Is spending US$12 billion to increase sales by 3.2% a good business strategy?

According to its website, Nestle is “the leading Nutrition, Health and Wellness Company”.

It also says, “We enhance lives with science-based nutrition and health solutions for all stages of life, helping consumers care for themselves and their families.”

Personally, I like their chocolates (I have a soft spot for dark chocolate KitKats), condensed milk and milk substitutes while our pets like their range of cat and dog foods.

I’m not sure how Carnation and Coffee Mate, or for that matter chocolates enhance my life but let’s not go there. But perhaps they should add ‘and their pets’ to the above claim.

Anyway, the Swiss icon, which is now the world’s largest packaged food group, reported sales of US$89.3 billion in 2016, up 3.2% on an organic basis. Well below the 4.2% growth in 2015 and is the fourth time Nestle has missed its “Nestle Model,” that aims for 5 – 6% growth per annum.

What’s interesting is that in the years 2011 – 2014, Nestle spent a cumulative US$12 billion on advertising. Not marketing, PR, promotions or anything else, just US$3 billion a year on advertising.

That’s a huge chunk of cash. And it’s like they need to spend that amount just to stand still because growth of 3.2% is not much better than standing still. Surely there’s a better way?

Penang’s destination video isn’t bad, but it isn’t great either. 6 ways to use video properly to build your destination brand

Google the words ‘Visit Penang’ and you get the following results:

'Visit Penang' search results
‘Visit Penang’ search results

The next step would be to click on the visitpenang website link that takes the visitor to a site that has no video on the homepage even though a video on a homepage is reported to increase conversion rates by more than 20%.

Indeed, the way consumers are absorbing information via video is well documented. According to YouTube reports, mobile video consumption rises 100% every year. Of course that will peak at some stage but it isn’t even slowing at the moment. In fact, more video content is uploaded in 30 days than all three major US TV networks combined created in the last 30 years.

And when it comes to travel and destination related videos, YouTube is the most used site with 79% of users looking at personal travel options. YouTube says that 66% of all travellers watch online films when they are thinking of taking a trip.

Someone sent me a link to a new tourism video for Penang and asked my opinion. The video, launched earlier this year lists a number of quotes stretching back to one from Yahoo in 2011. I presume the video is supposed to lure more visitors to the island but I couldn’t make out who it is targetted at.

I get the impression that it’s one of those ads designed to communicate with everyone that ends up communicating with no one. Yes it features everything that is well known about Penang but it didn’t bring us anything not already on the web. Penang is known for its Char Kway Teow and the dish is featured in the video but who is going to travel to Penang for a plate of noodles and besides, is it new?

Moreover, there are more popular, well established Vloggers on YouTube such as Roseanntangrs who have over a million followers including a Vlog about Penang food that has over 160,000 views (and plenty of negative comments that need to be addressed by the author). This would have been a smart channel to use to promote Penang food.

Here’s the Penang video. I feel like it’s about 20 years out of date, it’s like a TV commercial pushed out across digital.

It’s a real shame because Penang is a must visit destination for anyone coming to South East Asia. I felt this video didn’t do justice to the destination.

Inevitably after watching this I had to search YouTube to see if it was the worst tourism ad ever. I was surprised to find plenty of material including this one from Singapore that really is the worst destination ad I’ve ever seen or heard.

I don’t know what Singapore Tourism was doing when it commissioned this ad but it very thoughtfully pulled it off the visit Singapore site.

Thankfully or not, depending on your point of view, YouTube hasn’t been so considerate. Stick with it to the end because the punchline will have you heading for cringetowm.

Penang’s video isn’t as bad as Singapores but it will be as inneffective. Indeed after seven months it has only had 9,500 views. But what should Penang tourism’s approach be when developing destination videos?

Here are 6 top tips Fusionbrand recommends Penang take into account next time they want to use video as part of their brand strategy:

1) You can’t be all things to all people. And you can’t include everything about a destination in one video so don’t try. Hook the viewer with the first video and YouTube will do the rest of the work for you because they will link similar videos to the one the viewer first watched.

2) Think about the audience for your film. What will they want to get from a film about your destination and how can you make the content relevant to their needs? Because if it doesn’t resonate with a few seconds, they’ll move on.

3) Think about how travellers use the IoT. Basically it begins with explore and discover before moving onto consider and connect. That’s followed by evaluate and engage and finally adopt, buyin, embrace and share/endorse/advocate. You must be clear about what part of the buyer process your videos are aiming at and the content must reflect that. Don’t try and cover everything in one video.

4) Be real and human. The days of the corporate controlled ‘big idea’ and message pushed out across media are over. Consumers don’t believe it and besides, it’s been done to death. Instead show events that happen during filming, things that go wrong and the people involved in the filming.

5) Instead of spending your money on expensive production of one video, make it real and make it often. Publish and share film on an ongoing basis.

