Watch found, opportunity lost

Melbourne Herald Sun, Thursday March 14, 2013

I was so pleased to receive the message from the hire car firm in Noosa - had I lost a watch? Yes indeed, I thought it had gone missing in the sand but it turned up under the car seat. I thanked them, by text, and asked for it to be posted to me, I would pay for all expenses.

But no. They were too busy, it would take too much time, I must send a proper, stamped, self-addressed envelope and they would then post it. OK, no big deal - but it did sour, a little, what had been a warm exchange. I brooded on this. What would Winston say?

For many years, my friend Winston Marsh has lectured thousands around Australasia, and beyond, about the value of a customer. I had just spent $600 with the firm and been very contented with their car and service. How should they treat me?

"Why did they even message you?" asked Winston. "They should have returned it to you with a $10 voucher for your next visit to Noosa. They spoiled the chance to make it a great service experience." 

Warming to a favourite subject, he mused: "Where did it come from, the idea to ring you? It must be down from the top, an attitude running in the firm. It's management that has the responsibility to make policy that's then passed on by the middle managers. 

"Can you imagine what Richard Branson would do? He'd send you the watch and a voucher to make up for the time you were without it!" he smiled.

In our business you spend a lot of time communicating the obvious. Like - how much is a customer worth? It's quite simple to calculate. Just take the money you spend every year on marketing, advertising, mail outs, sales staff, rep calls, submissions and tenders - and then divide that total by the number of active customers on your books. That is, someone who has spent something in the past year. The figure is your cost per customer. Frightening, isn't it?

Of course we all know that eighty percent of the business comes from twenty percent of the customers - but that remaining eighty percent of customers still cost a massive part of your expenses.

Getting back to hire cars, what's your rule of thumb on the value of a customer, Winston? "For a big firm like Avis or Budget, who've got counters at the airport and big corporate contracts, I'd guess ten to twenty dollars a sale - probably more." 

But for a little off-site firm like I quoted? "Every customer comes through advertising or other media," he explained, making the job much harder. "For a small hire firm a customer has to be worth at least $100."

Which is pretty good justification for spending $1.20 in stamps, a padded envelope and the evening drop-off at the post office.

In return, they would have gained an advocate amongst the business community. Whenever a colleague was going north for pleasure or trade, I'd slip in my story about this car hire firm that was so honest they charged me what had been quoted, to the cent - and immediately sent back a watch I'd dropped under the seat. 

Word of mouth is the strongest form of advertising you can get. These days you can extend this to Facebook and Twitter.

The way to win - and keep - customers is by talking to them, on any excuse. A friendly note in the bubble bag, hoping I had enjoyed my stay and looking forward to my return, would have been a perfect touch. Ask Winston and Richard.

ray@ebeatty.com

What's contaminated about a horse?

Melbourne Herald Sun, Thursday March 7, 2013

As a healthfood scare, horses have done the full circuit this past few months. In Europe horsemeat has been found in hamburgers being routinely tested in Ireland.

In response, supermarkets in the U.K., France, Germany, Sweden and Norway suddenly dumped huge quantities of frozen lasagne and burgers and other prepared meats.

Then Ikea meatballs were found to also contain horse - leading to their withdrawal from stores in 21 countries. Some may even remember in 1981 when Australian burgers sold in America were found to contain horse, and the whole meat trade was jeopardised for a time.

Well I'd like to ask a question. What is so wrong with eating horse? Now let me quickly point out that I have no desire for it myself. But I am very familiar, on my travels, to strolling up cobbled streets in Italy or China, past modern butcher shops with big pictures of horses on the windows. In fact, in much of the world it is regarded as a gourmet meat.

What brought this to mind was last week's Marketeer about 3D printers eventually producing printed "meat" for us to eat. (I've had a couple of queries: was this a send-up or was it true? Yes, it's the truth.)

So apart from manufacturing meat, what other possibilities do we have for a future with an ever-growing world population and the human body's continuing demand for protein? 

Now this is the unpopular bit. There are a great many good sources of food and protein that go to waste for purely emotional reasons, in this very country. Think of the thousands of kangaroos that need to be culled each year; the rabbits to eradicate; the camels wreaking havoc in the central Australian deserts. All much-appreciated meats in different corners of the world, just not ours.

This is where marketing can weave its magic spell. As it has been doing so for centuries. Think about the way so many of our most popular meats have been disguised through the power of language. It's not a sheep's leg you're eating but braised mutton. Not pig chops but pork medallions. Not burned cow's buttock but roast beef with the trimmings.

We have William the Conqueror to thank for this, bringing fine French phrases to the kitchen while leaving the angle-saxon farmers sloshing in the muck. An early piece of marketing that endures to this day.

Perhaps we can do the same with a new generation of foods. Pastissada di caval does sound much nicer than horsemeat stew. Canada has grown increasingly fond of its gourmet gee-gees, explained by Toronto chef Grant van Gameren: AI call horsemeat cotton candy,@ he says. AIt melts in the mouth.@ There's a Horse Meat Recipe Exchange on Facebook - and scores of other enthusiastic cookery sites.

Our kangaroos are now exported to 55 countries worldwide. Certainly there is still much controversy against the harvesting of kangaroos. But some species are in excess and need control, agree groups like the Ecological Society of Australia and the Australasian Wildlife Management Society.

They also argue that we should base more of our agriculture on native animals rather than introduced livestock. This would then protect our fragile, thin Australian soils from the damage they continue to suffer from the hooves of sheep and cows.

So let's get a host of our animals off the "contaminated meats" list and into the pot, through some smart legislation - and clever marketing. Come on, Marketeers, any ideas?

