The Strategy Review

What does Amazon's home invasion mean for brands?

I'm surprised that, apart from the usual sporadic social fizz, Amazon's Dash (+ Wand) and more recent Echo services are not causing household brand directors to roll around on the floor foaming at the mouth. And not in a good way.

Do you see what I see?

The old Game of Thrones between brand, retailer and more recently consumer has played out over more or less a century. And as connectedness and data have arrived front and centre of this benign, bloody war.

Household brands are caught in a nasty pincer movement.

Ruthless retailer on one side, squeezing ever-harder on name brand equity with unavoidable in-store promotion, own-brand competition and - let's face it - a control of key shopper data that is more or less comprehensive.

And connected consumer, only ever a swipe away from the best price. Not to mention the new basket aggregators like MySupermarket.com, stripping away value from everyone, except of course, the shopper.

It's well-established that the traditional split between shopper - going to the shops, in one way or another, and consumer - connecting with the brand in the context of use, typically the home - is disappearing. Douglas Rushkoff has written most coherently about the underlying drivers of this shift in his recent book Present Shock.

As we know, name brands have been trying to push back into the retail space to regain a sliver of power behind the battle lines.

And till recently, the home has been a sort of sanctuary for the beleaguered household brand. Until, at least, the time comes for replenishment. And isn't it replenishment that FMCG marketing is all about? Who'd build a brand that was bought once on a promotion, then only bought again when the dreaded yellow label - the new uber-brand that all value-conscious shoppers - catches the eye to offer 50% off, 2 for 1, or whatever.

Well, that's pretty much where we find ourselves today. And while Amazon's home invasion, with opening salvos like Dash and Echo, may not seem like game over, there's a lot more where that came from.

My friend and colleague Professor William Webb, of Weightless SIG and the IET, made a startling observation recently that stays with me. William is a leading engineer, and as far from being a marketer as you could possibly get.

But when he and I were earlier this year discussing the potential impact of the IoT (Weightless is a leading open standard for object communication, by the way) on the home and in particular on the household brand, he innocently dropped something of a brand grenade on me.

And it merits serious reflection.

"I don't know much about marketing as you know, but surely we're looking at a time not too far away, when most of these brands will be trying to sell themselves directly to intelligent home devices?"

Only an engineer would dare to think, let alone say, such a thing. When irresistible and affordable consumer services become the buyers of commodity household goods - buying them surely on the basis os anything BUT brand - we envision an extraordinary return to a world where brand, advertising, and anything more than the most functional and rudimentary marketing, had no role to play.

A time, in fact, before the Game of Thrones that is household brand marketing and retailing had even begun.

Those of us who care about and value brands need to pay much closer attention. Most consumers are not as sentimental as we may be ... and the machines are getting smarter - and talking among themselves more - every day.

I'm afraid that, while advertising still has a key role to play here, so-called "digital transformation" will not answer this challenge. Retailer and consumers have already reached an unassailable point of power in terms of taking and holding advantage from data. And digital marketing, while the science continues to evolve apace, still lacks the sheer creativity - the art - to win a war where persuasion is no longer in play.

Until we can find alternative angles, it seems to me that these vulnerable brand giants urgently need to accelerate their service innovation programmes. The current Connected Homes projects are generally insufficient in both speed and scope to either outthink or outrun broader, deeper, smarter and above all, more integrated home automation technologies.

Service beats product, more or less every time.

Without an abrupt change in gear, we may soon enough see a dramatic drop, outside emerging markets, at least temporarily, in the potency and presence of many of the world's largest brands.

Food, we could say, for thought.

5 words that are driving consumer brands mad

Talking the walk

The way we talk about anything defines the way we think about it, and in the end, the way we value it.

This is important, because marketing and advertising are suffering more than they ever have before from a chronic lack of clarity about their meaning, their value, and their purpose.

And yet surely the game is as simple as it ever was. Get people to care about your stuff more than other stuff, so they buy it at a decent price, and may do so again.

