April 13, 2010

Tom Deierlein on the Business. Integration, Relevance & Social Media, Part 2


Edited by Paul McEnany

Yesterday we began a 3-part series interviewing Tom Deirelein on his views of what's going on right now on Madison Avenue. His perspective is unique. That's due to the fact that his view of the street has been more of an observer than in the maddening crowd many of us find ourselves in on a daily basis.

With Tom preparing to re-join his associates, clients and friends in the business, the MadAve Journal took the opportunity to spend time with him and get his insights on the on-going debate associated with the changing faces of traditional and interactive media, integration, relevance and the place for social media.

As COO of Dynamic Logic, his view is grounded in the effect research has in today's media revolution. Tim McHale jumped at the chance to partake in a discussion with Tom. This is Part 2 of their conversation. Today they focus on the perception vs. reality of many real-time issues.

(For those who missed yesterday's discussion, here's Part 1 for your review).


Tim: The two big buzz words today are integration and relevance. I would think research should be the primary tool to measure how well a brand is achieving one or both. Dynamic Logic offers all different kinds. How does a brand manager or a media person know what kind of research to recommend?

Tom: The advice I would give to somebody that's considering research depends on who is doing the asking. A brand manager has different needs than say a media strategist. Their goals are different. A brand manager needs information about their brand, their target audiences etc… But media strategists really try to make decisions based upon the research that the brand manager has done. It's kind of like the output from the brand managers becomes the input for the media strategist.

Tim: Interesting

Tom: There are two key components a brand manager always needs to be aware of; the competitive landscape and what attributes their peak target audiences are using to make purchase decisions. So, for example, if your brand is synonymous with "cool, sexy and fun", that's great unless your target audience wants, "nice, safe and clean". If so, then you're in trouble. Research will help you map out a new direction. Plus it will help you understand what attributes your competitors own. The Internet helps you with these kinds of attitudes and usage studies than any other forum to date.

Tim: That's true.

Tom: So I think that from a brand perspective, you really just need to have a really clear understanding of this, the brand real estate if you will that you own in your consumer's mind and then, secondly, if those are the right attributes. Is that what you're trying for your brand to be known for? Look at what Wal-Mart owned ten years ago. "Always low prices". Do they still own that?

Tim: Good question.


Tom: They're beginning to have the same problem as say, Microsoft. Wal-Mart is being demonized for being too good or being too widespread. A measurable number of people today now resent Wal-Mart. People are very aware that they've destroyed mom and pop shops. They've had other problems arise from their size on numerous other occasions lately. So while among the general public they're still "always low prices," they also own other things in people's mind these days. They might also own anti-union. Now is that something they want to be known for? No.

Tim: Right or the Nike Philippines situation.

Tom: Right. You've got to be very careful there. My advice for the brand manager is just make sure you understand where you are today in the consumer's mind and then where do you want to be. From there you're going to way to develop strategies that are sensitive that those factors which you can accomplish through a variety of brand tracking surveys. For the media strategist, the first thing, you've got to have is some insight into the media mix. In today's environment you can't just use your gut decide the way it was done years ago to allocate your media dollars.

Tim: Right, I agree.

Tom: If you don't know what the media consumption patterns are of your target audience, then you're really lining up your media in a black box, so that would be a key piece of research.

Tim: Right. It frustrates me that research as a line item gets only 4 to 5% of the budget. So even if you execute something flawlessly, if it's still in the wrong direction, you're wasting money.

Tom: Discovering what the media consumption habits are of your certain target audience can be a custom study or it can be syndicated research which is not very expensive. Quite frankly, I'm not frustrated by a 4-5 percent allocation. I think it's more than enough to get the job done properly as long as you're ascribing it as a percentage of the media buy. That said, don't try and take your brand tracking or your brand research funds out of that same 5 percent. You may find out other things such as the impact that experiments have on your brand, such as the blogosphere, or with events.

Tim: Makes sense.


Tom: You may find that the event is going to cost you $20 million so you might end up spending $2 million just to gauge its effectiveness. That may well be worth it if you know that next year you might spend $500 million in events. It really does become relative. So there may be nothing wrong with that 5 percent figure. If you think about how much money any brand, any top 500 brand, is spending, 5 percent set aside for research – media research – is more than enough money.

Tim: Yes, I agree. But, I don't know if I see people that believe in research spending event 5 percent, so it's interesting to hear you say that that's enough.

Tom: Good question. I saw a great ad for Investors Business Daily recently. They have a great tagline that I loved and I wish I thought of it before they did!! It reads, "Don't read it. Use it." I always think the same is true with research. What you've got to do is make sure that the research isn't being produced in a silo by the research department, and that it never gets to the brand manager or to the media strategist or to the business manager that's managing a portfolio of brands.

Tim: That's great!

Tom: I'm more worried about that than I am the actual dollar amounts because, all of a sudden, if I recommend that you spend 10 percent, the question you're going to have is, "why"? Well if you're using that 10 percent to be 20 percent more efficient with your media spend, well, that's a no-brainer. But if I suggest you spend 10 percent on media research that never gets used, never gets integrated into the improvement cycle or trying to make your media more effective, well, then, yeah, then that sounds like a big number.

Tim: Okay.

Tom: Five percent of something you're not even using is a problem so I think it's more important that people use the research that's already out there before we start talking about trying to increase the budget. But at a minimum, like I say, you need your key brand research, you need your competitive space research, and you need your media mix research in terms of what you're spending and what your consumers are consuming in terms of the media.

Tim: What are those three buckets?


Tom: Brand research, competitive research and media mix research. Together they will help you get to the two buzz words, integration and relevance. There's really no other way to do it with assurance you're achieving your goals in these areas.

