Melbourne Herald Sun, 18 September 2010
Stand at the back of the State Theatre during an Opera Australia performance and your eyes will be dazzled by a sea of white - the heads of the 2000 audience members. Any colour variations come from the frequent bald pates and the ladies' expensive hair dyes.
Quite obviously this audience has a use-by date and it's not that far away. Who will come to the opera, ballet or symphony orchestra when they are gone?
Roy Morgan Research keeps a constant watch on these "heritage arts" in their surveys, most recently in July. As always they found that the biggest group in the audience was aged over 50, and less than a third were under 35. Over the quarter-year, the arts drew an audience of half a million, as opposed to 9 million who went to the movies.
When your audience is so rigidly divided, how do you build a market? It's not like there is a lack of choice. Opera alone has its big Opera Australia, plus four active Melbourne companies. With four percent of the population attending, in fact we have a higher participation rate than the UK or US.
But that leaves 96 per cent who rarely go - or have never been at all. Can they be won over?
Oz Opera is a Melbourne-based touring company that takes opera to country towns and schools, demonstrating that there is nothing to be scared of and you might even enjoy yourself. Melbourne Opera and Victorian Opera also evangelise so there is no excuse for not peeking or being frightened off by the regal Arts Centre.
But there has not been much encouragement from our leaders. Both John Howard and Kevin Rudd thought "culture" was yogurt in the fridge, and both Julia Gillard and Tony Abbott rarely raise their sights above the sporting field.
The arts community wistfully recall the days of Whitlam, Keating and our own Jeff Kennett who were always there to raise the curtain. But this week's events have cheered them up enormously.
The appointment of Simon Crean as Arts Minister was heartily welcomed. As Greg Hocking, artistic director of Melbourne Opera, happily pointed out, the new boss is a genuine fan. The portfolio also goes back into the PM's department, which will give it much more clout.
Mind you, the minister still has to earn his stripes. Richard Gill, the charismatic conductor who heads Victorian Opera, voiced their thoughts. "To paraphrase Sting - every move you make, the arts community will be watching you."
It has just been announced that Melbourne will get the equivalent of the opera Olympics in 2013 - Wagner's The Ring Cycle, a $15 million production played over four nights for a total of 15 hours. This always attracts excitement and brings an audience from around the world. But be warned that it's not recommended for newcomers to opera.
It will play just three performances, only in Melbourne - because we have one of the world's biggest stages to accommodate the epic.
While Opera Australia struggles to break even with government grants of $18 million, Greg Hocking's Melbourne Opera receives no subsidy at all, but still puts out three professional productions a year.
Right now he is conducting a double bill, Cavalleria Rusticana and Pagliacci, at the Athenaeum. Tickets are as low as $25 each. "We don't have elaborate sets, we spend the money to make sure the singing is superb."
Hocking does not worry about the age factor, either. "All the years I have gone to performances, all over the world, the audience has always had grey hair. Opera is something you get to when you are older, it's something you grow into."
18 September, 2010
11 September, 2010
Do it yourself and save - can you dig it?
Melbourne Herald Sun, 11th September 2010
You want broadband fibre to the node? Then pick up a shovel and start digging a trench.
This is what the Norwegians are doing to cut down the cost of their broadband network. It's true. An Internet TV provider called Altibox gives customers nearly $500 rebate if they lay the fibre between their house and the node at the end of the street. And four out of five of them have accepted.
Is it because Scandinavians have a relatively small population that they have co-opted the customers into supplying the donkey work?
A few weeks ago I wrote about Ikea. Now there's a company that conquered the world with low-cost products - by getting the customer to do the assembly work. As we all know, when you buy at Ikea you don't get a cupboard or a table - you get a large cardboard box, a packet of screws and a Sunday of fiddling and swearing.
The Internet has given all of us enormous do-it-yourself power. Or headaches, depending on your level of competence. But we do like that feeling of being in control.
Like your next holiday. Are you just going to hand the destination over to your travel agent? Or are you going to spend a week or two rummaging the ether looking for that extra-special discount fare or a hotel that throws in free breakfast and an extra bed for a child?
Fortunately for travel agents, enough customers have tried this system and ended up poorer and sorry, that they come running back to the experts. The agents themselves, meanwhile, are constantly dreaming up new types of group or packaged holidays and marketing innovations to keep the customers flowing in.
Like everyone in today's business, they have had to quickly adapt or perish.
We like to feel in control of our money. How else can you explain the queue of clients waiting at the ATM while inside the bank is nearly empty? Between the cash machines and internet banking, our financial institutions have made themselves even richer by trimming out the middle-man - the teller.
Another industry to feel the pain of DIY is music. The record stores are fast shrinking and disappearing out of our high streets, with the decline of the packaged CD. Flicking through the thousands of records in the shop racks has been replaced by clicking through the millions of music tracks on iTunes.
You compile your own record and burn it to CD or onto your iPod. The company has saved itself the major costs of record production: manufacture, packaging, distribution and retail margin. Good for everyone, except the retailer.
A huge business is self-publishing. Think you have produced the great Australian novel, or that the world should know your family's history? Well after the first few dozen rejection slips very many authors do it themselves. There's an abundance of companies that will publish your book - so long as you pay for it. Be careful when you select one. Some are good and reputable, but many are not - be sure to investigate them closely before making any decision.
You can create anything yourself, even yourself. Since 2003 the Second Life virtual-world game has grown vastly and even non-players are familiar with the term Avatar - a self outside of your body yet part of you. The hugely successful movie of that name spread the term even further and many people are creating their own avatar. They can design whatever person they want, to be their alter ego in the mythical world. And they'll often use the character as their Facebook or email photo.
So the mild-mannered bookkeeper becomes a superhero with the power of flight, a slinky sexy model, or maybe Cartman from South Park. Do it yourself, dude.
ray@ebeatty.com
You want broadband fibre to the node? Then pick up a shovel and start digging a trench.
This is what the Norwegians are doing to cut down the cost of their broadband network. It's true. An Internet TV provider called Altibox gives customers nearly $500 rebate if they lay the fibre between their house and the node at the end of the street. And four out of five of them have accepted.
Is it because Scandinavians have a relatively small population that they have co-opted the customers into supplying the donkey work?
A few weeks ago I wrote about Ikea. Now there's a company that conquered the world with low-cost products - by getting the customer to do the assembly work. As we all know, when you buy at Ikea you don't get a cupboard or a table - you get a large cardboard box, a packet of screws and a Sunday of fiddling and swearing.
The Internet has given all of us enormous do-it-yourself power. Or headaches, depending on your level of competence. But we do like that feeling of being in control.
Like your next holiday. Are you just going to hand the destination over to your travel agent? Or are you going to spend a week or two rummaging the ether looking for that extra-special discount fare or a hotel that throws in free breakfast and an extra bed for a child?
Fortunately for travel agents, enough customers have tried this system and ended up poorer and sorry, that they come running back to the experts. The agents themselves, meanwhile, are constantly dreaming up new types of group or packaged holidays and marketing innovations to keep the customers flowing in.
Like everyone in today's business, they have had to quickly adapt or perish.
We like to feel in control of our money. How else can you explain the queue of clients waiting at the ATM while inside the bank is nearly empty? Between the cash machines and internet banking, our financial institutions have made themselves even richer by trimming out the middle-man - the teller.
Another industry to feel the pain of DIY is music. The record stores are fast shrinking and disappearing out of our high streets, with the decline of the packaged CD. Flicking through the thousands of records in the shop racks has been replaced by clicking through the millions of music tracks on iTunes.
You compile your own record and burn it to CD or onto your iPod. The company has saved itself the major costs of record production: manufacture, packaging, distribution and retail margin. Good for everyone, except the retailer.
A huge business is self-publishing. Think you have produced the great Australian novel, or that the world should know your family's history? Well after the first few dozen rejection slips very many authors do it themselves. There's an abundance of companies that will publish your book - so long as you pay for it. Be careful when you select one. Some are good and reputable, but many are not - be sure to investigate them closely before making any decision.
You can create anything yourself, even yourself. Since 2003 the Second Life virtual-world game has grown vastly and even non-players are familiar with the term Avatar - a self outside of your body yet part of you. The hugely successful movie of that name spread the term even further and many people are creating their own avatar. They can design whatever person they want, to be their alter ego in the mythical world. And they'll often use the character as their Facebook or email photo.
So the mild-mannered bookkeeper becomes a superhero with the power of flight, a slinky sexy model, or maybe Cartman from South Park. Do it yourself, dude.
ray@ebeatty.com
04 September, 2010
The Father’s Day oasis in the desert
Melbourne Herald Sun, 4 September 2010
If your business is retail you will be well aware of a large hole in your calendar. The seven months between Mother's Day and Christmas when there is no reason for the public to splurge - in your shop.
So was it just serendipity that dropped Father's Day right in the middle of this business desert? Or the work of a smart retailer with an eye for more trade?
Well for the sake of integrity I'm pleased to tell you that it was more luck than marketing. Father's Day was created in Washington State, USA, by a Sonora Smart Dodd in 1910, on the date of her father's birthday in June. So most of the world celebrates it on the Sunday of the summer solstice, around June 21st.
When it reached the antipodes in 1935 it was moved a couple of months across to the first Sunday of spring, from September 1st. You could say that it is the counterpart of the northern world's spring festival, Easter.
Certainly for the retail trade it is a legitimate excuse to welcome in a million sticky hands clutching five dollars bills to buy daddy a gift. Fortunately as they grow up, so does their spending capacity.
The cards and gifts thing has been a relatively recent phenomenon. These days this is definitely driven by marketing and gives a kick to trade at a chilly and quiet time.
While the past couple of years have seen subdued trading for the festival, this weekend it promises to pick up. In fact a report from researchers IBISWorld predicts expenditure of more than a billion dollars on the celebration.
A lot of it will happen tomorrow, when our cafes and restaurants are expected to reap $262 million, up nearly four percent from last year. That's a lot of busy chefs and waitresses.
If you're a dad who has been hoping for a new hammer-drill, you could be in luck. The hardware and electronics sector is expected to be the major winner for the day, with a 13 per cent growth in sales to $236 million.
It's the big day of the year for those who sell electric shavers, and a lot of dads will be getting new computer games.
In fact the news keeps getting better for you. With a decline of seven per cent in clothing sales, you are now less likely to receive a new tie or pair of socks.
The image of dad as an athlete, whether it's true or mistaken, is obviously firmly believed by their doting offspring. They will spend over $100 million in the sports store for you.
Half as much will be spent on books and CDs. While those with a true understanding of Dad's heart will spend nearly $30 million on booze.
Economics aside, I hope you give Father's Day the weight it deserves. In business you meet too many people who say, "I'm too busy for that nonsense", or "I'll give it an hour or two then I have to fly interstate for Monday's meeting". They shrug it off as sugary sentiment and not very manly.
But for your kids it's important. They've been preparing for it all week, have worried over their gift and their card. For them it's an important business campaign - to impress Dad with how clever they are and how much they love him. So you have to take it as seriously as any important business deal.
More so, because while customers come and go, and business ebbs and flows, your kids are with you a very short time and before you know it they'll be gone. How can you help them remember what a great time they had on Father's Day 2010?
ray@ebeatty.com
If your business is retail you will be well aware of a large hole in your calendar. The seven months between Mother's Day and Christmas when there is no reason for the public to splurge - in your shop.
So was it just serendipity that dropped Father's Day right in the middle of this business desert? Or the work of a smart retailer with an eye for more trade?
Well for the sake of integrity I'm pleased to tell you that it was more luck than marketing. Father's Day was created in Washington State, USA, by a Sonora Smart Dodd in 1910, on the date of her father's birthday in June. So most of the world celebrates it on the Sunday of the summer solstice, around June 21st.
When it reached the antipodes in 1935 it was moved a couple of months across to the first Sunday of spring, from September 1st. You could say that it is the counterpart of the northern world's spring festival, Easter.
Certainly for the retail trade it is a legitimate excuse to welcome in a million sticky hands clutching five dollars bills to buy daddy a gift. Fortunately as they grow up, so does their spending capacity.
The cards and gifts thing has been a relatively recent phenomenon. These days this is definitely driven by marketing and gives a kick to trade at a chilly and quiet time.
While the past couple of years have seen subdued trading for the festival, this weekend it promises to pick up. In fact a report from researchers IBISWorld predicts expenditure of more than a billion dollars on the celebration.
A lot of it will happen tomorrow, when our cafes and restaurants are expected to reap $262 million, up nearly four percent from last year. That's a lot of busy chefs and waitresses.
If you're a dad who has been hoping for a new hammer-drill, you could be in luck. The hardware and electronics sector is expected to be the major winner for the day, with a 13 per cent growth in sales to $236 million.
It's the big day of the year for those who sell electric shavers, and a lot of dads will be getting new computer games.
In fact the news keeps getting better for you. With a decline of seven per cent in clothing sales, you are now less likely to receive a new tie or pair of socks.
The image of dad as an athlete, whether it's true or mistaken, is obviously firmly believed by their doting offspring. They will spend over $100 million in the sports store for you.
Half as much will be spent on books and CDs. While those with a true understanding of Dad's heart will spend nearly $30 million on booze.
Economics aside, I hope you give Father's Day the weight it deserves. In business you meet too many people who say, "I'm too busy for that nonsense", or "I'll give it an hour or two then I have to fly interstate for Monday's meeting". They shrug it off as sugary sentiment and not very manly.
But for your kids it's important. They've been preparing for it all week, have worried over their gift and their card. For them it's an important business campaign - to impress Dad with how clever they are and how much they love him. So you have to take it as seriously as any important business deal.
More so, because while customers come and go, and business ebbs and flows, your kids are with you a very short time and before you know it they'll be gone. How can you help them remember what a great time they had on Father's Day 2010?
ray@ebeatty.com
28 August, 2010
How Abbott hung Parliament - and the Labor Party
Melbourne Herald Sun, 28th August 2010
Whichever party wins government in the next few days, there is one fact that can't be denied: the Liberals won the campaigning and Labor lost.
While the rest of this newspaper debates the politics, let's see if there is a marketing lesson to be learned by those of us in business. You see the seeds of defeat were planted on Monday 26th November 2007. That day should have been the commencement of Labor's re-election campaign, Monday after the victory of Kevin 07.
Successful marketers start preparing their next campaign immediately. In fact there should always be one on the whiteboard - even as you run your current advertising burst, plan how you will do the next.
This was the system Labor ran back in the 80s when Cain locally and Hawke nationally, were always ready to win the next campaign. The modern team are obviously too young to remember.
I'm sorry to tell those commentators who say the parties should be more flexible and willing to debate the hard questions, that it's never going to happen. That's not how you win elections.
Want to see how it's done? Look at Tony Abbot. He had an impossible task - defeating a successful incumbent government with record employment and economic success. But his team devised a simple strategy.
From the end of last year they planned the marketing of the campaign very carefully. Enough time would pass for the memory of the Malcolm Turnbull assassination to fade. They selected a handful of key issues. They gave each of them its own shibboleth - a magic password to be repeated again and again in place of any debate. And they stuck to it like glue.
By now you can recite them in your sleep. "The new big fat tax", "we will stop the boats", "cut the massive debt", "stop wasteful spending". The phrases were repeated again and again, with absolutely minimal discussion.
You could see Joe Hockey cringe as he mouthed simplistic phrases like "big fat ugly tax" and “a balanced budget by 2013". He would have wanted to say something more meaningful, more perceptive. But he was under orders to stay on message or face the Abbott wrath. He stayed on message.
Labor’s campaign error was in not preparing its own shibboleths. Maybe, "we're the world's best economic managers”, “we saved your job", "we rebuilt health and education", "we'll give you a broadband network".
Keep hammering at those over-simplified statements until the politicians believe them and eventually the public will believe them too. Sorry to say it but there's no room for complexity in modern politics, nor is there in modern marketing. As the poet said, "keep it simple, stupid!"
Look at your own advertising. Sure your product has dozens of great attributes. Sure you could talk for hours about the benefits. But don’t. Select one or two phrases and stick to them. And make sure everyone else does too.
The hardest part of an advertising agency’s job is to keep the client on track. Clients get bored with one positioning for their product. They’ve seen the new commercial a dozen times before it went to air and after it has played for a few months they believe the public is as bored with it as they are. Wrong. The public has only just started to notice it.
So what about “the real Julia”? Well that should have been planned for from the start. Instead they put her into a straight jacket that made her look like a mannequin. Only in the last couple of weeks did she break free - and start hard-playing the shibboleths: “better schools and hospitals”, “move Australia forward”, “better economic management”, “building a 21st century economy”. Repetitive short sharp simple phrases, just like Tony Abbott was doing. Only he was already months ahead.
Take a lesson from Triathlon Man. Before you launch your campaign decide precisely what your objectives are. Set the key target points and give each one a shibboleth - five words at the most. And then make sure that everybody in your team knows them and sticks to them.
Whichever party wins government in the next few days, there is one fact that can't be denied: the Liberals won the campaigning and Labor lost.
While the rest of this newspaper debates the politics, let's see if there is a marketing lesson to be learned by those of us in business. You see the seeds of defeat were planted on Monday 26th November 2007. That day should have been the commencement of Labor's re-election campaign, Monday after the victory of Kevin 07.
Successful marketers start preparing their next campaign immediately. In fact there should always be one on the whiteboard - even as you run your current advertising burst, plan how you will do the next.
This was the system Labor ran back in the 80s when Cain locally and Hawke nationally, were always ready to win the next campaign. The modern team are obviously too young to remember.
I'm sorry to tell those commentators who say the parties should be more flexible and willing to debate the hard questions, that it's never going to happen. That's not how you win elections.
Want to see how it's done? Look at Tony Abbot. He had an impossible task - defeating a successful incumbent government with record employment and economic success. But his team devised a simple strategy.
From the end of last year they planned the marketing of the campaign very carefully. Enough time would pass for the memory of the Malcolm Turnbull assassination to fade. They selected a handful of key issues. They gave each of them its own shibboleth - a magic password to be repeated again and again in place of any debate. And they stuck to it like glue.
By now you can recite them in your sleep. "The new big fat tax", "we will stop the boats", "cut the massive debt", "stop wasteful spending". The phrases were repeated again and again, with absolutely minimal discussion.
You could see Joe Hockey cringe as he mouthed simplistic phrases like "big fat ugly tax" and “a balanced budget by 2013". He would have wanted to say something more meaningful, more perceptive. But he was under orders to stay on message or face the Abbott wrath. He stayed on message.
