Obama’s Marketing Message

By Morley Winograd and Michael D. Hais

In less than two weeks, when Barack Obama’s lead in all the polls is likely to be confirmed in the voting booth by the American electorate, millions of words will be written about why he won and how John McCain managed to lose. Unfortunately, marketing executives and corporate leaders have ignored some of the most important lessons from the campaign.

Obama's success to date lies in his ability to blend his own persona as a messenger with a unifying and uplifting message that reaches the newest generation of Americans, Millennials, born between 1982 and 2003. His campaign has mastered marketing through social networks and other Internet-based communication technologies. This “cool” approach defeated the “hot” rhetoric that came from his primary opponent, Hillary Clinton, and is likely to perform even more favorably against the more confrontational and traditional campaign of John McCain.

But Millennials don’t just represent the key constituency behind Senator Obama’s successful campaign but also a key market opportunity for economic growth. Almost one-third of all Americans are in this generational cohort, and even though many of them are still too young to vote, almost all of them influence the daily purchases of the families of which they are a part. Until brand managers and marketing mavens master the art of reaching and attracting Millennials, consumer expenditures will continue to languish.

CEOs need to learn how to create brands that attract Millennials with something more transcendent than their product’s functionality or characteristics. Corporations will only hit their growth targets if they are willing to change their own message, messenger and media to fit the tastes of this generation.

A recent study by The Economist magazine’s Intelligence Unit suggests this campaign lesson has not yet penetrated the thinking of many in the “C suites” of the world’s corporations. More than half of those executives said they did not currently have a strategy to target or retain this demographic group. In their report, "Maturing with the Millenials", survey respondents acknowledged the need for new tactics to target the millennial customer, but indicated a lack of readiness to do so.

For instance, the report found that, “While 44% indicate that communicating the right messages in the right medium and at the right time is critical to their success, the majority have yet to leverage enriched content, peer recommendations and enhanced online experiences as part of their outreach—even though they acknowledge these are among the most effective ways to communicate with Millennials.” This sounds a lot like Hillary Clinton’s advisors Mark Penn and Mandy Grunwald on the eve of the Iowa caucuses when they derided the supporters of Obama as looking “like Facebook” pages. When Obama’s Facebook legions came out to vote in droves in the Iowa caucuses they dealt a fatal blow to Senator Clinton's cause.

Companies, fortunately, do not have to suffer the short shelf life of failed candidates. They can change their strategies in order to capture an emerging new base. We have seen this with companies that have succeeded with emerging ethnic markets at home and with whole new markets abroad.

Even though most executives surveyed by The Economist understood that Millennials have specific consumer needs, few have tailored their marketing strategy for this generation. Four out of 10 executives in the Economist’s survey said that Web 2.0 technologies, such as webcasts and online forums, are the best way to serve Millennial customers. More than 80 percent agreed that consumer needs vary by age group, and 42 percent believed that a bigger share of investment should go towards Millennial customers. Yet remarkably, the respondents reported that telephone, e-mail and physical storefronts were the top three ways that Millennials could interact with their company currently.

The risks companies are taking by not addressing Millennials are great. John Gerzema, Chief Insights Officer for Young & Rubicam, details this argument in a new book, The Brand Bubble. His research shows that consumers’ trust in brands has declined by half in just ten years. Instead consumers increasingly turn to nontraditional sources of information, such as search engines and social networks, to determine what they should buy and from whom. That is why any good corporate CEO should check every day what customers are saying about their company on the mushrooming “Why I hate xx” websites that now exist for every major company.

To restore their brand’s value and regain traction with the buying public, companies will need to reinvent themselves in order to engage Millennial constituencies on Millennial terms and in Millennial media. They will need to learn the art of attracting support from Millennials without appearing to be chasing after it in much the same way Obama did in his campaign.

One leading-edge private sector example of how to pull off this Zen-like non-effort is Nike’s successful efforts to enhance its brand’s attractiveness by creating online communities of runners. By partnering with Apple it created an application for runners that transfers running time, distance and even calories burned to a Nano so that the results can be uploaded for sharing with others. By building virtual running communities, Nike gave its customers an opportunity to register their individual profiles while receiving content that they can access while running. Nike was able to create its own social network linking people with similar running habits, such as those who run with poodles, to produce a strong bond of affiliation among each member of the group, and from that experience an equally strong sense of loyalty to the Nike brand.

In 2006, the International Television and Video Almanac pointed out that Americans were being bombarded with about “5,000 marketing messages each day, up from 3000 in 1990 and 1500 in 1960.” Nothing in the trend line for communication technologies suggests this amount of corporate generated content is likely to decrease in the coming decades. Not surprisingly, Millennials can absorb much more information at any single moment than previous generations. But this does NOT mean that they are absorbing information in the same way. To gain the attention and brand loyalty of Millennials, companies will have to turn to non-traditional, online information distribution platforms to create a new message that builds a sense of community and caring around their products.

The best way to do that is to incorporate a cause or purpose into the reason for buying a product. It may be protecting the environment by going green, or reducing inequality in the world through acts of charity, or demonstrating a commitment to young people by investing in educational institutions, or all of the above. Regardless of the cause, not only did the era of unfettered capitalism end with this month’s financial meltdown, but so too did the days of appeals to consumers based solely on narrow self-interest or conspicuous consumption. Bling is out; doing good is in. Make that your message, and you have a story that will work effectively in the Millennial era.

Morley Winograd and Michael D. Hais are co-authors of Millennial Makeover: MySpace, YouTube, and the Future of American Politics