Posts Tagged 'Marketing'

Market research isn’t about storytelling, it is about predicting the future

We recently had a situation that made me question the credibility of market research. We had fielded a study for a long-term client and were excited to view the initial version of the tabs. As we looked at results by age groupings we found them to be surprising. But this was also exciting because we were able to weave a compelling narrative around why the age results seemed counter-intuitive.

Then our programmer called to say a mistake had been made in the tabs and the banner points by age had been mistakenly reversed.

So, we went back to the drawing board ad constructed another, equally compelling story, as to why the data were behaving as they were.

This made me question the value of research. Good researchers can review seemingly disparate data points from a study and generate a persuasive story as to why they are as they are. Our entire business is based on this skill – in the end clients pay us to use data to provide insight into their marketing issues. Everything else we do is a means to this end.

Our experience with the flipped age banner points illustrates that stories can be created around any data. In fact, I’d bet that if you gave us a randomly-generated data set we could convince you as to its relevance to your marketing issues. I actually thought about doing this – taking the data we obtain by running random data through a questionnaire when testing it before fielding, handing it to an analyst, and seeing what happens. I’m convinced we could show you a random data set’s relevance to your business.

This issue is at the core of polling’s PR problem. We’ve all heard people say that you can make statistics say anything, therefore polls can’t be trusted. There are lies, damn lies, and statistics. I’ve argued against this for a long time because the pollsters and researchers I have known have universally been well-intentioned and objective and never try to draw a pre-determined conclusion from the data.

Of course, this does not mean that all of the stories we tell with data aren’t correct or enlightening. But, they all come from a perspective. Clients value external suppliers because of this perspective – we are third-party observers who aren’t wrapped up in the internal issues client’s face and we are often in a good position to view data with an objective mind. We’ve worked with hundreds of organizations and can bring these experiences bring that to bear on your study. Our perspective is valuable.

But, it is this perspective that creates an implicit bias in all we do. You will assess a data set from a different set of life experiences and background than I will. That is just human nature. Like all biases in research, our implicit bias may or not be relevant to a project. In most cases, I’d say it likely isn’t.

So, how can researchers reconcile this issue and sleep at night knowing their careers haven’t been a sham?

First and foremost, we need to stop saying that research is all about storytelling. It isn’t. The value of market research isn’t in the storytelling it is in the predictions of the future it makes. Clients aren’t paying us to tell them stories. They are paying us to predict the future and recommend actions that will enhance their business. Compelling storytelling is a means to this but is not our end goal. Data-based storytelling provides credibility to our predictions and gives confidence that they have a high probability of being correct.

In some sense, it isn’t the storytelling that matters, it is the quality of the prediction. I remember having a college professor lecturing on this. He would say that the quality of a model is judged solely by its predictive value. Its assumptions, arguments, and underpinnings really didn’t matter.

So, how do we deal with this issue … how do we ensure that the stories we tell with data are accurate and fuel confident predictions? Below are some ideas.

  1. Make predictions that can be validated at a later date. Provide a level of confidence or uncertainty around the prediction. Explain what could happen to prevent your prediction from coming true.
  2. Empathize with other perspectives when analyzing data. One of the best “tricks” I’ve ever seen is to re-write a research report as if you were writing it for your client’s top competitor. What conclusions would you draw for them? If it is an issue-based study, consider what you would conclude from the data if your client was on the opposite side of the issue.
  3. Peg all conclusions to specific data points in the study. Straying from the data is where your implicit bias may tend to take over. Being able to tie conclusions directly to data is dependent on solid questionnaire design.
  4. Have a second analyst review your work and play devil’s advocate. Show him/her the data without your analysis and see what stories and predictions he/she can develop independent of you. Have this same person review your story and conclusions and ask him/her to try to knock holes in them. The result is a strengthened argument.
  5. Slow down. It just isn’t possible to provide stories, conclusions, and predictions from research data that consider differing perspectives when you have just a couple of days to do it. This requires more negotiation upfront as to project timelines. The ever-decreasing timeframes for projects are making it difficult to have the time needed to objectively look at data.
  6. Realize that sometimes a story just isn’t there. Your perspective and knowledge of a client’s business should result in a story leaping out at you and telling itself. If this doesn’t happen, it could be because the study wasn’t designed well or perhaps there simply isn’t a story to be told. The world can be a more random place than we like to admit, and not everything you see in a data set is explainable. Don’t force it – developing a narrative that is reaching for explanations is inaccurate and a disservice to your client.

