When the Earth moves
Staying alive in a new brand landscape
Back to the Seventies...
• 1973: OPEC quadruples oil prices
• 1974: Miners‟ strike, power cuts, three day week
• July 1973-Sept 1975, UK economy in recession in
five out of nine quarters
Meanwhile...in a hall in Manchester...
...an earthquake happened
33 years later
• Relentless bad news?
• Initial exposure to bad
debts in banking sector
leads to vast loss of
confidence
• Financial markets, and much
of business world, in hands
of executives who have only
ever known growth...
• World turned upside
down?
The result..?
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Average House Prices 1999-2009 (Source: Nationwide)
33 years later
The only story they‟ll write about this period?
"I was asked what I thought about the recession.
I thought about it and decided not to take part."
Sam Walton, Founder of Wal-Mart
“There are masses of opportunities in times of recession.
It‟s when the greatest fortunes get made...
if you‟re in a position to have a great idea and
fund that idea you can do enormously well.”
Sir Richard Branson February 2009
„Flanked by models and fashionistas, the retail billionaire Sir Philip
Green was on pleasingly combative form at the opening of the New
York outpost of Topshop this week. Having waited in line for 45
minutes to speak to the great man, I had the chance to lob a few
questions in his direction, largely about the wisdom of opening a
$24m superstore in the middle of an economic downturn.
"We've put a massive investment in this store. America wants us to
invest again and we're happy to do it," Green told me.
Britain's ninth richest man soon got bored of this line of questioning,
though, and snapped: "Go and take a picture of the people queuing
up outside the store. Put that in the fucking Guardian. You're all so
bloody miserable.” ‟
The Guardian April 3rd 2009
Disaster?
Or opportunity...?
“Change will not come if we wait for some
other person or some other time.
We are the ones we‟ve been waiting for.
We are the change that we seek”
Barack Obama
Advertising works in a recession
Advertising is vital in a recession
Out of sight can mean out of business...
The Evidence
• Arguments are already becoming well rehearsed...
• 1930s...P&G piloted the soap opera - highly innovative
marketing
• 1939-45 : brands that continued to advertise even when
unavailable dominated post war/post rationing markets
• Early 1980s recession – study of 600 US companies saw those
who sustained/increased ad budgets showing average 256%
increase in sales vs others by 19851
• 1991-92 study of 127 UK brands in 46 product categories2:
– Highest performing brands increased adspend by 7% (and saw
average 1.1% share growth)
– Lowest performers – cut adspend by 8%, saw share decline of
1.6%
– “When times are good you should advertise. When times are bad,
you must advertise”3
• 2002, US study of 3500 companies, post 9/11:
– Maintainers/increasers of marketing activity achieved
share increases averaging twice the size of those cutting
budgets4
The Evidence
• And we know...
– That Renault increased market share in early 90s
recession with Papa/Nicole campaign and increased spend
– That market positions change most in recessions
• “Like the positions in a race change at the corners”5
– That recessions depress media costs
• SOV easier to achieve and works harder...
The Evidence
• Up to date evidence is already emerging...
• Nielsen 2009 US study shows that financial brands which are
increasing ad spend are much better able to maintain
confidence
The Evidence
• 98% of Finance Directors working for firms of 1000+
employees support increased marketing spend now6
The Evidence
So why...with some exceptions...isn‟t it happening?
Because of fear..?
The Evidence
• Because theory is one thing...
...practice another
• Margins for error much reduced...
– Big budgets won‟t come to the rescue
• And an insecurity about how
to communicate effectively
...now the chips are down...
The Evidence
So how?
By focusing on two things
Connection when the earth moves
• Success lies
– In a truth of your brand occupying the same emotional space as a
truth of the consumer• Your brand potentially has a number of powerful, useful truths built into its
identity...ripe for re/discovery
• Do you know what they are?
– In recognising that customers have in many markets reordered
their truths
• To create a new synchronicity...The new truth of my brand
The reordered truths of my customers
Then communicate distinctively, clearly, visibly
Connection when the earth moves
Think of it as Market Seismology
Market Seismology
• Brand and customer in harmony
• Healthy business, strong relationship
Market Seismology
Over time...gradual changes in
relationship are inevitable...
