Archive for the ‘Brands’ Category

Thinking mostly very slow

April 22, 2014

I went to see Daniel Kahneman speak a couple of weeks ago – the psychologist who won a Nobel Prize for Economics and wrote ‘Thinking, Fast and Slow’ – which is a book I see lots of people with but which even Kahneman jokes that few probably finish. [I was given another copy of the book at the talk so shout if you want it.]

Kahneman

 

 

 

 

 

 

It made me conscious yet again of all the new insights and provocations that have emerged in recent years from the fields of behavioural economics, neuroscience and psychology, and the difficulty of articulating a clear point of view when clients ask.

So I’m going to use this blog as a way to clarify for myself the bits that I find useful and perceive to be connected, and maybe that will be of use to others.

System 1 and 2

Kahneman has popularized the understanding that our minds have two main modes of operation:

‘Fast’ System 1 (the ‘autopilot’): automatic, effortless, intuitive, impulsive.  Capable of providing instant answers to questions like ‘what’s 2 + 2?’, interpreting facial expressions, grabbing a favourite brand off the shelf or driving a familiar route, and so much more.

‘Slow’ System 2 (the ‘pilot’): conscious, effortful, evaluative, voluntary.  What we use when we have to pay attention – e.g. to answer questions like ’What’s 24 x 17?’ or ‘Who might be the next Man United manager?’, or choose an important gift, or park in a difficult space.

We assume we are primarily guided by System 2 – that we are rational, reasoning beings – but actually System 2 is the back-up mode that kicks in only when required – the vast majority of our decision-making is automatically being done by System 1. If we used System 2 all the time we would react too slowly and would be overwhelmed by all the choices available (System 2 is limited in capacity whereas System 1 has a huge capability to process every single bit of information perceivable by our senses at any point). And System 2 is described as ‘lazy’: people generally avoid expending mental effort – it feels tiring and has been demonstrated to be physiologically depleting of blood sugar.

A key point is that the two systems don’t operate mutually exclusively – especially not System 2. System 1 is implicitly originating impressions and feelings that are the main sources of the explicit beliefs and deliberate choices of System 2. Most of the time System 2 adopts the suggestions of System 1 with little or no modification – you believe your impressions and act on your desires (you follow your ‘gut instinct’). But sometimes System 2’s reasoning might override System 1’s impulses (e.g. when you decide that the noise that woke you up feeling alarmed is not actually someone breaking in).

Another key point is that System 1 is not, in contrast to the ‘rational’ System 2, ‘irrational’. System 1 generally makes very good decisions, using innate instincts we were born with plus knowledge, skills and associations we have learned over time. But System 1 is particularly emotional: feelings are often the main driver and feelings largely derive from our memories – how we felt in similar situations in the past is extremely influential on our System 1 thinking.

This is just the tip of the iceberg of the work in this field but already it throws up some profound issues for marketers. We have long assumed that people make far more considered decisions about our brands and communications than they actually do – that all options within a category are considered, that persuasive messages are read or heard, that product performance is assessed objectively, … whereas in fact people decide extremely quickly and intuitively, based largely on emotional memories which are highly subjective and imperfect.

This connects up with something that has resonated for me in the work of Byron Sharp, which comes from the quite different perspective of mathematical analysis of patterns of brand growth …

‘Memory structure’

I have written before about Sharp’s book ‘How brands grow: what marketers don’t know’ and its provocative but convincing arguments (based on the work of Andrew Ehrenberg) about the need to focus on increasing penetration not loyalty, and the benefits of targeting light buyers.

Sharp talks about the importance for brands of maximizing ‘physical availability’ (distribution and in-store presence) and ‘mental availability’ (the ability to get noticed or come to mind in relevant situations, accompanied by positive associations that encourage purchase). The combination of these two things makes brands easier to buy – in Kahneman’s terms more capable of being suggested by System 1 and not screened out by System 2.

Sharp refers to ‘memory structures’, the collection of mental associations we have in our minds linked to a brand name, developed and refreshed over time through experiences such as buying and using the brand, being exposed to its marketing and hearing about it from other people. The more extensive, fresh, coherent and emotionally positive a brand’s ‘memory structures’ are, the more likely it is to get noticed or thought in buying situations.

