Super Safe Super Bowl

The Super Bowl, an annual orgy of excess for those seeking to tubthump their products on television, where a 30-second spot can cost up to $4m, is taking an increasingly holistic approach to promotion, using social media to make for a more integrated offering. In the end it was Twitter that came to the fore during this year’s event, when a power cut during the game created a captive audience for savvy brands (such as Oreo) to take advantage of.

It was interesting yesterday to hear the talking heads of CNBC reviewing the success of the advertisements that played during the game (click the headline image for a link to the discussion). Zeitgeist’s thoughts were provoked particularly on the question of whether the risk of outrage from social media backlashes was now so great that advertisers were becoming far more risk-averse than in the past, preferring instead to tug at heartstrings with ads like Budweiser’s, below, which was admittedly Zeitgeist’s favourite.

What Creative Destruction means for Kodak, China and Romney

Some things are built to last. Some businesses are made this way. They are in the end ultimately just as susceptible to market forces as their counterparts. Originally a Marxist idea, creative destruction has found its way into popular economics. Former Fed chairman Alan Greenspan mentions the phrase often in his autobiography. Zeitgeist has previously mentioned the late, great economist Schumpeter, too. His notion of ‘disequilibrium’ was that within the market, though you may have a great product or solution, there are external forces that can render said product or solution redundant. These innovations often come in leaps of ingenuity that might initially seem to be extraneous to the current product or solution’s market. Finally though, the new innovation ends up eradicating any synonymous inefficiencies. Think first about Henry Ford’s famous quotation,

“If I had asked people what they wanted, they would have said faster horses.”

Along with the insight that customer research is not always the best way to go – Apple’s avoidance of it is a case in point – what this quotation also illustrates is our tendency toward myopia when it comes to seeing strategic competition from a seemingly unrelated field. Harvard Business Review have an excellent paper on strategy that covers this. It is unlikely that anyone thought the motorcar would replace horses, or that it would even be popular. This eradication of the other, more inefficient product or solution is a great example of creative destruction. Apple’s iTunes and it’s myrmidons, and the damage it has inflicted on CD sales, is another example.

Speaking of cars, attention on the auto industry was front and centre during half-time of the recent Superbowl in the US. The automaker Chrysler, which produced a similarly provocative commercial that aired during last year’s Superbowl, has caused much chatter over television, radio, print and social media. It’s an affecting advert, not least because it is built on a fallacy. Though Zeitgeist believes that bailing out the auto industry was the right thing to do, this commercial, and politicians of different stripes (including Newt Gingrich and Obama), have all been harping on about the manufacturing renaissance coming to the US: America Redux. The simple, horrible truth is that while manufacturing as an industry has room to grow it will not return to what it was.

Moreover, those jobs that will be required demand increasingly skilled, technical labourers, i.e. college-educated. There will be a great many people who are now out of work in the US who will be unlikely to find work again due to a lack of required skills. This is not President Obama’s fault, just as it is not Bush Jr. or Daddy Bush’s fault. Though some would point the finger at policies endorsing outsourcing, this would be incorrect. Insourcing is an increasing phenomenon as wages improve in regions like China. It is the way of things, as a recent editorial explains in the FT explains,

Mr Obama [has] bought into the fallacy… that manufactures are declining in the US, but his work suffers from conceptual flaws. Take just one problem: services splinter off from manufacturing even as vertical integration yields to specialisation. Over time, manufacturing yields to services. This gigantic change that is taking place has nothing to do with outsourcing.

And speaking of China, the country sits on the brink of mass creative destruction. While money poured into the country during times of less fiscal restraint, China funneled it into myriad infrastructure and planning projects. Now the easy credit is drying up, the country is in a difficult situation, not helped by mass protests across the land as workers demand remuneration that could almost be considered wages. As with the US, there will be an inexorable shift from a manufacturing industry to a services industry. How horrific this shift will be depends upon timing, among things, as a recent article in The Economist points out,

“The long-term plan is for China to wean itself off its reliance on exports and investment projects such as roads, railways and overpriced property developments, and for domestic consumption of goods and services to play a much bigger role in fuelling growth. But this rebalancing will be a long, hard slog. Officials do not want shock therapy because it could threaten the jobs of many of the 160m migrants who come from the countryside to provide the cheap labour behind China’s exports.”

Republican Presidential candidate Mitt Romney, as is the lot of someone frequently perceived as front-runner in the candidate race, has been the focus of unrelenting criticism from his fellow party members. Some of this criticism has focussed on his time working for the private equity wing of uber-consultancy Bain & Co., specifically on how many people’s jobs the man cost during his tenure there. Though Romney claims to have created a net sum of 100,000 jobs, he has since withdrawn that rather nebulous figure as his arithmetic has been questioned. His Republican opponents, as well as grass-roots Democratic lobbying group MoveOn (below), have been airing ads featuring blue-collared workers who were let go thanks to Romney’s strategies and implementations.

