Last week Forrester released a report advising most marketers wait to use location-based social networks (LBSN) as only 4% of the US population is currently using platforms such as Foursquare (the current market leader), and that the networks skew heavily male. They advise that brands that target young males experiment with the services and other brands adopt a “wait and see” approach.

I couldn’t disagree more. Here are my 5 reasons why it’s smart to start experimenting now.

1. First Movers.

There’s something to be said for getting a head start on your competition in the digital space. Brands like Starbucks, Dell, Pepsi, and Nike have all taken advantage of the emerging channels and reaped the rewards of building a strong early foundation with consumers.

While you should not rush into a new tool without understanding your strategic goals and how it integrates with your business objectives, experimenting with emerging technologies that are opt-in and potentially have a direct customer impact is smart.

When Facebook opened their gates to the general population in 2006 they had a small user base of university students. Four years later they are a behemoth. Twitter adoption rates have been increasing exponentially year over year since their launch in 2007 and the tool is now considered a “must use” for social business. Considering Foursquare launched about a year ago, can we expect to see the same type of growth curve as the early adopters begin to influence the early majority? (see “Crossing the Chasm” adoption curve)

2. Google. Facebook. Oh My.

Location-based services are not limited to the current apps we have been hearing about. Facebook has expressed they will add a location-based offering soon, Twitter has added “Tweet with your location” to their service, and the biggest news is that Google is adding a Places API to their eco-system, as well as adding LB data extensions to their mobile advertising product.

LBSN will become mainstream sooner rather than later, and it will be the big players, not the niche networks that will drive the adoption. Testing and learning now, before it becomes ubiquitous should be something on every marketers radar.

3. Data and utility.

There is an enormous amount of insightful and actionable data that can be gleaned about your customers and prospects from mobile & LBSNs. Eventually this data could be used to inform inventory control, staffing levels, consumer tastes and trends, etc. The data can also be used in loyalty programs, to identify influencers, test new products, and as real-time service focus groups.

Companies already testing the waters include:

Nike with True City; Starbucks with their Foursquare offers; The Pepsi mobile branded app; and the City of Chicago with their Tourism campaign.

4. Sales, Coupons, Offers, and more.

Part of the Forrester analysis identified that mobile couponing is widely successful with the users currently using the services, which is interesting as the base is primarily young males, not the average coupon-consuming demographic. Gone are the days of clipping coupons in the Sunday paper, now you can serve relevant offers and drive foot traffic and purchase directly to a mobile device. These offers are opt-in, and contextually relevant, not SMS spam. Testing offers, tips, and messaging via mobile should be on every retailers plan for the next year.

Of course one size doesn’t fit all and ensuring that your product or service fits within the make-up of the demographic, depending on service (existing or branded), is a must.

5. Mobile usage.

Of course mobile, and specifically smartphone, usage is soaring year over year. Ignoring mobile at this point is like ignoring the Internet in 2002 because broadband wasn’t prevalent yet.

Bottom line for marketers:

Experiment. See what fits, what your customers are looking for, and where you can add value. Don’t wait until it becomes mainstream, because that will be sooner than you think and you’ll be playing catch-up.

photo credit: john weiss via Flickr

It all started with the insight and a deep understanding of the market and the consumer.

The objective, as Leigh rightly points out, was to re-position and re-invigorate the brand.  To do this the team needed to understand the competitive landscape, the perspective consumers had of the brand, and the territory they had to play in. The market was saturated with female unfriendly AXE advertising, and as women are the primary consumers for male scent gifts, turning that into an advantage would have been mandatory for Old Spice.

With that as the starting point the Old Spice team (with a receptive client) decided to do the obvious: appeal to women without alienating men.

Old Spice cast the perfect actor for the new positioning. A former NFL player, a nice guy, and someone who wasn’t so perfect that men would feel threatened. Genius casting. Based on, I imagine, a perfect casting brief.

The next step was to create a seriously funny commercial that turned all the cliche’s of advertising and film on their heads. “Look at your man, now back at me”. “It’s now diamonds”. “I’m on a horse”. They made a commercial that was frankly better than 90% of the TV shows it appeared alongside. I first heard of it because my partner was watching TV and told me I had to see it. So what did I do? I went to YouTube and there it was. Word of mouth at it’s finest, but it would have been dead in the water if the team hadn’t thought to seed it online first.

They let that roll and roll it did. Everyone who saw the commercial started sharing it, and a character was born.

