Welcome to television's wide wonderful land of rip-offs

Melbourne Herald Sun, Friday February 24, 2012


Television has always been a land of rip-offs. For ever, producers have spotted successful shows overseas, brought them home, re-badged them and sold them to local TV.

But now, see how the world has changed, it's our ABC screaming "Thieves!" at their British cousins the BBC.

Here's the format for their latest TV show which started last week. They put together a panel game with a presenter and four guests, showed them TV commercials, and asked for their comments. Sound familiar?

No, this Pommy show is not The Gruen Tansfer, it's called the Mad Bad Ad Show. And from what little I've seen so far, they managed to not only pinch a good concept, but to screw it up.

What makes Gruen work is that it has a comedian host with four presenters who are genuine, experienced, working ad people. Whereas in Mad Bad they have put together a humorous host, with two other comedians and two ad people. So it has turned into a laughathon - with lots of unfunny jokes.

Beneath its humour, Gruen studies and analyses its subject seriously - which actually makes it a much funnier show. Its creator, Andrew Denton, says "The UK producers have taken the default position of throwing comedians at it, it's a mistake, the ad men end up looking flat." Not totally displeased that larceny has failed, he prefers to call the result "a homage" to Gruen.

Here's another TV concept for you. With the Olympics coming, a committee is gathered together to prepare this huge project. And of course every kind of chaos and catastrophe hits them week after week, making very funny reality-looking television.

Sounds like John Clarke's The Games? Actually it's a BBC series called Twenty Twelve , currently running as Britain prepares for its own Olympic Games. Interestingly, Clarke's team had offered the idea to the BBC but were turned down. Then amazingly the Beeb had the same idea themselves.

A team of London lawyers is studying the situation, but I wouldn't hold my breath. Copyright is a very tricky area. It applies to "a work" - a book, picture, tune - but not necessarily to concepts. The law likes to hold two things side by side and decide whether one is a copy of the other or not.

But the rip-offs tear in both directions. Take Britain's Never Mind the Buzzcocks - a panel show where six entertainment celebrities answer questions about music and musicians. Sounds a lot like Spicks and Specks? Well at least they don't get prickly about the similarities - one of the Buzzcocks' long-running "captains", Bill Bailey, was also a popular guest on Spicks.

Or another panel show, where the guests have a great time making fun of the week's political news from around the world? Surely that's Good News Week? Yes but it's also Have I Got News For You which has been running in Britain since 1990.

Perhaps, as in business, some of the happiest arrangements are franchises. Master Chef was UK born and has since spread around the world. The logo remains the same, but many new territories use a version developed in Australia.

The most successful franchise has been Who Wants to be a Millionaire which has travelled from the UK to 100 countries. Its long successful run in Australia ended in 2006, supposedly because Eddie McGuire became Channel 9's CEO. But I suspect it had more to do with October and November 2005, when two contestants each became millionaires.

ray@ebeatty.com

Blog: themarketeer-raybeatty.blogspot.com

The value of work experience

Melbourne Herald Sun, Friday February 17, 2012

When you see the nervous look in the client's eyes, you know he is going to ask you a favour. "Er - Ray - you know my daughter's 15 years old? She's very interested in marketing and advertising."

First time I'd heard that, I thought. Here it comes.

"Her school's having a work experience week - I don't suppose you can take her here?" Yes of course, you're friends with the client and keen to keep the business so how can you refuse. But - what on earth are we going to do with the girl?

It's a problem I'm sure has been faced by every business at some stage. The big ones can find a spot for the child in the dispatch room or let them sit with different departments over the week. For smaller firms it can be a bit of a burden.

The problem is, all too often the kid has no interest in the business and little understanding of what it does. The staff are too busy getting their jobs done to give them much attention, so our schoolie could spend much of the week keeping out of sight, playing with their iPhone.

There is a place for kids in the workplace. The evening job or holiday work can be very educational. I have seen McDonald's turn out some very hard-working, diligent students after a couple of years flipping burgers. But it can't happen in a week.

Unfortunately too many of our kids are growing up in families that, in my youth, would have been regarded as rich. Plenty of pocket money, mum and dad to taxi them around, lots of after-school activities, big presents at birthdays and Christmas.

It blunts the hunger we remember, of having to save for months to afford the second-hand camera you desperately want. (Insert your teenage desire here.) These days all they have to do is mention that a new 12-megapixel single lens reflex would be nice for Christmas and the distracted parents put it on their list.

Now it's time for "When I were a lad". In my teens, if you wanted a holiday you'd go work in a factory for a month to save up for the trip. Two of my summers were spent sweating next to the conveyor-belt ovens of a cake factory, spraying the cake tins with fat and coming home each night covered in a thick film of grease.

Another job was working in a holiday resort - as a bar porter stacking crates. While the world around you was having a ball, you were the poor peasant in the background carrying dripping empty beer bottles, shouted at by the supervisors, bar staff, everyone.

But it was a great education. I returned to my studies with fresh motivation - no way would I drop out and end up in a job like those.

In the past decade more thought has gone into the work experience field, with laws and forms, regulations and manuals to create more structure around it - and more bureaucracy of course.

Ideally, the school should have spent several weeks preparing the students for the experience, so they have some idea of what to expect - and to realise that they can't get away with insolent behaviour like they can at school.

The parents should be involved, with dinner, advice and sympathy each evening.

At your end, the company supervisors should sit down beforehand to discuss what would be the most useful lessons the child could gain.

Have a plan, have some tasks ready - but don't be shy about giving them some dirty jobs. It could be a valuable career-planning lesson for them.

ray@ebeatty.com

From roses to jerky, the gift is love

Melbourne Herald Sun, Friday February 10

There's a florist near my place who has been on holiday most of January, just locked the doors and went away. But he's back now and will pay for his leisure time by staying open, day and night, the whole of February 13 and 14.

Yes Valentine's Day is coming, the pot of gold in every florist's year. Behind them of course are acres and acres of greenhouses where careful growers plot and scheme to make sure that a million roses will open up at just the right time so as to be not too buddy and not too bloomy when they are ribboned and presented.

Valentine's Day is a great example of "occasion marketing" - when an occasion or tradition is seized upon by marketers as an opportunity to sell more of their goods. We've just been through a couple of these, called Christmas and New Year.

Truth be told, there is no reason why one person should buy a gift for another just because of a day of the year - but without these days, our retail economy would be even more dismal and subdued. Our love lives and marriages would suffer a severe downturn too, if the partners neglected to observe the occasion.

The Valentine tradition we know today can be traced back to 1797 when a London publisher put out a booklet of sentimental verses called The Young Man's Valentine Writer. The real St Valentine was martyred by the Romans in 289 AD and as a bishop, was unlikely to have had a secret lover.

The tradition has grown in size and value for two centuries, to the point where it is spreading world-wide. In recent years, relentless marketing has planted the Valentine - the gift-giving part, anyway - in Asian cultures like China, Korea, Singapore and Japan. Not always on February 14 and not always boy to girl.

In Japan girls give chocolates to their male office colleagues. In Taiwan it's men to women. All very confusing but with one essential ingredient - a massive increase in expenditure on certain products.

So, you must have wondered, how can you get your product in on this buying flood? Can you disguise your widget as a Valentine gift?

Well plenty have tried. Obviously the makers of greeting cards, chocolates and teddy bears got into the act early in the piece, as did restaurants.

You'll find this paper will do a roaring trade next Tuesday with columns of personal ads decorated with hearts and flowers as all and sundry Romeos declare their love. Your message will be seen by a million and a half readers - one of which, hopefully, will be your love.

Later sales steps were a bit of a stretch. In the '80s, American jewellers started promoting diamonds as a suitable gift. No doubt to remind the girl of her other best friend. Some may think it's a bit of a leap from an embossed gift card, but hey that's marketing.

The rule is never miss an opportunity, which is why this year Interflora have launched a campaign aimed at gay and lesbian lovers.

Then come the ideas which must have struck their creators in the middle of a sleepless night - "I've got it!"

How about a message in a bottle, delivered in a little box. Or giving her name to a star. As our own Milky Way has two hundred billion, we won’t run out of stock.

