At this moment, I’m sitting at the airport of Frankfurt, waiting for my flight to Vienna. I’ve spent two days in Germany’s most central metropolis. I talked about marketing. I listened on marketing issues. I was a marketing professor. One of
– the most promising early-career marketing researchers
– working on quantitative/marketing strategy topics
– at European top universities
That’s a quote of those who invited.
The whole thing took place at the Frankfurt School. It’s a lovely bit of architecture. I enliven this post with random photos of the building.
YES is Young European Scholars. YES is an initiative by Frankfurt’s two marketing departments. Both Goethe University and Frankfurt School have used the past few years to really step forward as light-towers of German marketing research. Young and rather young faculty were pivotal to this rise. But there’s actually an entire generation of young scholars growing up.
I got my invitation at some point in June. I had just released my post on baking cake for my students. My temporal move to Munich was imminent. I knew that I’d be leaving academia at the end of the term. So I briefly connected with the organizers and we agreed that I should join anyways. And I’m glad I did.
YES brought together a small crowd of people between their 30s and 40s. Some already have reached tenure. Others are just about to start their first professor position. A few are on research-intensive post-doc positions. In total, we were something like 30 attendees. The program featured just six presentations. It wasn’t a conference in the classic sense, but more of a workshop-like format. Much better and much less superficial than the usual 20min presentation
Anyways, it’s more a community meeting than a conference. Personally, I didn’t know everybody, but I knew quite a few already from previous academic conferences. When I saw the participant list, immediately understood that it would be a meeting of quality. They gathered people who are ethical, interested in improving academia, social, friendly, optimistic, and intelligent. It’s awesome to listen to their ideas and to contribute to them with some thoughts. The future looks bright for the European marketing scene.
For instance, Maarten Gijsenberg (Groningen) used a Dutch data set of advertising spending to analyze if firms tie their advertising expenditures patterns to advertising expenditures of competitors. And if it pays off. Yes, he says: firms should follow a pulsing schedule of their advertisement, but adjust it to competitive spend. Interestingly, his results showed that a dumb and even spread of advertising over time was not that much inferior to this optimal strategy. So here’s the question that a firm should really ask itself: how much do we spend on monitoring competitive advertising as opposed to how much do we earn from competitor-maintaining pulsing schedules over this simple even allocation. For most firms, monitoring expenses are likely small enough. And they will pay off in other competitive arenas. But it’s nice to see some empirical evidence that simple strategies have not lost all use.
Yes, sharing customers
Valeria Stourm (HEC Paris) had another take on competition. Well, in her case it’s better to think about cooperation instead. See, you certainly have some loyalty cards in your wallet. (I personally use an app for that.) Some firms will open bonus programs only for their own customers. Others will participate in cross-firm-cross-industry programs. In reality, many firms will do both. In Germany, Payback exemplifies of the latter. So, when is Payback a good choice? Valeria says that you should not be the only shop of your kind in the program. Makes sense. If I don’t think that bike shops are using payback as well, I won’t think about redeeming my points. I’ll just think that payback is for gas stations and Karstadt warehouses. And then there’s no loyalty benefit for the single bike shop in the payback program. Importantly, there’s no cross-shopping effect from one bike shop to the other. Which does take place. Insert any reason why you don’t always go to the same shop. Then think about the payback program membership as some sort of a certificate that this other bike shop is no worse than your common choice.
Sourindra Banerjee from Leeds pointed out that he had six hypotheses. That’s great. Greater is his focus on doing marketing research that focuses on emerging markets. In this case: Bangladesh. I’m always happy when I may learn more about how marketing works outside the big corporate world. So, imagine that sales (of anything) is a tough challenge in rural communities in Bangladesh. They are dispersed, difficult to reach, and not well educated. Put simply: it’s a nightmare for firms to exert tight controls of their sales force. Instead, they might let them loose and give them autonomy to operate on their own. That can be a nightmare, too. You want to identify those sales people who actually can exploit this autonomy. Otherwise it’s just saving cost on control, but also compromising sales due to a lack of control. Sourindra tested the idea that empathy is a personal trait that successful autonomous sales people share. Oh, but empathy is not empathy. You achieve better outcomes with cognitive empathy, i.e. understand the perception of things of customers. Understanding their feeling also helps (that’s emotional empathy), but not with everything.
