FusionBrand

When Rebranding Goes Wrong

Companies usually seek to "re-brand" when poor customer service, lack of quality, dated offerings or other issue cause customers to defect.

The re-branding initiative should look at the causes of customer defection. Why do customers feel like they are no longer receiving economic, experiential or emotional value from the company? What can the company do to better deliver value? How can customer service or quality be reformed to meet customer standards?

But instead of attacking the reasons for customer loss, companies too often turn to a silver-bullet of re-branding, complete with a new logo. They must believe, as one graphic designer claims, "In the past it has been found that many under performing companies had started performing exceedingly well after they went through a logo makeover."  Landor Associates is infamous for dreaming up a new logo and calling it "branding."

Rebranding failures are legion. British Steel changed its name to Corus, complete with new logo, but that didn't stop its sale to the Indian group Tata. Xerox introduced a new logo in January, but that didn't keep the company's stock from falling almost 15% since then. The British Royal Mail spent £500,000 on branding consultants  who recommended rebranding to company to Consignia. The new name was so poorly received that Royal Mail  had to revive their old name.

Or how about this. Four years ago, Cingular bought AT&T Wireless. AT&T had become synonomous with pull-your-hair-out poor service, so Cingular dropped the AT&T name. But now, for reasons only the so-called brand consultant advising Cingular can explain, Cingular Wireless is now being rebranded as  AT&T Wireless. No doubt customers would have preferred more money being put into operations instead of being wasted on rebranding. Of the six largest cell-phone carriers, AT&T Wireless generated the most complaints overall and the most complaints per subscriber last year, according to the FCC.

Logo redesigns for the sake of rebranding can also lead to unintended consequences, such as this £14,000 logo produced for the Office of Government Commerce in UK, which has made it the butt of Internet sexual jokes.

Sometimes, name changes, along with new logos, become necessary when companies are purchased or when changing technologies make names obsolete. (The Carphone Warehouse is a strong candidate here). But, in general, spend your rebranding budget where it really counts – providing value to your customers – and let your competitors waste money with the snakeoil logo salesmen. 

What is Branding?

A marketing publication emailed me an excellent set of questions about branding prior to a speaking engagement in Croatia. Here are the interesting questions about everything from profitability to social engagement and my responses:

A lot of authors who are researching brands seem to think that brand is not a physical category, that it is not a product, but something that goes beyond the product in sense that a brand is actually a metaphysical category in a way. Do you share that thought, and what is a brand to you and how would you explain it to someone who knows nothing about branding?

The first issue is to define a brand: “A brand is a long-term profitable bond between an offering and a customer. This relationship is based on economic, emotional and/or experiential value, backed by everyday operational excellence & consistently measured for accountability, usually by customer profitability.”

This definition has several key concepts. One is profitability. For businesses, the only purpose to branding is to increase profitability. It is not to generate great creative or catchy taglines or win awards.  If any branding tactic does not contribute to greater profitability, don't do it.

Brands require a relationship. Anyone can sell a product once. But what is required for profitability is repeat sales. It is only after those repeat sales that a brand relationship is formed.

The next key component of value. Value can be related to price, an experience or a feeling, but no one buys anything unless value is seen.

Everyday operational excellence is the ability to consistently fulfill a brand promise.  Without the ability to ship on time, ensure quality and provide service, no brand can succeed. In many ways, the "organization is the brand."

Finally, measurement is key. Measurement enables benchmarks, which in turn ensures accountability. Measurement let you know what is working in terms of ROI, and what isn't. Measurement ensures better decision-making. Without data, you are just guessing.

You are also, among other things, a brand metrics expert. How do you “measure” a brand? That is, how can we measure things like the awareness of the brand, loyalty, experience, emotions, reputation etc.?

The most important measurement of a brand is profitability. If it is not making money, any brand will fade away. The second measurement is customer profitability. Everyone knows that 20% of customers generate 80% of the profits. But what a lot don't know is that 15% of customers are unprofitable – they cost more in service and other demands than they generate. The final key measurements are operational – on-time deliveries, customer service responsiveness, quality (mean time between failures, etc.) etc.

In your book, FusionBranding, you claim that the idea that  brands can dictate the consumers behaviour is absolute rubbish. You also claim that if it would be that simple, the companies would not make mistakes, and you are corroborating your claim with the information that 90% of new products don’t succeed to become a strong brand while they are, on the other side, spending billions of dollars on advertising. If brands are not affecting the behaviour of the consumers, what does?

Well, what I said was that companies cannot dictate consumer behaviour. They may make consumers aware of the brand, but ultimately it is the consumer who makes the decision to buy or not. Two factors drive consumer choice: word-of-mouth and operational excellence. Every research study underscores the point that word-of-mouth is by far the most powerful force in driving or discouraging sales. If your best friend says a particular brand is always in the repair shop, are you going to buy it, no matter what the company says about it?  Operational excellence is absolutely critical, especially for those selling to other businesses. It makes no difference, for example, how cheap or pretty or how well advertised an offering is, if the product is not delivered when you need it. Even for consumers, operational excellence is key. How do you feel when you go into a retail store and can't find a service clerk?

Your most recent book “Profitbrand: How to Increase the Profitability, Accountability and Sustainability of Brands” was endorsed by brand gurus Don Schultz, Philip Kotler, George Stalk… and other leading authorities from business and branding fields of work. Could you give us a short resume of the book?

A lot of branding books are based on the theories of a faded, mass-economy era – "brand personality," "brand equity," and "positioning." Worst of all, many fail to mention the word "profit," which is the whole point of branding. This book outlines the specific, actionable and measurable steps to achieve a profitable brand in an era of peer-to-peer branding. This is why it was named as a "Best Business Book" – not marketing book – by the international consultancy Booz Allen.

Which kinds of digital branding do you consider to have a crucial relevance in the year 2008? Do you think it will be social networking, podcast, RSS Feded or something else?

The first is Web 2.0 tools that are applied to specific industries.  While Web 2.0 mainly deals with technical issues, in 2008 we will be moving to "Retail 2.0," "Manufacturing 2.0," "Tourism 2.0." Looking ahead, companies will start establishing "XYZ 2.0," "Croatia 2.0," which will be based on the communities of interest – not segments – that are important to XYZ Company or Croatia.

In which direction will branding develop in the future?

The first trend, which is already in place, is the demand for accountability, which requires measurement. Marketing measurement has long been notoriously difficult, but great strides in quantification have been made over the past few years. Targeting and segmentation will continue to be important, but will evolve to incorporate communities of interest. The difference between segments and communities of interest is that companies define segments – "all women over 40," "golfers who play three times a month," etc. Communities of interest are consumers defining themselves in terms of their interest and passions – divers, bargain-hunters, eBay enthusiasts, etc.

What role in it do consumers have, and what is your view on integrating brand management and customer management, that is, how should the companies integrate those two views on business in order to have satisfied consumers through strong and big brands?

Without customers, you have no brand. As a result, I discourage companies from focusing too heavily on brand management because it generally revolves around products and issues important to the company, which may not necessarily be important to customers. If it is not important to customers, or provide them value, why do you want to do it? Customer management incorporates a lot of issues, but the most important is profitability. As noted above, 15% of customers are unprofitable. Why do you want to sell to an unprofitable customer? With customer management, you look at ways to decrease costs or increase the profitability of customers or customer segments. If they continue to be unprofitable, you recommend the competition to them.

What is the significance of executing brand strategies and creating of a consistent brand communication through all communication channels with consumers?

Two words sum up all branding tactics: consistency and engagement. Every media release or ad needs to have the same messages. Every communications material needs to have the same look-and-feel. 

What do you think of the emotional branding concept and do you think that a company should be more focused on creating emotional connection between its brands and the consumers or on achieving maximal ROI on its brands?

This question assumes that all customers are created equal. They are not. Some customers are loyal and buy a lot over time. Others buy just on price and will desert you in a second for a lower price down the street. Obviously, the way to maximize ROI on brands is to focus on the profitable customers and deliver economic, experiential AND emotional value.

Recently, the social networks phenomenon became really relevant. A lot of administrators are creating only platforms that offer the consumers (usually for free) a space to fill with their own content. The notable fact about those social networks is that they lack firm economic models. How do you predict further development of user generated media?

They may lack an economic model for Web sites that interconnect surfers, but they are a branding tool much more powerful than, say, mass-media advertising (which, in the vast majority of cases, only returns about 71 cents of every dollar spent, which means that it too lacks an economic model!). For example, one study estimated that 80% of the users on Facebook discussed a particular brand. What companies need to do is to use the communities of interest that make up social network, and provide the tools and links for user generated media. Worried about negative commentary? Always a risk, but what better incentive to provide economic, emotional and experiential value to customers?

Names, signs, symbols and association are adjusting themselves to specific cultural features and values. What are, according to you, the advantages and disadvantages of global brands?

The globalization vs. localization of brands debate has been going on for quite some time. The pendulum swings from one to another because both have advantages and disadvantages. However, most companies today are moving toward localization. Localization makes it easier to establish a relationship with customers, plus gain a deeper understanding of local supply chains, media markets, etc. We may all think we are global citizens because we listen to the same music and go to the same Hollywood blockbusters, but deep down we are still Croatians or French or Russians.

