I marketing maestro

Five branding trends

What are the hot branding trends that savvy marketers
should be looking out for if they are to stay on the top of
the heap? Brian H Meredith reports.
The following ore five developments thof,
according tc the Americon Marketing
Association (AMA), will affect clients,
customers ond budgets onytime now
(and it it's going tc be felt in the US soon, it
wiil be felt here scmetime thereafter):
1. Performance-based compensation:
ln2000.Procter8(Gamble.theworicl'siargest
advertiser, recked the advertising wcrld
by no longer paying media commissions,
Instead, ogencies were paid based on
actual saies, Compensation increased if
sales went up, and down if sales teli. I am
unsure if any New Zealand ogencies were
invoived or if ether clients of New Zealand
agencies have attempted tc tallow suit (if
you know do pieose let me know).
Despite predictions, performance-bosed
ccmpensaticn has not advanced very far,
partly due to fierce resistance by agencies
("what if the client can't deliver what is
promised" e t c ) and partly because of
the difficuities in measurement - genuine
enough barriers but how long wiii the
dam hold?
Advances in activity-tracking, especiaiiy
on the Web, and new demands for
acccuntabiiity, will result in increased
demonds
for
performance-bosed
ccmpensaticn for both advertising and PR
agencies. It's a trend ttiat agencies should
welcome, not tear - leading consulting
firm Accenture increased its number
cf employees by 25 percent iast year
after adding some type of performonoe
measures to 30 percent of its contracts.
2. Enhanced customer connectivity:
With consumers being bombarded with
60 peroent more ads thon they were a
decade age, ccmpanies are turning to
more innovative ways tc connect with
customers. Cut-through is now nothing
less than nightmarish for many marketers,
ond the New Zealand landscape is right
up there with ether larger markets in terms
cf the scale of the problem (far example,
Auckland has more radio stations per
capita than ony other city in the world).
Canadian shoe company John Fluevog

MZB August 2005 nzbusiness.co.nz

62

gets its customers to design shoes they

wouid like to see made. Other customers
then rate the designs enline. Six designs
hove "won" ond soles exceeded
expectations in each case.
Jones Soda in Seattle prints customer
photos on its beverages, Appie, Heinz
and other firms have established online
communities where customers interact
with each other.
The Ogiivy Loyaity index found that such
customers are worth six times the value of a
"typical" customer, whilst a McKinsey study
found that these customers accounted
for two-thirds of online sales.
There are some huge and untapped
opportunities for New Zealand marketers
here. The biggest problem seems to be o
real iack of Kiwi ingenuity when it comes
to exploiting the internet and the avenues
for innovotion thot it offers. Why is that?
3. Social branding:
New Zealand is a iong woy behind the
8-bail on this, The extent te which Kiwi
businesses acknowledge the existence ef
a broader social responsibility or, equaily,
understand the extent to whioh their
brands are damaged or strengthened by
communities beyond their shareholders, is
ef reai concern,
The success ef Naemi Klein and the "nologo" movement ore making oompanies
overseas understand that brands de,
indeed, have social as well as economic
volue.This is a lesson that oomponies such
as the Body Shop have long recognised.
As a result, cempanies are increasing
sponsorships of a wider variety of secial
movements, ranging trom the anti-fur
movement to micro-loans in third-world
countries.
Cempanies are also paying greater
attention to corporate governance,
recognising the strong effect that
transgressions can have on their brands.
Governance stondards in this country
are still closer to the "Wild West" than they
are to Best Practice and New Zealand
brands are being damaged as a direct
consequence.

4. Universe is the brand:

As advertising Pecemes iess effective due
to proliterotion and such consumer tactics
as TiVo, dc-not-call lists and spam filters,
cempanies are exploring alternative
metheds te get their produots in front ot
consumers.
Leok fer an expanded emphasis en
product placement, not only in TV and
movies but also in songs. As anyone who
hos seen Agent Cody Banks, Matrix or,
Charlie's Angels knows, mobile phone
manufacturers have made tie-ins a majer
part ef their promotional budgets, A paidfor song placement and excellent video,
"Pass the Courvoisier", helped transform
that fine beverage from o dusty fuddyduddy to a biing-biing accessory.
5. Blogs, wikjs and RSS:
BIcgs are the online tool pcwertui enough
tc bring down politicians and TV anchors
(which wouid be a remarkable feat in
itself in this country nothing quite having
managed this yet) and turns 20-year-olds
into internatienol superstars.
While they ore just beginning their rise
as a method for internal or community
ccmmunicatiens, RSS (essentially
a
syndication technology) wiil become as
important to a website as metatags. A
primary bronding driver is the recognition
of the power that blogs and wikis have in
fueling werd-of-mouth, which oocounts
far 30 to 50 percent ef all brand switching.
Fast-forward to the tuture
Keep an eye, soys the AMA, on podcosting,
mosesc and immersive communications.
These won't have much ef an impact in
2005, but could drive branding in 2006 and
beyond. Pcdcasting involves using the
iPedasa persenal ergrcup"radiestatlen;"
Mososo stonds for 'mobiie sooiol software'
that connects people threugh mobile
phones using iocotion-based services;
and immersive communications wili
leverage 64-bit processing, high-definition
dispiays and such emerging technologies
as Blu-ray that will make virtual reality less
virtuai and more real.

Mcn'illth IS ihief o.vectttii-c ofTbo Marki-tin^ liureau.

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