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12 marketing lessons from 20-year Coca-Cola veteran


Digging through a new book by former Coca-Cola Company European marketing chief Javier Sanchez Lamelas turns up plenty of insights for aspiring brand leaders.

Lamelas, who left the company in February after 20 years and subsequently set up a marketing consultancy, has written Martketing: The Heart and the Brain of Branding as “a manual to shorten your marketing learning curve”.

His understanding of how marketing and marketing departments work, or should work, also draws on eight years at P&G earlier in his career.

Campaign has picked out 12 passages from the book worth perusing:

On reversing Coca-Cola’s sales decline in the 2000s
Coca-Cola sales were declining – there was a faction that was convinced the product was stigmatized by consumers because of its sugar content. But that couldn’t have been the real reason … consumers tend to blame products when they’re not happy with brands. In fact, people forgive products when they love brands: Louboutin in spite of uncomfortable heels; Porsche in spite of their noise and inflexible suspensions; Rolex, even though they are heavy and inaccurate.

I realized the brand in declining markets was simply getting old: it was aging with its user-base consumers … we weren’t renewing our user base at a sustainable pace. During the nineties we’d been focused on driving existing-drinker consumption: “Always Coca-Cola”; introduced larger sizes; ran promotions to increase frequency of consumption; we introduced multi-packs in stores and larger cups at McDonald’s. Unlike in previous years we devoted very little effort to making new generations fall in love with Coca-Cola.

On focus groups
I have to confess that during my entire marketing life, I have not seen a single insight come out of a focus group … Consumers do not spell out insights. They do not know what is feasible and/or they provide unrealistic solutions. Or worse, they don’t know what they want.

On the failure of Coca-Cola C2, a predecessor to Coke Zero, in 2004
We were losing people as they aged [they weren’t switching to Diet Coke because it had a different taste to Coca-Cola]. We needed something low in calories, but with a taste that was closer to regular Coca-Cola. The R&D people came up with a product that had a 50% sugar reduction that tasted very close to Coca-Cola. We undertook a large battery of tests, both at the concept and product levels, to determine the potential of the idea. Test results indicated it was a good idea. That’s how Coca-Cola C2 was born. We launched it in the USA and Japan in June 2004. Pepsi simultaneously countered with a similar product, Pepsi Edge. After a few months in the market and more than $50 million invested in marketing, both companies had to discontinue … it was obvious the trade-off we offered consumers wasn’t enough.

On the need for marketers to stay objective about their ideas
People tend to fall in love with the stories they create. In marketing, though, you might have ugly babies. And you have to be ready to accept it. I know it’s hard, but that’s also why you get paid: to keep objectivity and your critical judgement intact and unbiased.

On rolling Diet Coke and Coke Zero into the Coca-Cola masterbrand in 2016
Coca-Cola was about “happiness”, Coca-Cola Zero was about “possibilities” and Diet Coke was about “sexiness” … that was a confusing and very expensive model. I recommended moving to a masterbrand approach … the idea of embedding “choice” within Coca-Cola was spot on. It was a smart way to answer our detractors when they claimed that Coca-Cola had too much sugar. Our answer was: “Which Coca-Cola? We also have Coca-Cola – the real one – with zero calories.

On research
Research is not a substitute for decisions. It just helps the decision-making process. And more importantly, research cannot “create” marketing.

The equivalent to [showing someone an ad and asking if they would buy this product more than competitors’ products] would be to give a bunch of flowers to somebody you just met and then immediately ask: “Would you be more inclined to marry me and have three kids with me than with another guy?” The obvious answer would be a big no.

On effective marketing investment
About 80% of the population chooses its favourite soft drink brand before they reach the age of 18 – and this tendency isn’t unusual in other categories either. Of this 80%, only 20% switch their favourite brands later in life … Any dollar spent on generating brand love that targets people older than 18 is at least five times less effective than the marketing investment aimed below this age.

On obstacles to great marketing
Most companies fail to deliver great marketing not because of the individuals involved, but because of processes – or lack of processes – that prevent them from working together.

