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The desire to be ‘big’ has been an all-consuming focus in the business world. The predominant thinking has been that big leads to better and that big equals more profit. Anyone who questions the validity of this concept is condemned as a heretic. It’s so entrenched as a business mantra that it seems that ‘big’ is the foremost business purpose. THE objective, rather than an outcome of a well-crafted plan and consistent delivery of ‘better’.

In the last week, there have been three specific stories that brought this issue to the forefront and made me think about the effects of the ‘drive to bigness’.

In a February 14 internal memo, Starbucks Chairman Howard Schultz criticized a number of decisions that have led to the watering down of the Starbucks experience.

“Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.”

He goes on to list what he sees as the underlying issues they need to solve and to take his share of responsibility for those decisions. Many initially questioned the authenticity of the memo, but according to a story in AdAge the company confirmed it as authentic.

Whole Foods is another example where the quest for big has caused a drift toward the middle, thereby losing some of what made it successful in the first place. In a story in today’s New York Times, it says some people believe the chain is “not living up to its core values — in particular, protecting the environment and supporting organic agriculture and local farmers. In interviews, some of the customers who describe themselves as committed to these values say they have become disillusioned and taken their business elsewhere. “They are at such a level you expect the best from them, and if you don’t live up to it, people notice,” said Todd Hale, a senior vice president of consumer and shopper insights for Nielsen, the market research company.”

Whole Foods has grown from a small business to a mega-chain with 193 stores, and just last week announced a deal to acquire the 110 stores of its largest rival, Wild Oats.

In the Advertising Agency business, an industry already under intense pressure and scrutiny relative to the efficacy of the full-service agency business model, Forrester Research further added to the pain with the release of a rather bleak report entitled “Help Wanted: 21st Century Agency”. The report says clients are dissatisfied, but for no clear reason that data can back up. (Just think of what happened with Cramer-Krasselt late last week.) Instead it’s a vague disenchantment and disappointment that value is not being delivered at a meaningful enough level.

Today’s struggle may be a result of sins of the past — the way in which the agency industry grew. In the quest for ‘bigger’, agency holding companies purchased lots of diversified companies and specialty services groups in the belief they could create an integrated offering by virtue of having these ‘units’ that their full service agencies could call on as needed. The logic was that because it was all under the same holding company banner (keeping the money in the family) it could integrate the offering while still allowing these specialized units to have their own clients/projects thereby avoiding the competitive conflict problem. Seems logical on the surface. The media agnostic pitch to clients worked well for a while because the story made sense. Agency holding companies got real big.

But, the approach didn’t deliver real integration or integrated thinking on a holistic level (in part because of P&L lines that worked against collaboration among agency sister companies and in part because of the infamous above the line/below the line mentality). At best, it delivered a multi-channel marketing capabilities set. Without the thinking, you can’t create an integrated solution or deliver a customer-centric or user-oriented approach that is in sync with today’s media/consumer scape. So now agencies are desperately trying to fold these capabilities and units into the main agency body and reworking their process and operations, as well as changing internal mindsets to get to a more integrated and accountable service deliver. (On top of scrambling to keep up with the quickly changing media landscape.) It’s a difficult predicament, but one that we need to find innovative solutions for in order to thrive and maintain value as a strategic partner. Because as one anonymous CMO was quoted as saying: “Client-side marketers are better at managing integrated campaigns and being media-agnostic.”

There are a lot of people doing some heavy-duty introspection and that bodes well. Personally, I find it refreshing that Schultz is doing some soul searching about Starbucks and like this post in TomPeters.com “I was beginning to wonder whether another great experience was going to surrender to the short-term gains of operational excellence, Howard Schultz gave me faith.”, I too have hope that if someone as revered as Howard Schultz gets it, maybe others will too. The upside of pushing the question to the forefront is that if we truly look at and understand the realities and effects of the all-out quest for ‘big’, perhaps we can create ‘better’. As Howard Schultz is famous for saying, “success is not an entitlement.” It has to be earned over and over and over.

Major yuck! I’ve completely lost my appetite.

This from a Yahoo news story:

“News video showing about a dozen rats running around a KFC-Taco Bell restaurant in Greenwich Village was widely disseminated Friday on TV stations and the Internet.

The footage, taken from the sidewalk through a window, showed the rats running around the floor, between counters and tables and on children’s high chairs. The establishment was not open at the time.

News crews flocked to the scene, and onlookers gave a play-by-play as the rodents moved about. When one rat came close to the window, a person on the sidewalk said: “He’s coming for his close-up.”

Though it’s just one small franchisee shop in New York, the story has spread like crazy. This all started Friday morning and by Friday night, the rat story was seen worldwide. Nothing like this stays isolated. Just type “rats at KFC” in the search field on Technorati and you’ll see over 1400 blog posts. There are thousands of stories on Google.

