Several readers paid me a very meaningful compliment recently. They asked me to compose a post about what qualities a good manager needs to be effective. So, here is my list. None of the items are probably original in your eyes but you may not have seen this mix of attributes before. Here goes:
1) Provide constant encouragement—this to me has to be the number one attribute that a strong manager must exhibit every day. All of us need encouragement and most of us do not get anywhere near enough in our private lives or on the job. I once worked for and with a man who was wonderful with entry level people. He told them what bright futures both they and the industry had. But his senior team never received the slightest hint of encouragement. I asked him about it and his response was that if he was paying someone $100,000+ per year they did not need encouragement. Smiling, I countered with something like “aren’t the senior team people, too.” He truly did not get it. I made it a point to encourage him especially after new business losses (he had many as all of us do). He really seemed to appreciate my pep talks but could never seem to do it to many who needed it the most. Encourage everyone above and below you. We all crave it and need it.
2) Manage by walking around—I always did this well. For nearly 30 years, I made it a point to talk to every team member every day. I did not meddle but I tried to get the pulse of what was happening. After a while, people would come to me for help or suggestions. Too many managers hid behind e-mail and do not communicate well. E-mail is wonderful but face to face meetings especially informal, ad hoc ones are far more valuable. So, get off your butt, leave your comfortable office and talk to the team. You will learn a lot.
3) Hire people who read—Ask people whom you interview what they have been reading lately. Often the best hires are those who are well read and continue to stay current. They stay up to date on the fast moving trends in our business and will feed you articles and film clips that you need to see. It is like having a private research service down the hall. You also have people to talk to. It can get very lonely being a manager of people who merely do the letter of the job but have no real interest in what is going on outside their tiny corner of the world. Staffers who read a lot make for a more interesting workplace and you will get some great ideas from them. Be very wary of people who say that they are too busy to read material that you ask them to review. If it is a single mom with three kids, cut her some slack. She may be a living saint. Anybody else, not having time often means that they are watching too damn much television or addicted to Facebook.
4) Hang on to the best people—stand on your head to keep the key staffers. They make you look good and hold things together and give the whole firm a chance to grow. These days not many can hold you up for more dollars as they have few places to go but if you create a good environment they will want to stay.
5) Don’t ask people to do things that you will not—I had a few bad experiences as a youngster in the business. One jerk would come to my desk around 4pm with a pile of assignments. He would say “have this completed by 9:30 tomorrow morning” (that was when he showed up). Another would call me from a golf outing asking me why I had not put more money with the media vehicle that had taken him to Florida or simply given him a Wednesday off at posh country club. I vowed that I would never behave that way and never did.
If my team was busy, I was busy too. It cost me some late nights and too many Sundays at the office but I don’t think that anyone resented me for the amount of work that they did relative to me. Years ago, in Texas, I ran into our Chairman on Friday night as we were both leaving the office. He asked about my weekend plans. I told him that I was coming in with several media staffers to work on a plan that was due Tuesday. At noon Saturday, he showed up and talked to everyone and people were thrilled. He then took off and we continued to grind. An hour later he returned with a gourmet Chinese spread for all of us. He thanked everyone for giving up their weekend and stayed to help collate copies with the weary team later in the day. The man was a leader and a thoroughly decent human being. He could not write a media plan if his life depended on it but he won everyone’s respect that day and still has mine.
6) Listen—when a staff member is talking with you look up from your keyboard, put down the phone, look them straight in the eye and listen! People are trying to tell you something. Give them your attention. It will pay you rich dividends.
7) Praise in public; reprimand in private—sadly, I have seen too many senior executives humiliate someone in front of others. Save the dressing downs for a private session. They may deserve it but you do not have to undercut them in front of their peers.
8) Hire the best—keep interviewing people even if you have no openings. You will have people leave and you always need to upgrade if you are to grow stronger as an organization. If a new person will not make your organization stronger, why bother?
9) Be very nice to nerds—the odds are overwhelming that you will end up working for one some day!
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Wednesday, September 22, 2010
Thursday, September 16, 2010
America's Discount Culture and the Future of Brands
We Americans love to shop and we love to buy things on the cheap. In recent years this has become an integral part of the fabric of life in the United States. Back in 1956, only about 6% of merchandise was purchased on sale. A lot has changed since then.
To look at our discount culture clearly, a good angle to view it from may be by taking a careful look at outlet malls. These out of the way entities are growing globally; you see them popping up in Europe, Japan, even Hong Kong. But, it is in the United States where the approximately 300 outlet malls are having the biggest impact.
You might be surprised to learn that they are not a fairly recent phenomenon. The earliest outlet location that I could find goes back to 1936 which was right in the middle of the Great Depression. In my home region of Southern New England, Anderson-Little, a mid-ranged purveyor of men’s suits opened the first outlet store. It was located a long distance from existing stores and they sold “seconds” which were items that were slightly defective in some way. Back in 1936, there were no interstate highways and not nearly as many people drove so there was little danger that their outlet location would cannibalize sales from their mainstream stores.
Today, outlet malls are a destination venue for 55 million + Americans each year. What they lack in convenience is a perceived big trade off in price. Most are bare bones in appearance and are full of serious shoppers. Conventional malls have issues with teenage “mall rats” who spend little money to speak of put roam around often in large groups on weekends. Seniors, too, haunt malls. It is not unusual to see them doing measured walks around malls in groups. This is especially prevalent in the South and Southwest. The outlet mall patrons, on the other hand, appear to be 100% shoppers.
