More consumers are phoning it in.

I've posted frequently about the huge role that mobile will play in engaging customers and continue to hold the view that mobile is not an advertising medium; rather, it is best viewed as a customer service app or as an opt-in response device.

Yesterday's report in the WSJ documents the rapid increase in the number of consumers using smart phones not only for comparison shopping, but also to make the purchase.  We're heading to Wal-Mart to shop, then, while standing in the aisle, buying the product for less on Amazon.  According to the article, "on the Friday after Thanksgiving a year ago, consumers using mobile devices accounted for just 0.1% of visits to retail websites...this Black Friday, they accounted for 5.6%." 

Essentially, mobile phones have transformed Wal-mart's, Target's and Best Buy's stores into one massive showroom for Amazon. 

I believe a brick and mortar retailer's best response is to reimagine their stores, more as customer service centers that create a tangible value for buying there, not just shopping.  For example, whereas currently Best Buy charges a premium for its Geek Squad service, I can imagine a day when this added value is offered free of charge.  Amazon would have a hard time matching this.  I can also imagine a day when Best Buy takes a page from Apple's playbook and turns its Blue Shirts into an in-store genius bar.  I'm less likely to buy from Amazon if I know I can make an appointment at Best Buy to get a tutorial on my new gizmo.

Mobile's other big value is as an opt-in response device.  By replacing generic calls-to-action with a mobile invitation (e.g., SMS to learn more, QR code to view product demo), mobile has the ability to make moot the silly distinctions between online and offline.  To wit, is a magazine ad with an SMS call-to-action traditional or nontraditional? You get the point.

 

Don't discount natural demand.

Yet more evidence that discounts seldom build incremental sales.  Instead, they tend to pull forward demand and reduce profitability.

According to a study out of the University of California, Berkeley, the government's "Cash For Clunkers" incentive increased car and truck sales by 360,000 units.  Sounds great until you read that sales for the next seven months were down by 360,000 units.  That was a $1.4B investment in discounting natural demand  (360k units x $4k/unit).

My purpose here isn't to criticize this specific program.  As economic and social policy, it put more money back into the consumer's wallet and helped remove less fuel-efficient cars from the road.

But this does reinforce what we see time after time in marketing – straight cash incentives (coupons, cash back) tend to discount sales marketers are likely to get anyway.  The best promotions tend to be those designed to change preference and long-term demand – e.g., discounts targeted at competitive customers (register-generated coupons targeting competitive users, online retargeting to reach competitive customers with a trial offer, member-get-a-member referral offers) or incentives to stimulate sales during off-peak periods (fly this summer, get a discount next winter).

What is leadership?

I gave an address yesterday to the Executive MBA program at the University of California Irvine's Merage School of Business.

My goal was to share with these executives what I've learned about leadership through observation, trial and error.  Core to my beliefs is the idea that leaders create more leaders to achieve things that matter.  The attached presentation outlines my point of view on the traits of effective leaders.

Creating great leaders.

View more presentations from wikimurph.

The power of local intimacy.

I've long believed that empathy is an essential building block in any successful brand strategy.

Empathy is how we bond with one another; it is also how brands bond with customers.  We gravitate toward brands that get us; that share our sense of humor; that share our values; that make us feel good about ourselves.  Define the basis of your brand's empathy with its customers and you'll get to the essential truth of your brand.


SABMiller has reached the same conclusion, and has done so on a global scale.  Rather than follow the siren song of global efficiencies – i.e., one message worldwide – the brewer realized that local marketing can be more effective in creating a tight bond with the emotions, values and culture of its customers, which, particularly in the case of beer, can vary widely from market to market.  SABMiller calls this "local intimacy."

This doesn't mean a marketer must sacrifice global efficiencies.  To be sure, a blue collar worker in Krakow likely shares many of the same values as his or her peer in Kalamazoo.  Hard-earned rewards for a hard day's work can be a universal appeal.  Many creative assets can be shared to enable local markets to invest less on production and more on media. However, in a "glocal" model, markets should use these assets flexibly to cast their message within the local zeitgeist (sports, humor, pop culture).

This flexibility can help make your brand feel like a good friend sitting on the next bar stool versus a passing stranger who tries to strike up a conversation.

