Watering Down The Brand

The companies that are lasting are those that are authentic. If people believe that they share values with a company they will stay loyal to a brand. We certainly can’t argue with that, although it wasn’t Brand Keys that made that statement. It was Howard Schultz, the Chairman of Starbucks.

But last week, the blog Starbucks Gossip turned up a memo from Howard where he noted “the watering down of the Starbucks experience.” The commodity that transformed itself into a premium-priced brand discovered that if you are not true to your values, your consumers won’t be true to you.

This realization didn’t surprise us.

In Brand Keys' 2007 Customer Loyalty Engagement Survey – providing predictive, leading-indicator measures of customer and brand value buttressing – Starbucks was knocked out of first place in the coffee-and-doughnuts category by Dunkin' Donuts. That’s the first time in five years Starbucks didn't dominate, because apparently it’s true these days that “America runs on Dunkin’.”

Mr. Schultz noted that the new automatic espresso machines don't require baristas to actually “pull” shots. So customers don’t actually see the drinks being made. He blamed packaging that locked in flavor and eliminated the need to grind the coffee in-store, so that fresh-ground coffee aroma was eliminated. "We achieved fresh-roasted bagged coffee, but at what cost?" he asked.

Starbucks might have learned from the Krispy Kreme donuts brand debacle. They traded away their brand’s equity – fresh made and hot – for an expanded, Entenmann’s-like distribution system: boxes in the stores, cold and congealed. That move was more devastating to the brand than all the Atkin’s dieters put together.

We have noted before that this is what happens when you take your eye off the brand. So many companies aren’t satisfied being wonderfully vibrant brands in their category. They want to be bigger. They want to be music brands. They aspire to being “Lifestyle Brands.” But most of the time when they do that they end up losing a good deal of their originality and differentiation, and along with that the crispness of the brand experience. Dilution of values is a sure and certain way of watering down a brand. A Starbucks spokeswoman commenting about the memo noted, "We do not embrace the status quo and constantly push for reinvention.”

For the record we would remind them that while invention may be the mother of necessity, sometimes the changes really aren’t obligatory.

And The Winner Is....

We issued the results of our Academy Awards Engagement Survey on Wednesday. It indicated which advertisers are going to “win” by running ads on the Oscar broadcast. (“Win” is defined as having consumers behave positively toward your brand, i.e., buy what you sell, and if you’re betting on ROI outcomes, L’Oreal, General Motors, and Dove are the way to go.)

The Academy Awards are sometimes called “The Super Bowl for Women,” and maybe that’s why you hear so much about fashion. It’s the second-most viewed TV event after the Super Bowl, but these days if you’re looking for winners, it’s better to bet on engagement than it is on eyeballs. And, as with most clients without predictive engagement assessments, advertisers will just have to wait to see if their investments paid off.

So, while we wait for the numbers to come in, we’d like to point out that the investment of millions of dollars doesn’t have to be done in a vacuum. Engagement metrics are available to anyone who is interested in knowing whether or not they’re making a good (or bad) investment. It can be done for any brand, for any media touch point before you spend your money.

Anyway, last year we offered up some odds on who would win the Academy Awards based on the same loyalty and engagement assessments we use to measure ad success. They managed to predict – with 100% accuracy – the recipients of the various Oscars.

So here are the odds we came up with for the “big” categories this year. We provide these for entertainment value only. If you’re making real bets on the outcomes, you’re on your own!

BEST PICTURE

The Departed: 3:1
Little Miss Sunshine: 9:2
Babel: 4:1
The Queen: 5:1
Letters From Iwo Jima: 6:1

BEST ACTOR

Forest Whitaker: 2:1
Peter O’Toole: 3:1
Leonardo DiCaprio: 4:1
Ryan Gosling: 6:1
Will Smith: 9:1

BEST ACTRESS

Helen Mirren: 3:2
Judi Dench: 4:1
Meryl Streep: 5:1
Penélope Cruz: 9:1
Kate Winslet: 10:1

BEST SUPPORTING ACTOR

Eddie Murphy: 2:1
Alan Arkin: 3:1
Jackie Earle Haley: 6:1
Mark Wahlberg: 6:1
Djimon Hounsou: 10:1

BEST SUPPORTING ACTRESS

Jennifer Hudson: 2:1
Adriana Barraza: 3:1
Cate Blanchett: 3:1
Abigail Breslin: 9:1
Rinko Kikuchi: 9:1

BEST DIRECTOR

Martin Scorsese: 3:2
Clint Eastwood: 3:1
Alejandro González Iñárritu: 6:1
Stephen Frears: 9:1
Paul Greengrass: 10:1

While we wish all the advertisers and nominees “good luck,” it’s worth remembering that in marketing as it is in Hollywood, it may be that the race is not always to the swift, nor the battle to the strong – but that’s the way to bet!

