When we emerge from this economic malaise, those companies that hope to thrive have to be committed to winning. Survival is not an end goal; thinking like this will ensure future troubles. Long term, strategic planning requires that survival of the fittest requires playing to win.
During my stint in Competitive Marketing Analysis & Strategy, one of the agency resources had been part of the first Bill Clinton for President team. In discussions, he often related how alike political campaigns and competitive marketing were. For each winner there is a loser. Being the best candidate is not nearly enough. Good strategies, tactics, planning, preparation and timing are all essential.
On that basis we undertook the challenge of creating on a rapid assessment & response capability. The idea was to develop the capability to understand the other guy’s situation and strategy to the point one could anticipate and predict the likely marketplace moves available. And then have some prebuilt ideas, campaigns, attacks. Essentially we hoped to play Chess (multiple moves ahead), while the other guys played Checkers (one move at a time.)
The agency, brand and competitive folks on this team evolved a set of guidelines. While much of the responses were tactical, a strong and clear strategic orientation and perspective was critical. It is very easy to be drawn into a firefight, winning the battle and losing the war. The following rules help reinforce the big picture needed:
1. No flesh wounds! Go after vital organs.
a. Core values
b. Basis of their legitimacy
2. Not for the faint of heart. Don’t make a move unless you are willing to drive it to the end.
a. Anticipate and plan for responses
b. Keep playing chess; it’s easier in the long run.
c. Only fight on turf YOU want to fight on.
d. Make the other guy fight from his sewer
e. You always have the option to muddy the waters
3. Timing is key. Communicate when the attention is on you
a. Keep your powder dry until it is time to kill.
4. Always be credible. The best credibility is to use the other guy against himself
a. Specific facts trump broad generalizations
b. Is it Negative or Comparative? That is determined by the receiver
5. Above all, make sure you are newsworthy
6. Your foundation is the general or specific knowledge that exists in the marketplace
7. Get someone else to go negative first, if possible
a. Claim you were attacked
b. You are merely & simply forced to defend yourself….THEN STICK THE KNIFE IN & TWIST FIRMLY
8. You absolutely cannot make a mistake or be caught in a lie
9. All communication must empower the audience.
a. If they aren’t gaining power, YOU lose.
10. Create and maintain the air-cover of decency
a. Don’t be a hostile or naked aggressor
b. Don’t be negative without a positive or better alternative
c. Better to be the victim
11. This is a Tactic, don’t get trapped.
12. Never, Ever let a negative go unanswered!!
Some rules may appear harsh or brutal on first reading, but business is not for the genteel. I am not an advocate of mean spirited or illegal activity. In fact, I abhor the divisive partisan tone that American politics has taken.
We would all be better served by winning ideas and innovation. However, not everyone shares that belief or is prepared to compete that way. These rules are for those times.
Good luck!
Kevin Hanft
Marketing Leverage LLC
Friday, April 24, 2009
Tuesday, April 14, 2009
Funding Sponsorship Deals – Look Across the Board for Hidden Dollars
Most typically, corporate sponsorship deals are funded and managed within advertising, brand or corporate marketing and sales promotion organizations. With the current economic times requiring senior buy-in, full utilization and accountability, it may require internal advocates to find broad based support and budget resources.
Careful review of leveraging activities and assets may reveal untapped and hidden opportunities that are beyond marketing functions. There are many internal groups that have benefited from sponsorship deals (along with others who haven’t even been considered) and may not have been asked to provide funding.
Below are a few business functions and areas that Marketing Leverage LLC has worked with successfully in generating participation and support for sponsorship related activities. Some are obvious, others not so.
• Employee Relations –This group should be part of the matrix core team as they can be central in helping to evangelize the benefits of a sponsorship along with telling the business strategy and sell the business case value. In addition, internal communications teams are often seeking ‘good news’ stories and interesting & relevant content to share with employees. Many companies provide access to sponsorship assets (tickets, merchandise, etc.) at a discount as an employee perk. Several Olympic sponsors run internal contests with winners awarded working trips to the host country during Gamestime.
o Generally the financial budget for Employee Relations is limited, so don’t expect many hard dollars. However, they can be a major ally when buy-in or renewal is needed. Also, by creating a win-win relationship, they will be more likely to do an effective job on communicating sponsorship strategy, sell in and wrap up.
