Facebook Advertising. P&G Failure.

Facebook AdvertisingI just read an interesting article in the Wall Street Journal about P&G (the largest advertiser on the globe) and its experience placing Facebook advertising in front of a highly targeted audience.

It seems that Proctor and Gamble had very limited success with the venture so far. It seems counterintuitive that it would not work as expected. Consider this:

P&G Facebook Advertising

The P&G brand Pampers is able to target new moms and pregnant women on Facebook. The very audience it NEEDS to excite to purchase. Feels like a no brainer. But P&G found the resulting sales less than exciting. As a result, while not giving up on Facebook, P&G is going to increase its TV advertising next year.

What is missing in Facebook advertising?

In other words, Proctor discovered that broad based rather than strictly targeted ads work better. What it is not grasping fully is WHY.

For most of the marketing world, P&G wrote the book on branding. In fact, it doesn’t really understand brand very well. What it invented and took to the level of a science is brand management. The entire marketing focus is on brand teams and the tight relationship between the brand managers and the product.

The reason the Facebook initiative is not working all that well is because the types of advertising that marketers create on Facebook turn out to be product ads and not brand advertising. The snippets are akin to billboards. They focus on efficacy and pricing, not on branding.

I say this because contrary to what P&G has made into its culture, branding is not about the product or HOW it works. Branding is about WHY it matters to the target audience.

Jif Facebook AdvertisingBranding works

The greatest brands in the world are, at their core, a reflection of the customer they need to influence. The greatest promise that Pampers can make is not how dry the baby is when you use Pampers (after all, every disposable diaper keeps the baby dry). It is about WHO the mom IS when she uses Pampers. How a Pampers mom is different and better than those that use a different brand.

Think of Jif peanut butter. Sure it promises that it tastes more like fresh peanuts but the brand promise that choosey mothers choose Jif is the driver of preference. That’s the sort of brand message I am speaking of.

To make Facebook advertising work for marketers, they need to have a MORE emotional message than they do in virtually every other medium. Facebook users have the attention span of a gnat and you must grab them in the gut to get them to invest in a message more intrusive than a billboard or coupon.pampers Facebook Advertising

If the medium is the message, then P&G must be better at selling the brand and not the product. It’s a brave new world of marketing and traditional advertising is becoming less effective. Advertisers struggle to become more effective and targeting sounds like the answer. It is.

But it requires a rethinking of what branding IS. The halls of P&G must stop harping on the agencies in the Proctor tent with the uniform call of “where is the demo” to an up-to-date demand of “where is the prospect’s emotional needs?”

Affinity programs and why they fail.

Affinity Programs Rarely Create Affinity

Almost all businesses from retailers to transportation companies have affinity programs designed to foster brand loyalty. Most work very poorly and often are simply a table stake in the category. Retailers, manufacturers and airlines will often find that their customers belong to a host of affinity programs that most certainly includes their competitors. (Affinity programs are an extension of CRM. Read an article on CRM here)

Affinity programs are similar to coupons

In many ways, discount coupons can be part of the affinity programs because they are all aimed at fostering trial and gaining repeat business.

As retailers know all to well, this sort of affinity program has severe limitations because consumers all begin to regard the couponed price as the real price.

Affinity programsAs a result, a business built on couponing lowers the standard price point significantly and reduces margins. P&G (Proctor & Gamble) are victims of this game. As margins reduce so do advertising dollars. What these packaged goods giants are left with is poorly supported brands that rely on a discount price for business success. Not a very good model to say the least.

I have written extensively about the airline industry in the past. Nowhere are affinity programs more a part of day-to-day business and many are utter failures. Often times the programs seem more like a criminal sentence rather than a benefit. Let me give you a personal case in point.

Airlines use affinity programs as a cornerstone of customer relationships

I have frequent flyer accounts on a multitude of US airlines. These affinity program accounts promise advantages on international carriers as well because of the alliances (like the STAR Alliance, SKYTEAM or ONEWORLD Alliance). I am a perfect example of a prospect who belongs to a host of competing programs. How then do the airlines try to compete for my business? In a word—Status.

United Airlines affinity programsWhen you fly as much as I do, gaining status on one or more airline is not that difficult. The key number to remember is 100,000 miles. Generally, at that threshold your status is considered premier. Don’t confuse this with PREMIER STATUS, which is an industry designation. I am speaking of having gained a premier position in status over other flyers. And this is where the trouble begins. The promise of status is very different from the reality.