How about ravioli cavallo? Or kangaburger. Fancy hot possum pot? Or how about a basted Christmas emu? Or a feast around a beach-baked hungi wombat? Who ever said Australia doesn't have its own cuisine?

ray@ebeatty.com

The new revolution: 3D printing

Melbourne Herald Sun, Thursday February 28, 2013 

You know the knob that broke on your stove? Or maybe that missing queen from your ivory chess set? How about you just print yourself new ones?

Yes, print, once you're scanned or designed the replacement piece. This is the next big wave of computer hardware that has started spilling onto the world stage: the 3D printer.

Extrusion printers have been around for over a decade, in engineering and architectural offices. But for the most part they have been expensive industrial machines. Now the prices have started to fall - and it's possible to obtain a good one for $2000, some for even less.

Build you own Eiffel Tower - on your desktop

Right now these printers have gone to the technically minded, the hobbyists, the designers, and you might be thinking, "Why would I ever want one in my home or office?" But then you don't have to cast your mind too far back to recall thinking the same thing about computers or laser printers.

Some pundits have started muttering about "the new industrial revolution", but think about it. The internet gives you world-wide access to any item's picture and often its design. Your scanner can copy anything, given the right software, and there are already laser 3D scanners on the market. Your computer can handle incredibly powerful CAD design programs. You already have almost everything you need.

The 3D printer is not so different from the ink-jet you have now. Instead of ejecting ink, this deposits drops of melted plastic, layer after layer after layer, building up a three dimensional structure. It is microscopically accurate. You can print an interlinked  set of cogs that work straight out of the machine.

In the workplace they have become the quick way to recreate a missing part. No more awaiting delivery from Dusseldorf or Tokyo. Especially for those times when one broken piece can only be replaced by ordering a whole sub-section of the machine. Forget it, just print the part yourself.

In past years, working with manufacturing companies, I can remember the long delays and huge expense of preparing the prototypes, moulds, and dies. Now, with some practised skill, much of this development work can be done on the desk.

Of course, like all new technology this will also become a lawyer's picnic. Who holds the patent on a stove knob? What's the value of a statue if you can punch out a copy in minutes?

Nothing I've discussed so far has been particularly revolutionary. So how about human livers and kidneys? Part of the development work powering ahead is "bio printing". This uses an ink made of living cell structures and builds them - as with the plastics - into human tissue. They have already succeeded with simple parts like cartilage and bones.

But in a decade it may be possible to recreate functional organs. Research is well under way on regenerative medicine, with printers producing experimental skin, heart valves, knee cartilage  and bone implants. And on the non-medical side, a start-up called Modern Meadow is using bio printing technology to develop a way to print meat.

Don't know if you can print the pepper and mustard

Does this mean that one day we'll be able to read the menu and then go on to eat it? All right, don't be flippant. But it does make one's sense of wonder continue to boggle - is this where it's all leading?

But if you think about our insanely expanding world population rate, and the heedless destructiveness of our management of this planet, maybe in future the only way to feed the billions is going to be by printing their food.

ray@ebeatty.com

Are you holding on to dinosaur droppings?

Melbourne Herald Sun, Thursday February 21, 2013

Are we coming to the end of the reading era? Is this newspaper in your hands the mere dinosaur-droppings of passing history? To listen to many pundits you would have to agree. But to my mind, the best source of research are your own eyes.

To be a good marketer you have to get out. Not in an air-conditioned Merc, but on the tram, the bus, in the supermarket, where you can watch commerce right before you.

Certainly, the morning train is no longer filled with the rustle and crumple of hundreds of newspapers. But neither are the passengers looking around them and chatting. They are all buried in their iPods, mobile phones, video games, the morning's on-air sudoku puzzle, and full-screen newspapers on their iPads.

They are reading just as fixedly as ever - some higher mathematics, some the joke pages and crosswords. The medium has changed, not the messages.

For those in the newspaper game this is reassuring news. After all those stories of print fading away, it is proving far more resilient than many thought. Just last week the figures came out giving the Audit Bureau of Circulation verdict on print sales. And yes, print circulation figures have dropped. News Limited by 5.3%, while Fairfax declined 14.8%.

But where combined figures have been obtained, it tells a different story. They are calling it the "Masthead" figure. All the publications obtained on paper, computer, iPad, phone - so long as they come under the one newspaper's title. Suddenly the figures are much more balanced. In fact the ABC was able to point to an increase in circulation. Only 0.2 per cent, but still on the positive side.

It's all changing before our eyes. The Sydney Morning Herald and The Age iPad apps have already been downloaded over a million times. So the content is still being read.

News Ltd is being quiet about its new offerings (even to me). But last week CEO Kim Williams indicated that he was not happy with traditional circulation counting. "This financial year The Readership Works will launch our sector's new readership measurement system," he announced, indicating that it was a system which will count, "Media consumption across all platforms - print, online, smart phones and tablets."

In the back rooms, the publishers are hard at work refining the screen delivery of their papers. Currently what you receive on your iPad is essentially a pdf of the paper, and it stays the same all day.

What is being developed are more interactive newspapers. So the news and pictures can update with any breaking news, stock reports, sports results. Giving papers the immediacy that perhaps they had a century ago in the days of "stop press!" and "afternoon edition".

This has already happened elsewhere. Perhaps most famously with the New York Times which now has 670,000 digital subscribers, and claims to generate more revenue from its digital base than its advertising.

These choices have given newspapers a way to slow, and in some cases reverse, circulation declines, raise prices and open up a new source of revenue. Most mportantly, it allows newspapers to reduce their dependency on advertising - always a fickle flow - and rely on more stable circulation revenue.

Around the world we are seeing more and more newspapers move behind paywalls, so eventually it will become the norm. It won't be the last of the paper product though. A fancy outfit or new car just look so much better in a big coloured print spread. No little telephone device can ever match that.

ray@ebeatty.com

Not invited to our own beer’s birthday party

Melbourne Herald Sun Thursday February 14, 2013

This year Foster=s will celebrate its 125^th anniversary, and what an historic birthday bash that will be.