The types of people you find in a market research presentation

Last summer I led a market research results presentation at a client’s office. I had not met any of the individuals in the meeting prior to the presentation other than my immediate client-contact. During introductions I tried my best to understand who was who and to carefully observe the dynamics between people. “Knowing thy audience” is key to an effective presentation.

And, I have to admit – within a few minutes I found myself stereotyping the members of my audience. I have delivered scores of presentations in the past and I can usually quickly assess what the dynamic of the room is going to be like and categorize attendees. But, I can also be wrong in my assessment and it isn’t healthy to make assumptions about people without taking the time to truly get to know them. I sort of feel guilty that I find myself doing this.

This particular presentation had gathered an interesting cast of characters and I couldn’t help but think about how they each were similar to people I have presented to in the past at various clients. Anyway, the list below is meant to be a bit humorous, and I think that anyone who has been in market research presentations will see people they recognize below.

“The Characters You Find in a Market Research Presentation.”

  • The Introvert. This is a person who says little during the meeting but her mind is racing. She tends to get active late in the meeting and provides insightful comments because she doesn’t feel a need to chime in on every obvious point. Others in the organization often ignore her because she is introverted but she is often the smartest person in the room. However, she has the potential to derail the end of the meeting by starting an entirely new line of conversation as you are trying to wrap up. How to succeed with the Introvert: Try to engage her early and ask for her perspective late in the meeting as this person often has the best things to say and adds a lot to the discussion if you can draw her out.
  • Mr. (Lack of) Attention Span. This is a person who probably comes late to the meeting and forces you to start over and repeat the first 10 minutes. Once in the meeting, he is constantly checking his phone, having side conversations, and asking questions that you just answered. This is also the person that skips ahead in the deck and won’t let you build a story as you would like. How to succeed with Mr. Attention Span: Do not provide handouts beforehand or during this meeting. Keep the presentation short if possible. State ground rules up front as to when you will pause for questions.
  • The Poseur. This person has a clear view of the world in his mind and will find a way to massage every fact you present to make it fit with a pre-conceived view. He uses your facts to illustrate just how insightful he is and what he already knows. This is the marketer that personifies David Ogilvy’s quote that marketers use research “as a drunkard uses a lamp post, for support rather than for illumination.”   He uses the meeting to become the center of attention. He has to provide his view on every slide and every conclusion you have no matter what the size of the meeting. He dominates and other attendees tend to defer to him before offering their own opinions.  How to succeed with the Poseur:  At the onset, set “pause points” in the presentation — at the end of each section you will call for a discussion. Establish ground rules for the meeting. Ask everyone to write down a prediction on how a research result came out on paper before you show the actual result. Then, call on other individuals to discuss their prediction. Look to qualitative techniques for inspiration on how to handle a dominant focus group participant for inspiration.
  • The Jargon Guy. This is a person who talks a lot but doesn’t really say anything. He is a master of business jargon – it is the person who will use words like “bandwidth”, “game changer”, “visioning”, etc.  He will add “ize” onto nouns to turn them into verbs and use acronyms as much as possible. He reads popular business books on the side. You’ll feel like you are in an episode of “The Office” when you meet him. How to succeed with the Jargon Guy: Learn some of the proprietary jargon and acronyms used by your client’s firm beforehand.
  • The Cherry Picker.  Similar to the Poseur, this is the client who also has a clear “map of the world” established in her head and won’t let facts get in the way of a good opinion. She is active in the discussion but what she does is cherry pick results – and criticizes every point that doesn’t fit with her vision, and falls in love with every point that does. How to succeed with the Cherry Picker: Try to get her to buy into your methodology and lead with conclusions you think are likely to fit with how she thinks. That may get her to listen more to findings that don’t fit with her outlook later on.
  • The Naysayer.  This person doesn’t believe in market research and once he learns the study isn’t perfect will challenge everything you say. He straddles a line between “critic” and “cynic”. How to succeed with the Naysayer: This person can be a useful contributor if you can get his negativity to become constructive and establish the right tone. Fortunately, his concerns can often be anticipated beforehand, and you can often address his concerns before he gets a chance to raise them.
  • The Academic.  The academic asks incredibly detailed questions about the methodology and slows down the initial part of the presentation. This person is usually highly educated and understands the details of statistics and experimental design, sometimes better than you do. The good news is she rarely questions your findings if she agrees with the methods you have employed. How to succeed with the Academic: get to her beforehand and share the details of the methodology so she doesn’t get the meeting off to a bad start by bogging it down with methodological details. This person can be a great ally for you during the talk.
  • The Box Checker.  This is a person who is mainly concerned that the research got done because it is part of a larger marketing process that he is responsible for. He is much more of a “process” than an “outcomes” person and tends to be bureaucratic. How to succeed with the Box Checker:  Make sure he knows the project got done efficiently, on time, and within budget.
  • The Enlightened Leader.  This is the person we all want to present to. It is the highest ranking person in the room, but she casts aside all her other responsibilities for the hour you have with her. For at least one hour, you and your client feel that this study is the most important thing in her life.  She truly listens, doesn’t presume anything, and allows the research to add nuance to her view of the world. She usually insists that others in the meeting take action based on the findings.  How to succeed with the Enlightened Leader: Bring her into the conversation early, as it sets the tone for everyone.