But some show real imagination. One firm is promoting beef jerky treats. No, not for the girlfriend's teeth, but to let her know you also love her dog.

ray@ebeatty.com

Nigella Versus the Supermarkets

Melbourne Herald Sun, Friday February 3, 2012

Nigella Lawson walks into a quaint old-fashioned greengrocer's and spouts lovingly about the beautiful vegetables and fruits in their handsome cane baskets.

She picks up a pair of eggplants, holds them above her ample bosom and drools about how fresh they are. Meanwhile your wife wonders why you have suddenly developed such an interest in TV cooking shows.

For the most part, though, buying fruit and veg is not such a sensuous experience. We dash into the supermarket, grab a few spuds and greens, and rush off to prepare for tonight's dinner.

Greengroceries are a staple that we cannot live without, and they represent $15 billion of our annual spending. As we know from the posters and ads that follow us from the kinder to the nursing home, we should all eat more fruit and vegetables, they are good for us and necessary for our daily health.

Not that we have been taking much notice. Surveys by researchers Morgans show that in the past eight years our spending on fresh fruit and vegetables has barely changed.

What has changed is where we buy our greens. The supermarkets have put relentless advertising pressure into pulling us into the stores, knowing that once inside we won't buy the potatoes without the meat, gravy and trimmings.

So the category becomes a "lost leader". That's where the supermarket cuts the price of goods to below cost just to drag the customers in. It's the same trick they have been using with milk.

There's a lot of this going on right now, if you leaf through the pages of this newspaper. Coles lost a lot of ground in their produce department under the relentless advertising of "Woolworths the fresh food people". Morgan's found a severe drop of Coles market share against Woolworths, from 2005 to the present day.

This week Coles launched their campaign slashing their green prices by half. What's surprising is that it took them so long to respond to the challenge.

In the fresh foods area, Woolworths sell $8.6 billion as against Coles' $6.3 billion. In greens the proportion is greater - 26 per cent versus 19.6. Coles had to fight back.

Unfortunately this battle between supermarkets makes everyone else become the tortoise in the field when the elephants fight. Already the two giants, Coles and Woolworths, own half of the business, with just one third of the nation's expenditure going to fruit shops and traditional markets.

The vicious price-slashing is easily done by the huge corporations that will just budget the losses as marketing expenses. For the little strip greengrocers it will be further pressure in their decline.

And it's no point in turning for help from governments of either colour. As far as they are concerned, cheaper grocery prices make them look good and as in the past two decades, when questions of unfair competition are raised they will look the other way.

So it comes down to us as consumers to change our buying behaviour. We are more aware of good food than in the past, thanks to shows like MasterChef and My Kitchen Rules, and celebrities like Jamie Oliver and of course Nigella.

We need to use this new enthusiasm to give support and encouragement to the Marios and Kostas and Borises of the shopping strips. They understand their vegies, know them far better than the schoolkid trimming lettuce in the supermarket.

Get talking to them to learn more about a bigger range of greens and exotic dishes. Oh, and keep your eyes open for lovely ladies and lads who take the time and care to smell the fruit.

ray@ebeatty.com

Kodak and the Death of Dinosaurs

Melbourne Herald Sun, Thursday January 26, 2012

I hate repeating myself, but some stories keep happening again and again. Anyone with any doubts on the science of evolution only has to follow the events catalogued in the endless flow of this Business Daily.

Here we see the survival of the fittest, the extinction of some of the greatest dinosaurs to ever walk the planet, replaced by the nimbler, more resourceful mammals.

What I'm talking about is the death of that great brontosaurus Kodak. Yes, along with many of its species, it is now under US bankruptcy protection - the palliative care ward for American businesses.

Of course we were warned well in advance, when the Australian operation closed in 2004. Already the writing was on the wall. The US operation was so much bigger, it took longer to die. But did it have to?

As always it is never just one event that causes the demise. Did they cling to their legacy business - film, paper and cheap cameras - too long? Yes. But it was, and is, still big business. What will yet rise up from the grave is still to be seen, but it surely will be a ghost of the proud 131 year old company that passed on.

Kodak were undermined on price by competitors like Fuji. Digital cameras came on with a rush - it's like everyone acquired one overnight. And the explosion of smart phones means that everyone now has a camera in pocket or purse.

How can such a giant falter? Last year we saw Borders collapse in a stack of books and in the States, American Airlines is doing its own Chapter 11 taxying right now.

The irony is that Kodak could have made it, they had all the ingredients and there's no doubting their muscle. Did you know that a Kodak engineer created the first digital camera? They invested lots of time and money into developing the technology and intellectual property still earns them huge royalties today - from other camera makers who have leapfrogged them.

But they never really believed that digital was going to overrun film so completely, so quickly.

They were like Xerox, who were developers of the key ingredients of today's computers - the graphical user interface, the mouse, the laser printer. Yet while Apple and many of the upcoming computer companies made fortunes, by 2000 Xerox were staring at bankruptcy.

Fortunately a new company president, Anne Mulcahy, who started in sales, suggested they talk to the customers - and saved the company.

This is what Kodak didn't do. Or maybe they were talking to the wrong customers. They didn't have the Apple design flair or the insight to extend their products out through web communications or social media - which is what all their competitors are doing now.

They developed the first wi-fi enabled camera, but when it didn't reach the sales targets they killed it off. Can you see the pattern here? When the going gets tough, the big run off.

Like IBM, who gave us the most successful personal computer system, but abandoned it to the clones. I always felt that the carpet bazaar haggling and trading that is the PC market never sat comfortably on those grey-suited shoulders.

When I look at the torment of these dinosaurs I see the big corporation curse: inflexibility and bureaucracy. So many of the key ingredients of today's technological revolution were not invented by Bill Gates or Steve Jobs but by Xerox and Kodak and IBM.

Where were these corporates , I wonder, when the young turks were plundering their basements? Probably in committees discussing the distribution of paperclips.

ray@ebeatty.com

Blog: themarketeer-raybeatty.blogspot.com

Big Brother is coming to your living room

Melbourne Herald Sun, January 20, 2012.

The name Big Brother comes from George Orwell's chilling book 1984. In it, everybody is watched and monitored. Which is why they called the TV series Big Brother. Day or night nothing is missed.

Well there's good news for marketers. You can be a big brother too and know all about your customers, thanks to the latest innovation released at this year's huge Consumer Electronics Show in Las Vegas.

It's a TV that views the viewers. Yes, many new models will have build-in cameras so that you can be watched. Isn't that good? Or is it absolutely terrifying?

In this ever-more connected world, the new TVs will be part of your network with the outside world. They will link you straight into Facebook so you'll be in contact with your friends.

How will the TV know it's you? With built-in facial recognition, it will notice when you enter the room and say, "Hello Julie". Or whoever.

The picture will be brilliant with new Organic Light Emitting Diodes (a new world to learn: OLEDs), and just four millimetres thick. You read it right. Not much thicker than a sheet of cardboard.

What's exciting for market researchers is that they can now get a true measure of TV audiences. They can count who's in the room and recognise each viewer. No more arguments about were they having a toilet break during the commercial.

They can even tell whether you are enjoying the program or are bored, by scanning your facial expression.
Technology has even more delights for you. You don't have to feel lonely any more, even while you're watching TV. A product called DirectTV will tell you what programs or movies your friends are watching, so you can watch with them too.

Another called IntoNow will analyse the audio signal of your friends' program through an iPhone app, and share it with your friends through Facebook.

Maybe I'm the wrong generation but I can't think of any friend who'd want to watch a TV show just because I was watching it. Must be lacking in empathy.

Getting back to the commercials, the new key word is no longer viewers or audience, but "impressions". To quote Rex Harris, from advertising agency group Publicis, "If you're looking elsewhere, then you're not paying attention. We would like to know if we're getting accurate impressions."

So the advertiser wants to know the ad is being watched, but wait there's more. Having recognised you and matched you with their huge database in the internet cloud, they know what you like. So the ads shown will be chosen to appeal directly to you.

Now this is very convenient and time saving for you and - doo-doo-doo-doo-doo-doo - spooky.

What also came clearly out of CES was the interconnection between technologies. Quoting Rex Harris once more, "People are increasingly consuming content on their smartphones, tablets, and now through devices that bring the internet to television - converged TV."

