Sunday, May 27, 2012

A One-Trick Pony

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For the past two weeks I’ve laid off commenting on Facebook and its IPO, deciding instead to watch the frenzy from afar.  Wow, that was fun.  Looks like retail clients will get hosed, along with some institutional clients (that weren’t privy to Morgan Stanley’s earnings warning to its “select” clients before the IPO) who got a load more shares than asked for.  So, the stock is now down over 20%—likely on its way to about $15 where it belongs.  The future for technology stock IPOs has been tainted for years, perhaps permanently.  And the best part: the hair-pulling, name-calling slapfest between lawyers, bankers, NASDAQ and the SEC has begun.  Couldn’t see that coming at all.

The Morning After at Morgan Stanley

The one benefit of the Facebook fallout is that publically-traded social media companies are now under intense scrutiny. Because they are no longer funded with private equity—start-up capital that was returned with a handsome profit with the IPO—they have to face public shareholders who want performance and results.  If the Facebook doesn’t deliver they will hammer the stock and demand changes, despite Zuckerberg's controlling interest.

This, in turn, puts pressure on agencies.  All those hyped metrics they’ve been touting—engagement, conversations and brand awareness—now have to translate into dollars. Serious dollars.  And with shareholders breathing down the necks of their clients, it seems that the days of no accountability are coming to an end. Almost. 

To stall for time, I imagine the bean-counting holding company behemoths and their C-level executives will shift the blame wholly upon the working stiffs—the creatives who do the work while the others make the arrangements (h/t Bob Hoffman)—to protect their mega-million dollar salaries.  Expect layoffs galore as they point fingers, distract, and deflect blame away from the real reason for declining earnings and shrinking client base.  But the day is coming when shareholders will realize these highly paid executives are enriching themselves at their expense and they’ll storm the annual meetings with torches and pitchforks looking for someone to blame.  It’s likely, though, they’ll run out of tar and feathers before they get rid of the lot.     

Playing to Strength

The real value of Social Media is in managing existing customers.  With a new client in the fold, over the next few months I’ll be using Facebook to its fullest.  It will be part of an integrated campaign (mass, OOH, Web, radio) to support the re-launch of a +100-year old brand.  The product, unavailable for close to a decade, was brought back three months ago.  It is only available at just a handful of locations for the moment, yet its Facebook and Web pages are receiving the most incredible unsolicited testimonials.  People have written about how they have missed it, and how relieved they are that they can get it again—one guy and his buddies went on a 90km road trip to get some.  Remarkable for something that hasn’t been around since 2004.

Orange Appeal
 The creative challenge for the re-launch is to let the tens of thousands of past users know that the product is back on the shelves.  The main tactic in all media will be to highlight the product’s distinctiveness—not its differentiation from others in the category.  The product is immediately recognizable to those who remember it; there is no need for persuasion, no hard sell.  Just the sight of the packaging will be enough to remind people how much they trusted a product that was a part of their family for generations.   As the campaign rolls out, I’ll tell you what it is and ask what, if anything, you recall of the product.


Friday, May 11, 2012

Time to Break a Hip-ster



I was reading a blog post by the Mensch of Manhattan, GeorgeTannenbaum, where he talks about Coming Apart; the growing disconnect between we advertising people and the consumer:
Do we, anymore, know our consumer. Know how they live, think, feel, buy? Do we understand their concerns, fears, senses of humor?
No.
We're too busy trying to be cool.