Mr. Romney, though his flaws and foibles may be many – he recently praised the height of Michigan’s trees as being “just right” – is not responsible for the trend of efficiency savings in America, as the Schumpeter editorial in The Economist points out,

“[I]t was also a symptom of a wider change. It was not just people like Mr Romney who were pushing American companies to shape up. It was also the new rigours of global competition. Firms of every description sought to squeeze out inefficiencies, sell off non-core businesses and close redundant operations, all in the name of shareholder value. [I]t was the shift from manufacturing to services.”

To attack Romney for such practices is to attack the foundations of modern capitalism. Which one is most welcome to do, but presumably something that most Republicans would want to shy away from, continuing as they do to bizarrely refer to Obama as a socialist. One can’t have it both ways.

Similarly caught unawares was the film industry back in the silent era, which underestimated the massive success it would have on its hands with the arrival of sound. While excellent news for film studios, many of the talent in front and behind cameras suddenly found their way of storytelling outdated and unpopular. The Artist, which won Best Picture and Best Director awards at the Oscars at the weekend, perfectly illustrates this change. The ceremony was a grand affair as usual, hosted in the same venue as it has been for years, The Kodak Theater. Reuters recently reported that Kodak has asked to have its name removed from the building as it tries to reduce its debts.

Kodak’s recent fall into bankruptcy serves as a superb example of the forces of creative destruction. The brand is surely one of the most famous of the 20th century. The Economist called it the Google of its day, and surely there are few companies that manage to enter the public lexicon. Until the 1990s it was “regularly rated as one of the world’s most valuable brands”.  The phrase “Kodak moment” has long since left the zeitgeist. The company built one of the first digital cameras ever back in 1975, the cheapest of which cost $1,000. Its share price has fallen 90% in the past year. Its competitor Fujifilm was cheaper and quicker to adapt. Creative destruction first made physical film cameras obsolete, and increasingly digital cameras as smartphones become equipped with high-definition cameras.

After trying to diversify into chemicals, George Fisher, boss of Kodak from 1993-99, “decided that its expertise lay not in chemicals but in imaging. He cranked out digital cameras and offered customers the ability to post and share pictures online.” This could have led to the creation of something akin to Facebook, but for one reason or another it did not. The Economist blames Fisher, and whatever the cause, the company has also suffered from inconsistent strategies due to a revolving door of senior management. Tony Jackson, writing in the FT, defines the creative destruction as one of “technological disruption… cheaper than the existing version and initially not as good. Faced with a cheap and dirty alternative… it goes against the grain to devote resources to it.” One of Kodak’s problems was also its passion; for physical film itself. This passion essentially made them blind to investing fully in the coming digital revolution. There was an acknowledgement that a change was coming, but it was underestimated.

Creative destruction works in terms of the stock market too, of course. What this clip, from the excellent film Margin Call, is alluding to, is that good times lead to indolence; crashes trim the fat. It is nothing new. The series is a cyclical, unending one, difficult to influence, let alone prevent. (That’s why it was so ludicrous when Gordon Brown, as short-lived UK Prime Minister, grandiloquently announced “no return to boom and bust”). Each new cycle brings new regulations, new ideologies and practices. New products, new solutions. The ways the booms and busts happen changes. The products we make and the strategies we implement change and become more and more innovative. But the cycle never ends. Enjoy the ride.

K-Swiss demonstrate the Powers of Media Neutrality

One of the myriad benefits online media platforms provide to brands is that they don’t need to appease the censors that stand between them and a TV audience.

If you want to do something a little risque or simply profane you can upload it, promote it and hope it goes viral.

One example is this video in which Kenny Powers from Eastbound and Down becomes CEO (or rather MFCEO) of K-Swiss. In it the character played by Danny McBride sets about recruiting a number of athletes, including NFL stars Matt Cassel and Patrick Willis, MMA champions Jon “Bones” Jones and Urijah Faber, and super-trainer Jillian Michaels to run various departments within the company and promote the Tubes line of footwear.

Warning! Lots of profanity, probably best listened to on headphones…

The campaign is also supported on Facebook and uses Microsoft Tag technology to enter consumers into sweepstakes and provide them with secret content when they scan the K-Swiss posters in Footlocker.

“Pretty much every person walking around has a mobile device. It is an accepted medium of communication that consumers are becoming more aware of.”  said Bryan Ogle, K-Swiss director of business development, explaining the strategy.

“Mobile is not ancillary but rather complementary to the overall messaging strategies employed during this campaign. Significant visual content was created for this campaign and mobile aids the brand in delivering the content to the consumer.” he added.

Initial reaction to the online content has been positive with the target audience and with more family friendly pieces being filmed for a TV audience the campaign is a great example of a brand maximising the benefits of each media channel rather than simply putting an extended TV ad online.

Product Placement’s Unknown Unknowns

Zeitgeist has commented on product placement several times before, including its bumpy ride to legality on British television (this summer the House of Lords debated its worth), as well as the contextual advertising that takes place on television sets in the US.

