Lairig Marketing

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.

Fast Follow-up Week – Shocking Timing

Every business pundit has remarked that Facebook’s gazillion-dollar purchase of Instagram earlier this week is the ultimate validation of the Web 2.0 bubble. (Every social media “guru,” of course, sees the buy-out as a signal that we have definitely moved on to Web 3.0 – whatever that is.)

Lairig Marketing believes, however, that the ultimate bubble validation came almost a month ago, with the news that a senior executive left Zynga to join – * drumroll * – Groupon.

“Curtis Lee, director of product management for Zynga, will become Groupon's VP of consumer products…”

On the one hand, this would be confirmation that things must not be looking good at one of the most-awaited IPOs of recent vintage. Indeed, after its pop to near-$16 the day Facebook announced its own IPO filing, ZNGA has – cue Tom Petty – free fallen to $11.50.

With majority-control issues and a secondary offering already, maybe Curtis Lee wrung out all the value of his Zynga stock holdings. Or maybe Zynga is is in trouble, given that Lee’s departure follows that of two other key execs in the past six weeks.

But how could half a story validate a bubble? It can’t. We need to consider why Lee would choose Groupon, of his own free will, as his next employer (this assumes there wasn’t a “daily deal” that day for Groupon’s product manager job opening). After all, there are a billon other game developers he could have gone to.

Groupon is a mess on all levels. Accounting cock-ups that seem to have no end. Another post-IPO lock-up expiration coming in May. Uncertain leadership capabilities (that’s being kind, we know). Pending investor lawsuits.

And, of course, a stock-price history that makes a technical chart analyst drool with pleasure.

So, then, why did Curtis Lee choose Groupon?

There is no logical answer. And that is our bubble validation.

The smartest mental case on earth, Jim Cramer, wrote a prescient piece yesterday. In essence – yes, this is now a bubble…but it is nowhere near a tradable event.

It’s going to be many, many months before ZNGA and GRPN touch zero. Facebook’s IPO will most certainly see a doubling of return in its second day.

Marketing is about loyalty, but Wall Street is not. The last, and biggest, fool will get the honor of being most loyal to the Web 2.0 stocks, and least loyal to the cash in his pocket.

Fast Follow-up Week – Not So Shocking

A year ago, we wrote about the dysfunction at Sears. We’ve updated the retailer’s continuing cock-ups in our Fast Friday Follow-up series.

One of the biggest issues at Sears has been the revolving door of senior executives. One of our updates on that matter was here, where we reflected on another in a long line of CMO departures. We said not to worry as “some sucker will step up to the plate. And strike. Out.”

Bingo. Sears Executives Are Still Revolving. Get it? Just five months after assuming the position (use your imagination on that one), the newest CMO at Sears has left. On her own.

Add to that two other senior departures in Q1-2012 (an EVP of Apparel and a President of Appliances), and wonder when we’ll see one of those Goldman-ish exit letters, writ Sears, titled “What It’s Like To Work For Eddie Lampert.” Subtitled: “Where Sales Have Fallen Every Year Since the Kmart Merger.”

In our most recent update on Sears just two months ago, we reported on its recent disastrous quarterly report, and half-jokingly opined that Amazon might pick Sears up for warehouse space once the stock price tanked – which it’s doing, down 30% from the end of the speculative run-up that ended just three short weeks ago.

Now let’s quickly opine on how Sears will deal with its CMO vacancy.

• Bring in another sucker from outside the company; probability = 75%
• Promote a long-term insider; probability = 2%
• Go without one, as the business continues to liquidate; probability = 60%

Who needs a CMO for a real-estate play anyway? Just last week, Sears announced it would turn one of its parking lots in Chicago into a bowling alley.

Sears could use its executives as the pins.

Fast Follow-Up Week – Shocking

This is the week for giving up – bread, meat, sin, school. And apparently for reading blogs.

So we’ll dispense with all-new insights and break down last week’s “missing” Friday Follow-up into little pieces all week. They will remind loyal readers why they come to Lairig Marketing.

And new visitors will see what they’ve been missing all these years (and how much they have lost from following Guy Kawasaki’s relentless Twitter spam – seven tweets this past hour alone, including “Comparing the depths of lakes and oceans”…WTF?).

First up is the shocking story of GM’s new EV, the Chevy Volt.

