April 7, 2014
How did Q get it all wrong: A quick look at the latest marketing campaign of Q

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WHAT IS THIS ABOUT?

It comes natural to comment, judge and make fun of ads, TV spots and marketing campaigns. It comes natural to everyone no matter what their job is. An accountant, an astronaut or an engineer. And it is “fair” to have an opinion since each one of us is a customer/consumer/client, you name it. I do not intend to analyse how subjective an advertisement is, whether individuals’ opinions should matter to the advertiser or not and why we usually dislike ads rather than like them. It will end up being a philosophical post while what I want to do is to try to prove why a specific ATL marketing campaign, the one of Q, “doesn’t work”.

 THE CASE STUDY OF Q

So let’s take it from the beginning. Q is a mobile network provider that mainly targets young segments. In the mobile industry, teenagers actually mean pre-paid subscribers which actually means subscribers without a contract who top-up their credits with pre-paid cards. Another important point is that Q, technically, is not a mobile network operator. It belongs to WIND but it has created its separate brand. WIND has its own pre-paid division as well which is called WIND F2G. To be honest, I do not know why there are 2 different pre-paid brand umbrellas under WIND but for the sakes of this post, I will consider all the pre-paid customers of WIND being subscribers of Q. (this is definitely not the case but let’s leave that behind for now)

Q recently launched its new brand and marketing campaign focusing on ATL media. It has heavily invested in TV and has also introduced a new website and Facebook page. Its trademark motto is wrapped around the easiness, simplicity and clear financial benefits that provides to its subscribers. The 3 short TV spots feature a funny actor in his mid 30s practically joking and performing unusual stunts. Another point is that he is talking to the audience following the House Of Cards style where the context of TV is collapsed and the actor comes to the same level of experience with the viewer. 

There is an old Q as well

At this point, I need to outline that Q is not a new brand. Q was introduced to the Greeks a few years ago with a really distinct approach where all the TV spots were animated and the leading “characters” were Q-shaped miniatures joking with each other in short 15/30sec spots. They had a tremendous success; they became talk of the town and they positioned Q in customers’ minds as something fresh, innovative and cheap. Cheap not with a sense of low quality but affordability.

Take a look at the Q brand aesthetics back then and keep them in mind. 

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THE VALUE OF MARKET KNOWLEDGE

A common problem with random people judging the marketing campaigns of big products is that they are not aware of the market intelligence. They do not know the strategy of the specific brand, what is the market status of the industry, the market penetration of the competitors etc Without having these data it is at least “unfair” to judge an ad or a TV spot. However, this usually happens with marketing people as well. They are not planning their campaigns based on the market data and the industry specifics but based on the “creativity” of an ad agency, which at the end of the day is a matter of personal taste.

I could not write a post about the marketing campaign of Q without checking first the status of the Greek mobile market. Below, you will find some key figures of the market that will help you understand my comments on Q and you will decide if you agree with me or not.

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So what are the main ideas we can extract from these key figures? WIND business heavily depends on its pre-paid customers (73% of its whole base) but at the same time it has the smallest market share in the pre-paid market with 24%. It shows an encouraging 5% of Annual Growth Rate and it is easily assumed that its main competitor is Vodafone, which is currently sitting on the second position (it is a race of 3). We are actually talking for a main difference of 0,5m subscribers in a segment where the levels of churn (leaving an operator and join another) are high.

SO WHAT DID Q DO?

Having in mind the figures above, if you are the ad agency hired by Q you need to plan a marketing campaign that will emphasize the strengths of Q versus its competitors, differentiate your brand following the rationale of the previous Q campaigns that have already positioned the brands in a very separate matrix and appeal to teenagers.

You may need to reinforce your B2B relationships and increase the number of your Point Of Sale (POS). Or you could spend thousands of euros in your digital advertising campaign and target young people online, where they spend most of their time. I am not in a position to know if Q has invested in these strategies, although I can guess.

The point is that the ATL advertising campaign of Q hasn’t followed the path that the market data have shown. So let’s break the new Q brand in smaller parts:

1. Color

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Q used to be blue and white following somehow the brand of o2.

