What if there were no more TV? FUTURELAB

Outline speech Bucharest Need kickass opener Advertising is Dead FUTURELAB

Actually…. FUTURELAB

Last Year

76% of consumers don’t believe that companies tell the truth in advertisements Yankelowich,2006 Last Year

“You can’t bore people into buying your product – you can only interest them” Last Year

Big Six study (US): People with DVR’s watch 12% more TV, yet 90% of them adskip (Germany : 88.2%) 78.2% of Germans are irritated by advertising, only 24% actually still watches it (GfK Marktforschung) 85% of Chinese stop watching TV during commercial breaks. More than half change the channel, while the rest do housework, eat, chat or use the bathroom. (McKinsey & Co.) In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.” (Jim Stengel, Global Marketing Officer, P&G) A US hour of prime time TV carried 21 minutes of advertising, Late Night network shows like Leno or Letterman carry 31:27 (TNS Media Intelligence, Q1 2006) FUTURELAB The Consumer is Tuning Out

“Today's marketing model is broken. We're applying antiquated thinking and work systems to a new world of possibilities." Jim Stengel, Global Marketing Officer P&G Last Year

Advertising Myths 1. Frequency is mostly not a driver for action 2. There is no golden rule about OTS Last Year

54% of US consumers avoids products & services which “overwhelm” with advertising (Yankelovich Partners) Last Year

Share of Voice?

Advertising is a tax you pay for unremarkable thinking Robert Stephens, CEO, the Geek Squad Last Year

With total transparency, how can there be advertising? Shotcodes in stores in Japan, telling you where to go to get the product cheaper A fucked company example Total Transparency

Prices aren’t what they used to be

Total Transparency

Lawyers

Doctors

Teachers

Most influential information sources in purchasing electronic goods? (TOP 3) CMO Council’s Retail Fluency Report, 2005 FUTURELAB What are we focusing on? Share of total adspend by medium (global) % 2008 forecast (March 2008)

People who live near train lines find ways to adjust to the noise ... Consumers have begun to treat encroaching advertising just like those trains. Now…

Banner blindness 1998!

“Online video ads are quickly becoming the medium of choice to drive both brand awareness and sales.” (2007) 67% of marketers report they will increase their social media advertising budget in 2009 “With young adults now spending on average six hours a week gaming, advertisers should be excited at how well their messages were embraced and the brands positively perceived” (2008)

Contextual advertising ...has just died

Advertising is dead – long live marketing Lets keep the patient alive a little longer

Procter & Gamble is placing radio-frequency identification tags on products at a Metro Extra retail store in Germany so that when a customer pulls the product off the shelf, a digital screen at eye level changes its message At least be the first! 

Marketing Sherpa Ad:tech survey % told by agencies to begin/increase viral video spend % of marketers advised by agencies to advertise in games/virtual worlds 62% 93% % asked to start/increase viral marketing spend on social networks 87%

Hmm – what’s this? Naah, cant measure it Isnt there a bit much? Sooo 5 minutes ago Hey, actually this is cool The Advertising Technique Hype Cycle

Is it all over?

It’s only just begun

The Attraction Model FUTURELAB

Attention Economy Reputation Economy

Relevance!

Reputation x Relevance x Engagement = $$$ Reputation Relevance Engagement

Reputation Relevance Engagement The Attraction Model FUTURELAB

Experience Listening Customers Reputation

perception 80% of CEO’s believe their brand provides a superior customer experience 8 % of their customers agree (Bain & Company) FUTURELAB

Online Reputation Romania FUTURELAB

The online reputation is just the tip of the iceberg But it can crash your boat FUTURELAB Source: Forrester Technographics® - 2008

Because if you don’t listen... So Listen!

Results 1 - 10 of about 11,600 from twitter.com for motrin. “hell hath no fury like a mommyblogger scorned” “With regards to the recent Motrin advertisement, we have heard you. On behalf of McNeil Consumer Healthcare and all of us who work on the Motrin Brand, please accept our sincere apology. We have heard your concerns about the ad that was featured on our website. We are parents ourselves and we take feedback from moms very seriously. We are in the process of removing this ad from all media. It will, unfortunately, take a bit of time to remove it from our magazine advertising, as it is on newsstands and in distribution. Thank you for your feedback. It’s very important to us.”

Reputation Relevance Engagement The Attraction Model FUTURELAB

Insight Communication Commerce Relevance

Understand what truly drives your customers FUTURELAB INSIGHT

Podcast and map downloaded Commercial – yet relevant

FREE TIX TO GREAT ADVENTURE Heard a rumor you can get 2 free tix to opening day weekend at Great Adventure amusement park 45000 tickets gone in 5 hours

Relevance of Commerce

Downsizing

Reputation Relevance Engagement The Attraction Model FUTURELAB

Engagment Funnel Content Recommendation Move the funnel Content Recommendation Engagement

Buzzmarketing

Content wants to be free

How to control millions of inaccurate and divergent conversations ? YOU DON’T Consumers are beginning in a very real sense to own our brands and participate in their creation … We need to begin to learn to let go. A.G. Lafley, CEO and Chairman of P&G, October 2006 (cc) Lynette Webb, 2006



‘Help us choose’

Let them improve your products

Let them build their own

The Power of Recommendation

The Power of Recommendation Word-of-mouth is 7x more effective than newspaper advertising, 5x stronger than a personal sales pitch and 2x as effective as radio advertising Marketing Science Institute, 2006 1967 1983 2001 2007 1955 This is not exactly news....

How can we measure all this

Extremely unlikely Extremely likely NPS™= (Promoters-Detractors)/Total DETRACTORS PROMOTERS PASSIVES Net Promoter Score ™ is a registered trademark of Bain & Company, Satmetrix and Fred Reichheld HOW LIKELY ARE YOU TO RECOMMEND? The Power of Recommendation

Promoters make you more money They spend more They negotiate less They stay longer They are easier to service They upgrade quicker ... Slide: Bain & Company, official NPS(tm) presentation Fred Reichheld. Net Promoter Score ™ is a registered trademark of Bain & Company, Satmetrix and Fred Reichheld The Power of Recommendation

Activate your Fans

Must See

Traditional compensation & other systems stand in the way Creative and media work in isolation Lack of experience with new media (not everyone went “dot-com”) Venturing into uncharted territory = risky (even on a personal level) Nobody really knows how things will evolve

GO DO IT

The Element of Surprise