Is anybody listening?

Three years ago while speaking on an Ad:Tech panel, I coined the term wikibranding to convey an observation that brands are in fact wikis, entities that are increasingly defined by the crowd and less so by the manufacturer.

Given the disruptive forces in social media that have taken hold since then – YouTube and Facebook weren't yet the mass forces they are today, and Twitter hadn't yet tweeted – I believe this to be even more true today.

So the question is not whether customers are talking, it's whether marketers are listening.  What are marketers doing with the flood of peer-to-peer likes and dislikes that travel around the world at light speed?

I've grown tired of traditional dashboards.  They provide heat but little light.  They report but don't inspire ideas.  That's because most analytics are a dizzying blur of data that are disconnected from the building blocks of brand equity; disconnected from product innovation; disconnected from the CEO's line-of-sight on what's actually happening in the marketplace.

Infographics is a start.  Sure to get more senior management attention on what the data are saying.

The chatter about the emerging role of Chief Listening Officers is another step, but one that will add value only if the CLO is given a mandate to make things happen.  (Shouldn't the CMO be the CLO?)

Another way is to begin aligning analytics with the key principles of how brands build equity and value. (A project that's already underway at BD'M.)

Whatever the solution turns out to be, it's sure to require an equal balance of lateral thinking to find insights within disparate data points, as well as patience to make sure we don't react to every opinion that passes as fact on the Internet.

The economic value of crisis management.

Interbrand just released its annual ranking of the Top 100 most valuable global brands.  The usual suspects made the Top 10 – e.g., Coke, IBM, McDonalds, GE, Microsoft and Disney.

This year, while looking at how Toyota and BP fared, the study made me think about the value of crisis management.  Both brands faced a major crisis of consumer confidence.  Toyota suffered through problems with sudden acceleration and customer fatalities, made even worse by the company's slow and confused response.  BP created an epic environmental disaster, and then had its CEO make matters worse by having us feel as though we were inconveniencing his summer holidays.

So how did each do in this year's ranking? Toyota dropped from the Top 10 to the #11 position, while BP dropped off the list all together.

Why did Toyota's brand value hold up better than that of BP?  Certainly years spent building brand equity and consumer trust worked in Toyota's favor.   And despite Toyota's halting initial response, it did something smart by deciding to offer its advanced STAR safety system as a standard no-cost feature on all models.  This showed great insight because, even though Toyota's problem was one of sudden acceleration, the emotional issue in play was a feeling of being vulnerable and unsafe.

And BP?  It ran ads.

If ever there was a case to be made why we need to consistently invest in brand equity – through a mix of product, service and advertising – this is it; particularly when we see how quickly a brand's economic value can evaporate.

Announcing the echo chamber app.

We live in a world where we can access the entire knowledge base of the human race within two clicks.  Why, then, do we increasingly find ourselves in an echo chamber?

The echo chamber happens when we tune in only to the cable news channels or blogs that reinforce our political points of views; when we use Twitter to hear ourselves speak but not to listen; when we only absorb topics within our comfort zone of daily water cooler chatter.  It's human nature to hunker down during a storm, and the interweb is a virtual tsunami of information.

Today, Christopher Taylor and I riffed a solution:  An app that monitors our daily intake of media, web searches, entertainment, appointments, tweets, social network interaction, etc. (which largely exist on our computer or smartphone) and provides a daily infographic illustrating whether or not we made it out of the chamber.

(My DV% to avoid the Echo Chamber.)

The app would require us to establish desired pre-sets – similar to the % Daily Value nutrition labels – that seek a balance between topics and people we know versus time spent exploring new subjects and voices.

Maybe the app could ping us at regular intervals during the day to let us know if we need to increase our intake of the new and unfamiliar.

Chris added that we could make this into a game.  Everyone loves badges, after all.  But unlike Foursquare, where you become a mayor by visiting the same place over and over (geo-echochamberism), we'd give out badges for visiting a place for the first time.

By the way, I just met Mr Taylor today for about 30 minutes, so I think I hit my DV% of New Opinions.

Now where's my badge?

What I learned at Lollapalooza.

I just returned from three days at Lollapalooza with my daughters. Great time with the girls.  Outstanding festival – really well planned and run.  (Chicago is a fantastic city!)

