Advertising Volume and Advertising Effectiveness

-Al Ries

Next to the Internet, radio is my favorite medium. It’s one-to-one and personal in a way that no other traditional medium can duplicate.

My favorite radio personality is Neal Boortz, a nationally syndicated talk-show host who broadcasts out of Atlanta on 171 stations. I listen to Boortz every morning during the commute to my office in Roswell.

Yet at the top of the hour, I turn off my radio and don’t turn it back on until 8 minutes after the hour. Why? Because that’s radio’s black hole. Eight solid minutes of commercials, traffic, weather, news and more commercials.

The second black hole occurs at the bottom of the hour, but it’s not quite as bad. I turn off my radio for only 6 minutes.

For every ad that radio stations used to run, it now seems like they run two. Radio, in my opinion, has become Radiado, an extra ‘ad’ inserted at every possible point in the programming.

There’s a relationship between advertising volume and advertising effectiveness. The greater the volume the less effective any individual advertisement is likely to be.
A number of magazine readership studies have shown, for example, that an advertisement in a thin issue of a publication is more likely to be noticed and read than the same advertisement in a thick issue of the same publication.

In the long run, the health of the advertising industry is related to effectiveness. As the increasing clutter reduces the effectiveness of advertising, clients are turning to other ways to promote their products and services. So today we have advertising on blimps, ATMs, gas pumps, eggs, commodes, even beach sand. And there’s a developing market in stadium naming rights and product placements in television, movies and videogames.

The New York Mets and Citigroup have signed a 20-year deal to call the team’s new stadium CitiField. According to press reports, the deal is worth at least $20 million a year, a record for stadium rights.

The Port Authority of New York and New Jersey signed a contract with Geico to place billboards and other advertisements on the George Washington Bridge. Less than a week after the contract was announced, the Port Authority backed out of the deal citing the hostility the plan had received. ‘We misjudged the negative reaction to this,’ said a Port Authority spokesperson.

If the New York community can get upset about a few signs on a bridge, why doesn’t the advertising industry get upset about the increasing clutter on traditional media? Especially since the arrival of new technologies that let consumers take charge of their own ‘clutter reduction’ tactics.

If I were running a radio station today, I’d worry more about Sirius XM Satellite Radio than I would about my direct competitors. So far, the merged satellite systems have signed up 18.5 million subscribers. (For $16.95 a month, you can say farewell forever to Radiado. Maybe not forever, since advertising is starting to creep into the satellite radio medium.)

If I were running a television station today, I’d worry more about TiVo (and other digital video recorders) than I would about my direct competitors. At the end of 2005, according to Forrester Research, 12.2 percent of households had DVRs. That number is expected to skyrocket.

Radio was my first love, both from a consumer and a business point of view. As a matter of fact, our agency was the first advertising agency ever hired by the Radio Advertising Bureau.

‘Radio is red-hot’ was the theme of our first campaign. In spite of radio’s lack of visuals, the campaign tried to make the point that radio is a primary medium because the objective of a marketing program should be to ‘own a word in the mind.’

Own a word. Not a visual.

Are visuals helpful? Sure, but the objective of the visual should be to associate the brand with a word. Volvo drives an automobile into a wall in order to drive the word ‘safety’ into the consumer’s mind.

Radio isn’t exactly red-hot today, but it has held its own among major media. In 1978 (when we first went to work for the Radio Advertising Bureau) radio accounted for 6.7 percent of total media expenditures. Today it's 6.9 percent, a gain of 3 percent.

Newspapers, on the other hand, are down 42 percent. Magazines are down 20 percent.

Radio is a powerful medium with great selectivity at relatively low costs, but Radiado threatens the very existence of the medium. Too much is too much.

One could make the point that radio has nothing to worry about. That advertising in general has not been increasing and in one sense this is true. For the last 60 years, U.S. advertising spending has averaged about 2 percent of the gross domestic product. (In 2005, it was 2.18 percent, the smallest percentage since 1994.)

That misses the point. The last 60 years have witnessed an explosion in the average family’s income. Yesterday’s luxuries have become today’s necessities. Today the average family has the money to buy air conditioners, microwave ovens, dishwashers and cellphones. Today, the average family has the money to spend on restaurant meals, multiple cars, jewelry, watches and other luxury items.

With an expanding income comes a declining percentage of a family’s income spent on food, housing and other essentials. Expenditures for food, for example, have been consistently falling. From 15.1 percent of the average family’s income in 1990 to about 13 percent today.

With rising incomes, the percentage of a country’s gross domestic product spent on essentials should be falling. Nobody should be saying, what most families need in America is more to eat. Or more advertising to consume.

The biggest health problem in America today is obesity. The biggest advertising problem in America today is obesity, too.

9 Digital Trends For 2010

-Derrick Daye

1: Facebook replaces personal email

Question: Google has it, Hoover has it (in the UK anyway), TiVo had it, lost it and has somewhat got it back. Xerox had it, but nobody really cares anymore. So what is it?

It's when a brand name becomes the verb associated with its use. So rather than searching, you Google, or TiVo when digital recording a television show. Arguably an even more powerful synonym is when a brand becomes a noun, such as Polaroid, for instant developed photographs, although that didn't end so well.

The newest one would seem to Facebook, although it has too meanings.

'I Facebooked you' could mean that you the person has added you as a Facebook friend or they sent you a private message though Facebook. The latter would seem to be of more interest as no-one has really owned this type of communication before. No brand ever became synonymous with email. To Hotmail or Gmail someone just never happened.

So the interesting and overlooked disruption of Facebook is its displacement of personal email as a communication tool. Completely permission based, no SPAM (yet), and no address book required - your friends are already on Facebook.
2: Open source software starts making proper money, thanks to the cloud

There's something starting to happen within the open source software world. Projects that were typically for the purview of programmers, or at least technophiles, are now available to the masses.

