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The Elephant in the segmentation room
By Tim Brooks and Kath Ludlow [Founding Partner at Legend Engage]
Legend Engage: http://legendengage.com/
Do digital analytics mark the beginning of the end for traditional market research? In the first of a series of articles exploring the impact and opportunities afforded by digital and social data, we debate to what extent these new research functions can replace or supplement traditional consumer marketing research. In this paper, we discuss segmentation opportunities in 2017.
Can digital make segmentation studies truly actionable?
There has been a long debate on the value/ROI of the major investment consumer-facing brands make in global [and local] segmentation studies. As a benchmark, a robust global segmentation can set you back a cool £1-2m.
At one end of the debate are the Sharpites[1] and their disciples [e.g. Mars] who don’t really believe in targeting at all. Their marketing target is seen as… just about everyone. At the other end however, we have most other FMCG brands who invest millions in segmentation to better define their category behaviours and ideal target audience, the aim being to improve the effectiveness of future marketing.
For the record, I’m happy to declare myself a fan-boy of Byron Sharp. ‘How Brands Grow’ is the only book I would insist that every person connected to a consumer business should read. That said, I am uncomfortable with following this sort of fundamentalism and dogma. Segmentation is clearly not the answer to the question, but it is a robust insight/understanding framework that should enable brands to refine and discriminate their marketing.
Segmentation creates a single, global version of [some of] the necessary consumer truths – which is always valuable to drive alignment on a global brand/category approach. A needs-based segmentation will also create valuable inputs for innovation, campaign creative etc.
But, there is an elephant in the segmentation room.
I have been involved in multiple global segmentation studies and have seen some fabulous work, but there is nearly always an issue. Segmentation outputs are just not very actionable versus the tasks most brand marketers have to do today. The theory can be lost in translation. Here are just three examples of why most segmentation studies sit gathering dust on a shelf rather than being used to drive business growth and brand loyalty.
- Talk to your media agency… and ask them to buy media against your key segments. They can’t. They use proxies [TGI etc.] that don’t really match the deep insight of the segmentation.
- Talk to your comms/digital agency and ask them what difference this makes to their work/output… and how closely they use it to plan and deliver your campaigns. Or do they ignore it and just ‘do’ stuff?
- Review your business strategy – has it integrated your segment outputs into its priorities and tasks? Doubt it, as most current segmentations are just expensive, albeit useful, background data.
So, we have many FMCG brands still investing in a potentially great piece of input that is only partly executable – and see limited evidence of them becoming hard-wired into company ways of working. They are diluted through the machinations of pragmatism and real politic. And 18 months later… they are useful background info filed on the corporate server.
So how might we make segmentation more actionable and therefore valuable? The solution is relatively simple and I’ve seen it done – so we are talking about an immediate action that can be taken now, not a hypothetical one
- Choose evolved learning cycles – when you have your final segmentation and targets in place don’t think you’re done. Add a continual learning step to your process. NB your segmentation agency currently can’t do this.
- Choose a specialist marketing and social insight consultancy who has a proven expertise in building and actioning segments in the digital space. NB there aren’t many who do it properly i.e. don’t be fooled that this can be created from a bit of social listening or a programmatic ad buying algorithm – it needs deep analysis/insight and human expertise.
- Give this specialist consultancy your £2m segmentation study and brief them to turn the segments into actionable ‘audiences’. Maybe, it will add 10% to your segmentation study investment. But it will exponentially change the ROI.
- Use this data to brief your business [Marketing and Shopper/Category should have it hard wired into their plans]; brief your agencies [your media agency will have no excuses, your creative agencies will suddenly be accountable for who their work engages with etc.]
- Use this process to turn it from an interesting piece of market research into a measurable piece of planning at the heart of your future growth.
