Marketing for free: creative approaches and infinite ROI

Necessity and a lack of resources generate creative approaches to common problems.  Prehistoric people got cold so they figured out how to make fire by rubbing sticks and stones together and  people needed to traverse large bodies of water so they cut down trees and stuck pieces of wood together.

This combination of necessity and a lack of resources is a valuable situation to consider – how would you market your business if you were given no money?

Mascara, Apple and the limits of rationality: A behavioural economist’s take on marketing

The theory and application of economics: a vague mystery to most, but a highly rigorous and mathematical discipline to a select few.

Economists have weighed in on many things: from the apples vs. oranges debate, to why China produces more clothing than the USA.

But what do economists have to say about the application of marketing?

Our economic consultant Jennifer Leslie-Barrett explores.

Mascara, Apple and the limits of rationality: A behavioural economist’s take on marketing

As an Economic Consultant I became frustrated with the strict assumptions placed on individuals’ preferences, and the concept of rationality. Mostly my frustration came from the knowledge that I myself was anything but rational.

Any woman who has ever gone to buy a replacement mascara and found herself coming home with the mascara, an unwanted lipstick and the piece of marketing genius that is the gift with purchase will understand what I’m getting at. I can’t begin to tell you how many mystery day/night creams have sat in my bathroom cabinet for a year before finally being thrown out. But economics says that we should know our preferences, we should be able to see what our future selves will want, and is tragically quiet on the subject of the little buzz of happiness I get leaving the store with my bag of mystery products.

Is mascara a rational purchase? Maybe.

You may wonder why, at this point, I didn’t just leave the lucrative field of economic consultancy and accept that rationality and I were not a good mix.  By some happy chance in my search for an island getaway I ended up at a conference on behavioural economics (it also met my criteria of free cocktails).

I found that this area of economics was able to explain almost all of the supposedly irrational behaviour I had observed in myself, and to analyse it and consider the consequences in an economics framework. Marketers have informally known behavioural economics for far longer than economists. But by taking advantage of the systematic study of peoples’ irrationality, we can use this knowledge to enhance brands. Behavioural economics is a very wide field, so for now I’ll just outline one of the key concepts, which is already used in marketing, but which we can take advantage of more effectively by having a better understanding.

The economics of Apple: What's your reference point?

Reference dependent preferences

Basically this says that individuals are not merely risk averse. They are in fact loss averse, relative to some mental reference point. What this means is that if we are able to incorporate our product into the customer’s reference point, their loss aversion will make them unwilling to leave the store without the product.

Apple takes advantage of this phenomenon. Mac stores are designed such that customers are able to use the product in the store. The customer incorporates the product into their reference point, and does not want to face the loss of leaving the store without it.  An action as simple as getting a customer to try on an item of clothing or jewellery begins the process of adapting their reference point.

But we can take advantage of reference dependent preferences to a greater extent than just introducing a product into the customer’s reference point. The aim of any effective campaign should be to incorporate your brand into the customer’s reference point.  If you can, customers will feel attached to your brand and be unwilling to leave the store without it.

<< Jennifer Leslie-Barrett

5 reasons why your brand’s Facebook page needs a ‘dislike’ button

Facebook.  Just about everybody is on it.

Consequently, many firms are joining the ever expanding and evolving social networking platform to put their brands where their current  and potential customers are.

Typically the goal here is to use Facebook to encourage consumers to positively engage with your brand, share content with their friends, and generally ‘do the leg work’ of traditional marketing – but with a much higher level of interactivity and often at a lower cost.

A common way that the success of Facebook campaigns is measured is through the amount of ‘likes’ it gets.  If a consumer ‘likes’ your page, it typically shows up on their profile page and in their public newsfeed, promoting their friends to see it.

‘Likes’ also provide feedback  about brands and marketing campaigns, and provide a simple quantitative measure of success.

But whilst it’s always valuable to know who likes your brand, in many cases it would be equally valuable to know who dislikes your brand.

So what about a ‘dislike’ button? And why would it be valuable for your brand?

Alec looks at 5 surprising ways in which your brand could benefit from a ‘dislike’ button.