An example is Beanstalk a fully hosted, version controlled code repository that uses the Subversion open source project. The big deal is that to set up and maintain a Subversion repository can be a pain - plus you need a server if you want to give access to anyone. Beanstalk has created a subscription based service that, for a small fee, removes the hassle. Services like this can only really exist with cloud computing infrastructure - so companies such as Beanstalk don't have the huge upfront capital outlay for servers, they only pay for what their customers use. With the right skills any open source project can be commercialized in this manner.

3: Mobile Commerce - the promise that has never delivered, yet.

As annoyingly tantalizing yet esoteric as the word 'convergence' has been over the last 10 years, mobile commerce has promised much but never delivered. Mobile phones have delivered real benefits to societies world wide and in developing nations are used commonplace as devices for the transfer of money.

However, until only very recently in the nations that invented and first adopted mobile technologies, has use of your most precious device been extended to payment for goods and services. With the advanced browsers of iPhone and the Android platforms one could pay for goods through full e-commerce sites, but who really wants to fiddle around with a phone in one hand and a credit card in another?

The game changer is the iPhone / iTunes platform. In-app purchases on the iPhone can tempt users to buy small items, upgrades, updates, etc, while iTunes holds their precious credit card information. All, of course, is done in seamless fashion, enough to promote impulse purchases. Would seem like an easy task for this to be extended to other platforms with PayPal or Google Checkout. But we have been here before haven't we?

4: Fewer registrations - one sign-in fits all

I use a great application on the Mac platform that securely holds my login details for upwards of 50 different sites. It means that I don't have to use the same password for each site and that I don't have to search around for post-it notes (my 1998 method) to log into the site I joined a week ago.

However, I'm starting to resent having to register for anything ever again. I don't see why, to leave a particularly pithy comment on a blog or news site, I have to register all over again. I'm sure I'm not the only one and that's why services like Facebook Connect and OpenID are particularly useful and will continue to be adopted at great speed through 2010. Who knows where these might go? Perhaps next year I'll be able to pay for something using my Facebook login.

5: Disruption vs. Continuity - Alternatives to the "Big Idea"

As the significance of social networks continues to grow, businesses are investing more in community building as a marketing driver. According to the recent Tribalization of Business study released by Deloitte, 94% of businesses will continue or increase their investment in online communities and social media and, for the majority of these companies, their marketing function will drive this investment. At the same time, as evidenced by Google's recent release of "free floating" social tools, such as Google Waves and Sidewiki, there is an increasing shift towards online identity and social activity being an integrated part of the network as a whole, rather than concentrated within discrete platforms such as Facebook.

With the increasing emphasis on marketing and advertising through social networks and the increasing pervasiveness of social tools, marketing objectives come into conflict with advertising techniques. While advertising has often sought to distinguish itself and stop the consumer in their tracks with a disruptive "big idea," the emphasis is shifting toward persuasion through fitting organically into the consumer's social sphere. It will always be the objective of marketing to provide creativity and novelty, but the way in will increasingly be one of persistence and continuity.

6: Self-Sufficiency - The Continuing Evolution of Web-Driven,Open Source DIY Culture

Much has been said about the power and potential of collective intelligence. From solving complex problems through crowd-sourcing, to reconfiguring industries to be leaner and more innovative by harnessing the expertise of a network of independent suppliers, many of the breakthrough solutions of tomorrow appear to lie in more effectively pooling the resources and intelligence of our increasingly networked world.

On the other side of the equation, the power of pooled intelligence and networked resources have empowered individuals to take on more and more complex undertakings themselves. From drawing on the collective intelligence of blogs and university open courseware to educate themselves, to services like ponoko, spoonflower and cafe press that facilitate small-scale production, to offline resource pooling like pop-up retail and collective office spaces, individuals are discovering that it has never been easier to try doing it themselves.

While we find new ways to thrive in a still struggling economy, expect to see lasting changes coming from empowering individuals to work together to become more ever more self-sufficient.

7: Info-Art

Where we once had pop-psychologists and pop-philosophers, we now appear to have pop-statisticians and pop-economists. The growing wealth of data and the access to rich and diverse data sources that are significant byproducts of information networks have made the art of data analysis a defining skill of our times.

By the same token, the skill of elegantly visualizing that data has become a defining art of our time. The art of the infographic is becoming increasingly pervasive as people look more and more to the growing amount of data at our disposal for insight, and more refined as the interactions of that data becomes more complex.

With an ever increasing need for real-time analysis of a growing torrent of raw data, expect to see greater innovation spurred by more elegant ways of capturing and visualizing information by a growing number of
info-artists.

8: Crowd Sourcing

Across many industries and organizations, crowd sourcing will become a growing tool as part of elance outsourcing strategies. Organizations will mobilize the passionate special interest groups to not only carry a message but, even more importantly perhaps, to lead and take part in activities on their behalf.

Predictions for 2010 are not as rosy as we all hoped and budgets for just about everything continue to be cut, encouraging 'creative' thinking regarding getting things done and done well.

From political canvassing to software development, from people journalism to environmental activism, we will see huge growth in crowd sourcing models provoked and led, largely, by digital social media strategies.

9: More Flash, Not Less

Outside of the obvious brand sites, micro-sites and media sites (video, games, etc.) Flash has often been looked down upon if not completely discounted by techies and search engine optimizers alike. It seemed to face an uncertain future as a viable tool for serious websites and applications such as eCommerce tools and corporate websites. As it is, Adobe's rich media tool has enjoyed the grit and determination of its advocates and external development community. Several tricks, authoring tools and server side scripting workarounds have meant that Flash built websites no longer serve up a single, impenetrable page. They offer deep, searchable, indexable sites that will allow acute, detailed traffic and behavioral analytics and search engine optimization.

