Keeping it simple: 4 roles for Digital for FMCG brands

If you’re reading this, you’ve probably got a digital marketing presence. (It is 2016 after all!). However, your digital activities are not working, or you’re not sure if they’re working, or you wonder if they could work better.

Be reassured that you are not alone. “FMCG brands struggle with digital.”   A Bain report highlights that even leading companies are not fully advanced:

Few have articulated a digital strategy, and most are not fully using digital technology across the value chain.
Some industry leaders have begun to experiment and innovate, but even they seem to systematically underestimate the power and potential of the Internet to transform businesses.

There is pressure to be online “as that’s where consumers are” and because “everyone else is” and because “it’s cheaper.”

However, those reasons (some of which may even be true!) are not sufficient.

Your digital success relies on a clear overall strategy. Digital is a medium and a tool. Your use of it relies on the same analytical rigour as your broad business strategy:

  • what are we trying to achieve?
  • why do we want to achieve it?
  • why do we think we can achieve it?
  • how should we achieve it?
  • (and what will it look like once we have achieved it?)


So in the spirit of keeping it simple, this article presents 4 roles for your digital strategy, and some steps below to ensure it is effective.

4 roles and the 4 Cs of digital

  1. e-Commerce
  2. Connectivity
  3. building Credentials
  4. Communication (specifically advertising)

Reason 1: e-Commerce i.e. selling stuff

E-commerce for FMCG brands is growing fast (up 28% in 2014). However, this still represents a small proportion of overall sales (3.9% according to this Kantar study) and even less in developing economies.


The important challenge for brands is to get onto a customer’s  online shopping list. Therefore, working closely with retailers (whether Amazon, Alibaba, or with traditional supermarket retailers, such as Carrefour) is often critical.

Since more than half of shoppers claim to repeat buy the same brands on each online shopping “trip”, you need to be on that list!

This is not a loyalty challenge.

Don’t interpret this as a loyalty issue! This is a customer acquisition problem. It may well be that once you have acquired someone they (by default of the shopping software in use) remain slightly more loyal. However, you need to be focussed on adding more customers.

It’s also important to realise your category’s role in consumers’ lives. Unsurprisingly, some categories (think diapers, baby food, etc.) have greater importance online since they cater to young families, are frequently bought…and are physically bulky/heavy.

And some countries are significantly more developed on the pre-requisites for a large e-commerce industry (e.g. fast internet access, trusted payment systems, delivery infrastructure reliability).

In short, it does matter that you focus on e-commerce as a channel. The Kantar report above highlights some key winners and losers in this. Worth a read! Be clear of course that there is no single solution for every brand. It changes depending on your category, your country, and your consumers.

Reason 2: connecting with consumers

Some brands can build a more memorable experience with their shoppers by providing added value through digital. I believe there are different ways of doing this: whether via the product itself (as with the toothbrush example below) or via other consumer-centric solutions (the re-order buttons).

Oral B has a bluetooth connected toothbrush that gives “real-time feedback on your brushing”

Amazon’s Dash buttons automate re-ordering of key brands.

Not only that, they provide permanent visual reminders of your “favourite” brands:

Amazon lets you shop with a REAL button: New Dash button allows a single product to be reordered

As the creation of the Internet of Things accelerates, we will see more and more devices talk to each other, and to us.



Whilst your packet of rice might not have much to actually say to you, it’s important for brands that they influence the “conversation” that leads to a retail purchase.

This moves brands from products or commodities into services. Evian has a solution that simplifies re-ordering of heavy bottles of water:

Your brand will be affected by increasingly-connected homes and consumers. Have you imagined how? (Get in contact and I’d love to work with you on it – or give you some further tips on how to start planning).

Reason 3: building credentials

Social media can help to publicise your brand amongst peer groups, friends and family.

This is not sufficient to achieve your sales ambitions, but can be leveraged, especially in some markets:


Think about what you do that allows your audience or customers to amplify your message. Don’t think about your online audience merely as the end of the transaction. Think about how they can be motivated to share/like/publicise/retweet your brand to their peers. Use the audience to be the media as well. This increases your all-important reach.

Reason 4: communication: i.e. advertising to people

The internet reaches people. We know that.

However, don’t for one moment think that people are automatically engaged in your communication online!

Your potential consumer is several times more likely to have twins, than to click on an online ad!


Visibility still matters – as it does in traditional media such as TV.