Millions have been budgeted for a year-long chain of events. TV commercials have been planned with the first already made, a lavish production recreating that first day.

Set in Melbourne of 1888, proud brothers William and Ralph Foster wheel the first barrel of their newly-created lager into the main street filled with 19^th Century citizens and diggers. In front of a town hall they pour the first glass of their brew and offer it to the mayor who tastes it and declares: ALittle ripper!@ 

Oh, one problem though. We=ll never see it in Australia - this is strictly ersatz Oz made in London for a world market, and Australia has not been invited to the party. 

Somehow in the great Monopoly games of the 80s with the likes of John Elliott and Alan Bond tossing million-dollar assets around the game board, Foster=s became a valuable little earner. In Britain and Europe it is made by Heineken International and is huge across the continent. You=ll find it in the US, Russia, Canada, India. Probably the hardest place to find a Foster=s is Australia.

SABMiller now own CUB here, after an $11 billion buy in 2011. They found a declining beer market, pounded by wines on the one side and trendy mixers and boutique ales on the other.

Not about to give up on such a major investment, they installed top gun Ari Mervis as CUB boss and he soon flexed his muscles. Although consumption of beer may be falling since the days of Bazza McKenzie, he insists that the traditional beer brands still hold the lion's share of sales and while trends will come and go, the biggies are here to stay.

Mervis implemented his first major marketing strategy and fortunately it has worked. When he took on the job, supposedly he spent the first 100 days visiting all his volume customers. At the end of which he had a pretty clear picture of what they - and their public - wanted.

He was shocked that his top seller, VB, had  been dropping sales at ten percent a year since 2004 - from 30 to 12 percent market share.

His listening, and company research, pinpointed that the Aafter a hard day=s work...@ profile of VB was scorned because of its low alcohol content. So they pushed alcohol back up to its original 4.9 per cent late last year. Last week they were already able to report that after a decade of decline, VB made its first market share increase, 2 per cent. Which in the beer market is a lot.

How could any management let an iconic product get into such a mess in the first place? From what I can see it was the old tag game of following the market down. Big retailers - our monopolies Coles and Woolworths - were up to their usual games of destroying the market.

All those slabs of beer for below-cost margins, the introduction of own-brand copies - the ultimate plan is skimming off the commodity market. Just like they are doing with bread, milk, soft drinks, cereals and hundreds of other basic products.

Of course breweries have their own duopoly nowadays, between CUB-SABMiller and Lion. Having seen the damage that reckless discounting can do to their brands, they claim to have become more cautious.

There is increasing emphasis on premium, imported and craft beers. Once-famous brands that have been out of the spotlight for decades, could return. Who knows, we might yet be invited to the Foster=s birthday party.

ray@ebeatty.com;

Election! All the news you won’t avoid

Melbourne Herald Sun, Thursday February 7, 2013

The announcement was the biggest non-news we are likely to ever hear: A2013 will be a constant fierce election campaign from beginning to end@. What a surprise! The pollies will be slugging it out in a long-endurance match. Well whether the writs are called or not, there was no doubt in anyone=s mind that this will be the year of the big fight. The only blessing is that we now have the date of the final bell.

Having established that AHe said@, AShe said@, AScandal@, AIncompetence@ will be the subject of every front page and news bulletin for the next seven months, the rest of us can quietly turn the page and get on with business. Certainly that is the attitude of the marketing community.

Marketing is a mixture of science and prediction. Should your new product campaign run in late autumn or early spring? How much will it cost to make the campaign dominate the air waves? What=s the best way to use the social media? Can you build in a couple of commercials to go viral before the footy season? Can you gain an advantage over your competitors through the timing of the campaign?

The team weighs and debates all these and many more points in designing a strategy, and prepares a hefty thesis to explain what they have decided and why - after all there are millions of dollars in product development and advertising funds riding on the success of this campaign. 

So you will understand why an election is a pain in the neck for marketing corporations. Having a pair of elephants fighting to the death in the midst of your carefully planned and planted field can be a disaster.

Political parties will run sudden policy promotions from overnight decisions that suck up all available advertising space. There are no more discounted spots that can be added to a schedule at little cost. Suddenly a block booking by the parties means that your carefully planned run of commercials has to be cut into sections.

Most importantly, the noise is so loud and distracting that you have a hard time getting your campaign to bite. So most definitely, marketers hate election years.

Whatever date you choose will have problems, but September 14 seems fairly safe, clear of the footy finals and the spring racing carnival - however unfortunately stepping on Yom Kippur, much to the annoyance of Michael Danby and the Jewish community. But many of them postal vote in any case, being a Sabbath, so no doubt this was judged the safest choice.

Both sides were close observers of the American campaign, with the PM=s senior strategist John McTernan huddling with the President=s Joel Benenson during visits to Washington.

The Obama camp has now revealed that they constructed a huge data base collecting every piece of information from every source: lists from campaign offices, fundraisers,

field workers, electoral records, phone books. From this they did micro‑targeting and statistical modelling.

They established that wealthy middle-aged females in California had an irresistible draw to small fund-raising dinners with George Clooney. On the east coast the magnet was Sarah Jessica Parker. They could tell who was watching which TV programs and target them through personal media.

And without relying totally on strings-attached corporate donations, they raised $1 billion.

These are the lessons our politicians will be putting to work over the next seven months, so be ready to get up-close and personal with your local candidate. The politicians know who you are and where you can be found. They=re coming to get you.

ray@ebeatty.com;

 

How do you measure a liar - and what should the punishment be?

Melbourne Herald Sun, Thursday January 24, 2013 

At times in the past when I've told people my business is advertising, some have been known to retort, "Oh you're a professional liar are you?"

