MarketingInsideOut.com

We’ve had many discussions the last 18 months at the office about deconstruction and reconstruction…and the constant need to push for enhanced creative problem solving in everything we do including questioning every single part of every process.

It’s a hard thing to do continuously. And often people don’t speak out because they think their idea is just too stupid or different to work. Frankly its an exhausting process because you really have to push yourself and everyone to look from a new perspective and question everything. I sometimes wonder if the benefits will actually payoff especially because most of the changes we make are simple.

But when I saw the new square milk jug at Costco and was curious enough to read about it, I found it surprisingly energizing psychologically even though the packaging and transportation of milk is about as far removed from what we do as anything you could imagine.

It just struck me as such a simple solution with such massive benefits. Yet I’d bet at first the idea seemed too stupid or different to be workable. Most things that end up being great seem to start as far fetched ideas because they break from tradition or convention.

To me, the new square plastic milk jug is a great example of creative problem solving. And the result of people with the guts enough to get past the “well that’s too different to work” syndrome. The result is a win win any way you look at it. They’re square which makes them stackable and compact in trucks and on shelves. The jugs are less expensive because of easier, more efficient shipping (you can ship more at one time). The elimination of milk crates saves labor, water and fuel. So it costs less for the retailer and less for the consumer. Less labor and steps means fresher milk in the store. AND it’s better for the environment. Better all the way up and down the chain…just because of a simple shape change. The only downside seems to be that it’s taking consumers some time to get used to them because they pour different. But in the end, it’s worth the relearning because of the payoff.

I feel more motivated. Maybe I’ll have a glass of milk to fortify me. As soon as I master pouring without spilling.

The One Laptop Per Child (OLPC) initiative is so very cool and I’m glad to be a part. I bought one and donated one on day one of the special “Give One, Get One” promotion. Tonight I got the following email:

Thank you for being one of the first to participate in Give One Get One.
All of us at One Laptop per Child were inspired by the number of people who joined our Give One Get One program on its very first day! Your participation makes you part of the growing community of people working to give children all over the world new opportunities to grow, explore, learn and express themselves.

Your XO laptop is on the way.
Your donated XO laptop will soon be delivered into the hands of a child in Afghanistan, Cambodia, Haiti, Mongolia or Rwanda. In one of our recipient children’s own words, “I want to thank you people because you had given us the laptop and I love it so much.” Your generosity will make a world of difference in these children’s lives, and in the future of their respective countries.

Thanks to your early action, your XO laptop is scheduled to be delivered between December 14 and December 24. Our “first day” donors are our highest priority and we are making every effort to deliver your XO laptop(s) as soon as possible. We will send you an update upon shipment.

—

What a great cause. What a great project. If you don’t know much about it, you can watch this video where Nicholas Negroponte (MIT media lab founder) and founder of the One Laptop Per Child project explains the project vision and goals.

The One Laptop per Child project’s “Give One, Get One” program has been extended through Dec. 31. According to reports, donations averaged about $2 million a day. On that pace, the OLPC should move about 490,000 units by the end of the year.

The big question many are asking is whether 490,000 units will be enough to rate the non-profit OLPC project a success.

That’s an issue that was raised in this Wall Street Journal article on Saturday. The basis of the WSJ story was this: Negroponte created a great idea but hasn’t hit his $100 mark for the price of the XO (yet) and after three years only 2,000 students in a pilot program have laptops. Some big orders may be on the way. However, Negroponte did rile up the for-profit biggies like Intel and Microsoft enough to bring down the costs of laptops in the developing world. If Negroponte’s project didn’t exist rest assured that Intel’s Classmate PC wouldn’t either.

My take is that Negroponte’s project is a huge success (regardless of the number of laptops he sells) merely because it forced a very important issue (education) to the forefront and got tech giants on board and created positive change.

When I wrote this post last week about my reaction to the latest Dove film, Onslaught, it seemed most everyone was praising it without hesitation. But I couldn’t.

While I respect the goal, the execution is south of the credibility line for me because I simply can’t separate Dove from Unilever and its many brands that perpetuate the beauty-is-everything stereotypes that are the core of the Onslaught message.

