SGW Blog

Brands sell. People close.

What many marketers still have not fully realized is how powerful a brand can be with regard to selling.  Some experts have gone as far as saying that the brand, if properly developed and promoted, can do “half the job” of making the consumer decide to buy a given product or service.  Once the brand has made the emotional connection with the consumer, the job of closing the sale is made that much easier for the sales people.

With regard to hospitals and healthcare brands, the realization of the role a brand can play is even lower than one might expect.  When there is a weak economy, the brand connection becomes even more important.  In a recent study conducted in 2009, Deloitte concluded that  “consumerism is a formidable force in health care, a defining characteristic between its past and future that will impact every stakeholder’s value proposition and business model.”

The study went on to say that while the status quo for many has changed recently, the “trend toward consumerism also presents great opportunity for those stakeholders that recognize the value of connecting with end users who ultimately drive demand for the goods and services sold in the U.S. health care system.”

More than ever, there is increasing evidence that growing numbers of consumers/patients want to be actively engaged.  They are quite able to see variance in service, quality and costs. They are comparing doctors, hospitals, medications, devices, health plans and self remedies. In addition, they are exploring alternatives to conventional approaches and spending money to achieve their health goals.  The tie-breaker when it comes to making these kinds of decisions is usually the brand.  A strong brand will win out every time.

With regard specifically to selecting a hospital, marketers might want to take a hint from the Disney organization, wild as that may sound!  What people want from Disney is a successful and valuable experience.  When choosing a hospital, people have to be treated as consumers in much the same way.  It is up to the hospital to provide the best experience a patient can possibly have.  If that is the essence behind the brand, that hospital will have a definite edge, most likely a decisive one.

To make the point in a simple way, consider the following chart:

Disney Approach	Hospital Brand Approach
Experience (Fun)	Experience (Healing)
Cleanliness	Cleanliness
Courteous Staff	Courteous Staff
Expertise (Entertainment)	Expertise (Medical)
New Rides	New Technologies
Courteous Staff	Courteous Staff
Good Accommodations	Good Accommodations

Of course, the comparisons could go on at length, but the concept of how a consumer thinks about brands in these times also has to be considered.  As in the case of consumer package goods, hospitals have to think of themselves as a “value purchase.”  People are more careful when it comes to spending today than ever before.  When consumers “shop” hospitals, the key criterion will be “value.”  If they feel they will be getting their money’s worth from the total experience, they will choose accordingly.

Value is perceived at various levels by consumers.  The following chart provides an example using water to illustrate.

Four Levels of Economic Offers
Commodity	Water from sink	FREE
Goods/packaging	Bottle in supermarket	$.12
Service	Bottle from machine	$1.00
Experience	Bottle at a ball game	$5.00

Obviously, in cases like these, our execution of a marketing plan would consider every possible message and thoughts needed to convey an “experience-centric” brand positioning strategy. 

Musings about the Ad Biz

It never ceases to amaze me how little the business world knows about the ups and downs about the ad industry.  They know that when things get bad, advertising is one of the first things to cut.  What they fail to understand is that when they cut advertising, they cut demand and sales go down as a direct result on a great majority of products and services.  One of the reasons that Social Media is successful is that it was considered a cheap alternative to traditional advertising which it is not.  Social media, in my opinion, works more like PR than advertising and it has not reached a point where it will replace traditional advertising by a long shot.

Where is the ad biz headed?  Well, it depends on what you read and to whom you listen.  Most forecasts come from some industry analysts who look at the business on a total spending basis by quarter.  They compare this year to last year and times before that to come up some results.  Everyone and his brother could tell you that the first two quarters of this year were dismal for the business.  Now, some forecasters are saying that the reduced spending has bottomed out.  That's the good news.  The bad news is that the media has had to lower their prices to get advertisers back into their tents.  So, when spending resumes, it won't be as profitable for the media and, as a result, for the agencies that work on commissions.

Look for more online spending and a continued increase in interest in Social Media over the short term.  When the economy starts to get better, it should be about the time we see the big sporting events like the Super Bowl, the Vancouver Winter Olympics and the 2010 World Cup carry the day for the industry.  In the meantime, let's keep a close watch on how Facebook, LinkedIn and Twitter learn how to make their sites able to generate advertising revenues.

