Congratulations! You're a Product Owner!

In the last 10 years the hierarchy of influence has really changed in advertising, as marketers have watched their roles become less about creating campaigns and more about building (and sustaining) actual products. Not the core products and services a company sells, but the expected and useful product component of an integrated advertising environment.

Some have embraced this change and others have fought it, because for many the transformation isn’t willing. Long-time marketers with incredible fluency around CTR, CPA, and CPM are completely at-sea when faced with UX, IxD, and RIA. Yet there’s no longer an option to forgo using products in your marketing. There is no more fishing where the fish are. The fish have scattered to all parts of the ocean, and marketers need to create and manage compelling products to ensure that potential customers can have positive brand experiences.

The credit (or blame) for this is more from Apple than anyone else. The creation of the app economy when the App Store began to allow third-party developers was the ultimate disintermediator. When Marshall McLuhan said, “The medium is the message” he may as well have been talking about Apple, a company that has built itself on products that market the company through differentiated hardware and software. With its third-party app platform, Apple opened the door for other brands to create products that do the same thing.

Think about why you use the products in your life. They provide some combination of value, utility, or pleasure in the experience of using them. Products that score well in those categories are the items we find ourselves using over and over again. Our direct experience with a product is the single largest factor in our decision of whether we use it again – in short, successful products are a company’s best marketing tool. But before the consumer has tried your product, she will have many interactions with your brand, and increasingly, those that have a product aspect to them are more powerful.

As we’ve heard from countless sources, brand and product reputation is much less dependent on outbound messaging and much more reliant on other methods – particularly on other consumers’ reviews. This shift is responsible for the accelerating importance brands place on social media. Social networks democratized opinions, and for products, shopping sites became small social networks. Very quickly what a product said about itself not only became hard to believe, it became laughable.

In many cases, social networks take great pride in putting brand marketers in their place by pointing out the ridiculousness of many claims, sometimes sparking legal recourse. For the most part, this has led to an improvement of the entire advertising industry. Messaging remains crucial, but now at least an awareness of authenticity flows through the lion’s share of campaigns. But most importantly, messaging is only part of the story.

And as much as executives are catching on to this change, as the data below shows, they still place an unrealistic amount of faith in channels that consumers don’t respond to.

Pay particular attention to the “social networks” line in the diagram. Too many brands use social channels as just another way to broadcast messages, and not to facilitate a dialogue. They are, in effect, ignoring the inherent product nature of social, and the result is consumers who don’t care as much about their social efforts. We’ve seen over and over with our clients; consumers won’t engage with messaging, but they will engage with content. If you think about social media as a product, it needs to provide the same value, utility, and pleasure that your primary product provides.

Apps are no different. Research firm Distimo periodically reviews how the top 100 brands utilize apps. In its 2012 report, only 12 of the top brands don’t have apps in the store, a sharp increase from the previous year. Distimo puts it well: “Many applications are in the App Store just to give more visibility to a brand,” and as a result, most (but not all) are free. This question periodically comes up with our clients and I find myself in the delicate position of reminding companies what their core business is. The answer usually comes quickly; we sell clothes, or candy bars, or homes, or a service. But as soon as a product starts to take shape as part of a marketing strategy, it’s common for marketers to get stars in their eyes and start thinking, “This is so good, maybe we can charge for it.” It’s an odd question: whether to sell your marketing or give it away. Do we think consumers are dumb? Can we get them to essentially pay for ads?

The answer is yes; you can create something that is both marketing and generates revenue, but it’s very hard. You need a very strong brand, a higher price point for your core product, and a lot of money to spend on marketing. Most importantly, you need to treat that product as seriously as any other in your line. Nike FuelBand is one of the best examples of using a product to market. Nike took the time to develop something that meets a consumer desire, then put it into its existing marketing channel, and now enjoys the byproduct of a brand reminder for other Nike products. But most of the time, marketers try to sell something they should be giving away.

One of my favorite examples is the Weber “On the Grill” app. Weber took the time to build a great app that tells you everything you need to know about grilling. Unfortunately, I’m concerned Weber forgot what business it is in. Every time someone uses the app, it is the best kind of advertising for Weber; it’s a favorable brand impression that creates fantastic utility. If you have a Weber, it reinforces your decision. If you are using another brand’s BBQ, it’s a gentle reminder of what you might want to choose next time. Consumers pay a premium for Weber grills; at $4.99, they also pay a premium for the app, and by the look of the reviews, most who have it really like it. That’s great for everyone who has purchased; but imagine how many times the app would have been installed if it were free, and balance that against the advertising spend the grill maker does worldwide.

Creating and owning digital products provide a raft of lessons for brands. Even if you can create something that is interesting enough for consumers to want and related to their core product, you’ll find that inconveniently, products don’t just go away. Unlike a campaign, products need to be cared for. They need updating, versions for other platforms, and changes to stay relevant. They will attract some critical users who will scream about what should be in it and dedicated users who will scream if you think about retiring the product. It requires new people, new thinking, and real dedication, but if it is done right, the reward for brand reputation can be massive – and that makes all of the work worth it.

Let me know what you think, and if you’ll be at ad:tech in San Francisco April 7 and 8, drop by my session and say hello.

Hype image on home page via Shutterstock.