October 23, 2007
Branded Services: The Way of the Future?

Even as television and other media forms struggle to quantitatively understand audiences as anything other than a mass of passive eyeballs, there is an increasing awareness among marketers that connecting with a brand is an active process not just for advertisers but for consumers as well. One of the ways this approach manifests itself is the movement away from traditional commercials and sponsorships and the movement toward a much different approach: branded services.

It's a concept that perhaps sounds novel and yet not all that surprising at all. Built off the backs of various goodwill and public relations initiatives that have long been a part of marketing brands, these newest moves are to offer services and experiences to potential consumers that in some way help promote the overarching brand.

Stores, of course, have done this for years. From free jewelry cleaning to various free consultations offered by retailers, stores have known that you can often get consumers into the store by offering a complementary service that then gives some goodwill and cache to the brand that might make you a future destination for the consumer, when they are in the market for your main line of business.

A little while back, Louise Story ran a piece in The New York TImes about some of these initiatives, including Nike's online community to encourage folks to exercise by using their iPod as a pedometer. She writes:

Behind the shift is a fundamental change in Nike's view of the role of advertising. No longer are ads primarily meant to grab a person's attention while they're trying to do something else--like reading an article. Nike executives say that much of the company's future advertising spending will take the form of services for consumers, like workout advice, online communities and local sports competitions.

"We want to find a way to enhance the experience and services, rather than looking for a way to interrupt people from getting to where they want to go," said Stefan Olander, global director for brand connections at Nike. "How can we provide a service that the consumer goes, 'Wow, you really made this easier for me'?"

See, for instance, the philosophy for ING Direct Cafe, which I wrote about last month, where a banking institution provides potential and current customers with coffee but also talks about the company's financial offers as well. Of course, you can go in for a cup of coffee and little else, so the service (providing coffee) actually helps to build a link to and goodwill for their banking services.

Thinking of services as marketing helps answer the question of what consumers get back out of advertising. The Times article points out subsidizing media content, but perhaps the benefits of dealing with a brand is more tangible and apparent in these service-based initiatives than in sitting through a 30-second spot or looking at a print ad or banner ad. The branding aspect of this is apparent in most of these instances, in that those taking advantage of the service generally realize that the goodwill is based on trying to bring people back in to pay money in the future for other services or products, or toward the brand in general.

But how do we measure the worth of these types of marketing versus the means by which to understand more traditional initiatives, or should we? Do the lower forms of "I" for these types of initiatives change the whole aspect of the concept of ROI?