In the book, Big Brother didn't give you any choice whether you wanted to be watched or not. So expect the next big debate: Should you opt in, or opt out?

Already in America the discussion has quietly started. The big buyers of media want an opt-out approach. That is, unless you tell them not to, they will log you on. The civil libertarians want it opt-in. If you want a camera filming your living room, you have to ask for it.

So are you in or out? I suppose it will depend on how many friends you've got - and how much you want them to see of you.


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

Is he a dork or a millionaire businessman?

Melbourne Herald Sun, January 13, 2012

A quote from author Colleen McCullough caught my eye, about her willingness to express unfashionable opinions: "I like Prince Charles. I don't care if the world thinks he's a dork. I don't care.''

Exactly my thoughts, I agreed. While many in the media enjoy making fun of him, I find myself approving a lot of his opinions on conservation, sustainable food production, and the hideousness of so many modern buildings. If I were a gardener I'd probably talk to my tomatoes too.

So is he a twerp? I decided to take a closer look. What I found was a very successful CEO who works harder than most businessmen I know of, and then gives much of his income away.

Although I'm a republican, I must say that Charles gets a raw deal in the media. Firstly, all the talk about how many millions he costs the British public purse.

The money comes mostly from his inheritance, the Duchy of Cornwall estate. The income is his, as bequeathed by Edward III in 1337 to each monarch's Prince of Wales, but he is not allowed to touch the capital.

However he manages the billion-dollar business, generating about $26 million a year. "The Firm" (as the Royal Family calls itself) claim that he has doubled its capital value in the past decade.

The income comes from those famous organic farms, of course, but also from large numbers of rented farms, properties and commercial buildings.

Incidentally they have a very nice range of holiday cottages in England's south-west decorated in the very best Country Life chic, at around $1000 a week for a four-sleeper. Better price than most hotels.

There's a range of foods called Duchy Originals from Waitrose that sells the estate's organic products through supermarkets, and exports as far as Australia. And there is a fat investments portfolio to be managed.

But this isn't his day job. He spends much of his time tearing around the country attending meetings and opening bridges (639 engagements last year. Doesn't that make your eyes glaze?) And 73 of them were overseas, as he buzzes around the world spruiking British products and culture.

Much of this work is done at the request of the UK government and foreign ministry, so you can sympathise with his expecting them to cover the air fares and accommodation.

He helped to raise $180 million for charities, including sizable donations from his businesses.

On top of this he also funds part of the income for sons William and Harry, and now his new daughter-in-law. Luckily they have their own jobs to help out.

He pays tax like the rest of us - $6 million last year. Of course, like any businessman he has regular arguments with the taxman, and in his case Parliament, about what is deductible and what isn't.

Then there is aforementioned son and daughter-in-law. Like any father, last year's wedding cost him a fortune. Though fortunately his own mum and dad, and Kate's, paid most of the costs.

Not the police and marching bands, mind, they came out of the public purse. I remember musing at the time that if they had charged for worldwide TV rights like the Olympics, they would have come out in profit. Considerably.

Meanwhile William and Kate are getting themselves ready to take over the family business, practising their fixed smiles and staying awake. Kate has turned into a godsend for British fashion designers. When she bought a $50 skirt at Topshop, the chain sold out by the next day. Now that’s marketing power.

ray@ebeatty.com

The cargo cult is still growing strong

Melbourne Herald Sun, Friday January 6,2012.

It has become a tradition for this column to start the new year by surveying how we are progressing with what I call our “cargo cult economics”.

You remember cargo cults? The natives of New Guinea watched the American planes come in during World War II and unload guns and jeeps, tools and clothes, PX Stores full of groceries.

After the war the planes stopped and witch-doctors told the people they could start things up again if they built airports and conning towers and radar scanners. This they did, from bamboo and straw and coconut shells. But somehow these didn’t work.

This caused years of unrest because the villagers did not understand that behind the goods there had to be an underlying economy of funding, planning, work and building.

Well we in Australia and the western world are not so different really. We’ve seen our wealth delivered by ship and plane for half a century, from America and Europe and particularly China, and today we’re getting more than ever. All they ask for is a few shiploads of dirt from our backyards, and our signatures on some IOUs.

But lately the cargo cult has been getting a big shaky. Over in America when some of their bamboo and coconut airports collapsed three years ago, it took them a long time to recover. In fact there are still clans of natives sitting around waiting to get back to work again.

Of course this causes unrest and their leaders have been blamed and chased around the political jungle with machetes. Just this week in Iowa the bosses of several clans were arguing over who will fight to become the new chief of the tribe. Each one promised more goods, more wealth, less work.

Europe was so solid and confident but now the tribes have all fallen into argumentative conflicts over who has the most pigs and whether they will pass them on to the poorer tribes.

The Greeks are not so worried. Two and a half thousand years ago they had a very successful economy where slaves did all the work and the citizens sat around the agora arguing philosophy and creating democracy - for those who were not slaves. Old habits die hard and they still confidently expect their daily wine and olives.

The Italians are another ancient race. They have not had a strong central government since Mussolini made the trains run on time, so they don’t see much point in paying taxes. As always the gods will provide, it’s not my problem they say.

As you’d imagine, their straw and copra airports are stunningly designed and exquisitely crafted. But they are not much better at generating magic wealth.

Any suggestion that they should contribute their share of pigs and bananas to the communal kitchen is rejected with horror. Though their refusal is mild when compared to the cries of outrage from the rich Americans if asked to give the tribe more of their pigs. They’d rather cut back on their medicine men.

And so all over the world we, the wealthy tribes, sit around waiting for the cargo planes to fly in more and more goods, as our right. Where they come from doesn’t seem to trouble anyone; who will pay is a problem for later on; the fact that the sea is slowly swallowing the tropical paradise is no worry for those of us in the highlands.

Down here in Australia there’s nothing to worry about so long as there is someone willing to pay for our dirt. We don’t even have to make any goods any more so we can shut all those tiresome factories.

Instead let’s sit back, fire up the barbie, and build another grass and bamboo airport. Look, they’ve worked so far, why not for ever?

ray@ebeatty.com

Blog: themarketeer-raybeatty.blogspot.com

This year it’s renovation throughout the nation

Melbourne Herald Sun, Friday December 30, 2011

If you’re taking some time off this Christmas season, my bet is that part of the time will be spent in your jeans and runners, hammer or paintbrush in your hand, doing a bit of renovating.

The amount depends on whether the place is owned or rented, but this is the perfect time to get those things done that have been bugging you all year. Rest assured that you will not be alone in these tasks.

A major result to come from the astronomical house prices and the prohibitive cost of changing homes, is that renovation is back in a big way.

Take Bunnings. Their annual report was able to boast a 5.7 per cent sales growth when so many other retailers were bemoaning a declining market. And they opened a further 27 of their huge stores around the country. That’s an awful lot of hammers and nails.

Dulux also told a happy story at this month’s AGM. Home renovation has been a major factor in driving their underlying net profit close to $80 million this year.

We know that these increases were not caused by new home building because the Housing Industry Association reports a further decline in new residential work. This past year’s new housing starts were down by five percent, and the HIA predict that next year’s will be twice as bad.

This is hard to understand, at a time when existing houses are so over-priced and the need for more homes so obvious. Meanwhile, the September quarter saw renovations hit a new high of $2 billion.

Like all the rest of Australian retail, hardware is going bi-polar. Bunnings have ruled the roost for years now, squeezing the other chains like Mitre 10 and Thrifty-Link, forcing them to grow big or disappear.

But another chain of aircraft-hanger sized stores has started moving in, armed with lots of street cred.

Where Bunnings is part of Westfarmers, which owns Coles, it completes that mogul's royal flush of dominance in the marketplace from coal and fertiliser to retail chains and stationery to fuels and hardware.

Of course Woolworths wants its own toolkit, too. And now they have it. In partnership with American hardware giant Lowe's, they have started building the Masters hardware chain. The first opened recently in Braybrook in the City of Maribyrnong. Another 150 are already on the drawing boards.

This is a market where you have to be big to survive. If you've ever renovated you'll know what it's like - you desperately need an articulated gusset to fill the hole you've made in the wall but the first couple of local stores are too small to stock the range you need. You drive the extra miles to Bunnings, and that becomes a habit whenever you need something.

