Thoughts on The Economist’s “Big Rethink”
Editor’s Note: Last week GreenBook was invited to attend and cover the “Big Rethink” conference by The Economist. Not to be confused with re:Think, the annual extravaganza by the ARF being held next week in NYC, this one day event was focused clearly on the CMO. The message was straightforward: global market dynamics and innovations in big data and social networking are transforming the marketing strategies of companies everywhere—and forcing them to rethink fundamental rules of engagement. Fortune 1000 CMOs and top agency executives convened at The Economist’s The Big Rethink US to explore the trends redefining marketing and customer engagement in the twenty-first century.
Our esteemed long time Board member Rick Kendall attended the event, and here is his take.
Next week look for more re-thinking the way marketing and insights work today as as we begin our coverage of ARF re:Think with Joel Rubinson & Dana Stanley blogging from the event.
By Rick Kendall
At the Big Rethink 2014 US put on by The Economist in New York last week, the event chair, Martin Giles, introduced the conference by saying, “Rapidly changing markets and innovations in big data and social networking are transforming the marketing strategies of companies around the world. This is encouraging a ‘big rethink’ of the ways in which businesses engage with their customers and other stakeholders.”
The all-day event consisted 29 senior marketing executives in13 separate panels each moderated by one four editors and correspondents from The Economist. The major topics covered included:
- Reinventing brands
- The role of video
- Managing digital in the C-suite
- Fine-tuning big data
- Marketing to China
- Real-time marketing
- The future of social media
Here is a short highlight reel of the event, courtesy of The Economist:
To say the least, it was a wonderful window into how senior marketers at a range of major companies see, and are responding to, the rapid changes occurring in the marketing environment today. A quote from a focus group with teens, however, brilliantly illustrated a major problem faced today by senior (in rank and age) marketers:
16-year old girl: “I don’t really text that much.”
Middle-aged moderator: “You mean, like under 10 times a day?”
16-year old girl: “ No, I mean like under 300 times a day.”
When your understanding of the marketplace is off by an order of magnitude, you are probably going to have problems!
Clearly, though, for these marketing execs, a major focus is trying to understand and effectively use both social media and big data. And, while they all put on a very brave face, I couldn’t shake the feeling that many of them were guilty of a bit of “whistling past the graveyard”. During one panel, the Economist moderator made reference to the famous Donald Rumsfeld quote about “known and unknown knowns and unknowns”. I think this is a fitting analogy for where marketing is in terms of dealing with big data and, even more, social media.
One area that was talked about in several panels is that of customer privacy and how personal data, collected through various means, is used – and, more importantly, how consumer attitudes about its collection and use are changing. Clearly, the Snowden-NSA episode has made consumers more aware of – and sensitive to – the surreptitious collection of personal data and its unauthorized use by both government and industry. One question that marketers are dealing with in terms of collecting data about customers is, “Where do we draw the ‘Creepy Line’?” Tariq Shaukat of Caesars Entertainment said they used what they call the “Sunshine Test”. “We want to be sure that, if our customers find out, they won’t freak out.”
In addition, research presented by Laura Simpson of McCann Truth Central strongly indicates that consumer willingness to share personal information with brands is declining. According to Simpson, consumers lump data privacy issues in with concerns about identity theft. So, stories about the latter also negatively affect attitudes about the former.
Another issue around collecting consumer data is the growing awareness by consumers that their information has value – and their expectation that they should be “compensated” for providing information about themselves. Often, that compensation is simply improved, more personalized service – especially when the information is not sold or exploited outside of the context in which it is given. In other cases, it may be in the form of special discounts, rebates or other offers. But, overall, the bottom line was that the consumer’s bottom line on giving up information is a rapidly moving target and brands must be aware at all times of where it is, and take pains not to cross it. As Amit Shah of 1-800-Flowers observed in the panel on real-time marketing, “People are forgiving in marketing, but not in how their data is used.”
Control: The customer must feel in control of the information they give and how it is used.
Choice: The consumer must be able to freely choose to be in the system or not.
Commitment: The company must have a strong commitment to protecting the privacy of their customers
Compensation: The consumer must feel they are being fairly compensated for the information they are giving up about themselves.