In the days since its launch, praise continues, but many have tempered it in the same breath…balancing praise with mention of the hypocrisy of the situation Dove finds itself in. From Bob Garfield’s AdAge review where he gives Onslaught a standing ovations but then goes on to say “Damn, if it just weren’t for the nagging hypocrisy of it all…. “What happens when Dove sales begin to flag and market share begins to slide? That will be the test of true righteousness. Does the “Campaign for Real Beauty” then get disposed of, like last year’s fashions, or dubiously “enhanced,” like a pair of fake breasts?” (Be sure to read the comments.) To this post from Stephanie Sage Smirnov of DeVries Public Relations. And this one by Danny G at one of my favorite blogs AdPulp. And there are more and more of this ilk daily.

In Wednesday’s LA Times there’s a story of a consumer group that has charged Unilever with hypocrisy “for running conflicting advertising campaigns — one for Dove that praises women and their natural beauty and one for Axe that the group said “blatantly objectifies and degrades” them. The Campaign for a Commercial-Free Childhood launched a letter-writing effort on its website and demanded that the company pull ads for the Axe line of grooming products for men, which one online pitch says makes ‘nice girls turn naughty.’ ”

So I’m most assuredly not alone in the reaction I had when I viewed the new film. But at the same time I feel a bit schizophrenic because I admire brands that take the risk to stand for something meaningful. I wish more had the guts. Yet I (and others) am calling them out for doing just that.

The reality is that putting a firm stake in the ground in a situation where you’re not pristine means you have to be prepared to deal honestly and openly with a whole different kind of onslaught…today’s technology-enabled, consumer-empowered world. And be able to deal with question about your motives AND the inconsistent behavior of those you are affiliated with. It’s a challenge AND an opportunity. Will they be up to the task? I guess time will tell.

Wal-Mart rolled out a new slogan last week developed by its new agency, The Martin Agency —”Save Money. Live Better”—after having used “Always low prices” and the smiley for 19 years. And thankfully, it seems to be backing way off recent attempts to portray its stores as more upscale [that seemed like a major attempt at an illusion even David Blaine couldn’t pull off]. Instead, promoting an image of what middle-class families can achieve by saving money at the registers. According to a quoted study [sponsored by Wal-Mart] done by Global Insight, it showed the average family saved $2,500 a year by shopping at Wal-Mart.

“Live Better,” reminiscent of Lance Armstrong’s cancer survival “Live Strong” line, is Wal-Mart’s attempt to change the story for consumers. Wal-Mart executives are saying that the new line is not just a slogan, but a four word mission statement for the retailer.

The new TV campaign is well produced, insightful and does incorporate much more of a warm and fuzzy emotional tone into its advertising than in the past, in an attempt to boost sagging sales. However, the move from fairly benign messaging [i.e. Always low prices] to putting the consumer at the center with the new line that adds “live better” [the benefit of saving money on everyday items] is actually a bold move [despite the rather soft sell in the commercials].

Think about it…publicly trashing and bashing Wal-Mart for turning small towns into ghost-towns, questionable hiring and benefits practices and contributing exponentially to the trade imbalance with China has damn near become a national sport — not to mention the nauseating coverage of Roehm-gate in the advertising industry. Yet, we’ve all felt fairly far removed from how they do business and thusly felt justified in commenting on their competitive, aggressive and sometimes questionable business practices. Confronting the consumer head on in the positioning with the fact they are the real beneficiary of the low prices, and the reason Wal-mart does what it does the way it does it, makes the consumer take some responsibility — whether they want it or not.

Focusing on the consumer as the beneficiary forces a change in the tenor of potential Wal-Mart bashing. It has to, because it’s no longer them focused, but us. And as much as I didn’t want to like the campaign [because it’s more fun to bash Wal-Mart], I think it’s right on the mark from a marketing perspective. The whole position centers on the very simple premise: consumers want/demand a good deal…a low price for the things we need to buy so we can spend our hard-earned money on other things.

