Sunday, July 31, 2011

Sex hardware - plumbing the depths

This is not strictly a brand story, but it took place in Bunnings this weekend,when my wife broke the taboo and accompanied me on the weekend pilgrimage. Being a Bunnings story qualifies it as a brand experience for me.

I won't bore you with the background to why I visited the plumbing department, except to say I was embedded in conversations with brass fittings when she asked me what I was looking for. I said there's no point in explaining and carried on.

I yielded on persistent questioning and advised I was looking for a 3/4 male into 1/2 female reducer. It was an inevitable response: "how can you have fittings that are both male and female. Last week you were telling me we had a male lemon tree, now you're looking for things that are both."

Another weekend warrior laughed as he overheard this, nodding knowingly in my direction - that sort of "serves you right, you should know not to bring them" look.

But worse was to come. She collared one of those semi-retired tradies Bunnings employs to help out deviant male-female shoppers. Having heard what I was looking for, he said: "Oh. You're after a nipple."

My wife was last seen heading for the car park. No way she was going to be seen at the check out with a trolley load of adult toys!

Monday, July 25, 2011

The AVEs now AVE nots

Phew! Ogilvy PR has just announced that it's dropping the Advertising Equivalent Value (AVE) measure of PR effectiveness, simultaneously declaring the 'age of spin is dead' (  Am I missing something here? I thought that was abandoned as a metric years ago when something called the internet was invented!

Basically, the AVE looked at the value of editorial space (either column cms or time) relative to what it would cost to purchase that space to drop in an advertisement. Depending on who you talked to, whose hand you were shaking and other variables, there was usually a multiple applied on the basis that editorial space was worth more than advertising space.

But the disaggregation of media with the much greater control it gives to information consumers has long made a mockery of all this. The blunt instrument of circulation, readership, TARP and so-on naturally inflated the estimate of audience reach and, along with it, the value of advertising space. All the multiple did was hyper-inflate the value of editorial space.

That's not to say, high quality editorial in a respected publication that favours your cause is not worth more than its space in gold. It is. But in the age of infotainment and advertorial sections, to generally apply a rule of thumb to the value of editorial relative to display advertising is a ridiculous concept.

Compare the various blunt instruments of audience reach with the more precise targeting and measurement accessible through online media and the shortcomings of AVE and similar are immediately apparent. No wonder we're seeing big shifts in media budget towards online - the accountability for campaign success has never been greater. This, of course, will inextricably also apply to television and, ultimately, print as these channels converge and interact with mobile devices.

And, in the same announcement, here's another revelation from Ogilvy PR that caught me by surprise: "More than ever before, brands must remain authentic as audiences are looking for more engagement that interests, excites, amuses and provokes thought." It's almost like the PR industry is just discovering authenticity and engagement. No wonder it's struggling to define itself. Consumers have been onto this for decades.

If it's taken leaders in the PR industry this long to discover this truth, then it's no wonder PR has failed to own the brand space, as it should have done. With brand tightly intertwined with reputation management, the PR industry was the logical facilitator of brand strategy and implementation. But it's not. Specialist brand agencies have filled the space and are talking the authenticity, cultural alignment and all the other things that should be part of the PR business' bread and butter. Even advertising, graphic design and human resources companies have positioned themselves in this space.

There are PR companies that are engaged in this activity and that are doing it very well. Carrying the legendary David Ogilvy's name would suggest Ogilvy PR is likely one of them. But the PR industry has never effectively positioned itself as the natural provider of these services.

The elite sports in PR have been issues and crisis management, political lobbying and communications that have historically involves some level of 'spin'. But often, spin would not have been required if companies, or politicians, had delivered on their brand promise in the first place and evaluated every decision through the prism of their commitments to, and reputation with, customers and other stakeholders. PR companies could have assisted clients with the alignment of commercial activity with brand promise.

Brand in its broadest sense is where PR should have started its journey. And that journey has always involved authenticity rather than spin.

Wednesday, July 20, 2011

Update on News Corp's brands

Just noticed marketing guru, Mark Ritson, has put up an excellent article on possible implications of the crisis for Murdoch's House of Cards.