Out west going to an outlet mall can be a major event. Busses often take a fair proportion of the citizens of small towns to an outlet mall 200-300 miles away. The group shops till they drop, meet for dinner in a large private room, stay in a local motel, shop the next morning and sleep on the long ride home. Most data that I have indicates that shoppers at outlet malls spend 80% more at a bare bones outlet mall than at a fully loaded regional mall.
Whenever one visits an outlet mall, you can get the vibes of a quasi Vegas mentality if you listen a bit to the shoppers. Invariably, somehow will say how she “beat the house” on a spectacular deal on some expensive brand name products. Well, you do not have to be particularly savvy to know that in Las Vegas the house always wins over time. I would say the same is true with outlet malls.
Originally, outlet stores were like the earliest example from 1936. The products were perfectly serviceable but slightly defective in some way. A great example was Coach. The owner sent his children out to Long Island to run their first outlet store. They had big problems early on as they almost always sold out 100% of the stock very quickly even though none of the outlet merchandise was perfect. As time went on they and many other players shifted gears on the nature of outlet store merchandise.
Today, many retailers sell merchandise at their outlet stores that is explicitly produced for exclusive sale at the outlet locations. The list includes Ann Taylor, Brooks Brothers, Coach, Donna Karan, The Gap, and many more. A very clever young shopper observed to me that if you look closely you can often tell the difference quickly. She commented that some items are from the actual retail store and of the highest quality but the goods are a few years out of style. Or, the colors are a bit different even zany. And, the sizes are either tiny or huge. The rest of the stuff that 85% of the people would want is of lower quality and specifically manufactured for the outlet store.
I have noticed different tags. Until recently, the outlet manufactured goods often had an “F” for factory outlet on them. Today, price tags are usually far more discreet.
Also, look out for “reference pricing”. That suit listed at $900 and now selling for $250 may have been produced exclusively for the outlet mall. It was never offered anywhere at $900 but your perception is that you are getting a world class bargain.
Even mainstream discounters are getting in to the act. Wal-Mart and Target often have electronic gear, lawnmowers, grills, etc. with brand names but a comment on the tag says made to “Wal-Mart” specifications. You are not getting a Webber you are getting a Wal-Mart grill. The brand name has really lost all meaning in cases like that.
So what is going on here? All of us have spent our careers either selling to or working with people who ferociously defend their brands against competitors. And, they bore you to tears talking about the integrity of their brands.
And, what of the customers who love going to the outlets and spend a lot there?
Here are my theories which are largely personal as it is hard to find a lot of data on this topic:
1) The outlet mall customers get a lot of pleasure from buying there. Going to the outlet mall is an event and a major event for many in the Rocky Mountain and Central time zones. Even the smartest shoppers feel that they are getting something close to major brands and the accompanying quality when they shop there.
2) The major players are not stupid and they have to study income data and demographic data as much as all of us in communications. The blue collar work force has not really received a raise in 30 years when you adjust incomes for inflation. The middle class, as we know it, is shrinking. Since 2007, it is safe to say that maybe 7-10 million have slipped out of the middle class. And poverty levels released today from the Census Bureau put us at the highest level in 40 years.
So are the retailers just facing facts? They merely sell the dream. The merchandise is not nearly as good as their conventional stores but people perceive that they are getting the original brand or something close to it. One retailer gets as much as 80% of their sales and I would assume most of its profits from its outlet store base.
Long term, this would seem to dilute the value of the brands significantly. But, if our wealth as a nation is slipping relative to the emerging eastern powers perhaps the outlet gambit is a clever way to keep the music going in people’s minds for a bit longer. If “most people truly lead lives of quiet desperation” as Thoreau put it, then the façade of gentility at outlet malls could have quite a long run.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
To look at our discount culture clearly, a good angle to view it from may be by taking a careful look at outlet malls. These out of the way entities are growing globally; you see them popping up in Europe, Japan, even Hong Kong. But, it is in the United States where the approximately 300 outlet malls are having the biggest impact.
You might be surprised to learn that they are not a fairly recent phenomenon. The earliest outlet location that I could find goes back to 1936 which was right in the middle of the Great Depression. In my home region of Southern New England, Anderson-Little, a mid-ranged purveyor of men’s suits opened the first outlet store. It was located a long distance from existing stores and they sold “seconds” which were items that were slightly defective in some way. Back in 1936, there were no interstate highways and not nearly as many people drove so there was little danger that their outlet location would cannibalize sales from their mainstream stores.
Today, outlet malls are a destination venue for 55 million + Americans each year. What they lack in convenience is a perceived big trade off in price. Most are bare bones in appearance and are full of serious shoppers. Conventional malls have issues with teenage “mall rats” who spend little money to speak of put roam around often in large groups on weekends. Seniors, too, haunt malls. It is not unusual to see them doing measured walks around malls in groups. This is especially prevalent in the South and Southwest. The outlet mall patrons, on the other hand, appear to be 100% shoppers.
Out west going to an outlet mall can be a major event. Busses often take a fair proportion of the citizens of small towns to an outlet mall 200-300 miles away. The group shops till they drop, meet for dinner in a large private room, stay in a local motel, shop the next morning and sleep on the long ride home. Most data that I have indicates that shoppers at outlet malls spend 80% more at a bare bones outlet mall than at a fully loaded regional mall.
Whenever one visits an outlet mall, you can get the vibes of a quasi Vegas mentality if you listen a bit to the shoppers. Invariably, somehow will say how she “beat the house” on a spectacular deal on some expensive brand name products. Well, you do not have to be particularly savvy to know that in Las Vegas the house always wins over time. I would say the same is true with outlet malls.
