Collective Voices

By Tim Maroney

A recent J.D. Powers and Associates report has confirmed what many of us have expected for years, serious uptake by consumers of alternative fuel vehicles (AFVs) and plans by more manufacturers to develop and get them to market is gaining traction.

Even though sales of AFVs are down this year (largely due to production problems following the devastating tsunami in Japan), Honda’s sporty new CR-Z is selling almost as fast as dealers can get them.

I recently visited a Honda dealership to test drive the CR-Z, and everything about it says “excellent economy.” Then, when I took my wife with me back to the dealership the next day, the car I drove was already gone.

Annual sales of electric drive-train vehicles in the U.S. have grown from 732,000 in 2010 to 940,000 in 2011, according to the Powers forecast. General Motors has no fewer than eight hybrids on its product line now and, another Powers report says the number of hybrid options available to consumers in 2012 will reach more than 40. At the same time, technological advances — from fuel cells to compressed natural gas — are being driven (pun intended) at a dizzying pace.

Fuel cell powered vehicles should receive government approval by 2014, and natural gas powered vehicles are close to production now. Should Congress get around to passing the “Pickens” bill anytime soon, tax incentives for buyers and users of natural gas powered vehicles will create enough demand to motivate service station owners to install natural gas fuel pumps (more than 1,000 U.S. gas stations have them now).

It would be great to say that all this activity is due to a widespread acceptance of global warming and serious personal commitment to improve the environment, but, rather, I think it’s recognition that the competition for the remainder of the world’s oil supply from emerging economies like China will keep gasoline prices unacceptably high for the foreseeable future. And that is a less sustainable option in the face of adopting alternative fuel technology.

Tim Maroney is Director of BBG’s Automotive Marketing team. For more information, visit: http://bbgintegrated.com/Autoteam [PDF].

By Scott Burkhead

Driven by attractive consumer offers that cost their advertisers dearly, Groupon continues its rapid growth. But when will retailers begin to gravitate toward programs driven by smart, value added promotions instead of giving away the store? Jasper Malcolmson, CEO of rival deal company Bloomspot, thinks retailers will soon reject money losing trial offers from Groupon and opt into services that offer fewer deep discount deals and more targeted promotions.

We think Jasper is on to something but neglecting a key issue: the majority of offers we’ve seen from either service are sadly lacking in any meaningful differentiation for the brand paying for the advertising. This is probably understandable as Groupon and its clones are the digital reincarnation of Valpak, which is rarely driven by either creative, or media strategy. This probably won’t change for Groupon’s core market of small, local retailers. However, to attract significant brands someone like Bloomspot needs to prove that Daily Deals programs deserve a spot in their media plans. Read the article by Tricia Duryee in eMoney for some great insights into this subject.

By Tim Maroney

For those of us lucky enough to be immersed in advertising New Media we love the holiday season because ours is a longer season than yours. That’s because Christmas and New Years are followed up in January by the Winter Consumer Electronics Show (CES) Show in Las Vegas.

Each year, electronics manufacturers, video gamers and other eccentric, but brilliant minds, trot out their new stuff. It’s an annual looking glass into our future.

The last few years have seen major technological advancements that seemed way down the road even before the Great Recession. Ideas like mass market touch screen computers, and location-based GPS applications with cell phones to carry them.

Some technology introduced at the CES Show advanced so far and quickly that it got replaced almost before it could be mass produced. Technology’s human equivalent of 15 minutes of fame. Remember tablet computers? They were almost the next big thing back in 2003.

This year we expect a lot to be said about advancements to 3-D televisions. Many will be on display and we can hardly wait to see them. That’s because the implications for the advertising agency business of having 3-D televisions in every home in the future is huge.

Broad acceptance of 3-D TV would bring a lot of excitement back into a ‘traditional’ media that has been drowned out at recent CES shows by the focus on other breakthrough technology like smart phones and Kindles.

Just imagine the possibilities for 3-D television advertising, or should we say Advertainment:

• Product demonstrations that would make John Popeil roll over in his grave (for those of you who are 12, he was the Veg-O-Matic guy. Ask your Dad).
• Virtual rides in new automobiles. Can’t wait for the BMW one.
• LeBron James dunking a basketball in your face while wearing what look like size 44 Nike sneakers.

There would seem to be no limit to the creative opportunities and revitalization that 3-D TV will bring into the ad business. But, here is the catch. 3-D televisions cost too much and the American people cannot afford them right now.

Moreover, many of the Hollywood films produced in 3-D over the last two years weren’t exactly blockbusters (anyone remember Alice in Wonderland with Johnny Depp? That’s ok, no one else does either). Then again, watching episodes of The Good Wife or any sitcom on 3-D TV may not get you to the point you would want to own one.

But, the investments are being made, the production systems are getting refined and I’m already thinking about how much a 30-second 3-D slot on the Super Bowl will cost in 2015 vs. a pithy high definition spot.

If this discussion seems premature to you, and you haven’t gotten the 3-D bug yet, because you can’t see beyond the glasses, then, like all other things CES you will not have to wait long to get bit. Apple this week announced that it has been granted a patent for glasses-free 3-D TV. Yes, really.

Do you want to see it? Here it is:

So, while all of you may be spending the weekend of January 1, 2011 singing Auld Lang Syne, or watching football, we’ll be thinking about the CES Show and saying “Bring It On!.”

By Scott Burkhead

Reading Dick Patton’s recent article in Advertising Age, “Good CMOs Facilitate Change, but Great CMOs Drive It,” I had to smile.

Dick used Domino’s Pizza as his example of a successful brand remaking its signature product during a period of strong growth and earnings. They hired CMO Russell Weiner in September 2008 after 58 consecutive quarters of same-store sales growth and less than two years later rolled out a series of self-lacerating ads that are impossible to forget.

