Gavin HiltonGavin Hilton: I’m going to talk to you about the customer engagement. I’m going to talk to you about what’s changed. I’m going to talk about what has stayed the same and then we’re going to finish up with something rum – which you will be glad to hear about. The latest KPCB report has just come out about 10 days ago and in it, Mary Meeker talks very eloquently about how technology is not just changing what we do and how we do it. It’s actually allowing us to reimagine very fundamental things about how we interact with each other. She talks simply about how news is no longer mediated by the third state but is created, consumed and had an opinion on by real people. She talks about how markets are no longer physical spaces but virtual ones. And what we are starting to serve as a result of that is that business models are emerging to take advantage of people’s new willingness to share with each other. For example, one fine stay for an interesting one that allows you to turn your house into a service apartment when you are away and charge people to come and live in it. And if anyone wants to stay in a particularly fine town house in Chelsea, go and have a look at the thing, and I will show you which buttons to press during the Olympics.

Gavin Hilton: So what does that mean? Well, the world certainly doesn’t need another chart that says “the consumer is now in control.” That is given for us now. But what it does mean is that everything’s been democratised – the way people create content, consume it, trade with each other and influence each other means that quite simply it’s harder work to be at consumer, which is what led Google to their thinking about Zmot. Now, I’m not going to dwell on this, I’m going to take it that we all know what this is, that it is all about the importance of search, and if Google is to be believed up to 70% of purchase decisions are taken in Zmot in the zero moment of truth when people search for and find information. And if that was the case, all we’d have to do is to optimise our paid search approach and then go home. I think it’s not really that simple. For example, if you go and look for Trip Advisor on the web – I did this yesterday – you won’t just find out where to find Trip Advisor, you will find that it’s been rated as 4 ½ out of five by some of its sellers. You will find that 170 people have plus oned it on Google plus, which might give you an opinion on Google plus, rather than trip advisor. But nevertheless, what’s happening as people Twitter, Facebook, use Instagram and all sort of social networks, is that they are leaving us with a very handy trail of data to follow. And now instead of simple stimulus and traction and trial to purchase, we’re now seeing something this complicated. Right there’s going to be a quiz now. Did you consume all that? Understand it?

Gavin Hilton: Let’s break it down. This is the world in which some of us started working in – really simple broadcast stimulus, driving to transaction, driving to trial, to loyalty or lack of loyalty. Then something happened called the Internet and that made new ways of broadcasting possible to us like display, made search really important. I was told by my first ever planning director by the way that I shouldn’t worry about this – that it was a flash in the pan and it would all go away and we could go back to making direct mail packs. He doesn’t work in the UK anymore. Then something else happened – social, which meant that people were sharing, influencing, talking to each other and causing huge amounts of complication actually. One of the things my clients are always asking me is “I’ve got all these channels, I could use all these channels, which are the most important channels for me to use and how do I know they are working? And how do I know they are influencing each other? And how do I know how much money am I making from each of them?” And multiply that by the fact that all of these channels are now creating data for us to use. That they are all out of our control because they are social, that they are all being used all over the place because they’re mobile – I bet at least one of you has tweeted since you got here. And that makes understanding our customers even more important than it ever was before. If we can understand our customers’ life stages, then we will know better what they are ready to receive from us. If we can understand what they need we will know better how to invent products and services that suit them. If we understand their value we will know how much to spend on them on acquiring them and keeping them. If we understand their behaviour, yesterday, we’re more likely to understand what they will do tomorrow.

Gavin Hilton: Because, unlike financial services, a customer’s past behaviour is indicative of future behaviour. And finally, and this is kind of a new thing, we need to understand their social influence because a customer isn’t now just a customer, but effectively a broadcast channel for you, for good or for ill. What hasn’t changed about my job in the last 10 years is that it is all about putting understanding and data and information at the heart of what we do. As Suki said, we were going to talk about observation, imagination, configuration, and response and I am. But to bring it to life, I’m going to talk to you about Bacardi because it’s booze and because you’re be more interested in that than something more boring. What on earth would a booze brand have to do with zero moment of truth? Who’s has ever searched the Internet for information about a booze brand when they are out and about? I’ve used mobile technology to find me a pub but never really needed anything to decide what I was going to drink when I got there! Well that may be true, but it also may not. Bacardi came to us a couple of years ago and they said “we don’t really know what to do with digital. How would we use it? What we want to do is to encourage people of legal drinking age to drink Bacardi responsibly and we’re focusing on a younger demographic – so up to about 24. We really don’t get how digital can help us in the on trade space.”

