Lairig Marketing

Mayor Koch Moment #9 – How’m I Doin’?

Here’s what Lairig Marketing predicted in December 2010, for September 2011:

“The privacy fowl-ups among Internet companies continues unabated throughout the year, then, in September, Google, Facebook, Twitter, Groupon and Amazon are all hacked by a foreign criminal syndicate. Detailed, private financial and personal data for Congressmen, CEOs, professional athletes and Hollywood celebrities are exposed. Internet traffic plummets to 50% of normal for two weeks.”

OK, so we were a little (!!!) paranoid, and as usual a couple months early. Last week, as you will know if you use Facebook, the latter was the victim of a “coordinated spam attack,” resulting in pornographic and violent images being randomly posted on users’ accounts.

Since I no longer use Facebook, the press says I missed out on images of “self-mutilation, bestiality, and doctored pictures of celebrities, such as Justin Bieber.” Oh, snap.

It would be easy to lay this all at the feet of the big networks and portals. Indeed, the FTC this year has pushed both Google and Facebook into 20-year agreements to play nice with our data. But that was just a finger in the dike.

The Interwebs are built on software code that cannot be protected from hacking. As we speak, shadowy figures are hard at work East Estonia and Uz-becki-becki-stan planning the next attack. You can read the reports yourself from Symantec/Ponemon, Cisco, AVG and others – the number of attacks on companies’ data systems is mindboggling. And the exponential increase in mobile data usage opens another big avenue of hacking opportunity.

Our prediction from last year was based on a belief that this tug-of-war could not continue forever without the good guys being hauled into the dirt. We still believe it. But for now, at least, marketers can count their lucky stars that they have been spared the hackers’ focus.

Which means there is time for contingency planning:

• What will you do if your marketing database is compromised?
• What will you do if your user-generated-content contest is hijacked?
• What will you do if your Facebook page or Twitter account is taken over?
• What will you do if someone bombs your site or landing pages?

This would be a great time to consider putting any in-house marketing systems into the cloud. One more brick in the wall against the bad guys, who you should believe will come after you in the next 12 months.

Don’t leave the light on for them.

Ads Ads Everywhere, And Not A Drop To Drink

Imagine you are making a close connection in some metropolitan airport. Every second counts. You cheat your way to the front of the plane. When the door opens, you sprint down the jetway. Just inside is an airline employee offering connecting gate information for $15 per request.

You opt for one of those big, FREE digital displays, just 25 yards away. You race toward it, knocking down little children and old people. You check your watch as you run. Less than three minutes.

You arrive at the gate information display, sweating and short of breath. You look for “departures.” Then you look for your gate number.

Except, what? WTF? You stare at a full-screen advertisement for Hilton Garden Inn. WTFITS?

After ten seconds, which seems like an hour, the screen goes back to normal, with gate information. You find yours, and start sprinting once again, overturning people in wheel chairs as you go.

You arrive at your departure gate. The agent sighs, “Oh, I’m sorry sir, we closed the boarding process ten seconds ago.”

Think you’ll be staying at Hilton Garden Inn anytime soon?

While this story is exaggerated, the part about the advertisement on a gate-info display is true. Welcome to the theory of ad “impressions,” which posits that the more places you see my brand’s name, the more likely you are to remember it, fondly.

It’s been done before – ski lifts, grocery conveyor belts, escalator handrails – anyplace that people are “captive.” Of the 67 million opportunities, there are approximately only 588 left.

The airline industry is doing all it can to make that list grow shorter, and in the process, make the flying experience more miserable than it already is. Take Spirit Airlines (please!).

This bucket-of-bolts operation has the following advertising opportunities available:

• $14 million to advertise on the exterior of its planes
• $200,000 for ads on overhead bins
• $119,000 for tray tables
• $18,500 for the puke bags

This is essentially a staring contest. You stare at your tray table – the ad stares back at you.

We’ve said it before. Marketers should add value in these captive audience situations – ideas like sponsoring the in-flight WiFi, or funding free beverage service or free box lunches on board.

Or maybe you could sponsor a slidey chute Olympics for flight attendants.

Benetton & Wodka Advertising – Shock & Flaw

Here is an extract from a presidential candidate’s platform:

“…we have decided, through this campaign, to give widespread visibility to an ideal notion of tolerance and invite the citizens of every country to reflect on how hatred arises particularly from fear of 'the other’…”

Just kidding. That’s actually from the website of Italian apparel retailer Benetton. Every few years, the company gins up some controversy through distasteful imagery in print and out-of-home marketing.