Now what to do with the follow up? The character was a success both online and offline and while they could continue to let it ride as a TV spot, the proof was there that they could take advantage of how much the spot resonated with the folks online.

The plan was to create a new TV spot, let that simmer for a bit and then pounce. The social media marketers did their homework and decided what the right outlets were to start spreading the character. The fact they took on 4Chan and won speaks volumes about how integrated and on the ball they were. While everyone talks about how they took over Twitter in a day, they really started seeding the campaign before that. They laid the groundwork. And it paid off. Big time.

It came on my radar with @jakrose tweeting that he’d received a video reply early Tuesday morning. “Fry it up and eat it down JakRose. Fry it up and eat it down.” The network effect took over and for the next two days it was all I cared about that was happening online. The social team did a brilliant job monitoring responses and working with the creatives to write compelling copy. They didn’t just target celebrities and “influencers” but responded to comments, Diggs, tweets and blog posts that they felt fit with the character as a whole. They were obviously fully immersed in the language and cadence of the social web because their video responses contained references only a geek would love (or get). They respected all the unwritten rules of the culture and tailored their responses to match the brand, and the mediums they were using.

They embraced the mash-ups and promoted them. They let the community roll with it. They poked fun at themselves (Old Spice responding to @isiahmustafa) And they set a time limit. Any longer than 2 days and it would have become tired. Any shorter and it would have been disappointing. The mash-ups continue to roll in, with the most recent being Mel Gibson calling the Old Spice Guy.

It was brilliance that came from the initial insights and work they did a couple of years ago. And deep understanding of how the social web works.

The challenge will be what they do next and if it moves the needle at the top of the purchase funnel (awareness & consideration). But I have faith, and am looking forward to every moment of it!

[Update August 13, 2010] W+K just released their case-study of the campaign: Old Spice is now the #1 brand of body wash for men, with sales increasing 107% in the last month alone.

One of the recurring questions has been around how it works. As one of our LinkedIn forum members said, “If no one is currently doing this, how can an agency possibly integrate the process and make it work?” Great question and one that’s been on our minds a lot lately, too.

As luck would have it, a campaign recently exploded online that I believe illustrates the adaptive approach to marketing. I’m talking about the Old Spice Guy work done by Wieden+Kennedy. It began as a great Super Bowl TV spot but what happened afterward – and they way they worked with their client – is what I find most compelling.

Iain Tait, in a readwriteweb.com post explains it best, “In a way there’s nothing magical that we’ve done here… we just brought a character to life using the social channels we all [social media geeks] use every day. But we’ve also taken a loved character and created new episodic content in real time.” As for the mechanics, he explains, “we’re looking at who’s written those comments, what their influence is and what comments have the most potential for helping us create new content. The social media guys and script writers are collaborating to make that call in real time. We have people shooting and we’re editing it as it happens. Then the social media guys are looking at how to get that back out around the web…in real time.”

My first thought was that to pull off such a responsive program they must have had a tremendously trusting client and collaborative working relationship. Tait said that Proctor & Gamble let his team create on the fly with little supervision, “There is such great trust … They have given us a set of guidelines and if we get close to the edges we contact them.”

In my opinion, Tait’s team has arguably created the most significant program since Subservient Chicken. They put all the right pieces together. But more so, they’ve illustrated exactly how an agency can practically develop and deploy a campaign that actively involves consumers in real time and delivers meaningful experience. Not only that, they completely repositioned the brand and now have an asset they can use in myriad ways.

I’ll probably take some heat for this, but personally, I always felt that Subservient Chicken was one-dimensional. Don’t get me wrong, I loved it and felt it arrived at exactly the right time in our industry. It showed how technology could be used to involve consumers without being ham-handed. But it was really just a playful destination. Somewhere to waste a few minutes online.

The Old Spice Guy concept goes way farther and operates on a much deeper level. It watches consumer activity, pulls it in without asking and feeds it back out as unexpectedly fresh content. On top of that it demonstrates a fundamental change in agency structure and approach. In fact, it’s so extensible that consumers themselves can run with the idea, create their own content and still be in line with the original idea… at no incremental cost to the client! See for yourself, have the Old Spice Guy create your voicemail message.

So What’s It Take To Do Work Like This?

There’s no debate that social media has completely transformed how marketers engage with their customers. And the impact of this change has rippled through agencies as they struggle to catch up to the changing needs of their clients – and consumers. But what hasn’t happened up till this point is agencies figuring out how to bring all the pieces together in one agile approach.