1. Gain a better understanding of marketing effectiveness

What do you Dislike?

Your brand might have 1,000 likes.  Great.  But in reality it might also have 2,000 ‘dislikes’ which are essentially invisible.  Therefore without a way to track this via a dislike button, you might be inflating the success of your brand and its marketing campaigns.

Therefore, a ‘dislike’ button would facilitate a more accurate and accountable net measurement (i.e. likes minus dislikes), rather than just a gross measurement (total likes) of campaign effectiveness.

2. Get to know who doesn’t like you

A great deal of marketing research, although valuable, is about discovering, understanding and profiling who likes your brand and regularly purchases it in, thus allowing you to better sell your brand.

However, it can be equally as valuable (if not more so) to better understand the people actively dislike like your brand.  It would enable you to more clearly define your target market and may highlight ways to improve your product or service.

3. Recover dissatisfied customers

A ‘dislike’ button may highlight customers who have had a bad experience and require some feedback from your firm.  Synch your Facebook page with your loyalty database and you have a ready-made list of high traffic customers who may now ‘dislike’ your brand, without lodging an official complaint.

This would give your firm an opportunity to recover dissatisfied customers.

4. Novel ways to connect with and surprise customers

Consumers who click the ‘dislike’ button would demonstrate that are aware of and to some extent, engaged with your brand.  In many ways a lot of the hard work is done.  Now you just have to provide a reason for the consumer of turn their frown upside down.

What about sending a surprise voucher to all the customers that ‘dislike’ your brand? Crazy?  Perhaps, but it would certainly turn some heads and maybe convince some non-believers to try your brand for the first time or give it a second chance.

5. Embrace your brand’s enemies

The "us against them" nature of brand loyalty: The more 'dislikes' the better

This may not be effective for every brand, but for some brands it would foster loyalty amongst supporters to have a vocal and visible crowd who dislike your brand.  Many brands thrive on having enemies and a ‘dislike’ button would be a way to identify this common enemy.

Think sporting teams for example: Manchester United, the New York Yankees, the LA Lakers, the Dallas Cowboys and the Collingwood Magpies, are some iconic brands which thrive on the love/hate mentality of their respective marketplaces , whilst encouraging an “everybody against us” mantra amongst their fans.

Thus, they are examples of brands which would benefit immensely from thousands, if not millions, of dislikes.  And if your brand thrives on a common enemy, a ‘dislike’ button could be the best thing Facebook has done for your brand.

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So what do you think?  Feel free to let us know if you ‘like’ or ‘dislike’ this article.

// Alec Schumann

“Share a Coke”: Why Coke shouldn’t have released a list of the top 150 names

I don’t normally drink Coke.  I find it too sweet and sugary.  However, after hearing Coke was printing 150 of the most common Australian names on Coke bottles, in the “Share a Coke” campaign I found myself rifling through the shelves at all of Canberra’s major supermarkets.  (Even though I’m in marketing I’m still a sucker for a good marketing ploy).

However, after an hour and half of anticipation, frustration set in as it became clear that the nearby supermarkets were not stocking ‘Alec’ Coke bottles, so I trudged back to the office.

When I got back I logged onto the campaign’s Facebook page(which by the way is getting a lot of “likes”) to see if Alec was available.  To my surprise and disappointment it wasn’t and thus my interest in Coke immediately ended.

What does this narrative indicate?

Well for the hour that I was searching for a bottle with my name on it, I was intensely engaged with the brand.  I didn’t even want to drink the Coke when I bought it; I was going to display proudly it on my desk for everyone to see.

However, as soon as I realised I wouldn’t find “my” Coke, my interest in the campaign and the brand plummeted (I also wasn’t willing to go through the hassle of locating one of the few outlets which will personalize one on the spot).

Share a Coke with Jess: but not Alec (or Bork).

But how could Coke have kept me searching and engaged with their brand?

Hypothetically, just say Coke decided to release 1,000 of the most common names, but stage this over a period of 12 months (e.g. release around 100 new names each month), all the while keeping this list secret.