This go-round, its “anti-hatred” campaign managed to piss off even the Vatican. Benetton was compelled to pull its photo-shopped ad of the Pope kissing a Muslim cleric. An altar boy could have predicted that outcome.

Some might defend Benetton by saying it has established itself as a lifestyle brand, for people attracted to global causes and outspokenness. Lest you think that translates to a growing, highly profitable brand, consider this:

Benetton annual sales have come in almost on the nose at 2-billion euros every year, for the past five years. Profit margin has been 5% each year, plus or minus a couple tenths. This is the mark of a boring brand.

Wonder how well it would do if it focused its marketing on its product.

Meanwhile, a campaign controversy that didn’t get as much press as Benetton’s came and went last week. Polish vodka maker Wodka got itself into a stew with the Jewish ADL for a billboard that, in so many words, said Jews are cheap: “Christmas Quality, Hanukkah Pricing.”

So much for Benetton’s “anti-hatred” vision for the world.

This is of a piece for Wodka, who has hit this theme with high-minded stuff like "Hooker Pricing” and “Newark Pricing." That same altar boy could have told Wodka's execs that this one wasn’t going to fly. The billboards were replaced in less than 24 hours.

All vodka is the same, except for price and branding. For Wodka to go all Benetton on a positioning of cheap is about as dumb as you can get.

Sort of like “Affordable Product, Polish Marketing.”

The Craft Beer Trend Has Already Been Canned !

The worst keep secrets in marketing are in the U.S. beer industry:

• American brewers are owned by foreigners
• Foreign beers are brewed in America
• Traditional beer brands are losing sales
• Craft beer sales are growing exponentially

Into this world of obvious, a “brewing” trend with a not-so-obvious outcome. A recent Denver Post article indicates that the idea of selling craft beer in cans – yes, in cans – might catch on.

To craft beer gourmands, this is sacrilege. But the brewers will tell these prigs that they aren’t the target.

The initial craft craze was actually years ago, on premise. The next obvious target was at-home drinkers, who wanted a package that evoked a more upscale environment (akin to a brew pub). Hence, bottles.

Would you next try and sell cans to that group? Foolhardy. Let’s look at two remaining segments, instead.

1) Beer drinkers who swear by cans, and swear at craft beer drinkers. They seem to love sub-par brews, and really really bad beer advertising. Target them with craft beer in a can? Fuhgeddaboudit.

2) Beer drinkers who find cans way more convenient at home, tailgating, picnics, etc. AND have tried an occasional craft beer at a bar. Because they don’t ever see craft in a can at retail, they go for Swill Light. Target this segment? Youbetcha.

Gaining consensus on targeting at such a high level is a critical step in marketing strategy, so simplistic that it is often overlooked. Message dilution and media waste result when brand managers haven’t made it clear who the target is.

Nine times out of ten, a nonstrategic marketer would go after Group #1 above, purely because it is such a large segment. But Group #2, although harder to find, is much more likely to be convinced to give “craft in a can” a try.

The bad news in all of this? We have many more years of really sh*tty “Group #1” beer advertising ahead of us.

SocialCode Fans On Facebook Fan Value

Had another post in mind this morning, but a link drew me away, like a moth to a flame. I cannot resist the temptation of an article that claims to reveal – finally, ONCE AND FOR ALL – the value of a Facebook fan.

I read these for the humor. I was not disappointed when I clicked over to an article titled “Why Brands Still Need Facebook Fans.” As if anyone has been saying they didn’t.

The subtitle was even better: “Fans Are 291% More Likely to Engage With Brand [sic] Than Non-Fans.” To that I say: f*cking duh.

The article was based on analysis by SocialCode, a Facebook-only social media agency. I would put several of the words in that prior sentence in quotation marks, but then I would be guilty of writing like Stuart Elliott.

SocialCode tracked ads on Facebook over several months and divided users who responded into two categories: (1) users who were already a Facebook fan of the brand that was in the ad, and (2) users who weren’t.

As you might expect, fans clicked more often than nonfans. However, because the response rate was so much worse for nonfans, their cost-per-acquisition (CPA) was much higher (roughly $15, versus a $5 CPA for existing fans).

