Lairig Marketing

A Summer High Ate Us

Apparently there will be no heat this summer. It is too cold to blog. Therefore, barring anything exciting taking place in the world of Marketing (2013 is on pace to be “The Most Boring Year For Marketing Ever”), we are done until Labor Day.

Anyway, we are tired, from being your only source to be way out in front of stories like:

>>> The disaster that is JC Penney – we predicted Ron Johnson’s failure a year ago.

>>> The spiraling Sears – too many posts about this clown outfit to mention.

>>> The fake Twitter accounts – we got there three weeks before The New York Times tried to blow the lid off the story.

>>> The resilient NHL – brand “gurus” said the NHL was finished; we were right in saying hockey fans would be back in spades.

>>> The crap economy – Q2 and Q3 might even be worse than we originally thought, but no one else in marketing has mentioned the economy in maybe a whole year.

>>> The unadulterated bullsh*t hype over “showrooming” – the word wasn’t mentioned once on Best Buy’s most recent earnings call.

>>> And finally Abercrombie & Fitch – last nite’s earnings catastrophe underscores what we said earlier this week: A&F’s problems have nothing to do with unattractive fat chicks.

For grins – if we can figure out how – we will open the comments area this one time. Let us know what stories or subject matter you want to see us assess in the future. Or ask us what your company’s tagline should be (inside joke). Or spam us. Or whatever.

One final prediction: sun block revenues are going to suck this year.

Fast Follow-Up Friday To The Nth Degree – NHL, NRF and NFC

The NHL is back, the NRF comes clean, and NFC is facocked. Jes’ like we tol’ ya.

Hot Ice
We told you here that The New York Times’s Jeff Klein would be wrong when he wrote that the National Hockey League would be “challenged” in coming back from its long lockout. Let’s use his own words from last week, post-lockout, to show you just how right we were, and how wrong he was:
“The N.H.L. returned over the weekend to sold-out arenas and record opening-day television audiences.”

In case Klein needs more reminders of how sorry his prediction was, he can check out this:
“The 3-2 Hawks win turned in a 5.40 local rating on CSN Chicago…shattering the previous record set in a March 2010 win over Vancouver.”

And this:
“The Bruins-Rangers game, drew 956,000 viewers, the best ever for NBC Sports Network for a regular season game…It was the most-watched NHL game on cable since 1.28 million tuned in to a Sharks-Red Wings game in January of 2002." TWO. THOUSAND. AND. TWO.

If there is bad news here, it is that New York Rangers fans will have to read Jeff “anti-hockey” (and “anti-grammar” by the way) Klein all season as the team struggles to shake off its high-paid rust.

NRF One Step Closer To Integrity
Someone must have sent execs at the National Retail Federation our story about its horrific forecasting escapades, most recently for the 2012 holiday shopping season.

We believe that is the case because the NRF did something it has NEVER done before: it compared actual results to its forecast.

Here is an excerpt from its January 15 press release:
“Total holiday retail sales increased 3.0 percent, below NRF’s projected forecast of 4.1…”

We fell off our chair.

So why do we say “One Step Closer” in our subheadline above? Because the rest of its press release is typical NRF obfuscation.

“For over six months, we’ve been saying that the fiscal cliff and economic uncertainty could impact holiday sales.” Not true. The NRF must have forgotten it said this (among so much other guff) during the shopping season: “…holiday shoppers have been out in full force these last few weeks…” Nary a cliff in sight.

In addition, the NRF still managed in its most recent press release to pass of U.S. Department of Commerce data as its own. Finally, whoever wrote the first sentence must have been so upset knowing a confession was coming that he/she tossed off this ungrammatical gem:

“Solid consumer spending in the month of December helped retailers finish the year with a healthy holiday shopping season, however economic uncertainties sent a cautious consumer to the stores.”

The NRF’s 2013 Valentine’s Day shopping forecast will be out soon. We will be all over it, like roses on a stem.