People would be much more likely to believe that they will eventually find a bottle with their name on it, and will conceivably keep looking.  Furthermore, people wouldn’t be disappointed by learning at the very start of the campaign that they would never find their name on shelves at all.

This would also promote greater engagement with the brand via social media.  People would post stories of how they found ‘their’ Coke, upload photos of the named bottles in various locations, and discuss the campaign amongst their friends, thus creating a level of excitement and engagement each time a new name was found on shelves.

Undoubtedly the aim of Coke’s campaign was to promote this type of engagement with their brand by being on a first name basis with their customers.  However, people will often lose interest if you can’t remember their name.

// Alec Schumann

The AnthonySchumann5: Part 2

Friday is an exciting day at AnthonySchumann.  People are busy working to various deadlines (unless your Levi who is nowhere to be found from 1pm onwards), Jules and Ted are discussing trendy restaurants and bars to go for drinks with clients and Alec is catching up on various proposals and briefs.

However, Fridays have become exciting for a whole new reason, The AnthonySchumann5.  5 questions which provide a window into the minds of some of the world’s leading thinkers, creatives, and experts.

And there is also a coat of arms.

In the second of this exciting weekly format, Alec catches up with freelance creative Eliza Carmen.

5 Questions, 5 Answers. A coat of arms.

Subtilis Bravado

Hot or Cold?

I think I’m more of a hot person… (laughs).  Temperature wise that is!

The saying “cold hands, warm heart” upsets me though because I have warm hands.

Would you rather be the fastest horse in the world or the lightest jockey in the world?

Fastest horse definitely.  There is glory in being fast, everyone remembers Phar Lap and Makybe Diva.

How do you take your coffee?

Mugaccino.  A mug trumps a cup every time.

Ted or Alec. Subtle or Bravado?

Well I’d have to say Alec as generally I report to him when I am working for AnthonySchumann.  And Bravado.

What is your number 1 tip for Designing tomorrow?

Precycling.   It’s essentially committing to reuse recyclable things and has tremendous potential to cut down on waste created by packaging, particularly in the FMCG sector.  It’s a very under explored area of sustainability.

Thank you for your time Eliza, hope you have a great weekend.  Good luck with the house hunting.

Thanks Alec!  It’s hard to find somewhere that’s nice and within the budget of a freelancer, but I’m always on the lookout!

Branding: experiential marketing on caffeine

How do you take your coffee?

Hot?  In a paper cup?  Well if you take it takeaway read on.

Coffee is the undisputed global leader of hot beverage.  Consumed in the home, workplace and in our social lives, it is arguably the fuel of our economy.  It is unsurprising to observe a strong correlation between an increase in coffee consumption and economic growth in many developed nations.  Don’t believe me?  Well observe the below graphic*.

Global coffee consumption: Coffee clearly leads to economic growth

If you take a walk through your local city you will likely pass by many coffee shops, such as: the large franchises (often inhabited with families with children), those attached to cafes (visited by the type people go on that awkward first date) and the more boutique, niche  stores (typically inhabited by hipsters – think skinny jeans, sharp haircuts and mustaches).  (For further reading on coffee and image see here).

The Hipster: "effortlessly cool" or “tenaciously passé”?

But why does one always seem busier than the others?  The actual coffee? Mass advertising campaigns?  Caffeine dependency?  Perhaps, but it is unlikely.

Well then why do people make a particular shop part of their daily ritual recommend it to their friends?

Takeaway coffee is an industry in which the seemingly small things often have the most impact, working together to creating a brand experience which gives outlets a personality and point of difference from the myriad of others, which essentially sell the same product – hot, bitter, brown, and caffeinated liquid (or you ask Levi, a lukewarm decaf with three sugars, a twist of honey and frothy soy milk).

It may be a cup of rubbish, but the experience keeps you coming back

Rubbish? Well consider some of the small questions which can differentiate one takeaway coffee place from another simply on experience.

Do the barristers remember your name?  Your preferred type of coffee?  Will they make friendly, yet meaningful small talk?  Do “your type” of people go there?

Does the coffee shop have nice takeaway cups?  Would they spot you a free coffee if you are out of change?

