marketing professionals would be able to understand stakeholders’ attitudes and perceptions towards the company’s CSR policies and procedures. 2 Effective communication Effective communication will facilitate better networking skills. This results in maintaining good relationships within the business as well as with society. A strong supplier networking base ensures mutual understanding and trust between a company and its suppliers on CSR policies. Trust between a firm and its suppliers grows over time and is embedded in its relationship (Gold et al, 2010). The ability to communicate in multicultural situations enables managers to respond with insightful CSR approaches on a global scale. 3 Technological skills for effective communication The use of technology for effective communication is essential. Managers should make use of technology both to inform and direct stakeholders on corporate CSR policy. NEXT, one of the leading UK fashion retailers, uses web based networks in order to communicate codes of compliance to employees and suppliers as well as to communicate their policies to end consumers. 4 Leadership skills and interdepartmental knowledge The role of senior management remains critical in planning CSR strategy. Without the backing of the company’s leadership, CSR strategies have little chance of continuity (Kitthananan, 2010). A strong leadership style to inspire subordinates to follow the CSR policy of the company is essential. This leadership needs to extend not only to the marketing division but also to other divisions such as finance, HR, operations and production. CSR strategy implementation should use a horizontal approach rather than the traditional vertical approach. Therefore managers need to have a sound knowledge of how each division operates. As an example, financially literate marketing managers will set strategic CSR goals which will help deliver a better corporate financial performance. behaviours Based on the above attitudes and improved skills, marketing professionals should build capacity in themselves to initiate CSR as a strategic response to the impacts of ethical consumerism. Increasing awareness of the company’s CSR policies among the public and other responsible authorities, supporting CSR and multi stakeholder initiatives, enhancing company credibility and working towards

Anon, (2002). McCartney backs anti-fur fashion.CNN.com. [online]. 28thoctober. Available from: http://edition.cnn.com/2002/ WoRlD/europe/10/29/design360. mccartney.fur/ [Accessed: 5th March 2012] Anon, (2012). oxfam and M&S have teamed up to help you support some of the poorest people around the world.[online]. Available from : http://www.oxfam. org.uk/donate/donate-goods/ma nds-clothes-exchange [Accessed: 3rd April 2012] Anon, (2012). When the jobs inspector calls: Do campaigns for “ethical supply chains” help workers? The Economist 31st March Barnett,M.(2011). The new CSR: This time it’s profitable. Marketing week. [online].14th April. Available from: http://www.marketingweek. co.uk/the-new-csr-this-timeits-profitable/ 3025435.article [Accessed: 4th March 2012] Berens et al, (2010). Corporate Social Responsibility in a Business Purchasing Context: The Role of CSR Type and Supplier Product Share Size. Corporate Reputation Review, 13(4), pp284-290. Bowen et al, (2001). The role of supply management capabilities in green supply. Production and operations Management,10 (2). pp 175-183. Carrigan, M. & Pelsmacker, P. (2009). Will ethical consumers sustain their values in the global credit crunch?. International Marketing Review, 26 (6), pp674-687. Cowe, R. & Williams, S. (2000). Who are the ethical consumers? Manchester. The Cooperative bank. Department for environment, food and rural affairs. (2011). Sustainable clothing roadmap progress report 2011. london: Department for environment, food and rural affair, pp5-10. Gold, S. et al (2010). Sustainable supply chain management and inter-organizational resources: A literature review. Corporate Social Responsibility and Environmental Management.17 (4). pp230-245.

