Wednesday, July 29, 2009

Sad signs of the times

During a recession, historically businesses look at cutting back on marketing first. This results in agencies struggling, laying off thousands of jobs as well as being late arrivals to the recovery party. Now, cut backs are not the only recessionary strain on agencies these days.

Many marketers are now telling agencies they cannot pay them the same fees they always have- cutting what they pay by up to 30 percent in some cases. Furthermore, some are asking that fees be reduced retroactive to 2008; paying less for work that has already been completed. Maurice Levy, CEO for Publicis Groupe was quoted in the WSJ last week "they want more for less" and David Sable COO of Wunderman said "There is no one in the industry whose clients have not said 'We are under pressure, so you have to cut fees.'"

Furthermore, major clients are trimming costs by stearing clear of retainer relationships and setting up a fee scale based on the ad's performance.

This concept is completely ridiculous when you compare it to most other industries, which is exactly what Scofield Editorial of Indianapolis did (and the entire point of this blog post) when it made this youtube video-Vendor Client Relationship- for it's clients.

Why should the agency have to cut its employees to save the jobs for their clients? A good client agency relationship should work like this- the client wants to see it's agency be profitable as well, because the more profitable an account in an agency, the better the talent that will work on an account.

Sunday, July 26, 2009

G is for huh?

A couple days ago the WSJ reported the earnings for PepsiCo, which sagged thanks to poor sales numbers from Gatorade, it's second largest selling drink by volume next to Pepsi-Cola. According to the report, Gatorade lost 4.5% of their market share down to 75% and volume slipped 17.5% in the first six months of this year.

Why I find this so interesting?

Back in January, Gatorade received a makeover to bring a bit of "coolness" back to the brand. They simplified the product label to a large "G" complimented with a smaller signature lightning bolt. In their advertisements, they ask: "What's G?"

Personally, I was a bit confused at first. I thought it might be a new flavor or a new line of drinks on the way. Turns out, I was in the majority. According to Mr. Pecoriello, cheif executive of ConsumerEdge Research LLC, when they asked, "people weren't sure." So what is G? It's the "heart, hustle and soul of athleticism," which I learned for the first time after reading the WSJ article.

This is not the only redesign Pepsi misplayed recently. In February, Pepsi pulled back from it's Tropicana redesign to return to the more familiar orange with a straw in it after consumers complained. Also, the latest Pepsi redesign was welcomed with mixed results.

I'm not accusing poor redesigns of being the only reason for the drop in sales-the overall category is down 12 percent and their is growing competition from similar jucies, teas and energy drinks. However, I don't beleive it's a coincidence either.

Regardless, this is not good news for the Pepsi, which just three years ago proclaimed they had trouble meeting demand for Gatorade.

Saturday, July 18, 2009

Buick trying to get bullet please meet foot

Yesterday I was reading the Wall Street Journal and I came across an article about GM trying to "breathe new life into it's profitable but slow-selling Buick line."

Buick hopes to attract a more affluent, younger demo. Currently, the average age of a Buick driver is around 70 years old. Tom Stephens, GM's Vice chairman of product development said that Buick is going for "the same person who would buy a Lexus" even though less than one percent of Lexus buyers considered Buick when shopping.

You don't need a crystal ball to see their future will not be bright as a result of this decision. However, I cannot say I'm shocked, this is GM after all. Oddly enough, Buick is one of their few profitable brands.

I look at it like this. My grandfather drove a Buick. Lot's have grandpa's drive Buick's. It has been this way for a long time. Therefore, changing Buick's public perception is unlikely. Make that very unlikely. Furthermore, this becomes an extremely bad decision because in the coming years, there will be more grandpa's than ever as the baby boomers gorw older. More potential grandpa's would have meant more potential Buick buyers.

Buick, your brand characteristics (story) are older yes, but also mature, classic, and rich. Sure it's not young and sexy, but you're actually profitable, and I don't know anything that's sexier than that.

Wednesday, July 15, 2009

Do sterotypical urban losers sell fast food?

I spent last night tuned into the Major League Baseball All-Star game because I love the game, not looking for any marketing insights, but it turns out I found some.

During a commercial break, a very long (almost 90 second) Taco Bell commercial came on, which can be seen in part here. I was instantly overwhelmed. REALLY TACO BELL!

This commercial is strangely close to this auto-tuned mess delivered by Wendy's. However, it was most likely McDonald's who is the originator of this over-the-top-song concept, releasing this commercial back in 2008. McDonald's however has always focused on an urban demo, featuring your run of the mill "young urban" crowd who are "lovin it" while chillin and breakdancing.

I'm not accusing Taco Bell of ripping off Wendy's or McDonald's because they've done is type of work before. I am however accusing anyone involved in creating (I use that term loosely) or approving these spots of lacking any desire to be original and, you know, "creative". Why does it all look like the same mass-produced fast food ad producing machine that did all this work?

In an article published by Al Reis just last week, he explains why advertising is so mediocre today, and subsequently why we have this phenomenon happening. Those that create the ads, as well as the managers who commission them view advertising in terms of a "accepted standard; people don't want different, they want better."

A message to these brand managers: different is better.

Saturday, July 11, 2009

King of Bad Marketing

Lebron James is one of the biggest American sports stars today; this goes without debate. However, this past week, the 24 year-old king of basketball was apparently dunked on at his own camp by a 20 year-old college basketball player. That player was Xavier guard Jordan Crawford and as a Xavier alum, I am extremely proud.