European Commission recently developed an initiative to loosen the legal regulation regarding the oblique advertising in the media, and it should be (for now) restricted to movies and sport. But where is the limit? The problem of oblique advertising is present in Croatian media too and there are intensive discussions about it. How to preserve journalism from marketing interference if todays media are living on selling advertisements, and not on the number of sold copies?

In a distant, faraway time, I was a journalist, so this is a subject near and dear to my heart. The issue of advertising influenced content is also tied up with the issue of education vs. entertainment. How far do you go in educating people about, for example, government inefficiency when the public really wants to be entertained with stories about Paris Hilton? The public also likes to read about marketing-related issues – just look at all the articles discussing make-up in women's magazines. Definitely no easy answers, but some key steps include establishing strong walls between advertising and editorial, ensuring editorial fact-checking, and working to ensure that journalists have ethics. 

Recently Croatia held parliamentary elections. What is your view on political parties in context of their “branding war” for the votes?

People get emotional about two things: Sports and politics. Sports teams like Manchester United have done a masterful job of connecting with their supporters worldwide (what other English product from a small town has done that?) through amazingly good marketing, merchandising and ensuring that their teams reflect their audience. You'll see politicians moving to this "Manchester United" model to connect with their audiences more effectively. What I find a much more interesting issue regarding politics is when do governments start using the Internet effectively? Governments were the first to use radio and television, but as yet have not really started leveraging the Internet other than for information delivery.

Great number of brands are directly associating with the manufacturer's country, building the image of that country on it. What is the way for Croatia, as a small country, to brand itself on the global market? Or, what is the first thing you think of when Croatia is mentioned?

Another timely issue, since I am in the middle of a three-year branding initiative for Malaysia, a country of about 25 million in southeast Asia.  The hardest part of this initiative is that everyone is looking for a single image, word or tagline to brand the country overnight. Unfortunately, there is no such silver bullet. On average, it takes 20 years to brand a country, and it involves activities in public diplomacy, trade, education, culture and other areas. No ad campaign is going to brand a country. Another important area is how Croatians act overseas, because 70% of brand perception is formed by personal interaction.  So, my advice for branding Croatia is to think long-term, strongly encourage tourism among segments who are most likely to be "influentials," (golfers, yachting, etc.), and work especially hard to ensure that Croatian businesses become valued supply chain partners.  This will be my first trip to Croatia, and right now my dominant image is lots of beaches and islands, and a good place to take a summer holiday. Undoubtedly, however, there is a lot more to Croatia, and I'm looking forward to learning more about the country.

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7 Branding Trends for 2008 You Won't See Anywhere Else

What are the seven branding trends that will affect you most in 2008?

ProfitBrand Trend #1. Next era of online advertising rises

"Have you ever clicked your mouse right here? … You will."

That was the world's first banner ad  (as well as one of the most prophetic), which kicked off the first era of online advertising. The AT&T ad ran on October 25, 1994, on the HotWired site.

This long-lasting era of online advertising has been substantially enhanced through the years to counter the slow glazing of consumer eyes, and now offers a variety of sizes, animation and tracking. Such banner or display ads account for about one-third of online advertising revenues, despite the fact that the click-through rates have declined dramatically from the early years. However, video advertising (which includes video search and mobile TV) is breathing new life into this genre, and will certainly capture many more dollars next year.

While the first era will be with us for a long time, the second era – symbolized by pop-ups and pop-unders -- is hopefully on its last legs. Surely, camera company X10  and the travel site Orbitz  deserve places in Advertising's Hall of Shame for their Internet carpet-bombing. (However, beware of "pop-up audio," an emerging format that forces visitors to hear an entire ad without being able to turn it off).  Revenue figures are hard to come by, but one estimate claims 20% of the $9.5 billion spent on casino and porn advertising goes to pop-ups and pop-unders.

The third era is sucking the lifeblood from newspapers. Online classified advertising, best symbolized by Craigslist  and also-rans like eBay's kijiji , captures at least $50 million annually of high-profit advertising that used to go newspapers. It is also a dagger poised at the heart of MLS, the real estate monopoly for brokers and agents. Classified ads account for about 17% of total online advertising, which various research firms estimate dto total $17-$20 billion in 2007.

The next era is, of course, search advertising, with more than 40% of the Internet advertising pie. The value of search advertising comes both from the ability to target someone interested in an offering and pay for performance. As a result, the average cost of a sale for paid search is $26.75 per order, compared to $71.89 for a banner ad. No wonder US advertisers spent $8.3 billion on online advertising in 2007, up from $7 billion in 2006.

This era will explode if Google, which controls an estimated 70-85% of the paid-search advertising market, completes its acquisition of DoubleClick. Imagine what marketers will do with the offspring of the marriage of the largest search query database with the world's largest online behavioural database.

The latest era, now just out of the blocks, is social advertising, where advertisers will be able to piggyback on the social interactions of online users.  Already, movies, books and companies have been putting up profile pages on MySpace, and then accepting "friend requests" for advance or "insider" information. Facebook users can treat brands as their "friends," and each online interaction with the brand can be communicated to their own circle of friends. USAToday achieved an amazing 380% increase in new reader registrations when it added social media services such as discussion forums, story recommendations, reviews and more. A companion trend is social shopping, which involves sharing shopping wish lists, experiences and purchase tracking.

ProfitBrand Trend #2: Google's OpenSocial

The Internet is becoming too much like the real world. Everybody is part of a different community, with very little interaction among the Facebook, MySpace, LinkedIn, Orkut, Ryze and almost every other online community of interest. For corporations, manufacturer employees find it hard to link with suppliers, and everyone feels six degrees away from customers. This both makes it harder for communities to attract new members, complicates our desire to enjoy the best of each community and puts barriers between customer and supply chain relationships.

Google has launched a potential solution to this Babel called OpenSocial. This Rosetta Stone for all online communities will expand business and personal networks, enhance peer-to-peer branding and give companies greater insights into customers. In technical terms, OpenSocial is a set of web APIs for building social applications. (Facebook and LinkedIn have also developed  social networking APIs.) The most immediate effect will be to build bridges across the various social Internet communities so that, for example, popular Facebook applications can run on other sites. 

But, much more important, OpenSocial will help brands build and expand bridges to customers. That is one reason Salesforce and Oracle have submitted citizenship papers. One branding application will be expanding the capability for customers to help customers. This is often the best form of customer support, as Cisco has long demonstrated. Think about getting an answer from someone who has faced the same problem as you rather than a script poorly read by a drone in a distant land. Customer co-creation, especially in the area of design, is improved because customers can build on the comments or even work of others.  Unplanned product usage – like the way electricians used tape to cover scrapes before band-aids were invented -- that opens up new markets can be identified earlier. With appropriate permissions (and this is an uncharted brand frontier), companies could share customers with complementary needs, such as a universities and textbook companies.

Today, brands strive to break into markets.  If OpenSocial gets widely adopted, brands will instead seek to break into communities.

ProfitBrand Trend #3: The handphone opens up

The handphone is the Swiss army knife of your life. It can connect your life via voice, text messaging (SMS), and email. It can track your life by storing contacts, calendars and calls. It can even track you, thanks to GPS.

But in the US, the handphone is more like those tiny Swiss army knives that attaches to your key ring. Handphones in the US are a generation behind those In Europe and in Asia, with useful features like call timing crippled by carriers. Switching carriers can be more painful than divorce even when your carrier is the partner from hell. Roaming fees can bankrupt Bill Gates.

Compare this to the rest of the world. In many countries in Europe and Asia, a wave of the handset can pay for subways, coffee and newspapers. (Technically, that's because of a very interesting development called NFC, or "near-field communications.)  Carriers can be switched by just inserting a SIM card. In Europe, roaming fees are capped at 0.49 euros (about $0.73).

But just as the closed worlds of CompuServe and AOL gave way to the Internet, MCIMail got buried by email, MCI broke the AT&T monopoly, and the open sourceFirefox is eating proprietary Internet Explorer's lunch, Americans are finally starting to strip off  telecommunications straightjackets. Hackers quickly learned how to break the iPhone. Google has announced plans for a phone platform called "Android" that will facilitate social networking, video and faster, cheaper applications. And before long, the US government will hopefully be auctioning off spectrum that will enable entrepreneurs to build specialty, open networks without current carrier constraints and failings.

Android and the new spectrum have the serious potential to transform handphones into advanced work and personal tools in the same way that broadband and the browser transformed the World Wide Web. The opportunities for branding are immense. High-speed video on larger screens. Easier content sharing among networks (think YouTube meets chat). Barcodes on ads to enable immediate information access. User reviews on restaurants you are walking past.  Multiplayer games. And that's without even thinking hard….

And what about privacy? The howls of outrage will disappear the same way that one-time concerns about advertising on the Internet faded away. Fears about keeping personal matters personal fade with every FaceBook entry and cookie dropped on a hard drive. In the digital age, when privacy rights and property (data and intellectual) rights conflict, privacy will lose every time.

ProfitBrand Trend #4: Crowd sourcing and open source branding

One of the first examples of crowd sourcing – using the public to solve a problem – was in 1714 when the British Government offered a huge bounty of up to £20,000 to anyone that could accurately determine longitude. Today, crowd sourcing is becoming an integral part of open source branding, which provides the strategic framework for viral marketing, word-of-mouth and reputation management. Consisting of asking customers or other broad audience to solve a problem carry out a task, crowd sourcing represents the ultimate form of brand engagement.

