Stories and Strategies Podcast
Episode 128
Guest: Heddy DeMaria
Published June 23, 2024
Doug Downs (00:08):
The Pepsi Challenge was a marketing campaign that started back in 1975. It was simple enough in the beginning, a marketing team would set up a table at a mall somewhere, and people took the challenge. The results were pretty consistent too. People chose Pepsi more than half the time. Amazing because Coke had always been the best seller. Longer brand life.
Singer (00:32):
Y’all ready to go? Ready to go. Ready to go. Ready to,
Doug Downs (00:34):
In 2005, author Malcolm Gladwell presented evidence that suggested Pepsi’s success in these SIP test challenges was that people generally prefer sweeter beverages based on a single sip, but over the course of an entire can, they preferred a less sweet beverage. Makes sense. Around the same time, neuroscience researchers at Baylor College in Texas did a study that also used the Coke Pepsi challenge. This time, they hook the participants up to a functional magnetic resonance imaging or FMRI machine that sort of identifies activity in different parts of the brain. When people took the taste tests blindly, the results were 50 50, but their brain activity showed a different story. The parts of their brain associated with seeking reward were more active. When they sipped what they had said was their favorite cola, even if they weren’t sure they were actually drinking it, then the study introduced a twist.
(01:31):
They showed the participants the labeled cans as they were drinking, except the labels weren’t necessarily accurate. The results this time skewed heavily in favor of the Coke brand. People liked the label even if they were actually drinking Pepsi at the time, and the brain activity matched. So what the heck influences our behaviors as consumers? Do we really make up our minds about things or are we subject to nudges perhaps today on stories and strategies? If we can accept our freedom of choice as consumers is heavily influenced, what role is the changing media landscape playing, and does that change product by product? My name is Doug Downs. Off the top. We’ve played the Pepsi theme song from 2022. Apparently it feels much older than that for me, but it says from 2022. My guest this week is Hedy de Maria, joining today from New York City. Hey Hedy. Hi. And you’re actually, you’re at the Hunter offices at One World Trade, right? That’s got to be kind of awesome. That
Heddy DeMaria (02:57):
Is totally awesome. We’re on the 68th floor. I am literally looking at the Statue of Liberty right now.
Doug Downs (03:03):
Oh, that’s amazing. And you don’t drive to the underground parkade for a job like that, right? This is a new train and that’s it.
Heddy DeMaria (03:11):
That’s right. The Path Train lets me off in the basement of the building. So good living in New Jersey, but commuting. I am definitely a bridge and tunnel person.
Doug Downs (03:20):
Awesome. Heddy, you’ve got 25 years experience with leadership roles across multiple disciplines, including consumer insights, shoppers insights, brand strategy, innovation and advanced analytics. Having worked for Kraft Pinnacle Foods, Nabisco and Nielsen Marketing Research, you also have an MBA in marketing and finance from the University of Pittsburgh, Katz Graduate School of Business. You’re with Hunter at One World Trade Hunter, a leading consumer marketing communications firm. Let’s start with the study that Hunter did, I think it was last September. You asked 7,000 people, Hey, what influences your purchase decisions? Of course they know top of mind. What did they tell you?
Heddy DeMaria (04:03):
Well, it’s interesting because we did, that was actually just the first phase of our study. We actually had two phases. So the first was exploratory because we were tackling influence. That is a big topic. We had no idea where to begin. So we did start with this big open-ended question about what influenced their recent purchase in one of seven different product sectors. And so we went to a thousand people in each one of these product sectors as this big wide open question and was amazed at all the results that came back. It was a simple question. The responses were anything but simple. We heard everything from motivations, the factors that they were considering, what they bought, where they bought it, how they bought it. But interestingly, we also heard a lot about the sources of communication that they used to ultimately influence them to purchase this product.
(04:59):
And it wasn’t just a blanket what sources. They specifically mentioned sources with regards to how they became aware of the product or service, and then also talked a lot about the various different channels of communication. They used to learn more about a product or service, and sometimes they weren’t even the same. And so really fascinating. We took all of that learning, classified it, coded it up, and then went into our diagnostic phase. Now our diagnostic phase, we partnered with another company called Libr and Research and Consulting. We went to another 7,000 people, again, a thousand from each one of those product sectors. And this time we were able to ask a more close-ended quantitative questions so that we not only understood all the variables and levers of influence, but we were able to quantify them so we could determine what was most important and least important.