Then, today I saw a related piece at fasctcocreate.com.  It’s called, Infographic Confirms it: Advertising People are not Normal.  (Like someone needed to do a poll to find this out.)  It is about a study done by Heat, a San Francisco agency and what it highlights has some bearing on how we view brands and social media.  Of note, the study finds:
• 71% of advertising/marketing professionals say they pay attention to brand posts in their Facebook news feed “all of the time” versus 23% of the general population.
As for Twitter: 92% of advertising/marketing professionals use Twitter to follow brands they like. 33% of the general population does so.
Should brands put more effort into interacting with consumers via social media?
• 63% of advertising/marketing professionals “strongly agree” that they should; 23% of the general population “strongly agree”
Meanwhile, digital marketing campaigns that are endlessly discussed in the advertising industry aren’t so well known in the wider world. Chew on this:
• 70% of advertising/marketing professionals were aware of Burger King’s “Subservient Chicken” digital marketing campaign vs. 8% of the general population; as for the mega-award-winning Jay-Z "Decoded": 63% of advertising/marketing professionals aware of campaign vs. 9% of the general population.
And the study also seems to suggest that the Mad Men stereotypes aren’t off the mark: Subjects were also asked about how they act at office holiday parties, and it appears that people who work in advertising are more likely to puke from drinking too much (37% vs. 9% of the general public); do drugs (26% vs. 3% of the general public); and hook up with a coworker (26% vs. 8% of the general public). If you work in advertising, these results likely aren’t surprising to you.
You're right, they aren’t even though there are many who will scoff at the results. There is, however, a home truth here. Within agencies, we tend to look inward, towards each other more often than outwards, where the rest of the world lives.  What we believe is happening on the street appears to be more a case of confirmation bias than of reality.  More important, this bubble we’re in can impair our judgment.

  © Heat 2012
 
Maybe the zeal we have for social media platforms is because we are always trying to chase the youth market.  But here are the facts, Jack, about the state of the economy and why chasing this crowd is wrong-headed, courtesy of Bob Hoffman, The Ad Contrarian and Nielsen. People over 50:
• control 77% of all financial assets
• control 50% of all discretionary spending...
baby boomers dominate 94% of all consumer packaged goods categories.
• they purchase almost 40% of consumer packaged goods
• they account for 1/3 of all TV viewers, online users, social media users and Twitter users.
• even in technology categories, where marketers assume young people dominate, baby boomers  "are purchasing at rates just as high as other segments, and because they are often buying for their kids, many are double-dipping."
• less than 5% of advertising is aimed at them. 

Maybe we should pop this bubble and keep Yogi Berra in mind more often: You can observe a lot by watching.

Thursday, May 10, 2012

Corelius Trunchpole

In an industry overrun with hucksters, pimps, and bean-counters (I'm talking advertising not politics), it is refreshing when the true masters show up and tell us a story.  This is a brilliant piece of work.  I wish I had helped.

http://www.youtube.com/watch?v=a-oT3zt3K_k&list=UUWwJzgpwVHr6wu7YD2itrtg&index=1&feature=plcp

Wednesday, May 9, 2012

Food for thought


Herb-crusted Rack 'o Lamb





I had a request for the recipe for the crust on a herb-crusted rack of lamb I posted on FB a while back.


I wish it were my recipe but it belongs to Thomas Keller, the über-chef of The French Laundry fame, taken from his Ad Hoc cookbook.  Here it is:

2 frenched 8-bone racks of lamb
Kosher salt and freshly ground pepper
Canola oil
¾ cup Dijon Mustard
3 tbs honey
6 tbs (3 oz) unsalted butter, at room temperature
1 tbs garlic puree*
3 to 5 anchovy filets, salt packed or oil packed, rinsed, dried and minced
1½ cup dried bread crumbs or ground panko crumbs
3 tbs finely chopped Italian parsley
1 tbs minced rosemary
grey salt or coarse sea salt

*Put 1 cup of peeled and trimmed garlic cloves into a saucepan and cover with enough oil to cover them by about 1 inch.  Set the saucepan over medium-low heat.  The garlic should cook gently; very small bubbles will come up but they should not break the surface.  Cook for 40 minutes, stirring every 5 minutes until cloves are completely tender when pierced with a knife.  Remove saucepan from stove and let cool.  Once cool, put the garlic in a food processor and blend, scraping down the sides often, to puree. For a finer texture, pass through a small, fine-screened sieve or  tamis.

