Marketing News: May 2016

ama.o r g

American Marketing Association

ama.org

may 2016

Marketing News

Reebok's Refit

making a comeback by cashing in on the Fit GenerationÂ

May 2016 No.

5

MN May 2016 Cover.indd 1

4/21/16 7:06 PM

May_full_pg_ads.indd 2

4/22/16 12:04 PM

table of contents

MAY 2016

AMERICAN MARKETING ASSOCIATION

VOL. 50 | NO. 5 AMERICAN MARKETING ASSOCIATION

38

Rob Malcolm Chairperson of the AMA Board 2015-2016 Russ Klein, AMA Chief Executive Officer rklein@ama.org Andy Friedman, AMA Chief Content Officer afriedman@ama.org EDITORIAL STAFF

Phone (800) AMA-1150 • Fax (312) 542-9001 E-mail editor@ama.org Molly Soat, Editor msoat@ama.org Zach Brooke, Staff Writer zbrooke@ama.org Hal Conick, Staff Writer hconick@ama.org Michelle Markelz, Staff Writer mmarkelz@ama.org Kristina Zapata, Art Director kzapata@ama.org Vince Cerasani, Associate Art Director vcerasani@ama.org ADVERTISING STAFF

Fax (312) 922-3763 • E-mail ads@ama.org Sally Schmitz, Production Manager sschmitz@ama.org (312) 542-9038 Michael Gay, Account Executive mgay@yourmembership.com (727) 329-4421

8

30

Nicola Tate, Account Executive ntate@yourmembership.com (727) 329-4437 Jordan Berthiaume, Media Sales Representative jberthiaume@YourMembership.com (727) 497-6565 x3409 Marketing News (ISSN 0025-3790) is published monthly by the American Marketing Association, 130 E. Randolph St., 22nd Floor, Chicago, IL 60601.

featureS COVER STORY

30 Reebok’s Refit

after 11 quarters of growth, reebok has finally cashed in on the “fit Generation” and made a comeback in the athletic-apparel industry.

Circulation: (800) AMA-1150, (312) 542-9000 Tel: (800) AMA-1150, (312) 542-9000 POSTMASTER: Send address changes to: Marketing News, 130 E. Randolph St., 22nd Floor, Chicago, 60601-6320, USA. Periodical Postage paid at Chicago, Ill., and additional mailing offices.

Canada Post Agreement Number 40030960.

Opinions expressed are not necessarily endorsed by the AMA, its officers or staff.

Marketing News welcomes expressions of all professional viewpoints on marketing and its related areas. These may be as letters to the editor, columns or articles. Letters should be brief and may be condensed by the editors. Please request a copy of the “Writers’ Guidelines” before submitting an article. Upon submission to the AMA, photographs and manuscripts will not be returned unless accompanied by a self-addressed, adequately stamped envelope.

Annual subscription rates: Marketing News is a benefit of membership for professional members of the American Marketing Association.

Annual professional membership dues in the AMA are $220. Annual subscription rates: $35 members, $145 nonmembers and $190 libraries, corporations and institutions. International rates vary by country.

Nonmembers: Order online at amaorders.org, call 1-800-633-4931 or e-mail amasubs@ebsco.com.

departMentS

38

2

the buzz

8

core concepts

10

the middle market

12

snapshot

Swipe Right

Dating websites and apps are scrambling to figure out how to connect users in unique ways, but how do they market their products? Prominent online-dating marketers discuss how to stay top of mind and center of heart for users.

Single copies $10 individual, $10 institutions; foreign add $5 per copy for air, printed matter. Payment must be in U.S. funds or the equivalent. Canadian residents add 13% GST (GST Registration #127478527).

Seen on aMa.org

THOUGHT LEADERSHIP

18

Customer Centricity

22

At C-level

ad retargeting

Employer Branding

Product Placement

12

scholarly insights

16

seven sages

customer Work

Perspectives on Growth

ama careers

56 back page

chris Golec, founder of Demandbase

Copyright ©§2016 by the American Marketing Association.

All rights reserved.

Michael Krauss reviews Originals, a new book by adam Grant.

Should marketers spend more on digital marketing and risk irritating consumers?

andy frawley, cEo of Epsilon

52

In the race to the White House voters should be thought of as consumers, according to Lawrence crosby.

24 Schultz on Marketing Strategy

46 10 minutes with

twitter Dos and Don’ts

Advertisers and advertising agencies assume liability for all content (including text, representations and illustrations) of advertisements published, and also assume responsibility for any claims arising therefrom made against the publisher. The right is reserved to reject any advertisement.

Marketing ManageMent

26

Business-to-Business

Marketers should listen more to consumers and less to Wall Street, according to top minds from the Institute for the Study of Business Markets.

Without written permission from the AMA, any copying or reprinting (except by authors reprinting their own works) is prohibited. Requests for permission to reprint—such as copying for general distribution, advertising or promotional purposes, creating new collective works or resale—should be submitted in writing by mail or sent via e-mail to permissions@ama.org.

Reprints in quantity are available by contacting Kristy Snyder at Sheridan Reprints: (717) 632-3535.

Printed in the U.S.A.

MN May 2016 1-64_4.22.indd 1

FIND OUT MORE AT

aMa .org

OR FIND US ON

4/22/16 1:28 PM

thebuzz Letter from the Editor

Culture Shock

M

arketers love to talk about millennials—how they act, what they read and what they want to buy. But marketing to millennials is less about understanding a particular buyer persona and more about adapting business models and marketing campaigns to an evolving human consciousness. Everyone, not just an urban millennial, is looking for easier ways to connect with loved ones, make healthy life choices and aquire the latest gadgets. Instead of “marketing to millennials,” which can be dangerously narrow, simply market to the people who live in this millennium.

Our cover story delves into just that type of adaptive strategy: Reebok has come back from near obscurity by aligning itself with consumers who flip tires and climb ropes at CrossFit gyms—the so-called Fit Generation. Those consumers are representative of a massive trend in consumer behavior: the desire to have brands be a seamless part their lifestyle, and vice versa. Staff writer Michelle Markelz—a CrossFitter herself—delves deep into the history of the fitness trend

and how Reebok is cashing in on those living a badass fitness lifestyle.

Dating is a cultural mainstay that changes from decade to decade but maintains a timeless end goal: finding a life partner. It’s unsurprising, then, that online dating is quickly overtaking classic meet-in-abar methods of coupling up.

But it’s a marketing Catch-22: When the service is successful, the customer never needs it again. According to Daniel Mori from the dating app

Zoosk: “On the one hand, we’d love to have a 100% retention rate. On the other hand, success means attrition. … Fortunately for the business, [but] unfortunately for humanity: Not all relationships last forever.” Staff writer Hal Conick spoke to marketers from top dating sites about how they’re shaping the way people meet.

The needs and behaviors of consumers—millennial or otherwise—are constantly changing. To keep up with those changes, marketers’ first

(and some say most important) problem is finding new sources of growth. On page 16, seven growth experts weigh in on how to identify sources of growth and how to best go after them.

The brands that can adapt to cultural changes are the brands that will survive.

Molly Soat Editor @MollySoat

Contributors

2

KIRSTEN ULVE

Michael Krauss

CHeston Bogue

Kirsten Ulve is an illustrator and designer living in New York. Her illustrations have appeared on magazine covers and in international ad campaigns, on the sides of buses, marquees on Broadway, in animated TV commercials, on children’s clothing, games, watches and in the form of toy figurines around the globe.

Michael Krauss is the president of Market Strategy Group in Chicago. He’s a veteran strategic marketer, business advisor, organizational coach, board member and investor, and author of the column At C-level.

Cheston is a Chicago-based photographer who specializes in action sports, outdoor and adventure photography. Cheston has been shooting photos professionally for nearly a decade and enjoys sharing his travels and lens of the world.

marketing news | May 2016

MN May 2016 1-64_4.22.indd 2

4/22/16 1:28 PM

thebuzz SEEN on AMA.org

More Brands Getting a #Trademark on Hashtags

2,900

global hashtag trademark applications have been filed in the past five years as brands seek to protect their content stream.

As the ignition keys to a social media keyword search, hashtags can be a powerful tool for marketers to drive viral conversations about and reactions to their brands. A great hashtag will spread far and wide across the digital landscape, but creator brands will get upset if competitors try to cash in by hijacking the content stream tied to a hashtag with their own marketing messages.

To guard against this, companies are increasingly seeking trademark protections for their hashtags.

Ronda Majure, vice president and head of global sales at Thomson Reuters, was part of a team that has examined the rise of hashtag trademarking since 2010. “I think one of the interesting things that we’ve seen is that [trademarking hashtags] is becoming part of the brand strategy,” Majure says. “It isn’t now just ‘did I get the domain name?’

[It’s] ‘Do I also need a design with my trademark?’ People are also now looking at whether or not they should they be registering their hashtag.

And those are always exciting times in terms of working in the brand business and marketing arena.”

In 2010, four years after the launch of Twitter, only seven companies had submitted applications to trademark specific hashtags, according to Thomson Reuters. That number has increased significantly, with 1,400 global applications in 2015 alone.

Nearly 2,900 trademark applications have been filed in the past five years, led by the U.S. (1,042), and followed

by Brazil (321), France (159), the U.K. (115) and Italy (115).

Majure ascribes much of the registration boom to the rise of social media, particularly Twitter.

“Marketing your brands and being

able to compete in social media is really the up-and-coming thing and probably the least expensive form of advertising,” she says. “We’re in early days in terms of what we’re seeing happen here, but the need for being able to control your trademark, [and] to monitor it, has always been important to brand owners. Being able to trademark the hashtag gives them ways to promote and license the rights of their hashtag.”

Majure says it costs $275 and usually takes around six months to register a trademark as long as there are no hiccups in the process.

Hashtags have been secured by

both small boutique businesses like #TheFitNewYorker and #BOSSBABE and huge brands such as Coke and Procter & Gamble. Along with security, trademarking a hashtag gives brands flexibility to re-use a hashtag in other forms of advertising.

The U.S. Patent and Trademark Office defines a hashtag as “a form of metadata comprised of a word or phrase prefixed with the symbol “#” and states that a hashtag is registerable only if it functions as an identifier of the source of the applicant’s goods or services. The office compares the examples #ingenuity—registerable for business May 2016 | marketing news

MN May 2016 1-64_4.22.indd 3

3

4/22/16 1:28 PM

thebuzz

consulting services as a distinctive term—and #skater—too generic a term for skateboard equipment and thus not registerable. This determination, the office says, is “made on a case-by-case basis.”

That statement has caused trademark law to remain uncertain to a degree, with some people claiming most, if not all, hashtags fall into the public domain. Summarizing an important 2015 ruling on hashtag trademarks in the case Eksouzian v. Albanese, intellectual property attorneys Kimberly Buffington and Carolyn S. Toto write on the social media law blog for the corporate law firm Pillsbury Winthrop Shaw Pittman: “The Court went on to cite the Trademark Manual of Examining Procedure (TMEP) and state that “the addition of the term HASHTAG or the hash symbol (#) to an otherwise

4

The U.S. Patent and Trademark Office defines a hashtag as “a form of metadata comprised of a word or phrase prefixed with the symbol “#” and states that a hashtag is registerable only if it functions as an identifier of the source of the applicant’s goods or services. unregistrable mark typically cannot render it registrable.”

Majure acknowledges the uncertainty. “What we find is that until there is definitive case law around a particular area it can be a gray area in terms of what people are wanting to do with their brand.”

Further rulings are expected, including one in the closely watched case involving Kris Jenner’s pursuit of a trademark for #proudmama, and carry the potential to alter and solidify the rules surrounding trademarked hashtags.

“That one is not actually a brand but she uses it within all her tweets. #proudmama gives the appearance of being very descriptive. Whether or not that gets approved will be an interesting turning point for hashtags and trademarking,” Majure says.

Until then, Majure advises brands to consider their long-term goals with any hashtag they use and determine if a hashtag is something that needs to be protected with coverage equal to other brand assets.

–Zach Brooke

marketing news | May 2016

MN May 2016 1-64_4.22.indd 4

4/22/16 1:28 PM

thebuzz

3 Ways Small Business Owners Can Increase Yelp Ratings

E

ven businesses with good customer service and products can be negatively impacted by bad online reviews. A study by Nielsen found that 70% of online review readers find them to be somewhat or completely trustworthy.

And Yelp users specifically are likely to make a purchase decision 93% of the time after reading reviews on a mobile device. Follow these three tips to generate good customer feedback:

1

Offer customers a venue for feedback. Before unsatisfied customers turn to social media and sites like Yelp to voice their frustrations, offer them a portal or form on your website or app to speak directly to you. If it’s difficult to communicate with your business, customers will find other more public ways to express their complaints.

2

Make giving feedback easy. It’s not enough to only create a

feedback platform, you have to make customers want to use it. Surveys that are too long or employ automated dialogue with a bot can make customers abandon the form before they tell you how to improve. Avoid automation, especially when dealing with complaints. Everyone appreciates human interaction and empathy.

3

Don’t retaliate. When customers leave negative reviews, it’s important to address them directly, but tactfully. At best, you will not change the mind of an upset customer.

At worst, retaliation could lead to lawsuits. Businesses that put effort into generating more positive reviews will do more to negate the impact of a handful of bad ratings. Businesses, especially local establishments and SMBs, should have an interest in monitoring the feedback their customers post to online review sites.

–Michelle Markelz

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 5

5

4/22/16 1:28 PM

thebuzz Marketoon

6

marketing news | May 2016

MN May 2016 1-64_4.22.indd 6

4/22/16 1:28 PM

May_full_pg_ads.indd 5

4/21/16 5:57 PM

coreconcepts

ad retargeting

On (Re)target Understanding the what and why of ad retargeting

By Zach Brooke | Staff Writer

 zbrooke@ama.org

O

f all the new must-have digital marketing strategies brought about by the explosion in online shopping, ad retargeting is one of the most prevalent. Unlike the physical world, where bricks-and-mortar businesses welcome window shoppers who ultimately leave empty handed with vague promises to “think about it,”

8

retargeting lets businesses follow up with those shoppers later on, keeping them interested and, ultimately, converting more of them to buyers.

Retargeting, experts say, is a fancy term for a simple concept: Advertise to internet users who have viewed products or services online but left before buying by purchasing ad space on other websites.

“It’s one of the best ways to sell. It’s proven that people need to come to your website five to eight times before actually converting,” says Rocco Baldassarre, search engine marketing consultant and founder and CEO of digital marketing agency Zebra Advertisement. “The way it works is pretty straightforward.

Basically you need to imagine online marketing where somebody is selling advertising space and somebody is buying it. It can only display ads on sites that are selling ad space.”

You Get What You Pay For Online advertising space is divided into three big universes: Google, Bing

marketing news | May 2016

MN May 2016 1-64_4.22.indd 8

4/22/16 1:28 PM

ad retargeting

and social media. Purchasing online ad space is not a fixed monetary transaction.

Rather, it’s a bid process. Since each webpage only has so much space set aside for display ads, brands must bid against competitors to score prime webpage real estate. “If you go to Bose and [Beats by] Dre to look for headphones and then go to Huffington Post, depending on whether Bose or Dre puts in a higher bid will determine which company’s ad you see,” says David Allison, marketing coordinator for online advertising co-op Hivewyre.

However, price alone doesn’t determine the frequency with which your ad is displayed. Each platform uses a proprietary formula created to assess the stature of an advertisement. Google uses a quality score, which evaluates the caliber of the advertiser’s website, while Facebook has a relevance score, which is determined based on the likelihood users will interact with a particular ad, Baldassarre says.

It’s important to have a retargeting strategy in place before engaging in open bidding. “The auction is automated and occurring in real time. You can bid extremely high to win all the possible impressions, but that’s not necessarily a good strategy. The best strategy is to set targeted parameters, and this requires a combination of great vendors using the best technology,” says Marlo Schneider, director of client services and strategy at Sellpoints, Inc., a provider of e-commerce channel sales solutions.