In an era where the simplicity and calmness of white are applied to pretty much every brand communication from banks to technology products, Q decided to rebrand itself with blue and orange. A really poor choice. First of all, these 2 colors do no match each other creating a very aggressive and difficult combination for a mind to absorb. Orange has been selected as the color that men and women hate the most. There are brands that use orange but use it wisely mixing it with much subtler colors like for example WHITE. Check Orange, a leading mobile network operating in the same business with Q. Last but not least, the color of blue loses its virtues when mixed with orange. Blue is supposed to communicate trust and safety. When mixed with orange it brings to mind …. confusion.

2. Website

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The digital presence of Q is a plain vanilla website that follows the logic of large, powerful images in a carousel. The images used are large but not powerful. They are simple shutterstock pictures that you cannot understand how to navigate/swipe left and right. All the features that millenials wish to see in a website are missing. Millenials are not supposed to visit 3 different websites (Q, Vodafone, Whatsup), check the pricing scheme of the offerings and then judge which company is better. They are not parents and they are not running companies. They are emotional customers that want to belong in a cool brand and feel part of something bigger like for example a youth movement. Q has 2-3 different banners in its carousel vaguely communicating the prices of its offerings. The website is EMPTY.

3. Interactivity/Rich Media

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It is simple, there is no interactivity at all. Videos, infographics, roll-up banners, unfolded images, live tweeting. NADA, ZERO.

4. Sponsorships/Endorsing Activities/Events

When you want to be considered a brand that effectively targets teenagers you need to sponsor, endorse, organize live events, music festivals, extreme games, art exhibitions and whatever else millenials need. If you check the websites of Q direct competitors, they communicate their main offering around the announcement of an event, an ongoing cool activity, ticket prizes etc.

5. Social Media

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(A typical picture of a teenager wearing sunglasses at night, because YOLO)

Another really important point for a brand like Q. You don’t need me to write down how many teenagers are using social media and how much addicted they are. Q has a dedicated Facebook page. There are daily posts usually with a picture and a tagline on it. The way that Q is using “cool language” to attract teens and appear as trendy is at least sad. Mediocre jokes and catch-phrases photoshopped in random Shutterstock pictures which do not represent neither Greek teenagers not millenials. Moreover, if you check the comments below the pictures you will see that the Q team usually says “stay tuned for more info” on basic questions that customers are posting.

The Twitter link leads to the official Wind Twitter account confusing the customers who do not know the relationship between the 2 brands.

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(Another illustrative example of Greek teens sitting on a wall and playing with tablets.)

 6. TV Spots

As I  previously pointed out the concept of the TV spots is that a funny guy says a joke or does something funny in front of the camera while speaking to the TV audience watching the spot at that given time. The aim of the post is not to decide if the jokes are funny or not. The aim of the post is to assess if the choice of having a guy in his mid-30s doing silly things will appeal to teenagers. I do not think there is need to explain more.

COMPETITORS

With a quick look towards the competitors’ websites and social media it is easily understandable why Q has followed the wrong strategy. By the very first moment you enter the websites of Vodafone CU and Cosmote WhatsUp you are not sure you enter a mobile operator’s site. You feel like you have entered a website of a youth group, cool project, have-fun place. The initiatives sponsored cover all possible areas of interest like entrepreneurship, extreme sports, art, tattoos, sex, universities etc. The TV spots change frequently featuring different concepts and initiatives and not focusing on a single person/actor having in mind that the teenagers are used in the ephemeral nature of nowadays media.

 

CONCLUSION

Nothing deep. Just a humble opinion on a marketing campaign of a respected mobile brand and a very draft market comparison to its competitors. The goal of this post is not to make fun of the professionals behind this campaign. And I will be glad to write a complimentary post for this specific issue in 3 months from now with revised market data covering Q1 & Q2 of 2014 where the results of the campaign will be visible. And I will be happy to see that I was not right with what I have written above.

* This is a very draft and quick commentary on the Q marketing campaign that solely focuses on the communication part. Marketing is not only communication. A thorough post would analyze the competitiveness of the Q products, the digital campaign and the money spent on search ads, the pricing strategy and potential conflicts with the Wind F2G brand. Maybe in a different post.

February 24, 2014
Facebook buying Whatsapp: A story about mobile, text and China.

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WHY AM I READING THIS?

So there is this whole discussion about Facebook acquiring Whatsapp for $19bn with some people arguing about the brilliance of Mark Zuckerberg and others making fun of the huge amounts of money that Facebook is paying for its acquisitions.