Why News Corp's House of Brands is starting to crumble:

Rock brands - from Clapton to clapped out

As usual this morning, I was professionally negligent while driving to work. As a communications bloke, I should have taken advice presented at a seminar run by Don Chipp's brother and former Melbourne PR doyen, Alan, while I was a young PR turk.

Alan told us that, as public affairs practitioners, we shouldn't be listening to pop music as we commuted, but rather ABC Radio's venerable morning current affairs, AM, or an informative chat show on 3AW - OMG, has Neil Mitchell been around that long?

So this morning, I was negligent, iPod playing Cream of Clapton through the car sound system. This is music played by a rock icon - a 'Guitar God' of the 1960s and 70s. Eric Clapton was a walking, talking rock brand and it got me thinking about the lifecycle of his 'brand' rather than his band over the years.

It started with a wailing, yet thoughtful electric guitar. The man nicknamed 'slowhand' (watch a video clip!) and who released an album by that name, giving his all to drive the guitar sound over the top of Ginger Baker's drums in Cream. Cream gave way to Derek and the Dominos, then 'God' moved into a solo phase, then to participating in big London-based charity gigs accompanied by other stars in decline like Bill Collins, who hit his heights in partnership with Peter Gabriel (he of Sledgehammer fame) in Genesis before going solo.

And finally, we have Clapton mainly doing 'unplugged' gigs - slipping quietly into the night. In fairness, I'm probably doing him a disservice, as the fraught and heartfelt Tears in Heaven after the tragic death of his son was a fine and, no doubt, enduring acoustic piece. And after all, with some exceptions, we do like more peace in our lives as we age.

How does this relate to brands? Well, at their height, there are no brands bigger than rock celebrities but, no matter how talented a la Clapton, they fade with changing tastes and styles. I try to tell my daughter this about Justin Bieber! They try to reinvent over time, but the boundaries of their success are defined by talent and adaptability. And there are many times you wish they'd just stop trying to look cool at 65. In the rock world, there is such a thing as 'shelf life' for personal brands and I wonder whether this also applies to corporate brands.

Sure, many have stood the test of time. Coca-Cola is still one of the world's best-known, but has battled to adapt to changing tastes with all kinds of hybrid products - to the point where the product around which it was built is just one of a stable. Apple is enjoying a resurgence but, after Jobs, how well will it keep adapting and is it only one breakthrough innovation away from being threatened?

The hot brands of the moment, Google and Facebook, operate in one of the most chaotic and anarchic environments ever created, the internet. What are the threats to their longevity? How far away is another breakthrough product from someone else? I've even heard the suggestion that the 'internet is dead' and apps are the way of the future. Personally, I think that's a little way off and it depends whether you regard the internet as communications infrastructure, or as the user interface, but that's for another discussion.

Should companies recognise that brands really have a defined lifespan beyond which the resources required to sustain them become unviable? Look at the auto industry. How much money has been invested to keep Saab alive? What about the Rover saga, the brief foray into reviving it in the 1990s was an abject failure, with only Land Rover surviving as a BMW subsidiary?

Baby boomers are the sole reason that many brands and bands survive. When our generation goes, the Beatles will be about as popular as Tchaikovsky and perhaps less well known. As one of that generation, I am doing my bit in February to keep the flag flying for old rockers, taking my 13-year-old daughter to Roger Waters' The Wall. (For non-cognizentia, Roger Waters was a key figure in Pink Floyd. Who's Pink Floyd? Forget I mentioned it!)

How I convinced her to attend with me, I don't know. I suspect it's something to do with the fact that she wants to remind me that 'We don't need no education. We don't need no thought control.' She loves Another Brick in the Wall for those words. I suspect that sometimes we might be better letting old brands and ideas fade into the sunset, lest they return to haunt us.

Will Rupert's papers give content free as News goes to war?

It's all very well charging for content when your brand's flying high, but Murdoch's News Corporation is now in a pitched battle to restore a modicum of lustre to both it's brands and the founder's family name.

