A branding expert would say that this is no accident: it’s the emotional tug of a successful brand at work. We thought it would be interesting and useful to compare two brands with very similar inheritances: Oxo and Marmite. One has tremendous, contemporary appeal.  The other seems to be dying in front of our eyes.  And yet it could all be so different.

History

Oxo and Marmite were both invented by talented German chemist Justus von Liebig (1803 – 1873) who discovered that you can create novelty foods out of the by-products of the new food processing industry.

First came Oxo, created around 1840 when von Liebig devised an efficient method of producing beef extract from animal carcusses and trademarked as Oxo in 1899. Marmite came when Liebig discovered that brewer’s yeast could also be concentrated, bottled and eaten. The Marmite Food Extract Company was formed in 1902.

Both Oxo and Marmite are concentrated versions of other food products. Both were invented around the same time, by the same person. Yet, both brands have followed radically different trajectories over the past 100 and a bit years.

Today, Oxo is owned by Premier Foods (current share price 4.69) while Marmite is owned by Unilever (current share price 2083.00). Oxo is generally viewed as static, characterless and dusty, while Marmite is considered cool, witty, savvy.

What the data tells us

A look at social media quickly determines gross disparity between the brands.

In the time frame 4 October 2011 – 17 November 2011, we have:

This is more than a case of Marmite simply being more involved in social media; the Marmite brand is “healthier” than Oxo.  It is more relevant, more current.

Conversations Determine Brand Health

This gulf in reach and appeal between Oxo and Marmite did not always exist. In fact, Oxo saw great success in the 1980’s with its “Oxo Family” TV ads staring Michael Redfern and Lynda Bellingham.

Marmite followed a similarly humble path, with the slogan “My mate, Marmite” chanted in commercials by an army platoon.

Why Marmite Succeeded

Marmite really took off when the brand used social cues from consumers to shape its branding. They realised that its distintive flavour had earned it as many lovers as haters. They played on this in 2009, when they invited netizens to join the “Marmarati“, a secret society invited to try an extra-strong version of Marmite, thus leading to great word of mouth and a lasting crew of loyal brand advocates. Marmite continues to play on the “love/hate” relationship in its branding, running a dual-skinned website and actively fueling the debate.

Marmite recognised that the social web word-of-mouth marketing means everything to a brand and consumer conversations determine a brand’s health. Not only that, but you can actually measure these conversations in terms of currency, advocacy and engagement.

Why Oxo Fell Behind

Oxo, however, has done little to adapt its identity to the social web. Their website is basic. They have no Facebook or Twitter presence. In fact, the brand seems to have little identity. More importantly, Oxo has failed to use consumers to inform their marketing. In fact, they appear to have done little to adapt their marketing to what consumers are actually talking about.

This is a shame: Oxo once had huge brand value and excellent positioning. It represented the family, the warm feelings of shared meals, home comfort. Now it represents very little.

Oxo’s Opportunity

Despite the dearth of conversation about Oxo, what’s there reveals that the Oxo brand IS worth something. It has potential.

The conversation that’s there is very positive and good-natured.

We’ve seen people tweeting to Katy Perry:

“@katyperry crush an oxo cube into ure beans and cook them.. You’ll be california dreaming ; p x”
http://twitter.com/#!/gems2000_uk/status/125914117696524288

Footballer Alex Oxlade-Chamberlain is nicknamed “oxo cube”:

Can some explain to me how Rosicky starts again and oxo cube doesn’t even make the bench? I’m beyond confused
http://twitter.com/#!/15Gooner/statuses/125538875505512448

Oxo is starting from a good base here. People have warm feelings about it, and even associate the brand with some major personalities.

What should Oxo do?

Oxo may or may not have a big marketing budget and during this time of austerity most brands are in this position. Fortunately, social media is free, and there are low-cost ways to benefit from it.

The thing to do is to opportunistically get involved in these conversations.