Hence the key task of advertising is to enhance memory structure for a brand: to refresh existing positive associations and add new ones. And it needs to be ultra easy for people to process communication using System 1, so the more it uses distinctive assets already in memory (colour, logo, pack shape, executional devices, etc.), the more likely it is to be assimilated (although not necessarily consciously) and stored in memory, linked to the brand.

I am constantly amazed by how few marketers really understand this and put it into practice. We are people who love creativity, change and get enormous energy from new ideas … but this isn’t necessarily in the brand’s best interest.  This has been evident when brands change their design too radically – e.g. Tropicana allegedly lost €30m in two months and returned to their previous packaging. System 1 automatic recognition of the pack was decimated by the change of pretty much all the easily identifiable elements (remember that in shops we are often viewing packs using peripheral vision – which is blurred).

tropicana040209

 

 

 

 

 

 

 

Of course sometimes brands need to change their advertising. But when everything about a memorable campaign that really resonated with consumers is left behind I feel very uncomfortable. Lloyds Bank recently ‘relaunched’ (from Lloyds TSB) and replaced their long-running, distinctive, charming and effective (IPA Effectiveness Award winner 2010) animated campaign with something that is visually, aurally, tonally and emotionally miles away:

lloyds cartoon

Lloyds 1

 

 

 

 

 

Lloyds 2

 

 

 

 

 

 

 

I have no evidence of the new campaign’s effectiveness but I can’t believe it’s high.

But nor is it usually in the brand’s best interest to just endlessly repeat stuff and not innovate with products nor refresh communication, since consumers will eventually get bored, categories move on and competitors may build up more effective memory structures. David Taylor of the Brand Gym uses the term ‘fresh consistency’ to describe the need for careful balance: to stick to brand ideas and distinctive brand properties but keep them refreshed, relevant and interesting over time.

Yet it is very rare that I hear any discussion of what those distinctive brand assets are and how they should be exploited and refreshed. In research we are inclined to despair slightly when consumers keep referring to old advertising years later, but we should be working harder to understand why they have remembered it for so long and how we can build from that. Where is the box on our brand positioning frameworks for this stuff? The only example I’ve seen is the ‘Root Strengths’ box on the Unilever Brand Key format.

In advertising pitch situations, or when results aren’t looking good, clients and agencies are too keen to throw out everything that’s gone before – whereas the more intelligent approach may well be to build from the best bits that already exist. I’ve been working recently on advertising effectiveness for Specsavers, which has achieved a fantastic return on investment through constant refreshment of the same memorable idea: ‘Should have gone to Specsavers’ – used since 2002 but most effective in recent years. My personal favourites below – so different yet so similar:

Specsavers ‘Vet’ ad

Specsavers ‘Collie’ ad

Next time we’re racing to reinvent some marketing let’s think about whether there’s a case for ‘thinking slow’.

Top 100 most valuable global brands

May 9, 2011

It’s been a while since I posted. Katharine is one of the people who (touchingly) have noticed and now she has prompted me into action by sending a link to the new BrandZ annual report into the Most Valuable Global Brands. For the uninitiated, BrandZ (pronounced BrandZee rather than Brandzzzz) is WPP’s version of Interbrand’s ‘Best Global Brands’ report and is different, and arguably better, in that it includes consumer research data as part of the evaluation (as well as detailed financial analysis).

Here are the 2011 results:


Note that the ranking of say Coca-Cola is that of the consumer-facing brand rather than the Coca-Cola company (although also note in the footnotes that they’ve included Diet Coke/Coke Lite and Coke Zero in this case – judging them as sub-brands rather than distinct brands).

There are some neat statistics here about the power of brands … such as the fact that the stock market value of these 100 brands grew by 36% since 2006 compared with a fall of 1% for the S&P 500, or that these brands have added $500bn in value since 2008. In other words, strong brands are more resilient, whether to recession or more specific catastrophes – as evidenced by Toyota rebounded to the no.1 spot for cars, despite the massive challenge to its reputation from its product recall sagas. However it’s still too early to tell for BP, which is judged here to have dropped in brand value by 27%, vs. ExxonMobil up 10% and Shell static.

