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EMBA London Residence WeekEMBA London Residence Week London, July 1999

Mark BrownBoard Planning Director

Leo Burnett, London

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Advertising & Brand Strategies Towards C21st

• Leo Burnett - who we are

• Preparing for the New Consumer Age

• Preparing for the New Digital Age

• Planning for a New World of Brand Communications

• Case Study: McDonalds

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WHOWE

ARE

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WHOWEARE

Source: Financial World

Helped Build Some of the World’s Most Valuable Brands

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WHOWEARE

Build Strong Brand Relationships

• Our mission is to create deep, enduring relationships between users and brands…

• With daring, fresh, engaging ideas built on human truths….

• To create profitable, long-term growth for your business

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WHOWEARE

Agency Vision

• To be an indispensable source of our clients’ competitive advantage

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WHOWEARE

In short, Blue Chip Roster of 18 Global Full-Service

Clients

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WHOWEARE

Proof of Performance in Successful Partnerships

• Worldwide, over 500 brands ranked #1or #2

• Average client relationship is 16 years, vs. industry average of 5.3 years

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WHOWEARE

We Build Global Icon Brands

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WHOWEARE

1998

$ 6,810

1997 $ 5,980

1996

$ 5,821

1995 $ 5,387

1990

$ 3,585

1985

$ 1,868

1980 $ 635

1970 $ 392

1965 $ 185

1960 $ 117

1955 $ 70

Billings

SWHERE

WEARE

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WHERE WEARE

88 Offices Around the Globe

A Network that Networks

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WHERE WEARE

North America

•Chicago•Detroit•Los Angeles•Miami•Montreal•New York•Toronto

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WHERE WEARE

Central America• Guatemala City • Managua• Mexico City• Panama City• San Jose• San Juan• San Salvador• Santo Domingo• Tegucigalpa

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WHERE WEARE

South America• Asuncion• Bogota• Buenos Aires• Caracas• Lima• Montevideo• Quito• Santiago• Sao Paulo

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• Amsterdam• Brussels• Copenhagen• Dublin• Frankfurt• Lisbon• London• Madrid• Milan• Oslo• Paris• Stockholm• Zurich

Western Europe

WHERE WEARE

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• Athens• Bratislava• Bucharest• Budapest• Istanbul• Kiev• Moscow• Prague• Riga• Sofia• Tallinn• Vienna• Warsaw• Zagreb

Central and Eastern Europe

WHERE WEARE

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WHERE WEARE

Middle East and Africa• Beirut• Cairo• Damascus• Dubai• Harare• Jeddah• Johannesburg• Kuwait City• Tel Aviv

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WHERE WEARE

• Bangkok• Beijing• Calcutta• Dhaka• New Delhi• Guangzhou• Ho Chi Minh City• Hong Kong• Jakarta• Karachi• Kuala Lumpur• Manila• Mumbai• Seoul• Singapore• Shanghai• Taipei• Tokyo

Asia

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WHERE WEARE

• Adelaide• Brisbane• Melbourne• Sydney• Wellington

Australia

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WHOI

AM

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“Preparing for the New Consumer Age.”

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Life at the end of the 20th Century

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Science Fact NOT Science Fiction...

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Understanding our world today...

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Change

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“When the world changes fundamentally, survival depends on fundamental change.”

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“It’s as if several tornadoes were coming together at once. Individually their force might not be very powerful, but together they are awesome.”

Robert Tucker, Managing the Future

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Consumers are ‘Pulling’ change

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Clients are ‘Pushing’ change

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Technology

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No guarantee of future market dominance...

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Alliance Advantage

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The consumer at the centre of the world

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Privatisationof Risk

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Contradictory consumer

• Consumers are more demanding …. but they are also more ‘satisfied’

• Consumers are more rational and growing more savvy …. but they are also often confused

• Consumers say that they like personal approaches …. but remain suspicious of ‘relationship’ marketing techniques

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The old stereotypes don’t work ...

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Too much choice?

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Everyone is running out of time (% agreeing)

0

10

20

30

40

50

60

70

1991 1993 1995 1997 1998

52% 53%57% 61% 63%

Source: Henley Centre

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Prepared to pay to avoid queuing

Airport check in 26%

Leisure Park 24%

Cinema 19%

Supermarket 18%

Bank branch 11%

Source: Henley Centre/First Direct Time & Money Survey

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Time as currencyTime Pressure

Spend time

Time as currency

Save time Invest time

Value for time

Time deepeninge.g. Driving + making calls +

listening to tape/news + escapism

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Shift in the balance of power...

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RiskAverse

SNeed for trust brands

Source: The Henley Centre, Planning for Social Change 1998

Personal responsibility

Personal consequences

Trust gap

Loss of trustRiskExplosion in choice

No time No expertise No partners

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Consumer strategies for dealing with overchoice.