New Survey On Communications Spending

Veronis Suhler Stevenson, a company that has garnered a solid reputation for its Communications Industry Forecast (covering the years 2003-2013), is now predicting  that total communications spending will decline 1% in 2009 to $882.6 billion.  That's the bad news.  The good news is that they are also predicting a 3.6% per year growth rate over the next five years to over $1 trillion. That will making communications the third fastest-growing sector of the U.S. economy over that period.
In summary, says the report:

• Institutional end-user and alternative media grows, as traditional media advertising declines
• Institutional end-user spending is expected to remain largest, fastest growing sector, 3.6% future annual spending gain driven by business information services and for-profit higher education
• Communications will be the 3rd fastest-growing economic sector going forward, rising from the 4th position
• Communications industry forecast to grow faster than GDP in ‘09 and over next 5 years

Social Media is still booming as people get to learn how to use it effectively.  In addition, blog "pick-ups" are expected to double by year end.  Stay tuned.

What consumers are saying about advertising today versus the ad makers

The Center for Media Research just released some findings from a new LinkedIn Research Network/Harris Poll conducted in June, 2009.  Consumers and advertisers involved in the advertising decision making process were the participants in the study.  The major finding is that there are often disparate views regarding how effective a given type of ad is. For example, about half of the advertisers polled believe ads that make people stop and think and ads that give people new information are very effective.  The numbers drop to about 30% when it comes to consumers who say they feel the same.

The report goes on to say that ads that are part of a campaign show an even greater divide between advertisers and consumers (26% to 7%).  Of even greater interest, 21% of advertisers say ads that reinforce a message already known are very effective compared to 10% of consumers.  On the winning side are ads that involve some type of humor.  Some 33% of consumers and 32% say funny ads are “very effective.” The lowest consumer scores went to ads that are self-patronizing and those that they consider scary or make people feel slightly guilty.

But the biggest winners by far in this stumbling economy are those that use a “value proposition strategy.”  Those would be ads promoting sales, coupons and discounts.  Almost three in five (57%) of consumers say that this strategy works well.  In a recent presentation I made to a chamber of commerce group in Bergen County, I emphasized the importance of value, particularly with regard to positioning a brand in today's volatile marketplace.  I guess I was on the right track now that I have seen the results of this study!

Video is booming in mobile!

I just read an interesting article in Online Media Daily, citing a new report that the use of online videos appears to be paying off.  This is true particularly in mobile data broadband use which is up 30% worldwide during the second quarter of the year.  The real growth is attributed increased video streaming on cell phones.

More and more folks are tuning into shows and clips on Hulu, YouTube and MySpace than ever!  In fact, the article goes on to say that video streaming on mobile devices is up some 60% as devices like smartphones grow in popularity as well as the selection of mobile programming continues to expand.

Full Web browsing accounted for the largest share of traffic worldwide at 32%.  In America, it was 37% largely based on the new sales of iPhone in the U.S.  In fact, iPhone alone accounts for half of the U.S. mobile traffic, and the author of the article, Mark Walsh, states "that Apple itself recently estimate the proportion at 65%."

Globally, however, he adds that Asia led the way in mobile broadband use with a 36% increase in mobile broadband use, followed by Europe at 28% and the Americas at 25%.

Marketers should sit up and look at these numbers seriously.  The time has come to figure out the best ways to use video to promote brands, products or services before the medium becomes too cluttered and saturated.  This is clearly a case where the "early bird will get the worm."  That worm could be worth a thousand words.

Creating brands that stand for value is more important than ever!

The following is an article that appeared in the July 3rd issue of The Suburbanite, a weekly newspaper that covers Fort Lee, NJ business.  I was the speaker for the Greater Fort Lee Chamber of Commerce's annual General Membership event.

Getting back to basics

Chamber members learn value of image
BY MAXIM ALMENAS

The Greater Fort Lee Chamber of Commerce (GFTCC) believes many of the businesses in the area need to learn more about successful marketing and advertising techniques in order to build their company’s brand, especially in a down economy.

