Okay, so we just finished talking about marketing math 101.
So hopefully that's a good framework for you guys to think about when you think
about what’s going to work in terms of execution, and what’s not.
One other thing that I want to overlay in the introduction that’s going to be very,
very important in terms of execution, is this whole idea of digital marketing.
So using the devices enabled by technology, the Internet, and
mobile phones to make marketing more effective and more efficient.
So a definition of digital marketing, you just look up on Wikipedia is
Digital Marketing is the use of Internet connected devices to engage a customer.
Which is all well and good, but the key thing I want us to remember is,
it's still marketing so we still have to have the right brand,
the right promotional message, the right customer strategy and so on.
So, marketing in fact is probably more non negotiable than ever.
But because of digital marketing,
if we get things wrong that word is going to get out more quickly.
So just a couple of other examples of why digital marketing is interesting and
why it's going to be important to execution.
First of all, there's a notion of something called Social Commerce.
Commerce has never been more engaged with multiple individuals than it is now.
So most of us, certainly in the United States, before we try new products or
services, look to reviews often by complete strangers.
Could you imaging going into a city and going to try a restaurant without first
checking the reviews on something like Yelp.com or maybe going to Open Table or
another one of those devices.
Would you buy a book on Amazon without looking at the reviews first?
So commerce is much, much more social.
People taking cues from other people, both friends and strangers, and
we'll be talking about that.
The second thing that's really,
really interesting with digital marketing is probably more than ever,
there's now an ability to really target people at a micro-level.
Based on their browsing behavior on the Internet, based on how they use social
media, and using things like big data to discover who it is that you are and
what you're doing and to send you messages that are more and more precise and
more and more engaging.
That's the second important trend and
that'll be coming through some of our discussions later on too.
The third thing about digital marketing is very,
very interesting as it's never been easier to experiment.
So, say my friend Chris and I have a new business selling shoes on the Internet and
we don't know whether we should make the website blue or red.
Well, we can just try it out.
In fact, an experiment like this was done at the Wharton School not so
long ago where we were getting people to come to a website to choose
different kinds of automobiles, and
what we noticed if the background of the website was red and there were almost
small little flames in the background, people who went to that website were
more likely to choose automobiles that had high ratings on safety.
Perhaps somehow the red color was making him think things were dangerous.
On the other hand, we sent people to a website with a green background,
looked a little bit more like money and dollar signs.
Those people were much more focused on automobiles that were better
value for money.
So those things can be very, very easily tested out.
And in fact, some data suggests that there's been more experiments run in
the last year, 2012, than all of the prior years put together.
So those are three very important trends in digital marketing,
social comments, digital advertising and behavioral targeting, and
then the ability to experiment.
Okay, so now let's transition into the first of the assets that
we have as marketers to execute on, that's the brand assets.
So I'm just going to review some of the things that Barbara talked about and
add a couple of additional ideas that become important when you execute
in a digital environment.
So, first of all, just to motivate us as to why brands are important, again,
continuing from Barbara's theme, we notice now that about half of the assets
that are held around the world are non-tangible assets giving value.
Think of a company like Google.
Google recently celebrated its 15th year anniversary, and
is one of the most important brands in the world, not because of his
huge factories and huge physical plant, but because of his intellectual capital.
That's kind of the idea there.
Second thing is, about one third of the value tied up in the global stock markets,
studies have shown, are due to brands and the premium that people pay for brands.
And then thirdly, my colleague here, Jeremy Siegel,
who's a finance professor at the Wharton School, wrote a book called Stocks for
the Long Run, in which he looked to performance of stocks over
a 50 year period, from 1953 to 2003 on the New York Stock Exchange.
And one thing that he found was that brands were very strong, and
why we perceived as valuable by customers actually also had stocks that
outperformed the market.
So that's three interesting pieces of evidence about the brand asset.
Of course as Barbara mentioned to you,
branding is also perception as much as it is reality.
So behind me on the screen, there's a shot of six brands of beer,
some of them you might recognize.
And this was a study that was done way, way back in 1964,
believe it not before most of us were born I believe.
And this six brands of beer were given to people in paper cups.
Brand A was Pabst.
Brand B was Colt 45 and so on.
And then people were asked to drink these brands in paper cups.
And afterwards, to answer the following question,
how similar there's brand A to brand B.
So A is Pabst, B is Colt 45, but
they don't know that cause they're drinking out of a paper cup.
And what you notice there is all of those brands from Pabst around to Budweiser,
were all perceived by customers drinking from paper cups, to be almost the same.
And yet that other guy, all the way over to the right on the perception map,
Guinness, which if you drink Guinness it's a dark, heavy beer.
At least they could figure out, well, gee, that one's different.
Now what was really interesting when this experiment was repeated,
here's the next chart, where people were drinking out of the bottles, and asked how
similar they thought these beers were to each other, we get this big spread.
That's the difference between perception and reality, and the importance of brand,
all of those great things that Barber was talking about.
So just quickly.
Again these are the top brands in the world as mentioned by Interbrand in 2013.
This survey's just come out.
The top ten that you see there, it's the same top ten as last year but
the order's changed a little bit.
For many years Coca Cola was the number one brand in the world.
Now Apple is the number one brand and number two is Google.
I’m not saying there’s too much you can do with this information, but
it’s kind of nice to see as a marketing person.
We will be talking about those brands, and of course also our focal brand and
family of brands for the course, Quidsi.com.
So now I’m showing on the slide the family of Quidsi brands that we've talked about
a little bit as we've gone through.
Diapers.com, Soap.com and so on.
So in addition to those kind of famous brands
these new brands are brands that we'll be talking about.
A couple of others that we're going to spend some time on as well.
Warby Parker, I'd encourage you to go to the website of these brands.
Warby Parker is a company that's disrupting eyewear.
Harry's is the shaving company that I mentioned earlier.
Bonobos is a men's clothing company here in the United States that does some
interesting online/offline/omnichannel strategy that we'll be talking about in
a subsequent session, and, of course, diapers.com.
So what are some additional things that you do when you develop a brand in
a digital environment and you try and
execute on all those things that I haven't talked about.
Well, just going back to basics, you think about your brand goal, which is to affect
people's heart, mind, thinking and feeling, and, sometimes, actions.
So, you want to change the way people feel by showing them certain messages.
You want to change the way they think.
And, sometimes, you want to get them to do stuff.
So, let me give you some examples, there.
So Google, and again I'd encourage you to go to Google and
Google this, recently ran an ad campaign in the United States called, Dear Sophie.
It was a very heart rendering campaign.
If you watch the video you might want to have some tissues with you because it's
a beautiful story of a child being born and a father essentially sending e-mail,
making YouTube videos and communicating with his daughter through her life using
all of the products that Google has, now why is Google doing that?
They're trying to build an emotional connection to make you think that they
really interact with you in a much deeper way than just purely through search.
So that's an example of a brand,
using a digital marketing campaign to try to picture your heart.
Thinking, one of my favorite ones here, this is an old one, but
we all have different ways of getting our protein.
Maybe we like tofu, maybe we like fish.
If you're a Kiwi like me, you like lamb.
Perhaps you like beef, but anyway, it wasn't so long ago that studies
were done that showed that white meat was probably better for us than red meat.
So clearly, chicken and fish are on the white side.
Beef and lamb are probably on the red side.
But if you’re pork, now which way do you go?
You’re more like the beef and lamb, or more like the fish and chicken?
And so, some very clever marketers came up with the slogan,
pork, the other white meat.
So now when I think pork, I think white.
White is good. I’m sure they got a good sales
lift out of that.
That’s an example of changing your mind.
