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.

What Part Of Abercrombie Don’t People Get?

How far we have come since 2006.

First, proof that online “content farms” are pretty much good for nothing: the stinkpile Business Insider digs up an old quote from the CEO of Abercrombie & Fitch, Mike Jeffries.

Second, proof that our helicopter-parenting-made-everyone-a-winner society has reached a new low: the social-media-sphere is at Defcon 1, vis-à-vis shock and awe, regarding what the CEO said (when no one gave a rat’s ass about it in 2006).

Third, proof that no one understands marketing strategy, least of all the opinion writers at trade pubs like MediaPost and business analysts at sites like Forbes: all of them pilloried A&F’s CEO, and declared the company’s marketing strategy a failure (as of 2013, mind you).

To wit, from MediaPost: “the episode is a powerful reminder that in the Relationship Era, you can do all the soft-porn advertising you want, but your image is not in your control.”

This is one more iteration in a long line of “the consumer controls your brand” bullsh*t statements. Funny that Abercrombie was doing just fine with its image until the public at large took “control” of it a couple of weeks ago – now, we have brand anarchy.

Here are the snippets of the A&F CEO’s quotes from the 2006 Salon article that are currently being cherry picked and replayed ad nauseam:

“We go after the cool kids…we want to market to cool, good-looking people. We don’t market to anyone other than that.”

“We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.”

That in a nutshell is proof that Mike Jeffries understands the starting point for marketing strategy – segmentation and targeting.

In fact, 2013’s revisionist historians forgot that Jeffries runs a successful business. From the same 2006 Salon article about Abercrombie: “…in DNR, a newsmagazine about men’s fashion and retail, the magazine noted that ‘not since Ralph Lauren’s ascent in the 1980s has a single brand perfected a lifestyle-based look so often alluded to and imitated.’ ”

To be sure, Abercrombie & Fitch faces significant secular change in the near term that it must determine how to address. In our humble opinion, however, we don’t believe segmentation and targeting needs any fixin’. Let us cherry pick from the 2006 story and show you what else Jeffries had to say, that everyone else – in their haste to pile on to some kind of cause (see “eating disorder;” “clothes for the homeless;” etc.) – seems to want to overlook:

“Those companies that are in trouble are trying to target everybody: young, old, fat, skinny. But then you become totally vanilla. You don’t alienate anybody, but you don’t excite anybody, either.”

“…we try to be funny, and we try to stay authentic and relevant to our target customer. I really don’t care what anyone other than our target customer thinks.”

We almost plotzed when we saw the word “authentic.” Imagine, Jeffries was using the term long before brand bloggers started tossing it around left and right like so much salad.

Finally, this cherry of a cherry-picked quote. Jeffries must have seen 2013 coming – a politically-correct-on-steroids era, when anyone who feels like an outsider can have his or her day in (an online) court, demanding some tendentious sort of justice:

“It’s all depicting this wonderful camaraderie, friendship, and playfulness that exist in this generation and, candidly, does not exist in the older generation.”

An older generation, passed over and bitter, trying to tell a profitable $ 4.5 billion business how to do a better job marketing to kids. Something Abercrombie & Fitch has been doing pretty well. Since at least 2006.

United Conducts Stealth “Launch” Of Boeing 787 Dreamliner

As we speak, thousands of Americans are risking their lives, taking to the air in commercial planes. Most of them aren’t even thinking about it, however, since the risk is known and fairly low.

But a select group of passengers this morning will be an exception to that profile. Just over two-hundred people will board a United flight in Houston, with plans to land in Chicago. The exceptional risk? Their plane will be the first “official” U.S. flight of a Boeing 787 Dreamliner since, well, since you know when.

The “known” and the “probability” of the risks United flight #1 (true !) faces? No one knows.

For probably the first time in history, scientists have “fixed” something WITHOUT KNOWING THE ROOT CAUSE. In this case, the dilithium crystals, er, the lithium-ion batteries on the 787 were essentially encased in their own little “black box,” and, for extra measure, vented to the outside “just in case.”

