The Truth of Selling to Brands vs Agencies

One of the constant questions that I see startups wrestle with is how to think about the selling process of brand marketers vs their agency partners.  Frankly it is a question that does not have clean cut answer.  But, it is a question that I think I am well positioned to at least help with since over my career I have spent two-thirds of my time on the brand side (P&G) and one-third on the agency side (Rockfish).  So how should startups handle the brand vs agency debate?  In my eyes, there is not a single answer but instead several questions that a startup should consider as they build their selling strategy:

Question #1:  Brand Tech? Ad Tech? Retail Tech?  Which budget would your service come out of?

Not all marketing budgets are created equal and not everyone on a brand has equal control on those budgets.  It is vital that a startup realize the type of spend that their company would fall under.  For instance, if you are a media buy or asking people to purchase based on CPMs than you are most likely AdTech.  And as such, you are not going to have much luck pitching to a Brand Manager.  In most cases, especially with the rise of programmatic buying, brands have empowered their media agency or internal media group to own all AdTech decisions.  For all but the largest strategic discussions, marketers turn over the decision on which sites to buy and do not even begin to get into the details of things like real-time bidding.   If you are a shopper marketing play (ie Retail Tech), then you need to be talking to the marketer (and their agency) that owns the relationships with their retail partners and customer teams.  Or if you are Brand Tech / Digital Marketing, then you are probably talking to the Brand Manager and their digital agency.  Startups can waste a lot of time and energy having meetings with people on the brand that really do not have a say on making the buy.  Figure out which budget you fit into and then map the right relationships based on that.

Question #2:  Who is impacted by your product? What work would take place to implement it?

While there is often a single decision maker that gives the go / no go decision on working with your startup, there is a good chance that decision will impact a multitude of folks on the brand and agency side.  Those people can become champions of your solution or there is an equal chance they can become a poison pill that kills the deal.  It is important to try and gain a 360 degree view of the landscape and how your solution might fit.  For instance, many brands are currently working on global templates to bring a common architecture to their websites globally.  If you are attempting to sell a social media content hub to the brand team in North America, you will have to realize the impact that would make on the global template work that another team might have been working on for over a year.  As the worlds of the CMO and CIO continue to blend together, the need to understand the impact of your solution is more important than ever.

Question #3:  Are you selling a “test & learn” to start or a broader implementation?

When a startup first sells to a brand marketer, they quickly learn the term “test & learn”.  Think of it essentially as a trial or foot in the door with the brand that lasts a set amount of time (and usually is under $50K at max).  Done right, it can lead to a bigger long term relationship.  Done poorly, it can mean you have shot yourself in the foot and ruined any opportunities in the future.  Some startups try to inherently avoid test & learns but that is a dangerous path.  Instead, you should focus on clearly defining the success metrics of the test & learn and what next steps would look like if those metrics are met.  Excuse the bad analogy, but you want to think of the test & learn as the engagement period that will hopefully lead to a marriage.  Even in those situations where you are pitching a much broader engagement (for instance switching to an entirely new Content Marketing Platform), the startup should look for a way to get a brand to dip their toe in the water.  If you have a great product that truly solves a problem that a brand faces, this trial can be what ultimately leads to you winning the business.

Question #4:  Have other brands or clients at the company / agency worked with you before?

Most startups learn about the concept of social signaling when first dealing with investors.  Well the same holds true with brand marketers and agencies as well.  If your startup has worked with another client at an agency, they are going to do the due diligence of finding out what worked and what did not.  And they will do the same if you have worked with another brand within a company.  You can use this to your advantage as well because marketers like to know that someone else has taken that first risk on your startup and worked out all of the kinks.  And frankly even more importantly, they know that someone else has the scars on their back from doing the hard work of getting your startup through legal and set up in their purchasing / payment system.  That seems like a small thing but it is actually a very big thing for most folks.  On the flip side, if this is the first time your startup has worked with a certain company, realize that you are asking that person on the other side of the table to not only say yes, but to also be a champion  for you internally.  You need to reward and recognize them for the extra work that in many times they will be doing on your behalf (this holds true if its on the brand or agency side).

Question #5:  What is the role and authority of the person you are talking to?

One of the biggest mistakes that a startup makes is not understanding the person they are selling to.  In general, they make two types of mistakes in this regard.  The first is they assume the more senior the person is, the better for them to sell to.  For instance, just last week a startup sent a LinkedIn message to the President of a large CPG that I know.  This President has overall Profit & Loss responsibility for his division yet this startup was trying to get him to meet to talk about a small digital activation of less than $100K (a rounding error in his budget).  The second mistake is that they don’t understand the role the person has within the organization.  There is a big difference between a Brand Manager that has budget responsibility and an Innovation Manager that is responsibility for exploring new areas.  Its not that one is better than the other but instead their internal reward structures are different.  For instance, the Brand Manager is going to be measured on growing their top and bottom line of the business – not on creating a new innovative marketing campaign necessarily.  Likewise on the agency side, the Account Director might not “own” the budget for the client, but they likely have one of the closest relationships and ability to convince them why it is worth taking a risk on a new idea.