How do I know it’s doable? Cards on the table, I’m not neutral. I came across just such a consultancy last year and now work with them as an advisor – Legend Engage. Their Mapper360 approach can do exactly this. It has actually done this with segmentation studies. And they could do it for you… even rejuvenating your recent moribund segmentations. It can work globally or locally and for a hoary old marketer like me… I find it amazing. It’s what I’ve always wanted. Every CMO or Insight Director should be talking to people like Legend Engage… before, during and after their shiny new segmentation is in play. And the research company should not feel threatened either. It’s building on the original work.
So before segmentation moves from being the elephant in the room to the dinosaur on your budget sheet, don’t replace it… revolutionise it.
[1] Byron Sharp: How Brands Grow.
Data, demand and influence – empowering people to manage their healthcare
Muzeable Thinking No. 19 – posted by Tim Brooks 14th July 2016
A brief piece written with Kath Ludlow at Legend Engage on a subject we both feel passionately about. We also think we can help provide a few solutions. http://legendengage.com/
As the world of advertising and advocacy continues to change, certain markets and categories are potentially changing exponentially. The grit in the oyster is clearly technology, or perhaps more accurately the data it generates. We are witnessing rapid changes in attitudes and behaviour – driven by, or better understood through, technology and big data.
One such market is healthcare. People have a growing expectation that they will stay well and healthy through an ability to treat minor conditions and increasingly a belief that medicine will deal with their more serious illnesses. But, businesses and health systems are still not maximising the opportunity to support the ambition.
Here at Legend Engage, we are always seeking fresh insights into consumer attitudes to healthcare and were particularly struck this month with this paper from Kantar Health, Edge of Insight: Health Activators – key influencers who drive healthcare decisions.
Here were our key outtakes…
Simply put, the paper focuses on how people make healthcare decisions now and the role of information and influence. The group at the heart of Kantar Health’s thesis are called Healthcare Activators… a cross-generational group that want to be proactive; feel the ‘system’ is about ‘sick care’ not healthcare; and their interactions with it are too rushed and lack a preventive, long-term angle. They want to do more but lack the knowledge [and face too much information] to make some of the decisions they need or want, to make.
This is clearly part of a much broader issue. The healthcare system is under immense pressure – driven by increasing demand [ageing populations et al] and finite resources. Kantar Health’s Health Activators are, in part, a reflection of this.
These issues are not going to go away – and in our role as an agency creating insights and marketing solutions for healthcare and pharmaceutical brands, we, also, cannot ignore them or underplay them when creating solutions or presenting insights findings.
To our mind, there are two fundamental components that current solutions fail to give enough weight to:
- We need to spend much more of our collective energy thinking about demand versus supply and how we can innovate to meet demand in a different manner. We will not solve the resource issues through operational efficiency alone – but we can massively alleviate them if we use behavioural understanding to change the relationship between people and the healthcare system. This could mean more information sources, more directed self-care, more focus on prevention, multiple points of support, deeper levels of personalisation [via wearable tech for example], more people-centred solutions and so on. Health Activators are an early-adopter group in this equation.
- We need to shift from paternalism to empowerment – and this will require a change in attitudes and treatment methods (professionals) and expectations (patients). This change will be challenging, but without enabling more responsibility for self-care – even within serious conditions – the system will eventually reach a state of atrophy.
Obviously, the solutions closest to our heart – and, to our mind, some of the least challenging to implement, involve digital ad social media. A future-facing approach to data -including social media – is what’s needed to start to set the wheels in motion for change.
There is an ongoing – and in some cases important – debate about the ability of some social channels to deliver effective marketing campaigns. Butwhat we should stop debating is the ability of the data and its robust analysis to build a powerful engine to drive insight, understand influence and behaviour and inform strategy.
This is not theory – this is how we deliver deeper, smarter more actionable insights day in, day out for our clients. We:
- Understand a lot about what, how and why people behaviour the way they do without asking them artificial ‘research questions’. We can map how influence and behaviour work – in the real world, often in real time, to deliver actionable insight.