• Human Resources / Campus Recruiting – These groups are marketing the company as a brand, too. Sponsorship relationships can help contemporize and demonstrate coolness or relevancy to potential hires. Most companies have job fairs, on campus recruiting and advertising that can all be enhanced by fully leveraging relationships.
o HR does have funds available, so plan to have them kick in some towards the rights fees. But help them out by sharing sponsorship related created, signage, ads or exhibit structure. This will offset some of their operating costs and also ensure they follow a consistent look, feel and thematic.
• Corporate Education and Training - May be seeking corporate activities to align with and thematic to tap into. Many sponsorship deals lend themselves as creative ideas and provide an interesting structure for training programs.
o Like HR, Training likely will not have many funds available to contribute. Assume this group as another internal ally in leveraging the deal. This may require you to give more than you get. But helping to relieve expenses, ultimately benefits the company. Sharing of sponsorship related creative, logos, photos, identity etc. will enable them to follow a consistent look, feel and thematic and make your life easier.
• Health & Wellness – Many large corporations have groups dedicated to promoting healthy lifestyles. These groups run employment involvement activities and health education seminars that are all easily tied into any sports sponsorship.
o H&W usually doesn’t have many funds available.Plan to use this group as another ally in demonstrating a “full circle” integration of the deal, to the employee body and senior management. Appeal to the property to see if they have health education programs or information readily available that can be ported over.
• Corporate Social Investment / Philanthropy – These groups definitely have funds available, either through a foundation or direct corporate allocation for arts and charitable needs to demonstrate socially responsibility
o Many have specific rules on what they can fund. This may restrict their participation to charitable aspects of a property, etc. Sponsorship leaders will have to spend time understanding these parameters. Working closely with properties is required to structure deals that can tap these funds or align with property related philanthropic activity (i.e. NFL – United Way; FIFA – UNICEF)
• Environmental Outreach – Companies whose processes or plants impact the environment often align with conservation related organizations.
o Most have funds, but individual situations should be explored.
• Product Management / R&D Budgets – In many categories (technology, automotive, video games, etc.) product managers have funds set aside for early user trials or product launch. R&D may be interested in extreme situations that can fully stress out products under demanding circumstances.
o These may take the form of direct cash funds or value in kind contributions. Sponsorship managers will have to be smart in structuring deals with properties in selling the true value of the goods being provided.
• Retail Promotion – Consumer package goods often have ‘key retailer’ strategies with specific funding for in store promos. The retailers are always seeking unique and differentiating ideas. Clever and tight integration of a sponsorship into retail can be a major step forward in enhancing this relationship.
o Funds are definitely available!Retail promos are usually planned at least three quarters in advance, so early engagement is needed. Be aware of the sponsor agreement and ‘pass thru’ rights considerations.
• Sales Awards – Virtually every sponsor of a major property utilizes one or many events as an award platform for the sales team. It is aspirational, exclusive and typically provides access to senior management.
o Sales always has money, so don’t be shy or timid! Get them to pay for part of the property rights, not just their own hospitality costs.
• Channel Marketing / Affiliate Relations – Most corporations have an extended ecosystem of partners, vendors etc. Many are actively engaged in leveraging or benefiting from sponsorship deals. (MasterCard & Visa – issuing banks; auto makers – dealers; Large retailers - manufacturers)
o Like sales, this group has money,make sure they are appropriately funding the overall deal, plus their direct costs.
• Advertising and Media Budgets – These groups may have dollars already allocated for assets that are part of the sponsorship package -- ad or signage placements in a variety of media that are viewed as useful and valuable. The sponsorship may “be” the big idea of the ad campaign and include entitlements to celebrities that will be featured in creative.
o The media group may loath this conversation, fearing that you have agreed to undesirable, off-target spots or large financial commitments. Like with other groups, early engagement, inclusion and solicitation of input is recommended.