Labor’s campaign error was in not preparing its own shibboleths. Maybe, "we're the world's best economic managers”, “we saved your job", "we rebuilt health and education", "we'll give you a broadband network".
Keep hammering at those over-simplified statements until the politicians believe them and eventually the public will believe them too. Sorry to say it but there's no room for complexity in modern politics, nor is there in modern marketing. As the poet said, "keep it simple, stupid!"
Look at your own advertising. Sure your product has dozens of great attributes. Sure you could talk for hours about the benefits. But don’t. Select one or two phrases and stick to them. And make sure everyone else does too.
The hardest part of an advertising agency’s job is to keep the client on track. Clients get bored with one positioning for their product. They’ve seen the new commercial a dozen times before it went to air and after it has played for a few months they believe the public is as bored with it as they are. Wrong. The public has only just started to notice it.
So what about “the real Julia”? Well that should have been planned for from the start. Instead they put her into a straight jacket that made her look like a mannequin. Only in the last couple of weeks did she break free - and start hard-playing the shibboleths: “better schools and hospitals”, “move Australia forward”, “better economic management”, “building a 21st century economy”. Repetitive short sharp simple phrases, just like Tony Abbott was doing. Only he was already months ahead.
Take a lesson from Triathlon Man. Before you launch your campaign decide precisely what your objectives are. Set the key target points and give each one a shibboleth - five words at the most. And then make sure that everybody in your team knows them and sticks to them.
21 August, 2010
Spam: fighting the locust plague
Melbourne Herald Sun, 21 August 2010
How a simple processed meat became a major marketing phenomenon - and everybody's favourite hate - would make a great comedy script, if it wasn't already a comedy script.
In 1970 the Monty Python team screened a sketch that reached new standards of stupidity. Two customers sit in a café where every possible dish contains Spam, the American processed ham. It so happens that sitting next to them, of course, is a crew of cow-helmeted vikings who start to sing "Spam spam spam spam lovely spam" ad nauseam.
This was recalled a decade later, newly-fledged internet email services were being bombarded by floods of unwanted advertising. The geeks of the day christened this "spam" and so it has remained ever since.
Just today, 90 billion spams have flooded the world's computers. And depending on the effectiveness of your spam filter, it probably feels like half of them have hit you.
Over the past 40 years the computing world has fought a continuing war against these ether-borne locusts. Today 96 per cent of all business email is spam.
In front-line defence is a spam and virus hunter called Mailguard. This is an Australian company, headquartered in South Melbourne, that protects companies in 18 countries. Managing Director Craig McDonald does not see the problem going away any time soon. "Some of our clients get - literally - thousands of spam emails per employee per day."
His company protects corporations, government departments and retail chains, including Acer, Baker's Delight, the AFL, the Australasian College of Surgeons.
In the darker recesses of the web you'll find 'botnets' - computers captured by a virus that turns them into groups of slaves, up to two million strong, pumping out email. Such a new spam site has just a few hours to operate before it is spotted and blacklisted by the anti-spam services of the world. But this is long enough to send out billions of letters.
If that's not sci-fi enough for you, they have 'spambots' that crawl the net seeking out computers that are not locked down and secured, and convert them into 'bots' to send out email.
Have I made your hair stand on end yet? Surely with so much effort, they must get some result to make it all worth while? Well a research project secretly measured the activities of a botnet for a month. Their conversion rate was well under 0.00001 per cent. From which they would have made about $3000. However there were other sites in the network, bringing the total up to about $3.5 million a year - not bad in a developing country.
Just what is it that they sell? Like the detective searching the suspect's rubbish bin for evidence, I lowered myself into my own garbage skip - the spam file on my computer. This is where all the rejected mail is sent by my Symantec anti-spam program. Before I empty the folder I always take a quick look, in case some legitimate mail was swept up by mistake.
Out of today's trawl - almost a hundred emails - about 90 per cent were pharmaceutical. This is common with a lot of people I talk to, and reassures me that I have not been specifically targeted for sexual enhancement.
However, I have been selected to receive many millions of dollars which will be passed to me as soon as I give Mr McWealth my bank details. And if that's not enough, Mr Frank Walter has offered me $10 million at three percent interest.
More worrying, I can quickly become a qualified radiologist able to carry out x-rays, diagnosis and treatment with radioactive compounds. I'll bear that in mind before my next medical check-up.
I can easily get an accounting degree - which might explain some of the funny-money stories that appear in this section of the paper. And I've just won half a million dollars in the Nokia competition.
All together now: "Spam spam spam spam, wonderful spam!"
How a simple processed meat became a major marketing phenomenon - and everybody's favourite hate - would make a great comedy script, if it wasn't already a comedy script.
In 1970 the Monty Python team screened a sketch that reached new standards of stupidity. Two customers sit in a café where every possible dish contains Spam, the American processed ham. It so happens that sitting next to them, of course, is a crew of cow-helmeted vikings who start to sing "Spam spam spam spam lovely spam" ad nauseam.
This was recalled a decade later, newly-fledged internet email services were being bombarded by floods of unwanted advertising. The geeks of the day christened this "spam" and so it has remained ever since.
Just today, 90 billion spams have flooded the world's computers. And depending on the effectiveness of your spam filter, it probably feels like half of them have hit you.
Over the past 40 years the computing world has fought a continuing war against these ether-borne locusts. Today 96 per cent of all business email is spam.
In front-line defence is a spam and virus hunter called Mailguard. This is an Australian company, headquartered in South Melbourne, that protects companies in 18 countries. Managing Director Craig McDonald does not see the problem going away any time soon. "Some of our clients get - literally - thousands of spam emails per employee per day."
His company protects corporations, government departments and retail chains, including Acer, Baker's Delight, the AFL, the Australasian College of Surgeons.
In the darker recesses of the web you'll find 'botnets' - computers captured by a virus that turns them into groups of slaves, up to two million strong, pumping out email. Such a new spam site has just a few hours to operate before it is spotted and blacklisted by the anti-spam services of the world. But this is long enough to send out billions of letters.
If that's not sci-fi enough for you, they have 'spambots' that crawl the net seeking out computers that are not locked down and secured, and convert them into 'bots' to send out email.
Have I made your hair stand on end yet? Surely with so much effort, they must get some result to make it all worth while? Well a research project secretly measured the activities of a botnet for a month. Their conversion rate was well under 0.00001 per cent. From which they would have made about $3000. However there were other sites in the network, bringing the total up to about $3.5 million a year - not bad in a developing country.
Just what is it that they sell? Like the detective searching the suspect's rubbish bin for evidence, I lowered myself into my own garbage skip - the spam file on my computer. This is where all the rejected mail is sent by my Symantec anti-spam program. Before I empty the folder I always take a quick look, in case some legitimate mail was swept up by mistake.
Out of today's trawl - almost a hundred emails - about 90 per cent were pharmaceutical. This is common with a lot of people I talk to, and reassures me that I have not been specifically targeted for sexual enhancement.
However, I have been selected to receive many millions of dollars which will be passed to me as soon as I give Mr McWealth my bank details. And if that's not enough, Mr Frank Walter has offered me $10 million at three percent interest.
More worrying, I can quickly become a qualified radiologist able to carry out x-rays, diagnosis and treatment with radioactive compounds. I'll bear that in mind before my next medical check-up.
I can easily get an accounting degree - which might explain some of the funny-money stories that appear in this section of the paper. And I've just won half a million dollars in the Nokia competition.
All together now: "Spam spam spam spam, wonderful spam!"
15 August, 2010
The Broadband Shock
Melbourne Herald Sun, 14 August 2010
It was a shock, two years ago, when the national broadband network was launched. $43 billion - so much money! $2000 a head! But after some agonised questioning, I concluded we didn't have any choice. It was either fork out, or go sit on the dock to watch the world boat depart without us.
Well now I've been shocked all over again. This time by the threat to discontinue the project two years down the track. We'd be left sitting on that dock, appropriately surrounded by stacks of bananas.
This news came through as I was working on a piece about convergence. This is where the media, tools and mechanics of industry are all coming together - at a spectacular speed.
Internet marketing and on-line shopping are already old hat. Even grandma is ordering her knitting patterns on the net. There's been a spectacular growth in remote working - even very large companies have their virtual offices, with employees working from home or their cars much of the time.
The amount of data passing within and between businesses has grown exponentially. Really, think about the way that you do business now. If you compared it to ten years ago - you'd probably wonder how anything ever got anything done back then.
The media growth is incredible. Pay TV threw down the gauntlet fifteen years ago, now offering over 100 channels of entertainment and news. After a very long pause, conventional broadcasters finally responded and formed the Free TV group. Government released more licences and suddenly we have the growth of free networks - ABC 2,3 and News, 7Two, SBS Two, Go!, One, and others.
Fast coming up is Internet TV. Channels like Boxee.TV (is it a channel? We need a new name.) give you access to thousands of TV programs instantly. Already debate has started - is ITV going to take up too much Internet space? How big will our internet pipeline have to get?
Certainly, in year or two, 100Mb speeds will be the norm around the world for commerce and communications. Which draws the question again, where would we be if we were still stuck in the copper age?
As regulations loosen up we see even further convergence. Telcos around the world are offering internet TV with their broadband packages. Cable TV providers are offering phone accounts and interactive services.
In the US they are already calling this new era TV2. Listen to Allen Weiner, of research firm Gartner Inc: "New stakeholders, such as telco providers, web search engines and portals, and new media titans, such as Apple and Microsoft, make for a crazy quilt of businesses and competitors looking for a significant stake in the future of TV." And they'll all be jostling for a piece of that data pipeline.
But never mind entertainment, what about your business? Most companies need to be connected into huge national data bases for stocks and supplies.
Just-in-time inventory management is no longer the preserve of car companies and big corporations. Now every business has a degree of JIT working, warehousing managed centrally, minimum stock investment on the floor.
All of us in business know the inadequacy of the communications network we have now. So hands up anyone who thinks that present problems, and future requirements, can be satisfied by a bit of tinkering and improvement to our copper network?
Regardless of the weather, I don't think you'll find a single raised hand in Collins Street or Pitt Street.
We now have the last week of an election that makes a Shakespeare play look like soap opera - just count the bodies littering the Forum. But let's keep focussed on what matters. Not next week but for the next ten years. So let me urge the political parties to put away the game plans and take a long cool look at where this country is going and what it will need to get there.
It's not the politics that matters, it's the hard reality of this country's future.
It was a shock, two years ago, when the national broadband network was launched. $43 billion - so much money! $2000 a head! But after some agonised questioning, I concluded we didn't have any choice. It was either fork out, or go sit on the dock to watch the world boat depart without us.
Well now I've been shocked all over again. This time by the threat to discontinue the project two years down the track. We'd be left sitting on that dock, appropriately surrounded by stacks of bananas.
This news came through as I was working on a piece about convergence. This is where the media, tools and mechanics of industry are all coming together - at a spectacular speed.
Internet marketing and on-line shopping are already old hat. Even grandma is ordering her knitting patterns on the net. There's been a spectacular growth in remote working - even very large companies have their virtual offices, with employees working from home or their cars much of the time.
The amount of data passing within and between businesses has grown exponentially. Really, think about the way that you do business now. If you compared it to ten years ago - you'd probably wonder how anything ever got anything done back then.
The media growth is incredible. Pay TV threw down the gauntlet fifteen years ago, now offering over 100 channels of entertainment and news. After a very long pause, conventional broadcasters finally responded and formed the Free TV group. Government released more licences and suddenly we have the growth of free networks - ABC 2,3 and News, 7Two, SBS Two, Go!, One, and others.
Fast coming up is Internet TV. Channels like Boxee.TV (is it a channel? We need a new name.) give you access to thousands of TV programs instantly. Already debate has started - is ITV going to take up too much Internet space? How big will our internet pipeline have to get?
Certainly, in year or two, 100Mb speeds will be the norm around the world for commerce and communications. Which draws the question again, where would we be if we were still stuck in the copper age?
As regulations loosen up we see even further convergence. Telcos around the world are offering internet TV with their broadband packages. Cable TV providers are offering phone accounts and interactive services.
In the US they are already calling this new era TV2. Listen to Allen Weiner, of research firm Gartner Inc: "New stakeholders, such as telco providers, web search engines and portals, and new media titans, such as Apple and Microsoft, make for a crazy quilt of businesses and competitors looking for a significant stake in the future of TV." And they'll all be jostling for a piece of that data pipeline.
But never mind entertainment, what about your business? Most companies need to be connected into huge national data bases for stocks and supplies.
Just-in-time inventory management is no longer the preserve of car companies and big corporations. Now every business has a degree of JIT working, warehousing managed centrally, minimum stock investment on the floor.
All of us in business know the inadequacy of the communications network we have now. So hands up anyone who thinks that present problems, and future requirements, can be satisfied by a bit of tinkering and improvement to our copper network?
Regardless of the weather, I don't think you'll find a single raised hand in Collins Street or Pitt Street.
We now have the last week of an election that makes a Shakespeare play look like soap opera - just count the bodies littering the Forum. But let's keep focussed on what matters. Not next week but for the next ten years. So let me urge the political parties to put away the game plans and take a long cool look at where this country is going and what it will need to get there.
It's not the politics that matters, it's the hard reality of this country's future.
08 August, 2010
The secret to making billions: consistency and great design
Melbourne Herald Sun, 7th August 2010.
Dutifully following Herself around the twisting alleys of the Richmond Ikea between displays of bedrooms and living rooms and kitchen appliances, I though of how many times I had been in this stage set. In Shanghai, in Berlin, in London. In fact you could go to 37 countries all around the world and find the near-identical store.
"It's no wonder," I thought to myself, "that the guy's the richest man in the world".
"The guy" is Ingvar Kamprad - that's the I.K. in Ikea. At such lofty heights, richness is a matter of degree depending on the strength of the US dollar - in March Forbes marked him as No 11 because the dollar was up but a couple of years ago he was No 1.
Like Steve Jobs of Apple, Kamprad has never invented anything new. He took existing technology, applied brilliant design and focussed marketing, and then stuck to it. He founded Ikea when he was 17, now he is 83.
So what can you learn from the secret of his success? He started with a vision. To give working men and women furniture that was elegant, functional, and inexpensive.
As a model he had the Bauhaus movement of 1920s Germany, that still influences every modern-day architect and designer. An object can be simple and made from cheap materials, yet still be beautiful.
One day in 1953, when it was just a small furniture store, an employee took the legs off a table to fit it into a van. Other bosses might have said, "Mind what you're doing!" Instead Kamprad saw a way to cut down the high rate of transport damage and at the same time save on construction costs. The flat pack was born.
Ikea first entered my marketing consciousness a few years ago when I needed a pair of bookshelves. They should match, but to serve different functions they had to be easily adjusted and customised. I saw what I wanted in the Ikea catalogue but when I called they were out of stock, I'd have to wait three months for the next container to arrive.
Blow this, I thought, I'll get them somewhere else. So I searched every furniture shop and showroom in Melbourne. The cheap ones, the dear ones, the fancy ones. None had anything of the simple flexibility that I needed, at any price. I ended up waiting three months.
As a marketer I was stunned. Here were the Ikea stores packed to bursting any day of the week. You'd think that after 60 years there would be a dozen Ikea clones in every high street. But there aren't.
Sure there are cheap furniture stores, but what they sell is limited and for the most part - cheap. They don't have that elegance of good design. This is where Kamprad, like Jobs, is willing to spend money on the very best.
Being publicity-shy he isn't seen much, but here's a quote of his philosophy: "Any architect can design a desk that will cost 5000 kronor," he wrote thirty years ago in A Furniture Dealer's Testament. "But only the most highly skilled can design a good, functional desk that will cost 100 kronor. Expensive solutions to any kind of problem are usually the work of mediocrity."
So if you're a youngster, here's the secret to making $25 billion. Start with a product everybody wants and needs - chances are you're sitting on an Ikea chair as you read this. Make sure the design is simple and functional but also beautiful.
Make buying it easy - think about the way Ikea stores are laid out, the thought and logic that has gone into every step of the process. And make it affordable so the buying decision is not hard.
Old man Kamprad is long retired to his home in Switzerland. But the story is that no major decision is ever made at Ikea without his approval - often as not it's his idea.
Dutifully following Herself around the twisting alleys of the Richmond Ikea between displays of bedrooms and living rooms and kitchen appliances, I though of how many times I had been in this stage set. In Shanghai, in Berlin, in London. In fact you could go to 37 countries all around the world and find the near-identical store.
"It's no wonder," I thought to myself, "that the guy's the richest man in the world".
"The guy" is Ingvar Kamprad - that's the I.K. in Ikea. At such lofty heights, richness is a matter of degree depending on the strength of the US dollar - in March Forbes marked him as No 11 because the dollar was up but a couple of years ago he was No 1.
Like Steve Jobs of Apple, Kamprad has never invented anything new. He took existing technology, applied brilliant design and focussed marketing, and then stuck to it. He founded Ikea when he was 17, now he is 83.
So what can you learn from the secret of his success? He started with a vision. To give working men and women furniture that was elegant, functional, and inexpensive.
As a model he had the Bauhaus movement of 1920s Germany, that still influences every modern-day architect and designer. An object can be simple and made from cheap materials, yet still be beautiful.
One day in 1953, when it was just a small furniture store, an employee took the legs off a table to fit it into a van. Other bosses might have said, "Mind what you're doing!" Instead Kamprad saw a way to cut down the high rate of transport damage and at the same time save on construction costs. The flat pack was born.
Ikea first entered my marketing consciousness a few years ago when I needed a pair of bookshelves. They should match, but to serve different functions they had to be easily adjusted and customised. I saw what I wanted in the Ikea catalogue but when I called they were out of stock, I'd have to wait three months for the next container to arrive.
Blow this, I thought, I'll get them somewhere else. So I searched every furniture shop and showroom in Melbourne. The cheap ones, the dear ones, the fancy ones. None had anything of the simple flexibility that I needed, at any price. I ended up waiting three months.
As a marketer I was stunned. Here were the Ikea stores packed to bursting any day of the week. You'd think that after 60 years there would be a dozen Ikea clones in every high street. But there aren't.
Sure there are cheap furniture stores, but what they sell is limited and for the most part - cheap. They don't have that elegance of good design. This is where Kamprad, like Jobs, is willing to spend money on the very best.