As family members and a former executive appear contrite before a UK Parliamentary Committee, one thing they have on their side is plenty of outlets through which to pitch their side of the story. But some of their most respected mastheads are already restricting content to paid-up subscribers only - think Wall Street Journal and The Times, both of which you want in your corner when your stock has dropped nearly 20% in a little under a week and your reputation possibly by even more.

While it's likely that the Murdoch clan members and even some senior executives were unaware of the extent of the scandalous actions of a few journalists, the issue for News Corporation is that somehow the organisational culture, particularly on the UK's notorious tabloids, at worst encouraged executives to turn a blind eye to phone hacking and other practices or, at best, allowed individuals to run the risk of causing serious reputational damage through lack of checks and balances.

As News Corporation emerges from the immediate crisis, it will do well to remember that brand and reputation start from within organisations. That's where the process of restoration must begin.

News Corporation is a house of brands, some of which, like the newspapers mentioned previously, will recover from this quite quickly - guilt by association won't last forever. Transparency in the change process via these media could play a significant role in the brand rebuild. A good start might be to maximise their audiences by dropping the subs for their online coverage.

Friday, July 15, 2011

TAXI or SMSF - which will take you further?

I couldn't wait to write this entry as a matter of record that I had an interesting and insightful conversation with a Melbourne taxi driver yesterday evening. It wasn't about the Prime Minister, carbon tax, boat people or religion - it was about money. Specifically, it was about the money in the taxi business.

I use a regular group of taxi drivers who operate a network within a network as quality service providers. All mobile phones, spooks and airport drama. There may even be sex involved, although I haven't encountered it yet.

Yesterday evening's driver owns his license and cab. Another driver I frequently use has four licenses. These are guys ranging in age from 45 to late 50s, the sort who should be starting or well-advanced in executing financial plans to ensure a comfortable retirement. As self-employed bods, they are probably candidates for a Self Managed Super Fund (SMSF).  The thing is, that these guys don't need an SMSF - they're driving around in it.

Yesterday evening's conversation revealed that:
  • A Melbourne tax license is worth $500,000 (if you have four you therefore have two million big ones);
  • A good cab and driver delivers revenue from $180,000 to $200,000 a year;
  • Cabs are serviced about every three weeks for about 60 bucks (oil and filter change), by some guy who literally operates a drive-through service operation with 20 mechanics (probably another multi-millionaire);
  • The cab lasts about 6.5 years;
  • Despite Ford Australia's protests, you can service a six-speed transmission and not replace it every 200,000km (this is not a financial insight, just an interesting one to anyone like me who use to spin for Ford).
So an owner driver shuttling you around town is probably richer than you are, possibly grossing 720G a year less expenses and sitting on a debt-free capital asset outside of the family home that most of us would give our left nut for (sorry girls). Why debt-free? Most of these are tightly held from the days when 'G' was better known as the first letter of 'goat' rather than 'grand' and licenses were dirt cheap.

And retirement planning? Farm the cab out to some other dudes willing to tour the town with punters of unknown origin. The money (slightly less of it) will keep rolling in.

So how do we market super to these high net worth cabbies? They just love the drive-through service guy. Perhaps a drive-through set up with an interactive join and contributions screen, free boulevarde coffee mugs (if you don't know what I mean, visit LA) and a long-range client breathalyser warning device, might be the go.

On the other hand, they might just tell you they've already got it sorted better than you have. These days the a TAXI license seems far more lucrative than an AFSL (Australian Financial Services License).

Meter's running, I gotta go...

Thursday, July 14, 2011

Education and advice is the only hope for financial services

As custodians and promoters of financial services brands, we all talk about customer engagement. But in an age of disaggregated media, are we kidding ourselves and should we be striving for something different?

No one LOVES their bank, or their super fund, or any other financial service. Financial services organisations are merely channels through which customers or members can reach out for concepts they're really engaged with - like buying a home, buying a luxury car, planning a holiday.