There are tens of articles and reports trying to explain Zuckerberg’s rationale behind this decision and to be honest I find most of them to be totally out of subject and focusing on wrong points like whether Whatsapp will be “contaminated” by ads etc

I am writing this post neither to praise Facebook nor to mock their business strategy. I would be a fool thinking that they havent made very careful business analysis before deciding to invest $19bn but at the same time this doesn’t mean that their decision will prove successful. History has proven that the tech industry changes in the flash of a light and we have witnessed both flops and golden wins, so I am not the one to judge Facebook mobile strategy. I am just trying to understand their rationale from the knowledge I have for the mobile marketing industry, in which I have been working for the last 4 years.

I will break down my thoughts on 3 main pillars. Mobile, Mobile Messaging and Emerging Markets.

A. MOBILE

What is happening with mobile?

Mobile is eating the world. So simple, so easy. Mobile is the most powerful tech growth driver in the last years, it will develop even more in the next decade and it expands in many different platforms. There is a huge battle in the field of hardware with players like Apple, Samsung, Nokia, HTC and Huawei. At the same time, the mobile operating system industry is more crowded than ever and last but not least the advertising dollars are moving to mobile as well.

Ben Evans, probably the most influential mobile analyst, made this presentation. A good example to understand mobile’s strength.

Why is Facebook interested?

Facebook is interested in all these. Do you know why? Facebook is a mobile company. It is not me saying. It is Mark Zuckerberg. If you check the Q4 2013 earnings report of Facebook, you will see that mobile advertising dollars are the most crucial part of their business model. Their survival depends on how well they will adapt to mobile and their latest decisions prove that. They acquired Instagram to dominate the mobile photography industry, they launched Facebook Search to be able to sell mobile search ads, they announced Facebook Home, they have openly talked about their plan to launch facebook branded apps like “Facebook Messenger” in order to offer a full mobile experience to their users without them having to login to their account.

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B. MOBILE MESSAGING & OTT

Whatsapp with mobile messaging? 

So mobile is one thing. Mobile messaging is the next one. Messaging is the most important feature that mobile offers, after of course voice communication. Messaging used to come only via the SMS technology which is still the dominant channel but starts getting challenged by the OTT players.

What are the OTT players? OTT refers to delivery of video, audio and other media over the Internet without a multiple system operator being involved in the control or distribution of the content.

Great examples of OTT players are Viber and Whatsapp. What these companies did was to offer simple and secure services, which were perceived till then as paid, for free. Consumers immediately embraced them, loved them, shared them, engaged with them and became loyal customers. At the same time, telcos could not do anything. They were watching start-ups like Whatsapp eating their revenues and their only profit was the data usage from their customers.

Here are some great numbers proving the dominance of OTT players over traditional channels over SMS:

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From 2013 to 2017, SMS revenues will grow by 4%, but they will begin to decline in 2017 after peaking at $166.5bn in 2016. Year-on-year (YoY) growth is relatively flat, with revenues growing at rates of 2% in 2012 and 1% in 2013. This stands in contrast to the rapid growth of social messaging services; 

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SMS is still generating money for mobile operators, but social messaging players are taking away more each year. The lost SMS revenues are considerable ($32.6bn in 2013), but the growth in mobile broadband revenues is bringing in a lot more than the money lost to social messaging. The prevalence of free services, the early stages of monetization of social messaging services, and the decline in SMS revenues will all put pressure on revenues from the messaging industry as a whole.

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So, it makes perfect sense for Facebook to acquire the hottest OTT player which has already started disrupting the messaging industry.

C. EMERGING MARKETS & THE SMARTPHONE REVOLUTION

The last thing is the importance of emerging markets and their next billion consumers for the tech industry in general and the mobile especially. I think this is the main driver behind Facebook acquiring Whatsapp in its mission to be the king of these countries in the next years.

My personal experience

I happened to work a little bit with the team of Ran Makavy,  Facebook Head of Growth, last summer trying to come up with effective solutions regarding the penetration of Facebook messaging in emerging markets. What I found out was how important the next billion consumers are for Facebook. Someone might argue that their purchasing power is much lower than this of their counterparts in the West but the other side of the moon is that the middle class in sub Saharan Africa, China, India and LATAM is gaining so much strength that you cannot ignore them.

All these people used to communicate via feature phones for so many years but we are currently witnessing a smartphone revolution in these markets. Why is this happening? Because this is how technology works. Smartphone manufacturing becomes cheaper and cheaper and we have reached a point where Nokia can announce an $80 smartphone. This means that in the next years almost everyone in Nigeria, China and India will have a smartphone and will want to text message for free. Why? Because this is what Whatsapp brought to the market. The easy and free messaging.