Markets develop, technologies
arrive, competitors act
„Fault creep‟
But smart companies keep pace via
on going research etc...and continue
to sustain dialogue/ relationship
Market Seismology
And then...
Earthquake hits...Customer reorders truths,
radically, rapidly...
„New‟ need no longer addressed by
brand...
Connection fractured...
“Brand liquefaction”
Market Seismology
Market Seismology
Liquefied...
...and now...
Market Seismology
Feeling the shaking...
Market Seismology
Market Seismology
Rebuilding the foundations
means adjusting to a
changed market.
Sinking foundations into the
new solid ground
Market Seismology: M&S Food
M&S Food
• Symbolic of growth in disposable incomes in
1990s/early 2000s...
– Its truths...
• Expensive
• High Quality
• Occasional
• Truths of its customers?• A sense of affluence and entitlement
• Personal indulgence a driver
• Outer directedness
• Some truths about their customers now?
– Nervousness about the future?
– Harder to justify indulgent grocery buying?
– Still enjoy quality food.
• M&S authentically reframes the truth of quality.
– Change the terms of reference...
• Positioning as alternative to going out (“Dine In” promotion)
• Remains true to M&S brand, recognisable
• Reflects reprioritised needs of customer
Market Seismology: M&S Food
Axa
• Until 2007, positioned around „Be Life Confident‟
– Achieve your plans/dreams etc
• Financial market catastrophe in 2008 changed
everything
• New thinking that involved:
– Understanding customer change
• Loss of trust in banks, anger, disillusionment, betrayal
• A deep need for security and reassurance...
Market Seismology: Axa
– Understanding that as insurance company this was part of
DNA of brand...
• Insurance should be about being on the side of the
insured when times are hard
– The accident/death etc
– The worldwide financial disaster
• Axa returns to the truth of protection
Market Seismology: Axa
Axa Commercial 2008
• From Axa website...
“We launched our new Global Vision called „Redefining Standards‟
because we realised that without your trust, we are nothing, and that
trust demands that we do things that prove we are worth trusting.
Too many standards in finance and insurance are sub standard:
standards that suit everyone else except you: standards that certainly
wouldn‟t make you trust anyone: and some quite the opposite. So we
decided to „do‟ something about them.
Having begun this journey to a better place, it made sense to invite
you to come with us”.
Market Seismology: Axa
Barclaycard
• 1991 – brand makes its first loss
• Economy plunging, new competitors entering
• Consumer truths of 1980s
– Credit boom, self indulgence, have it now pay tomorrow (or ever)
– Secure, „loadsamoney‟, „I‟m worth it‟ etc
• By 1991 truth reordering underway
– Uncertainties about the future
– Debt/negative equity concerns
– More financial risk aversion
Market Seismology: Barclaycard
• Industry orthodoxy – promote, financially incentivise, cut A&P
budgets
• Barclaycard‟s response?
– Added £8 pa charge
– Plus 100 day purchase cover
– Plus international travel assistance
• These features spoke to the prevailing mentality
• Barclaycard developed its truth of security and trust
– Understood that discounting/offer based marketing
– Or cutting budgets
...would not speak most usefully and successfully to the need
• Brand doubled adspend
Market Seismology: Barclaycard
• Result?
– Barclaycard took market leadership from Access
– Access cut spend, avoided addition of new benefits (but
added the fee)...
– ...Access brand sold to Mastercard 1996
Market Seismology: Barclaycard
From others...?
Responses to a changed world seem less convincing...
Market Seismology: Weak Foundations
• Lowering the lifeboats...
– Discounting: retailers‟ weapon
of choice...
• Responding to new world of high
price sensitivity (which they partly
stimulated)...
– Supermarket price wars
– Identical strategy from many
• But loyalty/engagement?
– Shopping trips become multi
store...price becomes only
differentiator
– Margin sacrificed, over and over
Market Seismology: Weak Foundations?
