Case Loewe: A Winning Marketing Strategy with 95% of Negative Ratings (III)

This is Part III of Case Loewe.

UPDATE: According to media sources all Loewe bags from Colleccion Oro 2012 are sold out in Spain, two months after the controversial ad analyzed in this blog. Loewe does not profide official information about sales, and continue with its policy of not commenting the ad.

“La nueva colección se está vendiendo muy bien. Están gustando las novedades introducidas por nuestro diseñador. De hecho, no tenemos algunos modelos en todo Madrid y otras ciudades, lo sabemos porque nos comunicamos entre tiendas para pedírnoslos”, declara una dependienta.

(Agotados los bolsos de la polémica campaña con los jóvenes modernos de Loewe, La Vanguardia, May 10, 2012)

*** Note: As the analysis of Case Loewe is becoming too long, it is currently organized in three parts. This is the structure of the three posts in this blog.

Part I: Loewe Colección Oro 2012 – The Aftermath of a Devastating Ad

Loewe Collection Oro Message: Loewe, did you say traditional and outdated?

Measuring the extent of the negative reaction to Loewe’s video.

Viral Diffusion Process: Measuring the Evolution of Video Views

How serious are 500.000 video views with negative reviews for Loewe brand equity in Youtube?

Part II: Loewe Is Dead. Long Live Loewe!

1. Measuring the direct negative impact of the campaign. An update.

2. About the target of the marketing campaign

3. About the channel used to present the campaign

4. About the genre chosen in the commercial.

5. Communications Crisis at Loewe: Crisis, What Crisis?

Part III: A Winning Strategy With 95% of Negative Ratings

1. The value for Loewe of a negative rating

2. The value for Loewe of a positive rating

3. Monitoring the reaction of viewers after the crisis.

4. Reaching the desired target, as never before

5. A substantial increase of people loving Loewe (+39% or +157%)

6. New targeted customers discovering old Loewe products… and loving it

7. Reaching International Markets, As Never Before

8. The role of parodies and spoofs: parodies of a parody

9. Tangible Benefits: Increase of Twitter Followers of 21% in one day

10. Tangible Benefits: A Sharp Increase Of Loewe Followers’ Engagement in Twitter and The Social Media

11. New Dimension of Loewe in Social Media Brand Visibility

12. Sharing My Loewe Experience. Photos Upload By Twitter Users

Part III: A Winning Marketing Strategy With 95% of Negative Ratings

This crisis emerged after Loewe launched its 3:27 minutes long Youtube video in social media channels. It presented young models wearing the new Oro Collection 2012 bags, some of them showed alternative style looking like punky. The sorpresive elment of the video is that models make rather insubstantial, banal and naïve comments about life and love. natural reaction by almost all viewers was to consider the whole video and comments as an stupidity. It eventually became viral and was a hot issue for several days. In order to avoid unnnecessary overlapping and repetitions, please refer to the previous post for watching the video and all the analysis we did concerning the measurement of the direct negative impact of the video diffusion (part I post), plus the mechanisms behind the video that clearly suggest that all this controversy was clearly planned on purpose (part II post).

I will bear in mind in this section of this post my own understanding of the strategic goals pursued by Loewe campaign. You can find in Part II how I elaborate the analysis to reach my conclusions. This analysis holds as far as the core diagnostic is accepted:

  • Loewe has decided to rebrand its profile. It is currently associate to tradition and conservative style. This is praised by many mature and old people but limits the growth of sales to active and professional people. Loewe’s bet is to become a reference brand for sucessful professionals, women and men, in the range 30-45.
  • Loewe has chosen social media as the best channel to access the desired new target, to show them products that match with their fashion demands (Oro 2012 Bags) and to persuade them that now Loewe is a brand that incarnate their values.
  • Controversy is the only way to reach desired target outside the circle of current Loewe brand lovers. The controversy tactics best adapted for a luxury brand in a rebranding process is extravagance. Extravagance will be understood by many as ridiculous and stupid, and their negative reaction will drive the viral process. Explosive viral diffusion will allow targeted people to discover the audacious green-orange-pink bags, covered by the envelope of an extravagant ad. Desired target makes perfectly the difference between the quality and attractiveness of the product and the absurdity of the commercial. Common viewers non targeted by Loewe don’t use the make this difference.
  • The quantitative analysis of the impact of the crisis (our first post) shows a trade-off. This is an exceeding success in terms of diffusion, well beyond the company expectations. But this has been made at the prize of an unanimous negative reaction against the commercial, probably in a higher extent than expected and calculated by the company.
This is our theoretical background. We present now the brand gainings for Loewe.
If you are convinced that all this ad is a perfect mistake and a nighmare for Loewe reputation BECAUSE Loewe is a brand based in tradition, you will probably maintain your position.

1. The value for Loewe of a negative rating

First task is trying to find some light in the darkness of viewers disliking the video. We can identify five groups of  ‘I dislike this’

a. Outraged Loewe customers.

This group corresponds to the undesired but assumed victims of the new branding strategy followed by Loewe. If a Loewe customer feel ashamed wearing Loewe products after watching this ad and by being personally affected by the massive negative of others, they can stop buying Loewe products. It is undeniable that this is a net loss. Some of them have been lost probably by the excessive negative reception of the ad. Artistic director and marketers would be right now wondering if they pushed beyond reasonable limits extravagance and auto-derision. This loss cannot be neglected: marketing team will be judged by future sales, and this group of outraged customers is translated into decrease of sales. Probably worst than sales, this is also translated into calls and pressures by these angry all-my-life-loyal-Loewe-customers to stop taking these autodestructive strategies. (For instance, we have just learnt that Emilio Loewe, former owner of the company is very upset with the campaign and considers it a big mistake, Diario de Sevilla, 23 March 2012) Yes, if they abandon Loewe is a direct loss. But this may become part of the indirect benefits of this campaign, as far as Loewe maintains the bet till the last consequences: if traditional Loewe customers stop buying and wearing Loewe products, the substitution rate with the new target customers will accelerate. If tradition style customers abandon Loewe, they will help to ensure the new brand perception transformation.

b. Desired new target viewers.

