Aired April 29, 2015
On Marketing Matters this week, the Wharton Future of Advertising leadership team—Executive Director Catharine Hays and Academic Director Professor Jerry Wind—talked to Havas Media, one of the world’s largest global communication groups. Started in 1835, Havas has witnessed the development and diversification of the media landscape, adapting quickly to each new challenge. Tom Goodwin, SVP of Strategy and Innovation; Greg James, Chief Strategy and Development Officer; and Peter Sedlarcik, VP of Analytics and Research were on air to discuss the present, and future, of media management and advertising in the post-digital age.
Tom Goodwin, a recent addition to Havas, made his career by posing difficult questions to the marketing world. An accomplished writer, Goodwin has published articles on the current state of marketing in The Guardian, Tech Crunch, and Adage, to name a few. “There were a lot of people noting the change in the media market place, and a lot of conferences were being held to discuss the changes,” explains Goodwin. “But very few people were doing anything responsive. Consensus within the industry seemed to just maintain the status quo.” Goodwin’s observations caught Havas’ attention. “The way I was thinking, and the questions I was asking aligned perfectly with the way Havas saw the industry, and resonated with their goal to really change an old model.”
As the SVP of Strategy and Innovation, Goodwin focuses on driving this change. “We are rethinking how our clients can make meaningful connections in the ever-developing media landscape,” explains Goodwin. “So much old terminology no longer makes sense, and creates unnecessary constraints. If we think of media for “TV,” we’ve already constrained ourselves to thinking about a big screen that people sit back from, having a one-way, immersive experience. But if we re-conceive of things around “video,” everything changes.”
Video, as we all know, is not limited to television. “TV is one context for a video, and phones are another,” explains Goodwin. “With a phone, you know where the person is, what the weather is like, and that the user has access to their social network. Increasingly, our phones are also our wallets.” A video should be responsive to this changing context: when played on a phone, a video could conclude with a downloadable coupon, or the option to save a local retailer to your address book, or to share the content on Facebook. “By refusing to constrain ourselves to outdated terminology like “TV,” we can recognize that new contexts have new meanings, and we can reimagine what’s possible” says Goodwin.
Goodwin is also working to reimagine re-targeting—the process through which ads are targeted based on browser history. “Retargeting is like a clock running slowly,” he says. When people have searched for something, they’ve often already found it. By using information from predictive technology, Goodwin thinks we can move from re-, to pre-, targeting. “By making fairly sensible guesses about what people are likely to do, we can give the right message to the right person at the right time. Offering someone an Uber when it’s about to start raining will be really powerful.”
Catharine and Jerry’s next guest was Greg James, Chief Strategy and Development Officer at Havas Media. James’ role has a heavily client-facing component to it: it is his job to present media strategies to clients, explaining how the media landscape is changing, and how best their company can engage with it. “With such a diverse range of clients, from highly visible brands like Dior and Hennessy, to big financial brands like Fidelity, to smaller, more boutique brands with less to spend, each strategy is unique,” says James. “But there is one consistency: all media depends on people, on empathy, and on psychology.”
How marketing psychology is being understood, and how empathy is generated, is changing. “Today, millennials, or post-millennials, have a very different relationship with the media,” says James. “They are far more aware of paid advertising, and understand the dynamic behind it. What this generation responds to is authenticity, and what creates authenticity is a human pathway.” Earned media is thus a particularly important area of contemporary advertising, and a place to get creative.
Whereas owned media is advertising the brand creates themselves—such as branding on trucks, and shared media is a venture with another entity—such as sponsorship at an event, earned media is advertising that comes from the brand’s story, and isn’t necessarily paid for. “A blogger writing about a product is a good example of earned media,” James explains.
Earned media—where a real person praises the authentic story of a brand—thus holds far more value, and creates more engagement, for the younger, more media-savvy audience. James gave the example of Hennessy, the world’s largest cognac producer, which has legendary rapper Nas as a brand ambassador. “When we thought about how to capitalize on Nas, the answer wasn’t a sponsorship model that would have existed 10 years ago,” says James. “We thought about what Nas has in common with his fans that mean they all drink Hennessy on a Friday night.” Finding this commonality—an authentic shared value—“makes you realize you don’t need a 30 second ad for Hennessy, you need something that tells that story, that touches that authenticity,” he explains. Having Nas talk about Hennessy in an interview does just that.
When asked what Havas was doing to push marketing models even further, James described a “dynamic partnership with Universal Records.” By aligning with a company that holds 40 percent of the music market share, Havas gained some powerful assets—major artists brands want to be associated with. But working with Universal has another value. “This partnership gives us access to a lot of fascinating data,” says James. “When you think about how consumers listen to music today—through iTunes, Spotify, or downloads—you realize music is a digital interaction. And digital interactions can tell us something about somebody.” This knowledge can help Havas respond to the market in a highly specific way.
Marketing Matters’ final guest was Peter Sedlarcik, EVP and Director of Analytics and Research, who shared research Havas has been doing on brand meaningfulness. Starting seven years ago, Havas has undertaken a global survey to establish which brands the public considers meaningful, and feel a deep commitment to. “As a company, we spend so much time with our clients thinking about strategies to connect brands with consumers, how to intersect in their daily lives, which media channels that will get their attention, and how we can impact their behavior,” says Sedlarcik. “This research really gives us an additional layer of insight into how consumers are engaging with brands, and what their perceptions and attitudes are.” The results, as Sedlarcik explained, are rather surprising. “In many markets, particularly more developed markets, consumers are kind of apathetic about brands; there aren’t too many brands they feel passionate about.”
The level of attachments to brands was significantly lower in North America and Western Europe—sitting in the single digits, compared to the emerging markets in Asia, which sat above 50 percent. Similarly, brand meaningfulness was split along age lines. “Looking at millennials, there is simply less meaningfulness in the vast majority of products across categories,” says Sedlarcik. “There’s just not a connection to brands.” How to create a media strategy across these dramatically varying demographics, that is, how to develop meaningfulness, is therefore complex.
“When we look at meaningfulness, we’re focusing on three core components that make up a brand,” says Sedlarcik. The first is marketplace attributes, such as the quality of the product and its price point. The second is personal wellbeing, how a product can make you smarter or fitter, how it can improve you life. And the third is the collective dimension: What is the brand or company contributing to the community in terms of business practices. Evaluating on these three arenas allows for very fine-tuning when developing a marketing strategy.
“Moving the second component, personal wellbeing, has been the most successful,” says Sedlarcik, as he described a recent project with a food storage brand based out of Chicago. “There’s only so much money you can invest in online or TV marketing to spur people to buy a product they only need a limited amount of,” he explains. “Through the meaningful brands research, we found that people were looking for ways to be healthier, and to be more efficient in the way they were preparing and storing their food.” Through different social platforms, Havas then developed programs that presented the product as a means to achieve both these things. “We gave people inspiration on how the product could extend beyond what they’d been using it traditionally,” says Sedlarcik. And the data reflected success: “there was an improvement in overall usage, and a bump in sales,” he explains. “We were able to increase their business results and improve their meaningfulness.”
Finding ways to make a brand more meaningful is therefore not necessarily limited to highly utilitarian products like Uber. “By thinking about how a brand can help someone organize their life, we can improve meaningfulness,” says Sedlarcik. And by tapping into the way consumers evaluate meaningfulness, Havas is able to provide a more meaningful—and valuable—media strategy.