Too much of a good thing?

We’ve always thought of targeting as a good thing. For example, as marketers, we first identify our target audience, this includes demographics and sometimes psychographic features, and then we go after these audiences with messages that we think will appeal to them. Choosing where to place these messages has always been a big part of whether or not the campaign would be successful. And, ad dollars being what it is these days, media placements are even more thought about and streamlined. Just read a very interesting article from the NY Times about a new branch of Mediabrands, called Geomentum, that will “figure out how to divide ad dollars among the almost 40,000 ZIP codes in the United States, sometimes zeroing in on even smaller areas, like a city block”. This (and copious amounts of caffeine) just got me thinking: is this kind of hyper-targeting really a good thing? Can zeroing in too much be potentially limiting?

To start off, here’s a quote from the article:

“In a simple example, a company selling drugstore makeup for Asian women ought to advertise in neighborhoods where lots of Asian women live, and not bother pitching its products in neighborhoods heavy on white men. Once Geomentum narrowed down where Asian women lived, it would then analyze how a billboard in the neighborhood performed, versus a newspaper ad, versus a dollar-off coupon, by writing a long equation that linked store traffic and local product sales with all those variables”.

This may seem pretty logical at first, if this company’s target market is Asian women, why would they want to spend their money in a neighborhood full of white men? However, I couldn’t help but wonder…

True, putting the ads in an Asian-women-heavy neighborhood may save money, but it also puts the brand in a corner. For example, if the brand exclusively promotes its products in Asian women-heavy areas, then it may be seen by the general population as a niche product, one that only works for Asian women. This may prove to be problematic for company growth and diversification in the long run.

Also, as a brand, you can simply never know what someone is thinking when they see your product. For all the aforementioned company may know, the neighborhood full of white men may contain 20% Asian women – in the roles of girlfriends and friends. In this increasingly diverse, social, and integrated world, one can’t draw simple conclusions based on zip codes anymore.

So I think this whole super micro-targeting thing is good for the short term, as it may give brands a higher return, but as it always is the case, successful brands need to balance the short and long term benefits, and really think about how every move will impact the brand perception and value to its consumers. Much like the concept of sales and discounts, this super micro-targeting technique may help in the short term, but what about its value in the long run? Done right, this may be a valuable part of the campaign, but if brands relied too much on this, they may find themselves spending more money to fix their images.

ARGH!

So I'm on my Google Reader and THIS is what I see.



I am so not amused. This is like the most lazy, stupidest way to promote a product. It's like, what's with that? Isn't there any other way to make your burgers seem more appealing, or is it because your burgers taste so bad that you have to sink to such low levels to promote it?

BK ads really make me angry, they are in general pretty controversial, but not in a good way--it's simply irresponsible advertising. Not that advertising has to be totally peppermint clean, but there are some moral codes that you should stick to, right? Like basic respect for the other gender.

Jimmy goes Cheap

The designer Jimmy Choo announced its collaboration with H&M for a cheaper shoes and accessories line. The fashion label is the latest in a slew of high-end designers forging partnerships with stores in order to produce cheaper and more accessible products. This trend of going down market has me wondering about the whole idea of Brand Equity: so in school, I learned that you can earn money based off of your brand if you have a well-established brand. To establish your brand, you need to figure out a couple of things that are central to your identity, and your messages have to relate to those characteristics. These characteristics will in turn, earn your brand some value and theoretically, will make people want to 1. buy your product, and 2. become loyal customers. So for example, Apple's brand is hip, great looking, and easy to use. They stick to those in all their commercials and messages, so people would want to buy an Apple product because of those 3 reasons.

For luxury products, one of the central characteristics that they all share is exclusivity, and exclusivity by way of price. In order to be a luxury line, your products must be inexplicably expensive. So a high price becomes one of the central defining characteristics of a luxury product. This characteristic is usually reinforced in all of the marketing for luxury lines -- most print ads for fashion houses give off the expensive vibe. So if designers such as Jimmy Choo are lowering their prices, then can they still be categorized under "Luxury"? If they have both cheap and expensive products, then how much of the brand image is the label compromising?