Reach is a defining value of a strong advertising campaign. The more people who see it, the more likely they are to buy it.

In fact, McKinsey highlight the importance of brand fame in explaining why developing market consumers trust friends.

“The more people I know who are using a product,” consumers reason, “the more confident I can be that it will not fall apart, malfunction, or otherwise embarrass me.”

It follows that the bigger the brand – and the bigger it is perceived to be – the better.

This is a critical point for FMCG brands – that big brands are big because lots of people buy them (and I’d love you to read more about the importance of penetration on this site if you haven’t already)

Going digital and making it work

So, assuming your want to build your FMCG brands’ digital effectiveness, one way to start is here:

Be clear on the campaign objective

This applies online as much as offline. What are you trying to achieve?


  • enhance the shopping experience
  • drive equity/brand engagement (e.g. youtube, Facebook)
  • drive awareness of promotion/call to action (geo-marketing)

Think mobile

With consumers increasingly consuming content on mobile devices, don’t copy & paste from the desktop.

Especially in the context of video, people spend longer (2-3 times) watching content on a desktop vs perhaps 10 seconds on mobile.

And even within mobile, the type of content consumed has changed. Desktop-like Landscape videos (where a user needs to rotate their phone) are giving way to more user-friendly vertical videos.

Think partnership: brands

Consumers don’t use your product or brand in isolation. Cereal goes with milk. Coffee goes with snacks. Retailer buyers control large categories (e.g. dry goods, fresh produce).

How can you partner with other brands, categories or channel partners to make activity more relevant for your shared consumers – and to increase visibility in store?

There are some great examples around. Get in contact and I’ve probably encountered some for your category.

Think partnership: providers

Finally, don’t ignore your digital, media and strategy partners. Ask them about the best examples. Challenge them to work to test new solutions for you. Learn.

It remains true that FMCG brands struggle with digital but external providers know a lot and can and should educate their clients on possibilities.

Work together. Digital is a tool, but it’s still being refined. Test and learn.


How to get an extra 5% topline growth? The answer is NOT intuitive.

Most companies still make too many decisions based on intution. This is despite the fact that increasing amounts of data (and increasingly powerful ways of analysing it) are now readily available.

Whilst, of course, intution or “gut feel” matter, they can be misleading. Just because you think you are right…does not mean that you are (as the leader of every failing business ever could probably tell you – afterwards).

I set out to work out what the challenges are, what the solutions are, and why it matters.


I have recently completed an Executive MBA at INSEAD business school. (It was a fabulous experience –  do get in contact if you’d like to know more about it).

As part of my Masters degree I needed to submit 3 lengthy essays. One of these already appears on this site here. However, my final dissertation was even more substantial and examined The future of decision making in the Big Data era.

I interviewed a significant number of industry leaders, especially in consumer goods businesses. It is clear that there are huge opportunities to better align Strategy with the Data available for decision making; and to better utilise people and teams to implement relevant actions that follow.

If you feel your company already does this brilliantly, superb! (I’d love to hear from you what works so well).

If not, do not worry. You are not alone!

Few organisations believe they are advantaged in all areas.

In fact, in a Bain & Company consulting study of 400 large companies:

only 4% of companies said they had the right people, tools, data and intent to draw meaningful insights from that data—and to act on them

Significant benefit

These missed opportunities are a commercial issue. An MIT study found that firms that emphasise decision-making based on data…performed 5-6% better—as measured by output and performance*—than those that rely on intuition and experience for decision-making

Take action

If you would like to receive a copy of my report on what companies can do better, do get in contact.

Three solutions for better FMCG marketing

Marketing: alchemy, magic or science?

magic book image

Marketing is a profession often viewed with suspicion. Some see it as no better than medieval alchemy: a profession which attempts to turn worthless base metals into glittering items of value.

There are others who see it as only a creative calling in which a spark of magic is required to bring brilliant unique ideas to life.

Most do not recognise that it is also a science. Data, logical conclusions and insights are required before we even attempt to turn base materials into something of greater value or before the creative forces can be unleashed.

As those who’ve worked with me will know, this is something I started to explore a few years ago, but in the last few months I have scoured academic journals for insights to build my knowledge.

But the work I’ve learnt from has been going on for a long time. Professor Andrew Ehrenberg (and many illustrious others) had identified law-like patterns in brand metrics many decades ago. The largest revelation from all of this has been in realising that what I had taken to be unique patterns in my brand’s data were not unique and, often, that the implications are not what I had predicted. In short, I was wrong. Science was right.