Oxo should do as Marmite have done: pick up on the conversational cues that are already there and ride it. Work on the Oxo-ness of Oxo cubes. Send Katy Perry and Alex Oxlade-Chamberlain a couple of boxes of Oxo cubes.  Set up a stand selling Oxo outside Arsenal’s next home game.

Oxo needs to build on the cranky, old-fashioned Englishness of the brand to drive PR and conversation. By simply observing existing conversations, Oxo can discover what the brand means to the different people who discuss it, be it slimmers or football fans.  The brand should try out strategies and themes of conversation, see what works, test it.  When it finds a theme that resonates, build on it.

The key for Oxo is to just get out there, mix it up, and start making itself relevant.  Learn from the success of Marmite and make itself relevant for the next hundred years.

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Please leave answers below!

It was the decision to bring back Wispa that created the impetus behind it. What drove that decision was social media research showing the strength of interest in the bar. This is the “causality” referred to. The Wispa phenomenon – cleverly communicated – then caught the wave of interest in social media, and became a case study, used by Mark Zuckerberg himself, demonstrating the power of social media. It should be clear that arguments for the ROI on social media rest on the outcome of the original decision to bring back the bar. Thereafter many other marketing channels played a part in driving sales.

When Cadbury and their agencies won the prestigious IPA effectiveness gold award for the Wispa campaign, 2007-2009, Market Sentinel were invited to share our insights and data for the effectiveness case study. The results were a little surprising, however.

Our original hypothesis was that Wispa was the buzziest brand during the period. We naively thought that buzz=sales. That turned out not to be the case. Although there were strong peaks of activity pre-launch in 2007 and when the Wispa gold launched in 2009 in general the buzz was no greater for Wispa than for other confectionery brands. And – curiously – there was far less activity for Wispa than (e.g.) for Creme Egg, particularly over the crucial Easter period. This was counter-intuitive.

Wispa volume versus Cadbury benchmarks

We wondered if the story of Wispa was the story of the adoption of Facebook. The two things happened simultaneously. Facebook was cited in the context of the decision to reintroduce the Wispa. Wispa was much discussed as an example of the new trend of social action through the website and was even mentioned by CEO Zuckerberg in this context in a Guardian profile. Here is the growth of the Wispa conversation normalised against the growth of Facebook. (The data is a bit spotty here as we are going on estimates of Facebook size from public sources)

Wispa fan growth % normalised versus UK Facebook

The “Bring back Wispa” campaign pre-dated Facebook. There were petition sites dating back well before 2007. There was a stage invasion at Glastonbury in the summer of 2007. As Facebook took off in the UK, the bring back Wispa campaign grew there, first in the “group” functionality and then on the “Fanpage”. Growth plateaud off after October 2009. Wispa now lives on Twitter, which represents % of commentary on the brand.

Wispa all mentions Sept-October 2011 by site

Was there anything, in fact, unique about Wispa? What made the social media campaign resonate? What led to sales of £86.5 million over three years?

Two key things: first the brand did not try to ventriloquise the social media conversation, it simply acknowledged it and celebrated it.

Second: the brand, because of its status as a bellwether of the coming together of social media with a consumer brand, became itself (as in this piece) a case study. The result is that there IS something unique about the way Wispa is discussed, which is that it has more positive connotations than equivalent brands.

Sentiment Wispa vs. other Cadbury brands

People feel more warmly about the brand and talk more positively about it, for a simple reason: the brand itself has become emblematic of social media. That’s a hard thing to pull off, but Wispa has done it. And when you tweet about Wispa, you are celebrating the medium as well as the chocolate bar.

Wispa is an example of social media ROI, and in rather a complex way. Its rearrival was triggered by the existence of social media monitoring (our own) and amplified by the delighted discovery by consumers of their own empowerment. Can one attribute £25m+ a year of sales solely to “social media”? In this sense: the brand would still be languishing in Cadbury’s museum without the social pressure exerted during 2005-2007 by the internet petitioners.

