World On A String

Adweek, December 11, 2006 By Wendy Melillo and Joan Voight

They turned on their cameras, plopped Mentos into bottles of Diet Coke, and swamped YouTube with videos of erupting fountains worthy of the Bellagio Hotel. They took Chevrolet up on its invitation to create online ads for the Tahoe, then turned on the automaker with spots savaging the SUV for its gas-guzzling ways. They used the commenting forums in the iTunes Store, typically a repository for free advertising about the products, to criticize Apple's service and the iTunes Store itself.

Energized and unsparing, consumers stole ever more ground from marketers in 2006, becoming, in effect, the new brand managers, able to alter the perception of brands—even their direction—practically at will. Empowered by technology and ever-expanding media options, they more than balanced marketers' outbound messaging with loud declarations of their own—heapings of praise and scorn—that changed the rules of consumer engagement. And they all but dared marketers to test that new power.

Think of it as a poker game. Marketers still unaccustomed to the idea of ceding control risked getting fleeced by the fresh-faced player across the table. So, how should marketers play it? By taking riskier bets, many observers say. Some heeded that advice this year, and it paid off. Others tried to do so and stumbled. Many held their cards too close to the vest, and saw their campaigns fizzle. But collectively, their efforts in 2006 taught them an important lesson: The house can still win in the end, if it takes the right calculated risks.

Marketers "must stop thinking of brands from [a] manufacturer's point of view," Procter & Gamble CEO A.G. Lafley told his audience at the annual meeting of the Association of National Advertisers in October. "Consumers own brand equities [and] brand messages. [Marketers] need to learn to let go."

Letting go doesn't mean disengaging—just engaging in a different way. It's about "getting consumers to push your brand out to their community," says Kathleen Kayse, evp of sales for AOL Media Networks. "We talk a lot about the consumer building or creating content about a brand, but what matters is how the consumer is sharing your messaging with their community of friends. How do you become a part of their conversation with their friends in a positive way?"

The answer may lie in looking at consumers in an entirely new way.

"Consumers are now channels," says Stacey Lynn Koerner, president of Interpublic's Consumer Experience Practice. "Most of the communications industry has spent the better part of the last 15 years selecting the right channels to reach the consumer. What they haven't done is consider the consumer as a channel. Now, any consumer can get online and broadcast their feelings and their experiences with your brand to a very wide audience."

Mentos, Chevy and AOL

Three big examples from 2006 demonstrate how consumers function as channels, creating content that reverberates in the echo chamber of the marketplace and can change the fortunes of a brand—even force changes in policy at companies themselves.

In early June, Fritz Grobe, a professional juggler, and Stephen Voltz, a lawyer, both from Buckfield, Maine, posted a video on a Web site called Eepybird.com in which they dropped Mentos candies into a bottle of Diet Coke and produced a geyser-like effect. (The pair had seen a little-known, poorly produced version of the same experiment online, and wanted to make a more theatrical production.) Soon enough, YouTube was inundated with amateur scientists posting the results of their own Mentos/Diet Coke experiments. The two brands suddenly enjoyed huge, unexpected exposure, and they faced a dilemma: Should they join the fun, or wait and see?

Mentos, by far the smaller brand, best known for its campy, retro TV spots, welcomed the fuss. Parent company Parfetti Van Melle tracked at least 800 online videos and ended up holding an official Mentos geyser contest. Coke, meanwhile, was more subdued. "We would hope people want to drink [Diet Coke] more than try experiments with it," a rep said in published reports in June.

Whereas the Mentos/Coke experiments took those brands by surprise, Chevrolet in March went straight to the public with an offer: Create some ads for us. In hindsight, it was a precarious proposition. Among the three dozen or so Tahoe ads subsequently posted on YouTube, almost all were critical, blaming the vehicle, and its owners, for perpetuating global warming.

Chevy was in a bind—having invited consumers to the party, it couldn't then throw them out. Nor, it claimed, did it want to. "We adopted a position of openness and transparency, and decided that we would welcome the debate," Chevy GM Ed Peper said at the time. But the episode clearly illuminated consumers' new point of view: They will dictate the terms of any collaboration with brands.

Perhaps the ugliest consumer/company dustup of the year involved Vincent Ferrari and AOL. Ferrari, a blogger, tried to cancel his AOL membership over the phone but was stonewalled by an AOL rep, who pressed him for reasons why. Ferrari had been recording the conversation, and he posted it online.

