http://www.creativeadawards.com/original/wrecking-ball/11338

EVERYTHING IS BROKEN THE END OF MARKETING AS USUAL

twitter @johnbatistich

“we think that everything is broken & we

throw our computing power at it to fix it” patrick pichete global cfo google

“nearly all of the tools, processes &

philosophies around marketing were

developed more than 50 years ago”

26 May 2010

“we want a one to one relationship with

7 billion customers” bob mcdonald ceo p&g

what we learnt is being disrupted

time to think different. think big!

what’s changing?

3 shifts

source: richard watson. picture: john homer

increasing life-spans

declining fertility

skills shortage

cotton wool kids

rise of the screenager

rise in sinks & dinks

increased immigration. higher ethnicity

urban-rural polarisation

smaller households

environmental change

resource shortages rising costs

resource nationalism

carbon economy

increased regulation

peak oil

water labeling

packaging/waste taxes

eco-cynicism

1 billion new mouths

market expansion

product sourcing into aus/nz

services outsourcing

asian values & aesthetics

resource competition

inbound tourism numbers

protectionist backlash?

demographic

power returns east

sustainability

1 accelerator of change

1. ubiquitous mobile connectivity

2. democratisation of production tools

3. access to higher data speed/more storage

technology enabled connectivity 1 billion pcs & 4 billion mobiles

location-based services

mobile & social payments

intelligent vending

3d screens

rising transparency & amplification

increasing collaboration

personalisation

acceleration of everything

hunger for real shared experiences

source: richard watson

26 May 2010

1. technology

2. behavioural change

3. business models

change coming in 3 waves

“WE ARE LOSING SHARE OF RETAIL”

“soon…you won’t forget anything, you’ll

never be lost, never lonely, never bored &

never out of ideas” eric schmidt google

1.SHOPPER BEHAVIOUR accelerated change in shopper behaviour challenging old norms

old ways command & clicks

text & 2d

single task

desk/laptop search & email

ecommerce

store trading hours

national

appointment to view

entertainment & retail

seasonal sales

quality relationships

private

knowledge

new behaviours touch, voice & gesture

video & 3d

multi-task

social & mobile search

mcommerce & social commerce

shop anytime anywhere

context. service finds you

time shifting

merged in a closed loop

pricing transparency

quantity relationships

public with utility

resourcefulness

source: psfk

2.THE LINEAR PATH

TO PURCHASE the old linear model is being replaced by a network to advocacy

See an Ad Receive Catalogue

Mail or eDM

Visit

Store

Consult

Sales

Person

Buy

Sign Up

for

Loyalty

card

Contact

Customer

Service

old linear path to purchase

Awareness Consideration Trial Purchase Repeat

Acquiring

Using

How does a customer

become aware with your

products or service?

How does a customer gain knowledge about

our products and those of your competitors?

Where do they go to learn and compare to get

the best solution?

How does a customer

transact with your

company? What are the

dynamics of the

purchase process?

How does a customer

take delivery of our

product or service?

What are logistics of

getting it?

How does a customer use our product in daily life?

What do they have to do to take advantage of its

benefits? What are the components of the user

experience?

How does a customer

interact with our company

post purchase? What are the

interactions that promote

loyalty and advocacy rather

than frustration?

Buying

Search

a customer experience chain

Discovery

Relationship

3. INFLUENCE VS PURCHASE channels of influence are as important as purchase channels

where the purchase is influenced matters

50%

$255B

offline

influence

purchase

44%

1% 5%

influence

online

purchase

offline

Influence

offline

purchase

online

online

influence

purchase

total

retail

sales

4. TRADITIONAL STORE we crave social, physical and instant experiences. online experiences are changing store expectations

the store is being re-invented. more

experiential, service, social & integrated

seamless experience across

any channel at anytime

“WE ARE LOSING SHARE OF RETAIL”

Context is everything

http://www.theage.com.au/technology/technology-news/virtual-shop-perfect-for-the-young-and-upwardly-mobile-20120215-1t6qa.html#ixzz1mZuBOUuz

''retailers need to understand

that online shopping isn't

something we just do at our

desktops any more. we now

do it out in the real world, out

on the streets and often while

we're in-store.‘’ sportsgirl

5. DIFFERENTIATION DELUSION being different & better only matters if your customer believes & values it

your brand is not as

different as you think it is!

