Marketing lessons for brands from the News of the World

 

 

 

 

 

 

 

So, after a frenzied seven days, News International closed the door on one of the world’s oldest and most popular newspapers yesterday.

At the time of writing this blog, none of the senior management responsible for one of the darkest periods in British newspaper history have fallen on their swords, but a loss making though popular Sunday tabloid has been shut down, with the loss of hundreds of jobs. And the rumours swirling even before Thursday’s BBC Question Time were that the paper will be quickly replaced by The Sun on Sunday.

From a marketing perspective, it was interesting to watch the discussion unfold as to the reaction of advertisers, their brands and their promotion using channels like tabloid newspapers to access huge demographic groups.

In some cases, it could be seen that first movers like Ford made the decision to remove their advertising with ethical considerations in mind. But in others, surprisingly brands including The Cooperative waited too long, wanting to see how far and how deep public anger would run before clarifying their position.

Marketers must take some critical learnings from this sorry episode.

1. Chose your marketing partners wisely. Your reputation and integrity are intrinsically linked once you do.

2. Whether it is advertising, direct marketing, sponsorship or PR, be mindful that the Internet and portals like Twitter have changed the game forever, transferring power to the public. We saw this week the ease of viral spread of online petitions, lists of target companies,  pre-populated emails and tweets.

3. Deal quickly and decisively and communicate your position and intentions as transparently as you can. Some advertisers had to run adverts in the magazine supplement which was already printed and were quick to advise.

4. Remember corporate social responsibility isn’t just a fad to be included as a bolt on in your marketing plan. Increasingly, it is a critical point of difference and the companies that embody it stand head and shoulders apart from those that merely pay it lip service.

Call me cynical, but I wonder if brands like Halifax, T-Mobile, Virgin and Tesco didn’t just switch their allegiances to other papers on Sunday AND continue to work with the News International stable. Waiting for The Sun on Sunday.

Yes it’s time to make a stand, but as we’re seeing, business is still business. Will marketers learn anything and even remember all this in twelve months time? I’m not so sure.

Image: The Telegraph

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Why operating in the niche might be flawed

The 2011 Sunday Times Rich List was published this weekend and unsurprisingly, the billionaires leading the pack, for the most part, hail from businesses that touch the lives of millions.

Most of us can only dream of creating this much wealth and it is hardly a great lesson in entrepreneurship when you consider the following:

1. Lakshmi Mittal, steel, worth £17,514m (down £4.936bn)

2. Alisher Usmanov, steel, £12,400m (up £7.7bn)

3. Roman Abramovich, oil and industry, £10,300m (up £2.9bn)

4. The Duke of Westminster, property, £7,000m (up £250m)

5. Ernesto and Kirsty Bertarelli, pharmaceuticals, £6,870m (up £920m)

6. Leonard Blavatnik, industry, £6,237m (up £3.237bn)

7. John Fredriksen and family, shipping, £6,200m (up £3.45bn)

8. David and Simon Reuben, property and internet, £6,176m (up £644m)

9= Gopi and Sri Hinduja, industry and finance, £6,000m (new entry)

9= Galen and George Weston and family, retailing, £6,000m (up £1.5bn)

11. Charlene and Michael de Carvalho, inheritance, brewing and banking, £5,400m (up £1bn)

12. Ravi Ruia, energy, £4,900m (new entry)

13= Sir Philip and Lady Green, retailing, £4,200m (up £95m)

13= Hans Rausing and family, packaging, £4,200 (up £200m)

15. Joseph Lau, property, £3,937m (up £112m)

16. Kirsten and Jorn Rausing, inheritance and investment, £3,900m (up £400m)

17. Anil Agarwal, mining, £3,810m (down £290m)

18. Vladimir Kim, mining, £3,500m (up £340m)

19. Sir Richard Branson, transport, internet and mobile phones, £3,085m (up £485m)

20. Nicky Oppenheimer, diamonds and mining, £2,900m (up £1.4bn)

What can we learn from this?

1. Real financial success takes time. Businesses that last are scalable and durable. Richard Branson started in records in the 1970’s but it is now his Virgin Atlantic business that keeps the whole group ticking over.