Net of the study should have been: “It costs $10 more to get a nonfan to respond to an ad on Facebook than it does to get a fan.”

But no, the article says this: “SocialCode is the latest firm to try to calculate the value of a Facebook fan as part of a new study. Their verdict: about $10 per fan…"

Since SocialCode HASN’T PUBLISHED ITS OWN STUDY ON ITS OWN WEBSITE as reference, it is unclear if that verdict is theirs or the author of the article – Ad Age’s Cotton Delo.

In any case, the “verdict” is bullshit, but will run through Twitterville like fire. What a shame. A sham.

This is value measured by a lesser-of-two-evil-costs approach. Since fans cost $10 less a head to acquire, then their value is $10? Nonsense. Value must be measured in terms of return – revenue, sales, operating income. There is none of that in this study.

While we are at it, here are some other interesting points to consider in SocialCode’s analysis:

1) Why would I need to spend a penny to get Facebook fans to do anything? Isn’t that the whole point of having fans – to deepen the engagement and relationship right there on the Facebook brand page? What is the point of spending money ON ADS to acquire someone I already acquired? From this perspective, the “value” of a fan is negative $5. Money eating itself.

2) Of the seven types of calls-to-action that SocialCode tracked, the one that received by far the lowest response (a paltry 2%) was “program sign-up.” Isn’t it interesting that the activity requiring the most commitment and providing the deepest engagement opportunity had the worst response?

As interesting as the conclusion that no one really gives a sh*t about meaningful analysis anymore.

Hey, You Got Lexmark In My Xerox !

Other than the fact that Xerox is five times the size of Lexmark, the companies look almost the same on paper. Both have been around since monks did the copying and printing, and each has a bland, er, brand that is bland.

And both have declared they are going to become less focused on hardware (printers, copiers) and more focused on “solutions” and “services.” For Xerox, this is at least the third time its contemplated such a strategy since circa 1998.

Meantime, neither Xerox nor Lexmark have given shareholders anything to cheer about since the 2008 meltdown. Most large technology companies have recovered, but these two are nowhere near their pre-recession peak: Xerox at $8, versus $20; Lexmark at $35 versus $70+.

Neither business is going anywhere. A merger would allow the combined entity to take Lexmark’s better innovation and the traditional cost savings and plow it into some good marketing.

The interesting dilemma in this case would be what to call the new company.

The Exxon Mobil Method
This wouldn’t work. Xerox Lexmark is as hard to say as Lexmark Xerox. Picture Rudy Giuliani trying to get through this one without drowning the audience in spit.

The Mash-Up Method
Xer-mark? Lex-ox? Xer-Lex? XeroxLex? Ain’t happenin’.

The Wuss Method
Lexmark, a division of Xerox. Or…Lexmark, a Xerox company. Both work, but amplify the “bland” brand issue noted earlier.

Make It Up Method
It’s been done a billion times before. Xfinity. Convergys. Agilysys. Zillow. This would be a waste, since Xerox is a household name, a common verb and a common noun. Although Xerox only came in at #57 in the 2011 Interbrand Top 100 brand list, Lexmark didn’t show up at all.

The Big Bet
To show it is really serious about its new future, Xerox must adopt “services” or “solutions” plus “content” in its post-merger name. Lexmark loses out from a brand identity perspective, but ends up as part of a $30 billion business. Better than a $5 billion one on its own.

So there you have it. The brand consultant who gets this job can bill $500,000 and skip right down to this as a starting point: “Xerox Content Services.”

Hurry, guys. The monks are not going to wait forever.

Friday Fast Four – The ROI Special

Our weekly look back, some that go wayyyy back. Just to show that you should have been reading Lairig Marketing in 2008.

Return On ElfYourself
We were the first to look under the hood of the ElfYourself sensation, trying to divine what tens of millions of “hits” had done for OfficeMax. We couldn’t find anything.

Now, years later, here are highlights from the company’s recent quarterly earnings conference:

• Between 2013 and 2015, the company forecasts paltry revenue growth of 2% to 4% annually
• It will close 15 to 20 stores every year
• It will partner with – drum roll – Radio Shack (!!!) by letting the Shack put a cell-phone shack in some stores

The best ElfYourself return-on-investment measure? Since they went “viral” in holiday 2007, the Elves have ridden OfficeMax stock down from $55.00 to $4.50. Not a very festive ROI.