This exercise is not merely about seeking and finding internal funds. The days of the old “tin cup” routine, where advocates make the rounds looking for investors have long since passed. Strategic, smart use of sponsorship assets requires that the project leader look broadly across the company, educate people on the benefits and provide marketing consultation.
Identify any and all angles for potential benefit extraction. Think about every group of constituencies that somehow touch the business – customers, employees, suppliers, partners, investors, media, analysts, regulators, etc. All may provide opportunities for further leveraging of the property.
In many cases, the group cannot provide directly investible funding. But they may be in a position to build upon the investment in place – fees, activation programs, etc. – that provide cost avoidance in their budget. Be sure to quantify and track these. At final review or renewal time they provide further evidence of the value to the business – plus the strong and effective leadership you have provided.
Good luck!
Careful review of leveraging activities and assets may reveal untapped and hidden opportunities that are beyond marketing functions. There are many internal groups that have benefited from sponsorship deals (along with others who haven’t even been considered) and may not have been asked to provide funding.
Below are a few business functions and areas that Marketing Leverage LLC has worked with successfully in generating participation and support for sponsorship related activities. Some are obvious, others not so.
• Employee Relations –This group should be part of the matrix core team as they can be central in helping to evangelize the benefits of a sponsorship along with telling the business strategy and sell the business case value. In addition, internal communications teams are often seeking ‘good news’ stories and interesting & relevant content to share with employees. Many companies provide access to sponsorship assets (tickets, merchandise, etc.) at a discount as an employee perk. Several Olympic sponsors run internal contests with winners awarded working trips to the host country during Gamestime.
o Generally the financial budget for Employee Relations is limited, so don’t expect many hard dollars. However, they can be a major ally when buy-in or renewal is needed. Also, by creating a win-win relationship, they will be more likely to do an effective job on communicating sponsorship strategy, sell in and wrap up.
• Human Resources / Campus Recruiting – These groups are marketing the company as a brand, too. Sponsorship relationships can help contemporize and demonstrate coolness or relevancy to potential hires. Most companies have job fairs, on campus recruiting and advertising that can all be enhanced by fully leveraging relationships.
o HR does have funds available, so plan to have them kick in some towards the rights fees. But help them out by sharing sponsorship related created, signage, ads or exhibit structure. This will offset some of their operating costs and also ensure they follow a consistent look, feel and thematic.
• Corporate Education and Training - May be seeking corporate activities to align with and thematic to tap into. Many sponsorship deals lend themselves as creative ideas and provide an interesting structure for training programs.
o Like HR, Training likely will not have many funds available to contribute. Assume this group as another internal ally in leveraging the deal. This may require you to give more than you get. But helping to relieve expenses, ultimately benefits the company. Sharing of sponsorship related creative, logos, photos, identity etc. will enable them to follow a consistent look, feel and thematic and make your life easier.
• Health & Wellness – Many large corporations have groups dedicated to promoting healthy lifestyles. These groups run employment involvement activities and health education seminars that are all easily tied into any sports sponsorship.
o H&W usually doesn’t have many funds available.Plan to use this group as another ally in demonstrating a “full circle” integration of the deal, to the employee body and senior management. Appeal to the property to see if they have health education programs or information readily available that can be ported over.
• Corporate Social Investment / Philanthropy – These groups definitely have funds available, either through a foundation or direct corporate allocation for arts and charitable needs to demonstrate socially responsibility
o Many have specific rules on what they can fund. This may restrict their participation to charitable aspects of a property, etc. Sponsorship leaders will have to spend time understanding these parameters. Working closely with properties is required to structure deals that can tap these funds or align with property related philanthropic activity (i.e. NFL – United Way; FIFA – UNICEF)
• Environmental Outreach – Companies whose processes or plants impact the environment often align with conservation related organizations.
o Most have funds, but individual situations should be explored.