This essay summarises my learnings. The learning continues though. To those who read my website regularly, I should warn you that this article is much longer than normal as it goes much deeper into insights and their implications. I hope you enjoy it though. (If you want to read more, then there are many references at the end of the article. If you want to read less search here for edited highlights)

As economist John Maynard Kenyes highlighted early in the last century, unlearning what we already thought we knew is the really hard bit!

Three solutions for better FMCG marketing

Target penetration growth, not loyalty growth

Strive to be distinctive, not different

Be memorable, not persuasive

These three statements are so easy to write, but so at odds with most perceptions of how to grow FMCG brands.

Hence the title of the next section:

The dangers of common sense

Before diving into the theory, the data and the logic, let’s start with a simple formula for a brand’s Total Revenue:

Total revenue

= Number of Buyers * Frequency of Purchase * Spend per purchase occasion

Seemingly nothing radical in that: if the goal of a business is to grow revenue, then logically any of the three factors can be influenced.

However this perfectly logical assumption is a trap. I now know that, whilst one may believe other factors are changing, and that you have strategies to drive loyalty and to encourage frequency, these are largely a fallacy.

Practically only numbers of buyers alter significantly between brands in a category. Put very simply, big brands are big because lots of people buy them.

The rest of this essay reviews the data and empirical proofs that underpin this and, importantly, reviews the implications for marketers in moving beyond this empirical reality.

Penetration – big is beautiful

Loyalty, share of requirements, or purchase frequency do not move significantly.

When packaged-goods brands grow, both penetration and loyalty increase, but penetration grows two or three times more than loyalty” (Romaniuk, 2013).

Big brands have more buyers. They do also have a slight advantage in that the largest brands not only have higher penetration, but also have slightly higher loyalty levels. This “double jeopardy” phenomenon was formalised for FMCG brands in 1990 by Ehrenberg, Goodhardt, and Barwise. Indeed well before I discovered this, the double jeopardy reality had already been “revisited, again” by Ehrenberg and Goodhardt in 2002.

This is well proven data but it is amazing how many marketers (this author included a while ago) are not aware of this. And it is robust data, confirmed in 2012 by Uncles, Kennedy et al. using data spanning 25 years, across 50+ categories and 60 data sets.  It is so important that, whilst I will not use data to confirm academic knowledge throughout this article, I will illustrate it here. This example (using data in the public domain) is a shampoo category in the UK. (Source: TNS)

Brands Market share (%) Annual penetration % Purchase frequency (avg.)
Average   1.9
Head & Shoulders 11 13 2.3
Pantene 9 11 2.3
Herbal Essences 5 8 1.8
L’Oreal Elvive 5 8 1.9
Dove 5 9 1.6
Sunsik 5 8 1.7
Vosene 2 3 1.7

We can see that the leading brand has a share 5 times larger than the smallest. However, its purchase frequency is only 35% higher. The penetration (i.e. Head & Shoulders’ much higher number of buyers) is what is driving performance. It is double jeopardy in action.

Knowing this pattern exists in consumer markets makes it easy to spot it when you look. (Find some panel data now and try. Contact me and let me know how it looks!)

For me, this was a significant learning. I have previously created superb, seemingly compelling strategies to grow loyalty. However, academia shows that any minor gains in loyalty were more likely a statistical fluctuation, or a feature of successfully growing penetration instead.

I still didn’t entirely believe it so I looked further to understand if this is truly widespread. I discovered that a study of 880 entries in the Institute of Practitioners in Advertising annual effectiveness awards confirmed this finding.  “Focusing on penetration, not loyalty” was the key to success (even in strategies that had actually set out to grow a brand through increasing loyalty!).

In a related article one of those authors titled the piece “the dangers of common sense”, so apparently logical is the Revenue equation at the start of the previous section. Binet was “shocked to discover that what most marketing people do and what actually works are really quite different.” (At least I was not alone in prevoiusly failing to understand!).

To check this in my brand world, I looked back on past data for brands I have worked with. My own data conforms to the Double Jeopardy pattern. My conclusions assumed something else. In a related point, the agencies that we as a client paid money to, were also often unaware of the Double Jeopardy phenomenon. I have uncovered a wonderful example from 2004. A well-known global research agency highlighted that our brand was 2nd in the market with smaller penetration than the leader. A further slide proclaimed the seemingly interesting “almost identical frequency of purchase between brands.” However, if that agency or I had been aware of Double Jeopardy this headline would have been unsurprising! It is the nature of FMCG markets as shown by Ehrenberg and others decades ago!


