What happens when that is wrong?  What does marketing do when it STARTS with the purchase?

This is an extreme version of what Procter calls “store back”.  However, based on shopper insights research I have conducted, I believe that, for grocery products, over half of first-time purchases are unplanned; in fact, the shopper might not even have been aware of the product before buying it.  In those cases, it all STARTS with the purchase and ENDS with awareness.  The purchase funnel is totally flipped.

When it all starts with the purchase, the role of marketing communications changes.  Now marketing must get the product noticed at shelf and impart meaning to it instantaneously for the shopper.  Packaging, shelf placement, thematic displays, signage, mobile messages that are location-aware, shopper offers based on that shopper’s history, and master brand familiarity become the main vectors for creating meaning.  In this communications model, when someone encounters a product they were unfamiliar with they should be able make sense of it instantly; to tell YOU (the marketer) what the product is about, rather than you having to tell them in a concept statement.  After the product is bought and being used, there is more sense-making that occurs.  If the consumer is really into the product as they are using it, now you have an opportunity to build engagement:  they might join a community, become a fan in Facebook, share comments, start seeking out advertising and recalling it, seek out the brand’s “creation story”, etc.  In this scenario, the impact of brand narrative, brand values, social media engagement, etc. come AFTER the purchase, so they solidify rather than precondition the brand-customer relationship. 

Could it really be that it all starts with the purchase?  Well, for certain types of products and retailing situations, I believe it does.  Consider this:

• Conduct a study to measure the percent of products bought for the first time that are discovered in-store (I got 50%+)
• Do you think the products bought for the first time on impulse in a Kroger’s, Trader Joes, Costco, Target, etc. are all the same and were previously known? If not, then you believe that brand adoption can START via the shopping experience.
• Consider shopping styles that people have, reflecting their relationship with a product category.  Can you imagine categories (e.g. artisan cheeses) where shoppers like to explore and find new interesting products to buy?

This last point is perhaps the most important.  People have different shopping styles for different product categories which means that the heuristics they use to make decisions are systematic.  You might not ever buy carbonated soft drinks the way you buy interesting dips that you just tried at a tasting station.  This is where behavioral economics intersects marketing; the study of how people decide is often more interesting than theoretical purchase intentions.  Hence, some products will predominantly be bought via a process that starts in-store.  Others will be bought based more on the traditional marketing model requiring awareness built via mass media. You need to study HOW people decide in order to understand when to start from the traditional end of the funnel and when you start from the other end of the funnel.

When it all STARTS with the purchase, everything that you thought was upstream becomes downstream and the thing that was the most downstream of all, the purchase, becomes the most upstream event. 

This is “store back” on steroids.

Now, the researcher in me has to ask the rhetorical question, “Does the marketing community have the research tools to act on this new way of thinking?”  Rhetorical because, I don’t think we do.

Everything will become digital

Digital used to be synonymous with online but everything will become digital. Dave Poltrack from CBS predicts a huge increase in HD, 3D, and IPTV TV sales.  David Verklin, President of Canoe Ventures talks about the interactive TV advertising experience that will be nationally available via Canoe (a joint venture of the biggest cable operators).  video in Facebook?  How about facebook built into your new 55″ HD 3D TV? The future of print media is being revolutionized by electronic readers like iPad.  One can also imagine codes being inserted into print advertising or editorial pieces that, when captured by a smart phone, instantly leads to a multi-media experience or electronic coupon. Radio sees a digital path forward with servable audio streaming.

Digitization is transformational to the media experience, advertising possibilities and media businesses.  No longer is CBS a TV company or Time, Inc. a magazine; no longer is “media platform” the business organizing principle.  Now, the media property is the organizing principle and it must live synergistically across platforms.  Advertising on traditional media no longer has to be static and served to a whole audience (but more on this later).

As traditional media reinvent themselves in a digital age, they will hold onto, even increase, their attractiveness to advertisers.

Data will always trail the media possibilities

New touchpoints are emerging weekly it seems.  Advertising via the iPad is exciting and was born so very recently.  Apps for smart phones that create amazing location-aware and shopper marketing options are emerging so fast it is mind-numbing.  How can a manufacturer not want to put codes on packages that, via a reader that any smart phone can now have, bring a brand’s story to life with sight, sound, and motion at point of purchase?

Digitization allows a marketer to guide a consumer along the path to purchase right to the check-out.  Imagine a TV commercial where you can request a coupon that then gets delivered to your cell phone and is integrated with cell phone payment via a reader (exists in Asia already).

