Digital Hive

McD's and Starbucks: here's the skinny latte

Starbucks response (going on the offensive, challenging its rival's "quality") doesn't make sense - it makes them looked scared, and they're actually in a position of strength: they're the premium brand. Economies go up and down, premium brands stay beloved, but only as long as they seem up to date.

McD's will upsell the new beverages to existing young (particularly ethnic) target - which is a cheaper and easier way to drive increased topline sales in a recession. That is, if people can understand the campaign. I think the campaign really lacks "conversationality" - the "e" thing is hard to say, the idea's not intuitive, it's even potentially a socially risk (what if you mis-pronounce it?)

Starbucks behavioral problem is consumers cutting out a visit a week. Consumers are doing this because they feel guilty about the sneaking suspicious they might have been wasting money on coffee for the past several years. McDonald's prices aren't lower enough to induce a brand switch, or probably even trial. Plus the McD's brand is all wrong for Starbucks - it's too young, too trendy and pop, not sophisticated enough. It's not a badge for young professionals grasping for prestige in a contracting economy and dreading potentially dwindling career prospects. Buying McDonald's is an admission that the dream hasn't worked out. People don't want to go there.

Starbucks needs to give brand lovers a reason to visit the store that's cheaper, or at least makes them feel like they're not wasting as much money as they have guiltily been for the past several years. That addresses the guilt thing. What if Starbucks invited people to come by the store even when they don't need a coffee, just to come on by, hang out, use the WIFI, whatever. Build the community piece of the brand, not the product piece. Remind the core Starbucks consumer of the value the brand brings to their lives - to inoculate them from the visit-cutting guilt they are feeling.

Better yet - what about sponsoring some online networking for folks looking for work? Unlocking the power of Starbucks nation around an issue that's driving the decrease in visits makes a ton of sense.

TV ads aren't the answer here. Starting with the customer is.

This WSJ article has the creative as well as a number of thoughtful points:

WSJ article

Photos of the recession - NYT project & Flickr too

Ali Considine turned me onto this wonderful NYTimes project where consumers submit photos (with annotated comments) representing how the recession is impacting their communities. It's a bold, unvarnished look at how real people (not policymakers or spokesmonkeys) are noticing, perceiving and reacting to the recession. Great stuff!!

And, Alyson Stevens shared a link to an analogous initiative on Slate.

Friend me! I am publishing short bits and bytes on FaceBook these days

Peeps - sorry for the recent brownout, been busy, but also have picked up a nasty habit of posting stuff on FaceBook. If you're a Digital Hive fan please friend me on FB to get those updates. And I  also pledge to get back to the Hive with new stuff soon (starting today). XO

WOMinomics - or why it makes economic sense to stimulate positive WOM

Mega thanks to my buddy and WOM guru Jackie Huba for a super post about the economics of word of mouth. You guys know how much I loves the math!

According to Satmetrix, who developed the Net Promoter Economic Framework, which determines total customer value based on buyer and referral behaviors of "Promoters" (those who are highly likely to recommend a company and/or its products) and "Detractors" (those who are unlikely to recommend a company and/or products), in a wireless industry study they did (Net Promoter Economics: The Impact of Word of Mouth), each Promoter was worth approximately $1,700 and accounted for roughly one-half of a new customer acquired through positive word of mouth. In comparison, each Detractor accounted for the loss of 1.3 new customers through negative word of mouth.

The lost business associated with their negative referrals subtracts the entire value of their purchase behavior and then some, creating a net cost of $300. Compared with the value of a Promoter, each Detractor is worth $2,000 less than a Promoter.

OK, so, this seems like common sense to me. But what I think is really interesting is to see the economics of WOM quantified. Now, what can we do with this info?

First off, know who you are targeting. Don't acquire detractors. In addition to being bad sources of long term revenue, they'll facilitate losing other customers. If there is any way to excise them from the acquisition process, DO IT. I do not know how to do this, if you have ideas please share.