While done with a soft touch, the campaign gets at the hypocrisy in the anti-Wal-Mart sentiment. The fact is, I look on the Internet to find the lowest price I can when I buy airline tickets, book hotel rooms, merchandise and more. I buy from just about anyone anywhere with a click of a mouse. Don’t you? Do I look into the business practices of all the companies I buy from? No. Do you?

The evolution of our mature marketplace combined with technological advances has not only put consumers firmly in control (as marketers we’ve heard this drum for quite sometime now), but has empowered us with more detailed data enabling us to micro-target messages, engage consumers with new levels of intimacy, and customize-to-order with small-batch manufacturing and new distribution options.

This seismic shift from one-size-fits-all marketing to millions of niche markets of self interest has major impact on the economic model we’re all working in regardless of the category in which we compete. It’s both a big challenge and big opportunity. A great opportunity in fact.

But understanding the nature of niche marketing today is vital in overcoming what is often the biggest barrier in developing a smart plan — concern over the economic viability of customization to small segments.

I read a great article last evening in AdAge about this very subject.

“Rather than equating niche with “small,” think “narrow.” As in narrowly targeting a group whose self interest/self concept is so clear that a marketer can offer something ultrarelevant and vastly different from alternatives. Then the scarcity principle allows the marketer to charge a premium, reaping higher margins.

When you expand the relevance and differentiation to multiple products and services (even information, experiences, networking and more), you gain share of wallet and can experience volume and growth that makes up for the narrowness of the target.

So what’s really new about the new niche marketing? It’s realizing that while our targets have to narrow, our definition of marketing communications has to broaden. Today, everything communicates what a brand stands for, all the time.”

To harness the power of niche marketing to achieve your business objectives in the new economy, follow these principles:

1. Position your brand as narrowly as is economically possible.
2. Become the specialist that anticipates the needs of your target.
3. Rapidly work with the target niche to co-innovate.
4. Set as your goal such consumer centricity that the target niche will want to co-brand their identity with yours.
5. Live by a higher standard of ethics.
6. Embrace a business model and metrics that grow the most valuable assets of the new niched economy.
7. Reap first-mover advantage by learning how to identify a niche of opportunity.
8. Re-imagine your role as that of entrepreneurial founder of a special interest group.
9. Forget push marketing; excel at pull marketing.
10. Realize your brand is now “media” competing against all other media.

I’ve been thinking a lot lately about the concept of risk. I’ve never actively courted risk in my personal life and always thought of myself as a fairly risk-adverse person. I don’t partake in extreme sports adventures or seek out an adrenaline rush. A near miss with a semi on the freeway the other day made me realize that…frankly, adrenaline sucks.

But when it comes to the business of marketing, I find myself constantly redefining the concept of what’s risky.

It’s become clear to me that the opposite of risk in business isn’t security. In fact, not taking a risk is downright risky today because you’re likely to get flattened by a semi truck of status quo.

Albert Einstein once said “Insanity is doing the same thing over and over again and expecting different results.” Obviously he wasn’t talking about marketing, yet a concept very similar has become ingrained marketing think…sanity and security is doing the same things you’ve successfully done before (over and over again) to get the same results. A company like P&G had it down to a science. But…the efficacy of that long-held belief is questionable.

Even P&G is now saying change is not only good, but mandatory to survive and thrive. And with change comes risk. But what’s the option? Obsolescence?

This quote from Bob Garfield’s Chaos Scenario 2.0 feature in AdAge really struck me…”Perhaps you believe that vast structures on which vast societies and vast economies depend do not easily lose their primacy. Perhaps you believe that the TV commercial and magazine spread — and radio spot and newspaper classified — are forever and immutable, like the planets orbiting the sun. Good for you.

Now, say hello to Pluto — the suddenly former planet. Forever and immutable, it turns out, are subject to demotion.”

But how do you demote the tried and true traditional thinking and approaches that are so very woven into the DNA of marketers and advertisers? Especially when many of those programs do still deliver results in the here and now. How do you get past the ‘if it ain’t broke right now, why fix it…instead let’s wait’?

Both sides of the coin say risk. Waiting is risky because by then it could be too late and/or too broken to fix. The ‘evolve now or become obsolete’ side of the coin comes with risks as well because no one really knows what the future holds.