As websites continue to increase in their importance as a company's storefront, the demand for rich, brand-extending experiences will also increase. Further proliferation of (lightning speed) broadband will reduce download issues while the adoption of Flash on mobile devices will dramatically increase and fuel reach and the desire/need for highly usable, brand transporting, conversion oriented experiences

The Anti-laws of Luxury Marketing #16

-Derrick Daye

16. Keep celebrities out of your advertising

In traditional marketing, stars of stage and screen are very often used in advertising: there is nothing like a David Beckham for selling sunglasses or shaving cream. Nestlé has also got in on the act, with premium brand Nespresso calling on the services of George Clooney, and Nescafé recruiting the famous English soccer player Ian Wright. Nestlé, the world’s number one in food marketing, knows what it’s doing.

However, using celebrities to promote luxury products is extremely dangerous. A luxury brand is courted by the stars, in the same way as those stars are courted by journalists and paparazzi. As we mentioned earlier about a luxury brand’s typical relationship with its customers, it must respect them, but it also has to dominate them. Even the most famous ones. Calling on the services of a star is tantamount to saying that the brand needs some of this star’s status just to survive, and admitting that it has none of its own.

For the luxury brand, this is a gross error of strategy, for it turns the relationship on its head. Only brand domination, standing above everything like a god, is acceptable, not simply behaving like any ordinary mortal. If celebrities are used to promote the luxury product, the status of the latter is reduced to that of a mere accessory. Louis Vuitton advertising with Mikhail Gorbachev, former USSR President avoids this:

• first, the celebrity is not a fashion symbol but a man who changed the world;
• second, his Louis Vuitton is not the hero, but only the witness of an exceptional moment (a strategic negotiation).

Brands & the Ladder of Life

-Al ries

One of the typical questions marketing people ask themselves is, What’s the lifetime value of a customer?

Presumably a company benefits by keeping its customers satisfied over an extended period of time. Nice idea in theory, but this kind of thinking often leads a company down the wrong path.

Take Saturn, for example. Here was a brand built on the ultimate in customer satisfaction. Comfortable showrooms, no high-pressure sales people, no haggling over prices. ‘A different kind of company. A different kind of car.’

The first Saturn model, the S series, was wildly successful. For a number of years, the average Saturn dealer sold more cars than the average dealer of any other brand. (In 1996, for example, the average Saturn dealer sold 776 cars versus 684 for Honda and 606 for Toyota. The average Chevrolet/Geo dealer that year sold only 237 cars.)

But what would happen when a Saturn customer got older and made more money? The S series, after all, was a relatively inexpensive compact car. No problem, decided Saturn management, We’ll take care of our customers by introducing the L series, a larger, more expensive car. ‘The next big thing from Saturn.’

Not a good move. Sales of the S series fell because the model was ‘long in the tooth.’ Sales of the L series suffered because prospective customers thought ‘it was a little too expensive for a Saturn.’
(Years ago I had the same argument with Peugeot management in Paris over the introduction of their 404 model in the U.S. The 403 was selling well, so why bring in a new, more expensive car? They did anyway, and sold both models in the same showrooms. As predicted, total sales declined.)

Today, Saturn is the latest entry in the big book of failed brands.

Saturn was a great car for young, single people just getting started in life. But when you grew up, got promoted and made more money did you want to buy a more expensive Saturn?

Most young people, including my daughter, wanted a BMW. When you move up the ladder of life, you want your brand to reflect your new status.

What happened when you got married and had kids? Did you want to pile the family into an SUV, the Saturn Vue.?

Most young people preferred a Volvo, the car that says you care about your family’s safety.

Then in the normal course of events, you got divorced. What happened next? The wife kept the kids and the Volvo and you purchased a Ferrari.

What should Saturn have done? Our advice would have been to keeps its focus on ‘entry-level’ vehicles. Instead of complementing the S series with the L series, they should have replaced the S series with an up-dated model. And done so frequently.

The grass might be greener on the other side of the highway, but you can usually build a more powerful brand if you constantly fertilize the plot that you already own. Let your customers go. Let them move up the ladder of life.

What happens in cars also happens in clothing, cosmetics, beer, liquor, watches and many other consumer categories. You know you are getting ahead in life when you can leave your old brands behind.

In some cases, it would pay a company to actively discourage customers to grow old with its brand. One of Levi Strauss’ problems is that older people wear the brand. No kid wants to wear what their parents wear.

We would have restricted Levi’s jeans to waist sizes no larger than 32 inches. Let those big old butts walk around wearing Wrangler’s.

When The Name You Want Is Taken

-Steve Rivkin

You've just found out the name you want for your brand is owned by somebody else. So, the temptation is to say, "Let's move on."

Not so fast. Names are property, and can be bought and sold (or leased) like real estate.

Coors licensed the name of its upscale beer Irish Red from a long-defunct brewery. Yves St. Laurent bought the name of its Opium fragrance for only $200 from two elderly perfumers.

The 1999 relaunch of National Airlines came about after the new owners paid $175,000 to buy the name at a bankruptcy sale from defunct Pan Am. (Pan Am had acquired the carrier in 1980.)

Not that long ago, we helped a Fortune 100 company acquire the rights to an automation software name from its Japanese owner. One week of phone calls and faxes produced a letter of agreement.

When the name you covet is owned by somebody else, go after it. Use an intermediary to open a channel of communications. Have a valuation in mind. Make sure the assignment of rights is perfectly clear. (For which countries, for what period of time are you acquiring the name?)