We’re all aware of Apple’s recent turbo-charged growth but this perspective on it illustrates the scale of change: 84% growth and now 37% bigger than Google at no.2. However I believe Apple’s market capitalization is still behind Google’s – its lead here is the result of including the perceptions of global consumers.  Interestingly Interbrand’s Top 100 of 2010 has Apple way down their list at no.17, although growing very strongly:

Other interesting nuggets from the BrandZ ranking:

Facebook is the biggest riser since last year, now at no.35 having grown 246%. The second biggest riser is a brand I’d never heard of: Baidu at no.29, the largest Chinese language search engine which specializes in understanding the nuances of Chinese languages and cultures as applied to searching the internet (a massively growing pursuit for China’s 1.3bn citizens).

There are another 11 Chinese brands, 3 Brazilian ones, one Indian and one Russian brand in the Top 100, reminding us not to be too myopically Western in our perspective. For instance Pizza Hut does well here, with 58% growth, driven partly by its performance in China. In the UK we might regard it as rather an embarrassment, a brand that’s had its heyday, but that’s clearly not the case everywhere.

Amazon edged past Walmart to become the no.1 retail brand at no.14, despite having no physical stores. As it enters ever more product categories (including food?!) I do wonder whether it will stretch too far. But witness the genius of not choosing a brand name that anchors you to a product category, as well as the power of fantastic execution.

Pampers does amazingly well at no.34 (ahead of Facebook). This is partly because the valuation includes an assessment of the extent to which the brand itself contributes to its value – e.g. via trust and an emotional relationship. Luxury brands like Louis Vuitton and Porsche score highly on this measure, but so do massmarket brands in emotionally important sectors, such as Pampers, Guinness and the Skol and Brahma beer brands.

The full report is worth a read – see http://www.brandz.com. There is even an app, which I have to admit to finding quite good. You can look at different regions and product sectors, and see brands that don’t make it into the overall Top 100 but are in the top 10 within a product category. You can also shake it and it gives you a random product category with the highest ranking brands displayed as a ‘word cloud’ thing. You will know you are a brand nerd when you find yourself doing this.

How brands grow: what marketers don’t know

December 13, 2010

That’s the title of a really good book I’m reading at the moment (thank you to Andrew Rayner of Nando’s for recommending it).

I buy business books all the time and rarely get beyond the third chapter – often you’ve got the basic idea by then and the rest of the book is just unnecessary repetition and amplification, or it’s just written in too dull a way to hold attention. Or both. But this one is different and I highly recommend it.

It’s an easy read (although occasionally repetitive) but more importantly it brings together lots of very robust-seeming research evidence to debunk common marketing myths and present logical alternative guidelines. A lot of it planners probably kind of know (it’s based on the work of Andrew Ehrenberg) but you forget it or don’t have the evidence readily available to persuade others of its merit. It is very consistent with the latest evidence coming from neuroscience (for instance that the way brands and advertising get remembered is via imprinting strong emotional associations) but uses the more familiar evidence source of sales and market share data from lots of categories and countries.

It takes very familiar marketing tenets such as these:

and challenges them in a clear-headed and substantive way.  For instance, you learn about (or are reminded of) law-like patterns such as the Double Jeopardy Law, that brands with lower market share have far fewer buyers and those buyers are slightly less loyal than buyers of big brands, with the implication that growth in market share comes from increasing penetration of buyers of all types (especially light ones who always make up the vast majority of customer bases).

You are reminded of the importance of making brands easy to buy by being continually both physically and mentally available, the latter meaning that brands should maintain salience via noticeable communication assets that build and refresh brand-linked memory structures that make it easier for the brand to get noticed and bought. It makes a strong case for mass marketing, since it demonstrates that most of a brand’s potential sales lie with light or non buyers.

The chapter challenging the wisdom of loyalty programmes will be particularly useful if you are considering launching one – I feel like most of my clients this year have discussed doing so and this book provides a more elegant and empirical argument against it than I’ve been able to produce.

I can’t do justice to this book in a blog post: buy it, absorb it and apply it and you will be better for it.

Postscript 20th Dec: Byron Sharp emailed within hours of me posting this to say thank you.  All the way from Australia. Which reminds us of the usefulness of Google Alerts (well provided you don’t have an infuriatingly common name) but also the importance of Being Nice.  What goes around comes around.

What he omitted to say but I’ve just discovered via Rory Sutherland’s Tweets is that he is speaking at the IPA on 18th Jan – see  http://twurl.nl/xbgpsp. See you there.

From smoothies to cat herding

September 15, 2010

It’s been a while since I posted so here’s a small collection of random things that have caught my eye recently.

