DDB Strategy

The Counterintuitive Nature of Consumers

Wed, 18 Aug 2010 22:10:04 +0000

I was listening to a recent HBR IdeaCast titled, Strange-But-True Insights that was an amazing collection of groundbreaking research across industries and situations. One piece of research by Leif D. Nelson, a Hass School of Business professor at Berkeley, was particularly fascinating as it challenged a commonly held assumption in human behavior. Professor Nelson has spent the past few years looking into “consumer adaptation” which deals with how we react to certain stimuli including marketing messaging. One of his earlier works was titled, Interrupted Consumption: Adaptation and the Disruption of the Hedonic Experience. Not surprisingly in this study, he and fellow researchers, found that people tend to choose breaks in negative experiences and avoid breaks in positive ones. Basically, we humans naturally attempt to intensify our positive experiences and mitigate the negative – really no big surprise. However, Nelson and colleagues argue that “consumers should insert breaks into positive experiences, but not in negative ones”. They explain this counterintuitive rationale with the following, “we argue that consumers will often fail to anticipate adaptation and the intensifying effect of breaks. We propose that consumers instead assume that breaks actually weaken the intensity of the experience. In other words, we argue that consumer’s preferences for breaking up experiences are often in direct opposition to the strategies that would maximize their enjoyment or minimize their suffering.” In simple terms, they are saying – insert breaks into positive experiences because each ‘start-up’ of that experience actually mirrors and intensifies the original emotions and impact. These are positive adaptations. Further, we should as people and consumers not insert breaks in negative experiences as it just causes us to relive it over and over rather that dealing with it directly and in total. Where Nelson and his colleagues work really engages is in a piece published in the Journal of Consumer Research in January, 2009 (Download). The essay is titled, Enhancing the Television-Viewing Experience Through Commercial Interruptions. Here is a verbatim summary whose insights are very counterintuitive: “Consumers prefer to watch television programs without commercials. Yet, in spite of most consumers’ extensive experience with watching television, we propose that commercial interruptions can actually improve the television-viewing experience. Although consumers do not foresee it, their enjoyment diminishes over time. Commercial interruptions can disrupt this adaptation process and restore the intensity of consumers’ enjoyment. Six studies demonstrate that, although people prefer to avoid commercial interruptions, these interruptions actually made the programs more enjoyable (study 1), regardless of the quality of the commercial (study 2), even when controlling for the mere presence of the ads (study 3), and regardless of the nature of the interruption (study 4). However, this effect was eliminated for people who are less likely to adapt (study 5), and for programs that do not lead to adaptation (study 6), confirming the disruption of adaptation account and identifying crucial boundaries for the effect.” Lots of academic language, I know. But in short, the authors are saying that consumers actually benefit by changes that challenge our adaptation processes so we are more stimulated. In effect, commercials break a pattern that contributes to overall pleasure and value of television-viewing. While I contend that consumers would prefer to watch an informative, entertaining and quality advertisement over one that does not deliver the same value, I cannot dispute Nelson and colleagues’ primary finding regarding the benefits of interruption. Very cool stuff and worthy of further research.

Jeff Swystun, Chief Communications Officer, DDB Worldwide

Cannes Is Synonymous With Change

Fri, 25 Jun 2010 15:06:44 +0000

It is an understatement to say that the advertising and communications industry has experienced a great deal of change in the last five years. Economic conditions, consumer engagement, social media, digital technologies, tangible metrics and much more, are changing how we do business. Clearly the industry needs to be fluid and adaptive while leaders within the industry need to be bold, take a stand, and lead the change. The Cannes Lions International Advertising Festival has not been immune to these forces and is doing its best to be increasing relevant within these new dynamics.

This year entries are up 7% and attendance has risen 35% which is comparable to pre-recession levels. This indicates a general restoration in faith in the economy but more importantly it signals a need to invest in the future and celebrate the strategic and creative accomplishments of the industry. Since arriving in Cannes, I have noted a refreshing seriousness amongst those in attendance. People are here to learn and to challenge themselves. I have never seen such active note-taking at the sessions and more earnest, intense discussions at the breaks.

