We all seen and read about the rise of private labels. In UK and US, companies as Walmart, Tesco or Mark’s and Spencer delight us with true valuable products at the level of any brand we have seen before. Retailers are beginning mastering brand management and realized how to manage their portfolio of products covering today categories within low, medium and high end offerings, sometimes stated by consumers as better than well established brands.

In the past years the world revolved around advertising and distribution: more ads would probably create more demand, therefore more distribution, therefore more sales. This as changed today with massive competition from many players and information accessibility brought by the Internet. No longer advertising works so well as in the past did. At the same time retailers realized they have the power in their hands, at the end of the day, they are the core location where people physically shop and choose their products, if even not online whereas they’re also doing a great job at delivering a great service.

Some experiments lead to implementing products of their own, copying what was already done. With a bit more effort retailers realized they could actually build brands and improve their margins by settling wider offerings throughout different categories and different choices throughout different quality layers. Again, they own the aisles and the shelves. Hiring talent to manage their portfolio doesn’t seem like a problem as well.

Some changes on the packaging, an incremental investment in improving product quality and bingo, people question themselves why not? Why not I don’t buy a product with the same quality as the other brand but at a lower price? After all this is value for me. People’s questions became imperative, and the rise of private labels seems to be here to shine. When thinking about what causes this shift, besides of what was mentioned above, the following key points lead to the situation:

1.  Branding is more vulnerable in FMCG. People use Armani to make a statement, but they don’t use TIDE or eat Danone Yogurt to make such a statement.

2.  The value proposition of private labels is huge. The inexistent costs in advertising, economies of scale, and distribution capabilities along with an alignment in product quality makes it very hard to compete with.

3.  The economic downturn as deeply changed consumer behavior. Smaller family budgets and a new mindset of value within shopping as helped private labels rise. People experiment more lower priced items and eventually get loyal fast if happy with overall experience. The incremental quality in private labels is buzzing already and spreading fast.

4.  The insights retailers can work on on their own shops is gold mine for developing strategies, products, brands and experiences which make the cut.

Given this what brands are doing? Well buying some supermarkets.. focusing on power brands and selling out others. Yet, we see brands as “Innocent” rising. The edges are where brands will win. Middle market is hard to cope with as people wonder around the cheap or the expensive, the big or the small, the fast or the slow. Focusing on a single positioning within the edges seems to be the best strategy.

People are attracted by landmarks. From these, ancient monuments, massive constructions, aligned ancient styles, great palaces or thriving castles, play a great role attracting people to countries or cities. On the other hand, wild nature, steep mountains, fast rivers, or amazing beaches play a similar role captivating people to other kind of places. So beyond cultures and tradition which also represent the key elements in attracting people to places, modern landmarks make the big cut in attracting crowds.

Louvre is a wonderful museum, filled throughout the year with amazing masterpieces of great artists, though, I believe a great deal of the people who visit the Louvre (specially most tourists attracted by Paris in general), are first subconsciously pointed to its architecture which also made its mark in films rather than firstly involved with the art collections itself. Ask your friend what is the Louvre and guess that quite probably he will remember its glass pyramid first instead of Mona Lisa (if you do an image search on Google you’ll confirm this aspect as well).

Ask what Bilbao is all about for a lot of people, and the wonderful Guggenheim Museum will probably come up first. Ask then which key exhibitions regularly come up there, and I’ll guess what the answer is. Rome, Istanbul, Barcelona, New York, Hong Kong, Chicago, and other examples as recently Dubai, are all surrounded by something that attracts people: Architecture. People are greatly attracted by buildings or other landmarks that make a difference.

I believe architects are the great masters that lead us to a visual impact that deeply shapes our perceptions and moves the whole experience with a city or place to a different level. When branding a city, giving absolute freedom to creative architects is definitely a one step further to put it on the world map.

What you do when your company heads towards out of business by a search giant conquering several categories. Google is launching a free sat-nav application integrated with search which you can use it on your phone. Garmin, Tom Tom and other related company’s shares just fell severely in the last days, and figures are not positive.