Being publicity-shy he isn't seen much, but here's a quote of his philosophy: "Any architect can design a desk that will cost 5000 kronor," he wrote thirty years ago in A Furniture Dealer's Testament. "But only the most highly skilled can design a good, functional desk that will cost 100 kronor. Expensive solutions to any kind of problem are usually the work of mediocrity."
So if you're a youngster, here's the secret to making $25 billion. Start with a product everybody wants and needs - chances are you're sitting on an Ikea chair as you read this. Make sure the design is simple and functional but also beautiful.
Make buying it easy - think about the way Ikea stores are laid out, the thought and logic that has gone into every step of the process. And make it affordable so the buying decision is not hard.
Old man Kamprad is long retired to his home in Switzerland. But the story is that no major decision is ever made at Ikea without his approval - often as not it's his idea.
31 July, 2010
Look at me! Now look at him.
You've got to laugh at this one: The most successful and talked-about commercial on today's TV is one that never officially ran on Australian TV. It has popped up on The Gruen Tranfer, Good News Week, even earnest and serious Q&A, and who knows how many more TV and radio talk shows.
It has been called "The perfect ad", has been ripped off and copied and parodied around the world. At the Cannes Lions awards it won the Grand Prix as "The world's best commercial". It's every marketer's dream - the ad that takes off like a rocket and captures the public's imagination.
I'm talking, of course, about the Old Spice "Look at me" commercial. No, not "Look at moi" as in Kath and Kim but "Look at me" as in Isaiah Mustafa. He's the handsome, muscular black footballer who challenges the ladies in his audience, "Look at your man, now back to me, now back at your man, now back to me..." And makes a fairly safe bet that your man does not look anything like the Adonis on screen. However with a dab of body-wash he could smell like the bulging-bicepped Mustafa.
The guy is so sexy you can hear the sound of heaving bosoms all around, and the script so clever that you have to laugh rather than gag. Add to it a million bucks' worth of scenery effects that transfer our hero from bathroom to yacht to the back of a horse without a blink of his penetrating eyes.
From the marketing point of view it's the perfect way to transform the fortunes of an old-old product associated with your granddad rather than Gen X or Y.
But can one commercial change the fortunes of a product that has been gathering dust on the back shelves of an old barber's shop? We'll have to see. It's certainly having a huge immediate effect.
In the US, after a year of static sales the product shot up 107 per cent and swung its market share up five points. Mind you Gillette and Nivea body washes also made substantial growth. But I wonder if the commercial didn't just re-awaken interest in the category?
This is a great example of a marketer taking a risk with a clever commercial and hitting the jackpot. Remember last week's column - how research shows if they like the ad they're more likely to buy the product?
Apparently this ad has never had a paid-for run in this country, according to my friends at Mitchells. Yet world-wide it had 94 million views on YouTube including huge numbers of Australians.
They then stimulated this further. In response to Twitter messages, they selected over a hundred people and organisations and made an individual version of the commercial just for them. Of course most of the selected are famous folk or news media - who are bound to show their trophy around.
This follow-up was a marathon effort which was apparently turned out over two days. The copywriters and cameramen must have been working like a cattle auction. But handsome Isaiah seems to keep his sense of humour - and his cool - throughout.
Go to YouTube and search for "Old Spice man", and you'll find there's a whole industry of them . He even proposes marriage, on behalf of one Twitter, to another. And I believe it was accepted.
The problem now is how to maintain the momentum, and turn all this notoriety into ongoing sales. Staid old Procter & Gamble is as cobwebbed as their Old Spice product was, it's not a company renown for its creative marketing. Can those arthritic toes dance them forward from here? "Look at me, I'm P&G" doesn't quite ring true.
24 July, 2010
How to grow brands without slitting veins.
Melbourne Herald Sun, 24 July 2010.
Two hundred years ago your doctor's answer to most of your ailments would be to slit your vein and drain a few pints of blood out of you. The sicker you got the more blood he'd take. And if you died - well he said you were sick, didn't he?
A new book claims that most of our marketing professionals have been using the same approach to diagnose our businesses - with similarly erratic results. And he says that just like medicine, we must stop relying on myths, beliefs and assumptions. It's time to examine years of accumulated research into what really happens when a customer chooses your brand, and develop an evidence-based approach.
Byron Sharp is a professor at the University of South Australia and his new book, How brands grow (Oxford University Press), swings a hammer at some of the key beliefs and rules running our marketing operations for half a century.
For example, the belief that loyalty is the key to solid market growth, and that it is cheaper to hold an existing customer than hunt down a new one.
Not necessarily so, says Sharp. Through analysing years of research from the US, UK and Australia, he has set down principles - the Laws of Marketing he calls them - which have been overlooked or ignored by generations of marketing gurus.
Expensive, elaborate loyalty programmes are designed to prevent defections to the opposition. But he is able to show that each brand has its loyal base, and a percentage of defectors. This defection rate is remarkably constant between brands, with or without loyalty programmes.
His controversial advice is: rather than work so hard to retain a small percentage of your escaping customers, concentrate on catching part of the much larger group of customers defecting from your rivals.
Research also explains the weak or slow responsiveness of brands to advertising. Too often even large marketers do not spend enough - as a percentage of their market share - to make an immediate difference. Or they produce advertising that is just not good enough to be noticed.
Also when they stop advertising, the momentum carries on for some time and makes it hard for a marketing director to justify any increase in their budget. So the investment stays too low but eventually there is a visible decline.
He analyses the consumers who were exposed to regular advertising as opposed to those who were not. Even though they did not show immediate results, research revealed a definite decline in sales for the under-exposed.
Some of the book's revelations come as no surprise. The major factor in success is wide distribution and ready availability; people are more aware of ads that they like; and that clever, creative advertising is the way to attract attention. Most importantly - they are more likely to buy products with ads that they liked.
Of interest to me is what he says about memory structures. That you must be aware of your brand's image and produce ads that reinforce people's existing memory structure. In other words, that the ad should fit in with how they know the product, it should 'feel right'.
How brands grow will disappoint those looking for an academic text book. This is very lightly written for popular consumption.
It sets down ten laws of marketing. Most you know already under other names, but a few are genuinely surprising.
For someone who has read very little marketing literature, this would be a good primer. For everyone it is a reminder of the importance of continually researching your brand - and getting a realistic picture of who your customers are and what they are looking for in your product.
Two hundred years ago your doctor's answer to most of your ailments would be to slit your vein and drain a few pints of blood out of you. The sicker you got the more blood he'd take. And if you died - well he said you were sick, didn't he?
A new book claims that most of our marketing professionals have been using the same approach to diagnose our businesses - with similarly erratic results. And he says that just like medicine, we must stop relying on myths, beliefs and assumptions. It's time to examine years of accumulated research into what really happens when a customer chooses your brand, and develop an evidence-based approach.
Byron Sharp is a professor at the University of South Australia and his new book, How brands grow (Oxford University Press), swings a hammer at some of the key beliefs and rules running our marketing operations for half a century.
For example, the belief that loyalty is the key to solid market growth, and that it is cheaper to hold an existing customer than hunt down a new one.
Not necessarily so, says Sharp. Through analysing years of research from the US, UK and Australia, he has set down principles - the Laws of Marketing he calls them - which have been overlooked or ignored by generations of marketing gurus.
Expensive, elaborate loyalty programmes are designed to prevent defections to the opposition. But he is able to show that each brand has its loyal base, and a percentage of defectors. This defection rate is remarkably constant between brands, with or without loyalty programmes.
His controversial advice is: rather than work so hard to retain a small percentage of your escaping customers, concentrate on catching part of the much larger group of customers defecting from your rivals.
Research also explains the weak or slow responsiveness of brands to advertising. Too often even large marketers do not spend enough - as a percentage of their market share - to make an immediate difference. Or they produce advertising that is just not good enough to be noticed.
Also when they stop advertising, the momentum carries on for some time and makes it hard for a marketing director to justify any increase in their budget. So the investment stays too low but eventually there is a visible decline.
He analyses the consumers who were exposed to regular advertising as opposed to those who were not. Even though they did not show immediate results, research revealed a definite decline in sales for the under-exposed.
Some of the book's revelations come as no surprise. The major factor in success is wide distribution and ready availability; people are more aware of ads that they like; and that clever, creative advertising is the way to attract attention. Most importantly - they are more likely to buy products with ads that they liked.
Of interest to me is what he says about memory structures. That you must be aware of your brand's image and produce ads that reinforce people's existing memory structure. In other words, that the ad should fit in with how they know the product, it should 'feel right'.
How brands grow will disappoint those looking for an academic text book. This is very lightly written for popular consumption.
It sets down ten laws of marketing. Most you know already under other names, but a few are genuinely surprising.
For someone who has read very little marketing literature, this would be a good primer. For everyone it is a reminder of the importance of continually researching your brand - and getting a realistic picture of who your customers are and what they are looking for in your product.
18 July, 2010
Make sure your consumer becomes a consumable
Melbourne Herald Sun, 17 July 2010
Leafing though an Officeworks catalogue I saw a good quality Hewlett-Packard colour printer for just $49. Doesn't seem so long ago that they were hundreds of dollars. Then on another page a range of HP coloured inks was selling at $85. "Ah yes," I thought, "and that's where HP get their money back".
The money's not in the printers, it's in the ongoing sale of inks, month after month. I've joked that next they'll put computer printers in Corn Flakes packets just to get them into our hands. (Yes it would be a very big Corn Flakes packet, but you know what I mean...)
If you're going to buy into a business, always check out the consumables connected to it. This can make the difference between struggle and big profits.
Four years ago when Gillette launched their new five-bladed Fusion shaver I was given a free razor and two blades as part of a promotion at my gym. Before that I'd wondered why on earth anyone would want five blades to shave with, and then just left it on the bathroom shelf for months.
But one day I tried it, it felt funny but seemed to work well, and I kept using it ever since - and buying packets of replacement blades. I now see that Britain's Office of Fair Trading is investigating allegations of price-fixing collusion between P & G (Gillette's parent) and major supermarkets.
One of their submissions says that the blades cost 10 cents to make. In my supermarket they are selling at $19 for four. So I think that by now I've paid for my razor.
For their cost, most popular cars do not have a high mark-up. On highly competitive models it can be ridiculously low. But have you noticed how all the dealerships have such bright, clean, well-managed service departments? Of course you'll take your precious new car to be serviced there. The first couple of years it's under warrantee and then it becomes a habit. And of course you'll insist on genuine spares, even if they do cost double. You've become a consumable.
From the States comes the story of the Toyota Prius. It seems some have had problems with their "high intensity discharge" headlamps. A number of them have needed replacement, which then highlights a little consumables problem: the HID lights can cost up to $2,000, including labour, to replace. And they're not covered by the warrantee. Ouch!
Have you been to a doctor or into a hospital lately? Now there's a market for consumables. Every hypodermic used once and destroyed. Sealed surgical packs opened, one or two items used, then everything dumped. The sterilisers and autoclaves gather cobwebs (metaphorically speaking - no cobwebs allowed in today's hospitals!) as truck-fulls of medical waste rumble out of the back gates.
What if you're selling a product that once purchased, will continue to do its job excellently for years? Well you have to turn it into a consumable. World business has got really good at this.
It was in 1960 that Vance Packard wrote in The Waste Makers about planned obsolescence: "The systematic attempt of business to make us wasteful, debt-ridden, permanently discontented individuals." That's a scheme that has certainly succeeded.
You've barely finished installing Windows Vista when Windows 7 comes along. You're all excited with your iPod and yet iPod 4 has arrived and is making your dearest look old. Your big old TV might still be working fine but it has probably been moved into the garage to make room for the new wide-screen plasma.
And as for your umpteen-thousand dollars worth of camera equipment - well that has all been made obsolete by so many wonderful digital cameras.
Don't think that I'm knocking consumables or planned obsolescence. They are an essential part of this economy we depend on. If Fords were made to last for ever and never need replacing, that would make Geelong obsolete, wouldn't it? (Sorry Geelong - just kidding.)
What do you think? Join in with a comment
Leafing though an Officeworks catalogue I saw a good quality Hewlett-Packard colour printer for just $49. Doesn't seem so long ago that they were hundreds of dollars. Then on another page a range of HP coloured inks was selling at $85. "Ah yes," I thought, "and that's where HP get their money back".
The money's not in the printers, it's in the ongoing sale of inks, month after month. I've joked that next they'll put computer printers in Corn Flakes packets just to get them into our hands. (Yes it would be a very big Corn Flakes packet, but you know what I mean...)
If you're going to buy into a business, always check out the consumables connected to it. This can make the difference between struggle and big profits.
Four years ago when Gillette launched their new five-bladed Fusion shaver I was given a free razor and two blades as part of a promotion at my gym. Before that I'd wondered why on earth anyone would want five blades to shave with, and then just left it on the bathroom shelf for months.
But one day I tried it, it felt funny but seemed to work well, and I kept using it ever since - and buying packets of replacement blades. I now see that Britain's Office of Fair Trading is investigating allegations of price-fixing collusion between P & G (Gillette's parent) and major supermarkets.
One of their submissions says that the blades cost 10 cents to make. In my supermarket they are selling at $19 for four. So I think that by now I've paid for my razor.
For their cost, most popular cars do not have a high mark-up. On highly competitive models it can be ridiculously low. But have you noticed how all the dealerships have such bright, clean, well-managed service departments? Of course you'll take your precious new car to be serviced there. The first couple of years it's under warrantee and then it becomes a habit. And of course you'll insist on genuine spares, even if they do cost double. You've become a consumable.
From the States comes the story of the Toyota Prius. It seems some have had problems with their "high intensity discharge" headlamps. A number of them have needed replacement, which then highlights a little consumables problem: the HID lights can cost up to $2,000, including labour, to replace. And they're not covered by the warrantee. Ouch!
Have you been to a doctor or into a hospital lately? Now there's a market for consumables. Every hypodermic used once and destroyed. Sealed surgical packs opened, one or two items used, then everything dumped. The sterilisers and autoclaves gather cobwebs (metaphorically speaking - no cobwebs allowed in today's hospitals!) as truck-fulls of medical waste rumble out of the back gates.
What if you're selling a product that once purchased, will continue to do its job excellently for years? Well you have to turn it into a consumable. World business has got really good at this.
It was in 1960 that Vance Packard wrote in The Waste Makers about planned obsolescence: "The systematic attempt of business to make us wasteful, debt-ridden, permanently discontented individuals." That's a scheme that has certainly succeeded.
You've barely finished installing Windows Vista when Windows 7 comes along. You're all excited with your iPod and yet iPod 4 has arrived and is making your dearest look old. Your big old TV might still be working fine but it has probably been moved into the garage to make room for the new wide-screen plasma.
And as for your umpteen-thousand dollars worth of camera equipment - well that has all been made obsolete by so many wonderful digital cameras.
Don't think that I'm knocking consumables or planned obsolescence. They are an essential part of this economy we depend on. If Fords were made to last for ever and never need replacing, that would make Geelong obsolete, wouldn't it? (Sorry Geelong - just kidding.)
What do you think? Join in with a comment
10 July, 2010
The gene for your brain
Melbourne Herald Sun, 10 July 2010.
This week I'm going to teach you a new word. It's doing the rounds of academia and is popular in the New York marketing cocktail party scene, so before long it will be on everyone's lips. I know my readers will enjoy being the first kids on the block to use it, so here it is. The word is 'meme', rhymes with cream.
Meme is the invention of Richard Dawkins, the Oxford professor who wrote The Selfish Gene, which describes how genetics and natural selection work. The meme is the social equivalent of the gene - the strand of DNA that determined whether you were born a human, an ape, or a fish.
In the same way, the meme is the germ of an idea that takes on its own life and grows - often in directions quite different from its original intention or meaning. Just in the past few weeks we saw a little meme become a world phenomenon: the vuvuzela. Did you know what one was a month ago? Does anyone in the world not know now?
There are lifestyle memes too. If you ever watch Mad Men, the TV series about advertising in the 60s, you'll soon feel ill from the constant smoking by every character. In the office, at home, in bed, full ashtrays everywhere. Unthinkable now. But just remember back a couple of decades at your own life and work...
This is the difference between a meme and a fad. Smoke-free environments are not a fad, they are here permanently. (So, alas, are vuvuzelas.)
Fashion is full of memes. Remember Cory Worthington's hoodie and sunnies? How many of those do you now seen on the streets of Melbourne? Mini skirts were thought a fashion item. Look around you, even in mid-winter - they are now ingrained in our girls' beings. And that fashion fad for faded blue jeans is still with us 50 years on - it's a meme.
Like genes, memes propagate and mutate. Like evolution, some flourish and grow while others eventually fail to reproduce and fade away.
The internet has provided the most fertile soil for memes. Men have developed a culture of regularly swapping and passing on jokes, funny commercials and sexy pictures. Women have their uplifting thoughts, pictures of sunsets and babies and meditations. (Mind you they also have their jokes and smut, but not as much as men, I think.)
These activities don't come from a compulsion to talk or nudge ribs. Rather they are a way of maintaining contact, telling each other they are still alive. If you want to get evolutionary, it's the modern equivalent of grooming the fleas out of each other's hair.
Smart marketers will spot a meme rising and jump on. Think about espresso machines. You'll scarcely find a café or even milk bar without one. Now it is becoming an essential for every good home. If only you'd had shares in Italian kitchenware importers a decade ago! And the early buyers of the coffee house franchises were able to pick the best sites and get in early.
I'm forever awed by the Paul Potts story and how one song on the internet propelled a good (but not great) singer to world fame, creating a meme that was later duplicated by Susan Boyle, proving that looks and age are no barrier when the meme is on the roll.
A Canadian called Gregory Levey wrote a book called "Shut up I'm talking" and promoted it on Facebook. Before long he had 700,000 fans. Not for his book, which was in fact about international diplomacy, but because the phrase generated a meme. The big question is, how can he turn those fans into book buyers?
There is now an academic field called Memetics which has generated books and PhD dissertations on the topic. Both scientists and philosophers are fascinated by the process of propagating thoughts and ideas.
Marketers, I'm afraid, are a bit more crass. We look on with deep interest and wonder how we can make a quid out of it.
This week I'm going to teach you a new word. It's doing the rounds of academia and is popular in the New York marketing cocktail party scene, so before long it will be on everyone's lips. I know my readers will enjoy being the first kids on the block to use it, so here it is. The word is 'meme', rhymes with cream.
