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Changing Channels with Confidence

New media channels are emerging all the time, and marketers are often unclear how to choose among them.

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Changing Channels with Confidence

  1. 1. POINT OF VIEW CHANGING CHANNELS WITH CONFIDENCE: A STRUCTURE FOR INNOVATIONChanging Channels with Confidence:A Structure for InnovationNew media channels are emerging all the time, and marketersare often unclear how to choose among them. While they are accustomed to changing the creative content of their campaigns on a regular basis, there is no automatic driver that Marketers need a way to encourages the adoption of new media channels, embrace change without being and marketers themselves may be disinclined to make changes. Changing established media swallowed up by it. allocations is risky; weighing the options requires time and effort. The fear of making the wrong We think this approach makes a lot of sense. decision can make exploration seem daunting.Duncan Southgate It has worked for Google, where the companyGlobal Brand Director, Digital But avoiding innovation carries its own risk. implemented it as a way to manage innovation, The world moves forward, and those who applying 70% of its workforce effort to core don’t advance with it will be left behind. businesses, 20% to adjacent products, and 10% to Marketers need a way to embrace change highly experimental innovation for the long term. without being swallowed up by it. How can they manage that process? In 2011, Jonathan Mildenhall, vice president of global advertising strategy and content excellence at the Coca-Cola Company, introduced his company’s new approachJohn Svendsen to investing in creative content. Coke isGlobal Brand Director, Media implementing a model they call the “70│20│ 10 investment principle,” an adaptation of the established 70│20│ protocol for apportioning 10 resources or investment.i Mildenhall explained that in its quest to double the size of its business We expect it will also work for Coke as they by 2020, Coca-Cola would apportion its innovate in developing their creative content. communications spend as follows: Furthermore, we think that the application of 70│20│ can go beyond creative content 10 • 70% would support low-risk, “bread-and- to media planning, specifically in terms of the butter” content. allocation of resources to new channels such as • 20% would be used to innovate based on mobile and social media. In fact, we believe so what has worked in the past. strongly in this approach that we are proposing • 10% would fund high-risk content involving it to our clients as the framework they can use to brand-new ideas. “change channels with confidence.” SHARE 1
  2. 2. POINT OF VIEW CHANGING CHANNELS WITH CONFIDENCE: A STRUCTURE FOR INNOVATION exclusively on TV spot advertising. This ventureA Structured Approach to helped Sheilas’ Wheels reach an awarenessInnovation level of 75% just three months after launch,Amara’s Law ii states that “we tend to and to surpass its internal sales targets byoverestimate the effect of a technology in the 65% during the first year. Sheilas’ Wheelsshort run and underestimate the effect in the long subsequently expanded its sponsorshiprun.” The adoption of a 70│20│ approach is a 10 allocation, and in 2008, when the companyway of counteracting both of these tendencies. launched its home insurance product, it made sponsorship its largest platform by investing £10 million (equivalent to US$20 million) in one of │ │The 70 20 10 framework, when British television’s biggest sponsorships slots: the ITV National Weather broadcast. Thus in aapplied to allocating resources short time, sponsorship became an important 70% activity for the new media channels, willhelp marketers learn to “change The 70│20│ Allocation 10 70% – The Comfort Zonechannels with confidence.” For most brands, the 70% zone of low-risk, bread-and-butter marketing is likely to involveHowever, the 70│20│ model should not 10 established channels such as TV, print, outdoor,be considered a strict formula. The precise and radio. But this will vary across categoriesallocations are not important; what is essential and countries. A strong FMCG/CPG brandis that some fixed proportion of spend is in the United States might use TV, outdoor,regularly devoted to innovation. This practice will online display, and online video. A brand in aencourage forward thinking and experimentation considered purchase category in Germany mightin a disciplined and structured way. By using use print, sports sponsorship, online search,such a framework, brands can steer a safe and and online display. A new service brand in Japanprosperous middle path while evolving both their might use TV, event sponsorship, mobile display,media and their research budgets. and QR codes. For some brands, the 70% could also include word-of-mouth marketing. But to say that 70% of the budget should fund communications in channels that are considered to be safe, familiar, and effective is not to say that 70% of a media budget should remain static from year to year. Based on ongoing learning and evolving brand objectives, channel composition within the 70% could vary significantly over time and from campaign to campaign.While 70│20│ is new as a formal framework 10 20% – Innovating Around What Worksfor media planning, some brands have already Innovating around media approaches that areexperienced great success in applying its known to be effective could include a broadprinciples. One example is Sheilas’ Wheels, range of options. It could mean taking a smalla UK insurance brand targeted at women. risk, such as increasing your spend on a channelWhen their first offering, car insurance, was that seemed to work well in your 10% last year.launched in October 2005, the brand invested It could mean spending behind a channel where30% of its TV budget into sponsoring drama. you don’t have concrete research evidence ofThis was considered innovative at a time a return on investment. Or it could mean takingwhen most insurance brands focused almost SHARE 2
