Big Brands—Too Big To Care
March 17, 2021
Part Two of Our Series on The New American Middle—The Center of Everything
This is a continuation from our previous article Big Is Bad, part 1 of the impact of BIGNESS on the New American middle consumer.
The layers of betrayal, as outlined above, have become the cultural frame around the brand picture. It is the cultural dirt in which commercial brands are now planted. Brands are small potatoes compared to the grave consequences associated with the above mentioned, but when a brand is perceived as “too big to care,” it can easily be lumped together with the worst of them. Consumers cool off fast when they feel like their favorite brands over-promote and try to “sell” to them. The best brands are trusted metaphors for friendship, but when that friend tries to sell you some products from the latest multilevel marketing scheme they’ve roped themselves into, the friendship is over.
In August of 2018, Marketing Insider published an article titled, “Big-Brand Status No Longer Guaranteed Success Formula.” It begins by stating, “Between 2011 and 2016, large U.S. consumer companies lost an estimated $22 billion in sales to smaller brands.” The article includes suggestions for repairing the outdated mindset of many brands. Most of the answers have to do with reconnecting with brand purpose, and reconnecting with the consumer, in order to retain relevance. In other words, for a large brand to regain success, they have to think big and little. Grassroots. Bottom-up. Face-to-face.
It feels like a lot of work, retooling everything. And besides, isn’t the American dream to succeed by getting bigger and more powerful? Is “too big” even possible? When everything has gone well, and there is momentum, why would we do anything to slow the roll?
And yet, if we want to retain the true core of a brand, perhaps there might be a lesson in here somewhere.
Women Shoppers—The Center of the New American Middle
Women exert massive influence on the household spend, and yet the brands that expect women to buy their goods are male-dominated. Most ad agency copywriters and creative directors are male. Most execs in agencies are male. There is irony for you. Is it any wonder why brands have trouble earning her loyalty?
Between “the Stock and a Charred Place”
So, brand marketers are all caught in a quandary. Big success is achieved by working at a big scale. Shareholder value or investor returns are expected in the short term. Discounting, over-promotion, and the declining-price spirals are a result of being controlled by such short-term demands. Profitable brands retain customers by knowing them and providing relevancy that goes beyond lowest price. Achieving relevance takes multiple skill sets and reinvestment to define a repeatable process. It not only takes capital—it also requires talent. Be big and act small? It seems impossible.
Deep down, all consumers understand a brand needs to make a profit. It’s how they do it that is the issue. Unless brands are about something more than making money, if they stand for nothing else, they are just selling “stuff,” and as Marie Kondo has taught us, no one needs more “stuff.” The ocean is filling up with it. The NAM isn’t in the position to row out and pick up that plastic floating in the Pacific, but they can—and do—reuse and recycle. Environmental stewardship is one of the “Core Four” NAM values, so while a family in the Midwest might not relate to distant sea life choking on plastic, they can relate to environmental issues closer to home, issues that affect their family and their community.
So how do brands work both at a top-down scale and toward bottom-up relevance? How do they operate at scale but do so in a way that retains relevance to the individual consumer?
Top-Down or Bottom-Up
But what about the brands that aren’t tech behemoths? The key to success is the same: work both “bottom-up” and “top-down.”
Top-down: Top-down marketing typically means working at a large scale. In the past, advertising and big media provided most of the answers. As we have stated, these two partners don’t work like they used to. In the last 15 years, the new digital tools have made bottom-up marketing possible.
Bottom-up: Demographics gave us better mailing lists, but cookies, dynamic messaging, and instantaneous metrics allowed us to find who we were looking for. Finding look-alikes is great, but finding psych-alikes is better. This means understanding cultural and behavioral patterns as they play out in real time. The new tools allow us to deliver a relevant message to the right consumer, at the right time, on the right channel. The initial return on ad spend (ROAS) can be expensive, but with time, talent, and testing, ROAS can typically be improved.
However, abuses by big tech have created a global reaction to guard privacy, and the consequences of that reaction are going to make it harder for brands, both big and small, to reach consumers.
Examples of these reactions include:
- Europe’s GDPR in response to the misuse of private data.
- The US government’s increasing scrutiny and regulation following the Facebook/Cambridge Analytica scandal (and helping Senator Orin Hatch understand how Facebook can make money and still be free, among other awkward moments).
- In 2020, Google announced the phasing-out of third-party cookies that would prevent marketers from retargeting like they were just learning to do.
- The government’s 2020 anti-trust investigation of Google may result in wide-ranging implications for how marketers use ads on Google. Spillover to Amazon and Facebook is expected.
- The invisible web. Although we think of them as all-knowing, Google is only able to track a portion of online data. There is the deep web, filled with unindexed websites, the nefarious dark web, and so-called “walled gardens” (g., Amazon and Facebook). They all keep their data to themselves.
- The public has learned about private browsers and how to turn off cookies.
In short, more and more details of online traffic will likely be excluded from view and out of reach for brand marketers as they try to future-proof their business by understanding their consumers.
Of course, there will always be work-arounds, and the big players will figure out what to do next, but there will be increasing transparency and ways to opt out. The upshot is that unless a regular ol’ brand collects and builds its own consumer data, it will be next to impossible to really know who their consumers are and what they want. Shifting to a direct-to-consumer model will become harder and harder to accomplish with each passing law. This will be good for what brick-and-mortar retail that remains, but bad for brands trying to guide their own futures.
In short, bottom-up grassroots marketing is an effective way to deliver relevant brand messaging to individual consumers, but it may become more difficult to accomplish in the coming years. When all the changes and restrictions related to consumer privacy are in place, marketers may have to fall waaaay back to the good old days (2016?) of demographic consumer clusters and interest targeting (using data that is owned by someone else). NAM values can certainly be found in demographic data, but it would be far better to pair bottom-up demographic data with the powerful top-down efficiency that comes through knowing what your audience believes and what they resist.
Meeting in the Middle or Top-Down?
Top-down marketing, or working at top scale, sounds like a dream, but it can also be the first (or final) step toward the commoditization of a brand. Living with rounded statistical models and distanced from meaningful (and messy) granular detail brings serious limitations. The East Coast/West Coast echo chambers become even more insulated as they fly over all their customers and never walk the streets. As momentum slows, brands then “swing for the fence” with broad discounting and productization of lifestyle marketing (i.e., a relevant concept replaced by “stuff”). It’s too much like work, running the bases and sliding into second. It doesn’t take long for loyal brand advocates to feel the difference in the game. Relevancy is lost in the interest of efficiency; sales may even go up, but profits spiral down.
Meeting in the Middle— Big Enough and Small Enough
The solution to maintaining a profitable brand is to work both ends: top-down for cost-efficient use of media, plus bottom-up relevancy to maintain consumer loyalty and, therefore, profits. The formula for this up/down mix depends on each brand.
We have been building a case to bottom-up relevancy, and understanding the New American Middle can bring a new level of relevancy to top-down marketing efforts.
Many national brands must create collateral from a top-down point of view that they then supply to their local or regional resellers. In most cases, big brands are forced to focus on product features and benefits or high-level messaging, because communicating local relevancy is too difficult. To bring local color, they would need a cactus in the Southwest or a lobster in the Northeast, palm trees in California, and maple trees in the upper Midwest. Some product categories, such as health or fitness, may successfully cross geographies, but many brands suffer when they are expressed through some common denominator. So, larger national brands must leave the local messaging in the hands of their resellers. In other words, the brand future is left to someone else’s insufficient message management.
Read the third and final part of our series on the impact of BIGNESS and the importance of expressing brand values to the New American Middle consumer.