Lance Armstrong. Self admitted drug taker, doper, liar, perjurer and cheat. Tiger Woods, serial philanderer, destroying his (previous) clean cut image. Sir Jimmy Savile OBE: ‘predatory sex offender’ according to Scotland Yard, and paedophile accused of abusing over 300 vulnerable children including mentally handicapped and terminally ill hospital patients.
What all these personalities have in common is that they all held significant commercial and charity endorsements. People like famous people. Marketers like people who people like. Nothing can create a winning product quite as quickly as a strong endorsement from a well-known personality. Take the George Foreman Grill. Or to give it it’s full title, the ‘ George Foreman Lean Mean Fat-Reducing Grilling Machine’, which has sold over 100 million units as a result of the aging heavyweight world-boxing champion’s popular infomercials. George’s famous signoff line “It’s so good I put my name on it” has entered popular culture. Without his endorsement the grill would have remained just another far less profitable ‘snackwich-maker’. Wouldn’t we all, as marketers, like to share similar success?
Of course when things go wrong for the personality endorsing a product, they do go spectacularly wrong. Tag Heuer, Gatorade, Gillette, Accenture, AT&T, Golf Digest, Buick (General Motors), Titleist, and American Express all rapidly jumped from the Tiger ship at the height of his crisis. Interestingly Nike stuck with him. For the rest, the positive attributes Tiger had previously exhibited and which they had hoped would rub off on their brand suddenly became a huge liability. It’s what I call the ‘congressman effect’: the fact that it always seems to be the congressman who extols family values who then embarrasses himself, caught up in a sexual imbroglio – like the aptly named Anthony Weiner, forced to resign from congress having sent an inappropriate photo of himself to a female Twitter follower while his newly married wife was expecting their first baby.
The spectacular downfall of the likes of Tiger Woods and Lance Armstrong has not, it seems dampened large brands’ enthusiasm for celebrity endorsements. Nike has just signed Rory McIlroy for a reported $250 million, and produced a rather clever ad with both he and Tiger. Pepsi has just signed Beyonce for $50 million and perhaps surprisingly Chanel No. 5 now features Brad Pitt in its much-parodied $7 million ad.
Not all endorsements are world-class sports and media personalities. The introduction of social media has increased the importance of recommendations from ordinary users of your products and services. The world has become a more transparent place. A place in which consumers are (even) more cynical of what marketers tell them, and more trusting of advice from ‘friends’ even if such ‘friendship’ is of the more superficial Facebook variety. The average Facebooker has 190 ‘friends’ – a far wider influencer set than ten years ago. Sadly, consumers may take more cognisance of a Facebook friend they haven’t physically seen since school than overt product information from an advertiser. So given this context and the reality that most organisations don’t have millions of dollars to spend on celebrity endorsements, what opportunities do endorsements, testimonials and recommendations offer?
Market research based recommendations can be powerful, provided they are credible, relate to a recognised body of respondents and you have verifiable independent evidence of your claims. Of course they need to be stated in a non-technical and impactful way. Examples that come to mind include: “Sensodyne is the No.1 dentist recommended brand for sensitive teeth” and “Panado – The GP’s choice”. Risks include your competitors contesting the independence or validity of the research your recommendation is based on, or perhaps even worse, you losing the support of the market and consequently the endorsement over time. If you operate as a market leader in a more niche market, research of a viable sample by an independent research company could be a relatively cost effective way of building a powerful positioning which would be very difficult for competitors to replicate.
Ever wondered why you see so many serious looking ‘experts’ in white coats in adverts? The current Life Buoy ‘Clini Care 10’ television ad being a great example as a whole auditorium of white-coats applaud their hero – a bar of hand soap. By association viewers associate the product with an endorsement or recommendation by doctors. Without being disingenuous, are there positive associations you can create through imagery for your brand?
Awards also offer opportunities to present evidence from a third party that your product enjoys wide recognition and support. The Sunday Times Top Brands Awards being a fine example. Multiple brands annually leverage their good showing in the various categories of this award in their paid-for adverting, while their PR companies send out a flurry of releases to gain exposure. Advertising agencies are famous for being defined by the awards they win. This is because a service, particularly one as intangible and subjective as advertising gains huge credibility from commendation through awards. Given that there is (to be cynical) virtually a whole industry of ‘awards’ of various stature, there is likely to be one your product or company could leverage to competitive advantage. One caveat: beware tying your brand to an award of obviously dubious credibility. If you have effectively paid for an award, your competitors can too, or more damagingly, point out your award’s lack of credibility.