Some other negative reaction may come from active and wealthy people that are in their 30-45, but are not currently Loewe customers and weren’t aware about the new line of products. They are the  new customers Loewe is yearning for. This is a very bad debut if they say that thy dislike you. Here again we have to be more conscious concerning the sense of a disliking vote inside this group. They are saying that they dislike the ad. But this does not mean necessarily that they also dislike the bags. Of course, it would be better to access your target with a double win in product and in packaging (the commercial). But we have considered that probably many inside this group are able to distinguish between their personal negative reaction against the ad, and their appreciation of the bags that are profusely visible in a commercial that takes more than 3 minutes, instead of the conventional 20 seconds ad. There is a fraction of people among the negative viewers that discover and love the bags presented by Loewe. They will have to decide if they can put aside the negative feelings linked to the ad and the social media controversy and become a new Loewe customer. We will show alter that we can measure empirically that these disliking the video-loving the bags constitute a relevant group.

c. Non core target

Loewe may receive negative ratings from potential customers that come from people in the selected segment. They may be too young or too old. Too young people (teenagers) have time to change their mind and become Loewe customers in the future if it succeed in maintaining its profile attractive to dynamic active people. It’s not very damaging. Also, if there is old people that are not Loewe customers and feel outraged by the ad, this is not really a severe loss for Loewe, as they won’t become customers in the future because they don’t match with the new brand profile.

d. Undesired targets

A vast majority of negative rating come for sure from people who dislike wearing luxury products, or who cannot afford reasonably to buy Loewe products (remember that the advertised bags are sold by 1,600 euros). Loewe should not care that much from losing the affection of these video viewers, as it has probably never had them as lovers before. Moreover, the bold negative reaction of the undesired targets in needed to create a debate and a controversy that ignites the viral diffusion of the ad. Loewe needed to provoke them to use them as channel to reach the desired target. Finally, having non desired targeted people disliking a luxury company makes it more attractive and even as a reference brand for some luxury customers that like specially the brand values associated to extravagance: narcissism, exclusivity, calling attention, provoking reactions in both sides.

All in all, we find that behind this apparent terrible disaster of 93-95% people disliking you there is a lot of good things. Again, we can conclude this based in the very specific nature of the present case. This analysis does not hold for other circumstances.

2. The value for Loewe of a positive rating

We have argued that not all negative values have the same meaning and are identically harmful. Let’s consider no the relevance of positive votes from people watching the controversial ad. Again, in order to simplify the explanation, we need to analyse them by separate groups.

a. Desired new target viewers.

Receiving a positive vote from non Loewe customers who are the new target is a victory and a treasure. These people that openly manifest their approval to what practically all people is detesting are strong contrarians. Manifesting that they love the ad is a strong statement supporting also Loewe bags. If they feel that Loewe maintain its new brand promise with new sophisticated designs and products, they will become the new prescriptors of the luxury brand, as they will buy the products and show them publicly with pride and ostentation. These strong contrarian are people committed with design, trends and style, and become the trend setters for many other people. Each positive vote coming from this group is a treasure. It represents also a new responsibility and to some extent a burden for the company. The loyalty of these cherished new costumers is conditioned to the fulfilment of the new brand promises that Loewe is showing of innovation, aggressiveness and modernity.

b. Non core target

There are probably luxury goods buyers that love the ad but do not pertain to the desired segment of age. There will be some people liking it above 45 but few above 65, as the rate of aged people using regularly social media drops substantially in for aged people. Those new potential customers in the range 45-60 are also welcome even if they are not main target. If they praise Loewe in the midst of the turmoil, it also means a vote for buying their products. Even if older than 45 are not the main target, as they are looking for rejuvenating their image, it is probable that the profile of those voting positive as strong contrarians reveals also a very dynamic personal profile. As for younger than 30 years old people and teenagers, with economic power, they are also interesting, but their impact on sales will probably be linked to gifts and not direct shopping decisions. This has a lower impact on sales.

c. Undesired targets

People loving the commercial and the bags but with low income, are a segment that is not targeted by Loewe. They become only occasionally actual buyers of Loewe products. But having them as new brand lovers is an additional valuable asset for Loewe. They contribute to create the brand value of an aspirational and admired brand. They increase brand engagement in social media and they increase the impact of any new corporate move by spreading the information with passion.

3. Monitoring the reaction of viewers after the crisis.

We have shown updated information about number of views and the proportion of positive-negative views. Comparing this data with the one shown in the previous post, we find that the share of positive ratings increase slighly (from 5% to 7%). This seems marginal. Total numbers tend to hide trends. This is why it is useful to show the share of positive-negative ratings each day. This is shown in the figure below.

We find that in the heart of the social media viral diffusion (14 and 15 March), positive rates were just 6% of all votes. New votings since 17 March more around 10%.

You may argue that as for a victory, this is a rather Pyrrhic victory. There is still 90% of people that right now consider that this ad is misfortunate.

Yes, but the important thing behind this data is simply that during the massive and unanimous critics against the video and the models, the share of people actually loving it was the double than the data revealed by actual voting. Many people restrained to vote positively wieving the strong unanimous opposition. As each positive vote counts and it is valuable in terms of gaining new potential costumers, this first empirical results tells us that the size of people loving and discovering Loewe bags double the initial figures.