When they scheduled a guest speaker for their June 24 general membership luncheon, they chose Walter Guarino, president and managing partner for SGW. “The message today is that a lot of people don’t realize how important their brand is,” said Guarino. “In fact, it’s their whole lifeline.” Inside Villa Amalfi restaurant in Cliffside Park, Guarino, who was acknowledged by Business Week New Jersey as one of the “top ten” most influential business leaders in the state, advised GFLCC members and guests to get back to the basics.

“If you have a brand, and people think of you in such a way, have you gone out and determined how you’ve been affected by the economy?” Guarino asked. “If it has changed, your lifeline could be dead. You’re going to have to respond.” Guarino, a 40-year resident of Fort Lee, explained that a brand has to connote value, as people are in a “value” mode today when making purchases. Using a popular discount chain store as an example, Guarino said that Wal-Mart was successful in part because it attracts a higher-level income demographic by showing brand name products in commercials.

“You can get a brand name product for less money and you want to keep that crowd after the recession is over,” Guarino explained. “Their perception is to create value with a new target audience.”
Guarino said small business owners can also create open dialogue with the local community by utilizing social networking Web sites such as Facebook, LinkedIn and Twitter to find out what people are saying about a company’s products and services.

But he also recommended a more traditional medium---weekly newspapers. “Local newspapers like the Suburbanite and the Bergen News are a great medium because you get readership,” Guarino explained. “There’s more readership time spent with weeklies than any other medium. This is one of the main stages where people find out about a community.”

The luncheon also served as an award ceremony to honor local businesses. Nelson and Joanna Gutierrez from Strictly Bicycles received the Conceptual Award, Anthony and Stacy Papavasiliou from It’s Great To Me restaurant won the Merit Award and Commander Jimmy Viola from the Cairola-Barber Veteran of War Post 2342 took home the Landmark Award.

“We were delighted with the turnout for our General Membership Luncheon,” said Judy Auerbach-Adamo, executive director of the GFLCC. “Congratulations to our award winners and special thanks to Dr. Walter F. Guarino.”
Craig Weinstein, president of the GFLCC was equally moved by Guarino’s words and found his message encouraging.

“I think businesses in Fort Lee are starting to see that we are turning the corner toward economic prosperity. Dr. Guarino’s presentation lifted everyone’s spirits toward that direction,” said Weinstein. “I left the luncheon with a strong feeling that smaller, localized businesses still have a place in today’s economy.”

Abbreviated brand names...a new trend?

Earlier this week, a reporter for CNN was asking about the reason for the SciFi channel shortening its name to "Syfy". He was curious as to whether this might be the start of a trend. Here's how I replied:

There are many guidelines that provide a basis for what constitutes a good brand name. The most important is that it either has inherit meaning upon first seeing it or that you can infer what the brand stands for (usually by adding a constant theme and/or icon that is proprietary). Whether it is an "initialized" or "abbreviated" brand, it still must convey a thought or feeling that the person seeing it can connect with. Even better if that person has a particular need that the brand "connection" can fulfill.

Now, in the case of KFC, it obviously was an established brand and the meaning was pretty clear. I believe that the reason for abbreviating the name was to not be "locked into" just a purveyor of fried chicken. The company wanted to branch out into ribs and other products such as roast chicken and the feeling was that the full name was too limiting for them to do that. It reminds me of the name change of Boston Chicken to Boston Market. The KFC brand was not so much a case as being "trendy" as is the case with Syfy. Cable TV has been going this route in my opinion to be more trendy in keeping with today's IM and texting language. It's could be deemed as more modern, thus it grabs a younger person's attention. Will the trend continue? Probably. I cannot see a reason for it to stop. Yet, I would like to point out that abbreviated brands have been around forever. I go back to brands like BVDs, TWA, UPS, K-mart, the major tv networks, BP, HFC, GM and on and on. I guess you could say "Coke" could be called an abbreviated brand as well.

