Last week Twitter announced that it is launching a program in partnership with Room to Read, the non-profit literacy organization headed by CEO John Wood. Crushpad, a San Francisco based custom winery will collaborate with Twitter to provide two types of California wines which will be sold in order to raise funds for the worthy Room to Read (www.roomtoread.org) organization. Twitter staff will participate in the making of the wine, a Pinot Noir and a Chardonnay, and the public is invited to follow progress of the winemaking via Twitter updates.
Social Philanthropy is an idea whose time has come. Thanks to the emergence of global social media, the effort to mobilize support for good causes through Twitter, Facebook, and LinkedIn and many other social platforms is now negligible. Technology allows us to create awareness and drive action across a broad base of the population very quickly.
The timing for these technology and social breakthroughs is also fortuitous. Due largely to the impact of the economic downturn, Americans have never been more inclined to participate in causes that can help others. There is a cultural shift at play, where people are feeling more acutely responsible for taking care of societal issues than ever before. The environment, poverty, literacy, hunger and a many other causes are now starting to seem like problems that are ours to solve.
What makes this Twitter/Crushpad/Room to Read idea so smart is that it is so simple. Each party in the social collaboration is doing what they do best. Twitter is spreading ideas in real time, Crushpad is making custom wine, and Room to Read is advocating the importance of literacy on the world stage while enjoying access to unprecedented exposure to new supporters.
The best part of this arrangement is that that $5 from every $20 bottle of wine will go directly to Room to Read. Room to Read enables literacy programs in some of the poorest regions in the world. The organization provides books, schools, and libraries, and offers financial assistance for the education of girls who would otherwise never have the opportunity to go to school or learn to read.
As the father of three daughters this is something that I feel strongly about. Without access to books and education, it is difficult for anyone to move forward and build a productive life for themselves. I believe that providing literacy in places of ignorance will lead to greater understanding across the globe.
The Crushpad wine can be pre-ordered for $20 dollars per bottle here www.fledglingwine.com. I highly recommend this for holiday gift giving.
Friday, October 23, 2009
Wednesday, October 14, 2009
Mad Men, Adland, and the Agency Model by Patrick Vogt
With the new season of Mad Men in full swing, it’s a good time to reflect upon how far the advertising agency business has come since the early 1960s. From the dysfunctional inhabitants of Mad Men, to the sardonic and witty tales from James Othmer’s recent book Adland, agency life is portrayed in the media as a high-octane, creative profession with a pathological dark side. In other words, it’s fun to watch. At the fictional Sterling Cooper agency, viewers are subjected to excessive smoking, drinking, sexism, self-loathing and self-destructive behavior on a weekly basis. Yet there is something about the place that makes you really want to work there. Advertising, after all, is where the magic happens.
As Don Draper once put it, “Advertising is about one thing and one thing only, happiness.”
So what has changed in advertising over the last 50 years? Surprisingly, the basic DNA of ad agencies is largely the same. Madison Avenue is still trying to sell happiness to consumers who long for it. Brands are still trying to make us feel hopeful and happy so that we continue to consume. Advertising success is predicated on igniting creative sparks that flare into an increased share of voice within today’s fragmented audience.
In a more profound sense, however, the world around the advertising industry has changed absolutely. Agencies are facing shrinking budgets, widespread adoption of social media and new disruptive technologies. The lines between companies and customers are beginning to blur, as brands question the value of agencies as intermediaries. As advertising budgets are slashed, campaign return on investment is scrutinized through new audience measurement and ad performance technologies.
Metrics & Accountability Matter
“I know that half of my advertising is wasted, I just don't know which half." John Wanamaker
With performance data widely available, clients are now looking for revenue-based results. Brands have begun to explore alternative compensation models for their agency partners, signaling a potential shift in the traditional hourly pay model. While only about 10% of today’s advertising compensation agreements are value-based, that may increase as brands leverage more tools to measure advertising effectiveness.
Some media critics today estimate that up to 80% of ad dollars are wasted as a result of three factors; inflated media prices, a decline in the effectiveness of traditional advertising, and poor decision making. That is a bitter pill for brands to swallow considering how many billions of dollars are spent on advertising each year. Brand management can also be ambivalent about the important role that advertising plays in their business. A recent survey conducted by the Marketing Management Analytics (MMA) and the Association of National Advertisers (ANA) showed that 39% of senior brand management viewed marketing as an expense, while 43% viewed it as an investment in brand equity.
At the same time, leaders on the agency side of the equation struggle with the current business model as well. Advertising and media are complicated businesses that take years to master, and agencies don’t appreciate having to validate their contributions every few months. To make matters worse, navigating the new social media channels for clients can be challenging and time consuming. While social media can be a force for good when users champion a brand, it can also be destructive if users decide to wage war. Agencies have had to develop a new level of expertise in this area.