Examples of crowd sourcing and brand building abound. Threadless is an Internet-based clothing retailer that sells T-shirts designed and rated by consumers.  Google depends on user-generated links to determine site popularity. The popularity of the Firefox brand owes much of its success to its continual improvements by users, and its ability to incorporate freelance extensions that extend functionality. L'Oreal, Sony and Toyota have used crowdsourcing to create their best ads. Soft drink company Mountain Dew has "Dewmocracy," which invites soft drink lovers to "shape the flavor, color, name, logo, and design of the next Mountain Dew." American Express is asking card members to identify and rank projects that will receive corporate funding.

Advantages of crowd sourcing are numerous. It lowers the risk of product introductions, since potential buyers have a stake in the outcome. Messaging stands a greater chance of being relevant, dynamic and authentic. And what better way to engage customers in a brand than to give them a hand in its creation?

ProfitBrand Trend #5: Widgetization of the Web

Need a knife? Or do you need chef's knife, carving knife, paring knife, serrated knife, utility knife, boning knife, filet knife, cleaver knife, santo ku knife, steak knife, mincing knife, oyster knife, de vein knife, clam knife, grapefruit knife, cheese knife, chestnut knife, tourne knife, peeling knife or one of dozens of other knives?

In many ways, widgets are like specialty knives. They do but one thing, but do it really, really well. Widgets generally provide specialized information, like package tracking or a traffic updates. Widgets can do everything from hormonal tracking to providing assistance with saying the rosary. (Widget catalogues are available at Widgetgallery, Snipperoo, Widgetbox and other sites.) Widgets are bolstering social media applications like MySpace and TypePad, and YouTube, Slide and other sites receive much of their traffic from widgets. For example, a YouTube video becomes a widget when it is added to a non-YouTube page. In many cases, widgets drive more traffic to sites than search engines do. Ultimately, widgets may write the obituary for portals.

Widgets come in three categories:

• Content: Provide information, such as news, weather or stock tracking
• Utility: Provide functionality, such as search, maps and chat
• Personalization:  Enable customization, such as countdown clocks, music, photos, etc.

Widgets can exist on a desktop, Web site, aggregation site like Pageflakes or Netvibes, or even be incorporated into an ad. Widgets enable both engagement and affiliation. For example, Purina has a widget that shows the latest pet-related news. With a widget from Adidas, consumers can share inspirational stories based on its "What Impossible Is" campaign, as well as shop for sneakers. Google has widget-based advertising called Gadget Ads, plus a home page that can be customized with widgets called iGoogle. Widgets can link customers to companies more closely. Widgets can communicate price changes, deliveries, new products and other information that must be frequently updated.

Like other aspects of digital branding, measurement is possible with download tracking, RSS feed volume and widget-tracking services from comScore. Site views are an additional metric; HotOrNot's Facebook widget doubled traffic at the people-rating site. In fact, look for "widget branding" to become the marketing buzzword of 2008, and "blidgets" – widget versions of blogs that can help broadly disseminate blog content– to become Blogs 2.0.

ProfitBrand Trend #6: Out-of-home advertising

The oldest form of advertising is getting a facelift.

The first ad was a primitive billboard scratched on a rock – "home-cooked brontosaurus" or its equivalent. For decades, outdoor, or "out-of-home" advertising didn't offer much more than that first billboard. But new visual, technological and measurement technologies, combined with advances in creative engagement, will make out-of-home advertising the rising star of 2008.

The outdoor advertising industry boasts about its reach and low-cost. "More people can view one particular billboard than the Super Bowl!" says the Outdoor Advertising Association of America. Media Dynamics says the cost of a TV impression is $15.20, while a billboard impression is $2.15.  But the claim of superb reach and low cost has been undercut by outdoor advertising's lack of measurement. Traditional traffic counts or diaries suffer numerous weaknesses. As a result, in most countries, outdoor advertising accounts for less than 5% of total ad spend.

But that is changing. The out-of-home advertising marketing expanded at a 10.6% clip in 2006, compared to overall advertising industry expansion of 6.4%, according to PQ Media. Global Industry Analysts projects that the world market for out-of-home advertising will reach $30.4 billon by 2010. Such growth will be fueled by four changes:

• New places: White spaces will be increasingly replaced by ad spaces. Already,  ads are appearing on airline tray tables and overhead bins. Arenas and malls  sport ads on escalator handrails and steps.  But the biggest new place may be inside your head. Soft drink machines, billboards and entertainment complexes are already using "hypersonic advertising." Walk by the billboard, and hear an ad no one else can hear, such as the gentle fizz of a soft drink being poured over ice. Essentially, hypersonic ads used a concentrated beam of sound that essentially "vibrates" your skull, giving you the illusion that you are hearing the message in your mind. Unlike other advertising, it is not something you can turn off or tune out. Inevitably, this will be combined with "passive analysis," which analyzes video feeds in real-time to determine the age and gender of passers-by, to deliver tailored audio advertising. The famous scene in "Minority Report" definitely wasn't science fiction.
  

• Instant ads: Also expect to see the spread of digital billboards, or LCD screens that can change ads instantly. That's a big advance over classic billboards, which take weeks or even months to change. Digital billboards are naturally captivating, plus consumers can't change the channel or hit the off switch. Digital billboards are part of the ads-everywhere explosion aimed at captive markets, such as retail TV, digital in-store merchandising, and "employee TV" (the latest tool of internal branding).

• Custom ads: Auto manufacturer Mini Cooper is experimenting with giving Mini drivers an RFID keyfob, which can then be programmed with a custom message. When the driver approaches an RFID-activated billboard, the custom message lights up. Who isn't going to look at a billboard with their name up in lights?

• Better measurement: Another advance is GPS technology, the guide-in-the-sky that is making maps obsolete. With traditional out-of-home advertising, calculating the value of those seeing the ads was dependent on methodologies with as much validity as "positioning." But travel and viewing patterns can now be tracked with GPS technology. For example, Nielsen Media Research claims its pager-sized GPS devices  in South Africa, Chicago, Los Angeles and Singapore can deliver "a reliable, people-based measurement system that delivers true reach, frequency and ratings data, complete with audience numbers and demographic breaks." GPS also helps track the progress of truck- or bus-side advertising through various neighborhoods. The digital advertising can automatically change messages depending on location. The GPS tracking information is later correlated with sales to help determine effectiveness.

ProfitBrand Trend #7: Rise of Islamic brands

Two recent headlines: The investment arm of the UAE government has taken an 8% stake in chip manufacturer AMD. Dubai Aerospace purchased 200 planes worth US$27.2 billion. And this is on top of other business news from the Middle East. At 555 meters, the Burj Dubai is the world's tallest skyscraper (and it's not even finished yet!). Dubai Internet City is one of the world's largest technological centers. About 25% of the world's construction cranes are in Dubai, completing $200 billion in projects. And on it goes…

Although Muslims make up approximately 20% of the world's population, and are as well known as the Japanese for their affinity for luxury brands, there are no Islamic brands on Interbrand's list of international brands. But backed by the increasing economic clout of the Middle East and Muslims worldwide, plus increasing marketing sophistication, Islamic brands will inevitably emerge, especially in the areas of food, finance, transportation and telecommunications. Potential candidates include Emaar, Genting, Mobile Telecommunications Company, Vestel, Saad Group and, of course, the rising star of the airline world, Emirates. Additionally, look for Western brands to start incorporating Sharia compliance into their branding, and looking at their advertising and messaging with a more culturally sensitive eye. This is especially true for banks, since Islamic finance is the fastest-growing area of banking.

Agree? Disagree? Are there other branding trends? Comments, please!

ProfitBrand Out In Paperback!

ProfitBrand: How to Increase the Profitability, Accountability and Sustainability of Brands is out in paperback!  That is very satisfying, because it means hardcover sales were solid enough to justify the publisher's investment.

In many ways, "ProfitBrand" was a groundbreaking book in its call for marketing accountability. That's one reason strategy+business named it as the "Best Business Book of 2005." Today, it seems like almost every marketing book now includes a call for brand and customer metrics.  While one part of me hates the increased competition, another is pleased that others recognize that marketing must move away from the fuzzy-wuzzy clichés of the past, like "brand personality," and toward accountability that can cost-justify branding expenditures to CEOs and CFOs.

If you haven't picked up your hardcover copy of ProfitBrand, buy your paperback copy today! And let me know what you think.

SMR: The Next Generation of Press Releases?

Is the press release, the 100-year-old workhorse of public relations, on the verge of being put out to pasture? Will corporate PR join the chant of "Die! Press release! Die! Die! Die!"?

The age of wikification, where brands are defined by customers and not "positioned" by companies, has spread to public relations. Instead of sending out traditional press releases, which have well-known flaws (a favorite: "it is difficult to extract news and information from press releases"),  forward-looking agencies and companies are looking at social media releases (SMR).

