The Tipping Point and Media Planning

It seems hard to believe that Malcolm Gladwell’s THE TIPPING POINT--How Little Things Can Make a Big Difference was published back in 2000, over thirteen years ago. The term has invaded our vocabulary in a big way ever since.

Gladwell did not invent the term--its roots go back to the 1950’s and was coined by Morton Grodzins, an American political scientist. Gladwell called it “the moment of critical mass, the threshold, the boiling point.” I always saw it as “the straw that broke the camel’s back.”

Webster defined it as “the point at which a series of small changes or incidents became significant enough to cause a larger, more important change.”

Many high brow people do not like Gladwell as they say he, a marvelous storyteller, tries to explain things a bit too glibly when scientific or statistical data is needed to back up some of his conclusions. I have found that he makes you think which is a very good thing.

Thoughts of The TIPPING POINT came rushing back to me this week. There are a number of young media planners across the country who read this blog. Several write to me regularly and I make sure that I offer them constant encouragement.

A young man more than a 1000 miles from New York labors in a small to medium sized ad agency. He is absolutely on fire about media. Part of a tiny department he writes most of the plans in his shop and sometimes negotiates TV, radio, and local cable in adjoining markets. He gets little praise from the shop’s owner who, he claims, does not understand media well and tries to ignore many of the changes going on today. So, he labors alone although his clients seem to like him.

Recently, he sent me a draft of a media plan for a multi-market retailer that he handles. As I read it, I made some quick notes on a piece of scrap paper and was getting ready to send him an e-mail with a few comments. At the end of the plan, he outlined a list of tactics by market which he was going to handle personally. I was stunned. It was, quite simply, pretty damned wonderful. He had taken a perfectly acceptable media plan and made it really good. The “tipping point” in the plan was the inclusion of customized tactics that he had worked out across six Nielsen DMA’s. As Malcolm Gladwell has told us, “Little things can make a big difference.”

His client is being well served. Had a mega-shop or media buying service been executing the media strategy they never would have had his attention to detail or spent the time to create a unique effort in each DMA. They might have negotiated a slightly lower rate here or there (none of the markets were large) but they would have set it and forgotten it and moved on to the next group of buys.

I asked my young friend if he would like to work in New York, Chicago, Dallas, or Austin where he could learn a lot from peers and meet many like minded people. He said that even though he arrives first in his shop and usually stays an hour late each day he only lives five minutes from the office. He has lived in his small city for several years and has a nice social network and a great girlfriend. Life is good despite being lonely at the office.

How many other young people are out their like this outstanding young man? He needs more stimulation and exposure to new ideas and colleagues as the digital train has long left the station and is changing everything. For the moment, he is doing a remarkable job. Yet, when the “tipping point” hits and means the end of conventional media as we know it, this marvelous young talent may be left behind.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

TV and The Product Lifecycle

We all know that most new products and new businesses fail. Once a product or brand survives the early days it invariably has a lifecycle. A friend and I talked about this recently and followed up with some lively e-mails for quite a while. Essentially, he said that TV was in the “decline” phase according to classic marketing measures and its days as an ad medium were definitely numbered. I saw his point but thought that TV’s life as an ad medium was longer than he predicted.

Let’s back up for a moment and define lifecycle phases. Remember that many products or services have their own unique, idiosyncratic lifecycles but, in general, they shape up as follows:

The Launch--here is where most products fail. To marketers, consumer acceptance is far more important than profit. So, money is spent and lost short term on advertising and promotion to build awareness. If the market is very competitive, you may come in low with penetration pricing to encourage consumer trial. Distribution is often spotty at this point.
Growth--as demand for your product increases, you can maintain pricing integrity. Also, distribution gets filled in and you spend more on promotion of all kinds to cover a wider audience than you did during the launch phase.
Maturity--you competition has sharpened their teeth or you have new entries in your space forcing you to often engage in a price war.
Decline--the whole category starts to decline because of technological innovation or changing tastes of the consumer. There are additional price cuts and advertising is often slashed to reduce costs. Sooner or later, the brand is sold or even discontinued.

