Solving marketing complexity is not about just about getting the next campaign right. It’s about a new philosophy of marketing strategy – a new type of understanding, where micro changes in individual behavior yield large changes in macro results. At the heart of this capability is the field of complexity science. Complexity science leverages the latest ideas from behavioral economics, neuroscience, psychology, system dynamics, and network theory to help marketers understand how their message is received, when it is passed on to other people, and best placement to achieve the highest impact.
The goal of this new approach is to provide answers to the tough questions:
- How well do my marketing tactics work together?
- When should I launch a new product or a service innovation?
- Which of my media channels delivers the best returns?
- What is the best way to adapt to and beat the competitors?
- How should I change my marketing mix to grow sales and protect brand equity?
How does this type of strategic capability do this? Three powerful ideas shape the model and its outcomes: 1. The Social Network
Whatever choice you make regarding what you buy, later you will tell your loved ones, friends, and colleagues about it. And they’ll tell their friends and onward this information will flow around towns, cities, and the world about brands, from where, and under what conditions to buy them. Complexity science models the structure of these networks and interpret all the interactions within it. It express the results in measures of paid and earned media, word-of-mouth, and on-line behavior. 2. The Product Reality You can have the best marketing strategy in the whole world but if your product is not very good, it won’t last long in the market. This key difference between a consumer’s perception and ultimate experience can have huge ramifications, either positively or negatively. Until now, no one has been able to build this difference into an analysis of marketing econometrics – but we’ve done it. 3. Agent-Based Modeling This is the tool that brings everything together: Agent-based modeling is simply creating “agents” (customers), connecting them to others (over a network), and strategically assigning them to receive marketing campaigns and influence others. We want ABMs that are simple (contain only what is necessary, and no more), valid (produces scenarios that match the real world), and useful (they provide strategy recommendations like, “Increase television marketing to people 15-19 years old” or “Host a modern art installment in front of your corporate headquarters”). ABMs incorporate feedback. Feedback empowers us with a terrifyingly accurate understanding of the consequences of our actions (changing this here does what way over there?). It also builds in interdependence: Even our connected models are connected to each other. In addition, it allows for self-organization. Like in most of the marketing environments in which our customers live, there is no central authority telling them what to do. They’re reacting totally organically to media, friends, and their own product experience. Insights into Sales and Brand Equity Why do all of this? Well, first, ABMs help us Explain: All results tell a story. They also Predict: What’s next? ABM results are richer and more robust than a statistical prediction without losing the rigor of traditional analysis. Finally, ABMs Empower: Marketers become in charge of it (the fractured and diverse marketing environment). It’s no longer in charge of them. They are able to shape perceptions as pat of the conversation not as an intruder How a person feels about a brand and whether they buy the product are not the same thing, yet we often use one to approximate the other. Concentric’s system analyzes and reports sales and brand equity separately and simultaneously, a holy grail of sorts for marketers looking to optimize investments. Not only can you provide ROI analysis across all touch points but also nuanced intangible insights about the brand and the way it works in the
communities in which it lives. Based in Cambridge, Massachusetts, Greg Silverman is the CEO of Concentric, a company empowering their customers to create innovative and breakthrough strategies through the use of agent-based modeling and complexity science. Connect with him on LinkedIn here.