I should note, that with very few exceptions, these personalities tend to be respectful and courteous and less challenging to present to than the above descriptions imply. Above all, preparation is key to success with all types of people. You need to deeply know your data set and have well-supported conclusions and implications, as in the end that tends to get you over any rough spots that arise. Your day-to-day contact needs to be your ally, and running through the presentation in advance with him/her often helps stave off any rough moments. Most research presentations go well, but we aim for them to not just go well, but to be effective. While it might not be appropriate to stereotype as I have done here, it is appropriate to realize each individual is coming to your presentation with his/her own perspective. Understanding that perspective can be as important as the study itself in terms of having research inform better decisions.

 “Gen Z” should make you cringe!

Adults have a number of misconceptions about youth generations. A glaring one is a tendency to think that a new generation will become a more intense version of the previous generation. That is rarely the case – new generations tend to sharply break with the old.

Let’s start by reviewing what a generation is. A generation is a cohort of people who share a common location in history. A generation progresses through life stages together and experiences key life events (childhood, adolescence, family life, retirement) at the same time. While our life stages change as we age, our generation does not. There is a commonality of experience and perspective that influences how a generation reacts to challenges presented by any given life stage.

While generational beginning and end points are hotly debated by academics, they tend to be bounded by historical events. For instance, the Boomer generation is known as the generation born after WWII ended as birth rates rapidly grew. Xers are those that were born during the subsequent demographic dip. Millennials began as an “echo” boom occurred as the large Boomer generation had their own children.

Generational change is abrupt and disruptive.  My own experience with this goes back to when the Millennial Generation (born 1982 – 2004) was coming of age in the 1990’s. At the time I was conducting studies of young people and was noticing clear breaks in the data sets. Inflection points often appeared when we graphed research measures by age. It took me years to realize these inflection points weren’t linked to a stage of development or age as they were migrating upwards over time. Eventually, I discovered these inflections were happening right at the generational break line – as soon as individuals born in the early 80’s came into the data sets, things changed.

It took me years to figure this out because this generation was most commonly referred to as Gen Y at the time. What does Gen Y mean? To me, it meant this new group would be a continuation of Gen X – only they would exhibit Gen X traits at higher intensity. I went to many youth conferences where speakers said precisely this. I often left puzzled, as what they were saying didn’t line up with what I was seeing in the data we gathered.

This new generation wasn’t behaving anything like Gen X. While Gen X was filled with latchkey kids who had developed a strong sense of individualism, independence, and self-worth, this new generation was all about teamwork, parental structure and oversight, and continuous feedback and validation. Calling them Gen Y seemed ridiculous as it implied they were merely an extension of Gen X. Thankfully, although the Gen Y moniker persisted, the term Millennial soon took hold.

Generations have unique characteristics and tendencies. These characteristics are almost never simply continuations of a previous generation’s characteristics. We can all agree that Boomers have not acted at all like their Silent Generation predecessors or that Xers haven’t been at all like Boomers. Millennials represent a further break with Xers.

There is no authority that has been commissioned to name a generation. Generations prior to Boomers weren’t really named during their time and many will claim that the Boomers were the first named generation. Prior generations were largely named by historians long after they had existed. For example, nobody called the WWII generation the “greatest generation” or the “GI generation” at the time – these terms took hold well after Boomers had been named.