The bidding process can make budgeting for a retargeting campaign difficult. Sellpoints’ pricing starts at $500 a month. Allison says he’s seen monthly budgets range from a couple thousand dollars to five figures. Baldassarre says that Facebook generally charges between 10 cents and a dollar per click, depending on the competiveness of your target niche, which means campaigns can be conducted for as little as $5 to $10 per day.

Time is another big variable to the overall cost of a campaign. Each platform comes with its own limits. Google and Bing have the longest retargeting times, around 580 days, while Facebook is much shorter, at about 180 days. Longer campaigns are

best designed for expensive products like cars or condos, or for B-to-B services.

“The length of your retargeting campaign completely depends on your business. Most advertisers should use retargeting as an on-going part of their marketing strategy. In-market times are business-specific, so making sure your campaigns are set up to align with your business, and testing different levers over time, is important,” Schneider says.

“The lower the price point is, the smaller the decision making process will be and the shorter your retargeting list times should be,” adds Baldassarre.

The Possibilities of Personalization Rather than reach out to everyone who stumbled upon a website, a retargeting campaign can be customized to target users whose captured site-visit data indicates a higher likelihood to buy.

For instance, a campaign can be set up to target only people who remain on the original website for two minutes or longer, visited upwards of six different pages within the website, or both.

Retargeting ads can be customized to offer special discounts to entice users to buy. They can also be used to upsell, offering accessories to already purchased items, or can be a platform for presenting entirely new products or packages.

Retargeting ads can also be adjusted to offer more facts about a service over a long campaign, so prospects will continue to receive new information about a company instead of just looking at the same ad month after month.

“The deeper you go in the purchase funnel, or in the decision making process if you’re [offering] a service, the more information you need to give the user that comes back to the site to feed his interest.

Many people don’t do that, but if you really want a good strategy, that should be the concept that you work on,” says Baldassarre.

One area of retargeting that offers bedrock certainty is quantitative measurement of a campaign’s impact.

By entering a few codes provided by the advertiser platforms, marketers can track site visits, nurture touches—reaching out

coreconcepts

to existing contacts with your retargeting display ads, with mid-stage or late-stage offers or content—and both the number and cost of conversions.

“The most important metrics to track your retargeting’s effectiveness is costper-acquisition. Make sure that when you’re setting up your campaigns, you have conversion pixels placed on all of the relevant success events that you want to track,” Schneider says.

At VentureBeat’s Marketing.FWD conference, Brad Smallwood, vice president of measurement and insights at Facebook, said retargeting is most helpful at the bottom of the funnel.

Baldassarre and Allison both agree with that assessment, but Schneider disagrees, saying, “Retargeting can also be used as a channel to reach your existing audiences with new offers [or] products or announcements in the same way that more traditional channels do.

Nontraditional approaches to creative messaging and audience identification are increasingly prevalent.”

The Creepiness Factor Out of all possible digital strategies, retargeting is one of the most criticized for being “creepy.” The technology is trying to evolve past that perception by implementing best practices and developing smart components.

Recommendations include creating relevant ads for specifically viewed products, using well-designed, eye-pleasing ads, reducing ad frequency, avoiding retargeting customers with items they’ve already purchased and pursuing as much individualization as possible.

“This is one thing that is very vendorspecific, so transparent technology partners are important. We’ve dedicated resources to improve and expand our audience modeling capabilities and our optimization algorithms. Both of these strategies allow us to weed out the ‘annoyed’ consumers by controlling their exposure over time based on their behaviors. Programmatic displayretargeting platforms are extremely complex, and it’s valuable to have someone who can help you navigate,” Schneider says. m May 2016 | marketing news

MN May 2016 1-64_4.22.indd 9

9

4/22/16 1:28 PM

themiddlemarket

Employer Branding

Why Your “Employer Brand” Matters Studies show that employer brands and employee value propositions can be the differentiators for middle market firms fighting for top talent

By Michelle Markelz | Staff Writer

 mmarkelz@ama.org

T

alent is one of the biggest costs to a business, even more so when it’s unfilled. In 2014, CareerBuilder reported that businesses lose more than $14,000 on average for each position that remains vacant for three months or more.

More than 16% of businesses say that cost can exceed $25,000.

The middle market is one sector of business where talent acquisition and retention is particularly challenging.

Nearly half of companies with annual revenues between $10 million and $1 billion report that they don’t have enough talent to fill leadership positions, according to surveys of more than 400 middle market C-suite executives and more than 600 members of the middle market talent pool by the National Center for the Middle Market and the Novo Group compiled in the report “Building the Top Team.”

“When you have important roles left unfilled, that costs the company money.

When you’re hiring, you want the best. The difference between an A-player and a Band C-player can be significant, especially in a thought-leadership era,” says Leah Burdick, vice president of marketing for recruitment company Hudson RPO. An “employer brand” is defined

by Hudson as the perception of an organization as a great place to work by both current and prospective employees.

Though a business can do much to define itself as an employer brand, certain inputs such as Glassdoor reviews can also shape the brand, positively or negatively, outside the employer’s control.

Burdick, who co-authored “How to Launch a Successful Employer Brand,”

10

says employer branding has been part of the business lexicon for a while, but is still not executed by many companies.

“A lot of marketers aren’t even aware of [employer branding]. They’re so focused on the corporate brand. Marketers need to understand it affects the corporate brand.

They should take it very seriously.” Only 25% of those surveyed reported to the National Center for the Middle Market that they had strong employer brands.

83% of middle market executives believe their company’s welldefined employer brand helps keep top talent off their competitors’ payroll The National Center for the Middle Market survey confirms: 79% of middle market executives believe a good employer brand is essential to their company’s ability to attract top talent, and 83% believe their company’s well-defined employer brand helps keep top talent off their competitors’ payroll.

The employer brand is a critical tool for middle market companies to catch the attention of passive candidates, those who are already employed and not looking for a change, constituting 60% of the candidate pool. The Novo Group found that 63% of companies that grew more than 11% in 2014 made a commitment to recruit passive candidates.

“If one of the things middle market companies can offer is growth, the ideal candidate is someone who’s established themselves in a larger organization but is looking to do more,” says Larry Inks, clinical associate professor of management and human resources at

The Ohio State University and co-author of the National Center for the Middle Market study.

As important as the employer brand is the employee value proposition (EVP), a handful of unique attributes of working for a company. Elements of the EVP include compensation, benefits, job security, company culture, meaningfulness of work, quality of work environment and associates, recognition and awards.

64% of surveyed executives consider compensation an attractive aspect of the EVP while 49% say both growth opportunities and work/life balance attracted their attention to middle market firms While compensation is one factor that middle market firms struggle to match larger companies on, Burdick and Inks agree the middle market has much to offer employees. “Pay is not the top priority for everyone,” Burdick says.

“Flexible work time, better vacation time, better maternity leave, the ability to work from home … those are things that are meaningful to an employee.”

Role expansion is another card middle market companies can play to attract talent away from their Fortune 500 competitors. Just 64% of executives surveyed for the “Building the Top Team” report consider compensation an attractive aspect of the EVP while 49% say both growth opportunities and work/ life balance attracted their attention to middle market firms. And 75% of middle market executives agree that the quality of their colleagues is an important component of their EVP. Only 25% of middle market companies have strong employer brands and EVPs “Generation Y is looking for growth opportunities, to advance quickly, corporate social responsibility and work/ life balance. Middle market and small companies have an opportunity to really engage that,” Inks says. The report provides a case study of Jeni’s Splendid Ice Creams, which offers its employees a

marketing news | May 2016

MN May 2016 1-64_4.22.indd 10

4/22/16 1:28 PM

employer branding

themiddlemarket

the financial impact of the employer brand and EVP to the cost of customer acquisition. “If you have a more compelling employer brand, the cost per hire is likely to decrease as well as the turnover rate,” she says. “Likewise, when you have a strong employer brand, you’re more likely to attract employees who are a cultural fit [and] will stay longer.”

The report found that businesses with strong employer brands saw revenues increase by 20% on average annually while firms with weak employer brands grew just 8%. Similarly, strong employer brands correlated with 12% workforce growth while weaker brands correlated with less than 5% workforce growth.

For the majority of the middle market without a developed employer brand or EVP, there are steps that can be taken to facilitate the search for top talent. The report suggests six best practices: 1. Recognize that all firms have employer brands, whether they know it or not.

2. Brainstorm ways to strengthen and differentiate your brand and EVP. 3. Create an authentic and genuine brand and EVP. 4. Involve your marketing department in the process.

5. Clearly articulate your EVP to current and prospective employees, considering where each will encounter your brand (on the web, social media, employment fairs and in tools your organization uses internally).

6. Make use of your brand and EVP in your recruiting efforts.

month-long sabbatical after three years of employment.

“The bottom line is, in larger organizations, it’s a little tougher to be flexible and change policies. Smaller organizations can be more nimble and customize their offerings to match what millennials are looking for,” Inks says.

Businesses with strong employer brands saw revenues increase by 20% while firms with weak employer brands grew 8% “Building the Top Team” shows a correlation between strong employer brands and organization growth, both in revenue and workforce. Burdick likens

Burdick suggests starting with an audit of your company’s reputation to see how you measure up to your competition and to compare what the business believes its employer brand is and how employees describe it. Glassdoor is a common venue for this information, but internal surveys—so long as they provide adequate anonymity—can provide valuable insights. “Employer brand is like the corporate brand,” she says. “It has to be authentic. You have to deliver on the promise or all of your spend is wasted.” m May 2016 | marketing news

MN May 2016 1-64_4.22.indd 11

11

4/22/16 1:28 PM

snapshot

product placement

Cinnabon Calls Saul AMC’s hit series “Better Call Saul” opened tight on Cinnabon’s logo. Two seasons later, the company is seeing huge dividends from its involvement with the “Breaking Bad” prequel.

By Hal Conick | staff writer

 hconick@ama.org Goal As AMC’s “Better Call Saul” opened for the first time, the camera panned in on Gene, a character played by Bob Odenkirk, whose nametag, apron and regalia indicate that he’s the manager of a Cinnabon.

Set in black and white, the scene followed Gene as he makes the company’s famous cinnamon rolls step by step. For many, the scene was a peek into the new life of Saul Goodman, a beloved character from “Breaking Bad” forced to change his identity.

For Cinnabon, it was two minutes of un-interrupted TV time in front of millions, a boon for its marketing department.

A year and a half after “Breaking Bad” ended its white-hot five season run on AMC, the show’s anticipated prequel

12

“Better Call Saul” aired for the first time.

The debut broke records, drawing in 6.9 million viewers, the most ever for a cable premier in history. It shattered the old record by 2.9 million people, according to Nielsen.

Cinnabon’s brand name was the first thing the show’s 6.9 million viewers saw during the show’s series premier. How did the company get here? Quite organically, as Jill Thomas, vice president of marketing at Cinnabon, tells it.

Action Thomas, who has been with the company for approximately a year, says Cinnabon has been having its “moment of rediscovery,” thanks in no small part to

pop culture. Aside from “Better Call Saul,” the company has recently been featured on ABC’s “The Muppets” and “Black-ish,” as well as the recent Will Ferrell and Mark Wahlberg movie, “Daddy’s Home.”

“It’s a quick read. That’s why a lot of writers write us in,” she says, adding that the minute you say Cinnabon, it’s as if people can already taste or smell it. “It’s Middle America, it’s very approachable and positive. There’s a very positive perception of a very loved brand.”

The relationship with “Better Call Saul” started when the show’s creators, Peter Gould and Vince Gilligan, wrote Cinnabon into the penultimate episode of “Breaking Bad.” Saul, played by Odenkirk, told lead character Walter White in the midst of his big change that, “If I’m lucky, in a month from now, best-case scenario, I’m managing a Cinnabon in Omaha.”

At that point, Cinnabon tweeted a job application for the company’s Omaha shop at Odenkirk. Gould and Gilligan reached out to the company and told them about the idea for Cinnabon’s involvement in their new show.

“We totally embraced the idea and took it all the way,” she says. “For us, it was a really fun social idea. Just being there, always being in the moment.”

marketing news | May 2016

MN May 2016 1-64_4.22.indd 12

4/22/16 1:28 PM

PRODUCT PlACEMENT

Cinnabon and the “Better Call Saul” team went all in on the relationship.

Odenkirk was trained on how to make cinnamon rolls from start to finish, which he showcased in opening episodes of both seasons one and two. He also has told and retold the story many times, including on talk shows like “Conan” and “James Corden’s Late Late Show.”

Cinnabon created its own #SaulSelfie hashtag and had cardboard cutouts of Odenkirk in all of its stores as a way to get customers to take a picture of themselves with it and post it online for a chance to win a year’s supply of Cinnabon goodies.

“AMC has been a great partner in helping us develop ways to engage in ‘Better Call Saul’ in a more authentic way, both through social and bakery extension,” Thomas says. “These guys integrated us in. They welcomed us, they embraced us.

They wanted it to be authentic.”

Results While it’s difficult to isolate the retail value Cinnabon received from the airing of the show, Thomas says there was an increase in traffic during the weeks “Better Call Saul” aired. However, social engagements have been through the roof

CoMPanY

Cinnabon HeaDQuarters

Atlanta, Georgia CaMPaign tiMeline

During weeks of “Better Call Saul” season premiers, February 2015 and February 2016

PHOTO: CINNABON

results

More than $1 million in media value; 35-times the usual number of impressions on social media week of series premier; 10-times the impression and engagement weeks of the season premiers.

for the company, something Thomas says she could easily quantify.

The #SaulSelfie hashtag saw a 35-time increase in impressions the day the first show aired. The placement, which cost Cinnabon no money, was worth more than $1 million for the company in media value, Thomas says. For a company that doesn’t pay for placements and has a small marketing budget, the impact was huge.

“The value of that … is just incredible,” Thomas says. “We could never place an ad on a cable show like that much less be integrated for two minutes. The numbers are pretty astounding. For us, it’s everything.”

In addition, Thomas says they have seen increases of thousands of people following their brand across all social platforms, mainly Twitter, the week of both season premiers. Impressions and engagement were up 10-times on the weeks where Cinnabon was on “Better Call Saul.”

“When we do something like this, we see dramatic bumps,” she says. “I look at media and impressions on social on a weekly basis. It’s pretty evident, the amount of growth we see [from ‘Better Call Saul’].”

With the way television is consumed via binge watching on Netflix and other streaming services, Thomas says she’s hopeful there will be some residual value from the placement on “Better Call Saul”—not to mention all the storytelling Odenkirk is able to do on late night shows while the season is underway.

snapshot

Stacy Jones, CEO of Hollywood Branded, a Los Angeles-based entertainment marketing company, says these types of placements can make a huge difference at the cash register.

Jones used to represent Cinnabon before it brought marketing efforts in house.

Within one week of the brand being featured in a show (her example was CBS’ “King of Queens”), stores saw a spike in sales, she says.

It doesn’t matter if the show’s content may be dark or gritty, as is the case with “Better Call Saul,” Jones says. It only matters that consumers are engaged by the content and appreciate it.

“More and more, there’s fluff content that’s on your earlier hours on TV networks and, quite frankly, they aren’t doing so well,” Jones says. “But [on cable], it’s a little bit grittier, a little bit edgier.

There’s a little bit more adult content and higher viewership. Secondly, [this kind of content] offers more realism. It’s a natural, fun way for brands to get involved and be a little real. I don’t see starker, grittier shows as being a negative at all.”

As far as repeat viewing and replay value, Jones says she still sees the same old episodes of “King of Queens” that feature Cinnabon she saw 12 to 14 years ago. For a show such as “Better Call Saul,” with huge critical success and a cult-like following, the replay value could keep customers hungry for Cinnabon for years to come. m May 2016 | MARkETING NEWS

MN May 2016 1-64_4.22.indd 13

13

4/22/16 1:28 PM

scholarlyinsights

customer work

How to Make Customer Work More Appealing Many contemporary business models feature customer work post-purchase. Experts weigh in on how to position doing work yourself as a positive step, not a negative.

By Lance A. Bettencourt | contributor

 lance@liftphd.com

I

KEA, the innovative Swedish furniture retailer, made popular the concept of customer coproduction.