If you check out the homepage of the Festival, you will see a section, “Creative Advertising = Business Success.” This section features a report that purports to prove that creative advertising equates to business success. This is incredibly relevant to clients who, by the way, are back in force this year representing approximately ten percent of attendees. This is a good thing. Client participation can only result in more relevant and rewarding work from their agencies.

Another growing segment of attendees are what can be called "tech companies." Over the last few years, Microsoft, Google and Yahoo have become a staple and a force (this year Yahoo scored a minor coup by sponsoring the infamous Gutter Bar). Now these companies are joined by Adobe, Nokia, and HP. Global consulting firms are relatively new entrants with ones such as PwC joining session discussions on the changed marketing landscape. Hollywood too is increasing its presence supporting the theory that communications and entertainment are a natural combination.

The Festival will always be a great time, a great place to network, and a time to celebrate great work. Increasingly, it needs to be synonymous with effectiveness and results. By what I have observed, this transformation is underway.

Chuck Brymer
President & CEO DDB Worldwide

Introducing Bud House

Wed, 09 Jun 2010 21:49:28 +0000

Budweiser is the official beer sponsor of the 2010 FIFA World Cup, and as part of the Bud United sponsorship platform, DDB Worldwide is debuting Bud House - the first reality show tied to a global sporting event. At Bud House, we have gathered 32 football “fanatics” -- one from each country in the World Cup draw -- to live together in South Africa, under one roof, during the entirety of the World Cup. The fans will watch all the matches together and share the ups and downs of the world’s most global, and highly anticipated, sporting event. Naturally, they will also represent their country through a series of competitive, charitable and sure-to-be-entertaining activities. In short, Bud House is the perfect physical manifestation of the way Budweiser brings people together. As each team is eliminated from the World Cup, the corresponding fanatic will be eliminated from the competition and lose their chance at the ultimate grand prize – awarding in-person the Budweiser Man of the Match Trophy on the pitch after the final championship game. This is truly a once-in-a-lifetime prize on the largest global stage possible. Bud House is a product of collaboration between DDB Chicago and Tribal DDB Amsterdam and our clients on the Budweiser Global Team at Anheuser-Busch InBev. Check it out, follow the fanatics on Facebook and Twitter, tune in to the episodes, and share it with your friends: www.BudUnited.com Gill Duff Global Account Director, Budweiser DDB Worldwide

Making the Most of Mobile Marketing

Wed, 14 Apr 2010 20:36:03 +0000

I recently spoke on webinar covering Mobile Marketing. Given that marketing has moved from broadcast to engagement to involvement, mobile has a tremendous role to play. At DDB we are fond of saying, “speed is the new big” and since mobile is immediate it can position a brand in a very unique way.

And uniqueness is more critical than ever. We continue to be faced with staggering choices as consumers. There are roughly 450 new consumer products launched monthly, over 30,000 products in the average grocery store, and I recently counted 73 different “bars” (chocolate, granola, energy) in my local average convenience store. Another factor that requires brands to be unique is the increasingly frugal consumer who has been hit economically. A recent study from Booz & Co. of 2,000 consumers showed that 58% had reduced their spending on eating out and when good times return only 19% of those intend to go back to previous spending levels. So more choice and less volume are putting pressure on brands.

And of course we are seeing incredible changes in behavior in society due in significant part to technology. A recent study from AOL shows that teens and young adults spend $2200 per year with $864 of that going to mobile phones. This group now is occupied forty hours a week plugged into a combination of computer, tv, video games, and radio. This proves that media has shifted to “ME-dia” signaling that it is individuals who carry brand messages and marketers must know who those key players are to influence their brand positively. A study from Nielsen in July, 2009 shows that the most trusted source for consumers is now “recommendations from people I know”. These are all game changers.

