THE ROUSER MANIFESTO

A n e x p o s i t i o n o f t h e m o d e r n m a r k e t i n g c l i m a t e a n d a p r o p o s a l f o r h o w t o g e t

m a r k e t i n g b a c k t o t h e b o a r d r o o m .

2018

INTRODUCTION

ON TACTICAL ISSUES

As we detailed in the previous section on strategy, thecurrent marketing climate has become dangerouslytactified. To make matters even more troublesome,the reduction of the profession continues in theselection of tactics. Marketing communications,despite making up but a fraction of the totalmarketing mix, largely dominates the discourse.

Within marcomms, there are also further issues.Digital biases have skewed the conversation andcontributed to an all-too-common perception that thetraditional channels have shuffled off their mortalcoil, run down the curtain and joined the choirinvisible. As we shall see, the rumours of their demiseare greatly exaggerated.

Marketing tactics are tools with which to execute themarketing strategy. Consequently, the tacticalselection process can only be made once thestrategy has been established. In this, the secondpart of our 2018 Manifesto, we will argue for using aslarge of a toolbox as possible, identify inherentproblems with the presently popular digital-firstapproach and detail the profitability complicationsassociated with short-term thinking.

A SPECIAL THANK YOU

The authors would like to thank those whogenerously have taken time out of very busyschedules to provide invaluable feedback on thissection on tactics.

AUTHORS

JP Hanson

CEO,Rouser

Gary Rivers

Associate Strategist,Rouser

TACTICSLATER

TACTICS LATER

NOT SO GREAT EXPECTATIONS

Ogilvy Vice Chairman, and all-around UK nationaltreasure, Rory Sutherland famously tells a story abouthow one of his friends was told by an executive thatmarketing was “the colouring-in department”. Thequote is as revealing as it is uncomfortable tomarketers – there is undoubtedly at least a grain oftruth to it.

Far too many modern marketers lack formal training,which on one hand means that they fail tounderstand the broader scope of business and howmarketing fits into the corporate puzzle. On the other,it also often means that they do not understand thevery basics of what they are doing. Strategy isignored. Real-time optimization replaces long-termplanning. Marketing tactics become marketingcommunications and, well, little else.

Consequently, one cannot in good conscious blamethe C-suite for taking not only strategy but also keytactics such as product development, distribution,price setting, price maintenance and customerexperience off the marketing department’s table. Ofcourse, this is not ideal for the overall businessoutcome. As we have seen, marketing needs to beimbued by a holistic approach in order to deliveroptimum results. Inevitably, that will sometimesmean that tactics other than marcomms need to beapplied. Despite how much marketers are inclined tothink otherwise.

A GOOD PLACE TO START

In 1979, psychologists Michael Ross and Fiore Sicolyconducted a study called “Egocentric Biases inAvailability and Attribution”. In their research, theynoticed that human beings had a tendency toovervalue their contribution to a positive outcome. Ofcourse, marketers are no exception to this rule. Soperhaps it is rather unsurprising to see that they oftenoverestimate the impact they had on the success of aparticular brand or product.

An example of this can be found in “A New BrandWorld” by Scott Bedbury, the marketer oftenattributed with the success of brands such as Nikeand Starbucks.

On Starbucks, Bedbury writes “Perhaps even morecritically, cracking Starbuck’s brand code provided uswith a rationale for forgoing opportunities, appealingas they might have been, that were not closely linkedto our evolving conception of the brand”.

In this, as we have noted in the previous section onstrategy, Bedbury is right. The essence of strategy, asprofessor Michael Porter once said, is deciding whatnot to do.

However, he goes on to write about how the CEO hadcome to the conclusion that they were now “not in thecoffee business serving people”, but rather “in thepeople business serving coffee”. From this, Bedburydeduces that Starbucks was “well on its way totranscending the cup, to going far beyond thephysical domain of the product” and that theemployees were delivering “something morerewarding than just a cup of coffee”.