More than 60 years ago, IKEA offered a flat-pack table that customers had to assemble on their own in order to save money. As explained on its website, “We do our part, you do your part, together we save money.”

Of course, IKEA is not alone in emphasizing and even increasing the role customers play in the production of goods and services. At grocery stores, we increasingly check ourselves out and bag our own groceries. At restaurants, we pick up our own food and bus our own tables.

And, in categories including computers and exercise equipment, we assemble our own products.

On the one hand, research shows that customer coproduction often leads to higher satisfaction. It can be enjoyable and often leads to better results. On the other hand, anyone who has ever assembled their own barbecue (Should I have leftover pieces?), swing set (Seriously, 984 steps?) or furniture (I don’t think it’s supposed to lean that way) knows that the process is not always pleasant.

As businesses continue to shift more work onto customers, marketers must step back and consider how to manage the potentially negative impact of difficult coproduction processes on customer satisfaction.

Managing the Negative Impact of Coproduction In the November 2015 issue of the Journal of Marketing, Till Haumann, Pascal Gunturkun, Laura Marie Schons

14

and Jan Wieseke of Ruhr-University of Bochum in Germany published a paper that provides important insights into this issue. Their paper, “Engaging Customers in Coproduction Processes: How Valueenhancing and Intensity-reducing Communication Strategies Mitigate the Negative Effects of Coproduction Intensity,” shares the results of an experiment done in cooperation with a ready-to-assemble furniture retailer.

The researchers hypothesized and found that higher perceived coproduction time and effort led to lower customer satisfaction. Essentially, when customer time and effort are higher, but benefits remain the same, customers are less likely to be happy with the process, and lower satisfaction with the process spills over into general product satisfaction.

The ratio of outputs to inputs between the customer and the company has gone out of balance. With every bit of extra time and effort put forth by the customer, the exchange becomes more and more inequitable.

The researchers also looked at how different communication strategies might restore equity even when coproduction time and effort are high. Specifically, 803 customers of the retailer were randomly assigned to one of six groups–a control group and one of five different communication strategies groups.

Before they made a furniture purchase, the customers provided background information in a survey and were exposed to an advertisement poster with informative text and a matched image that reflected one of the following communication strategies:

1

Economic Value: The poster communicated that customer effort in self-assembly enables the firm to offer lower prices.

2

Relational Value: The poster communicated that the self-assembly task could be done with family and friends to satisfy relationship needs.

3

Combined Value: The poster communicated both economic and relational value benefits.

4

Self-Service Support: The poster

communicated that the firm had available a support hotline for customers who experienced assembly difficulties.

5

Full-Service Support: The poster

communicated that the firm had a reasonably priced service partner who could do the assembly for the customer.

After they made a purchase, customers were sent a second survey that measured their perceptions of self-assembly time and effort as well as satisfaction with the process and product.

marketing news | May 2016

MN May 2016 1-64_4.22.indd 14

4/22/16 1:28 PM

customer work

The results revealed that all five communication strategies worked.

Specifically, the research showed that either drawing attention to the customer benefits of coproduction (strategies 1-3), or highlighting other inputs that the company is making (strategies 4-5) mitigate the negative impact of coproduction time and effort on satisfaction.

In other words, high coproduction time and effort has a negative impact on customer satisfaction with the process and the actual product, but the negative impact is not as strong when the company either highlights the benefits of coproduction or other company inputs.

How to Make Coproduction Seem Reasonable, Even Desirable The results suggest four recommendations for making coproduction seem more reasonable and, ideally, desirable.

First, the results make it clear that a company should make every effort to make the coproduction process as quick and painless as possible for customers.

Customers are willing to accept a coproduction role for a lower price or

other benefits, but any undue burden of the process will reflect negatively on the company and its products.

Second, the research shows that highlighting benefits of coproduction reduces the negative impact of coproduction on customer satisfaction.

Importantly, it revealed that these benefits extend beyond those directly related to the transaction—lower price, in this case.

In fact, drawing attention to relational benefits of coproduction proved just as powerful. With this in mind, marketing managers should consider what other benefits might be highlighted in communications to customers: Perhaps sustainability could be highlighted, perhaps a sense of accomplishment could be highlighted, etc.

Third, a more indirect conclusion of the research is that any additional benefits that directly result from the coproduction process can improve perceptions of equity and satisfaction by increasing the ratio of outputs to inputs for the customer. The ultimate goal for any self-service or self-production process is to incorporate benefits that can be uniquely satisfied by coproduction.

scholarlyinsights

For example, coproduction offers a unique opportunity for customers to customize—and ultimately optimize—a product for their unique needs. As another example, the company could consider creative ways to enable customers to share their accomplishments with others—or even to gain a sense of accomplishment, such as turning self-assembly into a game or competition.

Finally, the experiment revealed that communication that highlights customer benefits or company inputs to coproduction can have a powerful impact. And, amazingly, this was achieved with a single poster days or weeks before the actual furniture was purchased. A firm should consider not only what to communicate to customers about coproduction, but also when, where and how often to communicate to have maximum impact. m Lance A. Bettencourt is a co-founder and managing partner of LIFT PhD, and a distinguished marketing fellow at the Neeley School of Business at Texas Christian University.

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 15

15

4/22/16 1:28 PM

sevensages

PERSPECTIVES ON GROWTH

SEVEn EXPErtS WEIGH In on tHE aMa’S

Seven Big Problems Problem one: Effectively targeting High-value Sources of Growth

david rogers

Jonathan Zaback

Jun loayza

katrina Craigwell

Author of The Digital Transformation Playbook and faculty at Columbia Business School

Chief Growth Officer at The CHR Group

Chief Growth Officer at Bunny Inc.

Global Director of Marketing Innovation at GE Digital

Need-based targeting is a great way to start.

Find the market you want to serve and address its needs. Creating a product in isolation is risky—how do you know it will appeal to anyone but you? The best way to reach a market segment is to understand where that segment “lives.”

Brands need to refine their stories, tell them well and communicate them in ways and places where consumers will respond. This is different for each market, but every market is reachable.

There is no doubt that the best way to grow as a company is to understand the behavior and desires of your customers. If you don’t know who to target, you can’t properly address their pain points or provide any real solutions to their problems.

Relevance is important to us because of the impact of GE technology, whether it’s power generation, aviation or health care. We have an incredibly wide footprint globally. Even if you are not in the market to purchase a jet engine or a locomotive, chances are that some part of your day has been impacted, hopefully optimized, by GE technology.

Is the CMO now the Chief Commercial Officer? For many businesses, the answer is yes. For years, the role of marketers has primarily been to drive demand for existing products and services through customer acquisition and retention.

Today, dramatic changes driven by digital and other factors are forcing businesses to look for new sources of growth as old competitive advantages rapidly decline. Marketers are being tasked not just with “selling our stuff,” but with helping a firm transform its value to the market. If the unique role of the marketer is to keep the business focused on its customers, then an essential job of today’s marketer is to discover the next generation of products, services and experiences that can bring value to its customers and earn value for the firm.

16

We all take positions: in our families, at work, online. Products need to do the same. Maybe a product is not for everyone.

Is there a spin about the design? Is it organic and non-GMO? Is there a celebrity-endorsement, or is the focus that it is made by a 3D printer in Brooklyn?

There are always stories to tell. Find your story and tell it.

Paid advertising might bring some quick ROI, but not being sure who to target will hurt you in the long run.

Focus more of your time on getting to know your customers through surveys and personal outreach to get inside their heads and understand their needs.

By seeking feedback and tweaking your products and services based on their suggestions, you will create a real bond that extends far beyond the experience most customers have with businesses. You will create a human connection that is desired in a world of automated customer service.

We think about the next generation of talent or the people in the current generation who we haven’t been able to reach yet. In the U.S., we’re thinking about how we tell that story to current and future shareholders. We’re also trying to think more broadly about the spheres of influence that affect the short list of people who might buy a jet engine or a gas turbine.

MARkETING NEWS | May 2016

MN May 2016 1-64_4.22.indd 16

4/22/16 1:28 PM

Perspectives on growth

Scott Davis

Ryan Gum

Chris Franco

Chief Growth Officer at Prophet

CEO at Attach

Chief Growth Officer at Miner Labs

Most companies spread themselves too thin when trying to grow their business. They try to land a small share from a few large customers, a little more from repeat customers and round it out with a couple of new customers. But a smarter approach is to focus on targeted segments.

Harken back to the first day of business school and applying STP: segmentation, targeting and positioning.

When working with clients, we focus on the target segments that we believe will ultimately drive disproportionate margin to their bottom line. By taking a smart segmented approach, you will be able to tag and segment customers in your database and be very intentional about whom you’re offering your best “self” to, which will maximize your chances for success and grow your bottom line.

A lot of marketers take a “wide net” approach to growth. They get excited by new technology, channels and opportunities so they end up trying a little bit of everything. Experimenting is great, but if you don’t give yourself the focus and commitment to dig a layer deeper, you’ll end up scratching the surface and never find out what really works. If an experiment fails, it’s a lot harder to figure out why than to move on to your next exciting idea on the list. To effectively find and target growth opportunities, you have to focus on one thing and truly learn from your experiments before you can expect high-growth results.

There are dozens of highvalue sources of growth, and that is a gift and a curse for growth-focused companies. The key is to implement a system that rewards high-tempo testing of a variety of channels, and from there, have the discipline to focus on the channels that work best.

The best growth strategies are rooted in a thorough understanding of and appreciation for the target audience. This helps make the right initial assumptions so you can concentrate testing in the right places; not just where the target audience spends time, but where they are in the optimal mindset for your messaging and offers.

Marketing is an exchange of value. If you try to be everywhere, you’ll be nowhere. Go where your audience spends its time, where customers want to hear from you and where they’ll respond to you.

sevensages

“Experimenting is great, but if you don’t give yourself the focus and commitment to dig a layer deeper, you’ll end up scratching the surface and never find out what really works.”

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 17

17

4/22/16 1:28 PM

marketingmanagement

customer centricity

Political Relationships

By Lawrence A. Crosby

 lawrence.a.crosby@gmail.com

I

often examine the applicability of customer centricity notions (i.e., satisfaction, loyalty, relationships, engagement, CX, etc.) in various eclectic domains, e.g., “healthy relationships” (health care), “philanthropic relationships” (giving), “sustainable relationships” (ecology), etc. One domain that I’ve avoided, with great trepidation, has been politics. This is partly due to the maturity of the field and all that has been written and said about the topic from applied and scientific perspectives. As a marketing columnist, I also want to avoid alienating readers who might take offense at comments made about a particular candidate or party.

But let’s face it: The current presidential race is pretty darn interesting and is dominating the public discourse.

There have been highly polarized elections in the past (I remember Johnson vs. Goldwater and McGovern vs. Nixon), but this one seems particularly contentious if not an outright donnybrook. It virtually begs comment. Let me weigh in with a few candidate- and party-neutral thoughts from a relationship-marketing standpoint. I am inspired by a former colleague and co-author, Bruce Corner, who noted how the brand loyalty model seemed to explain losses by such candidates as John Kerry (2004) and Michael Dukakis (1988). His premise was that in the war of emotion over reason, emotion always wins.

It is not unusual to think of a political candidate much like a product or service that voters can decide to “buy.”

While the analogy isn’t perfect, there are notable similarities. This probably

18

explains why many advertising and marketing research agencies have a political arm. As in brand marketing, voters develop an affinity for candidates in the consideration set over a period of time based on a variety of experiences, including communications. Campaign managers hope that what emerges is a large base of loyal supporters who actually go to the polls and vote.

Since campaigns in the U.S. often last many months, if not years, the strength and resilience of that votercandidate relationship is of paramount importance. As in the current presidential race, voters are constantly bombarded by influences that could deflect their loyalty emanating from friends and family, co-workers, debates, press interviews, editorials, endorsements and political advertising.

Looking even further down the road, if

the candidate is lucky enough to win, the re-election cycle is just around the corner, raising the risk of loyalty erosion due to the politician’s actual performance in office.

Let’s examine this notion of voter loyalty a little deeper. As in brand marketing, it is not a singular behavior: buy vs. not buy, pull the lever in the voting booth or don’t. There is actually a complex set of behaviors that are important to a successful campaign that reflect the strength of the voters’ attachment to the candidate. These include passing on favorable word of mouth, donating to the campaign, attending rallies and events, canvassing door-to-door, voting in party primaries and posting on social media. A better measure of voter loyalty might be the willingness to engage in multiple pro-candidate behaviors.

I’ll consider some of the factors driving voter loyalty again from a brand marketing lens. One factor often overlooked relates to “switching costs” and “switching opportunities.” Every act a voter makes in support of a candidate can be considered an investment in the relationship which adds to its stickiness.

While these behavioral investments are technically a sunk cost, it doesn’t feel that way to the voter. One implication for campaign management might be to foster progressive investments in small steps (e.g., “come to our rally and at least hear what the candidate has to say”). From the standpoint of the opposition, the flip side of switching costs is to create switching opportunities that can weaken or negate voter loyalty to the competitor.

Certainly the strongest switching opportunity is a viable alternative candidate, but the concept is also about paving the way and making it easy to switch. In some circumstances, loyaltyto-the-party can be a play (e.g., “the only way we’ll win the general election is if we all unite behind Candidate X”).

In other situations, it might involve Candidate X adopting positions advocated by Candidate Y to draw in Y’s support base.

marketing news | May 2016

MN May 2016 1-64_4.22.indd 18

4/22/16 1:28 PM

May_full_pg_ads.indd 7

4/22/16 12:09 PM

marketingmanagement

Not to diminish the importance of switching costs and switching opportunities, but brand marketing tells us that voter loyalty is probably best explained by the mix of emotional and rational motivation. For centuries, philosophers and psychologists have debated the role of emotion vs. reason in decision making. One school of thought posits that humans make decisions based on emotion which they then justify with rational arguments. It does seem possible to statistically separate these two influences.

In an article co-authored with Sheree Johnson, we presented data showing that (for B-to-C products and services) the impact of emotional motivation on loyalty outweighs rational motivation by a ratio of 5:3, and that this holds true across global regions. Since this ratio seems to apply to everything from cars to banking, my guess is that it explains voter loyalty as well. As brand equity theorists such as David Aaker, Kevin Keller and others have noted, emotional motivation

20

customer centricity

is reflected in feelings of trust, social approval, self-respect, and pride. It is tied to the symbolic meaning of the brand (or candidate) and the reinforcement of the person’s self-concept (especially the ideal). In contrast, rational motivation is more about cognition and logic. In the realm of products and services, quality and value (“what I get for what I give up”) are important rational motivation concepts. Perhaps the counterpart in politics might be the voter’s sense of the candidate’s qualifications, the degree of agreement with his/her policy proposals, and a confident belief of being better-off if the candidate is elected.

Theories abound on how brands (and candidates) go about making that necessary emotional connection. One is by reference to archetypes (think Carl Jung). In the case of an election, the notion is that voters process a candidate’s story through archetypes which are universal symbols found in stories and mythologies across cultures. They are thought to be rooted in the “collective

consciousness,” or our reptilian brain, as some might say. Essentially a method of categorization, they govern our expectations and responses. Donald Trump, for example, has been variously classified as the “outlaw,” via his antiestablishment style, disdain for political correctness and being a Washington outsider. He’s also seen as the “creator,” by virtue of his wealth and business accomplishments. Hillary Clinton, on the other hand, is often characterized as the “ruler,” referencing the Clinton dynasty, and being a member of the Washington elite. Clinton’s also seen as the “caregiver,” which reflects her populist views on education, health care and the economy.

While voters may share archetype associations, groups have different reactions depending on their aspirations and self-identities. Communications, including both message and media, go a long way in shaping archetype associations that can trigger positive or negative emotions. For example, John Kerry was probably seen by many as the “sage” or “scholar,” which is an archetype that not everyone coveys up to.