The Internet loved the David and Goliath story, as did the mainstream media. Soon, AOL was staggering under the weight of bad press. On June 23, just 10 days after Ferrari put his tiny audio file on the Web, AOL revamped its procedures for dealing with phone cancellations, limiting itself to two counteroffers in trying to dissuade members from leaving.

It also issued an apology, saying it had "zero-tolerance for customer-care incidents like this—which [are] deeply regrettable and also absolutely inexcusable."

The experiences of all three companies raise difficult questions for any company: Given consumers' newfound power, how and when should brands try to engage them, and on whose turf—and, in turn, how should companies react when consumers, whatever their agenda may be, try to engage them?

Old models die hard

Many companies continue to ignore the nuances of such questions entirely. "The major media companies still think that shoving their content down the throats of consumers through every pipe is what they want, and it isn't," says Bruce Braun, president of San Francisco-based Bridge Sales & Marketing. "That creates overkill, and this will break down in the digital age, because it is no longer a case of telling consumers, 'This is what we think you ought to watch and do.' "

When Braun reads about an initiative like one from MTV, in which the cable network plans to roll out some 20 super-niche broadband channels catering to narrow interests, he is underwhelmed. "That is like throwing everything up against the wall and hoping something will stick, where everything is viewed as a brand extension," he says.

Nor is simply trying to piggyback on the success of YouTube and MySpace necessarily a winning strategy. Both sites are "based on being unique and cool, which doesn't last forever," Braun says. "The window for all of this has shortened."

As new media forms shake out, agencies and marketers are hard-pressed to gauge which will succeed—which horse to hitch their wagons to. David Lubars, chairman and chief creative officer at BBDO North America, calls this the "culture eats strategy" phenomenon, in which the best-laid plans are compromised by the fickle consumer.

Take digital music. "Two years ago, I go in [to a store] and buy Bob Dylan on a Super Audio Compact Disc. Did that go away now?" Lubars says, referring to high-fidelity audio format that hasn't caught on widely. "I think the agency's job is to have a very sensitive antenna up to all the things that are possible."

Even once the agency has identified a trend worth embracing, there's another big roadblock. "Proving [to clients] that the idea is not a gamble but rather an educated strategy is much harder to do," Lubars says. "If you do something new, it has to be all the way new, and that is hard to measure. That is scary for clients and agencies alike."

But the risk is relative. "The alternative, of doing just the same-old, is even riskier," he says. "When you have success for one of these things, you are creating a new category for your client, and they are a category of one. That can be worth tens of millions of dollars to a client."

Whose side are you on?

How early a company joins the conversation with consumers—and how genuine its goodwill appears to be—may determine the tone of the discourse, experts say.

"You, as the brand manager, have to find a way to involve the consumer at the beginning, so that if your brand is going to be mutated, it will be done with you and not to you," says Shawn Conahan, CEO of San Diego-based Intercasting, which creates mobile blogs for Cingular, Verizon and Sprint, among others. "In the new model, you have to recognize that there is something to that notion of sharing."

At General Motors, that means acknowledging, rather than fighting, consumers' natural inclination to trust independent and third-party Web sites over GM's own messaging, says Curt Hecht, evp and chief digital officer of GM Planworks, the unit of SMG that manages GM's estimated $2.9 billion media planning assignment. The company has learned from research that 70 percent of car shopping now takes place on independent sites. "The control of the consumer is such that they are going to these sites first and making up their minds before going into a controlled situation," Hecht says.

Rather than battle this trend, GM has partnered with brands such as Kelley Blue Book, Google and Yahoo! "We are asking people to go to an independent environment, where the marketer doesn't control it, to see for themselves, and that takes confidence in your brand," Hecht says.

Furthermore, for GM, the concept of sharing means more than uploading content to YouTube, Hecht says. The company is using Jay Leno and his passion for cars to connect with like-minded consumers. It has created jaylenosgarage.com, which launched in October. NBC plans to extend the Jay Leno's Garage idea to MySpace shortly.

Says Hecht: "We are in one of those exploration phases to leverage Jay's personality and his passion for cars to try to build a relationship between GM, Jay and that fan base." Hecht believes many marketers focus on what they can do with YouTube rather than asking, "What is the idea, and how can we be relevant to the consumer and build a connection between their passion and the brand?"

Like any relationship, it also requires a degree of trust. Whether their forum of choice is an audio file or a company's message board, consumers will call out marketers whose interests appear to be at odds with their own. This goes some way toward explaining the feedback policies at a company like The Knot, an online wedding-planning site.