For a time I thought that BURT were onto something with their Agile Advertising approach, but the more I noodle it, the more I feel like what they proposed with their four feedback loops is really more of an optimization phase in a linear model (and something we’ve done at Teehan+Lax for some time). It’s great for tuning individual pieces of creative and improving their effectiveness but it isn’t necessarily about creating a platform for iterative ideas to be rapidly developed, tested and deployed. And an iterative development approach is really what we need.

“Everyone applauds innovation. At least, they love it in retrospect, after it has worked.”*

I believe we need to build teams and create operating environments that allow for responsive marketing that’s always on. Programs that respond to changing market conditions. Programs that naturally integrate the ability to test ideas and embrace failure. Programs that will use data to help inform what is made, how it’s designed, and who will be involved.

Tim Leberecht in his article, “Time for Marketing Innovation 2.0” delivers a stern challenge to all of us searching for new solutions. “As we are entering the new decade, it appears as if the marketing discipline, after undergoing a mesmerizing major transformation in the past two to three years, is facing stagnation. This often occurs when pioneering concepts are fully absorbed by the mainstream: Social marketing is on the way to becoming THE marketing, as social media is becoming THE media (it is always a sign of broad adoption if adjectives are dropped). Authenticity, engagement, meaning, communities, social, conversations, transparency, etc. – they’re all accepted across the industry and widely implemented now. What then is the next frontier for marketers? What will be the next big marketing innovation?”

To me the next big innovation won’t be the products we envision as much as it will be agencies we create that are structured to deliver Adaptive Marketing. And as the team at Wieden & Kennedy have shown us, it’s entirely possible and should now be expected. Silver fish hand catch!

Reading List:

After listening to what people had to say I thought it made sense to clarify a few things, namely:

• Language and terminology
• Agency structure and vision
• Creative output

The term “adaptive marketing” isn’t ours, it comes from the people at Forrester. If you aren’t familiar with their report (registration required), Adapting Agency Relationships In A New Marketing Era, I highly recommend you give it a read. It does an excellent job of setting the table.

Several people have pointed out that adapting to changes in the marketplace, integrating cultural nuances and responding to emerging opportunities are all hallmarks of successful advertising. And I agree. Being able to identify what’s hot and leveraging the next big thing is essential in keeping a brand top-of-mind. Being responsive and adapting to changing market conditions is what all marketers need to do. But it’s not what we mean when we talk about adaptive marketing as a practice.

Traditional Marketing Is Linear

Let’s look at traditional marketing for a moment. It’s fundamentally linear. It starts with the brief. The creative team then develops material that gets trafficked. Performance is measured to determine whether or not it worked. The individual project or campaign ends and measurement data is used to help inform the next campaign. Then the whole process repeats.

Agencies have done an amazing job of developing the linear model. When it comes to pushing one-way messages it’s impossible to argue with their success. In an era that was focused around informing consumers about the benefits of a product or service it was masterful. It resulted in legendary advertising that spread messages and built brand identities. But as consumers evolved they became more and more immune to advertising. And today, with a world of information at their fingertips, consumers share knowledge and find out about products in ever changing ways. Advertising still works, but not like it once did.

So, how can agencies also change and create marketing products that are once again relevant to consumers lives? How can they change and still serve the needs of marketers? How can they help consumers solve problems rather than push marketing messages? I believe the answer is tied to the way we work. And, the ways we are compensated for that work.

Adaptive Marketing Is Iterative

Adaptive marketing is considerably different from the linear model. It’s organized to be a dynamic, “always-on” process in which creative is continuously measured against a pre-defined objective. Creative is modified, refined or abandoned as required. And since the creative team is aware of the end goal in advance, they have the responsibility and authority to do whatever is required to achieve the goal. The creative product becomes a means to an end, rather than the end itself. And compensation is tied to key performance indicators rather than the hours it takes to accomplish the goal.

It works like this:

• The agency and client define the objectives of the engagement and establish several key performance indicators
• The creative team is dedicated to the project for a set period of time allowing them to focus on the task
• Ideas are rapidly developed, tested and deployed
• Ideas evolve and adapt over time
• Performance is closely monitored allowing the team to make adjustments
• Project success is determined by achieving the KPIs

Agency Structure

On our LinkedIn forum it was pointed out that Adaptive Marketing isn’t a new thing. And that’s entirely true. The strategic underpinnings go a long way back. But it’s the application of this approach in a modern agency that has us excited. In my opinion, large agencies will always have a difficult time embracing this way of doing business. The future is in the smaller, more nimble groups.