Originally, outlet stores were like the earliest example from 1936. The products were perfectly serviceable but slightly defective in some way. A great example was Coach. The owner sent his children out to Long Island to run their first outlet store. They had big problems early on as they almost always sold out 100% of the stock very quickly even though none of the outlet merchandise was perfect. As time went on they and many other players shifted gears on the nature of outlet store merchandise.
Today, many retailers sell merchandise at their outlet stores that is explicitly produced for exclusive sale at the outlet locations. The list includes Ann Taylor, Brooks Brothers, Coach, Donna Karan, The Gap, and many more. A very clever young shopper observed to me that if you look closely you can often tell the difference quickly. She commented that some items are from the actual retail store and of the highest quality but the goods are a few years out of style. Or, the colors are a bit different even zany. And, the sizes are either tiny or huge. The rest of the stuff that 85% of the people would want is of lower quality and specifically manufactured for the outlet store.
I have noticed different tags. Until recently, the outlet manufactured goods often had an “F” for factory outlet on them. Today, price tags are usually far more discreet.
Also, look out for “reference pricing”. That suit listed at $900 and now selling for $250 may have been produced exclusively for the outlet mall. It was never offered anywhere at $900 but your perception is that you are getting a world class bargain.
Even mainstream discounters are getting in to the act. Wal-Mart and Target often have electronic gear, lawnmowers, grills, etc. with brand names but a comment on the tag says made to “Wal-Mart” specifications. You are not getting a Webber you are getting a Wal-Mart grill. The brand name has really lost all meaning in cases like that.
So what is going on here? All of us have spent our careers either selling to or working with people who ferociously defend their brands against competitors. And, they bore you to tears talking about the integrity of their brands.
And, what of the customers who love going to the outlets and spend a lot there?
Here are my theories which are largely personal as it is hard to find a lot of data on this topic:
1) The outlet mall customers get a lot of pleasure from buying there. Going to the outlet mall is an event and a major event for many in the Rocky Mountain and Central time zones. Even the smartest shoppers feel that they are getting something close to major brands and the accompanying quality when they shop there.
2) The major players are not stupid and they have to study income data and demographic data as much as all of us in communications. The blue collar work force has not really received a raise in 30 years when you adjust incomes for inflation. The middle class, as we know it, is shrinking. Since 2007, it is safe to say that maybe 7-10 million have slipped out of the middle class. And poverty levels released today from the Census Bureau put us at the highest level in 40 years.
So are the retailers just facing facts? They merely sell the dream. The merchandise is not nearly as good as their conventional stores but people perceive that they are getting the original brand or something close to it. One retailer gets as much as 80% of their sales and I would assume most of its profits from its outlet store base.
Long term, this would seem to dilute the value of the brands significantly. But, if our wealth as a nation is slipping relative to the emerging eastern powers perhaps the outlet gambit is a clever way to keep the music going in people’s minds for a bit longer. If “most people truly lead lives of quiet desperation” as Thoreau put it, then the façade of gentility at outlet malls could have quite a long run.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Thursday, September 9, 2010
Apple, Google, The Elite, and the Future of TV
In the last week or so, both Apple and Google have introduced their new TV products. Briefly, they seem to be making the step we have all talked about for years—your TV and your computer will tend to merge. Both promise the ability to call up statistical data from your computer about a player or a team while you watch a football game on conventional TV, for example. There are hundreds of applications some of which are quite sophisticated. My only surprise is that Google has said that they currently have no plans to develop their own programming. Google TV is a new platform that appears to meld the Internet almost seamlessly with TV. You will be able to search by name for a specific movie or a TV show and you can watch it on cable or the web. You will be able to customize your own home screen for a specific web series, programs, or cable channel. Apple says that they will charge $99 for their version; Google has not gotten specific yet. It is hard to tell a clear difference between the two but early on it seems that Google has fewer restrictions and is more of an open source platform than Apple or other smaller players in that space.
Prior to these announcements, I was noticing a trend. Yes, fragmentation of audience was still continuing. Several writers talked about how young upscales often were not subscribing to cable or a satellite service. They got by with Hulu.com, streaming video online, and a heavily used Netflix subscription. I have pursued this and found that it is absolutely true but only for a VERY small number of people. They tend to be young urban dwellers who graduated from elite schools. They are very busy with their careers and social life and do not watch enough TV to justify a $100 monthly subscription fee. Last year, I joined them for a few months and found that 90% of my needs were covered with a similar approach. Students at the best schools are also often TV free but not video starved.
Within a larger group of young affluents, some of the young men said that ESPN (and Fox Sports) were the only thing that really kept them with cable or satellite. If they could buy select games a la carte, the subscription service would get the heave ho. Also, many say that they are buying plugs at Radio Shack that allow them to take Hulu and other on-line content and view it on their larger screen TV sets. A few people have approached me about a la carte purchases. They would gladly pay a few dollars an episode for a favorite show or a specific game but have zero interest in a subscription given their very low level of viewing.
My point here is that many of the young people writing these alternative viewing reports and those actually living that way are a VERY small group. Most people in their 20’s do not live in Manhattan or San Francisco, get very well paid, work long hours, and are socially hyperactive. Every person who chooses a virtual non-TV life hurts advertiser supported TV and cable but there are probably only a few hundred thousand of them at best. And, with the emergence of Apple and Google TV the press will focus on the dogfight between the two titans. What you need to keep your eye on how many people that Apple TV and Google TV pick off and how many cut their viewing of advertiser supported broadcast and cable sharply as a result.
As I said several weeks ago regarding the future of cable, there is a great deal of inertia out there among the mature. They want to kick back in their LA-Z-Boys with a cold beer and they want instant access. Young people are a lot more open. They will toggle back and forth from TV to computer and will wait a moment or two to call something up. To save a $100 a month they will do a lot more especially when they are not heavy users of TV as we know it.