I have flown over 2.5 million miles on United Airlines. As a result, I earned their top tier status. I am officially known as a Star Alliance, 1K Gold Member. This means I have flown over 100,000 miles in the previous calendar year. Sounds impressive on the surface but the system really falls apart after that.

Global Services. The Pinacle of Affinity Programs

On United Airlines they have a special status known as Global Services. If you have ever waited in your designated line at a United gate you have probably heard this group called to board the aircraft after people with disabilities that need extra time to board and in conjunction with military service people in uniform. United does not disclose how they formulate the invitation to Global Services but there are plenty of blogs around that speculate in a revealing if not an accurate way on just how they do it.

Global services is the ultimate affinity programTwo years ago, United awarded me with a Global Services member invitation. Benefits included first on the aircraft boarding, upgrades to first class 72 hours before your flight based upon availability. A separate phone line to call to speak with a Global Services representative. No fee charges to change a reservation. Hotel rooms paid when needed —regardless of the reason (including weather). And if possible, they will even pick you up at a connecting gate with a tight connection and whisk you off directly to the next gate in a company automobile. I have even had them bump a fellow traveler from a flight in order to guarantee me a seat in a last minute change.

Affinity programsSounds pretty good. And it can be. The problem is in how United manages the Global Services membership. It turns out that Global Services status is not based upon miles flown but rather the revenue you generate for the airline— in comparison to your peers.

This past year, for example, I flew my usual 100,000+ miles on United. I also have a United credit card upon.which all of my travel is booked. My Hilton Honors program is linked to the United account (Hilton touts it as double-dipping) and even my Hertz rentals get logged into my United Mileage Plus account.

This year, United took away my Global Services status. The reason? Because their revenue was down on my total spend. I’m now just a 1K flyer.

I know, who am I to complain. Well I’m going to complain and I’ll tell you why. I am a human being and we all feel about our privileges in the same way we feel about a coupon price being the REAL price. Once we have it we feel punished without it.

How should affinity programs measure affinity?

What United did not recognize was the value of my long term business with them. They have no metric for understanding it and as a result will be the ultimate loser in this game.

American Airlines affinity programsAs a 1K, I’m on upgrade lists but I rarely get them because they continue to discount the first class seats up until the time of departure and award the remaining seats to any and all Global Services members. I no longer have a designated customer service rep to help me sort through the myriad of travel issues that accompany this many flights per year. On top of this, no one cares if my connections are tight or that I miss flights because of delayed connections. Well, almost no one because my clients and I care. It’s just that United does not.

Affinity programs

What United does no know is that I also have a premier status on American Airlines. I am an Executive Platinum with American and United just said goodbye to  all of my business.

Here is a bit of history. My local airport is a small regional one in Greensboro NC. Aside from a few select destinations like New York, Chicago, DC, Atlanta, Philadelphia and Dallas all flights require a connection. Many years ago I started flying with US Airways because they had the most connections out of Greensboro. I could get almost anywhere in the nation via a short 20 minute connecting flight through Charlotte NC.

As my international business grew, I began to fly more and more on US Airway’s STAR Alliance partner United Airlines because they had great connections internationally through another partner airline Lufthansa. Over the years, I flew more and more connections through United as opposed to US Airways because the hubs of Dulles, O’Hare and Newark worked as well for me as connections from Charlotte.

This seems to happen to everyone. Affinity Programs lose relevance.

What happened to me, as often happens to frequent flyers, is that my status with United grew and I tried to consolidate more of my flights with the airline to gain greater status. In an odd twist, United began to cut service from Greensboro at about the same time they acquired Continental Airlines.

United eliminated direct flights to Houston (a Continental staple flight), took on the Newark connection route and eliminated all real United flights from my airport. In its place they flew only United Express flights from GSO (as Greensboro is known) which utilizes small regional jets and are owned by companies like GOJet and other regional carriers. These flights were smaller and more cramped but the longest leg of the connection was Newark and you can put up with anything for an hour and a half.

Affinity programsThe next shoe to drop occurred when US Air merged with American Airlines, thus eliminating the option of any connecting flights through Charlotte. American is part of the ONEWORLD Alliance and not the STAR Alliance. At the same time as this merger, United stopped flying jet aircraft between GSO and Dulles and replaced those flights with a turbo-jet WW2 throwback that added 20 additional minutes to the flight.

Then United cut back on the frequency of flights eliminating the possibility of caching an afternoon flight out of DC for any international flights. Reliability of the on-time arrival of the connections was so bad that I took to always taking the earliest flight. Regardless of the length a layover I flew early because I was consistently missing my connections on United Express from Greensboro. To be safe, the best bet was first flight out in the morning on flights that originated from GSO.