In Australia, government regulation and an obsession with minimising costs rather than delivering value is commoditising financial services, which means customer attitudes towards financial institutions resemble their relationship with their electricity provider more than their BMW dealer.

Anyone who regularly conducts research in the financial services space knows customers value security, investment returns and accurate communications and reporting above all other factors. It boils down to - "I don't want to lose my money, I want to earn as much interest as possible (or pay as little, whichever is applicable) and I want you to report to me how much I have." The rest really doesn't matter.

Yet in financial services, we all try to build a brand association more like that enjoyed by the BMW dealer. The problem is that the BMW dealer can deliver the BMW. The dealer is the gatekeeper to a tactile experience that satisfies all the expectations and senses (I am actually a long-time Audi devotee, but I'm just trying to be objective!).

A financial services institution cannot deliver the lifestyle to which we aspire. The link between the service and the dream is quite distant. In the retirement savings space, for example, the delivery date is so distant that most people cannot associate with it - largely because no one regards themselves as 'old', or even ageing.
In a sense, financial services brands have tried to bridge the gap through use of imagery. The trouble is, lifestyle imagery is difficult to align perfectly with everyone's visualisation of the idyllic life. The image of being happily retired, walking hand in hand along the beach at sunset is, for example, certainly not me. And even if it was, I find it hard to make the connection between my financial services provider and the dream.

What I want is a safe place to park my money and to have instant access to it whenever I want it - preferably online, at minimum through a hole in the wall. My relationship with my financial institution is a website and an ATM. I really don't care what label it has on it, as long as it works and there's plenty of access points. The ANZ campaign promoting ATMs that follow you around is great from this perspective. They're selling convenience and access and that's exactly what I want. The only thing is, that when I cannot find the promised ATM when I want it, I get severely pissed off.

The only touchpoint with any chance of emotionally connecting with customers is in the area of education and advice. This is where it gets personal and financial institutions can focus on dreams and aspirations at the individual level to help people make the connection.

But this creates a paradox for most financial services businesses, which are actively pushing people away from face-to-face relationships - out of branches and onto the web, ATM or phone. Software cannot replace direct person-to-person contact. Would you want to date an avatar? Sorry, don't answer. But you get the point, I'm sure.

Education and advice, delivered person-to-person is the most powerful relationship a financial services organisation can construct. That's why I cannot understand why financial planners fear the growth of industry funds. They have a strategic advantage, if they know how to capitalise on it. It's called a personal relationship.

Monday, July 11, 2011

Families with lessons for brands

I trundled all the way from Melbourne to Albury for lunch yesterday. To give you an idea, the 750km round trip is the equivalent of driving Melbourne to Adelaide. An amazing feat of endurance at the best of times, but at least trebled by the fact that I had three generations of family women in the car - daughter, wife and mother-in-law. And they wonder why I like coming to work!

But bragging about my stamina is not the purpose of this missive. The motive for yesterday's expedition was a family gathering of about 50 in-laws and out-laws in a town in which there is a thriving Lebanese community with Aussie roots going back to the early 20th Century.

I had not previously heard of or seen most of the people there, but what struck me most was their amazing capacity to argue, rebutt and bond simultaneously. It shouldn't be surprising really. The Lebanese have been traders going back to Phoenician times. Once a deal is struck, the decision is accepted as fair and everyone moves on to the next bargain.

There was an amazing dynamic in yesterday's four-hour gathering, from which a lot of companies could learn. While the far-flung relations had forged opinions on the merits or otherwise of family activities for many decades, these things were debated and dealt with internally. In fact, at every gathering of this type I have ever been to, I cannot recall one where differences weren't completely put aside, commonalities re-declared and unity of and clarity of family commitment firmly established as the party finished.

I'm sure any organisation that bottled this and apply it to brand strategy and management would do very well.

Thursday, July 7, 2011

Zara - the Apple of fashion?

How neglectful of me to miss commenting on the BIGGEST EVENT TO HIT MELBOURNE THIS YEAR - the opening of our own Zara store. Only months earlier, Melburnians sat smugly in their lounge rooms, dismissive of the rampant consumerism portrayed by the thousands of Sydneysiders as a similar event occurred in their city. Then we went into the same frenzy!

