The Bank of England Cut The Base Rate And I Think About The Effect Of Market Anticipation On Brand News

05Feb09

Is this an historic moment in banking and economic management? Well certainly the Bank of England’s move today has created a precedent, for the base rate has been cut to 1%.

For a lucky few customers who took out a mortgage with Cheltenham & Gloucester that charges interest at 1% below the Bank of England Base Rate, the change has an interesting impact. They will pay nearly no interest on their mortgage while it remains at this rate, or below.

There will be a small admin related charge, a few pence each month, as the finance company’s computer system apparently can’t cope with the concept that a consumer has no fees to pay on their mortgage. But this fee will reportedly be refunded at the end of the year.

The cut in base rate to 1% had I believe been anticipated by the markets and economic commentators. This may well mean the banks and the markets do not respond as swiftly, or positively, as the government might hope today.

The idea that markets anticipate change and adjust for it before it arrives caught my interest – and then spun off into a larger debate about the currency of new news from brands.

If traders and bankers anticipate major shifts in economic policy and therefore react more indifferently than hoped. How do consumers react to news from brands that they have already anticipated and may therefore have already taken into consideration?

Could the idea of market anticipation negatively affect brands and products when news has been leaked or spread far and wide before launch? Or does it instead simply fuel interest, debate and demand?

One of the hallmarks of product launches by Apple is the level of anticipation and excitement surrounding the event. Yes, of course rumours leak and pundits vie to anticipate the news. But I still believe the product launch event may play a significant and positive role for brands with genuinely exciting news to impart. The news from Apple launches is, in effect, a controlled explosion to an avidly engaged audience, rather than a whimper to the world at large.

Increasingly products appear to go through consultation processes with consumers that rob the launch news of their surprise. Controlled brand news and product launches are perhaps increasing reliant on drip-fed viral build-ups.

Could the level of consumer involvement with the passing on of up-coming brand news, which I argue is now so prevalent through wider but less informed digital discussion, mean consumers anticipate and adjust their perceptions of a brand before the new news actually can take effect? Before consumers may actually try a product or brand for themselves?

PR often concerns itself with the idea of packaging and controlling the release of a story, until an appropriate moment and through the use of methods that maximise the reporting of the brand / product news.

With the rise of the always available, always online culture of Bloggers and Twitteratti; with us all Google mapped Latitudinally and socially networked up to the eyeballs. Is there still a sense of heightened anticipation amongst consumers at the launch of something new?

Or is there, as I believe, cause for recognition that new news is now such a social currency online that it is spread widely and rapidly in order to secure the social status of the spreader amongst peers who share it with the tens of millions of others on through distribution networks like Facebook, WordPress and Twitter. Is the excitement of new discovery and news reaching a more jaded consumer palette? Does news of the next big thing become a commodity to lubricate social interactions, more than anticipate a drive to product trial and sales?

The idea that brand and product news has started to decline into a disposable social currency interests me. Particularly as the source of news is more trusted and sought from friends, bloggers and pundits than it is from expert opinion. Certainly newspapers, radio stations and even TV channels are struggling to compete with bringing the news first, best and in more easily transferable and referable formats.

Perhaps there is a bigger opportunity for brands to engage in the market for news with social currency?

Perhaps if brands cease to act in a purely anticipated manner, rather than acting in way that positively breaks expectations and conventions. Then it may be possible to create an effect that may overcome the problems relating to consumer anticipation, apathy and the disposability of ideas that become the social currency of news.

Could it be that brands simply need to focus on speaking when they genuinely have something worth saying, rather than add fuel to the distorted pool of poorly differentiated news mediocrity?

Thinking about how newsworthy commodities were protected and fostered in the past. I was drawn by the idea of how the original Hollywood movie studios managed the careers of their actors. The best acting talent enjoyed careers that were actively managed and generated enormous wealth for decades.

The movie studio model for managing fame might be described as one reliant on three things:
– The genuine talent of the star (the brand).
– The ability to connect and communicate the star with their loyal fan-base audience first before then a wider (less interested and more fickle) public.
– The pace of new, genuinely interesting, stories (new film launches, personal appearances, tantalising glimpses of celebrity lifestyle) and their quality was maintained.

In effect, people heard about the exceptional and celebrated the fame factory at work around these stars. The studios didn’t peddle the unexceptional successfully; they suffered if they pushed a below-quality product.

Perhaps the market anticipation enjoyed by movie stars is a positive model worth considering in how to bring new news and excitement around a brand?

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