I guess my main issue is that when you have a brand that wants to be both accessible and exclusive at the same time, it's hard to make it work. Many brands have solved the problem by introducing separate lines within the same label, such as Marc by Marc Jacobs and Michael by Michael Kors. And I guess it's a good solution for now...but the Marc Jacobs brand (the main brand) is still seen as less exclusive than say, Prada, when their products cost about the same.

A New Model for Coke

Coke pushing value-based Agency compensation model

“Under its new model, Coke will determine the value of assignments based on a range of factors including the work's strategic importance, the talent involved and whether other agencies could duplicate the work -- if they could, it's worth less. After those factors are used to set the value of a project, the agency's performance and the business results that follow determine what, if anything, the agency deserves to be paid beyond its upfront costs (which, in practice, are sometimes inflated). If all targets are hit, the agency could make as much as 30% on a project; if all targets are missed, the agency won't make any profit at all”.

Great idea! This further pushes creativity and encourages good marketing by shifting the emphasis to brands instead of sales.  A large part of why consumers are so wary of advertising these days is because a lot of ads are just junk.  Those junk ads are usually made because companies just want to make a quick buck.  Consumers today are smarter and less patient than ever, they have tools and they can control what they see.  So the ad industry is long overdue for a change…they need to make ads that really try to engage the consumer as opposed to flashing brands in the consumers’ faces. 

The tricky thing mentioned in the article is how one measures “value”.  I don’t think it’s that tricky…if you and a client can agree on certain goals, you should be evaluated by whether or not you meet those goals.  Goals may be hard to quantify in terms of numbers, but whoever said that numbers are the only measure?  Numbers are easy to understand and hard to dispute, and that’s why everyone uses them, but a value-based model calls for a more value-based way to evaluate campaigns, so the way in which we think about results would have to change.  Instead of putting all the importance on sales numbers, maybe we can shift to a more brand-centric evaluation.  This system forces companies to figure out their identity.  I understand that that requires a lot of work and almost a complete overhaul of how we think about returns, but I think it’s a good thing.  Most brands are so undifferentiated these days to the average consumer that the only thing that’s driving most consumer decisions is price, especially in consumer packaged goods.  However, I think there’s a lot to be gained by building a solid brand, and that’s not a new idea, it just hasn’t been emphasized as much as I think it should be. 

Back to the whole measuring value thing.  Think about something that is valuable to you, can you put a price on it?  Probably not.  So how can you measure how valuable that thing is if you can’t quantify it?  Well, you take other things into consideration.  Things like sentimental value and what it represents – all those things cannot be made into statistics.  Same thing goes for a brand, things like brand perception and brand value can’t truly be quantified because they don’t correlate directly to numbers.  Instead, they are great in terms of building a loyal consumer base.   I’m a Mac user, I’m pretty convinced that I’ll be a Mac user for life.  If there was another computer that did the exact same thing a Mac does, looked exactly the same way, costed $200 less, but didn’t have the nice little apple logo on the cover, I would still shell out the extra $200 for the Mac.  That logo is important to me because I identify with it, so I want it around.  Funnily enough, you can technically say that the Mac brand is worth $200 to me, so maybe you can quantify brand value after all.

Also, the value-based compensation model would shift more importance onto strategic planning, which is definitely a good thing.  Great advertising and effective communication come out of good strategic planning.  Take the Volkswagen “Drivers wanted” campaign, for example.  Arnold Communications took the insight gained from really good research and created one of the most successful campaigns ever. I think research provides enormous value for advertising, and if you conduct your research well and identify the necessary insights well, you are almost guaranteed to make a great campaign.  Because in advertising, you are just trying to get people to do something, so you need to really understand their wants and needs before you can figure out how to talk to them – and the best way to do that is to do really good research and analysis.