The main point here is that I do not think that the SciFi Channel will lost an ounce of equity by changing to Syfy. I think the name change is a reason to create new awareness to the brand. However, given their appeal to such a defined audience, I don't see many new people "entering their tent" as a result of this name change.

NJ Bank Marketers Show Interest in Social Media

Last Wednesday, I spoke to the New Jersey Bankers Association on the subject of protecting your brand during this kind of economy. Part of my presentation had to do with the growth of social media. I talked about the fact that things like "blogs" are reminiscent of the chat rooms and user groups that had seen some momentary popularity when the Web was first introduced. They were basically the same kind of information dissemination techniques that people today use, such as Twitter, Facebook, LinkedIn and others. The main change is that the number of users today is significantly greater, of course.

A fellow speaker, Steve Lubetkin from Professional Podcasts LLC, talked more about social media and the work he does delivering audio and video over the Internet. I was most interested in what he had to say, given that we offer the same kind of disciplines and programs. Steve used his blog to show how important it has become as a tool for growing his business. Over the years, he has garnered hundreds of followers and many of the discussions today revolve around the usage of social media. This is yet another indication of what we are seeing and hearing from New Jersey businesses, large and small.

As for the banking industry, there has yet to be any noticeable use of social media. In a business that has been so "behind the scenes" with the confidential nature of the financial business in general, that is understandable.  However, it will be hard to convince people that you are offering "personal banking" when you avoid the new two-way media other businesses are starting to adapt.

Things will change. For example, one of our newer clients is a leading title search firm. One of the disciplines we perform for them is a turnkey blog program.  In the beginning, there was some question about whether a blog was a good idea for this sector of the financial industry. Then, one of the principals of the firm attended a recent trade show focused on the category and one of the major topics discussed in a very positive way was blogging. How convenient that we were off and running with their blog before the competition could even think about it!

The Battle of the TV Networks

In a recent article, Ad Age requested the agency's viewpoint on the divide between CBS and NBC on the future of network television. One believes it is in retreat and the other believes it is still the best media buy there is. Here is how we replied:

We find it difficult to conclude that network advertising is in retreat. To begin with, television is a mainstay in people’s lives and networks dominate. Obviously, they have taken a hit from cable and a bit from the Web in terms of household viewing, but the networks are still the super powers of television.

Given the fact that the recession has taken some network advertisers temporarily out of the medium and (in many cases) into some forms of social media, the CPMs had to be reduced accordingly. That will change as the economy improves. Only the networks, however, have the power and clout to televise major events and promote them properly to continue to attract large audiences.

The advent of HD has made the quality of the picture vastly better and this will continue as more LCD-based monitors replace current sets. Networks can telecast their programs in the highest-qualitative manner with the best technology available. In my opinion, they will continue to dominate “live” special events, sports championships, and regular quality programming.

Speaking to Bank Marketers

On June 10, I will be addressing a group of New Jersey bank marketing folks on how to advertise in these difficult economic times. The problems that all banks are faced with are:

1. The recession created huge negativity and mistrust of all financial institutions.
2. Banks and other financial-related service providers suffered, both locally and nationally.
3. People are scared and suspicious of all new offers.
4. Bank advertising budgets in many cases were "frozen." 

We were (and still are to some effect) in a situation where Big Business had to convince people that it could fix the problem. Government, too, has to convince people that it could fix the problem. What one observer said was worse had to do with his feeling the "the marketing and advertising economic model of free enterprise, differentiation, creative advertising and marketing" was beginning to be looked at as broken beyond repair. One thing that happened immediately was the race to social media as a alternative. But the real issue was not a new means of delivering positive messages as much as it was one of just going back to basics.

What really is at issue here is a case of going back to the brand to see how and if it has been tarnished...and in what ways. A bank's brand is everything. Unless it conveys trust and solidarity at the minimum, all the advertising cleverness in the world cannot make it stronger. First, bank marketers have to find out what's broken and figure out ways to promote the brand to mend it. It's really a case of doing some research among key audiences to get an "update" on the brand. It's not rocket science. But it does involve some in-depth research even to the point of revisiting the bank's mission statement.

I could go on, but I think you have an idea of how to start the process. Look to the brand first, and then things will start to fall into place.