There Is No ROI In Free
Hate to keep pounding on Chris Anderson’s “future of business is free” theory that we held to the light back in 2008. But the data continues to prove what we said then – his notion is bullsh*t.

Here’s a nice stat quoted in the always excellent paidContent, referring to the difference in revenue for paid music downloads versus music streams that are advertising supported.

“Projekt founder Sam Rosenthal recently wrote:’5000 Spotify plays generates around $6.50. In comparison, 5,000 track downloads at iTunes generates $3,487.’ ”

Hmmm. Getting people to pay for music is 500 times more lucrative than collecting a few shekels from advertisers. That free tune is getting old.

Mommy Blogger ROI
We’ve squeaked about these squawkers before, most recently when Gannett shuttered 100 mommy blogs, when it realized it couldn’t get the business “to scale.” Disney, on the other hand, knows scale.

Little surprise, then, when Disney announced this week the acquisition of Babble Media, just one more in a collection of mommy blogs, more than 200 strong. Here’s an interesting little passage from Disney’s press release:

“Disney Interactive will infuse its Moms and Family evergreen content into Babble, thereby enriching the Babble user experience and extending the best of what Disney has to offer to today’s parents.”

That reads a bit like “Disney will ensure its new mommy bloggers will reference Disney products in every post.” A new definition of “captive audience.”

Digging For ROI
Can’t feel any happier about this one. As always, we were the only one to take on Digg’s operational model back when it was the next new thing:

What they don’t tell you is you are supposed to spend all day digging "the inner circle’s" stories. Then maybe you’ll be accepted and start having your posts dugg. Homey don’t play dat.

There are lots of homeys out there now, refusing to play by Digg’s rules. Again from paidContent:

“Its users also aren’t as active as they used to be. Where top stories used to need close to 100 votes to even appear on the site’s front page, some stories can now get on the front page and move all the way down without ever reaching 100 votes. Stories with more than 1,000 votes were pretty normal on Digg just two years ago.”

Another ROI hole being Dugg.

Mayor Koch Moment #8 – How’m I Doin’?

Here’s what Lairig Marketing predicted in December 2010, for August 2011:

"August – NYTimes.com’s First Paywall Victim
After receiving an inordinate volume of reader complaints about the value of paying for access to long-time Advertising columnist Stuart Elliott’s articles, The Times forces him to retire…"

Written half in jest, half in hope. But, in reality, there was no hope The Times would part with him.

So, mark this an “0 for August” (bringing us to 4 for 8 on predictions through August). All is not lost, however, as we will show how you – yes you, DEAR READER – can write like Herr Elliott.

Your opening must hark back to a reference no one under the age of 35 will get. For example:

From April 7: “What does Kraft Foods have in common with Dan Aykroyd, Ernie Hudson, Bill Murray and Harold Ramis? They are all ghostbusters.”

Then, less than a month later: “Remember the mock rant in Ghostbusters about ‘dogs and cats living together’? A new campaign for a dairy staple takes another look at the concept of unlikely amorous encounters.”

Next, have your assistant fetch two very dry paragraphs about the industry of the advertiser being “reviewed” in the current column (reviewed is in quotes, because all of Elliott’s articles originate from the PR department of the featured marketer).

Next, you literally describe the marketer’s TV spots. Other sources would link you to actual video, but not Elliott. Instead, turgid prose like this:

“In one commercial, a family is saying goodbye to their Thanksgiving dinner guests and as soon as the door closes, their home is magically transformed into Christmas Holiday Central, complete with decorated tree…” Jesus! As exciting, and as interesting, as watching paint dry.

Next, include no less than 15 paragraphs describing what the marketer is trying to do, using as much marketingspeak as possible. And, do it with an annoying convention of sentences that are half quotes, half nonqoutes. Like this:

For instance, the print ads featuring Unilever describe how Accenture helped Unilever executives “with an unprecedented effort to simplify, standardize and unify their business processes worldwide,” achieving “over 1 billion euros in savings” so far.

Look at those last nine words – nonquote, quote, nonquote. Dizzying. Unreadable. Especially when it covers a high-end topic like Chuck Norris as the spokesperson for Era laundry detergent – all 1850 words of it.

Conclude with where the campaign will run (content lifted directly from the marketer’s press release), and have your assistant plug in media spend data from a third-party.

