Wednesday, October 28, 2015

What is left of Advertising?

“There will be fat years, and there will be lean years, but it is going to rain.” - Don Draper – Mad Men, Season three, Out of Town

What Is Happening To Advertising?

Ever since we entered the advertising world we have witnessed multiple waves of change and challenges, but somehow, this industry has managed to preserve its economic and social purpose.     

Advertising as a function has probably started with the early human societies, but it has only taken a formal description and a clear role as a profession during the last century. Since then, advertising was affected by different trends and movements yet it has evolved and adapted to different situations and innovations till the present time.

This is not meant to be a historical overview of advertising, but based on personal experience and some examples; change and challenges never seem to be the end of the line for advertising but just the sign and the trigger of a new era that brings a new approach and fresh thinking.   

In the 1980s and 1990s it was the expansion era for the multinationals that has gradually brought all the global advertising brand names to almost every market. That was a huge phase of change but the end result was a significant development of the industry in terms of tools, systems, knowhow, and exposure.

The arrival of the Media Buying Units (MBUs) at the dawn of 21st century brought another painful transformation for the ad agencies as it took from them their main source of income to put it under specialized “partner companies”.

Around 2005, we knew another wave of specialized companies that took another bite from the traditional advertising pie. We meant the branding companies, design houses and other specialized brand consultancies.

These are not the only events that influenced advertising over the past 25 years. The industry was always affected by all the economic, social and political events globally and on a regional level.    

The latest wave of change was triggered by the global and massive development of digital communication in its various forms (online, social & mobile). This trend has led to the creation of a new breed of specialized communication services and agencies.

However, this is going to be just another phase of the brand communication saga. New services and technologies will keep arriving and will reorganize the relationship between brand owners and communication specialists. New innovations will always create new services and new types of communication agencies and at the same time, it will make some older services less needed.

The continuous development and democratization of digital tools will eventually offer advertisers more control over their communication activities and budgets.

What Is Lost Of Advertising?

With every wave, the advertising industry has lost important elements and gained some other assets; but above all it has proven that it has plenty of new tricks up its sleeve.

Over the years advertising has lost important sources of income whether by relinquishing certain services to specialized companies or by losing the old comfortable compensation models and adopting more competitive and tight formula.  

Besides the financial question, advertising has lost a lot of its initial “mystique” and influence over clients and brands partly because of the creation of a plethora of consulting services often overlapping with the advertising expertise.

At the same level, advertising as a profession, has also lost much of its “cool factor” that for many decades has attracted the best talent to the industry – and sometimes the worst elements.

A lot of valuable assets were lost over the past three decades mainly because the industry does not have a coherent strategy in place to confront consecutive movements that threaten its existence.

What Is Left Of Advertising?

At this stage of the game, it's going to be, once more, up to the advertising and communication players to sort out what are the most viable options and mainly what makes them most valuable in the eyes of their clients and partners.

The various waves of change have deeply transformed how advertising and communication services are created and delivered but it did not affect the core role of this industry and its main contribution to the business community and to the economy and society at large. Technology and delivery channels will keep changing but the “core role” of communication continues to be relevant and in-demand.

If we take out all the tools, the techniques and the vehicles of communication that are subject to change, what practically will be left of the advertising business?

What is left is the talent and expertise in generating ideas and delivering them in compelling and attractive ways regardless of the production technique or the media channel that will be used.

Once we redefine the role of advertising as “the business of generating communication ideas” we will see threats and opportunities in a totally different light and we will be much more confident and enthusiastic about the future of the industry.

Technology, systems, and media channels with keep changing; but at the same time, Ideas will remain necessary for business and for the development of brands.

Ideas can move people, push sales, drive markets, and change the whole economy.

Ideas can build brands, connect consumers, and transcend cultures to create a shared understanding and a better way of life at a global level.

As long as Advertising will be able to generate unique and compelling ideas it will be able to defy time and change to stay relevant for today and tomorrow.

Jean-Claude Saade

Monday, June 22, 2015

Banking on the Brand

"Shining a light creates shadows” ― Michael Lewis, Flash Boys

The banking sector in the region is developing and facing multiple challenges and many opportunities at the same time. From growing customers’ expectations to the macroeconomic and technological context, change is affecting everything. Yet, the safest bet for banks remains unchanged and it is to build their brands.

Banking on the Brand is a strategic decision that can be implemented by addressing 4 key areas that will need the organization’s continuous attention and dedication:
Relationship, and

Facing constant change, banks need to put Renewal at the heart of their strategy and practice as this is the only way to keep up with changing markets and changing moods. In other terms, Renewal means a continuous drive to keep up with the latest trends to always offer better solutions.

The Renewal strategy does not only cover innovation in products and services but also a genuine renewal in the culture and attitude of the organization and its personnel. To mark major Renewal efforts, a refreshed identity or eventually a branding exercise can be considered only when necessary and required.

The Renewal efforts undertaken by banking institutions will lead to a systematic adoption of new technologies and tools and a continuous adaptation and improvement of products and services to match social and technological advancement.