The cable and broadcast people have to be careful. Newspaper people a generation ago said that young people would endorse their product once they owned a home. They would want the daily paper on the front porch just as their parents did. It did not happen. Then they said they would give away the paper for free online and once readers hit a certain age, they would want the hard copy delivered daily. That did not happen either and many newspapers are fighting for their lives.
So, here is how I see it playing out. Both Apple and Google TV will make inroads across the board but do especially well with the young and particularly among the well educated. Some of the elite will stay away as now but will likely flirt with the free aspects of the Google product for a while. And, if you have lived a life without TV, will you suddenly get cable or satellite when you turn 30 or get married? Become a parent? Maybe, but I am willing to bet that an annoying number will not which will make advertising media planning and advertising sales more difficult.
The fragmentation in TV viewing that started 30 years ago will continue relentlessly as we go forward. But it will not destroy the broadcast advertising model overnight. The Apple and Google entries will however, speed up the process. Going into fall, 2011 planning media strategists may need to shift more weight out of traditional TV options that they had planned even a few short months ago.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Prior to these announcements, I was noticing a trend. Yes, fragmentation of audience was still continuing. Several writers talked about how young upscales often were not subscribing to cable or a satellite service. They got by with Hulu.com, streaming video online, and a heavily used Netflix subscription. I have pursued this and found that it is absolutely true but only for a VERY small number of people. They tend to be young urban dwellers who graduated from elite schools. They are very busy with their careers and social life and do not watch enough TV to justify a $100 monthly subscription fee. Last year, I joined them for a few months and found that 90% of my needs were covered with a similar approach. Students at the best schools are also often TV free but not video starved.
Within a larger group of young affluents, some of the young men said that ESPN (and Fox Sports) were the only thing that really kept them with cable or satellite. If they could buy select games a la carte, the subscription service would get the heave ho. Also, many say that they are buying plugs at Radio Shack that allow them to take Hulu and other on-line content and view it on their larger screen TV sets. A few people have approached me about a la carte purchases. They would gladly pay a few dollars an episode for a favorite show or a specific game but have zero interest in a subscription given their very low level of viewing.
My point here is that many of the young people writing these alternative viewing reports and those actually living that way are a VERY small group. Most people in their 20’s do not live in Manhattan or San Francisco, get very well paid, work long hours, and are socially hyperactive. Every person who chooses a virtual non-TV life hurts advertiser supported TV and cable but there are probably only a few hundred thousand of them at best. And, with the emergence of Apple and Google TV the press will focus on the dogfight between the two titans. What you need to keep your eye on how many people that Apple TV and Google TV pick off and how many cut their viewing of advertiser supported broadcast and cable sharply as a result.
As I said several weeks ago regarding the future of cable, there is a great deal of inertia out there among the mature. They want to kick back in their LA-Z-Boys with a cold beer and they want instant access. Young people are a lot more open. They will toggle back and forth from TV to computer and will wait a moment or two to call something up. To save a $100 a month they will do a lot more especially when they are not heavy users of TV as we know it.
The cable and broadcast people have to be careful. Newspaper people a generation ago said that young people would endorse their product once they owned a home. They would want the daily paper on the front porch just as their parents did. It did not happen. Then they said they would give away the paper for free online and once readers hit a certain age, they would want the hard copy delivered daily. That did not happen either and many newspapers are fighting for their lives.
So, here is how I see it playing out. Both Apple and Google TV will make inroads across the board but do especially well with the young and particularly among the well educated. Some of the elite will stay away as now but will likely flirt with the free aspects of the Google product for a while. And, if you have lived a life without TV, will you suddenly get cable or satellite when you turn 30 or get married? Become a parent? Maybe, but I am willing to bet that an annoying number will not which will make advertising media planning and advertising sales more difficult.
The fragmentation in TV viewing that started 30 years ago will continue relentlessly as we go forward. But it will not destroy the broadcast advertising model overnight. The Apple and Google entries will however, speed up the process. Going into fall, 2011 planning media strategists may need to shift more weight out of traditional TV options that they had planned even a few short months ago.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Sunday, August 29, 2010
Hostile Brands
From day one in courses in Marketing, Branding, New Product Development, Advertising, or Consumer Behavior students are always taught that a marketer must separate their product from the competition. Before launching a brand at a company, the old pros instruct the rookies that above all you must be able to differentiate yourself from other entries in your category. A new book, “Different”, subtitled “Escaping the Competitive Herd” (Crown Business, 2010) puts a whole new and important spin on that old marketing saw. The author, Professor Youngme Moon, teaches at the Harvard Business School.
Professor Moon’s thesis is that if you only make direct comparisons on features you may have the “perverse effect of making you just like everyone else”. It reminded me of John Hartford’s lyric from the late ‘60’s—“What’s the difference being different when it’s different now that looks alike”. Professor Moon suggests that we hop off the competitive treadmill and do something that is MEANINGFULLY different. Lots of people promise that with every campaign but the author gives a good roadmap for doing it.
The book cruises along pleasantly with simple logic and some nice examples. Then the reader encounters a chapter simply entitled “Hostility” which hit me like a freight train. Her argument is that some brands differentiate themselves meaningfully by admitting that they are not for everyone but rather for a small minority. Their advertising deliberately tries to polarize people as do their products. Some people love them but an equal or larger group hates them. She states that they do not lay out the welcome mat. “Hostile brands don’t market in the classic sense of the term; they anti-market.” She gives several great examples with my favorites being Marmite, Red Bull, and Mini Cooper.
