Category Archives: Sports Marketing/Sponsorships

Is Adidas about to commit brand suicide by ignoring TV?

Irish advertising legend John Fanning has a brilliant piece on the current state of advertising in this month’s Marketing magazine. Fanning spans the breadth of the business, speaking sense and bringing clarity to adland’s bullshit.

One of his main points is that for some reason, we love hyperbole. We love declaring the new thing, feeling like we’re ahead of the curve and forgetting about the fundamentals of marketing, the knowledge and experience that’s gone before.

We’re like magpies, addicted to the shiny new tool and forgetful of our past, always moving on, but never dwelling on what we already know to be true.

There’s never a shortage of biased gurus peddling snake oil and telling us that the ‘death of’ (insert channel here) is nigh, and we love to agree with them.

The result is that there’s a legion of channel biased marketers out there. People who are making illogical strategic decisions based on their own hubris and without understanding of how brands grow.

Enter Adidas.

A Fax Machine Marketing Strategy…

The German brand’s marketing team would do well to pick up a copy of Fanning’s article, because Adidas is on the precipice of making an objectively enormous and costly mistake.

Speaking late last year in Marketing Week, Adidas global head of digital ecosystem design David Greenfield offered a view that he might regret. He compared TV advertising to marketing via the ‘fax machine’.

“Of course TV still has a place but the fax machine still has a place too and I’m not about to create a fax machine marketing strategy.”

Last week, the company’s chief executive Kasper Rorsted went one step further. According to Rorsted, Adidas will stop spending on TV and focus on targeted digital advertising and creating more ‘direct engagement with customers’.

“It’s clear that the younger consumer engages with us predominately over the mobile device, digital engagement is key for us; you don’t see any TV advertising anymore.”

Now I don’t have access to any data about Adidas, nor am I an expert in their market. But I’m happy to make the bold prediction.

If this comes to pass, it will be incredibly damaging to one of the world’s great CPG brands.

How Brands Grow

For some reason, we keep hearing about the death of TV, how digital is so much more effective and why direct, personalised targeting is the holy grail. But that couldn’t be further from the truth.

We now know How Brands Grow. Sharp et al’s seminal text examines thousands of companies like Adidas, and outlines some key tenets for growth like penetration, mental/physical availability, salience and sustained broad reach. It explains how communicating in an interesting manner with a broad range of people is the best way to drive sustained growth, and why loyalty and targeting strategies can often damage a brand’s bottom line.

The likes of Binet & Field’s ongoing IPA research has supported this viewpoint, and the evidence about how vital TV is to drive brand growth has been proven again and again.

We also know that, far from dying, TV is still a huge part of all of our daily media diets – young and old.

We know that digital isn’t as effective as we thought. Only last week, a major study of CPG brands found that while digital has edged traditional channels as share of CPG advertising spending, retailers & shoppers give digital low marks for effectiveness.

And we know that digital engagement alone doesn’t drive sales.

Strong alone, better together

But most importantly we know that digital alone isn’t nearly as effective as when it’s paired with other channels.

The most recent example of this comes from research by Bain & Co. Let’s look at some of the main takeaways.

  • Digital media is less expensive for reaching a limited group of consumers. However, the “recollected reach”—the percentage of total population reached who recall a campaign hits a ceiling at around 30%.
  • TV advertising is far more scalable. While it is more costly than digital media for reaching relatively few consumers, TV messages are recollected at a higher rate—as high as 60%
  • Our research found that purchase intent increases with multiple exposures to different types of media—not digital alone.
  • Purchase intent reached 80% for those encountering an ad on many different media types, including digital and traditional.
  • Big brands with mass appeal and high awareness benefit from “reach and repeat”.
  • The combination of traditional and digital was much more powerful than any single platform taken in isolation.

Pretty clear right?

But that’s not all.

Multi channel campaigns are more effective, more efficient, more awarded, drive greater ROI, deliver greater equity and build better brand associations. 

What I’m not saying that TV is a holy grail. Digital is obviously an incredibly important channel for a brand like Adidas, and they’ve created some brilliant, innovative and effective digital campaigns recently.

But digital alone is akin to slow suicide for such a large brand.

The question for Adidas shouldn’t be ‘Digital Or TV’.

The answer should be ‘Digital & TV’.

Online businesses who sell digital advertising like Facebook, Google and Amazon spent over £640 million on TV in the UK last year. If the guys peddling digital advertising believe in TV, why doesn’t Adidas?

Good luck David…

The real issue here is why would you automatically bias yourself towards digital? Surely media neutrality is the way forward – taking every campaign on its merits and working out what is the best channel to communicate?
Why as CMO of a huge global brand would you arbitrarily choose to not use a channel that’s been proven to be the best brand building tool and the most effective way to reach your target audience? It smacks a fundamental bias towards digital.