If brands are big primarily because of penetration (i.e. number of buyers) then it is important to attract new users.

Perhaps no surprise, but in the next section I’ve reviewed more of what it means to grow through acquiring new users, specifically that they are going to be light buyers (not average, medium …or loyal).

Growth comes from light buyers

To understand buyer behaviour, I’ve been using data such as that below for many years. (This is actual data, but anonymised by the removal of category/country titles!)

% Buyers
1 time 42.6
2 times 17.1
3 times 9
4 times 6.6
5 times 4.9
6 times 4.7
7 times 3.6
8 times 2.4
9 times 1.2
10 times 1.1
>=11 times 6.8

It shows, apparently, that we have a massive opportunity to encourage people to buy the category more often. 60% of them buy it only once or twice a year.

In fact, what I only realise – and realise very clearly – from reviewing the academic research, is that frequency/loyalty charts typically have this shape, with most buyers being very occasional! This shape – the “negative binomial distribution” effect on brands (captured as “NBD Dirichlet” by Goodhardt, Ehrenberg and Chatfield in 1984) typically shows the same pattern where most buyers are “light”, and a brand relies for its sales on the occasional purchases by lots of such buyers.

The reality of what happens is that the users who are added are “light” users. In any time period, a new user who buys once is going to be light (vs, for example, the rare 7% who buy monthly in the annual data above).

This has been a key learning! It is easy for marketers to make false assumptions if they only look at their current data (e.g. the chart above). I have used datasuch as that above to focus on building loyalty and repeat rates. (The same global research agency presentation I referred to above went on to make a strategic recommendation to invest in frequency-building activities). However, realising that all categories look like this means I need to understand brand and category performance in a different way.

This does not necessarily mean that there is no such thing as a customer who appears loyal. Reichheld & Teal argue for such customers’ importance in their 1996 book, The Loyalty Effect. However, I have come to realize that the promotion of loyalty as a key driving force is not borne out by FMCG data. In services (admittedly not FMCG) a 1990 HBR article by Reichheld and Sasser suggested that “Companies can boost profits by almost 100% by retaining just 5% more of their customers.” When a trusted source such as the Harvard Business Review makes such a bold claim, the world pays attention. (For an alternative view it is interesting to read Professor Sharp’s dissection of the “loyalty myth” of the HBR article here)

However, the FMCG data (summarised by a quote from Jenni Romaniuk at the start of previous section), highlights that even if loyalty is important, penetration is much more significant. Having belatedly learnt that fact, I have now been able to see it in my own data that I had wrongly interpreted before.


Double Jeopardy highlights that Penetration matters, and NBD Dirichlet shows that brands sell mostly to large numbers of light buyers. Those two thoughts require an adjustment for many marketers. Loyalty programs, CRM, tight targeting on social media: all such activities make a lot less sense and need to be seen in a different light (with recommendations to follow in a future article. Contact me if you’d like a preview of my advice on that).

The challenge then is how to attract trial from the all-important light buyers.

Salience matters

To answer that challenge I have looked back on Ehrenhberg’s papers from the 1980s and beyond and also Professor Sharp’s research.  If growth depends on light buyers (who by their very definition do not purchase you very often) a brand owner needs to do everything to make the brand stand out. This, so far, does not present anything radical. Marketing strategies the world over will talk about raising awareness!

However, to grow a brand, Sharp talks about a brand needing both mental and physical availability.

In a buying situation the brand must be salient. At its simplest that means being visible on the shelf in the supermarket from which consumers buy this category, or being in the stores where such goods are bought. (This is distribution and merchandising, creating “physical availability”).

In that situation the potential consumer needs to recall the brand when faced with it on shelf. This is “mental availability”. The implication from this is that brands need to do everything possible to maximise linkages between communication outside the store (e.g. advertising) and communication inside the store (which would always be packaging, and could be point of sale materials). A brand needs constantly to build salience.


All of the above has a significant media planning implication. I have wrestled with media planning in multiple markets. There is a constant tension between having strong “bursts” (heavy investment levels in a short period) vs weaker “maintenance” / “sustaining” investment. The argument for strong bursts is that it “cuts through” and gets noticed. However, from my recent readings I am now more strongly in favour of maintenance investment levels.