Generational names evolve. Names often begin as something that underscore how adults don’t understand that generations are not just continuations of the previous generations. As an example, Gen X was most commonly called “the baby bust” generation at first, implying that they were  merely a consequence of a birth rate decline extending from the baby boom era. The term “Gen X” was popularized in a novel by Douglas Coupland. It became popular not because of the letter X but what this letter signified – a lack of a name for a largely forgotten generation, but also one that wasn’t particularly interested in being categorized or targeted.

The term Millennial was also established relatively late in the game. It was popularized in a book called Millennials Rising, and prior names either reflected a continuation of a parental generation (“the echo boom”, the “boomlet”) or of Gen X (“Generation Y.”). Millennials is a much better name and has largely taken over for “Generation Y.”

The whole purpose of naming generations from a marketing sense is that generations represent segments of consumers with unique needs. Our goal in naming them should be to show how they are distinct from each other.

Which brings me to Gen Z. This is a term we are seeing more and more, and I am tending to feel that those who use it are displaying a fundamental ignorance not only of generational change but even what a generation is. Gen Z tends to be used to describe today’s adolescents. But, because the youngest Millennial is currently 13 years old, the term Gen Z isn’t being applied to a new generation at all. It is being used to describe young, late-stage Millennials, which is sort of a segment of a segment.

The key characteristic of this microsegment (late-stage Millennials) of interest to researchers is that their parental generation has changed. Whereas the oldest half of the Millennial generation was largely parented by Boomers, the younger half has been parented by Gen X. This has some implications, but today’s teens are still Millennials and will exhibit Millennial traits.

The term “Gen Z” makes is cringe-worthy as it lays bare a fundamental misunderstanding of the generations. I even saw a study released recently on “Gen Z college students.”  Not sure I understand that, as the leading edge of the generation after Millennials is at most 12 years old currently. We are at least five years from the first member of the next generation showing up on campus.

“Gen Z” is also being used to refer to the generation that will come after Millennials (currently children aged up to 12 and yet to be born).  I have also seen this new generation referred to as “post-Millennial.”  And, what are we to name the generation that comes after this Gen Z? We’ve run out of letters, so perhaps we will have to use a spreadsheet convention and call them Generation AA.

Just like for previous generations, I’d expect to see today’s youngest generation eventually named in a way that describes who they are. I have heard some reasonable candidates:  The Homeland Generation, the iGen, The Pluralist Generation, etc. These all are descriptive. If the past is any indication, sometime in the next 10 years some name will achieve consensus (and it won’t be “Gen Z”).

For now please join me in cringing whenever you hear someone say the term “Gen Z.” J.

How to Be a Good Research Supplier

Crux Logo Final 2016

A while back, we posted “How to Be a Good Research Client” to help clients understand the makings of a successful partnership from the supplier perspective. Here, we’d like to do the opposite: advise suppliers on how to position for success with their clients.

Being an outstanding supplier goes beyond the technical abilities of understanding statistics, experimental design, business, and marketing. There are many researchers who have these skills, but are not great suppliers. They are necessary, but not sufficient skills.

It starts with empathy – a good supplier will understand not just the business situation the client is facing, but also the internal pressures he/she faces. We’ve found over time that suppliers who have spent time as clients themselves understand what happens to projects after the final presentation in a way that many suppliers just cannot.

So, here goes:  Our 10 tips on how to be a good research supplier.

