Tell me how it’s going to work. And I won’t fire you.
By Adam Morgan, 27/09/2011
I saw a very interesting presentation by a guy at J&J once. They had developed an ad for one of their products, and were unsure about how well it was going to work. So they set up a control: they ran it in half of the country, and not in the other half. They gave it six months.
The results were no different in the half of the country they had advertised in to the one they hadn’t advertised in. Drawing the conclusion that the advertising didn’t work, they did all the usual things one does in the circumstances: binned the ad, fired the agency, and started developing new work.
But they knew it would take months to develop new ads, and they couldn’t leave the brand unsupported over that time. So they ran a coupon drop across the entire country, to hold the fort.
Which is where the story gets interesting. Because the coupon drop worked very well where they had run the advertising, but hardly at all in the area they had used the control. The advertising had created a threshold interest in purchasing the brand that was then turned into active sales by another element of the marketing mix. By which time the agency relationship had been terminated
Peter Field and Les Binet’s seminal book ‘Marketing in the Era of Accountability’ stresses the importance of setting the right objectives for your communications. Hand in hand with this must go a clear understanding of how we intend our communications to work, and how those elements are going to work together. The agency has to be front and centre in defining this, and has to take a view across the entire mix – for its own sake. If they don’t, and the advertising doesn’t ‘work’ in terms of key measures like sales, the client will simply do all the usual things one does in the circumstances. When sometimes all you needed was a clear agreement on what element of the mix was going to do what.
And the right coupon at the right time.
This article first appeared in Campaign Asia Pacific
I think you’ve made your case that sales are the result of a confluence of interconnected factors and that the truth often lies beneath the surface. Both of these points are well worth attention.
However, I think you’ve missed the bigger picture here. The point of having a brand is to earn the right to charge premium prices over an unbranded functional equivalent. The advertising in your story earned the brand the right to discount their product via coupon. No marketer should consider that a success. And no agency should be proud of that work.
Brand advertising should not just be about getting awareness – hey look at me, I exist! Brand advertising should be about creating brand equity – that is, creating a perception in the minds of customers that the offerings of the brand are of more value than the offerings from other brands or from unbranded equivalents and the willingness to pay more. If you have to give a coupon in order to convince them to buy, then why bother? What prize have you won? The ability to sell a branded product at non-premium prices?
Even if you wanted to give your product away for free, you’d still need some form of advertising. If people didn’t know the product existed and was free, they couldn’t “buy” it. If you truly want to give your product away for free then you could call the advertising a success if it made people aware that the product existed, that it was free, and where to get it. But if you actually wanted to make money, then this would be an unmitigated failure.
Somehow, brand marketers allow themselves to believe that if they are merely discounting prices instead of eliminating the price altogether, that they’re doing a good job. I’m not sure why. If you have to lower your price to “hold the fort” then you don’t have a very strong fort. That’s not something to be proud of.
Entirely accept your point about a brand’s ambition should be about increasing perceived value, and therefore the price you can charge and the profitability to can create. For what it is worth, at the time J&J could offer coupons on Q Tips and still make good money. In a world which has moved to everything being on deal all of the time, that is almost certainly much harder now.
I was simply using it as an anecdote to illustrate the importance of understanding one’s brand model, and how it was actually going to work in the real world. And, in this case, how awareness/ appeal/ perceived need often requires a further trigger for threshold users to commit, and one needs to understand both that that is the case, and what that trigger (or potential range of triggers) could be.
Fair point Adam.
I would argue that in the past, J&J (and all of its competitors) did not have their brands put to the true test – how would they perform relative to an unbranded equivalent. Today, nearly all of J&J’s brands have unbranded equivalents. And the evidence is that the national brands are suffering heavily from this competition.
I’m sure you’re right that J&J could make good money on Q Tips even after offering a coupon. (Well, maybe Q Tips are a bad example since J&J does not own that brand. But I get your point.) If net of the coupon value they were still commanding a premium price relative to some unbranded competitor (and that unbranded competitor may not have always existed) then I guess the coupon is really just a game – I’ll pretend that I’m selling you a product for $4 that’s really worth $5, and you’ll pretend to believe me. It seems more authentic to simply call it what it is, charge what you’re worth (to the consumer) and dispense with the coupon. But OK, if the company is happy with its numbers and enjoys playing games with its consumers then why the heck not?
The problem is that typically these companies are not happy with their numbers. They are doing this as you say to “hold the fort.” They know that the price they want to charge – one that a brand should be able to charge – cannot be supported by the reality of the market. And so they try to have it both ways. They try to maintain the perception of their elite status by engaging in the behaviors of a brand – mining consumer insights, launching “new” products, investing in slick marketing communications – while also behaving like a no frills generic volume player.
Brands that behave this way are calling into question their raison d’etre. And private label manufacturers with their retail partners are gladly filling the leadership void created by the lack of courage of many national brands.
Enough about that. I’d love to hear more about your thoughts regarding the need for an additional trigger. I’m not sure I agree. Or, at least, I’m not sure I agree if the trigger you’re talking about is a coupon or some other bribe. I could understand your argument if the trigger to which you’re referring is just a reminder. People can see an ad, feel very compelled, decide to buy the product and then in the hustle and bustle of their life simply forget. But if the trigger is that the brand has to bribe the consumer then I would argue they have simply failed to make their case in the advertising and the degree to which they have failed is measured by the face value of the coupon.
Perhaps it’s time to challenge what has become conventional thinking in the brand management world. Perhaps brands ought to get back to standing for something, putting out offerings that are in line with their point of view and which are valuable to consumers, pricing appropriately, and dispensing with the equity-destroying gimmickry that one would expect from commodities but which is unseemly when it comes from brands.
Stumbled here today after seeing my dusty old Eat Big Fish book. Great blog. Downloading app.
I’m surprised the simple points of this post are being overlooked…1/One ad can’t do it all and 2/Know your goals so you know how to judge your success.
I think we are all advocates of good branding practices and would agree that coupons suck (even in an era where people are buying gucci on flashsale sites and planning 5-star vacations with groupon).
brand is king, but one ad won’t build it. especially if your judging the success of a brand building ad on whether or not you get immediate sales.