The point is, syndicated media research data bases, custom marketing research assessment can’t possibly get ahead of this; they will always be playing catch-up, focusing on the most significant of the touchpoints that are attracting substantial funds. The marketer who is cautionary and wants to wait for “solid evidence” of the effectiveness of a new media option will find themselves behind their competitors.

The importance of understanding audience size will diminish as we go to ad serving

The most important things in traditional media, the stats we all understand, relate to audience size ( GRPs, circ, etc.) However, imagine watching an episode of House on a platform that allows for selective ad serving.  As soon as two different households start getting different ads served to them, measuring total audience becomes less important to the advertiser.  They need to know how many got served the ad according to targeting ad serving rules, but total program audience is not a measure of reach in a targeting world.  Online, monthly uniques are a guide to which sites an advertiser should consider but they are paying for impressions served (or clicks).  “Traditional” media could/should move to this model as it becomes digital.

If this comes to pass as traditional media become digital, imagine the implications for syndicated media currency databases, and media tools.  While this will be traumatic to the existing infrastructure for “traditional media”, the increased business value of advertising and the increased CPMs that advertising should command when it is made more relevant based on intelligent serving rules are potentially very significant.

“Have senior, seasoned impact players on the front line (who are experts doing what the client can’t do vs. what the client doesn’t have time to do) focused on deploying their creativity on ideas that drive client’s business. Be focused on value creation, embrace and use data and analytics to elevate work, and be collaborative.”  

–Tony Palmer, chief marketing officer of Kimberly-Clark quoted in Ad Age May, 2010

Actually, Mr. Palmer was referring to K/C’s relationship with its advertising agencies but the statement could easily apply to what a progressive research/insights team wants from its research partners (take a minute and reread it with that in mind).

At the annual ARF Rethink conference, Susan Wagner, Vice President, Global Strategic Insights, Johnson & Johnson Group of Consumer Companies called for this level of servicing and said she would pay more for it.  Stan Stanunathan, VP Marketing Strategy and Insights , The Coca-Cola Company said he would be interested in creating leveraged compensation models where the research agency gets a bonus for superior business outcomes (which is starting to happen with ad agency compensation approaches).

Could the evolution of advertising agencies provide footprints in the snow for the evolution of marketing research firms?  If so, let’s examine ad agency evolution.

About 15 years ago, at super-agency conglomerates like WPP, the media parts from the different agencies were consolidated while the creative agencies were kept distinct.  The reason this made sense, as Erwin Ephron explained to me, is that media buying is about scale much more than the creative side is.  One could imagine thinking that media was like the factory and the creative side was where catching lightening in a bottle happens.  So an advertiser might find a super-agency, rotate among the creative teams until they get what they are looking for, and keep the media buying consistent.

Now a funny thing happened in the advertising industry; I’m not sure that these two halves of the business evolved as anticipated.  Today, media agencies are not a commodity service; they have highly differentiated offerings based on buying power, approaches, tools, and ability to impact media strategy which is becoming increasingly central to brand strategy. Media agencies are often the lead agency, have created planner teams (like creative agencies) and are even building their own creative teams supposedly to communicate more seamlessly with the creative agencies chosen by the advertiser.  In other words, the media agencies have evolved such that they are also in the value creation business.

Here’s the analogy to super-research agencies.  Online panels…the “factory” that executes the research is built on scale like media buying and the research account teams offering strategic thinking and branded solutions …or should be…are analogous to the creative agencies (splicing in Tony’s quote)”…deploying their creativity on ideas that drive client’s business. Be focused on value creation, embrace and use data and analytics to elevate work, and be collaborative.”

In fact, the consolidation of online research “factories” is happening.  For example, Kantar has built and acquired research agencies accounting for billions of dollars of billings which are served by a consolidated online research panel, Lightspeed.  We also see the emergence of companies that are basically production companies like GMI and Peanut labs.

If the big research agencies were to split their businesses this way, I’d say that both pieces have impressive business opportunities.  The marketing research agency’s commercial model is still mostly based on running research projects or programs efficiently and then analyzing the results from those programs.  However, in the ARF Insights Value Creation Model, we see the opportunity for “synthesis” to add tremendous value.  Right now, I’d say that consultants, account planners, and buyer-side insights teams are much more in the “synthesis” business than research agency account teams, but if research agencies  cultivate new skills in their account teams and ratchet up their offerings they can compete by providing a whole new level of business impact. There an opportunity to create a new type of research and insights firm with a high level of expertise at finding the “so what”.

Panel operations “companies” would have three great opportunities.  Improve online research data trustworthiness, develop strategies for obtaining representative data from hard to research consumer groups, and offer effective and efficient access to these capabilities to the broad research community.