Depending on my mood I can just laugh it off, or I can reply. "In advertising you are tightly bound by rules, laws, censorship, government oversight, industry self-regulation - and the fact that lying is plain bad marketing. No we're not the liars, it's the rest of you. And public servants are the worst."

I like to toss in the last phrase in memory of the many times when I've been assured that the submission, for whatever government advertising campaign, would only involve four companies, only to discover that a dozen have tendered and the contract was always going to go to the incumbent from the start.

They just wanted your submission to pump up the numbers, with no compensation for the time and resources your team spend. Beware the smiling civil servant.

Lying has been big news the past week, with Lance Armstrong making his confession to Pope Oprah. The fact that he was sitting like Henry VIII at his coronation didn't help credibility much, and in the confessional stakes he wasn't as convincing as Tiger Woods or Marion Jones before him.

I have to say that I can't be too harsh on a man who is nevertheless capable of scaling the Alps on two wheels at full speed the way he did. You could fill me with more drugs than Ozzie Osborne and I still couldn't get to the top of Bourke Street.

Nevertheless, his sponsoring days seem to be well and truly over. The big names have fled - Nike, Anheuser-Busch, Oakley and the rest. Cycling has always been a marginal sport compared to the football codes and it was only Armstrong's overwhelming success that brought it into centre field.

So much of marketing focuses on the bigger and brighter and better. So even a little fib can be a downer. Like the eleven inch Subway Footer. One photograph from Perth showing the too-short sandwich alongside a tape measure has exploded into a world-wide story, leaping from Facebook and the social sites into the news pages and bulletins of the global media. Subway PR have been working double time explaining that a foot does not always mean a foot.

But it also depends on what's the lie and who's the liar. So last year when the British Advertising Standards Agency banned two L'Oreal ads for over-enthusiastic digital retouching, Julia Roberts ("Teint Miracle") and Christy Turlington (Maybelline's "The Eraser") were not pilloried for lying about the depth of their crow's feet or frown lines.

Two years ago Dior designer John Galliano was videoed in a drunken anti-semitic rant that saw him sacked from his top-god position. But just this week the news came that he has been given a big-house residency - with Oscar  de la Renta. "John and I have known each other for many years and I am a great admirer of his talent," he explained. "I am happy to give him the opportunity to re-immerse himself in the world of fashion and reacclimatise in an environment where he has been so creative."

Bill Clinton still commands million-dollar speaking fees despite his historic "that woman" whopper.

And I particularly like a reader's comment, in American Advertising Age magazine's piece on Armstrong's future prospects: "Mmm let's see...a guy with a massive ego who is a liar, a bully and cheat with no morals. Any large corporations looking for a CEO?"

ray@ebeatty.com

Reborn circus juggles mega-bucks

Melbourne Herald Sun, Thursday January 17, 2013 

The circus is coming to town! When I was a kid my mate's mother had a milk bar. The visiting circus would give free tickets to shops for putting a poster in the window. Then we likely lads would wheedle and whine till she had passed the tickets on to us.

The marketing of circuses has changed a lot since those days. In the mid 20th century circuses, like cinemas, were devastated by the attack of television. While the movies fought their way back up through money, glitz and multiplexes, it was harder for circuses.

Animal rights campaigns, hostile councils, and the demands for celebrity standards "like the telly", plus the rising costs of a labour-intensive business, squashed many a small operation.

But another circus model was evolving. A new street-theatre energy gave birth to the likes of Circus Oz in 1978, and in 1984, in Montreal, the new king-pin to be: Cirque du Soleil.

It brought together theatre, fantasy, graphics, ballet, a modern music track - and sensational skills in juggling, tumbling, flying - everything except the animals. They, sad to say, have been locked back in their zoos and can no longer join the circus.

The whole profession has been reborn. Today Cirque de Soleil has 20 shows - some under the big top, some permanently housed, some as arena spectaculars. And this year their estimated turnover will be close to a billion dollars. Now you're talking "corporation".

Finn Taylor is an Eltham boy who ran away to the circus. These days he is a vice president at Cirque headquarters in Montreal. From selling popcorn his job has grown to managing some of the most challenging tasks in the organisation, the touring shows.

For example, right now he is responsible for the Michael Jackson World Tour, in Moscow. It's January. Any takers for that job?

Having been to Australia seven times in 14 years, the Cirque settles in here comfortably and knows it will fill the seats. "Australia is one of the best markets," says Taylor. "Per capita we're the second best in the world."

But there are no plans for a permanent show here. "That's a big leap that requires massive tourism traffic,"  explains Taylor. He might have added that a tourist town like Las Vegas has seven Cirque shows - in theatres built specially by the mega casinos for hundreds of millions of dollars. Once one of them had one, they all had to have one.

The show touring Australia is unique, as is each of the 20. This is called Ovo, a fantasy world of magical insects. As colourful and vivid as all the other creations, you are guaranteed to see sights and feats you have never seen before.

Australians are great lovers of circus and have welcomed Cirque seven times, for some of their biggest shows. But we also make a significant contribution to the profession as a breeding ground for young tumblers.

The National Institute of Circus Arts offers a three-year bachelor's degree and two-year VCE. The Institute is housed in its own $10 million National Circus Centre at the Prahran campus of Swinburne University.

This year Circus Oz will move in to their own building in Collingwood, which includes extensive facilities and a permanent spiegeltent.

Guy Laliberte was a 24 years old accordion player and stilt walker when he birthed Cirque du Soleil. Now he is a space tourist and World Series Poker champion with a personal worth of $2.6 billion. So never let it be said that there is no more money to be made from the ancient art of circus.

ray@ebeatty.com

Welcome to the new year's cargo cult!

Melbourne Herald Sun, Thursday January 10, 2013

If you have followed this column, you will know that at the start of every year I revue the state of our Cargo Cult Economy.