Marmite is a sticky brown food paste that has been around the United Kingdom for a while. You either hate it or are a true aficionado. I vividly remember staying at a British B&B some years back and watched people in the dining room slathering it on their “bits of toast.” I had to try it although it reminded of me of oil that had been sitting in the crankcase way too long. The stuff was dreadful or as the Brits would say “bloody awful.” But others in the breakfast nook scarfed it up with abandon. Their theme line is “Love it or hate it” and a TV spot of recent vintage has a blob of Marmite terrorizing a British town. As a boy in New England, there was a soft drink called Moxie which triggered similar polarized reactions. The great Ted Williams endorsed it so whenever we went to Fenway Park to see the Red Sox, I always ordered one and could never finish it as it struck me as having an awful medicinal taste. Finally, at the ripe age of ten, my father stepped in and stopped me from getting one saying “how about coffee milk (a great Southern New England tradition) or a Pepsi, Don? You know you won’t finish the Moxie.” Later that day, Ted Williams hit one of his last home runs which was thrilling and, to my father’s joy, he did not have to finish my Moxie for me. Moxie would have been a perfect candidate for a hostile brand. Instead, they took the high road and used New England’s greatest hero as spokesman.
Red Bull is well known to all of us. But the story behind the story may not be. Austrian entrepreneur Dietrich Mateschitz did his due diligence prior to launch and tested Red Bull extensively. Research results stated that the products coloring, sticky mouth feel, and taste were “disgusting.” One researcher wrote that “no other product has failed this convincingly.” Mateschitz’s response was a simple “great.”
He was not one to pander and as Dr. Moon put it refused to “even consider the possibility of modifying the product to sand away the rough edges.” Somehow the product caught on in clubs and select bars and was nicknamed “liquid cocaine”, “speed in a can” and “liquid viagra.” This spawned a consumer boycott by some worried about its health effects. Red Bull did no counter advertising. Their tone was “if Red Bull makes you nervous, don’t drink it”. The product has succeeded and has a hard core of devotees. To date, they have never flinched.
The final example is kind of a soft ball relative to the previous two UNLESS you saw their initial advertising. The Mini Cooper is a cult favorite which appeal to a certain class of driver. Early on they were strident. Initial ads were “The SUV backlash starts here”. To people who were worried about the small dimensions of the car, they simply stressed it especially on billboards. They were blunt and brazen with a very direct message.
What excites me about this discussion of hostile brands is that there is a world of media options available these days to allow a hostile brand to obtain awareness even if your budget is modest by traditional launch standards. Imagine a rollout into a few test markets. You could put together a package of cable channels with your local interconnect that would be a nice fit to the in your face or irreverent message that you were using. On line, the possibilities are endless. There are thousands of sites with an audience who might be turned on to your product and would not be offended by a “take it or leave it” positioning. New video options abound and would be inexpensive but nicely targeted. It almost makes me want to be a 28 year old media planner again.
Some brands are obviously too vanilla to be hostile brands. But, there are many like the Moxie of my youth that would be excellent candidates. Dr. Moon has done us all a great favor. Going forward her message of meaningful differentiation is sound but her defining the hostile brand and its applications is inspired.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Professor Moon’s thesis is that if you only make direct comparisons on features you may have the “perverse effect of making you just like everyone else”. It reminded me of John Hartford’s lyric from the late ‘60’s—“What’s the difference being different when it’s different now that looks alike”. Professor Moon suggests that we hop off the competitive treadmill and do something that is MEANINGFULLY different. Lots of people promise that with every campaign but the author gives a good roadmap for doing it.
The book cruises along pleasantly with simple logic and some nice examples. Then the reader encounters a chapter simply entitled “Hostility” which hit me like a freight train. Her argument is that some brands differentiate themselves meaningfully by admitting that they are not for everyone but rather for a small minority. Their advertising deliberately tries to polarize people as do their products. Some people love them but an equal or larger group hates them. She states that they do not lay out the welcome mat. “Hostile brands don’t market in the classic sense of the term; they anti-market.” She gives several great examples with my favorites being Marmite, Red Bull, and Mini Cooper.
Marmite is a sticky brown food paste that has been around the United Kingdom for a while. You either hate it or are a true aficionado. I vividly remember staying at a British B&B some years back and watched people in the dining room slathering it on their “bits of toast.” I had to try it although it reminded of me of oil that had been sitting in the crankcase way too long. The stuff was dreadful or as the Brits would say “bloody awful.” But others in the breakfast nook scarfed it up with abandon. Their theme line is “Love it or hate it” and a TV spot of recent vintage has a blob of Marmite terrorizing a British town. As a boy in New England, there was a soft drink called Moxie which triggered similar polarized reactions. The great Ted Williams endorsed it so whenever we went to Fenway Park to see the Red Sox, I always ordered one and could never finish it as it struck me as having an awful medicinal taste. Finally, at the ripe age of ten, my father stepped in and stopped me from getting one saying “how about coffee milk (a great Southern New England tradition) or a Pepsi, Don? You know you won’t finish the Moxie.” Later that day, Ted Williams hit one of his last home runs which was thrilling and, to my father’s joy, he did not have to finish my Moxie for me. Moxie would have been a perfect candidate for a hostile brand. Instead, they took the high road and used New England’s greatest hero as spokesman.
Red Bull is well known to all of us. But the story behind the story may not be. Austrian entrepreneur Dietrich Mateschitz did his due diligence prior to launch and tested Red Bull extensively. Research results stated that the products coloring, sticky mouth feel, and taste were “disgusting.” One researcher wrote that “no other product has failed this convincingly.” Mateschitz’s response was a simple “great.”