As a consumer, I am playing a relatively new role in marketing. I am a big fan of reading and enjoy reviewing books on Amazon. Personally I am influenced more by my fellow reviewer’s opinions than The New York Times book reviews. I will not buy a book rated below three stars and I take pride in the quality of my own reviews as these are scrutinized. Reviewers are ranked based on how the helpfulness of their reviews. So in essence, I am contributing to the entire publishing industry and influencing choice – very heady stuff.

Humor, Marketing and the Internet

Thu, 25 Mar 2010 15:02:55 +0000

The link between emotive power and business growth is clear. Science tells us that emotion, not rational thought is the gatekeeper to consumer behaviour: this month’s issue of Wired magazine features an article on this very topic, and our more avid followers may have seen Paul Price’s Yellow Paper titled Unleashing Emotions for Business Growth. It seems strange that despite the clear value of emotive power, very little of the debate surrounding digital marketing is about how it can be made more emotive. That’s why my second DDB Yellow Paper is about humour in the digital age of marketing: its renewed benefits; a glimpse at a brand that manages to be funny on the web; an investigation into how social technologies are impacting on the way that we joke; and finally a few pointers on how to ensure that your brand is in a position to take advantage of it. Enjoy the new DDB Yellow Paper: Humor, Marketing and the Internet! Dennis Hurley, Creative Strategist at Tribal DDB, Sydney

Aristotle on Marketing and Advertising

Wed, 17 Feb 2010 20:22:23 +0000

It has been some time since I read Aristotle or should I say forced to read Aristotle in school. But since doing so voluntarily and willingly I have been struck by the lessons he provides to marketers. One of his most interesting discussion threads in Poetics is the notion that cleverness precludes depth. Of course, he was examining poetry but there are clear lessons given the connection between storytelling and brand building. And cleverness trumping depth has been one of the historic criticisms of marketing and advertising. So I thought it would be interesting to relate ten of Aristotle thoughts to current communications practices. “A friend to all is a friend to none. “ By trying to please everyone, you end up pleasing none says Aristotle and this is certainly true today in business communications. Brands are sorting devices. Their stories must convey to consumers who the brand is meant for in terms of practical application and emotional appeal. A brand runs a significant risk when engaging the masses without first understanding who is the ideal consumer.

Bling, Bling...

Tue, 12 Jan 2010 19:42:51 +0000

Will consumers still connect with luxury mobiles when the recession is over? This article explores the impact of the "Great Recession" on luxury mobile phones. Apparently one would expect that, like all things luxury, mobile phones would have suffered too but this is not the case. It all comes down to what we mean by luxury. One thing is for sure, the days of simple badge value is long gone. If a luxury brand is to survive in this era they need to deliver something truly extraordinary and the same is true with mobile phones. The “sea of sapphire” on the surface of the Vertu “Signature” range for example goes through a two-week treatment in a hot furnace at 2,000C°. This material gives the case of the phone an astonishing hardness, making it scratch proof against any material except diamond. Now that's the kind of story a real luxury brand would tell.

Abdul Karim, Strategy Director, Luciola*

Best Business Books for 2009

Mon, 07 Dec 2009 15:06:56 +0000

Thanks to strategy+business for their annual review of the year’s business books. The forty-four page report is a great read itself. The editors point out that in May, 2009 year-to-date sales of professional books were down 6.8% in the U.S. The recession is the prime suspect for the decline and it is that event that fueled quite a few of the books on their list. It is not a ranking but rather a sorting of the cream within eight categories. True to the story of the year, the first category is The Meltdown. Seven books are suggested as worthy of reading with In Fed We Trust: Ben Bernake’s War on the Great Panic from David Wessel, The Wall Street Journal’s economics editor, as the top pick. It provides context, content and a compelling examination of the key players including Bernake, Geithner, and Paulson. The six other books include Fool’s Gold and House of Cards, both of which I have read, the latter being a must in my opinion.