This is the smartphone penetration by region in the next years. A graph by Asymco. Even if you cannot clearly read the details, you can see that the graphs are going UP:

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WHAT WE KNOW AND WHAT I THINK

Whatsapp has 450 million users and 72% of them are daily active. At the same time, Whatsapp users exhange approximately 500 million photos per day which are probably more than the ones exchanged in Facebook and Instagram combined.

Facebook paid $19 billion to buy Whatsapp which in other words means that Whatsapp costs at the 10% of Facebook current market value and last but not least the $19bn means that each Whatsapp user costs $35 for Facebook.

A first impression is that $19bn is A LOT OF MONEY. Actually, it is not an impression. IT IS A LOT OF MONEY. Moreover, paying $35 for a mobile user is way more than you will ever make from an ARPU strategy. ARPU stands for Average Revenue Per User and it is the most important metric of the mobile marketing industry.

A second impression is that $19bn is definitely not the price that Zuckerberg estimated for Whatsapp. We could say that the $19bn are also working as a clear sign of strength and dominance of Facebook towards other challengers like Google

In a nutshell? IMHO, Facebook acquiring Whatsapp is a brilliant move. It places itself in an amazing spot for the next years stepping one foot in the West and the other foot in the emerging markets. At the same time, the OTT consolidation is proven by Viber being sold to Rakuten. A clear sign of Chinese players trying to penetrate the West.

What about monetization?

How is it going to monetize all these users? This is a good question. One way is advertising? Not in the boring, traditional way of banners and suggestions. It will probably offer contextual texting advertising based on your needs and habits. (do not forget that Facebook will know everything about what you are texting, to whom and when).

Another idea would be to include messaging in a premium package of services along with other features like music streaming, news subscriptions and exclusive gaming. But this scenario is at least far-fetched.

December 24, 2013
Christmas Gifts: Books & Magazines

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I thought it would be a good idea to give some of the books and magazines I am reading to the people who spend a few minutes reading my blog. I imagine, I am not sure, that they will share the same interests with me and that they will be the kind of people I would enjoy going out for a drink and have a discussion about pretty much everything. So why not giving them a present.

The gifts are 2 magazines and 2 books:

1) ADBUSTERS is a quarterly magazine written by marketers, artists and creative people who care a lot about the art of communication, information flow, psychology and ideas. You cannot find it in Greece unless you are a subscriber. I bought it in London, I loved it and I am now a subscriber.

2) Radical Philosophy is a journal of philosophy. The journal appears 6 times a year and features major academic articles, commentaries, news and a large & diverse reviews section. The issue that I am giving out is focused on the Greek crisis and there are some really interesting articles in there.

3) "Seventh Sense" is a book written by Mimis Androulakis, a renowned philosopher/thinker and greek leftist MP. If you forget his identity of MP, his books are really interesting and especially this one touches some fields like synesthesia, neuroscience, predictions etc. It was the basic inspiration for 2 of my posts. One about synesthesia and one about Google paralyzing half of our brain.

4) “David & Golliath” is Malcolm Gladwell’s latest book. I am pretty sure you already know the basic info for Gladwell but in case you dont, he is a pop philosopher writing about social phenomena out there that you have already observed but you didnt know how they actually work. His books have received fierce criticism because of their lack of scientific proof of what Gladwell is saying and I agree with most of them. But at the same time, I think he is a great story-teller who can unfold a difficult story and make it easy for everyone to read. “David & Golliath” deals with how underdogs always prove stronger than the favorites. Here is a TED talk about the book.

HOW YOU CAN GET THESE GIFTS

I am not sure which is the most effective way to do that since Tumblr has a problem with comments and there is not a dedicated Facebook page of the blog (need to work on that). I think the only way to have a “fair” and not lame contest would be to write something (hopefully good) for my blog on Twitter with the link of the blog so I can find it with a Twitter search or RT my latest tweet (@mpilloukos). All these need to take place by end of the year. On January 1st, my friend Pan Pan (who has illustrated one of my recent posts and you can see his work here), will pick one of all the people who participated.

P.S. I am aware of the fact that Androulakis’ book is written in Greek and there is a chance that some of you do not speak Greek. If this is the case, I will get to know when we draw the winner and I will swap this book with another written in English. Promise.