Complex Language Weakening Brands

-Al Ries

"Call the law enforcement officers. We're being robbed."

Not a likely scenario. What the average person is much more apt to say is: "Call the cops. We're being robbed."

Unfortunately, marketing people are not average persons. Marketing people are much more likely to elevate their languages until, in some cases, they lose their meanings.

A few years back a senior marketing person at United Parcel Service asked me what I thought of the company's trademark.

I like it, I said, but what UPS really needs is a motivating idea or rallying cry, something like: UPS delivers more parcels to more people in more places than any other company in the world.

UPS, he said, is not in the parcel delivery business.

Huh. That came as a big surprise to me. We're a customer and I always thought that UPS was in the parcel delivery business.

No. UPS is in the logistics business.

He wasn't joking. At the time UPS was in the process of repainting some 88,000 vehicles with its new theme: Synchronizing the World of Commerce.

A serious impediment to communications is this constant upgrading of the language. No aspect of life is left untouched by the upgrade police. Not only does a term have to be politically correct, it has to be as long and as complicated as possible.
Maintenance men are now physical plant managers.

Janitors are now custodial engineers.

Garbage collectors are now sanitary engineers.

A business strategy is now a business model.

Accounting firms are now professional service firms.

The purchasing department is now the procurement department.

The personnel department is now the human relations department. (At Electronic Data Systems, the HR department has become the Leadership and Change Management department.)

Fireworks are now pyrotechnics.

A jail is now a correctional facility. Anyone setting off the pyrotechnics illegally will be sent to a correctional facility.

It would be amusing if the problem hasn't become a serious impediment to marketing. Many firms, for example, call themselves financial services companies. What's a financial services company?

If you want to buy banking services, you go to a bank like Bank of America.

If you want to buy insurance, you go to an insurance company like State Farm.

If you want to buy stocks, bonds or mutual funds, you go to a brokerage firm like Merrill Lynch.

Let's go to a financial services company to get our finances serviced, is not the way people talk. People talk in terms of specifics, not generalities.

As a matter of fact, it's easier to go from the specific to the general than vice versa. People know that a drug store sells a lot more things than just drugs. Toiletries, candy, soft drinks, stationery, photo supplies, etc. Should a drug store (pardon me, pharmacy) describe itself as a personal services store? I think not.

Boston Chicken was a huge hit when they first opened its doors. It was the first fast food restaurant chain to focus on rotisserie chicken for the take-home dinner market. But then it added turkey, meatloaf, ham and other items to the menu and changed its name to Boston Market.

Everybody knows what a chicken dinner is, but what's a market dinner No wonder, the company went bankrupt.

The same principle holds true among marketing companies. You probably know of many famous advertising agencies and many famous PR agencies, but how many famous marketing communications agencies do you know of? Name one.

When in doubt, use the narrowest possible term to describe your category. Let the mind do the upgrading, not your marketing.

The Anti-laws of Luxury Marketing #15

-Derrick Daye

15. Do not sell.

This isn’t arrogance, not at all. The luxury strategy is the very opposite of the volume strategy.

If you pursue the strategy of systematically raising all your prices, as illustrated by Krug, you have to be prepared to lose sales and to lose customers. Most brands don’t dare risk it, or else go running after customers; when you get to that point you’re no longer talking luxury but mass consumption – which of course can be extremely profitable as everyone knows.

Krug did lose some accounts, some importers, it is true. If not supported by the Rémy Cointreau management in the steps it took, Krug’s change in strategy would have been stopped as soon as the first big client walked away. In luxury, not trying too hard to sell is a fundamental principle in relations with customers. You tell the customer the story of the product, the facts, but you do not pressure them into making a purchase there and then.

We said a few words earlier about the campaign BMW had conducted on the internet in the US; a number of the most prominent film directors each made a short-length film around BMW, having been given completely free rein – not a commercial, but free expression. These films were made available on the internet and they very quickly did the rounds in the United States. Commenting on this decision, the marketing director at BMW USA said: ‘When it comes to luxury, the best way of reaching the very well-off is to let them come to you.’

Top Ten Integrated Marketing Trends for 2010

-Derrick Daye

1. Less will get done: until we learn to do more with less.

While the year 2009 was marked as the 'great recession', we won't feel its full effects until 2010. Both marketers and their marketing services agency partners are dealing with reduced resources in terms of head-count and budgets. We won't likely see enough breakthroughs in the marketplace, simply because marketers and agencies alike have to remain focused on 'getting the work out the door'. The only way to 'do more with less' is to align resources toward a single and powerful integrated marketing solution. Individual marketing tactics will simply become marginalized and highly tactical with 'less'.

2. Marketers will mistakenly 'whack' a medium of the marketing mix.

With reduced marketing budgets, 'something has to give'. Unfortunately, marketers are making wholesale cuts to specific marketing/media channels in the process. We've seen the most dramatic cuts occur in print media: newspapers and magazines. I caution marketers to consider whether the remaining media in the market mix can compensate for the cuts. For example, does the internet behave like print? Is the consumer experience the same in both media? Are the message formats the same? The answer is a clear NO. Reduced resources should not come at the expense of an integrated, multi-channel mix.

3. Marketers rush to employ 'social networking' strategies.

Marketers are in a mad rush to enter the social networking space with 'tweets', 'widgets', 'apps' and 'fan pages'. However, social networking is not a marketing tactic; nor is it a surrogate for the brand's social experience. It is not a line item on a marketing plan, a specific channel, or a form of content. Rather, it is an outcome. And, no single channel has a lock on the 'social' nature of content. Most any medium can serve as the 'originating' medium in a journey that can take a great piece of content across channels and into vast networks of hearts and minds.
4. More data and even less 'understanding'.

