Death to Tier 2 Advertising!

Why Abolishing Tier 2 As We Know it Might Actually Help Automotive Brands Sell More Cars

It's that time of the year again.  The time when automotive companies are gearing up for their year end sales events.  Their final burst of 'traffic driving' advertising, known as 'Tier 2'... the 'call to action' to 'buy now' because of 'special deals'.

Tier 2 advertising is a time honored automotive convention that has become part of American culture, and considered an essential piece of the three-tiered communications architecture that includes brand advertising for Tier 1, and dealer advertising for Tier 3.

During the course of the year, most automotive brands will spend between 20% and 50% of their total advertising budgets in support of Tier 2 messages.  That's roughly $4.5 BILLION per year!

But is Tier 2 a vestige of the past? Is it $4.5 billion wasted?   Can it be that Tier 2 messages deliver questionable traffic ROI, and worse, likely deliver zero 'ROB'...return on brand, as these messages are rarely differentiated? There is data that suggests that this is so.

     

First, let’s look at the messages and intended audiences for automotive sales events.  Boiling down the hoopla, the messages invariably focus around being ‘a good time to buy’ because of the ‘great deals’, and are targeted to an audience who is ready to buy.

All evidence suggests that the intended message and audience is completely out of synch with the way people are actually buying cars. McKinsey, CNW, Polk, and Gfk have all documented a similar 6-9 month path to purchase.  Buyers begin with a short list of brands to which they add and subtract as they progress. And they listen less and less to automotive companies and more and more to third parties (experts, third party websites and social media peers) as they get closer to purchase.

And if that is the case, they would likely Google ‘best time to buy a car’ and multiple sources will all confirm that it is always the last few days of the month or quarter, with even better deals at the model or calendar year end. 

Similarly, a ‘best car deals’ search will yield very specific information about the available deals  from virtually every manufacturer.

So, sales events might actually be a case of spending $4.5 billion to tell an audience who has stopped listening to you something that they already know!

So what is the answer?  It appears to be time for a complete revamping of the automotive communications architecture.  One in which the objective is to get on, stay on and get added to as many lists as possible throughout the process. One which abolishes ‘tiers’, and instead, matches intended audience behavior to desired result; One in which brands stop spending money on generic, readily available information, and instead focus on behaviors that deliver unique branded experiences and sharable content.

What might this look like?

• Re-channel tier 1 & tier 2 media dollars in two directions: high profile media and events that will consistently showcase brand virtues to a broad audience and state of art digital and analytics platforms
• Leverage 3rd party sites to intercept in-market shoppers
• Develop sharable brand accentuating content that will seed earned media (traditional and social) to reach in-market audiences with engaging news and product information.

So what’s stopping this from happening? Probably inertia and a desire not to rock the boat.  Manufacturers will tell you that dealers love sales events.  Dealers will tell you that they get traffic when the sales events run.  Of course these events run at precisely the same times that 3^rd parties are saying are the best times to buy, and no one has ever served up an alternative.

My experience calling on car dealers tells me that they are reasonable business people who will take a leap of faith on a well thought out plan, particularly if it has the potential to raise the brand profile, and increase the value of their franchise.  So the onus is on manufacturers to package all available purchase process insights to make the argument, and ask the dealers to take this leap of faith by reassuring them that they will actually be seeing more shoppers and a gaining a higher share of voice through budget reallocations and stronger earned media. And the manufacturer with the guts to do this will be setting the new rules for category, while reaping the rewards a renewed brand desire and dealership traffic.

Why It’s Never ‘Just a Viral Video’. Why Brand Matters More in Sharable Content Creation

During my tenure as Global Strategy Director at TBWA, I can’t remember how many times I heard the words…‘C,mon, it’s just a viral video…it’s not going to be seen by a mass audience’, as I discussed the brand inappropriateness of an online creative concept with our team in Brazil, France or just about every other region.  Admittedly, many of the concepts were hilarious, and I hated having to be the killjoy.   

