Brands at Risk of Self-Destruction as Marketers Miss the Mark

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Ninety-five percent of advertising spend in 2009 had no impact on the consumer

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Consumer trust is at an all-time low. What we are witnessing is an era of individualization. It is no longer adequate to adopt a strategy of mass broadcast and one-way conversations. Brands should be trying to understand communities rather than focusing on siloed communication channels.

Alterian (LSE: ALN), the leader in customer engagement technology and solutions, today published a new report illustrating a major social change in the way consumers listen to and engage with brands. Only five percent (four percent UK and six percent U.S.) of consumers surveyed in the report trusted advertising and eight percent (nine percent UK and six percent U.S.) believed 'what the company says about itself'. This equates globally to nearly $426 billion spent on ineffectual advertising activity in 2009 alone (1).

In stark contrast, the research found that consumers actively engaging in the use of social media feel more in control of relationships and more positive about their connection with brands in general. A third (31 percent UK and 35 percent U.S.) of respondents using social media believe that 'companies are genuinely interested them'.

"The report highlights that the majority of marketers are simply not hitting the right note with their target audience," commented David Eldridge, CEO, Alterian. "Consumer trust is at an all-time low. What we are witnessing is an era of individualization. It is no longer adequate to adopt a strategy of mass broadcast and one-way conversations. Brands should be trying to understand communities rather than focusing on siloed communication channels."

The report highlights that many organizations still do not recognize the need to change, with 58 percent of respondents believing that the lack of a social media strategy was due to the absence of board support. As global advertising levels are predicted to increase by 0.8 percent in 2010, the report calls for businesses to redirect their marketing spend into better understanding their audiences, which means investment in appropriate skills across every department to make the most of the opportunity that new media affords them.

Eldridge concludes, "Traditional marketing is dead. To know and communicate to individuals, to a specific individual, should be the strategic and tactical goal of all brands and organizations. This will present the number one marketing and wider business challenge over the coming decade. The question is how quickly can brands evolve their marketing strategy? If brands are ready to increase marketing budgets let's ensure that we focus that resource in the right places."

Author of the report, Professor Michael Hulme, said: "Meeting the challenge of individualization will require new thinking in the collection of customer information/data for an organization to be able to interact at a personal level. This will call for a commitment from the business to both structural and skill changes, arising from the need to break down silos, both departmentally and functionally to address the 'single view' of information but to also understand how the information is being used at any one time across the organization."

The report, "Your Brand: At Risk or Ready for Growth?", is available for download at http://www.alterian.com/brands-at-risk.

About Alterian:

Alterian (LSE: ALN) enables organizations to create relevant, effective and engaging experiences with their customers and prospects through social, digital, and traditional marketing channels. Alterian's Customer Engagement solutions are focused in four main areas: Social Media, Web Content Management, Email, and Campaign Management & Analytics.

Alterian technology is utilized either to address a specific marketing challenge or as part of an integrated marketing platform, with analytics and customer engagement with the individual at the heart of everything. Working alongside a rich ecosystem of partners, Alterian delivers its software as a service, or on premise. For more information about Alterian, visit http://www.alterian.com or the Alterian blog at http://www.engagingtimes.com.

(1) Source: This Year, Next Year", Group M, December 2009

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Lauren Eichmann
Walker Sands Communications
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