There's a lack of precision that underlies our usage of some of the most commonly used words in the business. And like anyone who's not quite sure of what they're doing, we respond by demanding results and value for money.

Let's look at a few repeat offenders and bring a little mental floss into the discussion.

1. Experience

There are almost no consumer brands whose delivered experience matters to the consumer. There are, however, a great many who are grasping the nettle of service innovation and scoring big points.

Too commonly, however, when we talk about experience design, we're talking about a bastard child of interface and/or information design. Good stuff, but at its best it simply "satisfices" the consumer, getting us out of the red of poor user experience, but nowhere near the black of fresh consumer value.

The great brands of this century almost all share a single common attribute ... they empower the consumer, and they do so with services that do more than meet needs ... they change behaviour. In this heady company, experience design is rarely more than table stakes.

Underpinning the wild and free usage of this problem term is the assumption that, at least at the point of contact with a consumer, a brand in some way "owns" their experience. This is dangerous nonsense. 

The connected consumer's experience at any moment is a rich palette, a giant pizza of optional choices and selections. Almost every individual brand encounter forms no more than a tiny anchovy on a very thin slice of that pizza.

Not everyone likes anchovies. What's more, as marketers need constant reminding - and this is the main job of advertising - consumers really don't care that much.

2. Relevance

We've all been followed around by the exhaust from a search or the momentary exploration of a site. We've all had persistent recommendations that meet a need that was met long ago.

This we might call bad, or toxic relevance. The experience is one of disconnection, of being talked at by an obsessive maniac.

What's good relevance then?

Well good relevance is not, in fact, an advertising concern at all. The fantasy that matching a consumer's profile - or at least the feeble proxy of whatever data we hold about them - in some way creates a value in the communication that would otherwise be absent, needs a firm hand-off.

Relevance is a brand marketing concern: we need to create, position and communicate our offerings in ways that resonate with corresponding consumer needs and desires. This is why we call hitherto unarticulated, important consumer wants "insights". Insights are fresh gaps in the idea market.

But the critical role of brand advertising, interestingly, lies in irrelevance. For this reason, great creative work always rules the roost: it's the alchemy that makes us care when a moment ago, we didn't give a damn. It takes the apparently irrelevant and makes a magical connection.

So, is that resulting connection "good relevance"? I'm still not convinced, and for now I'd be happier with a less precise, more traditional term: impact.

3. Storytelling

I'm really bothered by this one. Not because great brands and their advertising don't tell great stories that really matter to millions of consumers. That's a given.

Perhaps it's the very fact that this is a given that bothers me. Time and again I've been in meetings, presentations or seminars where something like "omni-channel storytelling" is trotted out like a Very Big New Idea.

I suspect that the villain here is a faulty assumption that, as in days of old - no soap ad, no soap opera - brands and the content they pay for still perform the important role of joining up an otherwise fragmented consumer world.

No. Consumers are already joined up, and the corresponding challenge for brands is to find new, meaningful ways of creating upfront value for them. Treating them like experience-starved media orphans that need nothing more than another story is to fatally miss the point.

 The great and still-referenced Nike+ was, and still is (not to mention its offspring, FitBit, Jawbone et al) to paraphrase Le Corbusier, "a machine for storytelling. Lonely, arguably insane runners (myself included, till age and a poor attitude took over) are given a tool to convert their sweaty journeys of personal triumph over adversity into ... well, elegant, well-designed and highly shareable stories of personal transformation.

The stories our brands may have to tell are forever secondary to the rich, potent and pervasive personal narratives that consumers themselves are spinning. We are, and only if we're lucky, the chorus, no longer the leading lady.

4. Content

It's not for nothing that this awful atrocity has been dubbed "the new c-word".

A well-known contemporary novelist and critic was recently quoted as saying, incredibly, "I just want the opportunity to create great content."

As soon as we use the word, we condemn ourselves to the ranks of those who will never, ever come to grips with the power, the value and the meaning of great music, great stories, great movies and TV, even great dirty jokes and YouTube clips.