Score the fat covering the lamb in a ½-inch crosshatch pattern; be careful not to cut into the meat.  Season all side with salt and pepper.

Set a roasting rack in a roasting pan.  Heat some canola oil in a large frying pan over medium-high heat until it shimmers.  Put 1 rack fat-side down in the pan and sear to golden brown, 1½ to 2 minutes; carefully move the lamb as it sears to brown as much of the fat as possible (it is best to sauté 1 rack at a time, so the temperature of the pan doesn’t drop dramatically).  Transfer the lamb to a roasting rack, meat-side up.  Drain off the fat, reheat the pan, adding fresh oil, and sear the remaining rack. 

Combine mustard and honey in a small bowl; set aside.  Combine the butter, garlic, and anchovies in a small food processor and puree until smooth.  Transfer the puree to a medium bowl and stir in the bread crumbs, parsley, and rosemary to combine.  Do not over-mix; the mixture should be moist, but it may not all come together.

Brush the mustard mixture over the fat and meat (do not coat the underside of the racks.  Spread the bread crumbs evenly over the racks pressing gently and patting them so the crumbs adhere. (The lamb can be refrigerated, on the rack in the roasting pan, for up to 6 hours.

Position an oven rack in the bottom third of the oven and preheat the oven to 425°F.
Put the lamb in the oven, with the met side towards the back, and roast for 25 to 35 minutes, until the temperature in the centre of the meat registers 128° to 130°F.  Let the racks rest on the rack in a warm place for about 20 minutes for medium-rare.

Dee-lish

You heard it here first

http://swimminginbs.blogspot.ca/2012/04/reading-week.html

From CNBC, it seems investors are starting to clue into some of the fine print in Facebook's latest SEC filing:

Increasing Mobile Usage. Increasing use of Facebook on mobile devices will also affect our performance, particularly if mobile use substitutes for use on personal computers. Historically, we have not shown ads to users accessing Facebook through mobile apps or our mobile website and we cannot be certain that our mobile monetization approaches will be successful in generating meaningful revenue. We cannot quantify the extent to which mobile usage of Facebook is substituting for, rather than incremental to, usage of Facebook through personal computers, but we generally expect mobile usage to increase at a faster rate than usage through personal computers for the foreseeable future.

It should get quite interesting over the next week


Tuesday, May 8, 2012

Facing the Wall Street



With Facebook’s IPO set to debut on May 18, investors are starting to take a well-advised closer look at the new issue. Analysts expect Facebook to be valued at $100 billion after the share sale, which is 33 times over ad revenues—Google trades at 5.5 times. (Google is worth $200 billion and has ad revenues of $36.5 billion.).  According to one analyst, to justify the $100 billion valuation, Facebook’s revenues will have to increase 41% annually for the next five years.  This compares to Google’s revenue growth of 24% in 2010 and 29% in 2011.

The big question for Facebook’s clients (advertisers, not users) is how to accurately measure the performance of their ads because Facebook is making a pantload of money from them—ad rates increased 41% over the past year.  Webtrends produced a study in January 2011 that assesses Facebook’s performance.  It’s important to note that Facebook results are no longer as specific; we only hear about percentage changes so you know they’re piss poor and likely below the industry average:

Year                    CTR                    CPC                    CPM                   CPF
2009                    0.063%                US$ 0.27             US$ 0.17             N/A
2010                    0.051%                US$ 0.49             US$ 0.25             US$ 1.07

Meanwhile, ad agencies are still dodging accountability for the performance of their clients’ social media campaigns. They say click-through rates are not important anymore, now it’s all about  hover rates, engagement, and awareness.  In the Wall Street Journal, Sarah Hofstetter, president of digital ad agency 360i, a unit of Dentsu Inc, says, If a marketer measures [return on investment] as direct sales from the Web, then Facebook may not be the ideal platform. But if the goal is to move the needle on brand health metrics, whether its awareness or engagement... then Facebook should be a key part of the marketing mix for most consumer brands. So, Sarah, how do you measure all this awareness and engagement stuff?  How do you give it a monetary value so you can quantify its worth?