(05:53):
So you asked me what we learned. So first and foremost, got back a ton of information across seven different product sectors. We learned so much about the specifics that influence each one of these different product sectors. But then what we also did was compare each one of those to see where are there consistencies across seven different sectors. And again, these sectors ranged from food and beverage all the way through to travel and technology. There was beauty care, healthcare, so there were very different kinds of products. So you would think that the influence variables would be very, very different. And in fact, in many cases were, but there were some universal truths that we’re finding that to us signified that there are in fact universal truths associated with influence. And there were particularly six, two kind of general insights three that really pertain more to the channels of communication. And then the last was demographic tendencies that we’re seeing across all seven categories. So do you want me to kind of go through each one?
Doug Downs (07:07):
Yeah, you tantalized me with the six. Now I have to add what were the six?
Heddy DeMaria (07:10):
Yeah, absolutely. So let’s start with the general one. The general ones. Were the first week say top of funnel is king of hill. And the reason we say that is look, marketers have known since the dawn of time that awareness is important to generating sales. But when a strategy had been conversion, product conversion based, often awareness was kind of a secondary factor. What we found in our study was awareness was by far the most significant in elements when trying to generate and influence purchase intent. What we found was in our study, 20 to 40% of consumers across each of the seven different product sectors sometimes never went on to another source of information to learn more about the product. They just bought it. Either they became familiar enough with the product to just go buy it or it was an impulse purchase, but for whatever reason, anywhere from 20 to 40%, probably not surprising when you’re talking about food and beverage, but 20% of technology buyers just never went on to a secondary source.
(08:26):
It really becomes very compelling, the waterfall effect that happens when you build awareness of what happens in terms of it also generating purchase conversion. The other general learnings we found was that, it’s funny because it feels like it’s almost contradictory to what I just told you, but a multichannel strategy is always the best way to go. You want to surround sound, your consumers for maximum engagement. Now, I just told you, 20 to 40% don’t go on to another form of communication. But conversely, 60 to 80% do. And so we’re dealing with a situation where we really found on average anywhere from two to five channels of communication. Were employed from awareness all the way through to purchase. And when you start drilling even deeper within each one of those channels or communication, multiple tactics are often used.
Doug Downs (09:28):
Put your finger in the page there for one sec. What does the multiple channels mean? Does that mean they get information from a newspaper source, a social media source, a podcast that would be great, a YouTube source? Is that what you mean by multiple channels?
Heddy DeMaria (09:41):
Well, we actually classify channels of communication into basically five and then sometimes a six depending on the category. And they would be at a high level word of mouth, high level in store, high level social media, high level web, something, digital media. And then after they selected which ones they picked, we’d have a drill down where we would then say, what specifically did you do in digital media? And it would say online reviews, website and so forth. So lot of detailed information of exactly what was used.
Doug Downs (10:20):
Okay, back to your finger in the page. Yeah, go ahead.
Heddy DeMaria (10:24):
Okay. So the multiple channels of communication, we also learned that the higher the risk associated with the purchase, the more channels of communication that they use. Good. Yeah. And that makes sense, right? So if you have a premium product, if you have a high-end product, multiple channels of communication strategy is going to be important, but even more important for any of those type of categories as far as the channel learning went, should I go on and share with you? Keep
Doug Downs (10:59):
Going, yes.
Heddy DeMaria (11:00):
Okay. So the channels learnings, to be honest, this is the surprising learning for me. We’re sitting in a world where social, digital media feels like it’s taking over. I’m telling you the latest statistics I saw. People are spending seven hours of screen time a day, five and a half hours on the phone. Half of that’s internet time, social media is a third of the screen time that’s happening. We’re just in this world where it feels like it’s all about social, digital media. And so of course as we employ this study, I thought we were going to find that social and or digital media was the primary source of influence across every single category that we looked at. Ironically, I didn’t find that at all really. In fact, the primary source of communication was in store, in store five out of the seven categories. It was the primary source of communication, both for how they became aware of it and for how they learned more about it after they became aware.
Doug Downs (12:06):
Finger in the page for one sec. Again, don’t lose your place. I want to ask, I go down the rabbit hole of that in store. Of course there’s physical in store and I was on the Amazon store in store. Yes. Do they mean physical in store? And what theoretically does that mean as we head toward this metaverse where we’re going to be shopping more and more and more online?
Heddy DeMaria (12:28):
Absolutely. So I do think we’re just starting to see the results of some of that metaverse in terms of people shopping more and more online. It’s certainly accelerating. And now with commerce emerging within e-commerce, it’s projected, I think, of being 25% of sales within the next three years. So we are definitely on a track. Unfortunately, fortunately, whatever way you want to look at it, we’re not there yet. So what we found in our study is that there was a strong correlation between becoming aware of a product in store and purchasing it in store physical location as opposed to online. There was no correlation. You become aware of something online. There was no correlation with purchasing it
Doug Downs (13:13):
Online. I don’t become as emotionally attached clearly. Exactly. There’s an emotional play here.
