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AIDA’s dead. Give it a rest.

19 Jan

AIDAAwareness. Interest, Desire. Action. When I took my first advertising course almost thirty years ago, our professor intoned those words as if they were gospel. “That is how,” he would say, “consumers move along the path to purchasing this item or that one.” And the whole industry was built around that never-proven, not-based-on-any-credible-research theory — all the stuff about reach and frequency and three-exposures-required-to-gain-awareness. It was how plans were developed, how fortunes made (and spent). AIDA.

For over 20 years now, since the advent of integrated marketing communications, the AIDA theory has been on the wane. Customers just aren’t that simple. The most current research by McKinsey about the Consumer Decision Journey should have put it to rest forever. And yet,… and yet students and clients still talk to me about AIDA as if it were the latest thing, as if all we have to do is make enough people aware of a brand to magically induce some portion of them to take interest, a smaller portion to develop desire, and a smaller portion yet to take action and buy: simply pour enough people into the top of the funnel (awareness) to see some flow out the bottom (action). Once upon a time, the P & Gs of the world placed product on every shelf and could buy enough reach and frequency for a product to make it look as if awareness led inexorably to action. Maybe it was even true in some small way. But not anymore. And even if it were, with people’s attention divided between so many media, so many content offerings, who can afford to buy huge awareness anymore?

The newer models, including McKinsey’s and inbound marketing models, take into account — correctly — the fact that interest now often precedes awareness. People start with a set of acceptable brands,  search for information, stumble upon things they weren’t hunting for, develop a modified set of acceptable brands, search some more, succumb to last minute changes of heart — in short, they act like people, not like lab rats. A brand’s mere presence somewhere on the journey, combined with the ability to establish some sort of connection, based on shared goals, values, or interest — as opposed to a simple bludgeoning of customers with a blunt message — can win the day. Let’s call it “affinity,” rather than “awareness,” that drives the brand decision journey.

Oddly enough, traditional media — notably television — can be effective in developing affinity, because of its great story-telling power, even though it lacks interactivity (for the time being), while most Internet advertising fails horribly in this regard. I urge you to check out two great pieces about this: a blog post by David Aaker and a video of a tremendous TED presentation by Chris Anderson. One of the key nuggets of knowledge that drives them both is the fact that the advertising value of an hour of an Internet user’s time is only about a dime. The reason is not only because the Internet’s infinite inventory of advertising makes it very cheap, but because we have not yet cracked the code on how to make it  effective, that is engage people and drive affinity. Most of us are still caught up in the AIDA model — impressions, eyeballs, clicks.

This is partially a measurement problem. Impressions, clicks and the like are very measurable; affinity and connection not so much. But we are also faced with a creativity problem. Knowing what we know about how individual customers make decisions, understanding that they are now in charge of what they see and when they see it, how do we use all the available new platforms to enable them to meet and engage with brands on their own terms? In a world where advertising is more like wildflowers and less like bullets, how do we spread our messages?

Social media has blossomed as a brandland strategy in response to this dilemma. But it’s only one answer. What seems clear while we grope to use digital and traditional media more effectively is that building brand communications around a full understanding of individuals’ complex motivations and habits, rather than forcing messages down any available throats, seems a better prescription for long-term brand health.

A Restaurant’s Guide to Groupon, Part Two

14 Jan

A few weeks ago, I wrote a post about Groupon, based on a nice piece of research by Utpal M. Dholakia. I did that because a lot of clients ask us about Groupon (and LivingSocial and Restaurants.com and others) and — let’s face it — there’s just no avoiding it. To my mind, Groupon and the others are nothing more than a new generation of ValPac and Valassis, which were themselves a new generation of targeted promotional media in their day. People will always love a deal. Retailers and restaurateurs will always want warm bodies in their establishments. Entrepreneurs will always be finding new ways to put those facts together for their own profit. It’s up to marketers to figure out what works for them.