At the ARF Research Transformation initiative, research firms are having this much needed conversation collaboratively with their clients about the future of the research ecosystem.

Now I understand. 

Marketing is so much more than efficiently offering products and services to people that they want.  Marketing is a fundamental process to a free society; it is a Right. 

Marketing and brands offer consumers choice; without choice, there is no freedom.  Conversely, a repressive society must limit marketing because it would cultivate an appetite for choice, desire, and citizens (rather than the state) wanting to be in control. That is the true meaning of brands and advertising; they are an essential part of the fabric of a culture built on freedom. 

What opened my eyes to the larger societal contribution of the practice of marketing was interviewing (with the help of Sheila Terry, formerly of Kraft) six people of various generations who grew up in essentially brandless worlds; The Soviet Union, Hungary, Poland, and Cuba. What was their life like? What happened when brands became available to them either in their country or because they emigrated? 

State-run economies were the antithesis of a consumer-driven economy.  In fact, as Sheila concluded, “consumers, as we know them, did not exist in these cultures; consumer as boss would be unthinkable in a supply-driven economy.” 

Listen to how people described their experiences. 

About choice and availability:

 Cuba was a world of restrictions; here (in the US) we have possibilities.

You had a ration card…one pair of shoes, so many panties; half a pound of meat every month (Cuba)

 You had to decrease your desires (Hungary)  

If you saw a queue, you got on it.  You would wait 1-4 hours and maybe not even get anything.   

Sometimes you would even buy things you didn’t need just because it was available. (Soviet Union) 

About service:

Rude service.  They were better than you.  They were in possession of what you wanted. (Soviet Union) 

About product quality 

Everyone assumed products from other countries were better because we knew life was better elsewhere (All)

 Produce in government stores was rotten.  Although it was 6-10 times more expensive, 35% of fruits and vegetables were bought in private markets. (Soviet Union) 

About shopping experience  

What was shopping like? Imagine hundreds of identical bottles of vinegar on the store shelf (Poland) 

Was it really a brandless world? 

Patrick Hanlon, author of Primal Branding, states that brands are so important because “we all want to believe in something greater than ourselves”. What I’m about to report supports that. 

One of the most interesting findings from the interviews was how people created their own “brands.”   Country of origin became a brand.  In countries where life was known to be better, it was assumed that products from those countries were better.  In the Soviet Union, the factory where something was made became a “brand” as certain factories were known to make better products.

 In addition, people would seek out brands by visiting other countries or speaking with relatives who emigrated.  For example, Hungary borders Austria and even before privatization, “We were going to Vienna for better brands and products. “

 Certain brands were available and were highly desired.  For example, “We all wanted to buy Levi’s jeans because it symbolized freedom and a better way of life” (comment from a number of those interviewed).

 When markets opened up

 Markets began to open up in the East Bloc, around 1990.  Again, I was a little surprised by what people had to say.

 “Brands started to enter Russia in the early 90s, but it took a while to realize what was happening.” 

 “When brands first came to Poland and advertising started we had to see if changes were permanent.  People were suspicious at first—was thisa government trap?”

 While some were amazed by this new Technicolor world (“You could excite me with a package of gum—all the colors, packaging”; “We would dress up to go to McDonald’s”), it wasn’t as new to others.  Many had already sought out brands from relatives living abroad or by traveling.

Others suffered from culture shock as lack of choice.  Struggling to buy the basics, and reusing everything possible was built into their DNA forever, it seems.

Dr. Nicos Rossides, CEO of MASMI (a firm that specializes in marketing research in Central and Eastern Europe) wrote, “The intense and rapid changes that accompanied this transformation were both exhilarating and unsettling, with citizens from ex-communist states able to travel freely, express themselves openly, vote for their leaders, and own businesses and land for the first time. What is more, they could now have a bewildering range of choice from among tens of thousands of competing brands – provided they could afford them. However, the values, beliefs and norms that entire populations were accustomed to and used as a gauge as to the appropriateness of daily actions – their moral compass – became largely irrelevant, causing a great deal of anxiety and disorientation, particularly for those …(other than)…the younger, more open and receptive people.”

 Living in this country, it’s easy to take freedom for granted and not see how blessed we are that we have the freedom to choose.  Why do you think that the internet has given us access to the accumulated knowledge of mankind and the long tail of choices at any hour of the day or night?  Because, when barriers were removed (blue laws, service costs, etc.), that is what people wanted and what marketers were able to provide.