Heddy DeMaria (13:18):
There is an experiential physical touch feel that consumers are looking for, and that hasn’t gone away. And if anything, retailers are recognizing it and now plussing up what they’re offering consumers to really make the most of that so that they can have a point of difference and a reason for being. But again, it is the number one source, a channel of communication. So it really, really does say that there should be an in-store component to any kind of campaign, any kind of communication that you have and how critically important it is that your brand story come to life through. It’s all the communication touch points throughout its entire path to purchase. So often there’s such rich communication and brand storytelling in the pre-shop experience, but then you get to the shop experience and it just goes away. It just becomes a very rational, functional process. And all the wonderful kind of connection, emotional connection and relevance and engagement you have with the consumer, it should be mustered up at that point of sale. That was one of our learnings. In fact, we coined it IRL Trump’s URL from our study,
Doug Downs (14:36):
Right? On
Heddy DeMaria (14:39):
The other one, another channel of communication that still yields a powerful punch is word of mouth. Now, that probably isn’t surprising to you. Word of mouth feels like it would be powerful, and it is the primary source of communication for travel and the secondary source of communication for food and beverage, for healthcare, and for learning more about technology. So it becomes really, really important. And a lot of times marketers kind of shy away from word of mouth. They think it’s really hard to activate against. But I want to tell you a little secret. You and anybody who’s listening to your podcast, we’ve recently become aware that younger cohorts, particularly Gen Z, consider influencers their friends. Think about that. If friends and family as a powerful source of influence and influencers are friends, they have literally give marketers around the world the reigns to word of mouth.
Doug Downs (15:48):
I’ll let you in on something. I’ve read studies that show very clearly podcasters fit in that same realm where they become influencers because it’s such a personal medium.
Heddy DeMaria (15:59):
Absolutely, absolutely. And even now, experts and celebrities can sometimes reach that status depending on how interactive they are with their show base.
Doug Downs (16:11):
Yeah, absolutely. Yeah.
Heddy DeMaria (16:14):
So where does social digital sit, right? I just told you that, gosh, I expected it would’ve taken over. And it turns out it isn’t the be all end all. But some really clear learnings we found, first and foremost, traditional media was the absolute lowest form of channel of communication across campus of the want. Every
Doug Downs (16:37):
Single interesting radio, TV, newspaper for whatever that is. Wow.
Heddy DeMaria (16:43):
If it wasn’t online, because there are things like articles online, print, it can be online. In fact, it’s mostly, and that all fell under digital. But if it was the old broadcast, literally the bottom, all seven,
Doug Downs (17:00):
We don’t trust them. We don’t, don’t trust traditional media anymore.
Heddy DeMaria (17:05):
Which is so weird because if you think about what’s happening on the communication landscape, fake media and all this problems with we’re having with fake news and information is because of the lack of controls that since we’ve moved to social digital. That’s right. It’s ironic that people don’t trust the printed word anymore.
Doug Downs (17:26):
The whole word of mouth thing. And I’m not surprised. It’s always refreshing to hear that, but it always hearkens back to a grouping that I call someone just like me because I accept word of mouth. If you and I seem to share the same values, we have the same rough ideas. And personally, I don’t care about geography. I’ve got a lot of Australians who are literally on the other side of the world from me, who I consider just like me. They just have an accent when they do it. But it is the holy grail. How do we as marketers and comms pros, how do we harness that? You referenced it’s scary to a lot of marketers and they don’t want to touch it because it’s so big to try to tap into how do we do that? What channels do we use?
Heddy DeMaria (18:15):
Well, I think the key is in the point that you made about someone like me as marketers, you need to start with the consumer. Understand who are you talking to, and then understand what channels of communications they deploy and who they connect with. And by the way, with the abundance of media sources that are available, that’s not necessarily an easy job to do. It is in part why we did this study is just to understand better how to connect with them, not only literally, but emotionally with our messaging. So it’s not an easy answer. I can’t just tell you how to do it. It’s a lot about just getting to know that consumer and then using what they’re telling you is how to connect.
Doug Downs (19:02):
And you’re right. Understand your own audience that you’re going for and niche it to some aspect is going for everybody means you catch nobody.
Heddy DeMaria (19:10):
Exactly. Exactly. Please somebody tell Byron Sharp and how brands grow.
Doug Downs (19:17):
Demographics, you talked about Gen Z a little bit and what kind of influences them and that digital is very powerful in the form of social media influencers. Just in the next two or three minutes here, walk me through the demographic tendencies when it comes to shaping sources of influence.