He was not one to pander and as Dr. Moon put it refused to “even consider the possibility of modifying the product to sand away the rough edges.” Somehow the product caught on in clubs and select bars and was nicknamed “liquid cocaine”, “speed in a can” and “liquid viagra.” This spawned a consumer boycott by some worried about its health effects. Red Bull did no counter advertising. Their tone was “if Red Bull makes you nervous, don’t drink it”. The product has succeeded and has a hard core of devotees. To date, they have never flinched.
The final example is kind of a soft ball relative to the previous two UNLESS you saw their initial advertising. The Mini Cooper is a cult favorite which appeal to a certain class of driver. Early on they were strident. Initial ads were “The SUV backlash starts here”. To people who were worried about the small dimensions of the car, they simply stressed it especially on billboards. They were blunt and brazen with a very direct message.
What excites me about this discussion of hostile brands is that there is a world of media options available these days to allow a hostile brand to obtain awareness even if your budget is modest by traditional launch standards. Imagine a rollout into a few test markets. You could put together a package of cable channels with your local interconnect that would be a nice fit to the in your face or irreverent message that you were using. On line, the possibilities are endless. There are thousands of sites with an audience who might be turned on to your product and would not be offended by a “take it or leave it” positioning. New video options abound and would be inexpensive but nicely targeted. It almost makes me want to be a 28 year old media planner again.
Some brands are obviously too vanilla to be hostile brands. But, there are many like the Moxie of my youth that would be excellent candidates. Dr. Moon has done us all a great favor. Going forward her message of meaningful differentiation is sound but her defining the hostile brand and its applications is inspired.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Friday, August 20, 2010
A New Twist on Good To Great
In 2001, Jim Collins wrote a great business best seller entitled “Good to Great: Why Some Companies Make the Leap…and Others Don’t.” In general he defines “great” largely on financial performance several times better than the market norm over a fairly long period of time. Some of the companies that he singled out who made the transition from good to great were: Abbott Labs, Kimberly –Clark, Nucor (steel and industrial conglomerate), Gillette (now a division of Procter & Gamble), Walgreen’s, and Wells Fargo.
He described several characteristics of these winning firms:
1) Humble leaders who do what is best for the long term.
2) First thing is to get the right people on your bus and then decide where to go.
3) Always confront the brutal facts regarding your industry but do not give up.
4) Be disciplined in all things at all times.
5) Remember that small initiatives are additive; they act on each other like the wonder of compound interest.
The book made a lot of us think. I remember vividly at the time if I had the right people on my bus. Last week, I was speaking at length with a general manager of a TV station in a mid-sized market. He told me that things were much better than last year but lamented—“this used to be a great business.” It certainly was. Many years his predecessor in the job had profit margins of 40-50%. The station changed ownership several times in the 70’s and 80’s as financiers felt that TV station ownership was a sure thing. Buy it and flip it several years later for a nice profit was the mantra.
Well, times have changed. In many markets, it is no longer a great business. But, as I stressed to my friend, it is still a VERY good business. And, with a manager such as he who trains his staff well and is fair with them, has close ties to the local community and hustles like hell, it should stay that way for some time to come.
All conventional media are going through this but the stage of downward evolution varies significantly medium to medium. Newspaper was a great business thirty years ago and a good one 15 years ago. Now, with few exceptions, it is a tough battle for survival unless some new technology can bail them out and bring in younger users. Magazines are a really mixed bag with a blend of successes and failures each year with new titles and they all struggle to monetize their online product. Radio could become very good or even great again in some cases if the corporate bean counters go away and local ownership comes back strongly. Outdoor, the last true mass media type, may have a big resurgence as TV continues to fragment and digital options for video multiply over the next several years.
But TV can still do well in the right hands. My friend is a very decent fellow and a hard headed realist. He laughs about his station site which gets into many advertising packages although he cheerfully admits that he feels many of the site visitors are nervous 60 year olds worried about traffic or snow for their evening drive home. Still, he soldiers on, makes a nice living, and does his best to provide value for those to whom he and his staff sell advertising. The days of dropping huge sacks of gold back at headquarters are over. But his station remains solidly profitable for his company which has owned the property for more than 20 years.
The great to good concept is sneaking into other traditionally solid businesses. Someone who fancies himself a securities analyst told me that Coca-Cola and Pepsico have gone from great to good in recent years. My attitude is that there is some truth in his thesis if he is referring to their US business for cola which is quite mature and where the margins are paper thin. But overseas they are just getting started. Indonesia, which some pundits say will be the next BRIC country (Brazil, Russia, India, China) of dynamic economic growth, has a per capita Coke consumption similar to the US in 1910. So, growth overseas for these beverage companies and McDonald’s, among others, should be quite robust as a middle class emerges in what were third world nations only yesterday. The US is only about 5% of the world and we need to keep that in mind.
Finally, I stressed to my broadcaster friend that there is nothing wrong with running and optimizing a good business. The easy money days are over for a lot of us but there is no need to be depressed. If TV truly is doomed a decade or more from now, I bet my plucky friend and his station will be one of the last to fall.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
He described several characteristics of these winning firms:
1) Humble leaders who do what is best for the long term.
2) First thing is to get the right people on your bus and then decide where to go.
3) Always confront the brutal facts regarding your industry but do not give up.
4) Be disciplined in all things at all times.
5) Remember that small initiatives are additive; they act on each other like the wonder of compound interest.
The book made a lot of us think. I remember vividly at the time if I had the right people on my bus. Last week, I was speaking at length with a general manager of a TV station in a mid-sized market. He told me that things were much better than last year but lamented—“this used to be a great business.” It certainly was. Many years his predecessor in the job had profit margins of 40-50%. The station changed ownership several times in the 70’s and 80’s as financiers felt that TV station ownership was a sure thing. Buy it and flip it several years later for a nice profit was the mantra.