If a startup goes in understanding these questions about their business and the company they are talking with, it will help them figure out the right path to explore.  There are amazing opportunities for brands and startups to more closely collaborate but it will take both sides working to make the most of the relationship.

What is the “Point of Video” advertising?

Tod Sacerdoti, CEO of BrightRoll, sent me a note today about a new presentation his company just released that details why marketers should about attention to the online video advertising market.  Called “POV: Point of Video“, it includes some great stats such as:

  • Video is larger than Search (33 billion video views vs 15 billion searches)
  • Online Video Advertising will be a $4 billion dollar market in less than 4 years
  • Almost 178MM unique users watch online video each month in the US

Definitely a worthwhile presentation for anyone thinking about online advertising.  Plus Tod deserves credit for actually sending the email himself instead of relying on a PR agency to do his dirty work.  That wins big points in my book.

The full presentation is embedded below for RSS readers.

Super Bowl Ad shows Google’s move from Tech to Consumer Marketer

Back in 2006, Google’s CEO Eric Schmidt infamously said that brand advertising was “The last bastion of unaccountable spending in corporate America.”

Yet during the 2010 Super Bowl, Google did what many would have called unthinkable just a few years ago… they ran a piece of brand advertising on the largest advertising stage in the world.

Supporting their Search Stories campaign, Google ran their “Parisian Love” television ad during the 3rd Quarter of the Saints / Colts Super Bowl.  Of course Internet companies have a long history of running ads during the Super Bowl.  And usually those attempts fail miserable (think Pets.com or E*Trade’s Monkey ad).

But Google’s latest effort is different than many of those failed Internet to Super Bowl Ads.  As my P&G colleague Stan Joosten wrote:

Google ad stands out – story based on emotions from a company centered around analytics. Sign of maturity.

Or take the point of Rishad Tobaccowala (from Denuo Group):

GOOG ad smart because it’s usage not awareness that matters. Most folks dont realize all one can do. Not even us “experts”

So why exactly is the Google effort a sign of maturity and not just another example of “unaccountable spending?”  From my viewpoint, the answer is in Google’s transformation from Tech Company to Consumer Marketer.

Ten years ago, Google was started as a pure tech company.  Their mission was “to organize the world’s information and make it universally accessible and useful” while their name was a play on the word googol (the mathematical term for a 1 followed by 100 zeros).

But today, Google is much more than a search company based on a great technology.  They are starting to truly become a Consumer Marketer, competing for the hearts, minds and wallets of consumers against fierce competitors like Apple, Nokia and Microsoft.

You see, the smartphone battle of the Nexus One vs the iPhone isn’t about technology.  Neither is the search war between Google and Microsoft Bing.

In these competitions, Google is entering the world of traditional Brand / Consumer Marketing.  Think Coke vs Pepsi… Bud Light vs Miller Light… or Old Spice vs Axe.  These classic brand battles generally aren’t fought (or won) on technology or performance alone.  They are fought with emotion, words, and stories.  This fact isn’t lost on Google and they proved it with “Parisian Love.”

So let me be the first to welcome Google to the world of Consumer Marketing.  I’m looking forward to seeing what you come up with next.

See the full ad embedded below:

The new job of a Brand Manager is to facilitate conversations & community

What we really need is a mind-set shift…that will make us relevant for today’s consumers.  From ‘telling and selling’ to building relationships.” – Jim Stengel, Former P&G CMO at 2007 AAAA Conference

One of the most glamorous parts of a Brand Manager’s job has always been creating television advertising.  In fact, it ranks up there as one of the top reasons many became marketers in the first part.  After all, creating a television advertising campaign was something you could be proud of.  It was something that others would see and congratulate you about.  It was the part of your job that your mother would actually understand.  And arguably most importantly, creating a breakthrough advertising campaign was the single best way to grow your business.  If you could orchestrate an effective advertising campaign in the hearts and minds of your consumers, you could guarantee your brand success for years to come.

Recognizing the power of advertising campaigns, Bob Garfield and the folks at Advertising Age published a list of the Top 100 Advertising Campaigns of the 20th Century.  In doing so, they used criteria that included:

  1. If it was a watershed, discernibly changing the culture of advertising or the popular culture as a whole.
  2. If it itself was credited with creating a category, or if by its efforts a brand became entrenched in its category as No. 1.
  3. If it was simply unforgettable.

The list included such memorable campaigns as Nike “Just Do It” (#4), DeBeers “A Diamond is Forever (#6) and Burger King “Have It Your Way” (#24).  Interestingly though, only three of the campaigns in the Top 100 were created after 1990 (Got Milk, This is SportsCenter and Coca-Cola’s Always).

Even in 1999, this should have been a sign that times were changing.