The only statement I found from YUM was this: “This is completely unacceptable and is an absolute violation of our high standards,” Yum Brands said in a statement.

Maybe they don’t feel they have to do much since it was a franchise and not a company owned location, but they seem to forget that this is their brand that is being affected. They should probably be a bit more stand up about this. It will be interesting to see how badly the brands are damaged by this very gross situation.

JetBlue’s valentine was anything but sweet. As most everyone knows by now, an East-coast storm combined with some operational stumbles stranded thousands of JetBlue passengers on Valentine’s Day. Toilets overflowed when nine planeloads of JetBlue Airways passengers sat on the tarmac for six hours or more at JFK in New York. Tempers overheated as the carrier canceled a quarter of its flights over the President’s Day weekend. Resulting in some very pissed off and frustrated customers and lots of bad press.

But, I’ve been impressed with some of the steps they’ve taken to own up to the mistakes including the “customers’ bill of rights” unveiled Tuesday. I’ve been particularly impressed by the stand up nature of JetBlue CEO David Neeleman. He’s taken all the blame for the Valentine’s Day operational meltdown. No finger pointing or hiding. He has apologized in e-mails, in news reports, on JetBlue’s website, on a YouTube video and even on “Late Night With David Letterman.” And it feels like a genuine, heartfelt apology. Most airline executives (or any executive for that matter) are more inclined to hide beneath their desks and let their minions handle the angry mobs. But Neeleman has been standup enough to be not only the face of the problem, but is earning credibility as the face of the solution as well.

Its clear JetBlue takes its hard-won brand fame seriously, and from the video and triage response it seems like they are making real, fundamental changes on behalf of their customers. That’s encouraging and impressive. That kind of humility and transparency about the problem goes a long way to mitigate customer frustrations. Every company and everyone makes mistakes, but too many try to “spin” their way out of it by trying to offload blame on circumstances or finger pointing at others. Owning up to it and taking this kind of genuine approach will help JetBlue restore confidence and ensure their evangelists remain loyal.

Same song, new verse. New CMO comes in and the “not invented here” and “I’m new, and must condemn everything that came before me” syndrome sets in.

In this case, Jeff Herbert, Aflac’s first CMO (a classically trained package-goods marketer) plans to ditch the duck even after he said he wouldn’t back in October. Instead he plans to focus more marketing on what Aflac does — supplemental insurance — while expanding its offerings and growing the category. Ohhhh, makes me tingle to think about that exciting content. A tip Jeff…insurance is an avoidance category, a complicated and confusing category. It’s not a packaged good and certainly not an impulse buy.

Maybe a duck does not directly sell insurance, but he has become a well-recognized and liked icon. Why on earth would you abandon that equity? Getting rid of the duck dilutes the brand and makes it like all other dull, forgettable insurance messages. People know, love and remember the duck. It gives the company some emotive character. It makes Aflac approachable and likeable. Use it.

Your goal should be how to use that to your advantage to deepen and target key messages…not, “we need to start phasing him out.” Smart marketers use these situations to their advantage. They don’t try to cram 10 pounds of crap into a 5 pound bag try to market an avoidance category as compelling. When we consumers need to purchase insurance we either start the study process by going to your web site or we turn to a trusted agent or advisor for the in-depth details. We don’t make purchase decisions based on the content of your ads. Your persona created by your marketing simply gets you into the considered set or not.

24 months from now, I bet we see a “change in strategy” yet again.

UPDATE:   This according to a press release from Aflac…“Contrary to recent media reports, Aflac has no intention of abandoning its use of the Aflac Duck.” Herbert said, “Like all of America, we love the Aflac Duck. It is as central to our marketing efforts today as it will continue to be going forward.”

Apparently there was lots of reaction from duck fans.  Many (including myself) read the media stories and walked away with the impression that Aflac was killing the duck.  Instead it sounds like Herbert’s intent is just to make him less prominent.

First Time makes “You” the person of the year. Now AdAge makes The Consumer the Agency of the Year. But Jonah Bloom says they didn’t copy Time…that they had the idea first…yeah sure…whatever.

Anyway…

It would have been FCBdraft except for that little Wal-Mart fisasco. But in the AdAge panel re-vote, a real agency like…say Goodby, was beat out, in large part, because of a piece created by two guys (one a juggler and one a lawyer) with way too much time on their hands. The now infamous Diet Coke & Mentos Experiment — millions watched it, hundreds of media outlets covered it and the mint in question enjoyed a 15% spike in sales.