David Liu, the site's CEO and co-founder, knows firsthand what happens when a vendor enrages a bride. "We have had many instances nationally and locally when a bride will go on our message board and tee off on one of our advertisers," he says. "Then the advertisers call and complain and demand that we take the posting down."

Liu's response? The posting stays. Liu is keenly aware that to acquiesce to an advertiser would sour the customer on the experience. "If consumers see us editing their messages, they will not come back," he says. "We have given the consumer the opportunity to hit back if they feel they have been taken advantage of. And we have lost very little advertising as a result. People understand that this is the landscape you have to work with."

Getting closer to the customer

Of course, not every consumer/company interaction is a standoff. For many companies, respecting the ascendancy of consumers simply means listening more closely to them.

Visa International, for one, is initiating a rebranding effort that focuses on innovations built around consumer preference: contactless cards (at retail, the user holds the card up to a reader instead of swiping it), payments by cell phone and other emerging technologies. Along with TV ads, "we used new media and more sponsorships to get closer and listen more carefully to consumers, to interact with them," says John Elkins, Visa evp of global brand and marketing. This is "more personal and builds a stronger bond than traditional ads," Elkins says.

Visa is also getting closer to consumers with experiential programs. During the Winter Olympics in February, it hosted the Visa Championships, an online gaming tournament that ran on NBC.com and other sites and attracted 100,000 gamers, who spent an average of 47 minutes of time per visit, Elkins says. A similar program is planned for the 2008 Summer Olympics in Bejing.

Such programs allow the company to "listen to what people are saying about our products and our reputation," Elkins says.

At Nissan, this obsession with getting closer to customers has prompted a wholesale rethinking of tracking mechanisms. Nissan has Ph.D. statisticians to establish the most efficient mix of marketing, but the automaker has gone beyond that, says Steve Kerho, Nissan director of media and interactive marketing. "The response we are measuring tells us what works, but it doesn't tell us why it works," he says. One answer? "We used to do a media day in the life of our target consumer. Now it is more like moment to moment."

Honoring consumers' preferences extends to in-store strategies, too. At Whole Foods, it's a matter of integrating the company's philosophy into the physical shopping habits of its customers. This year, it began loaning iPods to shoppers at its huge flagship store in Austin, Texas. Customers could take 20-minute audio tours of the store, listening to food facts, recipes and stories about the staff. The stores also offer podcasts, hold cooking classes and sell prepared dishes that promote Whole Foods products. CEO John Mackey even writes a blog. A favorite subject: conscious capitalism.

"They have target customers who want to explore and experiment with knowledgeable staff," says branding consultant John Moore, author of Tribal Knowledge, who used to be the company's director of national marketing.

In the end, the message is the same: Consumers want more hands-on experience in every area of their lives, utilizing the latest media options. Brands that provide it will likely be rewarded for doing so.

A healthy fear can be a good thing

As heartwarming as all that sounds, many companies may be wary—and rightly so—of being on the receiving end of the next Internet rant by the next Vincent Ferrari. But in a way, expecting negative feedback, and providing a forum for it, is another customer service, and can head off consumer frustration at the pass.

Apple's iTunes is a good example. Since last summer, iTunes users have commandeered the feedback section of the software to voice their dissatisfaction with iPods and iTunes instead of how good Battlestar Galactica is. By October, iLounge, an independent iPod blog, dubbed the barrage of criticism "the equivalent of picket lines" around the virtual store.

Apple allows the dissension, says Jeremy Horowitz, iLounge editor-in-chief, as a way of listening to customer issues. "When an issue reaches a boiling point, they'll make a change quietly," he says. But make no mistake: The forums belong to the users.

"The explosion in social media, such as iTunes comments, is because of the baggage of the way companies have handled customer service over the years," says consultant Tony Priore, senior manager of market strategy at Biz360. "People prefer public online postings because they feel they'll have a bigger impact warning others than communicating directly to large companies. They also trust recommendations and warnings from other consumers more than they trust what they hear from large companies."

In the end, if marketers are a bit afraid of that idea, it's probably not a bad thing. "If you are sitting around the poker table and you can't figure out who the sucker is, it is usually you," says Michael Kassan, chairman of Media Link, a media and entertainment consultancy, and former president of Initiative Media. "The biggest stakes at the poker table is the consumer. People market for a reason, and that is to hear the ching-ching at the end of the day. And the consumer has the control of the ching-ching, because they buy the goods and services. In the high-stakes poker game, they hold most of the chips."