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Consumer Brands Speak Out At
Festival of Media In Valencia

pg_coke.gifThis week the annual Festival of Media took place in Valencia, Spain. Several hundred key leaders from the media and advertising industry convened for 2 days of informative presentations and relaxed networking in the Spanish sun.

The global economic situation was clearly a big topic, and major brands P & G and Coca Cola talked about how they are organizing to get through this difficult time.

The Global Economy

Certainly the topic that was on the top of everyone’s mind was the impact that the current global economic crisis will have on the industry. Stephen Allan CEO of MediaCom and Charles Courtier, CEO of Mediaedge:cia discussed this at length in their session. There were several key points they highlighted.

  • The biggest impact is that the attitude of consumers has changed. They are feeling very “uncertain”, which means they are now looking for “value”. So brands need to be sure that their advertising is communicating a “value” message.
  • The time horizons for marketing campaigns are shortening, as brands are less willing to make long term commitments. This means that agencies need to become faster and more nimble to meet this need.
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  • Everyone is feeling the pain and passing it back along the value chain. Retailers feel squeezed so they squeeze the brands, who in turn tend to pass it along to their agencies, and eventually back to media owners. Some agencies have begun looking for media owners to set up arrangements where they share the risk rather than staying with traditional fee structures.

The Brands Speak Out

Another one of the highlight sessions was “The Marketers’ Response”, with two of the biggest brands in the world – Procter & Gamble and Coca Cola – talking about how they are handling the current environment.

Bernhard Glock, VP of Global Media and Communications at P&G, first emphasized that P&G’s objective has not changed, it is still to create value for consumers every day. That has been their strategy, and they are sticking with this.

pg_glock.gifBerhard then offered some thoughts on how to address what he sees as the eight key “C” words facing today’s marketers.

1. Consumers: spend effort on learning to understand consumers. Try to develop a holistic, consumer-centric view, rather then just looking a specific media-centric research.

2. Confidence: Consumers are feeling uneasy, and in general don’t trust advertising, so make sure you do everything you can to build confidence in your brand.

3. Competition: Embrace it, it’s here to stay and will intensify. There are two critical competitive moments to focus on – when a consumer picks your product off the shelf for the first time to try it, and when they come back later for a repeat purchase.

4. Cost: Due to changing prices, ROI levels are often very varied these days. And with media representing such a large portion of costs, it is often getting attention at the very top levels of the company where perhaps it didn’t previously.

5. Collaboration: You have to mean it. But every member of the value chain needs to add value, not just complexity, or you won’t be around for much longer.

6. Consolidation: Watch out for it, it is happening everywhere. P&G tries to identify and work with the companies they believe will be the future winners in the consolidation game.

7. Children: Learn from them, especially their commitment to sustainability. This is now a fundamental factor in consumer choice, and will keep growing stronger over time. So companies need to make sustainability a core company value as well. He also showed a wonderful program that P&G has put in place to provide clean water to underdeveloped areas of the world, check it out here).

8. Change: Bernard’s message was simple: “Do it – if we don’t change, we get changed”

Integrated Marketing Communications

Martin Albardo, Director of Media and Communication Innovation at Coca Cola, talked about how Coke uses IMC (integrated marketing communications) approach. He first pointed out that IMC is quite different from what people call “360°” marketing, because with a 360° campaign the brand is typically at the center, whereas with IMC it’s all about putting the consumer at the center.

A key part of IMC is doing “connection planning” instead of simply “media planning”. This is a higher level view of planning, and it must go across all of the consumer touch points. Integration across media channels is so important that Coke typically briefs all agencies at the same time just to eliminate any potential silos.

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Martin confirmed that Coca Cola is committed to continue spending throughout the recession, as there is a belief that brands that take this approach will emerge much stronger when the recession is over. However, that being said, there is currently a big push on improving marketing and advertising productivity. Coke is looking for improvements in both effectiveness (i.e. “doing the right thing”) and efficiency (i.e. “doing the thing right”).

Finally, Martin pointed out that in fact these days, he is interested not only in who he reaches and how often, but he also wants to measure “consumer outcome”. In other words, how did the consumer respond, what was the effect. And he pointed out that more and more Coke is compensating their agency partners based on performance, not just for hours spent.

Wrap up

In summary, it is clear that the economy is having a huge effect on the media and advertising industry. And most likely these effects will continue not only all throughout 2009, but also well into 2010.

However, it’s also clear that major companies, the ones that have been building their brands over many years, are maintaining a long-term view. They know they need to keep focused on the consumer, and understand how the consumer is reacting to this crisis. But in the long run, consistency and attention to the consumer will allow them to improve their brand position even through these difficult days.

Charlie Crowe, Chief Executive of C Squared (the company that produced the event), said, “The advertising industry traditionally overperforms the market in good times and underperforms all market averages in bad times. What we’re seeing is a huge underperformance in response to an unprecedented economic shock. But don’t fear. This recession is speeding-up many of the structural changes that were already underway – the industry will emerge as more efficient, value-oriented, client-facing, innovative and performance driven.”

“This is not the time to stop talking with consumers. If you use this opportunity to broaden your dialogue with the people who love your brands, you will come out of this period with a much stronger and deeper relationship with them.”

Joe Tripodi
Chief Marketing and
Commercial Leadership Officer
The Coca-Cola Company


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23.04.2009    Tags: , ,
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