Groskop, V. (2011). From red carpet to green catwalk: the woman matching style with ethics. The Guardian. [online].4th December. Available from: http:// www.guardian.co.uk/environment /2011/dec/04/livia-firth-designfashion-recycle [Accessed: 28th February 2012] halme, M. & laurila , J .(2009) Philanthropy, integration or innovation? Exploring the financial and societal outcomes of different types of corporate responsibility, Journal of Business Ethics, 84 (3), pp325-339. Just-style, (2011). Just-style management briefing: Eco-fashion retailers walk a fineline. JustStyle. [online].1st June. Available from: http://www.just-style.com/ management-briefing/eco-fashionretailers-walk-a-fine-line_id111248. aspx [Accessed: 22nd January] Kitthananan, A. (2010). Creating business and social value: The Asian way to integrate CSR into business strategies: Studies in trade and investment United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), 68. UNESCAP. labour behind the label (2011). let’s clean up fashion 2011: The state of pay behind the UK high street. UK: labour behind the label( September 2011) Maon et al, ( 2008). The Role of Managerial Perceptions in Developing a Corporate Social Responsibility Strategic Agenda. Systems Research and Behavioural Science. (Syst. Res. 25), pp.413-426. Newholm, T. & Shaw, D. (2007). Studying the ethical consumer: A review of research. Journal of Consumer Behaviour, 6, pp.253270. Nichols, W. (2010). Mike Barry: M&S is cashing in with Plan A. [online]. 9th November. Available from: http://www.businessgreen. com/bg/interview/1868061/mikebarry-cashing-plan [Accessed: 31st March 2012] Nielsen (2008).Corporate Ethics and Fair Trading A Nielsen Global Consumer Report. october. New York: Nielsen.

Porter, M.E. & Kramer, M.R. (2006). Strategy and society: The link between Competitive Advantage and Corporate Social Responsibility. harvard Business Review. (December), pp1-13. Porter, M. E. & Kramer, M.R. (2011). The big idea: Creating shared value. harvard Business Review (January- February), pp 4-17. Ramrayka, l. (2006) The rise and rise of the ethical consumer. The Guardian. [online].6th November. Available from: http://www. guardian.co.uk/society/2006/ nov/06/5 [Accessed: 21st January 2012] Roberts, J.A. (1996). Will the socially responsible consumer please step forward? Business horizons, 39(1), pp79-84. Siegle, l. (2011) hopping mad over shoes, The Guardian. [online]. 9th october. Available from: http://www.guardian. co.uk/environment/2011/oct/09/ kangaroo-leather-football-bootsethical [ Accessed: 01st March 2012] Smith, N.C (1995). Marketing strategies for the ethics era. Sloan Management Review, 36(4), pp85–98. Strong C. 1996. Features contributing to the growth of ethical consumerism: a preliminary investigation. Marketing Intelligence and Planning 14(5)5-13 Studying the ethical consumer: A review of research Journal of Consumer Behaviour J. Consumer Behav.6: 253-270 (2007) Published online in Wiley InterScience (www.interscience.wiley.com) DoI:10.1002/cb.22 Szmigin, I. & Carrigan, M. (2006). Exploring the dimensions of ethical consumption. European Advances in Consumer Research, 7, pp608.

Tallontire, A. et al (2001). Ethical consumers and ethical trade: A review of current literature. Policy series 12.United Kingdom, hobbs the Printers ltd.

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REFERENCES:

The Corporative bank, (2011).The ethical consumerism report2011. [online] Manchester. The Corporative Bank. Available from: http://www.goodwithmoney.co.uk/ ethical-consumerism-repo rt-2010 [Accessed: 11th February 2012] WGSN (2011). Tesco: “Greening” Clothing Production. london. WGSN. Wood,D.J.(1991). Corporate social performance revisited, Academy of Management review, 16, pp691-710. Cited in: Zu, l. (2009). Corporate Social Responsibility, Corporate Restructuring and Frims’ Performance.heidelberg.

FooTNoTES: 1 The term ‘green supply’ denotes “supply management activities that are attempts to improve the environmental performance of purchased inputs, or of the suppliers that provide them. They might include activities such as cooperative recycling and packaging waste reduction initiatives, environmental data gathering about products, processes or vendors, and joint development of new environmental products or processes”. (Bowen et al, 2001: 175) 2 Ethical Trading Initiative (ETI) is an alliance of companies, trade unions and voluntary organisations working in partnership to improve the working lives of people across the globe who make or grow consumer goods.

