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July 20, 2008

Knowledge, worth and reputation

The level of consumer disassociation with brand marketing present today suggests that collaborative, responsive relationships need to be at the core now of the way brands do business.

In the information age, opinion matters, reputations count and 'being liked' is a new currency within wealth management. So when reputation is everything... and in the information age it is everything... it pays not to be too heavy-handed.

This seems to be escaping Martin Sorrell at the moment. In his attempted purchase of TNS, it seems the message is that there are some things that money just can't buy. The Beatles called it love. In corporate take-over terms it's the ability to be a preferred partner.

The operating ethos that's built the WPP Group is pretty well known. A strident and doggedly persistent focus on its goals is one trademark that has possibly been what's behind having its bid snubbed three times to date.

The strange thing is that WPP is well-versed in the value of intangible assets as well as tangible ones. The value of brand management is predicated on this, but it seems that the value of reputation and of being preferred only now seems to be coming home to roost for Martin Sorrell as a decisive factor to take into account.

An irony exists in that, by following WPP's takeover battle for TNS, it's possible to glean from the fastest growing communications group in the last 30 years, just how much the communications landscape itself has changed over that period. One could argue it's this change that's at the root of Martin Sorrell's thwarted ambition.

It used to be that in building a consumer brand, 'first base' was to build awareness and an 'opportunity to see' via mainstream communications channels. An 'opportunity to see' (or OTS value) of 8 or 9 would usually be a sufficient amount of exposure to from any kind of recognition or recall and establish a sense spontaneous brand awareness. All that had to be done was to spray some interesting creative content with a pack shot and/or logo down a mainstream channel for that number of times or more and eventually your audience would get the message and get to know you.

After that, if the price-point fitted and customers could get hold of the product, an advertiser would have its first wave of sales. With a catchy call to action in place, a percentage of viewers would be tempted to go out and buy the product so the next step would be to focus on building repeat purchase. For that advertisers would need testimony, a couple of housewives, perhaps, discussing the virtues of said product. There was a name for those ads and it wasn't pretty, but they usually worked. And of course if you could get a celebrity endorsement, well then, how influential would that be.

Wealth_knowledge_matrix_pre_web20_3

A focus group or two, a bit of tweaking with the product and a few 'New, Improved!' campaigns later, everyone could get on with the business of keeping up the media spend, doing creative and charming campaigns, focus on building long-term customer loyalty and consider a bit of diversification or line extension. The best agencies of the age did that very well. Martin Sorrell bought quite a few of them.

Move forward to today and interesting conversations are being had between WPP, Google, Microsoft and Yahoo. There are some new kids on the block and new ideas. It's interesting to watch these worlds of established and emergent communications collide, and building testimony still has a very great part to play.

Now the lines are blurred however between client, partner and consumer and the communications landscape is no longer a place where anyone exists in the context of 'us' and 'them'. Martin Sorrell talks about the relationship as being one of 'frenemies', lately he has talked more darkly of 'froes'.

As Digitas CEO David Kenny said as part of the debate however, 'treating Google as a threat is counterproductive'. We've been living in a world coloured by threat and some would say of terror, for quite a while now. It isn't very appealing. But a large corporate has to protect itself by remaining large in order to survive.

This is possibly why, to WPP, the acquisition of TNS is so important. The 'kiss and punch' of the WPP model, as Martin Sorrell has described it, is built on the assumption that scale is the only way it can protect margin, and margin is derived from control.

Antonio Negri and Michael Hardt suggested in 2000 that capitalism is just another fad in a long line to have gripped society and then slid from grace throughout the development of the civilized world every 200-300 years.

Capitalist growth, certainly, demands ever more profit derived from ever greater consumption and streamlined production and distribution to succeed, yet capitalism has assumed a world of infinite resources. Advertising and marketing have depended on that assumption too.

From the beginning of the marketing age several decades ago, when communication traveled through a few primary channels and fed many simultaneously, we've moved through targeted, then tailored, then on-to-one marketing, then viral marketing, in the pursuit of more sales to feed a consumptive appetite as part of the capitalist ideal.

We have reached the point of audience fatigue and we may have reached the point where there simply isn't enough economic wealth in the system to generate an infinite supply of wants or ever increasing profit without something new in the mix.

Marketeers today are beginning to appreciate just to what degree controlled communication pushed out to consumers has little traction. Instead, as Yochai Benklerâs work on open-source economics suggests, a new model of 'radical distribution' has to drive us, one capable of generating new forms of economic wealth as well as new ways of realizing that wealth.

Wealth_knowledge_matrix_3

Some things are hard to retain or convert in the pursuit of progress - the switch from VHS to digital was one such example. The requirement for a radical shift in marketing now might similarly mean we shift to a new platform.

It's a shift that involves us moving from being primarily consumers to being primarily producers, a shift that's the result of moving from muscle to intellect as a primary means of production alongside the emergence of the information economy.

On the internet and in real life, given our scant attention on a number of subjects, we surf. Our attention tends to gather around people, groups and businesses that interest, inspire and lead the way. In the past that's been governments, large corporates or celebrities, but today it can mean any kind of group, such is the democratized beauty of online communications. As producers our interest is focused and generates attention.

Moving on from surfing, closer contact and deeper awareness with subjects, issues and interests as producers, means there is willingness to follow and track subjects in our sphere of interest. When promises are authentic, they generate fans, willing to be counted, then followers.

As followers, interest is invested over time, we touch, feel, generally interact as in the traditional heartland of consumption, but as producers, once we consume, we stay invested. We have ideas about the product based on a deep knowledge of how it engages us, and how it it could be developed to be better.

By contributing those ideas, involvement and participation takes place. Friendships are created, supporters bring goodwill and a vested interest in future success. We create shared truths and shared space. We build trust and develop the ability to influence.

Then as we become influencers an affinity of values, an economic fitness of use and purpose becomes manifest. And once we have gone that far, we become partners where co-production and collaborative relationships can generate future development and efficient income production.

This is a landscape of multiple currencies, all as valuable as one another, based on mutual interest in the pursuit of spontaneous and cost-effective growth where there is no one locus of control.  We all need to watch how we do business.

When companies and individuals take this to heart in their interactions to generate wealth, we have the antidote to the consumer disassociation that's become a blight to growth, not just for corporates and economies as a whole, but also to every one of us as individuals.

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