Most Agencies don’t have processes, experienced resources, or frameworks that can even begin to attack this problem

When it comes to actually integrating the Adaptive Marketing practice, “it’s not the way 90% of companies are structured. Most Agencies don’t have processes, experienced resources, or frameworks that can even begin to attack this problem even if a client came to them and asked for help.”

For an Adaptive Marketing practice to work an agency needs a special structure. We believe that for a group to be successful it needs a degree of autonomy and the freedom to be self-directed. It’s likely best done with a group that works well as a team and can share responsibility (regardless of seniority). At Teehan+Lax, we use an Agile framework (Scrum In 5-Mins pdf) and find that it works remarkably well.

I think it makes sense that teams are organized around the basic three pillar structure of design, copy and developer, plus a project manager. However, the team has to be able to evolve as the project evolves. As each project is unique, the creative that is developed will determine what is required in terms of talent and expertise. A company that can accommodate flexibility will be far better equipped to embrace an Adaptive Marketing approach.

Creative Output

A highly structured, yet free-form approach to creative development. The responsibility for steering the work sits on the shoulders of the entire team and they are directly responsible for meeting the KPIs. And when compensation is tied to these goals the group is incentivized to find innovative approaches and not simply rely on traditional solutions. When the team puts skin in the game, their success is tied to the clients’ success, and not just industry awards.

In terms of what creative can or should be developed… that’s something that’s almost impossible to answer. But there I find a frustrating over-reliance on the typical microsite/banners/youtube/facebook solution. That said, when the problem is framed as, “what do we have to create in order to help the consumer” then the right solution will appear. Too often, the traditional approach is to simply put messages “out there” in places where the audience will be, with the hope that they will a) see them b) care about them c) click or visit them. As I’ve said before, I believe this approach is out of step with the desires of today’s consumer.

I like to think of the creative output that comes from the Adaptive Marketing model as a meme. Continuously evolving and unfolding artifacts that build on each other make for a great platform for creative development. And the speed of online is a natural fit. Much has been written about memetics so I won’t go into it here, but the spontaneous and responsive nature of cultural memes in the online space serve as an excellent springboard for where creative approaches must go.

Data Monitoring

One of the first responses I hear from creative people when I mention that we embrace Adaptive Marketing is, “analytics will kill the creativity. Personally, I feel the exact opposite. I don’t think we need complex measurement and analyitics software to get in the game, but instead simple measurements that can be used to determine success. I want to go more into the use of analytics because it’s a thorny issue, but to me simplicity is the right way to go,

• It’s absolutely critical to know your objective (KPIs)
• Measure three things (tweets? site visits? sales numbers?)
• Use existing tools to start
• The problem will help define the measurement

We believe Adaptive Marketing is going to become an extremely important part of our industry and are excited to figure out how it will evolve. To that end, we’ve opened up a LinkedIn group to discuss the various issues around Adaptive Marketing. We welcome your participation and encourage input and feedback for what has already become a lively debate. In addition, you can use @adaptivemktg and #adaptivemarketing to participate in the discussion that way.

A common theme we keep hearing is: who and where are people who want to communicate with us, and whom we should be listening to and focusing our content development on?

As part of the process we’ve developed for formulating a solid and sustainable social strategy for brands, we typically start with developing a Digital/Social Persona to help guide the engagement and communications strategy. While Personas are common in advertising and UX circles, they are relatively unique within social media as most practitioners will just tell you to “start listening”. While this is absolutely key to understanding and getting involved, it doesn’t provide a roadmap for long-term planning and engagement.

A persona doesn’t replace interacting directly with your customers, however it does give brands an understanding of how their customers are using digital media in all its forms, how they are interacting and engaging with complementary brands, the types of content that resonate with them, and a sense of where the brand “fits” (or could fit) within their online life. It also clearly demonstrates where it falls down, or neglects an important aspect.

In our experience, having this information, backed by thorough data and research, immediately illustrates where traditional communications fall short and why they should invest in 1-to-1 interaction and content development to remain relevant. It also begins to start the process of thinking about what true integration and touchpoints mean on a larger level.

We have a system we use to develop these personas with both qualitative and quantitative research, and with each iteration or new project find new ways to get to know the “persona” of the composite individual we’re modeling. I have a firm belief that with the amount of data we are collectively collecting in the digital realm helping companies make sense of it all and truly understand who their customers and prospects are will become both easier and more difficult. :)

For my social media friends out there – what types of practices do you use to help your clients get to know their customer?

photo credit: Cesar R. via Flickr

For an industry that prides itself on a spirit of innovation, what we see happening doesn’t feel right. We believe it’s time to press forward. We believe that time to change is now. To that end, we are actively in the process of transitioning our Marketing Programs Group to an Adaptive Marketing model.