And that isn’t good for anyone.

Indeed, I’d go as far as to say it’s negligent!

Also, why the need to come out and crow about this decision, as if it were some stroke of strategic genius? Big congrats guys, you’re deciding to move away from the most effective marketing channel there is! Woah!

Adidas needs a strategy that will reach as many people as possible in inspiring and interesting ways, it needs to build mental structures to stave off the threat of Under Armour and Nike.

It does not need to focus solely on driving ‘loyalty’ and ‘engagement’ within a narrow target audience of current buyers, ignoring a large swathe of the market, while also damaging its brand recognition.

In his quote above, David Greenfield likens TV advertising to fax machine marketing, intimating that it’s a dead, dated medium that modern marketers should laugh at.

My take on that?

Best of luck with the new strategy David.

You’ll need it.

 

 

 

The Second Captains paywall – A smart, calculated experiment in new media models…

Full disclosure before we kick off – as you can see below, I’m a huge Second Captains fan. I’ve got the mugs and yearbooks. I know all the quotes, I’ve seen the TV show and I’ve followed the lads since they were fledglings on Newstalk.

And I’m also an avid media watcher, meaning this week’s announcement that Second Captains is moving from its cushy nest in Irish Times towers towards the wilds of a paywalled, community funded model from next Monday made me irrationally excited.

Maracana with the lads

A photo posted by Shane O Leary (@shaneoleary1) on

The Captains have decide to offer fans a ‘metered paywall’ model, in the guise of a New York Times or Irish Times, and will begin charging users €5 a month for a new ‘World Service’ edition.

The show will be kept ad free, and two free shows on Monday will remain, but in place of Thursday’s double bill, they will instead put out one daily podcast between Tuesday and Friday.

Mark, Ciaran, Ken, Simon and Eoin have shown plenty of balls in their media career. They’ve backed themselves to move from Newstalk, set up their own podcast against the backdrop of some scepticism, pitched and their own TV show, and won a new audience through their summer stand-in slot on RTE Radio 1.

In all of this, their fans have followed them.

But this is a different kettle of fish. Asking people to pay 5 quid a month is where the rubber hits the road.

Niche or enormous, there’s no middle

I’ve spoken before on this blog about how media is fragmenting and new models are emerging. Essentially, to succeed in modern media, there are two choices.

On the one hand, you can strive for enormous scale and hope that pays off. Try to make money by monetising your readers through display, print or paywall subscriptions, try to speak to everyone and cast the net as wide as possible. This requires experimentation and a reliance on distribution platforms, since most of us consume our media through social feeds now (and also leads to clickbait). Buzzfeed is probably the best example, but most daily papers play this game too.

On the other hand, you can be really, really valuable to a small cohort of people and hope that they love your work enough to provide enough income. Often, this requires a heavier paywall and ancillary revenue streams like events, merchandise etc. You can see this in effect across media, in places like The Economist, The Farmers Journal, The Information, Skift and in podcasts like ‘The Anfield Wrap’ and Marc Maron. In a similar vein, individuals like Tim Ferriss have created their own mini media empires too. It requires that you understand your fans, are very close to them and relies on you continually creating lots of value for them.

There’s very little middle ground between these two options, and media companies without serious scale or serious relevance are getting squeezed badly.

With the Second Captains paywall, the lads have chosen the latter route.

‘1000 True Fans’

They might not have heard of it,  but the way Second Captains as a brand has grown takes a lot from the ‘1000 True Fans’ approach, first coined by Kevin Kelly. According to Kelly, because of the lowering distribution costs on the internet, it’s now much easier to reach the people who really love what you do. The 1000 figure is just an arbitrary number, but the essence to his point is that if you can find a certain number of people who will buy anything that you put out, who really get huge amounts of value from what you do, and then service them directly without intermediaries,  you’re in business. It’s a theory that’s still very relevant in 2017, as the lads will attempt to prove.

If you lived in any of the 2 million small towns on Earth you might be the only one in your town to crave death metal music, or get turned on by whispering, or want a left-handed fishing reel. Before the web you’d never be able to satisfy that desire. You’d be alone in your fascination. But now satisfaction is only one click away. Whatever your interests as a creator are, your 1,000 true fans are one click from you.

The way Second Captains has grown its following has been both methodical and masterful. This move to paywall hasn’t come all of a sudden. They haven’t just started asking people for money, their growth has been staged, they’ve built slowly and smartly creating products and events, branching out into other media and even building their own brands through journalism.

