Thursday, April 30, 2009

Dan is right.

Dan Wieden, founder and head of Weiden + Kennedy, gave a thoughtful and impassioned pitch at the 4As conference on why diversity matters and why advertising agencies must get their act together.

My favorite quote: The issue of diversity "continues to gnaw at me because, like it or not, in this business I essentially hire a bunch of white, middle-class kids, pay them enormous, enormous sums of money to do what? To create messages to the inner-city kids who create the culture the white kids are trying like hell to emulate."

The imperative to create a more diverse agency culture is not something we should do because it is politically correct. It's something we must do to ensure the long-term success of our industry.

We are in the business of helping clients build their business through our unique ability to understand and connect with main street America. We've done this well over the years largely because we tended to mirror the face of America.

As the American landscape continues to become more diverse, so must we, or risk falling out of touch with consumers and becoming less capable of providing clients with fresh, relevant ideas.

Tuesday, April 28, 2009

The slipperly slope of discounting.

Today's New York Times has a good article on the slippery slope of discounting. Price cuts of 50% have given way to scorched earth discounts of up to 70%-80%.

Retailers find themselves between a rock and a hard place. Offer steep discounts and risk losing pricing power longer term. (Detroit car companies never really recovered from decades of discounts and rebates.) Or don't discount and risk a steep drop in store traffic and sales.

An added challenge with discounts is that they are easily matched and simply lower revenues for all competitors. Sandwich chains are seeing this in their $5 lunch wars. Ditto for airlines.

Some brands have found better alternatives, or have at least augmented their discounting with demand-building strategies that also strengthen brand equity.

Best Buy is broadening its appeal to price conscious shoppers by featuring low prices on house brands such as Insignia. The retailer is also maintaining its emphasis on customer service and support (e.g., Geek Squad).

Hyundai was the first car company to realize that consumer anxiety was the main obstacle to sales, not purely affordability. Its Assurance program recognized the emotional component of value -- i.e., the need for consumers to feel smart and in control.

There is no doubt that discounting must play a role in spurring demand during a recession. But marketers would be wise to balance this pricing strategy with other offers -- e.g., loyalty bonus, warranty, added convenience -- that can help differentiate the promotion while also building a lasting positive brand image.

Wednesday, April 22, 2009

Thank you world.


I'd be remiss if I didn't mark Earth Day by recognizing some of the contributions being made by some of the companies we work with at BD'M.

We partnered with Best Buy to help brand and promote its Greener Together initiative to help address the damage caused by too many electronics piling up in our landfills. We need to remember to not just dump an old TV or PC. Bring it in to Best Buy to be safely recycled.

Applied Materials is a nanotech company. So what has that got to do with Earth Day? At its core, Applied helps the world do more with less. Chips that are more powerful yet more efficient. Architectural glass coatings that conserve energy. Flat panel displays that are brighter yet use less energy. And a large and growing solar energy business that is helping to scale this industry to reach grid parity.

And today, our friends at United announced a new program to help eco-conscious fliers do something to offset the carbon footprint created by jet travel.

When companies try to support green initiatives they walk a fine line between trying to do something and being called out for not doing enough. Fair game. But doing something beats doing nothing every time.

On this Earth Day 2009, let's take a moment to say thank you to mother earth, through words and deeds. Perhaps this song will put us in the mood.

Thursday, April 16, 2009

The dark side of Wikibranding

I coined the term wikibranding to capture a new marketing dynamic -- consumers have even more power than marketers to rapidly define brands now that access to global mass media is just a point-click away.

Social media enables consumers to co-create and spread a great brand narrative just as easily as it enables consumers rightfully destroy poor quality brands. Most marketing people know this too well.

PR folks at Domino's and elsewhere are learning another painful lesson about social media -- there is no such thing as a local incident, everything is immediately global. The damage control needs to be swift and devoid of spin.

