Tag Archives: differentiation

14 September, 2010 · 9:59 pm

All Media is Now Earned Media

Reach is increasingly hard to buy.

As marketers try to sort the trends between traditional and non-traditional, online and offline, global and hyperlocal, at least one trend is clear. All media is morphing into earned media.

Earned media was typically used to distinguish from paid media.  Tools like PR and grassroots marketing that depended on some viral element to reach a large audience were put in the Earned category, and things like TV, radio, and print were put in the Paid category.  They were like apples and oranges. The common wisdom held that there was a clear trade-off between these categories. Earned media was cheaper to execute, but provided little or no control over what kind or how many people you would reach. Paid media was expensive, but provided guaranteed reach and frequency numbers that ensured the message was delivered.  The categories and the trade-off are both evaporating.

Technology and the explosion of choices have undermined guaranteed delivery.  New channels like YouTube are obvious examples of a choice medium where the viewership is entirely dependent on the nature of the content. You may get 10 views or 1 million views, but it’s impossible to predict. For every Annoying Orange, there are hundreds of thousands of unwatched puppet skits. But the even the so-called mass media are becoming increasingly choice-driven.  For example,  Morpace research estimates that almost 50% of TV viewing is via DVR, online, or other on-demand alternatives.  So even if marketers try to attach themselves to a hit show, their viewers increasingly time-shift and fast-forward past the advertising that is neither relevant nor interesting to them. The previous control over who and when your message would be seen is rapidly ebbing away.  The reach of a marketing message is increasingly dependent on the inherent value of its content regardless of the channel. That’s what we mean when we say all media is now Earned media.

Less obvious but equally true is that the low-cost perception of Earned media is also fading away.  A good press release or a publicity stunt just doesn’t go as far as it used to. The rise of social media has created more avenues for memes to rise and take hold, but also a flood of information that hastens their decline.  The competition for time and attention is more intense than ever.  So the chances of rising above the noise are less. And even if your idea does breakthrough,  it’s lifespan is much shorter because of the constant flood new work competing for the same attention spans. So even if the distribution costs of some new Earned media channels are lower (e.g. Facebook page vs. TV buy), the development costs in terms of the quality of the ideas, the frequency of the ideas, and the work required to populate those ideas with key constituencies is rising.

There are at least two implication for marketers. One is that they have to think of their messaging in terms of content. It must follow the basic principles by which we earn peoples’  interest in its own right or it will be ignored or skipped over.  This is true regardless of its form or distribution channel. The second is that they have to refresh their marketing efforts more frequently if they expect to maintain any consistent share of mind with their target.

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18 September, 2009 · 1:58 pm

The Purchase Funnel Fallacy

FunnelThe Purchase Funnel is more than a metaphor. Many companies actually use it as a tool to shape their sales and marketing programs. It is simple, intuitive, and wrong.  At least it is wrong for most products in developed economies of the Western world.

It is like physics , in that Newtonian physics is accurate for objects much larger than atoms and much slower than light. But it falls apart for describing subatomic particles moving at great speed. Similarly, the Purchase Funnel is accurate for markets with a limited set of products and information sources. But it falls apart  in a world of overwhelming product choice and a constant bombardment of brand messaging.

Think about the last time you decided to try something new. Did you survey all the product choices of which you were aware? Did you narrow that list to a subset of products you would consider? Did you sample the products within that set, and then determine which one to adopt? You may have done something close to that for a new house or a car, but most people would not describe that process for how they purchased a new shampoo, soft drink, or candy bar.

If your own behavior doesn’t convince you, take a look at Y&R’s Brand Asset Valuator. Y&R has been a marketing laggard for the last decade, but their brand tool is the most comprehensive brand database in the world in terms of both the number of brands it tracks, how many countries it tracks them in,  and how long it has been tracking them (full disclosure: I used to work for Y&R). While they are hesitant to say it, it provides empirical proof that the sales funnel is flawed. Time and time again, it tracks the rise and fall of brands.  It shows a consistent pattern.  They track four main characteristics of a brand:

  1. Knowledge – How well you feel you know the brand
  2. Relevance – How relevant you think the brand is to you
  3. Esteem – How well you think of the brand
  4. Differentiation – How unique you think the brand is

If the Purchase Funnel were an accurate model, you would expect to see a brand’s profile to develop in the order they are listed above. First, you’d get to know something about the brand, then you would determine its relevance to you, and so on. But it turns out that is not the case. In almost every case, the first element that people register about the brand is Differentiation. That may seem counter-intuitive at first, but not after you consider our environment. We are overwhelmed by brand choices and messages. We don’t seek them out, we avoid them. We have to filter things out in order to stay sane.  So what gets through our filters? Something that is different, unique. That’s what we notice first. Only after we notice something different do we evaluate whether it is for us or not.

Forrester recently took on the Purchase Funnel as well, but they ascribed its demise to the internet (good discussion of this and McKinsey’s alternative model from Robin Grant at We Are Social) . That is true to the extent that social media helps us manage our filtering process even more efficiently. But the underlying cause is something deeper. In our world, interest comes before awareness.

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3 July, 2009 · 4:26 pm

Ten Things Your Agency Prefers You Don’t Know: #8

olsen twinsThere is no real difference in capabilities between agencies.

The marketing services business in heavily saturated. There is no shortage of people willing to manage your social media campaign, make a TV ad, or facilitate an innovation workshop. There may be a brief window in the very beginning of new tool’s life, when there are a more limited number of people who can claim competency. Experts in search engine optimization were limited in 1996, as were television producers in 1938. But the pace by which people master new media has accelerated, such that those windows of scarcity are increasingly short. What that means is that there is no agency that is going to distinguish itself by having some capability that another does not.  Everyone has the same type of experts in the same fields. If not, they are easy to hire. While it is true that the very best in any field will always be rare, that true elite is probably not on staff at an advertising agency anyway. So agencies are not differentiated in terms of what they can do for a client, though a few may be differentiated in how well they do it.

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