Many marketing departments are organised like a tailor shop. The tailor – usually called the marketing manager – has end-to-end responsibility for projects moving through the department.

[It is] able to produce high-quality marketing, but only if … the tailor is a good professional with deep knowledge; the rest of the team respects and follows the tailor’s leadership; and the entire organisation has worked together long enough to understand how the tailor shop works.

That said, the tailor shop suffers from several important drawbacks. First, when the above conditions aren’t met, the quality of the subsequent marketing is usually very poor, or at best inconsistent. Second, the amount of work this kind of organisation can handle is limited. Eventually, the only way to boost the output is by increasing the number of tailors. Third, when the tailor leaves, the department needs to be rebuilt all over again. Fourth, high levels of team frustrationg are generated simply because the “boss didn’t like it”.

On commissioning design
Only a small percentage of people have the ability to cut through and understand the power of a great design at first glance.

The key is to leave your design in experts’ hands; your responsibility is choosing the right experts. Trying to modify an expert’s assessment using public opinion is a bad recipe. And don’t worry if not everybody likes the design at first. If the design is really good, they will like it sooner or later.

On why New Coke failed
New Coke [launched in 1985 in reaction to the Pepsi Challenge campaign] was one of the most consumer-researched launches in history. What went wrong with all that research? Actually nothing; the research was clear and consistent: New Coke was significantly preferred over Coca-Cola in sip and extended usage tests. Also in blind and identified tests. What went dramatically wrong was the interpretation of the results. Having – let’s say – 60/40 significant difference in overall preference does not mean that product A is better liked than B by everybody. It just means that 60% of people prefer product A and 40% prefer B. Remove product B from the market and you will get 40% of angry consumers, especially if the brand has a high emotional attachment. A terrible mistake in interpreting data led to a dramatic business decision.

On what makes successful brands
Successful brands do not talk to people. They lead conversations with their potential consumers, and not their current consumers. The essence of any good conversation is first to listen and then to respond.

On what makes dangerous employees
The really dangerous group [is] people with a low ability to solve problems correctly but with a high level of initiative. These people are the real value destroyers in the organisation. They do it naturally. And to make things worse, they also consume a huge amount of resources in the form of other people kept busy fixing their mistakes. Your job as a manager is to identify them and make sure they are out of your organisation.

Read more at http://www.campaignlive.co.uk/article/coke-uncovered-12-marketing-lessons-20-year-coca-cola-veteran/1409094#L5D2t10l4zcPFb1Q.99

 
 

Calls to improve creative standards in ad-blocking war


Industry leaders have warned that the creative challenge around digital advertising is just as significant as the technical one, in response to the launch of a consortium fighting against ad-blocking

Direct Line: the insurer’s online ad boosted awareness and purchase intentDirect Line: the insurer’s online ad boosted awareness and purchase intent

The Coalition for Better Ads launched at the Dmexco conference in Cologne last week, promising to create and implement standards guiding how ads are delivered to web users. It aims to improve the user experience and tackle the growing number of consumers adopting ad-blocking software. Research from eMarketer predicts that 27% of internet users in the UK will be running ad-blocking software next year, compared with 20.5% this year.

Industry figures largely welcomed the new drive but raised issues around creativity in digital ads. Direct Line marketing director Mark Evans said the coalition “can’t be a bad thing if it raises awareness and solidifies that this is a problem for everybody”, but added that it was only tackling half the problem.

“The appearance of digital marketing has changed a lot but the content hasn’t,” he said. “One of the issues is that perhaps the industry is not yet holding the balance between response and brand-building in digital advertising.”

Evans added that digital ads needed to embrace the creative potential of the medium, citing the example of a Facebook ad for Direct Line’s emergency-plumber service that depicted a room filling up with water.

The dominance of direct response in digital advertising also makes assessing the effectiveness of campaigns more challenging, according to Zoe Harris, group marketing director at Trinity Mirror. “The way success is measured often doesn’t take into account the overall effect on consumer perception,” she argued.

