Does Brand Marketing Matter in a World of Digital Assistants?
In the era of digital assistants, is brand marketing relevant? Some believe branding today is ubiquitous, seen in the growth of influencer marketing, consumer Instagram accounts, and celebrity mega-brands and conglomerates. But when it comes to these new platforms, digital assistants, others suggest brand marketing and management will have its limitations given the data-controlled purchasing environment. The power will reside with the platforms, as well as those with data analytics expertise.
In the HBR article, “Marketing in the Age of Alexa” by Niraj Dawar and Neil Bendle, they paint the picture of this marketing future stating, “Brands will need to shift the focus of their marketing from consumers to AI platforms, seeking to influence platforms in order to get preferential positioning on AI assistants.” My concern is that this statement might be misunderstood and that marketers will think traditional elements of brand strategy and experience management might no longer be relevant as AI assistants gain in prominence.
To be sure, understanding how these platforms and their algorithms work and data analytics will be critical to winning in this future marketplace, yet I’d argue that brand strategy and experience management are that much more critical in this newly forming environment. If anything, traditional marketing disciplines such as brand and product positioning, consumer understanding, and go-to-market, pricing, and promotional strategies will remain important, and those who have not developed and deepened these competencies will be the ones to fall behind rather than those who double-down on them. The model may need to change, but the competencies are still relevant.
We believe there are 6 areas that will remain important or matter even more in the world of digital assistants, today and in the future:
1. Brand awareness. Given how consumers currently use digital assistants, a brand will want to be top of mind. According to a Microsoft study (1), 39 percent of shoppers create shopping lists interacting with their digital assistants, so you want your brand to be the one they are actively adding to their lists. Right now, fewer consumers are actively using digital assistants to manage the shopping process itself with just 25 percent making a purchase, 16 percent changing an order, and 14 percent canceling an order. Similarly, according to a study by PwC (2), 76 percent of users would prefer to shop online vs. use their voice assistant. This would imply that the days of digital assistants proactively making purchase decisions and managing this process for consumers without any consumer input is some time off. In fact, we found that only 13 percent of consumers agreed with the statement, “I like the idea of letting a smart assistant device like Amazon’s Alexa make shopping decisions for me” (3). Consumers aren’t quite ready to hand over decision-making completely to an algorithm. Even if and when that future takes shape, imagine a digital assistant making a purchase decision for a consumer and the shopper finding an unfamiliar product when opening the delivery box at home. Will the trust of the digital assistant in making that decision transfer to the human being in accepting that purchase? Or, will that shopper have had to been familiar with the brand already? More research and time will tell.
2. Brand and product positioning. For digital assistant platforms to curate a product consideration set and know to recommend your brand and product offering, the positioning will need to be well defined and communicated in a clear, consistent way. To do that, marketers still need to understand consumer segments and underlying consumer motivations, be able to define consumer targets, and align an offering to the value proposition consumers are seeking. Yes, a marketer will then need to understand and manage towards how a platform’s algorithm is using that information to inform purchase options, but to ensure a good match you’ll first need to understand and work with the consumer fundamentals underlying the system.
3. Value proposition. When developing products, it will continue to be important to get the value proposition right. While it seems the use of these devices will squeeze prices and margins more, consumer search data suggests that it isn’t consumers that are driving the race to the bottom. The World Economic Forum reported on an analysis of Google Search data that showed across both low and high involvement categories (e.g., Paper Towels vs. Make-Up), consumers are searching for the “best” more often than “cheap” goods (4). Thus, products need to be developed that match consumer needs and desires and have an appropriate pricing structure. Nothing new there. What is new is that consumers have opened the door for and have higher expectation of brands to deliver more than just a product as part of the overall value proposition, seeking a full experience and the opportunity to have a deeper consumer-brand relationship. This leads to our next point.
4. Deep consumer understanding. Certainly, leveraging the data hopefully made available by these platforms will be powerful and informative, but that data will not be the only consumer understanding required to inform how to market to consumers and the algorithms in the future. Deep consumer understanding will inform customer experience and solutions, content strategy, and product innovation, to name just a few. For example, today through a deeper understanding of a consumer journey and having a good understanding of what consumers are asking and how, brands can create relevant content that can drive SEO performance and, in turn, achieve a zero position, getting the brand pulled into a digital assistant’s spoken response. Relevant and useful content will also be more acceptable to consumers. According to research by Google (5), consumers are open to receiving branding messages through their devices: 48 percent of those with devices “would like to receive personalized tips and information from brands to make their lives easier” and 42 percent “would like to receive info about upcoming events or activities from brands.” In order for consumers to embrace this form of marketing and deepen their relationships with brands, companies must have a deep understanding of their consumers.
Finally, product innovation will be a way that brands continue to differentiate themselves, which requires understanding of consumer needs and pain points. While data can provide some insight to consumer preferences and needs, unearthing breakthrough ideas usually takes qualitative consumer research and observation of human behavior. Consumers do not use all products through a digital device; most products are used in the context of people’s daily lives when they are at home, at work, or on the go. Unlocking new needs will take more than just analyzing reams of data.
5. Brand voice, tone, and manner. Digital assistants are conversational agents talking directly to your consumers. You’ll want what is communicated about your brand to not just deliver functional information, but also to connect on an emotional level. What gets communicated should be done so in a way that is clear, feels like a person, and has personality and character. In fact, according to research by Microsoft1, more than “1/3 of consumers expect brands to create personalized shopping assistants (chatbot or digital assistant) that reflects their brand personality and voice.” For example, will your brand be a trusted resource delivering information with a serious tone supported by scientific claims and facts, or does your brand deliver positive experiences that will be communicated with an upbeat, humorous character?
6. Pricing and promotion expertise. As sales continue to shift online and devices such as personal digital assistants allow for more 1-to-1 selling, pricing and promotion strategies will need to become more sophisticated. According to the Google research4 mentioned previously, 52 percent of those with devices “would like to receive info about deals, sales, and promotions from brands.” What are the economics of each individual customer that will allow you to tailor the offers you tee up to which consumers at what time?
It’s undeniable that digital assistants will play a powerful role in the modern shopper journey, but it doesn’t mean all aspects of brand management and marketing become irrelevant. Rather, the toolkit needs to be applied to a new playbook. Branding won’t go away, but brand management needs to be redefined. If anything, brand marketers will have to become even more sophisticated in applying the traditional toolkit or be left behind.
Sources:
(1) Microsoft/Bing Ads: Consumer Adoption of Digital Assistants and Voice Technology, March 2018.
(2) PwC, “Consumer Intelligence Series: Prepare for the voice revolution,” 2018. https://www.pwc.com/us/en/advisory-services/publications/consumer-intelligence-series/pwc-voice-assistants.pdf
(3) The Agency Oneto data from an omnibus study conducted by ProdegeMR with 500 U.S. adults ages 18+, June 2018.
(4) Nayyar, Sarita, Ingilizian, Zara. “Operating Models for the Future of Consumption,” World Economic Forum & Accenture, January 2018. Google, World Economic Forum: The FMCG Consumer – Utilitarian or Experiential?, 2017. https://www.weforum.org/reports/operating-models-for-the-future-of-consumption
(5) Google / Peerless Insights, August 2017. https://www.thinkwithgoogle.com/data-collections/voice-assistance-emerging-technologies/
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