Meme is the invention of Richard Dawkins, the Oxford professor who wrote The Selfish Gene, which describes how genetics and natural selection work. The meme is the social equivalent of the gene - the strand of DNA that determined whether you were born a human, an ape, or a fish.
In the same way, the meme is the germ of an idea that takes on its own life and grows - often in directions quite different from its original intention or meaning. Just in the past few weeks we saw a little meme become a world phenomenon: the vuvuzela. Did you know what one was a month ago? Does anyone in the world not know now?
There are lifestyle memes too. If you ever watch Mad Men, the TV series about advertising in the 60s, you'll soon feel ill from the constant smoking by every character. In the office, at home, in bed, full ashtrays everywhere. Unthinkable now. But just remember back a couple of decades at your own life and work...
This is the difference between a meme and a fad. Smoke-free environments are not a fad, they are here permanently. (So, alas, are vuvuzelas.)
Fashion is full of memes. Remember Cory Worthington's hoodie and sunnies? How many of those do you now seen on the streets of Melbourne? Mini skirts were thought a fashion item. Look around you, even in mid-winter - they are now ingrained in our girls' beings. And that fashion fad for faded blue jeans is still with us 50 years on - it's a meme.
Like genes, memes propagate and mutate. Like evolution, some flourish and grow while others eventually fail to reproduce and fade away.
The internet has provided the most fertile soil for memes. Men have developed a culture of regularly swapping and passing on jokes, funny commercials and sexy pictures. Women have their uplifting thoughts, pictures of sunsets and babies and meditations. (Mind you they also have their jokes and smut, but not as much as men, I think.)
These activities don't come from a compulsion to talk or nudge ribs. Rather they are a way of maintaining contact, telling each other they are still alive. If you want to get evolutionary, it's the modern equivalent of grooming the fleas out of each other's hair.
Smart marketers will spot a meme rising and jump on. Think about espresso machines. You'll scarcely find a café or even milk bar without one. Now it is becoming an essential for every good home. If only you'd had shares in Italian kitchenware importers a decade ago! And the early buyers of the coffee house franchises were able to pick the best sites and get in early.
I'm forever awed by the Paul Potts story and how one song on the internet propelled a good (but not great) singer to world fame, creating a meme that was later duplicated by Susan Boyle, proving that looks and age are no barrier when the meme is on the roll.
A Canadian called Gregory Levey wrote a book called "Shut up I'm talking" and promoted it on Facebook. Before long he had 700,000 fans. Not for his book, which was in fact about international diplomacy, but because the phrase generated a meme. The big question is, how can he turn those fans into book buyers?
There is now an academic field called Memetics which has generated books and PhD dissertations on the topic. Both scientists and philosophers are fascinated by the process of propagating thoughts and ideas.
Marketers, I'm afraid, are a bit more crass. We look on with deep interest and wonder how we can make a quid out of it.
03 July, 2010
Can Gillard save the Labor brand?
Melbourne Herald Sun, 3 July, 2010.
It sounded more like a marketing convention than political comment. Out of your paper, your telly, your computer came a flood of warnings: "Brand Rudd is terminally damaged", "The Kevin 07 brand has lost its lustre", "Labor's brand-damaging decisions". No wonder the cereal box had to be taken off the shelves and replaced with another one.
Now we have a New! Brighter! More Concentrated! product. But the question is, can it regain market leadership after such a battering?
These days political honeymoons last barely as long as the trip back from the registry office, so Julia Gillard can't rely on that to pull her across the line. Then what are Labor's marketing options for promoting themselves back into public favour, and how can the Libs stop them?
To start with they have to clear the debris off the decks. The resources tax advertising has quickly been hammered into a modified, negotiated package.
The miners knew that there was no way the tax would be dropped - no government was going to allow them to carve shiploads of money out of our soil without paying out a substantial slice. And it was obvious the Libs weren't going to rescue them - Tony Abbott has already started spending the money.
I do wish that political parties would stop decrying government advertising. Every opposition always swears that it will not use public advertising to promote its cause, and every one is revealed a liar once it gets into power.
But we the public need to get real too. We put such ridiculous demands on our politicians, such impossible standards which inevitably dissolve in the face of reality. Like this government coming under the multi-million dollar shock and awe attack of the miners. Of course they were going to dip into the treasury and fight back. Honestly, we act like the girl who believes her boyfriend doesn't have sex on his mind when he suggests a weekend in the country.
Expect to see a "happy schools" campaign to diffuse the coming attacks on Julia Gillard. The public needs to be assured that the benefits of the education spend are greater than a few screw-ups. And it's a weak spot you can bet Tony Abbot will be kicking with gusto because it's one of the few chinks in the PM's armour.
I asked the opinion of the best campaign strategist Labor ever had. Bob Hogg showed John Cain how to win, then repeatedly plotted the electoral victories for Bob Hawke. His last campaign was perhaps the most satisfying - stealing John Howard's seat with his partner Maxine McKew.
"They should concentrate on projecting their programs," said Hogg, "Don't spend time bagging Abbott - Gillard should not be associated with anything negative."
He also warns about jumping in response to opinion polls and "All the stupidity that comes out of Facebook and Twitter," which comes from very small groups and doesn't represent the public.
But Hogg was the one who invented closely managed election polling. Has he changed his mind? "No, you need research to give you information, but you don't let it run your life".
Everyone I speak to makes the same comments: that Kevin Rudd micro-managed obsessively and did not allow air to the others in his party, not the caucus nor even the cabinet. So we can expect Gillard to be much more inclusive and communicative.
This is where advertising can play a part. Not as the main thrust but as embroidery and expansion of the message. The Government needs to tell people what it is thinking and what's going on. And do it before it launches ready-made bills.
President Barak Obama has had a similar up and down ride. Fortunately for him he has no caucus to pull the plug.
But right from the start of his administration he has maintained an important link with any who care to take it. Every Saturday the White House blog loads a video address from the President. It may be just three minutes, or five, but enough to explain one of the week's topics. Not a bad idea, and you don't even have to face the charge of misusing public funds.
The Labor Government was taken by surprise at the ferocity of reaction to its carbon trading backdown. It was too busy watching the Libs and Greens across Parliament's floor and hadn't expected the massive scream that would come from its own supporters.
Mark up another topic for a coming public information campaign - once they have worked out what that information might be.
The Opposition has the hard task of kicking the Government's policies without beating up on a poor little girl. You can expect all kinds of lobby groups to pop up and run campaigns doing the dirty work, secretly guided from Abbott's office. The Government will be using the unions and others in the same way.
As for the Greens, reliable sources say that they have been gathering together their electoral funding from all over the country - they are paid $225 for every vote - and consolidating it into a killer treasure chest. Their target is Lindsey Tanner's vacated seat of Melbourne. Having taken a prime minister's head through their choking of the emissions trading scheme, their next political move is a seat in the Reps.
Now we can expect to see much of that money spent on Melbourne television through lots of very Green ads.
The Prime Minister made a smart political move by declaring that she would not take The Lodge until she won it outright. It gives a focus to the coming campaign ("Let's get Julia into The Lodge!") and an excuse for an early election.
If, this time next year, she's still in power and things get rocky again, she has another card up her sleeve. Australia's equivalent to a royal wedding. After all, that did wonders for Scott and Charlene's ratings.
It sounded more like a marketing convention than political comment. Out of your paper, your telly, your computer came a flood of warnings: "Brand Rudd is terminally damaged", "The Kevin 07 brand has lost its lustre", "Labor's brand-damaging decisions". No wonder the cereal box had to be taken off the shelves and replaced with another one.
Now we have a New! Brighter! More Concentrated! product. But the question is, can it regain market leadership after such a battering?
These days political honeymoons last barely as long as the trip back from the registry office, so Julia Gillard can't rely on that to pull her across the line. Then what are Labor's marketing options for promoting themselves back into public favour, and how can the Libs stop them?
To start with they have to clear the debris off the decks. The resources tax advertising has quickly been hammered into a modified, negotiated package.
The miners knew that there was no way the tax would be dropped - no government was going to allow them to carve shiploads of money out of our soil without paying out a substantial slice. And it was obvious the Libs weren't going to rescue them - Tony Abbott has already started spending the money.
I do wish that political parties would stop decrying government advertising. Every opposition always swears that it will not use public advertising to promote its cause, and every one is revealed a liar once it gets into power.
But we the public need to get real too. We put such ridiculous demands on our politicians, such impossible standards which inevitably dissolve in the face of reality. Like this government coming under the multi-million dollar shock and awe attack of the miners. Of course they were going to dip into the treasury and fight back. Honestly, we act like the girl who believes her boyfriend doesn't have sex on his mind when he suggests a weekend in the country.
Expect to see a "happy schools" campaign to diffuse the coming attacks on Julia Gillard. The public needs to be assured that the benefits of the education spend are greater than a few screw-ups. And it's a weak spot you can bet Tony Abbot will be kicking with gusto because it's one of the few chinks in the PM's armour.
I asked the opinion of the best campaign strategist Labor ever had. Bob Hogg showed John Cain how to win, then repeatedly plotted the electoral victories for Bob Hawke. His last campaign was perhaps the most satisfying - stealing John Howard's seat with his partner Maxine McKew.
"They should concentrate on projecting their programs," said Hogg, "Don't spend time bagging Abbott - Gillard should not be associated with anything negative."
He also warns about jumping in response to opinion polls and "All the stupidity that comes out of Facebook and Twitter," which comes from very small groups and doesn't represent the public.
But Hogg was the one who invented closely managed election polling. Has he changed his mind? "No, you need research to give you information, but you don't let it run your life".
Everyone I speak to makes the same comments: that Kevin Rudd micro-managed obsessively and did not allow air to the others in his party, not the caucus nor even the cabinet. So we can expect Gillard to be much more inclusive and communicative.
This is where advertising can play a part. Not as the main thrust but as embroidery and expansion of the message. The Government needs to tell people what it is thinking and what's going on. And do it before it launches ready-made bills.
President Barak Obama has had a similar up and down ride. Fortunately for him he has no caucus to pull the plug.
But right from the start of his administration he has maintained an important link with any who care to take it. Every Saturday the White House blog loads a video address from the President. It may be just three minutes, or five, but enough to explain one of the week's topics. Not a bad idea, and you don't even have to face the charge of misusing public funds.
The Labor Government was taken by surprise at the ferocity of reaction to its carbon trading backdown. It was too busy watching the Libs and Greens across Parliament's floor and hadn't expected the massive scream that would come from its own supporters.
Mark up another topic for a coming public information campaign - once they have worked out what that information might be.
The Opposition has the hard task of kicking the Government's policies without beating up on a poor little girl. You can expect all kinds of lobby groups to pop up and run campaigns doing the dirty work, secretly guided from Abbott's office. The Government will be using the unions and others in the same way.
As for the Greens, reliable sources say that they have been gathering together their electoral funding from all over the country - they are paid $225 for every vote - and consolidating it into a killer treasure chest. Their target is Lindsey Tanner's vacated seat of Melbourne. Having taken a prime minister's head through their choking of the emissions trading scheme, their next political move is a seat in the Reps.
Now we can expect to see much of that money spent on Melbourne television through lots of very Green ads.
The Prime Minister made a smart political move by declaring that she would not take The Lodge until she won it outright. It gives a focus to the coming campaign ("Let's get Julia into The Lodge!") and an excuse for an early election.
If, this time next year, she's still in power and things get rocky again, she has another card up her sleeve. Australia's equivalent to a royal wedding. After all, that did wonders for Scott and Charlene's ratings.
27 June, 2010
The mobile phone wars are far from over - they’ve only just begun.
Herald Sun 26 June 2010
The mobile phone wars are hotting up with a new intensity of competition. The reason, of course, is the Apple iPhone. And the question is, has Steve Jobs given the sector a shot of adrenalin - or is he vampiring all of the blood for himself?
You see, last year because of the Greedy Financiers' Cataclysm (GFC) the mobile phone market took a sharp dip. The junk bond traders and barrow boys could no longer afford a new phone a week so sales and turnover declined.
But by this year it has recovered, globally up by 22 per cent in the first quarter, selling nearly 300 million units. The impetus has come from smart phones. After all, who wants to be seen with a dumb phone these days?
In the US it's still Blackberry in the lead with iPhone, the newcomer, hard on their heels. Already between them they have nearly 60 per cent of the market.
Here in Australia, Nokia is still the king. But market research analyst IDC predict that Apple will knock the Fin off its throne by Christmas.
The claim has some credence in the street. One phone store was asked, "Are the iPhones selling well?" Their reply, "We haven't been selling anything else all month." There is a definite swelling momentum at work here that could sweep all before it.
So I wondered, well the other companies aren't dummies, they're hardly going to pack up and go home, they must have some strategies up their sleeves. What's the plan?
Nokia were tight-lipped about Apple’s predicted triumph, but they did declare they have the lion's share of the smartphone market in Australia - without nominating a figure.
Their hopes are resting on the new model N8, to be released October-December. This has more bells and whistles than a theatre organ: 12MP camera, high definition video, web TV - and a big graphic screen just like the iPhone's. They have obviously been burning a lot of midnight oil in Helsinki.
The other big hitters are also slugging away. Google's Android operating system is fuelling new magic from the likes of HTC and Motorola, while Microsoft are about to launch their new Windows Phone 7; their current customers include Samsung and Palm.
Where iPhone has won big-time is in the apps race. Two years ago Blackberry had thousands of apps yet Apple had but a handful. Today Apple claim 150,000 apps while Blackberry App World has 15,000 at the most. What went wrong?
"Blackberry didn't focus on apps, Apple did," explained a BB observer. "Also, they don't do their own above the line advertising, just leave it to the carriers, and Apple swamped them." Not controlling your own advertising is like driving from the back of the truck.
This is where good marketing counts and as I've often said, there's no better marketer than Jobs. He has sold iPhone directly to the public, creating a sucking vortex that the resellers can't ignore.
"Resellers hate iPhone, they don't make money out of it," explained the observer. "Jobs put all their money into marketing and has given the guys in the middle nothing."
Nokia also took a swipe at Apple. "We're not a one size fits all company," sniffed a spokeswoman. "We're able to deliver a range of handsets across different price points to different customers."
As if to prove the point, Nokia recently released its Bicycle Charger Kit, like a bike light generator you plug your phone into. It’s aimed at the Third World, one of the biggest growth markets. In South America or darkest Africa, even if they don't have electricity, they can charge their phones as they ride to work. Try that with an iPhone.
The mobile phone wars are hotting up with a new intensity of competition. The reason, of course, is the Apple iPhone. And the question is, has Steve Jobs given the sector a shot of adrenalin - or is he vampiring all of the blood for himself?
You see, last year because of the Greedy Financiers' Cataclysm (GFC) the mobile phone market took a sharp dip. The junk bond traders and barrow boys could no longer afford a new phone a week so sales and turnover declined.
But by this year it has recovered, globally up by 22 per cent in the first quarter, selling nearly 300 million units. The impetus has come from smart phones. After all, who wants to be seen with a dumb phone these days?
In the US it's still Blackberry in the lead with iPhone, the newcomer, hard on their heels. Already between them they have nearly 60 per cent of the market.
Here in Australia, Nokia is still the king. But market research analyst IDC predict that Apple will knock the Fin off its throne by Christmas.
The claim has some credence in the street. One phone store was asked, "Are the iPhones selling well?" Their reply, "We haven't been selling anything else all month." There is a definite swelling momentum at work here that could sweep all before it.
So I wondered, well the other companies aren't dummies, they're hardly going to pack up and go home, they must have some strategies up their sleeves. What's the plan?
Nokia were tight-lipped about Apple’s predicted triumph, but they did declare they have the lion's share of the smartphone market in Australia - without nominating a figure.
Their hopes are resting on the new model N8, to be released October-December. This has more bells and whistles than a theatre organ: 12MP camera, high definition video, web TV - and a big graphic screen just like the iPhone's. They have obviously been burning a lot of midnight oil in Helsinki.
The other big hitters are also slugging away. Google's Android operating system is fuelling new magic from the likes of HTC and Motorola, while Microsoft are about to launch their new Windows Phone 7; their current customers include Samsung and Palm.
Where iPhone has won big-time is in the apps race. Two years ago Blackberry had thousands of apps yet Apple had but a handful. Today Apple claim 150,000 apps while Blackberry App World has 15,000 at the most. What went wrong?
"Blackberry didn't focus on apps, Apple did," explained a BB observer. "Also, they don't do their own above the line advertising, just leave it to the carriers, and Apple swamped them." Not controlling your own advertising is like driving from the back of the truck.
This is where good marketing counts and as I've often said, there's no better marketer than Jobs. He has sold iPhone directly to the public, creating a sucking vortex that the resellers can't ignore.
"Resellers hate iPhone, they don't make money out of it," explained the observer. "Jobs put all their money into marketing and has given the guys in the middle nothing."
Nokia also took a swipe at Apple. "We're not a one size fits all company," sniffed a spokeswoman. "We're able to deliver a range of handsets across different price points to different customers."
As if to prove the point, Nokia recently released its Bicycle Charger Kit, like a bike light generator you plug your phone into. It’s aimed at the Third World, one of the biggest growth markets. In South America or darkest Africa, even if they don't have electricity, they can charge their phones as they ride to work. Try that with an iPhone.
20 June, 2010
Sometimes you need the Big Ugly Sign
Melbourne Herald Sun 19 June, 2010
One of our busiest business trainers, Brendan Nichols, has a good story he delivers at some of his seminars. It’s called “The Big Ugly Sign Theory”.
He speaks of a block of land he owned in an upmarket area. It had beautiful ocean views and he gave it to a local estate agent to sell. They put up a smart display board and waited for two months, with very little interest.
So Brendan decided to do it himself. He hammered a big sheet of plywood to a pole and hand-painted on it: “Private Sale - Good price - Phone xxxxxxxx now”. As he describes it, “The phone rang off the hook and I sold the land”.
Now this story is painful for those of us who spent much of our lives perfecting the art and craft of advertising creation. We want to the ad to look beautiful, the headline to be clever, for people to comment on what a lovely ad it is.
But I have to admit that this is not always what the product needs. Sometimes you have to tone down. So what’s the theory behind Brendan’s story? Well if you look around you, there’s a forest of real estate signs from the big house agents. Each is bigger and glossier than the last.
What the scrawled sign did was signal that this was a vendor sale. Probably they weren’t very sophisticated, maybe it was a chance to get the block for a cheaper “straight from the farm” price. It was certainly enough to stand out and spark interest.