Within ONE WEEK of us questioning, near the end of February, whether consumers’ “range anxiety” about electric cars would be overwhelmed by their sense that batteries degrade to about 50% of original performance in two weeks…and here came General Motors to announce it was suspending production of the Volt for five weeks.

Disappointing sales, “fallen short of expectations,” even as a gallon of gas heads to European levels. Embarrassed GM officials have stopped publicly announcing sales targets.

Yes, there was also the whipped-up story of a handful of Volts catching fire, days after they were crash tested. Simple answer to that one – unplug the batteries to a dead vehicle.

No, it’s not the fire – it is the lack of one. As we said back in February, consumers do not have faith in batteries.

To wit: According to the latest J.D. Power Smartphone "Customer Satisfaction Study," battery performance satisfaction has declined significantly in just the past six months, with the lowest ratings among owners of energy-sucking 4G phones.

Consumers are guessing that a Volt is simply a smartphone on wheels. Looking for a charge all the time isn’t much of a gas.

Fast Follow-up Friday #7 – Wheelin’ & Dealin’

[Special note to daily subscribers – we will not post next Monday & Tuesday, so everyone else can catch up]

The Bottomless Pit Of UGC
No sooner had we posted about silly user-generated-content contests, here comes Caribou Coffee asking folks to tweet how Caribou has helped "fuel their passion in life."

Never mind that WTF does coffee have to do with passion. Never mind that the contest is named "You + Your Bou" (WTF is a Bou?). Never mind that why isn’t it passion “for” life, since passion “in” life seems redundant.

Never mind that the contest was posted on Facebook only. Never mind that you also need to have a Twitter account to participate.

And never mind that nowhere on Caribou’s Facebook property can you see any UGC contributed by passionistas so far. Never mind that weekly winners will be “randomly selected” – what happened to community “voting”?

In sum, never mind.

Best Buy To Launch “Bean Squad”
The country’s last big-box electronics retailer has apparently taken our December post to heart and hired an industry veteran to take over its e-commerce business.

Wait, what? The new head of Best Buy Digital last worked for…?...Starbucks?!!?!

Do you want a latte with that TouchPad?

Everything Bagel? Meh. How About An Everything Donut?
Another company that reads Lairig Marketing – Krispy Kreme – evidently saw our post about its over-emphasis on social media. Exactly as we predicted then, KKD announced an excellent quarter, its stock price jumped a couple of bucks, and has tread water since.

So…as part of its “Glaze The Nation” campaign, Krispy Kreme has sent out a bus to – *drum roll* - meet customers FACE TO FACE at nearly one-thousand scheduled and “spontaneous” stops, or in marketingspeak:

"Because our purpose is to 'touch and enhance lives through the joy that is Krispy Kreme' we felt it was important to get out of our shops and take the party on the road," [the KK CMO] says.

However, the CMO apparently wasn’t sure what accompanying social media ideas would be appropriate, so he checked. Off. Every. Box.

- Facebook? Check.
- Twitter? Check.
- Blog? Check.
- Foursquare? Check.
- Instagram? Check.
- Pinterest? Why the f&ck not – check!

Hope someone at KK still has time to make the donuts.

Ally Bank Is Stressed Out
We dumped on this faux, TARP-spawned, still-taxpayer-funded bank back in the day.

Last week was the Federal Reserve’s turn.

Only 4 of 19 banks failed the Fed’s stress test. The worst performer? You guessed it – your ally.

Perhaps it’s time for Ally to focus on the one thing it knows best.

Fast Follow-up Friday #6: The Drowning Special

Old White Man Recycling Lives On
That twerp at Goldman Sachs has nothing to complain about when compared to the continuing arc of Robert Nardelli’s business career. We held him high way back in January 2010 as an example of the old-school thinking at the C-level that is mysteriously rewarded time and again.

Squeezed out of GE as a sorry runner-up to now-CEO Jeff Immelt, he messed up The Home Depot big time, then arrived at Chrysler just in time to ensure its bankruptcy (remember that week of vacation he took after ONE WEEK on the job?!?). Cerberus Capital owned Chrysler at the time, so it decided to reward him with an appointment to the CEO position of a gun company in its portfolio of companies.

How scary is that?

Finally, Cerberus has had enough. Last week it announced that Nardelli had “stepped down” from his duties, including the gun thing (phew !!!). As always happens though, he is still good enough to be a “senior adviser” to Cerberus.

Infinite recycling. How green.