We will see if the trend stops at a 10% level or futher increases when the impact of the critics diminish.

4. Reaching the desired target, as never before

We have argued that choosing social media as medium for presenting its new brand values was smart as the segment of people most widely using Youtube and Twitter are in the segment of age desired to be reached by Loewe. It counts also with a limited presence of mature people, supposed to be the main customers of Loewe.

We count with some tools open accessible to all to address this relevant issue. Which segments of age are predominantly watching the video and the bags?

We present first the results concerning viewers of Youtube videos about Loewe just before Oro Collection 2012. This analysis corresponds to the 40 videos about Loewe with more than 3.000 visits. It represents in total a little bit more than one million visits. For each video we count with the information of the three segments of age where the video is most popular. Results do not correspond to total effective views for all segments of age, but it provides a good representation of the demographics of the age of Youtube users views of Loewe videos.

We have chosen green for segments corresponding to what we considered the desired target of Loewe (25-44), yellow for second best options (45-54); white for segments that are not relevant for Loewe (13-24), and red for segments that Loewe is currently avoiding (55-64). We have indicated with a pink frame the data concerning female.

We find that all videos (in Loewe official channel and elsewhere) responding to the perfect matching (25-44) are just 15.6% of all viewers. More aged people than desired (45-54) represent the majority of viewers, with 57.9%. There is a presence of relatively aged people (55-64) with 4.6% of total views. Finally, there are some 20.6% of young viewers, including 15.5% of teenager girls.

We present now the results concerning the segments of age where the Oro Collection 2012 is currently more popular. Data refers to all videos, including those with individual interviews with the models. Total views are almost 1,5 million.

The result is clarifying. The majority of segments attracted by the video are comprised into the desired range 25-44 (62,9%). Only 4.8% is derived to people between 45-54. Almost one third of views correspond to young women (18-24). Remember that this not corresponds to actual views but to segments of ages where the video is more popular. The video has been watched also by teenagers, but their weight is smaller in comparison to the segments included in the figure. There is an almost 50/50 distribution of viewers by sex. We find also that women watching the video are younger in average than male.

We have here one of the benefits assigned to the otherwise apparently terrible marketing campaign. For the first time Loewe is really reaching in a massive way young people and the very desired segment of 25-44, who represent 62.9% of all viewers. Compare this results with the mince 15.6% that this segment represents in all other existing Youtube videos about Loewe.

This is yet a positive result of this campaign. We know that the vast majority disliked it. But now we can confirm empirically that those loving the commercial and the bags pertain practically all of them to the segment of age desired by Loewe.

5. A substantial increase of people loving Loewe (+39% or +157%)

There are only some 7% of people that like the video, against a massive 93% people disliking it.

Ths is a poor performance, for sure. Nevertheless, we have seen that Loewe does not need to care too much about the negative opinion coming from non targeted consumers. Loewe is not a mass consumption brand, but an exclusive luxury brand. Moreover, these negative ratings are encouraged by Loewe, as this is not a conventional ad but a controversial one, on purpose.

By contrast, Loewe should care a lot about people rating positively the campaign. We have seen that those voting ‘I like you’ in a context of an unanimous negative reaction calling the ad and the brand as ridiculous and pathetic is a sign of loyalty and engagement towards the new brand promise.

7% is a really thin set of new supporters. But how much does for Loewe as a brand?

Combining the information that we have already presented, we come to revealing and maybe surprising results. We find that, as shown in the figure below, that these small minority of people liking Loewe Oro 2012 commercial correspond to 28% of all positive votes that Loewe has received in all its videos available in Youtube. This means that just one week Loewe has increased the number of liking votes by 39%. This is a dramatic impact for any kind of brand.

Positive rates coming from the Oro 2012 video have a substantial impact due also to the controversial profile of the video. A controversial video not only attract views, but it also pushes for direct reaction and participation. As it can be appreciated in the following figure, the participation rate is some 3.5 times higher than the average videos of Loewe.

We can proceed to a more detailed analysis, and focus the attention on the quality of the ‘like’ votes. We have seen that Loewe videos (before the controversial ad) present a poor profile in terms of the segment of age that is attractive for Loewe strategy purposes. Only 16% of people watching Loewe videos where in the segment of age 25-44. In contrast, the vast majority of people watching, and liking and disliking Oro 2012 video, come from the wished range 25-44 (62.9%).

We have thus reestimated the impact of the positive ratings before and after the controversial ad, adjusting each liking vote by the share of people in the segment 25-44. Now, the results appear even more impressive. Total number of adjusted positive votes moves from a value of 391 to 1006, in a matter of just a week. This means an increase of 157% in the targeted segment of age.

Loewe has created its own Youtube corporate channel almost two years ago. It contains 72 videos. There are many other videos in Youtube about Loewe at least since 2007. If you create an ad that in a couple of days increase the volume of positive rates about your company in 40% (or 157%), many people would judge this marketing campaign as a tremendous success. It is possible that other companies have experienced such a dramatic increase of positive rating, but probably not that many.

If this ad is a branding defeat, one could start considering it as a sweet defeat.

6. New targeted customers discovering old Loewe products… and loving it

We commented in the previous post that we did not observe a contagion effect just in the aftermath of the viral crisis. There was not an ‘attack’ to previously existing videos of Loewe, by people writing negative comments or choosing the ‘dislike’ option. This kind of phenomenon may happen for companies or institutions suffering from a reputation crisis. This is what happened to FedEx videos. This is what is happening to all videos by Invisible Children, the NGO that launched KONY 2012 action: the critics coming from some groups against this proposal moved from main video to all other videos by the organization, even if unrelated with the proposal of capture of rebel leader Joseph Kony.