Of course if everybody had hand-made signs on every sale property, it would then be the fancy billboard that would attract the interest.
It’s a fine call to decide which way to go, which is why you call in a professional - if they’re good, they can make that fine judgement. Do you need the glossy brochure and inserts to say that you are a wealthy, successful company they can trust. Or do you photocopy a sheet of paper to say you are honest, down-to-earth and cheap?
Well if you’re a bank, nobody would believe the second anyway. But the first can work in the right context. Like the retailer I once heard about. His shoe sales were going very slowly so he pulled out several dozen shoes of all types, piled them on a large table near the door, and put up a big sign saying: “Run-out discount sale, check for sizes”.
Soon the table was surrounded by shoppers pulling out shoes, checking them for size - and he soon sold his stock. In the right context, yes it can work.
Another of my clever friends is Bill Shannon who has an agency called Shannon’s Way. A few years ago he mentioned that one of his campaigns was for the Industry Superannuation Funds. “What,” I accused, “don’t tell me you’re responsible for those terrible ads with that wooden Bernie Fraser recommending the investment funds?” The former Reserve Bank Governor might be a clever chap but he ain’t no matinee idol - or exciting presenter.
Bill grinned, “Yeah, that’s us, aren’t they wonderful? They’ve got to be some of the most boring ads on TV - and they work like gang-busters!” Of course. He’s selling people their most important decision - where to invest their life’s savings. They don’t want to give their money to a flashy car-salesman. They will believe someone who is steady, dull and boring. (Sorry Bernie, nothing personal.)
Money is a serious business and we want to believe that the people handling ours are reliable, serious, even boring people.
Come to think of it, that’s also Kevin Rudd’s secret of success. (Sorry Kevin...)
One of our busiest business trainers, Brendan Nichols, has a good story he delivers at some of his seminars. It’s called “The Big Ugly Sign Theory”.
He speaks of a block of land he owned in an upmarket area. It had beautiful ocean views and he gave it to a local estate agent to sell. They put up a smart display board and waited for two months, with very little interest.
So Brendan decided to do it himself. He hammered a big sheet of plywood to a pole and hand-painted on it: “Private Sale - Good price - Phone xxxxxxxx now”. As he describes it, “The phone rang off the hook and I sold the land”.
Now this story is painful for those of us who spent much of our lives perfecting the art and craft of advertising creation. We want to the ad to look beautiful, the headline to be clever, for people to comment on what a lovely ad it is.
But I have to admit that this is not always what the product needs. Sometimes you have to tone down. So what’s the theory behind Brendan’s story? Well if you look around you, there’s a forest of real estate signs from the big house agents. Each is bigger and glossier than the last.
What the scrawled sign did was signal that this was a vendor sale. Probably they weren’t very sophisticated, maybe it was a chance to get the block for a cheaper “straight from the farm” price. It was certainly enough to stand out and spark interest.
Of course if everybody had hand-made signs on every sale property, it would then be the fancy billboard that would attract the interest.
It’s a fine call to decide which way to go, which is why you call in a professional - if they’re good, they can make that fine judgement. Do you need the glossy brochure and inserts to say that you are a wealthy, successful company they can trust. Or do you photocopy a sheet of paper to say you are honest, down-to-earth and cheap?
Well if you’re a bank, nobody would believe the second anyway. But the first can work in the right context. Like the retailer I once heard about. His shoe sales were going very slowly so he pulled out several dozen shoes of all types, piled them on a large table near the door, and put up a big sign saying: “Run-out discount sale, check for sizes”.
Soon the table was surrounded by shoppers pulling out shoes, checking them for size - and he soon sold his stock. In the right context, yes it can work.
Another of my clever friends is Bill Shannon who has an agency called Shannon’s Way. A few years ago he mentioned that one of his campaigns was for the Industry Superannuation Funds. “What,” I accused, “don’t tell me you’re responsible for those terrible ads with that wooden Bernie Fraser recommending the investment funds?” The former Reserve Bank Governor might be a clever chap but he ain’t no matinee idol - or exciting presenter.
Bill grinned, “Yeah, that’s us, aren’t they wonderful? They’ve got to be some of the most boring ads on TV - and they work like gang-busters!” Of course. He’s selling people their most important decision - where to invest their life’s savings. They don’t want to give their money to a flashy car-salesman. They will believe someone who is steady, dull and boring. (Sorry Bernie, nothing personal.)
Money is a serious business and we want to believe that the people handling ours are reliable, serious, even boring people.
Come to think of it, that’s also Kevin Rudd’s secret of success. (Sorry Kevin...)
12 June, 2010
All Blacks are a brain strain
Melbourne Herald Sun 12 June, 2010
A few months ago I helped out at an agency that needed some web-page copy written urgently. The client was a manufacturer of breakfast cereals, the market was New Zealand and the promotion was all about rugby and All Blacks.
So for the few days I had to think like a teenage Kiwi rugby-tragic All Blacks fanatic. It was a strain on the brain cells I can tell you. I never understood rugby even in my own teens.
But in business you often find yourself having to think through the mind of a customer who is not the least bit like you. And you have to be convincing.
This calls for that much overused word “empathy”. It’s different from sympathy. It means feeling what they are feeling, from the inside, taking aboard their likes and dislikes and even prejudices.
A US research firm has been doing a lot of work on this, and has put people into 16 different categories. For example, people like me, in advertising or journalism, they put in a class called “word” people. Probably you would fit in that too.
But these people make up just 18.5 per cent of the population, who do much of the talking to everyone else.
The trouble is that the ads we create tend to appeal to other word people - like the clients and their marketing managers - and maybe don’t strike the right note with the rest of the population.
The company, Xyte Inc, did tests on TV commercials. And found that these ads tend to do disproportionately well with word people.
The company’s CEO, Larry Burns, was not surprised. “This is happening more often than we would like to admit," he said. While agencies are briefed on their target markets, they also want the clients and their own peers to like the ads. “We like to talk. We like word problems. We like to express ourselves. "
But often this is not what appeals to the customers. They don’t want to know how clever you are, they want to know if the product will give them what they want - in tangible, understandable terms.
Another category Xyte calls the "hands". These are people who prefer working with their hands. Their focus is much more immediate and practical. And they make up 30% of the population, a bigger portion than word group. "They like touching things, tangible things, and they often don't like ads that appeal to word people," says Burns.
Anyone who’s raised a child knows that they emerge from the womb hard-wired with certain personality traits, likes and dislikes, that no amount of training or enforcement will change. So it is that a person will be dismal in one environment yet exceptional in another.
A product or advertisement will appeal to one set of people but turn off another. It’s important to know the market for each product - and when you identify those who react against it, you can vary your message accordingly.
This you can only do by studying your audience - your customers. Talking to them and understanding their view of the world. The researchers say they are “segmented via patterns of predictability in media, messaging and purchase”. In plain English, if you know your customers and their core attitudes, this will tell you what to say and where to reach them.
Because the fact is that conventional classifications don’t necessarily work. A middle aged woman and a teenage boy might respond to the same stimulus (“Carn the All Blacks!”) while two adult men might totally disagree with each other on a product or issue (“Magpies!”, “Blues!”).
A few months ago I helped out at an agency that needed some web-page copy written urgently. The client was a manufacturer of breakfast cereals, the market was New Zealand and the promotion was all about rugby and All Blacks.
So for the few days I had to think like a teenage Kiwi rugby-tragic All Blacks fanatic. It was a strain on the brain cells I can tell you. I never understood rugby even in my own teens.
But in business you often find yourself having to think through the mind of a customer who is not the least bit like you. And you have to be convincing.
This calls for that much overused word “empathy”. It’s different from sympathy. It means feeling what they are feeling, from the inside, taking aboard their likes and dislikes and even prejudices.
A US research firm has been doing a lot of work on this, and has put people into 16 different categories. For example, people like me, in advertising or journalism, they put in a class called “word” people. Probably you would fit in that too.
But these people make up just 18.5 per cent of the population, who do much of the talking to everyone else.
The trouble is that the ads we create tend to appeal to other word people - like the clients and their marketing managers - and maybe don’t strike the right note with the rest of the population.
The company, Xyte Inc, did tests on TV commercials. And found that these ads tend to do disproportionately well with word people.
The company’s CEO, Larry Burns, was not surprised. “This is happening more often than we would like to admit," he said. While agencies are briefed on their target markets, they also want the clients and their own peers to like the ads. “We like to talk. We like word problems. We like to express ourselves. "
But often this is not what appeals to the customers. They don’t want to know how clever you are, they want to know if the product will give them what they want - in tangible, understandable terms.
Another category Xyte calls the "hands". These are people who prefer working with their hands. Their focus is much more immediate and practical. And they make up 30% of the population, a bigger portion than word group. "They like touching things, tangible things, and they often don't like ads that appeal to word people," says Burns.
Anyone who’s raised a child knows that they emerge from the womb hard-wired with certain personality traits, likes and dislikes, that no amount of training or enforcement will change. So it is that a person will be dismal in one environment yet exceptional in another.
A product or advertisement will appeal to one set of people but turn off another. It’s important to know the market for each product - and when you identify those who react against it, you can vary your message accordingly.
This you can only do by studying your audience - your customers. Talking to them and understanding their view of the world. The researchers say they are “segmented via patterns of predictability in media, messaging and purchase”. In plain English, if you know your customers and their core attitudes, this will tell you what to say and where to reach them.
Because the fact is that conventional classifications don’t necessarily work. A middle aged woman and a teenage boy might respond to the same stimulus (“Carn the All Blacks!”) while two adult men might totally disagree with each other on a product or issue (“Magpies!”, “Blues!”).
06 June, 2010
Sing a song to sell Australia
Melbourne Herald Sun, 5 June 2010
Can you believe that the United States created its first tourism board just a month ago? Before that they have always believed that tourists will come of their own accord, while local states did their own promotions.
But then a survey - by a British company, Oxford Economics no less - concluded that were the yanks to stir themselves, they could attract an additional 1.6 million tourists a year. And an extra $4 billion to their economy. Handy even by US standards.
So finally President Barak Obama signed the Travel Promotion Act - under severe criticism from Republicans of course - and enacted a $10 surcharge on every non-visa visitor to America, as a donation to the cause.
Of course here in Australia we read this with disbelief. Tourism campaigns have been so much of our national life and psyche, for so many years.
Like them or not, we are all aware of the campaigns of the past 30 years, and the fact that they have dragged millions of the curious half way around the world to stare at our kangaroos and empty spaces.
The grandaddy of them all is our favourite grandaddy (well most of us), Paul Hogan in the “Put a shrimp on the barbie” campaign. This Mojo Advertising gem pushed Australia up the US “Dream Destination” research stakes - from number 78 to number one in a matter of months, and it stayed there for 20 years. So don’t say that advertising doesn’t work.
The problem then becomes, how do you follow up on such a huge success? You try to be clever and that isn’t always easy. “Where the bloody hell are you?” was clever but also a major public relations problem. Sure, no publicity is bad publicity as PT Barnum said, and it made us top of the world talkback charts for a while, but a campaign that is banned in several of the key countries is really not very effective.
Baz Luhrman then strode onto the stage with a campaign based around his blockbuster Australia. Alas it didn’t do a huge amount of good for either the movie or the country, but it was a short-term stopgap.
This week Australia launched its new TV campaign and this one is “designed for the next 10 years” says the Tourism Commission with lots of hope and hyperbole.
You’ll see it soon enough. It starts with lone voices, mostly pretty bad, and a piano on the beach (borrowed from New Zealand?). Bit by bit it grows into a catchy anthem, with the usual surf and koalas, Ayers Rock, Kangaroos and helicopter shots. In fact it’s like an amalgam of every tourist ad you’ve ever seen, including barbies and schooners of beer thrust at the lens.
But I can’t be too critical. After all, this is what will bring the punters in. We have to appeal to their dreams and fantasies. Canada’s “Locals Know” campaign has helicopter shots of the Rockies, grizzleys frolicking and snaking snow trails.
South Africa is being clever in its World Cup run-up, with a campaign called “Do the Diski dance”, showing individuals from schoolboy to waitress to footballer - no not singing, but dancing. They’re all bouncing from side to side to a very South African tune and inevitably become a crowd.
Then New Zealand has its 100% New Zealand ads, with lots of helicopters over mountain tops and restaurants in the vineyards. Ah yes, show them what they want to see.
In fact the cleverest ad was one I reported on nearly a year ago, from Australia. That “Best job in the world” campaign that turned a million dollar investment into a hundred million dollars worth of free publicity. But these you only see once in a lifetime.
ray@ebeatty.com
Can you believe that the United States created its first tourism board just a month ago? Before that they have always believed that tourists will come of their own accord, while local states did their own promotions.
But then a survey - by a British company, Oxford Economics no less - concluded that were the yanks to stir themselves, they could attract an additional 1.6 million tourists a year. And an extra $4 billion to their economy. Handy even by US standards.
So finally President Barak Obama signed the Travel Promotion Act - under severe criticism from Republicans of course - and enacted a $10 surcharge on every non-visa visitor to America, as a donation to the cause.
Of course here in Australia we read this with disbelief. Tourism campaigns have been so much of our national life and psyche, for so many years.
Like them or not, we are all aware of the campaigns of the past 30 years, and the fact that they have dragged millions of the curious half way around the world to stare at our kangaroos and empty spaces.
The grandaddy of them all is our favourite grandaddy (well most of us), Paul Hogan in the “Put a shrimp on the barbie” campaign. This Mojo Advertising gem pushed Australia up the US “Dream Destination” research stakes - from number 78 to number one in a matter of months, and it stayed there for 20 years. So don’t say that advertising doesn’t work.
The problem then becomes, how do you follow up on such a huge success? You try to be clever and that isn’t always easy. “Where the bloody hell are you?” was clever but also a major public relations problem. Sure, no publicity is bad publicity as PT Barnum said, and it made us top of the world talkback charts for a while, but a campaign that is banned in several of the key countries is really not very effective.
Baz Luhrman then strode onto the stage with a campaign based around his blockbuster Australia. Alas it didn’t do a huge amount of good for either the movie or the country, but it was a short-term stopgap.
This week Australia launched its new TV campaign and this one is “designed for the next 10 years” says the Tourism Commission with lots of hope and hyperbole.
You’ll see it soon enough. It starts with lone voices, mostly pretty bad, and a piano on the beach (borrowed from New Zealand?). Bit by bit it grows into a catchy anthem, with the usual surf and koalas, Ayers Rock, Kangaroos and helicopter shots. In fact it’s like an amalgam of every tourist ad you’ve ever seen, including barbies and schooners of beer thrust at the lens.
But I can’t be too critical. After all, this is what will bring the punters in. We have to appeal to their dreams and fantasies. Canada’s “Locals Know” campaign has helicopter shots of the Rockies, grizzleys frolicking and snaking snow trails.
South Africa is being clever in its World Cup run-up, with a campaign called “Do the Diski dance”, showing individuals from schoolboy to waitress to footballer - no not singing, but dancing. They’re all bouncing from side to side to a very South African tune and inevitably become a crowd.
Then New Zealand has its 100% New Zealand ads, with lots of helicopters over mountain tops and restaurants in the vineyards. Ah yes, show them what they want to see.
In fact the cleverest ad was one I reported on nearly a year ago, from Australia. That “Best job in the world” campaign that turned a million dollar investment into a hundred million dollars worth of free publicity. But these you only see once in a lifetime.
ray@ebeatty.com
29 May, 2010
What’s the real cost of your advertising?
Melbourne Herald Sun, 29 May 2010
“I have to promote this little product. Is there any way to get free advertising for it?” At some stage every client asks that question of their agency and you give them the stock reply: “If I knew how to get advertising for free I’d have an endless supply of clients and be much richer than I am.”
The simple fact is that no, there is no free advertising, always it ends up costing you - usually according to the number of people seeing it. That’s why you need to do your sums on a “cost per thousand” basis - how much does each unit of a thousand readers, viewers, listeners, passers-by or whatever, cost?
You’ll sometimes find that a small publication works out more expensive than a big medium like TV or a newspaper.
For example the Wool Knitters’ Monthly may cost $1000 to reach its 5000 readers - 20c a reader. Whereas a TV commercial might cost $10,000 to reach 500,000 viewers. Only two cents a viewer. So which is the better buy?
Now if you are selling ice creams or draught beer, you’ll want as big an audience as possible so obviously the commercial is the way to go. But if you are a wool mill selling hand-knitting yarn, you’re looking for a small specialised market and it may well be worth 20c to reach each granny.
These days advertising is being expected to do a great deal. Think of advertising from your younger days and you’ll remember some department store and job ads in the papers, endless second-hand car commercials on telly. All right I’m exaggerating as usual, but memory does recall a simpler time, doesn’t it?
These days advertising is being expected to carry massive burdens. Like much of the cost of the internet for a start. All these billion-dollar deals involving Google and Microsoft, Times Warner and this paper’s parent News Limited, make almost weekly headlines. Just this month an online publisher called Associated Content was sold to Yahoo! for $110 million. It was founded in 2005 by a Luke Beatty. I must find out if we are related - he may get a visit from his Australian second cousin.
So much money being invested all round, and what’s going to pay for it all? Advertising. So there’s this massive expectation of how much money it’s going to generate, and that’s not forgetting all the myriad current media that still expect to make profits. Free advertising? Forget it.
However there are still cheap ways to do it. I’m frequently amused by a Prahran “fashion” clothing discounter which advertises its sales with placards and sandwich boards. You’ll find bored, desultory students standing on the street corners of Chapel Street holding a sign proclaiming “Huge sale now on!” as they read a book on their next uni assignment.
I’ve often talked with admiration about guerilla campaigns - where a very clever commercial gets hardly any paid TV time but is passed around the web with millions of hits. Or a new and exciting product that generates a tidal wave of chatter on talk sites and blogs, growing legs of its own.
But really this is only an updated version of word-of-mouth. Only now it’s word-of-web. The communication technology has improved immensely, but the product still has to pluck the heart-strings. And I’m sorry to say, however clever you are, it still involves as much luck as winning Tattslotto.
So here’s my advice. Examine your product and its users. Who are they, where would you find them? Spend enough to prepare good, effective, attractive advertising that will touch them. Then dominate your media. Now if the medium is the cooking page of your local paper, be the dominant, most visible ad on the page. If they listen to radio, choose just one of the stations they go for and be one of the biggest advertisers on that station.