Social networks have a dilemma in formulating an offer to brands. Social networks are about direct communication between individuals. How can a brand add value to this without appearing obnoxious? A brand has to wait unobtrusively with practical assistance, taking cues from the thematic context (shared links and topics). It risks being irrelevant, or misinterpreting the context at every stage. I sat next to a woman yesterday who was offended by being offered weight-loss treatments on Facebook. She has never expressed any interest in the topic. The ad is most likely being served based on a rather crude demographic cue – she is single, early thirties.

Considering the richness of the data Facebook is sitting on, serving weight-loss adds based on the age and sex of the user is not very sophisticated or – as we see from the low click-through rates – fruitful. The challenge that Facebook has set itself is that since f8 2010 its user settings now prohibit it from using more sophisticated methods (such as the tastes of the consumer) to serve ads UNLESS THE USER HAS OPTED IN TO AN APPLICATION. To spell this out, the key value Facebook could offer to brands is now closed to it.

Mark Zuckerberg’s f8 2011 announcements make it clear that Facebook too is coming to believe that its value lies in the hands of those (like Zynga or Spotify) who can use the network as a platform for their gaming or entertainment-based applications, offer entertainment to user in return for their data and then use the data to serve far more targeted advertising based on collaborative filtering (people who like X also like Y). The network (Facebook itself) could serve as a CRM repository for an ecosystem of application providers.

Facebook’s job is to keep those application providers on its platform (rather than moving off to iOS or Android) by adding so much value with its CRM data that it is worth content providers paying the “tax” to use the platform. It is this thinking which sits behind the controversial idea of “frictionless” (i.e. constant, involuntary) sharing.

If Facebook can persuade users that this trade-off (privacy for useful suggestions about cool stuff) is worth making, then this would be a good outcome for the business. When I worked at Amazon.com the collaborative filtering links post-purchase were by far the best performing on the website. The approach can work.

There are two challenges: one is the users themselves. Amazon’s collaborative filtering is anonymised, discreet. Facebook are proposing something in your face. Mary likes The Saturdays, Tom likes Blazin’ Squad. Not surprisingly this feels a bit intrusive to many users.

The second challenge is that serving ads using collaborative filtering techniques requires an ecosystem of “bought-in” vendors who are happy to share their data in order to benefit from the increased understanding it offers. Furthermore the big issue for Facebook is that this is not currently a business opportunity open to it. Only a successful application provider with really compelling content – an HBO or Warner Brothers – can take advantage of this, or an advertising network built on the back of a variety of such vendors.

When Google was in the same position in 2000 it benefited by from the work of Bill Gross, who brilliantly invented paid search at Overture and inspired the web’s most successful current business model. Facebook lacks a Bill Gross. In the meantime, and at the risk of sounding like a broken record, you would have to say that Facebook still lacks a business proposition to make it investable at anything like the mooted $75bn.

As of 15th August 2011, the folks at Facebook removed the ability of Corporate clients to “shut” their walls to comments. For pharma companies this is a headache.

The law is a mess here. A pharma company has a legal obligation to comply with adverse event reporting to the FDA, that is: information about any reported negative side effects of its products and another obligation to provide timely and relevant advice towards physicians and patients about its products. However exactly what it can say about its products is regulated by the FDA.

A pharma company has a broader, non-legal obligation to its stakeholder groups (employees, physicians, patient, disease advocacy groups) to keep up a reasonable dialogue. My understanding is that it would be illegal for a pharma company who were aware of an adverse event not to report it to the FDA to the best of their ability (including making attempts to identify the complainer via their Facebook profile). Any disclaimer would have no impact on this. Facebook privacy settings are ignored by this obligation (and could in theory be overridden!). This means that information about a patient which they have chosen to keep private on Facebook could be shared with the FDA by a pharma company which strictly followed adverse event guidelines as they exist.

