After The Flood

Not everyone gets to be a leader. Apple, Starbucks, western capitalism. These guys are leaders. 

Microsoft used to be a leader, but now it's the butt of the joke, stuck behind the edge, forever catching up, forever imitating, aping the leaders. Same could be said for Motorola, Sega, and printed magazines (that last one stung a little, huh?). Once you've been categorized as an also-ran it's very hard to move your brand out of that category. 

Sometimes there isn't a leader. Sometimes it's a closer race and everyone is  neck and neck. In these instances it's almost harder to get ahead, to set yourself out from the pack. Opportunities to rev the engine come rarely and stay fleetingly. 

This week, in the wake of hurricane Irene, someone got ahead: Allstate insurance. 

Disasters are hard on insurance agencies, they have to write checks to a lot of policy holders (no company likes writing checks) and for customers whose damages aren't covered agencies are often forced to present a very negative brand experience. Expensive and ugly. Two words you never want to hear. 

But Allstate really capitalized on Irene, and in an honorable, brand positive way. They pushed their 1-800-54-Storm hotline, a VERY streamlined claim reporting system that doesn't give you the run around or get bogged down with a lot of extraneous automated telephone option branching. 

Additionally Allstate erected trailers and tents in Home Depot parking lots all over storm-affected areas where agents could rapidly file and process claims, report information to customers, and do some brand ambassadorship. Since the rains stopped policy holders have been showing up at these parking lot claims tents with flood-damaged furniture and got immediate person-to-person claim service. 

They got the word out on this remarkable effort by doing a massive radio and cable media buy. People often scoff at radio in this modern socially enabled new media age, but in times of crisis (or just during everyday commutes) people listen to radio ads. And those ads sink in (by it's very nature audio is harder to ignore or "tune out" than tv or print ads). Smart placement on 'round-the-clock news stations insured that the people most concerned with the hurricane (read: it's likely victims) were sure to hear the message.

So what can other businesses in non-insurance industries learn from Allstate's example:

1 - plan for the best of the worst. Identify potential or likely future moments in the public perception where your brand can shine. Prepare for those moments, don't wait for them to happen to start designing responses. If you know when people are going to look to your brand you can get ready for your close-up

2 - commit to bold moves. It would have been easy for Allstate to have done the usual post disaster response. That would have been fine, but we wouldn't be talking about them unless they screwed up. All the work they did took money and careful planning and most difficultly a lot of people saying yes. Big, multi-pronged promotions need a lot of sign offs, it takes approval from  "the boss*."

Your brand needs to be able to pull the trigger on big ideas when the chips are down. Otherwise you face the threat of forever being number two (or worse). Leaders take risks. The path to the winners circle is not an easy one, but if your smart and you plan carefully and your able to make bold moves when it matters most (and of course that's the scariest time to do so) your brand  could make invaluable progress.

*note: in this case, and only in this case, "the boss" does not necessarily refer to Bruce Springsteen.

Clarissa Explains Cost-effective Marketing Strategy

Hey marketing strategists: why sink tons of money into demographic/media-buying research when you can just watch TV and dick around on the the Internet?

Could it actually be that easy? Can you really learn these very difficult lessons about where to allocate advertising dollars in this complicated modern media landscape by just doing the dumb stuff you do to kill time? Perhaps you can.

Between July 25th and 26th, for almost 48 solid hours, every trending topic on Twitter referred to the new Teen Nick “The 90’s Are All That” block of nostalgia programming. For those not familiar, think Nick at Nite, but instead of Dick Van Dyke and Leave it to Beaver, it’s the early 90’s shows from Nickelodeon: forgotten classics like Doug, Rocco’s Modern Life, and Legends of the Hidden Temple.

This unqualified takeover of the Twitter zeitgeist tells us something really interesting: that the people who are tuning into those shows are also very actively using twitter and–one can assume–other social networks as well.

So what?

So, if you're interested in attracting the 18-35 year old tech-savvy market, that’s a probably a good station/airtime block to sink some advertising dollars in to. And if you’re already buying time there and you aren’t also leveraging social media, you probably should be, as you can count on your audience being adept and frequent users.