6) Creating the video is only the start. You then need to share it, comment, respond, write about it and so on. An editorial plan should be developed around all videos.

Videos the future, for now anyway. But destinations like Penang need to stand out, not add to the noise. Otherwise branding investments are wasted and tax payers funds are too important to waste.

Another Malaysia Airlines marketing fail

Malaysia Airlines’ latest Twitter campaign is live. It really seems as if the struggling carrier sees digital and social media as another version of mass media – as a channel for pushing a corporate message onto an unsuspecting public.

Over the last couple of years they’ve made some terrible blunders online and you can read about them here and here.

Today the attached post appeared in my Twitter feed.

why would anyone share this pointless tweet from Malaysia Airlines?
why would anyone share this pointless tweet from Malaysia Airlines?

In an attempt to increase sales of business class, the marketing department seeks to make the business class offering unique by telling you that if you buy a business class seat you can have access to the business class lounge before your flight leaves!

Isn’t that stating the obvious? Doesn’t every business class passenger have access to the business class lounge? Or does Malaysia Airlines not allow business class passengers to use the business class lounge?

And if you click on the link in the tweet, you go to the golden lounge page on the website. That’s it!

That's it? A page with standard information on the lounges?
That’s it? A page with standard information on the lounges?

Seriously Malaysia Airlines marketing department, is this the best you can come up with? If it is, give me a call. I promise we can do better as you stop advertising, start branding.

Want to future proof your brand? You won’t do it with an advertising campaign

Advertising campaigns are as common as muck. We’re oblivious to most of them and even when we see one we like, we very rarely buy the product. And it doesn’t matter whether it goes out across social or traditional media, the reality is most advertising is simply noise.

Even if we do buy the product, we’re often let down at some stage of the experience. Because most firms don’t spend enough time and money on looking after us once we’ve bought something, even if the product works well, any positive perceptions created early on are destroyed later when there is an issue and the brand doesn’t respond well. When this happens, many of us become brand activists, for all the wrong reasons.

In the social economy, this can have a devasting effect on the brand. Harvard Business Review went as far as to say, “Traditional marketing — including advertising, public relations and corporate communications — is dead.…in today’s increasingly social media-infused environment, traditional marketing and sales not only doesn’t work so well, it doesn’t make sense.”

So I wrote a book on the subject and you can buy that book from Amazon here.

The book has been selling well and there is a lot of interest in Asia. Recently the prestigious CMO.com interviewed me and you can read the full interview here.

I think the interview works well and anyone who runs a business and is looking to build a brand should read it and if you like it, buy the book. Seriously I think you will learn a lot.

Thanks to Bobby McGill at Branding in Asia for doing the interview.

How to make better advertising and advertising better

There’s a small creative agency in London called Sell! Sell! The agency is run by Vic Polkinghorne and Andy Palmer and they’ve co-written a potentially interesting new book called ‘How to make better advertising and advertising better‘. This new book shouldn’t be confused with the equally new book ‘Stop Advertising, Start Branding‘ which was written by me.

But I think there will be some similarities between both books because neither of us are happy with the state of advertising today. Here’s a quote from the Sell! Sell! website. “And the poor old punter is left faced with advertising that is at best forgettable, and at worst insulting to the intelligence. Surely there’s a better way?”

Now what we think that better way is may be different. So I’ve ordered a copy and will let you know whether it is and what I think of the book. In the meantime, I have read some interesting reviews online and you can read one of them at the creative review website that is already generating some fascinating comments.

 

Make it better or bin it
Make it better or bin it

The book has also garnered some interesting testimonials including “This book is full of common sense. Which is rare, so it’s actually full of uncommon sense.” Dave Trott.

And this one from Bob Hoffman “The ad industry is in an unprecedented state of confusion. While the assertions and pomposity grow majestically, the advertising itself diminishes rapidly. Sadly there is no button we can push that will erase all the arrogance and self-delusion. Fortunately we have this book. It might be just the reset button we all need.”

I’m looking forward to getting my copy.

 

 

 

STOP ADVERTISING, START BRANDING is in all good bookshops NOW!

Attached is a press release for Stop Advertising, Start Branding. This is a book about change. Yep, another one. The difference is, this one is about changing back to what you and everyone else used to do. It’s about laying the foundations before building the house. It’s about researching the destination before getting on the plane.

Stop Advertising, Start Branding on sale now
Stop Advertising, Start Branding on sale now

That’s right, it’s about getting the fundamentals in place before coming up with the creative, the quirky, the clever, the funny, the whatever. Far too many brands try to compete in their markets today without doing the right research. Without even communicating to their staff what they are trying to say. At other times they don’t even know if they can deliver on the promises made. That’s mad and why so much advertising doesn’t work.