Mitre 10 know this and are rapidly building bigger stores, now bankrolled by grocery distributor Metcash who bought into the franchise chain this year.

The other big franchiser, Thrifty-Link, have announced the theme of their conference at the end of January: fighting back at the competition.

Even though Woolworths have committed $100 million to the Masters roll-out, they will open at most 20 a year. So it will be quite a while before they are able to stand toe to toe with Bunnings' 289 stores and trade centres.

Now finish your coffee, fold this newspaper, pick up your paintbrush and get back to work on the house. And do be sure to have a very happy - and productive - New Year.

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

To live a mile high, you’ve got to be rich as a sheikh

Melbourne Herald Sun, Friday December 23, 2001

How would you fancy living in the sky, a mile above the street? That's the plan for the Mile High Tower, due for completion in 2013. It will dwarf the current tallest world record holder, the kilometre-high Burj Khalifa opened in 2010.

Now that's an interesting building - it started life as the Grollo Tower, remember that? When the burghers of Melbourne decided that we don't really want the world's tallest building in our front yard, the concept moved north.

But this column is not about buildings. It's about money and power. You see both these buildings are in a place we know lots about, and nothing about. Arabia and the gulf states.

The mile-high Kingdom Tower (right)is being built just north of Jeddah, on the Red Sea coast of Saudi Arabia. The Burj Khalifa is in Dubai, on the Persian Gulf. They are both reflections of the huge wealth and power of this region.

Who are the richest people in the world? Well at $80,000 a head the Qataris come out well ahead. And that's in a country one-sixth the size of Tasmania.

They could teach us a thing or two about sovereign wealth funds, too. Like us they have made vast incomes out of their resources. The Qatar Investment Authority fund is worth $70 billion. For a population of native citizens of 250,000. The other million and a half non-citizens do well, but they are essentially guest workers.

But what is the use of all this wealth if it does not buy you influence? Qatar showed the world how this is done when Sheikh Hamad bin Khalifa Al-Thani, the Emir, set up Al Jazeera in 1996.

This Middle Eastern version of CNN has rapidly become a major news force world-wide, by maintaining high standards of journalism and relatively unbiased coverage of events. Qatar may be just a thumbnail on the world map, but it has a loud and insistent voice.

The lesson of the value of media - and opportunity of investment - has not been lost. Saudi Prince Al-Waleed bin Talal took his own plunge into social media this week by investing $300 million for a "strategic stake" in Twitter. That's an awful lot of tweets.

There's another major sale coming up next year that will have the sheikhs queuing down the corridors. Facebook is set to launch its initial public offering (IPO) and speculation on the funds gathered runs as high as $10 billion.

Remember that scene in the movie The Social Network, the story about the launch of Facebook? Mark Zuckerberg is telling his growing staff that part of their pay will be in share options, and that in time these will be worth a fortune.

Well that time has come, and the market is estimating the sale will create at least a thousand instant millionaires. The venerable founder and CEO will be all of 27 years of age.

Now don't you wish you studied harder in your computer classes?

Modern technology - the internet, smartphones, and social media that they carry - have made a profound difference to the rulers of the world, and we see its striking affects in the middle east. They have made life very hard for despots, always the world is watching, as they discovered in the Arab Spring.

Now the people and businesses of the Middle East have come to a fork in the road. Do they follow the mega-rich investors and ride sky-high into a prosperous future, facing the fact that social media will make them transparent? Or will they follow the road of the fundamentalists and lock themselves back in the middle ages?

ray@ebeatty.com

Think of those suffering Xmas Torture!

Melbourne Herald Sun, Friday December 16, 2011

As I walk through our city’s department stores and shops this festive season, I can’t help feeling a pang of painful sympathy for all those brave folk who work in them.

You see, in my student Christmas holidays I worked as an assistant in a men’s clothing retailer. It was an old fashioned store with timber product drawers and mannequins that looked like they had been modelled on The Follies of '36.

But the owner did allow himself one touch of modernity. An eight-track audio system. No, not a multi-channel mixer, these were the bulky packs that preceded the cassette tape. They had a length of about an hour and automatically started again when set for “repeat”.

For Christmas he had two tapes, with carols and Christmas songs. And they played from opening time to final close, continuously.

After a while it became a version of the Chinese water torture. Drip drip drip - merry - drip - jingle - drip - shepherds - aargh!

So yes, my friends in the retail stores, I do know what you are going through right now, and you even have to pretend to be happy and festive in the process.

Obviously they have the same problem in Sweden. And a retailer has cleverly made a promotion out of it.

The electronics store Pause is running a promotion called “Xmas Carol Torture!” And the first prize is a stereo system. To win it, however, you have to face the music.

Their web site (xmascaroltorture.com) plays a jolly version of Jingle Bells, in English. Continuously. The winner will be the soul who lasts longest watching the screen and listening to the carol.

Oh you can’t skive off and leave the computer running. Every minute or so a santa head on the screen laughs “Ho ho ho!” and you have to quickly click it with your mouse. When I looked at the site someone had made it to over two hours. I lasted about four minutes.

This technique can be used with interactive TV, as Burger King did in the US recently, with a campaign called “Whopper Lust”.

You had to sit in front of a dedicated channel on Direct TV, which for a week showed only a flame-grilled burger slowly turning on screen. The challenge was, watch this burger for five minutes and get one free. Watch it for ten minutes and you get two.

Presumably they believe that the spinning stack of bun, meat and tomatoes will hypnotise you into an insatiable desire for the burger.

Maybe they were right - more than 50,000 burgers were won during 13,500 hours of TV advertising. Once again you had to click in response to prompts or else you would be returned to the start. Obviously some people have nothing better to do with their time.

In my supermarket the PA system continuously plays “Woolworths the fresh food people”. This is a rather lovely song. Until you have been in the store for the umpteenth time this month and you hear it wafting down the aisles even as you pick up a trolley.

My silent sympathy goes out to those poor souls who know that every morning of their working lives they will be greeted by that jolly voice - and that it won’t stop ‘till they have clocked off.

I have to plead guilty myself. One jingle I created long ago was “Food Plus your store with more”, and every time I visited one of the convenience stores it would be tinnily chirping from the ceiling. Even though it was my own baby, after a while I would have happily thrown a boot at the loudspeaker.

ray@ebeatty.com

Celebrating the birth of the polls

Melbourne Herald Sun, Friday December 9, 2011

Opinion polls rule! Politicians jump at their peaks and troughs and are quick to dump candidates, even leaders, who can’t get the numbers. Products are minutely researched before they see the light of day.

We know about how many of us are fat or thin, when and how we shop, what we feel about any issue from a war to a proposed traffic island, and how often we have sex - and with whom. All is known to the all-seeing eye as we are pursued by armies of researchers.

But 70 years ago none of this existed. Here in Australia we may have read an occasional article about opinion polls in America, but on this quiet isle we relied on taxi driver polls.

Then in 1940 Sir Keith Murdoch (father of Rupert) sent his bright young accountant, Roy Morgan, to the US to find out about opinion polls from Dr George Gallup, founding father of the industry.

When he returned, Morgan was Australia’s leading - only - expert on the subject and immediately was put to work researching for this paper’s ancestors, the Melbourne Herald group.

In the spring of 1941, three months before Pearl Harbour, Murdoch set Morgan the task of measuring a “reader interest survey” for the Sydney Sun. It was Australia’s first “Gallup” opinion poll, measuring attitudes to equal pay for men and women.

Incidentally 60 per cent were in favour, showing that even 70 years ago, Australians were egalitarians.

However, political polling was tricky in the middle of a fierce war, but after it ended Morgan applied the Gallup method to pick the winning party for the next five federal elections from 1946 to 1954, within a margin of 1 percent.

Today of course an election would be unthinkable without its polls - and just about every other week in the year.

The Roy Morgan Research Centre became independent in 1959, though it received housing, power and postage from The Herald until 1973. But the other papers, and then television channels, were not going to take this lying down.

Since the late 60s, a number of polling companies have pushed forward. These days News Limited features within its stables the Newspoll and the Galaxy Poll.

In the early 70s Rod Cameron, whose research had guided John Cain, and then Bob Hawke, to their victories, formed ANOP. Fairfax use multi-national grocery researchers Nielsen.

