Kotler News

Questions from "China Advertisement" magazine:

Q1. How do multimedia platforms influence Marketing; especially social media platform and the self-media platforms?

A1. My colleague Lisa Merriam, an expert on social media, and I reviewed these questions. Our answers are based on rich experience in marketing and social media. In our view, social media has to be used as a part of an integrated marketing program, along with traditional media. It is not a substitute for traditional marketing communications. All of the elements of systematic marketing – research, segmentation, targeting, positioning, strategy and tactics continue to hold true for companies. Social media are tools for these functions.

Companies have to adjust their marketing organization to optimize the value of social media. They need new kinds of researchers and advertising managers and creative agencies to interact effectively with social media. The traditional approach for recruiting researchers is to get educated, introspective types that are good at quantitative and qualitative analysis of documentation. The same is true for creative agencies, which have traditionally looked for solitary, creative designers who have a lot of originality. Social media research and creative design needs circumspective personalities who look around and listen to what is going on; and analyze what the on-line community is saying, what they want and what excites them.

Traditional marketing research is based in the “interview” concept through survey research or focus groups. In the social media environment we have to shift from “interview” modalities to “listening” modalities. There is a lot of unstructured information – good and bad - about the company and its products in the social media sphere. Marketing organization needs listeners and responders who use their real name and title to interact with this comment stream. The public does not want a faceless, nameless corporate response to a complaint; or even a compliment. The job of the listeners is to register, analyze and sort out comments and send them to the appropriate departments for real life responses. Comments about new features should go to R&D; comments about employee behavior should go to HR; refund comments should go to finance. Marketing cannot answer these questions. Top management has to lead this effort and instruct, encourage and incentivize different departments to consider and politely respond to public comment. Responses should be vetted through marketing to maintain consistency and control.

One-on-one on-line response is very expensive. Marketing has to group comments and make genuine and efficient responses. The use of on-line and social media tools has to be carefully budgeted and integrated into an overall communication program. Recognizing that every Facebook comment goes to thousands of network friends and every tweet goes to the whole social media world that logs in your corporate name or product word, companies cannot risk spending less than it’s worth to hire and train smart people to manage this interaction. At the present time, most companies have not adjusted to the new power of social media and they generally have interns or low paid people managing the interaction. This is very dangerous. Skills and talent in this arena will improve shortly.

There is a generational paradox for most companies. Their most knowledgeable and skilled people are of an older generation that does not use Facebook and Twitter. Because they do not use it, they do not really know how to listen, even though their responses would be safer and more intelligent. On the other hand, young interns and new hires know the social platforms and how to listen; but they do not know the company well enough to make safe and constructive responses. This will change in time.

It is very dangerous for a company to go too far with micromarketing through the social media and get so personally interactive that it loses its systematic approach. There is a point of diminishing returns with personalized interaction. While a lot of people are vocal, most people in the marketplace still have similar group characteristics. Traditional market methods are still important, but they have to be adjusted to the additive value of social media listening and interaction. From a marketing organization point of view, the biggest impact of social media is on research and communication. Social media is still too new and the research results are not rich enough to have confident ROI metrics. How to budget for social media is a matter of art, market alertness and experience. Alertness is especially important because public comments here and there can snowball into strong negative trends, like The GAP logo change. At the same time, even trends should not, a fortiori, upset well-considered company strategies.

Q2. How does the communication system and content change for different media platforms? How do you make these changes?

A2. Social media impacts the communication system and content on all multimedia platforms. Let’s start with Broadcast TV. Broadcast TV faces many challenges of digital video recording (DVR), TiVo and other devices that bypass ads and threaten their basic revenue stream. In addition, and more to the point, there is just plain inattention to TV by millions of young people who spend their time on the Internet and social media. Broadcast TV has to fight harder for viewers and incorporate interaction into the viewing experience. TV can only survive with high quality, interactive programming. The same holds true for magazines, newspaper, catalogs and other traditional media.

Here are two examples of fighting back by traditional media. Glee is a Fox TV series production that is exciting and award-winning. The show’s glee choir has gone on the road in musical events and contests all over the country. It has linked to Facebook and Twitter and has panoply of digital formats and features. It is becoming as much a digital experience as a TV experience. It is a “true blue” multimedia experience. Forbes is no longer just a magazine. There is Forbes TV, Forbes blog, Forbes websites and Forbes events. Forbes has gone multimedia.

Q3. How can marketing take the most advantage of the self-media (like Twitter, YouTube)? How does self media challenge traditional marketing and what can companies do about this?