Stop Advertising, Start Branding is a book that doesn’t have a title with an animal name in it. It won’t win a creative award for the cover even though it looks great. It’s normal, it’s a bit thicker than many branding or marketing books today but that’s because the information you need to build a brand takes up this much space. Sorry.

But if you read it I’m confident it will make you stop advertising and start branding. Which means it’ll save you a lot of money because let’s face it, most advertising doesn’t make much of an impression on anyone.

And you can use the money you save to build a brand your people buy into and want to work for. And once they do that they’ll be able to deliver on the promises you make. And when they do that, your customers will come back to you time and time again and they’ll tell others how great you and your product are. And when that happens you’ll make a lot of money.

OK, it’s not that easy but that’s why the book is 300 pages and that’s why I wrote it. If you want to find out how to build a brand without wasting massive amounts of money on advertising, I suggest you get a copy from your local Kinokuniya, MPH or Times bookstore in Malaysia and Singapore or from Amazon in the UK. And if they don’t have it, make sure you complain and order it or call us at +603 7054 2075 and we’ll sort something out right away.

Click here to read the full press release for STOP ADVERTISING, START BRANDING by Marcus Osborne

Mazda should stop advertising, start branding

Malaysia’s January automotive sales nose dived 12% to 44,591 units although this was expected after the record highs of December 2015. Japanese firms were hardest hit with Toyota sales down 27%, followed by Nissan 22% and Honda down 12%.

It'll take more than a new logo and a dubious tagline to stop Proton's slide
It’ll take more than a new logo and a dubious tagline to stop Proton’s slide

Proton continued its slide with sales down 13%. And even though Perodua sold less cars this Janaury than it did in 2015, the relative newcomer to the industry saw its market share increase to 35% giving it more than double Proton’s market share. In an effort to stem the bleeding, Proton has created a new logo and tagline but Perodua is undeniably Malaysia’s number one automotive company.

Mercedes Benz sales went through the roof with a year on year increase of 139%. Mercedez Benz sold 1,027 units in January 2016, up from 430 in January 2015. Mercedes Benz was the only top 15 brand to sell more cars in January 2015 than it did in December 2015.

BMW and Audi probably spend more on traditional advertising than any of the other luxury brands and have been particularly active recently but neither brand was able to match the performance of Mercedes Benz. Audi sales were down over 40% in January over the previous month although they did manage a modest 9% gain over January 2015.

BMW fared better with a gain of 23% over January 2015 but compared to December 2015, sales were down 25%. This fall in sales would probably explain why BMW is now offering a longer warranty although anecdotal evidence suggests the BMW brand is losing its lustre in the local market.

But of most interest to me was the performance of Mazda. Mazda has come from nowhere to take 3% of the market share in Malaysia, up from 1% five years ago. This is an extraordinary feat because Mazda spends very little on advertising. Which is probably just as well because the advertising they do revolves around the words ‘ZOOM ZOOM’ and poorly written copy.

Seriously, what is this ad saying?
Seriously, what is this ad saying?

For instance ‘A new era of driving experience’ doesn’t make sense. The copy begins, ‘New levels of freedom, new levels of versatility. New levels of pure enjoyment on the road.’ Obviously the person who wrote that doesn’t drive on the roads of KL. Certainly not during the daily commute or on a wet Friday afternoon.

The copy also breaks the cardinal rule of not providing any solutions to problems but instead rambles on about nothing. I mean seriously, how can the CX-3 really be ‘designed and engineered to evoke emotions by closely matching human sensibilities?’ Get real. The copy is cold and doesn’t talk to anyone and ends with Zoom-Zoom is unique. It certainly is. I could go on but I’ll spare you the pain.

This is what I meant when I wrote my book Stop Advertising, Start Branding. It’s not that you should stop advertising, it’s that you should stop poor or weak advertising. Mazda is doing really well at the moment in Malaysia and globally. It has tripled its market share and could be on to something spectacular. But it needs to do more than churn out this sort of advertising because it is wasting money and it may have a negative effect on the brand. It needs to Stop Advertising, Start Branding.

I am yet to visit a Mazda showroom so can’t tell you about the experience. I will endeavour to do so and we’ll do some research and report back to you.

Brand communications is no longer about broadcasting a company position across multiple mass communication platforms.

In today’s always on world, an important part of any brand strategy is the communications strategy but if Asian brands are going to be taken seriously, Asian CEOs must understand that times have changed and that we are living in a new world order. And in that new world order, the success of a brand is in the hands of the consumer not the corporation.

Today CEOs must understand that how consumers source information about brands and where they source that information from, has changed dramatically over the last 5 – 10 years. Where previously they learnt about brands from television commercials, newspaper advertisements and the recommendations of friends, today they learn about brands from Facebook communities, Twitter lists and YouTube channels.