Gavin Hilton: So off we went to do some observing and we found something quite interesting. We found that Bacardi’s volumes peak as you would expect on Thursday, Friday, Saturday nights, but something really interesting happens around 10 o’clock. People stop drinking it. Now, we didn’t really understand that so we went and we spoke to some real people of legal drinking age up to 24. And we found some quite interesting things. These people in general aren’t loaded with cash so they are doing what’s the industry calls “pre-loading”. When I give this presentation to graduate trainees they kind of shuffle their feet and look a bit guilty. You of course will need reminding of this stage in your life where they drink at each other’s houses before they go out. There are smashed before they get anywhere effectively so we had to take account of that. There is also something else going on with the brands that we are competing with because we are not competing with other rums. We’re competing with Smirnoff – the most loyal Bacardi drinker drinks nine times more Smirnoff than Bacardi. Not on the same night. Bailey’s, Malibu and Jack Daniels. So we have to take account of that competitive set. And finally – and this is where we got to understanding why volume drops off about 10 o’clock – what they do is, once they have preloaded at home, they make their way to feeder bars before they go to clubs. And at that feeder bars something happens to change their drinking. Anyone have any ideas? Rounds kick in. Okay? And if you’re young and thirsty, rounds are dangerous things because you don’t want to be the first person finished your drink because if you are the first person finished, then you’re the next person buying the round. So people don’t want to drink shots so people stop drinking Bacardi. So that allowed us to build a strategy which wasn’t about getting people to drink more Bacardi on nights that they were drinking it, but was about getting people, more people, to start drinking in the evening with Bacardi, if that makes sense.

Gavin Hilton: In terms of actually configuring our solution then, we spotted something else very interesting about this demographic. The weekends start on Tuesday when they start to decide where to go, who to take and what to do. It’s usually the girls who decide who’s coming and more importantly who’s not coming. Very important to plan because the Saturday night is really important in these people’s lives. And also really important to remember so they are doing a lot of uploading via mobile to Facebook during the evening. Effectively, we have a five-day window in which to speak to them. We don’t just have to speak to them on the nights they’re drinking. So what we understood from that is that the zero moment of truth in this case actually isn’t where we thought it was at all. It’s earlier and it’s longer. In terms of putting the plan together, obviously we wanted to be where our audience was and I think when we briefed this there was the assumption that digital for Bacardi was something to do with banners and buttons. However, we discovered very quickly that we could reach the same number of these people with the same effectiveness by placing all of our money in just one place. Any ideas? Facebook – exactly. Because what that does is it inserting us right into the planning stage where they are talking to each other about where they want to go, who they want to go with. And so what we did is we built a strategic partnership rather than a media buy that allowed us to do lots of interesting things. We actually built an app – you can’t see all the detail here and I don’t have time to take you through it, but what it does when you download it is it pulls all of your friends’ birthdays into it – it’s a calendar, so you can see when you have reasons to go out and get drunk. We can push information to you about when our Bacardi events are happening, when our Bacardi bar will be because we know where you are, and we can reward you for using it with social currency. Someone has just taken an all-expenses-trip to Cuba thanks to this app and using it lots.

Gavin Hilton: The fourth element of this was about response and it’s difficult to respond to anything unless you’ve got data. So what we did was we used a very simple metric. Happily for ask Bacardi have got an algorithm that tell s us, relates people’s warmth to the brand and how much of this stuff people drink. So all  we had to know was how warm they were to the brand and thanks to our strategic relationship with Facebook, we were allowed to create control sells and actually understand people’s behaviour – whether they had seen our activity, whether they had downloaded the app, whether they had used the app and relate that to volume of sales. We found quite simply that interaction drives volume. So we are busy iterating this now – taking it into the mobile space, so we can help them do exactly what we’ve helped them do before but in the bars where they actually are. So that’s it really. I think I’ve done it in under 15 minutes which is great. What hasn’t changed fundamentally is it’s still all about understanding consumers, understanding what the data is telling you, acting on it, collecting more data, and reacting to that. Thank you very much.

Suki Thompson: Thank you Gavin. I’m going to open it up for some questions in a minute but first of all I’m going to ask Giles to talk because we were at the Capital Ball on Saturday afternoon. I’m not sure how people were there but my 14 and 12-year-olds were tweeting and Facebooking the whole way through, and I just wondered how does this relate to what you are doing at Global Radio?