Insights that Incite

Thu, 12 Nov 2009 15:39:33 +0000

Insights that Incite argues that the most effective and enduring communications are those born from single, simple insights into human behavior. Or more specifically human consumer behavior. Insights so simple that once revealed people react by saying, "that must already exist" or "why didn't I think of that". Insights require communicators to look at situations from new angles, examine problems from other perspectives, seek inspiration from other industries, from the animal kingdom, from science, from science fiction. The paper asks…How insightful are you? and How insightful are you?. Does your marketing and communications prompt new thinking? Will it change the way people think? Is it created solely for creative sake or does it solve a real business problem? Does it help sell more, more often, to more people, at a higher price? Does it improve our world?

Jeff Swystun, Chief Communications Officer, DDB Worldwide

Communication – it's for to Boss

Wed, 07 Oct 2009 17:17:39 +0000

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” This piece of wisdom comes from Warren Buffett, the entrepreneur, investor and, according to Forbes, the world’s second richest man with $37 billion and an ingenious talent for communications. His every word, every move, is carefully calculated for and watched by the market. A precious attribute like reputation is not a hard asset; however, it is measurable. While reputation can help build more tangible resources and enhance shareholder value, reputation is staked on what companies do and say. Similarly, reputation is damaged by a combination of actions and words. Leaders at any level should not delegate their responsibility for communications. Communication is just as much their job as brand stewardship. Whether you are a managing director of an office, president of a division, or chairman and CEO of a corporate behemoth, communication is within your purview and you need to own it, internally and externally, while working in concert with your public relations directors, marketing officers and senior executive team.

The U.S. has become an urban youth dominated Pan-Latin force.

Mon, 14 Sep 2009 14:37:57 +0000

While we were sleeping, it happened. A whole new demographic of young, reasonably affluent Hispanics entered the world of marketing as incredibly important and valuable consumers, but just not quite the way mainstream America thought they would in the ‘80s. Instead of a Gringo Nation with subtle flavors of Hispanic culture – reflected mostly in the food courts of an ever-expanding empire of suburban malls – the U.S. of A. has become an urban youth dominated Pan-Latin force.
Marta Insua, VP, Stategic Insights at Alma DDB

Realizing Opportunities in Challenging Times, Part 2

Tue, 25 Aug 2009 16:04:13 +0000

We are pleased to share our latest DDB Yellow Paper: Realizing Opportunities in Challenging Times: Marketing and Advertising in a Recession Part 2. The economic crisis appears to be abating as indicators suggest the worst may be past. Yet with each new release of data, the market is subject to impacts which produce varying opinion of the health of the global economy. It is widely agreed that the recovery will be long and trying. In the fall of 2008 when the severity of the downturn was being realized, DDB published a paper called, Capturing Opportunities in Challenging Times. The response was overwhelming with the paper downloaded over 50,000 times and referenced in numerous articles online and offline. Given the recession’s obvious impacts, we decided to produce a follow-up paper that examines how marketers and advertisers have responded to the economy in their communications. What has been the response in terms of strategy, creativity, messaging and spend? And how have consumers reacted both to the crisis and the communications they have received during this dramatic and behavioral altering downturn? It includes examples from McDonald’s, Harvey Nichols, Brita, Select Recipes, Sunpower and Volkswagen along with supporting data from Nielsen, eMarketer, comScore, and Datamonitor
Jeff Swystun, Chief Communications Officer, DDB Worldwide

Fundamental Flaw in Social Media

Tue, 25 Aug 2009 13:57:00 +0000

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

Through the crisis with more courage

Thu, 06 Aug 2009 14:27:08 +0000

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

Everything Old Is New Again

Mon, 13 Jul 2009 22:15:19 +0000

We are in the midst of a Retro Revolution. Twister, Hungry Hungry Hippos, and Candyland are flying off shelves. Forgotten characters – G.I. Joe, The Terminator, Captain Kirk – have taken over the box office. And once-gone fashion brands – L.A. Gear, Lacoste, Z. Cavaricci – are being stocked again in retail stores. Add to these the re-emergence of muscle cars, old-school arcade games, retro candies – the list goes on.

Allison Cenna, Senior Strategist, DDB Chicago