Another aggravating factor for agencies is that they are often required to spend considerable time and money developing full blown creative concepts for which they are never reimbursed. What’s more, clients often try to renegotiate fees after the work is already done. This creates tension in the business relationship as well. Roger Sterling of Mad Men puts it this way, “Being with a client is like being in a marriage. Sometimes you get into it for the wrong reasons, and eventually they hit you in the face.”
The Tipping Point in the Advertising Model
While assigning a value to advertising initiatives is difficult, finding new and better ways to reward agencies for their work can be even more challenging. We now appear to be at tipping point that could transform the role of advertising agencies going forward.
Some large advertising brands like Coca-Cola have recently adopted a “value based” compensation plan for their U.S. ad agencies. The company says that the objective is not to cut costs but to inspire creativity and efficiency (http://tiny.cc/wEgdV). Coca-Cola’s plan will cover all agency costs, plus provide a bonus of up to 30% based on sales performance metrics. Consumer-goods giant Procter & Gamble has also stated that they may abandon hourly fees in favor of a performance related fees for their agency partners. Other global brands like Unilever have recently adopted a performance-based model as well.
A few forward thinking advertising agencies have proactively moved towards a new business relationship where both the agency and client agree to certain key performance indicators (KPIs). Once met, these KPIs ensure that the agency is well compensated and rewarded for meeting specific corporate objectives.
Leo Burnett’s India Chairman and CEO Arvind Sharma, recently said that brands sometimes provide them with compensation incentives linked to sales. Mr. Sharma stated, "We love this model. Since 90-95 per cent of our projects exceed success parameters, the model benefits us.” (http://tiny.cc/6ELgQ). Similarly, the chief executive of Crispin Porter + Bogusky Jeff Hicks has said that a value-based approach has helped his agency work more closely with clients by aligning the agency’s compensation with the advertiser’s profitability (http://tiny.cc/wEgdV). This kind of progressive thinking may allow advertising agencies to get into the driver’s seat to initiate real change throughout the industry.
The New Normal
As time goes on, the economy will no doubt rebound, and social media, blogging and micro blogging will all be seamlessly integrated into strategic marketing plans. Meanwhile, the demand for hard data and ROI metrics will continue until reaching critical mass, at which point full accountability for advertising will be expected as the new normal. That is when the truly creative agencies will find ways to reinvent themselves in order to take advantage of the new advertising paradigm.
Great agencies are in the business of creating real and lasting value for their clients, and I believe they will become the designers of the new agency model. Their contributions run much deeper than simply increasing brand awareness to drive sales. An agency’s work enhances a brand’s reputation, and creates a deeper emotional connection between brands and their customers. An excellent advertising agency partnership is about so much more than the cost of a billable hour. It is about the true value of collaboration and the strategy, positioning, targeting and business intelligence that helps companies to grow and thrive. At the end of the day, we still want advertising to be about the magic.
As Don Draper once put it, “Advertising is about one thing and one thing only, happiness.”
So what has changed in advertising over the last 50 years? Surprisingly, the basic DNA of ad agencies is largely the same. Madison Avenue is still trying to sell happiness to consumers who long for it. Brands are still trying to make us feel hopeful and happy so that we continue to consume. Advertising success is predicated on igniting creative sparks that flare into an increased share of voice within today’s fragmented audience.
In a more profound sense, however, the world around the advertising industry has changed absolutely. Agencies are facing shrinking budgets, widespread adoption of social media and new disruptive technologies. The lines between companies and customers are beginning to blur, as brands question the value of agencies as intermediaries. As advertising budgets are slashed, campaign return on investment is scrutinized through new audience measurement and ad performance technologies.
Metrics & Accountability Matter
“I know that half of my advertising is wasted, I just don't know which half." John Wanamaker
With performance data widely available, clients are now looking for revenue-based results. Brands have begun to explore alternative compensation models for their agency partners, signaling a potential shift in the traditional hourly pay model. While only about 10% of today’s advertising compensation agreements are value-based, that may increase as brands leverage more tools to measure advertising effectiveness.
Some media critics today estimate that up to 80% of ad dollars are wasted as a result of three factors; inflated media prices, a decline in the effectiveness of traditional advertising, and poor decision making. That is a bitter pill for brands to swallow considering how many billions of dollars are spent on advertising each year. Brand management can also be ambivalent about the important role that advertising plays in their business. A recent survey conducted by the Marketing Management Analytics (MMA) and the Association of National Advertisers (ANA) showed that 39% of senior brand management viewed marketing as an expense, while 43% viewed it as an investment in brand equity.
At the same time, leaders on the agency side of the equation struggle with the current business model as well. Advertising and media are complicated businesses that take years to master, and agencies don’t appreciate having to validate their contributions every few months. To make matters worse, navigating the new social media channels for clients can be challenging and time consuming. While social media can be a force for good when users champion a brand, it can also be destructive if users decide to wage war. Agencies have had to develop a new level of expertise in this area.
Another aggravating factor for agencies is that they are often required to spend considerable time and money developing full blown creative concepts for which they are never reimbursed. What’s more, clients often try to renegotiate fees after the work is already done. This creates tension in the business relationship as well. Roger Sterling of Mad Men puts it this way, “Being with a client is like being in a marriage. Sometimes you get into it for the wrong reasons, and eventually they hit you in the face.”