I can see why my friend would say that TV is now in Stage #4--Decline. Average ratings for TV have been declining for years as the space is becoming more crowded with new choices be it cable channels, Netflix, Hulu, You Tube and all sorts of new alternatives on the horizon. And, increasingly, with people using their phones, laptops, or tablets to view,  video usage is increasing as TV viewing is declining.

TV, however, is not dead yet. While virtually all of you reading this in the US have Netlfix and most have HBO, most people do not. The landscape has certainly changed  and when it comes to brand building, TV can no longer carry most of the burden alone. Yet, TV still delivers a mass audience faster than anything else. And, let’s face it, the medium still has the ability to move product in most categories.

Perhaps most of all, TV still has a lot of the content! There is no question that it is not the advertising powerhouse that it once was. As I have said before in this blog, it was a great business and now it is a good business. May I suggest that you be careful when someone says that TV is ready to dry up and blow away? It may indeed be in Stage #4, Decline, but that decline is likely to be slower than many pundits forecast.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

The Secret Sauce of Social Media

A long time ago in Southern New England, when I was four years old, we were hit by a ferocious snowstorm. When the snow finally stopped, all school and work was halted. I remember my much older siblings helping me in to a snowsuit and I went out and played for what seemed like hours.

The next morning I woke with a terrible case of chapped lips. I tried to finish my cocoa at breakfast but I was very uncomfortable. My father, being treated to a day off, said, “come with me, little man.” I vividly remember him carrying me out to his car, a huge Oldsmobile 98. The snow was way too high for me to navigate around the car so he gently tossed me into the passenger seat (no seatbelts in 1954! ). Driving carefully through the snow encrusted roads, we made it to the little village with its battery of shops. We walked in to the drugstore and he asked Mr. Erickson, the druggist, for a Chapstick. I think it cost 15 cents!

Once back in the car, he opened it and applied it to my lips. “You will be just fine in a few minutes. Keep this Don and don’t lose it.” Belying my years, I put the Chapstick in my coat’s inner pocket and pulled the zipper. Instantly, I became a believer in the brand and nearly 60 years later I have rarely been without a Chapstick for more than a day. So, I am a loyal customer but my loyalty has been passive and unknown to the world unless you are a member of my immediate family.

The value of loyal customers is significant for any brand. Auto companies love them--if they can get someone in their early 20’s and hold them, that may be worth a million to a million and a half dollars over the course of his or her lifetime. Also detergents, fast food, liquor brands, even Chapstick find loyal customers to be of great value over a customer’s lifetime.

All of us in advertising and marketing have pushed the concept of the lifetime value of a loyal customer hard--you don’t have to spend much to keep them and they instantly go to you even if new brands come along that may be a better value. I used to explain the loyalty phenomenon as a ladder--on the bottom rung was awareness and that is what initial advertising exposures could do for you. Then you moved on to consideration if the advertising was effective and you were in the market or friends or relatives were happy with the brand. After you tried it, the next rung up the ladder was preference. Finally, after a pleasant and successful history with the brand, you hit the top of the ladder and got to loyalty.

Until now, millions of us, as I have been with Chapstick, are quiet loyalists. As a teenager, I used it often but in private as I did not want classmates riding me. So, my loyalty to the humble brand was solid but it was completely passive.

In recent years, social media has invaded the advertising scene in a big way. I struggled with it as people were giving somewhat breathless reports of how wonderful that it could be for all brands. Early on measurement was not the greatest and people probably wasted way too much money on it.

Now, I am seeing, how, if done right it can be wonderful and cost efficient form of exposure. What it centers around is that people are active advocates for a brand when they do things such as go to a company’s Facebook page. Because people are active or engaged, an interaction on Facebook is increasingly worth more than an exposure opportunity (ad impression) in TV or other conventional media where commercial avoidance continues to grow at an alarming rate. These social media interactions pack a powerful authenticity punch that a passive TV impression just cannot match.

This is how social media works. Remember a “liker” on Facebook has truly sought your brand out directly. That enthusiasm or positivity is what, in my opinion, makes social media click.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

No Logo Revisited

Back in 2000, I purchased and read a then hot book entitled NO LOGO written by Canadian journalist and activist Naomi Klein. I tried to get a few friends and colleagues to read it but no one took me up on it. They all asked why I would read a bestseller that attacked advertising and marketing so vehemently.