2. Have a decent target market to go at. Finding a gap is one thing, but ultimately looking for a market in the gap is more important than looking for a gap in the market. The Hausing family is behind Tetrapak. Any liquid kept in your fridge over the last 10-15 years has been in one of their packs.

3. You need to go national, or better, international. Companies that, for example, benefitted from the UK public sector gravy train are now realising that they should have developed their business and reached further afield when they had the chance. The company owners that have been working internationally have been relatively unaffected over recent years.

4. You need resource. Scaling up costs… in terms of people, equipment, and technology.  But smart companies, like Mittal, plan capital expenditure over the long term, calculating future demand and spreading the investment.

Are you operating in a niche and running out of customers? You may need to broaden your horizons or re-evaluate what you offer and who you offer it to.


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Improving marketing perception in your boardroom

Helen Edwards wrote a fantastic piece in Marketing recently (28th July) musing on how Peter Fincham took the top marketing role at ITV despite having no marketing qualifications or discernible experience from his time in broadcasting.

The fact he will now be responsible for all marketing and research budgets at ITV demonstrates the continued lack of regard given to marketing in Britain’s boardrooms. Helen pointedly argues that the same would not be the case if they were looking to recruit senior commissioners, finance directors or operations directors.

As a qualified CIM member with fifteen years experience from both sides of the client and agency divide, and a recently invested Chartered Marketer, I am frustrated when these situations arise, but they don’t surprise me.

In the real world, I come into contact daily with businesses where the owner, managing director or sales director hold the marketing reins. Sadly, this is often to the detriment of creativity, high impact (even daring) campaigns and frequently without the experience to properly brief and plan integrated marketing campaigns effectively.

This jeopardises the success of the client-agency relationships because at the core is a fundamental lack of regard for effective marketing.

So what has caused this and how can we fix it on the ground?

The CIM has a role to play but Chartered Marketer status will take a generation or longer. But will the Institutes’s CPD program ever truly achieve a similar status to those operating in the fields of medicine, accountancy or engineering?

Companies have a role. Any in-house marketing roles should demand experience and CIM related qualifications. Companies miss out in the long term when they promote the unqualified from other departments. In b2b companies, there is often a career path that starts in the field and progresses internally marketing management. The problem with this lies in the fundamental differences in the salesperson – living in the moment, securing the sale, where as marketers arguably build longer term relationships and see the bigger picture from a customer, product, market and competitor viewpoint. Controversial but, I think, accurate.

Individuals have a role, especially the graduates and students of this generation. How we manage our brand management teams and agencies, the type of consultancy we outsource, and the manner in which we plan, implement and evaluate our marketing campaigns, will determine how seriously marketing is taken in the short and long term.

In her article, Helen poses a number of questions that might come up in an interview for a top marketing job and encourages the long list of editors, salespeople, IT consultants, HR and accountancy professionals who might fancy a go in marketing not to.

Few companies have marketing representation in the boardroom, it is our responsibility to work to higher standards and secure our seat.

Image www.cogentis.com/au

Why the Top 50 UK Brands survey does little for b2b marketing (and me)

Marketing Week’s ‘Top 50 British Brands’ made interesting and confusing reading to me over the weekend, not least because it was almost entirely dominated by consumer focused brands.

Drawing on the findings from the Brand Finance valuation survey, the list features the 50 ‘most valuable brands of British origin’ and suggests that British business is on the up as these companies have increased their combined brand value from £166bn in 2009 to £199bn in 2010.

The top five are Vodafone, HSBC, Tesco, Orange and Shell. Clearly the survey’s findings were developed before the Gulf of Mexico oil spill as BP sit at 7th.

Call me a skeptic but don’t most UK marketers work in a business selling things to other businesses? Digging deeper, there are a handful of overtly B2B companies such as professional services firms PWC (8), KPMG (11), Deloitte (12), Ernst & Young (14), the mining group RioTinto (29), information and education provider Pearson (34) and security firm G4S (38), But I find the list and how it was created somehow disappointing from a B2B marketing perspective.