In other words, don’t get lost in the also-rans. Too many small companies waste the little budget they have by spreading it too thinly - till it just disappears. It’s more effective to make a couple of big bangs, than a trail of little pops.
ray@ebeatty.com
“I have to promote this little product. Is there any way to get free advertising for it?” At some stage every client asks that question of their agency and you give them the stock reply: “If I knew how to get advertising for free I’d have an endless supply of clients and be much richer than I am.”
The simple fact is that no, there is no free advertising, always it ends up costing you - usually according to the number of people seeing it. That’s why you need to do your sums on a “cost per thousand” basis - how much does each unit of a thousand readers, viewers, listeners, passers-by or whatever, cost?
You’ll sometimes find that a small publication works out more expensive than a big medium like TV or a newspaper.
For example the Wool Knitters’ Monthly may cost $1000 to reach its 5000 readers - 20c a reader. Whereas a TV commercial might cost $10,000 to reach 500,000 viewers. Only two cents a viewer. So which is the better buy?
Now if you are selling ice creams or draught beer, you’ll want as big an audience as possible so obviously the commercial is the way to go. But if you are a wool mill selling hand-knitting yarn, you’re looking for a small specialised market and it may well be worth 20c to reach each granny.
These days advertising is being expected to do a great deal. Think of advertising from your younger days and you’ll remember some department store and job ads in the papers, endless second-hand car commercials on telly. All right I’m exaggerating as usual, but memory does recall a simpler time, doesn’t it?
These days advertising is being expected to carry massive burdens. Like much of the cost of the internet for a start. All these billion-dollar deals involving Google and Microsoft, Times Warner and this paper’s parent News Limited, make almost weekly headlines. Just this month an online publisher called Associated Content was sold to Yahoo! for $110 million. It was founded in 2005 by a Luke Beatty. I must find out if we are related - he may get a visit from his Australian second cousin.
So much money being invested all round, and what’s going to pay for it all? Advertising. So there’s this massive expectation of how much money it’s going to generate, and that’s not forgetting all the myriad current media that still expect to make profits. Free advertising? Forget it.
However there are still cheap ways to do it. I’m frequently amused by a Prahran “fashion” clothing discounter which advertises its sales with placards and sandwich boards. You’ll find bored, desultory students standing on the street corners of Chapel Street holding a sign proclaiming “Huge sale now on!” as they read a book on their next uni assignment.
I’ve often talked with admiration about guerilla campaigns - where a very clever commercial gets hardly any paid TV time but is passed around the web with millions of hits. Or a new and exciting product that generates a tidal wave of chatter on talk sites and blogs, growing legs of its own.
But really this is only an updated version of word-of-mouth. Only now it’s word-of-web. The communication technology has improved immensely, but the product still has to pluck the heart-strings. And I’m sorry to say, however clever you are, it still involves as much luck as winning Tattslotto.
So here’s my advice. Examine your product and its users. Who are they, where would you find them? Spend enough to prepare good, effective, attractive advertising that will touch them. Then dominate your media. Now if the medium is the cooking page of your local paper, be the dominant, most visible ad on the page. If they listen to radio, choose just one of the stations they go for and be one of the biggest advertisers on that station.
In other words, don’t get lost in the also-rans. Too many small companies waste the little budget they have by spreading it too thinly - till it just disappears. It’s more effective to make a couple of big bangs, than a trail of little pops.
ray@ebeatty.com
22 May, 2010
Supporting brands supports your brand
Melbourne Herald Sun, 22 May 2010
That great ad man (long gone before us), David Ogilvy used to preach a major commandment for his agency. “I always use my clients’ products. This is not toadyism, but elementary good manners.”
His elegant words can be borne by all of us in business and marketing and advertising. In fact I would expand on them. I always use branded products. Because without branding, our clients would crumble and we’d be left cold on the streets.
I see advertising in two streams: bulk and brand.
Bulk marketing is what store chains and supermarkets do when they are promoting a sale. All the products are selected on the lowest price, often as not the stores’ own house brands. The product’s name or brand does not matter, just the price, so the cheapest wins.
The problem with this is it’s a race to the bottom. The manufacturer or importer ends up with a tiny profit mark-up, if any at all. Sometimes they are forced to sell below cost just to recoup some capital.
The rest of the producers are left with nowhere to sell their goods. Do that for too long and you no longer have a business.
Branding is the saviour here. If your product’s brand is so strong that the public demand it, and refuse to buy a home brand alternative, the retailer is forced to stock it or lose the sale.
Branding goes beyond price, it gives the customer a reason to buy.
Our job as marketers is to make people see and desire our products. They must be believed to be the best, with no acceptable plain-wrap alternative. And let’s face it, what a dull world it would be without Ferraris and Zegna - or even Dove soap, Ski yogurt, Kellogg’s All Bran.
So much of our time and effort goes into giving a brand its identity and personality. We need to believe in the concept, and support it ourselves.
What reminded me of this line of thinking was a few days spent with a quite large, successful Australian agency. Their staff were treated lavishly. Big espresso coffee machine, a dozen herb and flavoured teas, chocolates and sweeties, biscuits and big lounge chairs.
But then, looking behind the scenes, I saw crappy generic napkins, toilet paper, home brand milk, little things you wouldn’t notice, but I did. It said that part of them didn’t believe in what they were doing.
Now I’m sure that the management team didn’t run out to buy the dunny rolls. But someone amongst them should have pointed out to the staff that all their livelihoods depended on the world believing that branded products were superior.
Both at work and at home my insistence on branding was always well known. Plain wrap products were not allowed. If we didn’t look after our livelihood, how could we expect the public to buy our goods?
Because you are reading this column I assume you are involved in business, and somewhere in the process there is a product or service to sell. You’ve put a lot of effort into making it distinctive, superior, with its own personality. This is branding, even without bright colours or fancy logos.
Just as you hate somebody buying an inferior competitive product purely on price, you need to set a standard. That means buying the best - the branded - product, instead of racing to the bottom.
© Ray Beatty
ray@ebeatty.com
That great ad man (long gone before us), David Ogilvy used to preach a major commandment for his agency. “I always use my clients’ products. This is not toadyism, but elementary good manners.”
His elegant words can be borne by all of us in business and marketing and advertising. In fact I would expand on them. I always use branded products. Because without branding, our clients would crumble and we’d be left cold on the streets.
I see advertising in two streams: bulk and brand.
Bulk marketing is what store chains and supermarkets do when they are promoting a sale. All the products are selected on the lowest price, often as not the stores’ own house brands. The product’s name or brand does not matter, just the price, so the cheapest wins.
The problem with this is it’s a race to the bottom. The manufacturer or importer ends up with a tiny profit mark-up, if any at all. Sometimes they are forced to sell below cost just to recoup some capital.
The rest of the producers are left with nowhere to sell their goods. Do that for too long and you no longer have a business.
Branding is the saviour here. If your product’s brand is so strong that the public demand it, and refuse to buy a home brand alternative, the retailer is forced to stock it or lose the sale.
Branding goes beyond price, it gives the customer a reason to buy.
Our job as marketers is to make people see and desire our products. They must be believed to be the best, with no acceptable plain-wrap alternative. And let’s face it, what a dull world it would be without Ferraris and Zegna - or even Dove soap, Ski yogurt, Kellogg’s All Bran.
So much of our time and effort goes into giving a brand its identity and personality. We need to believe in the concept, and support it ourselves.
What reminded me of this line of thinking was a few days spent with a quite large, successful Australian agency. Their staff were treated lavishly. Big espresso coffee machine, a dozen herb and flavoured teas, chocolates and sweeties, biscuits and big lounge chairs.
But then, looking behind the scenes, I saw crappy generic napkins, toilet paper, home brand milk, little things you wouldn’t notice, but I did. It said that part of them didn’t believe in what they were doing.
Now I’m sure that the management team didn’t run out to buy the dunny rolls. But someone amongst them should have pointed out to the staff that all their livelihoods depended on the world believing that branded products were superior.
Both at work and at home my insistence on branding was always well known. Plain wrap products were not allowed. If we didn’t look after our livelihood, how could we expect the public to buy our goods?
Because you are reading this column I assume you are involved in business, and somewhere in the process there is a product or service to sell. You’ve put a lot of effort into making it distinctive, superior, with its own personality. This is branding, even without bright colours or fancy logos.
Just as you hate somebody buying an inferior competitive product purely on price, you need to set a standard. That means buying the best - the branded - product, instead of racing to the bottom.
© Ray Beatty
ray@ebeatty.com
15 May, 2010
Why won't companies talk to their customers?
This week's Marketeer: Herald Sun, 15 May 2010
It started when I discovered that Big Pond were blocking my emails. You see I send regular newsletters to a few hundred of my clients and prospects - as any good business should. But every time my email program sent 20 out, the rest failed.
When I investigated, it turned out that Big Pond, my provider, does not allow you to send out more than about 20 emails every 10 minutes. So I’d have to continually re-start the program, 20 emails at a time.
I called their offices to see if there was any way around this problem - and ended up in Manila, I think. I was politely told, “We cannot change that, it is policy.”
So let’s tackle the policy. “I want to speak with Big Pond Management,” I said. “Sorry sir but you can’t speak to management,” the supervisor replied.
After a couple of hours it was clear that there was no way I could talk to someone in Big Pond about their policy - because their policy is not to talk to customers.
Then I wanted to ask my branch of the NAB about a new cheque book. I plunged into the world of cloying robots: “Thank you for your call” and “To check your balance press 2" and dozens of other menu choices, through voice recognition which could not recognise: “I want to speak to my branch”.
Somehow after five minutes I reached a human. And she found me in a surly mood. I think I scared her into putting me through. The branch conversation was great - the teller knew me, checked my account, arranged for the cheque book. I asked if she could save all this angst and just give me their phone number. “I’m sorry Mr Beatty, we can’t give our number out.” “Why not?” “It’s policy.”
I decided to survey just how many companies refuse to talk to their customers. With Woolworths it took a lot of robot barriers but I finally found a human. No she could not put me through to the marketing manager. Nor to anyone in the management team.
I deliberately did not say I was from the press. I wanted them to think I was a customer who needed to talk to someone in management. I discovered the marketing manager’s name is Lew Dunkeley. Could I speak to him or his secretary? “Sorry sir, policies and procedures do not allow me to put you through.” Why not? “Because you are a customer.”
I tried other companies with varying success. But nowhere could I reach anyone senior - except, actually, Intel. They had a receptionist who put me through to their Melbourne manager.
At Fosters I reached a Brand Communications Manager. What did that mean? “Well it’s mostly PR but from time to time I get customer relations calls from the punters.”
Qantas passed me as far as the marketing manager’s secretary, while Telstra has a “Contact the office of the CEO” email link.
I could go on but these are good examples of what happens when you try to talk with corporate managers. Yes they are busy men and women and can’t be bothered by every Tom or Tammy who wants to bend their ears. But building corporate walls is not an answer.
This lack of contact leaves them just talking to each other up on the 20th floor, and a growth of myths and theories instead of reality. It’s a recipe for big errors and monumental incompetence.
I’ve long thought it would be a good corporate habit for executives to take just one short call a day, at random, from the public ringing in. Just to remind them that customers are real people - and that they would not have a job without them.
Ray@ebeatty.com
It started when I discovered that Big Pond were blocking my emails. You see I send regular newsletters to a few hundred of my clients and prospects - as any good business should. But every time my email program sent 20 out, the rest failed.
When I investigated, it turned out that Big Pond, my provider, does not allow you to send out more than about 20 emails every 10 minutes. So I’d have to continually re-start the program, 20 emails at a time.
I called their offices to see if there was any way around this problem - and ended up in Manila, I think. I was politely told, “We cannot change that, it is policy.”
So let’s tackle the policy. “I want to speak with Big Pond Management,” I said. “Sorry sir but you can’t speak to management,” the supervisor replied.
After a couple of hours it was clear that there was no way I could talk to someone in Big Pond about their policy - because their policy is not to talk to customers.
Then I wanted to ask my branch of the NAB about a new cheque book. I plunged into the world of cloying robots: “Thank you for your call” and “To check your balance press 2" and dozens of other menu choices, through voice recognition which could not recognise: “I want to speak to my branch”.
Somehow after five minutes I reached a human. And she found me in a surly mood. I think I scared her into putting me through. The branch conversation was great - the teller knew me, checked my account, arranged for the cheque book. I asked if she could save all this angst and just give me their phone number. “I’m sorry Mr Beatty, we can’t give our number out.” “Why not?” “It’s policy.”
I decided to survey just how many companies refuse to talk to their customers. With Woolworths it took a lot of robot barriers but I finally found a human. No she could not put me through to the marketing manager. Nor to anyone in the management team.
I deliberately did not say I was from the press. I wanted them to think I was a customer who needed to talk to someone in management. I discovered the marketing manager’s name is Lew Dunkeley. Could I speak to him or his secretary? “Sorry sir, policies and procedures do not allow me to put you through.” Why not? “Because you are a customer.”
I tried other companies with varying success. But nowhere could I reach anyone senior - except, actually, Intel. They had a receptionist who put me through to their Melbourne manager.
At Fosters I reached a Brand Communications Manager. What did that mean? “Well it’s mostly PR but from time to time I get customer relations calls from the punters.”
Qantas passed me as far as the marketing manager’s secretary, while Telstra has a “Contact the office of the CEO” email link.
I could go on but these are good examples of what happens when you try to talk with corporate managers. Yes they are busy men and women and can’t be bothered by every Tom or Tammy who wants to bend their ears. But building corporate walls is not an answer.
This lack of contact leaves them just talking to each other up on the 20th floor, and a growth of myths and theories instead of reality. It’s a recipe for big errors and monumental incompetence.
I’ve long thought it would be a good corporate habit for executives to take just one short call a day, at random, from the public ringing in. Just to remind them that customers are real people - and that they would not have a job without them.
Ray@ebeatty.com
09 May, 2010
Blogs Away!
Welcome to my blog!
Despite 27 years on computers, I've resisted blogs and tweets, muttering "I haven't got time". But finally my mate Winston Marsh shamed me into it: "Come on Ray, this is 2010, you've got to keep up with where the world's going!"
So I thought, OK, turn over a new page - I'm gonna Blog and Tweet and Twitter and get out into the world that way.
Mostly I will post some of the hundreds of weekly columns I have written as The Marketeer in the Melbourne Herald Sun. It has a million and a half readers every day but maybe you are not one of them. So here's your chance to catch up with me if ever you wish.
Check the title list on the left and pick one that takes your fancy.
* Cheers - Ray *
Despite 27 years on computers, I've resisted blogs and tweets, muttering "I haven't got time". But finally my mate Winston Marsh shamed me into it: "Come on Ray, this is 2010, you've got to keep up with where the world's going!"
So I thought, OK, turn over a new page - I'm gonna Blog and Tweet and Twitter and get out into the world that way.
Mostly I will post some of the hundreds of weekly columns I have written as The Marketeer in the Melbourne Herald Sun. It has a million and a half readers every day but maybe you are not one of them. So here's your chance to catch up with me if ever you wish.
Check the title list on the left and pick one that takes your fancy.
* Cheers - Ray *
08 May, 2010
The factory back door is now huge business
Melbourne Herald Sun 8th May, 2010
Sometimes I'm a bit slow at finding things, despite my pretence to expertise in marketing and advertising. So it was that just last weekend I visited my first DFO.
In case you're one of the four people out of today's million and a half readers who hasn't yet heard of them, they are Direct Factor Outlets. And they are unbelievably huge.
If you've been around long enough to remember a time when there were factories manufacturing goods in Melbourne, you'll remember factory outlets. Round the back of the shoe or clothing or leather factory there would be a small inconspicuous door leading to a large room stocked with racks of the factory's produce.
If you had a friend who worked there or had some other connection, you could buy the goods at a wholesale price. But it had to be secret because the whole structure of retail price maintenance depended on goods only being available through proper retail stores.
Well that was long before the dismemberment of retail price maintenance, before huge monopolistic supermarket and retail chains destroyed the normal give and take of manufacture and trade, and before Australian industry shut up shop and moved to China.
The modern DFOs - huge complexes of 20,000 sqm and with 100 or more stores inside - claim to be the modern factory back door. But once you get inside you find a very familiar shopping mall, not as classy as Chadstone but with many of the same retailers.
Yes, all the usual suspects - Just Jeans, Country Road, Adairs, Boost Juice, Matchbox - are there. So is there any difference?
They claim that their goods are seconds, display merchandise and end of season goods. Some of them are, but most of them are retail products bought to sell at discounted prices. It's like the department stores pretending that their Boxing Day sales are just goods that didn't sell at Christmas, even as you see the containers unloading at the back gate.
DFOs as we know them started in the US and the first purpose-built Australian one arrived in 1997, at Moorabbin. It evaded state and municipal planning laws - which would have stopped such a big centre being built so close to Southland - by using Federal land. It comes under Moorabbin Airport jurisdiction, which is why most of these centres are built near airports.
DFO is the brain child of two very rich, very clever men. David Goldberger and David Wieland first made their pile nearly 40 years ago with Solo petrol stations. These have now evolved into Liberty Oil. The oil business bought the two entrepreneurs identical mansions next to each other in Toorak. They used their wealth to generate even more when they formed Austexx, owner of the biggest chain, DFO.
This financial muscle has been necessary because their development has been fought every step of the way, particularly by Frank Lowy's Westfield Group, and the state governments in Queensland, NSW and Tasmania.
Do they actually harm other traders' business? Well certainly seeing the crowds milling through Moorabbin last weekend clutching armfuls of large shopping bags, they cast doubt on the retail recession.
Their estimated penetration is $1 billion, or 0.5 per cent of the market. However in the clothing and softgoods market it's more like 4.5 per cent.
I asked a friend, a long-time Chapel St retailer, if his business had been affected by them. "No, they have more affect on the outer suburbs than down here, where sales are more fashion conscious." But he'd heard that the Spencer Street Station outlet had hurt some City stores.
Not Myer though: "People shop at Myer for the new season's fashions. They don't get that at factory outlets," said Myer spokesman John Gillman.
Well my new sneakers don't have a fancy brand name, but they're very comfortable and boy they were incredibly cheap.
Ray@ebeatty.com
Sometimes I'm a bit slow at finding things, despite my pretence to expertise in marketing and advertising. So it was that just last weekend I visited my first DFO.
In case you're one of the four people out of today's million and a half readers who hasn't yet heard of them, they are Direct Factor Outlets. And they are unbelievably huge.