“Business has only two basic functions – marketing and innovation.” Peter Drucker

Adaptive Marketing is the next step in our evolution and will provide a truly progressive approach for our clients – one that we believe will become the approach that many marketers will use in the future. To the best of our knowledge we will be the first agency in Canada to provide this service.

Why are we doing this? Quite simply, we believe the days of doing traditional online marketing campaigns are fading. Linear programs based on reach and frequency are highly ineffective. As a direct marketing vehicle with clickthroughs averaging 0.02% they don’t work. And with banner-blindness being what it is, as a brand vehicle most efforts are largely ignored.

The reality is that consumers have changed faster than marketers. And they expect communication that delivers tangible value. Traditional campaigns that trumpet brand messages or focus solely on unique selling propositions are no longer considered the principle measure of value to consumers. To be blunt, what worked in the 50’s simply doesn’t work anymore. Today’s consumer demands more.

Value used to be derived from a consumer’s perception of what a product could do for them. This interpretation of value has evolved. And these days value is better characterized as, “what can a brand help me do?”

When we switch our strategic approach to deliver tangible consumer value – we are obligated not only to evolve the ways we engage with consumers, but also, to re-examine the approach (and processes) we use to create, monitor, deploy and continuously tune our marketing programs.

The Old Way

The “traditional online” marketing approach is linear and built on the idea of telling consumers about products and services through increased reach and frequency.

Forrester’s recent analysis of Adaptive Marketing issued the challenge that marketers and agencies need to change and move away from the old way of doing things. According to Forrester, agencies struggle to adapt because their models are still built for yesterday, in that they:

• Focus on campaigns rather than experiences
• Talk but aren’t very good at listening (or more importantly, conversing)
• Are built for waterfall versus iteration
• Treat customers as audience rather than participants
• Are mostly “unbundled” — creating disparate skill sets
• Have trouble mastering many new specialties at once
• Moved down the value chain and rarely distinguish themselves from each other
• Can only move as fast as their clients

At Teehan+Lax, our Programs Group is purpose-built to be the exact opposite. Our agile creative approach, small, team-based structure, and value-based compensation model (we’ll talk more about this in another post) allows us to create highly effective Adaptive Marketing programs.

The New Way

Instead of looking at projects as a series of requirements that extend the reach and frequency of a message we need to look at the problem differently. We need to first determine how to help consumers solve a problem. When we look at a marketing challenge this way, it allows us to identify a completely different set of success metrics and solutions.

If your marketing isn’t helping consumers, then you’re shouting messages from the sidelines.

In the past we were incentivized to create ads and microsites that would launch onto the Internet, exist for a while and then disappear. In the future, we will create programs and “things” that solve consumer problems. They won’t be ads, but instead, they will be solutions that need to be marketed. It’s a completely different approach. And a whole new ballgame.

The new way is about creating programs that continuously evolve as they go. They are build on the principle of listening to consumers, identifying what they need, and creating communication that helps them. There are several projects that we see as benchmarks for this way of thinking, notably, Domino’s Pizza Tracker, Pepsi Refresh, and Nike+ Chalkbot. We’d be well advised to learn from them.

In the future, programs must be iterative, highly adaptive, and responsive to consumer needs, market conditions, and technological opportunities.

The things we create will be as unique as the problems we need to solve… and our approach demands that we look beyond paid advertising as the first solution. Ultimately, what we will create are not campaigns (in the traditional sense of the word) but will be continuums of activity and initiatives – some small, some large, each of varying shapes and sizes – that each satisfy the real needs of consumers while delivering against a marketers connection objectives.

We believe that Adaptive Marketing is the right approach, one that will be the way of the future. We are extremely excited to move in this direction. And we’re looking for clients who share this philosophy.

Reading List

Forrester (registration required)

• Customer Experience Skills Are Critical To The Success Of Agency Relationships
• Adapting Agency Relationships In A New Marketing Era

BBH Labs

• So what exactly might ‘Adaptive Brand Marketing’ be?

Mullen

• Forrester debuts its findings on “The Future of Advertising Agencies”

Other

• Adaptive Marketing. How not to go the Dodo way
• Why is digital advertising so lousy? Industry is too smug to innovate.