Archive for the ‘advertising’ Category

You know you are the design leader when…

Wednesday, July 16th, 2008

I have a MacBook Pro. Since I got it I have realized how often the machine’s image is used in ads promoting web sites, software, etc. Even if it’s software that runs only on Windows! [Keep your eyes open when you're reading a magazine, and you'll see the MacBook Pro's distinctive features--silver case, elongated oval button, CD slot.]

Similarly, if you have a mobile web application, you include an iPhone in the advertisement, like this one here:

So this is the definition of design leadership. When your product is used as background to feature another product, you’re it. And right now in consumer electronics and PCs, that’s Apple.

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Taste trumps distribution (finally) in the beer market

Wednesday, February 6th, 2008

Distribution prowess has ruled the US beer market at least since the ’70’s. (I recall a Harvard case talking about the downfall of Schlitz, focusing on Anheuser-Busch’s building a nationwide distribution network.) As a result, most consumers have had to scan shelf after shelf of Bud Light and Michelob Ultra to find a good-tasting, fuller beer.

How things have changed. The craft beer movement, starting with Sierra Nevada in the ’70s and blossoming with Samuel Adams in the ’80s, is now a full-fledged market trend. People are buying Sea Dog, Cape Cod Beer, Yuengling, Brooklyn Lager, and hundreds of other small brands. Anheuser’s market share is down, despite deals to distribute Stella Artois and Beck’s.

And now, finally, the distribution monopoly that helped Anheuser crowd out rivals in the past is crumbling. In today’s Wall Street Journal, David Kesmodel reports that distributors who had signed exclusivity agreements with A-B in exchange for promotional and cash incentives are beginning to turn away from those agreements (”Beer Distributors Want More Than One Best Bud” link – $$). Writes Kesmodel:

In recent years, some of Anheuser’s 560 independent distributors became frustrated as craft brands such as New Belgium Brewing Co.’s Fat Tire Amber Ale surged in popularity and competing distributors snatched them up. Often, the distributors adding such high-margin brews were the same ones that peddled the beers of Anheuser’s top rivals, SABMiller PLC’s Miller Brewing and Molson Coors Brewing Co.

Anheuser wholesalers “are realizing that we have made the competition stronger by basically forfeiting these brands to them,” says Chris Monroe, vice president of D. Canale Beverages Inc., a Memphis, Tenn., distributor that carried only Anheuser products until last fall.

It’s a total reversal of where we’ve been. For years, large beer companies have relied on investment in non-product-related marketing, such as advertising and distribution, for sales growth–traditional “push” marketing techniques. Now, customer demands for better tasting, more-distinctive product are forcing distributors to carry what customers want.

Sounds like progress to me.

(Photo courtesy of Cape Cod Beer)

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Super Bowl Stories

Monday, February 4th, 2008

People who aren’t football fans tune into the Super Bowl to watch the advertisements. You’ve probably seen them, and read about them, already. The talking stain, Shaquille O’Neal as a race jockey, and so forth.

I was fascinated by another ad, part of a fascinating project by the National Football League which gathered stories from over 200 NFL players, and had fans vote on their favorites. The winner was made into a 60-second film, broadcast during the Super Bowl. It’s a narrated story, partially dramatized, about an NFL player who meets a large man working at the grocery store. He convinces the man to try out for the college football team. You’ll have to watch the video for the rest of the story.

The final product is excellent. But it’s also interesting to view the original story, told one-on-one by the Houston Texans’ Ephraim Salaam, and see how it changed in the more polished retelling. (Sadly, as of October 2009 the NFL has taken down the link to the original story. You’ll have to take my word for it; it was better.)

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Re-branding: an oxymoron?

Thursday, December 13th, 2007

I recently saw a to-do list on the wall at a company’s marketing department. At the top of the list was “re-branding.” And I’ve been thinking about that for some days. What is re-branding?

At companies I’m familiar with, it means redoing the logo, new taglines, new color schemes for the website, new ad campaigns, etc. But the more I’ve thought about that to-do list, the more I’ve come to think that re-branding is a misnomer for this type of activity.

The outward characteristics of a brand don’t mean much if they don’t reflect the intrinsic characteristics of the company and its offerings. An old, staid company with a sleek modern logo hasn’t added anything to its brand except perhaps confusion. It’s hard to put into a formula, but I’d say something like

Brand = Company History + Customer Perceptions + Noncustomer Perceptions + Impact of (Advertising & Publicity)

The re-branding exercise most directly affects the latter, and, over time, noncustomer perceptions as well. It can’t contradict company history or customer perceptions, so a complete reinvention of the brand is not possible.

Assuming equal weight to each, “re-branding” as it’s understood by marketing people can alter your brand image up to 25%. It, of course, has the advantage that it can be executed by the marketing department–without the challenge of rewriting history and changing customers’ perceptions.

So don’t call it “re-branding.” Call it “new logo,” perhaps, or “new look.” And be careful that your re-branding exercise doesn’t distract you from the long, hard work of truly strengthening your brand. That takes more than the marketing department to do.

It takes everybody.

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New iPhone advertisement a remarkable example of storytelling

Monday, October 22nd, 2007

I saw a new iPhone ad this weekend a dozen or more times. In it, an airline pilot tells how by using his iPhone he helped his flight avoid a three-hour weather delay and got his happy passengers to their destination on time.

(You can view the commercial on Apple’s website here. You’ll need Quicktime to view.)

This is an outstanding example of storytelling. There is a simple, compelling, 30-second narrative, related by the person involved. As he talks, he demonstrates how he used the iPhone to check the weather (artfully using many of the distinctive features of the phone, such as the display that reorients itself as you turn the phone and the zoom via touching). I can’t imagine a more concise, effective way of helping people understand just what the phone can do.

It’s the precise opposite of the glitzy iPod ads featuring wildly dancing silhouettes, which look great, but don’t convey much.

Simple, compelling, engaging. Now I want one.

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Perhaps advertising isn’t the money pit people thought it was

Friday, July 20th, 2007

The July-August Harvard Business Review contains a provocative article from Prof. Leonard Lodish of the Wharton School of Business and Carl Mela of Duke University on the decline of product brands (”If Brands Are Built Over Years, Why Are They Managed Over Quarters?“).

We’ve looked at the phenomenon before from the private-label goods perspective, Lodish and Mela approach the problem from a different angle: rather than blaming Wal-Mart and other retailers for squeezing the value out of branded products by their price-cutting philosophy and private-label strategies, they fault the brand managers themselves, who favor price promotion strategies—-which bring a rapid response from customers—-over brand-building activities, such as advertising, which only work over the long term.

By examining data on baseline sales (i.e., sales levels without promotions), and performance during promotions periods, they document persuasively how certain brands fall into a spiral of commoditization by relying on discounted sales for an increasing percentage of their sales volume. Customers learn to stock up when the product is on special, and their perceived value of the product declines accordingly. Brand equity is eroded.

[Why do brand managers prefer promotions? Lodish's and Mela's reason, perhaps good fodder for another post, is that purchase data is useful immediately, while brand equity information is less tangible and takes years to identify trends.]

By contrast, companies who hold firm on price and invest in long-term brand-building activities, such as advertising, development of new distribution channels, and product innovation (exhibit A: P&G), show higher baseline sales levels and therefore more unit profit per sale.

Think it can’t be done? Clorox bleach (a product ripe for commoditization if I’ve ever seen one) was able to raise retail prices 30% and turn a trend of revenue decline into growth by cutting promotions budgets and increasing advertising.

So, television networks, radio stations, newspapers: take heart. Perhaps marketers will fall in love with advertising all over again.