December 19, 2013
Let me read your mind

WHY YOU SHOULD READ THIS POST

This post will try to explain some facts around marketing, neuroscience, cognitive psychology and behavioral insights and you may think that this is something extremely narrowly targeted for marketing/advertising professionals and you shouldn’t read it but I tend to disagree with you. And there are 2 reasons I disagree with you.

I firmly believe that everyone of us is a marketer. We are all marketers because each one of us is striving on a daily basis to promote himself, to gain more followers, to be “liked”, to be reposted in Instagram, to build a better LinkedIn profile and land the job of his dreams, to upload cool pictures, to check-in at a cool place, to start a hip blog. Is this democratization of marketing happening now because of the rise of social media and online services? No. It was always there hidden in different occasions of our daily life and maybe in a lower lower level but it was there. It was there when you visited a grocery and you were trying to guess the character of the store owner and negotiate a better price, it was there when you were flirting with a girl in a bar and it was definitely there when you were trying to land a job and you had to reinvent yourself according to the questions you were being asked. So yes, I think that everyone is a marketer, everyone of us has his own brand that is trying to promote, everyone of us is an advertising account manager monitoring what is being written about him online and we definitely are creative directors coming up with nice selfies, witty tweets and repositions of our “self” brands.

At the same time, we are consumers. And I am not talking about the strict definition of consumption. We daily consume data, pictures, gifs, social media status updates etc. I find it extremely interesting to get to know what is happening in our mind when we face this monster of packaged online info, how we get to choose what we like and what we click.

In the next paragraphs, I will try to explain how marketing is changing, how important our brain is and how interesting it is to read about how our unconscious is working. So stay with me.

MARKETING + NEUROSCIENCE = NEUROMARKETING?

A funny thing about the marketing industry is that it follows the same rules like any market out there. There are trends, flops, rising stars and gurus. We have witnessed many different trends like engagement techniques, viral textbooks, big data, storytelling etc. Some of them are really important elements of marketing, others are big flops.  The latest “trend” is the convergence of marketing and neuroscience.

 If you make a quick google search of “behavioral insights marketing” or “neuromarketing” or “reading consumers’ minds” you will find millions of results. There are authors, academics and public figures who have emerged as “neuromarketing experts” like Adam Alter, Wired created a new blog called “Brain Watch”, NY Times had an exclusive interview with the masterminds of the “Behavioral Insights Team” a group of scientists testing the power of behavioral change to devise effective policies, seeing it not just as a way to help people make better decisions, but also to help government do more for less. Last but not least, The Economist recently wrote about the turn of advertisers towards psychology and behavioral analysis models created by Kahneman.

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The unit has been nudging people to pay taxes on time, insulate their attics, sign up for organ donation, stop smoking during pregnancy and give to charity — and has saved taxpayers tens of millions of pounds in the process, said David Halpern, its director. Every civil servant in Britain is now being trained in behavioral science. The nudge unit has a waiting list of government departments eager to work with it, and other countries, from Denmark to Australia, have expressed interest.

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I have also myself written about the “marketing of unconscious”, the irrationalities of our mind and the phenomenon of synesthesia.

WHAT IS NEUROSCIENCE AND HOW IT CAN HELP MARKETING

Neuroscience is the study of the nervous system that seeks to understand the biological basis of behavior. Broadly speaking, the most compelling application of neuroscience in marketing is its ability to understand individual differences at multiple biological levels. Neuroscience brings the ability to integrate many different explanations of behavior, and multiple levels might be necessary for various consumer phenomena. Indeed, neuroscience works to understand when different individuals employ different choice strategies. These efforts can build upon existing efforts in marketing to identify different strategies behind, providing a clear path for neuroscience to impart novel insights into how individuals utilize different decision-making strategies.

The current set of neuroscience tools could improve the efficiency of marketing strategies. Neuroscience cannot replace, either now or in the future, traditional approaches to understanding consumer needs. Instead, neuroscience data can indicate implicit processes, improve out-of-sample predictions, improve the generalization of models of behavior, and provide a reliable and process-based approach for segmenting customers.

Neuro- science data cannot facilitate prediction of all purchasing decisions by individuals, but it can facilitate an understanding of when and how preferences can change

NEUROMARKETING: NOTHING MORE THAN A BUZZWORD

A critical distinction is between consumer neuroscience, which refers to academic research at the intersection of neuroscience and consumer psychology, and neuromarketing, which refers to practitioner and commercial interest in neurophysiological tools, such as eye tracking, skin conductance, electroencephalography (EEG), and functional magnetic resonance imaging (fMRI), to conduct company-specific market research.

