Change Marketing

Waste Not Want Not

By Chris Arnold

After the financial industry we are one of the biggest users of direct mail. Unlike banks, few charities can afford to waste their money, yet as an industry we accept 95% wastage, or more, on direct marketing. That’s a lot of paper, pens and slippers going straight into the bin. This seems insane with modern research techniques, better data strategy and media planning. Add to that good engaging creative and there’s no reason we cannot reduce the wastage.

Here’s a simple thought that could change the way you spend your money. If you had to sell your direct marketing, would anyone actually buy it? I doubt it.

The publication ‘Change the World for a fiver’ has sold over 600,000 copies. Why? – Because it’s a lovely bit of engaging creativity with a valuable message.
When you have to put a price tag on something, you suddenly have to think about what the customer really wants and what will really motivate them to part with their cash.
Anyone who read Michele Hanson’s recent column in the Guardian lamenting the number of wasted gifts from charities at Christmas could hardly deny she had a valid point.
Her friends were inundated with gifts of umbrellas, slippers, fluffy cat blankets and of course pens. You can’t blame them for seeing this as “a ghastly waste of money, postage and packaging.”
She believes donors want to see their money going to help the cause not spent on novelties. It’s hard to disagree.

There is little doubt that 2007 will be the year of ethics as more corporations and the Government embrace ethical values from environmentalism to recycling and of course, reducing waste.
I hear a lot of whining along the lines of: “Why don’t the old formulas work any more?” Maybe the question should be: “Did they ever?” The danger is to think that just because you get more back than you spend then that’s ok. If Alan Sugar, founder of Amstrad and the star of The Apprentice, was running a charity, he’d expect a better rate of return than many charities do presently. He’d demand we be more challenging and rewrite the rules.

Here’s another thought. How about instead of reflecting on why 5% responded, ask why the other 95% didn’t?

Understanding the consumer mindset isn’t rocket science. Why would anyone gamble £100,000 on assumptions, when a little budget spent on research would give you more factual guidance and insight that could reduce wastage?

Can you afford it? Can you afford not to?

Why do charities find it hard to be brave?

Having judged the charity category for the Direct Marketing Association last month, I was disappointed but not surprised to see that there was little evidence of risk taking, even among the more creative entries.

Charities are more dominated by the fear of what could go wrong than by positive thinking and the opportunity gained. Several years ago a charity, that I won’t name, was presented with a massive money-making opportunity with ASDA. With no outgoing costs it was a sure earner, but risqué. The board of trustees was so paranoid that it might lead to a few letters of complaint that potentially thousands of pounds of income was rejected just because of fear – hardly ethical.

Charities have never been at the edge of change. Being brave and different is low on the agenda. The prevailing view is that it’s safer to resort to tried and trusted formulaic approaches with no imagination or experimenting with new approaches.

Even if you are brave, the chances are that you will be restricted by internal politics and a board of retired professionals that tends to be over cautious, and sees problems rather than opportunities.

Fortunately, there are exceptions to the rule. In 2002 Traidcraft announced its "fair share" deal offering members of the public the chance to buy shares in its trading arm, Traidcraft Plc. The launch took place in the City under the slogan, "Instead of making a killing, help someone make a living.” It was high-risk approach, but itt worked and generated £3.25m for the charity.

Oxfam, fpa and Shelter are just a few of the charities that have also benefited from not being afraid of rewriting the rules. Shelter hijacked the Ideal Home show in 2004, by using a powerful poster campaign to turn the spotlight back on to poor housing conditions in the UK. fpa gave the chalk-drawn Cerne Abbas Giant in Dorset a mock condom in an effort to promote safe sex, while Oxfam, herded goats through London. They all know how to stand out and be counted. And in a highly competitive market that matters more.

In a time when the rules are just not working you have to change.  Be challenged and challenge conventional thinking – unless you want to be conventional and there’s little value in that anymore.

The consumer is a different animal and marketing is a different beast. Charities have to rise to the challenge and be more imaginative with their contact strategy, more creative in their approach and more emotionally engaging (but not just via the begging bowl). They need to start measuring what’s really important, not making the measurable important. To start to shake up their thinking as much as shaking the tin.

If you aren’t changing in a changing world you’ll get left behind. It’s time to be brave, to experiment and explore. If you stick you neck out you actually are more likely to get it caste in bronze than cut off.