The issue of whether the post could afterwards be deleted sits outside this obligation. The FDA’s (somewhat unhelpful) lack of guidance in social media matters means that this is unclear. My sense is that as far as the FDA is concerned, the company could delete the post. However, doing so would create an unfortunate impression and might be considered culpable if any civil legal action resulted from damage being done by their products. As far as Facebook is concerned the page owner has an absolute right to delete a post which falls outside the guidelines of that page.

In relation to the other social networks: of course the same issues remain. They are most severe with Twitter, where comments have to be detected “in the wild” and are not easily found as in Facebook because of misspellings, vagueness, brevity. My sense is that pharma companies can comply with the spirit of the law by monitoring the brand name and comments addressed directly to the Twitter handles they own (@pharmaco). Similarly the liability in relation to LinkedIn conversations exists only where

a) groups are public, or
b) a pharma company – or its officials – have a presence in a particular group conversation

It is somewhat depressing that almost two years from taking its decision to meet the stakeholders in social media in November 2009 the FDA still hasn’t managed to provide even interim guidance on this issue. 57% of Americans use Facebook at least once a month according to an eMarketer survey of February 2011.

For more on this take a look at Market Sentinel’s recent white paper on Facebook and pharma.

All this summer we have been looking at the effectiveness of Facebook for a variety of big brand customers.

Here is what we have discovered, and for Facebook it doesn’t make pretty reading.

Facebook ads don’t work for brands

Even with the ability of the user to determine how and to whom an ad is served with great demographic accuracy, Facebook ads have click-through rates of only 0.011-0.165%, compared to Google’s 0.4-0.7%.

A former Facebook intern, Cliff Chang, with disarming candour, admitted to this on the question-answering site Quora. Explaining why Facebook had taken down its own conversion-tracking tool, he admitted:

“Some hilarious percent of people who generated pixels never received a single impression on them.”

If Facebook can’t compete strongly as an advertising platform it won’t be able to dislodge Google’s dominance in internet advertising (in 2010, Google owned 38.9% share of US online ad revenue, compared to 4.7% for Facebook, and eMarketer estimates that Google’s share will increase to 43.5% in 2011). The appearance of Google+ means that Google may finally be able to add an element of social proof to their own search results, diminishing Facebook’s USP.

Facebook fan pages don’t work for brands

Facebook fan pages provide a great opportunity for celebrities like Lady Gaga and Taylor Swift to reach their adoring public. These pages have eye-catching headline figures for the number of “likes” they attract. However, we recently found that the vast majority of “fans” don’t actually interact with the Page.

We surveyed the 20 most-fanned celebrities on Facebook and found that the number of “core fans” is far lower than the actual fan count. (Here, we define “core fans” as fans who have commented more than average for the Page [1].)

The table below shows the data as of 12 May 2011. Eminem had over 41 million fans and Lady Gaga over 39 million fans, but their core fan counts are 575 and 1,231 respectively (just 0.001% and 0.003% of their overall fan numbers).

Source: Skyttle Friends

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These numbers are significant because of the way content from fan pages syndicates into Facebook users’ news feeds.

Unless someone has actively interacted with your page, they won’t receive your updates. Many brands launch a Facebook contest to boost their fan count, assuming that their future updates are now reaching the thousands or millions of people who clicked “like”. But that’s not how Facebook works.

Unless a fan actively participates in a brand’s Facebook Page and their activity on the Page has been continuous, the brand’s status updates will cease appearing in the fan’s Facebook stream.

Facebook is a great CRM network for brands who know how to use it, but most don’t.

[Update 1] Sheryl Sandberg of Facebook boasts of the 50 million “likes” a day which brands receive on Facebook. She is being disingenuous. There are few ways for brands to take advantage of this. Brands can’t access the list of fans who “like” them. Brands can’t examine what else these fans like (since Facebook’s F8 update, the graph API no longer allows it). Brands can only address these fans for a short window after the initial “like”. The bald truth is that a “like”, in 99.99% of cases, does not presage further interaction with the fanpage.