If you've been around long enough to remember a time when there were factories manufacturing goods in Melbourne, you'll remember factory outlets. Round the back of the shoe or clothing or leather factory there would be a small inconspicuous door leading to a large room stocked with racks of the factory's produce.
If you had a friend who worked there or had some other connection, you could buy the goods at a wholesale price. But it had to be secret because the whole structure of retail price maintenance depended on goods only being available through proper retail stores.
Well that was long before the dismemberment of retail price maintenance, before huge monopolistic supermarket and retail chains destroyed the normal give and take of manufacture and trade, and before Australian industry shut up shop and moved to China.
The modern DFOs - huge complexes of 20,000 sqm and with 100 or more stores inside - claim to be the modern factory back door. But once you get inside you find a very familiar shopping mall, not as classy as Chadstone but with many of the same retailers.
Yes, all the usual suspects - Just Jeans, Country Road, Adairs, Boost Juice, Matchbox - are there. So is there any difference?
They claim that their goods are seconds, display merchandise and end of season goods. Some of them are, but most of them are retail products bought to sell at discounted prices. It's like the department stores pretending that their Boxing Day sales are just goods that didn't sell at Christmas, even as you see the containers unloading at the back gate.
DFOs as we know them started in the US and the first purpose-built Australian one arrived in 1997, at Moorabbin. It evaded state and municipal planning laws - which would have stopped such a big centre being built so close to Southland - by using Federal land. It comes under Moorabbin Airport jurisdiction, which is why most of these centres are built near airports.
DFO is the brain child of two very rich, very clever men. David Goldberger and David Wieland first made their pile nearly 40 years ago with Solo petrol stations. These have now evolved into Liberty Oil. The oil business bought the two entrepreneurs identical mansions next to each other in Toorak. They used their wealth to generate even more when they formed Austexx, owner of the biggest chain, DFO.
This financial muscle has been necessary because their development has been fought every step of the way, particularly by Frank Lowy's Westfield Group, and the state governments in Queensland, NSW and Tasmania.
Do they actually harm other traders' business? Well certainly seeing the crowds milling through Moorabbin last weekend clutching armfuls of large shopping bags, they cast doubt on the retail recession.
Their estimated penetration is $1 billion, or 0.5 per cent of the market. However in the clothing and softgoods market it's more like 4.5 per cent.
I asked a friend, a long-time Chapel St retailer, if his business had been affected by them. "No, they have more affect on the outer suburbs than down here, where sales are more fashion conscious." But he'd heard that the Spencer Street Station outlet had hurt some City stores.
Not Myer though: "People shop at Myer for the new season's fashions. They don't get that at factory outlets," said Myer spokesman John Gillman.
Well my new sneakers don't have a fancy brand name, but they're very comfortable and boy they were incredibly cheap.
Ray@ebeatty.com
China rules through our Cargo Cult addiction
Melbourne Herald Sun, 3rd January 2010
On New Year 2008 I described the state of world business as “Cargo Cult Economics”. Remember those natives of war-time New Guinea who believed that wealth was delivered by the gods? The planes would always land, bringing them food, clothing, machines - it was magic, they came out of thin air.
But once the war was over, the goods stopped coming. So the natives made gifts to appease the gods. They built aeroplanes out of straw and copra, radios out of coconuts, control towers out of bamboo poles. They believed that the cargo would always come.
So in our cities and Wall Street we believed that income would continue to grow, share prices would never fall, houses were solid investments.
By New Year 2009 the economic tsunami had demonstrated the flimsiness of our beliefs. Superannuation was supposed to be rock solid but it dissolved like sand. Banks crashed. Share prices crumbled, much of the world went into recession. At last we could see through all these financial facades and concentrate on building something real.
But wait a minute - here’s New Year 2010 and what do we see? All those coconut and banana structures are being rebuilt. Everybody is triumphant at having successfully saved our sacred cargo cult. The control towers are still built of bamboo and straw, the radar is a spinning gourd shell.
But the natives are living well. We have ample supplies of any goods we fancy. Beautifully made and very cheap, kindly provided by the hard working gods from Beijing.
These generous souls also allow us to continue our extravagant lifestyle, by giving us money whenever we need it. Currently America owes China about a trillion dollars for government securities alone. Whenever Uncle Sam needs a buck, Uncle Hu Jintao delivers.
Then last month we saw vividly where it was leading. China decided it did not want to be restricted by a Copenhagen treaty. So it told Obama, Brown, Sarkozy, Merkel, Rudd and the rest of our leaders to shut up and sign what it dictated. The world was going to play by China’s rules or not at all. After some vain protests, our leaders meekly signed the filleted accord.
China learned the lessons of world diplomacy from the best teachers. The British Empire fought the Opium Wars between 1839 and 1860 so they could feed the Chinese people constant supplies of opium. We knew an addicted people was in our power.
Well now the West are the addicts. Dependent on China for their tellies, iPods, clothing and - soon - cars. We’re also addicted to money. Where do you think all these billions spent on financial bail-out schemes will come from, ultimately? More loans from Uncle Hu?
Those of us in marketing are just the front-end of the process. We sell the products, wherever they were made. We build the straw and bamboo store fronts, and stand there handing out the toys and gadgets made afar. We don’t create the goods, our tools are smoke and mirrors.
The world has very little time to get real. We’ll never cure the addiction so at least let’s make more of the dope ourselves. Like adding value to the minerals we’re feeding into the furnaces of Asia’s industry.
Trouble is, our politicians have seen what happens to those who try to expose the cargo cult or preach reality. They are ripped apart by a raging mob. (Here we call this an election.)
Whatever persuasion you are, it’s time to stop berating our politicians and start encouraging them to be brave. It’s going to take some tough decisions if we’re to break the addiction of cargo cult economics. Happy New Year.
Ray@ebeatty.com
On New Year 2008 I described the state of world business as “Cargo Cult Economics”. Remember those natives of war-time New Guinea who believed that wealth was delivered by the gods? The planes would always land, bringing them food, clothing, machines - it was magic, they came out of thin air.
But once the war was over, the goods stopped coming. So the natives made gifts to appease the gods. They built aeroplanes out of straw and copra, radios out of coconuts, control towers out of bamboo poles. They believed that the cargo would always come.
So in our cities and Wall Street we believed that income would continue to grow, share prices would never fall, houses were solid investments.
By New Year 2009 the economic tsunami had demonstrated the flimsiness of our beliefs. Superannuation was supposed to be rock solid but it dissolved like sand. Banks crashed. Share prices crumbled, much of the world went into recession. At last we could see through all these financial facades and concentrate on building something real.
But wait a minute - here’s New Year 2010 and what do we see? All those coconut and banana structures are being rebuilt. Everybody is triumphant at having successfully saved our sacred cargo cult. The control towers are still built of bamboo and straw, the radar is a spinning gourd shell.
But the natives are living well. We have ample supplies of any goods we fancy. Beautifully made and very cheap, kindly provided by the hard working gods from Beijing.
These generous souls also allow us to continue our extravagant lifestyle, by giving us money whenever we need it. Currently America owes China about a trillion dollars for government securities alone. Whenever Uncle Sam needs a buck, Uncle Hu Jintao delivers.
Then last month we saw vividly where it was leading. China decided it did not want to be restricted by a Copenhagen treaty. So it told Obama, Brown, Sarkozy, Merkel, Rudd and the rest of our leaders to shut up and sign what it dictated. The world was going to play by China’s rules or not at all. After some vain protests, our leaders meekly signed the filleted accord.
China learned the lessons of world diplomacy from the best teachers. The British Empire fought the Opium Wars between 1839 and 1860 so they could feed the Chinese people constant supplies of opium. We knew an addicted people was in our power.
Well now the West are the addicts. Dependent on China for their tellies, iPods, clothing and - soon - cars. We’re also addicted to money. Where do you think all these billions spent on financial bail-out schemes will come from, ultimately? More loans from Uncle Hu?
Those of us in marketing are just the front-end of the process. We sell the products, wherever they were made. We build the straw and bamboo store fronts, and stand there handing out the toys and gadgets made afar. We don’t create the goods, our tools are smoke and mirrors.
The world has very little time to get real. We’ll never cure the addiction so at least let’s make more of the dope ourselves. Like adding value to the minerals we’re feeding into the furnaces of Asia’s industry.
Trouble is, our politicians have seen what happens to those who try to expose the cargo cult or preach reality. They are ripped apart by a raging mob. (Here we call this an election.)
Whatever persuasion you are, it’s time to stop berating our politicians and start encouraging them to be brave. It’s going to take some tough decisions if we’re to break the addiction of cargo cult economics. Happy New Year.
Ray@ebeatty.com
07 May, 2010
3D is coming to an armchair near you!
Melbourne Herald Sun, 9th January 2010
As a thrill junkie who nevertheless likes his adventures to be comfortable and safe, I determined to see the movie Avatar in 3-D, on the huge IMAX screen.
It was the right choice. Even if the story was rather predictable, the visual effects were stunning, keeping me on the edge of my seat for over two hours. Now this is the first 3-D I’ve seen in over 30 years and I’ve got to tell you it has come a long way from the old red and green plastic glasses.
Meanwhile, across the globe in Las Vegas, the world’s biggest gadget fair, the Consumer Electronics Show, is running this weekend. And guess what their hottest item is? Yup, 3-D TV. All the manufacturers are working round the clock to produce the newest, flashiest three-dimensional tellies.
Of course the first thing you’ll think is, "Oh gawd, does that mean that my brand-new $6000 digital TV is going to be obsolete in a couple of years?" Well, hate to be the one who tells you but... yes.
That's the way of marketing. Always have something new and irresistible waiting in the wings ready to create a frenzied wave of desire and buying around the world.
Sony already has a plan which forecasts that by the end of the 2012-2013 financial year, 3-D TVs will make up between 30 and 50 percent of the sets it sells. The Blu-ray Disc Association is working on a 3-D disc standard, plus Sony plans to add 3-D to PlayStation 3.
As always the other big manufacturers like Panasonic and Mitsubishi are hot in the race, while LG expects to sell 40,000 3-D-enabled sets worldwide this year.
You'll notice that there are a couple of marketing essentials missing here. Like product and distribution. Where are all these 3-D movies going to come from?
Here again we see a flurry of activity. Everywhere, that is, except Australia.
In the US there are two cable networks planned for this year. One is ESDN, the other is a collaboration between Sony, IMAX and Discovery. In the UK, Sky has announced plans for its own channel. Australia, having just given birth to umpteen new free to air channels, has no publicly-announced plans for 3-D here. You'll just have to watch the discs.
But before you rush out to order a set, think on this. They still haven't agreed on a standard, or even a system, yet. In fact there are four ways to do it, each with long names I won't burden you with, but basically it comes down to what kind of glasses you'll need, or whether you'll need glasses at all.
The final question I know you're bursting to ask is: what about the commercials? How are we going to see house-proud mum hanging up the washing in three dimensions?
The bad news for marketers is that the cost of making commercials in 3-D will jump between ten and twenty per cent, according to a US estimate. In fact last year Pepsi ran a 3-D ad in the Super Bowl break. But before that they had to distribute 125 million pairs of glasses at retail outlets. That's a lot of money for one commercial, I can't see any Australian company doing it.
So you can relax about forking out for the technology in the near future, you might like to put a piggy bank next to your TV and start saving for the day when it will be needed. Because believe me, 3-D is coming for you, ready or not.
ray@ebeatty.com
END
As a thrill junkie who nevertheless likes his adventures to be comfortable and safe, I determined to see the movie Avatar in 3-D, on the huge IMAX screen.
It was the right choice. Even if the story was rather predictable, the visual effects were stunning, keeping me on the edge of my seat for over two hours. Now this is the first 3-D I’ve seen in over 30 years and I’ve got to tell you it has come a long way from the old red and green plastic glasses.
Meanwhile, across the globe in Las Vegas, the world’s biggest gadget fair, the Consumer Electronics Show, is running this weekend. And guess what their hottest item is? Yup, 3-D TV. All the manufacturers are working round the clock to produce the newest, flashiest three-dimensional tellies.
Of course the first thing you’ll think is, "Oh gawd, does that mean that my brand-new $6000 digital TV is going to be obsolete in a couple of years?" Well, hate to be the one who tells you but... yes.
That's the way of marketing. Always have something new and irresistible waiting in the wings ready to create a frenzied wave of desire and buying around the world.
Sony already has a plan which forecasts that by the end of the 2012-2013 financial year, 3-D TVs will make up between 30 and 50 percent of the sets it sells. The Blu-ray Disc Association is working on a 3-D disc standard, plus Sony plans to add 3-D to PlayStation 3.
As always the other big manufacturers like Panasonic and Mitsubishi are hot in the race, while LG expects to sell 40,000 3-D-enabled sets worldwide this year.
You'll notice that there are a couple of marketing essentials missing here. Like product and distribution. Where are all these 3-D movies going to come from?
Here again we see a flurry of activity. Everywhere, that is, except Australia.
In the US there are two cable networks planned for this year. One is ESDN, the other is a collaboration between Sony, IMAX and Discovery. In the UK, Sky has announced plans for its own channel. Australia, having just given birth to umpteen new free to air channels, has no publicly-announced plans for 3-D here. You'll just have to watch the discs.
But before you rush out to order a set, think on this. They still haven't agreed on a standard, or even a system, yet. In fact there are four ways to do it, each with long names I won't burden you with, but basically it comes down to what kind of glasses you'll need, or whether you'll need glasses at all.
The final question I know you're bursting to ask is: what about the commercials? How are we going to see house-proud mum hanging up the washing in three dimensions?
The bad news for marketers is that the cost of making commercials in 3-D will jump between ten and twenty per cent, according to a US estimate. In fact last year Pepsi ran a 3-D ad in the Super Bowl break. But before that they had to distribute 125 million pairs of glasses at retail outlets. That's a lot of money for one commercial, I can't see any Australian company doing it.
So you can relax about forking out for the technology in the near future, you might like to put a piggy bank next to your TV and start saving for the day when it will be needed. Because believe me, 3-D is coming for you, ready or not.
ray@ebeatty.com
END
05 May, 2010
If dope was legal what would it look like?
Not published. 11 November 2009
I’m asking this question in the business pages, not the news or editorial sections, because I want to discuss this in a cool, dispassionate way rather than with the usual hysteria that surrounds the topic.
There is an increasing volume of opinion that the ‘war on drugs’ has failed. In 14 US states cannabis can be legally sold for ‘medicinal purposes’. The White House recently told the Justice Department not to prosecute users or suppliers of this ‘legal’ pot.
Last month at the Sydney Opera House the Festival of Dangerous Ideas heard speaker after speaker declare that drug prohibition was not working and would ultimately collapse, just like Alcohol Prohibition in the US from 1920 to 1933.
We have to ask, what can we do to rid ourselves of a thousand Al Capones from Mexico and Colombia and every US city, from Afghanistan to the Golden Triangle, from Moscow to Griffiths? Well history has already told us that there will only be one answer to the drugs problem. Tax it.
Just as the end of prohibition saw the re-emergence of the huge American alcohol industry, will we see the drug industry boom world-wide? Will this be the business bonanza of the century, as the billions of illicit dollars become legal trading?
So how would this legal dope work? Well there are plenty of precedents. Australians could buy opium from the local shop until 1906, and heroin was legal here until 1963. A registered heroin addict can already get his methadone at a suburban chemist.
In the UK heroin was supplied under the National Health until the early 1970s, and drug crimes rates were extremely low. Over the years several commissions into drug use have pointed to it as a health rather than a policing problem. Most addicts and smugglers don’t start life as crooks.
All the billions we could save from the relentless crime fighting would more than pay for a network of care centres and rehabilitation clinics.
Tobacco companies already control and collect taxes on vast quantities of their restricted drugs, cigarettes. They would be the obvious distributors of commercially prepared cannabis. Many think they already have the plans in their contingency drawers.
Of course the branding would be discreet, the distribution carefully controlled, with lots of warnings on the packs. But nothing you haven’t seen before. Already the cafes of Amsterdam have their shelves stacked with glass jars of premium blends and the connoisseurs can compare flavour and THC kick without worrying about gangsters or police raids.
As for production, opium and heroin are easy - we already have the globe’s biggest Golden Triangle right here, called Tasmania. We produce 50% of the world’s concentrated poppy straw.
GlaxoSmithKline and Johnson & Johnson, the two multi-national pharmaceutical giants, already have this trade well sewn up. If you want the biggest opiate factory on earth, look no further than our own Port Fairy.
This rather puts us in the box seat, doesn’t it? The 21st century equivalent of the Sheep’s Back could be the Drug Flood.
South America is well set-up for the cocain business, and once the legal taxes started flowing in, it would give Colombia and Peru the sort of advantage that Venezuela has received from its off-shore oil wells.
This is not a spoof, I’m being quite serious here. If - when - the whole drug prohibition industry dies, probably with a whimper rather than a bang, it will be a world-wide economic shock wave. All those unemployed police, empty jails, impoverished gangsters.
And for some it will be a major business opportunity. So think about it.
ray@ebeatty.com
I’m asking this question in the business pages, not the news or editorial sections, because I want to discuss this in a cool, dispassionate way rather than with the usual hysteria that surrounds the topic.
There is an increasing volume of opinion that the ‘war on drugs’ has failed. In 14 US states cannabis can be legally sold for ‘medicinal purposes’. The White House recently told the Justice Department not to prosecute users or suppliers of this ‘legal’ pot.
Last month at the Sydney Opera House the Festival of Dangerous Ideas heard speaker after speaker declare that drug prohibition was not working and would ultimately collapse, just like Alcohol Prohibition in the US from 1920 to 1933.
We have to ask, what can we do to rid ourselves of a thousand Al Capones from Mexico and Colombia and every US city, from Afghanistan to the Golden Triangle, from Moscow to Griffiths? Well history has already told us that there will only be one answer to the drugs problem. Tax it.
Just as the end of prohibition saw the re-emergence of the huge American alcohol industry, will we see the drug industry boom world-wide? Will this be the business bonanza of the century, as the billions of illicit dollars become legal trading?
So how would this legal dope work? Well there are plenty of precedents. Australians could buy opium from the local shop until 1906, and heroin was legal here until 1963. A registered heroin addict can already get his methadone at a suburban chemist.
In the UK heroin was supplied under the National Health until the early 1970s, and drug crimes rates were extremely low. Over the years several commissions into drug use have pointed to it as a health rather than a policing problem. Most addicts and smugglers don’t start life as crooks.
