Signs of the Times

Consumers everywhere are in a serious "recession mind frame." They're delaying purchases or deciding simply to forego things that they would ordinarily be buying. It's a scary time if you're a trying to market anything that's not pretty much an absolute necessity. If it's a "nice to have" thing but not a "must have" thing, then you are definitely feeling the impact of this recession mindset that gripping most Americans.

Here are a few things that illustrate how bad this recession mindset has become and how lasting its impact may be.

1. The Cute Puppy No One Wanted

I attended a charity event recently that I've attended for the last three years. The event includes both silent and live auctions to raise money for the charity. In prior years, the highlight of the event is the live auctioning of a cute puppy. The biding is spirited and the puppy generates a multiple thousand dollar contribution for the cause. This year, when the puppy went up for auction, no one bid. It was sad and embarrassing. The puppy was as cute as ever, but this year, no one wanted to come home with a new puppy. Another mouth to feed? Vet bills? Buying a new puppy in this economy? It was a sobering moment, because this was a relatively wealthy crowd. It really brought home how bad things have gotten.

2. Outrage at Excessive Executive Compensation

No matter how well a company is performing, it is now PR poison to grant large bonuses and multi-million dollar compensation packages to top executives. When so many are out of work, forced to cut back and losing their savings, it does seem ridiculous and unfair to read of CEO "Mr Big Shot" and his $25 million bonus. I think we've gotten to a point where this type of compensation is no longer routinely accepted. I think the press will now focus on these types of comp packages and report on them and that Board of Directors will be forced to react. Is it more important to keep a few top execs fat and happy or is it more important to protect the public reputation and image of the corporation? It will be interesting to keep an eye on this issue and see if it goes away once the economy returns to health. I suspect we may have experienced a watershed moment that could forever change the excessive compensation earned by a select few.

3. GM Headed for Chapter 11

An American Icon company looks like it is about to declare bankruptcy. Any guess on how the stock market will react to this event if it happens? Can you imagine what it must be like to be a GM Dealer these days? How many of them are about to go out of business, too? Last night a friend told me he just bought a new GM car and got $17000 off the list price. How desperate did that dealer have to be to unload a new car at that steep a discount? GM is trying hard but everything positive that they do right now is overshadowed by the mass of negative publicity they're getting.

4. Banks Only Want to Lend Money to People Who Don't Need to Borrow

Isn't one function of the banking industry supposed to be to loan money to entrepreneurs and aspiring small business owners so that they can create new businesses, employ more Americans and fuel the overall economy? This financial crisis has made banks so conservative in their lending that the only people who can get money now are those that don't need it. Banks want to make money and they want to minimize bad loans, but don't banks also have a social responsibility to help create more jobs and grow the economy?

There is a lot of ill will being created right now by many American businesses. I'm not sure that this recession will be like the other ones I've live through. The impact of this one feels like it will be more permanent. My dad grew up during the The Great Depression and his outlook on life and money and business was fixed during that era. I suspect that many Americans are being affected just as deeply now by what we are experiencing. The impact on marketing will likely be permanent and immense.

Can Anyone Explain These Crazy Things?

I admit that it's easy to be a Monday Morning Quarterback. But there are some things in the world of business and marketing that just seem so hard to understand when you first see or hear about them that you've got to wonder "what were they thinking?"

Here are a few recent examples:

1. AIG

How could they have not known that passing out bonuses using government bailout money would finish off the company's reputation permanently and forever kill the AIG brand? There is no way that AIG as a brand can survive now and I doubt that any attempt to rename the company and continue in business will succeed either. The leaders of AIG have got to be the all-time biggest business boneheads in history. Are we going to put even more bailout money into this disastrously mismanaged company? I sure hope not. What were they thinking?

2. Gatorade

An old colleague of mine responded to one of my recent postings where I criticized Coca-Cola for some of their latest brand positioning moves with a right-on comment about Gatorade's recent re-branding. For now, they're still calling themselves "Gatorade", but the brand name has disappeared from the front of their packaging. We now see nothing but a big ugly generic-looking capital "G". Why on earth did they do that? How did they convince themselves that it made sense and was a wise thing to do? Are we about to start hearing them call the brand "G"? What were (are) they thinking?