More studies are emerging from more places: set-top boxes, foundations, academics, marketers and the media themselves. And, the data all clearly point to a very different world: one that is highly fluid, highly interactive and quick to change structure and form. What's the problem with this picture? Data sets are less projective when the media world changes so quickly. Granted, while we may have a better understanding of what happened last week, last month or yesterday; we cannot take this understanding too far into the future. I'd say we're entering a 'Wild West' era of integrated channel planning.

5. Lines between media will continue to blur.

In the coming year, more primetime television content will show up in more places than ever before. Fans will have multiple access points into shows that used to be an 'appointment view' controlled by network programming executives. Between live view, live+3 day views from a DVR, video on demand, Hulu, network owned websites, and shared distribution deals (ala DirecTV and NBC for Friday Night Lights) it is no longer clear as to where one screen medium ends and another begins. Maybe we're starting to realize: it's all a screen!

6. Push vs Pull will become less relevant.

In 2010, the classification of marketing experiences into 'push' vs. 'pull' will become less relevant. Why? Because the best content (both programming and commercial content) will increasingly become 'push' and
'pull' at the same time. Ask yourself: is American Idol a 'push' medium because it's broadcast during primetime on Fox? Or, is it a 'pull' medium given the plethora of votes, downloads, and chats which result from the broadcast? The answer: yes! And, the phenomenon works both ways. Given the vast reach of our social networks, a viral experience that is pulled along by a small group of fans will quickly amass reach
without too much effort on the part of the original sender.

7. Great content will travel at the 'speed of share' -- 'average' experiences will evaporate.

In 2010, we will begin to wrestle with our sense of time. Messages can travel at 'the speed of share'. With the click of a mouse, or a mobile phone, consumers can advance a great story/ad/video/picture/newsbite to
vast, 'networked' communities of hearts and minds. The 'Speed of Share' renders the speed of traditional content distribution obsolete. It's like comparing real-time to slow motion! However, content will only
travel at the 'Speed of Share' if it is worth sharing in the first place. There will be less tolerance for mediocre content, and consumers will have even more means of disposing of, and/or avoiding it.

8. The Adult 18-49 demo will become even less relevant as a target cohort.

The diversity of the 18-49 demographic certainly isn't new, and on the surface shouldn't be cited as a notable trend for 2010. But, when you stop to think about how different the media world is for an 18 year-old, relative to a 49 year-old, you might just be ready to step away from a target cohort that doesn't hold up. And every year, the divide between 'internet-raised' and 'television-raised' consumers becomes more profound. Just read 'Media Generations' by Martin Block PhD, Don Schultz PhD, and BIGresearch, and you'll quickly understand that today's 18-49 demographic cohort contains four different media generations.

9. Symbiosis will create interesting and at times strange partnerships.

Many forecasters are predicting wholesale collapses in media channels. I prefer to hold a different point of view: I believe the media and marketing landscape will be affected more by the laws of symbiosis than the laws of natural selection. Consider the relationship between YouTube and television. What appeared on the surface as a 'competing interest' continues to evolve into a symbiotic relationship. Just ask Tina Fey, or Susan Boyle and they will speak of the power of one medium to reinforce and amplify another. I predict we will continue to see emerging relationships among what appear on the surface as competing media channels.

10. The year 2010 will become the year of the 'good idea'.

Our recent past suggests that we, as an industry, have become hyper-focused on the dynamics of channels to such an extreme that we may very well have taken our eye off the ball. At the end of the day, channels serve only as pipelines for content. And, as discussed throughout, only great content can be both 'pushed' and 'pulled' along at the new ' speed of share'. Without a good idea, the content will simply evaporate. It's that simple! So despite fewer resources, more diversity, and less certainty, I am advocating for good ideas to fuel integrated marketing outcomes in 2010.

Marketing Is Not Communications

-Al Ries

A 5-page foldout magazine advertisement opened up with the following 39 attributes spread out over two pages: Renegade, fearless, unexpected, bold, true, spontaneous, curious, intriguing, unwavering, rare, brash, provocative, intuitive, genuine, daring, uncommon, irreverent, brazen, absolute, unusual, visionary, idyllic, proud, maverick, wild, undaunted, resolute, poetic, dynamic, soulful, unconventional, strong, romantic, authentic, brave, unorthodox, deft, radical, dreamer.

What brand could possibly combine all these wonderful attributes? Turn the page and get the answer: The 315-hp FX45. And who makes the renegade, fearless, unexpected, bold, true, etc. etc. FX45?

There in small type at the bottom of the next page is the answer. Infiniti, accelerating the future.

What’s wrong with this advertisement and thousands more just like it? It assumes that the primary function of advertising is to communicate. ‘Tell more, sell more’ was the old advertising adage.

The idea that advertising is a form of communications is deeply embedded in the corporate psyche. Many Advertising Departments are now calling themselves the Marketing Communications Department or ‘Marcom’ for short. Too bad. The name encourages advertising people to go in exactly the wrong direction.
Advertising is not communications; advertising is positioning. The best advertising communicates precious little about the product or service. What the best advertising does, however, is to establish and reinforce a position in the prospect’s mind.

What’s an Infiniti? I don’t know, do you? What I do know is that an Infiniti is not a renegade, fearless, unexpected, etc. etc. etc. automobile.

You don’t have to communicate much of anything to build a powerful brand. Take Rolex watches. What do you know about Rolex except that it’s an expensive Swiss watch? The ‘best’ expensive Swiss watch.

Do you know where Rolexes are made? How they are made? What makes them different from less-expensive Swiss watches? As a matter of fact, do you know anything about Rolex except that it’s the best expensive Swiss watch?