Failure to activate emotional motivation with a large cohort of the public can doom a campaign, much like it can a brand. I have always found it rather quizzical that some candidates feel they can win mainly by making a rational appeal and directing voters to examine their detailed policy proposals buried in their websites. Does anybody really go there except journalists? This may partly explain the failure of the Jeb Bush campaign that did little to channel the anger and desire for change that other candidates have apparently tied into.

It does seem that the brand loyalty framework has utility for understanding the voter-candidate relationship. Both campaign managers and marketers can benefit from examining and taking note of what works and doesn’t work in each other’s fields. m Lawrence A. Crosby is the recently retired dean of the Drucker School of Management and serves as president of L.A. Crosby & Associates, Inc. He can be reached at lawrence.a.crosby@gmail.com.

marketing news | May 2016

MN May 2016 1-64_4.22.indd 20

4/22/16 1:28 PM

May_full_pg_ads.indd 9

4/22/16 12:16 PM

marketingmanagement

At C-Level

Are you an Original?

By Michael Krauss

 michael.krauss@mkt-strat.com

A

s a young consumer products marketing manager I wondered, “How do I keep up with new ideas now that I’m out of school? How do I avoid getting stale? How do I stay original?”

Today, you can read periodicals. You can surf YouTube and Twitter. There’s no dearth of trade publications out there. You can go to trade conferences and share coffee with other marketers.

It all helps. For me, when the classroom ended, business books began. As a C-suite executive, I consume almost every business book I can find. So should you, no matter where you are in your career.

Wharton professor Adam Grant’s new book, Originals: How Non-conformists Move the World, is exactly the kind of book marketers, trying to hone their skills, should devour.

As marketers, we are all trying to move the world in both small and large ways.

We strive to identify new, creative paths that will help us achieve our personal and professional ambitions.

Originals is a book that provides you with examples, entertains you with insights and instructs you with ideas and concepts. It will make you a more effective individual and executive.

Grant’s book examines a suite of diverse “originals,” from Martin Luther King, Jr. in civil rights; to long-forgotten women’s suffrage leader Lucy Stone; to Polaroid founder, Edwin Land; to Apple CEO Steve Jobs; to Segway inventor, Dean Kamen; and CIA analyst Carmen Medina, to mention just a few.

We discover how important coalition building is to creating change and how Stone’s relationships with other suffrage leaders and the decisions she made may

22

have catalyzed or delayed the results of the women’s suffrage movement.

We hear about Edwin Land, the inventor of the Polaroid instant camera and the founder of Polaroid Corporation.

Land was a man with a file cabinet of patents and enormous creative capacity.

But his inability to change ultimately led to his organization’s demise. We discover why Steve Jobs, an early enthusiast of inventor Dean Kamen’s Segway, could be such an effective original in the technology domain but a poor judge of new transportation technology. We see why Kamen, a prolific inventor, is probably not the fellow you want at the helm of your start-up.

For me, the story that was most instructive and profound was the tale Grant tells about Carmen Medina, a young CIA Analyst. In the 1990s, Medina tries, and initially fails, to convince her leadership at the CIA to use web technology for internal sharing of intelligence.

Grant describes what any young change agent like Medina must do to persuade her

peers. He shares the alternative strategies you might use and the psychological obstacles you face in selling original ideas as a junior executive. He explains how successful originals “tease apart two major dimensions of social hierarchy that are often lumped together: power and status. Power is about exercising control over others; status is being respected and admired,” Grant writes.

Why are passionate, young innovators often not heard, and are instead misunderstood and rebuffed in our corporate organizations? Grant explains, “When people seek to exert influence but lack respect, others perceive them as difficult, coercive and self-serving. Since they haven’t earned our admiration, we don’t feel they have the right to tell us what to do. This is what happened to Carmen Medina.”

He goes on to outline how Medina persevered, built her social network, rose within the intelligence community, gained power and status, and ultimately supported two junior analysts when they proposed, “Intellipedia, a classified version of Wikipedia that would be acceptable across the intelligence community.”

Like many authors who write about creativity, innovation and entrepreneurship, Grant is a fine story teller. He shares tales of how a suite of impactful “originals” succeeded. You learn how Jerry Seinfeld’s show failed in market research and, while on life support, was resurrected by an original-thinking television executive, Rick Ludwin. What gave Ludwin the ability to perceive the value of the Seinfeld opportunity? Grant explains that Ludwin worked outside of the traditional television comedy department in variety and specials. Because he wasn’t

“Conventional wisdom holds that ... some people are born to be leaders, and the rest are followers.

Some people can have real impact, but the majority can’t. In Originals Adam shatters all these assumptions.”

Sheryl Sandberg

marketing news | May 2016

MN May 2016 1-64_4.22.indd 22

4/22/16 1:28 PM

marketingmanagement

AT C-lEVEl

boost your originality is to produce more ideas.

3

immerse yourself in a new domain. Originality increases when

you broaden your frame of reference.

4

Procrastinate strategically.

When you are generating new ideas, deliberately stop when your progress is incomplete. You are more likely to engage in divergent thinking and give ideas time to incubate.

5

seek more feedback from peers.

It’s hard to judge your own ideas because you tend to be too enthusiastic.

Run your pitches by peers. They are poised to spot the potential.

burdened by the conventional rules of the comedy department, he saw the potential of Seinfeld and saved it.

While the book’s tales of original success are compelling, Grant gives us more than case examples in his book. He empowers us with an understanding that “originals” are just like you and me. Any of us can be “originals” if we try.

Sheryl Sandberg, COO of Facebook, sums it up in her foreword to the book.

“Conventional wisdom holds that some people are innately creative, while most have few original thoughts. Some people are born to be leaders, and the rest are followers. Some people can have real impact, but the majority can’t,” Sandberg says. “In Originals Adam shatters all these assumptions.”

Grant says the inspiration for writing Originals was twofold. “I worked as a manager for a while before I came into academia. The one time I worked up the courage to speak up I was actually

dragged by my bosses’ boss into the bathroom and basically was threatened that I would be fired if I ever spoke my mind again. I really wanted to know how I could have done that more effectively,” Grant says.

“More recently, since my first book, Give and Take, came out, people have been asking, ‘If I am in a culture that is basically toxic, if I’m facing undesirable circumstances, what do I do about that?’ I initially didn’t feel like I had good answers for them. So I started to do some research and here we are.”

Grant offers all of us guidance for unleashing our own individual creativity.

Among his recommendations, he says:

1

Question the default. Instead of

taking the status quo for granted, ask why it exists in the first place.

2

triple the number of ideas you generate. The best way to

There are many other small nuggets of in Originals: You learn why even Einstein’s approach to innovation may have been sub-optimal. Not all “originals” make their greatest contributions when they are young.

You discover that the web browser you select—Internet Explorer, Firefox or Chrome—may be a predictor of your own creativity and job success. Non-originals tend to pick the straight forward default option (e.g. Internet Explorer) but originals tend to pick the non-default option (i.e. Firefox or Chrome).

You learn that the most successful and original fashion designers not only travel abroad but live abroad in different cultures.

Immersion in different cultures can fuel our originality.

You find out that birth order may correlate both to success in stealing bases in the major leagues and to originality in business. Firstborns are more likely to follow the default path and less likely to innovate.

Personally, I’m glad professor Grant’s wicked boss’s boss took him out of the meeting and chastised him for speaking up when he was a junior employee. It lit a fire and sparked Grant to write a very original book on creativity. Originals provides every executive with a handbook on how to lead if you want to make a difference in your organization and in life. m MiChael krauSS is president of Market Strategy Group based in Chicago.

May 2016 | MARkETING NEWS

MN May 2016 1-64_4.22.indd 23

23

4/22/16 1:28 PM

marketingmanagement

SCHUlTz ON MARKETING STRATEGY

Irritating Your Way into Consumers’ Hearts by don e. SChultZ

 dschultz@northwestern.edu

I

n one week, two directly conflicting studies were reported. that seems to summarize the situation advertising finds itself in today: conflict, confusion and maybe a bit of concern.

At the American Academy of Advertising’s annual convention in Seattle, Professor Kelty Logan, of the University of Colorado at Boulder, reported results of her updating of a previous study conducted in 1995 and 1996 by Robert Ducoffe. In the original study, Ducoffe hypothesized a model of advertising value. He argued that consumers determined the value of advertising based on the information and entertainment value provided, discounted by irritation.

In 1996, Ducoffe extended his model to include consumer perceptions of internet advertising based on consumer’s perceptions of value, again, discounted by irritation. Nineteen years ago, Ducoffe found the irritation factor of internet advertising was only somewhat irritating.

Logan conducted her study in 2016 using essentially the same questions but with a larger online sample. She, however, got dramatically different results. Logan found today the internet is less informative, less entertaining and has significantly less advertising value. The only thing that grew was the irritation factor. We essentially have more advertising with less value and more irritation than we had 19 years ago.

At the same time Logan was reporting her study update results, the Advertising Research Foundation (ARF) was holding its annual ReThink 2016 conference in

24

New York. Based on the opposite results that were reported, it seems appropriate that the two groups were meeting at separate ends of the country.

The study ARF released claimed to be the “biggest [advertising] study in a quarter century.” In that study, the ARF researchers—to quote the headline Ad Age used in reporting the event—said: “Brands should be spending $31 billion more this year than last.” The reported

ARF argument seemed to be that advertisers need to diversify their media spending; that is, not just spend more but spread that spending around in multiple media forms. In most cases, that means the internet. In other words, advertisers should be everywhere, meaning more messages in more media over more time periods, and probably more irritation based on Logan’s findings. Excess or largesse? Your choice.

Holding these two studies side by side, one can only wonder what is going on.

Consumer are saying advertising has less value and more irritation while the ARF is saying advertisers should generate more exposures in more media—and spend more to do it.

We have a conundrum. While advertisers are being encouraged to spend more on more media forms across the media spectrum, consumers are saying “let up.” Give up the bombardment. You can’t spend your way to success. It’s simply not possible for you (the advertisers) to irritate us into buying.

In this uneven contest, who do you think is going to win? One would hope it will be the consumer. But that’s not likely.

Deep pockets make for big spending— and increased saturation—and the

This situation reminds me of the old adage: “If all you have is a hammer, everything begins to look like a nail.” Marketers seem to believe that through increased use of media, consumers can be beaten into submission (made to buy what the marketer wants to sell) whether that be through irritation, excess or inanity.

MARkETING NEWS | May 2016

MN May 2016 1-64_4.22.indd 24

4/22/16 1:29 PM

SCHUlTz ON MARKETING STRATEGY

concomitant irritation which the ARF blithely ignores.

For the advertisers, this situation reminds me of the old adage: “If all you have is a hammer, everything begins to look like a nail.” Apparently, marketers have the hammer in the form of new media forms and dollars to purchase time and space.

Consumers look like the nails to the marketer, or maybe it’s the new media forms that look like nails.

Whichever it is, marketers seem to believe that through increased use of media, consumers can be beaten into submission (made to buy what the marketer wants to sell) whether that be through irritation, excess or inanity.

What the ARF study really seems to be saying is that whenever and wherever there is a new “thing” that can be directed toward users or prospects or just innocent bystanders, the advertiser needs to spend in it or place ads on or around, or over, or under, or nearby,

or within it. Leave no stone unturned.

Irritate your way into the hearts and minds of consumers.

In their defense, advertisers have always claimed that advertising exposure—or in this case, seemingly overexposure—is simply the fee consumers must pay to get free entertainment, internet access, Facebook pages or all of the other communication values U.S. consumers enjoy. And, up to a point, that may be a fair trade. But what happens if advertisers take the advice of the ARF and pony up another $31 billion in spending in an attempt to become ubiquitous? Will that still be a fair trade, or will that tip the scales in the other direction?

There is increasing evidence that the balance between advertising exposure and consumer irritation is getting out of whack. Online ad blocking by consumers is growing since consumers perceive this as one way of fighting back. Media firms decry blocking and

marketingmanagement

advertisers become irate, but what other alternative does the consumer have besides unplugging their access to the world through the internet?

At some point, advertisers are going to have to come to grips with a concept which they have long ignored or avoided: reciprocity. Shared values.

Shared benefits. Equal returns for equal inputs. That doesn’t seem to be in the lexicon of the ARF, which in its report claimed that was “how much the advertisers were leaving on the table” by not taking their advice and bombarding consumers with even more exposures in more media over more periods of time.

Sounds a lot like “carpet bombing with advertising” doesn’t work.

Granted, these two studies present the polar opposites of the advertising spending spectrum. And, most of us, advertisers and consumers alike, live somewhere in the middle. These two studies, however, also represent what is happening in the marketplace and we really can’t ignore that. What to do? Is this something akin to the continuing search for world peace? Only time will tell. m don e. SChultZ is a professor (emeritus-in-service) of integrated marketing communications at Northwestern University in Evanston, Ill. May 2016 | MARkETING NEWS

MN May 2016 1-64_4.22.indd 25

25

4/22/16 1:29 PM

marketingmanagement

business-to-business

Hoarding Your Way to Stagnation Dr. Ralph Oliva and Laura Patterson

 roliva@psu.edu  lavrap@visionedgemarketing.com

A

s we move through the middle of the decade, we see firms managing assets by listening to the voice of Wall Street (VOW) more, and to the voice of the customer (VOC) less. We see an alarming rise in cutting of value-creating mechanisms such as R&D, marketing and longer-term investments to appease Wall Street for the quarter. This focus on Wall Street—and away from customers and markets—is coming at a terrible price: a falling rate of innovation and the stagnation of organic growth.

Growth is key to the health of our economy and, ultimately, to building value for shareholders. You can’t hoard your way to growth.

A Pivotal Juncture According to the U.S. Chamber of Commerce Foundation, American companies are at a pivotal juncture.

Over the postwar period from 1947 to 2013, the trend for economic growth in America was 3.3%. But since 2007, the rate has downshifted to a mere 1.5%, which translates into a meager 0.7% in growth per capita in the United States.

Even more troubling, the nonpartisan Congressional Budget Office (CBO) projects that growth will only average 2.5 % over the next 10 years and drop off to 2.0% at the end of the period.

The global economy is not doing much better. In a speech, International Monetary Fund chief Christine Lagarde warned us of a coming “new mediocre” era. She cited that the global economy is at an “inflection point.” She calls for governments and firms around the world

26

to recognize this trend, and make changes to see if we can build new momentum.

What’s disturbing about this situation is that we have the means to move the needle. American firms are sitting on a historically high level of cash. Based on numbers from the Fortune 100 in 2013, American firms alone are sitting on $3.6 trillion cash. Cash has become one of the least valuable, and most available, assets. Instead of investing, many firms have become more proficient at cutting cost, often at the expense of valuecreating mechanisms such as R&D, marketing and long-term investments.

A Shift in the Fundamentals of Capitalism Renowned scholar Philip Kotler has recognized the implications in the shift away from Main Street to Wall Street. In his new book, Confronting Capitalism,

he addresses issues that indicate that capitalism itself needs to “get back on the rails”.

He suggests that our current focus on the creation of wealth for shareholders has severe implications, including the persistence of poverty, income inequality, problems with job creation, higher social costs of doing business and a short-term orientation, among others. Somehow, the focus of firms needs to return to the creation of value in the marketplace, and move away from “making the quarter” at all costs.

Firms are forgetting why they were created in the first place. In his book Start With Why, Simon Sinek calls firms to remember—or in some cases to discover—why they exist in the first place. As firms were created, they usually began with a connection to an unserved, and perhaps unarticulated, need in the marketplace. This also brought the opportunity to create value with and for customers, and good jobs and a great workplace for employees. He calls for firms to get back to the “why” that got them started in the first place. Good idea.

Past Tactics are Not Working A fast answer for many firms: Leave growth to someone else, buy it or jump into a fast-moving emerging market.

Many firms are now colliding with the reality that the tide is not rising all that quickly for the middle class in China. Firms can’t simply count on rapid growth of markets in Brazil, Russia, India and China (BRIC). Making acquisitions work to drive growth is a tricky business and fraught with failure.

Ken Favaro, David Meer and Samrat Sharma in their 2012 Harvard Business Review article, “Creating an Organic Growth Machine,” reported that only 36% of acquisitions realized enough cost savings to cover the premium they paid. And for the other 64% the annual total shareholder returns are on average negative 2%.