The abundance and direction of social media in a marketing budget is something that keeps project managers and media strategists up at night. Having some direction like what kind of demographics are actively engaging with brands is the kind of solid gold data those folks pay gobs of money for. Just pay attention to the free indicators that exist in the world, and you might be able to save some of that research cash, freeing it up for bigger, more directed advertising budgets.

Closing the Big Box Book

What if they threw a buyout and no one came? That’s what happened last week to Borders bookstores, and as a result the big box media chain has begun liquidating.

Some will look at this event as a sign of the nation’s increasing economic woes, or as an indication of an empire in decline. Others will see this occasion as a symptom of advanced anti-intellectualism in America.

I’m not convinced that either of those arguments really hold any water, but they do make for some great fear-mongering.

In any free-market economy there are going to be losers and winners. Certainly, it’s startling when a large national retail chain becomes one of the losers, but the path of capitalism is littered with the detritus of fallen brands (Pan Am, Woolworth, Saturn, and Pennsylvania Railroad, to name a few).

What does the bankruptcy of Borders say about our culture? I believe that as our people’s basic needs are being met by pervasive, omnipresent national brands, those people increasingly turn to their smaller local communities for specialized needs.

The closure of Borders bookstores is indicative of the great wave of the shopping mall–that crested in the late 80’s–finally receding. For nearly the entire history of the world, shopping was a series of encounters with very specialized providers. You needed flour? You went to a mill. You needed meat? You went to Sam the butcher. To our modern eyes it was a drawn-out and exasperating process, but the business model of craftsman-as-sole manufacturer demanded it. In the 19th century, that started to change.* People began ordering unrelated products through catalogs. Eventually department stores were invented, and people started destination shopping--that is, going to one place for all their needs. We were just a short hop at that point from the mall and the death of the boutique.

But then the Internet happened, and the whole idea of the “store” got all mucked up.** Anyone could sell anything (or any number of things) to anyone else, anywhere in the world. At first, this was novel and exciting, but eventually it became just another way to shop. We buy our Xmas presents on Amazon, we buy our music from iTunes, and we buy weird knitted garden gnome scarves from Etsy†. The Internet became the destination, and the individual websites were able to go back to the making-and-selling-one-type-of-thing-expertly model.

This change in consumer attitude wasn’t the only thing that did in Borders (they bungled a lot, and made some dumb choices that were obviously wrong at the time), but it contributed. It’s something that other companies (or anyone who sells or buys anything) should examine, and see where they fit in in this new-market thinking.

*Yeah, there were merchants who traded in a number of goods long before the then, but such variety was a rarefied thing. I say modern shopping happened after the Civil War.
**for the better, IMO.
†that’s what you use Etsy for too, right?

The Groupon Hustle

Groupon is bad for the American economy.

Like really, really bad. For lots of reasons.

Lately Groupon has been the belle of the ball. Last year the company increased its annual revenue an astounding 2241%. I wish there were uppercase numbers so I could type that figure in all caps.

Because it’s important to understand how the big G pulls in all this cash, I’m going to summarize here how Groupon works; if the progressive coupon racket is old hat to you, feel free to skip ahead to the next paragraph. Essentially, Groupon sells coupons for local businesses' products at stupendously deep discounts (40-50% off is commonplace). The rub--and there's always a rub--is that a certain number of people have to purchase the coupon before it becomes valid. So if there's some deal that really interests you, it behooves you to tell all your friends and get them to buy in as well. There is no limit to the number of coupons available. Good deals on popular services in metropolitan areas routinely move thousands of vouchers. Groupon takes a cut of every voucher's sale price, usually around 50%.

On the surface, and this of course is the way Groupon frames it, this setup is good for the participating businesses. Groupon has a ginourmous audience, and customers who weren't previously aware of your product will be made aware of it. Groupon is essentially a marketing and promotions engine. But all this comes at a huge cost; not only to the participating businesses, but to the larger economy in general.