NFC = No Friggin’ Chance?
We told you here about the crazy mobile payments industry, with investment and development activity in near-field communications (NFC) technology a trillion times out of proportion to the lack of consumer interest. Cash, credit and debit cards work just fine for most folks.

So we had to laugh when we read this:
“Walmart and the other Merchant Customer Exchange members recently announced they would opt for a software-based mobile wallet instead of one based on Near Field Communication hardware.”

Boom! Ten years of effort down the hardware drain?

We’re still waiting for the article, though, announcing some genius has invented a “convenient” way for a 7-11 customer to use an iPad to pay for a stick of gum.

Ain’t No Cure - Four Summertime Blues

For your holiday reading pleasure, here are updates on four companies whose marketing we’ve picked apart in the past. All of them had a sh&tty summer, on their way to the destiny we’ve predicted.

As a bonus, we include one of our Stuart Elliott “gotta reference the 1950s” spottings.

HP = Hurd’s “Present” to Hewlett-Packard
Back in May 2008, we declared that Hewlett-Packard’s then-CEO Mark Hurd had made a big mistake engineering a take-over of IT services firm EDS. We called it a bolt-on acquisition that had absolutely no marketing angle for HP to leverage.

Three weeks ago, the chickens finally staggered home to roost. HP announced it would take a write-off of $8 billion re: EDS.

HP’s next big acquisition won’t be one of choice, but of necessity. The only question will be which brand name survives the merger – HP’s or Dell’s?

Best Buy Adopts Kmart’s Strategy
Last December, we declared Best Buy’s “best” days were behind it unless it addressed the product line-up and the retail-floor strategy. Since then, other than some layoffs and store closings, management has done nothing to stem the decline in revenues and profits.

That is until last week, when Best Buy ripped a page from Kmart’s playbook (reviewed by us here), and hired a guy from the hotel industry to turn things around. The Kmart hotel guy, er sorry, CMO, stayed at Kmart for three years. Coincidentally (*sarcasm*), Kmart’s revenues fell every one of those three years.

Best Buy’s “hotel guy” won’t get the luxury of three years. As a matter of fact, we’ll know in three months how he’s doing. Another Black Friday is right around the corner. And that corner could have some very sharp edges for Best Buy.

Groupon Soon To Be Groupoff
As we predicted, Groupon’s stock price has fallen pretty much nonstop since its November 2011 IPO. After Groupon’s mid-August earnings release, the stock took an immediate 25% haircut. Then resumed its deliberate slide. It is now teasing the under-$4 mark.

Blame low barriers to entry, a bad CEO, blah blah. This one is, at bottom, about the impossibility of any company being able to scale a $20-at-a-time business that requires every sale to be made by a human.

The only thing that keeps Groupon from hitting $0 is an acquisition. See our fourth item below for a likely candidate.

But first, here is your promised bonus item, brought to you by The New York Time’s advertising “guru” Stuart Elliott. Remember the template – either the opening or closing paragraph of Elliott’s column must reference something circa 1950.

So, here is Elliott’s July 17 column about another mind-bending topic – the new Fruit of the Loom advertising characters. Closing paragraph:

“As for the Fruit of the Loom Guys, there is no intention for them to go the way of brand characters like Gillette’s Sharpie the parrot or Joe Camel.”

Do not be surprised when we tell you that Sharpie the parrot first showed up in TV spots for Gillette in…drumroll…1952.

The New York Times Finally Stops Messing About
Speaking of The New York Times, we beat on it mercilessly for its good-money-after-bad strategy for the glorified content farm About.com. Last week, IAC (usually prefaced as “Barry Diller’s IAC”) agreed to take it off The Times hands, giving the latter 25% less than what it paid for About.com in the first place.

IAC should sound familiar to long-time readers. We told you about its annual makeover of its search engine, Ask.com, that never accomplished anything.

Now Ask.com’s problems have been solved. That is, if IAC turns this acquisition into www.askabout.com in the next couple of weeks. That URL, by the way, is indeed available.

Otherwise, Barry Diller will have caught another falling knife.