Chris Arnold - executive creative director, BLAC

Forget about your ABCs

Here we are in the midst of the new marketing revolution, witnessing the expansion of markets to meet the needs of increasingly niche consumer groups (the so-called ‘Long Tail’ effect), as well as having the ability to target increasingly empowered consumers using personalised behavioural or attitudinal targeting methodologies and yet we still have marketers referring to audiences in terms of ABC1s.

Just what does an ABC1 look like? If you know any could you please let me know as I really don’t believe they exist.

My opposition to socio-economic classification is on three grounds:

1)       The terminology is often misunderstood:

I have witnessed too many instances where such terms as ABC1, C1C2 and even recently D1D2 (whatever that might mean) have been bandied around with a look of self-satisfaction, without any understanding as to what it actually means:  many are ignorant that it is based purely on occupation of the head of the household rather than on income or social class; even more seem unaware that even the National Statistics Office moved away from using this form of Social Class back in 2001.

2)       The terminology is outdated:

It not just that the folks at the National Statistics have moved on, but the whole basis that you can tell a lot about a person from their occupation is seriously outdated. Research recently undertaken by the Future Foundation on behalf of Liverpool Victoria suggests that by 2020 over half of Britain will consider themselves to be “middle class” and that there are over half a million Britons earning over £100k a year who consider themselves working class.

We have moved from a manufacturing to a service-based economy, with rising standards of living and average wealth, but with huge disparities in individual assets between the haves and have-nots. Yes – for some, class remains a state of mind, irrespective of income or occupation; however for others it is an utterly meaningless or even confusing concept that they are unable to get their head around (whom the Future Foundation call “the Muddle Class”).

Take one prime example of an individual currently enjoying the warm glow of the media spotlight – Ms Colleen McLoughlin.

The twenty year old’s father is a bricklayer – and so by the traditional classification based on the head of the household, Colleen would be classed as a “skilled working class” C2. However, having recently moved in with her fiancé Wayne, assuming her earnings haven’t yet topped his, she would have moved up to being a C1 based on her husband’s skills as a manual worker (there’s no classification for those who work with their feet). And yet, as we know Colleen is a multi-million pound earner in her own right, a prolific shopper for luxury goods, a frequent first class flyer who is also engaged in charity activities. 

A simple C1 or C2 classification really provides no clarity here.

3)       It promotes lazy thinking:

Finally, and in fact my main point, is that describing an audience by their Social Class – whether A, B, C1, C2, D or E actually tells us very little about them. Of much greater interest would to define their relationship with the product, service or organisation of interest: are they customers, consumers, prospects, collectors, hoarders, disposers, promoters, users, dismissives or addicts? Alternatively, what about their relationships with other consumers: are they promoters, knowledge seekers or connectors. Or even better, what about their personality type or even better their social aspirations? If you don’t know the answer, then that suggests a need to some research or analysis to under your audience better.

If time or budget doesn’t permit any analysis, then make a guess as to how to describe the audience. Let’s face it, it won’t be any worse than describing them as an ABC1.

The language of Creativity

It's amazing how changing your language can change the way you think. Words can act to restrict our thinking or enhance it. They can add emotion or take it away. They can mean one thing to one person and something completely different to another.

Take any poem by William Wordsworth or a piece of Shakespeare and translate it into functional speak. "I walked along a field past some daffs and a lake." Or how about "bit unsure to be sure, should I take things as they come or challenge things?" Get the picture?

While as an industry we like to believe we think outside the box, in fact we do a lot to stay within them, most being media boxes. Ask any creative team to come up with an idea for a poster or a TV ad and instantly they are restricted. Ask them to find a way to emotionally engage the consumer and you'll get more imaginative and original results. Change a few words and then you instantly change the way people think.

One of the key problems that trips us up is the difference between rational and emotional words and their meanings. It's a simple fact the consumer spends a large percentage of their income on emotional purchase -- cars, houses, decor, holidays, food, entertainment and gaming. The fastest growing economy is the leisure economy, in London it's worth over £10bn a year. By comparison, we spend very little on rational needs by choice -- tax, insurance, utility bills and alimony.

As consumers, we are all seeking an emotional benefit yet when asked to justify our purchases we are conditioned to offer a rational explanation. How do you really justify buying a funky shirt, a designer pair of boots or even a holiday in the Caribbean? Instinctively we prefer to use language that is kinaesthetic like "feel", "gut instinct" or "it looks good" but are conditioned to use rational explanations like "it was a bargain". "I needed it for work". This is a common problem with research groups, consumers tend to give logical answers that can act as a decoy and results in briefs that focus on the wrong motivations. Yet instead of asking "why?" ask how they "'felt" about buying something and you get a very different result. That simple word "feel" reveals a new insight.