Well, times have changed. In many markets, it is no longer a great business. But, as I stressed to my friend, it is still a VERY good business. And, with a manager such as he who trains his staff well and is fair with them, has close ties to the local community and hustles like hell, it should stay that way for some time to come.
All conventional media are going through this but the stage of downward evolution varies significantly medium to medium. Newspaper was a great business thirty years ago and a good one 15 years ago. Now, with few exceptions, it is a tough battle for survival unless some new technology can bail them out and bring in younger users. Magazines are a really mixed bag with a blend of successes and failures each year with new titles and they all struggle to monetize their online product. Radio could become very good or even great again in some cases if the corporate bean counters go away and local ownership comes back strongly. Outdoor, the last true mass media type, may have a big resurgence as TV continues to fragment and digital options for video multiply over the next several years.
But TV can still do well in the right hands. My friend is a very decent fellow and a hard headed realist. He laughs about his station site which gets into many advertising packages although he cheerfully admits that he feels many of the site visitors are nervous 60 year olds worried about traffic or snow for their evening drive home. Still, he soldiers on, makes a nice living, and does his best to provide value for those to whom he and his staff sell advertising. The days of dropping huge sacks of gold back at headquarters are over. But his station remains solidly profitable for his company which has owned the property for more than 20 years.
The great to good concept is sneaking into other traditionally solid businesses. Someone who fancies himself a securities analyst told me that Coca-Cola and Pepsico have gone from great to good in recent years. My attitude is that there is some truth in his thesis if he is referring to their US business for cola which is quite mature and where the margins are paper thin. But overseas they are just getting started. Indonesia, which some pundits say will be the next BRIC country (Brazil, Russia, India, China) of dynamic economic growth, has a per capita Coke consumption similar to the US in 1910. So, growth overseas for these beverage companies and McDonald’s, among others, should be quite robust as a middle class emerges in what were third world nations only yesterday. The US is only about 5% of the world and we need to keep that in mind.
Finally, I stressed to my broadcaster friend that there is nothing wrong with running and optimizing a good business. The easy money days are over for a lot of us but there is no need to be depressed. If TV truly is doomed a decade or more from now, I bet my plucky friend and his station will be one of the last to fall.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Saturday, August 14, 2010
The Scary New Scenario of the Paradox of Thrift
On June 15, 2009, I posted an article entitled “The Paradox of Thrift.” In brief, I talked about the economic concept developed by Lord Keynes in the 1930’s. The idea is that in a downturn when people get worried about the future, they tend to consume less and save more. So, recovery can be slow as consumer demand lags due to largely to consumer fear. In the world of 2010, it is even more serious with a U.S economy that is now 70% consumer driven as compared to the 1930’s when the industrial base was a larger share of the economy that that of consumer activity.
When I posted the report on the Paradox of Thrift some 14 months ago, the U.S. savings rate was at 4.7% (it had been zero a year earlier!) and the official unemployment rate was 8.9%. Last Tuesday, new figures were released and the savings rate was at 6.4% which is the highest level in decades. People who have jobs are still uneasy and are saving aggressively. Back to school sales to date are 17% below last year’s levels! And, government unemployment levels have crept up to 9.5% from 14 months ago.
Now, over the years I have learned to respect the difficulty of working with a mass of information. And, looking at only two data points—the savings rate and the unemployment rate do not make a definitive economic analysis.
But my innate optimism was shaken and shaken hard in recent days when I considered two more facts. Our growth rate appears to be dipping back to zero. I will let the professional economists and pundits waste time on whether we are heading into a “double dip” recession or not. The other datum is chilling and not many people want to talk about it. Most economists agree that due to demographics and new graduates entering the work force we will need 3.3% growth rate in Gross National Product (GNP) to lower current unemployment levels. When the economy is sailing along as in the past at 4% growth and a zero savings rate in our 70% consumer driven economy, job creation was almost automatic. But now, with anemic growth at best and a very high savings rate, vibrant job growth is going to be a long time in coming.
So, if you are a broadcaster, cable executive or advertising manager, be realistic when the boss or headquarters asks for double digit revenue increases for 2011. There are some pockets of prosperity in a country with a few hundred media markets but aggregate consumer demand across the US will likely be tame for a while. Your sales teams may go at it tooth and nail but the increased advertising dollars will be hard to find in many markets.
Who is to blame? Many people point the finger at George W. Bush who lowered taxes for the affluent, Wall Street’s greed or President Obama whom they label as a socialist. All three have not helped much but the American consumer is largely responsible for what has happened. We had it too good for too long. For two generations, we saved less and less and borrowed more and more. If it took 60 years to get us into this mess, we are not going to be out of the woods in another six months. Recovery is going to be slow in my opinion and, for many, painful.
Am I afraid? No way. Concerned? You bet. And you should be too.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
When I posted the report on the Paradox of Thrift some 14 months ago, the U.S. savings rate was at 4.7% (it had been zero a year earlier!) and the official unemployment rate was 8.9%. Last Tuesday, new figures were released and the savings rate was at 6.4% which is the highest level in decades. People who have jobs are still uneasy and are saving aggressively. Back to school sales to date are 17% below last year’s levels! And, government unemployment levels have crept up to 9.5% from 14 months ago.
Now, over the years I have learned to respect the difficulty of working with a mass of information. And, looking at only two data points—the savings rate and the unemployment rate do not make a definitive economic analysis.