Recommendations by known experts or organisations, if they can be negotiated for acceptable cost, add significant stature.
Pope Leo XIII famously endorsed ‘Vin Mariani’, a patent medicine containing cocaine, in 1863. Clearly such a recommendation would be rather more difficult today, but Gordon Ramsey’s endorsement of Checkers’ butchery adds huge credibility to a previously undifferentiated offering. BP Ultimate’s “Recommended by the AA” as the only fuel endorsed by the Automobile Association of South Africa distances the product from competitor products, which frankly were delivered through the same pipeline. Are there similar opportunities within your industry or market? Here again, operating within a specialised niche might bring the cost of such a recommendation within budget.
While the term ‘endorsement’ normally applies to support from a celebrity, ‘testimonial’ usually relates to ordinary customers. Testimonials in my mind started running out of steam 20 years ago, (remember those old OMO ads where a women told us all that she “nearly died” with embarrassment from the lack of cleanliness of her bowling dress?) but have revived in the last 10 years as social media has become ubiquitous. Testimonials can be an important part of communal marketing via social media. Its has become the expectation that customers tell other customers about their experience. Amazon explicitly leverages this on their site offering product recommendations exclusively from customers. A powerful variant of this is their product recommendation engine, which automatically cross-sells on the basis that “customers who bought product A, also bought product B”. Instil similar thinking across your social media platforms. Make it easy for happy customers to tell other customers about their (positive) experience. And of course leap on any customer complaints before they too are multiplied.
This article was first published in Your Business Feb 2012.
- Tiger close to new multiyear Nike deal (espn.go.com)
- Using Testimonials And Endorsements to Promote Your Book: A Guide For Self-Publishers (business2community.com)
- Cheerleader Elle Smith Signs On as Spokesperson for Cheerleading Apparel Company Chassé (prweb.com)
- 18 Athletes Who Make More Money Endorsing Products Than Playing Sports (businessinsider.com)
Given the progressively complex and rapidly changing business environment, few would argue the importance of the marketing role in commercial organisations. Companies’ market value and business flows (particularly given the apparently inextricable move towards digital business models) are firmly anchored to market decisions, degree of market orientation, and the strength of their brands and reputation. Even during these economically tough times, international brand values continue to climb to stratospheric heights. Coca Cola, affirmed by Interbrand (a respected branding agency), as the world’s most valuable brand, tops the list at over $77 Billion. “The company excels at keeping the brand fresh while maintaining a powerful sense of nostalgia that unites generations of Coke lovers and reinforces consumers’ deep connections to the brand.” Apple, rushing up the brand value charts to a close second (129% increase in brand value to $76 billion in 2012), has transformed how the world sees technology and its brand personality defines the very character of its consumers.
The explosion of social media has irrevocably changed company / consumer relationships, effectively reversing the balance of power. Take Dave Carroll, small time musician, peeved that United Airlines had damaged his guitar and refused to compensate him. Their parsimony no doubt saved their insurers a couple of thousand dollars. It also earned their reputation a YouTube video entitled “United breaks Guitars” which has amassed twelve and half million views to date. And a book (unsurprisingly named “United Breaks Guitars – the power of one voice in the age of social media”. Dave fills his days doing corporate talks on, well, how United breaks guitars. The Daily Mail quantified the resultant losses at $180 million. Contrast this with KING III requirements to carefully manage stakeholder relationships. Of course, Greg Smith’s New York Times op-ed piece on why he resigned from Goldman Sachs knocked $2.2 billion off their market capitalisation – certainly a material consideration for the board.
In spite of this context some companies remain without a marketer in the boardroom. While it is the norm to have board finance committees, remuneration committees, ethics committees and audit committees, it is very rare to have a customer, brand or reputation committee. However given the requirements of King III and the increasingly legislative environment in which South African business is required to operate, the marketing directors role is increasingly critical.