Sure I watched them. You probably did too. I even wrote a blog about one of the experiments. They are all over YouTube and damn near every blog and industry rag. You couldn’t help but watch — in the same way you can’t help but look while passing a car accident. Or pause to watch a funny snippet on TV’s America’s Bloopers of someone getting kicked in the balls. It’s our nature. Our voyeuristic curiosity to enjoy something funny, chuckle at something stupid happening to other people, ponder something strangely off-beat or gawk at something we don’t routinely see.

But…did they set out to increase sales like an agency would be tasked to do? With a real strategic focus? Doubtful. These guys just wanted their 15 minutes of fame. And they found a very visual, funny, ninth-grade-science-class way of getting it that we all thought was fun to watch and share. The impact on the products involved was most likely…a lucky accident. Something they didn’t even remotely consider until after they started getting so much buzz.

I think the consumer-in-control, consumer generated content, consumer is king/queen issue is a major one facing the advertising industry and thankfully pushing the agency industry to step it up and embrace a real conversation with consumers. But for the industry publication to vote The Consumer as agency of the Year? That’s a real stretch to me.

From the AdAge story:

From an agency perspective, there are exactly three ways to look at the rise of consumer control. The first view is like something out of the Book of Revelation — all conquest, war, famine and death. Happily, the ad industry, thanks to countless foretellings of the death of the 30-second spot and pretty much every other Madison Avenue institution, by now has gotten used to apocalyptic visions of its future, so this will mean minimal leaps out of windows.

The second way of looking at this is to pretty much reject the notion that there’s any fundamental change at all. This is perhaps best espoused by Euro RSCG New York Executive Creative Director Jeff Kling, who responds thusly to the suggestion that consumers could one day unseat agencies at the right hand of marketers: “I think the idea that this represents a threat to ad agencies is patently absurd and drummed up to have something interesting to discuss. I don’t know anyone who fears for his job. Companies have always wanted to gain control over what’s said about them. It used to be letters to the editor; now it’s consumer-generated content. Advertising has the same role it’s always had, and managing and leveraging all that content that’s out there is classic creative direction.”

We arrive rather dialectically at the third way: an acknowledgment that there are lessons to be learned but those lessons don’t necessarily herald the end of the ad agency as we know it.

Not news to me, but it was in USA Today on 10/10.

The average 1970s city dweller was exposed to 500 to 2,000 ad messages a day…Now, it’s 3,000 to 5,000.

Companies are under more pressure than ever to deliver rosy quarterly results, and top marketing executives have less time than ever to prove their mettle. The average tenure of a chief marketing officer at a major U.S. company has declined to 23.2 months, according to search firm Spencer Stuart.

It’s no wonder they’ll sign off on increasingly bizarre ideas.

For instance, a recent promotion for the Paramount Pictures film Jackass: Number Two appears on urinal mats when the mat is hit with a stream of “number one.”

Even conservative Procter & Gamble (PG) has loosened up. It put print ads for Crest Night Effects whitening gel inside women’s restroom stalls — at eye level when the user sits down.

“Marketers are saying, ‘We must be more innovative — to zig when others zag,’ ” says Richard Notarianni, executive creative director of media at ad firm Euro RSCG.

“The industry is desperate to find clever ways to reach people, whether or not it has any legitimate value. … When someone says, ‘Let’s put advertising in bathroom stalls,’ another says ‘That’s great. It’s a captive audience.’ “

Last week’s Association of National Advertisers’ annual conference, heavily focused on reinventing the marketing industry, was attended by over 1,000 people — a large percentage of which were CMOs. The mantra of the meeting came through loud and clear. It’s time to “let go.”

In his keynote address, P&G chief A.G. Lafley, pronounced that it’s time to “let go” and cede control of your brand to consumers. He underscored the need to move beyond transactions to more meaningful relationships. (This from the company renowned for micromanagement of its brands.) Burger King’s Russ Klein joined the chorus of marketing execs counseling companies to let consumers have brands their way.

Lafley spoke about the need to achieve the right balance of being in touch and in control and the resulting paradox — the more control we take, the less in touch we are.

This theme ran through nearly every presentation, from companies like Sony, Wal-Mart, Mastercard, Yahoo and others.

For some time now, marketers have been talking about “letting go” and engaging in a dialogue with their consumers. Instinctively we know we have no choice. We have to let go, because only then will the consumer engage in our brand, in the community our brand can create, and with each other with our brand. But is it just lip service that sounds good? How prepared are we to take on the challenges that comes with real dialogue — of not telling, but talking?

Marketers have been control freaks for a long time. The shift to engagement is a big mind shift. Engagement requires the act of listening, sharing, creating a dialogue. It is not a one-way conversation we manage/control/spin.

