Digital insights

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Digital InsightsEIGHT QUESTIONS ANSWERED

What is the role of creativity for brands today? Mike Bednar, chief creative officer | 03

What’s the most important tech platform today in digital marketing? Raghu Kakarala, svp, creative technologist | 05

What can brands learn from retailers’ embrace of convergence? Shannon Delaney, director of behavioral brand planning | 07

What can brands expect from interactive TV in 2011? Tomer Tishgarten, vice president of technology | 09

How can brands stay relevant to consumers today? David Grzelak, executive director, brand planning | 11

Is social media amplifying an aspect of human nature that mass media didn’t activate? Patti Ziegler, chief marketing officer | 13

What social media metrics matter today for brands? Scott Hildebrand, chief consumer relationship officer | 15

Can privacy survive in the social media ecosystem? Mya Frazier, director of trends and insights | 17

contents

Excerpted from The Engauge 2011 Digital Outlook. Download the full report @

www.engauge.com/2011-digital-outlook.

Cover Image:Sabbath Photography

http://www.flickr.com/photos/msabbath/2350853664/Licensed under Creative Commons.

To learn more, visit creativecommons.org.

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QWelcome to the democratization of creativity. What do I mean? Well, let’s go back—starting a few centuries to a few years ago. Creativity was, by its nature, elitist, owned by few and awed by many. In order to create, you needed tools, a location and resources, not merely talent. The prohibitive costs and time commitments relegated creativity to those with the capacity to pursue it—the funded painters and poets, the industry-backed musicians and filmmakers.

It was no different in business. Ad agencies possessed all the time, tools and talent to create. Consumers sat back passively and watched or listened. Because agencies, bankrolled by marketers, could afford to create the message, we had control. We owned the influence; we commanded the mediums. We held all the creative cards.

Then technology came along and reshuffled the deck completely.In the hands of the many, the voice of creativity changed. Its tone became collaborative. It eschewed production polish for the

What is the role of creativity for brands today?

vibrancy of reality. It chose dialogue over monologue. The opinion of a teenager from Antioch, Wisconsin became as valuable as the postulates of a tenured Harvard professor. Anything was possible, and the unexpected became the expectation. Emotion hijacked logic. It was no longer necessary for logic paths to move rigidly from awareness to persuasion. No, it was marketing anarchy where the targeted audience usurped brand positioning right from the hands of unsuspecting marketers.

Now, what consumers say—in blogs and microblogs, on social networks, in email chains, on socialized sites and video sharing platforms—is the voice of your brand. And it can change in a nanosecond without rhyme or reason. Like it or not, this is the new world of creative influence.

Some brands will resist, some will reluctantly accede. But those brands

POINT OF VIEW

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READ MIKE’S BLOG:

ENGAUGECREATIVITY.COM

Mike Bednarchief creative officer

that not only embrace but also join their new creators will triumph. Here’s the secret to why: Brand positioning, by its very nature, is emotional. Its foundations are, and have always been, built on constantly shifting sands. Perception is reality. And consumers have always held the ultimate control—they’ve either believed or they haven’t. They’ve created images of brands in their own minds. Now they simply have the ability to create the outward-facing image. Consumers accept the creative messages of other consumers more readily than from marketers.

So give them the tools to create, unleash experiences and invite them in. Let them influence your brand’s direction, not the other way around. Trust them to know as much about themselves as your precious research does. Allow them to disagree, to argue—at least they’re talking. Create two-way content; share everything you have—without hesitation.

Their creativity is limitless and infinitely effective. When it’s built around your brand, it becomes the most powerful marketing tool any brand could possess.

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QSocial is no longer an optional add-on; it’s the new default. Facebook reached an epic milestone in November, accounting for a quarter of all webpage views in the U.S., according to Hitwise. For some brands, social presences are now the primary platform for brand expression and interaction. In 2011, their owned-media channels will be augmented by traditional homepages, rather than the other way around. However, those tech-savvy brands are the exceptions; the bulk of marketing has not kept pace with the advance of innovation. Brands should also recognize that successful owned-media channels on Facebook, Twitter or YouTube can be launched with minimal technological sophistication and very little up-front investment. It’s not completely free—somebody has to pay the salaries of dedicated staff

and community managers—but success in social is rarely attributable to how much money you throw around. Rather, social campaigns live or die as a result of creativity, commitment and mindset. Creativity, in particular, matters more than ever. Unlike traditional media like TV, brands can’t “rent” an audience for thirty seconds by buying a spot in a popular program. In social media, brands have to build and retain their own audience. Marketers bemoan the proliferation of platforms because of the increase in required resources. They continue to view these platforms as “tactics,” rather than an invaluable extension and expression of consumers themselves. Brands should take solace in the fact that these technological changes have reinvigorated engagement.