I guess I put my ass on the line in the camp that says evolution is the lesser risk, even though it means moving forward and inventing on the fly without a lot of precedent as guidance. It’s pretty unnerving, yet all signs point to the tried and true as the road to obsolescence. And that ain’t one I want to travel.

If you haven’t already read it, check out Bob Garfield’s Chaos Scenario 2.0 in this week’s AdAge. It’s a long piece, but worth the read. It’s pretty eye opening and judging by the number of comments, it’s hitting a nerve. I’ll second a comment on the story from Rick in Chicago: This is the clearest, most compelling piece I’ve read on this topic in two years. Will your readers’ buy it? Who knows? Should they? Depends on what they want to be doing in two years.

Here’s just a few snippets of the story:

“The online space isn’t remotely developed enough — nor will it be anytime soon — to absorb the advertising budgets of the top 100 marketers, to match the reach of traditional media or to fulfill the content desires of the audience. (Maybe viewers no longer demand their MTV, but what remains of the mass audience is in no hurry to surrender its Los Angeles Times and “Lost.”) A collapsing old model. An unconstructed new model. Paralyzed marketers. Disenchanted consumers. It’s all so … chaotic.

How long it will be before order is restored is anybody’s guess. What is certain is that the Brave New World, when it emerges, will be far better for marketers than the old one. What is nearly as certain is that many existing ad agencies and some media agencies will be left behind. And the reason they will be left behind is their stubborn notion that they can somehow smoothly transition to a digital landscape.

“It’s a very different kind of world,” says Adam Thierer, senior fellow at the Progress & Freedom Foundation and author of “Media Myths: Making Sense of the Debate Over Media Ownership.” “The problem is, the expectations are there to capture that mass audience that long ago disappeared. We are witnessing the gradual death of the business models that thrived in that age of scarcity.”

AdWeek published a story yesterday that addresses the very issue I pondered in my post last week regarding ABC’s interest in a TV show staring the Geico Cavemen.

Agencies have long been under the constraints of work-for-hire agreements and as such they don’t maintain rights to their ideas. In a digital era where the lines of content distribution blur across advertising and entertainment channels, those ideas are easily repurposed and the agency that created the idea is often cut out.

For example, McCann Erickson’s Staples ad campaign (the easy button) resulted in Staples ringing up $7.5 million in unanticipated sales from the novelty item. The roaming Gnome statues, spawned by the Travelocity campaign are being sold for $19.99 each. The agencies that created the ideas…get nothing.

From the AdWeek article:

Attorney Doug Wood, a partner at Reed Smith, New York, said, “If you look at the typical agency contract, it says: ‘Ad agencies transfer the ownership of all ideas and concepts to their clients.’ [Clients] can say, ‘The agency can’t use that idea anywhere else. It can’t control where I, the marketer, use it, how I use it, whether I use it at all.’ There are exceptions, but generally speaking, they hold fast to the idea that ‘you’re my agent and I don’t [pay to] retain you and then give you additional royalties and license fees. You’re like buying a pencil. Just because I use you for another purpose doesn’t mean I have to pay for you again.’”

“As advertising has become increasingly about content, agencies are no different from industries like publishing, motion pictures, video games, music, etcetera,” said Tom Finneran, evp, 4A’s agency management services.”

Joe Lawson, The Martin Agency copywriter behind Geico’s cavemen, who is writing the ABC pilot, needed client permission to do that.

Industry creatives are still second-class citizens when it comes to after-market use of their ideas.

Even their partners in producing work—musicians and photographers—retain ownership rights to their work.

Agency compensation issues aside, the question remains: What is the impact on industry creative people as a result of antiquated practices involving the ownership of intellectual property?

I never had a word for it before. Now I do. My teen daughter is into communitainment-ing. And she’s not alone. If you’re a parent of a teen or spend much time around them, you can probably relate.

The symptoms: they are always on…online…on MySpace…on IM…on a photo sharing service…on an online game with friends…on I-tunes…on their cell phone texting…on the spot in sharing some crazy video with their friends (sometimes all at the same time).