Following a few test flights, the FAA said the Dreamliner was good to go (even though the NTSB said the tests were inadequate as proof of anything). And so, United #1 is about to launch.

To great fanfare, no doubt?

No.

No TV or print campaign that we know of. No reportage other than a hack piece from the Associated Press – one would think the Houston Chronicle or Chicago Tribune would have had a reporter make a couple of phone calls.

No letters or emails to the great unwashed MileagePlus members. Nothing on United’s transactional home page. One small mention on each of Twitter and Facebook. The latter takes you to “United Hub,” a secondary site that one wonders “how do people know this site exists?” There, we see a 142-word press release, which includes this:

"Our customers responded extremely well when we introduced the 787, and we know they'll welcome it back," said Pete McDonald, United's chief operations officer.

No word on how Pete “knows” that.

Donald Rumsfeld would have loved this one – lots of unknown knowns and unknown unknowns in this instance. Too risky for a little marketing campaign?

We don’t think so. United could have made a much, much bigger deal of today’s launch of flight #1, whose passengers include its own CEO as well as the CEO of Boeing (if you hurry, you can grab one of about 50 empty seats for a cool $576, although we doubt the CEOs are flying economy class !).

Imagine. United spent more than $200 million for the plane that will be today’s flight #1. Yet it didn’t have the guts to toss in another $1 million or so to let people know what it’s doing to try and become #1 again.

Marketing Job Opportunities Jesus Himself Wouldn’t Qualify For

A crummy economy depresses employment opportunities, of course, but these times are tougher for Marketing, as we are “the function most likely to be thrown overboard in case of heavy seas.” However, for those with a modicum of experience, there are a surprising number of marketing job openings available.

The problem is, though, you need to walk on water.

Here’s an example – an opening for a Marketing Director at a “Device Recognition Data Products company.” Perhaps the first assignment for the winning candidate would be to come up with a better description for the company, but we digress. For now, take a look at some highlights of this job’s responsibilities and requirements below:

> “A real dynamo, go getter - Can get MD places to speak, etc”
A dynamo for a company too lazy to spell out “MD,” just in case the candidate thought the reference was to Doctors. Plus, how about a period at the end of “etc”?

> “Skills: Solutions Marketing”
There are about a million definitions for “solutions.” There are roughly a billion for “Solutions Marketing.”

> “Agency + Client side (must); Been a Director of marketing at a small co”
Setting aside (lack of) punctuation again as well as the atrocious grammar, we now approach Jesus territory. This company seeks someone who has worked both sides of the aisle, but one side can only be for a “small” company. Highly skilled IBMers need not apply.

> “Knows direct and digital marketing use-cases”
This implies another aisle someone needs to have split – traditional /old-school media, and new-fangled digital. Most job candidates who have the former skills are outright despised by those with the latter. Oil and water.

> “Skills: Corp Marketing”
Damn these abbreviations and punctuations! Anyway, go back to that thing above about “small” companies. How many of those have a “corporate” marketing department? [hint = “none”]

Finally, the cup of grace. Here is a list that follows the “Corp [sic] Marketing” reference above; the assumption being that the candidate must know how to do all of the following:

> “Events; PR; White papers; Positioning a company; Branding; Lead gen; Social marketing; SEM, SEO; Competitor info; PPTs, board meeting presentations, [stray comma]; Sales Decks; Collateral; Website copy”

If such a person existed (they don’t), he or she would be neither unemployed nor looking to work with an assclown outfit like this one. His or her salary expectations would be in the $ 500,000 range. He or she would also need to be roughly 78 years old to have amassed this degree of experience.

Here is the irony for marketing job seekers. If you have at least two of the dozens of What-Would-Jesus-Do requirements listed by a hiring company, go for it. You can Google the other stuff to prepare yourself for the interview.