The Tipping Point in the Advertising Model
While assigning a value to advertising initiatives is difficult, finding new and better ways to reward agencies for their work can be even more challenging. We now appear to be at tipping point that could transform the role of advertising agencies going forward.
Some large advertising brands like Coca-Cola have recently adopted a “value based” compensation plan for their U.S. ad agencies. The company says that the objective is not to cut costs but to inspire creativity and efficiency (http://tiny.cc/wEgdV). Coca-Cola’s plan will cover all agency costs, plus provide a bonus of up to 30% based on sales performance metrics. Consumer-goods giant Procter & Gamble has also stated that they may abandon hourly fees in favor of a performance related fees for their agency partners. Other global brands like Unilever have recently adopted a performance-based model as well.
A few forward thinking advertising agencies have proactively moved towards a new business relationship where both the agency and client agree to certain key performance indicators (KPIs). Once met, these KPIs ensure that the agency is well compensated and rewarded for meeting specific corporate objectives.
Leo Burnett’s India Chairman and CEO Arvind Sharma, recently said that brands sometimes provide them with compensation incentives linked to sales. Mr. Sharma stated, "We love this model. Since 90-95 per cent of our projects exceed success parameters, the model benefits us.” (http://tiny.cc/6ELgQ). Similarly, the chief executive of Crispin Porter + Bogusky Jeff Hicks has said that a value-based approach has helped his agency work more closely with clients by aligning the agency’s compensation with the advertiser’s profitability (http://tiny.cc/wEgdV). This kind of progressive thinking may allow advertising agencies to get into the driver’s seat to initiate real change throughout the industry.
The New Normal
As time goes on, the economy will no doubt rebound, and social media, blogging and micro blogging will all be seamlessly integrated into strategic marketing plans. Meanwhile, the demand for hard data and ROI metrics will continue until reaching critical mass, at which point full accountability for advertising will be expected as the new normal. That is when the truly creative agencies will find ways to reinvent themselves in order to take advantage of the new advertising paradigm.
Great agencies are in the business of creating real and lasting value for their clients, and I believe they will become the designers of the new agency model. Their contributions run much deeper than simply increasing brand awareness to drive sales. An agency’s work enhances a brand’s reputation, and creates a deeper emotional connection between brands and their customers. An excellent advertising agency partnership is about so much more than the cost of a billable hour. It is about the true value of collaboration and the strategy, positioning, targeting and business intelligence that helps companies to grow and thrive. At the end of the day, we still want advertising to be about the magic.
Wednesday, July 8, 2009
S.O.S. Tweets & New Leadership
I read an article recently called Twitter Comes to the Rescue, in the NYT (http://tiny.cc/21pLZ ). The article is about travelers with a whole lot of Twitter followers getting fast responses from airlines and hotels after tweeting publicly about bad service. As you can imagine, the tweets range from airline middle seat anxiety to slow room service delivery to everything in between. Companies like JetBlue and Southwest Airlines that have responded quickly to the tweeters in distress are proud of their quick thinking and savvy online interventions.
So what is wrong with this picture? Well, for one thing I started wondering what happens to the customers that don’t have thousands of Twitter followers. Should Twitter customers with a large following get preferential treatment, while other passengers and hotel guests wait on the customer service phone lines for nearly an hour?
We know that Twitter users with many followers can exert power. They wield the threat of public exposure and embarrassment for a company that provides poor service. These travelers will use their influence to get better service, and who can blame them? They have the luxury of circumventing the customer service department, a response mechanism that is often broken. The reality is that even with all these new, cool and fast communications channels, what we have here is a failure to communicate.
We need to rethink the definition of customer service. In the age of Twitter, bad customer service quickly morphs into bad publicity. That is because tweets become re-tweets, and bloggers and journalists pick up the thread of a problem and amplify it. So instead of responding only to high profile customers in order to protect a company’s image, why not use the same medium to reach out to all customers? Maybe it’s time to enlarge the definition of customer service.
For example, should the primary customer service channel always be over the phone? Why is there such a long wait time? Can we empower customer service agents to tweet updates that make things easier for customers, and to instantly respond to problems. Can we authorize customer service to use a common sense approach, and give them the authority to override systems to fix the issue at hand? Should companies use online mediums as a matter of course, to find creative solutions to everyday problems? Rethinking the role of customer service would have the added value of making the service providers feel that they are part of the rescue, not the problem.
Leadership is what is missing from this equation. I know that companies want to head off the online conversations as quickly as possible, in order to make people with a Twitter megaphone happy. But obviously it is in the best interest of companies to make all of their customers happy. Leaders need to instill these values into their organizations, and change processes as necessary to make it a reality. Then they won’t need to worry about a few bad tweets.
So what is wrong with this picture? Well, for one thing I started wondering what happens to the customers that don’t have thousands of Twitter followers. Should Twitter customers with a large following get preferential treatment, while other passengers and hotel guests wait on the customer service phone lines for nearly an hour?