Tim: Next question. There's a lot of buzz out there about social media as steering tool for how a brand is perceived by its consumers or potential consumers. Is it a replacement for the kind of research that Millward and Dynamic do and, if so, why and, if not, what is its place?

Tom: That's a great question. First, is it a replacement for it? No. If you're starting to see any type of new aspect to media in these social networks and what people are out there saying, you definitely have to be attuned to it. There are now offerings from a variety of companies that help you keep track of buzz marketing, both the positive and negative aspects of what's being said about your brand out in the blogosphere. But anything that you gain out of that is going to be not scalable.

Tim: Really.

Tom: If it's measurement-based feedback and it's done properly or if it's done where it isolates the proper variables and it comes out with some type of measurement, then that's actionable. That's what good research is. Brands definitely want to be aware of what's going out there in that space but they can't just say, "Well, I'm going to go listen to what people are saying in the blogosphere," By doing so, you're relying on different types of people other than your general customer. You're always going to go to the opposite ends of the bell curve. You're going to find that the super happy and the super disenchanted tend to be the most vocal about a brand, and you can't go about making a decision for your brand based on 4 percent of the population.

Tim: You're hitting exactly on my cynicism about it. Citizen Marketers is a great book. They talked about something like ten people, and how each of those ten people were not just like an average Harry and Louise with 2.3 kids. Each of the people and the subjects they focused had a glorious background in some area that gave them above-average credibility to their blogs and their opinions about the topics they were blogging about. In my mind, it really wasn't that the social media forum was as relevant as that they had the expertise and credibility to impact the market. People respected them already. Had they written something in a magazine or were interviewed on TV, the effect would have been probably the same.


Tom: That gets back into one of the questions that you're asking about, which is what is going on with user-generated media in the blogosphere? Jim Stengel CMO of P&G made a well-covered speak saying, "You have to let go of your brand." I completely disagree. You can't just let go of your brand.

Tim: of course not.

Tom: Because then you turn it over to a group of people when you don't know what their motives are. If were Kraft and I wanted to secretly pay 100 people a bunch of money to go out there and lambaste Pringle's, I could do that. Now they may eventually come back on you and they'll find out what's being done, but the damage may already be done. A better example would be Frito-Lay.

Tim: It's like a new kind of click fraud. Blog fraud. There's no law against it either. That's why spoofing works. People can get away with it.

Tom: People don't understand motive. The example I have is on Wikipedia. People realize, hey, let's have this great common area where people can contribute their knowledge. Well, there was one guy that wrote that Fuzzy Zoeller, the golfer, battled alcoholism and had run into the law with trouble for abusing his wife.

Tim: Right.

Tom: Not true. So all of a sudden, this guy, Fuzzy Zoeller, who is a brand. He's an athlete so he's a brand. He sees his brand damaged by some guy because Wikipedia didn't police its entries. While Wikipedia is great as a concept – and don't get me wrong; I'm on it every other day - you do have to start to second-guess the factual elements of some of the entries. I myself on subject matters I am expert going to that periodically and saying, "Wait a second. I know that that's not true." It's just that someone else thought it was, or it was part of urban myth. They took it as fact and they wrote it down and just because it is written down it's perceived as factual.

Tim: Will Rogers' famous quote, said quiet cynically in his time was, "I never met a man [person] I didn't like and I believe everything I read in the newspapers"!


Tom: Anyone is allowed to state any opinion they want which is wonderful. I happen to be someone that believes very positively in a brand like Jet Blue. Jet Blue for me was the best brand I'd ever interacted with. I wasn't one of those passengers that were stuck out on the tarmac for nine hours. If once they got off the plane and decided to start writing a blog that got linked to linked to linked, anyone could start to use that and then start to question, "Maybe Jet Blue might not be the right airline for me". So on Monday, they were great, but by Wednesday, because of the blogosphere, you could have somebody from United Airlines or Delta writing blogs about how terrible Jet Blue is with their service.

Tim: Funny you picked airlines as an example. I have a friend who has written a number of times for us say, "No matter what Delta Air Lines does in terms of their creative and targeting overall marketing efforts, I've had so many bad experiences with that airline that I will never, ever fly Delta again."

Tim: I think that these days you have so many evangelists talking about the wonderful element of social media and that, you know, it's important to make sure it has transparency. Well, there's nothing transparent about human beings, whether it's consciously or subconsciously. People will not always tell the truth and even if they do, they may do it poorly and then be open to wide interpretation.

Tom: Great point and that's exactly it. You don't understand the motive. There's too much we don't know now to say they are worth relying on wholeheartedly.

Tim: Let's move on to another topic. There's a lot of confusion out there about what an advertiser should or shouldn't do to adjust its marketing budget to reflect the pace and rapid change in media consumption. Everybody says it's about content. Hollywood is the largest voice since they have the most benefit with product placement and all different ways to get the message out there. There's a good case to be made that content helps get around a consumer's cognitive dissonance. If you were a media planner, what percent of dollars would you invest in branded content, in something that wasn't a specific brand message?

Tom: I think it's so new that you definitely want to be extremely conservative. I were going to invest in it, I would experiment and test, experiment and test. I wouldn't spend a single dollar on content-based marketing without testing its outcome. Why? Because of the risk of it quickly going from 1 percent to 10 percent. There's significant dis-connect with content and sales. Research should be factored in with anything new such as blogs or content in order to generate any learning from the experiment. If there's no concrete feedback tool set in place, the reality is that the funds are being allocated in these new areas because right now it's fashionable. It may put the agency or the brand up for an award!


Next week: Part 3, The Future!

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