The danger of a “burst” strategy is that it could be 2-3 months since a consumer was last exposed to my brand messages. A lower level, but more continuous media strategy makes sense. “Mental Availability” will be stronger – i.e. the chance of being thought of in the buying situation. (This, of course, does not remove the need to create strong creative work that gets noticed, but I will come back to that below).

There are other implications about measuring the impact of advertising, especially vs competitors. A move to seemingly weaker advertising needs a more refined research methodology to capture its impact on long term memories of target consumers. We need to be mindful of research effects from brand scale. Romaniuk highlights that the classic Top-of-mind awareness indicator “is highly biased to brand users (and particularly heavy users) and will favor larger share brands. For the same reason, it is a poor metric choice for tracking a small (potentially growing) brand.”

The differentiation myth

To build salience in the form of “mental availability” large FMCG brands typically communicate through advertising. Hours (and hours!) are spent refining advertising messages and campaigns. Many marketers are brought up on the idea of Unique Selling Points. Reeves “created” the concept in the 1960s so it has had a long time to be established. Trout and Rivkin reminded everyone to “Differentiate or Die” in 2000.

However, whilst it seems conceptually appealing, a review of (again!) the data shows that all is not as we might expect.

What the data highlights is that most consumers buy from a repertoire of brands. In Sharp’s words they are “polygamously loyal” to a range of brands not an individual one. Brands gain most of their purchases from people who also buy other brands in the category. This is also consistent with the NBD Dirichlet fact that most buyers of my brand are “light”.

This means of course that advertising doesn’t convert or persuade! (What it does instead is remind, and build salient memories that connect the product to the brand and the category. It can then be recalled in buying situations).

In their 2012 article, It’s a Dirichlet World, Sharp et al confirm that “loyalties are distributed across consumers with little differentiation between brands, such that each brand in effect sells to all category buyers rather than a particular segment”. Other studies (e.g. Uncles et al 2012) explain this further. “From a consumer viewpoint, many people see competing brands as substitutable”. (The data in these studies is remarkable. It really is worth a read!)

Again, I didn’t fully believe this so looked for more confirmation. In an article by research agency, Millward Brown, reviewing their own BrandZ database of 6000 brand and category buyers, they confirm that “on average, the proportion of people willing to endorse any brand as “different from other brands of (a specific category) is low… Among those that consider a brand acceptable, an average of 18 percent agreed that it was different from others

Put another way, people happily buy a brand even though in 82% of cases they do not think it is different from others in the category.


This means that advertising does not “persuade” people of the merits of one brand over the other. Consumers remain somewhat indifferent.

What becomes important is to ensure consumers think of the brand as a suitable substitute in the category. This means truly understanding how the consumer thinks of the category and how your brand can fit into that. It is very different from trying to persuade them of a unique feature of your brand. It is actually about showing them that you are a good example of your category: a very different challenge from the USP way of thinking.

Time for magic

The title of this article raised the idea that marketing may contain a magical creative spark.

What I realise more clearly now is that in a “Dirichlet World” where growth depends on new buyers and where loyalty is not a likely reality, creativity matters.

The largest brands in a category score highest on generic attribute measures for that category (e.g. refreshing, washes whiter, tastes good). Consumers see them as a good example of their category.

In the section above we reviewed that consumers see competing brands as largely interchangeable.

What matters is to be distinctive. This is the magic of marketing: to turn the generic into the memorable. Unilever’s washing brand, Persil/Omo, embraces the idea that “dirt is good”.  The benefit is still that the product washes whiter, but the story is distinctive. The benefit is not unique. The ingredients are not unique (or are unlikely to offer any sustainable advantage). However the story becomes memorable for the way it is dramatised.

This, for me, is a powerful insight. In a previous role I was presented with a marketing concept from our global team to launch a new product. Striving to be different it avoided the core category attributes that the market leaders already “owned” and defined a range of unique selling propositions to stand out from the crowd.

However, what I see better now is that what we needed was not a new set of rational benefits (which were of low interest to the consumer as the top ones were already “owned”). What we needed was a creative way of branding our version of the category core benefits. The sad fact is that we already had it – a creative world in which our brand already lived, distinctively! Our creative challenge should have been to say that we now also had a product from that same distinctive world that did everything the category leaders said their products did. We needed to brand the generic, not try to attach our brand to meaningless USPs.