Probably not. Nor do you need to know anything more than that. That’s the Rolex position. The best expensive Swiss watch.

A mind is much too small a container to hold all the marketing messages that companies are trying to stuff into it. Trying to communicate more information than is necessary is self-defeating. It can actually reduce the effectiveness of a marketing program. Furthermore, it can also reduce the mystique of the brand.

The primary function of a marketing organization is to position the brand. That’s the goal that should always be kept in mind.

It can be shocking to learn how little information the average prospect holds in his or her mind. Take Peter Drucker, for example. What do you know about Peter Drucker?

To most management people, Peter Drucker is a management guru. The ‘best’ management guru. But what do you know about his principles. What does he have to say about managing a business?

‘Aaaah . . . he’s a guru,’ the average manager might say. And what else does that person need to know to hold Peter Drucker in an exalted position in the mind? Nothing.

Actually, knowing too much about a person’s beliefs hurts the positioning process. Politicians have learned that principle well. If a politician took a position on every issue in an election, he or she would be bound to offend everybody in the process. And possibly lose everybody’s vote.

‘Better ingredients, better pizza,’ says Papa John’s. As a result of this brilliant positioning, Papa John’s has become the third largest pizza chain in America and one of the fastest growing.

Do you know what the better ingredients are? Do you know that Papa John’s uses fresh crushed tomatoes, real mozzarella cheese and distilled water in the preparation of its pizzas? Most people don’t. Does it matter? Probably not. Better ingredients, better pizza is enough to position Papa John’s a step above Pizza Hut and Domino’s.

Look at your marketing materials. Are you trying to communicate or are you trying to position? There is a difference.

Look at the automobile communications problem, not from the point of view of the communicator, but from the point of view of the communicatee.

There are hundreds of car models. Is the prospect going to associate one of those car models (the 315-hp Infiniti FX45) with 39 different attributes. Obviously not.

As a matter of fact, can you even position a car model? For the most part, the answer is no. There are just too many to conveniently fit into the mind.

The best you can do is to position a car brand. And only a handful of car brands have done so. Volvo owns the ‘safety’ position. BMW owns ‘driving.’ And Mercedes-Benz owns ‘prestige.’ And Infiniti owns? Well, what do they own? Or what do they want to own? Or what can they own?

These are the questions that every marketing department should be asking itself.

The Anti-laws of Luxury Marketing #14

-Derrick Daye

14. Keep raising the average price of the product range

In traditional marketing, you launch a product at a skimming price, then when competition comes onto the scene, you drop the price. In luxury it is precisely the opposite. A luxury brand must always be seen to be restoring the gap, restratifying, and as such it is acting as a visible agent of meritocracy.

A brand that cannot grow in volume and profitability other than by launching accessible products shows that it is no longer part of the luxury market. For instance, the fact that Mercedes has launched its super top-of-the-range under a different brand name (Maybach -- pictured above) reveals its presumed change of strategy: Mercedes from now on will be the maker of regular and premium automobiles, and the luxury range now goes under the Maybach brand, no longer Mercedes.
This means that while it may be necessary to have a few introductory products for the benefit of new clientele, having a luxury brand signifies a permanent shift in vision. Its growth does not rely on running after less well-heeled clientele but on taking advantage of the global economic growth that is creating thousands of new rich and very rich people throughout the world. These people are looking for a way to reward themselves (through products) and for a symbol (being the brand) of their accession to the ‘Club’, having made sure that it is a closed ‘Club’ – they wouldn’t want to mix too much with the wrong kind of people, after all! That is why the average price needs to keep going up – while of course at the same time increasing the value element of the product or service.

China Embracing English Names

-Steve Rivkin

Go global, young man.

That was the advice from Harvard’s Theodore Levitt when his seminal article, "The Globalization of Markets," was published in 1983. Since then, globalization has become a dominant theme of international business strategy.

It really is a neat idea: You drive a global brand with one big differentiated idea, everywhere from Akron to Auckland. Your brand gets recognized on the shelf by travelers and natives alike. A single name lowers production and manufacturing costs.

That’s normally what we mean by a “global name.” But in China, the younger generation is giving globalization a provocative new spin. As China talks of opening itself to the world, its young people are presenting themselves to the world by selecting new names in English.

The Associated Press reports that some college students have named themselves for Western brands, calling themselves Kodak, Chanel, Levi or Marlboro. A young lady originally named Wang Wei, a hotel marketer, tried on “Linda” and “Vivienne” for a better fit, then found her unique solution in the aisle of a supermarket. She is now Vanilla Wang. “In China,” says Vanilla, “it really helps to have a name people remember.”

Young Chinese find inspiration in a popular book by Wang Xeujun about choosing English names. The author observes, “More Chinese are leaving China, more Chinese are coming into contact with foreigners in China. And English is the world’s language. So a beautiful or unique English name gives you access to all the countries of the world.”

One Chinese-born, American-based translator reminds us that English is taught as a second language in China and Taiwan, and teachers also encourage students to pick English names. (Many will change their English names many times before settling on one.)

Zhao Tianqi is an artist working in wood-block prints. She is now Colour Zhao (with the added dash of the British spelling). Wang Lei is a video editor who translated his birth name and now works in Beijing as Thunder Wang. Among his contemporaries are Harlem Zhao and Echo Wang.

The Chinese place much greater emphasis on the meaning of names than most English speakers do, according to analysts. Many foreign words are assimilated into Chinese with great care. America is “meiguo” (beautiful country). Elvis is “maowang” (king cat).