Martha, Marcia, Martha
Speaking of boardroom divas, the troubles at Martha Stewart Living Omnimedia keep getting worse. Will there ever be a “better”?

We told you last year this company could not do well without a ton more involvement from Miss Martha herself.

Revenues for the recently closed Q4 were down a remarkable 15% year-over-year. Every part of the business declined.

In the earnings call with analysts, company president and COO Lisa Gresh said the company has “focused too much on cross-brand selling.” We have no idea what that means, and we work in marketing all day long.

This one is trouble, with a capital “M.”

TV Cord Cutters Continue To Miss Out
We know we pound this whole “cord cutting claims are overdone” a bit too much (OK, a lot too much), but it’s because Lairig Marketing was the only one to take the contrarian view at the end of 2010.

More confirmation rolls in every week. Exhibit A: After letting NCAA fans watch March Madness games online for free in prior years, CBS is putting up a toll in 2012 of $3.99. Watch the cord-cutterati spend hundreds of man-hours trying to find a workaround.

Exhibit B: Remember Google TV? It was going to enable you to watch anything and everything using your little keyboard. Ain’t happenin’. Google sees the writing on that wall, and recently filed paperwork to be a cable TV provider in Kansas City. Talk about covering all the bases.

Drowning The Lizard
We’re not usually impressed with the typical short-term findings of the “YouGov BrandIndex,” a daily poll of U.S. consumers’ brand perceptions. But when it shows longer-term data, it is worth evaluating.

YouGov asks its panel “If you've heard anything about [insert name of brand] in the last two weeks, through advertising, news or word of mouth, was it positive or negative?”

The panel’s feedback for our friends at Geico has been going negative since fall 2010. We told you a while back how awful, tired, and unfunny its recent batch of TV spots were. And per the YouGov data, State Farm and Allstate each rose past Geico’s sinking rating early last year.

In our Geico review, we said it had “jumped the shark.” Based on its long-term YouGov brand ratings trend, it also looks like it forgot to pack a life vest.

Fast Follow-Up Friday #5 – Double-Crossing Data

We should start renaming this one “Fast Follow-up Friday NIGHT.”

Is Target Still Off Target?
We ripped Target pretty good for its Missoni Mess last fall. While many pundits assumed Target undertook a successful “scarcity” campaign, we felt it was one giant cock-up.

Target’s Q4 earnings call from late February seems to confirm that the company still hasn’t gotten itself under control. Besides the hemming and hedging about the sh&tty economy and “most intense ever” holiday period, management admitted its e-commerce operation is still three ounces short of a pound.

And there were lots of promises made about apparel and hardline goods, even though it is grocery that it keeping Target in positive territory for same-store comps so far this year. It will be interesting to see what impact J.C. Penney’s rebranding has on Target’s apparel sales, and how our new best friend Walmart impacts everything else Target sells. Online especially.

Dumb As An Online Doorknob
Hard to believe we haven’t awarded a Research Hall of Sham award since last July. Seeing as how much dumb marketing research gets released…

Like this:

“Visitors to CPG brand Web sites buy 37% more in retail stores than non-visitors to the brand sites. That’s according to a new study from Accenture, comScore and dunnhumbyUSA…”

Or this:
“Adobe' research of 16.2 billion visits to 150 online retailers shows that tablet users spend more per order than desktop PC and smartphone users.”

Let us translate these two points for you, in hopes of avoiding future squandering of research talent and time. “People who are more intelligent and richer spend more online.”

You can thank us later.

Super Bowl Stocks Are Super Consistent
In order to do it the official and proper way, per Professor Tomkovick, we have run our Super Bowl advertiser portfolio out to a full two weeks post the February 5th game.

The 20-stock portfolio increased its lead over the S&P 500 to just over 1.1 percentage points of positive return. Nice, but still not enough to offset your trading costs.

The Rich Person’s Old Normal
Rich getting’ richer. From the press wires today:

“Neiman Marcus…posted net income of $40.1 million for the fiscal second quarter ended January 28, nearly double the $21 million of a year earlier…Neiman's revenue in the quarter rose to $1.28 billion from $1.17 billion a year earlier, helped by comparable sales gains of 9%...”

Late next week we’ll use this little piece of data to discuss why we feel our recession call for Q4-2011 and Q1-2012, made back in October is still on target.

Turns out this is the one thing the 1% agree that only the 99% should enjoy.