Friday, January 20, 2012

Kodak failure a lesson for all, but not surprising

It's sad about Kodak, the venerable brand that has played a central role in capturing a big chunk of modern natural and human history. Perhaps more sad is that fact that the people running it either a) didn't see digital coming or b) saw it coming and buried their heads in the sand and refused to embrace it.

The company's demise is no surprise to me. I consulted to another long-established and highly respected brand in the 1990s - Agfa. They were in the film production business also and arguably produced the best consumer film product on the market.

The interesting thing about Agfa was that it had seen the digital age coming and was actually a leader in the area of high-resolution medical and pre-press imaging (remnants of it still are, as far as I know). Even in the mid-range scanning segment, some of Agfa's flatbed scanners were second to none. So there was no excuse for its rapid demise and disappearance in the consumer imaging sphere.

The writing was on the wall for me when I was asked to promote Agfa's range of digital cameras. I had a stockpile of them in my office that I promoted to the camera cognizenty in the media to 'road test'. I remember them clearly - 2 megapixel resolution on the base model, with a premium 4 mPx on the upmarket model.

That was great for about six months, but not for the several years that the company promoted the range. It got to the point where I was forced to have a very robust conversation with the company's executives about the wisdom of maintaining the media evaluation program when competitors were rapidly moving on to a whopping 6 mPx and beyond.

In fact, in my famously diplomatic way, I shipped all the test units back to them declaring that there was no evidence that the company had any commitment to the segment and no product development strategy that I could see.

Twelve months later, and to my cost, I received the inevitable call from Agfa Australia. I was to lose a significant marcoms account - not because of what I said, but because I had been proved right and the Belgian HQ had announced Agfa was withdrawing from the consumer digital imaging market. That was back in 2001 and, in my view Kodak was not looking much healthier even then - remember the $15 million Australian Government subsidy to retain Kodak in Australia when Ziggy Switowski headed up the operation? Perhaps we'd rather forget this in the context of the auto industry funding debate!

But, back to the knitting. I was later told that Agfa had withdrawn from the sector because it saw mobile phone and electronics companies as the future players in photography for the masses. And hey, they were correct. The digital cameras offered in mobile devices today are vastly superior to their early offerings. But the point is, why didn't they take action to forge alliances or even negotiate mergers with some of these operators?

Agfa's brand in consumer photography was massive in Europe, respected in the United States and growing in Asia-Pacific. It had strong advocacy in professional photographic ranks. But it appeared the executive placed no real value on the potential for their brand to assist other companies not already in the consumer imaging space to, at minimum, develop and manufacture products for them.

I am not close enough to Eastman-Kodak to know the intricacies of why they went broke, but Rupert Goodwins of technology website, ZDNet sees it this way:

"Kodak made all its money from selling film, then the digital camera came along and now no-one's buying film. It's not like they didn't see it coming. Kodak hesitated because they didn't want to eviscerate their business," he said.

Sounds a hell of a lot like history repeating itself to me and there are lessons in it for all of us. Purists might argue film produces superior images with more subtle colour gradations and so on, but no one wants it. Some audiophiles still argue vinyl LPs deliver a warmer sound than CDs. And even I believe CDs deliver superior sound to mpeg devices. But those views don't matter if the masses don't believe them.

Consumer demand drives our businesses, not the widgets we might develop or service models and systems we might think are good, or even superior,  for them.

It's not only the Earth that's spinning!

Have you caught up with the discussion about whether we should ignore the Earth's speed of rotation on its axis and set our time by the obviously more accurate atomic clocks? If you haven't, pin your ears back because it occasionally has implications for all of us.

If you didn't know it already, the Earth is not an accurate keeper of time because, would you believe it,the damn thing cuts a nick off 24 hours every time it spins. This is because it actually wobbles several degrees on its axis and gets hit by various bits of space debris, solar winds etc.

So if you stuck around a few million years, if you relied on good old Mother Earth to run your life, you'd effectively be robbed of a few weeks or so. In fact, the boffins who work tirelessly to deliver this info to us calculate the loss of about half a day every 6,000 years. It means that once in every few thousand years,  your client's deadline of tomorrow is really closer than you think.

To better focus our minds on this, our boffins have spiced this debate up in a way that should soon have management and IT consultants donning the sandwich boards again declaring 'the end is nigh'.