• Product Management / R&D Budgets – In many categories (technology, automotive, video games, etc.) product managers have funds set aside for early user trials or product launch. R&D may be interested in extreme situations that can fully stress out products under demanding circumstances.
o These may take the form of direct cash funds or value in kind contributions. Sponsorship managers will have to be smart in structuring deals with properties in selling the true value of the goods being provided.
• Retail Promotion – Consumer package goods often have ‘key retailer’ strategies with specific funding for in store promos. The retailers are always seeking unique and differentiating ideas. Clever and tight integration of a sponsorship into retail can be a major step forward in enhancing this relationship.
o Funds are definitely available!Retail promos are usually planned at least three quarters in advance, so early engagement is needed. Be aware of the sponsor agreement and ‘pass thru’ rights considerations.
• Sales Awards – Virtually every sponsor of a major property utilizes one or many events as an award platform for the sales team. It is aspirational, exclusive and typically provides access to senior management.
o Sales always has money, so don’t be shy or timid! Get them to pay for part of the property rights, not just their own hospitality costs.
• Channel Marketing / Affiliate Relations – Most corporations have an extended ecosystem of partners, vendors etc. Many are actively engaged in leveraging or benefiting from sponsorship deals. (MasterCard & Visa – issuing banks; auto makers – dealers; Large retailers - manufacturers)
o Like sales, this group has money,make sure they are appropriately funding the overall deal, plus their direct costs.
• Advertising and Media Budgets – These groups may have dollars already allocated for assets that are part of the sponsorship package -- ad or signage placements in a variety of media that are viewed as useful and valuable. The sponsorship may “be” the big idea of the ad campaign and include entitlements to celebrities that will be featured in creative.
o The media group may loath this conversation, fearing that you have agreed to undesirable, off-target spots or large financial commitments. Like with other groups, early engagement, inclusion and solicitation of input is recommended.
This exercise is not merely about seeking and finding internal funds. The days of the old “tin cup” routine, where advocates make the rounds looking for investors have long since passed. Strategic, smart use of sponsorship assets requires that the project leader look broadly across the company, educate people on the benefits and provide marketing consultation.
Identify any and all angles for potential benefit extraction. Think about every group of constituencies that somehow touch the business – customers, employees, suppliers, partners, investors, media, analysts, regulators, etc. All may provide opportunities for further leveraging of the property.
In many cases, the group cannot provide directly investible funding. But they may be in a position to build upon the investment in place – fees, activation programs, etc. – that provide cost avoidance in their budget. Be sure to quantify and track these. At final review or renewal time they provide further evidence of the value to the business – plus the strong and effective leadership you have provided.
Good luck!
Monday, April 6, 2009
Share of Voice – A Key Metric That Has Lost Its Place?
In the mid ‘90s I worked in competitive analysis for a market leader consumer services brand during an extremely active and aggressive period in the market. The business was led by a hyper kinetic guy who left no challenge unanswered and was always angling for a squabble. It was a great learning experience that reinforced the need for sound business and marketing strategy.
I was tracking the advertising and Mar-com for four major competitors. We were tasked with understanding the message, promotions, offers and target audiences. We also looked extensively at the media types, investment and share of voice, going to great expense to have a pretty accurate handle on the numbers.
Interestingly, the senior executives never warmed up to or really “GOT” the importance of the Share of Voice (SOV) or Share of Spending (SOS). They were most intrigued by the creative, give-aways and offers. Our team put together a terrific presentation on the correlation of Share of Voice to Share of Market (SOM); using a classic marketing science book entitled The Wheel of Marketing by James Peckham Sr.
Peckham had analyzed several hundred leading package goods brands from 1946 to 1975 while working for Nielsen Data Corp.
The key conclusions were:
• SOV/SOM is key; if not the best indicator of what level of media support is needed to drive share growth.