From The New York Times:

Video Prank at Domino's Taints Brand

By Stephanie Clifford

A video prank two Domino's Pizza employees posted online has shown how social media has the reach and speed to turn tiny incidents into marketing crises....http://www.nytimes.com/2009/04/16/business/media/16dominos.html

Tuesday, April 14, 2009

Optimism requires hard work. And that's the point.

Optimism has long been a uniquely American trait. It defines who we are. We are a nation of people who believe tomorrow will be better than today. It is why our forefathers and mothers risked long ocean voyages in search of a new world, why settlers in wagons ventured ever westward and why immigrants continue to come here by any means possible, by plane or make-shift raft from Cuba. (As a Pakistani born son of Irish immigrants, it is why I am here today.)

Our ingrained sense of optimism was set in motion by our founding story, fueled by generations of immigrants and reinforced by years of abundance and success.

Lately, though, I've come to wonder if our definition of optimism, or more pointedly our underlying motivation, has changed over the past decade, perhaps not in a good way.

American optimism was always an extension of our "can do" spirit. Anything was possible if we worked hard enough to make it happen. Our optimism sprang from hard work, not hope. We knew tomorrow could be better for us and our children if we rolled up our sleeves.

Recently, however, optimism evolved to become an entitlement, no longer an earned reward. We bought houses bigger than we could afford because we had every reason to believe we would get another raise or that our portfolio would continue to grow. We used magic money -- a.k.a., home equity loans -- to buy the muscular SUVs we coveted. We didn't have to work any harder. Good things just happened.

While the current recession has shaken our confidence, recent polls suggest that President Obama is inspiring us to find reasons to be hopeful once again.

I am hopeful the current "cleansing" process will bring us back to the true definition of American optimism. Tomorrow will be better than today, but only if we roll up our sleeves and earn it.

Thursday, April 9, 2009

Microsoft finds an idea.



Microsoft's new Window's campaign finally has found a clear selling proposition to support "life without walls."

Windows enables us to find and configure the exact computer to meet our needs because it is the standard embraced by every manufacturer...except Apple. (This seems a little more compelling than Jerry's desire for a moist and chewy PC.)

Leaving aside comments on the execution, the premise that Windows opens us up to a full spectrum of options and brands is persuasive. Additionally, it gives Microsoft the opportunity to reposition Apple as a take-it-or-leave it brand that asks us to sacrifice choice in pursuit of cool.

Thursday, April 2, 2009

A lesson in why brand image matters.

Next time somebody tells you that brand image doesn’t matter, that the internet has transformed consumers into rational and well-informed shoppers, just respond with one word: “Malibu.”

In 2007, GM revamped the Chevy Malibu from top to bottom to compete, once and for all, with segment leaders Toyota Camry and Honda Accord, two cars that have ruled the midsize sedan market for years. The result is a $20k car that looks, drives and feels like a luxury sedan.

Consumer Reports recommends the new Malibu. Kelly Blue Book concludes that it looks like a $40k car. JD Power ranks the Kansas City factory that builds it as one of the top three quality plants in the country. It was voted Car of the Year.

Nevertheless, more than twice as many people bought a Camry last year.

It is unreasonable to expect to rewind years of inconsistent quality and value in one year. Having worked with both Ford and Toyota at Y&R and Saatchi, I have seen first hand the hurdle that domestic brands face.

As consumers, perhaps it's time to rethink our aversion to domestic cars, do some homework to update our facts, and, minimally, take a test drive. Then buy the best car.

As marketers, never assume we can milk a brand (or starve it) for years and expect consumers to stay loyal.

Wednesday, April 1, 2009

Wearable technology.

Check out this video from TED, presented by Patti Maes from the MIT Media Lab. It is a mind-blowing demo of the potential of wearable technology. Which marketer will be the first to test this? Let the race begin.

It takes about two minutes for Patti to get to the demo, but hang in with it, you'll be glad you did.

Thanks to Dominic Lee for turning me on to this.