Without being in any way disrespectful to Bedbury, atthis point he, being largely responsible for theStarbucks brand, seemingly falls into theaforementioned egocentric bias trap and what onemight call post-effect emotionalization. As probableas he is to argue otherwise, the main driver of thecoffee chain’s success was actually very likelysomething else.

As professor Byron Sharp established in “How BrandsGrow”, brands compete on mental and physicalavailability. Mental availability refers to the ease withwhich a consumer notices and/or remembers abrand in a purchase situation. Physical availability isabout making the brand easy to find and buy. Withoutit, efforts to create mental availability will beineffective, if not completely wasted.

The essence of strategy, as professor Michael Porter once

said, is deciding what not to do.

“”

When Americans, as Sharp aptly put it, at last joinedthe rest of the developed world in drinking espresso-based coffees, Starbucks “rode the wave well, rightlyfocusing on opening new stores rather thanadvertising”. As it turns out, they eventuallyoverplayed their hand, had to close a few stores andbegin advertising to hold their market share.Undoubtedly, however, the key to their initial successwas in fact that they had a nice store on every corner,selling a nice cup of coffee, at an acceptable priceand nobody else did. Not that Starbucks were“transcending the cup” into what would later becomea whole lot of nonsense about brand purpose (that,famously, haven’t prevented recently well-publicizedincidents).

Product, price and place (to use the original Pdesignations, even though they may be considered atad simplistic by modern standards) deal withphysical availability and, as such, need to beconsidered in any marketing mix.* While manymarketers, for reasons alluded to at the beginning ofthis section, admittedly may struggle to dictate thesetup of a distribution chain, they need to at the veryleast be aware of it, or their next office shipment mayindeed contain crayons. That, of course, requiresthem to understand strategy, which also brings us tocommunications.

ON COMMUNICATIONS AND JEOPARDY (NO, NOT THE DOUBLE VARIETY)

Undeniably, a large part of modern marketingdiscourse revolves around communications despite itbeing a very small part of the overall marketingpuzzle. Some of it, as we have alluded to earlier, maybe down to marketers not being trusted with muchelse, and some of it may be down to marketers notknowing better. One can only speculate as to whatfirst led to what. Either way, communications is atactical area in which a lack of strategic competencyis very easily spotted.

Marketing strategy is inherently media neutral. It isnot until it has been defined and the objectives havebeen set that the best and most cost-effective waysof reaching said objectives can be identified.Unfortunately, as fundamental as this may sound(and indeed is), many brands fail the exercise. Mediabiases instead come into play, often to the detrimentof the brand.** Although it might be easy to conclude

*It should also be noted that small brands aren’t exempt from these rules and here digitalmay provide a promising tool. Direct to consumer sales, for example, come with a lowerthreshold. Large and convenience retailers require scale that new entrants often cannotdeliver. Consequently, even if they are able to secure an opportunity in traditional channels,they are typically unable to meet the requirements of widespread distribution. We willexpand further upon our analysis of digital tactics other than communications in theConclusions section.

that the likelihood of such biases surfacing would behigher the smaller the brand, large brands are by nomeans immune to them. For example, Adidas’ CEOKasper Rorsted recently stated that “Digitalengagement is key for [us]; you don’t see any TVadvertising anymore”, and that he wouldsubsequently put all his money into digital media.

With the statement, he effectively limited hiscompany’s chances for future success and turned itsmarketing into a game of Jeopardy. He had his digitalanswer. What was the question again?

Marketing must take the opposite approach to makefinancial sense. Again, not until the objectives havebeen defined can the best ways of reaching them beidentified, which means that anyone claiming to be“digital-first” immediately demonstrates a lack ofstrategic competence.

At this point someone might argue that Rorsted hadalready done his strategy and that Adidas decideddigital would provide the best tool for the job.However, there are a couple of basic errors thatindicate that not to be the case. As it happens, theyare the same errors that we see on a daily basis: (1)underuse of multiple-media approaches at the cost ofpotential synergy effects and effectiveness, and (2)overinvestment in short-term activation at theexpense of brand-building efforts to the detriment ofthe brand’s profitability.