At a leadership level, the scope of the marketing role is dependent on the marketing-orientation Vs product / production orientation of the organisation as a whole. Organisations vary dramatically in their marketing orientation due to their market conditions, industry structure, strategic intent and maturity as an organisation. Brand driven organisations are inclined to place greater emphasis on marketing with greater scope under the direction of the marketing director. In sales led organisations a separate sales director may work in conjunction with, at the same level as the marketing director. In business-to-business roles or indeed those organisations that are price takers (such as miners of commodity products) may require only a very limited marketing role.
Senior marketing professionals at board level must balance the analytical and creative. While it is true that the marketing discipline may perhaps require a greater creative component than say, financial management, it should not be confused with “Mad Men” the American TV show depicting an ad agency in the ‘60’s. While the creative output is perhaps the most physicall y evident, and is a differentiating aspect of marketers role, it in not, a senior level, the exclusive defining aspect. Marketing remains after all a management science. The Marketing Director needs to be able to hold a long-term focus on developing the brand and business positioning into the future while simultaneously retaining a short-term action orientation.
The high level functions of a Marketing Director include:
- Input into the organisations overall strategic direction.
- Translating the strategic direction into a specific marketing strategy and campaign.
- Create a corporate / stakeholder communication strategy and plan
- Developing and protect the organisations corporate and other brand/s
- Developing and protecting the organisation’s reputation, including risk management and mitigation structures and procedures.
- Overseeing new business development and sales strategies.
- Ensuring appropriate pricing and distribution structures are in place.
- Managing the organisation’s marketing resources. Budgeting for such.
- Identifying, appointing and managing appropriate, cost effective marketing service providers
- Development and maintenance of market and competitor intelligence, and the maintenance of the organisational customer records and CRM systems.
- Develop a suitable structure for the marketing department and if appropriate a matrix structure for marketers embedded within functional business units.
- Leading the marketing professionals across the organisation.
- Ensure legal compliance of all marketing activities.
Appointments at this level would clearly hold significant experience, ideally in the type of marketing environment the organisation operates within. Recognising that marketing is very broad by definition, experience in the FMCG field may not easily, for instance, translate to business-to-business marketing. Likewise senior marketers from within a marketing specialisation such as advertising or research may be stretched to undertake a full spectrum marketing-generalist, leadership role. A senior marketer should additionally be reasonably knowledgeable in a wide variety of allied disciplines, such as production, information technology, legal and finance given that the marketing function is expected to interface across such disciplines.
While there are a number of notable senior marketers with no formal qualification in the subject, it would be the norm to expect a Marketing Director to have a minimum of a degree specifically in marketing, communication, or an associated specialisation. As with other board level appointments a general management qualification such as an MBA adds stature, improves linkages into the business and ensures an organisation-wide outlook. A professional designation Chartered Marketer conferred by the Marketing Association and ratified by the Directorate Registration and Recognition (DRR) of the South African Qualification Authority is available to senior marketers.
“It takes 20 years to build a reputation, and 5 minutes to ruin it. If you think about that, you will do things differently.”
The Marketing Director is the primary custodian of an organisation’s brand and reputation. While most of his efforts are focused on building a positive reputation, the marketing director needs to ensure reputation monitoring and risk mitigation strategies and structures are in place in anticipation of future crisis.
King III points out that the economic value of a company can no longer be based solely on the balance sheet:
Principle 8.1: The board should appreciate that stakeholders’ perceptions affect a company’s reputation.
Principle 8.2: The board should delegate to management to proactively deal with stakeholders relationships.
Principle 8.5: Transparent and effective communication with stakeholders is essential for building and maintaining their trust and confidence.
Principle 8.6: The brand should ensure disputes are resolved as effectively, efficiently and expeditiously as possible.
Large listed companies may retain the services of a specialist stakeholder relations firm to maintain communication with shareholders, although responsibility for such may be devolved to the Company Secretarial or Corporate Affairs teams.
Some larger brands have their brands explicitly valued by external brand agencies to ensure long-term protection and growth of this asset. While the marketing profession can’t claim unanimity with regards to brand value methodology there are recognised methods, such as ISO 10668 Monetary Brand Valuation.