3. MSNBC

They decided to air a segment that attacked consumers suffering with "underwater" houses due to the mortgage lending/housing market crisis. There may be a few scrooge-like ultra right wingers out there that have no sympathy for fellow Americans having to deal with this crisis, but that is not exactly the prevailing sentiment. MSNBC rightfully got taken to the woodshed by John Stewart of Comedy Central and then the media circus was on. An avalanche of negative publicity for MSNBC ensued. How could MSNBC have lost touch with their viewers and American public opinion that badly? Fat cat on-air announcers with big-money contracts who are not feeling any financial pain are not representative of the average American. What were they thinking?


I'd love to hear from anyone out there who doesn't think that each of these things are crazy-headed "what were they thinking" examples of pure marketing insanity.

Direct Response TV - When "FREE" doesn't really mean "free" and other bogus practices

There is a subset of marketing people, agencies and production companies that specialize in a unique form of American marketing collectively called DRTV (direct response TV).

These are those generally awful ads selling products you can't buy in stores but are only available through these "amazing" and "incredible" and "fantastic" tv offers. It's the closest marketing comes to the old wild west huckster selling magic elixir out of the back of his covered wagon.

Cable broadcasters air these DRTV ads when they have no real honest-to-goodness paying advertisers. So rather than fill commercial time with dead air or a barrage of network promos (neither of which generate any revenue for the broadcaster), cable networks assault us with these hard-sell intrusive long-form (usually 60 seconds or more) ads. They give away the air time for nothing. All you need to be in this business is a slick selling spot that gets gullible viewers to call that number and order that gizmo. Cable networks play along because if you're sucker enough to call those on-screen numbers and actually order something, the cable network shares in the revenue. Hey, it's better than earning nothing for that ad time. Right?

Wrong. And here's why.

Most of these ads use tried and true DRTV practices that are at best "unethical" and at worst "outright fraud." Here are some of the "Hall of Shame" tactics that are their standard tools.

1. "It's FREE". No it's not. Check out the shipping and handling fees. Those more than pay for the cost of the item and provide a profit margin to the seller, too.

2. "Act now and we'll double the offer." All that means is that the price they're charging is more than enough to give them comfortable margins even if they supply you with two instead of one, four instead of two...you get the idea.

3. "Not sold in any stores!" That's turning a negative into a positive. There's no place to take this back if you don't like it or it doesn't perform as advertised. And that number you called to order.... it's a call center. It's not any kind of company HQ. Good luck getting a refund if you call back with a complaint or because you're dissatisfied. And if they really were selling some sort of truly amazing product, why wouldn't they be selling it by the millions through conventional retail channels instead of one at a time over the TV?

The cable TV networks that broadcast these deceitful ads are valuing a few dollars of incremental revenue over their own ethical standards. As a paying advertiser, I certainly wouldn't want any of my spots anywhere near these sleazy DRTV ads. These ads tend to sully the reputation of all ads and all marketers. They aren't doing anything to enhance the image of the cable network airing the ads either.

I'd like to see the cable networks implement higher standards in determining which DRTV ads they agree to run. If they don't police themselves, it's time that the FCC get involved and put an end to these shamefully misleading ads. They don't entertain. They don't enlighten. They just try to trick you into ordering something that probably doesn't work.

Coke's Brand Strategy for Colas - How Times Have Changed!

Here's an opening disclaimer: I used to be in charge of cola marketing at The Coca-Cola Company back in the late 80"s and early 90's. I helped make Diet Coke the success it was in the early 80's when I managed its advertising while at one of Interpublic's agencies. Therefore, I'm probably not completely objective about what Coke is doing these days, but I also know a lot more about their brands than the Average Joe.

Here are some of the things that puzzle me about what Coke is doing.

1. Coke Zero is directly positioned against brand Coke.

The Coke Zero ads feature two bogus brand managers who try to be funny while communicating the message that Coke Zero has stolen Coke's taste. The target of the advertising seems to be Coke drinkers who they are trying to switch to Coke Zero. Huh? Unless the brand economics make Coke Zero a lot more profitable than Coke, why would Coca-Cola want to introduce a brand with the apparent purpose of simply cannibalizing the mother lode? What happened to competing with Pepsi? I don't get it.

