IPG’s Terry Peigh on 6 paradigms of traditional marketing that are being challenged

Terry Peigh, Managing Director, IPG Group, has been tracking six countries since 2009 through ‘The New Realities’ study. India joined the programme in 2011. ‘The New Realities’ is a large sample quantitative track of changes in consumer paradigms and behaviour, being run in 6 countries since 2009. 

At an event in Mumbai yesterday (September 26, 2019, Peigh talked about the six paradigms of traditional marketing that he sees being challenged 

1) To start with, 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 a knowledge brings to them. This is true (66%) right across 18-52 years and both in men and women. That such an expertise is a social currency that brings admiration from others is an added incentive, finds his survey. Survey found that as many as 60% of Indian netizens initiate conversations about brands with friends and relatives, regularly. 

Peigh draws attention to a marked reversal of Indians from 2011 to 2019, in spending more time, evaluating their purchase. In 2011, majority of Indians were spending less and less time evaluating what to buy. By 2019, the very 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. 

Secondary data suggests that majority of buyers have cut down on their retail visits in the last 5 years. A majority finalises their consideration set base on information provided by peers and experts on the Iinternet. “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 observed. “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 on-line with them. Not many search out interesting live experiences that the fans would enjoy and willingly share widely,” Peigh added. 

When brand designs experiences that allow consumers to showcase their talent, their creativity and win acclaim, you have super engaged consumers. That’s why Starbucks showcased art of their consumers on their coffee cups, he explained. 

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

Peigh pointed 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,” he said. 

It is also about how we give that information. When it is given, it is increasingly unfriendly to the 53-70 age group, as per the survey. 

3) Till 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,” observed Peigh. “It is trust that is far more important to track,” he added. 

“Trust is the most important stabilising force brands have in a cyclical or ‘promotionally stormed’ market,” he clarified. 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 added. 

In choosing brands, people prefer trusted sources of information. TV/ print are losing trust around the world (IPSOS study 2018). Even social media has shown a drop in 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 6 countries tracked, India and China show the sharpest drop. 

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

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

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

If you don’t want to be ignored, ask… are we helping the consumer choose right. This proves good intentions, helps in building trust. That also 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, observed Peigh. 

“When all of us are spending most of our waking hours in work, it is quite natural to expect our brands to champion social causes that we believe in. Social causes are critical in defining and giving meaning to products and services,” said Terry. 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, he pointed out. 

5) Traditional marketing advises minimum necessary transparency. However, transparency is a vital part of maintaining trust, finds Terry, 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 organization like sourcing,” observed 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 Bazaar, 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, observed 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,” noted Peigh. 

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 found specialisation, unparallel 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,” he observed. 

For this, one final rule of traditional marketing may have to be turned on its head, as per Terry, “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,” concluded Peigh.