First and foremost, it’s very hard for businesses to absorb the deep discounts Groupon demands. Businesses often operate at a loss on the products they discount and 50% is a HUGE margin. These businesses are just hoping against hope to create some new trickles of revenue.

Next, you have to face the fad factor. Groupon is the hot-shit thing in marketing right now. There is a great deal of peer pressure to be on the service. If you aren’t and your competitors are, what does that say about you to your customers? Honestly, no one is sure. It probably doesn’t say much of anything at all, but very few companies are willing to take that risk.

Lastly you have the devaluation problem. When you give your customer a product at 50% off, they come to expect to pay that much for it. When they return to see your normal, non-Grouponed price points, they might feel the products aren’t worth that much. It’s nearly impossible to change a consumer's mind once they’ve decided a product's worth. Groupon devalues the products it promotes, and that’s about the most damaging thing you can do to a brand.

The funny thing is, despite all the money Groupon’s taking it at the expense of local businesses, it’s not a very fiscally solvent company. See, for every dollar that Groupon makes, they spent $1.45 to get there. Apparently, having an army of salespeople cold-calling every business in the world takes a lot of up-front investment. Recently they raised nearly a billion dollars in venture capital, but almost that entire amount was sunk into repaying earlier investors.

I’m not going to say Groupon is a sinking ship (the rats are still swarming the decks). Nor is it the wrong move for every business using it, but it is overvalued in our cultural mindspace, and at some point in the near future the other shoe is going to drop, and it’s going to be a hell of a thing when it does.

Anthony Wiener Would Make a Great Dungeon Master

When I say “Dungeon Master” I am not referring to any sort of S&M dominance play thing–although I'm not going to discount the representative from New York’s potential in that arena; for all I know he might be great at the job. He’s certainly got the abs for it. No; instead, I am referring to a far more deviant and misunderstood subculture: people who organize and play Dungeons & Dragons (and sundry other role-playing games).

As we have all been made painfully aware, Anthony Wiener is good at sexting. And at its core, sexting (and its related hobbies--phone sex, etc.) is pretty much the same activity as table-top role playing.

Allow me to unpack that a little. Consider for a moment the games of football* and basketball. These sports are very different on the surface, but the action of the participants is basically the same: people on a team work together to move a ball across the length of the play space, scoring points as they do so. The other team tries to stop this action or take the ball away from them. In the same way, RPGs and sexting are very similar: Participants improvise a story, are responsible for describing their character’s actions, and have some authority over the setting details and other participants' characters.

The difference is principally that sexting is about, well, sex, and D&D is about adventure and magic and orcs (and stuff like that).**

A secondary argument could be made that both of these activities have been lauded by their adherents as a bold future of human interaction, as amazing new ways of enabling people to become closer with each other. At the same time, both RPGs and sexting have been condemned by non-participants as everything from immoral to just plain weird.

I’m not going to make a call on the validity or importance of either D&D or sexting. Both are activities that are just fine for consenting adults to participate in once safely out of sight of minors and puritans. That’s not really the point of this post.

The point is that these two seemingly disparate things are actually both just acts of storytelling--one of the most basic elements of human communication, one that we are all naturally drawn to. Despite differences in how we approach it, it is something we all seek to participate in.

*When I say football I mean the American sport with the not-round ball. That is, I explicitly do NOT mean soccer.
**Although--if you can stomach it--this Facebook exchange shows that the congressman was trying to get into some superhero-fantasy play.

From the Gamestop to the Gallery

Are video games are legit now? If so, what does that mean for the medium?

The NEA has finally deigned to make video games eligible for grants; The Smithsonian launched a massive exhibition chronicling the history (and art) of video games; Cory Arcangel got a very nice bit of press in the New Yorker about his show “Pro Tools”; and L.A. Noire got a stellar review from the Times (the mere fact that the old Grey Lady has a video game review section is telling).