The answers to these seemingly small questions are infinitely more important to consumers as opposed to how much the firm spends on advertising.

So what does this mean for your brand?

Well the insight here is that the small things can often have a significant impact.  Want to increase the experience consumers have with your brand, thus driving revenue and all those tangible things that your CFO is riding you about?  Well maybe before launching a multi-million dollar advertising campaign, commit to remembering what type of coffee each of your clients take.  These small things will help create an experience that keeps them coming back.

// Alec Schumann (long black, no sugar)

*This is a potentially risky argument (everyone knows correlation doesn’t equal causation!), however it supports the claim I was making.

…

In the next installment of his series on image, Ted Anthony will take a look at fad marketing and the rise and fall (and annoyingly cyclical return) of the hipster.

Stay tuned.

The AnthonySchumann5: Part 1

5 Questions, 5 Answers. A coat of arms.

Subtilis Bravado

Ted and Alec are proud to announce the first of the AnthonySchumann ‘5’, five questions which provide a window into the minds of some of the world’s leading thinkers, creatives, and experts.

And when somebody answers the AnthonySchumann5 they also receive.  A coat of arms to be precise.

In the first of this exciting weekly format, Ted sits down with our new employee of the month, Jules Cassavani who is the first to answer to the AntonySchumann ‘5”. 

Hot or Cold?

Hot… Or Cold. Just not in the middle! (laughs)

Would you rather be the fastest horse in the world or the lightest jockey in the world?

Hmmm, can I say both?

No

Well then… horse. No wait…. jockey…. Yes jockey.

How do you take your coffee?

Extra hot, double machiatto.

And 1 sugar – just not in the coffee! (raucous laughs)

Ted or Alec. Subtle or Bravado?

Do you want to get me fired? I report directly to you Ted, so I guess I should probably say you. But Alec makes a mean tofu omelette, which gets a lot of browny points in my book… not sure. Pass?

What is your number 1 tip for Designing tomorrow?

Try and engage with your stakeholders across multiple platforms – and make sure you listen, don’t just speak.  A lot of firms get sucked into the habit of just talking too much, so much so that they miss valuable feedback.  It’s basically about leveraging all the knowledge you receive today into ideas for tomorrow.

And most of all, get started today.

Thank you Jules, it’s been a pleasure.

You too Ted, see you in the office on Monday.  Have a fantastic trip to Hong Kong.

…

Well there you have it.  The AnthonySchumann5.

Stay tuned next week when Alec catches up with our freelance creative Eliza Carmen. What will her answers be?  Will she accept the coat of arms?  Will paradigms be shifted?

All will be revealed.

Playing it simple: a guide to the Probit Model

You don’t have to be a rocket scientist to understand the Probit Model

In layman’s terms, a probit model is simply a popular specification for an ordinal or a binary response model that employs a probit link function. This model is most often estimated using standard maximum likelihood procedure, such an estimation being called a probit regression.

To many of you, this is quite simple, and I apologize if I’m treading familiar ground, but I want to make it as clear as possible for those new to marketing lingo, because it is such an important concept in the industry at the moment. Basic, but important.

To introduce it straightforwardly, suppose response variable Y is binary, that is it can have only two possible outcomes which we will denote as 1 and 0. For example Y may represent presence/absence of a certain condition, success/failure of some device, answer yes/no on a survey, etc.

Got it? Ha ha, “yes, Ted, we realise 1 +1 = 2”. Okay, then let us continue (sorry to bore you with this!)

We also have a vector of regressors X, which are assumed to influence the outcome Y. (duh) Specifically, we assume that the model takes form:

where Pr denotes probability, and Φ is the Cumulative Distribution Function (CDF) of the standard normal distribution. The parameters β are typically estimated by maximum likelihood.

It is also possible to motivate the probit model as a latent variable model. Suppose there exists an auxiliary random variable

where ε ~ N(0, 1). Then Y can be viewed as an indicator for whether this latent variable is positive:

Again, apologies if you feel I’m treating you condescendingly, it’s not my intention. I am merely using the most fundamental concepts of the model to prove a point- i.e. it is that easy.