Yes, the big short
Anatoli Colicev (also Bocconi, and he’s actually tall) spoke on How Main Street Drives Wall Street, i.e. Customer Satisfaction, Short Sellers, Stock Returns, and Risk. I’ve followed his presentation already in April, when he gave his job talk at Bocconi. Basically, some papers proposed around 10 years ago that customer satisfaction has an influence on stock returns. Empirically, investors appear take into account information from publicly available customer satisfaction metrics. Anatoli insisted that it’s a very specific type of investors, i.e. hedgefunds that go short on a stock. Other investors ignore customer satisfaction. Message: selling customer satisfaction metrics to analysts is a profitable business for the vendor; the normal buyer doesn’t use it. Only very specialized buyers (hedgefunds) eventually use it. We can also change the perspective: some firms undoubtedly want to serve happy customers. They won’t reap direct stock market benefits from their efforts. If that’s their interest, they might need to take a more proactive approach.
I’ve backed a few projects on Kickstarter and Indiegogo. Not always, but occasionally with big success. Us backers are a strange breed. And look at that. Cathy Yang (HEC Paris again) looked at how novelty and usefulness influence the total amount that backers give to a project. You might say: more novel and more useful products should receive more money. Now, we can measure it by claims that project owners make. But of course they can lie. Someone who repeats again and again and again how novel his product is… he might appear to hide that something is wrong, right? Cathy’s results show that more novelty claims are better. And more utility claims are better. I mean: more novelty claims given a specific number of utility claims. And more utility claims given a specific number of novelty claims. But more novelty claims and also more utility claims, that’s bad. It will reduce the additional funding. Still, you may take away: more claims engage more people. (Or if you’re on Indiegogo: more claims fool more people.)
Yes, Germany’s next influencer
We concluded the meeting with Andreas Lanz (Mannheim). He spoke about influencer marketing. It’s a hot topic. We are not really sure yet how it pays for firms. We do know it does pay for firms. Sometimes. But not always. It might depend on the influencer. And not all influencers are cheap. What sounds simple is actually complex: His model boils down to an economic calculation. If you have less budget, don’t pay those who already are influencers. Pay those who are not yet influencers, but pay them next to nothing now so that they do something of value in the future. The problem is: how do you know who will become Germany’s next big influencer? And that’s where his model then turns complex and develops an algorithm to monitor and identify them. It’s somewhat idiosyncratic to the platform he is studying (Soundcloud) that influencers tend to be celebrities in the wider society as well. The general principle should transfer. In the end, it’s not that uncommon from football: if you don’t have the money, invest in young players that have talent, then harvest the fruit a few years later.
Naturally, when academics come together, it’s not all about research itself. We also connect as humans – and as friends. We headed out on the first conference day to jump on the Ebbelwei Express. Ebbelwei. Äppelwoi. It’s the same. Basically, we could call it cider. And be done. Hessians won’t be insulted, but according to them that’s not exact enough. So we keep calling it Äppelwoi.
Thanks to the Ebbelwei Express, I got into areas of Frankfurt that I’ve never seen before. Just that I didn’t really see them, such occupied was I by talking to my peers. The second day, however, the conference ended. A friend from Groningen and I happened to have still quite some time. I took him around the city center and showed him the most important historic sites that I knew of. I think I did a rather good job. It has some irony: the guy from Berlin who lived anywhere in Europe but in Frankurt took the duty of the tourist guide.
That seems to become a somewhat natural role. I was also involved in writing up the touristic guide for Berlin for the Association of Consumer Research Conference in 2016. It could be some contribution to next year’s YES Marketing Conference. We’ll meet again in Frankfurt also in 2019.
It’s by invitation only. If you do get an invitation, take the chance. Äppelwoi should be incentive enough. And if not: there’s still the academic part.