**Some marketers working agency side are going to be biased merely as a result of wherethey work. For example, you would expect a marketer working at a social media agency tobe biased towards social media. A marketer working at a media agency, however, not somuch, at least in theory. In practice other things factor in, such as the amount of moneythat can be made from fees and rebates from digital media, which means it is oftenconsiderably more profitable for media agencies to, say, recommend online display overTV or radio.

Marketing strategy is inherently media

neutral. It is not until it has been defined and

the objectives have been set that the best

and most cost-effective ways of reaching said

objectives can be identified.

“

”

PERCEPTION VS REALITY

One of the most unfortunate, yet common,phenomena in modern marketing discourse is thetraditional-digital dichotomy and the attitude towardswhat is deemed traditional media channels. Not onlyis it troublesome because the division ignoresdevelopment in technology – the so-called traditionalchannels are today all to various degrees digital,which begs the question what wouldn’t be digitalmedia – but also because it leaves untappedmarketing potential on the table.

A recently published study by Ebiquity illustrates theproblem. More than 100 marketers from both brandand agency sides were asked to rank media channelson twelve different attributes, including targetingcapabilities, highest Return on Marketing Investment,best for emotional response and most likely toincrease brand salience.

As one can see, there are clear discrepanciesbetween perception and reality.

TV remains the undisputed champion ofeffectiveness.* IPA data suggests that TV increasesoverall business effectiveness by around 40 % andhas a particularly strong effect on market share(which, of course, is key to brand growth and profit). Itshould also be noted that this is not a budgeteffect.**

Print is, as the study clearly shows, considered aparticularly antiquated medium, but again the datashows that it has value. Campaigns that includepress tend to be more effective than those that don’t.Much like TV, share of voice analysis shows that it isnot a budget effect.

*Effectiveness means scale of effect, measured in whatever terms are relevant to thecontext. It typically refers to the number of large effects or share growth. It does not relatethe effect to the level of investment made to drive the effect. Efficiency, on the other hand,is a measure of what is achieved per unit of investment made. Return on marketinginvestment (ROMI) is a common efficiency metric.

**Of course, budget may still provide a threshold, particularly for new and small brands.This will be elaborated upon in the Conclusions section.

Radio provides great reach and, as a result, continuesto be an effective medium. Again, it is not a budgeteffect. Radio increases share of voice efficiencysignificantly.

In other words, the so-called traditional mediachannels, as much as columnists and commentatorswould have one believe otherwise, still make a strongcase for investment.

Yet perception becomes reality and marketers shifttheir money to digital and online (some of which maybe explained by the fact that digital advertising ingeneral and the programmatic sphere in particular ismore profitable for agencies, as mentionedpreviously). As a result, average effectiveness (asmeasured in IPA case studies as the number of verylarge business effects reported) has fallen to itslowest ever level on a ten-year rolling basis. Digital isproving to make traditional channels more effective(TV, print and radio are working better than ever, andout-of-home is on the rise due to the prevalence ofdigital-out-of-home), but digital on its own is anythingbut.

This is all not to say that what is usually called digitalchannels cannot be good. Rather, our point is thatbrands should identify the media that will best helpthem reach their objectives. They may well be digital,but they could also be traditional. More often than notthough, they will be both, as it typically ensures thebest result for business. Ample data is available toshow that multi-channel campaigns are moreeffective than single-channel ones. While we do notintend to go into detail about campaign structure –there are plenty of media agencies who are experts inthe field – brands need to at least be aware of thefundamentals before executing a strategy. Much likehow tactics each have their strengths andweaknesses, so do channels, and brands can pickand choose depending on what they are trying toachieve, who they are trying to reach and what theirbudgets are. But there is also incremental increase inROI to be found by simply adding channels, at leastup to four.***

***Multiple-media repetition has been shown to generate more positive cognitiveresponses, attitudes toward brand and higher purchase intention than single-mediumrepetition. A 2011 IPA study on the UK market showed diminishing returns after fourplatforms. A more extensive 2016 Advertising Research Foundation study of the USmarket found that two platforms added 19% ROI, three platforms +23%, four platforms+31% and five platforms +51%. A ThinkTV study of the Australian market in 2017 alsofound the sweet spot to be five platforms. Either way, synergy effects from multiple-mediaapproaches are evident in the data.