Well, I have always found it instructive to read views strongly opposite to my own. Sometimes they manage to soften my position on certain issues and, in other cases,  they only reinforce what I felt initially. So, this past week, 13 years later, I decided to re-read NO LOGO and see how I reacted to it. I got 10 times more than I bargained for in the revisit.

The book, even though, called NO LOGO, struck me as a clarion call against globalization. Ms. Klein posited that the way that the new world was emerging was one in which companies, via their strong brands, were more powerful than many countries and the brands were becoming even stronger due to liberalized trade, outsourcing of work (particularly manufacturing in low cost countries with sweatshop labor) and deregulation across the globe.

Ms. Klein stated that businesses were cocooning consumers into a “Brandscape.” She acidly commented that companies were marketing aspirations to consumers and creating a “Barbie world for adults.”

Obviously, advertising came under a lot of heat in her rant. Yet, she made suggestions about marketing brands that were fascinating more than a decade after I first read them.
Number one, she constantly, talks about the need for brands to be authentic. Also, tactics such as guerilla marketing and culture jamming make sense. Well, do the brand gurus talk about today? I was laughing out loud when I reread some of her passages. Everyone talks about how the brand is everything and you must protect the brand at all costs. And, most importantly, you must be AUTHENTIC in all things that you do.

Couple that with a decline but not elimination of offshore plants with underage or underpaid workers, major US firms taking strong green initiatives and one could argue that Ms. Klein has won her battle. Seeing her most recent work and watching interviews on You Tube, she does not strike me as wanting reform as much as an overhaul of the entire financial system.

What had me laughing? It seems that some of the major brands have virtually used NO LOGO as part of their marketing playbook in recent years. They have beat the drum for authenticity and product integrity loudly and often. So despite the blip in 2000, it appears that behemoth brands have pre-empted much of Ms. Klein’s complaints. Even a casual observer of the marketing scene knows that brands, especially in apparel, are stronger than ever.

I saw Ms. Klein being interviewed about the Occupy Wall Street movement and felt sympathy with her and the protesters. She is also a gifted writer who is easy to read. But, while she may have won round one with the publication of NO LOGO the marketers have definitely won the battle as brands are more solidly entrenched in many categories than they were more than a decade ago.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com,

Umbrella Brands and The Future

Back in 1994, Anglo-Dutch consumer products giant Unilever was about to celebrate its 75th anniversary. Prior to that time, Unilever did not have a huge presence with consumers. Like Procter & Gamble, the giant of consumer goods companies, Unilever let their individual products do the talking.

By 1995, all of that had changed. A Unilever logo was stamped of every package that the company sold. Take a look today. If you have Ben & Jerry’s, Breyers, Dove Soap, Lipton, Skippy, Suave, Vaseline, or Hellman’s in the house, you will find the Unilever logo prominently displayed. One person told me it was a way to lure potential investors to their shares. To me, that, at best, is a minor reason. It may be a way to rally the troops across the giant company who work for assorted brands and have their loyalties there. Unilever also culled their product list from 1600 to 400 at the same time so nervous employees needed some encouragement.

This concept where many products either possess or are easily identified as having the same name is known as an Umbrella brand (a few still call it a family brand). Great examples are Johnson & Johnson in baby care products and Colgate in dental care. Food king Nestle is also using their name on a wide variety of packaging.

Why do it? Well, promotion becomes less expensive and easier for products that fall under the umbrella branding. Also, it helps to launch new products as much of the public has already readily accepted the brand image of other entries with the same name. The seven pillars of Integrated Marketing Communications (IMC) can work more smoothly which is the entire point of an IMC program (pillars are Advertising, Promotion, Public Relations, Personal Selling, Database Marketing, Direct Response Marketing, and Publicity). New products are easy to identify by customers. When traveling, this is very helpful as the packaging and umbrella name helps you make a fast decision regardless of the culture you are in. So, umbrella marketing is much easier for the target market to understand.

Is there a downside? Different brands vary in quality and negative publicity for one entry can pull the whole roster of brands down a bit. You are truly only as strong as the weakest link in a chain to trot out a true but old cliche.

