Those who make only safe bets in the area of products and communications lose. Instead of figures, managers should trust their intuition.

Tonio Kröger and Amir Kassaei

Germany’s economy is presently being given a good shaking. As diverse as the analyses of the situation are the ways in which different companies are handling the situation: some with increased trepidation and a fixation on numbers, others rushing toward mergers or acquisitions (no panacea there) and, fortunately, a few with pragmatic audacity. These few company managers, who resist the temptation to turn the financial screws and run for cover behind expert situation plans, instead focus on what is really important: their products and their market. In so doing they bestow a sense of calm and purpose within their organizations and set up a framework for success instead of failure.

Still, the fear of making the wrong decision, especially prevalent in middle management levels, prevents most from seeing crisis as an opportunity for reorientation and innovation. And in the area of communications, companies bet on what has been tried and tested and that in itself is a huge risk. Look at the annals of any successful company and quite notable is that from the beginning each has always had an appetite for risk, and an understanding of the market and their own product.

There was a time when an average product and a high advertising budget could be successful on the market. Consumers were passive, their media and purchasing behavior predictable. This has changed rapidly in the past ten years. Today consumers painstakingly consider whether they need a product, what potential additional value it actually contributes to their lives ,and if it does add value which brand is the right choice. The Internet provides the tools to do so in depth: It creates transparency and direct possibilities of comparison. For telecommunication products every third consumer opinion and in the area of nutrition every second consumer opinion is a purchasing recommendation, or not..

Looking back at the winners from past crises it is clear that some companies have managed to prepare for future success during economically difficult times with new products that make people’s lives easier. While, for example, the Internet was regarded as off limits in the new economy crisis, the gigantic rise of Google and eBay began during this time. From the point of view of market communication their success is based on the courage to make two decisions.

On one hand it is about showing a distinct profile during difficult times. Those who know what they can do and what they stand for should utilize the lethargy of others to develop new markets. Because even if all are striving to position themselves, most lack the power and courage to take a clear position and to stick with it.

The limits of market research

On the other hand, it requires courage to base the decision about communications or a product not only on market research. Polls can only show what is already known. Innovation, on the other hand, results from the ability to think in new ways. It is not about following a trend, but rather about creating one. A market research analyst could hardly have predicted that we would ever have the need to coordinate our lives via cellular phone. Marketing managers must thus be like compass needles and must not lose their grip on the strategic direction of their product.

A good brand and company manager require creativity and space to develop it. Those who are only driven by investor relations and compliance are missing the chance of positioning their company for the future. Now, more than ever, there is a need for analysts who are still pragmatic but less driven by figures and inhabit the world of their customers.

Tonio Kröger, CEO, DDB Group Germany

Amir Kassaei, CCO, DDB Group Germany

Posted on August 6, 2009 2:27 PM | Permalink

There is a certain amount of ‘irrational exuberance’ around the introduction and maturing of social media. It has been widely and rapidly adopted as a means of both personal and commercial communications. It has spawned numerous platforms including Facebook, Linkedin, Twitter, Digg, MySpace, etc., prompting the question of how much intelligence and value have we lost in all this communication? Arguably, much of the content is re-purposed and subtly changed to fit the seemingly slight differences in platform and audience. And, in the case of Twitter, its very existence is questioned entirely.

It just seems to be a “land-grab” of sorts with the real estate actually being a relatively small group of online/digital influencers. And that is where the fundamental flaw exists in social media. Even though the medium and its technology promise the ability to reach a specific person or group (e.g., close friends or brand advocates), most users (individuals and companies/brands) are using it to gain a large audience. This is because most marketers are wielding social media as they have historically done with traditional advertising and communications. These extremely nifty tools exist yet most brands employ them like a television campaign masterminded by 1960’s Sterling Cooper of Mad Men fame.

Think about your own Facebook and Linkedin accounts. Do more connections really equal more? Or are you beginning to sort your more valuable contacts in these platforms from all the others? The goal is not to have a huge network, it is to have a deeper, more meaningful one (think how we mature through life and come to value fewer, closer relationships). We learned this with blogs. They proliferated like wildfire when the technology was made available. Now most people follow a handful of bloggers because they are trusted, valuable and consistent. The same is happening with Twitter as roughly two-thirds of accounts go dormant in three months.

And this is supported by recent research from Nielsen based on a survey of 25,000 people (Trust, Value and Engagement in Advertising). It probed respondents on their trusted sources in various forms of advertising. “Recommendations from people known” is by far the most trusted. This is a radical behavioral change, laying out the fact that people treasure belonging to different groups as a means of personal identity and expression but at the end of the day we only really trust a small group of friends and influencers. Why? Because we know them. We have come to rely on them and them on us. They represent authenticity, honesty, and reliability because of shared values. This connection to influencers and peers is driving consumer behavior and the technology exists to leverage it but only if marketers adopt a very different mindset in how they conduct business.

It is like the old business school adage, “I would rather have one customer who represents $1,000 in revenue than 10 who represent $100 each”. Social media can reach millions and that is exciting and interesting but how many actually purchase the associated brand? Social media’s promise and proof will not be in mass connection it is in meaningful connection.




Jeff Swystun, Chief Communications Officer, DDB Worldwide

Posted on August 25, 2009 1:57 PM | Permalink | Comments (11)

Search this Blog

Posts for August 2009