"Content" co-opts some of the best, the most important cultural things that we have ever produced, minimises the awful hard work, the creativity and personal risk that it takes to get them, and turns them into files on a server.

It equally elevates utter dross to the level of being, at least when paired with an unsuspecting brand, taken seriously, when it should have been thrown in the bin.

Above all, "Content" is an easy excuse, an apology, for lazy advertising. And by the way, some of the best advertising we've ever seen is entertaining, engaging and meaningful.

So what are we talking about when we use the c-word? Is there a better word out there somewhere?

I really, really hope so.

5. ROI

Every other presentation or report on advertising still begins by referencing - and misquoting - the words of the US department store owner John Wanamaker. "I know half the money I spend on advertising is wasted, but I can never find out which half."

The assumption that follows is that this successful businessman was criticising the business of advertising for being somehow inefficient, that he was demanding either a slash of 50% of his investment, or a doubling of impact.

The spirit of this misconception haunts us today, as we repeatedly sacrifice truly great ideas, ideas that have the power to make the irrelevant interruption into the compelling and timely offer by sheer force of wit, at the altar of accountability. The current obsession with targeting (see Relevance above) both feeds and is fed by such thinking.

But Mr Wanamaker was making a far more sophisticated point. He was acknowledging that, in advertising as in so many other fields, art and science will always be uncomfortable but entirely necessary bedfellows.

Of course advertising much pay for itself. But it does so not by swinging to one side or other of the debate, but by forever succeeding in living between the two. When we ignore the imperative of balancing creative impact with business sense, we produce bad advertising that wastes money.

More prosaically, big brains in the absence of big balls are of no use when we're building brands.

 

The Inconvenient Truth ... Who, really, needs it?

One of my favourite moments in the excellent Ray Donovan, the Showtime series about a family of Boston gangsters making a life in Hollywood, forced to move there following a disastrous one-two of criminal acts by their father - Jon Voight - and childhood abuse by a priest, is when Ray - our anti-hero, played by the outstanding actor Liev Schreiber - is confronted at a Malibu beach house by his latest client, a rich, psychotic life guru who advocates "Radical Truth" in his followers.

Steve pushes Ray to tell the truth, to say exactly what's in his head, right now.

To our delight, after pausing and fixing him with the still, considered stare that is his trademark, Ray finally says: "I think you're an asshole. And I'm only using you for your money".

What's happening here? The truth makes us laugh, as is the case with every good joke you've ever heard. But is anyone better off?

An important legacy of the utter transformation of our lives - both culturally and commercially - of our lives by digital connection on the network is an unfolding explosion of transparency.

Salman Rushdie, a few years ago, dismissed the rush to the new social confessional as "blurt culture". And we can see, from the perspective of one who makes a living purely out of le bon mot, what he means.

Whether the tide of universal truth - be it trivial or tremendously important - is a good or bad thing is discussed in infinite depth and detail elsewhere. But putting the social and cultural effects aside for now, where are brands and the businesses that own them left by the new transparency?

Are we seeing more or less truth in commerce?

Before diving into this, a important side note. We often speak of the truth as if it were, intrinsically and indisputably, the right thing to say. Jumping back, for a minute, to the uses and abuses of religion, I will always remember in my youth being lectured by an imposing, austere priest who taught at my secondary school.

"Just because it's true, Michael, doesn't mean you have to say it."

Think of the centuries of power, control and, yes, wisdom that lie behind that statement. We realise that the world we live in and the truth are entirely different things. When we sit down, finally, for a heart to heart with a friend, a colleague or a loved one, we're invoking more than "just the facts". We're calling into play a powerful, irrevocable and, let's say it, often dangerous tool.

We speak of the truth as if it mirrors, tracks if you like, our day to day lives. But the fact is that we very rarely apply it. Indeed, too much of it, whatever your moral preferences may be, is rarely, except in court, and perhaps, if you must, in therapy, welcomed.

Much of the time, we'd rather not hear about it. And much of the time, we're probably right. Humans are not, in the end, set up for too much reality. That's why we have that often-derided mental and emotional cushion, denial.

