Lookin' for latte in all the wrong places

When I was last in Zurich, in 2006 (negotiating a settlement regarding trademark infringement by Swisscom - shame I don't ski) I took a few hours to explore the city on foot. After I had passed the fourth Starbucks, it struck me that I had likely traveled 16 to 20 city blocks, so made my way back to the hotel. I had counted my distance in Starbucks, not blocks. The same could have been done in every American city and virtually any other city in Europe. And then.

Three years later, Starbucks has shuttered hundreds of locations worldwide and what was once an iconic brand and a unique experience now looks to McDonalds Value Meals for salvation. The thinking must be that they are looking for ways to ingrain Starbucks into our routines the way McDonalds has done. Yet in addition to the grab and go $5 latte market, Starbucks was always a destination for the self-employed, the freelancer, the coffee networking types to meet and discuss business. With this in mind, just how much business do Starbucks executives think is conducted at McDonalds?

In the interest of fairness and full disclosure, I am not privy to extensive research regarding Starbucks customer base. Anecdotally, however, these types of meetings, good for about $10-15 a table and high table turn, are a critical market - and in my neighborhood, Starbucks are losing these common meet-ups to Paneras Bread. Paneras welcomes this type of guest with large tables and free wifi, which activates with a polite reminder regarding etiquette in the use of the facilities. (Starbucks is still trying to wring revenue from agreements with AT&T and T-Mobile.)

There are other local restaurants, regional and national chains that serve a similar market, but few are as effective as Panera at creating an environment as specifically well-suited to the needs of the increasing legions of the 1099 workforce.

Last year the 1.3 billion (revenue) Paneras stock soared from $32 a share in January to about $50 a share at the end of the year with a debt-free balance sheet. McDonalds, meanwhile, struggles with systemwide sales off by 4.6% in February. McDonalds might be aspiration for Starbucks in size and brand ubiquity, but Paneras reflects the needs of its customers.

In latte as in life, it is important not only to understand your competition, but to be certain that you've properly identified who they are.

The Internet, in dog years

This is not your teenager's Internet.

The latest news from the Pew Internet and American Life Project will not surprise a colleague who has a 90+ year old father who regularly "Tweets" his family.

Older Americans are going online more than ever before.

According to the study, in the past three years the 'hockey stick' in Internet adoption has been in the 70+ demographic. 70+, folks. God love 'em, these are the same folks that still re-use aluminum foil. Growth in Internet use among people ages 70 to 74 increased by 19% and for those above 75 (b.1924!) growth clocked in at 10%.

Other studies concur that older demographic groups spend more time online than their younger counterparts and while many go online to get health information and visit government Websites, the growth actually stems from use of the Internet for activities such as games, watch movies, use social networking sites or read blogs.

The assumptions and biases that the Internet, social networking and digital media are all tools to reach younger demographics needs to be readdressed by marketers as in this economy particularly, no opportunity to reach out to prospective customers should go unexplored.

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How much is a friend worth?

A month or more ago when Burger King was running its Facebook promotion that encouraged users to delete 10 friends to receive a free Whopper, a friend of mine posted on his status that he "is not going to give up a friendship for a Whopper." Well, that’s a kinda low threshold for my value as his friend, though to be certain, I'm glad I qualified.

So what is a friend worth? Poets and songwriters might couch it in elegant prose and a clever turn of phrase, but a new study by University of Chicago Economics professor Gabriella Conti affirms that being popular – particularly in high school – is quantitatively valuable later in life. In the study, Conti and colleagues measure the association between popularity in high school and later wages.

From admittedly dated data (the raw data was gathered in 1975 from 4000 men who graduated in 1957) The subjects were asked to name up to three of their closest friends and used the number of times ta person was mentioned as a measure of that person’s popularity, and then compared that to a person’s earnings.

The takeaway?

They found that, after controlling for variables, each extra close friend in high school is associated with an increase in earnings of 2%. The study concludes that either social skills carry forward to the working world or simply, friends tend to help friends.

Given the subjects and the data are dated, it begs the question as to whether the data carries forward to friends through Social Media net out as an increase, and if friends that are exclusively 'virtual' friends have the same impact.

Either way, its bad news for social misfits who take solace in the idea that one day they'll be lord and master over their current adolescent tormentors. The data doesn't seem to support the fact that the computer club president will one day be in a position to hire and fire the varsity quarterback. On the upside, years later he might still be able to hack that football hero's fat bank account.