For the most part, this sounds great. Great for companies, for sure, as marketing costs almost have to decline over time and the advertising efficiencies will be significant as well. Where does this leave ad agencies and the legacy media such as TV, Radio and magazines? They have to be hurt by it. Talk to an old hand in TV. Right now, some 50% of package goods money spent is on promotion. Their TV spending, especially in spot TV markets, is way down from 15 years ago in many, many categories. As umbrella brands grow, the situation may get tighter. And, agencies don’t make as much money grinding out coupons for a “family of brands” as they would for producing and placing TV spots.

From a business standpoint, it also means that the big players will likely get bigger. By leveraging their brand via the umbrella approach, they can introduce many new products at a very attractive cost. For an upstart with no name identification, the cost of entry may be too great and the new brand could never launch.

Interesting, as Unilever and others implemented the umbrella, the historical leader in brand building, Procter & Gamble (P&G) did not. They like the independence of their brands and have nearly two dozen with a billion dollars in sales each. How many consumers know that Tide, Gillette, Pampers, Dawn, and Ivory all come from the same Cincinnati based company? A few of us in advertising and marketing do as do their shareholders. Yet, virtually no one refers to P&G brands as they do with Colgate or Johnson & Johnson.

During the recent Olympics, P&G ran some beautiful two minute spots thanking Moms around the world for helping their sons and daughters become Olympians. Some said this was the opening salvo in a campaign to embrace the umbrella concept. Others complained that because the P&G name did not show up until the end of each execution, they failed at branding. Since then, I have seen no evidence that they are abandoning their long term approach of building strong independent brands.

Look for more umbrella branding in the years to come as line extensions among major players accelerate and companies get even more ruthless about cutting marketing expenses. Some, such as P&G, may remain apart from the trend and still thrive.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

What Business Are You In?

Recently I was cleaning out some boxes in my attic. I stumbled across one that I had not opened in decades. It contained my notes, a few textbooks, and some articles that I had copied during my MBA program at Boston College some 40 years ago. When I saw one of the articles, I stopped dead in my tracks, laughed, and reread it immediately. The article was by Theodore Levitt, from The Harvard Business Review (HBR) in 1960 and was entitled “Marketing Myopia.”

Some of you may have heard of Levitt. He is widely credited with coining the term “globalization” in 1983.  Actually, if you dig a bit, the New York Times was using it in 1944 but a more accurate description may be that he popularized the term in an HBR piece entitled “Globalization of Markets.” Current writers on global business, such as Tom Friedman, owe a debt to him.

The other thing that he is famous for is the article “Marketing Myopia.” The basic thrust of the article was that businesses had a better chance of succeeding if they would zero in on meeting their customers needs rather than on selling products. Also, he felt that many told themselves that they were in a “growth” industry which lead to complacency.

The article according to some business historians marked a watershed moment. Many said that this was the beginning of the modern marketing movement. Most businesses, according to Levitt, did not really understand what business that they were really in. The paper had some wonderful examples of such confusion and others chimed in as a million copies of the article were distributed throughout the business world. Movies did not prepare and react properly to TV growth because they felt that they were in the motion picture business. No, they were in the entertainment business and should have embraced TV when it was in its infancy. Warner Brothers got it eventually and then other studios followed suit.

Oil companies morphed into energy companies as a result of Levitt’s trailblazing. He said profoundly,  "People do not actually buy gasoline. What they buy is the right to keep driving their cars.”

Railroads were a great example and I quote at length “the railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today (1960) not because that need was filled by others (cars, trucks, airplanes, and even telephones).......They let others take customers away from them because they assumed themselves to be in the railroad business rather than the transportation business.”

All these examples showed that they were product oriented rather than customer oriented. Did people get it? Some did and some did not. Think of the giants of recent years. No one is more laser focused on the customer than Jeff Bezos of Amazon. And, how about the late Steve Jobs. He did not design the laptop or the smartphone--he made them easy to use for the everyday person. The focus was 100% on the consumer.

This may seem obvious in 2013 but it was revolutionary stuff in 1960! Back then the emphasis was mass production of products and lowering unit costs. Levitt went on to make an important distinction that many ad agencies today still do not understand.