T H E P E R V E R S E I N C E N T I V E O F S H O R T - T E R M T A C T I C S

Another essential aspect brands must be aware of,we would argue not only in communication but ingeneral, is the balance between short-term activationand long-term brand-building – getting it right iscrucial for maximum commercial effectiveness.Spend too little on brand building and the resultsfrom activation will be less than stellar. Spend toolittle on activation and your brand, as strong as it maybe, will never been exploited to the full. Brands needto both create memories and activate them, or, to putit differently, both water the tree and pick the fruit.The optimum balance between the two, according toLes Binet and Peter Fields’ “The Long and the Short ofit” study, is around 60 % on brand and 40 % onactivation. That’s 60 % long-term and 40 % short-term. Every brand is unique and there are differencesfrom one vertical to the next, naturally, but the ruleprovides a good rule of thumb grounded in solidresearch.

Yet it’s not even close to what most brands do. For amultitude of reasons – CMO tenure (or lack thereof),VC ROI demands, strategic shortcomings, agenciesincentivised to push digital, to name but a few – weare instead seeing overinvestments in immediatereturns and bottom-funnel conversions. The problemwith the approach is that while long-term strategiesalways provide short-term results, short-term tacticspractically never have long-term benefits. In fact, dueto their nature, they tend to erode brand equity.

This means that in the quest for sales uplifts, the veryfoundation of long-term sales growth is underminedand the very point of the brand itself lost. A perverseincentive is created, i.e. an incentive that has anunintended and undesirable result which is contraryto the interests of the incentive makers.

Nowhere is this more clearly on display than in theworld of digital, perhaps rather unsurprisingly giventhe undeniable activation potential of digitalchannels.

Big data allows brands and agencies to targetpotential customers with greater precision than ever.The internet is, by and large, a perfect channel fordelivering information on products and prices, andcombined with mobile it can drastically hasten thecustomer journey. With purchases only a click awayand a smartphone practically in every pocket,activation has never been more efficient. Purelyonline brands are almost twice as likely to be short-term focused as purely offline brands.*

*This is, unfortunately, particularly troublesome. As Jeff Bezos pointed out in his famous1997 Inc. interview, brands are even more important in the online world than in the offlineworld.

But, as the most recent Binet and Field study “Mediain Focus” shows, measuring success in the short-term leads to numerous important false conclusionsabout effectiveness. Very large market share effectswere reported in only 3 % of the analysed short-termcases. For cases exceeding 30 months, it was 38 %.Long-term cases (6 months or more) drove 460 %more market share growth than short-term cases did.

This weakness in short-term campaigns, Binet andField argue, is ignored because of activation effects.65 % of short-term cases generated very largeactivation effects, as compared to 33 % of 3+ yearcases. If one, for reasons explained above, measuressuccess in the short-term by activation effects, itwould appear as if short-term campaigns are highlyeffective. However, look at the bigger, long-termpicture and they are revealed to be highly ineffective.

Some of this is down to the suboptimal mediachoices that we have discussed previously. With fewexceptions, media fall to one side or the other of theshort-long divide, i.e. their addition to a campaignschedule promotes either long-term effects or short-term effects, rarely both. When it comes to digital,short-term is its forte. Digital metrics are stronglyoriented to the short-term, but the point also appliesto, for example, direct mail and sales. In order torectify the issue, it is imperative that brands usemetrics to evaluate that are appropriate for thestrategic intent.

It is worth noting that this may mean focusing onother metrics than ROMI (ROI). Goodhart’s Lawdictates that a measure ceases to be a goodmeasure when it becomes a target, and this canindeed be the case for efficiency metrics.

A perverse incentive is created, i.e. an

incentive that has an unintended and

undesirable result which is contrary to the

interests of the incentive makers.