The truth, of course, has a sporadic affair with brands and advertising. Recall the late and great Dudley Moore, during his unlikely stint as a movie star, in Arthur, pitching a new strapline for Volvo: "They're boxy, but they're good".

Sidestepping "The Mind Manipulators" - in itself an inconvenient truth about the realpolitik of brand advertising that, most of the time, we'd rather not pay attention to - how do consumer brands relate to the truth?

Paul Polman of Unilever famously launched their laudable Sustainable Living Programme several years ago. He committed, not just to consumer and market, but to the financial markets, that the world's second-largest advertiser would double its turnover and halve its relative environmental footprint by 2020.

Whether this was career and commercial suicide or a smart political play - or indeed both - remains to be seen. But while the company has launched some remarkable and very worthy initiatives - Lifebuoy's hand washing promotions in the developing world are an example of serious intent and genuine impact - it's hard to imagine that Mr Polman's aggressive commercial targets will be reached.

Looking closer, though, we see the raw truth behind the USLP. Without many interventions like the Lifebuoy project, millions of the world's future consumers of goods, in the very - in fact, arguably the only - growth territories that Unilever and every other FMCG marketer has marked for investment, will die.

Pragmatic - and there's nothing wrong with that - is the word. We must, whatever happens, applaud the company's vision and courage.

Turning our attention to branding and brand advertising, we find a dismaying plethora of ersatz truth everywhere we look.

The awful word "authentic". Surely, at least in terms of the way the term is used, we mean some sort of appealing, getting-away-with-it echo of integrity. Miles Davis, for example, an epitome of authenticity and "cool" (let's not even get into cool ...) was a notoriously prickly, against-the-grain genius whose own encounters with the truth were often mediated through drug addiction. Believe me, that's not what we mean when we ask for brand authenticity ...

"Edgy" ... "Real" ... the list goes on. But we never, ever seek the Edge, or Reality or whatever, when we imbue our brands with these qualities. What we're looking for, most of the time, is a back story for the brand that has a bit of drama, a bit of jeopardy, a bit of Ray Donovan about it. We want to point to the edge, like a tourist in Rio, but we don't really want to go there.

When all else fails, we're entirely correct in demanding the truth. But we need to both grow up and use the concept with far greater care and pragmatism.

The facts are, whether blunt instrument or stiletto, weapons that rarely merit public consumption. And before we demand them of any person, institution or corporation, we must ask ourselves how badly we actually want the truth.

The machine of capitalist society (no judgment intended, by the way) is no more oiled by the facts than our daily lives are enabled by persistent, profound examination of our private motives.

The truth is important. But, all too often, it is and will continue to be more inconvenient than we ourselves, let alone the market, will bear.

Revising the language of experience marketing

WHERE'S THE BEEF?

It's now a brand marketing truism that customer experience is key.

But is experience marketing in fact, when we look closer, a tautology, a self-evident truth that tells us about nothing more than itself?

Beyond the obvious imperative of actively avoiding poor brand encounters, and appreciating that service expectations are being driven up every day, what are the meaningful brand benefits of prioritising investment in better customer experience?

How often - or rather how very rarely - do we in fact succeed in making the great leap from "Meh ..." to "Wow!"?

And if it's so self-evident that experience is "a good thing", why do we continue to struggle to put a satisfactory value on it?

Let's dig a little into these questions and see where we end up.

RELEVANCE?

A brand's CX journey typically begins with enabling and delivering customised and / or personalised content, manifesting on website, emails, apps, ecommerce purchases, and let's not forget direct mail.

We evolve from this point, over time and naturally, to focus on context. This moves us to incorporate information about, for example, adjacent media, time and place, a user's social media actions, and so on.

One of the most commonly declared goals here is relevance. And this nebulous concept continues to be held up as a primary KPI, even if, of course, its evaluation and measurement remain elusive.

Who wouldn't choose to be less irrelevant? Again, it's more or less tautological that relevance is an essential quality of any brand encounter. Or is it?

I'm not sure I buy this, at least not without a struggle.