Now a new paper has been published by the Harvard Business Review that furthers our knowledge of how Groupon and other deep discount vouchers work in the marketplace. In it, the authors develop a model to explore how consumer demographics and offer details interact to shape the value of voucher discounting. Here are a couple main findings and how they affect restaurants interested in Grouponing.

First, “discount vouchers can facilitate price discrimination, allowing merchants to offer discounts to customers who value the merchant’s product less than ordinary customers do.” In other words, Groupon and others encourage trial by those who simply won’t pay your prices. That’s a good thing if their experience is so good they can establish a strong connection between your price and their pleasure and/or your margins are high enough to scrape adequate profit from the voucher users and/or the Grouponers who show up aren’t already customers. That’s a lot of ifs, ands and ors.

Second, “discount vouchers can benefit merchants through advertising, by informing consumers of a merchant’s existence. For these advertising effects to be important, a merchant must begin with sufficiently low recognition among prospective consumers.” Obviously, Groupon and others offer an opportunity to introduce yourself (or reintroduce yourself) to a potential customer. But it comes at a cost. Groupon’s seductive business model — no money down, proceeds from Groupon sales split 50/50 with the merchant — can mask the true cost in lost margin. Giving that margin away to current customers just doesn’t make sense. So if you’re already well-known, but just want to generate a little more sales volume, find a different answer.

So again, the question must be asked: to Groupon or not to Groupon? The answer is yes, if:

  1. You need a big awareness bump at any cost. New restaurants or restaurants that can’t seem to get over the hump may need a jump start. Groupon’s ability to reach many people and induce trial can be very powerful. But it ain’t free.
  2. Your margins are high enough to take a battering. For most restaurants this probably won’t apply. But some have begun raising prices to allow space for deep discount vouchers. In the short term this can look attractive. But it’s no way to build a brand.

Above all, if you do choose to go Groupon, make sure your system for collecting customer data is in place. If you don’t take responsibility for bringing the Grouponers back, you may never see them again.

In Brand Building, the Tactic is Father to the Strategy

21 Dec

There’s a lot of talk and confusion about strategy and tactics. Most people like to think strategy is Really Important Stuff (e.g. divide and conquer), while tactics are, well, just details (e.g. pay some of the Taliban to leave the fold). In some senses, it’s true. You can miss the boat on some tactics and still win the war if your strategy holds up. But if your strategy sucks, it doesn’t matter how good your tactics are — you lose.

One of the classic examples of this are the Alka Seltzer campaigns of the 60s. The first two ads (read: tactics) below were made to fulfill one strategy; the last one was built to fulfill another. The first two are some of the more memorable ads of the era. They won a bunch of awards. The last one, not so much. The first two didn’t increase sales. The last one, featuring our friend Speedy, did. The strategy it represented — of hammering home an easily remembered mnemonic — was followed successfully by Alka Seltzer for many years. (Note: If you think I’m using this as an example because the old Alka Seltzer commercials are awesome, you’re right. But it’s still a good example.)

OK, so this was an example in which strategy drove tactics. But recently, in one of the now-too-frequent social media discussions I find myself engaged in, someone pointed out that social media isn’t such a big deal, because it’s merely what used to be called “word-of-mouth” — that is, it’s just new tactics for an old strategy. While it’s true social media simply takes word-of-mouth to a new level, you can’t deny that the new tactics enable a whole new set of brand building strategies. Once upon a time, word-of-mouth was something that happened over backyard fences and water coolers, virtually invisible to the brand marketer. Not much strategy was really possible. Now that it’s out in plain view, everyone’s clamoring to develop strategies that put social media tactics to effective use.

I don’t want to get hung up on social media. This same principle is true for online video, product placement, SEO, and lots of other tactics that make new strategies possible. That’s why the business of building brands is undergoing such huge change — because the available tactics are morphing so rapidly. For someone involved in developing brand strategies to assume tactics are for other people is to miss the fact that — while strategies are what make tactics useful — tactics are what make strategies possible. Before architecture can be possible, we have to learn how to turn mud into bricks and bricks into buildings. It starts with the most tactical activity: playing in the mud.