Great creativity doesn't come with easy to buy rational explanations. How can you rationalise paying millions for the Mona Lisa? It has no real function unless you want to hide a stain on the wall. But owning it would make anyone feel great. And how do you explain great music? I wonder how well great artistic works would stand up to the classic adland research groups?

Unconsciously, most of us have been conditioned to think in a rational linear way (it all originates back to the Greeks). This is the way most clients and account handlers think. This isn't a criticism but an observation, no one way is right or wrong in its approach unless it creates the wrong outcome.

Creatives by comparison think in what is known as "fuzzy thinking", they are more emotional and chaotic, making leaps between different ideas and thoughts forming new connections.

When asked to explain their thinking (a phrase that in itself defines the nature of the answer), they often look to a planner for a rational. They know it will work, they have a gut instinct but clients don't buy words like "instinct" anymore, there's too much risk.

We assume that everyone understands what we mean when we use even common words like 'love'. Ask seven people to write down seven  words associated with love (a simple exercise I use in workshops). Now compare. Even the obvious ones like romance and sex aren't on everyone's lists. In fact, very few people will put down the same words. Each person has their own collection of word associations that reveal a lot about themselves. When confronted with words like "quality", "fastest", "better value" or "number one" (common words found in briefs) their interpretations can be very different.

When you employ foreign creatives -- I have an eclectic department from Poland, Spain, America, Italy and Australia -- they make you realise how easy it is to misunderstand words. I recently hired a young award winning Polish animator, she expresses herself in a very imaginative way, whereas the Spanish and Italians language is very emotional, using very passionate words to describe things.

Another word that throws up different meanings is "ideas". Commonly used in advertising to define creativity, it is in fact a rational word -- a term created by people who need a logical explanation. What's the idea behind a great picture, poem, music, food or a great design? It's all about how we feel. So instead we should ask "what is the emotional reaction it creates?" If we applied this to many ads we may get a different result.

There is a growing trend in "emotional connectivity", an approach that doesn't seek to define creativity by logic, but instead it seeks to connect, engage and influence in the way art, poetry, writing and music does. I recently reviewed a campaign for a fashion brand of shoes. It was fantastic, illogical but somehow said it all. It made me feel I wanted them. I suspect the brief was very kinaesthetic rather the traditional proposition type we use or worse still the type that tries to sum up the brief in one word.

I have noticed a tendency for brand consultants to use this approach, to try and sum a brand up in one word. "Invigorating", "innovative" or "leadership". I have one word, "tosh". If we can't all agree on the meaning of a universal word like "love" what chance does "innovative" have to communicate?

I have been reading a lot of comments from the US about the fact we no longer work in "advertising" but the "communications industry" and that we need to change the way we think and behave. I agree, I love change and am a big champion of "change marketing".

So time to change your vocabulary, instead of "media" think "channels", for "creativity" think "emotional engagement". And for "ABC1" think of "Joan, John and Jackie" -- real living human beings who have hearts and minds. And if you want to inspire people use inspirational words.

By simply applying a different language you open up the mind. And minds are like parachutes - they work best when open.

Chris Arnold is executive creative director at BLAC, and chairman of the DMA Agency Council.

The end of TV as we know it

Whilst many advertising agencies are still trying to get their heads around digital, the very medium on which they have traditionally relied on for income is rapidly in decline - commercial television. 

The exponential growth in home broadband usage (now making up over 75% of home Internet access), together with new innovations which can send Hi Def signals via broadband, mean that Internet Protocol Television will be here even sooner that media analysts predicted. This will further dramatise the shift in power from content suppliers (channels) to content providers (production companies) as TV viewings evolves to one created around personal preferences rather than listings.

IBM have covered this area in quite some depth in their no-holds-bar attack entitled "The end of TV as we know it: a future perspective". Well worth checking out.

Changing consumer interactions

Consumers are more advertising literate than ever, with marketing speak entering the vernacular. Children are even being educated at school to decode advertising. Indeed, many consumers are creating their own media through blogging or podcasts. Others are becoming ‘minipreneurs’, investing significant leisure time in marketing their own hobbies and interests.

Research in the US revealed that consumers are now more willing to do without TV than their mobile phones or the Internet.