So what these companies should do? the dip is near and the turn should be strong, but the fact is that the question lies on what should have they done. One of many reasons GM might have failed was that it didn’t spot or believed in the green opportunities of the future auto industry, which could reduced people’s annual spending on cars with a valid reason behind. Yet, they kept insisting building bolder cars with high levels of gas consumption plus launching more and more brands losing focus.

GPS nav companies face the same irony when confronted with such market shift. Google is offering a free app which might be of a superior quality when compared with others charging around 50$ to 100$ US per app. Mobile is concentrating everything, and search is indeed the perfect match for such GPS services. As for the free model, that’s just how Google operates, along the long tail.

Toyota plans hundred years ahead, and as many say today that it is hard to plan next month in such rapid changing markets, I believe companies should definitely plan ahead several scenarios that can happen in the fast moving markets we see today. The key thing here is that they shouldn’t be able to react, but instead drive their industry and product categories as Google keeps on driving. Innovation is staggering and decisive today. If you had a Google next to you as your direct competitor what you would do today?

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RATP is the company behind the transportation service and the metro in Paris. RATP is broken. Every beginning of a month inside the metro stations we can see huge lines of people waiting to solve their problems with their monthly passes to access the metro.

After these huge lines of people we can spot a few unmotivated employees, usually two or four at a small office trying to deal with the crowd demands, which can span from acquiring their passes to technical problems solving or a need for more information in determined issues.

These small offices are present in a few key stations, 28 in fact within the whole Paris area (which has about 400 in total). The recharging machines also see huge lines of people as everyone tries to recharge their passes within the same day to not lose a single dime in the monthly period.

The fact that is a public company might be a strong reason why people from top to bottom actually don’t care that much about what happens. Not only this is normal here but also in many other countries throughout the world, as the key goals that drive state owned companies seem not driven to improve but to maintain. There is a complete inertia in RATP and also a lack of care in fact for the people who use the service.

Now, if we changed the scenario from this essential transportation service natural monopoly by RATP to a product or service fitting in whatever existent category, the result would be interesting to see, I guess in a 6 months’ time the company would have closed.

You don’t have to pay consultants to realize that if you change the configuration on the pass to start-end whatever day instead of first-last day of the month, or add more people for support at peak days, or get more machines rolling at the same days, or divert the crowd by days within increasing timelines, etc. You just have to do it as you would do it if it was for yourself. Effectiveness unfortunately is still very scarce in public companies and just makes Paris in this aspect definitely not a fast moving forward thinking European capital as others nearby indeed are.

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Neon lights advertisements are seen everywhere in Hong Kong. How they distract car drivers?

Part 3:

Deutsch and Norman, pertinence model

Broadbent and Treisman agree that the selection of a single channel occurs at an early stage before recognition processes begin, and so their models are called – Early selection models.

On the other hand, Deutsch and Norman pertinence model (elaborated after Deutsch and Deutsch, 1963), argue that information from all channels is transmitted to the semantic analysis recognition stage and just then a selection is made (Late selection model). All stimuli are fully analyzed, being the most important or relevant stimulus determining the response.

The content is analyzed semantically, but the words (e.g.) in the unattended channel cannot access consciousness.  This theory places the stated ‘filter’ in processing much more ahead and near the response end of the processing system.

Consequently, there is a complete perceptual acknowledge and analysis of all stimuli, supposedly with no difference in detection rates between two different messages. Hence, only important inputs can be an object to lead to responses. Selection of all stimulus is ‘top-down’ as opposed to Broadbent’s and Treisman’s models which are known as ‘bottom-up’.

This theory lead to a understanding that if neon advertisement, as strong as it is when analyzed closely, would provoke a tremendous effect on the drivers when in contact with such extreme stimulus at the same time they are processing another tremendous amount of stimulus such as driving demands, making the driver extremely busy in their attention thoughts and proving the theory incongruous to the case.

