"Marketing is not a cost" - John Gerzema

I follow John Gerzema's Brand Bubble so I clicked on this video posted by my friend Saurav on Facebook. Soon I found myself listening intently to John who was talking about "Avoiding the Looming Crisis in Brand Value" in this year's The Economist Marketing Forum. He cites examples of brands who have done the right thing, he warns us of the changing consumer psyche and of the changing marketing principles. He talks about "trust", "value", "values" and "durability" among other things. Yes, we gotta get down to the basics, offer warranties, cherish loyalties etc. Those I have heard before. What I hadn't was what he said at the end - "Marketing is not a cost, but a fiduciary responsibility to share holders." I second that.

During the conference, John also says that this time around more and more brands are getting innovative with their approach. For eg, McDonalds has this website called http://www.unsnobbycoffee.com/ where you can send a letter to your friend and stop him/her from paying for over-priced coffee. On the other hand, Starbucks has their Gold Card Program for people who really love Starbucks. These are just one of many promotional or branding ideas, one of which I had mentioned in a previous post of mine where I had maintained that "Quality Matters". Cause' it does. McDonald's can never ever get my coffee right whereas Starbucks does it everytime! But again, that's just my opinion.

Innovation. Competition. Both spell heaven for the consumer. Also, the economic meltdown has given us a chance to look at ourselves and re-think our choices. Our regulatory bodies have a lot to learn. So do we and the brands we promote or purchase.

John also said that "Trust in brands has declined by 50%" while according to Brand Asset Valuator (BAV), "Trust is the second-most desirable attribute for a brand, right after high quality". It is interesting to note here that "sensuous" is the least desirable attribute.

It makes sense, doesn't it? Consumers want to be able to trust their brands, they don't need them to be sexy! Marketing is definitely a fiduciary responsibility, but we have to make sure we market the right goods or services. Quality matters. As always.

Advertising Budget in a Slow Economy

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As the cartoon by Tom Fishburne suggests, this is exactly what some premium brands are doing or thinking of doing. My advice: DONT! In times of economic downturn, the last thing you want to do is lose your premium advantage. Instead,

1. Focus on your core brand value and maintain it.

2. Try and avoid advertising budget cuts as much as possible. When the economy revives as we all know it will, you think it will do your brand any good if you had zero consumer contact during the slowdown.? Naah! I didn't think so.

3. No need to get all sappy. Just maintain brand loyalty through presence in multi-media. Nobody likes to be patronized, right?

4. This maybe a good time to go digital. Saves you money, expands your reach. According to Advertising Age, Procter & Gamble slashed U.S. ad buys 18% in the first quarter but more than doubled digital spending. "Our media strategy is pretty simple: Follow the consumer," said Marc Pritchard, global marketing officer. "And the consumer is becoming more and more engaged in the digital world."

5. Brush-up on SEO (Search Engine Optimization) and SMO (Social Media Optimization). These are the advertising tools which will rule the coming years.

6. While buying media, this is the time to take advantage of the low cost of entry and increase your share of voice across categories.

The points mentioned above are not new to many as is evident from the fact that brands like P&G did not slash their advertising budget even during the Great Depression. According to TNS Media Intelligence (via Media Post), U.S. media spending declined 14.2% in Q1, mainly because of automobile brands. But companies like GE, Sprint, Johnson & Johnson and Verizon increased their media spend during the same period! Apart from financial gain, these companies will be perceived as stable and consistent, both desirable qualities for any brand. Don't you think?

Super Bowl Commercials - why spend so much money on them?

So much is being written about the Super Bowl commercials. The spots are being rated, categorized, praised and criticized. Well, nothing new about that. What is new though is that companies are reducing costs and struggling to survive in this economic slowdown.

According to Forbes.com, the game attracts almost 100 million viewers, a rather astonishing number given that there are only about 300 million people in the country. In 2008, the official price of a Super Bowl ad was $2.7 million for 30 seconds. This was up from $2.6 million in 2007 and $2.5 million in 2006.

Guess what, this year, it was a whopping $3 million for 30 seconds. Of course, it offers a great marketing opportunity for big brands with big budgets. But does that justify the ad spend? Most advertising agencies in US would jump at the prospect of creating a Super Bowl commercial. For once, the Creative Department would accomodate crazy deadlines and make life that much easier for the Account Management guys. But I can't seem to get rid of this doubt...does spending millions on a commercial make business sense in this economic situation?

Companies are freezing salaries, people are getting laid off, big organizations are downsizing and even the holidays couldn't make people spend like they did last year or the year before that. So why this sudden splurge?

The Super Bowl spot is best used to launch a new product or create long-term brand associations. Remember Toyota Prius and Macintosh? Both made their debut during the Super Bowl. And then we have Coke, Pepsi, Budweiser, Audi, Castrol Oil...the endless list of long-term brand builders with deep pockets and fancy computer graphics. But are today's worried consumers listening? Seems like they are...but only to which concern them.

According to Media-Research firm Innerscope, the top 5 most emotionally engaging Super Bowl ads had everything to do with the present state of the economy. CareerBuilder and Cash4Gold being case in point. Even Hyundai, with their Assurance Program is making an impact on consumers scared of losing their jobs.

Obviously, if an ad sends out the right message at the right time, the target demographic will be engaged but will they be convinced enough to buy something they don't really need? With tips to live frugally flooding the web, will a car-chase or a talking monkey move the American people to shell out their hard-earned dollars? Will a "laugh-out-loud" moment or a "feel-good" ad make us reach out for our wallet?

No, I don't think it will. What it will do though is inject a drop of hope into our minds. Making us imagine a world filled with brand new product possibilities, a healthy rise in consumer demand and subsequently a recovering economy. For now, it is all a dream. But, doesn't all great achievements start with one?