This is an excerpt from the Spring 2011 issue of UNC Business Magazine.
Test Your Vision
Today, marketing is happening in person, online, around the world and around the clock — so your brand has more dimensions than ever. That creates challenges, but it also means new opportunities are popping out at you all the time. Are you facing marketing problems or possibilities?
It’s all in how you see it.
By Nancy E. Oates
These days, the fierce competition among sports teams has spread to the fans. In the span of a generation, ESPN went from being the only sports network in the country to fending off an onslaught of media outlets. Not only does every major network vie for sports fans, but each sports league has its own network, as do individual teams. And the networks have websites, sometimes for individual cities, with live streaming, and Facebook pages competing to be “liked,” and tweets spreading the smallest bits of information that can be passed off as breaking news.
As senior director of brand marketing at ESPN, Hayes Tauber (MBA ’00) thrives on this speed and the interaction with fans.
“We have to be very reactive, respond to fan requests, take feedback, make adjustments,” Tauber said. “The expectation is that if a fan has a question or complaint, by the end of the day, there will be some sort of resolution. That’s what social media has done. If you wait a week, you’re too late.”
Joining the Conversation
The executives from “Mad Men,” the television series about advertising’s heyday in the 1960s, would be stunned by the pace of today’s marketing world. With global marketing, the reach is farther; with social media, customers are closer; with the Internet, business is always open. Successful brand managers and chief marketing officers must be fast, focused and foresighted enough to be prepared when the latest trend hits, regardless of the economy.
Daryl Evans (BSBA ’76), vice president of consumer advertising and marketing communications at AT&T, calls social media “word-of-mouth on steroids.” Word-of-mouth has always existed, but it used to be local; now it’s virtual.
“A conversation is going to occur about you, whether you want it to or not, and sometimes it’s going to be negative,” Evans said. “As a marketer, you have to be in the conversation. The worst thing you can do is to say nothing.”
Finding those conversations and joining them sometimes requires repackaging personnel to be more friendly in a digital environment. Ellen Thompson (MBA ’04), JELL-O brand manager at Kraft Foods, taps the equity her brand already has by putting some of her kitchen experts online to do live chats with people on Facebook. The challenge, she said, is how to be a presence in a consumer’s life, how to engage with consumers without intruding in their space.
“You have to keep up-to-date and make sure you’re talking to people in the right way and in the right areas,” Thompson said. “With emerging media, there’s always a learning curve. Younger consumers, especially, are very savvy. A lot of times they’re ahead of us. What will be the next big thing? The hard part is trying to get out ahead of it.”
Sometimes corporations become overly protective of a brand because its goodwill is so valuable. The idea of inviting comments on a blog or posts on Facebook can be nerve-wracking. Yet Disney recruited volunteers for a parents’ panel on its website and actively engages with mom bloggers, said Leigh Ann Raines (MBA ’03), director of global marketing strategy at Disney.
“It’s scary for the organization, especially the legal department, to give control of our brand to consumers,” Raines said. “But the reality is that they influence our reputation and brand equity every day.”
Some Disney fans have their own websites about the Disney experience, which can be good resources for potential customers. Disney makes itself available to the website originators, should they have questions.
“Credibility is very strong if it’s not Disney-controlled,” she said.
Learning to Listen
But not all industries can have that sort of personal engagement with customers. Ben Basil (MBA ’08), director of consumer insights for Eli Lilly & Co., has to stay within the guardrails of how the FDA will allow pharmaceutical companies to discuss products and promote to the consumer.
“If you go on Facebook or Twitter, you’re not going to find Lilly discussing specific medicines or diseases,” Basil said.
Instead, Lilly devotes resources to understanding its customers before designing a therapeutic treatment, rather than starting with an idea or product and introducing it to health care professionals exclusively. In recent years, Lilly has used focus groups, in-depth interviews and quantitative research methodologies to better understand its customer groups.
“If you focus on one and not the others, you’re missing an opportunity to better serve all of them,” he said. “When we understand our customers, everybody wins.”
A marketing analytics course that UNC Kenan-Flagler introduced in recent years gives undergraduates and MBA students new tools to define core customers and make predictions about sales. Students learn the models and software, how to interpret the output and draw conclusions from the results. Feedback from recruiters, said J.B. Steenkamp, the Knox Massey Distinguished Professor of Marketing, asks for more students with those analytics skills.
Aaron Watkins (MBA ’10), associate marketing manager at Wal-Mart, credits the analytics course with one of his recent career successes. Using segmentation to discern one group of potential customers from another, Watkins discovered that “in our general merchandise business, we were going after the wrong person.” He presented his plan for a change of strategy to Wal-Mart’s senior vice president and was given a budget to take the plan further.
Watkins’ research has uncovered some surprises, such as the lower-income customers Wal-Mart traditionally courted have a high rate of smart phone adoption. “We’re having to rethink how we talk to our customers,” he said. “Where we used to run weekly circulars and TV ads, this year we launched a smart phone app to help our customers budget for Christmas.”
Evans, at AT&T, relies on econometric modeling around media allocation and what happens as that spending goes up or down. “We put tons of information in the models — about three years of data on advertising, our pricing, competitors’ pricing, traffic sales, number of mentions on Facebook,” he said. “Those models become dashboards for making decisions. If we see a competing carrier making a particular move, we can respond.”
Eric Boggs (MBA ’09) is the founder and CEO of Argyle Social, a Durham, N.C.-based startup company that provides tools for brands to monitor and measure the business outcomes of social media campaigns. He relies heavily on lessons from the analytical and statistical curriculum from the School in the work the company does.
“Organizations big and small are starving to figure out social media and how to connect with their customers in a meaningful way,” Boggs said. “As more businesses are moving online, marketing is becoming much more of a science. Measuring social media marketing outcomes is often a matter of correlating social engagement and social activity with customer events happening in-store, online or elsewhere.”
In October, Argyle closed $325,000 of seed funding from six investors that Boggs met through UNC Kenan-Flagler networks.
UNC Kenan-Flagler plans to add a course in digital marketing taught by Valarie Zeithaml, David S. Van Pelt Family Distinguished Professor of Marketing, next academic year. The course will cover the basics of the media used today — search, social, mobile, location and other types that evolve — as well as key marketing and managerial decisions of platforms, monetization, metrics, analytics, optimization and best practices.
The tight economy has affected businesses in some unexpected ways. Customers view JELL-O as an affordable comfort food. Thompson, at Kraft, keeps that emotional connection with consumers by asking them on JELL-O’s Facebook page about their favorite memories of JELL-O. Having a social responsibility component also strengthens customer interaction with a brand, such as the Spread the Warmth campaign she launched when she worked on Kraft’s Stove Top brand. Consumers went online to talk about charities they were excited about, and Kraft chose three charities to receive donations to continue their work.
Basil, at Lilly, delves into consumer insights to understand customers’ changing values as the tight economy pushes people to view medications as discretionary or seek out generic drugs. “The consumer is thinking differently,” he said, “asking, ‘Should I visit the doctor one more time this year or do something else with the money? Do I get a particular medication or buy a TV set?’ Those two things previously weren’t even close to being in the same consideration set.”
The digital revolution has been the catalyst for a rapid metamorphosis in marketing. UNC Kenan-Flagler alumni, with their reputation for innovation and confidence with taking risks, are setting the pace.