  3. 3. POINT OF VIEW CHANGING CHANNELS WITH CONFIDENCE: A STRUCTURE FOR INNOVATIONa risk in an established channel that is familiar Coke UK is reported to have a “mobile first”to you, perhaps by sponsoring a sporting event mentality in their planning process. Starting withfor the first time when you have previously been the 10% not only ensures that 10% innovationknown for associations with music festivals. happens; it also ensures that these projects are given due consideration and a chance to play anFor many brands across a range of categories, integral role in the overall campaign, rather thansocial media currently falls into the 20% being seen as afterthoughts.category. Brands have some practicalexperience and strongly believe in the exciting 70│20│ and Research Budgets 10new ways social media allows them to interact Research and measurement are key drivers ofwith their consumers. But they still have innovation, so the 70│20│ principle should be 10questions about the return on their investment, applied to the research budget as well. Table 1and they are still learning how to create and summarizes the goals and outcomes for both thedeliver campaigns that are truly social by design. media and research choices within each of the10% – Into the Unknown three types of activity. However, as we stated atThe 10% zone is the place where genuine the outset, the critical element of the 70│20│10experimentation takes place with new and approach is the commitment to consistentlyemerging channels. But this risk-taking should allocate resources to new channels, even ifbe in line with brand and campaign objectives; the proportions are not exactly 70│20│ For10.iPhone apps and Pinterest pages are right for research expenses, the proportions could varysome brands, but not all. widely, and they might not be the same as the proportions used for media. For measurementFor many brands, mobile currently falls into the of the 10% and the 20%, you may end up10% category. The mobile marketing landscape “overinvesting” if research needs to be createdcontinues to evolve as ownership of smartphones specifically to measure the return from a newand tablets grows rapidly around the world, channel. To really understand how a new channeland questions abound about the best ways to works, it may be necessary to spend as much ontake advantage of these new opportunities. research as on the media itself. Table 1 70│20│ for Media and Research 10 Comfort Zone (70) Innovate on What Works (20) The Unknown (10) Reach target with intended Goals Extend both reach and strategy. See if it works! messages.Media A familiar strategy is extended, Practical learning and Campaign delivers as expected Outcomes with some ROI, some pleasant ideas for the future, with an against plan. surprises. occasional runaway success. Evaluate communication/ Assess channel potential/gain Goals Identify media impact. effectiveness of media mix. ideas.Research Type of Mix of newer and established Brand-new approaches, Mainly established techniques. Research techniques. trial and error. Incremental optimization Winners and losers identified Outcomes gains make a large absolute Optimize/extend use of channel. (failure of campaign is difference. successful learning). SHARE 3
  4. 4. POINT OF VIEWCHANGING CHANNELS WITHCONFIDENCE: A STRUCTUREFOR INNOVATION However, we are not suggesting that researchers can afford to take their eyes off the 70%. Even when the media used are known to be effective, learning from research may call for incremental adjustments that will have significant effects. And there are very compelling arguments for investing in research that can help to optimize the mix across channels. The 70 | 20 | 10 approach will give new channels a chance to shine. Conclusion Marketers consider channel optimization every time they plan new campaigns. Some are 70│20│ in Practice 10 actively involved in changing their channel mix, while others leave these recommendations to When assessing how your current media budget their media agencies. Marketers that adopt a stacks up against 70│20│ it is important to 10, 70│20│ approach will know that new channels 10 consider all the costs involved in a particular will be given a chance to shine and that their channel. Projects in the 10% zone are likely to media plans will evolve through a systematic be relatively resource intensive even if media process. By overlaying a comparable approach costs are low. Therefore, to ensure that the to research planning, companies can ensure 70│20│ approach is applied comprehensively 10 that they extract maximum learning from this and fairly across the full spectrum of paid, process. Marketing and insight-generation skills owned, and earned media channels, brands will evolve in parallel, and the ultimate result will need to weigh all the costs associated with be a meaningful difference in brand success. each channel, including not only hard media outlays but also the cost of support, production, and organizational expenses. To read more about media and In large companies, experimentation may be research planning, please visit spread across brand portfolios or markets. One sub-brand may attempt an augmented reality campaign while another builds a mobile app. If you liked “Changing Channels Pooling learning in this way improves the breadth with Confidence: A Structure for of experimentation possible and helps speed Innovation,” you might also enjoy: progress in identifying the channels most likely to “Are You Getting Your Fair Digital move from the 10% to the 20% in future years. Share?” Research budgets will likewise go further if “Brand Building Along the Media partners can be recruited. Media agencies, Long Tail” media owners, and research agencies all have an interest in understanding how new channels work “Integrated Planning: Standing Out in and might be eager to participate in joint projects. the Cloud” i 70│20│ was originally proposed in the 1980s as a framework for learning 10 Roy Amara, 1925-2007, was an engineer, researcher, and co-founder ii development, and later used as an approach to innovation by companies and president of the Institute for the Future, a nonprofit based in Palo Alto, such as Google. California, that pioneered technological and sociological forecasting. SHARE 4