What they all share is a high degree of accuracy that has grown from long practice. At the end of most modern campaigns, the postmortem shows all the major companies within a couple of percentage points of the outcome.

In both politics and consumer research they have introduced innovative methods. We are now familiar with political debates being underlined by a “worm”.

Morgans claim to have devised it, but the term “worm” has rapidly become a common noun so now it is named The Reactor . This is the squiggly lines across your TV screens as politicians debate, to show the public’s immediate reaction.

This is now available as an iPhone app from the Morgans web site so you can participate in research wherever you may be. The plan is to encourage TV viewers to comment on programs as they run - the good bits, the boring bits, the flow of interest. So if you want you can invite the all-seeing eye into your home.

Meanwhile, today, Morgans are having a 70th birthday party.

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

Leapfrogging phone war

Melbourne Herald Sun, Friday December 2, 2011

If there’s one thing the advertising industry loves it’s a war. Oh, not the “bang bang you’re dead” kind - the “my product is better than yours” kind.

Once the companies don their war paint and charge into the streets, they will stop at nothing - and advertising is one of their cheaper options.

As I predicted 18 months ago, the mobile phone companies weren’t going to lie down and let Apple steamroll the market. They have billions of dollars of investment to protect and they have been working with fury on all fronts: the product development, bells and whistles, retail deals and of course the flood of mobile phone ads we see.

The combined marketing onslaught must be working. Despite the impression that everyone who sits near to you on a train or a café has an iPhone, these days it’s hard to tell the difference between the real Apple and the many similar fruit around.

In fact, Samsung last month proudly declared that their S2 phone had hit top spot in Australian smartphone sales. This follows a year that saw Apple knock Nokia off its perch, now they are under attack themselves.

HTC is another fast-growing phone. The Taiwanese company has startled American analysts by snatching the lead from both Apple and Samsung. Two years ago the company only sold its phones under the stickers of other companies. Now it is selling one quarter of all smartphones in the US.

This leapfrogging looks like the way of the future in the volatile market. Most of the contenders are taking advantage of Google’s Android operating software, highly praised by the critics and allowing the phones to perform new tricks.

Android is an “open code” software. In other words, it is made available to anyone who wants to use it for no fee. Apple’s code, by contrast, is strictly proprietary - and not allowed into anyone else’s hands.

Except, that is, for the bit that allows external developers to attach their applications to the iPhone. The apps market has been the secret to the phone’s success. The last figure I heard was that there are now half a million of the little programs available for iPhones.

However, the developer has to pay Apple a royalty of 30 per cent for any he sells. Whereas Android’s will be royalty-free. So you can bet that all those apps will quickly be edited to fit the Android space.

The Australian phone wars are making world news too. Determined to throw a spoke in Samsung’s wheel, Apple has tried to ban Samsung’s new tablet, the Galaxy Tab 10.1, arguing that it will take away iPad 2 sales - so far they have sold 500,000 iPads in Australia.

Then, just two days ago the Federal Court overturned an injunction and the Galaxy could be selling by next week. So expect another flood of advertising to pour out of the fortresses of the rival corporations. Their advertising agencies must be rubbing their hands in glee.

A new ad in the US is delighting in poking fun at the devoted Apple fanboys. It features a round-the-block line waiting to buy the newest iPhone release. The camera eavesdrops on the Apple corps.

"I am so amped, I could stand here for three weeks," says one.
"Only seven people stand between us and meaning," says another.
"If it looks the same, how will people know I upgraded?" wonders a third.

Doubts start creeping in - the Samsung has a bigger screen, the Apple has battery problems and isn’t 4G. But one determined fanboy sums it up:

"I could never get a Samsung. I'm creative."
His friend chips in: "Dude, you're a barista."

Expect to see a lot more fireworks from Roman candles to bangers to mortars as this war gets progressively more bang-bang.

ray@ebeatty.com

How do you get the shoppers back to the shops?

Herald Sun, Friday November 25, 2011

Like the waves pounding on the Bass Strait coast, the changes in our buying patterns roll in relentlessly. It’s a natural phenomenon with no regard to the damage being wreaked on ships and shore. Great sandstone cliffs can be worn to collapse and carried away in the undertow.

Just last week the Australian National Retailers Association declared it is making an effort to cling to Christmas. Together with Commercial Radio Australia they have started a campaign nominally priced at $5 million, although much of it is advertising provided by the radio stations.

Having listened to the campaign commercials and read the literature on their web site, I can only find one word to describe it: wet.

Wet as in weak and mealy-mouthed. They do not actually tell us who they need protection from. Is it the multinational invaders? The booming on-line shopping industry? The strangling, selfish supermarket giants? But no-one is targeted, which means the campaign will never hit its mark.

The commercials themselves are awful. If they are the best that the combined brains of our Australian radio industry can produce - well that confirms my sadness at the creative decline of radio in this country.

There are major problems facing the retailers and they do need help from us, their customer base. But they will not make a difference by bombarding us with figures.

They tell us there are 140,000 retailers. That’s a lot. And they employ 1.2 million people. Yep that’s a lot. But somehow these figures do not give me the need to leap for my wallet.

The bright-voiced announcer goes on that these are mums, dads, uncles, aunties, sons and daughters. Yup... most people are.

But we’re talking here about winning back the hearts and minds of a population that is drifting elsewhere. From the retail strip to the mega-mart. From the local café to the multinational chain.

Most worryingly, away from shops altogether. You might remember my column a couple of weeks ago, featuring the subway wall in Seoul which had been converted into a virtual market. Commuters can order their groceries with a click of their mobile phones.

To combat these waves of progress, we need to be more cunning. The campaign needs to give our mums and dads et cetera, a reason to want to visit shops.

Any campaign planing should start with the question: what would make people prefer the jostle of a busy street to the canned music of the supermarket? Or, the bigger threat, the comfort of their livingroom computer?

Mandy Vere, writing in Britain’s Guardian newspaper, summed it up: “They have goods for you to peruse and handle, feel and read; free p&p; the joy of serendipity; live, and often knowledgeable, staff – sometimes even with smiles and conversation.”

You can feel the cloth and put on the shoes, enjoy the variety of choice and explore shops you had never seen before. It is this physical, emotional experience that needs to be communicated, not statistics.

When New York’s Department of Commerce wanted to promote its city and state, in 1977, it hired the hottest agency in town, Wells Rich Greene, and the great graphic artist Milton Glaser.

Because they gave the job to the best they got a campaign that was brilliant in its simplicity: I Love New York -

It’s still running today, and every city in the world has picked up the graphic - just take a look at the souvenir shops in Swanston Street.

I’m sorry retail association and radio stations, I give you an F for your campaign, with the note: “Engage your hearts and start again”.

ray@ebeatty.com

The wee folk have invaded your head

Melbourne Herald Sun, Friday November 18,2011

In life, and in business, you have a constant battle with the little people. Those wee folk who inhabit your head and keep nattering away at you, pushing and tugging and trying to nudge you off course.

With me the most persistent imp is Prue Krastinator. It's she who says "This can wait until tomorrow" or "You've got a week before deadline, leave the job ‘til Friday." Boy she's got me into trouble over the years.

If I let my guard down and neglect to write up my to-do lists for a couple of days I get rapidly landed in the soup. Has she ever come your way? From what I can see she has a lot of siblings in this town.

Another troublesome inhabitant of my cranium is Shootya Mouth, who is forever tossing dumb quips into the breech and urging me to fire indiscriminately without first engaging the brain.

Fortunately as I've got older he has become easier to control. But you can't afford to let your guard down because this one's as cunning as a cat, slipping in when you're stressed, excited or otherwise engaged - like in the middle of an important meeting.

His sister is called Weakas Water who won't say a thing until it's far too late to speak out. She worries she might offend or ask too much or otherwise sour the atmosphere.

Consequently she sets up situations where matters which were small glitches to be smoothed out, are left until they become major problems to be unravelled. She thrives on the fact that we all like a peaceful life and will keep putting off saying that most difficult word: "No".

Then there’s cousin Lazy Daisy whose favourite posture in life is stretched on the couch with a box of chocolates at the elbow and a remote control in hand.

Hours and days can drift past unnoticed until you suddenly realise that you’ve run out of customers, or the deadline's tomorrow, or the competiton’s sprinted past.