He stressed that selling is not marketing. “Selling concerns itself with the tricks and techniques of getting people to exchange their cash for your product. It is not concerned with the values that the exchange is all about. And, it does not, as marketing invariably does, view the entire business process as consisting of a tightly integrated effort to discover, create, arouse, and satisfy customer needs.”

Customer-creating satisfactions were his key to marketing success and it had to permeate an entire organization. The best marketers do this be it Amazon, L.L. Bean, Apple, Procter & Gamble, ESPN, or Harley Davidson.

Mid sized and small ad agencies like to produce good advertising. That is fine but long term the trend is away from it (see Media Realism, The Slow Death of Advertising, 5/13/13). WPP Chief Sir Martin Sorrell, said that a full third of their billing is digital rather than conventional and some clients are clamoring for a 50% allocation to digital. That leaves the mid-sized players in a tight spot unless they shift gears and relentlessly focus on the ultimate consumer. Levitt used the hackneyed example of buggy whip manufacturers to make this point. When the automobile came on stream, no amount of improved product development was going to save the industry. Had it considered itself a transportation firm, maybe they could have produced tires or fan belts as those industries emerged from the car explosion.

People who still talk nearly exclusively of making great TV and radio spots (and believe me, they still exist) need to get real. The pace of change is rapid and they need to adapt or go the way of the buggy whip manufacturers.

As Levitt put is so well in 1960, “The best way for a firm to be lucky is to make its own luck.”

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

Leadership

Leadership is usually defined as organizing a group of people toward a common purpose. What qualities do you need to be a leader? Well, business is full of intangibles but after decades of observation, I would say that nothing is as intangible as leadership.

Back in the 1990’s some CEO’s had achieved almost rock start status. Today, perhaps only 83 year old Warren Buffett still maintains that status. It is interesting to observe that there has been clear progress in production techniques, marketing, strategy and usually finance in recent decades but leadership still appears no better than average in most companies.

There is no question that a motivating leader is very valuable but as times change and business conditions evolve, perhaps a different skill set is needed as well relative to what worked in the past. If you look at treatises on leadership, they invariably mention the following as necessary attributes: Technical competence, ability to absorb concepts, size up talent well, have a proven track record in their field, people skills, sound judgement and strong character. It is hard to argue with that list but going forward the last few may be the most important. These skills are what industrial psychologists often refer to as “soft skills.” Those who have soft skills can bring passion and significance to the work which helps to retain great employees who may be highly sought after by other companies.

 One thing that is prominent today in discussion of leadership really mystifies me. Today, leaders are said to really need to be “authentic.” If you want people to trust you and follow you, you need to be yourself. People should not have to worry about what you are thinking. Did you know that managers and executives can now go to weekend seminars on authenticity training? Forgive me, but how does one learn to be authentic in a weekend? No one has been able to isolate or distill charisma which allows a leader to get their team to follow them to hell and back.

There is no question that there are different styles of successful leadership. Canadian researcher, academic and management guru Patricia Pitcher boiled it down to three major types:

Artists--they are imaginative, visionary, inspiring, emotional and entrepreneurial
Craftsmen--steady, sensible, predictable and very trustworthy.
Technocrats--cerebral, detail oriented, uncompromising and hard-headed.

Each type of leader is ideal for certain situations. Looking at this it became very clear to me why most ad agency mergers or buyouts fail or have huge issues. The first type of leader, the artist, would be ideal for a boutique agency and help grow it. If the company survived he would have to at some point bring in a craftsman, to manage the growing enterprise. Should the artist sell to a technocrat who runs a holding company there is going to be an enormous clash of cultures.  The technocrat may be a low grade financier rather than a visionary so his bottom-line fixation can drive the imaginative artist nuts. Also, the artist has not taken orders from anyone in 25 years and will not like his or her expense report questioned.

At the same time, the Technocrat becomes the indispensable man during hard times. If a retrenching or downsizing has to occur, the Technocrat will do what has to be done and not look back.


So leadership is not simply charisma. If someone can refine some type of leadership theory it will easily be the key development in business operations of our new century.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com