Vidyani Warnakulasooriya holds a bachelor’s degree in fashion design and product development from the University of Moratuwa, Sri lanka. After graduation in 2009, she started her career as a textile designer attached to MAS holdings, one of the leading apparel manufacturers in Sri lanka. later she joined the Spanish fashion brand “The IoU Project” founded by Kavita Parmar. She was able to gain a wide experience in fashion marketing while she engaged in “The IoU Project”. Vidyani is currently reading for her postgraduate studies in marketing in The Chartered Institute of Marketing.

qUSTOdIAN CASE STUdy Now that over half of the British population own a smartphone, and with over half of mobile internet users 35 or older, there can be little doubt that for the foreseeable future, ‘mobile’ is an extremely important channel for marketers. Whether it be for social activities, seeking information or interacting (‘engaging’) with companies, people (=customers) are spending significant time using their mobile devices. It should be no surprise then that brand owners regard mobile as an important part of their marcoms mix, and are allocating budgets accordingly. The following paper and case study has been prepared by Qustodian, a company formed in 2009 to allow users more control over what information they receive, when and how.

REACh VS ENgAgEMENT IN MObIlE MARkETINg – A qUSTOdIAN CASE STUdy

any of you will have seen the data showing that the opportunity for mobile advertising is enormous, because the advertising spend on mobile does not yet match up with the (growing) amount of time we spend with our shiny new smartphones. If you didn’t see it, the following is taken from Mary Meeker’s state of the internet annual study.

JohN RoBERTS

Graphic 1: Percentage of time spent by media vs. percentage of ad spend

In addition to this, mobile advertising is growing at a very high rate (157% in the UK last year, source: IAB) and is set to continue for the next decade. So it’s all good, right? Well, scratch beneath the surface and things are not as rosy as they seem. Jean-Louis Gassée wrote a very interesting piece called “Mobile advertising: the $20bn opportunity mirage” in the Guardian on 12 June 2012. In it, he pointed out something that seems blindingly obvious, but that many people in the advertising industry seem to be burying their head in the sand about: smartphones are not like previous media. He said: “We get closer to the heart of the matter when we look at a common thought pattern, an age-old and dangerously misleading algorithm: The [new thing] is like the [old thing] only [smaller / bigger]” In short, whilst the people who work in the advertising industry are smartphone users, just like us, when they get into work they seem to purposely forget that normal people just don’t want interruptive advertising on their mobile phones. They continue to try to crack ‘reach’ on mobile phones, ie. getting to as many people as possible, as this is all they really know from all previous media.

But mobile is different. Unless people buy into the content they receive on their mobile they simply won’t engage with it. Permission based mobile marketing is one potential solution to this problem. Whilst currently representing less than 5% of all mobile advertising, services that actively seek opt-in by an audience can generate engagement. As an example, Qustodian provides user controlled mobile advertising and marketing. Nearly a quarter of a million users have joined our service to date in Spain and the UK and receive ads, offers and interactive commercial content every day via our Apps that work on all major smartphones. People join to receive relevant commercial content based on their profile of interest (that we help them easily create and interact with by using the service) as well as receive up to 50% of the revenue generated by their interaction with the advertiser. By putting the user in control and sharing the value they are generating by their interaction, they opt in to view relevant messages whenever they want, thereby removing the perception that advertisers are shouting at them. The results of such an approach are striking… CASE STUdy: NIVEA FOR MEN Qustodian recently ran a very successful campaign for Nivea for Men via the agency Carat. The following message was sent to relevant users of its service during half time of the England v France game during Euro 2012 to coincide with the Nivea for Men TV ad launch.

Video view on YouTube

The client metric was simply to drive YouTube views of the outtakes video and of the people who were sent the message: • • •

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SERVICES ThAT ACTIVEly SEEk OPT-IN by AN AUdIENCE CAN gENERATE ENgAgEMENT

67% of users read it, 72% of the users who viewed the message clicked through to YouTube, The message was viewed 1.42 times by the audience, showing they liked the content and shared it.

A week later, a follow up feedback message was sent to a subset of the original audience.