It's like the world that faced the highlanders of New Guinea after World War II. They had watched the flow of goods flown in for the war effort and thought they were the gifts of the gods.

When the war ended and the goods stopped flowing, cults grew up to restart the cargo. So they built airports out of straw, planes of bamboo, radios of coconuts, all the magical goods they had seen, believing they would encourage the real thing to appear.

Even today cargo cults exist in remote regions. Any attempt to talk them out of it is taken as proof that the white man is trying to hide the secret: why these goods, created by the gods, should go to them and not to the natives who so obviously deserve them.

Is this faith so different from that of the "advanced" societies? Our tribes insist that the goods keep coming - more cars and tellies, more clothes and gadgets, more food and drinks. Pity the politician who tries to denies these things - they are rapidly sent to the electoral scaffold.

In the big land across the Pacific, many tribes believe that taxes are all evil and should be resisted by any means, even pushing the economy to the edge of a cliff.

These same tribes worship guns, the bigger the better. The more one owns, the more one's respected. Of course every now and then a native goes berserk and kills a few dozen people, but the answer to that is also in the cargo: give everyone more guns. It's in their constitution - every American's birthright is a gun under their pillow.

The European tribes have laudable traditions to care for their citizens from the cradle to the grave. It's what they do in the middle that can be a problem. But give everybody a job, not too demanding, and lifelong benefits - it will all be fortuitously paid for out of the cargo.

Here in Australia we have been enjoying a lotus lifestyle with vast ships digging up pieces of dirt and sailing away. But the continent is so huge nobody is going to miss a few billion tons, and look at all the cargo we receive in return.

Every now and then someone suggests we could melt some of this dirt down and make goods ourselves. But that's too hard, we'd rather invest in more mines than factories.
Belief in the cargo cult is obviously as strong in our world as in the tropical islands.

The money will keep coming. In America their deficit is $2.8 trillion, and unless they fix their fiscal deadlock - maybe even let the President run the country once in a while - it could reach $6 trillion by end of 2015.

If you want to see that figure, write down 6 followed by 12 zeroes. Six million million. Such an unimaginable figure that no-one can take it seriously. Alas it's not straw and bamboo, it's real. And somewhere down the line we've got to earn it.

And don't think "Oh that's America's and Europe's problem". We're all shackled on the same chain gang, if one goes over the edge the others eventually follow. And no bamboo aeroplane is going to come to the rescue. Happy new year.

ray@ebeatty.com

Blog: themarketeer-raybeatty.blogspot.com

Lines in the sand inspired the modern world's code

Melbourne Herald Sun, Friday 21, 2012 

Your shopping whips down the conveyor belt and into the bag making a little blip! on the way and you don't even think about the massive amount of calculation and technology going on in the background.

The product is individually identified from billions of others around the world by its own unique code, a number that is read in an instant from a jumble of lines in a little square. Scores of different technologies are needed to make this happen, most of them developed and grown in the years since World War II.

Computers, laser scanners, computer printers, fork-lifts and warehousing technology - today's commercial operations are totally different from even a few decades ago, and the quantity of goods and money moved each day would have been unthinkable.

But at the heart is one little graphic invention: the bar code. An idea born in 1948, in its own way it was as important as the invention of Arabic numbers in making the manipulation of figures possible.

Last weekend saw the death of the man who came up with the idea of depicting large complex numbers as a series of thick and thin lines: Joseph Woodland.

Aren't you fascinated by the tiny little thought that can trigger a great idea? Newton's falling apple evoking gravity; Fleming's mouldy dish evoking penicillin; Archimedes understanding water displacement when his bath overflowed, and running naked through Syracuse shouting "eureka!".

In the case of Woodland, he was struggling with how to encode product information in an easily-readable form. He retreated to his grandparents' Miami Beach house and spent months sitting in the sand thinking. One day, making finger ridges in the sand, his schoolboy knowledge of Morse code came to mind. Could a series of thick and thin lines, like the dots and dashes of Morse, be used to depict complex numbers?

By 1949 he and fellow graduate student Bernard Silver had developed the beginnings of what is now officially the International Article Number, expressed by the symbol we call a barcode.

His lines formed a circle, like a target, but the support technology was too expensive and cumbersome so they ended up selling the patent for $15,000 - all they ever made from the invention.

By the 1970s lasers, scanners and computers had arrived and IBM was able to create the scanning system that we know today, using a development team including Joseph Woodland. He and Silver were inducted into the National Inventors Hall of Fame last year.

I learned about barcodes seventeen years ago when I got the task of creating an education display for the numbering authority, EAN - today called GS1. With their marketing manager, Graham McAlpine, we devised a baked bean factory - for simplicity.

Into the factory come beans, labels, cans - all identified by codes. They are cooked, canned, packed, palleted. Every step of the process carries its own code number. The beans are shipped to a "supermarket" and stacked on shelves. As they are sold, every can is accounted for all the way along the supply chain.

The exercise displayed that bar coding is not just an easy way to put prices on packs. It gives the manufacturer and retailer total knowledge and control of the process. What is being made? When will it arrive? What has been sold? Stock position? All the figures are available on the computer screen, instantly.

The baked bean factory is long gone, but its modern incarnation is still active, in Mt Waverley. There are educational tours for businesses, universities and schools contact them through www.GS1au.org. 

ray@ebeatty.com

Ray's going modern - I have now set up this blog to respond to Facebook and Twitter. Ain't I modern?

Try this out - you can now access the Marketeer blog through Facebook and Twitter.

My words are strictly off the record

Melbourne Herald Sun, Friday December 14, 2012 

From a nearby office I hear the booming voice of my colleague: "No, I don't want you to record my call. Turn the thing off."

Moment's silence. "What do you mean you can't turn it off? Call your supervisor and get him to do it!"

I can't help feeling sorry for the call centre operator, though I sympathise with the stand. Why do they need to have everything recorded these days?