Market Seismology: Weak Foundations
• American Airlines
• Investment...yes
• But in the generic
campaign?
– Category benefits
• Product still lags behind BA,
Virgin, Singapore Airlines
et al
• Without product lead,
where‟s the insight?
• “We know why you fly?”
– Do you?
“We are currently operating in a particularly competitive environment and it is important for us to invest in promotional activity to drive continued consideration of the American Airlines brand by discerning UK travellers.”
Maria Sebastian President Sales and Marketing EMEA.
• And the „apology‟ campaign by
The Standard?
• Solving the wrong problem?– Consumer reordering moving away
from print medium...
– Recessionary pressures have
accelerated this
• Most pressure on paid print
medium...without a compelling/
unique benefit.
• But an attempt to re-explore
other latent truths of the brand
for a new age...?– Campaigning, rallying point for
London
• Jury is not yet in... still less out!
Market Seismology: Weak Foundations?
• Others seem caught in the headlights...
– Car Industry (paralysis)
– Banking (denial)
– Building industry (temporary death)
• But for others still, a new landscape...
Market Seismology: Weak Foundations
• For some, the shifting earth
brings new windfall
opportunities
• Fewer driven away?
• And - by „happy chance‟ -
new audiences suddenly
exploring the brand, as
reordering brings it into view
Market Seismology: A new landscape
Market Seismology: A new landscape
• The Economist - sales increase Jun-Dec 2008: 2.4%
• Match.com - 26% y/y membership increase
• LoveFilm reporting 40% membership increase in recent months
• McDonalds, KFC, Burger King all benefitting from shifts in
priorities/behaviour and growing
• Confectionery industry posting impressive results
• Timpson – shoe repairs showing huge growth
• „Dinner party foods‟, wine, selling well
– Home cooking ingredients too...(pasta/rise up 20.8% year to Mar 08 etc)
• Garden centres/garden products performing very well...
– Wyevale garden centres 50% growth, Homebase gardening products up
85%
• In this new territory, connections may not yet be fully made...
• A need to make the brand part of the new buyer‟s life before...
– The earth shifts again...or slides out of recession
• With new customers knowing no reason to stay when their
truths are reordered once more
– Someone else in their new world does it instead
• Your competition...
Market Seismology: A new landscape
• For these brands – issue is
now how to cement
loyalty...how to bond...
• It‟s about 2010/2011 now...
• Is it happening?
– Mixed signals
Market Seismology: A new landscape
• And for others?
For whom the „happy chance‟
isn‟t so evident?
– The challenge...opportunity...
– Find the new
customer...and/or
the new „fit‟– Is there a truth of your brand
ready to draw a new
customer to you...?
• Are they waiting to hear from
you?
Market Seismology: A new landscape
When the ground shifts
• There are conversations to be had – now as ever, because
Recession is no more than change• Some human truths return to the top of the agenda..?
– Security
– Hope
– Real value (not simply price)
• Genuineness – in performance and promise
– P&G‟s „Performance -based value messaging‟
– Meaning – less time and money to waste on the pointless
– An end to waste – synchronous with green agenda
– Renewed exploration of what makes us happy
– Authenticity and honesty...
When the ground shifts
...take your brand to pieces
look inside
...take the mind of your
customer to pieces...
look inside
When the ground shifts
Connection when the earth moves
...do this...
...and we can help you do it
The new truth of my brand
The reordered truths of my customers
Or...
...there is another way...
Cause the next
earthquake yourself...
and wait for them to come...
qualitative research - idea generation - creative consultancy – brand planning
Jo Shaw 07917 194535 [email protected]
Vikki McKeegan 07831 278530 [email protected]
www.differentriver.co.uk
change based on truth
References
1. McGraw-Hill Research www.machtech.com/adsales/recession_marketing/
2. The Billett Consultancy
3. Penton Research Services, Cooper & Lybrand, Business Science International study
4. PIMS/Paul Dyson www.warc.com
5. Sarah Carter, DDB „How to get your brand heard in a recession and boost your ROI‟
Admap Jan 09
6. KDB, Media Week March 25 09