  1. Begin by seeking out the right clients. There is simply too much pressure, especially at larger research firms, to take on every project that comes your way. It really helps if you have guidelines as to which clients you will accept: which ones match with your skills in a unique way, are doing things you are genuinely interested in studying, and have individuals who are good project managers.
  2. Be honest about what you are good at and not so good at. Research isn’t quite like law or medicine where every task seems to devolve to a specialty, but there are specialties. You are not good at everything and neither is your firm. Once you realize this, you can concentrate on where you provide unique value.
  3. Understand what is at stake. Some market research projects influence how millions of dollars are spent. Still others are a part of a substantial initiative within a company. Somewhere, there is somebody whose career hinges on the success of this initiative. While the research project might come and go in a matter of months to you as a supplier and be one of a dozen you are working on, the success of the project might make or break someone’s career. It is good to never lose sight of that.
  4. Price projects to be profitable. You should price projects to make a strong profit for your firm and then not waiver easily on price. Why? Because then you can put all thoughts of profitability out of your mind at the onset and focus on delivering a great project. Never, and we mean never, take on an unprofitable project because of the prospects of further projects coming down the road. It doesn’t serve you or your client well.
  5. Don’t nickel and dime clients. They will ask for things you didn’t bid on or anticipate. Not everything they need will be foreseeable. An extra banner table. A second presentation. A few extra interviews. Follow ups you didn’t expect. Just do it and don’t look back. Larger research firms are prone to charging for every little thing the client asks. After a while, the client stops asking and moves onto another firm. Projects can be expensive. Nickle and diming your clients for small requests is about as frustrating as buying a new car and having the dealer charge you extra to put floor mats in it.
  6. Never be the one your client is waiting on. If there is one rule here that we feel we have mastered at Crux it is this one. There are a lot of moving parts in a project. You often need things from clients and they need things from you along the way. Never be the one people are waiting on. Stay late if you have to, come in early, work from home … do anything but be the “rate limiting factor” on a project. Your clients will love you for it.
  7. Be around “forever” for follow ups. We have seen suppliers put in contracts that they are available for 3 months from when the project is over for follow up discussions. Why? We love it when clients call years after a project is over as it means the project is still having an influence on their business. Be there as long as it takes for them.
  8. Be human. It took us a little time to learn this one. We used to be very workmanlike and professional around clients to the point of being a bit “stiff.” Then we realized clients want to work with people who are professional about the task at hand, but also fun to be around, and well, human. Granted, they don’t want to hear about every stress of your personal life, but relax a little and be who you are. If that doesn’t work out well for you, you might not be in the right career.
  9. Make them feel like they are your only client. You might have a dozen projects on your plate, family commitments tugging at you, coworkers driving you crazy, and a myriad of other things competing for your time. Time management isn’t easy in a deadline driven field such as research. But it also isn’t your client’s problem. They should feel like you have nothing else to do all day but work on their project. The focus needs to be on them, and not your time management. When you are late for a meeting because you had another run over, you are telling your client they aren’t your number one priority.
  10. Follow up. The project might be over for you, but it lives on longer for your client.  Be sure to follow up a few weeks down the line to see if there is anything else you can do. You’ll be surprised at how often the next project comes up during this conversation.

Crux Research is Going to the Ogilvy’s!

Crux Research is excited to announce that our client, Truth Initiative, is a finalist for two David Ogilvy Awards. These awards are presented by the Advertising Research Foundation (ARF) annually to recognize excellence in advertising research. Ogilvy Awards honor the creative use of research in the advertising development process by research firms, advertising agencies and advertisers.

Truth Initiative is a longstanding client of Crux Research. Truth Initiative is America’s largest non-profit public health organization dedicated to making tobacco use a thing of the past. Truth is a finalist in two Ogilvy categories:

For both of these campaigns, Crux Research worked closely with CommSight and Truth Initiative to test the effectiveness of the approaches and executions prior to launch and to track the efficacy of the campaigns once in market.

We are honored and proud to be a part of these campaigns, to have had the opportunity to work with Truth Initiative and CommSight, and most importantly, to have played a supporting role in Truth’s mission to make youth smoking a thing of the past.

The 2016 ARF David Ogilvy Awards Ceremony will be held March 15 in New York.  More information can be found Ogilvy Awards.

“I wish that I could be like the cool kids”

In today’s digital environment, marketers are often seeking a viral way to spread news about their product or to stoke a trend. Traditional thinking was that trends spread predictably. Trends were seen to launch on the west coast (usually from urban environments), spread to the east coast, and eventually make their way to middle America and a mass market. This is why so many “cool seeker” or “trend seeker” researcher panels were established. By connecting to the cool kids in the right environments, marketers could get an early sense of what was going to happen next and get on board for the ride. They could seed ideas with the right audience and let nature take its course.

The Internet has largely blown up this paradigm. It has become a great “leveler” of youth trends. Now, a trend can start anywhere, become viral seemingly randomly, and spin out of control quickly. A geographic center of trends is hard to pinpoint if it exists at all. In research, “trend seeker” panels have become more of an oddity in market research – and have been supplanted largely by online communities of teens from across the country.

How can a communications and “connecting” technology (the Internet) have such a profound impact on how innovations and trends take hold?

Innovation diffusion to the mainstream has been the subject of academic study for some time.  Perhaps the most seminal work in the field came in 1962 when Everett Rogers published The Diffusion of Innovations. This book has been required reading at MBA marketing programs for more than 50 years.