Returning to What Capitalism is All About It was Peter Drucker who said: “The

marketing news | May 2016

MN May 2016 1-64_4.22.indd 26

4/22/16 1:29 PM

Business-to-businesS

marketingmanagement

purpose of the business is to create a customer. The business enterprise has only two basic functions: marketing and innovation. Marketing and innovation produce results, all the rest are costs.

Marketing is the distinguishing, unique function of the business.� In light of a current loss of focus on these areas, we’d suggest three pathways forward:

1

Put the customer back at the center of business. Value is not

created on Wall Street. Real economic growth is driven by firms as they connect to customers and build better alternatives for them. This is the very essence of what capitalism is about. Some fundamental elements of capitalism are coming unraveled, and it’s time to knit them back together. This is a call to arms for chief executives and their marketing teams: Bring the customer back to the core of corporate strategy.

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 27

27

4/22/16 1:29 PM

marketingmanagement

2

Release the hoard of cash and invest in growth. Cash is

3

Marketing and innovation need a voice on Wall Street.

an abundant resource, sitting on the sidelines and creating little value. Now is the time to invest in value-creating mechanisms that can boost marketdriven innovation, and tools and techniques for better understanding opportunities that add value. Return to the essence of what business is all about.

Many activist investors seem to be experts at splitting up firms into pieces for fast “value harvest.” We hear all the politically correct terms—sizing, restructuring, streamlining—meaning careers often ended. Where is the voice and support for innovation that drives growth and creates jobs? In our view, Wall Street needs a fundamental re-education on how value is created

28

business-to-business

between suppliers and customers, how this drives the top line and how that more directly ties to the value of their portfolio in the long term. This is a call to arms for marketers and the marketing profession to take a stronger hand in educating Wall Street on what customer value is, how it’s quantified, how it’s communicated and how it can be effectively harvested. All of these are the very basics of business, and they seem to be adrift in current market conversations. This is a call to CEOs to return to the reason their firms were created, and to liberate cash to create new value with customers.

well, the shareholders—who provide the resources necessary for the firm to live—always succeed in the long term.

It’s time for CEOs and marketers to return to the basics and equip firms to better understand, create, deliver and harvest value in the real world.

To invest in a longer-term view and make the customer the central part of the equation. We challenge corporate America to liberate cash to do so. You cannot hoard your way to growth. m Ralph Oliva is a director of the Institute for the Study of Business Markets (ISBM), and professor of marketing in the Smeal College of Business at The Pennsylvania

Take Back Your Business Although there are many changes going on in the marketplace, the fundamental mission of a firm remains to identify, create, demonstrate and document value for customers. When this is done

State University. Laura Patterson is the president of VisionEdge Marketing, Inc. She is the author of three books, most recently Metrics in Action: Creating a Performance Driven Marketing Organization.

marketing news | May 2016

MN May 2016 1-64_4.22.indd 28

4/22/16 1:29 PM

May_full_pg_ads.indd 11

4/22/16 12:19 PM

30

marketing news | May 2016

MN May 2016 1-64_4.22.indd 30

4/22/16 1:29 PM

Reebok's

Refit After 11 quarters of growth, Reebok has finally cashed in on the Fit Generation and made a comeback in the athletic-apparel industry

By Michelle Markelz

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 31

31

4/22/16 1:29 PM

T

he real teSt iS Still in FrOnt OF uS—MakinG the reeBOk BranD MOre releVant tO cOnSuMerS.” Those are the words adidas Group CEO and chairman Herbert Hainer said to shareholders in a 2007 annual report. At the time, Reebok had been a subsidiary of adidas Group, the global sporting goods parent company of adidas and TaylorMade, for just more than a year. Reebok, once the leader in the athletic footwear market, ahead of Nike, had fallen out of relevance more than a decade earlier.

When it was aquired by adidas Group for $3.8 billion in January of 2006, Hainer warned critics of the long road to the brand’s recovery.

Each March for the next four years, the group CEO assured investors that Reebok was finally on the right path. In 2009, the “clear roadmap” to success set out Reebok’s plans to dominate women’s fitness, challenge men’s sports, and revive heritage styles.

By 2010, the success of the “toning category”—featuring footwear that promised to tone wearer’s legs—seemed to have revealed a better way forward. But by 2011 toning was waning and Hainer grasped at Reebok’s running and fashion shoes for a bright spot.

While the brand continued to search for an identity and a foothold in the market, the seed of a partnership with great promise had been planted. If and when it would bear fruit was yet to be seen.

32

Among the crowd of CrossFit enthusiasts that flocked to Carson, California, in July of 2010 for three days of fitness competition was the director of sports marketing for Reebok. A CrossFitter himself, Chad Whittman was there as a spectator but was also on a mission: to make contact with Greg Glassman and introduce the founder of CrossFit to Reebok.

Both brands were at an inflection point. CrossFit, a high-intensity exercise regimen created by Glassman to practice functional movement, had outgrown its former arena, a ranch in Aromas, California. For the first time, the CrossFit Games would be hosted at the Home Depot Center in Los Angeles to accommodate the growth of the sport. At the time, CrossFit had been gaining popularity for a decade. CrossFit Inc. was incorporated in 2000, but Glassman’s program was first picked up in 1995 by a police force in Santa Cruz, California, and later by visitors to CrossFit.com, where anyone interested could find a new workout posted each day.

But with troubling media coverage about the potential dangers of the demanding sport and little infrastructure, word of mouth had yet to build a following as strong as any of its component activities (Olympic lifting, gymnastics and aerobics). Reebok was on its way out of American football as it radically shifted its focus away from sports and back to its fitness roots.

“When [Reebok] was the most powerful and meaningful … it was centered around fitness,” says Yan Martin, vice president of brand management at Reebok.

Fitness in 2010 looked a lot different than it did in the 1980s, though. Women had ventured outside the mirrored studios where they once did step aerobics and had begun to make their way toward the dumbbell rack.

While Reebok wanted to leverage the equity it had in its women’s fitness category, it also wanted to carve out a place in the modern fitness market.

“Our president, at the time, was working out at CrossFit New England and came back one day and said, ‘This thing is amazing. It’s what fitness will be for years to come,’ ” Martin says.

MARkETING NEWS | May 2016

MN May 2016 1-64_4.22.indd 32

4/22/16 1:29 PM

PHOTO: CHESTON BOGUE; PREVIOUS PAGE, PHOTO: RANDI BEREz, COURTESTY OF REEBOK.

The CrossFit Courtship

Photo: Cheston Bogue; Previous Page, Photo: Randi Berez, Courtesty of Reebok.

CrossFit, widely noted for its gender equality, was a natural fit for Reebok.

Meaningful fitness—exercise that lets people discover their potential— and community orientation were two tenets that Reebok identified as central to both modern fitness and CrossFit. “We felt it was a perfect fit based solely on purpose,” Martin says.

That summer, Steve Weiss was among the team from CrossFit that traveled to Reebok headquarters in Canton, Massachusetts, to learn more about how the two brands might work together. Initial conversations mentioned nothing of licensing, revenues or business synergies.

Rather, the brands talked about shared values. “They really convinced us they believed in CrossFit as a lifestyle and a fitness program and they wanted to help elevate that movement rather than just trying to sell apparel,” Weiss says.

Although the brands meshed ideologically, a business case had to be made as well. CrossFit was seeking a title sponsor of its annual games as well as global infrastructure to grow the sport. (In six years, the number of CrossFit affiliates has grown from approximately 1,500 to more than 12,000 in 150 different countries). Reebok would in turn get exclusive rights to create CrossFit-

branded footwear and apparel and an authentic position in one of the fastest-growing movement in fitness.

“Reebok was using CrossFit as a lighthouse as they transitioned away from team sports,” Weiss says. The brands penned a 10-year deal, and Reebok took its first step in pursuit of the “Fitness Generation.”

Putting Faith in the FitGen CrossFit was the first of four strategic partnerships Reebok would go on to make with athletic brands aligned with the FitGen—a segment, or “tribe,” defined by Reebok as, “a generation hungry to get back to the basics.” Following CrossFit with obstacle-course race series Spartan Race and group fitness studio Les Mills in 2013, then mixed martial arts promotion company UFC the following year, Reebok rounded out its “tough fitness” category.

The next year also saw the debut of a new logo, the Reebok Delta, whose three sides represent the physical, mental and social transformation people experience when they commit their lives to fitness. As president Matt O’Toole described it in a press release that year, “It’s not a logo, it’s a

symbol … a way of life.” The lifestyle of fitness is what sets the FitGen apart from those that came before it. “What we’re seeing is that what we call the Fit Gens—the consumer who’s typically in their 20s whose entertainment is working out—they’re responding to our version of fitness, which is much more challenging but also much more social,” O’Toole told Footwear News in 2015.

With a core group of partners assembled, Reebok debuted its multichannel “Be More Human” campaign on Super Bowl Sunday in 2015. The TV spot, titled “Freak Show,” features everyday people flipping tractor tires, leaping over flames, and stepping in unison to a high-intensity instructor, but also fighting fire in a burning building, playing patty cake with their kids and maneuvering in a wheelchair.

According to the narrator: “We do it to get better. Period.”

“One thing that’s hard on the fitness and training side is capturing emotion,” says Ellen Schmidt-Devlin, director of the University of Oregon’s sports product management program.

That’s why brands often use sport to create an emotional association with their products. That Reebok figured out a way to use training to capture May 2016 | marketing news

MN May 2016 1-64_4.22.indd 33

33

4/22/16 1:29 PM

January 2006

July 2011

adidas Group acquires Reebok for $3.8 billion

The first Reebok CrossFit Games take place in Carson, California

January 2013 Spartan Race makes Reebok the title sponsor of its events and official outfitter with a multi-year contract

SePteMBer 2010

March 2012

Reebok and CrossFit Inc. sign a 10-year contract

Reebok exits the NFL as apparel contract expires

The Road Back to Relevance

reebok is trying to intermingle lifestyle, fashion and competitive sport. they’re trying to say, ‘Life in general is a sport.’

emotion is one reason Schmidt-Devlin believes the campaign is effective.

“The intensity, the visuals: this is beautiful stuff, but this is millennial marketing,” says John Rowady, CEO of Chicago-based sports marketing firm rEvolution. “[Millennial marketing] is about custom human

34

experiences. … ‘Be More Human’ is this general cast on trying to study and target the millennial audience.

Reebok is trying to intermingle lifestyle, fashion and competitive sport. They’re trying to say, ‘Life in general is a sport.’ ” If Reebok needed a foundational segment to which it could sell its new definition of fitness, numbers would suggest they’ve tapped into the prime patrons of the fitness industry. According to the Nielsen Les Mills Global Consumer Fitness Survey (2013), 76% of regular exercisers are 18-34 years old. A 2015 study by Technogym reported that 69% of millennials believe physical competitions are a good way to keep fit, and 77% would like their workout to be as interactive as possible.

“I think there’s a lot of trust and loyalty with this generation of buyer,” Rowdy says. “If you’re listening to them, you’re part of the community, you’re born in the space and you’re what they feel is the legitimate company that is part of their lifestyle, they’d rather reward you over another brand.”

That’s what Reebok is banking on as it competes in a fitness category whose customers are no longer the fringe. “We feel we play a big role as

community participants,” Martin says.

“We understand that we were the first mover in the marketplace. … What makes our company unique is the fact that we are our consumers.”

Among the more than 10,000 CrossFit-affiliated gyms that have opened since Reebok and CrossFit joined forces, 108 are co-branded Reebok affiliates. Reebok CrossFit One, the 500-member affiliate located on Reebok’s campus in Canton, has become a place of pilgrimage for CrossFitters around the world. “We had Katrin Davidsdottir (female winner of the 2015 Reebok CrossFit Games) here last week,” Martin says. “[Reebok CrossFit One] has become a symbol of how authentic the relationship is between CrossFit and Reebok.”

Reebok’s CrossFit-branded products are a manifestation of the community, as well. Whether it be Kevlar-infused shorts to protect against barbell abrasion or the everevolving CrossFit Nano—a shoe designed for diverse workouts allowing athletes to run, jump, weightlift and rope climb in the same pair of shoes—every product takes a consumer-focused approach, says Mike Kratochwill, senior director of training and CrossFit asset marketing for Reebok. “We have hundreds of

MARkETING NEWS | May 2016

MN May 2016 1-64_4.22.indd 34

4/22/16 1:29 PM

PHOTO: REEBOK

How Reebok took steps to retrain its focus back on fitness and tap into the Fit Generation

February 2014

January 2015

Reebok unveils its new logo, The Delta

The “Be More Human” campaign debuts

October 2013

December 2014

Reebok and Les Mills partnership

Reebok and UFC sign a six-year apparel deal

Reebok’s “Be More Human” campaign captures the emotion of training.

hours of video of top CrossFit athletes sitting with our developers, designers and marketers talking about what they like and don’t like. All of our product is designed, developed and executed by someone who does CrossFit here at Reebok.”

Photo: Reebok

Competitors Take Aim In April 2015, Nike released the Metcon 1, a competitor cross-training shoe to Reebok’s CrossFit Nano.

Because of CrossFit’s trademark status, Nike, like any brand other than Reebok targeting the CrossFit consumer, can’t market or describe the Metcon or its successor, the Metcon 2, with the word CrossFit. But that

hasn’t stopped the powerhouse brand from trying. With its own sponsored CrossFit athletes, such as Lauren Fisher and Mat Fraser, Nike has taken an interest in Reebok’s brand of competitive fitness. Days prior to the 2015 Reebok CrossFit Games, (during which athletes were required to wear CrossFit-branded Reebok shoes and apparel) Nike released a version of the Metcon 1, designed as an homage to the Air Jordan 1, which Nike calls its “first outlawed shoe.”

“During the biggest event in the world of high-intensity training, our athletes have been banned from wearing the Metcon 1,” Nike said in a product description below the words, “Don’t ban our shoe. Beat our shoe.”

“Nike is the classic guerrilla marketer,” Rowady says. “Nike invests and gets into marketplaces that other people start. They want to be dangerous enough to understand the space and target audience, and if it goes well, they’ll want to be further in.” The scale of Nike’s resources make it a tough competitor in any category it chooses to enter, he says, so the challenge for Reebok will be the balance between building an endemic reputation for itself in the CrossFit category and protecting its market share. “The question,” Rowady says, is, “Does Reebok need to be an owner rather than a sponsor to really protect their long view, in the way that Vans owns their own events?”

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 35

35

4/22/16 1:29 PM

At its height, Reebok’s strongest segment was the female aerobic exerciser.

Today, the brand is leveraging the trust it built with women to outfit a new definition of female fitness that includes weightlifting, running, yoga and studio classes. Currently, about 40% of Reebok’s business is credited to female consumers—Reebok estimates that the industry average is closer to 25%—and Reebok is aiming for a 50/50 split by 2020.

“Women consumers sometimes have been overlooked,” says Ellen SchmidtDevlin, director of the University of Oregon sports product management program. “Reebok did not overlook them when they took on aerobics, and I think they found the same thing in CrossFit. It’s such a powerful statement for women, and Reebok is able to take that position with authenticity and with authority.”

In its hybrid magazine-catalogue Rally and in the “Express Your Strong” commercial series, Reebok shares the stories of women who are being more human and changing the world around them, says Yan Martin, vice president of brand management at Reebok.

36

Photo and catalog cover: Courtesty of Reebok.

Leveraging Brand Equity

But for the next four years, at least, no amount of marketing can wrest from Reebok its exclusive rights to the CrossFit trademark.

“It’s tough for competitors to compete with the position Reebok has,” Schmidt-Devlin says. “Every other brand needs to come into [the CrossFit] territory and define it differently.” In lieu of carving out their own CrossFit categories, competitor brands, she says, will either align CrossFit products with another category in which they’re strong, such as running or basketball, but this can make the products more gender-focused.

“Reebok defined CrossFit in a space where there’s equal respect [among the genders]. It’s a niche between fitness and sports, and in that niche, there’s equality and empowerment.