Of course you are told in the monotonous recorded message that "calls will be recorded for training or coaching purposes". But how many examples of a bad customer to operator exchange do they need?

When I looked at what industry insiders say, it's a bit different. "I was talking to my manager about a call I had yesterday. I took about 50 yesterday but only 4 were recorded." Most of them just disappear into the ether.

The Australian Information Commissioner says: "An organisation must tell you at the beginning of the conversation so that you have the chance either to end the call, or to ask to be transferred to a line where monitoring does not take place.:"

There are some areas where you'll have an argument getting the recorder turned off. For example, stockbrokers want to get instructions recorded - they happen quickly and a misunderstanding could become a million-dollar law suit. Bookmakers record too, for the same reason. Of course emergency services also need to closely monitor all exchanges, as we have learned in several major cases involving fires, ambulances and police, recently.

However, do you need to record every ordinary phone enquiry? I don't think so. What are the limits of privacy?

A topic that flares up periodically is the so-called Australia Card. Back in 1985 the Hawke government introduced a card which would carry a person's basic information. It was fiercely opposed by the Coalition opposition in the Senate and finally got buried as a topic.

That is, until six years ago when the Coalition introduced the idea, using an expanded Medicare card - and were faced with fierce opposition from the Labor Party and minorities. After a year of tussle it was re-interred with the 2007 election.

Ironically we have all that information on free display anyway. Your driver's licence gives your name, photo, address, date of birth, signature, and eye-sight condition. All they need to add is your tax-file number to give them more than would have been on your Australia card in the first place.

Then there is the argument of trying to overcome privacy restrictions. A friend needed a separate phone line to his office. Being in a hurry he asked his associate to fix it. All went well till the associate died. Could they arrange for the line to be transferred to my friend? Not till the renter permitted. But he's dead. Then where's his death certificate? We don't have one.... The argument continues - meanwhile the dear departed is regularly fined for not paying his phone bills.

So these privacy regulations can end up being yet another bureaucratic obstacle in our path - you can't ask any questions at the bank about your spouse's account, you can't talk to the gas company or electricity supplier unless your name is on the account. The university wouldn't talk to me about my children's progress.

This is all done for good reasons, but at the time it feels like yet more red tape around us.

You can't even enquire at the hospital about a relative's well-being - unless you are the Queen calling about your daughter-in-law's health. And just see what trouble that can lead to.

ray@ebeatty.com

We must learn to dance the Korean way

Melbourne Herald Sun, Friday December 7, 2012 

Gangnam Style has now officially passed its billion-download mark, to become the most popular online video ever.

Now heads are being raised and notice being taken in high places. It's not about a jaunty tune and a dorky dance. It's about - "What's happening in South Korea and what should we know about it?" A country of 50 million people is making its mark on the world, and we in this country of 20 million need to understand how this has happened.

As well as the roly-poly popster Psy (right), South Korea has developed a flood of valuable pop treasures. Most we do not see much of here, because they are very Asian-flavoured, but if you are making smash hits in the multi-billion markets of China, Japan and South-East Asia, Australia is not missed.

But in the nightclubs of Shanghai, Tokyo or Singapore super groups like Wonder Girls, Girls Generation and Super Junior are instant scream generators. They also happen to be "manufactured" groups, like The Monkees or One Direction. Made to measure for a voracious popular market.

Indeed, manufacturing is Korea's strength. Look at the success of LG televisions, Samsung phones, and Kia and Hyundai cars. And the ones you never hear much about - SK Hynix just happens to be the world's second biggest memory chip maker. Besides cars, Hyundai is the world's largest ship building company, with the world's biggest shipyard. POSCO is the world's fourth-biggest steel maker.

They have nothing compared to the space and resources of Australia, in fact they are one-77th our size. Yet their economy is half as big again as ours.

Having nothing is perhaps the key to Korea's success. They are trapped in a vice by their huge neighbours - China to the west, Russia to the north and east, Japan at their feet, and their lunatic brother making bombs in the attic.

By necessity they had to be clever and they had to sell their products. Now 53 per cent of what they make is exported - far more than China at 31 per cent or - even with all the raw material resources shipped out last year - Australia at 21.

Ever since the end of the Korean war in 1953, the focus has been outside, both in manufacturing and culture. They have a name for it - "Hallyu", the "Korean Wave".

Politically it means millions devoted to pushing the national brand. The Ministry of Culture, Sports and Tourism has a budget of more than $3 billion, with a sizable portion devoted to hallyu.

The Koreans jumped into the smartphone field, produced a better phone than their competitors, and now the Samsung Galaxy range sell twice as many world-wide as the Apple iPhones. Just watch the tablet market. Once again, it is dominated by Apple, the iPad. But already Samsung is galloping into the straight and we will see it pulling ahead over the next couple of years.

However, we all have our burdens to bear and in this case it's the mad brother in the attic. North Korea continues its Stalinist fantasies with a vast standing army and every conceivable weapon up to nuclear.

For the past 20 years we have been expecting it to do an East Germany and collapse under the weight of its own pretension. But somehow despite starvation, isolation, and condemnation - it continues goose-stepping along.

The cracks are showing, though. More and more of their citizens are being jailed for watching South Korean movies and TV serials like the hugely popular Winter Sonata. No doubt the jails will soon be filled to bursting by youngsters doing the Gangnam Style.

ray@ebeatty.com

James Bond, soda pop and Captain Cook

Melbourne Herald Sun, Friday November 30, 2012 

With a seductive smile, James Bond pours two fingers of scotch, picks up the crystal soda siphon and gives a short squeeze to the lever. A surge of foaming water shoots into the glass and he sips. Very elegant. But today you'd have one problem - where do you get the soda siphon?