If you can keep her from stealing more than a few minutes or hours at a time, you're doing well. I know people who have let her have weeks, years - their whole lives, even.

Finally let's not forget that master contortionist, Indy Sision. Boy can he gum up the works! He's the one who keeps whispering in your ear, "Yes that looks right - but what if you’re wrong? Hadn't you better wait ‘til you're sure?"

Or "If I did this I'd get six of one, but if I did that I'd get half a dozen of the other - I can't decide." Or the real clincher - "If I leave it another week something will happen to make the decision easier."

Sure - someone else walks off with the account or the girl or the bargain or whatever it was you were indecisive about. And then isn't it amazing how clearly you can see what you should have done? Crystal clear, you were just in time to be too late.

So how do you deal with this tribe of monkeys on your back? The only way is eternal vigilance. Let your guard down and they grab the controls.

With a daily to-do list you can keep track of your activities - but make sure everything is on the list, in priority.

Though of course our friend Prue can turn writing a to-do list into an art form. So keep checking. Right now are you doing what is most productive with your life? (Of course at the moment you're reading this newspaper which I can assure you is a most virtuous, highly productive activity.)

ray@ebeatty.com

Blog: themarketeer-raybeatty.blogspot.com

China Dictates Entertainment

Melbourne Herald Sun, Friday November 11, 2011

There are certain advantages to dictatorship. Take China, where authorities have instructed TV stations to sharply cut back on shows that are "overly entertaining and of low taste," according to a spokesman with China’s State Administration of Radio, Film and Television last week.

When we look at the hit list and see dating shows, talent contests, talk shows and reality shows, we have to register some sympathy. There are a couple of quiz and reality shows here which would not be missed if dropped into the China Sea.

The statement said, “A number of entertainment programs are simple reproductions of other popular shows and some have tried to attract audiences through vulgar content such as gossip and exposure of privacy”. Well that does sound familiar.

I’ve found that many Australians still don’t understand how big and modern China is. Did you know the country has 34 satellite channels at the centre of a vast media network? The stations will be limited to broadcasting two “entertaining” programs each week, with a maximum of 90 minutes every day between 7:30 pm and 10:00 pm.

But one part of the statement spells problems for advertisers: "All broadcasting, TV and relevant organizations are not allowed to conduct ratings rankings.” So how do you evaluate a program without ratings?

Well for a start, commercials will increase in cost as marketers chase a smaller number of popular shows.

Just this week the bids were in for advertising on China Central Television, the country’s national broadcaster. The system is, you bid for ad spots for the coming 2012 year. In recent times, the prices have increased by double digit percentages each year. Last year advertisers pledged nearly two billion dollars.

The audiences are big, and so are the rates. A thirty second spot on a good show can cost $60,000. Come to think of it, on a per capita basis, that could be a lot cheaper than Australia.

In the bidding are multi-nationals like KFC and Kraft, and the big media buyers like Starcom MediaVest Group and Aegis Media’s Carat.

London-based Aegis is one of the world’s biggest media agencies, turning over $1.5 billion a year. Just last year Australia’s Harold Mitchell merged his Mitchell media group into the organisation making him their second-biggest shareholder and a member of the international board.

These days business success is so much harder if you don’t have solid ties to China, so all the big advertising agencies are there and many are flourishing.

The analysts do see some positives come out of the new regulations. For one thing, the stations may be forced to produce more quality programming rather than endless copies of copies of overseas shows.

The directive specifies scripted programmes, concerts, events and quiz shows that rely on knowledge rather than pure luck.

Of course in China the political cadres are never far away. A Chinese ‘Idol’ type of show was enormously popular with the singers attracting audiences of 400 million, when all of a sudden the plug was pulled and the mikes went dead.

It was found to be too entertaining, though speculation said the real reason was that the popular voting for winners was a bit too close to democracy for the Party’s liking.

There are difficult choices for Chinese authorities, if people watched less TV they might do more blogging or tweeting - much harder to control.

As an example of popular tastes, a year ago a Japanese porn star called Sora Aoi went to Shanghai and opened her microblogging account. Within a day she had 220,000 followers and now she is a celebrated personality - a sort of Kim Kardashian of the Middle Kingdom.

Is that what the authorities envisaged?

ray@ebeatty.com

Remember the Eskimos, Arabs and Australians?

Melbourne Herald Sun, Friday, November 4, 2011

Long ago the three jokes in marketing were: selling ice cream to Eskimos; selling sand to Saudi Arabia; and selling water in bottles.

Well Eskimo ice cream really does exist. Mind you it’s made from fish, reindeer fat, berries and seal oil so it must be an acquired taste.

Perth’s GMA Garnet really does sell sand to Saudi Arabia. It’s a special alluvial sand used in sand blasting, but that’s still a great sales tale.

As for water in bottles - well we’re all drinking it now aren’t we? And who would have thought it a few years back?

As a kid on European holidays I drank bottled water - because, they told me, the local water was not suitable for drinking: “aqua non potabile” said all the taps on Italian trains.

But back home everybody praised the purity and taste of our water. Here in Melbourne the Board of Works boasted the finest water in the world straight out of our taps.

So what has changed to turn bottled water into a $500 million industry, and discarded plastic containers into an ecological problem?

The main driver has been health consciousness. We need to drink more water, say the health and beauty articles. We should drink less sugar water, the plain is best. It’s the slimmest drink there is.

Add to this our changing climate. As the planet gets hotter and our summers seem to get ever longer, our drink consumption soars. The growth of the gym and running movement contributes. Did you see how many water bottles get drunk and discarded during a marathon or bicycle tour?

The past two decades have also seen some very sophisticated advertising to put a gloss on a very plain product. It is the perfect example of how to transfer personality to a product that has absolutely zero to start with.

The French do it beautifully as you’d expect. The Perrier commercial that showed water surging up from the bowels of the earth; more recently a girl walking through a summer day so hot that the cars are melting in the street.

Evian have created commercials that get remembered after just one viewing - in fact their “Roller Babies” are a top pick on YouTube. Locally Mt Franklin has featured children playing in water, while Hepburn Spa paints a historic picture of Captain Hepburn.

All very little to do with the reality of huge production lines filling millions of plastic bottles, often with filtered tap water.

There’s an illogical side too. The hatred for the plastic bottles - so much so that the town of Bundanoon in NSW has banned all bottled water. So has the University of Canberra and just recently the Victorian College of the Arts. No doubt more will follow, with the first school - Monte Sant' Angelo Mercy College in North Sydney - showing the way.

I’m afraid the logic of a bottle of water being sinful while a bottle of Coke is not, escapes me. The difference is a spoonful of sugar. But you see no protests against Mother or Red Bull, with much less savoury reputations.

The industry is taking this seriously. Just last month Coca Cola Amatil loudly announced that it is moving Mt Franklin water into new, eco-friendly bottles that use 35% less plastic and won the environmental award from the Australian Packaging Covenant. This is a joint body between governments and industry to reduce and recycle packaging in products.

Of course there is nothing to stop people from bringing along their own bottles and filling them from the tap. But for the fashion conscious this is as appealing as fish-flavoured ice cream.

ray@ebeatty.com

For marketing the future’s on the wall

Melbourne Herald Sun, Friday October 28, 2011

The new world of marketing is on the wall. The subway wall.

We are being hit by profound changes and five years from now your business will have to have adapted or face extinction. You’re in a fight for the survival of the fittest.

I don’t have to tell you how rapidly business, media and leisure are changing. It’s as if every day we discover something new we didn’t know existed, and have to change our behaviour.

From booking tickets for the movies to buying a book, from visiting the bank to checking the encyclopaedia, from filling a government form to applying for a job. We do things differently now, and the changes will come faster.

The accelerator will be the National Broadband Network.

Now that it is getting over its stuttering start, we will see it spread like oil on a pond. Already the navvies with their orange jackets and blue cables are appearing on corners in every state.

Let me give you an example of what could happen.

Two months ago in Seoul, South Korea, commuters discovered that the walls of one of the busiest subway stations had been covered with illuminated pictures of shopping shelves. Row after row of cereal boxes and detergents and soup packets, just like in a real supermarket.