While I've spent years creating events for youth marketing programs, often from the outside looking in, this gave me chance to experience youth marketing from the mosh pit out.

By and large, the marketing was fairly flat-footed.   The usual branded swag became white noise.  The best efforts came from a handful of marketers whose presence added something to the fan's experience.

The best by far came from my old friends at Toyota.  Their tent wasn't an escape from music – it celebrated music and creative expression.  There you could hop in a Corolla retrofitted to be a four-door photo booth; spin to win some cool prizes; listen to little-known, up-and-coming bands (the roots of Lolla, right?) who performed in the tent and were streamed over the interweb; as well as create art and posters.

Estancia Wines showed that it understood a simple fact about three-day concerts:  people need to sit in the shade.  The Estancia tent was set up like an outdoor ultra-lounge, featuring leather chairs and couches, cafe tables and stools, and, of course, a wine bar.

AOL did a decent job promoting its Lifestream service by setting up a helpful charging station.  Very simple and insightful.

The most well-intended but ineffective effort came from AT&T, which handed out ear buds to promote that it was offering free wi-fi inside the festival.  The only problem was that its wi-fi coverage didn't extend throughout Grant Park. Epic Fail.  (They've learned what veterans of Lolla and Coachella have long known – 3G networks become paralyzed by tens of thousands of people simultaneously blogging, posting, tweeting, texting, poking and uploading.)

My daughter Lauren has a great idea for any marketer gearing up for next year:  Sponsor a tent where fans can decorate and personalize their own "find me" stick, and perhaps upload the image to their friends.  I noticed in the crowd how some people brought poles and sticks decorated with stuffed cats, balloons, jesters, etc – anything they could hoist up to help their friends find them in the sea of fans.

Let me not mislead you into believing that I actually spent three days thinking about this stuff.  It was all about the music.  And here's the music I really loved:

The Strokes
Arcade Fire
The National
Frank Turner
Against Me
The Walkmen
Yeasayer
Matt & Kim
Gogol Bordello (tied with Matt & Kim for the most entertaining band)
Social Distortion
and, of course, Green Day

Me and Green Man are tight.

Why Millennials will save Madison Avenue.

(As published in the Minneapolis Star Tribune.)

Listen in on most brand planning meetings and one word comes up over and over – Millennials.  Sometimes called GenY or EchoBoomers, this is the generation born between 1982 and 2000.  Millennials are no longer solely on the playground; they're running companies (Mark Zuckerberg), entertaining (Rihanna) and winning Olympic Gold (Shaun White).  To marketers, Millennials represent a 76 million strong brand-conscious demographic.

Recently, however, I’ve started viewing this generation through a different lens.  Beyond being a coveted advertising target, the characteristics that define this generation make them extremely well-equipped to re-architect the modern advertising agency.  

I believe this to be true because Millennials are widely viewed as a generation of collaborative, tech-savvy, multicultural, problem-solvers – the very skills necessary to address the questions marketers increasingly voice about their advertising agencies.

Let’s break it down by examining some of the defining traits of Millennials, as outlined by Lynn Lancaster and David Stillman in their recent book, The M-Factor, and examine how a career in advertising meshes with these values.

Millennials are inherently collaborative:  This is a generation that believes we > me.  They’ve been working in teams since kindergarten as classrooms increasingly emphasized group participation.  Soccer became the suburb’s biggest after-school sport because it prizes team flow over star-power.  Advertising is a great profession for people who thrive on collaboration (or “no walls”, as we call it at BD’M).  The agencies that are succeeding are those that have banished silos, where media, creative and strategy form one big mosh pit of ideas.

Millennials are the first multicultural generation:  This generation has grown up in a time in which the U.S. experienced dramatic growth in immigration and racial integration.  Multiculturalism is simply a fact of life for this group, reinforced early on by Sesame Street, and later in the classroom, as well as in film and music.  Let’s face a hard truth:  the advertising industry must do a better job when it comes to diversity. This is not simply a politically correct goal – it is an economic imperative. We're in the business of helping clients connect with main street America.  Agencies succeeded at this over the decades largely because we mirrored the face of America.  This is no longer true, and unless this changes we put at risk our ability to give our clients relevant and intimate customer insights.  Millennials can play a huge role in reshaping the face of agencies and our ability to understand and connect with multicultural America.