With the new model, they’ll likely be ramping up these extra revenue streams, but critically fans are already used to paying. According to producer Mark Horgan, speaking in the Indo this week, “The way our audience has developed is interesting. Many are the same people who listen every week and they want more. They’ve been dedicated since the beginning. It’s also rolling the dice in some ways, but it’s perfect for this type of journalism. At our last event, in December, we sold out in hours. Part of the deal with the new membership subscription is that members will get first call on tickets.”

The benefit of radio and podcasting is that it also really lends itself to creating strong relationships with fans, since your in their ear for 4-5 hours every week. It seems the lads are now ready to monetise all the work they’ve put in to these relationships.

$$$?

So what are the economics like? From the outside, this seems like a gamble. Why move from under the brand of a large media group (The Irish Times) that can offer you distribution and fame?

But Killian Woods put out this interesting set of tweets during the week, and, even with back of fag packet sums, the money part seems to make sense.

When you really analyse it, the risk here is small and calculated. The lads have a hugely valuable brand. That won’t be going away. They own their own channels too, which is crucial.

And even if this goes wrong, the worst case scenario is they go back to usual podcasts and sell advertising. I’m also pretty sure that another media company would come calling very quickly. But it won’t go wrong. They’ve done the sums, they know how much their fans love them and they’ve seen other models in media make money this way. This is never going to be an explosive growth business, but I’d be pretty bullish that it’s a smart decision.

Irish people are willing to pay small recurring amounts in subscriptions for a high value service, particularly in sport, and particularly if it’s a company with a strong value offering that you can’t get anywhere else.

Best of luck Second Captains, and congrats on a ballsy call that should show the way for the rest of Irish media.

They never go home those boys.

 

 

 

The power of utility marketing as showcased by Mountain Dew

Marketing statistics

It ain’t easy being a marketer these days.

The people you’re trying to talk to are increasing cynical about your profession and don’t really care about what you’re trying to say.

The prevalence of blocking advertising messages has increased steadily in the past few years, and will likely continue to go up.

And even when you do get that ad out there, attention spans have become increasingly fleeting, as the sheer volume of branded communications and channel choices have ballooned.

But dry your eyes lads and lassies.

As Mr Chris Martin once sang ‘nobody said it was easy’.

Advertising these days is becomes less and less about communication or interruption, and more about entertainment, facilitation and adding value.

Why would you piss somebody off with an ill timed message, when technology allows us to come up with novel solutions to interesting problems?

We expect things to be easy, fluid and frictionless these days, and brands that make that happen are valued. Look at some of the most valuable companies in the world like Uber (taxis & delivery), Amazon (one click shopping) and WhatsApp (communication between friends).

Each understands the power of simplicity.

Us marketers can learn from that.

Making life easier

Good marketing can be executed by simply making life easier for your customers. We need to become less arrogant and far more empathetic, more understanding of consumers rather than presumptuous around their needs, more about adding value and creating solutions than using the megaphone to interrupt.

A good examples of this new style of utility marketing comes from Mountain Dew in Colombia.

In attempting to attract notoriously cynical ‘skaters’ to their product (a cohort of over 2 million in the country), the strategic team behind the brand searched long and hard for an idea that could connect the brand with their needs and expectations. Through a week long ethnographic process with the skater audience, they uncovered an interesting truth.

They found that skaters spend 50% of their life in activities related to skateboarding, 60% of this time is spent skating. The remaining 40% is spent on fixing their boards. The damage that their boards suffer is so big that they spend a lot of time on bringing them back to action, making this a massive pain point.

But surely no brand could take on that challenge right? Surely some print and digital ads was the way to go?

Mountain Dew didn’t think that way.

If they really wanted to connect with the skater community, they couldn’t do a traditional advertising campaign. Instead they had to create something that was part of their lives.

The opportunity was staring them in the face, and for me, it’s a brilliant example of marketing as utility.

Mountain Dew created the “Dew Tool” concept – the first soda that also worked as a tool to fix their boards. The bottle had a cap with a 10mm gap so it could be used as tool on any skateboard (all skateboard’s wheels and truck screws are the same size).

The brand produced 10,000 Dew Tools and took them to point of sales where skaters usually concentrated.

And the bottle became a cult hit collector’s item.

With a low budget, the Dew Bottle Tool was sold out in less than 2 days and the skater community demanded to have more of this special edition through social media networks.

A simple truth, a little lateral thinking, a willingness to move beyond advertising and an understanding that consumers these days want more than just interruptive ads stuffed down their throat.

When are marketers going to realise that the old model is dead?

Over the weekend, I saw a revered Irish marketer bemoaning the fact that advertising is becoming irrelevant.

A more sincere, empathy driven way of acting is our opportunity to regain that credibility and relevance once again.