Neuroscience and Brand Connections

-Derrick Daye

As neuroscience opens the brain to marketers' scrutiny, the electrical flashes that arise in response to stimuli make it increasingly apparent that what drives purchase decision making is actually a primal mechanism of the mind -attachment. This signal of a potent emotional attachment is the foundation for brand success. It's a form of primal brand magic, built on a near-mythical brand story that unconsciously transports one from the mundane to the imaginational, transforming our inner world and inspiring us to buy.

A brand experience has the potential to actually transform our brain chemistry. The experience of a product/service and its messaging, can be transformational in a sensory way and emotionally. More importantly, at the end of a satisfying product experience, our feelings have been transformed into a strong emotional attachment (magical/mystical bond) that endures until proven otherwise.

Fostering magical brand connections is particularly important in this "new normal" era of consumer frugality because an emotional connection creates consumers loyalty. But how can CMOs begin the quest for the
magic brand grail. These three keys will unlock the doors to begin the journey.

1. Understand the "right brain" of your category.
"Brand Marketers always have a deep understanding of their category's "left brain" - the numbers and functional benefits. The "right brain" attributes often are unexplored. What visual, sensorial and emotional benefits can your brand deliver and own - that work together with your product's attributes - to create an unbreakable bond that turns your consumers into brand enthusiasts? This can start with highly projective techniques like portrait building, present and future brand scenarios, and story creation with all of the internal teams that have a stake in the brand: marketing, design, R&D, senior management and your various agencies.

2. Understand the sensorial and emotional palette of your audience.

A lot of research is still left brain, Q&A focused. To unveil the magic in your brand, using highly right brained projective techniques – like image sorts, drawing and writing - can get at the more elusive sensorial and emotional attributes that are important to YOUR consumer and relevant, meaningful and inspiring in YOUR category. A great example is the method brand, which disrupted the established home cleaning market with a "detox your home" message and a visual position that brought that message to life using simple, clean, highly sensorial shapes and colors that intrigue, inspire and motivate one to buy.

3. Create a Visual Position.

Brand positions are often created in words, though people experience brands primarily visually. BUT...a brand's packaging, advertising and overall presence in the world starts with visual symbolism, not words. And unlike our pets at home, who have heightened senses of smell and hearing, humans are primarily sight driven. 70% of our sense receptors are in our eyes and 80% of what we learn about the world comes to us visually...yet most brands do not have a visual position that brings the written positioning and story to life.

Visual positioning defines the symbolic territory a brand can occupy to create distinction and often includes: overall personality, color and texture palettes, movement (upward like Gillette Mach3 or explosive and outward like Gillette Fusion), energy and other qualities that will unleash your brand's magic.

When To Launch A Second Brand

-Al Ries

Whenever a fashion or technological change occurs, an existing brand, no matter how dominant, faces a choice.

Should the brand be ‘stretched’ to encompass the new fashion or technology or should the company launch a second brand? If the change is significant enough, the better answer is almost always ‘launch a second brand.’

* The rise of casual clothing in the workplace led Levi Strauss to introduce Dockers which has become a billion dollar worldwide brand.

* The success of Mercedes-Benz and BMW led Toyota to introduce Lexus which has become the largest-selling luxury vehicle in the U.S.

* The success of Makita, a Japanese professional-tool brand, led Black & Decker to introduce DeWalt which has become the dominant brand in the category.

* The success of Costco led Wal-Mart to introduce Sam’s Club which is now neck and neck with the category leader.

When it comes to launching successful second brands, you rapidly run out of case histories. By far the majority of marketers prefer to expand their core brand to cover the new category. With mediocre success. Some examples:
* IBM’s failure to extend its mainframe dominance to the personal computer field.

* Xerox’s failure to extend its copier dominance to the computer field.

* Polaroid’s failure to move its brand out of instant photography.

* Kodak’s failure to duplicate its film photography success in the digital field.

Companies that shy away from second brands usually end up paying a high price for their insularity. Take Visa U.S.A. and MasterCard International. So far, it has cost the two credit card companies $3 billion with possibly more financial bad news to come.

A number of years ago, the two credit-card giants decided to get into the debit-card business. It would be hard to find two categories that are more competitive. Credit cards are the enemy of debit cards. And visa versa.

So what do Visa and MasterCard do? They put the same names on both cards. Visa on credit cards and Visa on debit cards. And the same for Master Card. To compound the problem, both card companies force their retailers to ‘honor all cards.’ In other words, if a retailer accepts a Visa credit card, the retailer must also accept a Visa debit card.

Then they put the debit card charges through the same signature-based system as the credit card charges, forcing the retailer to pay five to ten times as much in fees as they would if the customer has used one of the alternate debit card networks such as Star, Pulse or NYCE, which use a personal identification number, or PIN-based system.

In the biggest antitrust settlement in history, Visa U.S.A. agreed to pay $2 billion and MasterCard International $1 billion to a group of retailers led by Wal-Mart. Their contention: ‘Honor all cards’ was an illegal tie-in scheme.

Why not launch a second ‘debit’ brand to complement the Visa or MasterCard ‘credit’ brands? It’s the chicken-and-egg problem, explained one Visa executive. Visa would have had to start a new brand from scratch, one not yet issued by any bank or honored by any merchant. ‘But why would you possibly have done that?’

We can think of three billion reasons. But more important than the short-term financial losses at Visa and MasterCard are the long-term implications of their ‘honor all cards’ strategy. By integrating its debit with its credit card system, Visa (as well as MasterCard) is locked into a slower, less secure and more expensive way of processing debit-card charges.

Actually MasterCard did try a second brand strategy, launching a PIN product called Maestro (not exactly a worldclass name). But Maestro was losing out to the Visa signature-debit card, so MasterCard reversed course and came up with their own signature debit card. Too bad. If they had had a little more faith in their strategy, today MasterCard would have been a billion dollar richer with a big lead in PIN-based debit cards over its Visa competition.