We know that Twitter users with many followers can exert power. They wield the threat of public exposure and embarrassment for a company that provides poor service. These travelers will use their influence to get better service, and who can blame them? They have the luxury of circumventing the customer service department, a response mechanism that is often broken. The reality is that even with all these new, cool and fast communications channels, what we have here is a failure to communicate.
We need to rethink the definition of customer service. In the age of Twitter, bad customer service quickly morphs into bad publicity. That is because tweets become re-tweets, and bloggers and journalists pick up the thread of a problem and amplify it. So instead of responding only to high profile customers in order to protect a company’s image, why not use the same medium to reach out to all customers? Maybe it’s time to enlarge the definition of customer service.
For example, should the primary customer service channel always be over the phone? Why is there such a long wait time? Can we empower customer service agents to tweet updates that make things easier for customers, and to instantly respond to problems. Can we authorize customer service to use a common sense approach, and give them the authority to override systems to fix the issue at hand? Should companies use online mediums as a matter of course, to find creative solutions to everyday problems? Rethinking the role of customer service would have the added value of making the service providers feel that they are part of the rescue, not the problem.
Leadership is what is missing from this equation. I know that companies want to head off the online conversations as quickly as possible, in order to make people with a Twitter megaphone happy. But obviously it is in the best interest of companies to make all of their customers happy. Leaders need to instill these values into their organizations, and change processes as necessary to make it a reality. Then they won’t need to worry about a few bad tweets.
Monday, June 29, 2009
If Obama Were a Brand, He’d Be a Porsche, Patrick Vogt
Let’s face it. President Obama is one cool customer. Through a global economic meltdown, two wars, and a potential pandemic, Obama is a study in composure and confidence. With the intense media coverage and scrutiny from all sides, the President remains poised and polished. He genuinely appears to be comfortable in his own skin. At a press conference recently, Obama calmly diffused the growing panic over the Swine Flu by telling Americans to wash their hands. No kidding. And the press responded as though he had imparted great wisdom.
What’s more, Obama really seems to be enjoying himself. He is frequently seen laughing his head off with David Axelrod, or playing basketball with Reggie Love, or simply relaxing with his kids and the first family dog. In his appearances on both 60 Minutes and Jay Leno, Obama demonstrated his intellectual acumen in global matters, while tossing off jokes about everything from Air Force One to the over-protectiveness of the secret service. Last week at the White House Correspondent’s Dinner, Obama joked that Dick Cheney couldn't make the event because he was working on his memoir entitled “How to Shoot Friends and Interrogate People.” He also playfully hinted that Hilary Clinton would like very much for him to contract the Swine Flu.
Obama’s unflappable style has now crystallized into his personal brand. Like all good brand-makers, he has established his reputation through consistency, always appearing thoughtful and resolute in the face of adversity. We know Obama is reflective. We know he will speak calmly and pause before answering any questions. No wonder Saturday Night Live continues to make fun of his cool, controlled demeanor and lack of temper. In a hail storm of calamities both big and small, Obama wears sunglasses.
The branding of Obama on the digital airwaves began early and without his consent, back when the Obama Girl video hit YouTube in the summer of 2007. It was viewed at least 13 million times on YouTube, twice the number of views for any of the official campaign videos. The video was followed by the Obama Hope poster, which was created by a graffiti artist and was by definition user-generated content. The poster became an iconic campaign image for the first African American president of the United States, effectively linking Barack Obama’s image with the word Hope. In a weird Internet-culture moment, the Hope poster also went viral and together these two pieces of content seemed to solidify the pop-icon status of Barack Obama.
If you compare political branding fundamentals with that of commercial brands, you will see that the goals are not much different. Corporations desire a strong brand image in order to sell products, while politicians sell ideas. Just as Obama’s image will shape the perception of America on the world stage, the brand image of business leaders formulates the perception of their products and companies. With today’s powerful social media tools, it is critically important for corporations to develop brand personalities that positively represent the company.
There are many CEO personalities that enrich a company’s culture, and help to establish a brand’s reputation. Think of Richard Branson, Martha Stewart, Steve Jobs, and Larry Page and Sergey Brin. These companies benefit from the strong association between leader and company. Brands that do not have an iconic founder handy can still participate in this game. With the emergence of so many new social media channels, it is becoming mandatory that brands develop and groom executives to represent the company across the web. A smart and trustworthy spokesperson will become the public face of an organization, and will humanize a brand within social media circles.
Today, social media for business is like one big American Idol contest. New platforms enable companies to amplify their message and promote their best talent, but ultimately customers will vote on what they like and don’t like. Too often public chatter about a company is largely ignored by senior executives until it is too late. A company’s silence in the media-sphere creates a vacuum which is naturally filled with user commentary. A few individuals can create a great deal of pain for a brand by spreading inaccuracies and disinformation, which then gains traction through repetition across the blogosphere. Conversely, active participation by a company’s management can insulate a brand from one-sided, unflattering content. Brand perception can be influenced by engaging directly with customers through many digital channels.