Then again, Kia’s VP of Marketing, Michael Sprague, seems to be cool with no accountability.  Sprague says, Being on Facebook sends a message… Consumers they say 'Facebook is working with Kia, I like Facebook ergo I like Kia.' That's what we are hoping for.  *sigh*  Hey Mike, I'm hoping to see a unicorn one day but wouldn’t you rather like someone to buy your vehicles instead?

Hopefully, investors will press Facebook to reveal its results and explain how it plans to maintain revenue growth now that mobile usage is expanding much faster than online (which may have reached saturation), a platform Facebook is yet to effectively monetize.  Failure to properly address these issues  could end up costing plenty to those investors who aren't in it for the quick flip, just like so many of the hyped online IPOs have of late. Groupon anyone?

Fanboys like Facebook because its fun.  It where you can share cat videos, photobombed pictures and tell everyone that you’ve just become the Supreme Ruler of Bob’s Tattoo and Meat Emporium—all while you give away all your personal data for free to Facebook so it can make a killing selling it.  Face it, advertisers will have more success showing a guy being bludgeoned with a 30-inch, 7-lb dildo than they will trying to get a fanboy to click on a Kia ad… unless, of course, the guy being bludgeoned is driving a Kia.

And for your enjoyment, I provide this handy Web Economy Bullshit Generator.  Brilliant!
http://www.dack.com/web/bullshit.html

Monday, May 7, 2012

Asshats Abroad

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Recently, I’ve been getting email from YouTube saying that my video is on the top of YouTube. It doesn't tell me which of my videos is wildly successful or what top I'm supposed to have reached. Having posted a few on YT, I know they don’t send emails out saying such things.  Anyway, for fun I thought I’d succumb to the link bait.  




 




It took me to Toronto Drug Store, a very patriotic place that declares itself an Essential Part of Canadian Rx Network. I guess it must be true because there is a photo of a serious but handsome doctor—he’s in a white coat with a stethoscope around his neck so he’s got to be one.  Behind him is what I assume to be a nurse holding something that’s supposed to look like a patient’s chart and she’s got a stethoscope, too. (I figure that if she were a doctor she’d have to be wearing doctorly glasses.And, she’s got her head tilted to the side and her expression is reminiscent of someone watching kittens play with balls of yarn. Awwwh, how cute is that??



So, it’s an online pharmacy that features Viagra and Cialis (aka le Weekender) and the picture at the top right of a laughing couple drinking tea or coffee or maybe Jack Daniels suggests these pills are effective, because, well… LOOK at them! Actually, he may look like he thinks he’s about to partake in some serious rutting, she’s smiling because she spiked his tea/coffee/Jack with enough saltpetre to knock the sex drive out a 2,300 lb. bull for a month. 

To my surprise I discover the email and the pharmacy operate out of Russia.  Whaaa?  It seems that Ivan the Terrible Marketer, an asshatski sitting in Minsk, actually believes that when he lies to people to get them to his site, when he posts fake pictures of his offices with fake addresses, and fake diplomas, people will gladly order and pay for his boner fide pills.  People will trust that he sells the real deal, not the ones made with dead baby skin—oh, sorry, that’s the Chinese doing that (and why I never ever buy produce and seafood from China).  Man, he must be huffing some pretty powerful adhesives to think that this is the path to success.  I much prefer the Nigerian/UN/FBI scams—at least those are worth the read for their sheer entertainment value.

Friday, May 4, 2012

How consumers think

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In Testing to Destruction (London, 1974), Alan Hedges offers a remarkably accurate breakdown of the consumer’s decision-making process.  It’s worth keeping in mind that, while this was written in 1974, a time society’s roles were different, the way people process advertising is the same today as then, regardless of the platform.

"Traditionally we have tended to think of an advertisement as something whose properties and powers are intrinsic to itself and capable of being studied quite in isolation.