In this book, Rogers outlines a classic theory. Innovators (2-3% of the population) start using a product. Early adopters (10%-15%) see what the innovators are doing and jump on board quickly. Next, the early majority (30%-35%) jumps on board as the hype around the product peaks. The late majority (30%-34%) gets on board. Finally, eventually the laggards (10%-15%) join in.

For decades, this thinking caused marketers to focus a disproportionate effort on the innovators – the 2%-3% of the population that supposedly spark new trends. This concept is the underpinning of why marketing dollars flow towards young people, urban consumers, minorities, etc. as marketers hope to start a chain reaction through the Rogers segments. Why have we had such a focus on youth marketing? It isn’t because they have a lot of money to spend, as compared to other age segments they don’t.  It is because marketers feel they are influential.

New media and viral marketing has made this thinking even more prevalent. If we can just reach the influencers, we’ll let loose a viral effect and sell a lot of product. Unfortunately, this thinking is a good example of applying an old paradigm to a new world.

Even in the pre-Internet past, this thinking tended to work more on a “fad” than a “trend” level. To illustrate this, in presentations I often ask the audience to write down what they think the most successful marketing brands and products have been in the past 10 years that are youth-oriented. I pause, and then list them out on a whiteboard. Typical responses are as follows:

  • The iPhone
  • Harry Potter franchise
  • American Idol
  • Barbie
  • National Football League
  • Various Boy Bands

I then point out that franchises like these, which have hit it incredibly big with youth, all have one thing in common. They didn’t diffuse to the mainstream in the Rogers fashion. They didn’t start by being popular with cool kids. Rather, they found a way to go directly to the mainstream. Oftentimes, they got there by being shunned by the cool kids.

I believe the rise of the Internet will eventually (once they catch on) cause marketers to stop thinking in the traditional way about how new trends diffuse to the mainstream. The introverted kid in the Midwest who has a popular blog is fast becoming more influential than the hipster on the street in Los Angeles. Marketers will find more direct tributaries to the mainstream, and the cool hunter research panels that still exist in the market research industry will disappear.

What has two eyes, one brain, and costs a quarter million dollars to educate?

education-at-work-college-evolution

Publicly-funded education is perhaps one of America’s greatest triumphs. Education has been part-and-parcel to our democracy and the founding fathers realized early that if government was going to be of the people, for the people, and by the people, then the people better be well-educated.

The idea of compulsory public schools goes back to the founding of the nation but actually took some time to gain traction. This is likely because education was and (despite recent history) remains largely a local responsibility. Throughout the 1800’s States passed laws making education compulsory. It took some time for these laws to create a culture where education of children was largely left up to the State, sort of “outsourced” from parents.

In 1912, 72% of America’s children were in school. By 1930, this percentage had reached virtually 100%. I believe this is the main factor behind the dawning of American dominance in the 20th century. There were other factors, but the US had early success in making education compulsory, which gave us a head start in innovation and business. It led to almost a century of leadership of the world’s economy.

Yet, somehow this educational prominence has slipped, or at least has been perceived to have slipped. International comparisons tend to show that our students are not doing well compared to other developed countries. Although many of the prophesies of “A Nation at Risk” have not come to fruition, the concerns expressed more than 30 years ago are resurfacing.

Complaints about the educational system seem to flow with the business cycle and peak at times of economic uncertainty. And we shouldn’t ignore the economics: the resources we spend to educate our children are considerable. My local school district currently spends $12,684 per student per year. Some quick math implies that it cost about $165,000 to educate my child from grades K-12.  Since I have two children, it has cost about $330,000 to get them to a high school diploma. As a parent, I owe our local taxpayers a thank you.But, as a taxpayer soon to not have children in school, I have to be concerned about this level of public investment.

Take the case of a child in the school district where I live, which is a suburban district in New York State.Most students from this district end up going to a 4-year college. For demonstration sake, I picked the closest State college and closest private university to where I live. The annual tuition, room and board, etc. for these students runs $18,055 at the State college and $45,602 at the private university. I am assuming this captures the full cost of what it takes to educate a student for a year at these institutions. These costs might be paid by parents and students, or loans, or grants. For this example, it doesn’t matter where the money comes from.

Using these figures, the total cost of educating a child in our district from Kindergarten until he/she turns the tassel at college is about $237,000 for the State college and $347,000 for the private university. This is what it costs “society” to educate a child from my area, with society being a mix of tax dollars, parent and child money, scholarships, loans, etc.