Silly Skittles, this trick is for kids

Okay, so by now, everyone knows that Skittles jumped head first into Social Media yesterday, and by today (24 hours later) has recognized what many of the rest of us already had known: its a shallow pool. Or a pool of shallow people. Either way, a bit of a mess. Like I wrote THREE years ago folks, just because its the new thing, doesn't mean its right for your message, or at least the way you might initially think about going about it.

A brief history of Skittles Marketing, ca. March 2 - March 3, 2009: "Edgy" ad campaign moves to Social Media by using the Skittles brand feed on Twitter as the home page, accepting all posts and all posts using the word "Skittles". (User name, "Skittles", incidentally, not secured. A lonely woman with a cat and an abandoned Twitter account, #skittles, presumably gets a lot of misdirected traffic.) After discovering a preponderance of negative and/or objectionable posts coming through on the Twitter feed, decide on Tuesday to instead use their brand's Facebook presence as their new website. Rude comments continue on both sites.

So, Skittles discovered that the prime users of Social Media and their demographic overlap. What they hadn't learned was that Social Media isn't about them, its about the community. By hijacking a third party site like Twitter and claiming it as your own, you are undermining the validity of that community.

Hint: Marketing is a lot more than simply mixing in equal parts audience reach, clever messaging, and good product. It takes a bit of thought, consideration, and strategy. Those leading the social media revolution are brilliant, truly, but just a little green. Hey kids, marketing fundamentals are still relevant.

Still, I wouldn't be too concerned. Former Coca-cola CMO Sergio Zyman built a career talking about the New Coke debacle. I assume this will have a silver lining as well.

Warning signs

The other night I had an "I Love Lucy" moment – I found myself desperately, and ultimately unsuccessfully, attempting to stem the tide of about 75 PSI of water shooting from what had been the stem control of an upstairs bath.

I had been ignoring a persistent drip for weeks.

Together with a client, I was speaking yesterday with a lovely woman who runs the Diabetes Education Center at a local hospital. The topic soon turned to preventative medicine, and the number of people who discover they have diabetes only after entering the ER with blood sugar levels in the 700s (that’s really high).

They were ignoring the frequent urination, constant thirst, weight loss, fatigue and other warning signs of diabetes.

Last month a neighbor had to be rescued from the side of a busy highway during rush hour when her transmission gave out and she slowly glided to a permanent stop on the gravel shoulder. The car had been recently detailed, however, so it looked sharp as it was hoisted onto the back of the battered tow truck.

She had been ignoring the thump and jolt from the backend of her foreign sedan for months.

And of course, we can all point fingers at the politicians and bankers and brokers and others who ignored the warning signs that have led to the current world financial credit crisis.

What are you ignoring? What are the warning signs in your own business that need attending to?

Are consumer complaints increasing? Is innovation fading? Are too many of your receivables over 120 days out? Do your employees fear the next 'all-employee meeting'? Has cash flow become the dominant topic over the water cooler, instead of tactics and strategy?

None of these scenarios are uncommon in a weakened economy. But what are you doing about it?

There are no easy answers to these problems. But analyzing the problem for weeks isn't helping. The quicker you act and the more decisive the action – any forward action – the greater the likelihood of preventing the situation from truly getting out of, that is, beyond your, control. Once a problem is beyond your control, it is too late and the options for a remedy, such as they are, are never good ones.

Okay, so this post doesn't say much that hasn't been said before. But if you've ignored the same reminders before, here's your chance to act.

Regardless of the specific corrective action required for your company's circumstance, the immediate requirement is communication. Internal and external communication to explain the company's circumstances to employees, partners and customers; reinforcement of company values and vision, and each individual's role in fulfilling the company's mission; the long term and near term future for the organization. And communication is a two –way street as well, that is, remaining open for customers to become real-time sources for feedback and product ideas, perhaps seeking out suppliers willing to extend finance terms, and listening to employees for suggestions regarding improving operational efficiencies.

The important thing is not to ignore the constant drip, drip, drip of market erosion and declining revenues, blindly hoping that a sudden macroeconomic recovery is around the corner, a rising tide that raises all boats. Don't ignore the warning signs. Take action now, because like my plumbing, the 'pressure' to take corrective action now is only building.

Marshall McLuhan and Social Media

Skype, Facebook, MySpace, Match.com, Vonage, eBay, YouTube, Craigslist… the connection between them is the connection between us, and all rely upon the Internet – or IP protocol – to operate.