If we focus on outbound brand communications, relevance feels like where you get to when you take media planning to its logical, and in fact not all that exciting conclusion. Do we end up at a point where every piece of communications see is, more or less, about me?

It seems that what we're really talking about here is not so much about delivered value, more about "minimal waste" ... waste of both brand media budget and, that most precious of current commodities, consumer attention.

My challenge, at its root, is this. While relevance is, it seems, central to information-enabled service, the notion of a marketing message or any other kind of brand-driven customer encounter being proportionately more valuable by being "more relevant" to the recipient, i.e. in some way more granular in its focus, is far from convincing.

To place too much emphasis on relevance as a driver of brand communications is to claim that you need hot water to make good coffee. True, but not a useful addition to the argument.

ENGAGEMENT?

Let's turn our attention to engagement.

It's a little like art, in that we can't seem to define it (or still, annoyingly, put a commercial value on it), but we sure know it when we see it.

If a respectable definition is best derived from the current usage of a word, there are in fact two forms of engagement, one for media and one for brands.

Engagement for media is, at its most basic, a flip from quantity of impression to quality of encounter. It's a "retro-metric", which typically describes a combination of consumer time spent vs depth of attention allocated. This is about an encounter that happened in the past.

Where attention, as so often now, is splintered ­- TV on in the corner, kids supposedly on a laptop doing their homework but in fact updating their Facebook page, while texting friends about something that relates to none of the above ­- this is quite useful. Did we get (will we get) the attention we thought we'd get from a campaign or tactic therein?

But when a brand briefs its agency for engagement, it's asking for more than just consumer attention, or even depth thereof. Engagement for a brand usually implies a "two-way" connection with the consumer, also one that extends beyond the actual communication.

Engagement for brands is best viewed as a future-­focused measure of consumer predisposition to participate in contact and communication with brands. When I'm truly engaged with a brand - and let's face it, that's rare today - I'm receptive to further communications, further encounters.

Looked at this way, degrees of brand engagement are, in fact, degrees of intimacy. 

INTIMACY?

Intimacy speaks of a relative warmth of attitude, an attitude of trust, a shared or partially­-shared set of cultural references, and above all, in terms of this discussion, a willingness to, at some future time, prioritise attention paid to the person, object or idea (or brand) in question, above the myriad demands of others. 

Intimacy, in other words, is about a quality of brand><consumer connection that has some continuity to it. This is not, I believe, impacted by relevance, or perhaps only in a negative sense, so far as utter irrelevance - frequently achieved in spades, paradoxically, by some of the most efficiently targeting messaging - is bound to fragment any kind of intimacy.

Relevance, in any kind of direct brand communication with a customer, is table stakes. Engagement is an outcome that is best viewed in terms of a future predisposition of that customer to accept future encounters with the brand. This, in turn, is expressed and ultimately measured I hope, in relative degrees of intimacy.

RECOGNITION?

There's one more step we need to take in correcting the terms of experience marketing, and hopefully equipping us to build more confidently and intelligently going forwards.

What we really appreciate, and continue to value highly in communications from any brand in any medium, is recognition. This manifests as a relatively powerful shared, and above all, meaningfully personal encounter between brand and customer.

It's a two-way phenomenon. The brand sees me, and I see myself in the brand.

SO THIS MEANS?

Many of our most skilled experience strategists and designers emerged from ecommerce, where their impact - on both basket value and, to perhaps a lesser degree these days, brand equity - has been undeniable.

However, these skills, while in themselves critical to the hygiene elements of online experience, rarely provide the value that transforms the way we perceive a brand.

Recognition, in these demanding times, constitutes far more than a "Welcome back, Michael" from a database, a slick journey to execute my purpose, with a cluster of relevant offers cheering, or at least whispering, from the sidelines.

The paradox of brand experience is that it never, in fact, belongs to an individual brand.

It's a very slim sliver of the much larger pizza that is the connected, powerful and rather cranky consumer's experience of everything they touch.

Including, most importantly, their experience of being themselves.