Gartner estimates that mass marketing campaigns now have only a 2% response rate and this is declining annually. Despite this, Asian CEOs, so long in control of their brands and reluctant to lose that control, continue to try and shape brand perceptions by broadcasting positions repeatedly across traditional media via multiple and repetitive campaigns.

But Asian CEOs need to accept that in today’s noisy, crowded, dynamic, mobile market place, a brand cannot be shaped by repetitive communications campaigns that try to appeal to as many people as possible in the hope that someone will buy and communicated across traditional media. And those CEOs must understand that the success of their brands is too important to be left in the hands of marketers and advertising agencies.

According to Gartner, by 2015, at least 80% of consumers’ discretionary spending will be influenced by marketing across social and mobile platforms. And it is imperative that CEOs do not allow marketing departments to continue the mass market model of invasive campaigns that try to push a one size fits all corporate position onto consumers.

So if building a successful brand requires more than a traditional approach to marketing where reaching anyone and everyone and making them all aware of the brand with a generic message broadcast multiple times across multiple channels is not the way forward, what should Asian CEOs do if they want to challenge the global western brands?

The first thing is that this new world order is good news for Asian CEOs because it means they can stop wasting funds on expensive creative driven initiatives that require deep wallets to fund advertising campaigns repeatedly across traditional media in the hope that they will resonate with consumers and lead to a possible sale because the reality is, very few of them are noticed, let alone remembered.

Try this experiment. If you advertise in a daily newspaper or on TV, ask yourself which ads you remember from yesterday’s newspaper or on TV last night. Be honest. I doubt it is many. Personally I remember the ads from the Sunday paper because I was stunned at how many pages featured supermarkets and hypermarkets having a ‘cheap off’ on chicken wings, grapes and cases of beer.

And these are the very same newspapers that featured advertisements for Patek Philipe and Rolex watches, Lexus and Audi cars and other luxury products and services the week before!

And even if you remember newspaper ads or TV commercials, how many of the products or services advertised, have you interacted with? And of those how many have led to a purchase? And even if they have led to a purchase, what did the company do to ensure you come back again? I suspect they didn’t do anything and instead, after they spent all that money getting you into their store or to buy their product, they let you leave without getting some personal information in order for them to start to lay the foundations for a relationship!

In this era of smart phones and the half a million applications that can be used on them; In this era of social media with five hundred million Facebook users (6 million in Malaysia) of whom 50% are active every day and one hundred and forty million daily tweets on Twitter, many of them generated by Malaysia’s 1.1 million members; the proliferation of leisure time activities and abundant choice at malls and more, Asian CEOs must understand that the answer to brand building is delivering economic, experiential and emotional value to consumers and on their terms and across all touch points.

The global economic situation is a golden opportunity for Asian brands to take market share from established Western firms struggling to overcome cash flow issues and poor brand penetration. But it is up to CEOs to understand that they have to review traditional practices and take an interest, indeed responsibility for the brand and ensure brand departments understand that it is no longer enough just to advertise in traditional media and hope a brand will succeed.

CEOs must ensure too that at the heart of any new strategy must be the organization, making sure every brand touch point focuses on delivering value and communications departments must take social media seriously and understand how to deliver more engaged communications. And this will have to be done in a much more integrated, dynamic and fluid manner.

And whereas in the past, a series of the same full page ads repeated in daily newspapers or a number of prime time TVCs was generally sufficient to build brand awareness which would lead to a sale. Indeed, many consumers would actually watch a commercial and take a note of the brand and where they could purchase it. Those consumers would then go to the store, look for the brand and buy it. If the brand was unavailable they would take time out to come back again and again until they could make a purchase.

Today those same consumers don’t bother taking note of the brand names because they’re carpet bombed with messages throughout the day, every day. Many of those messages are making outrageous claims or are totally irrelevant to them. They are also too busy multi-tasking during the expensive commercial breaks. Furthermore, they’ve been let down so many times after believing those claims that they now often ignore them completely. And because consumers have so much choice and so many information channels, they don’t need to pay attention to messages broadcast via mass media any more.

Now consumers use social media and other tools where they inhabit communities that they relate to and trust, to seek information about brands. So it is in these communities where brands must learn to communicate and engage with consumers and deliver value that resonates with those consumers enough to make them want to own the brand.

Don’t get me wrong, I’m not saying don’t advertise but I am saying that if your organization is not on brand and all marketing initiatives are not integrated to allow you to deliver on the brand promise. And if your organization is unable to deliver value across all touch points and if you don’t use every opportunity to engage with consumers and collect data to help you get to know your customer and start to build a relationship with your customer, your advertising efforts will be wasted and your brand will not survive these extraordinary times.

In this crazy, always on, competitive market place it is these relationships that are going to help build a successful brand and not newspaper ads or TV commercials, no matter how cool they are and no matter how cutting edge is the technology used in the commercial.