What’s the most important tech platform today in digital marketing?

POINT OF VIEW

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FOLLOW RAGHU ON

TWITTER @INTERPOLATE

Raghu Kakaralasvp, creative technologist

Social and mobile have increasingly become essential “life tools” for mainstream users. Over 20% of U.S. consumers visit social networking sites and blogs on their mobile phones, according to comScore, and it’s expected that half of all U.S. consumers will have a smartphone by the end of 2011. If consumers are allocating their time and money, what’s holding back brands? Today’s early adopter is often an average consumer, rather than the neighborhood techno whiz. That’s why it’s not too early to begin testing emerging technologies like connected TV, where brands can come alive through addressable commercials, or social TV, with mobile apps that enable audience participation. These technologies may be logical next moves for brands that have already mastered their owned-media channel.

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Every day, shopper expectations get higher and higher, and the brand that is present in every channel on every device is the one that is going to have the best chance to make a real connection with them.

Not long ago I stumbled across an Altimeter report, “The Rise of Social Commerce,” that talked about the enlightened state of “frictionless commerce” in which social and retail are integrated for a completely redesigned shopping experience that’s truly consumer-centric. Even for non-retail brands, there are benefits to adopting an e-commerce mindset when it comes to convergence. But why stop there?

The future of marketing is frictionless engagement. I call it brand nirvana and define it as the removal of barriers that inhibit consumer decision making.

QWhat can brands learn from retailers’ embrace of convergence?

Consumers shop in stores while using their phones to check competitive pricing, read product reviews and ask their network of friends for their thoughts and experiences. The more considered the purchase, the more highly social it becomes as anxiety to make a good decision drives consumers to reach out for real-world input. Accepting and enabling these behaviors is the first step. Best Buy gets a nod for early adoption by putting Internet-connected terminals inside stores to allow consumers to do that very thing.

We now see the integration of Facebook Connect with brands’ own site-registration processes. In addition to making the log-in process simpler, Facebook Connect provides a detailed picture of customers. The data goes far beyond demographics. We know what books they read, events they attend, brands they care about and who their friends are. Amazon is leading the way by making the site your experience,

POINT OF VIEW

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reminding you to buy gifts for friends’ birthdays and suggesting books and music you should buy based on your “likes.”

Sometimes people are so excited about a great score or the pure joy of something they recently purchased, they want to share it with the world in real time. And yet, recently, a client asked, “Shouldn’t we wait to launch our social presence and spend six weeks doing focus groups to ask people what they really want from our social offering?” My answer: “Why wait? Every day is another day that you aren’t present in a place that they expect you to be and even more important is you have a social focus group right there.”

To truly influence consumer behavior, you need to recognize that digital retail and social are not isolated channels. Seamlessly integrated and highly personalized experiences will lead to frictionless engagement. That’s not only nirvana for brands; it’s also heavenly for consumers.

Shannon Delaneydirector of behavioral brand planning

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Interactive TV represents a hybrid medium where on-demand content and Web applications meet the biggest screen in your home—the television. Consumers with Interactive TV sets use built-in applications (widgets) to access content such as YouTube videos, Flickr photos and Pandora music, along with social media from Facebook and Twitter.

Television set manufacturers have been eager to roll out interactive TV (a.k.a iTV or connected TV) with the hope that it would spark con-sumer demand like high definition did in years past. However, current barometer readings indicate that these smart displays are poised for lukewarm interest at best among mainstream consumers. Research from Forrester has confirmed that approximately 40% of users who own interactive TVs either failed to connect their TV to the Internet or connected their display yet failed to use this feature.

While the mainstream consumer may be out for now, early technology

adopters are already vested. They are astute consumers with the high-est expectations, highest technology-specific investment and highest potential for engagement in the near term. They’ll be experimenting with the applications to figure out, essentially, what the new technology can really deliver. If their expectations and interests are fulfilled, these initial experiences will help shape mainstream consumer behavior of the future.

Brands have an opportunity in 2011 to dip their toe into this medium and begin to experiment on a limited budget by turning to a set-top box, such as the Logitech Revue with Google TV. This device represents an alternative component within the typical home entertainment center, and in many cases, consumers who want interactive TV will opt for such a device rather than replacing their TV display. This is particularly true for the most tech-sophisticated crowd, who may be in no hurry to ditch their traditional, expensive, 42-inch, high-definition displays.

QWhat can brands expect from interactive TV in 2011?

POINT OF VIEW

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The Logitech Revue is powered by the popular Android mobile operating systems. Developers that have built mobile applications will be able to technically repurpose them once the Google TV software development kit is available. When Google rolls out the Android Marketplace in early 2011, marketers and developers will finally be able to deploy their custom applications and fully experiment with this technology. Additionally, Apple is expected to follow suit by expanding support for third-party iOS apps on their Apple TV device.