Why You Read This Blog

For those loyal readers who are waiting with bated breath to see how close our prediction was for Microsoft’s earnings last week, and haven’t had time to examine the numbers for themselves…well, wait no longer.

First, a quick reminder. In last week’s post about MSFT’s silly promise (threat?) to return to the “online news portal” business (a post which included a bonus assessment of the Yahoo-Mayer news), we made this prediction:

“We are so certain that we predict here and now that Microsoft’s Q4 loss in Online Services will be $462 million.”

So, how did we do?

Microsoft reported a loss of $6.672 billion in Online Services for Q4-2012 last Thursday evening. Subtracting the earlier-announced $6.2 billion write-down on the 2007 aQuantive acquisition (which we also referenced in our post), that leaves the reported loss at…

* drumroll *

$472 million.

We missed by a scant $10 million, a mere 2%. Pretty f&cking amazing, even if we have to say so ourselves.

That’s why you come here. Because you know you can’t get this type of marketing strategy insight from Seth Godin; or Guy Kawasaki; not even from that old coot at Ad Age, Al Ries; not from TechCrunch or Mashable; nor the whiny Business Insider; and certainly not from the social media “gurus” slagging off their endless “5 Ways To Have A Great Facebook Fan Page” posts.

The Lairig Marketing essence is about not following the herd. Thanks to those who come here, not because “everyone else does,” but because you want to.

Fast Follow-up Friday #11 – Summer Swan Song

[Note to daily readers – during our summer hiatus we’ll be posting once a week to keep Google from knocking us off its search results…]

Another Bubble To Keep A “Social” Eye On
Since we outlined just two short months ago why social media for business is a canard, two major acquisitions in the “Enterprise Social Networking” space took place.

In late May, Oracle bought Vitrue, a company few have heard of, for $300 million…more than three times REVENUE. A rounding error for Oracle, but an error is still an error.

Not to be outdone, Salesforce.com purchased Buddy Media for $689 million. Forget that this deal was done at roughly SEVEN times REVENUE. Focus on the fact that Buddy Media’s wagon is tied entirely to Facebook. See Zynga and its stock chart for reference.

[ *UPDATE *] F&CK! We forgot always-late-to-every-game-in-business Microsoft, who bought ESN Yammer on Monday for FIFTY, yes FIFTY, times REVENUE. Fire. Ballmer. Now.

More Soup For You !!!
Loyal Lairig Marketing readers know we have pounded endlessly on the soup that Campbell’s cooked for itself over the past several years. A number of solutions (no pun intended) have been announced by the company.

Yet, in the just-closed earnings period, Campbell’s announced its eighth consecutive quarterly decline in U.S. soup sales, this time 3%. Stunning.

So, the next proposed solution (pun intended)? The company announced recently a plan to launch 30 new soup products, including the likes of “Jammin’ Jerk Chicken.”

Jammin’ jerks, indeed.

NRF = National Recycle Forecast
We have repeatedly brought to your attention the bullsh&t cheerleading forecasts, most recently here, produced by the National Retail Federation.

Over the past five months of one of the most sluggish economic periods ever, here is what the NRF has predicted:

• Valentine’s Day Gift Sales – up 8.5%
• Easter Day Gift Sales – up 11.0%
• Mother’s Day Gift Sales – up 8.4%
• Father’s Day Gift Sales – up 10.0%

See the pattern? Again we’ll remind you absolutely no one tracks the actual spending.

Like a broken clock, the NRF will eventually get one of these holiday forecasts right.

They’ll Have To Shrink The Carts Soon
Lest you thought the trend toward smaller retail stores we brought to your attention over a year ago was fleeting, here is more proof this one might become the “new normal” for a while.

“Price Chopper has introduced Price Chopper Limited, a first-of-its-kind concept store in Saratoga Springs, N.Y., that provides a smaller, full-service grocery…with tailored assortments in a compact 19,000-square-foot footprint.”

Wegman’s and Spartan are other chains who have ventured forth (or back?) in the past six months. This will lead to another big story at the end of the year – how CPG companies will be struggling to launch new products due to a lack of shelf space. You read it here first.