Millennials want to be innovators and problem-solvers: Marketers hire us because the lines on the graph are heading the wrong way.  At its core, advertising professionals solve problems by inspiring clients to embrace new solutions.  More and more these solutions involve online, mobile and social media.  Millennials have been training for this job since birth.

Millennials want to feel they are contributing: Boomers and Xers sometimes label Millennials a needy group requiring constant feedback.  To be sure, this is a generation that received trophies for simply participating, not to mention an endless flow of reinforcement from their “helicopter parents.”  Advertising is an excellent career for people who thrive on instant feedback.  In this business you’re either a hero or a goat; there’s nowhere to hide.  Whether you’re writing the TV spot, mapping the online user experience, or crunching the CPMs for the media plan, your work is out there in the white hot spotlight for all to critique. 

Millennials want a job in which they can be heard:  On the night before a pitch, a great idea knows no title.  If you are a so-called “junior” and feel you have the answer, irrespective of the fact that your title has half the syllables as that of your boss, shout out and be prepared to defend your point of view. Anybody who has worked with me knows that I refer to meetings as a full-contact sport.  Come play.

Millennials want to make a difference in the world:  Like it or not, we live in a consumer culture bombarded by media in all its forms.  Smart, talented and creative people can get intimately involved in creating marketing ideas that make a difference.  Witness Starbucks’ support of Red; Pepsi’s strategy to crowd-source world-changing ideas; Target’s support of the arts; GE’s ecomagination; or Ford’s support for the Susan G. Komen Foundation.

Millennials want to express who they are through work:  Good luck expressing yourself in a huge corporation.  Conversely, an agency is like high school for grown ups.  You can earn social currency through your individual sense of style, taste in music, tattoos, social causes or antics at the last party.   We really don’t care if you are gay, straight, indie, emo, conservative or downright crazy, just as long as you have smart ideas and come through when it counts.

To capitalize on the opportunity that Millennials present, the advertising industry has to begin making a clear case why this profession should attract this generation's best and brightest.  (Anybody who hasn’t viewed Rory Sutherland’s 2009 speech at TED –“Life lessons from an ad man.”– should take a few moments to watch it and reflect on the economic value and cultural impact we create when we do our jobs well.)

The 4As must ramp up campus recruiting and attract talented graduates by connecting the values of this generation with the unique career opportunities advertising agencies present – a career that stands at the nexus of business, media, entertainment, technology, pop culture and any and all new trends.

Most importantly, senior leaders of advertising agencies need to stop dwelling on what they had to do back in the day to get ahead and instead unleash the creativity and energy of the twenty-somethings buried in their agencies.  Any agency that is having a hard time grappling with social and digital media is simply an agency that hasn’t tapped its in-house experts – its Millennials.

Jobs = income = demand = profits. Not vice versa.

Yesterday I attended a leadership meeting for the Merage School of Business at the University of California Irvine, where I serve as Vice Chair of the Dean's Advisory Board.

At the meeting Paul Merage, whose gift and vision has helped propel the school's progress, reiterated his vision that the U.S. is in the midst of its third economic epoch. The current Innovation Economy is radically transforming our country from its earlier roots in its industrial and agrarian based economies. As Paul points out, our country faces twin challenges if it hopes to succeed in this economy: we need a new generation of executives to lead in a global innovation economy and we also need a well educated work force to ensure these innovation-driven jobs stay at home.

This same theme is put forward in a must-read article in Business Week by Andy Grove, former CEO of Intel. The legendary Silicon Valley leader makes a compelling case for why we need to fix America through jobs and not Wall Street profits, particularly when there is 10x more tech jobs in China for every one in the U.S. Sure, our jobs pay more, but left unchecked this is the path toward wider class and economic divisions in our country — a highly unsustainable economic and social model.

While Henry Ford is rightly credited with pioneering mass production, what he actually created was a viable middle class to consume these mass-produced and newly affordable cars, appliances and, later, TVs. Higher paying manufacturing jobs creates real income which fuels consumption which underpins demand. QED.