Second, identify your promoters and encourage and equip them to share good stuff. Enable them to tell their friends they love the product or experience.

Other ideas?

Repurposing: the new purchasing?

I found an interesting article on WSJ.com  that I wanted to share. It's about taking older fashion items and repurposing them in new ways to mirror current fashion trends.  The video from the piece helps give you an idea of what this is about.

The overall point about not buying new stuff initially got my attention, but I think a bigger point (unaddressed in the article) is what brands can do to respond to this. On one level we're talking about people not buying as much stuff as they used to, and why on earth would we want to encourage that. But I think there's opportunity in tapping into the notion of working a new purchase into what you already have, helping the consumer get the most from his/her overall collection of items, buying something will stand the test of time and go with lots of other things, etc.

This is a great time to revisit the idea of brands adding value for consumers. If what they want is the ability to make their dollars go further, let's help them with it. And not just by discounting the uber-trendy.

Instead of just pushing new for new's sake, I wonder if a new spin on purchasing would work better in these troubled economic times.

Consumers' changing attitudes about consumption: learnings from American Greetings

Check out this great article in the online WSJ about how American Greetings has been tracking consumer sentiment about spending and revising their expansive product line (3,000 cards!) to reflect what they're learning. A few interesting quotes from the article:

An early clue to the new direction: During brainstorming sessions held late last year for the 2008 holiday collection, nostalgia for simple holiday traditions like cookie-baking, walks through the snow and tree-trimming kept coming up among the writers, artists and trend experts in attendance. Then, amid the glitzy, festive tone that dominated last year's holiday-card designs, American Greetings noticed that traditional cards with heartfelt messages were selling surprisingly well.

By early this year, as the housing downturn accelerated and gas prices rose, the Cleveland-based company's research showed that consumers, spending more time at home, were focusing on personal relationships and reminiscing about happier times together.

The product implications are interesting:

A definite no-no this year is expecting too much from Santa. "The cards with a lot of shopping bags or gifts piled high, the excess we thought was so cute last year, doesn't work now," says Candace Corlett, president of New York consulting firm WSL Strategic Retail. "We don't want to be reminded of our aggressive consumerism."

So the greeting-card giants, never known for radicalism, are playing it especially safe. Nontraditional holiday shades, such as pink and light blue, are being used sparingly. "This year you could add accents of pink with red or green, but you need traditional icons, like trees or snowmen, to do it," says Ms. Sliede of American Greetings.

The text is deliberately long-winded. Before, cards had shorter, snappier messages. "Now people want longer copy," says Rochelle Lulow, creative director of American Greetings' editorial studio. "During difficult times, we see people wanting to connect on a deeper, emotional level that goes above and beyond." Another executive said: "We started seeing that at Mother's Day."

Embedded in the article is a great slideshow of some of their latest designs that reflect these insights.

Creating ideas, 21st century style

You guys probably already saw this great story in last weekend's NYTimes magazine but if not, check it out. It highlights some of the critical aspects of developing ideas for today's brands and consumers. And during the course of the article they actually come up with some interesting ideas, unprompted and (presumably) without preparation (the Facebook overalls idea is pretty awesome).  

Participants in the roundtable: BENJAMIN PALMER is the C.E.O. of the Barbarian Group, an Internet advertising and marketing firm based in Boston. He helped create the ‘‘Subservient Chicken’’ online campaign for Burger King. LARS BASTHOLM is a chief creative officer at AKQA, where he has worked on campaigns for Xbox, Coca-Cola and Motorola. ROBERT RASMUSSEN is the executive creative director of the Nike account at R/GA, an agency that specializes in digital media. He has created campaigns for ESPN, Sega and Jet.

Loved this quote: Most media, like television, used to be a kind of flow. You’d sit down, you’d turn it on and you’d watch. The reason advertising is completely broken is that the flow doesn’t exist anymore. There’s no prime time. There’s no such thing as must-see TV. Everyone’s composing their own flow. And once you start becoming the composer of your own flow, you can’t go back. You’re like, Why would I have somebody dictate to me what I watch when I’m used to programming for myself? 