Our Ongoing “Stuart, Stuart, Dear Stuart” Series
Our favorite advertising “guru,” The New York Times columnist Stuart Elliott continues to fill our coffers with his inane first-paragraph references to days gone way, way by.

In a recent story about the groundbreaking campaign (* sarcasm *) from Pizza Hut for its new sandwiches, Elliott opens with this:

“When the moon hits your eye like a big pizza pie,” the song goes, that’s amore. But there is little love lost when a big maker of pizza pie gets hit in the eye with the success of sandwiches.”

Forget what a f&cking lame stretch the metaphor is. Realize that the song Elliott cites, That’s Amore, was first introduced in…

…yep, you guessed it…1952. Don’t you just amore it?

Fast Follow-up Friday #10 – Four Stall

“United We Stand”…
Just as we predicted one year ago, the latest airline merger is way off course. We figured United’s perennial last-place ranking in the American Customer Satisfaction Index would pull Continental down with it, rather than Continental pulling United up.

We were right.

According to the DOT’s latest report (April 2012), United dropped one spot to 14, out of 15 airlines, in on-time performance. Its mishandled bag rate made it the worst of the major airlines. And it had far and away the most passenger complaints in April, accounting for a full 33% of the industry’s total.

We cannot wait to see how United’s new advertising agency of record, mcgarrybowen, will perfume this flying pig.

Nickel & Diming Penney
When we reviewed J.C. Penney’s quarterly disaster with you on May 13, we said this:

“…execs don’t seem to feel they need anything…to…replace lost weekend traffic. Expect to see them revisit that misconception soon.”

How’s 13 days for “soon”? On May 30, J.C. Penney leaked that it would add five "Best Price Friday" events, including one on post-Thanksgiving "Black Friday."

They can thank us later.

Hope That HFCS Can Ketchup
No sooner had the ink gone dry on our post this week about the Corn Refiners Association’s futile years-long campaign to convince the public high fructose corn syrup (HFCS) is good for y’all, we come across this news:

“ConAgra has reverted back to using HFCS in its Hunt’s ketchup less than two years after replacing the much-maligned sweetener with sugar.”

Why? According to the company: “Consumer demand for the HFCS-free ketchup was not as strong as expected."

Like we said – it’s not about the science. The Hunt’s reversal should convince the CRA to do as we suggested and focus on helping food manufacturers drive more sweet demand.

Stuart, Stuart, Dear Stuart
The New York Times “star” advertising columnist, Stuart Elliott, has been working overtime lately to provide us enough material to make him a permanent part of our Fast Follow-up Friday series.

First as a reminder, the Stuart Elliott template: Review nothing but the most derivative of ad campaigns. Begin each column with a reference to something circa 1950, and close it with an unfunny pun.

An article last week might be his best (worst) ever. In a story about JetBlue’s new online game show, Elliott began with this:

“For decades, advertisers were as closely associated with game shows as slick hosts eager to give away prizes.”

Think “quiz show scandals.” Circa 1950.

We get a bonus old-time reference a few paragraphs later, when, referring to JetBlue's faux game-show host, Elliott writes:

“The Hammerberg character, whose name winks at classic game-host names like Wink Martindale, will be as eager to give away prizes as quiz masters like Bob Barker, Richard Dawson and Monty Hall once were.”

Bob Barker is 89. Monty Hall is 91. Richard Dawson is dead. He passed just two days before Elliott’s column was published. Dear Stuart still might not be aware.

Finally, a trifecta of sorts. The final paragraph. A completely unfunny pun; a mash-up of products and old, OLD game shows:

“If [JetBlue’s new game show] catches on, what could be next? ‘The Priceline Is Right’? ‘ABC Family Cable Channel Feud’? ‘You Bet Your Life Cereal’? ”

You should not be surprised to know when You Bet Your Life debuted on TV.

October, 1950.