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Neon lights advertisements are seen everywhere in Hong Kong. How they distract car drivers?

Part 2:

Treisman, feature integration

Treisman agreed with Broadbent that indeed there is a bottleneck in our attention process, but disagreed with its location.

According to Treisman, attention binds different features of an object (e.g. colour and shape) into consciously experienced wholes, and the same filter mentioned could be more accurate and effective if in a different level than what Broadbent had located.

This filter is suggested far over and is mentioned as it will reduce or attenuate the analysis of unattended information, being the “absorbing barrier” more flexible to understand and differentiate various stimuli. Plus, this theory supports that stimulus are processed through a hierarchy, describing a process where each stimuli follows and moves to further detailed information at the same time the unattended information becomes gradually more attenuated throughout the process.

Considering the neon lights when driving in Hong Kong, the same thinking principles mentioned in the Broadbent case can similarly apply, since the driver still might not have ability enough to process instantly such powerful advertising details within a large amount of each billboard information at the first instance. Still, according with this theory, the driver will indeed process all the information presented but through a more flexible and gradually attenuating process, having the chance to understand advertising messages which spark its interest and rapidly choose naturally which will follow the hierarchy to a deeper level of understanding. This allows to better control in some way its various external stimulus when still based on a focus of the main activity of driving – the attended message, and gradually filtering unattended messages, understanding they could or not be of interest at a first instance.

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Neon lights advertisements are seen everywhere in Hong Kong. How they distract car drivers?

Part 1:

Broadbent, filter model, selective attention

Broadbent theory supports that a filter is located in between the incoming sensory register (eyes, nerve impulses), and the short-term memory storage in our brain, with attention that not all information make it to the third stage (long term memory) or other stages as the filter works together with a buffer. The stimuli presented at the same time are held in the short-term sensory buffer, and its information can be retained there for a short period before being processed. After that it disappears from the processing system, which means that the same filter makes an analysis regarding semantic content (meaning within conscious awareness) and selects one of the inputs on the basis of its physical characteristics, passing it through a limited capacity channel for further processing. Any stimuli not selected by the filter doesn’t receive this semantic analysis and never reaches conscious awareness, although occasionally could be stored in the unconscious.

Neon lights from outdoor advertising in Hong Kong could be well managed if the driver can balance correctly the outcome of colours and signs present in the ads, at the same time he focus on sensory aspects that come with the act of driving and traffic conditions at the moment.

Taking in account Broadbent’s filter theory, a filter do exists and functions like a sort of protecting barrier, absorbing conditions, processes, handling both stimulus at the same time, but dividing them appropriately and assigning one out of other choices to immediately process or hold for later processing.

This means that the filter prevents overloading of messages and therefore the overloading of the tremendous advertising sensory aspects we can experience in a flashy billboard crowded street in Hong Kong. Hence, ultimately the attention-to-memory processing will lead to a single focus and processing of complex information about the driving conditions, managing well the challenge of cruising the streets of Hong Kong.

However, if the filter chooses to direct attention to the neon flashy outdoor advertisements, all the drivers which had it more inclined to ‘choose’ processing information such as the neon lights would put the individual in a serious problem when driving. One could imagine processing an ad message without paying attention to the traffic (although it might happen in some situations, namely when text messaging, it is not the average).

Thus, in this situation the attention and information processing were driven out to secondary aspects instead of the primary aspect that is the current action of driving, makes this theory ambiguous to the case as people can drive in harsh conditions and in the streets of crowded ad spaces such as Hong Kong. Therefore, probably not applicable to the case in terms of cognition related to visuals, but others would be applicable such as Broadbent’s auditory experiences.

More, the outcome we can take from here regarding advertising effectiveness is that within a crowded ad space, people tend not to pay attention to specific advertising unless it is remarkable. The cognitive process described above, although not fully fitting the overall ad space context, we can argue that a person in principle doesn’t process / store information about probably more than half ads present in a crowded space such as Hong Kong streets outdoor advertising.