Obama is the first president to extend his brand image through social media. In a role reversal of the usual formula, the new administration is leading, rather than following private industry with the adoption of social media. The tech-savvy Obama team has established a presence on many networks including Facebook, Twitter, MySpace, Friendster, LinkedIn, YouTube, and iTunes. They have even created an official White House flickr channel to disseminate photographs in real time, along with a White House blog. With these initiatives, Obama has ushered in a new generation of leadership. He is creating a government that is accessible and participatory, using multiple Internet channels to quickly and effectively connect with the public.
Our business leaders have to be on the forefront of this movement as well. We need to understand Internet technology, mobile platforms, and the inherent ramifications of social media, and become active members in these communities. We are fast becoming a micro blogging culture, where the minutia of everyday life is shared with the world. Some call this the era of social colonization, where all products and services are reviewed by consumers in real time. Relinquishing the idea that it’s possible to control all brand communications is the first step to understanding the new rules of the game. We do know that customers expect to hear from brands on a consistent basis. Companies that satisfy this need will move forward quickly and experience a whole new level of customer engagement. Those who do not will continue to struggle.
One thing great leaders and great brands have in common is transparency. If you’ve delivered on the promise of the brand, then people will believe in you and they will trust you. That’s how you know that your branding is working. And although we have still difficult days ahead, the polls continue to show that as a nation we are feeling very hopeful. That’s how you know that leadership is working.
Interestingly, journalists have likened Obama’s style to both Abraham Lincoln and
Spock from Star Trek. A few publications have written extensively on the Spock analogy, describing the president’s ability to balance his finely tuned intelligence with a talent for restoring order and inspiring confidence. In the Star Trek prequel, Spock’s father tells him that he will always be a child of two worlds. Just like Obama. That my friends, is branding.
What’s more, Obama really seems to be enjoying himself. He is frequently seen laughing his head off with David Axelrod, or playing basketball with Reggie Love, or simply relaxing with his kids and the first family dog. In his appearances on both 60 Minutes and Jay Leno, Obama demonstrated his intellectual acumen in global matters, while tossing off jokes about everything from Air Force One to the over-protectiveness of the secret service. Last week at the White House Correspondent’s Dinner, Obama joked that Dick Cheney couldn't make the event because he was working on his memoir entitled “How to Shoot Friends and Interrogate People.” He also playfully hinted that Hilary Clinton would like very much for him to contract the Swine Flu.
Obama’s unflappable style has now crystallized into his personal brand. Like all good brand-makers, he has established his reputation through consistency, always appearing thoughtful and resolute in the face of adversity. We know Obama is reflective. We know he will speak calmly and pause before answering any questions. No wonder Saturday Night Live continues to make fun of his cool, controlled demeanor and lack of temper. In a hail storm of calamities both big and small, Obama wears sunglasses.
The branding of Obama on the digital airwaves began early and without his consent, back when the Obama Girl video hit YouTube in the summer of 2007. It was viewed at least 13 million times on YouTube, twice the number of views for any of the official campaign videos. The video was followed by the Obama Hope poster, which was created by a graffiti artist and was by definition user-generated content. The poster became an iconic campaign image for the first African American president of the United States, effectively linking Barack Obama’s image with the word Hope. In a weird Internet-culture moment, the Hope poster also went viral and together these two pieces of content seemed to solidify the pop-icon status of Barack Obama.
If you compare political branding fundamentals with that of commercial brands, you will see that the goals are not much different. Corporations desire a strong brand image in order to sell products, while politicians sell ideas. Just as Obama’s image will shape the perception of America on the world stage, the brand image of business leaders formulates the perception of their products and companies. With today’s powerful social media tools, it is critically important for corporations to develop brand personalities that positively represent the company.
There are many CEO personalities that enrich a company’s culture, and help to establish a brand’s reputation. Think of Richard Branson, Martha Stewart, Steve Jobs, and Larry Page and Sergey Brin. These companies benefit from the strong association between leader and company. Brands that do not have an iconic founder handy can still participate in this game. With the emergence of so many new social media channels, it is becoming mandatory that brands develop and groom executives to represent the company across the web. A smart and trustworthy spokesperson will become the public face of an organization, and will humanize a brand within social media circles.
Today, social media for business is like one big American Idol contest. New platforms enable companies to amplify their message and promote their best talent, but ultimately customers will vote on what they like and don’t like. Too often public chatter about a company is largely ignored by senior executives until it is too late. A company’s silence in the media-sphere creates a vacuum which is naturally filled with user commentary. A few individuals can create a great deal of pain for a brand by spreading inaccuracies and disinformation, which then gains traction through repetition across the blogosphere. Conversely, active participation by a company’s management can insulate a brand from one-sided, unflattering content. Brand perception can be influenced by engaging directly with customers through many digital channels.