Graphic 3: Nivea for Men campaign feedback selected screens

Recipients responded and this qualitative research showed that the users had largely enjoyed the message, that it was the kind of activity that they’d expect from Nivea For Men and that a smaller number had shared the content with friends. Again, over two-thirds of the recipients read and responded to the survey showing their active interest in engaging with relevant brands and sharing their views. Qustodian consistently delivers around two-thirds engagement with its messages, which is at least an order of magnitude larger than industry norms. Unless this level of interaction is achieved by sending only relevant and interactive, valuable or fun content, then the content will be perceived as spam-like by recipients. It is clear from this and similar services that a deeper, more direct interaction with identifiable (albeit anonymised), opt-in users delivers results. The big question is can these solutions scale up to deliver the ‘reach’ that advertisers want? Well, if people working in the advertising industry continue to forget that the ‘media owner’ of a phone is us, the phone users, then it is unlikely. If we concentrate on showing people how their interaction with the world of commerce can be both valuable and fun, then we will have a chance.

John Roberts is co-founder and MD UK of Qustodian. he has 20 years’ experience in the mobile and mobile advertising industry and prior to creating Qustodian was responsible for launching MVNos across Europe, including the first on the orange UK network.

Graphic 2: Nivea for Men campaign to generate YouTube screen views of outtakes video

PhIlOSOPhy OF MARkETINg Why dO WE NEEd MARkETINg? any products will be purchased without any encouragement. Many products and services are staple to daily lives and do not need to be “marketed”, only placed in the market. However because of the way ChARlES W. NIXoN we, in the advanced (Western) world, live it is no longer a requirement to fulfill the basic needs of survival that drives business and so we now compete for the better product. Is there a reason for marketing, does it add to the body of business knowledge? The honest answer is No. Sociology and psychology tell us how people behave, economics tells us how markets react and mathematics provides the source of financial inputs. Like all social science disciplines, it is not essential or naturally formed. It is a convenient set of models to assist in the age old task of creating a successful company. And by “successful” I mean one that achieves its aims, even if those are only survival or subsistence for the employees. However, marketing does bring all of these disciplines together and provides a unique focus on the marketplace and the customer. Do we need marketing? The answer is that all other business disciplines are functional whether finance, production or human resources. Marketing is philosophical and in short it is about the customer and how they interact, and how companies need to understand them. Surely the true test of the word is to see if we can find other words to replace it in most contexts. If we can, then there is no need for it. What are we doing when we are marketing? • We are promoting our goods, advertising or communicating • We are researching the market for customer reactions or consumer needs • We are developing or launching new offerings So is there anything we are doing when we are marketing that’s not something else? Probably not. Is the term therefore only a convenience. No, as it embodies more than a set of actions, it embodies a way of thinking about the economic and social intercourse of companies and individuals. Marketing is a process, a methodology and a philosophical approach to business that transcends the purely financial and transactional. In its fullest incarnation it can even be counter to short term profit maximising (the primary goal of many economic theorists and investors).

SO hOW ShOUld WE dEFINE MARkETINg ANd WhAT ChARACTERISES gOOd MARkETINg? Marketing means different things to different groups, so firstly we need to look at how it is viewed in different sectors before we can

COMMENT - NIxON

WE NEEd TO EdUCATE ThE CUSTOMER TO gET ThE bEST FROM OUR OFFERINg ANd TO gIVE US ThEIR COMMENTS ANd CRITICISMS

define it and establish a set of guidelines for its use. Is marketing about relationships or is it about aggression and the role play of dominant companies getting their points/products across to a subservient consumer? Are consumers the puppets of Multinational Corporations as stated in Naomi Klein’s book “No Logo”, or are they intelligent decision makers actively engaging with corporations for mutual benefit? Is the customer king? One way to come to a conclusion is to look at how marketers (in a company) describe their other halves (those they are having the relationship with); Targets = very militaristic; Potential = exploitative. In modern terminology many would have them as stakeholders or partners. Let us start with the most virulent of these, marketing as exploiter: of people, their ignorance and their time. The overselling or misselling of products and, more latterly, services has often been based on the exploitation of customer ignorance. One Advertising adage states that all products can be sold on the basis of Fear or Greed. Add to that Sex and you can account for 90% of sales advertising. Unrestrained promotion has raised many fears and concerns over pollution, obesity, children and health. Problems have resulted in controls on the marketing of financial services, drugs, food and health issues amongst others. Yet there are two counter points. In order to have an impact this advertising must be accepted and acted upon by consumers. So does the consumer play a role? Furthermore, in order to educate people about the issues, legislators use the same marketing and advertising techniques to change social attitudes and habits. Get fit, Stop Smoking, etc. The Government during the 1990’s instigated that greatest increase on what is called “Social Marketing” ever seen in order to get policy messages across. You cannot travel the country these days without being told to do some of the most basic things. The Government was trying to achieve its legislative targets using direct mailing and advertising. This leads to an interesting dilemma. Junk Mail (and adverting) is greatly disliked, however, information and knowledge about