A3. Self media is social media. Let’s use the generic term social media to avoid confusion. Facebook apps can expand a company’s Facebook profile by integrating product catalogs, contests, incentives, sales promotions, games and more. Facebook is also emerging as a new efficient search engine. Friends ask each other to guide them to products and information; rather than muddle by themselves through endless search engine entries. Why re-invent the Google or Baidu wheel when you have friends who have been there. Why ask ChaCha.com a question when you have 1,000 Facebook friends who can give you a better and faster answer. Google is including blog comments, tweets and Facebook content in its search results and is getting into some of Face book’s territory with Google +. Social media models are constantly changing and blurring. Coca-Cola has as much information, events, coupons, etc. on its Facebook page as it has on its website. It also has YouTube channels and a strong presence on Twitter. It is a great example of a company that is successfully integrating social media into its communication menu.

Many companies have not adjusted to the power of social media and have not used it effectively in their time of crisis and on-line outrage. For example, BP ignored the social media outrage about the Gulf oil spill. It took the traditional nameless and faceless corporate approach of defending itself in newspaper ads that few people pay attention to; while ignoring the millions of negative and even some constructive comments on the Internet platforms and social media. When it tried to defend itself in the old-style mode of official corporate comment, people became more incensed that the company refused to interact with their intense concerns. While it is impossible to calculate the defensive value the company could have by personally interacting with the social media, it can reliably be said that its refusal to use these platforms added to its negatives. No company can afford to ignore the social media platforms.

Q4. In the past, traditional media played an important role in marketing communication. With the new media emerging rapidly and on a massive scale, the legitimacy of traditional media has been weakened. What can traditional media do to support its enterprise? How can it produce the best possible marketing results in the future?

A4. There is no way for traditional media to avoid the impact of social media. Traditional media argues that mass and segmented advertising can promote the sale of products by one-way promotion and awareness. This is no longer the case. There are many challenges to advertising products in the traditional mass advertising manner. There are many new trusted websites, like Compare.com and ConsumerReports.com that have taken on the “listening” job and can provide product comparison analytics to the on-line community. This can diminish print media product claims. All of these sites have comment inputs by viewers. Companies need to listen to these sites to assess their corporate and product strengths and weaknesses. The comparison sites also inform companies of the advantages that their competitors have over them.

Companies can use these sites to announce new product improvements. For example, Pampers received many on-line complaints about a diaper rash problem. Marketing listened and made personal responses about the issue. They investigated the problem and announced product improvements. Named members of the marketing staff personally communicated this listening and improvement process to the public through social media and blogs. Similarly, after massive vehicle recalls and thunderous consumer complaints, Toyota got smart and began using social media to demonstrate its responsibility to its vehicle owners. Toyota Twitter has real marketing people with names and titles responding to tweets.

Marketing has to come to terms with the fact that in this day and age of many millions of Internet and social media comments, it no longer controls its own brand. Company branding is now collaboration between the Company and the public. The GAP changed its logo and many users objected on on-line platforms. GAP had to backtrack and restore its old logo. Companies are not as free to “stretch” their image as they were in the old days of one-way communication. Now they have to interact with their customers and be fluid and genuine in order to create “real life” images that their customers can connect to. The mission is to create an image in real life, as opposed to a creative design image. Branding is collaboration between the company and customer; and the company has to earn the respect of the public. The brand is an asset that has to be shared with the public. It is an interactive asset; not a static asset.

This does not mean that companies have to abdicate their strategies to social media pressure. There may be strategic reasons to resist social media negatives. Starbucks decided to diminish the word “coffee” in their communication. The company knows that the coffee focus cannot sustain its long term growth. Many people objected to this on media platforms; but the Starbucks held firm.

Here is an example of how a U.S. regional consortium of New York State Land Rover dealers effectively integrated social media interaction with their tradition promotional programs. The consortium offers owners and potential buyers a professional driving school. They have their own woodland driving track. They teach drivers to handle exciting off-road terrain that they have not experienced previously. The Land Rover dealers turn their vehicle owners into “explorers” and have an Explorers Club for new off-road adventures. They build a Land Rover community. For credibility, Land Rover uses off-road specialists who train the Navy SEALs in driving. The dealers are planning a Mongolia driving event. They use adventuresome events to create a real niche community of off-road experience. Their vehicles owners communicate with each other about their adventures. Land Rover is a high priced niche vehicle with a small number of owners. They use event discussion on the social media to keep the community together and build exciting input. This creates high quality life style in the brand. It keeps the brand close to the dealers. It creates brand “fanatics”.

The dealers host and participate in the community, but don’t control it. Social media reinforces Land Rover loyalty, add-ons and re-purchase. Re-purchase means that Land Rover vehicle owners continue in their special community of adventurous drivers. This is a dealer program that integrates social media into its traditional promotional program.