Fast Follow-up Friday #9 – The Way It Looks

[Special note to daily subscribers – we are way ahead of everyone again, so we’ll resume posting next Thursday AM]

Only one of our four lookbacks this week is a positive story. The headline is your hint. Post your answer to Pinterest (hah!).

Private Label Goes Stable
We were the only blog to dare to say that private label sales would peak, even during a sh&tty economy. Now the news is becoming less “private.”

“For the first time since 2008, consumers polled by NPD said they did not plan to increase their purchases of store-brand products in the coming year.”

NPD produced a full report titled, “Does Brand Name Really Matter?” Again, we say, it’s about price – not name – for private label’s future. The narrower the gap these greedy "private" pigs make it between their prices and those of brand names, the worse it will get.

Mens Wearhouse – A New Look To Like
We beat on these guys pretty good for a new (bad) advertising look back in the day.

Mens Wearhouse got back on track soon after, and coincidentally or not, its share price has doubled since we “got together.” And P.S. The new CMO at the time of the 2010 ad campaign has been sent back to ad agency land.

It keeps the momentum going with a new campaign geared toward a younger, “hipper” man. This one is a beauty, as it shows how you can go after a new target segment WITHOUT losing your brand voice, essence, or credibility.

To wit: the George-Zimmerman-delivered, age-old tagline is still there.

We like the way this looks.

About.com Takes About A Half-Step
The sad state of The New York Times’s About.com “information portal” that we pointed out earlier gets even sadder.

Recent quarterly results show a 23% drop in revenue and 50% collapse in profit year over year.

To get these amazing results, About.com went through the motions of reskinning its home page. Duh. The rest of the site continues to be the ad-littered scrap heap it always was.

HP Soon To Be Sold On eBay
New CEO Meg Whitman, still angry at spending $160 million of her own money to lose the race for California governor, this week announced the lopping off of 27,000 heads at Hewlett-Packard.

One of the places she found fat to cut was a business unit we tipped you off to in 2008, when then-CEO Mark Hurd (before he got caught with his pants and receipts down) purchased EDS.

We said at the time this would end up as a “cut some heads” scenario.

Megala was only too happy to bring the hammer down.

Fast Follow-up Friday #8 – What’s New Is Old

[Special note to daily subscribers – we will not post next Monday, Tuesday, nor Wednesday so everyone else can catch up]

Our best weekly follow-up yet. In our humble opinion, of course. If you don’t tweet or pin this, we will come and find you.

Another Growing U.S. Export
We very recently bemoaned the Starbucks conspiracy to transform its U.S. locations to the cargo-ship feel they have in Europe. Well sonuvabitch if one week later The New York Times reports Europeans bemoaning the current state of Starbucks shops over there!

So now Starbucks is doing an about face in Europe, adding back the comfy chairs, private tables AND – f&ck me – POWER OUTLETS. All the things U.S. locations are losing.

Let’s Do The Stuart Elliott Time Warp Again
He’s done it again. And again. The New York Times “advertising guru” Stuart Elliott continues his scintillating analyses of new campaigns by the likes of modern brands such as Life Savers and Motel 6. With “modern day” references, as we have told you, that younger readers will NOT recognize.

Such as a recent article that referenced in its opening paragraph, The Anniversary Waltz, a song from…1941.

Or another article earlier this week that included:
“The film…will be divided into five shorter segments — five easy pieces, if you will..”

Get it? Five Easy Pieces. A movie from NINETEEN-f&ckin’-SEVENTY.

But, hey, it did have Fannie Flagg in it.

The Heat Is Turning Up At Dave’s, Er, Wendy’s
We still believe our recommendation to rebrand Wendy’s as Dave’s is possible. The company continues to make big moves in marketing.

First, the company hired a 20-year veteran of Procter & Gamble to be its new CMO. Then, Wendy’s changed its tagline (again) to “Now That’s Better.” A perfect set-up to announcing a name change – “Wendy’s is now Dave’s. Now that’s better.”

By the way, the new CMO used to market hair-care products. Look out Wendy. He’s going to wash that man right out of your hair! (Stuart Elliott would love the reference…)

Airlines Grounded Once Again
Way back in the day, we mocked a futurist’s forecast that airline travel would increase 60% by the year 2025. Everything we said then has come true.