Social Media, are, of course, both a source and a target of big data in the sense of consumer data being used to target ads on social sites and a means of gathering information about actual and potential consumers of a brand. But, social media are also a powerful means for consumers to share information and opinions amongst themselves about a brand and, indeed impact brand identity. An audience question pretty much summed up the issue: “Given the impact of social media, who now controls the brand? The company or the customer?” Sheryl Adkins-Green CMO of Mary Kay answered, “We tend to see it as ‘joint custody’.”
While the level of true understanding of the profound effects of social media and networking on brand image is evolving in companies, it was clear that some companies still see it as another medium for one-way communication, while others use it to engage in actual two-way communications and relationship building with their customers. Esther Lee, SVP of brand marketing, advertising, and sponsorships of AT&T said, “Customers will have conversations about your brand [on line], and you can’t control that. What is important is how you “be” the brand. We need to make sure that the brand is what we want it to be.” For example, a brand’s online presence is responsive to the needs of the consumers. Customers must be able to seamlessly navigate a brand’s website and have their needs met.
Another aspect of online marketing and engagement that generated discussion was that of how to measure results from the use of social media. Marketers have to be careful not to be misled by what some referred to as “vanity measures” (e.g., number of “likes” or “followers”). Conversion to sales is what it is all about at the end of the day according to more than one panelist. However, as another speaker pointed out, if you only look at the number of conversions and don’t attend to their quality, “You are likely to end up with a number of one-night stands”.
An area that was addressed in several sessions was what could be called “Immediacy Marketing” – marketing that takes place in real or near-real time (“real-time marketing”) as well as the need for companies to rapidly respond to changing conditions around their brand in the social space.
One issue was that of relevance, both in terms of the content of the message as well as the context in which it is delivered. These variables can be critical in determining the impact a message will have. Amit Shah of 1-800-Flowers gave an example of using location tracking and seeing that a consumer has visited a jewelry store (relevance of place). If the visit happens in mid-January, it could mean anything (getting a watch repaired, returning a Christmas present, etc.) – and a mobile ad about flowers may or may not be appropriate. However, such a visit the week before Valentine’s Day (relevance of time), likely signals something very different and an ad for flowers could be extremely timely. While some contexts will be obvious, others won’t be. Understanding the variables affecting consumers’ varying receptiveness to a particular type of message is an area where developing both quantitative and qualitative insights is of increasing importance.
A second issue was that of simplicity. Especially with mobile marketing, simplicity of message is critical. The rise of the 6-second video, for example, forces marketers to keep the message simple. But this is not new. As one speaker pointed out, “Simplicity is an old rule but we seem to need to learn it all over again with each new medium. We have long known that the best billboard message is six words or less but we continue to see that rule ignored.”
Another demand of “immediacy marketing” is the breaking down of the corporate silos that create communication barriers between departments that must work together in order to quickly execute any effective marketing program. Legal, IT, and finance, as well as the traditional divisions within marketing (e.g., Mobile, Social, TV, promotions, etc.) all must work together seamlessly if a timely response to the changing marketplace is to be made. One approach is to have “war room teams” made up of representatives who are empowered to make key decisions from each of the relevant departments all in the same room when timely decisions need be made. Regardless of how it is done, participants on several panels made it clear that the old structures were no longer adequate to meet the needs of brands in the new and rapidly changing world of marketing.
The true challenge for marketers –and companies — was summed up by Douglas Rushkoff, author of Present Shock, in an overview video produced by The Economist:
“Marketers still look at net-enabled humans as ‘consumers’. They don’t understand them as employees, or shareholders, or a public, or citizens, or humans. They understand them as consumers. So they’re using the lens of the direct marketer rather than the lens of the true social media innovator. And that means they are limited to trying to recreate the effects of the past through a new medium rather than generate truly new forms of engagement.
“There’s ways for marketers to use interactive media and social media but they have to understand that we’ve returned to really a medieval-era bazaar. It’s a nonfiction space where people are now talking about product attributes. They want to know, ‘Where are these cookies made? What is in them? Are they organic? What’s the supply chain? What’s the labor like? What’s the environmental footprint?” Not, “What’s the name of the elves in the hollow tree that supposedly baked them?’”
In short, the impacts of the new social and interactive media environment go far beyond marketing strategies and can impact the very nature of how companies are structured as well as how they think about themselves, their brands and, most importantly, the users of their products and services.