At the time I didn’t have the evidence to explain why pursuing the generic attributes was a valid strategy, so ingrained is the quest for a USP into the mind of the modern marketer.

One rationale is that consumers don’t see brands as that different, no one owns an attribute, and there are few persuaded, loyal consumers. However, there are some sampling realities too.

Scriven and Goodhardt reviewing “The Ehrenberg Legacy” in the Journal of Advertising Research in 2012 highlighted that “Users of a brand tend to say positive things about it (e.g., “It tastes nice”; “I like it”), whereas non-users are less likely to comment”. Usage drives attitude! “Whether people say that a brand has a given attribute largely depends on whether or not they buy the brand” (Romaniuk, Sharp, 2000)

So, brands with the largest penetration (user base) score highest on category attributes. (I read this, didn’t believe it, then found it hidden in old marketing data from brands I have managed. I saw that academic experts were right, once again, and that my original interpretation of the data was wrong!)

Consumers are not really “persuaded” of a brand’s unique attributes. Ehrenberg’s view of advertising was that it works by publicising a brand not by persuasion. If consumers were “persuaded” of rational brand benefits they would a) likely be loyal, b) stay consistent in their beliefs [but only about 50% express the same view in subsequent research interviews (e.g. Romaniuk et al. 2012)]. In Ehrenberg’s words in a 1997 article, the role of advertising is more as a “nudge” (a weak, reminding force) than as a strong persuader.

More bluntly an Admap 2009 article confirms that “Ads must be memorable, not persuasive, to influence choice.” I see that this does make sense. If FMCG brands grow mostly through attracting new buyers or reminding light ones, then a brand’s communication needs to be remembered in store to “nudge” purchase behavior. Salience matters (and continuous media strategy reaching large numbers of people is more important than shorter bursts).


From an advertising and creativity perspective this all shows that we should not be afraid of category generics.

It is important to understand better what data actually proves. It is remarkably liberating to realise that the largest brand will always appear to “own” the category generics. Causality is not clear in a snapshot of the data. Respondents agree with the statements because they have experience of (i.e. buy) the brand. They do not necessarily buy the brand because they see the attributes as unique.

The largest brand appears to “own” attributes but that is simply the way consumers respond (saying positive things more about brands they buy). More buyers means high attribute agreement.

Seeking a “USP” can be a dangerous trap. Consumers buy a category for its fundamental attributes. The task for a brand is to turn those attributes into something memorable for that brand. The magic in marketing is in branding the generic.

Dumb data and alchemy


At the start of this article I posed the observation that marketing is perceived as little better than alchemy. However, I don’t believe it is possible to persuade someone to keep spending money buying a “bad” product.  It is not possible to turn lead into gold.

However, I do think that many marketers (this one included) have been guilty for many years of trying a similar trick, of trying to convert flawed knowledge of base data patterns into valuable strategic recommendations.

If we look at our brand’s data and conclude that we will grow by increasing loyalty (rather than penetration), we fail to understand the science.

Moving further, if we recognise that loyalty is a statistical artefact related to scale and penetration, then our media strategies need to act as constant reminders to the uninterested potential consumer. Strategies that “burst” to better “convert” competitor users are likely to fail. We need constant efforts to stay salient, to nudge and to top up mental availability.

If advertising does not really “persuade” because no sizeable FMCG brands consist of entirely 100% loyal converts, then its role is to be memorable. As described above we need to be distinctive and embrace the generic motivations of the category.

The science of marketing

To return to the title of this essay, marketing is not alchemy – though many alchemists still practice here.

It can be magical (and it can be a wonderful thing when brilliant creatives are given a tight brief and turn the generic into the memorable).

What I hope I have shown through this article is that it is certainly much more of a science than many (including this writer) have ever realised.  Key fundamentals were the Double Jeopardy law and the NBD Dirichlet model – which you should read if you haven’t already!

I then started to ask “So what..?” and looked for implications from those laws. That uncovered the fact that (despite my best efforts over many years!) consumers don’t see brands in a category as very different from each other.

I learnt that research data appears to paint a certain picture (e.g. of the market leader “owning” a set of category attributes), but is often misleading.

I then started to review how advertising and media planning should work (through increasing salience for lots of non/light buyers) – which challenges a huge range of other theories (e.g. of advertising as persuasion).