By jumping into this category in 2011, with apps and related media like interactive social and video content, brands have serious potential for high-visibility impact in this much-watched space.

Marketers can bring a creative touch to the technology, delivering eye-popping content that unleashes the exciting possibilities of the new medium. Technology consumers, manufacturers and the media are all waiting for the true innovators to step forward.

Tomer Tishgartenvice president of technology

FOLLOW TOMER ON

TWITTER @TOMERIFIC

OR ON HIS BLOG

ALLTHATIKNOW.COM

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QIn order for a brand to become “social” and do so in a meaningful and relevant way, brands must get beyond thinking and defining themselves solely as a set of product benefits. Why? Because product benefits are a short and uninteresting topic for social conversations and they certainly don’t add any badge value or meaning to the brand that makes them “like-worthy” to our narcissistic and in-control consumer.

Today, in a world of over-choice, where product benefits and features are quickly and easily copied by competitors and where buzz terms like social, dialogue and interaction have replaced the safety of simply sending out ads into the market, the whole notion of positioning a brand upon its unique space within a category has become as antiquated as defining a cell phone by its ability to make a phone call.

Branding today requires a new approach—an approach that doesn’t start with a proclamation about what we are or how we want consumers to feel about us, but with an understanding of consumer culture and the cultural meaning that surrounds the consumption of our brand. Branding is no longer done from the inside out; it works from the outside in. Letting the values, beliefs and attitudes of consumers shape and define our brand so that our positioning doesn’t just create category relevancy, but cultural relevancy.

This is a big and necessary shift in the way we approach branding. Letting consumers define your brand makes for more relevant connections and increases the meaning of your brand in the lives of consumers. It takes us beyond the package and product to a positioning that allows brands to become alive and infinitely more

How can brands stay relevantto consumers today?

POINT OF VIEW

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READ DAVID’S BLOG AT

DAVIDGRZELAK.COM

David Grzelakexecutive director, brand planning

interesting in the day-to-day lives of consumers. The minute we, as marketers, put ourselves in the context of a category, we immediately limit the usefulness and meaning that our brand can have in the marketplace. We reduce ourselves to features and attributes, but thinking of our brand through the lens of consumer culture opens up an endless source of inspiration and imagination.

So while we may see narcissism in the behaviors of consumers in social media, we, as brands, must let go of ours. Nothing good comes out of a conversation between two narcissists, and it may just be time for brands to replace our narcissism with a little bit of humility and finally recognize that consumers do, in fact, define and own brands.

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QIf every person wants to be a brand and every brand wants to be a person, where does that leave marketing? What does it say about our culture that young girls want to become celebrity brands like Miley Cyrus, while companies and products are competing to be our friends?

Brands were once the cornerstones of consumer culture, but with the rise of social media, consumers have increasingly subsumed brands. They’re now the producers and the consumers. Brands are sidelined to serving “content,” which, sadly, makes marketers sound like caterers—ferrying drinks to VIPs at a cocktail party, desperately hoping everybody likes the appetizers. Advertising, long acknowledged as both tastemaker and toastmaster in American culture, is now mostly a facilitator. It’s the hired help. Let’s

face it, though, brands are lucky consumers let them in to the party in the first place. Rather than barring the door, they’ve brought brands into their social scene. They’ve taken us inside their houses, they’ve shared their thoughts, they’ve expressed sincere interest. We may be living in a nation of narcissists, but consumers are actually encouraging brands to behave more like people—in other words, more like them.

People have always projected—we put on our best face in public. But that kind of social projection used to happen in private encounters, smaller settings. It wasn’t mediated. The message wasn’t packaged and broadcast across global networks like Twitter and Facebook. People weren’t building their own personal brand. They weren’t marketing themselves.

Is social media amplifying an aspect of human nature that mass media didn’t activate?

POINT OF VIEW

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READ PATTI’S BLOG AT

PATTIZIEGLER.COM

Patti Zieglerchief marketing officer

Jacob Lewis, co-founder of teen literary social salon Figment.com, observed that in the past there was no expectation that famous authors would correspond with their readers. “That’s not true now,” says Lewis. “There’s been a fundamental shift. When kids today interact with the authors they love, they expect a response. They demand a response. Reading isn’t a passive experience for them; it’s a social one. People want to participate.”

Which means it’s a mistake to get too preoccupied with notions of narcissism, because there’s also a brighter side to this paradigm—a vibrant culture that finds value in creating and contributing, not just consuming.

Brands aren’t celebrities. They’re not people and they’re not peers. But they can be very useful friends. And that’s worth considering in this new creative context. There’s a party going on—now go serve those canapes.