It occurs to me that a few years ago the promise of the Internet was in the democratization of content and the free exchange of ideas. So today I'm not certain the cause of the hand-wringing over the growth of Social Media. Cynically I could suggest that our collective hand-wringing is simply in the fact that we don't accept Social Media as a valid tool (or proper use of our time) because we haven't yet monetized it properly. (44% of all web visits are to Social Media sites but only 5% of all revenue from the internet is driven from them.) All things, it seems, are accepted in time as we learn to make money with them.

While I understand the concerns regarding the lack of privacy of our youth's postings and the banality of photos posted by exuberant parents, it seems to me that Social Media – and similar applications of the medium – are simply the latest stop on the train to Marshall McLuhan's Global Village. It is, after all, the goal of an increasing number of projects such as One Laptop Per Child to bring the information and interactivity of the global web to remote, more impoverished parts of the world.

A JPMorgan survey from last November revealed that half of online social networkers were there to connect with old friends, while still more were there to interact with their current friends, sharing music and photos. There is a big time-waste with Social Media, say the critics – yet it is important to note that it is at least an interactive medium, unlike television.

The ultimate realization of the promise of the internet will be in its social aspects – connecting, sharing, even buying and selling. Whether in twenty years it will look like Facebook or appear more as holographic avatars in a room of mirrors is incidental. The thing that matters is that we all continue to communicate, regardless of the media.

Now if you excuse me, I need to research how to make money with Twitter…

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Phelps, Personal Branding, and 'These Kids Today'

Michael Phelps' recent stumble simply serves to underscore the critical requirement to actively build and protect one's 'personal' brand – especially online where a poorly lit photo from a lousy angle can become a sensation and tear down one of America's heretofore greatest athletes – not to mention the personal financial cost to Phelps in endorsements - as Kelloggs has already abandoned their multi-million dollar endorsement deal with Phelps.

Marketers have long recognized that with the growth of the Web 2.0, the term 'brand management' has proven oxymoronic, as the control over the perception of a brand is now more than ever before in the hands of the consuming public. Yet what of the impact on our personal brand? Those of us experienced enough to understand the importance of our personal brand (or 'reputation' to use an old-school term) are now leveraging social media to enhance it. And while readily evident to my generation, our youth appear not to understand or worse, not to care, that the consequences of their actions will appear today on more than their dreaded 'permanent record' –a manila folder in the principal's office – but rather, a new permanent record - another regret posted on a MySpace or Facebook page.

As recently as only a few years ago, an outlet for narcissism this dangerous was limited to the realm of celebrities and reality television. Yet today the explosive growth of social media (one of every twenty web hits is now directed at a social media website) has essentially created a world where we are all stars in our own reality show.

In a line I wish I had written, Lakshmi Chaudhry, writing in The Nation last January, derided the YouTube generation with this pithy line: “When it is more important to be seen than to be talented, it is hardly surprising that the less gifted among us are willing to fart our way into the spotlight."

In fact, I'm predicting that in the not-too-distant future we'll witness the advent of video capability on headsets so that we can stream our lives directly onto our own websites and Facebook pages. (Ironically I've determined that for some social media addicts, this will amount to a nearly 24/7 feed of them viewing their own pages.) SEE UPDATE

“Our character is what we do when we think no one is looking,” observed author H. Jackson Brown, Jr.

Absolutely true, but in a world where everyone is looking at everyone else, all the time, where is the room for such contemplation? When there are no dark spaces left for self-reflection, self-control or self-consciousness, is the movement toward this ever-increasing comfort in exposing our thoughts, our desires, and our backsides lowering the bar on what is considered ethical and moral, or just lowering the curtain on what we all knew was there all along?

In spite of recent growth in adoption of social media for the over-35 crowd, I'm still on the upper end of the age demographic for the technology, so my age may account for my views on the subject. Yet even forgiving for a moment my parental angst over what might simply amount to a generational gap in the way we view technology, the need for young people to be taught the basics of branding – particularly personal branding – is more urgent than ever before.

I had an email exchange about a year ago with an old friend whom I've known from high school, and a large part of the on-going discussion was non-specific regret over things said, fights fought, and hearts broken when we were 17. Nothing we did was ever beyond the pale for a typical American teenager, but the minor mistakes we made in high school never really impacted the men we became. It has always been that way. Except today, when seventeen year olds are codifying their spontaneous thoughts and actions in such a way that it will soon impact their lives and defining – essentially restricting – the person they will become.