“Domino’s pizza crust to me is like cardboard,” says a focus group member in one spot. Crestfallen company executives quote customer comments like “Worst excuse for pizza I ever had,” “totally devoid of flavor” and — my favorite — “The sauce tastes like ketchup.”

The event that prompted Domino’s self flagellation and its determination to remake its product seems to be a 2009 survey of consumer taste preferences in which the company’s pizza tied for last place. In spite of these results, the decision to change the product was not a desperation move, but a carefully planned and executed effort by Weiner and team.

I smiled because the article reminded me of times in my agency life when change in a client’s marketing strategy presented a clear opportunity, but only after the forces of inertia were painfully overcome. Sometimes our ally was the CMO who worked with us to convince a skeptical CEO and Board, and sometimes it was just the opposite; a CEO moving ahead of his marketing group to drive the needed change. And sometimes, nobody budged and nothing changed. Experience teaches me that it is far easier to effect change in a brand with flat or down sales than one that is showing annual gains — even if a powerful argument exists for the change. The Domino’s example is an extreme one, and Weiner must be a powerful persuader. And sometimes doing the right thing has an immediate and good result: four months after rolling out the new recipe, the brand experienced a more than 14% quarterly sales gain. This continued in the second quarter with 8% gains and huge profitability increases.

A couple of other pesky bromides that still hang around some company cultures are, “There are no bad ideas,” and “Don’t advertise during a recession.” Fact is there are usually a lot of bad ideas that have to be ploughed through and eventually ploughed under before the good ideas find the sunlight. And not advertising during a recession is a great way for your competitors to gain share.

I don’t know which advertising agency Weiner worked with on the Domino’s initiative, but I bet if you asked he would offer high praise. Changes like this one don’t happen without support, and experience with my own agency, and others I know well, tells me that a project like this required a smart, powerful team of company and agency people working together to pull it off. It is times like that when my job has always been the most fun: working with a smart client who understands the power of strategic collaboration and is anxious to take his brand to the next level. During those times the size of the client, even the size of the budget, and the thousand frustrations of the business are forgotten in the excitement of creating something of value: a brand that grows on the customer, acquires the power of devotion, and joins the American conversation.

By Tim Maroney

I was watching a Seinfeld re-run recently and was amused by the size of the wireless telephone devices with collapsible 12” antennae that they were using compared to what we use today. And I thought, it is easy to get caught up in the doom and gloom of overall economic statistics during this recession for which there seems to be no end in sight. However, in the background of this downturn, and as there has been in every economic cycle in the past 30 years (we’ve had a recession every 10 years), there are always innovative miracles of sorts going on in the background.

The burst of the high tech bubble in the late 1990’s followed by the events of 9/11/2001 are less remembered today for the pain they caused thousands of venture-backed small businesses and thousands of families respectively, than they are now for the emergence of new technology-based businesses like Google, Amazon, EBay and PayPal, that  with great vision, technological prowess and entrepreneurial spirit put our economy on a new path that is still growing, creating new businesses and job growth.

Google’s easy access to information, literally everything you need to know, plus Amazon’s online shopping experience made simple, opened a whole new chapter in American retailing and gave advertisers and other brand marketers a whole new set of sales channels collectively called interactive marketing.

Since this recession gained momentum in 2007 so many new marketing platforms have emerged that according to Bureau of Labor Statistics, technology sector jobs will grow by 118% over the next 10 years. That sounds conservative when you consider that the introduction of the iPhone alone spawned thousands of new applications (and developers).  Facebook, Twitter and LinkedIn were not yet household words in 2007. Yet now it seems that everyday there is a new “app” or services that are technologies within technologies, like location-based marketing apps within mobile marketing platforms.

We are still riding that techno-wave today. The spill over into the marketing channels is affecting how all businesses attract new customers and interact with existing customers. For the glass-is-half empty economists among our readers and those of you still using Jerry Seinfeld’s -2G wireless devices, let me prove my point by listing just a handful of headlines from mobile marketing industry publications since January of this year:

• Mobile alerts drive 1 out of 3 recipients in-store–27% to make a purchase
• Pizza Hut exec claims mobile accounts for 50% of orders
• Mercedes-Benz Financial tops $2.5 million in mobile payments
• Starbucks drives 1 million customers into stores through social media
• InterContinental Hotels Group rolls out Android-based rewards program
• Carrabbas Italian Grill SMS coupon program sees 68% redemption rate
• Gap makes shopping more social with iPad app
• Taco Bell campaign boasts 13,000 opt-ins in 5 weeks
• Chilis distributes location-based mobile coupons to drive foot traffic

Over the last 6 months we have found that the development of new technology platforms is now so rapid that it is causing confusion among a lot of brand marketers. And for some, their biggest problem is less what they want to say about their brand, but more about where is the best place to say it. They are asking us questions like, “With everything that is going on out there, what should I be doing?” and “How do I integrate the core product and legacy investments we have made in traditional media with all that new stuff?”

Well, here are some starting points:

1. Find a brand strategy that brings your customer closer, that is genuine and that works, so you’ll be prepared to consistently communicate its value. Get yourself up to speed in the New Economy, so to speak.
2. Know who you are talking to and how to reach them by focusing on where they are spending their time and how they like to communicate. In short, try to put yourself in the driver’s seat.
3. In a world that’s heard it all before, shaping your brand’s look and message should not be a simple recycling of old ideas. Look for something fresh, truthful and relevant. And join the American conversation. Accelerate your thinking.

Keeping pace with competition isn’t going to get easier when you consider that they have the same myriad of choices as you. Trying to look too far down the road won’t work either, because the speed at which new technology is being created makes it hard to see the curves that didn’t exist yesterday.