Other publishers called on marketers to revise their expectations of digital advertising. Ben Walmsley, digital commercial director at News UK, said that while good advertising could be as engaging as editorial, “poorly targeted ads or those with ‘spray and pray’ acquisition goals will drive up the prevalence of ad-blockers”.

The coalition’s standards will be informed by the “Lean” (light, encrypted, ad-choice supported, non-intrusive) ad principles launched by the Internet Advertising Bureau in October last year and will specify factors including ad format, frequency, density, file size and data use.

Adam & Eve/DDB chief executive James Murphy said that enforcing such standards would help but that creative agencies also need to consider consumers more carefully. “Creative agencies are experts in emotional experience, not user experience,” he said. One example of this, he added, is agencies’ tendency to prefer rich media, whose aesthetic qualities may come at the expense of functionality.

Other agency figures cautioned against the “snobbery and arrogance” of some in the industry towards digital creativity, which Ben Fennell, chief executive of Bartle Bogle Hegarty, said was usually misplaced.

The coalition’s stakeholders include prominent advertisers, media owners and industry bodies – such as Google, Facebook, Unilever, Procter & Gamble, the IAB and the World Federation of Advertisers – as well as Group M, the world’s biggest ad buyer.

John Montgomery, executive vice-president of brand safety at the WPP media group, said it was necessary to form the coalition in order to enable publishers and advertisers to fight back against the ad-blockers, after Adblock Plus owner Eyeo announced at Dmexco that it was launching its own ad exchange (see page 8).

“What we don’t want is for the ad reinsertion companies to define what the standards are,” Montgomery said. “There needs to be a global set of standards.”

Eyeo’s tactics, he said, are only addressing the “symptoms and not the cause” of ad-blocking, which is a poor user experience, and this needs to be tackled before publishers could credibly ask readers not to use ad-blockers.

Percentage of UK Internet Users Running Ad-blockers (by device)

2014 2015 2016 2017*
Desktop/Laptop 9.5 13.0 18.5 24.0
Smartphone 1.7 3.3 5.8 8.8
Total 10.0 14.0 20.5 27.0

Source: eMarketer, April 2016; *Forecast

Read more at http://www.campaignlive.co.uk/article/calls-improve-creative-standards-ad-blocking-war/1409570#D1RL4ijXMpWgCiu6.99

 
 

In Australia, Nearly Everyone Under 50 Goes Online via Mobile Phone/e-Marketer


When it comes to tablets and the internet, however, demographics play a far more important role

About 75% of consumers in Australia access the internet via mobile phone, according to a June 2016 survey by Sensis. But that figure is only as low as it is because of those ages 50 and up—61% of those ages 50 to 64 do so, and just 33% of those ages 65 and up do the same.

Consumers in Australia Who Access the Internet via Mobile Phone, by Demographic, June 2016 (% of respondents in each group)

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That means for younger age groups, just about everyone is a mobile phone internet user. More than nine in 10 of those under 50 go online via mobile phone.

Within that under-50 group, there are few contrasts. And the gender breakdown of mobile phone internet users is also balanced.

But accessing the internet via a tablet is an entirely different story.

There’s a gender divide, for example: While nearly two-thirds of women use a tablet to access the internet, only about half of men do. Age, too, sees significant differences.

Consumers in Australia Who Access the Internet via Tablet, by Demographic, June 2016 (% of respondents in each group)

Those ages 40 to 49 use tablets to access the internet more than anyone else—73% of respondents confirmed they did so. The youngest and oldest surveyed were least likely to use them to go online—and they were about 30 points behind their middle-aged neighbors in penetration rates.

Overall, consumers in Australia are less likely to use their tablet to access the internet than their mobile phone.

In April 2016, eMarketer estimated that 71.5% of the population in Australia would use the internet via mobile phone this year on a monthly basis, a figure that will rise to 75% by 2020.