Heddy DeMaria (19:35):
So before I just get there, I do want to just make one more point about social digital media. I don’t want to leave you with the wrong impression. So I mentioned traditional media was at the lowest social. Digital media was a complimentary important part of all communication campaigns at some level. And it actually did become primary in two types of industries. One, technology. Anytime something was complex, people tended to move towards digital media. And so for technology, it was the primary channel of communication.
Doug Downs (20:12):
It’s complex. I YouTube it, somebody’s going to DIY it for me
Heddy DeMaria (20:15):
And show you how and explain it to you in a 30 minute clip, no less or 30 seconds downward. Less for that, less,
Doug Downs (20:22):
Less.
Heddy DeMaria (20:25):
And then also interestingly, in categories that had a certain aesthetic quality, something that involved personal expression. So we saw it played a secondary point of importance for beauty care, for home decor, and for, what was the other one? I’m sorry? Is it travel?
Doug Downs (20:48):
No
Heddy DeMaria (20:48):
Fashion, sad fashion. So anything that the benefit is something to do with self-expression. It also plays a critical role. And then that takes us to then demographic tendencies. Because one of the demographic tendencies, and I don’t think there’s going to be a surprise to anyone listening to this, is that Gen Z and millennials are much more likely to be influenced by social platforms. And in fact, for those groups, they do tend to rise to either a primary or secondary level of importance. Interestingly, bipoc also fall within that criteria. So if you are from a bipoc kind of descent, then yes, you are more influenced by social digital sources. So if your consumer target is of a younger cohort or referrals within the Bipoc classification, you absolutely need to have social digital media as part of that multi-brand strategy or multi-channel strategy rather. Right?
Doug Downs (21:52):
And as you get older up to X or boomer, which by the way, still awfully powerful, a lot of boomers and they have a lot of money.
Heddy DeMaria (22:01):
And again, it doesn’t go away. If you’re technology, you need to have a digital forward communication strategy. It doesn’t matter if you’re a Targets boomer or if it’s Gen Z in that case. So it’s again, just really understanding what are the channels of communication for your particular category that your consumers are plugging into. But there’s other demographic tendencies. The influencers particularly effective among Hispanic and black consumers and Gen Z, we found that in terms of generating awareness, it’s relatively low for everyone. But interestingly, men are relatively more likely to become aware of a product through traditional media, and women are more likely to become aware of something through word of mouth, social or social media.
Doug Downs (22:58):
How interesting. So
Heddy DeMaria (22:59):
There’s this kind of gender split that’s happening in terms of awareness generation.
Doug Downs (23:06):
This is stereotyping, but I sort of think women talk with one another more than men do. That’s what
Heddy DeMaria (23:12):
The whole hunting versus gathering thing, I felt like.
Doug Downs (23:15):
We’re out hunting, we’re hunting for new shows to watch on tv, apparently.
Heddy DeMaria (23:19):
Yes, exactly. And then the last really big demographic tendency that we saw that kind of cut across all is households with kids, larger households and bipoc households. And I mentioned them as though they’re mutually exclusive, but if we were to draw Venn diagrams, there’d be a lot of overlap across those three groups. But what we’re finding is by the nature, they tend to view all their purchases as more risky, and therefore they use more sources of communication, more channels of communication, because there’s a strong correlation between the degree of risk associated with the purchase and then the number of sources, channels of communication associated with influencing that purchase. And that makes sense. But what you should really take away from that is then if I’m dealing with a large household or bipoc household or households with kids, again, that multichannel strategy becomes a critical play in order to convert them to your business.
Doug Downs (24:24):
Wonderful. I really appreciate your time today, Hetty. Thank you for this.
Heddy DeMaria (24:28):
This was so quick.
Doug Downs (24:30):
I know, and I’m jealous of the view that you’ve got. I’m just imagining it in my mind.
Heddy DeMaria (24:36):
And you know what? We have a panoramic, we have the whole floor, so we get to see all of Manhattan and its surrounding boroughs. Absolutely gorgeous.
Doug Downs (24:45):
Don’t take it for granted. I see the mountains every day where I am, and you do. You just sort of, there’s the mountains, right? But
Heddy DeMaria (24:52):
I haven’t gotten there yet. We moved in about four years ago, and just the sunrises and sunsets here are so beautiful that I just haven’t gotten used to it yet. Hopefully I won’t Anytime soon.
Doug Downs (25:06):
If you’d like to send a message to my guest, Hedy de Maria, we’ve got some contact information in the show notes. What an amazing study that Hunter did, A brilliant read. Stories and Strategies as a co-production of JGR communications and Stories and Strategies, podcasts. If you like this episode, please leave a rating, possibly a review. We’re also on YouTube and YouTube music. Big thanks as always to our producer, Emily Page. Lastly, do us a favor forward this episode. This is word of mouth, Heddy. Word of mouth. Forward this episode to one friend. Thanks for listening.