Remember the Y2K millennium bug? Filled newspaper columns and IT consultant pockets in tandem, as we waited in dread throughout 1999 for the moment when society ground to halt as we ticked over past midnight to enter the 21st Century.

We'll never really know whether the 20th Century habit of encoding the year date as two digits in PCs would have brought down contemporary society because our multi-million dollar investments in IT upgrades were completed in time, but it was probably the biggest ever millennium con we ever fell for! Of course, Apple users were immune from the travails faced by mere PC users - more iTuned into the future as usual.

Now scientists are debating whether we should abandon our current practice of bumping our atomic clocks by a second every few years to compensate for the Earth's wobbly behavior lest it upset our computer systems. The Ghost of Y2K perhaps?  So, if we stick to the atomic clock, some are arguing that we won't have to make the miniscule adjustments that put our computer driven society at risk every few years.

What we really need now is the daylight saving lobby to zoom in on this discussion. What are the implications of moving to atomic clock time? Will this result in extra daylight seconds - those poor farmers having to get up micro-seconds earlier to milk the cows, curtains fading, outdoor decking needing extra oil. The consequences don't bear thinking about.

And what about the nuclear lobby. Where do these atomic clocks derive their power. Where will we dump the nuclear waste? My God, we already have atomic clocks. Is there a waste dump in my backyard? Should I start buying BHP shares to capitalise on the proceeds from the Olympic Dam development? Big social and strategic issues that strike at the heart of my general well-being!

And then there's the Green lobby. How is carbon pollution influencing the timing and rhythm of our existence? Should we go nuclear or keep burning fossil fuels to keep town hall clocks running. Should we re-introduce wind-up watches so we derive health benefits as well as energy savings.

We spend a lot of time talking about this stuff, yet we have all been turning back the clock to help our punctuality for years. Even as I write, I'm betting someone somewhere is adjusting a watch heading into meeting to declare their timepiece had let them down again.

For the most part, knocking a second off a deadline once every few years is not going to resolve my day to day tardiness, especially when the atomic adjustments are most likely to occur on New Year's Eve!

Saturday, January 14, 2012

Social media - awareness or equity in the brand equation?

I'm pretty much over the Marcoms seminars on social media, so just to bore everyone yet again, I'll talk about(yep, you guessed it) social media. The reason I'm over these discussions is because I'm essentially over the line with it, both a relatively early adopter and convinced that it has a role to play in corporate communications.

In fact, it plays many roles, both offensive and defensive in overall communications strategy but, from a brand perspective, I'm starting to believe that in some sectors it is a greater brand awareness than engagement tool. Many would argue that they have run successful engagement programs using social media. I have seen some very creative and engaging programs. My issue is, what exactly has the target audience become engaged with? I'd argue that in nine out of ten instances, the engagement has been with the creative rather than the brand. The brand is a sponsor of the program, but does it translate into calls to action of commercial benefit to the sponsoring brand?

Sponsorship is perhaps an appropriate analogy. How does sports sponsorship benefit a brand? Does it deliver greater brand awareness, or does it build brand equity? In some instances, it can create a positive disposition towards a brand, but does this ultimately translate into sales?

Both social media and sponsorship generate interaction with the brand. Both can promote brand values by positive association with well crafted campaigns, well-chosen partnerships and so on. But there is increasing evidence that users of social media, in particular FaceBook, are not enthused by the thought of interacting with business in these channels. There are better online vehicles for that, principally online search and aggregator sites like eBay etc.

And if we generally accept that social media is not the appropriate channel for handling specific customer queries and complaints, we by definition remove one of the most effective drivers of interaction from the social media space.

On the flip side, followers on Twitter and friends on FaceBook have expressed an interest in your company simply by following your news and commentary and given you permission to access their space. Even so, I think you'll generally find that very little flows back the other way from these disciples - unless, of course, you really want to launch some edgy conversation. That's why I qualified my opening comments by saying engagement is difficult in 'some' sectors. Part of the brand DNA of some organisations may actually court controversy - think Benetton.

It's why I'm leaning to the view that, for most sectors, social media has greater potential for brand awareness building through leveraged distribution of information than it has for true customer engagement reflected in increased sales. That's still better achieved through well constructed search and website strategies.

The key for me lies in optimizing online strategy to ensure that, no matter what online channel people are in, that they are ultimately directed to a websites designed by you to provide solutions and advice aligned to their interests. You never know, doing so, may actually encourage people to really 'Like' you!