new ideas and products is welcomed. Indeed whole television programmes are dedicated to it. This leads us to marketing as informer and educator: The consumer is keen to know more but is only sold to and not informed. The Customer is King but everywhere is Ignorant. Here is the main point. When marketers are seeking to exploit, they look mainly to the quick sale, and like the stock market and some bankers, are interested only in the short term. They will resort to short selling in the financial world (selling something they do not have) and selling on price in the marketing world. Little thought is given to the long term consequences; it is all about achieving targets. However, when viewing the customer as partner, then a different relationship is needed. We need to educate the customer to get the best from our offering and to give us their comments and criticisms in order that the company can improve its offering. Taken in today’s context this means engaging in efforts such as crowd surfing as a way to develop new products. (Marketing needs to be applied carefully but not everybody needs to be a Marketer). SOCIAl MARkETINg OF ThE MARkETINg IN SOCIETy Michael Sandel, the well-known Harvard Professor, has recently argued that marketing has become so endemic within society that it is beginning to become corruptive. The implication being that marketing has monetised every aspect of society, including things like rewarding people for doing what they should always be doing, such as reading books or indeed the renting of wombs in the case of people who are wanting to become pregnant but can’t. Sandel is implying that the market or marketing has gone over its barrier of selling goods and services and is now interfering with the moral good of society. This is an interesting discussion. One that might be countered by the argument of ‘old’ versus ‘new’ money. The concept, historically speaking, especially in traditional UK society has been that old money, which has come about over hundreds of years, is that which aims to do what should be done rather than what can be done. Therefore money is not always used where it can be and extraordinarily high prices are not paid for things that are not worth it and restraint is made. On the other side, we have new money, the nouveau riche, who believe that because they have earned large amounts of money it will get them anything they want, whether it happens to be a football club, access to a night club, or indeed any particular service that they may require. The interesting dilemma is; where do you stop with the use of marketing? Do we market ourselves as individuals; do we market clubs and societies or do we market only goods and services? And what, indeed, have we unleashed in the concepts that we have created? One could summarise this with the statement that we have become addicted to money. What that means for the future and society, is anyone’s guess?

BY DON MOYER

s a society, we are biased toward answers. Answers settle matters and tell us it’s safe to move forward. Questions are troublemakers, poking holes in ideas and plans. But questions are also powerful tools for marshaling facts, exposing vulnerabilities, and stretching imaginations. How can we make this work? How can we make this work better? What’s the worst thing that can happen? What do you want to be when you grow up? For simple fact gathering, you can’t beat the classics: Who? What? When? Where? Why? and How? But to really lift the lid off a problem, you need more provocative inquiries. In their book Why Not?, Barry Nalebuff and Ian Ayres propound questions that hold problems up to the light and give them a good shake. Where else would it work? Would flipping it work? Why don’t you feel my pain? What would Croesus do?

Not only are great questions well conceived, they are also well timed. In “The Discipline of Innovation” (HBR, May–June 1985), Peter Drucker reminds us that innovation often occurs under special conditions—such as a change in demographics or the emergence of new knowledge—and that questions posed at such inflection points produce the best results. So sow your queries in fertile fields, and watch solutions sprout and then flower into glorious potential.

Don Moyer has collected his series of cartoons as a book, entitled 64 Drawings. It is available from Blurb at www.blurb.com/bookstore/detail/949041

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