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Tuesday, April 26, 2011

Indy Car Sponsors have a Different Take on Winning

Winning the Long Beach Grand Prix Branding Race

Brand managers view the world differently than the rest of us. For example, you would think the first car to cross the finish line at an IndyCar race would be the winner. WRONG. From a brand manager's point of view that is a nice bonus, but has little to do with winning. In many cases it is irrelevant.

Winning is about competing for a common goal. For a brand manager it is about building buzz for a brand and getting people talking.  The car which creates the biggest buzz wins. So winning by IndyCar rules is a nice bonus because it adds some buzz to the brand, otherwise it just doesn't matter.

I had the occasion to visit the Long Beach Grand Prix this year. It is a brand building mega-event. Logos everywhere. The fans were bombarded with thousands of product displays, posters, t-shirts and of course cars covered in logos. There was a competition going on, but the winner was clearly the brand who got the fans talking the most. 

Toyota was the clear leader at the start of the race. They had logos on the barrier walls, chain link fences and nearly everywhere else you could looked. Toyota had a clear head start on the rest of the racers as their brand was all over the track hours before the other brands took the first lap.  As I walked to my seat it looked like this race was over before it even had a chance to begin.

As the cars actually took to the track the tide had turned a little. GoDaddy started to get the crowd talking as it's driver Danica Patrick created an instant buzz.  Fans were looking for the GoDaddy car and talking about her as the race continued. The crowd was buzzing about GoDaddy and therefore GoDaddy was winning the for a good portion of the race. The fans became almost numb to Toyota and its buzz was pretty much out of the race at this point.

Then we came to lap 67 and everything changed. In the first turn there was a small accident. Ordinarily this is no big deal, but this time there was some added excitement as the Telemundo car driven by Oriol Servia had to swerve off the track to avoid a wreck. The Telemundo driver completed a dramatic 360 turn complete with smoking tires, dust and rocks flying everywhere as he threw his car back into the race.  It was a scene right out of a movie. The fans were on their feet. Clapping and talking about "the move" as the Telemundo buzz filled the grandstands. Immediately the dozen or so big screens around the venue replayed the dramatic 360 move from every angle. Each time fans saw the replay they applauded. It was definately the highlight of the race.

For the remaining 18 laps the buzz remained with Oriol Servia's Telemundo car. The fans in the grandstand couldn't stop talking about it. They kept looking for the Telemundo car.  As they waived the checkered flag everyone was still talking about the Telemundo car.  Even as the race ended and I walked back to my car the people around me were still talking about the incredible move from "The Telemundo Car". 

Of course by IndyCar standards Mike Conway's Firestone car won the race, and we owe him a congratulations. (But he was in the IndyCar race, not the brand building race so from my point-of-view Firestone didn't really win).

I have to say it over and over. Brand managers sponsor IndyCars to build a buzz for their brand. They do not sponsor cars to win races. The only real benefit to winning is it can increase the buzz (but only a little). 

From a sponsor's point-of-view here are the winners of the Long Beach Grand Prix:

Long Beach Grand Prix
1) Telemundo - Oriol Servia
2) GoDaddy - Danica Patrick
3) Firestone - Mike Conway

Sunday, April 10, 2011

Reference Power is Everything

If you read Ad Age, PR Week, or any of the other media outlets for brand managers you will find hundreds of theories on advertising strategies, public relations techniques and the occasional complex mathematical formula which will help you build your brand.  It is often informative, but almost always long winded.

There is only one common truth in all successful brand building strategies from the dawn of time until now: “Reference Power Builds Brands.”  When other people tell you a brand is good, you tend to believe it is good. How strong is the power of their reference? That depends completely upon how much you value the opinion of the person who is giving you the reference.  For example, imagine you are asking a professional basketball player to recommend a good shoe for playing basketball. You would probably value their opinion and their reference power would be very high. You could ask the same basketball player which mobile phone is the best, but you probably wouldn’t value their opinion and therefore not be influenced by their reference.

Let’s take a look at the use of a celebrity spokesperson in advertising. Advertisers know the power of reference. They could use an actor or an executive from the company, but they get better results from a celebrity spokesperson. Why? Because of reference power. If you recognize the celebrity spokesperson the advisement is off to a good start. If you like the celebrity spokesperson the advertisement is doing even better. If you feel the celebrity spokesperson has a valid connection with the product the advertisement is almost a success. For these reasons you have established some value for the opinion of the celebrity spokesperson and have given them some reference power even before they begin to speak about the product.  Prepare to be influenced.  But wait…..   Your brain is not that quick to give up too much reference power. Why? Because you know this is a paid endorsement and the celebrity spokesperson’s reference was highly influenced by money.  You still may value the sales pitch of the celebrity spokesperson, but you do so with caution.

People are often influenced by products they see on film and television. This again is all about the reference power. You may like the character or the celebrity on the show and feel influenced by the brands they wear. This has proven to be a very powerful way to build a brand. Again it is all about you observing a celebrity and forming opinions on brands based on the perceived like or dislike of the celebrity.  Reference power is again powerful, but again you may have some reservations. Like advertising there is a reason to hold back on giving too much reference power to what you see on TV and film. It is acting. The celebrity has been told what to do and say. In some cases you may hold back some of the value you give to this reference.

The pure reference power comes from a natural endorsement. If someone whose opinion you value is using a product, it is very powerful. For a brand manager there is nothing better than getting people to tell other people about their brand. The problem is getting this process started and keeping it going. The solution is to find a small group of people who can reach a large group of consumers. This problem is solved with celebrities, but we already discussed how celebrity spokespeople are only somewhat effective.  The solution is not in the paid endorsement, but rather the implied endorsement.  An implied endorsement is when a celebrity is photographed using a product. They have not said they officially like the product, but it is implied.  Implied endorsements are viewed as being more honest and therefore have more reference power than paid endorsements. 

Strategic brand managers will leverage implied endorsements to build any brand.  At Social Hill we have a very simple formula which is the core of our business. It is the law of celebrity association: “If people like a celebrity, and a celebrity likes your brand, then people will like your brand.” 
Check out Socialhill.com to learn more.  

Social Hill Website Launched

We have made our www.socialhill.com website now public.  A little bit about us:


Social Hill is the world's leading product placement company. Last year we generated over 25,000 photos of products with celebrities and had dozens of products on television shows and magazines all over the world. There are several product placement companies, but no other company delivers as much placement as Social Hill. No other company is even close.