Why? Most of the remaining companies on the list operate in consumer and business markets, and muddy the waters with their marketing by trying to apply a common approach. Also, emotional scoring plays a big part in brand value metrics, and this is significantly more important in a consumer brand evaluation as opposed to the complex, multi tier, multi contact influencer approach required in business marketing. B2C and B2B brands should be treated separately.

When they’re not, we end up with a table that gives Vodafone and Tesco a much higher rating than Rio Tinto or G4S. But is this right or fair? Can we truly compare a business like Rio Tinto on similar metrics to a company like Vodafone and then rank them? Personally, I don’t think we can because they operate in different ways, delivering different needs to very different customers.

Expanding the argument further, here is the 2010 list of 500 ‘business superbrands’. How many are actually business superbrands, as opposed to ‘consumer with a business division’ to ‘true consumer/business hybrid?’ Again, I’m not convinced

Marmite sandwich box image courtesy of KitchenCritic

39 million users can’t be wrong

The BBC recently reported that over 39 million people in the UK now regularly use the Internet. That equates to around 60% of the population.  Of the additional 2 million users added in the last twelve months, half are over 50 years old.

Think about that for a minute. It’s spectacular. Most of these people use the Internet to search. To find information. Wouldn’t it be amazing if there was some way of communicating with them, engaging with them, harnessing their opinion and input into design and being in the front of their mind when they need what we provide?

There is. It’s called marketing. For years, marketing has been treated contemptuously as a cost rather than an investment in business. Companies that have splashed the cash and media titles that have ridden the wave have up till now convinced most businesses not to market. Sales Directors have been revered whilst Marketing Directors have been reviled.

But there has been a sea change. Marketing is getting a better name. Sure, there is still an element of spin and seduction involved. But to be seduced, a prospect needs to play along. They need to be interested. They need to have a problem or a headache that needs to be solved. They looking to be engaged with rather than being sold to.

What does this tell us? If you are solving problems, treating headaches and fulfilling needs, 39 million UK users are telling you that the Internet is the place to be.  So, are you here?

Image credit Surfing Computers

Hosepipe bans & lessons for business

When you are a business which makes half a billion in profit a year, surely continuity of supply shouldn’t really be an issue that risks serious damage to your brand reputation.

United Utilities, a business providing water to 2.5m customers in the North West of England (and which counts the English Lake District in its region) last week imposed a hosepipe ban and fines of up to £1000 on customers who are found continuing to use them.

The media and consumer rights groups have been vocal in their criticism of the company. There has been little significant investment in developing supply from the Lake District over a twenty-five year period, in infrastructure upkeep or in leak management.

They appear to be more interested in furthering their FTSE and global business aspirations and are more proud about the fact their business supports 25m people – thats 22.5m away from their core North West business.

As a United Utilities customer (no actual choice in that) it’s telling that the only communications I receive are either statements, letters to say my bill is increasing, or collateral designed to upsell other products like pipe maintenance and leak protection. I’m viewed solely as a revenue stream (pardon the pun).

United Utliities, like other major utility operators, has a contract of such colossal scale that it probably doesn’t have to worry too much about its reputation, as the barriers to entry for anyone hoping to succeed them are virtually unscalable. That it is a listed company at least provides some hope, but then again, as long customers can’t vote with their feet, will the share price be affected enough to drive change.

What can we take from this?

1/ If you’re not in a line of business where you’d benefit from privatisation and protectionism, you’d do well to find one.

2/ Be the best you can be within your core business before considering diversification or brand extension. Tesco didn’t risk their grocery business when moving into insurance, mobile phones, credit cards and banking.

3/ Communicate with, and keep customers happy. Lifetime customers who become advocates take a long time to create, but can be lost in seconds.

Is branding all that matters?

I watched the first instalment of Jo Malone’s High Street Dreams on BBC1 where the retail entrepreneur mentored two food businesses and gave them the opportunity to pitch to major supermarket purchasing teams.

I had been looking forward to it but came away a little disappointed as the entire focus of the project in both cases was to get the brand and packaging right. Sure this is absolutely critical but when you’re starting out, as both were, the key thing is surely to drum up interest and some sales to convince anyone to take a chance.