As I look at the recent online content metrics, I’m feeling vindicated for being so hard.  According to Visible Measures, in September, the average online video got 4.5 times more user initiated views than they did just 3 years ago, with an average video now receiving 1.6 million views. Top performers are getting over 20,000,000 views!

While part of this is likely a function of changes in audience behavior and online channel availability, part is likely due to an accelerated learning curve of what makes content sharable.

If you Google ‘tips on sharable content’ you’ll get links to pages of articles that describe how content needs to entertain, elicit positive emotions (humor being one at the top of the list), tell a story, be unique, etc.  All good advice.  But brand owners also need to understand that with the increasing impact that branded content has on shaping the total brand experience, it’s extremely important that in addition to entertaining storytelling, content needs to amplify and extend brand experiences that create value.

September’s top 2 viewed video campaigns were Apple iphone 5s/c, and Motorola Moto X. While both campaigns are for mobile phones, they illustrate vast contrasts in brand behavior, and the resulting customer experience.

The iphone videos are simple, visually engaging and informative, as they romance the phone’s design, while demonstrating the phone’s features.  Their minimalist approach is unmistakably Apple…consistent with the simplicity, elegance and seamlessness that Apple brings to every brand experience, at every touchpoint.

The Moto X video is also a product demonstration.  It features hands free, voice-activated control. It follows the basic rules for sharable content, in that it uses humor to tell a story in a unique way.  The Story: It begins with a couple in bed.  The man is trying to give his partner a massage, while setting the mood with romantic music from his phone.  The phone has been personified, and is portrayed by a somewhat out of shape man, who is lying in bed next to the couple.  ‘The phone’ pulls up his shirt and tells its owner that he must touch the ‘phone’s’ stomach in order to play music.  While it is arguably entertaining, unique and funny, there is a creepy vibe to the whole situation, which probably leaves the majority of the 17.9 million viewers wondering what Motorola is all about.

Like the two examples above, more and more brands seem to be creating entertaining online product demonstrations.  Recently, Mercedes released a video featuring ‘magic body control’, a technology that stabilizes ride quality.  In it, we see the rubber gloved hands of what appears to be an engineer holding and manipulating a chicken to dance to the beat of Diana Ross’ ‘Upside Down’.  It’s catchy, entertaining, engaging, and it does demonstrate the benefits of the technology.  And it’s clearly sharable.  Last week, it was the 9^th ranked viral video, with 1.4 million views.  Released September 23^rd, it has already garnered 6 million views.  However, how does this amplify the Mercedes brand experience?  Is it consistent with the rest of the Mercedes experience?  While premium brands need not be stuffy, should they be silly?

As branded content becomes a large and significant contributor to the entire brand experience, brand owners have a responsibility to ensure that every piece of content is aligned with all other brand behaviors to create brand value.  And as content sources multiply to include technology and media companies, it is ever more important these companies are provided with a clear sense of brand appropriate-ness and out of bound behaviors. ‘It’s just a viral video’ is no longer an acceptable excuse for entertaining, off-brand content because it is, indeed, going to reach a mass audience.

From Multi National to Global: The 5 Questions to Ensure Your Brand Stretches Without Breaking

From Multi-National to Global:

The 5 questions to ask to ensure your brand stretches around the world without breaking

Many multi-national brands are looking to go ‘global’ to some degree, but what ‘global’ means, and how it’s accomplished can vary significantly, as can the degree of results. Most brands start with similar motivations: to reduce the potential for marketplace confusion created by mixed messages as media crosses borders, as well as to satisfy procurement’s push for efficiencies.

My experience in global branding, which includes Disney and Nissan, among others, has taught me to ask these 5 questions of global brand owners. Answering them correctly will ensure that global branding efforts will result in maximum alignment and value creation.

1.  What is the end game: ‘matching luggage’ or alignment to brand truth?

Certain degrees of consistency are relatively easy to achieve, but in the end, don’t really serve the intended purpose.  For instance, imposing strict standards for global look and feel in communications can create a sense of ‘matching luggage’.  Going only this far, however, can still result in behavioral dissonance across borders. 

