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IPG’s Terry Peigh reveals how the rules of marketing war have changed

The Managing Director of IPG Group shares the insights from his study which he tracked from 2009 in six countries. The study titled ‘New consumers, new war, new rules’ was presented by FCB India in Mumbai

On his fifth visit to India, Terry Peigh, Managing Director of the IPG Group, revealed how the rules of marketing war have changed which he tracked from 2009 in six countries. He presented a six-country study report titled ‘New consumers, new war, new rules’ at an event organised for the marketing community and media in Mumbai by FCB India.

Peigh presented the six paradigms of traditional marketing that he saw being challenged. The paradigms are a result of the latest round of ‘The New Realities’ study combined with secondary data and his views.

1) In the name of ‘engagement’, marketing communications have been jettisoning more and more ‘information’. Finger is pointed at ‘distracted, over-stimulated consumers’ for this.

However, Peigh proves that consumers (71%) find it increasingly fulfilling to find information on brands. One reason for this is the ‘increased self-esteem’ that such knowledge brings to them. This is true (66%) right across 18-52 years and both in men and women. That such expertise is a social currency that brings admiration from others is an added incentive, finds his survey.

The survey found as many as 60% of Indian netizens initiate conversations about brands with friends and relatives, regularly.

He draws attention to a marked reversal of Indians from 2011 to 2019, spending more time, evaluating their purchase. In 2011, the majority of Indians were spending less and less time evaluating what to buy. By 2019, the converse is true. This, further, supports value of ‘information’.

“Brands are losing out on the inspiring power of a parallel, informative channel to the consumer,'' said Peigh.

His secondary data suggests that the majority of buyers have cut down on their retail visits in the last five years. A majority finalises its consideration set based on information provided by peers and experts on the internet. “Traditional marketing was about getting them to listen. Today, it’s important for marketers to focus more on how to get the consumers to talk more about their brands,” he observes.

“What’s most important to today’s purchase decision is what consumers say to each other about your brand. The focus increasingly has to be on engaging with prospects and enabling them to speak favourably about your brand. Yet, most brands fail to reward consumers who get involved online with them. Not many search out interesting live experiences that the fans would enjoy and willingly share widely,” he adds.

When a brand designs experiences that allow consumers to showcase their talent, their creativity and win acclaim, then it has super-engaged consumers.

“Starbucks showcased art of their consumers on their coffee cups,” he explains.

2) Traditionally, most brands see a role for marketing communications almost only before purchase. When otherwise?

Peigh points out that globally, people are seeking more information after purchase, year after year. 39% Indians seek and 57% notice information about the brands that they bought, after their purchase.

Giving more information is the most cost-effective way of increasing satisfaction with your brand,” points out Peigh.

It is also about how we give that information, he adds.

3) To date the most prevalent way of tracking brands is to track their awareness, benefits and attributes.

“Conventional tracking of brands is severely limiting in the new digital reality,” observes Peigh. “It is trust that is far more important to track,” he adds.

According to Peigh, trust is the most important stabilising force brands have in a cyclical or ‘promotionally stormed’ market. “Consumers who trust a brand are two times more likely to stay loyal, buy new products from, advocate and even condone their brand.”

“But, trust remains an often misused word in India, standing mostly for an old familiarity. Real trust has three more requirements, viz. good intentions, competence and transparency,” he observed.

According to Peigh, social media has shown a drop in the level of trust for the first time in India, in 2019. India shows a sharp drop (from 62% in 2017 to 42% in 2019) in netizens who admit to having bought a brand based on recommendation of somebody they follow on social media. Of the six countries tracked, India and China show the sharpest drop.

“Their own friends, relatives and micro-influencers enjoy stronger impact. Then comes the experts (nearly half of the Indian consumers admit to expert influence). Celebrities and large influencers have bigger followings, but the lowest impact,” he points out.

“The world is rapidly adjusting to the new reality of dropping trust in traditional social media influencers. The trend is to use consumers as well as employees as marketers for the greater empathy they enjoy,” says Peigh.

4) Traditional marketing entailed selling, convincing. “The resultant ‘pushiness’ has compelled the consumers in becoming experts at ignoring us,” observes Peigh.

If brands don’t want to be ignored, they should ask if we are helping the consumer choose right. This proves good intentions, helps in building trust. That brings consumer experience and how it is shared in focus.

When Starbucks showcased their consumers’ art on coffee cups, they even let the consumers shape the experience of the brand, explained Peigh.

According to Peigh, when consumers are spending most of their waking hours at work, it is quite natural to expect from brands to champion social causes that consumers believe in. “Social causes are critical in defining and giving meaning to products and services,” says Peigh.

The Edelman Global Survey 2019 shows that half the consumers believe the brands can solve social problems better than government. Brands are seen to have better ideas for that.

5) Traditional marketing advises minimum necessary transparency. However, transparency is a vital part of maintaining trust, finds Peigh, because if one person knows it today, the whole world can know it tomorrow.

There are secondary benefits of transparency too. “Transparency encourages fresh brand stories in otherwise dark parts of an organisation like sourcing,” observes Peigh.

6) Conditioned by the past, brands are busy counting their wins against fellow brands in the category.

The survey has brought out the rapidly rising acceptance of private labels. Most worrying is the truth that majority of consumers failed to see private labels of Flipkart, Big Bazar, Big Basket as private labels. To them, these were brands in their own right.

“To get two hits, brands may have to create 50 options. But, the platform brand knows what's hot, without spending money on the rest 48,” observes Peigh.

This early knowledge of what’s working leaves private labels of large chains and e-commerce platforms with unheard of efficiencies and very attractive collections. “Brands are ill-prepared to face the real battle of Private Labels,” he said.

Millennials do not have the perception (held by older generations) of private label as “cheap and poor quality”. In fact, millennials buy with a view to upgrade in a few years. Private labels not only offer them better value and thus, an amplified opportunity to experiment, but also the right features. After all, their owners are armed with the information of what is being sought after from the data of sale of brands through their channels.

Peigh finds specialisation, unparalleled competence within the specialisation, scale within specialisation, global or at least wider leverage of innovation and data competence as the way to tame their tide. The worst way to deal with private labels is to withdraw money from advertising and redeploy in discounting.

“Brands will rarely win the ‘price battle’ against private labels. Instead, the real way is to build intangible value on the back of innovations,” advises Peigh.

For this, one final rule of traditional marketing may have to be turned on its head, according to Peigh. “If only the brand’s health is made a distributed responsibility across all major activities of business, that the new War can be won!”

“Expediency in business results shaped the approach being followed today. But, in the new world of new consumers, there is a new war with its new rules, that is telling us to think again,” concludes Peigh.

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