This is likely an underestimate of the true costs of education. Costs are higher than this calculation for the State college, as they receive government subsidies that help keep their tuition costs down. And, there is an opportunity cost to not having the student in the workforce and contributing to the economic output of the nation until he/she is 21 or 22 years old.

This example shows that there is an understandable economic underpinning to current criticisms of our education system. At a time when we have pressed an increasing base of students to go to college, the college costs have risen substantially. That in itself is not problematic – more problematic is that the costs of college have been growing at a much faster rate than the benefits.

A recent piece by the Wall Street Journal indicates that since 2006, the cost of a 4-year degree has increased by 16.5%. At the same time, starting salaries have stagnated, and I have even seen calculations suggesting first year salaries for college graduates have fallen for the first time in history, when calculated on a real basis.

So, is this a bubble that will have to pop? I guess the definition of a bubble is that nobody really knows we are in one until it punctures. But, it is predictable that education institutions, both K-12 schools and colleges and universities, are going to be under even more intense pressure in the future.

Marketing in Schools – A Necessary Evil?

kidsforsale

The youth marketing industry’s practices are coming under increased scrutiny by the media, academics, and government. Issues such as increased commercialism directed towards children, online privacy, marketing in schools, the content of children’s media and advertising, and childhood obesity have become part of a national discourse.

This post is going to stress the topic of marketing in schools.

There has been a lot of information and misinformation placed into the public debate regarding commercialism in schools. At Crux, we feel we are in a unique position to comment. We have worked with and for school districts for many years and have close relationships with many school administrators. At the same time, we work with some of the most respected brands in youth marketing. So, the topic of marketing in schools is one we contend with often.

Commercial presence in schools is not something new. Local corporations have a genuine interest in the quality of their school districts. Not only are companies significant taxpayers that want to be sure their taxes are being spent wisely, but the quality of the workforce they can attract, local housing values, and quality of life for their employees depends greatly on the schools.

In terms of brands in schools, there has been marketing in schools for a long time, but it has really been the last 20 years or so that commercial interests really started to see schools as an untapped resource. I don’t think too many people would deny that the level of marketing activity in schools has been on the rise. You can notice this in your own travels in schools. You just “see” brands in school environments much more than you used to.

I thought I would share some of my own anecdotal conversations I’ve had with school Superintendents.

First, when I myself first starting “selling” our research to school leaders, I learned right away that the “pitch” had to be couched in a certain way. I had to show them how the research would lead to greater staff productivity or greater parental involvement in the schools. And, it was the moment that I had information that showed that our studies directly lead to greater student achievement that our services got easy to promote.

Which leads me to an important point: the motivations of school leaders are very pure – in a way you don’t see often in the corporate world. They are all about the kids. If you have a program and want to win over a school administrator’s heart, show them how it benefits the kids. Financial issues are very real to them – but are not what makes them tick.

Second, if you think you have pressures in your job, consider theirs. I’ve been to dozens of school board meetings. These are people that are at the center of many controversies. They are negotiating with the union. A parent has a concern. They have a crazy school board member to appease. The governor has given them some more unfunded mandates. They are adapting to new Common Core Standards. In short, they have a lot of battles to fight. Don’t assume that yours is going to make their priority list. So I learned that early on – if you are doing something that creates controversy, they will shy away.

Budgeting and school law are a big part of their job. But, it is also a part of their job they hate.

Finally, and probably the salient point for those who want to market their brands in schools, is when you speak to Superintendents about marketing in schools, the ONLY thing they will play back are the financial benefits. I have never met a school official that thought allowing marketers into schools is a good idea. But I have met plenty that feel it is a better option than making further cuts to the school music program.

And that is a perception that needs to change.

So, why do we see corporate involvement in schools? First and foremost, school budget issues are very real and acute. But, there is also a sense that society has become so commercial with advertising clutter everywhere, that allowing it into schools isn’t such a big deal.

And, the youth market is seen as a growth area – more and more marketers are developing plans for the youth demographic. The youth market has become increasingly lucrative. At the same time, schools have become relatively poor and more focused on their finances.

This makes a point that I think many people in the corporate world don’t realize. Typically, somewhere between 80% and 90% of the annual school budget is not under the discretion of school leaders. Between the union contract and state mandates, there really is little discretionary spending. The budget situation became dire in the recent recession and has yet to pick up.