Like many marketing problems, the debit-card situation is complicated. How do you design a product that has benefits for all the players in the game? Consumers, retailers, banks and the card network itself? It’s not easy.

Here is where the power of conceptual thinking comes in. Categories tend to diverge, not converge. You may not know how, when or where that divergence will take place, but you can be sure that ultimately it will. Two different categories, credit cards and debit cards, will become more and more different and there’s nothing one company can do about it. Trying to keep them together under the same brand name is an exercise in futility.

Never fight a trend. As time goes on, there’s always room for new brands. If you don’t launch a second brand, you can be sure that some of your competitors will.

The Anti-laws of Luxury Marketing #13

-Derrick Daye

13. Raise your prices as time goes on in order to increase demand

In the standard market model, when the price falls, demand rises. With luxury, the relationship is reversed. In the 1950s, Krug was one of the smallest champagne houses. Its champagne had an excellent reputation, was adored by the great artists and performers of the day, and particularly appreciated in Great Britain. In the late 1950s Moët & Chandon, on finding that Krug was being rationed (the product’s objective rarity made that a necessity), launched its new product that was destined to upset the status quo radically. Dom Pérignon was introduced at a price three times higher than that of Krug. In order to speed up the symbolic acceptance of Dom Pérignon, a quantity of it was dispatched to the Queen of England, and in 1961, in the very first film of the James Bond series, Agent 007 drank nothing but Dom Pérignon.

How was Krug to respond to that in order to regain its position at the top of the champagne hierarchy?

-Should it do nothing, believing that the superiority of its product would speak for itself – the truth being in the glass?
-Or, should it imitate Dom Pérignon, and at the same time improve it (a Lexus-type strategy)? This seemed an impossible approach for a house that had been in existence for 160 years, managed by the same family for five generations, and conscious of its mission.
The brilliant stroke – or perhaps one should call it Krug’s strategic daring – lay not in producing an exceptional vintage, a very top-of-the-range champagne that would justify the price put on it, but to hoist its prices substantially across the range, starting from the lowest; within 10 years it went up from $19 to $100 a bottle. At the same time, in a move to create a product of great rarity from one small corner of the vineyard, Clos du Mesnil was born. This champagne takes 10 years to come to fruition, taking into account the time it takes to prepare the land, bring in the harvest and allow for a period of ageing; nowadays, a bottle of Clos du Mesnil fetches a cool $700+.

Krug’s revival is an excellent illustration of the following anti-law of marketing: when it comes to luxury, price is a mere technical detail. As soon as price becomes an issue again in the classic price–demand relationship, we’re no longer dealing with luxury, even if the product bears the name of a luxury brand. Examples abound in every sector: it is by raising prices – and, of course, by reinvesting these additional profits in quality and in advertising – that a brand can stay in the world of luxury.

To live in luxury you have to be above others, not be ‘reasonable’, in both senses of the word. A reasonable price is a price that appeals to reason, and therefore to comparison. Now, recalling our anti-law no. 1, luxury is ‘superlative’, not ‘comparative’. To be reasonable is also to reduce the object to its tangible dimension and to deny the intangible.

By increasing prices you lose the bad customers, but now you suddenly become dazzlingly attractive to people who would previously not have given you a second glance.

The final point of this policy of systematically raising prices is that it gives the whole company a sense of responsibility. Price is a decisive factor in bringing about a change in mentality; indeed, we see quite profound internal changes in mentality, as every person in the company in their own way is constantly trying to find new ways of creating more value for the customer. It’s all a matter of living up to the price.

Innovation: Pathway To Brand Success

-Brad VanAuken

I am a huge advocate of innovation. Some of the most successful brands the world has witnessed are the result of innovation. Think Apple iPod or Toyota Prius or eBay or Amazon.com or even my hometown grocery chain, Wegmans. They have all experienced uncommon success based on innovation.
First, let’s define innovation. Innovation is the application of novelty to create value.

What leads to innovation? Here is my short list (based upon several experts’ extensive research in this area):

• A penchant for experimentation and action over analysis
o Wegmans has succeeded over the years by constantly testing new concepts in a few stores and then, if they are successful, integrating them throughout their other stores.
o Organizations need to play to win rather than play not to fail.
• The realization that in many industries, approximately 70% of innovations are developed by users, not the firm bringing the product to market (from research done by Professor Eric von Hippel at MIT)
o Harley-Davidson executives go on HOG Rallies with their customers taking notes and asking questions about accessories, bike modifications and other user-added features. They then debrief and act on what they discovered upon returning to their headquarters. • The importance of connectivity. An enterprise has a much higher success rate if it is interconnected with the widest variety of potential idea sources, suppliers, business partners, customers, universities, governmental agencies, etc.
o In their book, Co-Opetition, Adam M. Brandenburger and Barry J. Nalebuff convincingly make the point that enterprises that view other organizations and entities as potential partners rather than potential competitors are more successful in the marketplace.
• Build on your strengths, don’t waste your efforts on hiding or compensating for your weaknesses. Identify your assets and amplify them.
o Numerous municipalities have ignored their inclement weather (either during the winter or the summer) and built on their unique strengths to attract businesses, residents and tourists
• Envision the positive outcome that you seek.
o World class athletes make use of creative visualization. In their minds, they relentlessly visualize their ultimate success.
• Be optimistic and constantly work until your optimism is justified.
o Henry Ford’s first two automobile companies failed.
o In baseball, a batter doesn’t improve by waiting for the perfect pitch. He improves by hitting -- again and again and again.

Innovation is fun. It is energizing. It makes you want to work harder. It can make the world a better place in which to live. And it can lead to exceptional business results and brand success. I wish you an innovative future.