Neuromarketing is an emerging field that bridges the study of consumer behavior with neuroscience. Controversial when it first emerged in 2002, the field is gaining rapid credibility and adoption among advertising and marketing professionals. Each year, over 400 billion dollars is invested in advertising campaigns. Yet, conventional methods for testing and predicting the effectiveness of those investments have generally failed because they depend on consumers’ willingness and competency to describe how they feel when they are exposed to an advertisement. Neuromarketing offers cutting edge methods for directly probing minds without requiring demanding cognitive or conscious participation.

If neuroscience is considered to be in its infancy, neuro- marketing is clearly at an embryonic stage. Marketers are just awakening to the possibilities offered by unveiling the brain circuits involved in seeking, choosing, and buying a product. While many of the studies done by neuromarketers are commercial and as such don’t go through the standards and review process imposed by academics, enough evidence has been already published to highlight a few core neurocognitive principles at play when consumers perceive advertising messages.

HOW WE START LOVING A BRAND: WE USUALLY LOVE THE BRANDS THAT ARE LOCATED ON TOP SHELVES

It is very common for people to say “I love the X,Y,Z brand”. This statement can derive from many reasons like personal experience, cheap pricing, nice branding etc. But how it starts?

The framework divides the stages that are required for brand preference formation over time into four basic components: (1) representation and attention, (2) predicted value, (3) experienced value, and (4) remembered value and learning.

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Each second we are exposed to an estimated 11 million bits of information that reach us through all our senses, yet humans are capable of processing only around 50 bits of that information, letting most of the input go by unnoticed.

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The first process in brand decisions involves forming the representation of the choice alternatives—that is, brand identification. This entails processing the incoming information, so that different options for choice are identified, like for example different beer brands. At the same time, the consumer needs to integrate information on internal states (thirst level) and external states (location, social context) that drive attention. For example, when faced with a choice between drinking Heineken or Amstel beer (an incoming information) a consumer’s choice is likely to depend on her own level of thirst (an internal state) and what her friend chooses to drink (an external state).

Attention is the mechanism responsible for selecting the information that gains preferential status above other avail- able information. Recent review of attention in neuroscience indicates that four conceptual components are fundamental to attention: bottom-up or saliency filters, top-down control, com- petitive visual selection, and working memory.

Bottom-up or saliency filters automatically select the most important information from all available information. This selection is based on the low-level features of the visual input: colors, luminance, orientation, size, shape, movement, etc. Such bottom-up factors have a strong effect on the initial eye movements when consumers are exposed to marketing information: the first four eye-movements are made within the initial 2.5 s of exposure. Some higher- level factors are also capable of gaining automatic, preferential access to attention. These include faces, text, novelty, and one’s own name.

Visual selection occurs when the most important information from all the areas that are identified as potentially important in preattentive scans (based on the bottom-up input) is chosen. This means that attention is given to a particular location in space.

The predicted value of each brand that is available for choice (e.g., Heineken vs. Amstel) represents the consumer’s belief about the experienced value of that brand at some time in the future. In other words, the predicted value involves the consumer’s evaluation of how much enjoyment he will derive from consuming a Heineken or an Amstel beer.

Experienced value is based on the pleasure derived from consuming a brand. According to early notions of utility or value, experienced value is the “true value” that should matter the most for value-based decision making. Experienced value consists of the (a) valence and (b) intensity of the consumption experience.

These and related studies suggest that relatively greater activity in the left frontal region is associated with either positive emotion- al experience or the motivational drive to approach an object.

Consider again our example of choosing between Heineken and Amstel. An important predictor of your choice is your memory of previous exposures to the two brands. If you remember that Heineken had a bitter taste and Amstel had a distinct whiff of something sweet, these experiences may influence your decision. You may remember a recent entertaining Heineken commercial, but you have no such memory of an Amstel commercial. Brands “work their magic” by associating themselves with experiences, which in turn influence subsequent retrieval and recognition. It is important to note that these can be personal experiences or those of other people

The link between memory and preference was further strengthened by studying how “expert power” influences this link. In the study, products that were presented simulta- neously with an expert person were associated with improved recall at a subsequent memory test on a different day

Different models of memory retrieval have seen memories as being “replayed,” contributing to the popular notion that (episodic) memories are stored as hard copies in the brain. In this view, remembering is the process of retrieving factual and true information about the experiences we have had. While memories have been thought of as labile during encoding, information that is consolidated in memory has been thought to be retrieved as more stable “information packages.”