– See more at: https://www.emarketer.com/Article/Australia-Nearly-Everyone-Under-50-Goes-Online-via-Mobile-Phone/1014511?ecid=NL1007#sthash.LnvmQYZq.dpuf

 
 

Data-Driven Marketing Is Driving More Revenues/e-Marketer


Spending on data-driven efforts is also going up

Marketers put more dollars behind their data-driven marketing efforts, and saw revenue gains, between Q1 and Q2 2016 in the US. According to August research, this upward track is expected to continue into Q3.

Change in Revenues Generated by Data-Driven Marketing Activity According to US Marketing Professionals, Q2 & Q3 2016 (% of respondents)

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In July 2016, Direct Marketing Association (DMA) and Winterberry Group found that 40.9% of marketing professionals surveyed said their organizations’ revenues from data-driven marketing activities grew at least somewhat from Q1 to Q2 2016. Though a larger share said there had been no change between the periods queried, only 11.3% reported a decrease in such revenues.

Looking ahead to Q3, the majority of marketers plan on continued success with data-driven marketing; 51.8% said they expect a boost in returns. Not far behind, another 41.8% said they foresee no change to revenue, which left a mere 6.5% who predict a slump.

Meanwhile, spending on data-driven marketing is on a similar track. While most of the respondents said there was no change in their investment between Q1 and Q2 2016, spend on this type of marketing has increased. Roughly a third (32.4%) of the marketers polled said their organization contributed more dollars quarter-over-quarter.

Change in Data-Driven Marketing Spending According to US Marketing Professionals, Q2 & Q3 2016 (% of respondents)

And this uptick in spend is expected to continue into Q3. According to the data, 39% plan to increase investment in data-driven marketing somewhat or significantly compared to Q2.

Overall, spending on marketing technology—key to data-driven efforts—continues to grow worldwide. Advertising and marketing professionals outlined loftier spending increases on data-driven activities in 2016 vs. the year prior. According to a separate survey from Global Alliance of Data-Driven Marketing Associations (GDMA) and Winterberry Group, 68.6% planned to up their spend this year, compared to 56.3% in 2015.

– See more at: https://www.emarketer.com/Article/Data-Driven-Marketing-Driving-More-Revenues/1014487?ecid=NL1007#sthash.XwsGhLbN.dpuf

 
 

Tired of Being ‘Bombarded,’ US Internet Users Turn to Ad Blockers/e-Marketer


Ad blocking is expected to grow by double digits this year

US internet users are not very fond of ads, and many are installing ad blockers to get an improved—and uninterrupted—browsing experience. According to May 2016 research, internet users download ad blockers for a variety of reasons, including the fact that they’re simply tired of being bombarded by ads.

Reasons that US Internet Users Would Use Ad Blockers, May 2016 (% of respondents)

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In fact, 40% of internet users cited this very reason in a survey from marketing agency Omnicom Media Group. Slightly more respondents (45%) said they would use ad blockers because they don’t want to deal with pop-up ads. Interestingly, 44% said they associated ad blockers with blocking pop-up ads.

Ad blocking is expected to grow by double digits this year and next, according to eMarketer. Indeed, this year, 69.8 million Americans will use an ad blocker, a jump of 34.4% over last year.

Ad blocking is more common on desktops and laptops than on smartphones. In 2016, 63.2 million people will use an ad blocker on their desktop or laptop PC, vs. 20.7 million who will use one on their smartphone. In fact, 90.5% of ad blocking users will block ads on desktops and laptops, while just 29.7% will do so on smartphones. (There is overlap among the groups.)

US Internet Users Who Use Ad Blockers, June 2016 (% of respondents)

Similar data from Omnicom Media group, June 2016 research from the Interactive Advertising Bureau (IAB) also found that internet users are using ad blockers because they’re annoyed by ads that block content. Although a majority of respondents said they do not use an ad blocker and don’t plan to in the next six months—in contrast—another 26% said they do have ad blocker on their desktop or laptop. Furthermore, 17% said that while they didn’t have an ad blocker when polled, they planned to in the next few months.