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QWhat social media metrics matter today for brands?

As an industry, we’ve spent a lot of time asking ourselves: What’s the value of a Facebook friend? But that’s always been the wrong question. And, ultimately, an impossible one to answer. The necessary and logical questions to ask instead are: What is there to learn in the social media space? And how can we use this knowledge to create more meaning in the lives of consumers and, therefore, value for a brand? As with any technological innovation, especially those accompanied by a radical shift in social and cultural norms, figuring out what it all means for marketing practice doesn’t happen overnight. Yes, fans are a measurable outcome, but not necessarily the best metric. Fan counts are simply what is available. Marketers gravitate by habit to these measurements because they are similar to

POINT OF VIEW

readership figures or viewers of a TV show. And just like those metrics, it doesn’t speak to impact or relevance. It indicates audience. And just like the mass market of the distant past, Facebook’s aggregate audience is massive. It reached 70% of the U.S. Internet audience in 2010, up from 48% in 2009, according to a recent report by J.P. Morgan.

And yet we remain essentially toddlers in the social media space when it comes to metrics. The only thing we’ve figured out is how to count things. We need to move from talking about X or Y brand being mentioned 10,000 times to “what did these consumers actually say?” It’s essentially a move from quantitative to qualitative data analysis.

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Scott Hildebrandchief consumer relationship officer

We are at a very binary stage, asking whether something is good or bad. We must move on to intent. There is a richness in social conversations that brands need to tap. The future will be dashboards that will tell you how well your social media performed in terms of activity. We will get to the point where we will be able to gauge how well a social campaign performed in terms of brand perception. Once we understand how brands are perceived, we can start to alter those perceptions and drive category growth or a brand positioning against a competitor. And that’s certainly not counting or a superficial indication simply of popularity or buzz. That’s where analytics must improve—linking an individual with their ability to drive actions that create value for a brand. It’s an uphill climb, but we will eventually arrive at that level of granularity with our analytics.

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QAs our public selves merge perceptibly with our private selves on so-cial networks, our notions of what constitutes privacy—arguably even the very definition of privacy—is undergoing a radical revision. Mark Zuckerberg audaciously quipped in 2010 that privacy was no longer a social norm. For most of the 550 million users of Facebook, the idea of a “private” profile on Facebook apparently persists. But, in fact, there is no such thing. A recent study of online social networks started with this premise: Given the known attributes of some fraction of users in an online so-cial network, can we infer the personal details—geographic location,

interests and schools attended—of the remaining users? The answer was perhaps predictable: Yes. It was the high degree of accuracy that was surprising. Even when given information on as little as 20% of users, the personal attributes of the remaining users could be broadly determined. Put more simply, we are friends with people like us. Our networks reflect commonalities easily inferred by even the most basic of algo-rithms. Just by joining—often under the illusion of privacy—we reveal ourselves. But few stop there. Instead, we share some of the the most intimate details of our lives—children, marriage ties, school and work connections. We voluntarily make ourselves more vulnerable—but

Can privacy survive in the social media ecosystem?

POINT OF VIEW

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FOLLOW MYA ON

TWITTER @MYAFRAZIER OR

ON HER BLOG

MYAFRAZIER.TUMBLR.COM

Mya Frazierdirector of trends and insights

vulnerable to what, really? RapLeaf? The People’s Republic of China? The threats remain largely abstract, opaque, seemingly academic. With every new status update, we may be entering a Faustian bargain, but we really can’t see whose hand we’re shaking. As Facebook grows ever larger and more powerful, we’re increasingly caught in a zero-sum game between participation and privacy. The emerg-ing cultural norms of transparency, openness and connectedness involve some inherent sacrifices. The question remains whether these tradeoffs will be worth it.

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About EngaugeOne of the nation’s largest independent agencies, Engauge leverages creativity and technology to develop transformational ideas that connect brands and people. Engauge guides a growing roster of clients on the path to realizing the power of digital channels by focusing on driving results and sustainable growth for brands. The agency’s client roster includes Nationwide Insurance, DAD’S Pet Care, The Home Depot, Best Buy For Business, Chick-fil-A, Brown-Forman, Food Lion, Van Gogh Vodka, NGK Spark Plugs, Perkins, IHG, UPS, Logitech and more. Engauge, which has offices in Atlanta, Austin, Columbus, Orlando and Pittsburgh, is a portfolio company of Halyard Capital.

For more information, contact:Patti ZieglerChief Marketing [email protected]

Engauge375 North Front StreetSuite 400Columbus OH 43215engauge.com

This report is an excerpt from The Engauge 2011 Digital Outlook.

Download the full report at www.engauge.com/2011-digital-outlook.

© 2011 Engauge. A

ll rights reserved.