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Few of us are confident we will make the right choice

Holiday 56% New car 18%

H’hold electrical goods 40% Life insurance 16%

Car insurance 35% Home computer/PC 16%

Travel ticket 34% Health insurance 14%

Home insurance 28% Mortgage 12%

General banking 22% Investment products 12%

Source: Henley Centre Teleculture Futures

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A market dominated by scares

0

10

20

30

40

50

60

70

'87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98

I am neversure food issafe to eat

I would paymore for foodwith noadditives

Source: Henley Centre

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Dealing with overchoice

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Dealing with overchoice

“I’m not going to listen (to authorities), I’ll just do whatever I feel”

Disengage

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Dealing with overchoice

“I’m not going to listen (to authorities), I’ll just do whatever I feel”

Disengage

“The whole system is rotten, and we have to replace it”

Alternative Philosophy

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Dealing with overchoice

“I’m not going to listen (to authorities), I’ll just do whatever I feel”

Disengage

“The whole system is rotten, and we have to replace it”

Alternative Philosophy

“If brand X does it, it must be OK”

Prophet Seeking

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Dealing with overchoice

“I’m not going to listen (to authorities), I’ll just do whatever I feel”

Disengage

“The whole system is rotten, and we have to replace it”

Alternative Philosophy

“If brand X does it, it must be OK”

Prophet Seeking

“I just want the facts”

DIY Expert

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Modes serve as guides to consumption

Disengage AlternativePhilosophy

ProphetSeeking

DIY Expert

FoodPhilosophy

Eat whatyou want

There arepoisons inthe food

chain

Stick withbig brands

Readeverything

Brands Big brandsDiscounts

AlternativeBrands

Sainsbury’sKelloggs

Clarkson’scars

Gluck’swine

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Stores can’t meet the demand for organic food

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Decision delegation...

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Prepare for the age of the never satisfied consumer ...

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Empowered consumers ...

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Personal Power @.com

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The dawn of the New Consumer Age

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Real time responsiveness

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No hassle convenience

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Discounting

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“Share what you know. Learn what you don’t. Consumer reporting from actual consumers.”

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Mass customised choice

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Ultra-service

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World-class quality

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Charter of demands for the New Consumer Age

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A growing minority?...

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Unprecedented choice

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Simplification of choice

“One effect of fragmentation of consumer markets is that consumers become paralysed for choice. Faced with a jungle of choices, consumers will return to brands they trust.”

Source: John Naisbitt

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“Brands as signposts ….”

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From Trademarkto Trustmark

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TrustManagement

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Who do you trust?

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Who do you trust to be honest and fair?

64

33

106

3935

31 29

17

0

10

20

30

40

50

60

70

Your d

octo

r

Philips

Sony

Your c

hurc

h

Danon

e

Coca

Cola

McD

onald

s

Curre

nt g

over

nmen

t

Mult

inatio

nals

Source: Henley Centre, Frontiers ‘99 (Eur8)

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The opportunity for brands

Loss of Trust & No Partners

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Explosion of Choice & No Expertise

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Personal Responsibility & No Time

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Brand evolution

Brand asproduct

Brand as user image

Brand aspersonality

Brand as organisation

Source: Aaker; Frontiers 98/99

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Future brand evolution

Brand asproduct

Brand as user image

Brand aspersonality

Brand as organisation

Brand as relationship

Brand as life manager

Brand as trust guide

Source: Aaker; Frontiers 98/99

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The consumer at the centre of the world

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Conversationbetween thecustomer andthe brand

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Brands are ideas ...

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Inform, Entertain… SELL

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“A good basic selling idea, involvement and relevancy of course are as important as ever …”

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“…but in the advertising din of today, unless you make yourself noticed and believed, you ain’t got nothin’.”

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“Preparing for the New Creative Age.”

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Impact of technology on advertising communications

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From a monologue to a dialogue world...

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Understand the new digital media...

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Immediacy and impact...

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The fourth era: The Creative Age

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“This is the age of creativity because that’s where new technology wants us to go next.”

John Kao, Jamming

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Exploiting new technology...

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The age of golden opportunity...

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An industry used to change...

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A vision of the future...

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Convergence...

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Information

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Information

Transaction

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Information

Transaction

Communication

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Information

Transaction

Communication

Entertainment

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One core idea of and about the brand...

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Brands will become more powerful in the digital world...

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Velocity in advertising and communications

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Planning for a New world of Brand Communications

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“Markets change faster than marketing…”

Kotler

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C21st

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“The industry will change…”

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“Advertising will only be part of what we do...

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“Change or die…”

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GROWTH

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Four benefits of a strong brand

• 1. Competitive shield

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Four benefits of a strong brand

• 1. Competitive shield

• 2. Elevates the buying decision

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Four benefits of a strong brand

• 1. Competitive shield

• 2. Elevates the buying decision

• 3. Provides a bridge to other markets

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Four benefits of a strong brand

• 1. Competitive shield

• 2. Elevates the buying decision

• 3. Provides a bridge to other markets

• 4. It’s a powerful glue

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Collaboration

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Thinking withinthe framework inwhich problemswere createdcannot solveproblems ….

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A simple common goal...

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InformExciteMotivate SELL

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Open-systems model

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Hard Reality

Giant Step

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Unconfinedby media

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Holisticapproach -everythingcontributes

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HOW WEWORK

Life Brands

The Lab

Innovations

Stars

Leo Direct

Hard Reality

Leo Events

@leoburnett

BRANDLeo Sports

Leo Burnett Advertising

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HOW WEWORK

• The Brand is at the heart of Leo Burnett

• The best way to grow a brand is to have a cross-functional Brand Team managing it

• The Brand Team works with the client to determine the optimum solution for the brand

The Brand Team

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Case Study: McDonalds

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Leo Burnett servicing McDonalds in many areas

Brand advertising

PromotionalAdvertising

PromotionalMerchandise

Event Marketing

Sponsorship

Sports marketing

Product development

Retail planning

Internet

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QUESTIONS?

That’s all folks