We count now with an interesting case. As the degree of critics and even attacks and insults against the content of Loewe Madrid Oro Collection 2012 ever increased, Loewe took as first measure to disable the comments option in all videos about the campaign contained in their official Youtube account. As the negative ratings were unanimously negative, the luxury company decided to remove the video from the main page. It was replaced by the video ‘Masters of Leather’. It is ‘A Loewe film that pays tribute to the house’s craftsmen’.

When the crisis started, this video had some 4,800 visits. In these few days as leading brand video, number of views has increased to more than 12,000. This is a relevant impact for Loewe standards. Consider that the 72 videos in the official channel had as average 2,050 visits (we do not include in this list the Oro 2012 videos). If we exclude the video commercial with Spanish matador Cayetano Rivera presenting perfume 7, the average views per video is just 1,450. In fact, ‘Masters of Leather’ is now the second most popular video in Youtube official channel, excluding the Oro 2012 series.

What do we learn from the visits received by this video in the midst of a flow of outraged comments and reactions provoked by Oro 2012 ad?

First of all, that this video is watched by the best target, as the segments of age watching it more intensively are Male 35-44, Male 45-54 and Female 25-34. Please note that the content of the video is not specially appealing in the sense of attracting per se the interest of young audience. This means to us that viewers are mainly non traditional Loewe users, but people attracted by the brand thanks to the controversial ad.

The second result is that people love this video, and they manifest it so. The positive rating reaches a 94% score. The approval degree was similar at the beginning of the crisis.

We will see in the future if this new gain is repeated in the future with the new content upload by Loewe.

7. Reaching International Markets, As Never Before

Loewe opened its firs store abroad in 1963, in London. Then followed Hong Kong and Tokyo in the 70s. In 1985 Loewe reached an international distribution agreement with LVMH. Global expansion was promoted after Loewe was acquired by group LVMH (1996). It currently counts with stores in Hong Kong (8), Guam (3), Australia (3), Canada (1), China (16), Germany (1), France (3), Finland (1), Colombia (1).

Loewe and LVMH create and develop brand awareness in each country by marketing actions addressed to target public. In big markets like Spain Loewe can launch marketing operations that reach all publics, through TV commercials.

How international or even global is Loewe’s brand reputation and awareness? As being part of global luxury group like LVMH, it is certain that LVMH managers try to develop internationality of all brand in their portfolio. Loewe is the only brand in the group with a clear Made in Spain profile. Which is the mission of this brand in the global group?

If Loewe is planning to enter into new markets or increase its relevance in existing markets it requires as s first condition to increase brand awareness and recognition. Youtube videos, social media platforms and the internet may become new channels to expand brand awareness internationally. Youtube video is probably an strategic branding tool for fashion firms and for luxury firms. Short videos with commercials and catwalk shows are perfectly adapted for Youtube users, and can perfectly transmit the core brand values of fashion firms.

Youtube can be used also in the other way round. Gathering information from Youtube viewers by their geographical originl can provide extremely relevant information about brand power of fashion firms by country. People watching the videos of a brand is telling us how visible this brand is in each country.

We have monitored this information for the portfolio of videos about Loewe in Youtube. In the figure below we present country indexes of brand awareness for some selected top markets. Results concern all videos about Youtube exceptp all related with Oro 2012 campaign.

Our index moves between 1 (null visibility) to 5 (maximum intensity of viewing).

We find that, as expected, Loewe has a very strong brand awareness index, with 4.16. Outside Spain, the country where Loewe videos are watched more is Russia (1.97 points). Remark that Loewe is not directly present in Russia with company stores. Third market with more relative followers is United States, with 1.5 points. The rest of the countries present a very low profile of brand awareness, moving between 1.1 and 1.3.

We have monitored also the viewing of Loewe videos in Spanish speaking countries and Brazil. Main market in terms of interest is Mexico, with 2.27 points. Argentina follows, with 1.96 points. Brand awareness is stronger in Latin America, but it is still rather poor.

We will present now the international impact of the controversial videos about the campaign Oro 2012 Collection.

We present in the next two figures the impact of the new campaign, and we compare it with the existing values, for each country.

The results tells us that its brand awareness has been strenghten in Spain, the unique market where the brand had strong brand awareness. With th controversil videos it has increased its brand awareness in all international markets, with the exception of Russia and Brazil.

How shold we evaluate the impact of this sudden increase of international brand awareness ‘thanks’ to a controversial and highly criticised video?

The story that we have told about the need for Loewe to create a controversy in order to ensure that viral marketing helps all people know that a new fresh Loewe brand is emerging does not hold for international markets. Why? Because we have just proven that except eventually for some few countries, there is a low international brand awareness about what Loewe is. As global people abroad don’t know about Loewe, they don’t know that Loewe is/was associated to traditional fashion style and a strong women mature segment of customers. Loewe does not need a rebranding strategy abroad, as people watching the viral video learn about the existence of Loewe for the first time ever.

If international viewers do not have a previous judgement about Loewe, they discover a luxury brand choosing a bizarre, extravagant commercial to present itself. Many people abroad will judge, like in Spain, that models appearing in the commercial are rather stupid and that the luxury brand behinds design very strange marketing products. People will laugh at it, and they will probably think that Loewe is a brand oriented to young people an teenagers -the critics that many people say about Loewe strategy for customers in Spain, diagnostic that we have discarded-. Loewe will probably attract some new customers among people in other countries discovering Loewe and loving its bags thanks to this video. The bad image that Loewe may create among non target viewers is no relevant for Loewe brand reputation.