“

”

ROI-focused activities often target consumers withestablished affiliations to the brand and imminentpurchase intentions at the cost of brand growth, long-term base sales and margins. Long-term activities,inversely, invest in attracting future customers at acost to short-term ROI. Consequently, ROI oftencorrelates negatively with penetration, which is key tomarket share gains. In a marketing world in which,according to the aforementioned Ebiquity study, ROIis considered the second most important attribute ofan advertising medium, this is important to realize.*

Focusing on ROI can prevent benefits from scale andlarger, more secure, profits. If brands are to stayprofitable, they must avoid attempts to projectforward short-term effects to long-term growth.

*Of course, there are practical explanations as to why this is. Inevitably, any marketerlooking to spend a large amount of company money is probable to come under pressurefor proof of ROI. In the Conclusions section, we will propose a potential solution.

A RECAP OF TACTICS

STRATEGY COMES BEFORE TACTICS…

…not the other way around. It is not until theobjectives have been defined that one can identify thebest ways of reaching them.

BRANDS COMPETE ON MENTAL AND PHYSICALAVAILABILITY…

…and tactical choices need to be made with the goalof establishing both. This means acknowledgingtactics other than communications.

MARKETERS NEED TO TAKE AN OBJECTIVESTANCE ON MEDIA…

…to avoid further increasing the discrepancy betweenperception and reality and stop the negative trend inmarketing effectiveness.

MARKETERS MUST BALANCE SHORT-TERMACTIVATION AND LONG-TERM BRANDBUILDING…

…in order to ensure maximum commercial outcome.Spend too little on brand building and activationactivities will underperform. Spend too little onactivation and the brand will never be fully utilised. Asolid rule of thumb is 60 % on brand, 40 % onactivation, though the optimum balance depends ona myriad of contextual factors.

METRICS MUST BE STRATEGICALLY RELEVANT…

…to avoid important false conclusions abouteffectiveness. Activation effects may create theimpression that short-term campaigns are highlyeffective, though they from a long-term perspectivemay be revealed to be highly ineffective.

RECOMMENDED READING

BOOKS

A New Brand World Bedbury, Scott 2002

The Rise and Fall of Strategic Planning Mintzberg, Henry 2000

How Brands Grow Sharp, Byron 2010

Theory. Evidence. Practice. Sharp, Byron 2018

The Brandgym Taylor, David 2017

STUDIES

Driving Cross-Platform Impact ARF 2017

The Long-Term Effect of Marketing Strategy on Brand Sales Ataman, Berk et. al. 2010

Media in Focus Binet, Les & Field, Peter 2017

The Long and the Short of It Binet, Les & Field, Peter 2013

Re-evaluating Media Ebiquity 2018

Measurement Strategy in the Digital Era Effworks 2017

Are Big Brands Dying? Ehrenberg-Bass 2017

Planning for Synergy Ehrenberg-Bass 2012

Mounting Risks to Marketing Effectiveness Enders 2017

New Models for Marketing Effectiveness IPA 2011

Profit Ability: The Business Case for Advertising ThinkBox 2017

ARTICLES

Most Marketing is Bad Because it Ignores the Most Basic Data Roach, Tom 2017

Marketers Undervalue the Impact of Traditional Media Channels Hammett, Ellen 2018

Marketers are Clueless About Marketing Effectiveness Ritson, Mark 2018

Planning for Synergy and Effectiveness Carr, David 2017

ABOUT ROUSER

WE ARE ROUSER

Rouser is an international brand development consultancyfirm headquartered in Stockholm, Sweden, that specializesin brand growing aspects of business strategies, primarilypertaining to marketing.

At the very core of Rouser is an unwavering belief in criticalthinking and freedom from hype. The approach has led thefirm to not only perpetually analyse established truths andnew ideas alike, but, as a result thereof, to also form itsprocess. It is based on principles, not formulas. On techand media neutrality, not square pegs in round holes.

The process enables Rouser to define, align, develop,manage and track brands to create stability, relevancy,demand and growth. As such, it is another reason whyglobally active, award-winning companies with rapidgrowth rates and iconic, mature businesses alike trustRouser to help them make their brands better, not justbigger.

CONTACT

Web: www.rouser.se

Email: hello@rouser.se