80%

8%

ceo customer source: contagious

Is your brand different? % Agree

6. DISCOUNT DEVOTION we are increasingly dependent upon deep discounts training our customers to wait for specials

the amount of purchases at discount

is at a all time high & many can’t stop

http://arts.brighton.ac.uk/__data/assets/image/0016/6253/Problem-Based-Learning1a.jpg

7. LACK OF TESTING the world is forever in beta test

amazon conducts 200

tests a day to improve

the user experience

learn fast, cheap, well & first. place lots of

little bets and scale up the ones that pay off

8. STRONG BRANDS

GET DELETED brands under threat from shelf space rationalisation

“WE ARE LOSING SHARE OF RETAIL”

nielsen estimates private labels

will represent 40 per cent of

packaged goods sales by 2015

http://www.smh.com.au/business/its-war-but-how-low-can-they-go-20111125-1nz6h.html#ixzz1f25svbl5

http://cerisereve.deviantart.com/art/Used-Crayons-72200919

9. OVER CHOICE we need simpler solutions & more involved experiences

http://michaelfaber.deviantart.com/art/not-thinking-straight-35033655

in 1997 there were 2 million brands

and now there are 8 million brands

more clutter. more confusion

in 2008 the average person’s daily intake of

information was 300% greater than in 1960 university of california san Diego study

Source: Sparksheet.com

10. LOYALTY PROGRAMS too many complex reward programs with low value creating reward fatigue

the world doesn’t need another hard to

understand low value reward program

Spend $15.7K at Coles on FlyBuys or spend

$11K at Woolworths to get a $50 voucher

Source: impetuoussoftware.com

11. DATA DELUGE making sense of the increasingly available behavioural data is the new gold

most marketing departments are not

prepared to make sense of the single

view data that is rapidly becoming

available about their customers

12. RESEARCH REACH & CLAIM majority of your audience are out of reach. you are what you do not what you say

http://www.theatlantic.com/magazine/archive/2013/03/anthropology-inc/309218/

“you only get to talk to about 10% of the population

via traditional online market research, so what about

the other 90%? Who wants their evening interrupted

with a phone call from a research agency” Peter Harris

we make

decisions on

claimed not actual

behaviour. who

can accurately say

how often they

have seen an ad or

purchased a

product in the last

4 weeks?

13. EDM INVOLVEMENT

http://www.fullissue.com/index.php/email.html

volumes are up but open rates & click through rates are declining

why do 79% of members don’t even open

your email? & it’s getting worse!

Source: Responsys

14. CPM FOR TV ADVERTISING

http://www.digitalproductionme.com/article-1135-middle_east_tv_ad_revenues_to_buck_downturn/

your audience is not as high as you pay for!

80

viewership of ad breaks can be 10%-

35% lower than the program you buy

Source: ikon

SO THINK ABOUT… 15. MOBILE FIRST design for mobile…the most powerful technology of our generation

“our coordinates, has the potential to

change all the outputs…where we shop,

who we talk to, what we read, what we

search for, where we go, they all change

once we merge location and the web” matthew honan wired magazine

access reviews, pricing, content,

community & buy anytime anywhere

mobile payment systems

change the pos & banking

yet more than 50% of websites

are not mobile optimised

16. ECOMMERCE

CONVERSION value, range & convenience driving online sales but conversion is extremely low

different conversion by channel

online

conversion

good store

conversion

92%

30%

2%

mall

conversion

why the high online cart abandonment?

online cart

abandonment

store cart

abandonment

<1%

65%

http://www.shutupitson.com/tag/mad-men/

17. MEDIA AGENCY DEALS channel agnostic, complete disclosure transparency & total accountability

media agencies who commit to future

investments with media owners before

understanding their clients needs

media agencies generating undisclosed

rebates from media owners

18. THE AD AGENCY new models forming for social, digital, video & mobile channels

agency resources measured on inaccurate

time sheets vs value/outputs

Source: webzbranding.com

resourcing digital channels that are more

intensive, reiterative & measurable

the creative director role will evolve

from creator to curator because no one

person has a mortgage on creativity

http://steja007.deviantart.com/art/HD-wallpapers-part-2-104834273

agencies will collaborate more, shift to

projects over campaigns & create ideas

that are born to live in beta (social) not

built to die (media schedules)

19. PRIVACY CONCERNS all notions of privacy are being traded for personalised utility

http://www.google.com.au/imgres?q=cyber+privacy&start=164&hl=en&tbo=d&biw=1680&bih=909&addh=36&tbm=isch&tbnid=F5

xmDMtUU7zoeM:&imgrefurl=http://www.ngcicommunity.org/wiki/index.php/Trust_and_Privacy&docid=mCXt2uOUvkUpLM&imgur

l=http://www.ngcicommunity.org/wiki/images/thumb/0/0e/CyberSecWithLock_small.jpg/350px-