Okay, now we move on to the Maximum likelihood estimation (groans… “give us something that challenges us Ted!” Again, sorry, but we need to keep it simple so everyone’s on the same footing, school kids might be reading!)

Suppose data set contains n independent statistical units corresponding to the model above. Then their joint log-likelihood function is

The estimator which maximizes this function will be consistent, asymptotically normal and efficient provided that E[XX’] exists and is not singular. It can be shown that this log-likelihood function is globally concave in β, and therefore standard numerical algorithms for optimization will converge rapidly to the unique maximum (…you don’t say!)

Asymptotic distribution for  is given by

 

where

and φ = Φ’ is the Probability Density Function (PDF) of standard normal distribution.

I know, I know, easy stuff. But the next bit is where it gets a bit more challenging (and I do stress a bit, sorry), and that is Berkson’s minimum chi-square method. This method can be applied only when there are many observations of response variable y_i having the same value of the vector of regressors x_i (such situation may be referred to as “many observations per cell”). More specifically, the model can be formulated as follows.

Suppose among n observations  there are only T distinct values of the regressors, which can be denoted as . Let n_t be the number of observations with x_i = x_(t), and r_t the number of observations with x_i = x_(t) and y_i = 1. We assume that there are indeed “many” observations per each “cell”: limit n_t÷n → const_t>0 as n→∞ and for each group t.

Denote

Then Berkson’s minimum chi-square estimator is a generalized least squares estimator in a regression of

on x_(t) with weights :

It can be shown that this estimator is consistent (as n→∞ and T fixed), asymptotically normal and efficient.Its advantage is the presence of a closed-form formula for the estimator. However, it is only meaningful to carry out this analysis when individual observations are not available, only their aggregated counts (t) (for example in the analysis of voting behavior).

Well, there you have it, the Probit Model. For some of you (or should I say most of you) this would have been child’s play. It really is a pretty basic concept, comparable to the multiplication table in maths, or the Solfège technique in music. But, for those new to marketing it’s a good starting point and a must if you’re really going to understand the basic concepts of marketing.

– Ted Anthony

Excessive Minimalism

A lightbulb? Or Excessive Minimalism gone rampant?

What is Excessive Minimalism?

Excessive: Mayonnaise on a Porterhouse steak.

Minimalism: A black table in a white room.

Can the two co-exist? In reality: No. In our minds: Yes.

Are our thoughts a reality? Yes. Yes they are. Don’t believe me? Imagine in the middle of a white room a black table. And on that table is no other than a white plate of Porterhouse steak cooked medium rare, covered completely in mayonnaise. Excessive Minimalism.

It happened and you weren’t even aware. And there you have it, the definition of Excessive Minimalism. It is not so much a phrase, but an essence, a way of life.

How can we harness Excessive Minimalism for creative dialogue?

In short, we can’t. It harnesses us. Excessive Minimalism is all around us. It’s in your Prada suit, your green tea, your sandwich from Food with Flair. It is everywhere, but nowhere. The trick is to let it take you where it wants to go. Say, for example, you’ve been given a brief to market social networking to the homeless. Do you go out and collect data to assess the appropriateness of social media for this community? The answer is no. It is Excessive Minimalism. And there’s your starting point.

Excessive Minimalism in the Creative Boutique

Here at Anthony Schumann we believe in subtle bravado. Does that mean we give no heed to Excessive Minimalism? Of course not. On the Beatles’ seminal White Album, the late John Lennon sang, “Happiness is a Warm Gun”. Ignoring some of the obvious references to sixty’s popular culture, his sentiments remain unchanged. Happiness is Excessive Minimalism. But it is also so much more. It is passion, virtue, integrity, danger. It is everything we at Anthony Schumann believe in, but it’s also the opposite. So we must be wary of EM’s capabilities, yet we must also embrace it. It is too important not to.

In Summary

If you think Excessive Minimalism is just another marketing buzzword, you’ve missed the point. It is THE marketing buzzword of the moment, and it’s here to stay. Deal with it.

-Ted Anthony

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