8. The role of parodies and spoofs: parodies of a parody

The impact of the controversial original video by Loewe was so deep, that soon imagination and creativity were in action for producing new versions of the video as parodies. If the parody was funny enough, the creators could seize the opportunity to enter into the viral diffusion process and reach a substantial number of views. These opportunities are very attractive for Youtube bloggers, amateur comedians and TV comic and satirical programs. There is one video that is approaching to the 1 million visits, and many others that have received thousands of visits. Loewe Collection Oro 2012 has become a very appealing story for many people.

Youtube parody videos about brands, institutions or personalities are feared as the evil incarnation. They may have devastating consequences for brand reputation of the ‘victim’ chosen. In some cases, these spoofs or fake commercials correspond to direct attacks to a company. One classical case is the campaign made by Greenpeace against Nestlé, accused to use palm oil for producing Kit Kat chocolates. Palm oil recollection destroys forest in Indonesia according Greenpeace, and this is destroying the natural habitat of orang-utans. The video launched by Greenpeace seems at the beginning a true Nestlé ad, and then it introduces disgusting images. It has a very negative impact on Nestlé reputation. Another Youtube reference as reputation killing video is the parody protest video ‘United Breaks guitars (we commented its impact in the FedEx case).

Parodies are reputation killers because they succeed, by using irony, sarcasm and fun, in transmitting to the viewers images and messages that show that the chosen target has serious problems with some brand values that the company is trying to hide. There is probably nothing worse for a company reputation that a successful parody video.

We have considered the impact of parodies in some of the crisis analysis considered in this blog.

We found for instance that the negative impact of the video of a FedEx worker throwing a computer monitor over a fence was increased by the success of some parodies made by TV programs. (see Case FedEx). We also showed that political parodies dominated by far Youtube content viewed during the General Elections in Spain, November 2012 (See case Election in Spain and Youtube).

Parodies have gained relevance in the Loewe crisis; they benefit from it and they have helped to further develop it, as some people got in touch with the story first by learning the existence of the parody and going to the official video afterwards.

Consider, as we have shown in our previous post, that from the total 2 million views of videos related with Loewe campaign crisis by 18 March 2012, almost 700.000 came from parodies and spoofs.

There are four sorts of parodies in Loewe case:

  • Usage of original images and manipulation of voices and/or music. There are videos using the full lenght video, and some other just selecting some scenes.
  • Youtube bloggers videos showing the blog star commenting or acting like one of the models
  • Versions of the original video trying to reproduce the spirit of the original video using amateurs actors
  • TV presenters commenting the images of the video.

How harmful are all these videos for Loewe prestige and reputation?

If, as perceived by many, Loewe was pursuing just to launch a more creative, youth and fresh commercial to present the traditional values associated to Loewe, the negative reaction by the public shows that this strategy was a terrible mistake and it its tarnishing Loewe brand reputation. Under this assumption, parodies are just an extension of the nightmare, as they reveal the weaknesses of the original video, increasing the sense of ridicule and stupidity, that are perceptions completely opposed to a renowned luxury brand. The parodies and their success is then an additional punishment for Loewe, and, like spoofs attacking other brands, they will create lasting negative perceptions that harm long term brand equity. This negative effect would be even more perverse in this case, as luxury brands rely entirely in excellence in brand reputation.

What if you analyse the impact of the parodies inside the explanatory framework proposed in this series of posts about the case Loewe? Assume, as I have tried to proof, that Loewe has designed a campaign with the clear and first mission to create controversy. Assume that the goal of the controversy was twofold, first to ensure viral diffusion of the video to reach the new desired target, and second, showing by the facts (extravagant campaign to present extravagant luxury bags) that the new brand Loewe is not mainly oriented to mature fashion conservative women, but young adult active and trendy and stilish women.

Under this framework, the interpretation of the impact of the parodies is completely modified. Parodies are just exacerbating the extravagant gestures that were included in the video as the igniting mechanism to generate shock, not by scandal, but by sense of ridicule. Parodies just strengthen the sense of ridicule. It would seem damaging for a brand to be associated to ridicule and shame. But in this case, these feeling are just confirming the inner nature of the commercial: extravagance. The excellent news for Loewe is that parodies have chosen the storyline proposed by the artistic director of the campaign, Luis Venegas, instead of exploring other values that could block the impact of the message of the campaign. In this campaign, the only parodies that can harm Loewe strategy are spoofs showing old ladies still loving Loewe. If parodies associated Loewe to traditional values, they would transmit the message that the rebranding strategy is not credible, and Loewe will always be perceived as a very conservative and traditional fashion brand. There are no traces at all of this kind of critique against Loewe.

If the parodies use exactly the same storyline that was designed on purpose by Loewe marketing team, then the conclusion is direct, and again paradoxical: every viewer laughing at parodies and spoofs, sharing with others or sending the video to friends are acting as positive multipliers of the audacious rebranding strategy launched by Loewe. Viewings of the parodies reinforce the message that Loewe is not a brand for old conservative ladies.

Think again in the examples presented in the Part II post of other personal brands that used extravagance as strategy to present their values and to increase brand awareness, like Lady Gaga and Salvador Dalí. If Lady Gaga or Dalí are ‘victims’ of parodies by people laughing by imitating the meat dress or using flowers in the moustache, they are not tarnishing and destroying their reputation. In the opposite, they are just reinforcing the association of these artists to the values that they have chosen to incarnate.