Gender doesn’t matter,” she says.

That niche creates both a safety net and a ceiling for Reebok in the adidas Group and the athletic apparel market. “Reebok’s not really Reebok any longer,” Rowady says— at least not the Reebok it was at its height. “It’s a niche brand under the adidas portfolio.” As such, Reebok’s role is not as a contender with Nike, Under Armour or other brands of their size. Rather, it fills out the specialized segments for adidas Group, he says. While training is one of adidas’s key categories, CrossFit and Reebok’s other brands of tough fitness diversify the portfolio enough to make their own category.

“Reebok had to have made a determination to move into a place where they’d have few competitors so they could own the space and be heard,” Rowady says. “Reebok can be relevant and define a sustainable growth pattern for the brand in the [CrossFit space]. And I think that’s what they’ve done.”

marketing news | May 2016

MN May 2016 1-64_4.22.indd 36

4/22/16 1:29 PM

Adidas Group and Reebok Net Sales 2006-2015 $25

$20

$15

$10

$5

$0 *

2006

2007

2008

adidas Group net sales

The Numbers Story Profound. That’s the word Kratochwill uses to describe the impact CrossFit has had on Reebok. Kratochwill has been with the brand for eight years and seen its transformation catalyzed by its partnership with CrossFit. Since Reebok became the exclusive licensee of CrossFit’s trademark and the title sponsor of the CrossFit Games, Reebok’s training category has nearly doubled, composing nearly 34% of the brand’s net sales. Q4 of 2015 marked the 11th consecutive quarter of growth for the brand overall and the third consecutive year of double-digit growth for its training category, of which CrossFit is a big driver Kratochwill says.

The numbers suggest CrossFitters and cross-trainers are beginning to trust Reebok to outfit their fitness, but across all its categories, the brand’s sales have hovered between $2 and $3 billion since 2006, while adidas Group overall sales have

2009

2010

2011

Reebok net sales

trended up by about $6 billion.

Last year, adidas Group had to quash speculations that it would divest Reebok.

“Can Reebok leverage their leadership in [the CrossFit] category to rebuild their brand? I don’t know,” Schmidt-Devlin says. “It would be interesting to see if people believe enough in their products to say, ‘I trust you for CrossFit, now I trust you for my running shoe or my sports bra.”

Apparel is one area where Reebok is particularly optimistic about growth. Since 2012, Reebok’s overall apparel business has grown 19% year-on-year. “Apparel is key,” says Dan Sarro, corporate communications manager at Reebok.

“Traditionally Reebok had been heavily a footwear brand with a lot of our apparel in licensed business, with the NFL, for example. Branded apparel wasn’t really there. The new partners we have have generated a huge increase in our apparel sales so

2012

2013

2014

2015

* In billions of dollars

we’ve become a footwear and apparel brand the way we want to be.”

Just as important to Reebok’s viability is the growth of CrossFit as a brand and a sport, which will depend not only on how many gyms open up, but media sponsorships and how much airtime the games get on television. Thus far, in Rowady’s estimation, Reebok has yet to truly break through the growth ceiling it’s been under for a decade.

“You run the risk of really destroying the brand by uncoupling it from the much broader strategy Reebok had,” he says. “They seem to have stabilized and made sure they didn’t have any massive downturn in their sales by refocusing. That’s really hard to do. It’s also very difficult to find something that’s increasingly more popular that matches with their original roots. The real question is, will CrossFit continue to grow and have expansive audiences? I feel it’s going to be a long climb to continue to grow that fan base.” m May 2016 | marketing news

MN May 2016 1-64_4.22.indd 37

37

4/22/16 1:29 PM

Swipe 38

marketing news | May 2016

MN May 2016 1-64_4.22.indd 38

4/22/16 1:29 PM

Illustrations by kirsten ulve

Right

By Hal Conick

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 39

39

4/22/16 1:29 PM

Marketers created the Online Dating Boom.

40

Online dating isn’t perfect. No website has found the magic method of creating a love connection. Just ask Mark Brooks, who has worked in and around the industry for two decades. “This is a total virgin science,” Brooks quips with a restrained laugh from his deck in Malta.

Brooks runs Courtland Brooks, an agency that provides strategy, marketing, business development, and media relations for companies in the online dating world. He’s worked with websites like PlentyofFish.com and Cupid.com and has seen the industry through multiple eras, from the early days of online personals to companies scrambling for mobile relevance.

Competition has grown along with the size of the industry.

Reports say there are anywhere from 2,500 to 8,000 online dating platforms worldwide, all with their own unique claim or angle to attract users. Pew Research Center reports that while few users were online dating in 2005, 15% of all Americans have used online dating sites or apps at some point as of 2015. This equates

to roughly 48 million people. Pew also recently reported that the share of 18-to-24-year-olds who use these platforms has nearly tripled from 10% in 2013 to 27% today.

Even the boomers are getting in on the action, with online dating user share doubling from 6% in 2013 to 12% today.

The stigma of meeting your soulmate through a website is dwindling by the day, experts say, especially for millennials and Generation Z. Melanie Shreffler, senior editorial director of “The Cassandra Report” by Deep Focus, which looks at emerging trends and youth behavior of people ages 14 to 34, found that platforms are looking to give a more realistic experience to win over more users. “People want the other person [they meet] to be real and not just some online façade,” she says. Opportunities for the younger crowd to join an online dating service can be found in the numbers, such as the juxtaposition of 83% of young people Cassandra surveyed preferring to meet a potential partner in person but only 40% having ever actually asked someone on a date face-to-face.

While it’s growing, the industry is “sort of being

marketing news | May 2016

MN May 2016 1-64_4.22.indd 40

4/22/16 1:29 PM

squished,” with the majority of growth seen at large businesses and smaller apps, leaving a large middle section open, Brooks says.

Squishing aside, the increased interest has meant huge revenue.

IBISWorld reports the online dating industry was worth $2 billion in 2015 and poised for even more growth.

Industry marketers have proverbial dollar signs in their eyes and are trying to figure out how they can become relevant to users in unique ways. While some online dating platforms fit neatly into niches, others cast a wide net for the hearts of every single person in America.

Take Tinder, the wildly popular dating app in which users “swipe right” to note interest in someone, or “swipe left” to reject them. Those who both swipe right on each other can begin a message conversation.

Tinder is the gamechanger, as it has severely reduced the stigma of online dating with its ease of use and gamification, many professionals agree. According to Brooks, Tinder’s explosive popularity

changed the face of internet dating with its launch in 2012. The app grew from college campuses, Brooks says, as the company used a marketing program to entice “campus connectors” (or the “popular kids,” as he deemed them) to spread the word.

“It doesn’t take much,” he said. “It’s such a hotbed on campuses that you can get these things to take off on campus with the right story and the right product.

[Tinder is] a very, very compelling product.

It’s one of the few dating apps that’s truly sharable. For some reason, apps are more sharable in online dating. You wouldn’t generally talk about Match, but on Tinder, you’d just show it around and talk about the experience.”

How do these dating platforms grow? Brooks says it’s something that isn’t often discussed, but the traditional way is for these websites to spend their way to growth via pay-per-click advertising and paid acquisition, as well as SEO and content marketing. Companies with more money are

able to advertise on TV where they can “go big or go home,” he says.

Marketing has been a true difference maker in the industry, playing a key role across each site that has reached a critical mass of users. How have these marketers made a difference and created a service few ever thought they would need?

Marketing minds from multiple online dating platforms, some old and some new, weigh in on how they plan to thrive with a fickle and ever-changing demographic.

Classic and Conservative In 2000, Grant Langston was asked to be a copywriter for a new startup website. It was just for six months, they told him. He hesitated before taking it; the job was in Pasadena and he was pretty comfortable at home in Los Angeles. Sixteen years later, he’s the vice president of brand marketing for that startup, eHarmony, which is now one of the most successful and largest subscription-only dating websites on the market.

How did eHarmony grow from a startup with no users to a mammoth with 45 million users? It certainly didn’t happen overnight. In fact, things were pretty bad in the first couple of years, Langston says, as the company relied solely on PR and online marketing and could initially only

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 41

41

4/22/16 1:29 PM

manage a “small trickle” of users.

With its minute base, eHarmony became “good at apologizing and asking people to hang in there” while competitors continued to enter the market.

Then, in 2003, the company started airing its first radio ads. The ads featured real couples talking about how they met on eHarmony. After about six months, the team translated that storytelling model to TV—and it was a hit. Langston refers to TV as eHarmony’s “magic formula,” a method that helped them gain more users than any other medium at the time.

TV advertising, however, is a fickle beast and was not without its hurdles. Anyone who has heard of eHarmony has likely seen its TV commercials, which were similar to its radio spots: Couples talking about their experience with the site and how they’re still together. While this worked beautifully for years, with a huge response rate, Langston says they ran variations on the same spot from 2003 until 2009—something he says “was a pretty bad mistake, in retrospect.”

“Back then, the theory was you wanted everything to be integrated.

You wanted one campaign that spoke to everybody,” Langston says. “We would shoot one series a year, one package of commercials a year. Everything we did from every platform, from every channel, was

that exact same ad. Essentially, we Although TV is the main route just burned out America on the eHarmony has taken to winning exact same thing.” market share, Langston says they still Response rates hit rock bottom. do radio ads, keyword testing, display “It was a crisis here,” Langston says, ads and digital video—they just bring adding that the company started in less money than TV. Social media, trying other methods that did not however, has become a key player in work. Then, perhaps serendipitously, eHarmony’s marketing strategy in the there was turnover at the top of the company.

Langston was asked to take over the company’s users: 45 million advertising direction and told Founded: 2000 his superiors it was Primary method of marketing: TV advertising essential for the company to start Price: $60 per month putting several campaigns into the marketplace at one time instead of past five years. They’ve learned how having all of their proverbial eggs to monetize it in a way they never in one basket. “Let’s get more imagined possible, Langston says, creative,” he says. gaining nearly 300,000 Facebook Evolution happened in subtle fans and just more than 44,000 ways, such as making the TV spots Twitter followers. humorous, Langston says, and Langston says the advent of the the response rate ascended. Now, Tinder era has helped business, television accounts for approximately giving their priced model even more 70% of eHarmony’s lead generation. legitimacy and clout by keeping It’s a numbers game, he says. TV the focus on its model of creating registrations have a dramatic velocity long-term relationships rather for the company. Those who come than hookups. “You have to stay to eHarmony by way of TV register connected. We just don’t ever want faster, subscribe faster and take the to change who we are and what we questionnaire faster. It creates an represent,” he says. “As long as you emotional and motivating connection keep both of those things going, we’ll be golden.” to the audience, Langston says.

eHarmony

Modern and mobile Daniel Mori is trying to keep up with a lot. Not only is he Zoosk’s senior director of business analysis and monetization, he’s also currently heading up the online dating company’s marketing efforts. “I’m having a very busy quarter,” Mori says in his thick Italian accent with a laugh and slight sigh.

Amid all of the spinning plates he has to keep track of at Zoosk, he’s also tasked with capitalizing on the large cadre

MN May 2016 1-64_4.22.indd 42

of consumer data that comes in on a minute-by-minute basis through the company’s website, mobile app and 13.3 million fans on Facebook (the company began as a Facebook app in 2007).

Most of the company’s decisions are based entirely on data, he says, especially when it comes to figuring out how marketing dollars are allocated.

“The main goal for [our] team is to tie price to value,” he explains. “We’re very diligent about making sure every marketing dollar we spend has a measurable value on business.

Our job is to measure that impact.”

4/22/16 1:29 PM

spiritual and sOcial There’s one question that has been eating away at John Volturo, chief marketing officer at Spark Networks, since he started working in online dating in 2004. It’s been eating away at the rest of the industry, too: Can you create a dating brand that’s about more than just dating?

Volturo has been experimenting for years to find the answer.

He started in the industry by building up the brand for online dating website PerfectMatch before trying to start his own online dating service a year later. It fell flat; they had underestimated the expenses.

“People require so much more to effectively date,” he says.

“Dating brands are a commodity in the space. Unless you have the [unique selling proposition] that resonates with someone, you’re going to get [people who] defect pretty easily.”

After years of experimenting, Volturo now works on the branding efforts for more than 20 brands at Spark Networks, including ChristianMingle and JDate. The selling proposition at Spark? Knowing there’s a religious connection before there’s a love connection—a shared value system from the start.

Mori says zoosk is “a bit of a hybrid between direct response and a large consumer brand.”

The company does a lot of digital direct response marketing to a smaller audience than most other large consumer products.

“Think about it in these terms: Fifty percent of the adult population in the U.S. is single; that’s our target audience in general. Those are the only people who are even eligible for our service,” Mori says. “Within that 50%, we have to make sure approximately 25% have tried online dating or are willing to try online dating, so we have to figure out ways to determine intent within that pool of the adult population.

“Most of what we do in marketing is try to polish and refine our marketing to identify single adults … and try to predict intent. That’s easy in

“We have the ability with as well as welcoming back Facebook to target people previous users, has been helpful. who have self-identified as Mori says security features, such being single,” Mori says. “Even as photo verification done by if we’re not always able to independent moderators, have measure their intent, we know helped the company build up their eligibility for our a level of search marketing [such as PPC service. That’s a trust with its and SEO] … but beyond search very, very effective users. When marketing, intent becomes marketing tool relationships a little bit more of a trick for us.” end, many exercise,” Mori says.

It’s no wonder end up While zoosk has attempted mobile is so effective returning users: to break it big via TV and radio for zoosk, as more because of 37 million spots, like eHarmony, Mori and people, specifically the positive his team weren’t satisfied with in the 18- to 24-yearexperience, Founded: 2007 the ROI. Perhaps the biggest old crowd, are now according player in zoosk’s marketing on mobile dating to Mori.

PrImary method oF strategy is the aforementioned apps. Pew reports “We live marketIng: faCeBook, 13.3 million Facebook fans and that 22% of people in a bit of a TargeTing Via Big daTa the heaps of data it receives on in this age group paradox,” PrIce: aBouT $30 a daily basis. now use mobile Mori says of per monTH Mobile spend is outpacing online dating, up the onlinedesktop spend at zoosk, as the from the 5% who dating Facebook mobile app is one of used mobile dating marketing the most successful distribution in 2013. Combine that with the world. “On the one hand, we’d outlets for the company. Mori reported 1.44 billion active love to have a 100% retention says the conversion rate for Facebook mobile users and the rate. On the other hand, success Facebook mobile, from click potential is substantial. means attrition. Unfortunately, to install, is between 5% and Where can zoosk go from the reality… well, fortunately 10%. This is thanks in large part the mass amounts of users and for the business, unfortunately to the extremely specific data Facebook followers? Keeping for humanity, I guess: Not all it receives. up quality of the site and app, relationships last forever.”

FIND OUT MORE AT

Zoosk

marketingpower .com

OR FIND US ON

You

Tube

May 2016 | MARkETING NEWS

MN May 2016 1-64_4.22.indd 43

43

4/22/16 1:29 PM

“One of the things we hear a lot on the Christian side of the business is that it’s really hard to go into a bar and figure out who’s Christian and what type of Christianity they follow,” he says. “It’s an awkward question. That’s why when you’re sitting at home or a coffee shop, we provide [a great] service. … You really do know with ChristianMingle and JDate that people’s faith is important to them.”

In addition to bringing people together online, both properties have seen success with in-person events. Volturo likes to think about each of the brands as a local business in each territory they’re in. This has paid off, he says, simply because of the connections they’ve created with users. People are “hungry” for these events, Volturo insists, as the events become social tools to make the brand exciting and relevant to its users.

ChristianMingle sees a fair amount of success with TV ads, with roughly 70% of Americans identifying as Christian. JDate has a harder time with this, he says, as it hasn’t been able to find a Jewish audience that responds well to TV commercials.

JDate and ChristianMingle’s unique selling point now allows the brands’ reputations to speak for themselves.