"In reality the way an advertisement is perceived and the kind of influence it has will depend intimately on a whole host of other factors external to the advertising itself.

"Take a typical housewife and her relations with (say) the floor polish market. Let us trace her contacts with this market through an imaginary week, not forgetting that this is just one tiny thread among thousands, which I am drawing out and magnifying for purposes of illustration. The housewife herself would certainly not have it in sharp focus.

"Let us suppose that this market (for simplicity) contains only three brands. Let us imagine they are called Lewis’s, Whistle and Glo. New Glo is our brand.

"The lady starts the week with an inherited bundle of impressions of floor cleaning and of the three brands. She has some Lewis’s in her cupboard. She has also used Whistle on odd occasions, but she has never tried Glo. Her impressions which are vague and hazy in the main, are a compound of her own experience, odd remarks from neighbours, past advertising seen or half seen, the look of the products and their packages, a fact or two from a Which? report she once started to read, some bits of lore learnt at her mother’s knee, the names of brands, the reputations of their makers, and who knows what else.

"Monday is her regular floor cleaning day. She gets out the Lewis’s and sets to work. She sees the pack. She doesn’t really look at it, it is so familiar, but perhaps just the way it looks reinforces a tiny particle of an impression. She doesn’t read the words on the pack (maybe she did years ago, when she first bought it, perhaps not even then), but perhaps she half notices an odd word, and another flake of meaning joins the mixture in her mind.

"Even after all these years of using Lewis’s she enjoys the smell of it, it reminds her of the way her mother’s floor used to smell. She thinks about her childhood home; polishing the while. She hardly notices how long it takes her to get a really good shine to the floor. After all, Lewis’s gets you good results, but you have to be prepared to work at it. Another image crystallises a fraction.

"She puts the polish away, noticing that the pot is nearly empty, and making a mental note to get some more.

"At lunchtime, flicking through a women’s mag, her gaze wanders over an ad for Whistle for a few seconds. She doesn’t think about it, but somewhere her mind ticks up the impression that she has heard a lot about Whistle recently. A bit further on in the mag, there is an article about labour-saving types of flooring. She wonders for a moment whether all this polishing is really worth it, when you come down to it. A tiny curl of displeasure winds around the Lewis’s she has been using.

"Later that afternoon she goes shopping. On the way she passes one of our new Glo posters. She doesn’t even glance at it, although later in the week she will notice the Glo on the supermarket shelf and wonder for a split second where she saw it before. The poster shows a beautiful, highly polished wooden floor, and a pack of Glo.

"In the supermarket she checks off her shopping fairly methodically, although she forgets she is running out of floor polish. She even passes the polish shelves without the penny dropping. There is a good long facing of Whistle in that eye-catching new pack. If you asked her leaving the shop she wouldn’t remember seeing it, but that is the second time already today that it has flashed in front of her eyes.

"There is that familiar old Lewis’s pack on the shelves too. She doesn’t look at that either – why would she? But every time she catches sight of it, it reinforces that familiar old image. It looks so old-fashioned, but so good. Satisfying, somehow.

"There are some of our Glo packs there too, although not many – the trade promotion hasn’t really got off the ground yet. But we’ve done a good job with the pack – even at a glance you feel that here is a modern brand which will really get results good enough for the fussiest. But the lady doesn’t look. She is worrying about the meat and keeping an eye on the time for meeting the kids from school.

"That night, watching the television, she sees two of our ten-second launch commercials for Glo. When the first one comes on she is trying to shoo the children off to bed. Second time round she’s still laughing at the show she’s just seen. If you rang her that evening and asked her what ads she had seen she wouldn’t mention Glo, that’s for sure. But by the end of the evening her latent interest in the brand is a little higher than it would have been that morning. She has no occasion to think about it yet, but when she does she will find that she has a few small and elusive impressions tucked away.