So, what we see are schools taking some desperate measures to stay afloat fiscally. Some of these measures would be quite comical if they weren’t true. We have found cases where schools have hired marketing firms to sell naming rights to their buildings and facilities, have held fundraising telethons, etc.  We have even found a case where parents held a blood plasma drive in order to make enough money to save a teacher’s job.

Now certainly all schools aren’t this desperate, but they are certainly not flush with cash either.

So, let’s think about it a little more rationally. Why would educators want corporate involvement in schools?

Certainly, financial considerations are important. But there is also a big trend towards narrowing the curriculum to core subjects. Schools are being held accountable for test scores in math and reading.  So their resources are flowing to core subjects. This is putting non-core subjects (music, languages, arts) all at greater risk.

And, since the economy hasn’t been great recently, taxpayers have not been supporting tax increases like they once would.

At the same time, corporations want to be in schools like never before. Young people spend about a fifth of their lives in schools, and schools are about the most uncluttered advertising environment available.  Also, to some extent the medium is the message – an advertising message delivered in schools carries an implied endorsement.

Finally, traditional advertising venues are not working – at least not as well as they used to. Media has fragmented and the way young people use media has fundamentally changed. It is a bit of a mess.

So, companies do a variety of things. They place ads in the schools, on buses, on scoreboards, and on book covers. They distribute product samples in schools and place yearbook ads. They work with textbook publishers to get their products mentioned in books. They sponsor programs like the High School Heisman, Odyssey of the Mind, National Science Bowl, and National Spelling Bee.

And, in what might have been the straw that broke the camel’s back, they establish vending machine contracts and pouring rights for soft drink companies. This created such controversy that sugary drinks have been disappearing rapidly from school hallways.

It is easy for the youth marketing industry to look like a villain, but there are some strong arguments that can be made in support of advertising in schools:

  • Companies provide materials and financial support that would not be available otherwise.
  • Commercial materials present an opportunity for teachers to discuss media literacy in their lessons.
  • Teachers are capable of evaluating materials for commercial bias and using materials appropriately.
  • Businesses have unique information and resources that improve education – often better resources on some topics than educator’s have.
  • Problems with marketing in schools have been exaggerated. Commercialism is everywhere today and our kids can handle it, perhaps better than adults.

Of course, there are strong arguments against having a commercial presence in schools:

  • We are ceding control of education to people outside of education, and education is supposed to be locally controlled. Education isn’t and shouldn’t be a business.
  • School marketing efforts can compromise the integrity of education.
  • Ads in schools imply an endorsement from the school, which isn’t accurate.
  • There is a blurring of the line between education and advertising and kids don’t understand the difference, particularly younger kids.
  • Teachers are not appropriate gatekeepers as they have no training in this area.
  • We are promoting materialism.

So, how can youth marketers get on the right side of these issues?

Well, some ways of reaching young people in schools are seen as more appropriate than others. Sponsoring sports competitions, providing loyalty programs that reward schools for gathering product labels, purchasing sports equipment with brand names on them, school book fairs, and advertising in school newspapers tend to all be seen as appropriate tactics to reach children in schools.

Advertising on school buses, advertising on school book covers, and integrating brands into instructional support material and lessons tend to be seen as inappropriate.

So, below is our 6 step guide for organizations who seek to further their brands in a school environment.

  1. First, realize that to date opposition to in-school marketing has effectively positioned youth marketers as the “bad guys.” It doesn’t have to be that way, but the industry is starting from a negative position.
  2. Improve PR:  It is not inconceivable that marketers can be positioned as a “savior” and not a “villain.”  Done right, school marketing provides more than financial support – it can provide educational support as well.
  3. Stop doing the “really dumb” things. Your involvement has to be more than just advertising. It has to further an educational mission at the same time.
  4. Clearly delineate commercial messages – don’t “veil” them in curriculum, place them in contexts that are obvious advertising vehicles.
  5. Show that your involvement makes a difference to an educational need, and not just a financial one. I think most school leaders would agree that this is the essential approach.
  6. Leave curriculum and instruction to the educators, but if your organization has an expertise that is relevant to the curriculum, offer it!

Remember, school leaders have to choose their battles. Your in-school marketing can be something they trumpet, not something they have to defend.


Visit the Crux Research Website www.cruxresearch.com

Enter your email address to follow this blog and receive notifications of new posts by email.