Parodies are providing additional return to the original campaign, in several ways. The main one, as just explained, is that they reinforce and make more credible the message that Loewe is not a fashion conservative firm. Secondly, many people learn about the campaign and the controversy not thanks to the original video, but because of the parodies. All these people captured by the parodies are almost forced to watch the original video to establish comparisons. Third, by the nature of the parodies, it also attract the segment of people from the desired age, 20 to 45 years old. Finally, all these new viewers discover that Loewe is launching some very provocative and innovative green-blue-pink luxury bags, specially if they watch parodies that are based in manipulations of the original video.

9. Tangible Benefits: Increase of Twitter Followers of 21% in one day

We will present a series of measurable positive results for brand Loewe directly associated to the impact of the controversial campaign.

We have previously shown that it has also increased substantially the number of positive votes received in Youtube (+39%), but critics with the ad may argue that this results has been reached at the prize of a terrible deterioration of global reputation in Youtube as now the number of people disliking Loewe videos have increased substantially. We have tried to explain that positive and negative votes have a very different interpretation and impact for Loewe as a luxury brand. We have also shown that number of views to other Loewe videos increase and are rated positively. We have also shown that Loewe has reached as never before a very attractive target and international audiences.

These benefits can be weakened of sense and value by those considering that the right place of Loewe as a brand is linked to tradition, and that this attempt of brand repositioning has been a big mistake and so its consequences.

Now we will present results that should be considered net gains, whatever your position is about which is the right brand profile of Loewe. They are positive for the old brand based in tradition and for the new one based in creativity and youth.

We have been monitoring the impact of this campaign in the social media profile of Loewe. We wanted to observe the reaction of people actually following Loewe in the social media, and if the controversial and very negatively perceived ad attracted nevertheless some new followers to the new brand, even in de midst of the turmoil.

We present here the results concerning the Loewe official Twitter account, Loewe Madrid 1846 (@LoeweMadrid).

Early in the morning of 14 March 2012, when the crisis started as new Twitter TT in Spain, Loewe counted with 5,200 followers. Did Loewe lost its asset of brand lovers, outraged by the new campaign and by the extravagant new bags? We cannot provide a direct answer to this question, as we have the evolution of total number of followers, and movement is made by the difference of new followers minus the people that decide to unfollow. If total number of followers increase is that the eventual loss of old brand lovers is compensated by the entry of followers loving the nee brand profile.

Loewe is a rather late adapter of social media channels, as it created Twitter account by 1st September 2011. This more than seven moths of presence with 5,200 followers correspond to an average of 27 new followers per day. The results concerning the daily movement of net new followers after 13 March 2012 are quite spectacular for us. They are shown in the figure below.

Loewe attracted new 1129 followers during the peak of the reputation crisis. Loewe gained in one day the equivalent of 42 days. It added another 413 followers the day after, 15 March 2011.

Loewe increased its Twitter power by 21% in one day, and 30% in two days. Even ten days after the start of the crisis, the number of new followers doubles the rhythm compared to pre crisis average numbers.

We present in the next figure the evolution of total number of followers since the opening of Loewe Twitter account.

If social media power of brands means something to the companies, the controversial ad has had at least a direct positive impact by increasing the number of follower in a remarkable way.

Consider also that all these new Loewe social media fans have taken this decision in the framework of an unanimous attack to the brand. The clearly form part of those contrarians who take personal and shopping decisions disregarding completely is they will find support or critique from external and social opinion. The new followers are for sure not just passive followers, but are some of the new prescriptor of the brand that will explain loud and proudly their support and attachment to the new Loewe brand.

10. Tangible Benefits: A Sharp Increase Of Loewe Followers’ Engagement in Twitter and The Social Media

In the previous section we have shown that the controversy created as a by-product an extraordinary increase of the size of Loewe brand supporters as registered in the social media channels. They took this decision in an incredibly position of minority, as there were an almost unanimous reaction of people criticizing what Loewe did.

This new Loewe followers entering in the hard times should be strongly committed supporters and prescriptors. In a lesser extent, this is probably the same for many previous Loewe followers that decided not to quit.

We provide in this section another empirical evidence that the apparently disastrous campaign has derived some tangible and unquestionable benefits for the brand.

We said that Loewe is a relative newcomer in Twitter world, as it opened its official account by 1st September 2011. Between opening and 23 March 2012 Loewe Twitter CM has published 412 tweets or retweets from other sources. The vast majority of tweets, especially in the first months contained also photos or videos. It shows photos about new Lowe products (mainly bags), about catwalk sessions presenting new collections, about leather craftsmen, and some photos about celebrities wearing Loewe products. This kind of content is essential for a luxury brand, and this is why social media channels are powerful tools for creating brand equity. A valuable element of Twitter official account for companies is that the content and the message is almost completely controlled by the firm.

We have monitored all 412 tweets posted by Loewe, including retweets from other sources, selected by Loewe CM. We have identified retweets (RT) and ‘Favorited’ (Fav) made to each tweet, by other Twitter users.

We present first the results for each one of the tweets, since its inception.

We find that before the presentation of Oro 2012 campaign, there are some few tweets that exceed 10 RT mark (8). There was a RT from male model Andres Velencoso Twitter account that reached more than 50 RT. This was a photo in the backstage of a Loewe presentation, but he was not wearing Loewe products; this was a portrait photo. There are 5 tweets that break this barrier after 13 March 2012.

In the newt figure we show the detail of all tweets published in March 2012, to better appreciate the before and after effect. Direct observation reflects a sharp increase of willingness to promote content created by Loewe in other Twitter users’ accounts.