That will likely be enough to put you light years ahead of the hiring manager.

Coke’s Teen Marketing: A Meme Mash-up !

The LAST thing Coca-Cola corporate marketing folks want to be caught doing is advertising directly to teens, especially given the recent “authentic” (see: bullshit on a stick) obesity campaign: “Drink Sugar ! No, wait, don’t ! Well, OK just don’t get yourself fat !”

To that end, Coke recently announced a genius move. Take three dominant themes in marketing – gamification, branded content, and sharable user-generated content – mix them together, and do an end-run around industry watchdogs. To wit:

“Coca-Cola has launched its first all-digital campaign, dubbed ‘The AHH Effect’ on smartphones and tablets (and also via Ahh.com – ed.: how was THAT url not taken?!?!)…

“…seeks to involve teens through digital content, ranging from videos and GIFs (such as one of cats playing with empty Coke boxes) that are consumed in seconds, to games that engage them for longer periods…

“…Most important, it will be recruiting teens, through social networks, to create their own ‘experiences’ – with winners to be given their own ‘AHH Effect’ digital destinations.”

Let us assess this mess.

Gamification
You can count on one hand the brands that have had success with developing their own digital games, activity that people found engaging for more than two seconds. Yet, marketers are still being led to these roiling waters.

The obvious rationale is the insatiable appetite for games which, email aside, account for a majority of app time and smartphone time. But what marketers aren’t told (or don’t admit) is that the most popular games aren’t low-cost “branded” nonsense, but professionally developed entertainment.

We’d love to see a teen “taste test” between an “Ahh” game and anything on Xbox.

User-Generated Content
We’ve been to the "UGC" well a bunch of times (see this post, for example). Suffice to say there is nothing Coke can offer here that is going to up the consumer’s user-generated game, if you will, in terms of content that is (a) of high quality and, most importantly, (b) has f&ck all to do with the Coke brand.

Coca-Cola continues to drink from the “UGC = high-quality brand engagement” fountain (pun definitely intended).

Branded Content
What’s missing from most (OK, all) discussions of branded content (“Marketing Meme of The Year” for 2012 AND 2013) is the notion of timing. Branded content that reaches consumers anytime and every time is nothing more than a grossly overengineered expanse of billboards, stretching as far as the eye can see. Impressions, impressions, impressions, with complete lack of regard for when consumers are contemplating a brand’s product.

During the “Ahh” press conference, a company spokesperson said the aim was to position Coke as the “the ultimate in refreshment.”

User-generated branded gamification content (phew!, that’s a mouthful) seems to us an approach that will go opposite of Coke’s desired direction.

Probably more Oohs than Ahhs.

The Death Of The Affluents

The political clamor of the past couple of years rammed home the point to just about every American citizen that the economy is in the hands of a disproportionately small percentage of people. Smart marketers have long known this – in a surprising majority of cases, 80% of business comes from just 20% of the customer base.

These are the “affluents,” citizens fortunate enough to pull in at least $100,000 in income per year. People who qualify, for example, for the new mobile app from SMART Jets, so they can “book (and pay for) a private jet in less than 10 seconds” with nothing more than a smartphone.

One could easily trick oneself into thinking the supply of affluent consumers is a constant – just multiply our ever-growing 315-million-plus headcount by 20%. Unfortunately, there’s that “$100,000 annual income” requirement.

Analysis by Unity Marketing, renowned consultants to companies that target the affluent, suggests that fewer and fewer people are going to clear that $100,000 bar.

Unity created a beautiful chart of the number of affluents, from the year 2001 onward, in two age brackets: 35 to 44 years of age, and 45 to 54. It is beautiful in its illustration of two main points:

>>> In 2001, there were roughly 20% more affluents in the younger bracket than in the older one. As the group aged, they were able to maintain their income status, thus pushing the older bracket’s bar up incrementally in the subsequent years’ charting. Yet, the crap economy of the early 2000s kept newer 35-to-44s from joining the club, if you will. The younger bracket’s 2001 headcount had fallen by 15% as of last year. And Unity Marketing doesn’t see any appreciable growth until 2019.