Consider the controversial Ford Figo ad that eventually resulted in firings in India.  At first glance, it certainly looks like a Ford ad.  It contains a brightly colored, prominently featured clean looking photograph of the car, and a brand compliant logo and tagline.  But closer inspection reveals the image of former Italian Prime Minister Berlusconi in the back seat, and three women bound and gagged in the trunk.  This set of matching luggage was filled with explosives!

Brand Compliant?

Alignment to a brand truth, on the other hand, will actually give local markets more freedom to bring the brand to life in locally relevant ways, while still delivering a globally consistent customer experience at every touchpoint. 

2. Has the brand been defined in an actionable way that favors clarity over poetry?

Marketers tend to favor brand definitions that wax poetic about the virtues of their brands and sound more like clever advertising slogans than simple, single-minded, actionable statements.  While this makes everyone feel warm and fuzzy, it can create confusion as the brand attempts to cross borders.  Puns, complex emotions, and 3-dollar words usually don’t translate easily, and encourage local markets to create local versions of the global statement. More often than not, these local statements actually wind up redefining the brand and erasing the original intent.

Brand statements must not only be clear, but they should be actionable by identifying brand behaviors that the entire organization can follow to create valuable customer experiences. 

Clarity or Poetry?

Over the years, Avis defined itself with the simply worded, ‘We Try Harder’. Much more than a tagline, it clearly informed all brand behaviors.  Recently, as part of a brand repositioning intended to focus on the customer experience, that iconic line has been replaced with the more poetic, and arguably much more enigmatic, ‘It’s Your Space’.  What does this new line tell the Avis franchisee in Milwaukee to do? Will it drive the same behavior as the franchisee in Dubai?  Probably not, as it is neither clear nor actionable.

3. In seeking local market relevance have we preserved the relevance of our brand?

One of the fundamental rules of global branding is to find local market relevance for your brand. But this philosophy can be easily misapplied.  The key to success lies in leveraging local market insights in service of the brand, rather than pushing the brand beyond credible truths, in service of local market insights. 

Anyone who has ever worked in the Chinese market has heard that Chinese consumers are driven by status. Certainly, ‘bling’ is king for certain consumers, and this has served certain brands well.

Too Far A Stretch? 

Recently, there have been reports of the internal struggles at Volvo regarding the future of their brand. Their new Chinese brand owners, Geely want to follow the bling with a bigger more powerful flagship. Their Swedish management believes Volvo’s value in the China market can be more credibly established by strengthening their current reputation as a safe, understated brand by leveraging their new safety and environmental technologies.  Is bling too far a stretch for Volvo?  Could such a direction be credible in the US and Europe, or is there another Chinese insight that better serves the Volvo brand everywhere? Considering that China has the second highest vehicle fatality rate in the world, and significant air pollution issues, might Volvo forgo the bling and win the future by credibly leveraging its unique strengths?

4. Do I need to centralize the organization in order to ensure consistency?

When moving towards global brand alignment, there is a natural tendency for global headquarters to want to control everything.  Not only is this impractical, it is also ineffective.

The key is not for headquarters to impose their will on the local markets, but rather for roles, responsibilities, and accountability to be clearly identified and tangibly reinforced.

Headquarters should be responsible for providing a strategic framework that is flexible enough to account for cultural nuances, but rigid enough to align all behaviors. When developing this framework, headquarters should consult with local markets, not for strategic advice, but rather to understand how cultural and competitive context might impact activation.

Local markets should be responsible for optimizing activation behaviors within the strategic framework, by leveraging their local market and customer knowledge. 

Many organizations stop there, only to be frustrated by lack of progress.  Perhaps the most critical factor in ensuring success is to make everyone in the organization accountable to the same objectives. Achievement of these objectives should directly tie to their compensation. 

5. Has the obvious been overlooked?

Urban legend has it that the Chevy Nova failed in Spanish speaking countries because ‘No va’, means ‘no go’.  While this is actually just an urban legend, there are many true examples of brands that have overlooked the obvious in committing faux pas when crossing borders.

