Embrace entropy marketing: Be agnostic and succeed

In previous discussions, we have argued for an increase in the strategic and central role for the CMO, as well as look at how marketing effectiveness and efficiency can be improved. At the very heart of marketing is a fundamental premise that brands matter and must be nurtured by credible and relevant innovation. The marketing battle will be a battle of brands, in category after category a competition for brand dominance. Investors and businesses across the board are beginning to recognise brands as a company's most valuable asset.

Arthur Stern is CEO of Global-Prime.

From this critical concept, comes a straightforward leadership vision about how to develop, strengthen, defend and manage a business. And the competitive necessity it will be to have the foresight and insight, as well as the commitment to win the opportunity share, recognising that traditional category boundaries are blurring and that a focus on market share is looking at our futures through today's spectacles. The need to create clear and relevant brand touch-points will, for many, be enhanced by collaborative brand activities that have partners benefiting from an ecosystem marketing philosophy.
 
It goes without saying that as digital ecosystems develop so it is the people, who we refer to as "People 3.0", who are truly in control of their brands and the communications and communities that surround them. Such developments demand a different approach to brand communications with a greater focus on a strategic brand platform and an agnostic view of channels/communications planning, which necessitates fundamental shifts away from traditional media planning and budgeting (Table 1). The focus on people is subtle but lends a more active role by strategic planners than those with media backgrounds taking the lead to re-define communications.
 

In the same vein, this apparent lack of control by the brand owner and marketer is something that needs to be embraced explicitly. It is neither going away, nor can it be not considered! The insanity of the times demands signposts. Simply providing products and services that work, with acceptable quality, is not the automatic winner it was a while ago. People are more discerning and powerful. Their choices are made not simply because of rational characteristics but increasingly at a more emotive and personal level.

Over a century ago, Henri Poincare proved that the motion of three bodies under gravity can be extremely complicated. It was the first evidence of what is now called chaos: the ability of simple models, without inbuilt random features, to generate highly irregular behaviour. Chaos is exciting because it opens up the possibility of simplifying complicated phenomena. Chaos is worrying because it introduces new doubts about the traditional model-building procedures of science. Few companies can rely on finding the Holy Grail; in consumer terms the next Walkman, wii, i-p...

Rather, I believe that learning from chaos theory, we should be confident that it is unlikely that big effects will result from big causes, but small changes in initial conditions could have enormous consequences. Chaos is fascinating because of its interplay of mathematics, science and technology; but above all chaos is beautiful. The striking computer graphics of chaos have resonated with the global consciousness; the walls of the planet are papered with the famous Mandelbrot sets. To complete the analogy, marketing communications has to be able to engage against a similar complex backcloth of consumer clutter.
 
An information explosion is driving our imaginations. An imagination explosion is driving our search for information. We're living in a time of exceptional synergy between information and imagination. Instead of lifeless regimentation, the Information Age has spawned a great global flowering of imagination and creativity. With information comes a greater hunger for knowledge. PC's are about personal empowerment, not technology; word-of-mouth becomes a powerful mechanism for success and viral marketing needs to be built into any communications programme. Such communications create a dialogue and we have to accept that internet-based communications are less controllable.
 
Experience shows that where an agency and a brand owner recognise the importance of strategic planning, so there is typically, and to some, an apparent paradox: a significant improvement in creativity and its effectiveness. With the recent explosion in digital content, user-generated content and discussions about digital media, it is rather a shame that strategic brand planning has not raised its game as in this new era it is the brand-people connection rather than a media mentality that should frame the holistic brand plan orientated round the idea. The real brand battle has become a battle for the ideas that will win the hearts and minds of people.

As we accept that we are living in a total on-demand world, then it is a short step to understand that the whole way that content and entertainment is delivered will totally change. Greater understanding of the interaction between content and context for any connection is necessary to ensure relevancy. The four CSF's for implementing communication planning are:

1. Consumer focus rather than channel or creative led
2. Insight orientation founded on objective information and analyses
3. Agnostic in regard to which channel to select (no vested interest)
4. Measurable impact with clear metrics for measuring brand ROMI, rather than media impact

The shift in communications budgets from above-the-line to below-the-line, while understandable from the perspective of measurability, miss the strategic point -- there is no line!

A greater understanding of consumer choice and decision-making does require more sophisticated shopper marketing initiatives, but it is not a zero-sum game. That said, we will also see a rise in the use, and sophistication, of intelligent email marketing that drives personalisation.

For this, a holistic multi-channel approach is necessary for lead generation and sales conversion, demanding firms who can offer systems to cover the complete customer decision journey with integrated processes and flexible systems. Technologies (and tech partners) are becoming more important, and while for many email is central, the ability to include social networks, SEO, text mining, behavioural targeting analysis/segmentation and scoring, new call centre technologies, data planning and analytics, will increasingly be a cost of entry.
 