WHAT WE LIKE, WHAT IS THE CONTEXT AND HOW WE DIFFER FROM EVERYONE ELSE

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The brain is responsible for all our consumer behaviors. To function properly, it needs to use a lot of energy. Even though the brain is only 2% of our body mass, it burns nearly 20% of our energy. Most of the functions we need to go through a day are managed by the brain below our level of consciousness. This explains why nearly 80% of our brain energy is necessary to sustain our rest state or default mode, a critical aspect of brain functioning which continues to puzzle neuroscientists. Clearly, we only use about 20% of our brain consciously. Worse, we do not control the bulk of our attention since we are too busy scanning the environment for potential threats.

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There are 3 basic pillars that characterize how we think before we choose or buy something.

First, to evaluate a brand (or to buy a product), consumers must determine whether or not the product and the price are to their liking (preference measures). Second, consumer preferences are susceptible to context and hence it is important to understand how perturbations to cognitive and neural pro- cesses will affect choice. Third, like all things, preferences will vary across consumers (individual differences).

If neuroscience is able to identify brain activity that corresponds to preference measures, this demonstrates an ability to identify precise computations taking place in the brain. In other words, the existence of value signals in the human brain argues for a cognitive process of subjective valuation, and that mechanism can be studied in the context of pricing or another costs associated with consumption

The ability of emotions, memory, social comparisons, and previous actions to affect consumer choices is well known. Similarly, the manner in which a decision problem is posed may affect choice behavior, including whether or not an individual is in the physical presence of potential options. All of these scenarios involve changes in decision context and modulations of choice behavior.

Neuroscience studies now attempt to understand how choice processes are modulated by various contextual changes, whether external (e.g., framing of a problem) or internal (e.g., mood, memory). For example, changes in the price of wine modulate both subjective reports of flavor pleasantness and the corresponding neural activity. Similarly, the presentation of an equivalent risky choice problem has been shown to affect the neural processes recruited to resolve it. Internal manipulations, such as sleep deprivation, have also been shown to affect the neural processing of risk. Another manipulation, self- regulation, has been shown to affect both physiological and neural responses to reward; neuroscience can quantify the ability of an individual to self- regulate. Finally, neural markers of decision processes can be shaped by choice-induced changes in the evaluation of out-, as well as by preference changes borne out of cognitive dissonance.

Once the marketing team has collected sufficient information about a new potential product, they can then make revisions to their original prototype and revise the design of the product. Feedback obtained from market research in stage 1 can also aid in modifying brand name and packaging strategies. The scale and scope of such processes is heavily product-dependent. Thus, the contributions of neuroscience to this stage may be limited, although procedures similar to those outlined in stage 1 can be iterated to improve the evaluation of modified prototypes.

Once a product is developed, a communication strategy is typically put in place to educate consumers on the both the existence and the benefits of the product. I have extensively explained in a previous post how brands should plan their communication strategies based on how consumers’ unconscious works. This communication strategy will be integrated across all the various ways in which the firm interacts with the consumer (e.g., from product packaging to in-store displays to social media, and traditional advertising campaigns). Many marketing researchers still follow historically popular approaches to measuring the effective- ness of these efforts. For example, a brand manager may employ a memory test to measure recall, assuming this measure is a good determinant of advertisement effectiveness. If memory recall does indeed always accurately correspond to increased preference and purchasing behavior, this would be a sufficient metric.

CASE STUDY: PLAYERS WERE DRIVING MUCH FASTER A RED BULL CAR IN A RACING VIDEO GAME

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Brand exposure can have double-sided effects on behavior, with brand identity associations creating both positive and negative effects on objective consumer performance. Experimental results from a racing game involving functionally identical cars with differently branded paint jobs show that Red Bull branding creates a U-shaped effect on race performance, as Red Bull’s brand identity of speed, power, and recklessness work both for and against the players. Even though brands were exposed supraliminally, effects traveled through nonconscious channels. Double-edged effects of branding on consumer performance could be increasingly important as ambient advertising and product cobranding become more commonplace.