When I was living in Australia, the Gap was opening its first store in Sydney.  There was much hype surrounding the opening, and as an American ex-pat, I was truly excited about the prospect. I fought my way through the opening day crowds during peak Christmas shopping season…the middle of the Down Under summer.  Imagine my surprise and disappointment when all the merchandise was fall/winter apparel! How such a great brand could overlook such an obvious detail seemed unfathomable!

Don’t take things like local climate, dialects, and taboos for granted.  Make sure that any globally run initiative, no matter how small is vetted with the locals before proceeding. 

The road to global branding is never easy, but properly thought through and executed, the move can bring big rewards for brand owners. 

The American/ US Airways Merger: Is the Justice Department Asking the Wrong Question?

Is It About More Competition, or A Different Kind of Competition?

Last week’s lawsuit filed by the Justice Department to block the merger of American Airlines and US Airways on grounds that it would limit competition, and lead to reduced service and higher prices, may be missing the point.

Consider these facts:

• The biggest mergers have taken place in the last 12 years, with American/TWA in 2001, Delta/Northwest in 2009, and Continental/United in 2010.
• Over that same time period, the airline category American Customer Satisfaction Index, a predictor of consumer spending, pricing power and shareholder value, has trended relatively flat, consistently ranking at the bottom of all 43 categories measured.
• Since 1995, Passenger Revenue per Available Seat (PRASM) has lagged the CPI, suggesting relative airline price deflation.
• Since 2008, there is virtually no difference in PRASM between network carriers (which include all newly merged airlines) and low cost carriers, like Jet Blue and Southwest.

What does all this mean?  Well perhaps it means that consolidation has had no effect on service or price.  And perhaps it really means that airlines’ value equations are broken.

If that is the case, then perhaps what airlines need is not more competition, but a different kind of competition.  A kind of competition that is not driven solely by price and availability; a kind of competition that de-commoditizes one of the most potentially experiential categories in existence; Simply put, a kind of competition that is driven by brand value creation.

Unfortunately, there is little sustainable brand value creation occurring among the network carriers.  Ironically, the exceptions are the low cost carriers, Southwest, Jet Blue and Virgin. 

Southwest pioneered democratized flying 38 years ago, with the vision of getting people to their destinations on time, at a lower price and have fun doing it. It has never strayed from this simple idea. While the amenities may be bare bones, its consistently reliable experience and unique personality earns strong customer satisfaction, fierce loyalty, and higher PRASM than US Air or United.

Jet Blue launched in 2000 with a unique  value proposition of bringing humanity back to air travel. Over the course of time, Jet Blue has not strayed from its core brand proposition.  Its customers know that they will sit in relative comfort, not have to pay for their first checked bag, in-flight entertainment, or in flight snacks, like their signature Terra Blue Chips; that should something go wrong, they are protected by a Passenger Bill of Rights.   

All of this has paid off in real brand value creation. Today, Jet Blue enjoys the highest customer satisfaction index rating, 14 points above category average.  Consequently, Jet Blue has increased PRASM by almost $4 since the year 2000, closing the revenue gap with network carriers from over $2.32 to less than 75 cents.

So what could this mean for network airline brands in the future? Are mergers alone the answer to surviving this changing landscape?  Or do they need to rethink their go to market strategies, with value added brand propositions?

Perhaps the first thing that they need to do is regain a sense of purpose for their newly formed brands.  That sense should drive differentiated, brand behaviors and customer experiences.

For instance, shouldn’t an airline that proclaimed ‘We know why you fly’ be able to track your history, anticipate where and when you will fly next, and pre-reserve a ticket for you?

Shouldn’t an airline that proclaimed ‘We love to fly and it shows’ spread that love to its passengers by offering flying lessons as a frequent flier reward?

Shouldn’t an airline that extolled the virtues of face to face business meetings in its post 9/11 ‘It’s time to fly’ campaign facilitate the arrangement of face to face business meetings with complementary airport business centers and fully wired ground transportation?

Yes, all these ideas would likely raise prices, but they would also enhance the value equation, raise customer satisfaction, and re-establish the network carriers' position in the market.  And isn't that the kind of competition we really need?

Sources: American Customer Satisfaction Survey; MIT Airline Data Project