Currently, banks are heavily focused on the digitization of their channels to improve efficiencies and customer satisfaction. From this perspective, Renewal needs a considerable investment in hardware, software and especially in people with the right profile and mindset who can embrace innovation and improve the brand image and competitive advantage.

From their side, customers expect their bank to adopt the latest technology and offer secure and easy to use services; but will be disappointed when faced with halfhearted innovations and low-grade products. For instance, when a bank is not ready yet to integrate a certain technology in its services it is better to wait and come up with a solid solution rather than offering inferior services that can bring more damage than satisfaction. If the bank is not ready to offer NFC (near field communication) enabled SIM cards, offering an NFC patch or sticker might look odd compared to the competition.    

When it comes to the technology aspect of the Renewal strategy we have to admit that some markets are ahead of others in adopting and implementing the latest technologies in banking. Therefore, what is the “latest incredible innovation” in a certain market is a several years old service in another market in the same region. Some humility and respect to the customer mind will pay off in these situations.

Moreover, market segmentations and diversification of products and services to better address the needs of specific customer groups will also fall under the brand Renewal strategy. Different customer groups will appreciate different services and banking channels.

The brand Renewal and innovation effort is an ongoing battle for excellence and higher customer satisfaction in the banking sector. This is also an area of great opportunity for the most visionary brands to excel and differentiate themselves from the competition to further build their image and reputation.

Reputation has always been a key competitive advantage in the banking sector. Nowadays, it is taking a different and more complex dimension; in other words, Reputation is the spirit of the brand.

Like brand value, Reputation in the digital and social media world is far from being controlled by the brand owners. Reputation is owned by the market and subject to change positively or negatively with every marketing activity, transaction and interaction with the bank. Reputation can also be affected by public mood, nurtured by some media and opinion leaders who sometimes disagree with the growing influence and wealth of the banks.

Reputation is heavily affected by the bank’s communication campaigns and re-branding efforts. Therefore, any communication activity should be well planned and strategically aligned. For the same reason, any branding or re-branding of the bank should have a solid base.

Satisfying customers and retaining their loyalty for a long period of time is a real challenge for banks in the current context. Customers are becoming more open for exploration and change in all categories including banking; and the saying that customers do not change banks is becoming just a myth.

Customers are more informed, demanding and especially sensitive to the idea of being under-serviced by some corporations and brands. Therefore, building a true relationship with the customers of today is a demanding task that would involve the full package of brand touch points. From the brand values and commitments to the daily interactions with employee and digital services, the Relationship with the bank is being built and tested every single minute.

Building a solid and lasting Relationship should not be any more just a personal initiative from the employees or branch managers; it has to be an intrinsic part of the brand strategy and the operational guidelines of the bank.

A true personal experience can demonstrate how easy it is to damage long customer Relationships. I have an account with an international bank that is much known across the region and I have been their customer for more than 15 years with a good satisfaction level in general. Last summer, my wife’s purse was stolen and we immediately tried to stop the credit cards including the one from the bank in question. With local banks, the process was smooth and quick, but contacting the call center of the international bank in question was a complicated and frustrating process that took more than an hour. By that time, the thief managed to use the credit card at a big name showroom (apparently he has a taste for expensive smartphones...) When we contacted the bank to file a claim, the bank refused to take any responsibility. You can imagine the level of disappointment with this particular bank and the learning that we can draw from this true story. Building a Relationship is a serious endeavor that covers all the points of interaction with customers and around the hour. Even if that bank had the best online banking in town and a top notch personal service, their useless and retarded call center made them loose the Relationship battle.

Building a strong Relationship with customers also relies heavily on the physical presence of the bank through its network of branches, ATM machines and eventually kiosks in malls and other selected locations. This is a serious investment. It is true that digital services are reducing the need for direct interaction with the bank, but presence and proximity to customers continue to be an important factor in building and maintaining the Relationship.

Customers (both individual and corporate), and all other stakeholders expect and demand Results. Therefore, in a well-managed banking organization all the previously mentioned strategic areas should work in sync to deliver Results.

Results are not limited to income and benefits. Stability, continuity, security and satisfaction delivered to all stakeholders are important Results.

We can mention two quick examples to elaborate on the Results strategy from banking perspective: one tangible and the other intangible.

A bank that consistently offers lower interest rates to saving accounts compared to other banks of the same size and stature is a bank that is low on Results in the eyes of customers even if it is delivering better Results for shareholders.

A bank that has low levels of customer satisfaction will be scoring low when it comes to Results considering the cost of losing customers and attracting new ones instead of having a smooth and steady relationship for a long time.

As mentioned in the beginning, the challenges of the banking sector are many, but the best marketing advice that could be given is to bank on the brand.

The above mentioned 4 strategic areas will need ongoing improvement and evaluation in order to build a solid and attractive banking brand that can create value to all stakeholders and stand in the face of fast change and fierce competition.

In the online and social media time, banking services would need to become much more easy to use, probably as simple as using any application but with a security fit for the digital age.

Let the best banking brands shine.

Jean-Claude Saade