It should come as no surprise that with all the bankruptcy filings and talks of more airline mergers, the Department of Transportation reported that airlines’ domestic departures in 2011 were the LOWEST IN A DECADE. Since our post, in fact, domestic departures have fallen every year.

Proving once again that old adage – nothing grows to the sky. Not even airplanes.

Fast Follow-up Week – Shocking Nonstrategists

We put a lot of time, effort and thinking into our five-part series on the economy last week. Nowhere else in the marketing blowhardsphere has there been anything that comes close to help you think about, and plan for, near-to-intermediate-term wheel-spinning.

One of the posts focused on employment, and the recent few months of “headfake” data – i.e., hiring up, unemployment claims down. We looked deeper, and prepared you for bad news.

Last Friday we received government data on hiring for March. Atrocious. From Bloomberg News:

“The 120,000 increase in payrolls reported by the Labor Department [for March]…was the smallest in five months and less than the most pessimistic estimate in a Bloomberg News survey of economists…”

Note, as always, professional economists remain clueless. This also puts to bed the conspiracy theory that the Obama administration is doctoring the data.

Then, this Monday, we received government data on unemployment claims for the prior week. Atrocious. From Reuters:

“The number of Americans filing for jobless aid rose last week to the highest level since January…increased 13,000 to a seasonally adjusted 380,000…defying economists' expectations for a drop to 355,000.”

Note the economists again, on cloud nine. Or perhaps cloud ten – check this out from the same Reuters article:

“Some economists blamed the Easter holidays for the spike in claims…”

At least they didn’t blame Passover.

Coincident data show personal income flat for January and February, and credit card debt plummeting.

Now you know why the fifth part of our economic series told you to include a recessionary scenario and a flat scenario in your planning. Nothing similar yet from Ad Age, Adweak, Seth’s blog, nor Guy Kawasaki’s (who only posts once a month anyway).

This is why loyal readers keep coming to Lairig Marketing. And why, if you’re a new reader, you should too.

Fast Follow-up Week – Shocking TV

One of the popular memes we’ve been ridiculing for a couple years here at Lairig Marketing is the “death of TV” – all the blather about no one watches TV anymore, everyone is cord cutting Pay TV, digital will drop spend on TV advertising to zero, blah yadda blah.

Looks like the social media intelligentsia got our message. Similar to how they have slowly embraced other fundamentals of marketing – social CRM, social commerce, social influencer marketing, yadda blah yadda – they are now giving the world - * drumroll * - social TV.

And, once again, it is simply “digitizing” what people have been doing since Edison.

It is common wisdom that 1 of every 2 people in a group watching TV will talk throughout a program. Instead of laughing at a sitcom joke, the person must speak: “Wow, that dude is funny.”

Instead of gasping during a suspenseful moment in a drama, the person must speak: “Whoa, that dude didn’t see THAT coming!” On and on, for as long as you can tolerate it.

The beauty of social TV is that it allows that person to type these thoughts on a keyboard and annoy people OUTSIDE the living room – Facebook friends, Twitter followers, et al. Of course, if he also speaks while typing, everyone is screwed.

As always, one hand giveth, one taketh away. Dozens of companies – GetGlue, Miso, IntoNow – are looking to monetize this activity, to insert programmers and marketers (surprise!) into the conversation. It’s the Facebook model: twaddle infused with crappy ads.

The irony is that “gurus” aren’t emphasizing the “social” as much as the “TV.” This is the future of TV, they tell us. If programmers and station owners don’t get on board, they are toast. The viewers shall rule the airwaves.

The airwaves that we were being told two years ago were going the way of the dodo. Guess not.

A bigger irony: just to prove how powerful a medium TV is, one of the new players in the social TV space across the pond in the UK, Zeebox, is using TELEVISION ADVERTISING to promote its SMARTPHONE APP.

Too bad for Zeebox that the target audience is going to miss its commercial.