>>> Because the younger bracket took on fewer new affluents over time, the growth in older affluents hit a peak in 2011, and will fall as this cohort ages. Combine the observation in the first point above, and you end up with annual declines in affluents overall, until well past the year 2020.

Of course, an improving U.S. economy later this decade could boost the number of affluents and perhaps offset or override their projected decline. Except that an improving U.S. economy is about as likely as you buying a winning lottery ticket today.

Businesses whose survival is dependent on affluent consumers should prepare not for “growth,” but for “share.” Start planning for raging battles around (a) share of market and (b) share of wallet.

Or, in SMART Jets’ case, share of smartphone.

A Mission Statement Not Exactly On A Mission

We’ve said it a million times before, and we’ll say it again: corporate mission statements are a waste of time and energy. Congratulations to all the consultants who are able to convince clients to pony up big bucks to go through the exercise.

No better illustration of our thesis than the output we came upon here, on SlideShare (which, for those unfamiliar with the site, does exactly what its name implies). Memory fails us as to how we found the presentation – either someone at LinkedIn or on SlideShare itself felt it was worthy to, um, share.

In any case, we were entranced, bad-car-crash-on-the-other-side-of-the-highway style. The presentation began with this teaser:

“At the beginning of 2013, [name of company]’s leaders got together for a series of offsite planning meetings. There, we wrote out the [name of company] Way. It’s a statement of how we work. It expresses our values.”

[name of company hidden to protect the alleged innocent…]

A series of offsites? Wow, this must be good.

Wrong.

What followed that introductory slide was a Guinness World Record-worthy collection of HR/business buzzwords, 29 pages worth. Stuff like this:

>>> We set big aggressive goals and then we focus on hitting them.

>>> We are never complacent.

>>> We learn from our mistakes and try not to repeat the same mistake twice.

>>> Our [name of company] formula…the best place in the world to work.

Imagine 25 other pages just like the above. Hats off to the consultant(s) who was/were able to produce this tripe for a no-doubt rewarding pay day.

We thought the output was hackneyed and undifferentiating (the definition of buzzword, we suppose), and said so in the comments section.

Someone responded to our comment – the consultant we believe – and asked us to do better. In ten minutes we created this:

“We design smiles.

For ourselves, in how we treat each other and work together to get great work done.
For designers, by surpassing every definition there is of "service excellence."
For consumers, by creating unexpected emotional connections to the most innovatively designed products in the world.

Never satisfied. Always challenging. Forever learning. And succeeding, humbly but with the passion to do it all over again.

We are [name of company].
You will think so, too.

The smile will give you away.”

This doesn’t mean we have stopped believing that mission statements are a drain. Our point is this – if you really want one, take no more than four hours and six employees to develop it. Have a copywriter polish it off. Then go back to running your business (and marketing ;-).

We hope this company puts our condensed mission statement into its “About Us” section of its website. We think it is “Fab.”

Mountain Dew Won’t Dew For Every Target Segment

Another crummy video commercial, another “sorry if we offended anyone” apology. And another miss by marketing analysts as to what should be the key take-aways from the incident.

Mountain Dew is, on the one hand, a phenomenal story re: product and marketing. High in sugar, high in caffeine, and high in weird coloring for a carbonated beverage, it nevertheless reached the #4 spot as measured by U.S. volume, trailing only Coke, Diet Coke and Pepsi.

On the other hand, Mountain Dew is – pun intended – a story of “flat.” Essentially flat volume growth for many years now, and thus flat market share.

Numerous product-line extensions have supplemented the main “Green Dew” business in this century. Some have been basic flavor/color related, such as Code Red. Others have tried to go out of category – such as AMP, and now Kickstart, into the energy-drink sector.