Consumers were growing tired of fancy TV advertising campaigns and were beginning to tune them out even years before DVR’s started to penetrate households.  So while the leading advertising publication was celebrating the past, consumers were starting to look towards the future.  The glitz and glamour of orchestrating traditional advertising campaigns was starting to tarnish.

“Though consumers may be adept at tuning out traditional, top-down marketing messages, they’re proactively using technology to conduct their own brand research to decide whether or not to pursue a relationship…In addition, whether spurred by a user review, a Google search, a brand site or a mobile application, technology has created multiple entry points to engage with a brand. And although it may be hard for marketers to predict that entry point, it’s a safe bet the interaction will be digital. In fact, consumers’ first interactions with brands are commonly through digital technology.” – Bob Greenberg, AdWeek

If the time of orchestrating carefully managed advertising campaigns is coming to an end, what will fill the void?  As I’ve written before, the answer of course is digital and the ability it creates to facilitate conversations and community.  In the new world, Brand Managers will play the role of a moderator in the brand’s community.  These communities will help us co-create our brands while we incorporate their voices into brand-building activities to communicate a balance of performance and emotional attributes.

“Brands have to look at themselves as offering a service to consumers. What you do as a brand is going to be more important than what you say. In the world of Mad Men, the brands were the ones that told the stories about themselves. In this world, the best brands let the consumers tell the stories—and they talk back.” Nigel Morris, CEO, Isobar

A change in who tells the story

For the past 65 years, brands controlled the storytelling.  It was easy to push messages to people because we had a captive audience sitting in front of the TV.  And people put up with our commercial interruptions because in return they received entertainment.  But now, thanks to technology, consumers have taken back control and they are the ones telling the stories about our brands.  A new breed of Brand Managers recognize this fundamental shift and instead of fighting it, they embrace it.  They are joining in the conversations and using those conversations as the foundation for a community around their brand.

This requires a different skill set for today’s Brand Manager.  In the old world, we were trained on managing our agencies, writing creative briefs and evaluating communication ideas (ie TV spots & print ads).  In other words, we were really good at telling other people what to do.  But thanks to the power shift driven by digital, we need to stop talking and start listening.  And once we have learned how to listen, we need to strike up a conversation.  The shift is going to be in how we have that conversation.  We can’t show up at the party and just talk about ourselves and why we are special.  Instead, we need to let consumers talk about what they like and express their feelings.  Even better, we need to let consumers tell each other what they think without us interrupting (take a look at how Zappos uses Get Satisfaction for a good example).

The story they tell each other will be more credible and more believable than any story we could ever hope to tell them through advertising.

Take for instance the case of Innocent, makers of what they call “little tasty drinks.”  This is a company that is built upon the concept of facilitating conversations and community with their consumers.  As they tell the story of their founding:

“In the summer of 1998 when we had developed our first smoothie recipes but were still nervous about giving up our proper jobs, we bought £500 worth of fruit, turned it into smoothies and sold them from a stall at a little music festival in London. We put up a big sign saying ‘Do you think we should give up our jobs to make these smoothies?‘ and put out a bin saying ‘YES’ and a bin saying ‘NO’ and asked people to put the empty bottle in the right bin. At the end of the weekend the ‘YES’ bin was full so we went in the next day and resigned.”

Since that fateful weekend in 1998, Innocent has continued to make their consumers feel as if they have a vested interest in the company.  In fact, Innocent does everything they can to make people feel like employees of the company rather than just consumers of the products.  Take for instance these examples of Innocent facilitating conversation and communition:

  • Every year Innocent hosts an AGM (known as an Annual General Meeting to big companies…or A Grown-Up Meeting to Innocent fans).  At the AGM’s, hundreds of passionate Innocent fans have the chance to learn more about life at the company headquarters.  They spend the day talking about the business, letting the attendees vote on recipes to launch and even answering tough questions about carbon footprint.  At the end, the AGM is a celebration of the Innocent community.
  • In December 2008 the company enrolled the “wisdom of the crowds” in their traditional” advertising when they reached out to their fans through the Innocent News e-mail newsletter.  In the newsletter, Innocent asked fans to look at rough versions of ads and “Vote for your favourite, or tell us that you think they’re all rubbish and that we should do something with a dog dressed up as a sailor on a trapeze.”

But have these efforts to build community translated into a successful company?  Well in 2008, the company was selling over 2 million smoothies a week and had a 72 percent market share (according to IRI in August 2008).  Sounds like a brand can succeed without orchestrating expensive advertising campaigns.

Innocent is just one of many companies leading the change in how Brand Managers need to think about building brands.  The fact is that all of us need to understand that building a successful brand in today’s world means playing by a different set of rules.  It requires us to embrace facilitating conversations and community like never before.  It is a change that won’t be easy for many, but will be necessary for all.

And you wonder why a Brand Manager’s job is tougher today?

Shiv Singh pointed the way to a graphic that perfectly captures what Brand Managers are faced with today.  The complexity of marketing and media choices has exploded since the 1980’s.  But at the same time, this is what makes it so fun to be in brand marketing right now.

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