Thought Leadership The Era of Adaptive Marketing ThE ERA Of ADAPTIVE MARKETING Using real-time data to sharpen brand relevance Norm Johnston Chief Digital Officer norm.johnston@mindshareworld.com ACROSS THE globe, privacy has become a political hot button and governments are collaborating with industry leaders to come up with sensible solutions that balance understandable consumer privacy concerns with legitimate marketers’ wishes to create a more effective and impactful online experience. Why is this important? At the very heart of this issue is arguably the future of marketing itself. Without a proper—simple, intuitive, legal, ethical—online exchange of data, both consumers and brands will find far reaching implications to the way they buy, sell, create, and configure products and services. The majority of consumers already realize that in return for some of their personal information, brands can do a much better job adapting their products and associated marketing to meet their unique needs. According to the data from the UK Direct Marketing Association: 75 percent of consumers would share personal information with a brand with which they have a relationship; 62 percent would share if they were simply in the market to buy something. At Mindshare we have a name for this accelerated data-driven and consumer-focused mentality: Adaptive Marketing. It’s an approach that enables marketers to truly adapt every part of a brand’s marketing mix to meet its consumers’ interests and needs. And it all depends on data. Optimizing advertising Using Adaptive Marketing, advertisers can now optimize both their media and creative to ensure consumers are getting more relevant content both online and offline. TV advertising can be optimized based on assessing how viewers respond to a TV spot with their Twitter activity, Google searches, and Facebook posts. For example, to maximize the impact of Kleenex’s TV ads, our Mindshare UK team adapts the TV media plan to local markets by using Google search terms to identify locations experiencing flu outbreaks. A recent GroupM/ Thinkbox study in the UK found that 20 percent of the total online response to a TV ad happens within 10 minutes after the ad is aired. That response rate is likely to rise with the growing second screen trend, in which people view TV while communicating with their social network on a tablet or other device. In addition, content itself can be shaped instantly. With technology like WPP’s Xaxis, Collective’s Tumri, and Google’s Teracent advertisers can assemble ads in real-time based on a target audience’s behavior and preferences. Mindshare is even using social data to adapt ad units. Our Shanghai office recently launched Social DNA 1.0, a digital display ad unit that dynamically syncs with users’ public profiles from qq, Ren Ren and Sina—Chinese messaging, social media and micro blogging sites—to create a personalized branded experience for users. Dynamic, effective, pricing Advertising is of course only one element of Adaptive Marketing. Consumers are using their personal data to adapt brand relationships in a variety of ways. Pricing, for example, has become infinitely more dynamic. Companies like Staples adjust prices on their online shop based on a person’s physical location and whether one of its competitors has a physical store nearby. Sporting teams have also started using online data, such as search volumes, weather forecasts, and player status to adjust ticket prices in real-time. Marketers are using digital data to adapt their actual products. Nike lets runners customize their trainers via Nike ID, while Coca-Cola has introduced Freestyle vending machines, which enable consumers to create their own beverage by mixing together existing Coke products and then sharing their favorite creations via Facebook. Is all this adapting worth it? It depends. Some luxury brands may actually benefit from their inflexibility and elusiveness. For others, the benefits of Adaptive Marketing can be enormous: many of our clients are seeing a dramatic increase in sales with lower cost-peraction (CPA), while others are building a powerful army of Facebook fan advocates. Serious structural changes What all marketers should consider is the threat from new companies with adaptability built into their DNA. In an age of margin pressures and the constant threat of commoditization, some level of Adaptive Marketing may be a necessity rather than a luxury or one-off experiment. Becoming an Adaptive Marketer can require serious structural changes including rethinking the entire media process to make it more fluid and “always-on” and developing a library of creative assets—images, callsto-action, applications—that can instantly be deployed. Processes need to be revised to reflect the need for speed and rapid iteration. New technologies and new talent also may be required. Finally, data must be ethically harnessed, liberated, and applied. Some of these changes are not easy, but the rewards can be enormous, indeed essential. As Jack Welch, the former CEO of GE once said: “There are only two sources of competitive advantage: the ability to learn more about our customers faster than the competition and the ability to turn that learning into action faster than the competition.” Who knew Jack was our first Adaptive Marketer? Mindshare is a global media and marketing services network with 113 offices in 82 countries. www.mindshareworld.com 40 <strong>Brand</strong>Z Top 100 Most Valuable Global <strong>Brand</strong>s 2013 41
Part 3 | The Categories Food & Drink 66.....Beer 70.....Fast Food 74.....Soft Drinks 42 <strong>Brand</strong>Z Top 100 Most Valuable Global <strong>Brand</strong>s 2013 Consumer & Retail 44.....Apparel 48.....Cars 52.....Luxury 56.....Personal Care 60.....Retail Financial Institutions 80.....Banks 86.....Insurance Commodities 94.....Oil & Gas Part 3 The Categories Technology 100.....Technology 106.....Telecom Providers 43