All the billions we could save from the relentless crime fighting would more than pay for a network of care centres and rehabilitation clinics.
Tobacco companies already control and collect taxes on vast quantities of their restricted drugs, cigarettes. They would be the obvious distributors of commercially prepared cannabis. Many think they already have the plans in their contingency drawers.
Of course the branding would be discreet, the distribution carefully controlled, with lots of warnings on the packs. But nothing you haven’t seen before. Already the cafes of Amsterdam have their shelves stacked with glass jars of premium blends and the connoisseurs can compare flavour and THC kick without worrying about gangsters or police raids.
As for production, opium and heroin are easy - we already have the globe’s biggest Golden Triangle right here, called Tasmania. We produce 50% of the world’s concentrated poppy straw.
GlaxoSmithKline and Johnson & Johnson, the two multi-national pharmaceutical giants, already have this trade well sewn up. If you want the biggest opiate factory on earth, look no further than our own Port Fairy.
This rather puts us in the box seat, doesn’t it? The 21st century equivalent of the Sheep’s Back could be the Drug Flood.
South America is well set-up for the cocain business, and once the legal taxes started flowing in, it would give Colombia and Peru the sort of advantage that Venezuela has received from its off-shore oil wells.
This is not a spoof, I’m being quite serious here. If - when - the whole drug prohibition industry dies, probably with a whimper rather than a bang, it will be a world-wide economic shock wave. All those unemployed police, empty jails, impoverished gangsters.
And for some it will be a major business opportunity. So think about it.
ray@ebeatty.com
02 May, 2010
Tell the world - did you make love this morning?
Melbourne Herald Sun 24th October, 2009
Did you make love this morning? Did your neighbour? Maybe the answer is on your computer. Visit the web site ijustmadelove.com and you’ll find thousands of people from Vladivostok to Antarctica, Woi Woi to Warsaw proudly proclaiming the night’s score. As I write this the site’s counter has clicked off over 50,000 reports.
This is as graphic a demonstration as I can find of how to start a new business venture on the Web. A lateral combination of imagination, psychology, technology and entrepreneurship.
Already the site is carrying the usual “call me” phone sex ads, but with the rate it is growing, before long the big advertisers will take over. After all it’s aimed at the right market to make it perfect for beer ads, confectionery, movies, not to mention contraception. No, whoever came up with the idea, I think you’re looking at another overnight millionaire.
Think it’s all too flimsy? Look at Twitter. The first tweet went out in March 2006. Just this month it was valued at $US1 billion. And it still doesn’t have a business plan - nobody has yet figured out how to make a cent out of it. However if you had any of Twitter’s original shares, they have increased in value 240,000 per cent.
But there’s good reason too. In Britain it was recently announced that on-line advertising had overtaken TV, in billings, for the first time. People are positioning themselves in a rapidly changing world. This has been pushed along by the global recession. Where advertisers in the US and UK have cut down on their TV spend, they have looked for cheaper alternatives and found that on-line was effective.
So there is a continuous hunt to find the next big thing and we are seeing lots of smart new businesses on the internet.
An example I found was TailoredMusic.com. This is a company formed by a group of musicians in Canada. They will write and record your very own love song, for around $200. They provide a number of ready-written songs and you can edit in the person’s name, an event, a sentiment - and it will all be professionally recorded and emailed to you as an MP3.
Imagine how delighted your sweetheart would be if at your favourite restaurant you plugged a speaker on your iPod, fell to your knees and played a love song especially for her! Well, you get the idea - it’s not for everyone.
The enterprise bug has even bitten closer to home. My wife and stepdaughter have been planning, writing and spending hours with web designers all year and early next month will launch ALittleColour.com, a colour consultant site for children. Sort of mini Trinny and kinder Suzannah.
You email or Facebook some photos of your little darlings which will be professionally analysed, and in return you’ll be given a report on the child’s colouring, a swatch book of their ideal colours, and advice on clothes and dressing. All for under $90. They’re highly excited as the launch approaches, all I ask is that when the millions start rolling in they don’t forget old Dad in the corner here.
Of course of the millions of new enterprises being launched every year, only a very small percentage will hit the jackpot. But a lot of them will supply a steady income flow for the operators. There’s the advantage of a world-wide catchment area for your customers. But the disadvantage of a world-wide source of competitors. So often the winner is the one who thought of it first, launched it big, and hung on for dear life.
Now, what was it you were doing this morning?
ray@ebeatty.com
Did you make love this morning? Did your neighbour? Maybe the answer is on your computer. Visit the web site ijustmadelove.com and you’ll find thousands of people from Vladivostok to Antarctica, Woi Woi to Warsaw proudly proclaiming the night’s score. As I write this the site’s counter has clicked off over 50,000 reports.
This is as graphic a demonstration as I can find of how to start a new business venture on the Web. A lateral combination of imagination, psychology, technology and entrepreneurship.
Already the site is carrying the usual “call me” phone sex ads, but with the rate it is growing, before long the big advertisers will take over. After all it’s aimed at the right market to make it perfect for beer ads, confectionery, movies, not to mention contraception. No, whoever came up with the idea, I think you’re looking at another overnight millionaire.
Think it’s all too flimsy? Look at Twitter. The first tweet went out in March 2006. Just this month it was valued at $US1 billion. And it still doesn’t have a business plan - nobody has yet figured out how to make a cent out of it. However if you had any of Twitter’s original shares, they have increased in value 240,000 per cent.
But there’s good reason too. In Britain it was recently announced that on-line advertising had overtaken TV, in billings, for the first time. People are positioning themselves in a rapidly changing world. This has been pushed along by the global recession. Where advertisers in the US and UK have cut down on their TV spend, they have looked for cheaper alternatives and found that on-line was effective.
So there is a continuous hunt to find the next big thing and we are seeing lots of smart new businesses on the internet.
An example I found was TailoredMusic.com. This is a company formed by a group of musicians in Canada. They will write and record your very own love song, for around $200. They provide a number of ready-written songs and you can edit in the person’s name, an event, a sentiment - and it will all be professionally recorded and emailed to you as an MP3.
Imagine how delighted your sweetheart would be if at your favourite restaurant you plugged a speaker on your iPod, fell to your knees and played a love song especially for her! Well, you get the idea - it’s not for everyone.
The enterprise bug has even bitten closer to home. My wife and stepdaughter have been planning, writing and spending hours with web designers all year and early next month will launch ALittleColour.com, a colour consultant site for children. Sort of mini Trinny and kinder Suzannah.
You email or Facebook some photos of your little darlings which will be professionally analysed, and in return you’ll be given a report on the child’s colouring, a swatch book of their ideal colours, and advice on clothes and dressing. All for under $90. They’re highly excited as the launch approaches, all I ask is that when the millions start rolling in they don’t forget old Dad in the corner here.
Of course of the millions of new enterprises being launched every year, only a very small percentage will hit the jackpot. But a lot of them will supply a steady income flow for the operators. There’s the advantage of a world-wide catchment area for your customers. But the disadvantage of a world-wide source of competitors. So often the winner is the one who thought of it first, launched it big, and hung on for dear life.
Now, what was it you were doing this morning?
ray@ebeatty.com
01 May, 2010
You can never beat City Hall - or can you?
Melbourne Herald Sun 1st May, 2010
At the start of my working life, as a cadet reporter, purgatory was weeks and months covering the magistrate’s court. Forget the drama of Law and Order, a petty courtroom is a sleep-inducing atmosphere.
But every few weeks things would liven up when someone would strenuously defend themselves against a speeding charge or parking offence or shoplifting indiscretion. They would roll out well rehearsed arguments, drawings, photographs, medical records sometimes even lawyers to prove their case. And you watched with detached compassion because you knew they didn’t have a snowball in hell’s chance of getting off.
In three years of weekly courts I can count on one hand those who succeeded. It rammed home a lesson to me. As the saying goes, ‘You can’t fight city hall”. Or the magistrates and police, or the tax man. Not unless you’re very persistent and very well heeled.
A Melbourne food importer, Alfred Abbatangelo, learned this the hard way in the Federal Court last month. The attempt to persuade the tax office that Perfetto Mini Ciabatte are bread and not crackers - and therefore free of GST - will cost him an estimated million bucks, not to mention six years of his life plodding through the courts. “No,” was the verdict, “It’s crisp, it snaps, it’s a cracker."
A friend of mine discovered this six years ago. Andre Scibor-Kaminski is a smart IT man who developed a phone directory on CD called DtMS. The one disk had the every phone and every business in Australia, instantly searchable. Groups could be collected, mail-outs organised, reversed searches from a number to a name. It was far superior to anything on offer from Telstra or Sensis today.
But Telstra sued Andre for breach of copyright. The rebuttal was: how can you copyright a number? It’s not an original work of authorship or art. He lost the case, despite some heavyweight legal opinion in his favour. He appealed and lost again and finally after five years the money ran out and the company went into liquidation.
Yes, size does matter. And so do deep pockets. There again, even city hall can’t fight Spring Street. In recent months we have seen Stonnington and Yarra councils battling the Victorian Government against extended clearways on busy shopping streets.
The money hasn’t extended to the millions yet, but certainly hundreds of thousands have gone in advertising, legal fees and lost parking-fine revenue. And you just know that in the end, might shall prevail. Just as it did when the Victorian Government battled the Australian Government over hospitals.
Now you know I don’t like to despair in this column. So there is a chink of light. It is possible to beat city hall, sometimes. Remember Geelong’s sanga-gate.
Forgotten already? It was only a year ago when Mick Van Beek and Peter Anderson were sacked by Geelong Council because they used some left-over asphalt to fill a couple of pot-holes at the Leopold Sportsmans Club. Their bribe for this “theft” was a steak sandwich in the clubroom.
Well this is where you put the media to good use. The story got out and suddenly hundreds of people stormed the city hall, encouraged by the news crews and, it seemed, half the world’s media. Peter and Mick, with his beard and beanie, gained their fifteen minutes of fame in one night.
The Australian Services Union leaped in, closely followed by lawyers and politicians. And finally the council caved in and reinstated the men, city hall was beat.
But don’t expect that to happen next time you get a parking fine and are positive you did not exceed the permitted time. I can tell you right now, you ain’t got a snowball’s.
ray@ebeatty.com
At the start of my working life, as a cadet reporter, purgatory was weeks and months covering the magistrate’s court. Forget the drama of Law and Order, a petty courtroom is a sleep-inducing atmosphere.
But every few weeks things would liven up when someone would strenuously defend themselves against a speeding charge or parking offence or shoplifting indiscretion. They would roll out well rehearsed arguments, drawings, photographs, medical records sometimes even lawyers to prove their case. And you watched with detached compassion because you knew they didn’t have a snowball in hell’s chance of getting off.
In three years of weekly courts I can count on one hand those who succeeded. It rammed home a lesson to me. As the saying goes, ‘You can’t fight city hall”. Or the magistrates and police, or the tax man. Not unless you’re very persistent and very well heeled.
A Melbourne food importer, Alfred Abbatangelo, learned this the hard way in the Federal Court last month. The attempt to persuade the tax office that Perfetto Mini Ciabatte are bread and not crackers - and therefore free of GST - will cost him an estimated million bucks, not to mention six years of his life plodding through the courts. “No,” was the verdict, “It’s crisp, it snaps, it’s a cracker."
A friend of mine discovered this six years ago. Andre Scibor-Kaminski is a smart IT man who developed a phone directory on CD called DtMS. The one disk had the every phone and every business in Australia, instantly searchable. Groups could be collected, mail-outs organised, reversed searches from a number to a name. It was far superior to anything on offer from Telstra or Sensis today.
But Telstra sued Andre for breach of copyright. The rebuttal was: how can you copyright a number? It’s not an original work of authorship or art. He lost the case, despite some heavyweight legal opinion in his favour. He appealed and lost again and finally after five years the money ran out and the company went into liquidation.
Yes, size does matter. And so do deep pockets. There again, even city hall can’t fight Spring Street. In recent months we have seen Stonnington and Yarra councils battling the Victorian Government against extended clearways on busy shopping streets.
The money hasn’t extended to the millions yet, but certainly hundreds of thousands have gone in advertising, legal fees and lost parking-fine revenue. And you just know that in the end, might shall prevail. Just as it did when the Victorian Government battled the Australian Government over hospitals.
Now you know I don’t like to despair in this column. So there is a chink of light. It is possible to beat city hall, sometimes. Remember Geelong’s sanga-gate.
Forgotten already? It was only a year ago when Mick Van Beek and Peter Anderson were sacked by Geelong Council because they used some left-over asphalt to fill a couple of pot-holes at the Leopold Sportsmans Club. Their bribe for this “theft” was a steak sandwich in the clubroom.
Well this is where you put the media to good use. The story got out and suddenly hundreds of people stormed the city hall, encouraged by the news crews and, it seemed, half the world’s media. Peter and Mick, with his beard and beanie, gained their fifteen minutes of fame in one night.
The Australian Services Union leaped in, closely followed by lawyers and politicians. And finally the council caved in and reinstated the men, city hall was beat.
But don’t expect that to happen next time you get a parking fine and are positive you did not exceed the permitted time. I can tell you right now, you ain’t got a snowball’s.
ray@ebeatty.com
To succeed, match your Madonnas with your virgins
Melbourne Herald Sun, 15th December 2009
In a world of stars and celebrities, spare a thought for the producers - the hard-working business men and women, maybe a bit like you, who have the courage to take risks and invest their meagre funds on someone’s talent.
Take Seymour Stein. This legendary record producer was in a hospital bed when he heard some Madonna demos and signed her on the spot, in 1983. A year later he risked accusations of heresy by pairing Madonna with a new song Like a Virgin. The rest is history.
Stock Aitken and Waterman were a production team in London. The Neighbours “wedding” of Kylie Minogue and Jason Donovan had been watched by half of Britain in 1987. The Aussie girl had a good voice and they thought they could put her through their “hit factory” and make a buck or two.
But when she arrived they had forgotten she was coming. While she sat in the waiting room they wrote a song that she could immediately record. I Should Be So Lucky became a number one hit around the world. And the rest is...
Perhaps genius is coming up with the smart idea at just the time when it is needed, so it’s pretty close to luck. In the history of music and theatre, luck has been ever-present.
In 1786 the hottest property on the European stage was playwright Beaumarchais. When Mozart offered the Imperial Theatre a musical of his most popular play, they snapped it up bidding 450 florins - three times the annual wage Mozart used to get back in Salzburg. The opera Marriage of Figaro became a big hit.
Seventy years later the hottest stage play was The Lady of the Camelias by Alexandre Dumas. Composer Guiseppe Verdi snapped up the rights to make a musical. “We’ll call it The Prostitute, that’ll bring the punters in.” Sure enough La Traviata became one of the most successful operas of all time.
The point is, great art is often the result of good business. History glosses over the fact that these geniuses were businessmen, just like Cameron Mackintosh producing Andrew Lloyd Webber’s Phantom of the Opera, which has become the most successful entertainment project in history. It’s still running in New York and London 24 years later.
The producer’s job is to find a great idea and develop it with the most talented people he can find. Sometimes it means taking a risk - usually because he can’t afford the price of the established people in the field. Then he applies an obsessive demand for the very best production values.
My personal experience of this was back in 1979 in a small production studio in Elsternwick where I made commercials. In the next suite a curly-haired doctor worked obsessively over the film editing desk cutting together a movie he was making for a ridiculously small budget.
But he gathered in the most talented actors and crew in Australia - the young ones he could afford - and cast an unknown lead called Mel Gibson. We watched this movie coming together over his shoulders and were increasingly impressed - it was much more intelligent and better made than the shlock we had imagined.
When Mad Max was released later that year it took Australia by storm, and then the world box office to the tune of $100 million. Miller was not just the director but the producer, along with his mate Byron Kennedy. Which just goes to show you how important a brave producer is in making history.
ray@ebeatty.com
In a world of stars and celebrities, spare a thought for the producers - the hard-working business men and women, maybe a bit like you, who have the courage to take risks and invest their meagre funds on someone’s talent.
Take Seymour Stein. This legendary record producer was in a hospital bed when he heard some Madonna demos and signed her on the spot, in 1983. A year later he risked accusations of heresy by pairing Madonna with a new song Like a Virgin. The rest is history.
Stock Aitken and Waterman were a production team in London. The Neighbours “wedding” of Kylie Minogue and Jason Donovan had been watched by half of Britain in 1987. The Aussie girl had a good voice and they thought they could put her through their “hit factory” and make a buck or two.
But when she arrived they had forgotten she was coming. While she sat in the waiting room they wrote a song that she could immediately record. I Should Be So Lucky became a number one hit around the world. And the rest is...
Perhaps genius is coming up with the smart idea at just the time when it is needed, so it’s pretty close to luck. In the history of music and theatre, luck has been ever-present.
In 1786 the hottest property on the European stage was playwright Beaumarchais. When Mozart offered the Imperial Theatre a musical of his most popular play, they snapped it up bidding 450 florins - three times the annual wage Mozart used to get back in Salzburg. The opera Marriage of Figaro became a big hit.
Seventy years later the hottest stage play was The Lady of the Camelias by Alexandre Dumas. Composer Guiseppe Verdi snapped up the rights to make a musical. “We’ll call it The Prostitute, that’ll bring the punters in.” Sure enough La Traviata became one of the most successful operas of all time.
The point is, great art is often the result of good business. History glosses over the fact that these geniuses were businessmen, just like Cameron Mackintosh producing Andrew Lloyd Webber’s Phantom of the Opera, which has become the most successful entertainment project in history. It’s still running in New York and London 24 years later.
The producer’s job is to find a great idea and develop it with the most talented people he can find. Sometimes it means taking a risk - usually because he can’t afford the price of the established people in the field. Then he applies an obsessive demand for the very best production values.
My personal experience of this was back in 1979 in a small production studio in Elsternwick where I made commercials. In the next suite a curly-haired doctor worked obsessively over the film editing desk cutting together a movie he was making for a ridiculously small budget.
But he gathered in the most talented actors and crew in Australia - the young ones he could afford - and cast an unknown lead called Mel Gibson. We watched this movie coming together over his shoulders and were increasingly impressed - it was much more intelligent and better made than the shlock we had imagined.
When Mad Max was released later that year it took Australia by storm, and then the world box office to the tune of $100 million. Miller was not just the director but the producer, along with his mate Byron Kennedy. Which just goes to show you how important a brave producer is in making history.
ray@ebeatty.com
Subscribe to:
Posts (Atom)