It’s easy to look at games like L.A. Noire or Heavy Rain as art, because they can be readily compared to other things we’ve already deemed worthy of artistic merit (novels, films). Who could argue about the quality of Cain’s Double Indemnity or Hitchcock’s Strangers on a Train? So too is it easy to look at a work like Flower or Limbo or Love as works of art due to their pure visual majesty.

While I’m sure there is no end in sight to the churn of abysmally dull murder-core games out there, it’s nice to see that the silver lining is getting a little wider, and that folks doing truly innovative things (in any medium) are getting the praise they deserve. Does this mean that the medium is an art form? Or are there simply bits of artistry within an expanding miasma of product?

Video games are a commercial enterprise. They're meant to be purchased by consumers. How does that impact their artistic significance? It’s an interesting question; one I'm looking forward to seeing further thought on in the next few years.

But what about Mario and Master Chief? These characters represent game franchises that have spawned numerous titles that sold bajillions of units. They'll forever go down in the annals of history as “great games.” But were they art?

The right answer is: WHO CARES?

The argument is totally needless. Their cultural impact is profound and lasting. Turning the art world’s eye to games is nice. It makes an argument for the medium's legitimacy to stodgy old coots who are rapidly becoming irrelevant and societally functionless.* But in the end, whether or not games are ART doesn’t matter; what matters is that they’re still relevant in our expanding entertainment culture. There’s no real question that they are.

*In all fairness Ebert kind of apologized for his dismissal of the gaming medium. But it was a pretty weak handjob of an apology, and it smacked of being more a PR move than a heartfelt reversal of attitude.

Putting Platforms on a Pedestal

In the sunset of his career Luciano Pavarotti did something he had never done before: He released an album of pop songs. And despite being one of the greatest living tenors–a man with legions of fans the entire world over–that record didn't sell very well.

Here's the thing: it wasn't a terrible record. Granted, it wasn't Lady Gaga or Tony Bennett, but it wasn't garbage, either. The fat guy could carry a tune. In the hands of an artist we'd never heard of before, it would have been an intriguing debut. So why didn’t it move units? Precisely because it was something ol’ Luciano had never done before.

The adoring public knew Pavarotti as an opera singer, perhaps the best, so they weren't interested in him dabbling in other genres. When you're very good at one thing, it can be quite difficult for you to interest your customers in a new and separate offering.

When was the last time you checked in on Facebook Places, the social media giant’s geolocation service? When was the last time you posted a comment on Ping? You know, Ping? The social network built into Apple’s iTunes? Or checked the weather by using your cable television’s widgets menu? For the vast majority of you, the answer is "never."

We use foursquare for geolocation and we use Facebook for social networking, but swich that around and the equation doesn’t make sense to us. The roles are played as cast. Once somethings function has been established, it’s hard to alter the perception in consumers' minds that THAT’S WHAT IT DOES–even if it’s an added functionality.

And yet we also live in a world of profound ADHD, omnipresent multitasking, and 100k+ app stores. So what gives? I believe there is a dichotomy in the consumer mind that separates things they purchase into two catagories: products and platforms.

Products do one thing. We try to buy the best products we can, and when a market leader emerges, we celebrate it. A taco, for example, is a product.

Platforms, on the other hand, serve a number of applications, and provide us an interface for gathering and using those applications. Platforms tend to not have as much longevity as a product, but they can make much bigger market booms. A taco truck is a platform.

Occasionally, a product can transition into a platform. Google has made the transformation from a simple search engine into a rich platform of applications and product offerings.

Facebook, on the other hand, has had mixed success. Zygna made a fortune by leveraging Facebook as a social gaming platform, but for every Zygna there are countless failed enterprises that never found their footing.

Only a few years ago the very idea of comparing Google and Facebook as competitors would have been ridiculous. Lately, though, these brands (and others aspiring to their level) are seeking to transmogrify themselves into platform-based business models. It is a route fraught with peril.

Frequently, trying to move into the platform space just dilutes your brand. There's nothing wrong with simply being a product. Products do just fine. Look at the Flip camcorder, the iPod, or Wikipedia; all are hugely popular products. They do one thing, and they do it exceedingly well.