But my innate optimism was shaken and shaken hard in recent days when I considered two more facts. Our growth rate appears to be dipping back to zero. I will let the professional economists and pundits waste time on whether we are heading into a “double dip” recession or not. The other datum is chilling and not many people want to talk about it. Most economists agree that due to demographics and new graduates entering the work force we will need 3.3% growth rate in Gross National Product (GNP) to lower current unemployment levels. When the economy is sailing along as in the past at 4% growth and a zero savings rate in our 70% consumer driven economy, job creation was almost automatic. But now, with anemic growth at best and a very high savings rate, vibrant job growth is going to be a long time in coming.
So, if you are a broadcaster, cable executive or advertising manager, be realistic when the boss or headquarters asks for double digit revenue increases for 2011. There are some pockets of prosperity in a country with a few hundred media markets but aggregate consumer demand across the US will likely be tame for a while. Your sales teams may go at it tooth and nail but the increased advertising dollars will be hard to find in many markets.
Who is to blame? Many people point the finger at George W. Bush who lowered taxes for the affluent, Wall Street’s greed or President Obama whom they label as a socialist. All three have not helped much but the American consumer is largely responsible for what has happened. We had it too good for too long. For two generations, we saved less and less and borrowed more and more. If it took 60 years to get us into this mess, we are not going to be out of the woods in another six months. Recovery is going to be slow in my opinion and, for many, painful.
Am I afraid? No way. Concerned? You bet. And you should be too.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
Sunday, August 8, 2010
The Old Metric Lives
Since the early 1960’s (before my time) many people used a very simple calculation and still do to determine whether a retailer should advertise on spot television. Fast food is where it has received the most acceptance but I have seen it work against several categories over the years.
The metric is very simple. Divide the number of retail locations (points of distribution) that an advertiser has in a Nielsen DMA in to the total number of TV households in the DMA (Designated Market Area). If the number is under 30,000 Spot TV has an excellent chance of paying out. If it is in the 30-50k range per point of distribution it is an iffy proposition. Over 50k per retail location and TV is very hard pressed to pay out other than with a destination venue such as a luxury car dealer or huge big box retailer. Keeping this metric in mind saved me a lot of pain over the years and won me the love of some radio stations who thought I was simply helping them. The reality is that TV is wasteful for some retailers and a bonanza for many others.
In the last few weeks, I spent a lot of time in New England. I was not in Boston or Hartford but spent most of my time split across the other DMA’s in the region. Something amazing was going on. I sampled the 6pm local news in each mostly to get the weather report for the next day. In a few markets, there were small retailers buying the local news. I do not know what they paid but was stunned simply to see them there. Once restaurant with two locations advertised across a DMA with 619,610 TV households. So, TV households per unit were not in the vicinity of 30 thousand but were nearly 310 thousand per location! How could that possibly pay out for the advertiser? Another advertiser, a marine supply company with one location advertised in the news in the same DMA. As I moved across much of the six state area, I saw other questionable placements but none quite as bad as the two mentioned above.
Don’t get me wrong. I applaud local stations for the chutzpah to bring new advertisers on the air in a difficult environment. Yet, realistically, the odds of some of these people succeeding seem very remote. These advertisers belong on local cable not on over the air TV. Period!
How does it happen? Many young planners and buyers do not do their homework. There is no analysis. They have never heard of the 30,000 TV households per store rule because no one taught them such simple rules which cover a multitude of sins. Perhaps their clients were eager to get on TV and pushed them to it. An experienced media person would tell the client what a long shot such a buy has of ever paying out.
As I have said before here, we need a back-to–basics approach with media planning. In my home region of New England, they clearly need it more than most. The old 30k metric remains a decent yardstick. It should be the first screen a planner makes before considering local television.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
The metric is very simple. Divide the number of retail locations (points of distribution) that an advertiser has in a Nielsen DMA in to the total number of TV households in the DMA (Designated Market Area). If the number is under 30,000 Spot TV has an excellent chance of paying out. If it is in the 30-50k range per point of distribution it is an iffy proposition. Over 50k per retail location and TV is very hard pressed to pay out other than with a destination venue such as a luxury car dealer or huge big box retailer. Keeping this metric in mind saved me a lot of pain over the years and won me the love of some radio stations who thought I was simply helping them. The reality is that TV is wasteful for some retailers and a bonanza for many others.
In the last few weeks, I spent a lot of time in New England. I was not in Boston or Hartford but spent most of my time split across the other DMA’s in the region. Something amazing was going on. I sampled the 6pm local news in each mostly to get the weather report for the next day. In a few markets, there were small retailers buying the local news. I do not know what they paid but was stunned simply to see them there. Once restaurant with two locations advertised across a DMA with 619,610 TV households. So, TV households per unit were not in the vicinity of 30 thousand but were nearly 310 thousand per location! How could that possibly pay out for the advertiser? Another advertiser, a marine supply company with one location advertised in the news in the same DMA. As I moved across much of the six state area, I saw other questionable placements but none quite as bad as the two mentioned above.
Don’t get me wrong. I applaud local stations for the chutzpah to bring new advertisers on the air in a difficult environment. Yet, realistically, the odds of some of these people succeeding seem very remote. These advertisers belong on local cable not on over the air TV. Period!
How does it happen? Many young planners and buyers do not do their homework. There is no analysis. They have never heard of the 30,000 TV households per store rule because no one taught them such simple rules which cover a multitude of sins. Perhaps their clients were eager to get on TV and pushed them to it. An experienced media person would tell the client what a long shot such a buy has of ever paying out.
As I have said before here, we need a back-to–basics approach with media planning. In my home region of New England, they clearly need it more than most. The old 30k metric remains a decent yardstick. It should be the first screen a planner makes before considering local television.
If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com
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