Whilst this article packages significant concepts in one document there is more to be done: to understand implications fully, to check aberrations, to build better research plans, and to optimise communications strategies.

The learnings from my research has helped me build stronger brands. I just wish I had known all of the facts sooner! If you would like to know more and think I could help you or your business, do get in contact.

In the meantime, happy discovering…


Some sources been directly cited above. Others were a means to an end: they informed my thinking and pointed me off in new directions to explore even if they are not specifically referenced in the essay. I am particularly indebted to Professor Byron Sharp and to Martin Weigel for their excellent guides to these topics.

  • N Barnard and Prof A S C Ehrenberg, Advertising: Strongly Persuasive or Nudging? Journal of Advertising Research
Vol. 37, No. 1, January/February 1997
  • Binet L,
 The dangers of common sense, Market Leader Quarter 3, June 2009
  • Binet, L and Field, P; Empirical Generalizations about Advertising Campaign Success. Journal of Advertising Research, June 2009
  • H Bloom, R Kennedy, A Ehrenberg and N Barnard, Brand advertising as creative publicity, Journal of Advertising Research
Vol. 42, No. 4, July/August 2002
  • M Bongers and J Hofmeyr, Why Modeling Averages Is not Good Enough: A Critique of the Law of Double Jeopardy, 
Journal of Advertising Research, Vol. 50, No. 3, 2010
  • P Buckley,
Exploiting the implicit: I believe it’s what brands don’t say that matters, 
 WPP Atticus Awards 2012
  • Bullmore: Advertising and its Audience. Advertising Association lecture 1998
  • Ehrenberg, A; Goodhardt, G, Double Jeopardy Revisited, Again, March 2002, Marketing Research; Spring2002, Vol. 14 Issue 1, p40
  • Ehrenberg, A S C, G G Goodhardt, and T P Barwise (1990), Double Jeopardy revisited Journal of Marketing, 54 (3), 82-91
  • T Ewing, B Pankauskas, R Brown and J Chen, Research in a world without questions, ESOMAR
Congress, Atlanta, September 2012
  • Goodhardt, G J, A S C Ehrenberg, and C Chatfield, “The Dirichlet: A comprehensive model of buying behaviour,” Journal of the Royal Statistical Society, 1984, 147 (5), 621-55.
  • R Heath and P Feldwick, Fifty years using the wrong model of advertising, International Journal of Market Research Vol. 50, No. 1, 2008
  • N Hollis, It Is Not a Choice: Brands Should Seek Differentiation and Distinctiveness, 
Millward Brown Points of View, April 2011
  • R Kennedy, S Long and A Ehrenberg, Competitive Brands’ User–Profiles Hardly Differ, Market Research Society Annual Conference, 2000
  • Kluger, Why You’re Pretty Much Unconscious All the Time, Time Magazine, June 2015
  • J Leighton Ads must be memorable, not persuasive, to influence choice,
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It’s SWOT time!

How do you feel about writing a SWOT? Excited, depressed, unimpressed?

Many companies use SWOTs, especially around this time of year stuck into the annual planning process.

Used well, I think a SWOT is a useful summary of the key opportunities and issues.

The trouble is, a SWOT is often used very badly and fails to communicate anything relevant!

In fact, Mark Ritson has condemned “the utter pointlessness of the SWOT approach” (and I do understanding his perspective).

It only works well if you use it well

However, for me a SWOT can be powerful as the end of a process of analysing your situation, internally, externally, assessing competitors, customers, consumers, etc.

Facts first

If you’ve done your analysis you will have lots of facts. Some of these facts you hopefully knew already (if you’ve been working on a brand/business for a while). Additionally, really rigorous analysis will hopefully shine a light on some new gems too.

However, where SWOTs fail – for me – is in stopping at a list of facts.

Facts need to become insights

I want a SWOT to give me insights.

An insight is only an insight if you can do something with it. Otherwise it’s simply a fact.

Let me give you an example: many multinational brands in developing markets operate at a price premium to local competitors (due to strategic choice, manufacturing standards, cross-border pricing, import duties, overheads, etc).

So, the fact often is:

  • “Most competitors priced significantly below us”
  •  “80% of the market priced below $1 per unit”.

You get the idea: lots of products are cheap. Ours is not. But, so what? What’s the implication of this?

For me, a great SWOT contains a built-in implication.