Obama is the first president to extend his brand image through social media. In a role reversal of the usual formula, the new administration is leading, rather than following private industry with the adoption of social media. The tech-savvy Obama team has established a presence on many networks including Facebook, Twitter, MySpace, Friendster, LinkedIn, YouTube, and iTunes. They have even created an official White House flickr channel to disseminate photographs in real time, along with a White House blog. With these initiatives, Obama has ushered in a new generation of leadership. He is creating a government that is accessible and participatory, using multiple Internet channels to quickly and effectively connect with the public.
Our business leaders have to be on the forefront of this movement as well. We need to understand Internet technology, mobile platforms, and the inherent ramifications of social media, and become active members in these communities. We are fast becoming a micro blogging culture, where the minutia of everyday life is shared with the world. Some call this the era of social colonization, where all products and services are reviewed by consumers in real time. Relinquishing the idea that it’s possible to control all brand communications is the first step to understanding the new rules of the game. We do know that customers expect to hear from brands on a consistent basis. Companies that satisfy this need will move forward quickly and experience a whole new level of customer engagement. Those who do not will continue to struggle.
One thing great leaders and great brands have in common is transparency. If you’ve delivered on the promise of the brand, then people will believe in you and they will trust you. That’s how you know that your branding is working. And although we have still difficult days ahead, the polls continue to show that as a nation we are feeling very hopeful. That’s how you know that leadership is working.
Interestingly, journalists have likened Obama’s style to both Abraham Lincoln and
Spock from Star Trek. A few publications have written extensively on the Spock analogy, describing the president’s ability to balance his finely tuned intelligence with a talent for restoring order and inspiring confidence. In the Star Trek prequel, Spock’s father tells him that he will always be a child of two worlds. Just like Obama. That my friends, is branding.
Thursday, June 11, 2009
A BRAND NEW DAY Series, Patrick Vogt
How a Brand Can Tumble Like Dominos
As everyone now knows, it doesn’t take much to damage a brand in today’s world of powerful social media tools. The scope, reach and speed with which harmful content can ricochet around the web are truly alarming. Just like the Somali pirates at sea armed with automatic weapons, disgruntled users can leverage social media to hijack your company and take everyone aboard hostage. Because of the interconnectedness of social media platforms, and the fast-growing expansion of personal-cluster networks, management teams can be tied up for weeks in such a crisis (metaphorically speaking), unable to do anything besides try to contain the damage. While the near-term harm can be localized to lost sales and productivity, the long-term damage can be severe and far-reaching, causing serious brand repercussions. This can impact brand trust, reputation and customer loyalty.
The Dominos story that unfolded last week has been widely viewed as a cautionary tale about how not to handle a growing public relations disaster in a real time world. In other words, how do we manage an old-school problem like bad publicity, using new -school tools like social media? Most of Domino’s media coverage focused on three areas for improvement. They were the importance of a media crisis team, the ability to follow real time developments, and the need to respond quickly. While all are valid points, there is an important component to the Domino’s narrative that has yet to be explored. That is, there are preventative strategies that can be put in place to protect your brand from social media attacks.
First, let’s walk through the facts as they happened. In a small Domino’s franchise in North Carolina, two employees posted a prank video of some unsanitary and pretty disgusting food preparation practices. Thanks to the power and reach of social media, within a few days there were more than a million views on YouTube, a viral spread of the subject on Twitter, and five references on page one of a Google search for Domino's. Then, things got worse. Domino’s responded too late, about 48 hours after the video post, and it took time to get the video down from YouTube. The lag in response time left the online conversation to grow and fester, and the story continued to proliferate throughout social media channels, ripe with speculation about the authenticity of the video and the location of the Domino’s store. Domino’s did not issue a formal press release, but did finally open a Twitter account to answer questions, and then posted a YouTube apology to try to diffuse the public relations fiasco.
The apology from Domino’s president Patrick Doyle can be seen here: http://www.youtube.com/watch?v=7l6AJ49xNSQ.
The Domino’s apology was both heartfelt and honest, and I’m sure Mr. Doyle meant it when he said that there was nothing more important and sacred to Domino’s than their customer’s trust. He then continued, “It sickens me, to think that two individuals can impact our great system, where 125,000 men and women work for local business owners.”
In another interview, company spokesperson Tim McIntyre confessed that 10 and 15 year customers were now second-guessing their relationship with Domino’s, and he added, “That’s not fair.” Not fair indeed. Welcome to the world of net -zero response time.
The cost to the Domino's national brand equity over the long term is still undetermined. Two recent surveys seemed to indicate that it will take time for the national brand to recover. An online research firm called YouGov confirmed that the perception of Dominos’ brand quality went from positive to negative in approximately 48 hours. In addition, a national study conducted by HCD Research using its Media Curves Web site found that 65% of respondents who would previously visit or order Domino’s Pizza were less likely to do so after viewing the offensive video.