JDate has been around for 18 years

Spark Networks * users: 200,000 active (paying) users Founded: 1997 Primary method of marketing: Events, word of mouth Price: $36.99 per month *

and is extremely well known in the Jewish community. ChristianMingle, while newer, has created the most Christian marriages of any online dating site according to a 2015 survey by Survata.com. That makes Volturo’s job easier, he says: He just has to ensure the consumer has a good experience from the time they

The No. 1 way Volturo says his

president of marketing at dating app brands Grindr and Blendr, said the app’s hyperlocalization sets it

sign on to the time they cancel their account after finding a relationship.

was most recently vice

Love at first sight is harder

apart from anything else on

than ever to come by in

the dating market.

team reaches out to users is through

2016. Pew Research recently

e-mail, which has meant testing,

found that 62% of people

chance meeting,” he says.

optimizing images, asking questions,

believe online dating allows

“Typically, [people] go to the

and measuring time users are on

them to find a better match.

same restaurants, they go

the page, among other analytical

Happn, a company which

to the same gym, the same

testing. Keeping lines of communication open is essential, as

refers to itself as “the first

grocery store, the same dry

they have looked to be trusted and create a bond with users.

real-life dating app,” wants

cleaners. How amazing is it

The most important marketing effort, Volturo says, is the

to make stumbling onto love

that you can meet people

combination of all of them; the halo effect of each channel

in real life the new hot trend.

who have similar activities

Properties such as ChristianMingle and JDate

increasing the relevance of the next.

The app uses geocoding

“It’s more about the

as you do? That’s really the

to match people who have

true algorithm: Meeting each

The company launched its first apps in 2014, which Volturo

crossed paths, meaning

other in real life and seeing

admits was late in the game but says they are “thinking about

users actually have to leave

the same things rather than

it every day and working on it.”

the house to have a chance

filling out a 40-question

of meeting someone new.

questionnaire trying and

thinks so. Free apps don’t offer a focus and don’t bring the quality,

Happn tells users just

meet up with someone.”

he says, while other paid sites don’t offer religious filters.

how many times they and

One area Spark Networks may need to improve is mobile.

Has Spark Networks found its unique way of marketing? Volturo

The Paris, France-based

“There’re riches in niches,” Volturo says. “Because it’s

another individual have

company has been rolling

been around so long, it’s iconic, and there’s a huge amount

crossed paths and will

out slowly in the U.S.,

of virility because the number of [Jewish] people who got

connect both if they both

launching in bigger cities

married through JDate far exceeds all other dating sites. That

would like to chat.

such as New York City, Miami

longevity, that history, that success rate really translates into a lot of viral growth.”

44

Hip and Happening

CMO earlier this year and

Serge Gojkovich, who was hired as the company’s

and Los Angeles. This makes sense, as GlobalWebIndex

marketing news | May 2016

MN May 2016 1-64_4.22.indd 44

4/22/16 1:29 PM

How brands are getting involved Recent research from The Cassandra Report found that 75% of

has reported that 74% of location-based dating app users, as of the 4th quarter of 2014, were in urban areas.

Thus far, the U.S. accounts

people believe online dating makes it easier to meet people and 73% believe it’s possible to have a relationship with someone they met online. But how do they feel about brands marketing and advertising to them amid their online romantic quests?

Cassandra’s Shreffler says she sees a lot of interesting opportunities for brands in the online Happn dating world. Many are already using mobile platforms heavily in advertising campaigns, so users: 13 million, worldwide reaching this audience wouldn’t make for a huge Founded: 2014 jump. But the big opportunity she sees is to give Primary method of marketing: Targeting people that “meet-cute” story, or their own unique larger cities with events story of “how we met.”

“It makes their story a little bit different than Price: Free, but users can buy packages of other people’s,” she says, citing brands that hold “Charm” credits to virtually woo potential dates events in concert with online dating apps, hold special promotions and interact with users in unique ways. One example she gives is from a woman she spoke with at a focus group who claims, after meeting her boyfriend at a Heineken-sponsored event, that “Heineken introduced us,” a story they tell time and again.

Gojkovich, the CMO of Happn, says online dating apps give brands a “powerful platform” for implementing interesting content into a unique environment. His company has already worked with big brands like Fiat and the nonprofit Equality Now for International and create a fun association Women’s Day. with the name “Happn.”

“When you create the right kind of content … whether it’s for a While having a plan nonprofit or an advertiser, users get engaged,” he says. to reach critical mass in online dating is essential,

for roughly 13%, or 1.75

Gojkovich knows that

million, of Happn’s user base.

without a well-functioning,

Happn says it is adding 1.5

unique platform, the

million users each month

company would be left for

across the world (150,000

dead. That’s why he says

to 175,000 in the U.S.), with

the Happn crew strives to

an expectation of 30 million

introduce new features to

total users worldwide by the

the app, such as the ability

end of 2016.

to send a potential date

The reason for targeting larger cities is simple, Gojkovich says: There

a song from Spotify or showcase Instagram photos.

“What we’re trying to do

are more people around,

is create an app and new

creating a better chance

features that people want

of more people crossing

to use,” Gojkovich says, “But

paths. The objective now is

we also have to tell people

to “insert ourselves where

about it. That’s why we’re

people are out and about

doing event marketing.

having fun.” The company

That’s why we’re doing the

has events scheduled in big

public PR push.”

cities across the country,

Reaching critical

including pool parties in

mass this year will be

Miami and an event at

an important step for

Basecamp Fitness in Santa

Happn. “We’re excited

Monica, California, to show

about dominating the U.S.

people how the app works

market,” he says.

What does the future hold?

Years ago, Brooks says he predicted that “we’d go Star Trek” in

online dating, meaning he foresaw the impending mobile boom.

In his recent research, he found that 73% of all visitors to dating services are on mobile devices.

But a unique selling proposition is needed for websites that want to break through. Brooks believes larger screens, five-to-six inches, will come into prominence in the near future. Users want larger pictures for their online dating needs and Brooks says larger phones and small tablets will serve that need.

After that, he believes wearable technology will play a larger role in the industry. Runners, for instance, may want to date other runners, but how can you truly know if someone exercises the same way? People often tell white lies on their dating profiles, but Brooks says sites may be able to take advantage of a customer’s FitBit data by matching people who run seven miles per day. The activity becomes the more in-depth way of describing one’s self.

One thing is for certain: Online dating is here to stay with little chance of evanesce. Brooks notes that the availability of people, within the click of a button, has created an addictive element.

“Once you’ve got a person in tow and you’re communicating with them, the economics of the entire experience requires you to remain in contact with them or lose them,” he says “That’s the way the world works. We’re getting closer to modeling it after the real world with this new shift.” m

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 45

45

4/22/16 1:29 PM

MN May 2016 1-64_4.22.indd 46

4/22/16 1:29 PM

data-driven branding

knowledgebase

10 Minutes With

Andy Frawley CEO of Epsilon

By Zach Brooke | Staff Writer

 zbrooke@ama.org

T

o say Epsilon is a premier agency is an understatement.

Among the world’s leading marketing agencies, Irving, Texasbased Epsilon handles 70 billion digital interactions per day in display, delivers more than 50 billion e-mail messages a year and is responsible for helping 15 of the top 20 global brands identify their customers. In 2015, the company tapped then-company president Andy Frawley as its new CEO. Now on his second tour of duty with the company, Frawley’s tech roots run deep. He’s written extensively on growing customer experience and engagement in his 2014 book Igniting Customer Connections. Since taking the helm at Epsilon, Frawley has focused on steering the company toward becoming a global marketing powerhouse by tapping into the deep data it’s gathered for brands.

While most of Madison Avenue talks a big game about building out their data components, Epsilon has done it, and is now reaping the rewards for its clients.

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 47

47

4/22/16 1:29 PM

knowledgebase

data-driven branding

Q

You have an impressive marketing pedigree. How did you get there?

A

I like to think that it was a brilliant strategy, but the thing that’s interesting about my background is I actually went to work at Epsilon in the mid-’80s, right out of university, and did my basic training there. Epsilon was, and still is, a great place to learn about Big Data, analytics and how to do highly targeted marketing. Obviously the tools and techniques we have today are very different than they were in the mid-’80s, but a lot of principles are the same. That sort of basic training enabled me to do a lot of different things in the 20-odd years when I left Epsilon the first time and when I came back seven years ago.

The notion of how you apply technology, data and creative to improve the business performance of brands by marketing to their clients—I’ve done that from a management-consulting standpoint, I’ve done that from an enterprise-software standpoint and then obviously here at Epsilon in the last seven years bringing all that together along with content creative agency services. It wasn’t my plan 30 years ago, but it’s worked out really well.

Q

A lot of agencies are playing catch-up with building their

data components. Epsilon is in a good position, having the resources it needs when it comes to data.

What can a data-rich marketing department do that others can’t?

A

There’s a lot of evolution going on, but we believe that Epsilon can understand consumers better than anybody else in the world. That comes from our very rich set of thirdparty data, which marries classic demographics and psychographics with a lot of cross-category purchase behavior that we’ve simulated. It obviously leverages our very unique competency, particularly versus agencies, to build and manage first-party data, which is critical to this new world. Through our conversant assets we have more and more understanding of how consumers are consuming media—you know what they’re seeing as they traverse the mobile and social web channels. You put that together and it allows you to complete the process.

Over the past five or 10 years, there’s been a lot of talk of engagement [and] how we engage with our customers. Our view is that engagement is table stakes now. The ability to engage, make those connections with customers in a crossdevice, multi-screen environment. I won’t say it’s easy, but it’s very possible.

The question is, once you’re engaged

Engagement is table stakes now.

The ability to engage and make those connections with customers in a cross-device, multi-screen environment: I won’t say it’s easy, but it’s very possible. The question is, once you’re engaged with them, how do you activate them?

48

with them, how do you activate them?

How do you get them to do the thing you want them to do, whether it’s open, buy, click, re-buy or refer? That’s a lot more about emotions than it is about engagement. How do we create that emotional connection between a brand and a consumer at that moment in time that they’re more likely to respond or act the way you want them to? That’s what the data allows us to do. It allows us to understand contextually how people are feeling about a brand, what is the thing that–whether it’s rich content or some sort of an offer, or some sort of prestige that comes out of a loyalty program– what is the thing that’s going to make them activate?

The other thing it lets us do, versus a traditional agency model, is when we deliver a creative brief, we do research like other agencies. But because we have this large third-party data asset, when we deliver a creative brief, we also deliver the 3 million who are most likely to respond to that message. It’s a very different approach. Being able to actually produce analytically driven audiences that go with each creative strategy is a critical differentiator we have versus other agencies.

Q

In your book, you talk about a formula: return on experience times engagement, or ROE2. What does this formula mean and how is it important to marketers?

A

When [I]wrote the book [with Epsilon] we set out to try to understand experience. What we learned as we went through the process of experience is it equals emotions and, in many ways, engagement. If you have people who are very engaged with a brand—for example very active with the brand, but also very emotionally connected with the brand—how do those customers behave versus other customers?

We did a bunch of primary research specifically for the book that really looked at the relationship and the ability in the correlation between those two things and your ability to predict brand

marketing news | May 2016

MN May 2016 1-64_4.22.indd 48

4/22/16 1:29 PM

data-driven branding

or business equity. We measured it across a number of different financial measures. What we saw was this very compelling two- or three-times correlation between somebody who is engaged with the brand—which a lot of companies measure—and emotionally connected to a brand—which fewer customers measure at the consumer level. Those are people you really want to spend time and energy marketing to.

The other thing that we exposed is how you create those connections.

What are the steps you can do to create an emotionally connected consumer and that we feel should really guide a lot of marketing strategy as people or brands think through the audiences or segments of consumers they want to spend time and money on? Ultimately, it’s a question of where you spend your marketing dollars and how you move them through this high level of

engagement and experience. And the squared [in ROE2 equals] the return on engagement experience.

What we’ve really found is that if you look at marketing through this lens, you do very different things than if you look at it in terms of how we connect with companies and consumers and become engaged with them.

Q

What’s the biggest misconception brands tend to have about their customers?

A

It comes in a couple different categories. One is, it still amazes me the urban legends that persist based on some set of data that’s been exposed over five, 10, 20 years. When you apply real hard data to it, it’s almost always wrong.

I was with a retailer not long ago talking about how to apply some of these concepts to merchandising. The

knowledgebase

realities that things like men’s clothing are often not bought by men was a fact that the merchandisers hadn’t fully internalized as a very basic thing.

I think the other misconception today is, the brands don’t control the flow of communication with the customers; the consumers do. But most brands’ marketing programs still act like it’s a very campaign-centric model where the brands act like they control the cadence of offers, messages, communications and incentives. It’s very different now. The consumers control that.

Another term we use in the book is “atomic moments of truth,” which is being able to understand and predict when the consumer is going to be accessible and, in the atomic moment of truth, find the most appropriate communications strategy. It’s a complete shift in the balance of power. But until brands recognize that, they [think,]

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 49

49

4/22/16 1:29 PM

knowledgebase

data-driven branding

here’s my campaign calendar, and I’m going to do TV, and then I’m going to follow it up with some experiential stuff and I’ve got a direct stream. It’s completely opposite of how consumers view things these days.

Q

Today’s consumers have a lot of options and are exposed to a ton of targeted messaging. There’s also a certain level of sophistication and immunity to overt marketing.

How loyal can today’s customer truly be?

A

I’m probably a little biased because we run some of the largest loyalty programs in North America. We run the Walgreens program, we run the Hilton Honors program. The principle of loyalty is still very powerful and works well.

And again, it ties back to that emotional connection. The reason people are loyal is honestly less about offers about communications, and it’s more about creating the emotional connection with a brand. In a loyalty program, that’s why you have different levels of prestige— in the airline programs, that’s why you get upgraded to first class if you’re very loyal. It’s those sorts of emotive things that are actually much more powerful in creating a long-term connection with a brand. … Once you get there, the value of those customers is dramatically higher. Loyalty is still out there and you can pierce the veil, so to speak, but there’s a certain amount of immunity to the communication that’s there.

The way you break through that from a communications standpoint is [by delivering] communications at the right time that are relevant and activate that emotion connection.

If you had another dollar to spend, which customer would you spend that on, which channel would you deliver that through, what would you want them to do? If you bring it back to that, it’s a very unifying concept. Where it fragments is where there are 23 different budgets that are allocated differently and they don’t ever come back to some level of truth around what’s working and what’s not working.

Q

We talk a lot about the growing dominance of mobile, the right way to run e-mail or social media and traditional marketing fundamentals. It can seem like you’re going in a lot of directions at once with no center. How do you incorporate balance into your marketing?

50

marketing news | May 2016

MN May 2016 1-64_4.22.indd 50

4/22/16 1:29 PM

data-driven branding

A

Measurement, honestly. We work with our clients to really have that core point of view around, as best we can, what’s performing and what’s not. From our point of view, a lot of marketing is around how the budget gets allocated, whether that’s allocated by segments, whether that’s allocated by channels or whether that’s allocated by products. We have points of view around the best ways to do that, but we try to bring it back to how you’re spending the money. If you had another dollar to spend, which customer would you spend that on, which channel would you deliver that through, what would you want them to do? If you bring it back to that, it’s a very unifying concept.

Where it fragments is where there are

23 different budgets that are allocated differently and they don’t ever come back to some level of truth around what’s working and what’s not working.

Q

How can you create personalized marketing messages to customers without scaring them or turning them off in some way?

A

There’s no single answer to that.

The reality is every consumer has a different level of tolerance to that. Having a single canonical rule won’t work. There are people who will take every message that you give them and look at it, and there are people who will opt out the first chance that

knowledgebase

they get. The first part is to have some point of view around segments of your consumers, developing audiences with the recognition that people will have different tolerances, and that can only be determined through test, lure and measurement strategies.

The other part is you’ve got to send them something they’re interested in. If I’m on the web comparison-shopping for golf clubs and I see a banner ad that talks about a deal on the new Calloway hybrids, that’s something that’s probably interesting me. It’s probably even more interesting to me if you know I’m a golf enthusiast and I play more than 50 rounds of golf a year.