- Map demand – in a mechanistic sense, but also in an emotional sense. This can be used to build simple models and ‘experiments’ to change behaviour. Forget the rhetoric of ‘likes’ etc. Nudge and social/digital are a marriage made in heaven.
- Interrogate data sets – by expertly mashing together, bespoke, multiple data sets we can create unique actionable data points. This is the future.
- Act within regulations to get closer to people than ever before. We use highly anonymised data analysis to understand the world and create tightly targeted interactions in the form of campaigns and communication programmes that deliver industry-beating results.
Mapping and analysis to drive insight and understanding of behaviour and influence is available NOW – yet many healthcare and pharmaceutical companies and systems seem stuck in the headlights of change. The data’s there and people are sharing more than ever before, especially when it comes to their health – isn’t it time that brands started to listen and act?
Paternalism and the myth of homo-pharmaceuticus: why the ASA ruling on Nurofen is not very people-centred.
Muzeable Thinking No. 18 – posted by Tim Brooks 14th July 2016
Paternalism and the myth of homo-pharmaceuticus: why the ASA ruling on Nurofen is not very people-centred.
By Tim Brooks and David Gray
The ASA’s ruling on Nurofen advertising is a setback for Nurofen/Reckitt Benckiser. It is also a fundamental body blow to the OTC industry. Now, and in the medium/long term.
But, the real denouement is that it is actually a small retrograde step in the broader approach to one of the bigger problems facing the world – the funding/management of our healthcare system. Against this issue a vibrant and effective self-medication market is not just ‘nice to have’ it’s ESSENTIAL.
And whilst the importance of the success or otherwise of a large pain brand is of no material importance, this broader issue really matters.
Why?
We are, and will continue to be, on the edge of a crisis. The developed world is caught between the rock of aging populations/technological healthcare advances and the hard place of finite resources.
In the UK prescription drug use continues to grow and service use – often unnecessary if you even take a cursory look at GP visits/A&E admissions data – is growing rapidly.
The system is run and organised by administrators, academics and healthcare professionals. They are almost blindly focused on their ‘day job’ – the supply side of the equation; efficiency, service delivery, resource management etc. We need to focus more resources on DEMAND.
For demand, we must continue to explore ‘nudge’ and service design, but in reality there is actually only one solution. A vibrant, effective and commercially attractive self-care market where manufacturers, brands and retailers/own label, are able to use unpleasant things like marketing and advertising to help people feel confident, empowered and better able to treat themselves.
We are fully aware that Nurofen’s marketing employs some smoke and mirrors in that they have a generic ingredient and they are presenting it to create a sense of difference. So, what?
We are not aware of any fundamental lies they tell in their presentation of the basic data around the performance of their product in specific pain situations. Both the MHRA and PAGB approved their approach. It is a perfectly good painkiller for joint/back pain. Its mode of action will [admittedly among other things] involve it basically treating the pain at its site.
For the record, we totally believe in regulation. We need it. The consumer needs it. Markets need it. But our approach to regulating medicine in the self-medication space is misguided.
It is driven by paternalism and an inherent belief that pharmaceutical companies don’t quite have our interests at heart. It [and most HCPs/regulators we’ve listened to/met] naively [stupidly!] believe that the route to solving the problem is information/education and a world filled with generic ingredients. A world where everyone knows what guaifenesin is. The myth of HOMO PHARMACEUTICUS is alive and well. The rational goes like this. ‘Surely if we present rational/technical data and choices to people they will make the right decisions.’ And pigs will fly. Just read any behavioural economics work of note – even if you choose not to fully believe that it is the answer to all our ills – and this approach disappears in a puff of smoke.