Recent work has extended brand priming effects to non-consumption environments, where even incidental or nonconscious exposure to a brand can trigger goal- relevant behavior and cognitions

Unlike traditional advertising or mere exposure, however, placing brand information on real-world and virtual objects that consumers can interact with offers a second potential route of influence within consumer behavior.

The Red Bull brand, for example, has cultivated a brand identity that resonates with concepts of speed, energy, and aggressive risk-taking. In addition to their “Gives You Wings” slogan, Red Bull has built their brand identity through promotions such as sponsoring downhill street luge contests, airplane races, and creating full-contact ice-skating obstacle courses known as “Crashed Ice.”

The Red Bull brand identity may influence consumers to attempt to finish the race as fast as possible, pushing the car and their abilities to the limit in order to achieve the fastest lap scores. At the same time, these brand characteristics could encourage people to race too hard, pushing the car and themselves beyond their limits of performance and skill. This could lead to consumers taking too aggressive of a racing line, going off track, or even crashing, leading to the opposite effect on race performance than the brand identity might suggest

This suggests that Red Bull encourages participants to pursue a fast, aggressive racing strategy, which results in fast times for some participants, but an increase in off-track time led to decreased performance for participants pursuing overaggres- sive driving strategies.

Red Bull’s personality associations of speed, power, aggressiveness, and recklessness either pushed consumers to the edge of their ability, leading to very fast races overall, or pushed them beyond their ability, leading to higher off-track times and slower races overall. Indeed, Red Bull was the only brand with a significantly uneven race speed distribution, showing a strong U-shaped effect on race time; Red Bull was most commonly a participant’s fastest or slowest car.

Overall, these results highlight the importance of exploring the effects of brand exposure on consumer behavior. Brand exposure can create double-edged outcomes on consumer performance, with both positive and negative effects arising from a single set of brand identity associations. These effects may travel through largely nonconscious pathways outside of conscious awareness suggesting that objective performance metrics may better capture brand priming effects over subjective or cognitive measures. As ambient out-of-home advertising continues to flourish, brand collaborations and cobranding attach multiple brands to single objects, and promotional techniques such as product placement challenge traditional advertising for marketing dominance, these effects are of growing importance as the amount of brand exposure increases in consumers’ lives.

BIBLIOGRAPHY

December 19, 2013
The most contagious ideas of 2013

 

November 25, 2013
5 videos you should watch

1. THIS IS THE INVISIBLE BIKE HELMET 

2.  MIT MEDIA LAB LATEST INVENTION ALLOWS YOU TO TOUCH PHYSICAL OBJECT THROUGH YOUR SCREEN

3. STEPHEN FRY EXPLAINS CLOUD COMPUTING IN A SHORT ANIMATED VIDEO

4. JASON SILVA CALLS HIMSELF A PERFORMANCE PHILOSOPHER AND RUSSIAN STANDARD VODKA BUILT ITS LATEST AD CAMPAIGN ON HIM

There has been a dramatic rise of clever individuals who combine pieces of knowledge around technology, design, philosophy and marketing and then they wrap them up in interesting talks, videos or interviews. Jason Silva is one of them. He calls himself performance philosopher and viral artist. He is behind the amazing “Shots of Awe" YouTube channel, he gives TED talks and I am pretty sure he is a really interesting guy to have a conversation with. 

Russian Standard Vodka decided to make him an ambassador in its latest ad campaign and build the promo around his personality and communicaion skills combining technology, entertainment, storytelling and nice graphics.

My opinion? Much much better than having paid a second tier celebrity.

5. WHAT IS A POSITIVE EMOTION? A YALE PROFESSOR EXPLAINS

———————————————————————————————————————————————In many ways, when you experience positive emotions in a context that doesn’t match that function, here’s where we’re finding that difficulties arise, and that we shouldn’t be trying to promote positive emotions at all times and in all situations, and for all people for that matter. 

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November 14, 2013
These are the 2 most recent examples of branded content coming from Dolce & Gabbana and Prada and directed by Martin Scorsese and Wes Anderson respectively. Totally uninspiring and repeating the “love for old” concept that Italian brands have been promoting since for ever.

October 8, 2013
11 minutes about Malala Yousafzai, the 16-year old girl from Pakistan who was shot by the Taliban because she wanted to be a doctor and she is now nominated for the Nobel Peace Prize

September 24, 2013
248 slides explaining why native advertising is right now the only digital advertising format that works

September 24, 2013
This entire short film takes place inside a computer screen and is probably the best documentary of how millenials think and act

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