1. Innocent was originally called Fast Tractor. Who knew?  Not me until David Taylor’s blog revealed it. Here’s what the label looked like:

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You can see how they got there: getting the fruit from field to bottle super-fast blah blah. But so much weaker than Innocent, which has emotional meaning as well as rational, feels like a ‘big idea’ with tons of breadth and presumably works better internationally.

So next time you are working on a positioning, ask yourself whether you’ve got a Fast Tractor or an Innocent? 

2. There’s been a lot of stuff in the media lately about how the ‘pick ‘n’ mix’ world of the internet, Twitter, Facebook and all is reducing our attention spans and making our brains less capable of concentrating for long amounts of time on seriously productive creative endeavour.

Well they say for every trend there’s a counter trend and here are examples: Slate (online magazine) have been commissioning some really long pieces and finding they get millions of page views and the editor of the New York Times magazine says it’s their longest pieces that get the most traffic.

3. Mother have made their first ad for Ikea in which they release 100 cats around the Wembley store and film what happens.

It’s rather nice (in that post-modern ‘long film that doesn’t feel like an ad’ way) and is already going gangbusters on the YouTube/viral circuit.  I assume the brief was something about making Ikea merchandise more emotionally desirable and resonant of cosy homes, not just renting your first flat. The ad does a decent job of that but has its work cut out if it’s going to override memories of the horror of the stores and the disappointing reality of the products. 

 The ‘making of’ video has had 4x as many views as the actual ad and is inspiring parodies such as this very funny one:

Fake yourself

May 13, 2010

I’m a big fan of things South African, having been there last year, and just came across this cool story of how a cool T-shirt brand in Johannesburg Love Jovi secretly produced a counterfeit version Luv Jovi and sold it in markets, via street sellers and so on to gain access to the people who couldn’t afford designer prices and to create buzz around the original.  They made a fake website and made it look like the knockoffs were made in China when actually the marketing was shot in Jo’burg’s Chinatown. Nicely disruptive and a nice film telling the story.

http://www.youtube.com/watch?v=pNEByJZbONY&feature=player_embedded

The importance of a brand name

February 21, 2010

Was in Primrose Hill just now and this made me laugh:

The challenges of brand extension … this cafe is now trying to position itself as a wine bar too in the evenings but its name makes that a bit tricky. It’s  actually called Le Tea Cosy which makes things even worse.

Low cal treats

January 31, 2010

Interesting to see that New Covent Garden Soup have launched one portion cartons labelled prominently with ’99 calories’. Reminds me of the PizzaExpress Leggera pizza which markets itself as 500 calories (they’ve cut out the centre and put salad in it), to which have now been added Leggera wine and desserts.

These seem like smart moves to me, especially at this time of year.  Some would argue that these are occasional treat purchases and people aren’t thinking about health or calories on those occasions. But I would argue that (a) a lot of people are grateful for a lower guilt treat, (b) for some buyers these brands are quite everyday purchases where health considerations are already relevant and (c) this should open up additional occasions for these brands and hence increased frequency of purchase. 

Even amongst people who aren’t calorie-conscious these initiatives get these brands talked about and considered afresh. They demonstrate that these companies are alive and innovating and not afraid to try something out: very appealing qualities and particularly important for long-established brands.  Just do it, as they say.

Everyone’s going to the pictures

January 25, 2010

A predictable plot, a dodgy script, simplistic characterization, half an hour too long … but boy is Avatar worth seeing, in my humble view. Not especially for the 3D but for the amazing technical accomplishment of creating a really rich, absorbing, convincing, artificial world. It just blows you away. And I am not a sci fi/action movie kind of gal. As my friend James commented, wouldn’t it be amazing if these techniques were used to create experiences you could actually spend time in. The new Disneyland, perhaps?

On the subject of films, I read a piece about Tesco going into film production, and being Tesco it looks well thought-through. They’ve done a deal with a production company who will work closely with high profile authors to turn their books into films – authors such as Jackie Collins, Philip Pullman, Jacqueline Wilson, Dick Francis who are bang on for the Tesco audience. The films will have a few cinema showings (doubtless for Tesco customers and staff only) and then go straight to DVD, sold exclusively through Tesco stores. Tesco get a great footfall driver, the opportunity to sell more of the associated books as well as the DVDs, the ability to get unique behind-the-scenes content and of course further expansion of their brand’s scope, now into the more glamorous worlds of entertainment provision and content creation. Nice.