Creativity and the role of ad agencies.
Creativity is used as a lever to multiply the impact of a well thought through communication campaign. You will recognise from your own experience that highly creative adverts break-through the clutter more effective than bland ones do. However, clearly a more risqué advert or communication is more likely to offend at least a portion of the target market. Thus while a creative campaign can offer significant strategic advantage, it may come with an increased risk to the organisation’s reputation. The degree of market tolerance for such communication depends on the history of the organisation with regard to past advertising (i.e. has it always tweaked the nose of convention) and the category of product and service. A fast service chicken restaurant with a long history of satirical and irreverent advertising is more likely to be forgiven than a funeral home or multinational pharmaceutical company. Critically brands should remain consistent to reduce market push back.
Marketers outsource the creative component of advertising to external agencies because it is difficult to justify the cost of retaining ‘creatives’ in house, especially given the ad hoc nature of their output; creatives prefer and work best in the fertile environment agencies offer; and because the sort of creative staff who work at ad agencies generally don’t want to work in client-type organisations.
A primer on media
Media has proliferated, fragmented, and faces significant change as consumers move from traditional media such as newspapers and magazines to more contemporary channels such social media. Some form of media is a requirement to communicate to an organsation’s target market, and is likely to be their single largest marketing expenditure. The broad categories of media are: those channels the company owns: web sites, brochures, in house publications and the like; media it buys such as advertising and sponsorships and that media exposure it “earns” – traditionally thought of as “public relations” but increasingly “content marketing” and most social media. It is the marketing directors responsibility to arbitrage between the costs and advantages of the media types available. This is done with the assistance of a media house, which offers both media strategy, as well as media buying on behalf of a large number of organisations. Earned media is likely to be facilitated through a media relations or reputation management service provider (previously known as the “PR agency”).
The South African business environment and in particular the marketing environment has become and continues to become increasingly legislated. The days of simple self, or industry regulation are largely coming to a close. With sanction of fines up to R10 million or jail terms up to 10 years, the risk of legal non compliance are material at board level. Clearly the prospective reputational damage of a legal case via the Consumer Commissioner, the Competition Tribunal or other bodies are also significant. While the Marketing Director may not be in a position to determine the specific legal risks of a particular market structure, marketing strategy or tactical undertaking he should certainly have sufficient knowledge and experience to know when to confer with legal council.
Relevant legislation specific to marketing issues includes:
- Competition Act no 89 of 1998 as amended
- Consumer Protection Act no.68 of 2008
- Electronic Communications and Transactions Act, 2002
- Protection of Personal Information Bill soon to be promulgated
- Sector specific legislation such as FIAS Act no. 37 of 2002
Self-regulation clings on in the form of the Advertising Standards Authority (ASA), an independent body funded through industry contributions based on advertising spend. All members are required to abide by the rulings of the ASA. Additionally, in terms of the Electronics and Communications Act (Act No 36 OF 2005) all electronic broadcasters must adhere to the code administered by the ASA. This offers a low cost alternative to legal action to settle complaints regarding advertising in South Africa. Unfortunately for marketers it also means that advertisers are required to respond to complaints even if such a complaint is from a single individual. The ASA can sanction advertisers by prohibiting further dissemination of the communication.
This article was first published in Directorship the official journal of the Institute of Directors South Africa.
- Introduction: Madness in the Market(ing) Place (themarketingmadness.wordpress.com)
I like ads, I really do. They’re art. Sometimes the best even end up on display in museums. Adverts are attractive, often amusing, informative, a snapshot of our contemporary history. They are a source of pride for their creators. They look good in our portfolios, make great conversation around the braai and allow us to show our kids what we do for a living.
The fundamental question is: Do we like our ads too much?
First off, I suspect that the answer to too many questions in marketing is “an advert”. It seems that too often creating an ad is the culmination of the marketing process. And there is of course the whole (sexy) ad industry waiting for the call. It’s trite, but let’s remember advertising is just a subset of one of the (apparently now indeterminable number of) marketing P’s Do we spend a similar amount of time and resource on the other fundamentals of marketing? How much time have you spent over at the “pricing agency” this month?