Affinity programsThrough all of this turmoil, I remained loyal to United because of my Global Services status. They bailed me out of many a tight squeeze by meeting me at the gate and shuttling me to my connection. They provided me with the flexibility of flights by booking me on competing airline flights when the connection failed to work as planned. They treated me as if I mattered. As a result, everyone in my company flew United because often my colleagues fly with me. United failed to measure this value.

Affinity programs and the nNFL Baltimore ColtsThis past January, when United dropped me back to 1K status I gave up my loyalty. The reduction in status did not make me want to try to book more flights with the airline in an attempt to regain status. It had the exact opposite effect. It made me angry with them. I felt like a Baltimore Colts fan who had an emotional connection to a team that left me stranded in the middle of the night.

Suddenly I realized that my belief that I mattered to them was a figment of my own imagination. The affinity program was completely one-sided. They had no affinity for me.

In measuring my value to the airline, they failed to take into account the sacrifices I made to remain loyal. They also failed to calculate the value my fellow employees brought to United by flying with me. They completely missed the point. Affinity must work both ways or it simply does not work.

The brand opportunity for affinity programs

Here then is the brand effect of affinity programs; the value of a member needs to be calculated as a lifetime benefit not a short term measure. Once a benefit is granted it should be considered long term because anything less than that is viewed as a punishment. So the threshold of premier benefits needs to be a bit higher and the forgiveness of not meeting that criteria once gained needs to be significantly lowered.

Cvs affinity cardIt is possible that all affinity programs are incomplete or failed attempts at fostering loyalty. Often they begin to feel more like handcuffs than they do a life-line. The very act of specialness always requires that many be left out.

Think about this for just a moment. How special would it feel to be a premier member only to find out that everyone had the same status and boarded at the same time? You see the conundrum. Signaling out specialness is a double edged sword. It must cut a bit but not so much that it hurts.

Affinity programsThe airlines are in deep trouble. Currently, their revenues are up but that is due only to the dropping cost of fuel. They have never understood the costs of doing business and they continue to miss the value of customer loyalty. For the airlines the battle is defensive not offensive. They struggle to maintain loyalty and have very little to offer in the battle to steal market share.

To make up for this they have created affinity programs that express no love for the customer or prospect and reward only short term investment. They have never developed a metric to understand real value and fail to measure and reflect the sacrifice the member has made to remain loyal.

We have many choices in today’s world and most of us chose based upon short term values. Businesses, or rather brands must have a longer horizon. If they do not they become prisons rather than coveted havens.

 

Airlines and thier markets

The retail category market study

The worst marketing. Airlines.

Brand names and brand naming

Brand names to increase preference

Brand names and brand namingOften as not, rebranding involves a new name. This is because most existing brand names arise organically. They were product, corporate or brand names created to reflect a value or need that existed at the time of the brand’s founding. Often, when we look at the names, they seem like a time capsule reflecting an earlier epoch.

Think about a few of these brand names and you will see exactly what I mean. Electrolux, Jiff, Tang, Duncan Hines, Aunt Jemima, Polaroid, Tupperware, Wonder Bread and Pepsi are all brands whose name alone indicates the era the brand name found its way to the market. Some feel dated because we are less familiar with them. Some, like Pepsi, are so familiar that the brand name is not given a second thought in terms of intrinsic meaning. Electrolux (including its logo script which was recently updated) looks so dated that it has a slight resurgence of cool.

Brand names and PampersWhen we create a brand name we think more about the emotional importance of the product to the target audience than we do with any form of corporate identity. This is because our understanding of the emotional properties in brands and brand naming has changed.

Today, we know that brand purchases are all a part of the customer’s self-identification. We all tend to favor brands that in some way reflect back to us an image of ourselves. The most powerful brands allow us to find ourselves in that value. Simply put, we like to buy things that are in concert with our own expressed values and precepts. We appreciate brands that reinforce our ability to say to ourselves (as opposed to showing off to others), “Yes, I want to be THAT.”

Brand Names in the Diaper Category

So let’s take a look at the disposable diaper category (called Nappies in Europe). This category dates all the way back to the 60s and, in some ways, the brand names reflect that. However, the naming tried to own an emotional intensity that best described the value and self-description of the target market.