We don’t know who brought the complaints – a paltry 18 loud voices – not even worthy of the title ‘minority’. But it is almost certainly either HCPs or a scientifically minded ‘experts’ who understand the mode of action of an NSAID. Lucky them. They clearly feel that the average unscientific persons on the Clapham Omnibus need to be educated to see the error of their ignorance. It’s critical they are able to understand and make a rational, considered choice based on the data and act in their interests to buy the cheapest generic ibuprofen they can. Maybe…
The myth of homo-pharmaceuticus, like the myth of homo-economicis, is just that – a myth. People just don’t – and never will – work like this. And neither do they need to. It adds no value to our complicated, full to over-flowing lives.
Between us we have been involved in millions of pounds of research with real people in the area of self-medication. We have read and seen 100s millions £££ more of such data. Much of it is robust, insightful and relevant. This data is as useful in shaping our approach to healthcare as is any clinical trial. Yet, we ignore it.
So, for the record. Three fundamental things drive people’s self-selection of medical products selection in store.
- What symptoms [not ‘indications’] is it for?
- What benefit does it deliver? [What can I expect it to do for me?]
- Branding. Interestingly, even if someone buys own label/generic they use brands to navigate, to find things and to make choices. The decision to buy own label is almost entirely made before someone gets to the store.
Price and format and pack size are obviously important, but these three are key. All the extensive research we have seen highlights that ‘segmentation’ – targeting products at specific needs [e.g. specific products for headache or joint/back ache] is REALLY helpful to people who don’t understand or want, even need, to understand the technical attributes of an ‘ingredient’ [safety information notwithstanding]. HCPs can get as frustrated as they like about the logic gap in this…but, it’s behavioural and therefore they are wasting their breath.
So, the people centric, if not the clinical data, would on balance support the Nurofen approach. And again, given the way the OTC market works, own-label products are able to copy this and create a value/price alternative for people with the same segmentation. So the only ‘advantage’ a brand has is that it invests in advertising the product [a choice with risk, not an unfair advantage.] And against our need to drive the demand side of the healthcare conundrum if we make advertising of OTCs more and more unattractive the holistic situation can only get worse, not better. That’s ultimately a problem for all of us.
Further, we are seriously struggling to see how the person buying Nurofen Joint and Back is misled in a meaningful way by this advertising? The product is as good a treatment as there is available for their problem. Buying own label ibuprofen will not increase their comfort – given the placebo effect of branding it might even lessen it! They certainly wouldn’t be harmed. If manufacturers charge dramatically different prices for the same product it is a different debate. But not specifically an advertising one. Even here, brands will [rightly] get caught out in the long run if they do these things.
Conclusion. This ruling is a retrograde step. It has huge knock on effects and the ASA either doesn’t understand what it’s done, or it knows and is complicit in a paternalistic out-dated approach to the regulation of self-medication and the unhelpful ‘protection’ of ‘the consumer’. Shame on you ASA.
We need to do 2 things and do them fast.
- Put people’s actual behaviour at the heart of our approach to regulation/self-care. And, unless meaningful numbers of people are going to be seriously harmed… base policy and interpretation of regulation on this real behaviour.
- Within a clear regulatory framework change the balance between paternalism and empowerment in healthcare. We need to experiment to drive OTC demand and rightly or wrongly ONLY brands will ever have the commercial self-interest to drive this. This doesn’t need any ‘de-regulation’, just a more 21st century interpretation of the current regulations.
Let’s stop trying to make the system work for a mythical species – homo-pharmaceuticus – and make it work for real people. Nurofen Joint and Back is a small part of this equation. If it’s a good idea it will flourish and the result is more people will treat pain. If it’s not… it will wither and disappear. In the meantime, nobody would have been hurt and the fact they don’t understand prostaglandin synthesis is not a meaningful gap in their lives.
About the authors: Tim Brooks runs Muzeable a healthcare strategy consultancy and is a non-Executive Director of Creative Leap.
David Gray is CEO of Creative Leap, one of Europe’s leading healthcare branding and creative agencies.
Tim and David have worked together and in healthcare for far too long.