I can recall a similar 'happening' in Melbourne in the 1990s. Richard Branson won't thank me for reminding you all of the 'Virgin Megastore' opening in Bourke Street. ROFL as I think of the crazy notion of a megastore full of music CDs - especially with the hindsight afforded by the phenomenal success of iTunes and more infamous music download and shareware sites. By the way, what did happen to Brash's?

As Zara, the flagship of the Spanish fashion armada hit our shores, in other parts of town, stores in the Colorado Group's fashion stable were closing their doors. Various marketing dudes and receivers (who know lots about marketing!) piled in on the act to describe how Colorado had lost its way, along with other brands in the group, like the venerable Mathers footwear chain, JAG and so on.

Colorado had been brushed off the plateau of outdoor apparel by brands that had simply driven a crampon into their space, taken a firm grip and clambered over them. Brands like Kathmandu come to mind as owners of the space that Colorado should have secured long before.

And JAG - what a sad mess they made of that. I remember buying JAG in the 1970s. If memory serves me right it was a brand set up by Adele and Rod Palmer. I remember the high quality of the JAG range in those days. Much of it was made in Australia. In fact, there were a few brands around back then that carried locally made lines. A bit more expensive generally, but high quality.

Unfortunately, JAG just became another in the conga line of Chinese garment distributors that proliferate in retail these days. Yes, they all have their 'unique' designs, thanks to the busiest people at fashion launches these days, illustrators who have to get sketches to China by SMS by the end of the night. The result for designers: Originality 1 v. Commercial Advantage 0. Sort of like watching Arsenal play beautiful football, but never winning a trophy!

It will be interesting to see what Zara does to maintain the rage. Positioned as a retailer that brings the latest fashions to market fast and cheap (thanks to those busy illustrators!), its a position that could easily be challenged by other stores if they really focused on it. Let's face it, Target has been doing the same thing for years with Stella McCartney.

Generations flying by quicker than I can blog

Social trends guru, Mark McCrindle, posted two separate items recently that said:
  • The last of the Gen Ys are in their final years of school meaning an 'all-Gen Z' school population; and
  • Generation Alpha has officially kicked off (that's the one following Gen Z for non-cognizentia).
I can vouch for the first being a proud slave to a Gen Z daughter. I think I recall saying in a previous blog that if marketers thought Gen Ys were hard going - wait until you hit Gen Z. They're the ultimate tech natives. The only difference between primitive man and them is that their savagery is directed only at deferred gratification, things that don't work as they should, and mobile phones that don't tidy their room for them.

Recently, a colleague of mine went on maternity leave - the result being the issue of bubba photos for immediate distribution around the workplace. I looked at this example of Gen Alpha and wondered how different we really all start out. The eternal question about whether how we turn out is governed more by what we're born with or the environment we grow up in.

Our Gen Alpha sample looked the same as most Gen Z catalogues that I've seen. In fact, it didn't look greatly different than the old boomer pix, except for the latter's monochrome reproduction. Gen Zs would actually argue that as we lope around in our navy blue trackie dacks we live up to the monocolour start that we had. (I've moved into purple recently to try and overturn this misconception.)

Nonetheless, I wonder what unique marketing challenges Gen Alpha will present? They'll respond to sensory cues that we haven't even dreamed of yet. Email will likely be dead and buried, replaced by cryptic Twitter code, illegible to any previous generations. They may Google by telepathy. Apple will have reincarnated Steve Jobs to develop the iHand, a phosphorescent skin that fits like a glove and glows to display downloads from their Google telepathy. "Can't shake hands 'cos you'll change my browser settings".

The employers of choice will be those who pay them more to stay at home as governments, congested infrastructure, office rental and environmental preservation kill off the city commute. In fact, we may not have employers, just a population where everyone can search for the best talent and skills to hire on an hourly basis.

Hard to believe that Generation Alpha won't, like all before it, be a product of its environment...