Jim Stengel, P&G global CMO was right on in his ANA presentation when he suggested that the first step is to stop thinking of consumers and consumer segments and start thinking of people – their individual needs, dreams, hopes and wishes.

This simple thing forces an immediate shift in thinking. And as a result, you naturally do things differently.

You market to consumers — you listen to people. You observe consumers –- you interact with people. You deliver messages to consumers –- you talk to people.

It’s a start.

90% of the time when I’m online I’m multi-tasking.  Sometimes I’m also watching TV.  Sometimes I’m listening to music or a podcast.  Sometimes I’ve got the radio on.  For me, that’s been typical for years. So I wasn’t the least bit surprised to read the following in Susan Whiting’s (President/CEO of Nielsen) keynote address at a recent client meeting  — 30% of all media time is spent with more than one media. And four out of five TV viewers are interacting with other forms of media while they watch TV.  

But…the pace of media transformation is most certainly quickening. 

Many people, including Whiting believe that 2006 could very well be the tipping point in the transformation of media – forcing a serious “rethink” of just about every aspect of the media and marketing business.

The fact is, the boundaries of both time and space are being systematically demolished, enabling consumers to increasingly access and share information whenever, wherever and, however they want.

“I want it WHEN I want it”
Time-shifting — the recording of a program for viewing at a different time isn’t new. Since the 1984 Sony Betamax decision by the Supreme Court we’ve been able to record a program to play it later. 

Of course, TiVo, DirecTV and other US cable or satellite subscription services offer DVR set top boxes.  Not only do 80% of households subscribe to multi-channel program sources like cable or satellite TV; but telecos including Verizon and SBC are spending billions on fiber networks to deliver Video-on-Demand and high-definition programs.

What is interesting is how quickly time-shifting is evolving as it moves beyond the TV. Consumer electronics companies like Sony, and computer giants like Microsoft and Apple, either already do or plan to provide hardware and software to let viewers access TV programs and other media through single, integrated systems.

Apple made a huge splash in 2005, when it cut deals with ABC and NBC to sell some of their shows through iTunes.  Since their debuts on iTunes in October, ABC’s “Lost” and “Desperate Housewives” are up in ratings versus the same period last year.  Executives credit iTunes with helping to drive up overall ratings. Further, the networks are evolving to provide content opportunities as well, as is evident at CBS, ABC and even NBC with the pilot episode of “Conviction,” which the network made available for free on iTunes before it even aired. 

And because of the increasing penetration of broadband, internet pioneers are producing and distributing video/audio content more broadly.  Case in point is the video stream of the March Madness I wrote about in this post.  

As the price of the technology dropped and the ease of use increased, podcasting gained momentum and is growing rapidly as an advertising vehicle.   Syndication (RSS/ATOM) consumption is doubling every month.

But even as companies try to adjust to the disruptions of time-shifting, they’re starting to do battle on a second front…well beyond the walls of our homes.

“I want it WHERE I want it”
A cadre of mobile devices allows users to take their media wherever they go — creating place-shifting.

TiVo recently announced plans to make content available via mobile phones. TiVo owners will also be able to use their PCs to drop recorded shows into iPods and Sony PlayStation Portables.

MVNOs are coming out of the woodwork to offer mobile services well beyond the basics.

And think about this…ten million families already have mobile video capabilities in their cars – nearly double last year’s number — a number that’s expected to more than triple by 2010. The big three automakers already offer integrated media options. The 2006 Buick Terrazza comes with a 40-gig hard drive, capable of playing music, movies and videogames, simultaneously. GMC is marketing its Explorer conversion van as a “rolling living room,” complete with a 26-inch high-definition flat screen monitor.

Sling Media and Orb are duking it out in a market for a cutting-edge technology which lets users watch programming televised in one location from just about anywhere else. With Slingbox you just attach it to both a TV set-top box and a broadband network, and watch programs stored on your DVR from just about anywhere — another room or another country.

By time-shifting and place-shifting media usage it means the shifting (and potentially deletion) of the advertising that is attached to it. This has huge implications for marketers.  But it also represents enormous opportunity if you can get out of the 30-second box.  For example, broadcast networks such as ABC are selling some of their most popular shows on Apple’s iTunes for $1.99.  But a recent Frank N. Magid survey found that 72% of consumers would be willing to watch an ad if the sponsor picked up the cost of the show.  The stream of the March Madness games not televised was made possible by advertising revenue.  Yes I sat through an Old Spice commercial and a Dell commercial as I watched the stream.

As the audiences continue to splinter and power continues to shift to the viewer it will take the ultimate in creative, innovative thinking to find new effective ways to reach the anything/anytime/anywhere consumer.  A task that is both daunting and exhilarating.