In the example above there may be many implications:

  • fast track move to local manufacturing to compete in the largest part of the market
  • reinforce our value credentials (“longer-lasting”; “more concentrated”) to  justify price premium
  • upweight media spend to give reason-to-buy against lower cost competitors
  • focus communications against top 30% of the population who can afford our premium product

If you can get these types of implications into your SWOT, then you have a powerful call to action. (In fact you may also notice that the first word in each bullet point above is a verb – an action word implying you can  do something).

Simply stating a fact that’s always there, with no obvious sign of doing anything about it, is utterly pointless.

How can you achieve a useful SWOT?

I’ve coached this a lot and it’s not easy.

1. The most important question you can ask is “so what?” Keep asking that until you think you’ve got something useful. If you haven’t got anything useful you only have a fact, not an insight. And a SWOT is useless if you can’t do anything with it.

2. Try to start bullet points in a SWOT with a verb. A verb already implies some action – that you can do something about it. It avoids just listing irrelevant facts.

3. You may find it useful to add a second page after the SWOT that is called “Key Leverage Points” or “Implications” or, simply “Top priorities”. Hopefully your new, brilliant SWOT is full of implications already, but you can help to make it even more powerful by summarising – in order – your top 3-5 action items.

In summary

Done well, a SWOT is not anentirely pointless laundry list of issues, which may or may not prove to be relevant or indeed true”.

If it is founded in analysis and fact a great SWOT can be full of insights that allow businesses to prioritise.

A SWOT is nothing more than a strategic summary of your business issues and opportunities (put into a fancy Powerpoint set of boxes).

If it’s time for the business planning cycle and you must create a SWOT, be happy! A great SWOT can standout and make a difference to your business.

It’s SWOT time!

Doing nothing can be a powerful choice

I love working in business and in marketing. We get to spend time with great people, full of good ideas, passionate about moving things forward.

But there is a downside to all this vigour.

Just because something is a good idea, it doesn’t mean you should do it.

Several years ago I moved into a new team. Profits were terrible (below zero!) despite people working incredibly long hours.

One of the many issues was that the team were trying to do too many things. They had a sense that they should respond to every request, spend money on every brand, and stay busy.

Marketing is about making choices.

I remember being presented with one such choice. One of my team presented me with a promotional idea. Buy product X, get Y free at the checkout. Yes, it was a lovely promotion for the customer.

But, for us it would have been terrible. Sourcing a desirable freebie (Y) would involve too much time and money. Arranging the logistics of getting it to store and briefing staff would have been complex. And the brand (X) was too small to justify this (or really any) level of investment. [And, there would have been no Return on Investment – i.e. the cost of doing the activity would have outweighed any potential extra sales from it].

This was part of a broader issue. Out of a limited amount of advertising and promotional (A&P) money, most brands were getting some. As a result most brands were below a threshold level for media impact. Many brands had so little money being spent on them that it would have been entirely wasted.

Choosing how to make money

We chose to do less.

I told the team that I wanted them to go home after working shorter days. As a result we had to make more choices about what to do.

That started with reviewing all our A&P investments. We picked the priority categories and brands (based on where we had strong positions, in growing categories, with global assets to deploy). We invested the necessary amount of money for them to accelerate their growth. On our list, when we ran out of money, we said that the other brands got none. Obviously some people were unhappy! (To help we explained the reasons in advance, and demonstrated the benefits when they came).

Over the next couple of years, these kind of tough choices accelerated the business. Doing nothing on some brands was a powerful choice to help drive growth on the brands that mattered. Our revenues grew high double-digit percentages. Our profit margins exploded to levels higher than our peer companies. And – the personal metric I’d set – people went home much much earlier!

Make strategic choices

I was reviewing this same situation with someone yesterday. The issue remains: just because it’s a great idea, doesn’t mean it’s an idea you should pursue.

  • What are the options?
  • What is the overriding strategy?
  • What are you hoping to achieve?
  • What money do you have in total?
  • How many people/hours do you have?
  • How will you measure success (and will this idea be more “successful” than alternatives?)

I’ve written about the importance of making strategic choices (various articles here). It’s important to get it right. Getting it wrong (e.g. investing time on the wrong ideas) can be a waste of time, money and talent.

So much so that one senior executive I worked for previously suggested that for many brands it was better to have no one responsible for managing them. Doing less was potentially an asset that would grow the overall business.

For more on how to manage a portfolio better, have a look at this previous article.