Advertising on British television certainly needs a jolt. The amount of money spent on original British programming by advertisers has declined £300m, from £2.9bn in 2004 to £2.6bn today. This figure comes from Mark Thompson at the BBC, at a speech given at the Edinburgh festival recently. One solution to these pains, suggests Brand Republic, is ad-funded programming [AFP].

TV executives used to be extremely snobby about working with advertisers, fearing they would want a programme about the joys of baked beans or the absorption power of nappies.
But this view is changing as programme-makers realise their ivory-tower attitude does sophisticated modern marketers a huge disservice.

This is a potentially lucrative avenue. It creates opportunities for both product and programming that are mutually beneficial. The possibilites of funding from brands for content however are potentially fraught with danger for consumers, and the article concludes quite rightly that such an approach is still a way off.

Holistically, product placement is on course for a compound annual expansion rate of 18.2% to 2014 according to PQ Media, “as a result of the economic recovery and a relaxation of formal restrictions”, as written in WARC. The difficulty will be – as Viviane Reding, EU commissioner for information, society and media said in 2006 – in getting “content to drive the advertising”, rather than the other way around. The EU’s premise for product placement transparency is to ensure that consumers always know when such a placement is ocurring while they watch the idiot box. Brandchannel cannily compares this to “how the Dutch make candy commercials display a toothbrush icon to remind kids to brush their teeth after eating sweets.” This may well be scaremongering though; Zeitgeist isn’t aware of any TV shows, rollicking with product placement they may be, where the advertising drives the content, (except perhaps for the odd clip in the video below…) Indeed, in the US some savvy work is going at the moment, for example with the NFL and Febreze. Brandchannel reports “During ESPN’s locker room interviews with NFL players, the product can be seen on the players’ locker shelves — a subtle yet effective product placement.

One of the nastier and more insipid occurrences of product placement, however, might make regulators nervous. The infamous Snooki from the similarly-infamous detritus that is MTV’s Jersey Shore has been the target of reverse product placement, as luxury brands have sought to distance themselves from any association with her by providing her with products and accessories from their rivals. Devious indeed, not to mention ingenious. All of which goes to show that regulators, broadcasters and consumers must be wary about the potential rewards and pitfalls of product placement in the near future.

The Fearful Symmetry of Tiger Woods

From the Winter 2009 Zeitgeist…

Brand ambassadors are nothing new. Napoleon (seen above in a casual pose) has long been such an ambassador for the watchmaker Breguet, having worn one during his short (for he was short) life. But what happens when the real world conflicts with the manufactured artifice? Are all of Andre Agassiʼs triumphs now overshadowed by drug addiction? What of recent rumours that Tony the Tiger is diabetic?

Tiger Woodsʼ indiscretions have highlighted such concerns; what happens when an athlete who is not only a champion in his chosen field, but also seemingly the epitome of a gentleman in his private life, turns out to be less than perfect? Tigerʼs presence – a young man of mixed ethnicity in a sport dominated by old, rotund white guys obsessed with the faux exclusivity of country clubs – was a huge statement in of itself. It was for all these reasons though that some major blue-chip brands chose to invest in his good name. Who can forget the fantastic Nike spot of yesteryear?

While his namesake currently graces the Spirit Airlines website, Tiger can unfortunately no longer be found on the Accenture homepage. For a company to so abruptly end such a sponsorship is an enormous blow to both parties and both brands. Industry Standard wrote, “Tiger has literally become the sole face, the strategic embodiment, the business essence of Accenture, the $22 billion global IT, outsourcing and business consultancy proclaim[ing]: ʻWe know what it takes to be a Tiger.ʼ Everything about that slogan has now become a PR debacle, comedian’s punch line and perplexing psychological  examination…”.

Tiger is now on an “indefinite” leave from golf and the brands that rely on the sportsman solely for his golfing prowess are sure to be affected. Electronics Arts will have a hard time selling the umpteenth version of the Tiger Woods PGA Tour franchise if the eponymous player does not compete. TV ratings for golf tournaments will similarly suffer, according to the FT and New York Times. Nike, PepsiCo and AT&T are all of a ʻwait and seeʼ mindset. Gillette will “remove its Woods-related advertising for now” in order to respect his much sought-after privacy. Gilletteʼs triumvirate has suffered of late. Thierry Henry is also mired in scandal after denying Ireland a place in the World Cup by somewhat guiding a ball with his hand at a crucial point in the game. Gillette has denied the act will affect his contract. Roger Federer seems to be the only one currently untainted, though not wishing to jinx him, Zeitgeist will move swiftly on…

Ultimately, such crises can be fleeting. Michael Phelps, pictured with a bong and promptly dropped by Kelloggʼs, will not be forgotten for winning a Fort Knox-worth of gold medals in Beijing. NFL player Michael Vick organised brutal dogfights in his free time, but returned to the game to cheers from the fickle crowd. There may be lasting impact this time, however. As the Zeitgeist team have said before, if caught, the best practice is to immediately admit culpability, express sincere contriteness and take ownership of the situation, as Accenture have done.