Also loved this riff on how to take Katie Couric at CBS and actually make her relevant: 

Palmer: What Katie Couric is not giving us, as a mainstream evening-news anchor, is an invitation to participate. So what if we changed the format of her show? Every day she gives us a sneak preview of whom she will interview over the next week. And you can go online and post your own questions. Maybe two or three user questions end up on the evening news, and you’re like a big star if she uses your question. She says your name: “This is Robert Rasmussen’s question.” You’re totally psyched. You feel awesome. And then on the Internet we post the other 17 user questions and their answers. We put those on the Internet, so there’s actually like an hour of content. A half-hour is on TV, and the other half-hour is on the Internet. You start involving people in the conversation. You start using television as the theatrical component to the Internet. Because what TV offers that the Internet doesn’t offer is a guarantee of fame. You know that millions of people saw that bit of you on television.

Also: 

Bastholm: She also needs to change from being a persona to being a person, and that’s what digital is best at. I’d begin with a Twitter feed where she’s talking about what she’s actually doing during the day. She’d talk about all the behind-the-scenes stuff that you don’t see when she’s interviewing, say, Sarah Palin. Talking very openheartedly about how she experienced that the second after she’s done with the interview. So you kind of start to feel you know the person who’s doing the interviewing versus just the anchor posing the questions. 

And: 

Palmer: There’s a difference. A Super Bowl ad is broadcast and everybody sees the same ad, and it comes from a single source. And so you may have a preference as to whether you liked this ad in comparison to this other ad in the block of ads that you just saw. But when you feel like you’ve discovered something on the Internet, it’s a different relationship to the brand. Say I was one of the first thousand people who saw that Cadbury gorilla ad — where he drums along to Phil Collins — and I send that out to all my friends. There’s a pride that I have in having discovered that, a connection that you actually can’t get with broadcast advertising.

A few key takeaways for me:

• Benjamin Palmer had the best comments; interesting, considering he runs (what I consider to be) the most forward company represented. Would love to see how he'd respond to leading a scale agency. Will his ideas and way of working become mainstream, or will big holding companies resist?
• Ideating at its best is free form - people build on each other, based on insights. It's not arduous, it's fun. But it starts from an understanding of (and empathy with) the consumer and brands' reality in connecting with them
• Yet another reminder that what makes an old school TV-led campaign "go" can be very different from what drives campaign success these days

Good lord what have we come to?

Good lord what have we come to? This is a DRTV response page for for a product (I think at least) targeted at scrapbookers. I always thought of scrapbookers as Little House on the Prairie types - "hey Laura, I just made a scrapbook out of that filthy old potato sack." Relaxing, simple, blissfully uncommercial. But apparently there's just as much marketing targeted at them as the rest of them. There's nowhere to hide.

Uniqlo does it again

Uniqlo has  a fabulous new online piece about bra tops. Don't ask, just go see it.

The music restores my hope in the world.

http://www.uniqlo.com/try/

VivaKi on social media: the news from the top

I've copied below a great AdWeek op-ed piece by VivaKi's 2 leaders, David Kenny and Jack Klues. Lays out VivaKi's POV on social media and some of how we are planning to help the VivaKi and creative agencies approach this burgeoning area.

They reference the VivaKi social media summit that I was proud to be part of leading in September. Was a great opportunity to meet industry luminaries and boldly plot the way forward.

The Art of Friending.How to move from conversation to conversion in social media, the communications platform of the future

Consumers seeking a sense of community, camaraderie and conversation have built platforms where they can talk about anything and everything. Portals dedicated to dog lovers, moms, artichoke or political aficionados, sports fanatics, gossip mongers and any other common and uncommon interest groups abound. Social networks are huge and scalable, and they facilitate emotional brand connections more than anything we've seen so far in digital media. Consumers have set up more than half a million custom social networks. Today, there are 100 million Facebook users and close to 1 million active Twitter users, according to company estimates. Marketers are racing to find unobtrusive ways to enter these conversations.