Above the displays were the instructions. Use the application on your smart phone (if you haven’t got it, call this number and it will be instantly inserted). With the phone’s camera, take a photo of the QR code on whatever product you want.

Oh that’s a Quick Response code. The funny square dots that keep appearing on products and newspapers and look like a bar code on steroids. Which is precisely what they are.

They link your smartphone into the web and exchange information. One snap and you have just bought that item.

Walk the length of the wall and its pillars with shopping list in one hand and phone in the other, clicking off the week’s groceries. By the time the train gets you home, the order is already with the supermarket, being picked and packed for delivery.

The Koreans have the world’s fastest and biggest national broadband network, are the biggest consumers of smartphones, the highest users of QR codes. So they are leading the world in this new technology. Have no doubt about it, we will be following the same road.

Just this week our sister newspaper The Australian questioned 15 of the country’s leading advertising buyers about the opportunities that will come from the NBN. All agreed that they will be considerable.

They counted off internet television and movies, online e-commerce like Korea’s, better information delivery and feedback, greater connectivity with country areas.

“There’s a million opportunities,” said Aegis Media chairman Harold Mitchell.

“Speed will accelerate changes in retail behaviour...and open the door for new models,” says Mindshare Australia’s James Greet.

“Any brands enabled...to build deeper relationships through content and genuine dialogue will win,” adds OMD’s Peter Horgan.

And MEC’s Peter Fogel concluded: “The brands that will win are those able to attract and engage consumers more often and for longer periods of time”.

In other words, your relationship with your customers will be closer, faster, more intimate. You will know them better - but in turn they will know you better.

This is an opportunity to develop a real dialogue with your customers, like speaking to each of them face to face in your office or shop. The combination of fast broadband and smartphones gives you that interaction any time, any place.

What a brave new world we are stepping into. How ready are you to cope with it?

ray@ebeatty.com

Don’t trifle with the male shopper

Melbourne Herald Sun, October 21, 2011

The advertising brief was simple - write a TV commercial launching new Foster Clark’s Instant Trifle, and show how easily a trifle could be made thanks to fast-setting custard and jelly.

My idea was, “it’s so easy that even dad and the kids can make it”. So I wrote a script where mum is out on Saturday morning and the family decide to give her a treat - make the dessert themselves. Quick cuts show ingredients prepared, end with look of delight on mum’s face when she arrives to a lovely trifle and beaming hubby and kids.

Nothing offensive or contentious? So I thought until the storyboard went in for consumer testing. It came out shredded.

Mums regarded the kitchen as their territory and did not want the family in there without them. The response was, “they’d only make a mess and I’d have to clean up after them” or “there’s no way my husband would do any cooking himself” - the script was spiked and we went back to pretty pictures of tempting desserts.

Now this all happened some 30 years ago. How the world has changed since the 80s. But just how different is it really?

One thing research can measure is the gender of grocery buying. We all know, visiting our supermarket, that there are more men pushing trolleys than in the past, The amount of food in the basket shows there is a family to feed.

To get figures, I asked Geoffrey Smith, Industry Director for Retail at Morgan Research in Sydney. They continually survey Australian trends, questioning 16,000 people a year.

“From 1997 to 2003, the number of male grocery buyers rose from 35% to 40%,” he explained. “But then it flatlined, stayed at 40% right up to 2011. And we don’t know why, really.” Obviously men have hit their supermarket ceiling.

The change has worked both ways. Women supermarket buyers fell five percent between 67 and 02, and have remained at sixty percent ever since.

Still, four out of ten men is a sizable number - not that you would notice it in TV advertising. In most commercials it’s still mum who pushes the trolley, cleans the toilet, cooks the dinner, as it has always been.

In most of the advertising world, the only time we see a man in a supermarket it is as a bewildered twerp.

Boyfriend is sent to the supermarket to buy one item - but then forgets the brand. However then he sees a girl bending down at the dairy counter, ogles the bareness at the top of her jeans, notices she has a black thong. Aha - Black Swan dips!

In a Keloggs Crunchy Nut commercial a young couple take a romantic balloon ride, but when they urgently need altitude, they jettison all their possessions. The final item is the pack of cereal. Cut to girl enjoying her breakfast, and boyfriend tossed far below.

There’s also a belief that men know nothing about periods. Recently a commercial for Libra showed boyfriend playing with a box of pads, sticking them on his arms and head, pretending to be a robot - till girlfriend and her parents walk through the door.

Now presumably such an expensive ad by a major company would have been solidly market researched before being made. Which leaves me scratching my head - what exactly do our Gen X and Y girls think about the men in their lives, and their own menstruation, that it can be such a joke? To understand I’d have to be much younger - and female.

However marketers had better start understanding that the nowadays the market is both male and female - almost equally.

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

Goodbye Steve, and thanks

Melbourne Herald Sun, October 14, 2011

A million words have been written and spoken since last week’s death of Apple founder Steve Jobs. But how could I not acknowledge the passing of this column’s idol, the greatest Marketeer of all?

More specifically, let’s take a look at what Jobs can teach you about your business. What did he get so right, so consistently?

Back when he started as a 21 year old in his family garage, he had marketing in mind.

Looking at the interest of geeky hobbyists for self-constructed kit computers, he could see a market for a real personal computer. He did the marketing, and brought his friend Steve Wozniak - a real electronic hacker - into a partnership to do the designing and programming. They built the Apple II.

Always Jobs insisted on simplicity of use. And a great deal of the Apple II’s success was achieved by tramping into the schools of America, and later the world, promoting it as an ideal educational tool. The kids could quickly get up and running without having to learn programming first.

There was another advantage to this marketing strategy: get them young and you’ll keep them for ever.

Then came the Macintosh, the computer that transformed how we all communicate. From Xerox he took the GUI graphic interface, from Stanford Research Institute, the mouse. All aimed at making computers simple, tactile to use, hiding the immense complexity within.

The fresh marketing drive aimed at the visual industry. Designers, advertising agencies, newspapers, architects - who also happened to be the opinion leaders in what is new and trendy.

Then came his decade in the wilderness. He could never see why everybody was not like him - driven, perfectionist, creative, demanding - which made him a terrible boss. In 1985 the board, made up of more conventional, button-down men, voted to effectively push him out.

Undaunted he formed a new computer company, NeXT. By 1997 Apple realised that they needed their dictator and bought NeXT. Jobs was back in the saddle.

Now began the greatest marketing tour de force we’ve ever seen. First came the iMac. Who would ever want a strange, coloured, transparent computer? Answer: everyone.

Jobs knew that marketing is about creating desire. He didn’t just get an engineer to design his products, he made the brilliant English artist Jonathan Ive his Senior Vice President of Industrial Design.

Ive conceived the off-the-planet iMac, and then the MacBook, iPod, iPhone and iPad. In other words, everything that makes an Apple an Apple.

Jobs understood image. Look at his advertising. An Apple commercial is unmistakably Apple. Smart, slick, clean, just like the products.

To market his iPods, Jobs created iTunes and before long became the kingpin of the music industry.

For the iPhone he created the Apps market - where other people did all the work.

His showmanship was legendary. All the secrecy behind new Apple products, right up to the moment when Jobs would stride onto a stage and unveil the new invention like a rabbit from a hat.

Also dazzling was his ability to generate waves of publicity for his products. Think of all the hype over the iPad. Five years before, Bill Gates had introduced his tablet computer as “the next great thing in computing.” He was right, but smart as he is, he just did not have the chutzpah that Jobs could bring to launching the product.

What were Jobs’ secrets? Brilliant concepts. Willingness to pay for the very best people and designers. A sense of timing. Persistence. And the one thing you may find difficult to learn: sheer genius.

Goodbye Steve, thanks for all the music.

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

Bad rep? Call Web Dusters!

Melbourne Herald Sun, Friday October 7,2011

What do you do when you’re browsing through Google, checking yourself out as you like to do every now and then, and you discover that someone has written something about you, or your company, that is untrue. Or even worse, that is true but you didn’t want anyone to know?

What do you do? You call Web Dusters!

Well that’s my name for them. They call themselves “Reputation Defenders” or “Online Reputation Managers”. These are companies you hire, either per task or on retainer, who look out for nasties in the woodpile.