Essentially, SMRs incorporate Web 2.0 and other elements that give journalists and other recipients the visual, informational and other tools to create and understand a story from their own perspective. Key elements of a SMR can include contact information (including Skype and IM details), RSS feeds, a custom del.icio.us page, and various  multimedia resources, including video and podcasts. These can be accompanied by third-party quotes/endorsements and other background material, available online or via PDF downloads.

The classic – if such a word can be used for a concept that just emerged in late 2006 – SMR model is available from Shift Communications. Edelman, which enjoys a love-hate relationship with the rest of the PR industry, is pushing SMR with its "StoryCrafter," which, in Edelmanspeak, is "designed to offer pushbutton, fill-in-the-blank ease." (Full disclosure: I just did a podcast with Edelman on nationbranding.) Brian Solis, who is an active proponent of SMR, has written a good guide for putting together SMRs.

SMRs have numerous advantages. They extend the functionality and impact of the news release with multimedia. They provide tools  to tailor information, which makes them particularly effective at reaching bloggers. They make it easier for the resource-short media to report, which increases the likelihood of pickup. And, for the time being, they provide a way to stand out from the swarm of releases crowding editorial inboxes.

Any innovation has glitches. A great case study  illustrates how effective SMR can be, but also shows distribution can be a problem. Another case study underscored the need for careful proofing and testing. A missing letter in a link can send recipients into the black hole of a 404 error. Other media recipients have complained about the use of bullets instead of copy, which makes it harder to cut-and-paste

Despite the fact that at least four journalism schools are teaching SMR, the debate has been vigorous. Proponents like PRWeek claim SMR is "PR 3.0." Those with less hyperbole in their keyboards see it as old practices wrapped in new technologies, similar to the unfortunate habit of emailing bloggers with standardized pitches and offers to "talk to the CEO." The jury is still out ("I had hoped we would be talking more about what [the SMR] would do and how it would do it, but instead found a never-ending supply of cynical PR Pros and pessimists who would rather invest their time defending the status quo instead of finding a better way forward."), but it is refreshing to see the industry moving beyond century-old habits and hackneyed "positioning" ("the leading provider of XXXX solutions"). This is one of the most interesting issues to emerge from the PR industry in quite some time, which spends too much time moaning about why they don't get the respect they deserve from executives and the media.

Some tentative observations gleaned from the debate:

• Prepare for more work: The traditional press release model is so well understood that the youngest PR hire can quickly churn out the latest announcement.  Despite this facility, press releases can take weeks to emerge. It is amazing how corporate executives, lawyers and other wannabe players can spend more time on a release than on corporate strategy. Yet SMR will potentially reference a vast amount of material, ranging from videos to blogs to an array of Web sites. All that material has to be produced and/or researched. Can an SMR be sent out during times when a news event demands immediate distribution? And how long will it be before the lawyers start insist on reviewing every link in an SMR for even more delays than with today's releases?

• Provide context and substantiation: One reason journalists have a love-hate relationship with press releases is because they often make unverifiable claims. "Leading," "unique," "thought-leader (gag!)," "ground-breaking," etc. Through links and other resources, companies can not only verify such claims, but also provide the market and industry data that enrich a story and improve play.

• Think outside the media box: One of the most under-utilized tool for customer and prospect communications is the press release. It is amazing that companies will send a press release to uninterested media, often for immediate trashing, yet neglect to send the same information to their most important stakeholders – customers. SMR represents a tremendous advance in communications to a disparate customer base.
  

• Tagging is the new targeting: For decades, PR professionals have been told, "target your releases." Despite such nagging, they rarely are.  In many ways, tagging is like Google for the rest of us. While Google uses secret, ever-changing algorithms to categorize data, tags enable recipients to target themselves. If there is a weakness to the Shift Communications model, it doesn't emphasize tagging enough. Tag your SMR (and web site!) so they can be retrieved by StumbleUpon, del.cio.us, Reddit, Furl, Digg and other bookmarking sites. 

• Don't give up the traditional release: As much as they complain about press releases, journalists still depend on them. Some even prefer them over a format that puts them at the mercy of a broadband connection, or requires them to assemble multiple elements. Just as you now ask whether recipients prefer to receive communications via text or HTML, ask about preferences in receiving releases. Survey your media list about whether they prefer traditional or social media releases. Repeat the survey every 12-18 months.
  

• Beware of manipulation:  In an age where resumes are routinely embellished, it is inevitable that some witless agency will concoct a SMR ecosystem where every link and reference is a fake. Even Coca-Cola, which should be above such two-bit shenanigans, created a fake blog to support Coke Zero. In the awkward but understandable age of YouTube-ification, where every word, action and misdeed is prone to be promoted for worldwide posterity, the blowback from such stupidity will be immense.   

The marketing industry prides itself on "creativity" and "pushing the envelope." Actually, it is quite conservative. The world has changed dramatically in the last 30 years, but the concepts of today would be familiar to anyone from the 1970s. Press releases. 30-second ads. Direct mail. "Positioning."  That is why SMRs are a brilliant idea, but must fight against the staid inertia and standardized practices of most PR agencies. Still, the future is here in bits and pieces, and so you should start experimenting with SMR now. The venerable press release may have lasted a century, but with the pace of change today it may not last another decade. 

Resources & background:

Social Media Release group on Google

History of the SMR (if slightly biased)

SMR in holoistic context

Web 2.0 PR tools

SMR & metrics

How To Write A Terrible Tagline

So you want a tagline to go along with your corporate colors and logo? Good for you! How can any company make it big without a tagline tagging along?

In many ways, a good tagline is a bit like porn: hard to define, but easily recognizable. Yet despite the wealth of good examples out there – “Just Do It,” “You’re In Good Hands,” “Every Little Helps”– many taglines fail the primary test of a good one – succinctly communicate the value of a benefit or experience.

Sometimes, knowing what not to do is more important than knowing what to do. So here are some suggestions for writing terrible taglines:

• Don’t differentiate between product and corporate taglines: Product and corporate taglines are as different, as Mark Twain might have said, as lightning and a lightning bug. Product taglines encapsulate the USP (unique sales proposition). As a result, they may change as products and/or the USP changes, or even fade into the corporate sunset. Corporate taglines reflect the foundation for long-term customer relationships. The easiest way to write a bad corporate tagline is to confuse it with a product tagline.

• Use a committee: If two heads are better than one, then 10 are best. Make sure that your tagline represents a consensus among individuals with different agendas. The surest way to make sure that your tagline says nothing wrong is to make sure that your tagline says nothing at all.

• Make it long: Many memorable taglines are 6-8 words, and some are even shorter. So be sure to describe all your many capabilities in the tagline. Surely, the more it says, the more that people will remember you.

• Ask a question: “What can brown do for you?” (UPS) “Where do you want to go today?” (Microsoft)  “Where else?” (Sears) This is a particularly good way to solicit answers don’t want (“none of your business,” “I don’t know, and I don’t care.”). Using a question also works if you are unwilling to make a statement about your brand, and you want your brand to be defined by all the varied answers that can be given. There is only one exception – when your tagline can only be answered by “yes” or “no.” “Got milk?” is one of the most successful taglines of the past decade.

• Use “we:” According to an ADSlogans Unlimited Database survey, 19.09% of taglines begin with “you” or “your.” This approach looks at the offering through customer eyes, which is the heart of all good branding. By contrast, taglines incorporating “we” is in third place, at 6.03% of total taglines surveyed. “We” taglines essentially elevate the firm over the customer, plus contributes to a company-specific narcissism. Proof: “We’re Exxon.”

• Follow hot trends: One- or two-word taglines are fashionable now.  “Drive.” (Nissan) “Invent.” (HP) “Belleve.” (Yahoo Personals). While such taglines can pack a punch, they also have the ephemeral quality of a talk-show trend. Inevitably, someone will start asking questions like, “how can we give people a reason to drive our cars, and not just any car, in our tagline?”

• Use the tagline the CEO likes best: If the tagline committee deadlocks or runs into a roadblock, just use the CEO’s favorite. Don’t bother to test it, especially among customers.

• Let employees pick their own tagline: One trend is to develop a variety of taglines, then let employees pick the one they believe is most suitable for their business cards. Do this especially if you are interested in developing an inconsistent brand or confusing customers (“I understand why you have different titles, but why do you have different taglines for the same company?”)

• Don’t test international translations:  The surest laugh in any Marketing 101 class are examples of how some English taglines and slogans have been translated. Look at how "finger licking good" “came out in Chinese: "Eat your fingers off." Don’t waste money on testing, and your tagline too can be added to that Marketing 101 list. Actually, many argue that taglines should never be translated because of cultural or linguistic minefields.

• Use a bland label: To demonstrate a complete lack of understanding about what you can provide customers, use a label: "A company called TRW" or “BASF: The chemical company.”

• Use “delivering,” “solutions,” “quality” or “value:”  Cliches,  overdone to the point of appearing on pizza parlor menus, have little appeal: “Quality in everything we do.” (Ernst & Young)

And the worst mistake of all:

• Consider a tagline to be your brand: It isn’t. It is a tiny facet of your brand, which is defined by customers based on your promises, services and delivery.