 Is being in Marketing a worthy profession? “Oh, you’re in marketing”, or “Oh, you’re in advertising?”  (implied ‘ugh’ follows). Well, I beg to differ.  Our most important rights are based on our freedom to make our own life choices which are activated daily by the options that marketing and media give us. Think about the force for democracy that Twitter (a marketer) was in Iran during the elections. Marketing is every bit as noble as the medical profession, or education, or being an environmental scientist.  We are all equally essential to the human condition.

 Some in government want to “nudge” choice.  Legislators who think they know better than we do are attempting to use taxation to dissuade advertising and consumption of certain products.  Seems logical; why “allow” people to make BAD choices?  Well, I hope they read this blog.  As you restrict choice, you move closer to a world our interviewees will find familiar.

 Feel the stories of people who grew up in cultures without choice where daily existence was defined by deprivation rather than hope.  Freedom is spelled C-H-O-I-C-E, and that is the importance of marketing and brands.

1. Media clouds

Increasingly, the same media brand can be experienced on multiple platforms, in ways that fit with the strengths of each type. For example, MTV’s The Hills is not just a scheduled TV program; it has an immersive web environment with on-demand episodes, social media, ringtones, blogs, and more. The New York Times doesn’t just put print content online; it offers sophisticated interactive graphics on its website and articles encourage user comments.

I think of this as a type of digital cloud … a media cloud. Consumers can “grab” content from the cloud – in traditional forms, in non-linear snippets, on a mobile, on demand, at home or in a store while shopping. Your friends now come with you on every shopping trip if you have a smart phone; the possibilities are endless. Media companies are building their content for multiple platforms.

Advertisers need to consider if it is better to buy different programs in a given medium or to forge tight co-branded, integrated trans-media packages.

2. Integrating bought, owned, and earned media

Media exposure is no longer a linear, brand-controlled transaction – media can now be thought of as bought, owned or earned. They each can serve different purposes in the brand building process so you need to sharpen your objectives and map them to touchpoints. Bought advertising is costly, yet it works and it delivers the reach that many marketers need. Earned media can be defined as consumer-to-consumer brand sharing (comments or assets); it’s pretty much free and influential but you can’t control self-perpetuating sharing. If you don’t catch lightening in a bottle, consumer sharing of messages or applications results in low reach so it might not be the best center of gravity for a media strategy for a broad penetration marketing need. Owned media is about media synergy. People probably first discover your website by either bought advertising, search, or already being a customer. Bought and earned media also drive search so there are indirect as well as direct effects on the business. The ARF 360 media and marketing council is hoping to help the ecosystem crack the code on how this all fits together.

3. The yin and yang of technology

Addressable advertising technology provides the ability to deliver messages that are highly personalized and contextualized. But for every action there is a reaction; while some welcome relevant advertising, others find such personalization creepy and intrusive, motivating legislative inquiry into privacy issues. Every marketer, media company, and ad serving company will need effective privacy leadership. Marketers must prepare for a mixed targeting model that combines addressability for those who opt-in with a better choice of media properties where no addressability is required.

Media technology has also given us DVRs and video on demand potentially allow people to skip ads. In response media companies disable fast-forward for ads in on-demand viewing, create program/product integration and add coordinated interactive content.

Yin and yang; for every marketing action there is a reaction and then a reaction to that.

Media Planning: The Bottom Line

Media planning typically kicks in downsteam of the new offer development. Then media planners often start by reverse engineering the media strategies of benchmark brands. Advertisers need to rethink this media planning process. Media strategy development should start much earlier … right when the opportunity is first being sized, the target is being determined, and the way that consumers seek and share information about the purchase is understood. In fact, the media strategy might be the source of the innovation (e.g. Dove Campaign for Real Beauty) and the best way to choose among different concepts. Integrating media and offer into a quest for something new, different, and incremental means the advertiser needs to “run the media strategy meetings”.

Media strategy principles in a 360 world should take priority over the analysis of benchmark brands. The benchmark approach locks you into a recursive trap so you are probably observing strategies that reflect a 5-7 year old media environment (those brands probably used benchmarking too). Instead, the media strategy team needs to answer questions such as:

• How big is the opportunity? (To inform the need for broad reach)
• On which media properties and social media sites do my target consumers tend to congregate?
• How do people seek and share information about what you offer and the needs you address? Which media touchpoints are most influential for this type of product or service along the path to purchase? In fact, don’t rule out the possibility that shopper marketing (either in-store or via mobile devices) could be the cornerstone of the brand-building strategy.

We are living in the new normal so think different. Marketers need to fully integrate offer development, listening and consumer input, quantitative research, and media strategy right at the fuzzy front end.