For consumer brands out there, this is a serious wake up call. Social Media can be a double-edged sword. The good news is, viral content with an interesting hook can travel fast, and that makes social media rich with possibilities for brand marketers. The bad news is that intentional or unintentional lies and disinformation about a brand may have to be reeled in occasionally. Protecting your brand against this kind of sabotage is absolutely essential.
Luckily, there are a few concrete steps that companies can take to defend against unprovoked attacks.
1. Create a Face – Think about Facebook or Twitter accounts where users have not yet uploaded a photograph. Kind of leaves you cold, right? Humanize your company through Executive Branding by creating a face for your company. Select either the CEO or your best corporate spokesperson, and brand them across all social media channels. Market capital flows from high social capital, and an authentic company spokesperson who talks about strategy and direction will build confidence with customers. This should be a real company executive, not a team of social media interns. Patrick Doyle of Domino’s strikes me as a perfect candidate for Executive Branding. He is sincere and passionate, and therefore believable. For customers, this executive becomes the trusted, familiar face of the company. When a crisis does strike, the public will look to that face to find answers.
2. Advocate for Your Brand- Social Media is not just for crisis management or new product releases. On the contrary, these communication channels are participatory, and can be used to resolve issues and build bridges to connect with your customers. A Brand Advocate can be employed to stay at the forefront of the company’s social media connections, to help to shape the external perception of the company. The Brand Advocate’s role must be transparent, and ought to be viewed as a way to exchange information with customers and fans. Engagement on Facebook, Twitter and in the Blogosphere should be active, timely and honest, and issues that arise should be addressed in real time. Efforts at simple self-promotion will quickly be exposed as disingenuous. Topics that do surface have tremendous value for a learning organization, and must be catalogued and reviewed by senior management on a regular basis.
3. Articulate Brand Values– Insight into a company’s core values and business philosophies will put your brand in a better light. Use Social Media to articulate your Brand Values. Talk about philanthropic or environmental causes, and charitable organizations that your company supports. Manage social media channels as an organizing principal to invite customers to join your employees in programs like fun runs, food drives, or any altruistic endeavors. These activities provide a more comprehensive picture of the company, and the positive associations will help to establish you as more than just a purveyor of products or services. At its best, articulating Brand Values demonstrates good will and shows that a company has a heart. This can help sustain your brand through difficult times.
If the Domino’s story has taught us anything, it is that our brands and our reputations are vulnerable in new and unexpected ways. It is true that we live and work in different times now. New technology and new media have empowered customers to take action as individuals, and as parts of a collective whole. But it is also true that this new reality has a very big plus side for brands. We now know what our customers are saying about us, instantly and endlessly. It sometimes feels as if we can practically hear them think. We used to pay a lot of money to acquire this knowledge, so let’s recognize it as active market intelligence and use it to improve our business.
Finally, the Domino’s story should be put into its proper perspective. Admittedly, two rogue employees with a video camera caused a blow to the company. It should be noted however, that at any other time in history, Domino’s response time of 48 hours would have been considered exceptional. We now know that we need to move faster than that, but the real story was how big the Domino’s story became. The post-game press surely eclipsed the actual video viewing population exponentially. This is because Domino’s became one of the first companies to take a hit from social media. I’m betting this experience will make them a stronger company, with a more robust online presence going forward.
Finally it’s good to bear in mind that Americans are notorious for their short attention spans. With any luck, in three month’s time this whole incident will be long forgotten. Quick, who remembers the name of the man from Vermont who was held hostage by pirates for five days and then rescued? It’s Captain Richard Phillips, and he seems to be doing just fine.
As everyone now knows, it doesn’t take much to damage a brand in today’s world of powerful social media tools. The scope, reach and speed with which harmful content can ricochet around the web are truly alarming. Just like the Somali pirates at sea armed with automatic weapons, disgruntled users can leverage social media to hijack your company and take everyone aboard hostage. Because of the interconnectedness of social media platforms, and the fast-growing expansion of personal-cluster networks, management teams can be tied up for weeks in such a crisis (metaphorically speaking), unable to do anything besides try to contain the damage. While the near-term harm can be localized to lost sales and productivity, the long-term damage can be severe and far-reaching, causing serious brand repercussions. This can impact brand trust, reputation and customer loyalty.
The Dominos story that unfolded last week has been widely viewed as a cautionary tale about how not to handle a growing public relations disaster in a real time world. In other words, how do we manage an old-school problem like bad publicity, using new -school tools like social media? Most of Domino’s media coverage focused on three areas for improvement. They were the importance of a media crisis team, the ability to follow real time developments, and the need to respond quickly. While all are valid points, there is an important component to the Domino’s narrative that has yet to be explored. That is, there are preventative strategies that can be put in place to protect your brand from social media attacks.
First, let’s walk through the facts as they happened. In a small Domino’s franchise in North Carolina, two employees posted a prank video of some unsanitary and pretty disgusting food preparation practices. Thanks to the power and reach of social media, within a few days there were more than a million views on YouTube, a viral spread of the subject on Twitter, and five references on page one of a Google search for Domino's. Then, things got worse. Domino’s responded too late, about 48 hours after the video post, and it took time to get the video down from YouTube. The lag in response time left the online conversation to grow and fester, and the story continued to proliferate throughout social media channels, ripe with speculation about the authenticity of the video and the location of the Domino’s store. Domino’s did not issue a formal press release, but did finally open a Twitter account to answer questions, and then posted a YouTube apology to try to diffuse the public relations fiasco.