In September, a group of social-media junkies from across Publicis Groupe convened with leading social-media vendors to answer the most pressing question about consumer conversation: "How can our clients use social media to power the connection of people to each other and to brands, globally and at scale?" We determined that the solution is to create a common marketplace for social insights, experiences, ads and outcomes.

Advertising has historically been an exposure and intrusion practice -- get in someone's face and talk about the attributes of a brand. That approach works less and less effectively all the time, and it is absolutely fatal in the social arena. As in every successful marketing campaign, actionable human insights are critical to social media. Understanding the passions, expectations, needs and desires of the people you want to talk to -- or inspire to talk about you -- is vital. Marketers (and those of us who serve them) need to take a close look at what's going on in the consumer's world. We need to listen. That's no small task when you consider the vast number of conversations going on in the social Web, but the truth is we can get plenty of data about social networking from resources like Converseon, TruCast and BuzzMetrics to help us figure out what's happening in the consumer's intimate sphere. This data well augments the rich insights we have become expert at gleaning from other sources and studies.

Want to reach Millennials? Just observe how these 18- to 24-year-olds behave in social sites. Digitas did just that on behalf of Starburst and its new Gummi Burst candy. When Starburst launched its "Share Something Juicy" campaign, it offered Millennials an opportunity to express themselves through an animated Web series called Nite Fite and a Starburst-branded YouTube channel that hosted short "Starburst Moments" videos. By allowing consumers to express individuality and participate creatively in the campaign, Starburst joined and enhanced consumer conversation.

Still enjoying relative infancy, social media does not have a lot of built-in access points or mechanisms to achieve scalable audiences. This has to change. Perhaps the most beneficial thinking we can bring to social media is to push for platforms that help deliver the scale and access of other mass media while remaining sensitive to the unique qualities of social audiences.

Off-the-shelf social-media programs and platforms are a powerful starting point, although not a complete solution. There are a number of vendors and partners in the online space that are developing tools that make activation in the social space easier and more efficient. Leveraging widget and social-application platforms allows us to focus on the messages and the social experiences that bring them to life.

We also need to source social-media audiences at scale. Agencies and their clients can build platforms around brands, much like we did with Audience on Demand (AOD), a partnership between VivaKi and four major internet networks (Google, Yahoo, MSN and Platform A). We need to aggregate social-media inventory in much the same way, reaching keenly defined communities via influencers and with ads that resonate within the social context.

Finally, we need to more carefully align social and search, which feed each other. Social bookmarking, blogs, review sites and social-network listings increasingly influence search results. Social media has opened up new avenues for pay-per-click ads and has created more opportunity for search to be a vital function for each site (e.g., Twitter search). We must capitalize on this interconnectivity to create more points of entry.

With the right combination of scalable social insights, experiences and ads, a social-media program can go far. However, it will fail to succeed until we put the proper measurement mechanisms in place.

Right now, the systems don't exist. Media planners can't pull comparisons of social media and TV, even though social media is quickly becoming a breeding ground for more consumer conversations and interactions. This is a priority for us and for others who want to find the best way to measure social-media engagement. But what is engagement? It must be something more than page views or downloads in this context. Perhaps the number of fans or the number of pass-alongs to friends? User-submitted content, from photos or comments to reviews or full blog posts to well-produced videos, needs different weighting. We must decide, define and deliver.

We believe the solution lies in the intersection of emotion and performance.  When we can capture and combine emotional outcomes and performance metrics, we will have a more complete understanding of how well a particular effort is working, and what we might do to make it work harder.

Social media is perhaps the most powerful communications platform of the future. Making it viable is more than a VivaKi priority: it is an industry imperative. An open source, collaborative effort is the most effective way forward. In other words, "friending" all partners.

David Kenny and Jack Klues are managing partners at VivaKi, Publicis Groupe's entity overseeing the digital and media assets of Digitas, Starcom MediaVest Group, ZenithOptimedia and Denuo.