With this ability to narrowcast messaging, it will become more crucial to truly understand brand equity, as the core acceptance of entropy marketing will become more important, the business enterprise has two and only two basic functions:  marketing and innovation (they produce results, all the rest are costs).

Brand equity will need to be reconsidered not by accountants, but by marketers employing principles of micro-economics, in conjunction with tracking consumer preferences and consumption loyalty. Corporate reputation will become more significant. Consciously we use the word reputation rather than image; image is what you say about yourself while reputation is earned!

Who are you (today)? As healthcare provision becomes more customer centric and free enterprise the norm, this simple question will need careful consideration. If this cannot be clearly articulated then it will be difficult for the patient to make their (right) choice! One often hailed example is the values that guide the J&J decision-making which are spelled out in "Our Credo". Put simply, it challenges J&J to put the needs and well-being of the people they serve first.

A brand links business strategy to customer experience, but equally important is the fact that brand management addresses needs not wants. Any company, with a strategic view of marketing, needs to take a more holistic view of:

• The target customers' activities, lifestyle, and social space
• The company's channels and supply chain
• The company's communication
• The company's stakeholders' interests

Building on our last discussion, the role of the corporate brand and the need to embrace new marketing-based solutions cannot have a more profound impact than for the large pharmaceutical groups and healthcare providers in general.

Around the world and across all sectors of the industry, healthcare leaders are exploring many of the same solutions. Transferable lessons are emerging, but perhaps the most dramatic is not unexpected: consumerism. Providers are reorganizing themselves in a patient-centric continuum through care management approaches. Payers are developing consumer-oriented benefit plans. Pharmaceutical and life sciences companies are using new pharmacogenomic discoveries to pursue personalized medicine.

Free enterprise thrives on marketing and brands -- it is our hypothesis that going forward, healthcare provision and medicine will (have to) become more orientated to the principles of free enterprise.

To establish a dialogue with people, rather than talk to patients; to accept that medicine and marketing are not mutually exclusive when people have choices. Indeed, there is a complete synergy! It is a myth that marketing is an art; it is a science where the best marketers focus on results, not activities.

Although a majority of marketers have embraced online social media and user-generated content efforts, one industry is conspicuously not taking advantage of the gold rush: pharmaceuticals. Drug brand websites almost never carry the features that marketers usually are desperate to give their customers: bulletin boards, chat rooms, blogs and webpage hosting.

The reason: marketers fear that user-generated content will include complaints about injuries caused by their drugs' side effects. The law requires these "adverse events" to be reported to the FDA. The FDA's adverse-event databases are regularly combed by lawyers looking for potential class-action suits. Thus, drug marketers have stuck with a decidedly Web 1.0 model, in which customer interaction is kept to an absolute minimum.

The pressure for drug companies to evolve is growing. "Drug companies need to begin embracing ways to look for adverse events instead of hoping they don't stumble across them," said Peter Pitts, an SVP at Manning, Selvage & Lee, New York, who keeps a blog that champions the industry. "I think the attitude of 'there's safety in ignorance,' or active ignorance, is no longer actionable or responsible." Bruce Grant, (Digitas Health).

Grant refers to a survey from Nielsen BuzzMetrics, of 500 messages on health-related Google and Yahoo! sites. Only one reportable adverse event was found, suggesting a "volume that is entirely manageable within companies' broader [adverse events] monitoring programs."

Marketers consistently pick up their best lessons in times of crisis. We think differently about ROI. We act more intuitively. We become more agile and flexible. We "sense and respond." We really don't have much of a choice but to act and not allow yesterday's rules to justify complacency.

A clear recent example: the global  "swine flu (H1N1)" outbreak. At the center of this crisis is the US Centres for Disease Control and Prevention. The communication work it is leading is neither sexy nor flashy, but it's highly effective -- and critically timely. Moreover, the approach is building credibility -- strategy that does not link to operations is not strategic. It's just pointless planning!

As co-marketing and collaboration become more prevalent for brand owners to more effectively marry their customer and dialogue and multi-channel strategies, so there will be an ever-increasing pressure on existing brand communication development processes.

While the false dichotomies of ATL and BTL, or indeed more recently on- and off-line, have stimulated much industry discussion, there has been little material change to date because of legacy processes and/or unwillingness (inability) to re-engineer.

It is a communications tipping point that brand owners will more likely reach sooner than traditional agencies since they have a clearer and more strategic interest in effective and efficient brand investment!

Who is prepared to make the leap?

Chris D Beaumont is professor at Tokyo University's Global COE Program, and Arthur Stern is CEO of Global-Prime.