They don’t watch much TV. But nonetheless, when you start to worry that they are becoming desk-potatoes and anti-social and you force them to disconnect and go outside to get fresh air or exercise or go to the mall or a ball game, it’s not uncommon to find them in groups on their cell phones texting others and even one another. As more of them convince their parents to buy them smart phones, they are taking and sharing video, mobile myspacing and so much more.

A report released last month by Piper Jaffray’s analyst Safa Rashtchy entitled ‘The User Revolution’ describes how users are going from simply exchanging information, to sharing information, ideas, content and entertainment, all within a social context, as part of a process dubbed ‘Communitainment’.

In a story in Adweek, Rashtchy pondered whether the younger viewers were cutting back on something else? It turns out they are cutting back on some of the more traditional entertainment avenues. But the communication on IM and MySpace is entertainment for them. To them, communication is not what it is to us. If we’re talking, we want to exchange some information, then we’ll get back to our work, or we’ll go watch a movie or some TV for entertainment. For younger people those [communication and entertainment] activities are intertwined. They send music and video files to each other, and that activity, by itself, is fun for them. It is not the same as what we call communication. He believes that increasingly, people on the Web, especially younger people, are going to gravitate toward content consumption in a way that is not direct content consumption but, combined with something else that is tied within the idea of social community.

The report suggests that “Communitainment” will at least partially replace other forms of content–i.e., TV, magazines, and even big Internet sites in favor of niche content sites. And the importance of the trend is not just in shifting traffic patterns but, more importantly, in the way users view content as a free-flowing part of the communication spectrum.

So where do marketers fit? When consumers watch TV, there is an understanding that they get commercials in exchange for free programming. With “Communitainment,” that ‘understanding’ doesn’t exist. Content is created and shared by users. It’s a closed system and advertisers have to find a way to get into it. And that point is critical if Rashtchy is correct in his prediction that “communitainment” will rise from 30% last year to 50% over the next decade. But once you get in, you’re actually part of the family. The content family. Part of the family, that is, if advertisers can indeed gain consumers’ trust.

This according to TMZ.com:

“ABC is looking to an unlikely place to find the next big television show: Geico TV commercials. The show would revolve around three pre-historic men who must battle prejudice as they live their day-to-day lives in modern Atlanta.”

I’m sure it was a simple decision for ABC. It’s a great campaign. People love it (read the comments on TMZ).

But:

1) What if it bombs? Would it taint the effectiveness of the Geico spots?
2) I’m assuming ABC would have to pay some type of licensing fee for the concept. But my guess is The Martin Agency (the actual creators of the concept) would not get any of it. (See update below.)

The agency industry is largely governed by an hours-based work-for-hire compensation system where the client owns the ideas not the agency. Agencies typically sell their ideas based on the number of man-hours it takes to create. It’s possible Martin has a unique deal with Geico, but normally agencies don’t get to retain the rights to their work. (If you don’t know much about the challenges in agency compensation, here’s a good background article.)

The Martin Agency is a well-respected shop with terrific work. I’m sure they’re excited and flattered that their work has impacted popular culture to the point where a network wants to make a show about it. And it will certainly increase their profile in the industry. BUT…you can’t take that to the bank.

Agencies have long rued compensation arrangements that size them up by the number of man-hours they commit rather than by the success of their solutions. So some agencies are starting to push for compensation packages that are more value based. Crispin Porter’s deal with Haggar, in which the agency took an equity stake as part of its compensation, and New York-based Anomaly who has priced itself based “on the subjective theory of value” where on its client Virgin America the company will get a percentage of the revenue from the sales of an in-flight entertainment system it helped to design are among a few that have inked new types of deals.

While the compensation issue is far from resolved, progress is being made. In fact, on the agenda at the ANA Advertising Financial Management Conference in May is a session entitled “Creating a Value Based Agency Relationship” where the premise is that benefit of this type of compensation aligns the interest of the agency and the client.

That’s good news.

Hat tip to Erin for the idea.

UPDATE:  After I wrote this post, I discovered that the project is actually being penned by Joe Lawson, a Martin Agency copywriter who was behind the “Caveman” ads.  That’s a surprise and one I never anticipated.  Adds a whole other twist to the situation.