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Today I came across another ad that simply keeps spreading the thinking of  interruption marketing on the web. Besides the fact that the website below as a lot of ads, the one in the middle is just annoying, and one of those banners that as you scroll up or down it follows, covering the text that indeed you’re looking forward to read.

So the point when mentioning again the awareness vs engagement, is that you can get a lot of awareness here – buy ads, buy more ads, buy more and more ads, and people will notice your brand! Great, but will they buy it? Will they get out of their own way to click, read, spend time learning more, send an email asking for more information, pick up the phone and call your company asking about your service, schedule a meeting and eventually convince others or themselves to close a deal with you? just because you interrupted them when they were reading something that they were interested in and the ad didn’t went out of their way so easily?

What attracts companies to keep working like this is that if you buy a lot of ads, spend a lot of money, get a lot of impressions and eventually some clicks – Yes.. Eventually someone will buy it! But the percentage of that “someone” compared with the money spent or impressions, i.e. conversions, will be probably not relevant, not worthy, insignificant within lower budget opportunities. You can build high awareness, but low CTR’s, in the same way you interrupt people to make them buy your products, but you don’t engage them to build your brand and eventually buy your products in a sustainable way.

Key thing here is to stop interrupting people and start thinking on how you could engage and spread the word about your brand, make a better product, make a better marketing campaign that doesn’t annoy a lot of people, build interaction, fun, curiosity, help people solve their problems, communicate how you can help people solve their problems, integrate different channels, innovate, create something new, something worth to talk about, talk with people, change the way you handle the service, use the web to connect people on achieving something good, it can be free, or you can use ads to reinforce your message, not to interrupt people, use them to make people participate in something, not to try to find the “close this window” link. Want an example? Find them, create them! Below you can find two already.

www.twix.com

www.willitblend.com

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I am reading a fine book on advertising, and what makes this book quite good is the approach on common sense key points that we usually tend to forget. Beyond several insights that caught my attention so far, there is one to highlight that is simple when building a communication strategy but ignored often, it says:

Clearly list and brainstorm the features, advantages and benefits of your offering, but start by the benefits, advantages and features when communicating with your market.

The attention your consumers dedicate to your brand is scarce within today’s landscape of ad clutter, if you don’t show fast the benefits consumers have with your offering, how do you think you’re going to get their buy-in in a tremendous competitive landscape? Below is a easy simple framework which should be always kept in mind. Consumers think on the benefits first, though several advertising messages think on the features first.

According with the authors, the thinking on true value propositions for the consumer is being easily filled by blank “buy me” propositions. As advertising seems to be dying nowadays, if you keep thinking on the traditional monologue, it will die faster. Why does this book have to highlight simple common sense and the community repeatedly be reminded of these time and time again? Here are a couple of reasons why I think it happens:

- Lack of proper research

- Research is not converted into valuable insights

- Consumers fail to provide true behavioral answers

- A few people in a focus group is not enough to get valuable conclusions

- Advertisers, marketers are busy enough they ignore insights from stakeholders

- Advertisers try to please marketers, marketers CEO’s: all fail on customers

If your advertising copy says, “we pride ourselves on the exceptional service we provide to all of our clients”, or “the best place on earth”, erase, rethink today.

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“I bought it because was cheap and I really like the brand”. Says a friend of mine regarding a sun cream. So I asked, why do you really like the brand? First thing was, “I don’t know”. Then trying to extend his arguments came more rational attributes to justify the brand choice. The product smell or parfum experience was great and could even make the bathroom have an aroma in the air. Then also the competitive pricing and some comparisons with other brands, as well as the creamy side of Dove’s line of products. Funny to see how rational attributes come to justify a brand choice when there’s a bunch of emotional attributes behind that. The first glimpse of my friend’s answer was that he actually didn’t know what to answer. People take it hard to understand, market researchers harder.

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