Those fine Schweppes siphons have long gone and become expensive curiosities on eBay, certainly the company does not market them any more. For that matter Schweppes Australia is now a subsidiary of Asahi Breweries, which makes it as English as wasabi on sushi.

In Australia its competitor is star-spangled Coca-Cola. Between them they share a $4 billion market. The also-rans are way way behind. None of them seem to produce the old glass soda siphons any more.

Meanwhile, a major source of environmentalists pain is raised by the vast quantity of packaging that is generated by the industry - all those bottles and cans and boxes, though much of it is recycled. Then there's the manufacturing plants, warehouses, trucks and fuel. Does the world really need 206 billion litres of water a year, each in its own little plastic bottle?

One company has relaunched itself to take advantage of these green sentiments. Maybe it has been some years since you saw a SodaStream maker on a benchtop.

The unit holds a small cannister of carbon dioxide gas. Using one of the bottles they supply, part fill it with tap water and flavouring, fit it into the machine and press the top. A shot of CO2 surges into the liquid and you have soda water.

SodaStream goes back to 1903, invented by Guy Gilbey of the London gin family. In 1985 it became part of the Cadbury Schweppes empire but gradually lost its fizz. In 1991 Peter Wiseburgh bought the company, by 2003 he closed the original Peterborough factory.

In 2010 SodaStream International launched successfully on the Nasdaq exchange and currently has a market capitalisation of $722 million. Nowadays its main factory is controversially located on Israel's West Bank. They sell in 55,000 stores in 45 countries. And they have come out gunning for the much bigger guys.

Their world-wide campaign commercials show a SodaStream machine gassing a bottle - and then cut to pallets of soft drinks at the warehouse, or bottles on the production line, which explode with a noisy splash. The voice-over simply says: "With SodaStream you save 2000 bottles a year. If you love the bubbles, set them free."

CEO of SodaStream, Daniel Birnbaum, has deliberately chosen a controversial approach. After all how else do you get noticed as a pigmy among giants? His justification is the 460 billion bottles and cans manufactured every year. He claims the vast majority are dumped as waste across parks, oceans and landfills. "We challenge the entire beverage industry," he declares. "There exists a smarter choice."

Carbonated water was invented by English preacher-scientist Joseph Priestley in 1767. He was part of a scientific outpouring called the Midlands Enlightenment which gave us James Watt's steam engines, Samuel Johnson's dictionary, Josiah Wedgewood's ceramics and Erasmus Darwin's evolutionary theories that so influenced his grandson Charles. They were the men whose enquiring minds created the modern industrialised world.

Priestley's experiments interested the admiralty, who thought the pleasant liquid could benefit sailors on long sea voyages, particularly against scurvy. One of Priestley's early experimental devices was taken on the voyages of Captain Cook.

So quite possibly history's first refreshing glasses of soda pop were enjoyed in the waters off the sunny coast of Australia, before it was even Australia.

ray@ebeatty.com

From bloody tears to psycho killers

Melbourne Herald Sun, Friday November 23, 2012 

After years of bloody, tear-soaked TAC commercials, who would have thought that a jaunty little ditty about psycho killers, drug dealers and setting fire to your hair would be the ad to capture the young folks' attention?

The new Metro transport campaign does just that - featuring dismembered figures bouncing along to the tune of "Dumb Ways to Die". The underlying message is "don't stand on the edge of the station platform, don't drive around level crossing boom gates, and don't run across the train tracks." But instead of transport-institution droning, they gave the job to the creative team at McCann Melbourne who thought maybe a fun message was going to cut through, after the much-reported "carnage fatigue" where the realistic crashes and maimings no longer register.

Something is certainly happening - this week the YouTube viewing figure for this commercial is close to ten million, rocketing it up the Australian viral video charts. Maybe the attractions were: "Don't poke a stick at a grizzly bear" or "don't use your private parts as piranha bait".

Until a week ago the chart toppers were Nova FM's Fitzy and Wippa singing their spoof of "Call me maybe". This scored 2.3 million - for a pretty basic production.

Another ad that is doing well - but much more glam - is Sam Kekovich in a garish blue suit at the Australia Day barbecue urging us to eat lamb chops  - and actually singing. The shock value of Sam singing "Barbie Girl" with Melissa Tkautz is irresistible so no wonder it pulled 700,000 hits.

Mind you Sam will have to cook a lot of chops to catch up with our Kylie Minogue. Her new single "Timebomb" scored 12 million views and rising, since it was released earlier this year.

There haven't been many other million-hitter commercials from Australia so far, you have to go overseas for the big numbers. The only stand-out is neither an ad or a song but a speech. To everyone's surprise - and no doubt her delight - it was our PM with her globe-circling "misogyny" speech that made it big. Last time we looked it was hitting two million.

It seems every year we get an unexpected jaw-dropper in the talent shows. This time it was the X Factor discovering Bella Ferraro that generated 2.5 million hits. This huge public exposure bodes well for the teenager's future, even though she didn't win.

Another singer, well ahead of everyone, is that quiet good-looking Australian-Belgian called Gotye. After a decade as one of Melbourne's many struggling young musicians, the gates of success finally parted for him. In two years he has topped the charts in the US, UK, Belgium, Netherlands, Germany - 31 countries. And his biggest success, "Somebody that I used to know" has been viewed 347 million times. That's just up to this week.

On December 8th he is giving a concert at Myer Music Bowl. It comes at the end of a world tour that filled Greek City in LA, Radio City in NY, Hammersmith in London and other great rock venues around the globe. I somehow think the numbers at the Bowl will be higher than he used to get playing the Espie in St Kilda with The Basics. In fact I'll make sure I don't drive through the city that afternoon.

While I love quoting these wonderful social-media figures, I do have to keep reminding my marketeers of some basic realities. Like, that this bundle of print you hold in your hand gets a million and a half "hits" a day. So while new media is great fun, you can't afford to ignore the old.

ray@ebeatty.com

Can Obama's lessons save Gillard?