It really is about that notion of audience development at a very fine-grain level paired with content that’s interesting. The place that I think the really creepy factor comes in is some of the retargeting that’s done these days where, once I click on that golf club banner, it follows me around the digital world for several days. Clients are realizing that that sort of strategy really doesn’t work.

Q

How should brands talk to their customers about data collection?

A

With full transparency. We recommend all clients have a very open and transparent data policy where we tell them how we use the data. We only do permission-based work, so anytime we’re sending you an e-mail, for example, it’s a permission-based e-mail.

Anytime we show a display ad, you can click on it and understand why you got it. Companies can do a certain amount of that themselves, and they absolutely should. I think as an industry there will be more of that: More standards and more ways to provide transparent use and access to the data. We’re fully transparent with our consumers around our third-party data and what information we have. They’re able to get it and see and correct and opt out of it if they want to. We think regulating that is a hard thing to do and not something we would like to see, but transparency is our view of the way to go. m

May 2016 | marketing news

MN May 2016 1-64_4.22.indd 51

51

4/22/16 1:29 PM

amacareers

personal branding

6 Ways to Make (or Break) Your Career on Twitter Think before you post, focus on your passion, always be learning and more great advice from Twitter pros

By Hal Conick | staff writer

 hconick@ama.org

T

o help wade through the world of Twitter and avoid having a tweet-gone-wrong forever saved in the Library of Congress, three social media professionals weigh in with some tips on what career marketers should and shouldn’t do on the decade-old, yet always evolving, social media platform.

3 Things to Avoid Posting Without Thinking Through Your Message. Kathi Kruse,

social media and digital marketing specialist and owner of Kruse Control, says that she’s a big advocate of “thinking before you hit send.” Right now, there’s a large number of people posting inappropriate images, videos, thoughts and musings on Twitter. This can be gravely damaging to a career, she says.

“I’m not saying people shouldn’t have their personal opinions about things politically or otherwise, but what you say and do online speaks for you,” she says. “A lot of people don’t realize that, because it’s

just the click of a button. But the reality is, you can see it for the rest of your life practically. It really only takes one time.”

With Twitter, it just takes one Google search to go from a candidate for a new job to the rejection pile. “Tread lightly,” Kruse warns.

Talking Only About One Person: You. Think of Twitter like a cocktail party: Does anyone stand in the corner and maintain conversation with the person who speaks only of themself?

Janet Fouts, a social media strategist and CEO of Tatu Digital Media, says that this is one of the biggest mistakes that professionals can make online.

Don’t be a know-it-all. If a marketing professional expresses herself as an authority on Twitter when she isn’t, it will be obvious (and annoying) to followers.

52

“They think they’re the hottest thing in the world and [the] smartest and no one else has any intelligence,” she says.

It’s not just joining in on conversations.

That’s important, Fouts says, but even more important is sharing something another person posts, which adds value to your own network.

“Respecting the intelligence of other people and sharing their information aligns them with the people they respect,” Fouts says. “When they do that, they can really raise their status by associating with people who are super smart and sharing more info.”

Speaking as an Authority if you Aren’t an Authority. Don’t be a know-

it-all, says Lissa Duty, social media coach and co-founder of Rocks Digital. If a marketing professional expresses herself as an authority on Twitter when she isn’t, Duty says it will be obvious (and annoying) to followers.

“That’s one of the biggest fails they have,” she says. “They’ll try to, because they feel intimidated about how long they’ve been in the industry, … pretend they know everything.”

Wanting to be an influencer is a great goal to have. Forcing yourself into that role? It won’t work, Duty says. Everyone who has experience in your industry will know when you’re faking. Be open to learning new information instead of trying to constantly bestow it.

3 Things to Do Focus on Your Personal and Professional Passions. It may be

cliché, but Kruse says that posting what you’re passionate about is a great way for a young professional to establish themselves as a thought leader.

“Let that guide you for how you want to be seen and establish yourself as an expert or a thought leader,” she says. “Volunteer to write content around it, certainly, but also volunteer to speak at certain places or contribute to blogs of companies that you admire. Do this proactive kind of thought leadership so that when [potential employers or partners] look back on a body of work they say ‘Oh, they are a thought leader.’”

marketing news | May 2016

MN May 2016 1-64_4.22.indd 52

4/22/16 2:47 PM

AMA Recruitment Classified Advertising Need to hire qualified, skilled marketing professionals or professors for your University?

AMA’s Recruitment Classified Ads are the most cost effective way to reach your target audience!

POSITIONS OPEN ACADEMIC FACULTY KELLOGG SCHOOL OF MANAGEMENT, NORTHWESTERN UNIVERSITY HAS ONE OR MORE FULL-TIME TENURE TRACK POSITIONS OPEN in the Marketing Department at the rank of Assistant Professor or above for academic year 2017-2018.

The position requires being responsible for conducting advanced research in chosen areas of expertise and interest; supervising doctoral candidates; teaching basic and advanced courses in marketing at the Master’s Degree level; contributing to the research and teaching of other faculty members.

Candidates must have a Ph.D. or D.B.A. in marketing or related fields (e.g., economics, management, psychology, sociology, statistics, cognitive sciences, etc.) in hand or expected by employment start date.

Selection criteria include potential for (or record of) superior research, adaptability and creative interests in application to marketing problems, excellent teaching ability, and strong recommendations.

Applications should include a complete curriculum vita, copies of research papers and three letters of recommendation.

Applicants in the process of completing a doctoral degree should include an approved dissertation proposal or a research paper that represents progress in the dissertation.

In order to ensure interview consideration at the Summer Marketing Educators’ Conference in Atlanta, GA, applications must be

ORDER INFORMATION To place a classified ad in Marketing News, please contact Jordan Berthiaume at amaprint@yourmembership. com or call Jordan at (727) 497-6565 x3409. To post your job on AMA's online job board, go to http://jobs.ama.org.

received by June 24, 2016.

Please apply at http:// www.kellogg.northwestern. edu/marketing/recruit/index. htm, where all required and relevant materials can be uploaded.

Please direct questions to the Recruitment Coordinator, at recruit-mktg@kellogg. northwestern.edu.

Northwestern University is an Equal Opportunity, Affirmative Action Employer of all protected classes including veterans and individuals with disabilities.

Women and minority candidates are encouraged to apply. Hiring is contingent upon eligibility to work in the United States.

MARKETING MANAGEMENT ORACLE AMERICA, INC. has openings for Expert Services Manager positions in New York, NY. Job duties include: Develop, coordinate, test, and launch complex interactive marketing programs using Oracle Marketing platform for ontime, on-budget, and error free project deliverables.

Apply by e-mailing resume to stevo.knezevic@oracle. com, referencing 385.17674.

Oracle supports workforce diversity.

Marketing Manager – Retail Key Accounts. Essilor of America, Inc. currently has an opening in Dallas, TX for Marketing ManagerRetail Key Accounts to be responsible for Essilor’s brand management, planning & strategy, working closely with sales teams to provide integrated programs that support the sales effort.

Requires 20% travel. To apply, please mail resume to: Attn: Talent Acquisitions, 13455 Branchview Lane

STANFORD UNIVERSITY GRADUATE SCHOOL OF BUSINESS Faculty Positions in Marketing

The Graduate School of Business at Stanford University invites applications for tenure-track faculty positions in marketing beginning September 1, 2017.

All ranks and relevant disciplines will be considered. Candidates should have or expect to complete a PhD by September 1, 2017, and should possess a strong and active research record. The successful candidate will be expected to conduct research and to teach both MBA and PhD courses in marketing.

Applicants should submit their applications electronically by visiting the web site http://www.gsb.stanford.edu/recruiting and uploading their curriculum vitae, research papers and publications, and teaching evaluations, if applicable, on that site. For an application to be considered complete, all applicants must have three letters of recommendation, CV and job market paper submitted by September 1, 2016. For questions regarding the application process, please send an email to faculty_recruiter@gsb.stanford.edu.

Stanford University is an equal opportunity employer and is committed to increasing the diversity of its faculty. It welcomes nominations of and applications from women, members of minority groups, protected veterans and individuals with disabilities, as well as from others who would bring additional dimensions to the university’s research, teaching and clinical missions.

Dallas, TX 75234 and indicate applying for Job ID 11102.3

Hotwire, Inc. currently has openings for the following opportunities in our San Francisco, CA office (various/levels/types:) • Product Managers: (728.1603) Set, track, analyze and communicate business goals for programs/projects and drive integration of strategic initiatives.

• Managers, Transport Analytics and Strategy: (728.1466) Support online marketing and product development teams with supply quality insights for flight, car rental, package, and media lines of business.

• Managers, Hotel Analytics (728.1643) Engage with Hotel team to identify business priorities. Develop analytical frameworks to facilitate strategic decision making, identify risks, and opportunities.

Send your resume to: Hotwire/Expedia Recruiting, 333 108th Avenue NE, Bellevue, WA 98004. Must reference position and Job & Job ID# listed above.

MARKETING RESEARCH Newly formed DIGITAL & MARKETING SERVICES ORGANIZATION needs you.

Leading Fortune 200 CPG company is seeking digital experts to drive market strategy, analyze trends, and create opportunities within the digital world.

Current openings include: Senior Digital Analysts, Associate Manager App Channel, Senior Specialist Community Management and a Consumer Marketing Database Analyst. To learn more and apply today, visit www.cantbeattheexperience. com. EOE BUSINESS DEVELOPMENT SPECIALIST: Research market conditions to devise marketing campaigns & strategies. Gather, analyze data and prepare reports on competitors and customer demographics to be used in marketing campaigns & to identify new markets to ensure growth. B.Sc. in Bus. Admin. + 2yrs. exp. in job or as market analyst req’d. Send resume: BeautySales LP, 16540 Arminta St, Van Nuys, CA 91406.

MAY 2016 | MARKETING NEWS

MN_May_classifieds.indd 5

53

4/21/16 12:43 PM

amacareers

personal branding

A lot of smart companies will try to poach these Twitter thought leaders, Kruse says. Why? Because it makes the company look like a thought leader by proxy.

Strive to Learn From Your Network and Beyond. There are a lot of

important people on Twitter, and the smartest professionals learn from them, Fouts says.

Marketing professionals should think of Twitter as a place of professional development where they can learn from the leaders in the field. By reading and sharing these insights, marketing

54

professionals can also help others learn, thereby helping their own brand.

Reach Out to People who are Likely to Respond. While making

friends in high places is great, Duty suggests focusing on connections with influencers who are attainable and within reach for mentorship. For example, that person with 500,000 followers may not readily respond to questions and conversation, but the person with 50,000 may. This can have immense value.

“That mentorship may not be where they’re directly saying ‘Hey, I’m your

mentor,’ but someone they can look to, ask questions of, follow and look to that is an attainable goal,” she says. “Someday, they can develop the relationship and they too will be an influencer. And that’s how they grow and reach on Twitter and other larger platforms.”

In fact, this is how Duty increased her influence and reach on Twitter. Her @LissaDuty account has more than 31,000 followers, but it didn’t happen overnight. She identified three influencers who had reach beyond her own and worked toward developing a rapport with them. When their influencer status grew, Duty’s did too. m

marketing news | May 2016

MN May 2016 1-64_4.22.indd 54

4/22/16 1:29 PM

advertisers’index ADVERTISERS’ INDEX Quick source for contacting the suppliers in the May 2016 issue of Marketing News.

2016 AMA Marketing Workshops . .......................... p. 29 URL: http://www.AMA.org/ springworkshop 2016 AMA Nonprofit Marketing Conference / Marketing Strategies for Nonprofit Success ........... inside back cover URL: http://www.AMA.org/ nonprofit ab+c Creative Intelligence . .......................... p. 19 Ph. 1-888-848-1552 URL: http://www.a-b-c.com AMA's Marketing Resource Directory ............... p. 4 Ph. 1-888-777-6578 URL: http://marketingresourcedirectory. ama.org

AMA Member-Only Webcasts . ............................... p. 28 URL: http://www.AMA.org/mow AMA Webcasts ....................... p. 55 Email: sales@ama.org URL: http://www.AMA.org/webcasts AMA Whitepapers ................. p. 27 Email: sales@ama.org URL: http://www.AMA.org/whitepaper ART2016 / AMA Advanced Research Techniques Forum ..................................... p. 21 Ph. 1-800-AMA-1150 URL: http://www.AMA.org/artforum Eureka Facts ........................... p. 5 Ph. 240-403-4800 URL: http://www.EurekaFACTS.com

GfK . .......................................... p. 7 URL: http://www.gfk.com Marketing News ....................... p. 6 Ph. 7 27-329-4421 / 727-329-4437 URL: http://mediakit.ama.org NJCU School of Business ........ p. 5 Email: mmartirano@njcu.edu Ph: 201-200-2402 Northwestern | Medill School of Journalism, Media, Integrated Marketing Communications . ....... back cover URL: http://www.imc.northwestern.edu Salesforce Marketing Cloud . ............... inside front cover Ph. 1-866-558-9834 URL: http://www.sfdc.co/donorschoose

MAY 2016 | MARKETING NEWS

MN_May_classifieds.indd 3

55

4/21/16 5:45 PM

backpage

Executive Insights

“The future will be about

how to have measurements of success and CRM data all interoperate in a much more automated way.”

Q Background It’s an old refrain: Sales departments don’t feel they get enough good leads from marketing departments. In the B-to-B arena, accountbased marketing (ABM) could be the answer. Chris Golec founded Demandbase, an ABM enablement technology company, in 2006 with the goal to dramatically change the way B-to-B organizations do business by using network IP mapping to help marketers reach the full panel of stakeholders at prospective client businesses. He’s been talking up the benefits of ABM for years but says the method is finally catching fire.

Demandbase describes ABM as a practice that marketers have been employing for years, but it also involves cutting edge-technology. Define ABM and describe how it incorporates timetested methodology and cutting-edge tech to optimize customer acquisition.

A

Account-based marketing is really about focusing your marketing dollars and efforts on the businesses that best align to your company or the accounts your sales team wants to sell to. Most of the marketing technology developed over the years has been based on consumer marketing, which is really volume-based— more leads, more traffic, more clicks. And account-based marketing really flips that on its head and says, “Those leads might be interesting if they’re the accounts my sales team wants to sell to.”

ABM is really lining up marketing and sales so their efforts and investments are all focused on the top accounts, and the measurements of success are now: “Did I attract the right company to my website?

Did I engage them? And did we turn it into sales activity?” Companies that have kicked this off start talking about increased close rates and higher pipeline for their target accounts, not [marketing-qualified leads] or click-through rates or website visitors.

It really brings the two organizations together.

Q

How does ABM complement the modern buyer’s journey in which the customer seeks out the business and shows up already very educated?

A

If you have a very static website where one size fits all, you basically have a 20% chance that customers will get to the right content. Through ABM and a

56

personalized experience on the website, you can take them to the deeper-level content right from the very beginning. With ABM, you can also now serve ads across the web at scale, just to your target accounts (called account-based advertising), so you can connect the message on the web [ad] to what’s on your website, and it’s all done without cookies, so you can have a rich experience whether you’re on a mobile device or an iPad or in the office.

Q

Is there a threshold on the size of business that ABM is optimal for?

A

I think for anyone who is selling to businesses, ABM can now be done at a much greater scale. It’s been done for years and years, but a lot of it has been done in the analog world. Now, I can target 10 accounts or thousands of accounts at scale with the same level of effort. In bigger companies, 90% of revenue comes from existing customers, so the strategy is marketing and selling to your existing customers more effectively. An example would be Adobe. They have 30 million visits to their website every month. They have 1,700 strategic accounts that make up a huge portion of their revenue. But they’re 1% of their web traffic. Normally, you wouldn’t change your website for 1%. However, because it makes up a huge portion of their revenue, they’re figuring out how to use tech to personalize the website when one of these 1,700 named accounts comes to the site. And it doesn’t have to be for each individual company. It could be for different industries.

–Michelle Markelz

marketing news | May 2016

MN May 2016 1-64_4.22.indd 56

4/22/16 1:29 PM

May_full_pg_ads.indd 13

4/22/16 12:21 PM

May_full_pg_ads.indd 14

4/22/16 12:24 PM