Blurring The Lines Between Tech & Toys

It won’t come as a surprise to marketers and consumer alike that “high tech” will be the two watch words to watch for at the 2007 American International Toy Fair, taking place in New York this week.

Yes, yes, you’ll see the usual assortment of dolls and games and lots of things with film tie-ins (Spider Man 3). The usual suspects (Elmo and the Sesame Street gang) will be present, but as in recent years past, electronics, high tech, and video game-related items will be the important toys to watch. Fisher Price, for example, will be introducing the Easy Link Internet Launchpad, a gateway to the Internet that allows children access to parent-approved games but goes no further into cyberspace.

All that said, we thought it might be worth a walk down memory lane to recall some of the less high tech toys that once engaged both retailers and children:

The yo-yo (1928)
Radio Flyer wagon (1930)
Silly Putty (1950)
Mr. Potato Head (1952)
Frisbee (1957)
Hula Hoop (1958)
Barbie (1959)
Etch-A-Sketch (1960)
G.I. Joe (1964)
Care-Bears (1982)

After that, and coinciding with the non-calendar-based coming of the 21st century (1985), electronics and high tech took over. Some manufacturers have sought to “modernize” or co-brand the classics. Things that engage do have generational half-lives, after all. I would note that those who speak of progress in this category would measure it not on the basis of quality and fun, but to the degree to which toys are infused with technology, but my 12-year old would vehemently disagree!

Genius May Have Its Limitations, But Stupidity Is Not Thus Handicapped

We are constantly amazed at the lengths some marketers will go to create what they see as innovative metrics – even if they don’t measure much of anything. Today’s burst of pique was engendered by a survey we received that counts the number of times the average American mentions a specific brand in conversation. Sounds interesting, doesn’t it? So very 21st century word-of-mouth buzz-like, right?

The study asked 100 people, 13 to 65 years of age, to recall the brand they referred to when they chatted with family, friends, and co-workers during the week. Using that number – the study asserts – advertisers can configure a brand’s “talk share” relative to its brand share. The higher the talk share, the more the market share will grow. QED right?

Wrong. Issues of sample size, actually identifying the “average American,” linguistic and subject matter variations by age, lack of controls regarding category or brand usage, the context in which the brand was actually mentioned, and the fact that all of the data was based on recall notwithstanding, the perpetrators of this theory might have benefited from a conversation with brands like Martha Stewart, General Motors, and a litany of other brands that in their time got plenty of prattle, but very few profits.

Sometimes you innovate and you end up getting it wrong. When that happens one should just acknowledge it and move on. It’s a complex marketplace out there, so we are patient with stupidity but not with those who are so proud of it that they publish proof of it!

Putting A Price On Love

Legend says it started with a letter from a prisoner – Valentine – to his beloved. And by the 21st century, Valentine’s Day has turned into a major retail holiday.

This year the average price placed on love is $125.50, up 11% over last year, and 2007’s top-10 gifts include:

Cards - 85%
Dinner/Entertainment Events - 58%
Gift Cards - 55%
Flowers - 48%
Candy - 45%
Jewelry - 28%
Stuffed Animals/Balloons - 13%
Lingerie/Clothes - 13%
Perfume/Cologne - 8%
Books - 9%

Top Valentine’s Day activities include:

Dinner - 51%
Movie - 33%
Sex - 28%
Stay at home - 4%

It is worthy of note that based on anticipated consumer behavior, “engagement” may have a double meaning tomorrow!

The Fundamentals of Creative Advertising

We participated in a radio interview this week that was a critical review of Super Bowl advertising, which proves that Super Bowl advertising apparently has a 2-week professional relevance half-life.

