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Vincent Stuhlen – GEMBA 2010 – September 2010
Brand Management Implementation Essay
“Impact of Digital Engagement Marketing on Branding”
1)
 
The Evolution of the Marketing Paradigm
a)
 
The Evolution of Brand relationship
Brands have been part of human trading activities for a long time. Starting with the appearance of certifiedmoney, the first modern branding traces were seen on "Vesuvinum" wine jars found at Pompeii (dated 79 AD).The “Brand” word itself came from cattle marking through “burning” the animals’ skin to mark the producers’ownership, which then evolved to legal trademarking during the industrial revolution.Brands have then constantly evolved to deliver valuable customer benefits through a known Brand indentitywhich could be decomposed as its distinctive name, unique visual expression (or look), and character (orvalues).In the early days, Brands incarnated both a promise and a personality like any person would have, and theyactually had a real face behind their name. It was often the founder and owner of the business, and people couldrelate to that person who transmitted his own values to the Brand that was in fact a proxy to himself. Brand hadtherefore necessarily a social dimension with a sense of proximity.During the Industrial revolution and the emergence of branded consumer goods, the industrial scale broke thehuman dimension of Brands and their social linkage. This phenomenon was exacerbated through mass-mediatelevision advertising in the 50’s, which incarnated the one-to-many communications strategy of companies thattried to leverage their Brands’ strength across growing audiences, multiples product categories and geographicalmarkets.It was the apogee of the Push economy that did rule for 50 years. The prevalent “Interruption” Marketing modeldidn’t care that much about the relationship with consumers, pushing products to fulfil a growing demand forwestern products and lifestyle that didn’t have much choice at the time, and pushing messages without listeningback. Even relationship got automated in the 90’s through Customer Relationship Management (CRM) systems,simulating a human proximity at an industrial scale.But things changed. First, Globalization increased competition, and the range of alternative products triggerednew behaviour as consumers now had several purchase options. The Digital landscape then emerged in the 90’s,with further democratization of access to information through the Internet at the beginning of the new Century.It dramatically changed the power of Brands and their relationship with consumers. It marked the emergence of a new economy and Marketing model.
b)
 
The evolution of the new Marketing model: from Push to Pull economy, from Interruption toEngagement Marketing
 
 With the increase of competition and product alternatives, combined with the democratization of Informationand Communications Technology (ICT), economists commented to transition from a Push to a Pull economy. Itallowed consumers to “pull” information information on products and Brands more easily than ever before, andthen express their freedom of choice by “pulling” (e.g. purchasing) their favorite product or Brand amongstmany alternatives.This fundamental behavioral change impacted the Marketing model that shifted from “Interruption” to a nownecessary “Engagement” with consumers.“Engagement Marketing”, also called "Experiential” or "Participation Marketing”, is a Marketing strategy thatdirectly engages consumers and invites them to interact and participate to the evolution of the Brand. It is rootedin the insight that human beings are highly social animals, and have an innate need to communicate and interact.Ultimately, Engagement Marketing attempts to connect those consumers more strongly with Brands byengaging them in a two-way dialog.The Brand Engagement and related Experience are provided through “Interactive Channels” such as Retail,Live events, and of course Digital channels. Those later completely redefined the rules of EngagementMarketing by providing instant and ubiquitous opportunities to connect and interact with Brands and theirunique characteristics. Digital did therefore re-ignite the Social dimension of Brands, with has a huge impact onstrategies to create and manage Brand Knowledge, Equity and Value.
c)
 
Introducing the role of Digital Channels in Engagement Marketing
In the last 10 years, Digital Channels profoundly changed consumers’ behaviour, Marketing-Communications(MarCom), and commerce. A lot of data is showing that in mature markets, Digital Media consumption is nowahead of all other classic media with a strong growth expected in the years to come (see appendix 1
 
), andeCommerce already represents more than 10% of all retail sales across many industries, and is expected to growthreefold by 2019 in least mature industries such as Apparel (see appendix 2).Furthermore, new usages and new channels accessibility are further accelerating the paradigm change, like therapid growth of Social Media (that did beat email usage in just 5 years, see appendix 3
 