"In the morning she opens the hall cupboard to get out her dustpan and her eyes slide over that familiar old Lewis’s pack. On the way to the shops she passes the Glo poster again. In the housewares store she visits for some clothes pegs there are big stacks of Whistle right inside the door, and some kind of competition. She doesn’t look at them.

"In the afternoon she goes to her sister’s for a cup of tea. Leafing through a magazine she passes the Whistle ad again. She recognises the pack in the ad... where has she seen that recently? And stops for a couple of seconds to look at it. Mmmm, might be worth trying, looks a bit easier, like a sort of spray. But she passes on without reading the copy. Her sister comes in with the tea. Later she notices a can of Whistle on her sister’s windowsill. She picks it up and looks at it. She glances at the instructions on the pack. It does sound easy to use. She puts it down and turns to look at the new snaps of her sister’s children.

"On the front of the bus that takes her home is an ad which tells the world that Whistle is the cheapest floor polish on the market. She doesn’t notice it, but a faint impression slithers into her mind.
The bus passes a store with a big stack of that attractive Whistle pack in the window. It goes past a Glo poster. She doesn’t look at either, not more than a passing glance, anyway.

"That evening she sees a commercial for Glo again, and one Whistle. The Lewis’s pack is still there when she opens the cupboard.

"In the morning she remembers she needs polish. When she arrives at the store (passing but not noticing the Glo poster), she goes in due course to the polish shelves, where she reaches instinctively for the Lewis’s. Her eyes pass the Whistle display, and slide back to it. She picks up a Whistle pack, reflectively, and looks at the instructions again. She looks at the Lewis’s pack, indecisive. No doubt about it, that’s the one for results. You can’t beat the old stuff really. But this does look a bit easier – and probably cheaper. Her mind runs over the article on labour-saving floors. She looks at the price. It is heavily cut. She shrugs and drops it into her basket. Her brow furrows. Can she really afford the steak she was planning? Mustn’t forget mother’s birthday card...

"At home she unloads her purchases. She doesn’t remember having passed the Glo poster again on the way home. She holds the Whistle in her hands for a second as she puts it in the cupboard. She looks at the Lewis’s pack. She shakes her head. There’s really no substitute for the good old stuff. This new stuff just doesn’t look like proper polish. She begins to feel a little sorry she bought the Whistle. She pulls out the Hoover and forgets all about polishing floors. Catching sight of the magazine she was looking at on Monday, she wonders for an instant as the memory darts through her mind if she could persuade her husband to lay out for some floor coverings that don’t need polishing. Still, the wood looks nicer really. She compares her home with her sister’s, which is a bit plastic. She hoovers on.

"The week goes by. She passes heedlessly the Glo poster a dozen times. She flicks past press ads for all three brands. When she notices a Whistle ad she stops to look at it, remembering that she has a can waiting in the cupboard. She reads the copy idly, reading of the low price, the miracle ingredients, the special high-gloss finish and the ease of use. She frowns absently. Not like a real polish. Still she could do with saving a bit of time. She passes on. She sees at least half-a-dozen commercials for the various brands. She half-notices the Whistle ad and nods agreement at the mention of cheapness. She doesn’t give it a second thought. Every time she opens her cupboard she sees the Whistle and Lewis’s packs but she has lost interest in them – although seeing them half-a-dozen times gradually reinforces the polarisation in her mind. She sees other displays around.

"On Monday she opens the cupboard to get the polish out. For a microsecond she wonders whether to finish the Lewis’s first, but she is a bit curious to see whether that Whistle is as easy as they say it is. She glances at the half-remembered instructions and misapplies the polish. It’s easy to put on, bit hard to get off. She looks at the instructions again, and corrects the procedure. Well, it is quite easy. It polishes all right... but it’s not the same really. There’s not the same sort of feeling about it. She probably won’t buy it again.

"Her mother calls while she is finishing the polishing. Her eyebrows rise at the sight of the Whistle. Their brief conversation confirms the housewife’s tentative resolution to go back to good old Lewis’s, after all, that’s what polishing’s really about, isn’t it.