Rinse “and repeat.” Weekly. Year “after year” after “year”…

Sadly, Elliott has stopped closing each piece with a bad pun. Age, we guess.

Sadder still is the fact that The Times has upped the ante considerably with its technology blog, Bits. Its media blog, Media Decoder, is well done, also. That it hasn’t created a similarly strong advertising and marketing blog that covers more than TV campaign blather, is a tragedy.

But what do we know? We thought Ghostbusters was a bore.

Farther Out On The Recession Limb

Once again, Lairig Marketing finds itself the contrarian in the world of marketing blogs. The only one to have broached the economic topic that dare not speak its name – Great Recession Part 2.

As others guffaw over an October aggregate retail sales increase of 0.5% compared to September (and failing to note, for example, the 0.7% drop in apparel and 1.2% plunge in department store sales), we’ve been tracking other evidence over the past 30 days or so.

It isn’t all of it, and it is certainly not a pleasant read. But it is information you’re not going to find on Mashable, Ad Age, nor Search Engine Fantasy Land:

Almost 25% of large-company chief execs expect to cut jobs in the U.S. over the next six months, according to a survey by the Business Roundtable. That is more than double the result from its June survey…

JPMorgan said it would cut 1,000 jobs from its investment banking business...

AstraZeneca, Level 3 Communications and Verso Paper disclosed plans to cut hundreds of jobs…

Lowe's is closing 20 of its U.S. locations, eliminating 1,950 jobs, and slashing its store-opening plans…

Credit Suisse announced it is cutting another 1,000 jobs, on top of the 2,000 positions the bank said in July it would slash…

Whirlpool plans to cut 5,000 jobs, about 10% of its workforce in North America and Europe, as it faces soft demand. The world's biggest appliance maker also cut its 2011 earnings outlook drastically…

3M reported disappointing quarterly results and cut its full-year guidance. Sales in its display business fell 14% due to weakness in the LCD TV business…

Visa reported fiscal fourth-quarter revenues grew at the lowest rate so far this year…

Goldman Sachs survey of Street analysts, the GSAI, fell 0.9 points to 42.4 in October (a sub-50 reading means more analysts see contraction rather than expansion). The 3-month rolling average dipped below 50 for the first time since September 2009…

On average, consumers put 3.6% of their earnings into savings in September, the government reported. It marks the lowest level of saving since December 2007…

Through all of this, we should not forget to seek counsel from our wanker economists. Here is an exemplary assessment, following the “big” retail sales increase referenced in paragraph #2 above:

“Another recession is pretty unlikely…The report “suggests a very strong start to the quarter. We’ll continue expanding at a better pace.”

This economist’s name? Samuel Coffin.

Which should just about put a nail in this one.

Wendy’s Should Be Dave’s – Part 2 of 2

Changing Wendy’s to Dave’s as discussed in part 1of this post, as shocking as it might be, would not be enough, of course. There would be a few details to iron out.

Product
As hinted at yesterday, this is about burgers. They will never go away, at least until the “cows” go home. The demand is limitless, “healthy” lifestyles be damned. Take Dave’s burgers out of the quick serve category, and position them – cook them – for the fast casual category.

Take all that product development effort on parfaits, and come up with ten great burger types. Package them in baskets, not clam boxes or paper/foil wraps. Become a sort of Shake Shack for the lower crust.

Place
No fast-food interior is attractive, but Wendy’s has been especially successful in turning its dine-in spaces into a blend of operating room, ice cube, and fish bowl. Turn this one on its head. Crowdsource a bunch of ideas. Tap into one of those “innovation” gurus.

Don’t fear making mistakes for this item. Any change – any – would be an improvement.

Promotion
For advertising, don’t even think of a bring-back-Orville-Redenbacher-type campaign. No cartoon characters either. And no fake family scenes (McDonald’s has that genre cornered). Go with some food porn, mixed with real customers talking about the experience.

While you are at it, sponsor every Little League team in every city and town you have a store.

Using the guidance above, brainstorm ways to bring new Product, Place and Promotion to life, then agree on the four best approaches. Should take about four hours.

Then set up four separate field tests in live restaurant situations. Should take about a week to set up (you could YouTube it and Facebook it and Tumblr it and Twitter it as “Restaurant Makeover” or some social madness like that). Run the test for a month.

See what works. Mash up the best of the test.

And if it means rounding some of the corners off the brand, then so be it. Huey Lewis wrote music, not philosophy.