2. Diet Coke has become what Tab used to be.

Now that Coke Zero is on the scene, Diet Coke has ben re-positioned squarely and only against women. Diet Coke became a success by breaking the "Diet" stigma and convincing cola drinkers that it tasted good enough for everybody - men and women. It was launched "Just for the Taste of It" with advertising that was broadly targeted and definitely NOT diet focussed. Coke invested in that strategy for about 20 years. They must have spent a billion dollars on it, literally. In the last few years, it's "never mind." What a titanic waste of money! As someone who devoted years of their life to building the Diet Coke brand, I REALLY don't get it.

3. Coke's advertising is a mess.

Is it my imagination or does every single Coca-Cola ad now try to equate the brand with lofty things like "goodness"and the environment and education? The brand is taking itself so darn seriously now that it's no fun. It's become this pompous overblown brand that relies on high tech animation techniques and other whiz-bang effects because it is without a core brand idea that is fun and relevant. Every so often they stumble onto something that people like (remember the Polar Bears) but that's been more luck than strategic marketing acumen. Pepsi has finally got it right again, returning to the basic Pepsi Generation positioning that makes that brand young and fresh and fun and relevant. Coke's advertising is bloated, too self-important and increasingly irrelevant (and Coke Zero is helping this happen!).

Over the years, I've watched Coke be a revolving door for marketing people and advertising agencies and brands. The guys at the top find scape goats and they dodge the bullets and continue to blunder along. Coke is still one of America's great brands in spite of all the recent incompetence. Maybe, one of these days, they'll figure things out and get the brand back on track.

Some Thoughts on Marketing's Role in Today's Depressed Economy

The economic news continues to be bleak with no upturn in sight. Layoffs are continuing. The stock market continues to decline. Every night, the network news is loaded with stories of corporate and human distress. The marketing fundamentals of our economy may be undergoing permanent change. How should your marketing team respond?

I'll start with a principle that needs to shape your marketing actions: Marketing can't make anyone do anything that they don't want to do.

So, in this economy, if most of your customers don't want to spend money right now to buy whatever it is you're selling, what should you be doing? The correct "marketing mindset" for your company should be "how can I help (not sell) my customers in the short term in order to gain even more of their business in the long term."

There are many companies that are responding to today's economic conditions with deep discounts and deals and special offers to try to get reluctant customers to buy NOW. No doubt, some customers will respond to this. But most will not. However, they will remember the special deal price and when the time comes that they are ready to buy, they will not be happy about the return of "regular" pricing. Discounting is generally a one-way street. When you set a new lower price, it usually very quickly becomes the price that your customers expect to pay from that point on. So discounting may generate a short term lift, but the long term impact on future revenue and profits will be significant. Beware!

Smarter companies are shifting their marketing tactics without resorting to cutting their prices. One interesting example is Hyundai. They are promoting a "Forgiveness" plan that promises that if you buy a new Hyundai and then find yourself in economic distress and unable to make your payments, that they will simply allow you to return the car, without all the ugliness that is normally associated with that type of situation. Hyundai could easily have been investing the same marketing resources into promotions and discounts in order to sell more Hyundais RIGHT NOW. This softer approach is much more compelling and. I bet, more effective for them.

Other companies are recognizing that their customers simply want to exercise more buying caution in these uncertain times. Caution means "slow down" and "learn more" and "be sure." So the tone and style of your marketing should reflect that. You should expect longer sales cycles and be creating marketing materials that will gently push your customers along, providing the information they need and providing it with more frequency than in the past. The information you're providing may need to be more detailed and the after-the-sale service may need to be more robust (and less expensive). You're financing options may need to be expanded, with more options offered. Your guarantees may need to be strengthened or promoted more aggressively. All of these tactics will reflect your customer's mindset and, as a result, be more effective.

Marketing is about understanding your customers and communicating with them in ways that demonstrate understanding and provide compelling information that motivates them to do business with you. If your marketing shows that you don't understand the economic realities facing your customers today, then you're not doing a smart job of marketing.

Marketing with Music - Not What It Should Be

There's rarely a TV commercial that gets produced today that doesn't use music in some way. Yet most marketers are getting far less brand impact from the music they use than they should be. Music can be so much more than an underlying soundtrack to the words and pictures of a TV ad. Music can be brand cement. It can be a marketing communication tool that enables you to plant a brand message in a viewer's head FOREVER.