For anyone who has had a baby, you know first hand the emotional changes that arise. Suddenly, your own life is less important and the care and nurturing of that little infant becomes your life’s highest emotional intensity. (This is before they become teenagers and you want to kill them!)

So it made sense that diaper brand names should reflect this highest emotional intensity.

Think about this: Pampers, Luvs and Huggies all represent a hook into that emotional chord. Of course, the purpose of the brands in those days was not stealing share from one another but in the conversion from cloth diapers to disposable ones.

brand names and huggiesIn many ways, the early converts had to battle the cognitive dissonance of leaving a labor-intensive process (collecting the used diapers in a pail, washing the cloth diapers, disinfecting them and, in many cases, boiling them) with simply opening a package and then throwing a soiled diaper away. Process often is translated in terms of importance and it took years for dependence on cloth diapers to go away.

brand names and  LuvsThe names are interesting. Pampers was a very intelligent means of telling the purchaser that they were in fact pampering their child (meaning taking better care of them than the cloth standards). Huggies, which came along after Pampers, was an attempt to equate the disposable diaper with hugs and kisses (similar to the Pampers story). Luvs needs no explanation but is certainly a dated name that sounds rooted in the 60s and 70s.

The problem these brands face today is that the purpose for which they were created is no longer viable. None of them need to convince cloth diaper users to switch. Instead they need to steal share from competitors and this is difficult when all the brand names claim the same turf.

I believe it is high time for a flanker brand to be launched by either Kimberly Clark (the makers of Huggies) or P&G (which makes both Pampers and Luvs) to reflect this new market flux. I believe a newly branded flanker in this category could increase its relevance and therefore gain preference on an aging category.

Today, parents do not need to be reminded by a diaper that they love their baby. Instead they need to find an emotional reason to choose a brand beyond just price, fit and dryness.

What do you think? What do the brand names mean to you? How are you choosing between diaper brands?

Read an article we wrote about diaper market share here

Doritos-flavored Mountain Dew — Really?

There’s an age old adage I am fond of: “Because you can, should you?”

The phrase itself implies that you shouldn’t automatically do everything you might be thinking of doing. The result is not always beneficial nor additive.

And so, when I read that PepsiCo is trying out Doritos-flavored Mountain Dew on college students as a possible future blend, one of my favorite lines quickly came back to mind.

Aw, hell. Let's just combine the two and get it over with.
Aw, hell. Let’s just combine the two and get it over with.

It’s not that I don’t like Doritos while watching the game, or a Mountain Dew here or there (okay… I’m not a big fan of the soda). But really, mixing the two sounds revolting.

Said the folks over at PepsiCo: “We are always testing out new flavors of Mountain Dew, and giving our fans a voice in helping decide on the next new product has always been important to us.”

Okay, but is a concoction like this — one that is a worthy rival to say, “Freckle Juice” – worthy of any time or money at all? I mean seriously. I like beef jerky and root beer but I know better than to mix the two. I’d hope PepsiCo may have had the brains to realize that as well.

Added PepsiCo: “We opened up the Dew flavor vault and gave students a chance to try this Doritos-inspired flavor as part of a small program at colleges and universities.”

Thank God I am long out of college. I’d want no part of this taste test.

The P&G branding model’s fallout

Proctor & Gamble, the nation’s largest consumer product company, is getting rid of a whopping 90 of its brands.
The company said that the brands it will be keeping make up 90% of its business, meaning this is a crack at cutting some of the underperforming brands and streamlining its offerings to satisfy investors.

P&GIt’s the right call, although for an unusual reason. P&G has always had a unique model as a house of brands (a house of many brands), and its approach at branding has been to outspend the competition and promote the product benefits.

In full disclosure, I’ve done some work for P&G in my long ago branding past, including shepherding Tide as well as Pampers diapers.

The way P&G practices branding is not a model to follow. Marketing only product benefits only helps you if you are the market leader and the rest of the category is also marketing product benefits. That way, you become the default choice.

That worked for P&G because it had the resources to basically buy market share by outspending the competition, and introducing fighter brands with large budgets that could keep some lower cost competitors out of the market.

What’s happened now is that P&G has so many brands and it has spent so much money on those brands that it’s affecting its bottom line in a negative way. To keep up the same model, it has to cut brands or there’s money rushing out the door with low return.

Few should ever adopt the P&G model. It’s not branding. It’s throwing money at the problem and P&G is paying for it now. Instead, you can steal market share by being smarter than the competition – marketing the emotional triggers that say why those product benefits are important – rather than just spending more money.

It seems the competition of those failing P&G brands are doing just that.