Blogging & Corporate Relations

I'm speaking on Friday, May 24, on a panel in Kuala Lumpur on "The Blogging Explosion and the Impact on Corporate Reputation." The panel, sponsored by the IABC in Malaysia, will address whether "blog relations" is as important to corporate communications as media relations, investor relations, government relations and customer relations. Other members of the panel include Ahirudin Atan, president of the National Alliance of Bloggers, and well-known Malaysian blogger Jeff Ooi. The fourth member of the panel is the principal communications counsel for the mobile wireless provider DiGi. The event begins at 3 pm at the Hilton Kuala Lumpur.

I will be discussing the methodology behind a global monitoring effort to examine how Malaysia is perceived in CGM (consumer-generated media). We looked at 16 million blogs over a two-month period to determine what visitors to Malaysia thought of their experiences here.

Review: "How to Sell at Margins Higher Than Your Competitors"

Cutting prices to boost sales is a classic strategy, but it more often is the first step on the road to ruin instead of riches. Price cutting not only sabotages profitability, but, paradoxically, it creates more work for the sales force. Worse, any customer gained on the basis of price alone will run toward anyone else offering a lower price.

But rare is the sales person who doesn’t wilt in the face of a prospect insistent on driving a bargain. Listen to the little white lies that accompany discounted orders: “We’ll make it up on volume.” “We got our foot in the door.” “He was just about to sign with a competitor.”

“How to Sell at Margins Higher Than Your Competitors: Winning every sale at full price, rate or fee” by Lawrence L. Steinmetz and William T. Brooks put the backbone back into your sales force. The book lays out strong arguments for maintaining price discipline, pointing out that the sales force often wants to cut price for either the wrong reasons, or because they are too lazy to truly sell. Top executives can also learn that price discipline is much easier to maintain when pursuing profitability growth instead of the false gods of sales and market share growth. As the book stresses again and again, “Business is a game of margins, not volume.”

The strongest argument against price-cutting centers on the mathematical implications of any reduction. Some put their faith in price-cutting because they believe that a 10% price cut will lead to a 10% increase (or even more) in sales, ultimately allowing the company to make the same amount of money – “we’ll make it up on volume.”  But the authors show, using easy, back-of-envelope calculations that “when we cut our price by 10% on a 35% gross margin, we actually cut our gross margin in excess of 20%.”  In practice, that means that sales volume in dollars must increase by 80% -- repeat, 80%! -- to make the same amount of money that was made with a 35% margin. Even more daunting, the quantity of product that must be sold to recoup previous margins has to double.

The implications are clear. A sales force is going to have to work twice as hard to make the same amount of money. The bar gets even higher if competitors match the price cut. Even if sales can double the volume, manufacturing, support and other operations will be put under pressure, potentially affecting quality and customer relationships.

Compare that unhappy possibility with a 10% increase in price. Gross margins will expand by 17%. Yes, sales will be lost with a price increase, but companies with a 35% gross margin “can lose a little more than a third of all the sales they’ve been making and still make the same amount of money!” Additionally, higher prices bolster brand credibility. How else can Rolex sell manual watches for $8,000 that don’t keep as good time as $40 electronic Casio watches?  No wonder the authors advise, “if you ever make a pricing error, you should make it on the high side.”

If the consequences of a price cut are so great, especially compared to a price hike, why do companies let customers steal from their bottom line so easily? A major reason is that companies mistakenly believe that customers buy mainly on price. Numerous studies have pointed out that price is rarely the primary factor driving a sale.  Few consumers, for example, are wearing the cheapest clothes they could find. Businesses seek reliability, service and, most important, on-time delivery. When things go wrong in a business, no one ever thinks, “Well, at least I got the cheapest price.”

Rather than selling on price, companies should follow the time-honored – but oft-ignored – wisdom to sell on value. Such value can be timely delivery, guidance on complex purchases, service, reliability, knowledge of customer operations, breadth of product offerings, service and more.  Selling on value instead of price takes executive commitment, customer knowledge and true sales skills. That’s hard, so sales forces often take the easy way out by waving the pricing white flag immediately after the greeting. One way sales people often invite discounting demands is by using such wording as “our usual price is…,” “the quoted price is” or “how do you feel about $200?” Sales forces also surrender by “cracking” at the first sign of customer resistance: “Now, you know I want to work with you on this.”

A sales force that isn’t trained in true selling, or a management team that is willing to sacrifice profitability for a sale, is easy prey for skilled purchasing agents. They’ll lie – “a competitor is offering it to us for less” – and be unscrupulous enough to generate fake quotes.  They will throw tantrums. They will run down your product. They ask for volume discounts for low-quantity orders. They pretend to be busy, saying, “just give me your best price now.” They ask for throw-ins, such as favorable credit terms or free delivery, when their pen is poised over the contract.

The book offers solid advice on dealing with price resistance. Key tips include:

• When customers tell you that price is more important than delivery or quality, tell them “great, we’ll ship it to you in four years.”

• When customers say that they can get it cheaper from a competitor, point out that the cheaper price comes with lower quality, lack of inventory, no guarantee, etc.

• When customers say, “I can’t pay more” or “it’s not in the budget,” ask “why not?” The answer will help determine who the true decision-maker is.

• When customers ask for “your best price now,” get out your pen and ask them to sign a purchase order that reflects a price good for only two minutes.

• When customers misrepresent their purchase volume to get a lower price today, get payment upfront and give them a rebate when future orders are actually received.

“How to Sell at Margins Higher” provides good tips on how to tell when your prices are too low, or too high.

Most pricing books descend into a jungle of arcane formulas while many sales books sound like Oprah on steroids, pushing a panacea of motivation, confidence and persistence. Although the book is a bit repetitious in places, Steinmetz and Brooks present a balance between both extremes, giving both sales forces and management the wisdom – and the courage – to support pricing that matches the value delivered to customers. 

Teach Your Customers Well

"Oh-hi-yo-go-za-imas."

If you are flying from Los Angeles to Tokyo, you can learn how to say "how are you" in Japanese. The lesson is provided as part of the JAL in-flight entertainment in four language categories: numbers, dates, words and dialogue. Other airlines also offer interactive audiovisual language programs, including Virgin Atlantic, Air France and Singapore Airlines.

It's all part of the trend toward brand engagement, one of the two great trends reshaping branding today and tossing such tired, 30-year-old theories like "positioning" to the dustbin of marketing history. (The other related trend is wikification, which says that brands are defined by customers – not companies – based on their own and others' interactions). Engagement, a broad term encompassing everything from sampling to product placement to personal service, is the process of forming an emotional or rational attachment to a brand by using it or viewing it in a personally relevant context.

Most brand engagement activities today revolve around enhancing experience. Companies race to make their online experience compelling. Apple and Sony make experiences, not products, the centerpiece of their stores. Lexus doesn't sell cars; it sells the experience of being a Lexus customer.

But as JAL and other airlines understand, another important aspect of engagement is brand education. Brand education takes two forms: education about the offering and its usage; or contextual education relevant to the brand. Companies are generally doing a terrible job at brand usage education, and are getting better at contextual education. But there is a new element of brand engagement just emerging will force companies to take a new look at brand education.

No brand experience can be positive if a feature is misunderstood or information can't be found, or worse, read. Yet companies do a terrible job with their manuals, product design and Web sites. How many times have you sought information in a manual, only to find the needed info missing, poorly explained or illustrated by a micron-sized illustration? Or spent time looking for an inaccessible feature? Or tried to decipher a Web site with 10 pt. grey type on a white background?

Companies are getting much better at providing contextual education. Look at the ski lodges offering free lessons on bunny slopes, or Home Depot's famed Saturday morning classes in everything from birdhouse building to bathroom tiling. Even in-flight language lessons are part of context-based education.

Reinier Evers, the perceptive founder of trendwatching.com, calls such context-based education "status skills." "In economies that increasingly depend on (and thus value) creative thinking and acting, well-known status symbols tied to owning and consuming goods and services will find worthy competition from 'STATUS SKILLS': those skills that consumers are mastering to make the most of those same goods and services, bringing them status by being good at something, and the story telling that comes with it."

The term "status skills" – especially when inflated with self-important capital letters – is a poor choice because it implies we learn to impress others instead of to improve our lives or careers. (What do you think of people who show off what they know?) But it does underscore the fact that knowledge about an offering either makes a customer more loyal or raises switching costs, and increases the potential for word-of-mouth. In fact, one study claimed that 20% of consumers who learn a skill based on a product will buy that product, 65% will buy that brand again, and a mouth-opening, eyebrow-raising 96% will tell a friend about the experience.

Examples of usage or contextual education range from the corner store that offers cut-rate computer classes, racing lessons from luxury automobile firms, wine-tasting on cruise ships, make-up clinics in department stores and many more. Some lessons and advice from these brands:

• Get the basics right: Can your sales force answer questions about compatibility? Is your manual easy for a non-MIT grad to understand? Does it have all relevant information about features and usage? Does your Web site comply with basic communications design principles, including navigation and content? And, most important, is your offering iPod-easy to use?

• More education, less promotion: Remember that a classroom is not a captive audience for advertising or other corporate propaganda. Product functionality must only be taught in relation to helping student customers achieve a personal or business goal. In other words, PhotoShop's airbrush feature is not about pixel diffusion or even ease-of-use; it's about removing age spots from a picture of your parents on their 30th wedding anniversary.