However, it appears that the videotape of this dunk will remain unseen because it was immediately confiscated by the Lebron/Nike team of drones, resulting in a tremendous amount of negative publicity for Nike and Lebron this week. This adds to the swirling negative perceptions around Lebron that he is only about himself, a sore loser and he doesn't want an unknown college player (who has done and said all the right things) to have any shine with his spotlight whatsoever.

From a marketing perspective, this event was a great occurrence; giving Lebron and Nike had the chance to steal the headlines for a couple days during the sleepy NBA offseason. Even greater, this is social marketing GOLD. It was not created in some studio by an ad agency, it just happened naturally, creating a massive buzz throughout the sports world.

However, they seem to be looking at this from the half empty perspective. Instead of spinning positively saying Lebron is human and even he can get dunked on, Nike totally shoots a brick. Did they forget that human is Nike's core demographic? Not professional athletes but the weekend athletes.

In the end, Nike will lose a lot of authenticity in the consumer's minds. Instead of a company full of young, rebellious, ahead of the curve marketing geniuses, they drop the ball and look like just another boring billion dollar self image concerning conglomerate.

Finally, did Nike really think that a college athlete and a young reporter were going to take down the Lebron empire with a youtube video? These are the guys who have degrees in this stuff. The guys who do this for a living better than anyone else. Something tells me that Nike being professionals at this stuff wouldn't miss an opportunity like this. That leaves Lebron in charge, and he completely tossed an air ball on this one.

Wednesday, July 1, 2009

Is there a downside to Social Media?

I am not going to be going out on a limb when I say that most people know all about Facebook and Twitter at this point. One thing is definitely certain- marketers know what it is. Social marketing is all the rage within marketing circles; it doesn’t take a genius to know this but if you read the blogs or talk to people you will quickly discover their excitement in this area.

I pulled this entry from a Rochester New York based advertising agency Dixon Schwabl’s blog, posted June 20th 2009.

“As social media continues to grow at a pace faster than you can blink an eye, more and more companies are trying to weigh the pros and cons of venturing into this unknown territory, while at the same time trying to understand just exactly what social media can do for their business. The benefits of social media are many, so if your company is teetering on the fence and considering taking the dive, here are a few of my favorite reasons to get the conversation started.

Increases visibility: There is no arguing that social media forms draw millions of subscribers. By participating, your company is creating another platform for which to increase brand awareness, be recognized and talked about.

Search Engine Optimization: Social media drives more traffic to your site/links, enhancing your company’s online presents and increasing traffic results.

Flexibility: Social media comes in many forms. If you don’t have success with one approach, try another, and best of yet, all it usually costs you is time!
It can work alongside traditional advertising methods: As with any campaign, an integrated approach will yield a higher ROI compared to a silo approach. Use social media to add another medium into the marketing mix. It will provide a new platform for which to reach potential customers.

It’s here and now: Recent technology has created a whole new world for which companies have the ability to tap into. The Internet is as social and active a place as any, and although it might diverge in the years to come, it’s not expected to disappear anytime soon. Your competitors are likely creating a web presence, so not participating and growing with technology may mean a risk to your company if your competition reaches your consumer first.”

Later I even saw a Dixon Schwabl brochure that went as far as to say companies should switch to new media to reach their audience. They compared a boring, obsolete traditional campaign to a new a supposedly effective one in 2009. They recommend replacing traditional newspaper ads with banner ads on newspaper websites, billboards with email blasts, and television ads with online video ads… You get the picture.

They make a lot of great points about the advantages of social media, but I don’t share the same free-wheeling enthusiasm for social media as many other agencies seem to have. I do believe there is a downside to this, which I know, is an ironic thing to say on a blog.

Well, my main objection to the social media craze is that it’s so new and unproven that how any agency can really make claims about the results of social media. The number of eyeballs that your message reaches is often dependent upon people sending it to their friends. Also unproven is the formal for creating good social media. Take a viral video for instance. Who wrote the rule book for creating a good one? Perhaps that Britney Spears crying guy- his/hers (?) was a blockbuster. Chances are that your agency doesn’t know the formula exactly. The fact is that some videos catch fire, and some don’t.

We’ve already seen some brands like Dominos take major punches because of outside attacks via social media. Anyone can say anything true or untrue and it can spread like wildfire. However, I think some brands need to be careful about using social media themselves because of disconnect that could result in cheapening a brand.

Some classic brands come to mind. Do you think an older, iconic brand like Rolex would advertise on Facebook and send out email blasts? In there case, I think advertising in the Wall Street Journal and a written newsletter to buyers is more appropriate. Although they incur costs, these mediums are just more appropriate for that type of brand. What about a medical professional sending out Twitter updates? I think I speak for many when I say I don’t want my doctor “tweeting.”

Furthermore, because social media is so easy to use, a lot of brands jump in with both feet without thinking first. Are you sending a mixed message that conflict with other brand messages? Do you test your messages before you throw them up on Youtube (talking to you Motrin), like you would with a television commercial.

Finally, as everyone rushes into the social media party, the room is going to get very crowded. There is more clutter on the net everyday, which makes it a lot harder to stand out. As this clutter piles up, the user gets annoyed and tolerance gets shorter. They won’t be looking at those 25 twitter updates and 15 newsletters that are waiting in their inbox.

I liken the social media craze to a classic college kegger. At first it’s fun and exciting (I know, freshmen), they’re few house rules obeyed and the next morning you may wake up wondering if there were more productive uses of your time and resources.