We summarise and capture the specific impact of the campaign in Loewe followers’ engagement in our final figure. It presents the monthly average of RT and Fav per tweet, since September 2011. Before the presentation of new 2012 collection of Amazona bags, monthly average moved between 1 and 3. In a sharp contrast, the average number of RT and Favs for the 18 tweets posted since 13 September 2012 is 12.2 (10.8 RT + 1.4 Fav). In fact, if we restrict the analysis to those six tweets showing the new and controversial Amazona Oro bags, the average impact is 23.3. This is an extraordinary increase of engagement by Loewe followers in Twitter. This is a big marketing success, desired by all companies.

11. New Dimension of Loewe in Social Media Brand Visibility

Diffusion of the controversial Loewe Ad video become viral mainly due to Twitter communication as leading TT during more than 24 hours.

We will provide later detailed information about how the viral diffusion evolved, and how it moved from social media to traditional news media. We will show also Twitter content analysis for understanding better the impact of the crisis.

Now we want to show the profile of Loewe in terms of social media visibility, before and after the crisis. The aim is to show the new stature of this brand, once it decreses the impact of the controversy and Loewe become another of the consumers brands that may be part the text of a tweet.

The measurement refers to the size of Loewe in Twitter messages, just before the crisis (7 to 12 March), comparing it to its current post crisis presence in Twitter, one week after the crisis (20 to 23 March).

A way to evaluate the impact of the transformation is to compare Loewe visibility against other luxury brands. We have monitored the presence of some selected brands in messages written in Spanish.

Before the crisis, Loewe had a size of 3.6 points, comparable to Fendi. This was more than 20 times less than Chanel, Dior or Gucci.

Now, one week after the crisis, we find that the social media size of Loewe moves aroung 306 points, eighty times higher than before the crisis. This makes Loewe the leading luxury brand in the Spanish speaking Twitter market, well ahead all other international brands.

Of course, there is still a lot of content related to the crisis, the parodies, and the evaluation of this crisis for the brand. But there are many other tweets about Loewe products. Many more than before the crisis.

What is currently happening is that Loewe is the brand chosen for discussions, comments or jokes about fashion, luxury, ‘pijos’ (wealthy trendy young people). Before this controversy Loewe was almost never chosen in this kind of tweets, and this place was taken by other luxury brands as the ones presented in the figure. Loewe has reached a new social media status. This means not only a substantial sustained increase of brand visibility, but also a complete diffrent brand perception compared to pre crisis context.

12. Sharing My Loewe Experience. Photos Upload By Twitter Users

Results from the previous section of this post show that the presence of Loewe in social media before the ad controversy was limited. This also mean that pics upload by Twitter users in relation with Loewe were scarce and occasional. many times they were created with people with direct interests with the company or the company itself.

The controversial ad has provoked a tsunami in the social media. Now Loewe is a brand with a strong visibility. We have shown in the previous section that one after the shock, Loewe is still the main reference in luxury and fashion brands in Twitter conversations. There are still a lot of mockery, attacks, references to parodies, but right now Loewe is the reference in Twitter.

Now we will provide an extension of the results applying an indirect content analysis, by showing the pics posted by Twitter users in relation with Loewe. Uploading pics show a much stronger personal engagement with the topic that just publishing a written message.

This is a selection of pics, but they are really representative of all pics upload by Twitter users. These are pics from tweets published between 20 and 24 March 2012. This is one week after the crisis.

Group 1: Parodies with bags

    

1. I took part in Loewe Ad                2. We are Loewe                                    3.  I am very Loewe

   

4. Soy la pera limonera                    5. Loewe Collage                               6. Being Loewe (With a Desigual)

Group 2: Other Parodies

  

7. ‘Loewe’ bags                             8. Drinking, Loewe Way                             9. Loewe solutions

 

10. Loewe for designers                      11.  Being in love is cool                       12. A Loewe party

 

13. Loewe and Fallas           14. Me like the silly Loewe models    15. John Lennon is a Loewe fan

  

16. New Loewe Ad by Ponte                 17. Desigual copying Loewe           18. I’m Loewe superguay

 

19. Living Loewe: Gin tonic in the kitchen  20. We are the new Loewe boys

Group 3: Showing Loewe Products

   

21. My niece                                                22. My Loewe Bag!                  23. My mum gave me her bag!

 

24. Ready to be insulted        25. My Loewe Vintage Scarf         26. My Loewe wallet

  

27. Loewe, The City & Skates                 28.   I love them!                            29.  My new Loewe Oro bag

 

30. My Loewe shoes                       31. Look, a true Loewe woman!

Group 4: Showing Loewe Stores

  

32. Colourful showcase                  33.  I couldn’t resist                      34. Being in love is very cool

We have selected more than thirty pics, to show a variety of uses made by Twitter users.

What is the global picture and the verdict in terms of brand perception of all these photos?

It will depend again if people still consider that Loewe is a traditional centennial luxury brand, and that it is a trahison and a mistake trying to provide a new ‘false’ image. In this case, many of all the photos (all from group 1 and 2, and the first ones of group 3) are the confirmation that Loewe has completely distroyed its prestige and its brand. Now Loewe is the source of mockery and contempt. This shows images that are associating Loewe to stupidity, sillyness, vulgarity, ‘pijos’, banality, bizarre, provocation, ridicule.

By contrast, you could consider that Loewe was trying on purpose to provide a new position to its brand, presenting it as trendy, creative and young; or you simply discover Loewe as a brand because you have not previous knowledge of the brand or its brand values. In this second case, you could feel that practically all images show an incredible refreshing and attractive image of Loewe. You like it because they show amusement, enjoying, youth, originality, sympathy, creativity, a point of positive bizarre, modernity, urban style. You decidely love it.