• Bite-size is better than mouth-size: Learning is hard work. Make sure that educational branding occurs in small, easy-to-absorb lessons. Include as much hands-on involvement as possible. And, wherever possible, offer ongoing learning programs, not just classes.

• Develop an virtual brand university: Go beyond product tutorials to offer online courses in material relevant to your brand. Proctor & Gamble has a "virtual university" for consumers. Sony offers online classes in digital photography and scrapbooking. Atkins has offered classes in nutrition and exercise. Financial services companies regularly offer e-courses on investing and retirement planning.

But the biggest trend in brand education – and one that is closely linked to wikification – is customer-generated lessons. Just as YouTube and blogs have transformed everything from branding to reporting, sites like WikiHow – "the how-to manual that anyone can write or edit," VideoJug – "life explained, on film," SuTree – "an online index and library for free video-based lessons, tutorials, lectures and how-to's" and Viewdo– "know-how-on-the-go" – open an entire new frontier in branding, offering both opportunities and threats. No one is better qualified, or has more credibility, than a knowledgeable customer demonstrating how to use a product. But what if the information outlines a shortcoming, or demonstrates an unsafe, unwise or even illegal product use? Does anyone remember how cocaine users favored McDonald's coffee stirrers?

So teach your customers well. Remember that knowledge leads to action. Give them the gift of useful and relevant knowledge, and in return they will give you brand loyalty and word-of-mouth.

Advertising Awards Hurt Advertising

A speaker at a recent advertising event boasted about the 400 – yes, 400! -- creative awards he had won. Not long before that, a copy writer promoting a seminar said his credentials included more than 700 awards – and he was under 35.  A large agency ends its emails with a sig claiming it has won more awards than anyone else.  A new creative director profiled in an advertising magazine wants to put his agency on the map “by winning more awards.”

So many awards are given out like candy at a children’s birthday party that the  advertising industry threatens to become a parody of itself. Worse, however, the plethora of awards is dragging the industry into irrelevance in the eyes of the business community, which is especially disheartening at a time when marketing is trying to win a long-sought seat in executive boardrooms.

Awards do have a place.  Every industry has its feel-good events. Awards represent a  psychic payoff in an industry renowned for low pay and long, hard hours. It looks good on resumes as long as the number of awards is confined to double-digits. And it can put a smile of the face of clients who don’t know any better.

But the award-giving – and the excessive importance agencies attach to winning yet another plaque or piece of plastic – has clearly gotten out of hand.  Not only does the number of awards make any individual award practically meaningless, but the deceitful practice of “scam ads” – crafting an ad just to enter in award shows – is an open secret. For example, Lintas & Partners Worldwide’s Australian agency had to return two Bronze Lions won at the International Advertising Festival when it was discovered that neither ad had won.

Agencies must understand that winning awards has little to do with winning the respect of the business community. In order for agencies to achieve the long-sought goal of being seen as strategic partners instead of glorified art schools., they must judge advertising by the same standards that business uses to judge itself.

Look at the criteria for most advertising shows – “impact,” “creative,” visionary,”  “boldness,” “awesome,” “stunning” and other pretty words. These fluffy award standards are usually applied by judges from the advertising world, which is a bit like having fathers and mothers referee their childrens’ football games.  Fun yes, credible no.

For awards to be credible, judges must come from the business world. Additionally, criteria must be based on business standards and measurements. One of the world’s most prestigious awards already recognizes this. Since 1980, the IPA Advertising Effectiveness Awards Competition has given out awards every two years based on a close analysis of advertising effectiveness and “a clear demonstration that advertising can be proven to work, against measurable criteria.” Most of the judges are business experts with no links to agencies.

Travelocity.co.uk, an online travel booking site, won a “Gold” IPA award after demonstrating a 123% increase in visits, a sales boost of 135% and a 44% growth in market share. The ROI was estimated at of £5.60 for every £1 spent. Virgin Mobile won an award from the Advertising Federation of Australia with a campaign that delivered $37.9 million in incremental profit and a return on investment of $4.36 for every $1 spent.

The best practices for marketing accountability, recently released by the Association of National Advertisers, make excellent criteria for future awards that seek business relevance.  These practices include “metrics that reflect management expectations; a rigorous, end-to-end measurement process; and responsibility for proving short-term ROI of marketing expenditures.” Awards groups must also look at using respected business consultancies like Booz Allen & Hamilton or PwC  instead of creative directors and similar ilk to judge competitions.

Some in the industry argue that a rigorous focus on metrics will dampen creativity. Absolutely not.  “Cog,” the award-winning, Internet-popular ad for Honda produced by Wieden + Kennedy UK, was responsible for a 28% increase in sales and £388 million more revenue.

David Ogilvy, the godfather of advertising, said it best in 1994:  "Nowadays, you know, the creative departments and agencies are dominated by specialists in television. Their ambition is to win awards at festivals. They don't give a damn whether their commercials will sell, provided they entertain and win awards.  They won't have anything to do with research if they can help it.  These creative entertainers have done the advertising business appalling damage."

Agencies are always on the hunt for new business.  They should remember that businesses that focus on financial and other numbers are not going to be interested in agencies that focus on the number of awards.  400 – yes, 400! – awards indeed. What does that have to do with ROI?

Catch the Korea Wave

The Korea Wave has been going on for so long that a backlash is emerging. But the reasons for the Wave, and how it was promoted and sustained, provide interesting lessons for branding in both Asian and Western countries.

The Korea Wave, referred to as “hallyu,” is shorthand for the flood of Korean TV shows, movies, comic books, fashion and video games that has been sweeping across Asia since 1999. The Korean drama “Jewel in the Palace,” a historical drama about a cook in Korea’s ancient royal court, was at one time the most popular program in China, Hong Kong and Taiwan. As many as 20% of Japanese TV viewers tuned into the Korean drama, “Winter Sonata,” which has megastar Bae Young Jun standing by his first love through 10 years of car accidents and amnesia. Scroll through the MP3 of any Asian teen, and see more songs from Korean “K-pop” artists than American music stars.

Other countries have not been immune. The Korea Wave is the latest trend sweeping the Middle East. Korean dramas are among the most popular in Mexico, whose own soap operas are among the most watched in the world. The Korean movie, “The Host,” is an international blockbuster. Even in the US, the Korean pop star Rain sold out Madison Square Garden twice. Daniel Dae Kim from the hit show “Lost” was one of People magazine’s “Sexiest Men Alive.”

The benefits to Korea have been substantial. Tourism to Korea has soared, reaching a record 6.15 million in 2006 – not bad for a country still technically at war with a nuclear-armed neighbor just over the horizon. Exports of film and TV programs is approaching $2.5 billion. Even the sale of comic books has grown from a miniscule $240,000 in 1999 to $3.26 million in 2006. Korean movies are winning top awards at Cannes and other film festivals. Thousands are taking Korean language and cooking classes worldwide, and the Korean native dress (hanbok) was the highlight of a Paris fashion show.  About 150,000 attended a Hallyu Expo. Matchmaking services promise to find Korean husbands, and many have plastic surgery to look “more Korean.”

Reasons for the popularity of Korean culture vary. Some say that Korea filters cultural messages from the West, making them more palatable for Asian tastes. Others say that the common themes of Korean drama – the struggle between filial piety and emotional love, the arrival of rich and kindly Prince Charmings, and the importance of family-centered Confucian values – appeal to Asian tastes more than the sex and violence associated with Hollywood. Women also have stronger roles in Korean dramas than they do in other Asian shows. Inroads by Korean manufacturers like Samsung and Hyundai have created a beachhead for Korean cultural exports.  High-IQ pundits claim that the Korea Wave represents the first move toward a Pan-Asian culture that will unite Asian countries around common values.

More cynical observers point to the well-planned efforts of the aptly named “Ministry of Culture and Tourism.” For example, the ministry has set up public relations offices overseas called “Korea Plaza” to strengthen the country's image through hallyu. Korean President Roh frequently stresses, “A powerful cultural nation will become an economically strong nation.” Korean delegations regularly visit Asian countries not to talk about trade but to promote Korean cultural exports.  And the packagers of pop stars like Rain are as slick and as disciplined as those that put together New Kids on the Block and Backstreet Boys.

Like any trend, there has been a backlash. The Vietnamese government is threatening to ban Korean TV shows. In Japan, anti-Korea wave blogs abound, and a comic book called “Hating the Korean Wave” became popular.  In China, there have been calls for boycotts of Korean movies and shows.

Debate continues on whether the Korea Wave is a passing fad or continuing trend? One sign: Movie exports have plunged by 68% in 2006 compared to the previous year, and every Korean movie flopped in Japan in 2006. But Hollywood has had bad years too, and its influence continues.

So what are the potential brand implications of the Korea Wave?

• Culture is brand: Almost all of Korea’s many cultural treasures were destroyed during the Japanese occupation and Korean war. As an alternative, Korea leveraged its living heritage to encourage tourism, promoting everything from movie sites to homes of the stars. The government has also devoted considerable resources to promoting its culture, language and food abroad. It is a smart move; cultural tourism is estimated to total $1.5 trillion worldwide.

• Korean values sell: Don’t be fooled by the spiky orange hair in Tokyo and facial tattoos in Taiwan – Asia is fundamentally much more conservative than the west. Family responsibilities, duty, honor, “face,” personal and group identity and similar issues resonate much more strongly here.  As a result, even the most modern, youth-oriented messages must echo eternal values or risk rejection.