Apps should work for brands, but often don’t

A well-designed application on Facebook can produce a Niagara of valuable data about users, but only if

1. users download it
2. they opt in to sharing data
3. there is an “off-ramp” leading them to spend money on the brand

Brands who have taken good advantage of this include film studio Warner Brothers, who delivered The Dark Knight as a pay per view Facebook rental and brand Starbucks, whose application has over 45,000 active users (and an all-time high of over 760,000 monthly active users according to appdata.com). But most brand applications do not follow through with serious ROI. No branded app (outside those from telcos and tech businesses with skin in the game) makes Facebook’s top 100.

The three pillars to Facebook’s business model we have examined all have major question marks over them. Advertising click-throughs are low, brand presence is a poor fit for the functionality of the fan page, and applications, whilst effective, are poorly understood and exploited by few.

It is clear that Facebook can be a great business. It could carve out a terrific niche delivering qualified audiences to entertainment brands who launch successful movie, TV and music channels. These brands will share some of that revenue with Facebook. It could offer a transactional interface based on local search, as Havas boss, David Jones has suggested. This would be supported by new location-based ad targeting functionality. But the critical thing about these revenue sources is that they are in the future, they are unproven. Facebook is widely rumoured to be going to market now with a valuation of $65bn. That valuation is hard to support until Facebook provides proven, public answers to the questions about how it’s going to generate bucks for brands.

[1] UPDATE 2: To compute the core fan count, we calculate the average number of posts-per-contributing fan. This number ranges from 1.14 for Bob Marley to 2.03 for Bob Marley. Any fan whose comment count is higher than the average is a “core fan”. As you can see it doesn’t take much to become a “core fan” by this measure, making the low totals even more notable.

UPDATE 3: In quick succession we have news that Facebook is delaying its floatation until late 2012, first with their spin and then with bearish rumours. So this delay is either “to keep employees focused on product” [Financial press PR flacks, passim] or “because it missed revenue targets“. I would be inclined to accept both explanations. The challenge for Facebook is that by delaying its floatation a year, we will have progressed on the Gartner hype cycle from the peak of inflated expectations through to the trough of disillusionment. And in the trough of disillusionment people are going to be auditing the performance numbers.

Please share with us, anonymously if you like, evidence that Facebook can generate big bucks for brands.

We have had terrific interns in the past: some interns have ended up working for us long term. Others have gone on to companies like Deloitte’s and Google, or banks, and others to write novels. The typical background is a technical degree of some kind, but we have people who totally self-taught and people who have joined us from the third sector. Here are the details:

Market Sentinel provides insights to brands starting from – but not limited to – social media. We use complex maths and very detailed desk research to generate insights which enable our clients to gain and retain competitive advantage. It is a demanding, stimulating workplace where conversations about Justin Bieber, linkfarms or SSRIs are equally likely.

Every summer we take on interns with the following skills:

a) marketing (web-savvy, Twitter-using individuals with a liking for Excel and good PowerPoint skills);

b) product (web-savvy folk with some coding skills and/or experience of building web sites or applications);

c) technical/web development (people with some coding skills, front end or back end – our core languages are Java and Python. Experience of web services, JUnit, Tapestry, Subversion, Maven, Hudson, Perl, Python, AJAX, XML processing, RSS, natural language processing and workflow engines is welcome);

d) analyst (people with stats and analysis skills who have excellent written English and – ideally – at least one other language)

We offer an entry level salary (a bit better than the minimum wage!) upon completion of a short expenses-only work placement trial.

Interested? Follow us on Twitter @marketsentinel and post a link to your details and/or send a CV and a covering letter with something about yourself to joinmarketsentinel@gmail.com.

Shapeways does 3D printing and are set to become – as Fast Company puts it – the Kinko’s of 3D printing. Read Fast Company’s interview with Peter about his ambitious goals, and a new deal with the VC that funded Etsy and Twitter:

Shapeways Scores $5m From Union Square Ventures