– See more at: https://www.emarketer.com/Article/Tired-of-Being-Bombarded-US-Internet-Users-Turn-Ad-Blockers/1014467?ecid=NL1007#sthash.MqpPFFks.dpuf

 
 

Social Media Matters More Than TV in Australian Purchase Decisions/e-Marketer.


Social surpasses more-traditional channels in purchase influence

Internet users in Australia increasingly rely on social media and their peers when it comes time to make buying decisions. In fact, social media is increasingly outpacing traditional channels like TV as the preferred medium for Australian advertisers looking to reach, and influence, potential customers.

Important Influences on Purchase Decisions According to Internet Users in Australia, April 2016 (% of respondents)

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April 2016 data from Deloitte, which examined the leading influences for purchase decisions among internet users in Australia, highlights this move toward peer-based recommendations and social media. Recommendations from friends and family, along with online reviews or recommendations for social media circles, topped the most influential sources, mentioned by 78% and 58% of respondents respectively. Television ads, meanwhile, came in third, mentioned by 55% of respondents.

Even though more than half of respondents still mentioned television advertising as a factor in purchase decisions, social media is often present in a second-screen role, particularly for millennials. In Deloitte’s examination of TV multitasking behaviors, more than 40% of millennials (ages 14 to 32) used a social network while watching TV.

Activities Conducted Simultaneously While Watching TV Among Internet Users in Australia, by Age, April 2016 (% of respondents in each group)

The growing importance of social media among shoppers in Australia may be one reason for the higher prices Australian retail brands have paid for social ads in recent years. According to a Q1 2016 report by Salesforce.com, which looked at Australian Facebook ad CPM rates across different industries, retail advertisers paid CPMs of more than $10 through the social site, higher than any other industry studied.

– See more at: https://www.emarketer.com/Article/Social-Media-Matters-More-Than-TV-Australian-Purchase-Decisions/1014453?ecid=NL1007#sthash.xLvLAZdu.dpuf

 
 

What Video Ad Length Is Best on Facebook?


65.8% of US marketers plan to use the platform for video ads

September 6, 2016 | Advertising & Marketing | Social Media | Video

It might be easy to assume that the shorter the video ad, the better the completion rate. But maybe things change when it’s on a social platform. According to Q2 data, video ads that were between 30 and 60 seconds long fared better than those of less than 30 seconds on Facebook.

US Facebook Video Ad Benchmarks: Completion Rate, by Ad Length, Q3 2015-Q2 2016 (% of total impressions analyzed by Kinetic Social)

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During Q2 2016, Kinetic Social tracked data based on 2 billion social ad impressions, including ad spending for all ad types on Facebook, across both desktop and mobile channels. Kinetic Social is a programmatic social media platform that delivers paid social ads, and more than 90% of its clients are US-based.

According to the data, almost half (or 44%) of 30- to 60-second video ads on Facebook were viewed to completion. Meanwhile, those that ran 30 seconds or less saw a 26% completion rate. Interestingly, 2-minute or longer video ads had the second-best completion rate of 31%.

In a separate survey from Animoto, within the next 12 months, 70.8% of respondents said they plan to invest in social video ads overall, including ads to boost content. And Facebook is most likely to benefit from this intent; 65.8% of those who planned to do social video advertising planned to use it.

US Marketers Who Plan to Use Social Video Ads, by Platform, May 2016 (% of respondents)

And don’t forget what’s lurking on the side lines: live streaming video. Trust Media Brands, previously The Readers’ Digest Association, reported in August that 7% of agency and 19% of in-house marketers definitely plan on allocating budget to live stream video ads in the second half of this year. Facebook Live rolled out in April, and is anticipated to be a new and interesting revenue stream for the social media giant.

– See more at: https://www.emarketer.com/Article/What-Video-Ad-Length-Best-on-Facebook/1014438?ecid=NL1007#sthash.VAIsejIs.dpuf

 
 
 
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