It can be a pretty big woodpile, too. It’s not unusual for a medium-sized company to come up with a few million references when they’re searched for on Google or Bing.

The Web Dusters vacuum their way through this and winkle out unappealing references.

Of course this is a labour of Sisyphus - the bloke who spends eternity pushing a boulder uphill every day, only for it to roll down every night. It’s a job without end.

The dusting reaches far and wide. Wikipedia is a huge reference where a person or company can be misunderstood. It’s nice to be in an encyclopaedia, but not if the reference points out wrongful or unflattering events.

Even worse, Wikileaks waits for any secret tit-bit to slip into its grasp. And we all know what a hard time that has given the world’s governments.

Two years ago a YouTube video showed two Domino’s Pizza employees doing gross things to their pizzas in the back room. It was a sensation viewed around the globe and the couple was actually prosecuted. But not before it had done millions of dollars’ worth of damage to the company’s sales.

Reputation Manager Australia is a local company that offers its watchdog services. They give the example of a web search on a businessman who quickly became their client.

The search of his name had brought up, in the first three responses, a reference to an ASIC investigation report. It was harsh and recounted the agency’s prosecution of him, leading to his being banned for a time.

Owner David Cannell boasts that he was able to push the client’s reference down the queue to oblivion.

Another rich vein of business is our sporting world. Working with sports clubs, he has ways to keep their champions’ antics out of the public eye.

Of course there is also a do-it-yourself element in the black-blogging trade. Company staff are encouraged to write glowing reviews about their restaurant or hotel - incognito of course. And then they go on their opponents’ sites and complain about bad food and poor service.

These too can be dusted out.

But you have to be careful not to get caught. Recently the PR goliath Burson-Marsteller was sprung when they were asked by client Facebook to do a little internet spying on their rival Google. Unfortunately whoever was given the task asked the wrong person. He turned out to be a whistle-blower who blasted the story across the web.

Mind you, considering that the US online advertising market is now worth $28 billion, you can understand a little frisky competition.

There is now official interest in all this skullduggery. In the US, the Federal Trade Commission prosecuted a PR company, Reverb Communications. They had a side business writing glowing reviews on video games, and charging the developer for the service.

The FTC slapped the company on the hand and warned everybody else not to post fraudulent reviews, either for themselves or for their opponents. No doubt the industry looked up from their monitors, nodded acknowledgement, and went back to writing reviews.

Call out the Web Dusters!

ray@ebeatty.com

Cash bells ring for the marriage market

Melbourne Herald Sun, Friday September 30, 2011


If your business has been running a bit slow in its profits or growth, maybe you ought to look at marriage.

No, I cast no aspersions on your current relationship - rather, the money to be made out of splicing the knot.

Marriage seems to be one of the armour-plated, recession-proof products in this world and believe it or not, Australians are marrying more than ever - with ever-increasing cost.

This year 119,000 Australian couples will tread the aisle, a percentage point up from last year. Historically the marriage rate has been steadily falling, so any increase is a surprise.

The Australian Bureau of Statistics records the current annual marriage rate at 5.5 per thousand population. In the seventies it was close to eight. The record was set in 1942 when it hit 12. Mind you they had good reason to be in a hurry.

Today’s couples are much older than in the past. The median age is now 32 for men and 29 for women, whereas in the seventies they married five or six years earlier.

Is this the sign of new wisdom and maturity? Certainly they have had time to develop careers, their incomes and savings. So when it comes to the wedding, they splurge.

Researchers have placed the average cost of a wedding at $36,000. And much of the money seems to come from the savings of the couple. Manager of the research group IBISWorld, Karen Dobie, pointed to couples regarding the wedding as “A high priority expense”.

Couples save for a long time, tightening their belts to raise the bank balance, and no doubt doing their waistlines no harm either.

Each Saturday as you pass your local church, think about the cost of those gowns and flashy cars. This is a $4.3 billion industry.

The biggest winners are the hotels and reception palaces that rake in $1.4 billion of the takings. And that does not include the food which brings in another $670 million. Flowers also generate a hefty $760 million. All these categories are expected to grow by more than 10 per cent in the coming five years.

Photography and film production is the only category not doing so well. No doubt it’s because of so many friends and uncles offering to film the event with their newly-acquired expensive equipment. Mind you, seeing some of the results of these efforts makes me think that the prudent couples will double-up by hiring a professional too.

Of course, who could forget the wedding dress. Now you don’t have to buy the world’s most expensive - that record is currently held by Renee Strauss who created a dress with 150 carats of diamonds, valued at $12 million.

But possibly if you are the father of the bride, you may feel that hers is not so far behind. Especially when you throw in the bridesmaids’ custom-designed frocks and the groomsmen’s Armani dinner suits. At the end of the year you are looking at close to a billion dollars spent on clothes.

Progress is effecting printers too, as more invitations are done by email, with DVDs replacing the mountains of photo sets sent to the guests.

However there is another ray of light in this story, for the wedding industry. Around the world a whole new gold rush is evolving. From Argentina to Sweden, from Canada to South Africa, the phenomenon of same sex marriage is spreading.

And when gay couples pledge their troths, you’ll usually find a high-income couple, older and wealthier, surrounded by friends who insist that this must be the best bash since Princess Di.

Ah, there’s a whole industry here waiting with bated breath for our legislators to get in on the act and give gay marriage a go.

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

Fred Schepisi and the art of storming through

Melbourne Herald Sun, Friday September 23, 2011

Last weekend we saw a wonderful movie, The Eye of the Storm, Fred Schepisi’s interpretation of Patrick White’s novel starring Charlotte Rampling and Geoffrey Rush. And it set me off thinking about advertising creativity.

I remembered, as a junior writer in one of the big agencies, when Fred learned the film business through making TV commercials.

In the agency we would meticulously hone the script, each word and visual hammered out between the creatives and the clients, till we had a script - dry and typical of a committee effort.

Fred would be called in, as the hottest young director in the country, and be drilled about the requirements word for word.

Then he would disappear. No thanks, he didn’t want the agency or the client at the shoot or edit. The first thing we saw was the rough cut, when the commercial was 95 per cent made.

Client and agency would gather in the darkened boardroom to view. Surprise - the film seemed to have little connection to our careful script. The voice-over had been cut from fifty words to five. He at least allowed us to see a pack shot at the end.

Anyone from client or agency who objected was met by a torrent of expletives from the director, who then asked: “Is this better than you wanted?” And we all had to agree, it was brilliant. He had captured the real meaning of what we wanted to say and delivered a powerful message for the product.

He was quite unreasonable in ignoring agency protocols. But as I quoted in last week’s column, “All progress depends on unreasonable people”.

One of the greatest ad men of recent times, Britain’s David Abbott, built his agency AMV-BBDO through outstanding creative work. He showed how to turn the slowness of Guiness pouring into a virtue, and even made a supermarket classy through his Sainsbury’s ads (alas a feat that has never been emulated here).

In the process he made his millions, but refused to compromise. As he recently said in an interview with American adman Rance Crain, “Most of the talk in the advertising business is about clients picking agencies. I think it's just as important for agencies to pick clients."

He wanted clients who respected and listened to him. "Every client we picked and agreed to work with - it was not only that we wanted their money, but we wanted their company as well. We chose people we liked, for whom advertising seemed to be an important, upfront part of their business."

This was the philosophy that made The Campaign Palace a success, first in Melbourne and then also in Sydney. Founders Lionel Hunt and Gordon Trembath made a reputation for not compromising on the creativity. So they needed clients who would trust them.

The ads they made were risky. “Some day you’re gonna get caught with your pants down” showed Dunlop’s Pacific Brands that saucy ads could attract the public’s attention far greater than the media spend available.

The ads that followed like “I’m wearing No Nickers” and “Antz Pantz (sic ‘em Rex!)” proved the point.

In the early years clients like Just Jeans and P&O (“Heron Island - Just a drop in the ocean”) were successful because people remembered the ads.

Says Trembath: “If you're clearly presenting memorable uncompromised work that's so obviously going to brand that client a hero, you're going to be loved forever for your uncompromising stance."

However the hard part is getting to that point of trust.

Once you’re as famous as Schepisi or Abbott or Palace, you can persuade the clients that bending to your will is going to make them rich and famous.

But until then the major job to be done is selling yourself.


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