The very first question was, “Which ads do you feel were successful in sharing their brand?” and I found myself asking the show’s host, “What do you mean by ‘sharing their brand?’” The answer I got isn’t important, but the question is important for Super Bowl advertisers. Or a more targeted question at least, which is “What did I expect I was going to get for my $2.6 million ad buy on the Super Bowl?”

What did they expect? Awareness? Most of the brands that advertised on the Super Bowl don’t lack for awareness, and even if they did, awareness is no guarantee of sales! Just ask GM. Corporate bragging rights? If so, buying the Super Bowl may be God’s way of telling you there’s too much money in the marketing budget. An announcement of product/service availability? Distribution for all the advertisers has reached the point of unconditional ubiquity. A service to the public in the form of an entertaining moment. A laugh. A sigh. A notion invoked? (Note to the brain measurement folks: commercials registering highly in areas dealing with “upbeat emotions” mean that people are entertained by the commercial, NOT that they are engaged to a degree that they’re going to rush out and buy the product!)

Somewhere along the line, fighting commoditization and lack of differentiation and new media and the “bionic” consumer of the 21st century, the ad industry forgot that the business they’re in is one of “disciplined creativity.” It’s fine – in fact, it’s preferable – if the advertising is creative and entertains the audience. But most of the ads that got run on the Super Bowl – hell, most ads generally these days – are production heavy and strategy lite. And you don’t see much R.O.I. from production values alone.

In most industries creativity can solve almost any problem. In the ad business, it ain’t creative unless it sells!

The Arresting Of Human Intelligence

A number of consumer-generated Super Bowl College Ad contests ended last week and we thought in the maelstrom of Monday-morning creative quarterbacking – and as a public service to the marketing industry – we’d give you a taste of what got cooked up by consumer collegians. It was unclear as to whether winning commercials were going to be run “on” the Super Bowl, or “during” the Super Bowl, or some web-based/IM proximity of the Super Bowl, but you had to go online to see some of them, so we guess the whole “see it on/during the Super Bowl” was pretty much a PR waffle.

Anyway, go to the link below, take a look at what was deemed good enough and engaging enough to be a “finalist” for Chevy then come back to this blog. We’ll wait for you.

http://www.chevycollegead.com/2007/01/reality_webisod.html

Were you engaged? Did you hang on every word? Are you amazed that the Chevy Aveo is textured, spacious and roomy? Were you moved to run out and buy one?

Nah, neither were we. Did you find yourself asking, “What possessed Chevy to do something like this!?” Yeah, we did too. Maybe that’s why it wasn’t on the actual broadcast! The best you can say is that it’s different. But “different” isn’t always good, and that probably wasn’t the adjective you had in mind anyway. Advertisers should remember that when it comes to engaging consumers differently, it should happen via a well-conceived plan, not by accident. At least the Doritos c-g commercial ran on TV. During the game. And it only cost $12.00, so between a high Brand-to-Media Engagement boost for the brand and a reasonably low cost for production, you have to figure a better than average R.O.I.

Stephen Leacock wrote, “Advertising may be described as the science of arresting the human intelligence long enough to get money from it.” We believe that he meant that the “arresting of human intelligence” part came after the advertising was created, not before!

Sony Sales Strategy Boomerangs

Sony's October-December profit slipped 5 percent, largely due to PS3 startup costs. The red ink in the gaming division could turn out to be worse than the $1.6 billion operating loss that Sony is already forecasting.

It’s no surprise that Sony faces immense competition from Nintendo's Wii and Microsoft‘s Xbox 360, each of whom have been looking for their share of the home gaming category. From an engagement perspective, consumers seem to be snatching up Sony’s rival Wii, which costs about half as much and comes with a wand that players swing around like a bat or pole or lance depending on the game.

Game machines usually come down in price, but faced with robust competition, Sony lowered the PS3 price in Japan by about 20 percent even before sales started. This was/is risky since PS3 comes loaded with a next-generation DVD and is powered by a super-chip. It’s rumored that Sony was already taking a loss on each machine, hoping to recoup the investment by selling games.

What’s the lesson here? It would seem that competing in the game machine category is like the game of boomerangs. Our attempts at engagement and marketing return to us sooner or later, with astounding accuracy.