Melbourne Herald Sun, Friday November 16,2012

The American election is over and you can be sure that in the headquarters of Australia's political parties, the lights are burning late as our own political pundits study the lessons.

Not many months from now, we will be bombarded by TV ads, billboards, leaflets and hearty telephone callers, as election fever crosses the Pacific like a tsunami of persuasion.

0bama's resurrection will inject new hope into the ALP as they see the pendulum swing back their way. Meanwhile the Coalition will be putting a Chinese burn on the arm of every supporter to squeeze out funds.

It's good news for our media owners. Every available TV spot will be snapped up, papers will be able to print extra pages, peak rates will be paid without argument.

But if there's one lesson that has emerged from America it's that content matters more than quantity. What won for President Obama was careful targeting and steely consistency.

In the end, elections are won by a few votes in a few seats. This will be the case here as it was there. In America they spent a billion dollars for what proved to be a few thousand votes.

Just as important was the remorseless door knocking, phoning and election-day voter-fetching. I wondered at the time whether the badly fluffed first debate - when Obama allowed the world to see how sick he was of all the election bull - wasn't deliberate. It scared his supporters out of their complacency, scared him into action too. Perhaps it was a self-inflicted slap in the face.

Where the advertising was needed was in defining the issues. The Democrats carefully controlled much of their media, including the outside support groups, keeping the lid on the crazies. The Republicans had 37 groups, ranging from tea-party to gun associations and anti-abortionists. What the Republicans didn't say is what the public wanted to know: who is Mitt Romney? To the end he remained the enigma, Mr Flip Flop.

Back home the lessons will be closely analysed by Brian Loughnane, a keen student of American politics, and his wife Peta Credlin. They are Tony Abbott's praetorian guard - Loughnane federal director of the Liberal Party and Credlin chief of staff.

They are credited with getting Abbott this close to power and now tasked with giving him the final push over the line.

Their opponent was revealed just last week. Mark Collis has been appointed to assemble an ALP advertising team. As a creative director at both Ogilvy and Leo Burnett, followed by a stint at Telstra, he is well regarded in marketing circles. The campaign will be based in Melbourne, to keep it free of the notorious NSW political machine.

Julia Gillard's senior political strategist, John McTernan, has been spending time with President Obama's pollster, Joel Benenson, learning about fine-tuning data bases and getting messages out to the right people at the right time.

Obama won through clever targeting of women, latinos, young people and auto industry families. All perceived as areas of weakness in Romney's campaign. It's interesting to note that not long after returning from her chat with Obama, the PM inflicted a festering wound on Abbott with her misogyny speech.

Now Loughnane has to find ways to get Abbott out of the "Dr No" cage he made for himself - which will be hard when much of the campaign's resources will be spent on negative advertising.

Because, we have to face it, unpleasant as they are - negative ads work, and we will be seeing lots more of them in the coming year.

ray@ebeatty.com
Blog: themarketeer-raybeatty.blogspot.com

Energy: the greatest economic opportunity of the 21st Century

Melbourne Herald Sun, Friday November 9, 2011

The Indian held up a block of thin ceramic tiles the size of a loaf of bread. "This will give enough energy to power the average US home. Twenty-four hours, 365 days. Put a bunch of these together in a box and you can power a supermarket."

Two years ago K. R. Sridhar unveiled his Bloom Box. And he spearheaded a revolution that is going to change the world as we know it. Its energy needs, anyway.

This revolution will be the largest economic opportunity of the 21st Century. Huge amounts of money are being invested into it right now. Some will fail. But others will generate oceans of wealth. So if you are going to get into the game, pick carefully.

Let me walk you through it. There are plenty of alternative energy sources that can power our world. But they all have problems. Usually they are too expensive compared to existing methods such as coal-fired generation. Or the technology is not quite there yet. Bloom is one that appears to be working.

Sridhar is - literally - a space scientist. He conceived his catalytic cells while working on the Mars mission at NASA. When the project was shelved he set out on his own, later persuading venture capitalist John Doerr to invest in him. To the tune of $100 million. Seems like a lot? Well now it's over $600 million.

But Bloom Energy Servers are real. They have been installed at major hubs of Google, eBay, FedEx, Walmart and other big players. And after the past couple of weeks' events their sales will explode.

What are they you ask? A thin ceramic square, simply baked sand, which acts as the electrolyte. On one side is painted an anode chemical, on the other a cathode. When an energy source passes over these sheets along with oxygen, it generates electricity. One square gives enough for a 25W electric light globe.

What's special is that the source can be almost any energy - natural gas, petrol, methane, solar energy. So potentially you could run it off a tank of cow manure, though now they are using natural gas. It gives off half the emissions of competing technologies. But most importantly, the boxes are self-contained. They don't need a power grid, they do all the generation on the premises.

Currently Bloom boxes are double the cost of equivalent power generators, which is why just the very rich California corporations are their main customers. But after the Hurricane Sandy experience, every big data centre in the world is looking around at ways to secure their power. If only Bloom were a corporation, this would be a great time to buy their shares.

If they need muscle, they have the enthusiastic support of Arnold Schwarznegger who has been behind them since he was The Governator. He made California a vivid green: an investment in Bloom boxes earns a 20 percent cost subsidy, plus 30 percent federal tax break because it's a green technology. Our own politicians could learn a thing or two from America.

There are several other competing fuel cell systems in the running, like Australia's Ceramic Fuel Cells Energy, or Ceres Power or - of course - giants like GE and Siemens. But like I said at the beginning, this will be the century's big economic opportunity - already they are predicting Bloom's IPO at $3 billion, and it will happen soon.

Meanwhile Australia obsesses about cleaning brown coal, cuts back incentives for alternative energy, and may totally miss the boat.

ray@ebeatty.com