Feature
Neighbourhood watch
08 April 2011
As we enter an age of austerity, with cuts in government spending across many mature markets, brands have the opportunity to fill the vacuum created between society and government. Socially intelligent initiatives to put something back into local communities and engage with consumers are, so far, proving incredibly lucrative.
Ten years ago, business was business and brands focused on aspirational messaging that promised to make us cooler, sexier and more successful. Fastforward and people have grown cynical about marketing messages, demanding that businesses be held to account almost as much as governments.
According to a study by US research company Cone, 65% of US consumers believe that organisations should look beyond profit and blend social initiatives with commercial operations. For this reason, we have seen consumers in the UK boycott the likes of Vodafone for not paying a $9bn tax bill – a clear sign that people are increasingly questioning brands’ role in society.
Although utility marketing has been around for a long time (André Michelin launched the first Michelin Guide in 1900 to get people to drive more and so buy more tyres), there has been a notable shift in the past few years.
It started out with tactical approaches from the likes of laundry detergent Tide, which helped the people of New Orleans rebuild their homes and wash their clothes in the aftermath of Hurricane Katrina. Similarly, Clorox’s bin liner brand Glad helped people dispose of their waste when rubbish collectors went on strike in Canada.
However, a clear turning point was Pepsi’s decision not to advertise during the 2010 Super Bowl in the US for the first time in more than 20 years. Instead, it transferred its saving of a cool $20m to a more philanthropic initiative – the Pepsi Refresh Project.
The project invites consumers to submit ideas that will have a positive impact on their community in one of six areas: health, arts and culture, food and shelter, the planet, neighbourhoods and education. The ideas are uploaded to a central website and people vote for their favourites to win grants between $5,000 and $250,000. Pepsi receives more than 1,000 funding applications per month and has continued the project for a second year and made it global.
Since then, we’ve seen a rash of large-scale utility marketing campaigns. Initiatives that once rolled out under a sidelined CSR directive are now forming the focal point of marketing activity. Notable examples include Dulux’s ‘Let’s Colour’ campaign, which saw the brand renovate and paint rundown buildings throughout the world, and Orange Rock Corps, which encouraged young people to take part in community initiatives for tickets to see their favourite bands.
Other brands with a view to being helpful include O2 and its provision of free Wi-Fi hotspots for UK consumers, KFC’s sponsorship of the repair of a fire hydrant network in the US to promote its “Fiery Grilled Wings”, and Barclays Bank funding the city bikes in London.
Chris Clark, creative director, LBi, says. “Brands have always provided utility by having useful websites, or apps that help people make the most out of a product. But now we are seeing more brand generosity that goes beyond the context of how to better use their services. They are trying to be helpful.”
From a cynical perspective, this is about brands finding new ways to reach out to consumers in a time when it’s hard to achieve cut-through. “The interruptive advertising model is inexorably giving way to a new contract, which is based on engagement. Rather than wasting time and money seeing who can shout the loudest, marketers should focus on adding value to people’s lives,” explains Gareth Jones, brand engagement director, LBi.
He adds: “Value could be a piece of content that entertains, a service that informs or, crucially, a utility that simplifies a task. Brands that add value will truly stand out from the crowd, no matter whether they are small challengers or global behemoths.”
CRISIS OF CONFIDENCE
According to a study by global design consultancy Fitch, more than 62% of the UK population neither trusts nor relies on the institutions they deal with day-to-day to meet their needs.
Against this backdrop, brands need to do more to gain people’s confidence. Jessica Bower, project director, brand insight agency Sundance London, says: “Branded utility offers brands the opportunity to prove their commitment – vital in an era where consumers are more able than ever to see behind the scenes, and more cynical than ever about marketing messages.”
However, Stuart Wood, executive creative director, Fitch, is keen to point out that it is merely about brands re-establishing a connection with their community that has somehow got lost along the way. He says: “Companies such as Cadbury used to be at the heart of the community and they created schools and playgrounds for people who worked in and around their area.” In an age of outsourcing and globalisation, brands need to find a way of recreating that bond. Branded utility helps to drive advocacy, which trumps the awareness created by advertising time and again.
There is even a new breed of agency that focuses on socially intelligent marketing. Instinct promotes advertising space on products designed to support needy communities. In Ghana, it has created Trikademic, a tricycle that works as both a free school transport service and a mobile billboard, used by telecoms company Zain Ghana and beverage giant Voltic to gain exposure. Instinct’s founder Magali Bongrand says: “Society as a whole is going through a change of mindset when it comes to hyper-consumerism. A company that can claim it is leveraging its marketing budget to provide free social services or infrastructure will gain in brand image. It tackles visibility and CSR together.”
Developing markets and those that have been worse affected by the financial crisis are prime hunting grounds for utility marketers. Wood says: “The vacuum created between society and the government is a great opportunity for brands to play a more emotional role with people.”
However, there is no point in a brand being generous for generosity’s sake. There needs to be a clear fit between its core business and the utility it provides. LBi’s Clark explains: “At the most basic level, good utility marketing requires a deep understanding of the brand and the role it plays in people’s lives.”
So, Dulux’s ‘Let’s Colour’ taps straight into what Dulux is about – transforming people’s homes (and lives) through colour. Likewise, Dove’s ‘Real Beauty’ campaign and its associated Self-Esteem Fund are strongly linked to its message of making women feel better about themselves in the face of a harsh beauty industry. Life Agency managing director Ian Humphris warns: “The challenge is how to make marketing initiatives feel more than just a cost-effective, tactical communications vehicle. Without strategic justification, there’s always the danger that it benefits internal stakeholders more than consumers. There needs to be a just cause and obvious rationale at its heart.”
Such ‘enlightened self-interest’ can be incredibly lucrative for brands. An Interbrand study states that some 13 cents out of every dollar of brand value is linked to CSR efforts.
It’s encouraging to see that Dove’s ‘Real Beauty’ campaign increased global sales by 6%. Similarly, when Philips installed a queue ticketing system to cut down on waiting times in Chinese hospitals, it benefited from an unexpected 65% reduction in media costs because its ads were then categorised as public service broadcasts.
However, utility marketing is not to be taken lightly. Just like social media, it’s not something that can be carried out on a campaign-by-campaign basis. It requires long-term, consistent investment to benefit the bottom line.
But that benefit can easily disappear if the brand tries to back out. Just as there is a huge backlash from people when they learn about government spending cuts, there is a possibility of a similar brand backlash if people grow to expect brands to plug the gap in public spending and then they stop.
The public get the opportunity to shift their political allegiances through elections every few years, but consumers can shift their brand vote with their wallets immediately.
Olivia Solon