• Korean stars boost sales: The main effect the sexy ad Paris Hilton did for hamburger chain Carl’s Jr. was to crash its web site with requests for downloads. But Korean stars can drive sales of everything from hair gel in Malaysia to jeans in China. When a Korean refrigerator manufacturer hired a Korean TV as its spokesman in Vietnam, market share went from nothing to 34% in less than five years. But don’t expect this talent to come cheap. Korean movie stars get $5-10 million per picture.

• Use Korean stars to penetrate Western markets: Companies are devoting a lot of attention to penetrating the Hispanic market. But the Asian market is potentially even more lucrative.  Leverage the eagerness of Korean stars to penetrate the US market to promote your brands to the Asian community.

The US is often called a celebrity-driven culture, but fan devotion rarely reaches the levels of fanaticism seen in Asia. Only in Asia would people pay to look at a plastic model of a favorite pop star sitting on a white leather sofa. If you want to brand quickly in Asia, ride the coattails of an emerging Korean star.

Wither Singapore Girl?

The Singapore Girl, symbol of Singapore Airlines, is one of the longest-running brand icons. But the poor girl's head is now on the chopping block, thanks to a decision by Singapore Airlines to change agencies after more than 20 years. Whenever a new agency is chosen, the chances are high that previous taglines, images, icons, messaging and strategies will be replaced by ones that the new agency can take full credit for. Will the new agency keep the Singapore Girl, or gradually sideline her like an aging wife?  Stay tuned....

This article, by David Fullbrook, provides an excellent look at the evolution of the Singapore Girl, and provides some hints about what might happen next.

How to Defeat Brand Insurgents

The video of the Comcast technician asleep while on hold to his company’s technical support. The numerous online forums about Dell’s shoddy customer service. The broken screens on Apple’s Nano and poor battery life on early generations of iPod. The tax return errors of H&R Block. Wal-Mart’s labor policies.

What do these PR disasters have in common? Brand insurgents. Like the U.S. military, traditional brands are unmatched in a classic Coke-vs.-Pepsi war. The reams of market research, “shock-and-awe” advertising, distribution control and economies-of-scale give traditional brands the scale to ignore unhappy customers. How many complaint letters have been written in vain? How many articles on customer service sound as if they have been cut-and-pasted?

But just as US forces have been bedeviled by Iraqi and Afghan hit-and-run fighters, many large brands have been hit by media-savvy, driven and passionate insurgents willing to engage in no-holds-barred attacks. These brand insurgents combine digital media and an understanding of what drives news to escalate a single complaint into a worldwide firestorm. A fascinating article in The New Yorker that examines the new military thinking on insurgency quotes an expert on the new battlefield realities: “This ain’t your granddaddy’s counterinsurgency.” Just as the military is coming out with new ideas to fight insurgents, brand guardians must develop new strategies to fight their own insurgents. Stale tactics like “positioning” from your granddaddy’s marketing battles just can’t cut it in this new environment.

The new ideas are encapsulated in an updated CounterInsurgency (aka COIN) manual produced by the US Army and Marine Corps. (Unbelievably, this manual had not been updated in more than 20 years – or about the time that “positioning” first emerged as a theory.) The introduction to the COIN manual sums up the current challenge to brands well: “Effective insurgents rapidly adapt to changing circumstances. They cleverly use the tools of the global information revolution to magnify the effects of their actions...” This manual, and the strategic thinking behind it it, offers guidance to those brands which also face insurgents.

The most fascinating insight – and the one that applies most to branding – is that insurgencies are based less on ideology and more on social networks. People are largely driven to fight a greater power not because of a fundamental belief but because of their family, friends and associates. One study of 172 alienated Muslims who became radicals found that the common element among all them was not poverty or religious belief but the activities and beliefs of their peers.

Interestingly, these networks are held together by what may be called “anti-brand stories.” The power of stories in branding is well-known. The classic anti-brand story concerns Procter & Gamble, whose logo supposedly symbolizes the “mark of the beast” in Revelations and who supposedly uses its profits to support the Church of Satan. 

The other interesting insight emerging from the new approach to insurgency is that, despite relationships among insurgents and a common story, insurgents are not a monolithic force. For example, Iraq’s insurgents range from hard-core criminals to Sunnis to Shiites to nationalists to anarchists, united only by a common enemy. Likewise, many who attack brands also share little in common except their tactics.

The new brand environment is no place for old tactics:  “The side that learns faster and adapts more rapidly – the better learning organization – usually wins,” says the new COIN manual. So what lessons does the military’s COIN strategy, and the way it’s being implemented in Iraq and Afghanistan, hold for  brands facing their own insurgents?

• Speed is of the essence: First impressions make the strongest perceptions. When Iraqi insurgents blow up a military vehicle, they videotape the attack from multiple angles, edit a high-impact video, add a sound track with hypnotic chants or songs of victory, and post it on the Internet within hours, complete with a button soliciting donations. By contrast, the military is still gathering information to send out a written press release that needs multiple approvals. Not only does the video reach more people, it also has greater impact on perceptions because it makes its case first. If your brand is attacked, don’t ponder, debate and wait for the lawyers to get back to you. Have a strike force that responds immediately.

• Make friends before you need them: The strike force must leverage an existing network of information allies. One reason the US prevailed in the Cold War was because it had numerous cultural, educational and economic outreach programs, such as USIA libraries and Radio Free Europe, to citizens behind the Iron Curtain. This built a community who helped promote Western values, and counterbalanced Soviet propaganda. Find out now who your friends are in the media and blogosphere, and line up customers and experts who can credibly support your case.

• Deliver on promises: In Afghanistan, many US military leaders sit down with tribal leaders over bread and tea before military operations. “If you help us, how can we help you?” The answers can range from Korans to generators. The military gathers the supplies, then hand them over to the tribes within hours after the battle ends. The result is both credibility and goodwill. Listen well to customers and other stakeholders, and make sure you quickly deliver what you have promised.

• Segment the enemy: Unfortunately, the struggle against violent extremism has fallen into a stupid, self-defeating dichotomy: “you are either with us or against us.” But the new counterinsurgency stresses that differing insurgent groups are likely to have differing agendas, even if they are united in battle. The first step in fighting brand insurgent is to understand each group. The new COIN manual stresses the importance of “insight into cultures, perceptions, values, beliefs, interests and decision-making processes of individuals and groups.” Then, just like customers, insurgents must be segmented, with separate information and other strategies to address their issues. Or, as Pentagonspeak puts it: insurgents must be “disaggregated.” The blogger complaining about customer service must be treated differently than the one questioning corporate environmental policies.

• Don’t treat customers like the enemy: Customers can’t get through to a live operator? Technician doesn’t show up as promised? Interest rates or other details are changed in fine-print notices? Offers are made to new customers that aren’t made to existing ones? No wonder customers can feel like an enemy that is “targeted,” “captured” or kept at bay. The COIN manual stresses understanding the local environment so much mainly because winning the hearts and minds of the people is vital to counterinsurgency. If you treat customers with distrust and suspicion, then expect them to defect to your true enemy – competitors.

• Hire brand anthropologists: One reason for the success of the occupations of Germany and Japan after WWII is that the military listened to – even partnered with – anthropologists who understood the local cultures. The US is belatedly sending anthropologists to Iraq and Afghanistan in the spring. Leading design and other firms are moving away from traditional market research to direct observations in the home and workplace. The insights over time are much more valid than those that emerge from a 10-minute survey or two-hour focus group. Either hire such brand anthropologists, or become one yourself by spending as much time with customers as possible.

Branding in the YouTube age is a lot harder than in the days of Big Media, where limited outlets simplified the task of affecting perceptions. But now digital media and other forces give customers – and insurgents – the ability to drive your brand. Slowly, painfully, the US military is learning how to fight back against insurgency. Take their hard-won lessons to heart for your brand.

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You're Fired! Wal-Mart vs. Julie Roehm

Cards on table: I avoid shopping at Wal-Mart. I also think Wal-Mart shafted Julie Roehm. But I also believe Roehm should not be hired for any marketing position again.

Roehm, you may remember, was the senior vice-president of marketing who was fired by Wal-Mart in December. The story has been more National Enquirer than Fortune. The advertising agency gets fired weeks after being selected. Wal-Mart alleges acceptance of improper gifts from agencies and even sexual dalliances with subordinates. Wal-Mart even takes away her discount card.

Roehm's side of the story is outlined in a BusinessWeek story. It is the first time she has given a major interview to the media. For someone telling her side of the story, she does not come out looking good.

Everyone in branding is familiar with the backstory. For a variety of marketing and other reasons, Wal-Mart is no longer the growth engine it once was. It was searching for a new marketing strategy as part of a turnaround. That new strategy would move away from the "everyday low pricing" that primarily appealed to the less-affluent, and attract a wider audience among the middle class. To execute that strategy, Wal-Mart  even came out with its own designer labels like "George."