Whatever your camp is, the selection of the images and context chosen by Twitter users, and even your positive or negative reaction to all these photos paradoxically pointing out the outright marketing triumph reached by Loewe: all positive and negative values that you can associate to these pics are all linked to extravagance. Extravagance is with no doubt, the storyline genre chosen by Loewe ad creators to create controversy and to show the new brand profile (see our analysis in Part I and II). I fing that this reflects an astonishing branding success, as Loewe has been able to completely control the context of the new message. If you dislike the photos, it is because you love a brand that does not extist anymore. In this case, if you are a luxury brand buyer, you will have to choose another brand, as Loewe is not ready anymore to cover this market target. If you, in spite your probably negative reaction to the campaign find that these captions are positive and you agree that they correspond to the new brand profile that has emerged after the crisis, you are confirming that Loewe has accomplished an almost suicidal but final successful rebranding campaign that will open to Loewe a new target of luxury consumers.

This is in fact a similar analysis and conclusion that we reached concerning the impact of video parodies. If the parodies appearing in the photos are just a simple replication of the eccentricities shown in the original campaign, the parodies just strengthen the power of the message launched by Loewe creative. All parodies repeat the extravagances of the official video. Twitter users do not tarnish in fact Loewe reputation, but in the opposite, they make stronger the credibility of the new brand position desired by the company.

The collection of images reflect another second extraordinary gain obtained with the campaign. There is a big success in what is not appearing at all in any one of the photos captured and upload by Twitter users. There is no single reference to mature or old ladies, adopting a conservative fashion style. Remember that the opening statements of the young models in the official commercial was to refer to Loewe as my mother or my grand mother brand. This second result is an extraordinary performance achieved by Luis Venegas. By creating a shocking auto-derision and critics to Loewe as being an old fashion brand by the own company models, that are young, modern and proposing marginal fashion styles, they are breaking this brand stereotype. It has been implicitly assumed by all people reacting to Loewe campaign: there is no one accusing Loewe to be a traditional old fashioned brand that is trying to create a false new auto-image. People assume the new brand position, and discuss about it in favour or opposed to it. If you look again to the images, you will see that there is no even an indirect mention to old ladies.

Making credible a complete rebranding strategy is not an easy task at all. When a company tries to create a new brand image, it is always attacked by many observers who remind consumers about the ‘true’ visage of the corporation. Parodies showing the opposite values are precisely used to counteract the company movement. Think for instance to fast food companies launching campaigns or programs for a healthier products, or oil companies embracing the green economy values, or financial institutions presenting non profit initiatives. A number of parodies emerge in each case manipulating corporate commercials, with the aim to ridicule the main message and to show that it is not since and credible. We have not observed reactive parodies attacking the credibility of the new brand position of Loewe, neither in the videos, nor in the pics upload by Twitter users.

We can appreciate some additional interesting results from the selection of Twitter users photos.

People smile in all photos. Even if pics are upload to make mockery of Loewe commercial, they do not show angry reactions; all parodies reflect people having fun. Loewe increases the emotional profile of its brand values.

The auto-parody proposed by Venegas, using bags as hats has had a so strong impact that now, and probably for a while, it is becoming a common popular reaction to create a ‘Loewe moment’ when people is having fun with friend or relatives, or even at work (captions 9 and 10). The social media virality of the video and this ‘bags over the head’ was so intense, that it oblige all people doing this to refer explicitly to Loewe, and not simply to bags. This is really a ‘Loewe moment’, which will be experienced thousands of times in Spain. When an becomes so popular that it enters into the lives of many people, it maintains the impact of the campaign and the new brand values channelled in it, in the long run. Another brand that succeeded in creating slogans entering into daily life was for instance carbonated sweet water Casera, with its arch popular ‘Si no hay Casera, nos vamos’

Captions 6 and 17 are also revealing, and a nice victory for Loewe. Spanish fashion company Desigual launched its advertising campaign using the same idea with models showing the bags over the head. This was presented to public practically in the same time than Loewe. Now people refer to Desigual ad as an imitation to Loewe movement, and not the opposite. It is amazing to find that tweet for photo 6 is labelled as a ‘Being Loewe is very cool! … while using a Desigual bag. This kind of results shows that Loewe moves from follower brand to leading brand in consumers’ perception.

Photos from Twitter users willing to share publicly that they own or that they have seen a Loewe product is also a very powerful reflect that after the ad many people are considering Loewe as an aspirational brand.

Photo 23 is another triumph and direct consequence of the commercial and rebranding strategy. This is a young stylist who proudly shows a yellow bag owned by her mum that she has rescued and now she will happily use. Try to imagine if this would happen before the ad.

Many people consider that this campaign is a failure. A vast majority of experts in the fields of fashion, marketing, social media, communication crisis, branding consider that movement made by Loewe is a mistake. Not me.

Communication, advertising, marketing, branding, sales, strategy, sustainability. Enrique Loewe labelled this current crisis as a meteorite in the story of the luxury brand. Fpor the former owner of Loewe, this was a destructive meteorite, and he showed disappointment (Diario de Sevilla, 16 March 2012). Loewe is a brand. Loewe is just a company. The verdict of this risky marketing campaign is not given by the 95% people disliking it (nor the 5% liking it). It is not given by the experts (nor me). It is not given by Enrique Loewe. Verdict will come in the mid and long term, by the evolution of sales. The future will tell us if the disruption of this meteorite has created something new and highly valuable, or if it just killed or strongly damaged an otherwise old well established luxury brand.

(additional new reputation analysis coming)

Advertisements