"That afternoon she goes to the shops again, once more passing the Glo poster without a glance. In the supermarket she is walking past the polish shelves when she notices the display of Glo, slightly bigger than last week. She doesn’t stop – she has a lot to get, and she won’t need any more polish for a month or so yet. Her brief flicker of interest in new polishes has died. Well, more or less died anyway. As her eye lights on the Glo the thought crosses her mind that she has heard good reports of it. With that one you really would get a finish you could be proud of. Now, where did I see those tomatoes.

"She has this vague feeling about Glo now (which strengthens a tiny bit as she passes the Glo poster on the way home, and gives it a quick sideways glance as she wonders whether the last shop short-changed her). It comes partly from the look of the pack, which has a kind of traditional polishy feel about it; and partly from that beautiful shiny floor she keeps passing on the Glo poster without apparent recognition; and maybe even partly from the brand name, who knows. The lady herself certainly doesn’t – and wouldn’t care much if she did. After all, it’s only polish.

"Maybe if this seed of an idea germinates and is properly nourished she will buy Glo next time round – or the time after that. Maybe she will just go back to good old Lewis’s (she knows where she is with that one). It all depends what happens next week – and the week after that – as the same processes go on and on.

"Even this long account has had to be concentrated and dramatised, and the real-life processes are probably even more diffuse and casual than those depicted, for many markets at least. Advertising is certainly less prominent than I have made it sound.
What I have been trying to make clear in this fictitious account is how interdependent our advertising is with the advertising of our competitors, and with the nature of the products, the packs, promotions, names, past experience, hearsay, editorial matter directly or indirectly related to the product field, and so on.

"In my example the stimulus which really opened the lady’s mind to the idea of a new polish was an article about labour-saving flooring, nothing directly to do with polish at all.

"Then again her reception of our messages about Glo might very well have been quite differently interpreted if it had not been for her recent flirtation with Whistle, and her rejection of an important part of the Whistle copy platform (the bit about getting good results).

"I hope the foregoing passage also makes it clear what I mean about advertising having its effect gradually, and largely at lower levels of consciousness. It would be very difficult to put one’s finger on the precise point at which our housewife really decided to give Whistle a try, or the precise influence which tipped her into doing it.

"Finally it should show just how difficult it is to separate the influences of advertising, promotions, distribution, packaging, naming, public relations, product formulation and so on; and conversely, just how important it is to see advertising as just one manifestation of the product which needs to work in harmony with all its other manifestations in order to be truly effective."

Wednesday, May 2, 2012

The Gap not dead yet



The Gap refuses to get in the cart

 Last Sunday the NYT business section featured a full-page article on The Gap. After years of writhing in confusion trying to be something it wasn’t, The Gap’s senior managers appear to have regained their senses.  It has a new ad campaign out, “Be Bright,” which is light-years better than previous ones, and it is moving back to its core business.  And sales are improving.  Go figure.  Yes, The Gap appears to have woken up... but time will tell.  How they got to this point, however, should become a case study on how constant fiddling around, following imaginary trends, and incompetent/inexperienced senior management can destroy a well-respected and profitable brand.  

In the early 2000s, after years of expansion and acquisitions, and rivals crowding in on Gap’s clothes-for-the-masses approach, it teetered on verge of bankruptcy.  In 2007, Glenn Murphy, the head of Shoppers Drug Mart in Canada, was brought in as CEO to turn things around.  His first task was to appease Wall Street by slashing expenses and reducing the number of stores to increase profitability.  It was his first mistake: It wasn’t waste and too many stores costing the company sales.  As one unnamed source within Gap said, Murphy may have had experience in grocery retail but retail clothing ain’t like moving toothpaste. 