As I use Facebook Facebookand LinkedIn to get connected and reconnected with colleagues from my early corporate roles here in Dallas, advertising years in New York, friends from high school and even junior high school (!), it is the branding wonk in me that is grateful that as an adolescent extrovert I was spared the consequences of access to social media. Yet regarding today's generation, I pause to consider the impact of a future web search that might bring up an intelligent byline they've written – alongside a photo of the otherwise respected author passed out at a 'kegger' years earlier.

Personal branding is as critical a skill to future generations as reading, 'ritin, and 'rithmetic. Yet unlike trigonometry, a working knowledge of social media's impact on personal branding will be relied upon again and again in their future. Adolescents today make choices that are under greater scrutiny and a harsher light than ever before, therefore discussion of ethical and moral choices needs to be highlighted at school and at home – along with the new visibility of these choices and their online 'permanent record'.

UPDATE, Aug 2010: www.looxcie.com 'Nuff said.

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No excuses

I recently re-discovered this quote from the inimitable Sir Winston Churchill and inspired, tried to build a blog entry around it, but in the end nothing I wrote seemed to add anything to his brilliant quotation that it didn't say on its own.

Apply it to marketing, selling, the economy, the environment, your marriage, the body politic or your now-fading resolutions; it all boils down to this:

"It's not enough that we do our best; sometimes we have to do what's required."
Sir Winston Churchill

'The' One and Only

Image by Taifighta via Flickr Middle names, excepting in cases like G. Gordon Liddy or F. Scott Fitzgerald, are an often overlooked nod to a favorite grandparent or distant cousin. But in his inimitable blog, Seth points out that there is a middle name in marketing circles the resonates above all others.

"The". As in Attila, The. Hun.

What an amazing shortcut to get to what we branding guys call a "Brand Essence". Proper nouns on the left, adjectives and nouns on the right, 'The' in the middle.

What is your company's "The"? What is it that you do so well, with such consistency and regularity, that you are the only one that does it or the one against all others are measured?

Barbarians are now and forever defined against the One True Barbarian: Conan. The Barbarian. Giants, they must measure up to Andre. Want to be Great? Alexander set the bar. Sports legacies are built on this sort of imagery. (Ali) The Greatest, George Ruth - The Babe, (Jack Nicholas) The Golden Bear, or Gretsky - The Great One (Alexander apparently has competition).

Arnold got a two-fer. The Terminator. Who became The Governator.

A few obvious brands that overtly use 'The' in their positioning come to mind: There's Wikipedia, The free encyclopedia. Coca-cola, The Real Thing. Or you might favor Pepsi, The Choice of a New Generation.

But you don't have to use the The to be a The, however. You just need to know what it is. For example, there's Google, which we all know is The Search Engine. But how do we know that's the 'The' if we don't use the 'the'? Because Google is now a verb, just as Kleenex is (to their chagrin) now a noun. It's the ultimate 'the'. Not to mention that no less a source than our ex-President Bush indicates that he likes to use 'the Google'.

Years ago when casting for Mad Max: Beyond Thunderdome, it is rumored that the producers were looking to cast an actress 'like Tina Turner'. Finally they decided to cast the 'The'. Tina herself.

Be the The.

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Some ideas are more equal than others.

The genesis of this post was the gawd-awful design my sainted but flawed Mets will be forced to wear on their uniforms this year to commemorate their new stadium. Who exactly within the Mets organization designed that abomination? (The WordArt application in PowerPoint is not the ideal program for logo design. Just sayin'.) I ask because it couldn't have been a branding or design agency. Or maybe it was a branding or graphic design firm, once again cutting its own throat by abetting the tasteless opinions within the organization.

"You'll know you've made it when you can make money from what you know and not from what you do." It's what I was told when I started consulting. But I wasn't consulting in finance or M&A. I was consulting in marketing, where often what you know and what you do are the same. We're like lawyers that way. (And that's not the only way admen are like lawyers. But I digress.)

So therein lies the rub. At the point at which all you know and all you do is generating 'the big idea', there's been a door left open by we marketers that allow clients - blinded by narcissistic perspective and biased by the skin they have in the game – to value their ideas as well, if not better than – those who have made marketing, branding, design, and advertising their profession.