Giles Pearman: It relates very directly because, from our point of view – and I drew a little triangle there while you were speaking because for us it’s a kind of a three-way thing – you’ve got on air, you’ve got online, which is effectively a social space force and you’ve got on the ground. So on the ground you’ve got 80,000 people at Wembley Stadium with a concert that sells out in three days, which of course you are promoting and supporting on air. But what do you do online to engage with these audiences. Now, you could take advertising campaigns around social media space. But when you’ve sold out a ball you don’t need to do that. So from our point of view, we created a virtual stadium and gave people the opportunities to win tickets by actually take seats at the stadium and winning prizes and then the key element of that was about, the point you were making about social engagement with peer groups because on capital, we have a very high level of social media engagement but what is interesting about those audiences is they are also very strong at convincing their peer groups. And so from our point of view everything we build is all about trying to influence peer groups. So tweeting and liking and communicating out of their broader social groups is very important so that piece of activity got about 800,000 tweets and likes and push-ons as a result of doing it. So we’re trying to create that kind of like triangular relationship, but the objective for us is to get those audiences to broadcast for us and communicate what we are all about to their friends and families and so forth. And so there is a lot of connection point with what you have been doing there.

Suki Thompson: Thank you Giles. Does anyone else have a question that they want to ask or has any other comments that they want to add to this? Simon? Simon is from Fujitsu.

Simon: Are there any good examples in the market at the moment of B2B or where you’ve got a much longer sales cycle where you don’t have the immediacy that the sort of case study you’ve talked to works?

Gavin Hilton: In terms of using social?

Simon: In terms of the whole process in terms of how you are using your information then using that to drive that through a social or a different channel than the traditional.

Gavin Hilton:: I think the process remains the same. I think that so long as you are understanding how your audiences is using social networking or any new channel then you are well advised to use that information to the max. We’re just doing a piece of B2B work actually using LinkedIn which is talking to Micro SMEs about changing the way that they do business by demonstrating that the particular brand that we are working on understands them better than its competitors who just treats them like a smaller enterprise. And so the human understanding of how to use LinkedIn and helping them solve their day-to-day problems is what we are focusing on.

: An example of, by the way, which is live at the moment is because the audience is by default smaller then Philips and LinkedIn are a better position to manage the content because there is just a smaller volume. So it’s something you should look at actually, and it is actually up and running at the moment and I do think it’s probably one of the best examples where LinkedIn have actually taken the strategy themselves and actually kind of exploded it out themselves into the marketplace. It’s probably the best one I can think of. It’s not as prominent as you would see on the consumer side for lots of reasons.

Suki Thompson: Toby I think you wanted to ask a question?

Toby: Something quickly. Something you said about brand warmth and volume which sounds fantastic. Are you allowed to just talk a little bit more about that?

Gavin Hilton: I can talk to you about everything in very broad, brushstroke. We actually had to whittle around the research department in the Bacardi Brand and found it quite hard to find it. Someone for years and years and years has been doing this really interesting work that correlates claimed volume with Alco-vision to brand warmth. They’ve created a T-cell that allows us to extrapolate relatively accurately how brand warmth relates to volume consumption over a year. They work in 9 litre cases so we’ve got to take a pub measure and then understand that people’s drinking at home is probably three times what of measure is, if my drinking at home is anything to go by. And then work out how much that is in 9 litres cases. So we’re talking to the business back to them in the language that they understand, which is all about x-facts. But that has taken years and years. We were very, very lucky that that made the measurement really simple, because we just used pop-ups and created control cells, pre-imposed and sell to people to get a different exposure to the work and we were able to measure it that way.

Suki Thompson: We’ve got time for just one more quick question? statements Oh that’s good, actually. I was going to ask you. From a media perspective, could you tell me quickly how this impacts on what you’re doing?

Jed: Jed from Mindshare. Just a slightly pragmatic question. I mean a great case study and obviously you’ve set it up as not being a media buy. Obviously Facebook are quite interested in cash.

Gavin Hilton: We did give them cash.

Jed: I just wondered how that bit has developed from yours and their perspective.

Gavin Hilton: Well, we were in the beta test places for example. We are able to influence that bit. They helped us with the measurement; they created the cells of consumers so we could create control and measurement cells and everything else. They knew we were giving them the entire digital media budget so they worked with us a lot to make sure what we did was stable on their platform and worked really well and downloaded quickly. They actually helped us develop the app as well.

Suki Thompson: Thank you. We’re going to take a break now so you can get a drink and maybe something to eat and then I will call you back in a few minutes. Thank you very much.