CyberSecWithLock_small.jpg&w=350&h=263&ei=WUWtUKHlG-

b3mAWKv4DwBg&zoom=1&iact=rc&dur=468&sig=117778829446237125984&page=4&tbnh=136&tbnw=181&ndsp=58&ved=1t:

429,r:56,s:164,i:92&tx=131&ty=91

Source: Accenture

retailers must offer control, relevance &

value in exchange for consumer information

20. ADVERTISING BRIEFS ignored uninspiring briefs replaced with a business challenge

“we're getting rid of the creative brief after we asked

our agencies to be honest about whether they used

them or not. they said they basically ignored it.

rather than offering their best work, creatives focus

on trying to give you what you want. instead, we're

now giving creatives a business challenge” p&g

21. CREATIVE FEEDBACK the quality of the feedback & relationship supports great work

http://sharpsuits.net/#Home

you get the creative work your deserve

22. ACTIVE INVOLVEMENT

IN SOCIAL NETWORKS too often, acquisition is the key focus but active involvement is where the real value is…

97.4%

2.6% active: like, post or comment

passive or do nothing at all

why acquisition over involvement & value?

how do you get your community active?

http://www.noupe.com/inspiration/stunningly-creative-and-unforgettable-print-ads.html

23. CRISIS MANAGEMENT listen, shape & respond with speed & transparency

“consumers have

something they

have never had

before, the power

to warn &

threaten, rather

than to punish

silently after the

fact” bruce philp consumer republic

24. ATTRIBUTION understanding the value of a customer remains the holy grail

for every $1 spent online with

macy’s led to $5.70 in-store

418% more likely to visit startbuck.com

spent 8% more. transacted 11% more frequently

are they pre-existing preferences? source: comscore

source: comscore

fans are more valuable

spending $159 more per year

http://www.google.com.au/imgres?q=mcdonalds+facebook&um=1&hl=en&sa=N&biw=1920&bih=1019&tbm

=isch&tbnid=0v3-Z2BKm1XWhM:&imgrefurl=http://blog.hudsonhorizons.com/Article/Facebook-is-the-

McDonalds-of-Social-Networking-Infographic.htm&docid=92-B7tkw3-

lxWM&imgurl=http://www.hudsonhorizons.com/pub/images/facebookmcdonaldssocialnetworkinginfographic

s.jpg&w=274&h=263&ei=aDZET97fLerkmAWRtJnYBw&zoom=1&iact=hc&vpx=1152&vpy=148&dur=327&h

ovh=210&hovw=219&tx=122&ty=126&sig=111856002902335195116&page=1&tbnh=151&tbnw=154&start

=0&ndsp=45&ved=0CFcQrQMwBQ

source: syncapse

25. REFLECTIVE THINKING

http://my.greasy.com/cgi-bin/blogapp/img.cgi?image=32367767.jpg

we are losing the ability to think in a deep, creative ways, which is affecting our decision making

“teens were faster than adults at

reading online but their attention

spans were much shorter, so anything

difficult tended to be skipped” jacob nielsen

“always on, information overload, multiple-

tasking work environments are killing

productivity, attention fragmentation,

dampening creativity and making us unhappy” mckinsey report june 2011

source: jon bird

source: psfk

20 IMPLICATIONS asking the right question is the first step for change

26 May 2010

1. understand the changes in your customer journey in terms of influence & purchase

2. location matters. shift your digital gravity towards mobile

3. determine the utility connecting content & channels for customers

4. optimise your website for mobile then design for it

5. track the interaction of your social communities & identify value

6. review your real TV audience and then negotiate on your ad audience

7. focus on activating of your edm databases

8. simplify your loyalty program to create real value

9. review your data analytic capability & tools

10. change the focus of your research towards behaviour

11. set aside 10% of your budget for testing

12. personalisation is the ultimate form of membership

13. evolve towards a social business design

14. don’t use meaningless words like engagement & activation

15. ask your media agency about undisclosed rebates

16. renumerate your agency on outcomes not time

17. find another way to brief your agencies. inspire with a problem not a brief

18. carve out time for reflection & learning

19. conduct market experiments to model channel attribution to guide future choices

20. define what you need to stop, start & continue to free up capacity to innovate

westfield study tours

morgan stanley

ellie rogers of ikon

david whittle of m&c saatchi

anouk darling of moon

michael batistich of we are social

peter harris of vision critical

jon bird of ideaworks

best buy slideshare

richard watson

youtube

google & google images

flickr

techcrunch

mumbrella

emarketer

smart company

inside retail

psfk

mckinsey quarterly

contagious

@johnbatistich

http://www.creativeadawards.com/original/wrecking-ball/11338

EVERYTHING IS BROKEN THE END OF MARKETING AS USUAL

twitter @johnbatistich