His second mistake was surrounding himself with the wrong people for too long.  One was Patrick Robinson, a well-known designer who had worked for the likes of Perry Ellis and Paco Rabanne (who?).  Under Robinson’s direction, Gap tried to emulate stores like Express and Macy’s.  Those clothes didn’t sell.  So, he focused on women’s career clothing.  Nope.  The next year it was back to the basics; denim.  Then, it was forget denim, focus on tops.  In 2010-11, when rivals were all about bright colours, Gap had drab greys and weak pastels.  Zigging when they should have been zagging.

Murphy’s third mistake was lowering quality to improve profits.  He opted for cheaper fabrics and fewer finish options on clothing.  Granted, in 2011 cotton prices rose 20%, but the shift to cheaper alternatives and the decline in quality led to a decline in sales and harmed the brand.  Even today, Murphy seems to be in denial about it, as he says that there are many ways to measure quality.  Sure there are, Glenn old bean, but a t-shirt made with fabric so thin that single-ply toilet paper feels like steel siding beside it is not one of them.  

To make up for these three errors, Murphy resorted to discounting to drive traffic.  It got so bad that Gaps creative department couldn’t churn out 40%, 50% off signage fast enough.  He had no choice, though; it was obvious that no one liked the styles or the quality.  It all had to go, and the sooner the better.

In 2010, in a perfect example of an act of desperate panic, Gap’s Brand president, Marka Hansen and the company’s ad agency had a brainwave on how to turn things around.  A new logo!  BOOM—the New Coke of Retail had arrived.  The blowback was immediate, ruthless, and withering.  Customers hated it.  Non-customers hated it.  Ad agencies mocked it.  A total pooch.  Seven days later, the old logo was back.  What Hansen and her agency failed to realize is that it wasn’t the logo outside the store that kept people away—it was what was inside. 

After swift and repeated kicks in the crotch by investors for years, Murphy took a man-sized broadsword to his management team in 2011, decapitating five members, including Robinson (who was replaced by Art Peck) and Hansen (replaced by Pam Wallack—who cut her teeth developing Gap Kids and Baby Gap).  Peck, who is now president of Gap North America, acted quickly and insisted on better fabrics and a minimum weight for t-shirts.  Good move, Art.  The reason why I (and likely millions of others) stopped going to The Gap around 2002 was because of its poor quality and flimsy clothes.  Now, if you could bump that weight up more to, say, what Haynes’ Beefy Tees are like, I’ll start buying them again and will gladly shell out a few bucks extra to get them.  Even more if you make some with pockets.  Also, please, please, please, bring back the labels on the shirts.  Those of us who sometimes need to get dressed quickly in the dark (to go to work or go home) a label on the back instead of those printed ones that are almost invisible in daylight would ensure we don’t put our shirts on backwards.  If it costs an extra buck, do it and I’ll pay it. 

Wallack, who is responsible for design, production and marketing, is emphasizing bright colours, denims, khakis and knits, which are what made Gap famous and profitable, and has a new production plant that can ramp up and produce fashions quickly as new trends pop up.  Now, Pam, if you could bring back some of those ‘60s-style windbreakers Gap made in the ‘90s, that would be cool.  (Also, don’t forget about the staff.  The couple of times I used to wander in and soon wander out during the flimsy years, the staff, while friendly and helpful, were demoralized.  I’d comment on the clothing and they would shrug and say that’s all we sell now.  As you revitalize, share the plan with them.  I believe they want to take pride in The Gap again.)   

What I hope for in future is that as The Gap turns things around, Murphy, Peck and Walleck remember that instead of focusing tweens and teens, keep in mind what the Ad Contrarian, Bob Hoffman, keeps reminding advertisers and their agencies:
  • People over 50 control over 75% of the financial assets of the US
  • They dominate 94% of all consumer packaged goods categories
  • They purchase almost 40% of consumer packaged goods
  • Even in technology categories, where marketers assume young people dominate, baby boomers "are purchasing at rates just as high as other segments, and because they are often buying for their kids, many are double-dipping.
  • According to Nielsen, less than 5% of advertising is aimed at them

So, Glenn, Art, and Pam, deliver what The Gap used to promise and I won’t walk out empty-handed anymore.