Here are some great examples of branded music that many of us can probably not only remember, but most likely still sing along with.

Almond Joy/Mounds - "Sometimes You Feel Like a Nut"
Meow Mix - "Meow Meow Meow Meow"
Roto-Rooter - "Away Go Troubles Down the Drain"
US Army - "Be All You Can Be"
Alka Seltzer - "Plop Plop Fizz Fizz"
Chili's - "Baby Back Ribs"
Oscar Meyer - "I Wish I Was an Oscar Meyer Weiner"
Campbell's Soup - "M'm! M'm! Good!"
Hertz - "Let Hertz Put You in the Driver's Seat"

There's another really good way to use music and really BRAND it. That's to steal a song that's become a hit on its own and apply it to your brand in such a strong way for such a long time that it's impossible to hear the song any more without thinking of the brand it has now become associated with. Here are a couple great examples of that.

Chevy - "Like a Rock"
Heinz Ketchup - "Anticipation"
California Raisins - "I Heard It Through the Grapevine"

Another approach that also works is the short musical button that ends a spot and becomes an instantly recognizable element of the brand. Two examples of this are:

Mennen - "By Mennen"
Intel - "Intel Inside"

Today, music in marketing has essentially become a throw-away. Part of this is because so few marketers are now committing themselves to long-term campaigns, which is a requirement if you want to establish any branded music. It's a shame because music can and should be a powerful branding weapon.

Does it really make sense to pay for the rights to use the music of some hot recording artist only in one spot for only a limited period of time? Almost never! Unless you're Apple marketing the iPod, in which case using interesting new music is a big part of what the brand is all about. But exceptions like this are rare and only prove the rule. Don't invest big money in music UNLESS you're committed to making the music a big part of your brand identity for a substantial period of time - like FOREVER.

The Obligatory Super Bowl Advertising Review

It was a great game. Certainly one of the best Super Bowls ever.

One of the unique aspects of The Super Bowl is that the "day after" evaluation of the ads has become such a part of the game itself. It's one of the reasons why advertisers invest in those high-priced ads. They command the attention of everyone and the one exposure the advertiser pays for in the game itself is multiplied many times over with the "day after" exposure that each of the ads invariably receives.

By now, you'll have formed your own opinions about the ads, read what others think and probably debated the merits of the ads with relatives, friends and co-workers. Rather than bore you with just another opinion on all those ads, I'll take a slightly different approach. I'll take issue with some of the ads that most reviewers are praising and support one of the ads that most of the reviewers are criticizing.

Were These Ads Really Any Good?

1. Doritos "Office Ball": Isn't a guy getting nailed in his family jewels the oldest and stalest slapstick gag in the world? Aren't great ads supposed to be original?

2. Coke Zero "Polamalu": Ripping off the classic Mean Joe Greene ad was another example of failed creativity. The original ad generated powerful and sweet emotion. This one went for silly slapstick humor and just ended up cheapening the original.

3. Coke "Bugs": Wonderful animation, but what else was there in this spot? Using fabulous production technique does not mean that you don't still need a core selling idea. And bugs are not nearly as cute as polar bears.

4. Cash4Gold.com: Some reviewers actually liked this ad. Unbelievable! It was sad seeing winners who are now losers (Ed McMahon and MC Hammer) depicted in such chessy desperate fashion.

Was This Ad Really That Bad?

1. Heineken "Vanguard": John Turturro is a great actor and not just a pretty face. The copy was intelligent and Turturro's direct to camera reading was riveting. Was he too old and too pretentious? Maybe. But I paid attention and it was definitely distinctive from other beer ads.


I Agree That These Ads Were Terrific

1. Bridgestone "Potato Heads" and "Jump Around"
2. Budwesier "Clydesdale Plays Fetch"
3. E-trade "Babies"
4. Pepsi "Forever Young"
5. Monster.com "Moose"
6. CareerBuilder.com "It's Time"
7. Denny's "Wise Guys"

I Agree that These Ads Were Terrible

1. Bud Light "Skiier" (Drinkability MUST go!)
2. GoDaddy.com "Enhanced"
3. SoBe "Ballet"
4. Pepsi "MacGruber" (Beyond bad. Embarrassingly awful.)