• 96% of leading brands that grew share maintained SOV/SOM ratios exceeding 100%
• There is a substantial lag effect resulting from SOV/SOM ratio changes and actual market share impacts.
• SOV/SOM must be sustained for a long period to drive share changes.
• The greater uniformity/equality that exists among the competition on the quality of advertising and brand benefits, the stronger the correlation of SOV/SOM.
• Brands with news or high growth categories get a better return on increased SOV/SOM ratio.
• The following circumstances require greater SOV/SOM ratio to grow share:
- New brands generally need a disproportionate ratio (150 to 200 indexes) to get a foothold and grow.
- Longer purchase cycles.
- New brands without a quality or equity difference.
• The theory of SOV/SOM ratio does not hold for the following situations:
- A major price change by one brand
- A brand pre-launch or significant new innovation
- Entry of a significant, dynamic brand
- Much more compelling message, copy or creative for one brand
- Dramatically poorer brand image or equity
The extensive data that backed these analyses won over the marketing staff to a more scientifically driven approach to the media plan and market analysis. To be clear, it was not easy or inexpensive to compile the data, especially in a highly active market. It was also challenging to apply CPG models to a services industry. Yet, it was very worth it as it moved the ‘non-marketing types’ who held important marketing roles away from their obsession on creative issues and allowed the professionals to run advertising and mar-com.
These days, with many more media forms and the fracturing of the marketplace and audiences, SOM calculation is even more challenging. However, for any brand that can isolate a target segment and media, this analysis can be very beneficial.
A couple of important learnings for me were that data and facts will always sway the discussion and that marketing is part science, along with an art form
I was tracking the advertising and Mar-com for four major competitors. We were tasked with understanding the message, promotions, offers and target audiences. We also looked extensively at the media types, investment and share of voice, going to great expense to have a pretty accurate handle on the numbers.
Interestingly, the senior executives never warmed up to or really “GOT” the importance of the Share of Voice (SOV) or Share of Spending (SOS). They were most intrigued by the creative, give-aways and offers. Our team put together a terrific presentation on the correlation of Share of Voice to Share of Market (SOM); using a classic marketing science book entitled The Wheel of Marketing by James Peckham Sr.
Peckham had analyzed several hundred leading package goods brands from 1946 to 1975 while working for Nielsen Data Corp.
The key conclusions were:
• SOV/SOM is key; if not the best indicator of what level of media support is needed to drive share growth.
• 96% of leading brands that grew share maintained SOV/SOM ratios exceeding 100%
• There is a substantial lag effect resulting from SOV/SOM ratio changes and actual market share impacts.
• SOV/SOM must be sustained for a long period to drive share changes.
• The greater uniformity/equality that exists among the competition on the quality of advertising and brand benefits, the stronger the correlation of SOV/SOM.
• Brands with news or high growth categories get a better return on increased SOV/SOM ratio.
• The following circumstances require greater SOV/SOM ratio to grow share:
- New brands generally need a disproportionate ratio (150 to 200 indexes) to get a foothold and grow.
- Longer purchase cycles.
- New brands without a quality or equity difference.
• The theory of SOV/SOM ratio does not hold for the following situations:
- A major price change by one brand
- A brand pre-launch or significant new innovation
- Entry of a significant, dynamic brand
- Much more compelling message, copy or creative for one brand
- Dramatically poorer brand image or equity
The extensive data that backed these analyses won over the marketing staff to a more scientifically driven approach to the media plan and market analysis. To be clear, it was not easy or inexpensive to compile the data, especially in a highly active market. It was also challenging to apply CPG models to a services industry. Yet, it was very worth it as it moved the ‘non-marketing types’ who held important marketing roles away from their obsession on creative issues and allowed the professionals to run advertising and mar-com.
These days, with many more media forms and the fracturing of the marketplace and audiences, SOM calculation is even more challenging. However, for any brand that can isolate a target segment and media, this analysis can be very beneficial.
A couple of important learnings for me were that data and facts will always sway the discussion and that marketing is part science, along with an art form
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