Marketers are facing the “squeeze play – they can’t get their word out because jaded consumers refuse to share their attention:

Consumers are more in control than ever through the MPS, TPS, soon-to-be-launched unaddressed MPS, pop-up bloggers, PVR ad-skippers and simply choosing not to engage with your message. Research by Yankelovich Marketing and Forrester Research suggests that:

-          65% of consumers feel constantly bombarded by ads

-          69% feel that ads have very little relevance to them

-          What’s more, 70% of consumers would be interested in products or service that help them avoid marketing messages

Consumer time spent with “engagement media” will continue to increase with the growing popularity of new delivery methods and devices. Ebay has over 200 million registered users across the globe, and accounts for 10% of internet usage time in the UK. World of Warcraft has over 5.5 paying subscribers, generating over $700m revenue a year.

We will soon witness the emerge as economic agents a new generation of consumers who have grown up with mobile and internet technology. They see little distinction between “online” and “offline” (its just the way you do stuff). In fact, many of them have been actively involved in the creation of their own media

In a recent survey, 69% of teenagers said that their day would be ruined or not as good if they couldn’t access the internet outside of school. Some 60% had visited social networking sites, with 60% who had visited creating their own personal profile.

The methods by which consumers absorb information and entertainment – and the ways they perceive, retain and engage with brands and brand messages have changed irrevocably.

Traditional definitions of marketing concern the creation of value through the meeting of consumer NEED. However, we are in a new era. Most of the time we are trying to engage with post-consumption consumers. They have everything they need, and most of everything they want. They have more choices than ever but what they want is more time.

So how do engage with such sophisticated, switched off consumers? How do we profitably satisfy their WANTS? In such information-rich times, we have to appeal much more to the emotional. To engage their sensitivities on a personal level by connecting directly with a relevant brand truth, in a relevant and engaging context. The consumer will chose to engage with our message, as opposed to being unable to avoid it.

Unprecedented change

“The advertising industry is passing through one of the most disorienting periods in its history.  Consumers have become better informed than ever before with the result that some of the traditional methods of advertising and marketing simply no longer work.”  The Economist, June 2004

The advertising industry is in the midst of an unprecedented transformation.

What Seth Godin describes as the “TV industrial complex” no longer applies. This model was based on the simple idea that heavy spend in  above-the-line advertising would guarantee awareness and distribution, automatically resulting in greater sales, which would generate more revenue, ploughed back into further marketing investment to continue the cycle.  This was great news for agencies that at the time made commission on the media spend, irrespective of the time, effort or intellectual capital invested.

However this age is over. ITV currently faces a huge shortfall in its forecasted ad revenue, with its digital channels cannibalising its terrestrial business at a lower CPT. In the US Pepsi last year launched PepsiOne without any TV support.

Similarly the direct marketing industry is also in transition. We are witnessing a huge consumer backlash, with record levels of customers signing up to the TPS, the MPS and the previously hidden Royal Mail door-to-door preference service.

However, whilst the old media no longer work as well, organisations are under increasing pressure to justify every pound of marketing investment.

Whereas once there was a clear divide between the product marketing skills at the client and communications skills within the agency, the line in skill-set is becoming increasingly blurred. Today’s clients see themselves as communications experts, resulting in a need for agencies to be much more objective in their proposals rather than relying on experience and judgement alone.

The term integration itself will soon become meaningless as the terms “above” “below” and “through” the line will disappear. This is because all media is becoming accountable, and marketers recognise the need to think and plan in terms of moving specific customers down the purchase funnel rather than separate “awareness” and “response” bursts.

What is new is that in order to create EFFECTIVE results, we need to understand the unprecedented degree of CHANGE that is now happening and develop new ways of working that harnesses these changes in to obtain an advantage.

These unprecedented changes are happening in:

- The way consumers interact with brands

- Market dynamics and how brands succeed

- Media channels and the tools available for marketing

This is an exciting time to be a marketer. To deal effectively with constant change. To continually challenge assumptions and pioneer new ways of doing business.

To misquote William Gibson - the future of marketing is already here, its just not very well distributed.

Explore Dream Discover

“Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did.

So throw off the bowlines. Sail away from the safe harbour. Catch the trade winds in your sails.

Explore. Dream. Discover.”          

Mark Twain

Welcome to Change Marketing

Welcome to the BLAC Change Marketing Blog or "Blag" as we like to call it (thanks to Marketing magazine).

So, what do we mean by 'Change Marketing?'

Well, according to the Economist "the advertising industry is passing through one of the most disorienting periods in its history." We have recognised that a new approach is required to marketing - one that deals with change in a creative way, to enable brands to move from one place to another to gain an advantage.

Welcome to Change Marketing!