) or ubiquitous MobileInternet access usage (with already a 21% Global penetration of 3G technology , see appendix 4).It is well known that Digital is the biggest enabler of this new Engagement Marketing model, and still, thepotential is largely untapped with an unprecedented gap between the Digital Channels usage and actualinvestments from companies (see appendix 5
 
). Furthermore, the proven Digital channels efficiency (seeappendix 6
 
) vs. traditional media for MarCom activities is increasing the relative investment paradox. This slowshift of Marketing resources towards Digital channels (see appendix 7) can only be explained by the veryspecific internal skills required to manage those Digital channels properly.In this essay, we propose to analyze the impact of Digital Channels and their specific Marketing and Brandingstrategies on the creation and management of Brand Knowledge, Equity and Value.For that purpose, we will use the latest thinking in Marketing Funnel transformation, look at the impact of Digital on Brand Knowledge and Equity through the “Customer-based Brand Equity” model, analyze the rapidchanges in the InterBrand Top 100 Global Brands ranking, as well as the results of the very first large scaleEngagement db study on Brand Engagement.We will also look at the difference between the “Digital Pure-player” Brands, and what we will call the “DigitalAnalogue” Brands, defined as the one proposing physical products and operating in the real world butleveraging the potential of Digital Channels, as opposed to other Brands not playing in the Digital landscape.
 
 Finally, we will look at the new rules prevailing in this new Digital space, the required capabilities, and thepotential limitations of those Digital Channels.
2)
 
Impact of Digital Engagement Marketing on Branding
a)
 
The role of Digital Channels in the Marketing Funnel
The transformation of the Marketing funnel has been recently studied and documented (please look at StrategicMarketing Implementation Essay
 
). Despite the fact that it obviously became fragmented and non-linear, thedistinct steps described in classic Marketing are still relevant to describe the purchase process for consumers,and to analyze the impact of Digital on that process and on Brand Knowledge and Equity building.The classic Marketing Funnel construct is the following:Awareness (Aware)
Engagement (Interested)
Activation (Decided)
Conversion (Customer)
Loyalty(Loyal Customer)
Advocacy (Ambassador) (see appendix 8
 
)Each of those steps can be impacted by specific Digital Media tactics across different Digital channels.
Digital Media tactics
are classified by RazorFish (leading Global Digital agency part of Publicis Group) thefollowing way:-
 
Controlled Media (by the Brand, where costs are related to distribution capabilities building and contentproduction)
o
 
Websites
o
 
eMailing
o
 
Content distribution through RSS feeds, etc...-
 
Paid Media (different buying models according to different impacts on Brand)
o
 
Classic Media & Portals (CPM = Cost Per Mille, impacting awareness & engagement)
o
 
Search (CPC = Cost Per Click, impacting engagement & activation)
o
 
Affiliation (CPA = Cost Per Action, impacting conversion)-
 
Earned Media (exposure, awareness, image, evaluation “earned” by free content creation anddistribution in favour of the Brand by enthusiastic Consumers)
o
 
Blogs and personal sites
o
 
Social Networks (e.g. Facebook, Twitter, Orkut, MySpace...)
o
 
Content Platforms (e.g. YouTube, DailyMotion, Flickr...)
o
 
Forums & Wikis
o
 
Etc...These Digital Media tactics can apply across multiple
Digital platforms and devices
(often described as“Multi-platform” Marketing):-
 
Computer Web browsers-
 
Mobile phones-
 
Tablets-
 
Gaming consoles-
 
Retail kiosks-
 
And more and more connected devices (like the emerging Internet TV...)At each step of the funnel, Online channels and tactics are bringing specific advantages over the Offline ones:-
 
Awareness (Aware): Digital has a much lower average cost per GRP or CPM, up to 10 times cheaperthan TV (see appendix 6
 
). There are still few studies about the relative Qualitative impact of each
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