The apology from Domino’s president Patrick Doyle can be seen here: http://www.youtube.com/watch?v=7l6AJ49xNSQ.
The Domino’s apology was both heartfelt and honest, and I’m sure Mr. Doyle meant it when he said that there was nothing more important and sacred to Domino’s than their customer’s trust. He then continued, “It sickens me, to think that two individuals can impact our great system, where 125,000 men and women work for local business owners.”
In another interview, company spokesperson Tim McIntyre confessed that 10 and 15 year customers were now second-guessing their relationship with Domino’s, and he added, “That’s not fair.” Not fair indeed. Welcome to the world of net -zero response time.
The cost to the Domino's national brand equity over the long term is still undetermined. Two recent surveys seemed to indicate that it will take time for the national brand to recover. An online research firm called YouGov confirmed that the perception of Dominos’ brand quality went from positive to negative in approximately 48 hours. In addition, a national study conducted by HCD Research using its Media Curves Web site found that 65% of respondents who would previously visit or order Domino’s Pizza were less likely to do so after viewing the offensive video.
For consumer brands out there, this is a serious wake up call. Social Media can be a double-edged sword. The good news is, viral content with an interesting hook can travel fast, and that makes social media rich with possibilities for brand marketers. The bad news is that intentional or unintentional lies and disinformation about a brand may have to be reeled in occasionally. Protecting your brand against this kind of sabotage is absolutely essential.
Luckily, there are a few concrete steps that companies can take to defend against unprovoked attacks.
1. Create a Face – Think about Facebook or Twitter accounts where users have not yet uploaded a photograph. Kind of leaves you cold, right? Humanize your company through Executive Branding by creating a face for your company. Select either the CEO or your best corporate spokesperson, and brand them across all social media channels. Market capital flows from high social capital, and an authentic company spokesperson who talks about strategy and direction will build confidence with customers. This should be a real company executive, not a team of social media interns. Patrick Doyle of Domino’s strikes me as a perfect candidate for Executive Branding. He is sincere and passionate, and therefore believable. For customers, this executive becomes the trusted, familiar face of the company. When a crisis does strike, the public will look to that face to find answers.
2. Advocate for Your Brand- Social Media is not just for crisis management or new product releases. On the contrary, these communication channels are participatory, and can be used to resolve issues and build bridges to connect with your customers. A Brand Advocate can be employed to stay at the forefront of the company’s social media connections, to help to shape the external perception of the company. The Brand Advocate’s role must be transparent, and ought to be viewed as a way to exchange information with customers and fans. Engagement on Facebook, Twitter and in the Blogosphere should be active, timely and honest, and issues that arise should be addressed in real time. Efforts at simple self-promotion will quickly be exposed as disingenuous. Topics that do surface have tremendous value for a learning organization, and must be catalogued and reviewed by senior management on a regular basis.
3. Articulate Brand Values– Insight into a company’s core values and business philosophies will put your brand in a better light. Use Social Media to articulate your Brand Values. Talk about philanthropic or environmental causes, and charitable organizations that your company supports. Manage social media channels as an organizing principal to invite customers to join your employees in programs like fun runs, food drives, or any altruistic endeavors. These activities provide a more comprehensive picture of the company, and the positive associations will help to establish you as more than just a purveyor of products or services. At its best, articulating Brand Values demonstrates good will and shows that a company has a heart. This can help sustain your brand through difficult times.
If the Domino’s story has taught us anything, it is that our brands and our reputations are vulnerable in new and unexpected ways. It is true that we live and work in different times now. New technology and new media have empowered customers to take action as individuals, and as parts of a collective whole. But it is also true that this new reality has a very big plus side for brands. We now know what our customers are saying about us, instantly and endlessly. It sometimes feels as if we can practically hear them think. We used to pay a lot of money to acquire this knowledge, so let’s recognize it as active market intelligence and use it to improve our business.
Finally, the Domino’s story should be put into its proper perspective. Admittedly, two rogue employees with a video camera caused a blow to the company. It should be noted however, that at any other time in history, Domino’s response time of 48 hours would have been considered exceptional. We now know that we need to move faster than that, but the real story was how big the Domino’s story became. The post-game press surely eclipsed the actual video viewing population exponentially. This is because Domino’s became one of the first companies to take a hit from social media. I’m betting this experience will make them a stronger company, with a more robust online presence going forward.
Finally it’s good to bear in mind that Americans are notorious for their short attention spans. With any luck, in three month’s time this whole incident will be long forgotten. Quick, who remembers the name of the man from Vermont who was held hostage by pirates for five days and then rescued? It’s Captain Richard Phillips, and he seems to be doing just fine.
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