As a result of this focus on ads, are we as marketers overlooking less sexy but possibly more effective ways of building our brands? As the Chile mine crisis reached its emotional climax (with claims of higher viewership than the world cup), my marketing friends and colleagues were unanimous “You just can’t buy positive exposure like that”, they lamented, as they headed off to the ad agency. Not the PR Company mind you! Yes, non-paid-for commercial communication can be hugely powerful, yet remains (with apologies to my enormously professional colleagues within the PR and communication specialisations) the unpopular stepchild of our profession. Fundamentally are we being objective with how we allocate our marketing resource and effort?
Secondly, to the specifics of the ad itself: Seems we marketers think that a really good ad can fix any product, positioning or marketing weakness. It’s what I refer to as putting lipstick on the bulldog. It might fool a few, but fundamentally it remains a bulldog. How many times do we see brands or products where the only differentiation is the advertising? The weakness of such a “lipstick strategy” is that lipstick is freely available to our competitor’s at the nearest beauty retailer (read agency), even if the shade is slightly different.
I always liked the definition of an advert in law – namely: “an invitation to do business”. Which leads me to an illustrative (if cruel) analogy in this regard. Think back to school. When the pimply-faced, socially-awkward classmate handed out their mother’s beautifully crafted party invites, enthusiasm remained thin and attendance of the event was inevitably embarrassingly low. When the sexy number we were all secretly in love with, merely mentioned the time and location of a trendy sounding bash, there was an unseemly scrabble to attend.
My point is that it’s not always the elaborateness of the invitation (read advert) that is the answer. Perhaps the differentiated attractiveness of the party (read product) itself is more important. So fundamentally let’s make sure we as marketers invest sufficient time and resource on the party and not just the invite.
South African marketers constantly bemoan their lack of status, but seem unwilling to do anything about it, writes Howard Fox.
Much has changed in South African marketing over the past two decades. We’ve rejoined the world economy; media has proliferated; the net has become precedent. One constant remains, though: Marketers’ steady refrain about lack of representation at board level, the general lack of respect for the business specialisation of marketing, and the fact that we just aren’t seen as a profession.
And yet, when there is an opportunity to be recognised as a profession – to receive a professional designation rated at the high end of the national qualification framework – the marketing community is apathetic. “What’s in it for me?” they ask. “You want me to pay an annual fee to retain my professional status?” they moan. Or simply: “It seems like a lot of work, I think I’ll hold off until it becomes a necessity.”
What is it that gives us, as marketers, an excuse for not being professional? Here’s a silly analogy, but one I hope will finally get the message across. Let’s say that, as we commute to our offices, we drive across a number of bridges. Personally I know very little about bridges, and clearly it’s impractical for me to complete an engineering degree and inspect every bridge to ensure it is fit for purpose.
Even suggesting that, of course, is rubbish. Major engineering endeavours like bridges are undertaken under the auspices of a professional engineer, an individual certified as sufficiently qualified and who has agreed to a code of conduct and to constantly update his knowledge. I find that very comforting … so comforting that I don’t ever question the professionalism or competence of engineers in South Africa.
Multi-million rand strategies
Having safely negotiated our way into the office (and over the bridges) with commendable lack of drama, we marketers finish off our multi-million rand strategies which propose the investment of very large sums of shareholder’s funds – and on which the financial future of the organisation (and its employees) rest. Not quite the literal “life and death responsibility” of a civil engineer. But, in a marketing context, close.
I will leave it to your collective experience as to whether we marketers receive the same unquestioned professional trust that our engineering colleagues do, or a somewhat lesser response, when we present our plans in the boardroom.
So, if we want to be recognised as a true profession, let’s act as one. Let’s build a significant base of Chartered Marketers; individuals who have been certified as sufficiently qualified and experienced to hold a recognised professional designation. Let’s be marketing professionals who have agreed to a code of conduct, to be held to account by our peers and to constantly update our knowledge.
Why would we do otherwise? Yes, there is a cost, as well as the hassle of fulfilling the continuous professional development requirements. And possibly the benefit to the profession may currently exceed the benefits to us personally. But if we don’t, do we deserve to be recognised as professionals truly worthy of the boardroom?
First published on Marketing Web 09 September 2010