Check it out on BBC iPlayer and let me know what you think. This link won’t last for long.

When developing a product, there has to be a need (a ready made market) or a strong perceived need for it, and there have to be some very clear benefits for why it will sell.

I just felt the programme glossed over some of the more important elements to creating momentum around a brand, and indeed the cultural and organizational aspects of moving a business from your own kitchen to supplying a high street operation like Waitrose or Asda.

And just to square the cirle, I went looking for Muddy Boots burgers in Waitrose on Saturday, but there was no sign, and I’m assuming that the programme was made some time ago. A massive promotional opportunity missed there by everyone involved.

It brings the topic of brand into sharper focus. GyroHSR, an international B2B agency, recently staged a well publicised event with the question of whether ”Brand or Demand’ is the objective of marketing at its heart. I think brand is important, but it is definately not all that matters.

Minimizing social media risk

The brand building and sales potential that social media sites like Twitter, Linkedin and Facebook can provide to even the smallest enterprises naturally make them a very attractive addition to the marketing mix. But before you go off all guns blazing, opening your company, customer base, employees, products and services up to the world, make sure you are covered.

As the use of social media increases in work time and on workplace machines, employers and employees are facing increasing dangers and are falling foul of a rising number of legal precedents and need to protect themselves.

In recent months Virgin and British Airways staff have been sacked or suspended for activity on social media sites. And in a prominent High Court case, a former employee of UK recruitment firm Hays was ordered to hand over some Linkedin contacts nurtured during his time the company using company assets.

A survey recently conducted by solicitors Pannone reported in the Manchester Evening News last week suggested that 79% of companies did not have a social media policy, 62% failed to actively manage their online profile and 73% thought that staff spent too much work time networking online when they should be working.  66% of managers were concerned that the business could be damaged by inappropriate comments and content whilst 1 in 5 were weary of how openness on Linkedin could risk customers and staff loss. Breaches of confidence, data security, bad reviews and spurious claims were all major concerns.

But how do you minimize the risk?

1. As an employer, create a policy, even if you only need a statement. Social media should fall within your acceptable Internet usage policy, but be drafted with marketing and business development in mind.

2. Outline the benefits but be clear about what is and what is not permissible. Is access during office hours accepted? Is using office computers accepted? Make it plain that references to the business when using social media risks disciplinary proceedings if it is deemed to be negative.

3. Have visibility of who is active on social media, platforms they are using and, if necessary follow them to keep a handle on what they are saying.

4. Have a statement that clarifies the ownership of the outcomes of social media use (ie Linkedin contacts, blogs) when an employee comes to leave the company.

5. As an individual, be very clear about what you choose to post using social media. Once you post, you post to the world and it is very difficult, if not impossible, to retract.

Don’t risk your company’s hard earned reputation. Don’t risk your job.

A positive Budget for business?

Millions of words have already been written on the subject of the 2010 Budget. What we know in business is that we have been in the deepest recession in sixty years; one which has left a large number of skilled people unemployed, many companies out of business and an economy that is barely growing.

There was probably more hope than expectation in the run up to yesterday’s Budget statement. Remember, on the back of a grim recent economic period, we are about to enter into a General Election. If we’re honest we knew there would be little in the form of stimulus or giveaway with a huge blackhole in our national accounts to somehow fill.

That said, there were reasons to be cheerful. The cut in business rates will have a positive effect on scores of businesses and may even allow a significant number to continue trading and keep people in employment. Entrepreneurs have been incentivised to continue investing in UK PLC with a doubling of their capital gains tax relief. A new body will look to reduce the administrative burden associated with setting up and running a business. And there are a number of new investment initiatives, not least in manufacturing, which will provide some stimulus too.

It was a budget perhaps designed to appease business, and yes secure some additional Labour votes. It was inevitably thin on the deficit, and thin on the details on cuts required. From a business perspective it could have been worse, and better.

But, I think the best thing we can do is look ahead positively, focus on what we do well and do more of it, target our activity to our best and most profitable customers, and wait and see how takes on the reins of Government in May.