The insightful quote from Bill Hewlett that 'marketing is too important to be left to the marketing department' is as valid as ever – but too often misapplied. Hewlett never meant that everyone in the organization could create effective marketing. He was suggesting that everyone in the company had a responsibility to market the organization as effectively and as often as possible, and not to remain mute as marketing bore the weight of lead generation and brand-building. And it certainly didn't mean that marketing couldn't be trusted to create those messages. The distinction is as clear as the difference between the message and the messenger.

The belief (and I'll admit that I've been guilty of spreading it in the past) that 'good ideas can come from anywhere' is abject nonsense. The client's spouse is hardly ever – nay, never ever – right. I think it was the collective of smaller agencies that have been guilty of spreading this virus and have encouraged it among clients in a short sighted effort to position themselves as far more open and accommodating than their multi-national brethren who were, a decade or more ago, hammering closed the windows opened by legitimate alternative creative resources, such as Coca-Cola's use of CAA (Creative Artists Agency) to create the now iconic polar bears campaign.

Theoretically, of course, great ideas can come from just about anywhere, just as Archimedes made a great discovery in a bathtub. Yet as a general rule, such an egalitarian valuation of ideas does significant damage to the business of branding. Yes, you can win the lottery, a rookie pitch a perfect game, or a starlet be discovered in a drugstore. But what are the odds, and is it worth those odds to marginalize an entire industry – especially our own? Just as architects don't turn their drafting tables over to the developer, or doctors their stethoscopes to the patient, neither should marketing professionals abdicate their proper roles of architects of the next great idea and healers of troubled companies. And furthermore, as I stated in my post from a couple of years ago regarding the Houston's soccer team, why, if it is so easy, is it often done so damn badly?

Zeitgeist 2008

Cover via AmazonI'm currently halfway through the book Click (the one by Bill Tancer, not Nick Hornby); full title Click: What Millions of People Are Doing Online and Why it Matters. Tancer, who runs the research effort at online market research firm Hitwise, analyzes search patterns from search engine data and addresses the often surprising results and challenges us about what we've believed about the psychology of consumers. So when Google printed this "Google Zeitgeist" for 2008 – snack food for stat brats such as myself – I had to look to see for myself what Bill Tancer spends his day analyzing.

Interesting is the country-by-country breakdown of top 10 search terms and the "How to" list. #2? "How to kiss."

Some lonely gamers out there, still.

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Analysts, experts, and me

I've been amusing myself lately with the headlines I'm seeing in the business press. All of the experts and analysts that are financial reporters' go-to guys and gals for quotes and insight have something in common: No one is certain. Each one, to an individual, is either hedging - "Manufacturing is likely to rebound, but if China does this or that, or the bailout results in this other thing, then, it is likely to sink further." Or, equally common are out and out incorrect prognostications, such as T Boone Pickens predictions - almost wishes - that "oil won't fall below 120...100... 70... 50".

So in an environment where Kirk Kerkorian has lost billions, Jerry Wang has been forced from Yahoo, Alan Greenspan's portrait at the Federal Reserve is waiting for fresh graffiti, and even Warren Buffett can't turn a buck, I'm ready for my turn on CNBC's Squawk Box.


Here then are the prognostications I made on a recent survey from Chief Executive Magazine:

1. How would you rate business conditions in the US currently? Bad
2. How would you rate employment conditions in the US currently? Bad
3. How would you rate investment opportunities in the US currently? Good
4. How will employment change over the next quarter? Stay the same
5. How do you expect capital spending within your company to change over the next quarter? Stay the same
6. What do you expect the economy will experience over the next quarter? Stagnation (No growth, no decline)

On December 31, 2009:
Dow Jones (currently at 8,932) will be at 9621 points
Oil (currently at $40.50) will be $59 per barrel
Interest Rates (the Fed Funds Rate, currently at 1.00%) will be: 1.00%

Prediction comments:
(I said) Uncertainty is driving the market and the economy; once some certainty arrives with new administration - for good or bad - wild swings will stabilize and the widely oversold market and general malaise will slowly lift.

Confidence comments:
(I said) Business decision-makers will become comfortable de-coupling their decisions in the real world from abstrations like the Dow. But once that fog clears, the impact of government intervention on national debt and as a general signal of the new regulatory environment will be a drag on growth.


So we'll check back in a few months to see how I've done. If I'm right, I'll start a new profession. If I'm wrong, well, I'll join the legions of analysts and experts who now are taking a page from former President Clinton: It all depends on your definition of 'wrong'.