To help with the turnaround, Wal-Mart hired Roehm, 36,  with a base salary of $325,000 and a signing bonus of $250,000. Roehm had been director of marketing communications at Chrysler Group. She had made her mark with edgy advertising, including the infamous "Lingerie Bowl" ad that was scheduled to show during the Super Bowl. Chrysler canceled the showing, scared off by the reaction from those offended by Janet Jackson's famous "wardrobe malfunction." Part of Roehm's mission was to be a "change agent" at the company's headquarters in the small town of Bentonville, Arkansas.

But 10 months after she was hired and shortly after hiring DraftFCB as its agency, Roehm was fired. She has since filed a $1.5 million lawsuit against Wal-Mart.

A jury will sort out the rights and wrongs. Oddly, after such a debacle, BusinessWeek calls her a "marketing whiz." But here's why Roehm would be wrong for any position in marketing:

• She didn't do her research:  A library of books have been written about Wal-Mart, including many by former executives. All point out the overwhelming focus on cutting costs. Some executives even use doors on supports as desks to avoid buying office furniture. Offices are windowless; walls, gray. But one of the first things Roehm did was to "paint her office chartreuse with chocolate-brown trim," according to BusinessWeek. This obviously angered Wal-Mart. In its response to Roehm's suit, Wal-Mart says Roehm "is free to collect 'a step ladder and paint supplies."

• She lost focus on who pays the bills: Following a tradition set by founder Sam Walton, Bentonville executives spend a lot of time visiting stores and talking to customers. But that was not Roehm's focus. Says BusinessWeek:  "For much of the summer, Roehm jetted around the country visiting the 30 or so ad agencies that were bidding to win the $580 million Wal-Mart account." Remember, too, how cost-conscious Wal-Mart is.

• She didn't understand marketing: Culture is fundamental to marketing, as everyone who tries to sell to the Hispanic, international or other segment understands. It is also fundamental to organizations. How many trees have been killed to print books and newspaper articles about cultures within businesses? So what is Roehm's takeaway from her painful experience: "The importance of culture. It can't be underestimated." She should have learned that LONG before she reached her position of responsibility.

• She got sucked in by the 'Dark Side': The Dark Side that appealed to Darth Vader was power. The Dark Side that appeals to marketing is creativity. Like power, creativity can be a force for good as well as evil. As the Lingerie Bowl shows, Roehm was looked for "edginess" in her advertising. The chief  spokesman at Chrysler, her former employer, says, "We're probably the edgiest automaker in terms of the things we try. And the times Roehm went over the edge have been well documented." Part of Roehm's problem -- although not her fault -- resulted from her winning ad agency placing an ad in an industry publication showing a lion mounting its mate. The headline read: "It's good to be on top."  Remember, the purpose of marketing is not "to go over the edge" but to get people to buy -- not once but again and again.

• She didn't understand how to execute: Branding execution depends on two factors: Internal buy-in and external support from supply chain and other partners. Without internal buy-in for your project, it is doomed. How did Wal-Mart  ultimately beat KMart in the retail sumo ring? One factor was Wal-Mart's famous weekly meetings, which kept managers up to date and focused on common goals. BusinessWeek: "Roehm, on the road and unaware of how important it was to attend these meetings, missed several in a row. "'Had I known,' Roehm says, 'I never would have been gone on Friday.'" Had you known??!! Did you not research your company? Did you not talk to your peer executives?

Wal-Mart has mud on its face, too. It hired someone who obviously would not fit in their culture. Some of Roehm's problems stemmed from Wal-Mart's organizational weaknesses. For example, the consumer research and marketing strategy department reported to Roehm's boss instead of her. To make matters worse, the manager of this department tried to shut her out, according to Roehm. Research is so important to branding that it needs to be integrated within marketing, not separated. Wal-Mart's accusations of sexual impropriety on Roehm's part are both irrelevant and unseemly. Merchandising was the most powerful force in the organization, which led to an over-emphasis on in-store signage to drive sales. Wal-Mart didn't commit to a new strategy long enough to see whether it would work. As soon as same-store sales began to slide, Wal-Mart returned to its "everyday low prices" USP.

But Roehm still made too many rookie mistakes. Would you want her to head your marketing program now? Julie, save your signing bonus, and I sincerely hope you'll win your lawsuit, because I don't think you will ever work in branding again.

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Dumb-Ass Branding: Ford and the Taurus Revival

What do you do after making a massive branding mistake? According to Ford, you compound the error by making a bigger mistake.

Last fall, Ford killed off the Taurus brand. Despite the fact that the car had saved Ford financially in the ‘80s and outsold the Camry and Accord for five years running, Ford failed to give the car any branding support. While the first Taurus design “scared” Ford’s then-CEO, the follow-up design in 1996 was as boring as a windshield wiper. It stopped advertising the car for two years, and gave the car the automotive kiss of death with bulk sales to rental car fleets. No one ever washes a rental car, nor does anyone buy one. (Earlier blog on Taurus.)

Instead of letting memories of a bad decision fade into history, Ford rips the stitches from the wound and – I am not making this up – renames the current Five Hundred as the Taurus. If that wasn’t bad enough, Ford is also renaming the Mercury Montego as the Mercury Sable. There is no truth to the rumour that Ford is also naming its Focus as the Pinto, although that might be expected.

It makes no sense to take the name of one failed brand and apply it to a failing one. The Five Hundred sedan, criticized for its bland styling, has failed to meet sales targets since its introduction in 2004. In 2006, sales fell 22 percent to 84,218 vehicles. In January, Ford sold fewer than half the number of Five Hundreds than a year earlier.

Everyone recognizes abandoning the Taurus brand was a mistake. "We never should have walked away from the equity we had built up in the Taurus and Sable nameplate," Mark Fields, president of Ford's Americas unit, said.

Fields is absolutely correct, but the rationale for resurrecting the Taurus name from the grave is misplaced. "Taurus has been an icon for Ford's family sedan for more than two decades, and it's time to return this powerful name to where it belongs," said Fields. "Consumer awareness of the Taurus name is double the Five Hundred that it's replacing, and awareness of Sable is triple that of Montego.”

This “awareness” argument has two flaws. The first is that the “awareness” was for a completely different vehicle. Worse, the “awareness” is for a discredited brand. Remember, reviving a brand risks picking up its baggage as well as its strengths. Second, and much more important, “awareness” has little place as a brand criterion. Just because consumers are “aware” of an offering doesn’t mean they will buy it.

Ford would have been smarter to wait five to ten years, and then re-apply the Taurus brand to a blockbuster car. That would enable it to take advantage of the nostalgia factor as well as avoid tainting the new car with memories of a failed brand.

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The Personal Brand Champion of the World

He could stop traffic in Moscow, Tokyo, Nairobi, Shanghai and Mumbai. Kings, presidents and prime ministers worldwide would take his call. He outshines Madonna, Mick Jagger and Meryl Streep.

Despite the fact it has been more than 25 years since he occupied center stage, he is the world’s greatest personal brand. He is the incomparable Mohammad Ali.

He is a colossus astride sports history. Sports Illustrated named him “Athlete of the Century.” His fights with Sonny Liston, Joe Frazier and George Foreman are called boxing’s greatest ever. He was the first boxer to win the heavyweight title three times. He was a gold medal winner at the 1960 Olympics. One fight was seen by an out-of-work actor called Sylvester Stallone, and became the inspiration for “Rocky.”

Ali’s boxing record is the stuff of legend, and boxing has never been the same since he retired. But just as interesting are the lessons his life holds for developing your own personal brand:

• Think international: At a time when most Americans could not find Canada on a map, Ali had fights in Toronto, London, Zurich, London, Jakarta, Kinshasa, Munich, Kuala Lumpur, Dublin, Manila and other cities. Whatever you are doing now, think about doing it internationally, especially since globalization makes it not only easier but also crucial.

• Live your principles: At a time the powers-that-be were saying we had to fight the enemy abroad so we wouldn’t have to fight them at home, Ali said, “I got nothin’ against them Vietcong.” Because of his beliefs, he was indicted for refusing induction into the Army during Vietnam, and lost his heavyweight title for almost four years. That was when he was at his peak as a fighter, and meant the loss of millions of dollars. After winning a gold medal for his country he came back to his hometown of Louisville, Kentucky. After being refused service in a restaurant because of his color, he went outside and threw his gold medal into the Ohio River. Contrast that with Tiger Woods, who did not boycott the Masters because of its gender- and race-based exclusion, and Michael Jordan, who did not support the black opponent to segregationist Jesse Helms because "Republicans buy sneakers too."

• Live your faith: Ali gave up his “slave name” of Cassius Clay after converting to Islam, eventually becoming a Sunni Muslim. He refused the draft because of his faith. He was called a black racist because he argued against interracial marriage. All this created a strong backlash, but Ali never recanted.

• Feed the media: The best PR strategy boils down to this: “Feed the media.” Ali actively courted reporters, symbolized by his long-time friendship with Howard Cosell. He knew the value of promotion. He once locked up his gloves in a Malaysian jail before a bout, and wore T-shirts that said, “Manila guerrilla.” He gave copy that wrote stories by themselves.  “It will be a killer, and a chiller, and a thriller, when I get the gorilla in Manila."  “Float like a butterfly, sting like a bee.” “Joe Frazier is so ugly that when he cries, the tears turn around and go down the back of his head.” “I'm so fast that last night I turned off the light switch in my h