Through all these product changes, the Dew’s core target has continued to be hip white teens who [blank] board – fill in the blank with “snow” or “skate” or “wake” or “water” or “game” or “whatever.” There are, of course, a limited supply of such people.

So, for a couple of years now, the folks at PepsiCo have either directly or unknowingly approved of some curious marketing initiatives by Mountain Dew brand managers to grow the business outside the core target segment. No product changes per se, just adjustments to positioning and creative.

Long story short, the urban adventure for Mountain Dew has not been excellent. The culmination = the goat video spot (aptly named) that was pulled last week due to consumer blowback. We guess that the corporate marketers at PepsiCo jumped into this one, weren’t happy to, and that will probably cost a couple of Dew brand marketers their jobs.

Guessing aside, we do believe it is time for senior leadership at PepsiCo to rethink its approach to target-segment expansion for Mountain Dew. Under current course and speed, we only see more goats. Which will continue to erode the core brand.

It’s time for a new product – either a subbrand under Mountain Dew, or a new brand in its own right - to be the vehicle to reach the intended target segment.

Pepsi marketers can refer to their own case study for help on this one: AMP used to be “Mountain Dew AMP,” way back in the day. The two brands later went their separate ways, and Mountain Dew finally removed its name from AMP packaging last year.

For now, Mountain Dew’s targeting strategy is generating lots of energy, not much of it good.

Market Research Hall Of Sham Award – Part 473

This is depressing. As much as we have tried…and tried…and tried…to alert the Marketing industry to the absolutely horrifying state of market research, the deluge continues. And no one but Lairig Marketing gives a flying f*ck.

And we can’t figure out why.

Today, we present a study from the typically up-to-snuff IAB (Interactive Advertising Bureau), who teamed up with InMobi and Viggle to research the current adoption of financial apps. Bias alert: InMobi is a mobile ad vendor, Viggle is a “social TV” app provider.

Here is the introduction from their report:
“It’s tax season, and money matters are very much on the minds of American consumers. Increasingly, Americans are embracing mobile services to help them manage their financial lives.”

Note the intentional reference to “Americans,” meaning EVERY CONSUMER.

But a few sentences later, a plot twist:
“To investigate how media-savvy consumers are adopting mobile internet tools to help the [sic] manage their financial lives, the IAB, InMobi, and Viggle teamed up to field a survey to Viggle’s user base.”

So we’re not really talking about “Americans.” Not every consumer, apparently.

Next, then, are some highlighted results:

>>> 83% of “respondents” are aware their bank has a mobile app
>>> 75% of “respondents” are aware their bank has a mobile-optimized website
>>> 58% of “respondents” say they have used their bank’s mobile app
>>> almost 40% of “respondents” who use mobile financial apps have downloaded Paypal’s mobile app

Unfortunately, and perhaps not unintentionally, the specific detailed data charts for each of the results cited above don’t say anything about the “respondents” other than how many there are (i.e., “n = 1242”).

At this point, realists like us look at these numbers and call “bullsh*t!” As just one example, if the PayPal number was accurate, then the total number of PayPal mobile app downloads in the U.S. would be north of 50 million. As of a year ago, PayPal reported 17 million downloads.

We’d also venture that 58% of “Americans” don’t even know what an “app” is, but we digress.

It’s not until you force yourself to page down to “Survey Methodology,” that you understand who the survey “respondents” truly are:

“Viggle emailed invites to a random sample of Viggle’s nearly two million registered users…The Viggle audience is both technology- and media-savvy…centered around the 25 – 34 demographic. They’re more coastal, more urban and tech savvy than the average consumer.”

Not Americans, not every consumer, not even representative of the smartphone user base, for Christ’s sake. So what really is the point of a research exercise like this? What does one do with findings like these? To what reward?

We could come up with only one answer. To that end, we congratulate the IAB, InMobi and Viggle for receiving the latest Lairig Marketing Research Hall of Sham Award.