this from the Senate hearings 2 days ago:
the G-S sales guy, Fabrice Tourre who sold some of the much-discussed securities said in an email
“...a product of pure intellectual masturbation, the type of thing which you invent telling yourself: ‘Well, what if we created a “thing,” which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?’ ”
There's no way to top it.
Thursday, April 29, 2010
Friday, April 23, 2010
G-S: Is It Surprising?
Like everyone else, I'm listening to the dialogue on Goldman's most recent media-worthy transaction: the creation of the synthetic CDOs for Paulson and sold to DB and others. Above the title actors in this movie include the president who loped into NY yesterday to shake a finger at Wall Street. But doesn't most of this hand wringing and grand standing sound pretty naive. Or worse, sound as if there is another huge misdirection going on. As the heathcare debate lost meaning and clarity with talk of death panels, the issue of financial reform is already sinking under its own weight.
Some simple observations:
Is having clients on both sides of a trade unique? No. IBs are in the middle of transactions all the time.
Is trading gambling? Yes.
Is gambling illegal? No.
While we're talking of financial regulation, is there a clear end to 30+% interest on credit cards? No.
The fundamental issue, it seems, not whether parties were betting on outcomes, but if there were any real assets attached to the paper they were betting on. All of the jargon shouldn't distract from the fact that there's nothing to a synthetic CDO. There's no where to go when it goes bust.
And that might be a basic change in the model of commerce. Where once the model was based on things--companies, factories, inventories, receivables, etc--now it's based purely on math. As we're learning over the course of the meltdown and the current recession-based recovery, there aren't any houses attached to the mortgages in the mortgage-backed securities in the collateralized debt obligations mirrored in the synthetic cdo's.
It even possible that's there isn't enough blame to go around. For as the winds of babel swirl, forgotten is Barney Frank's role in democratizing home ownership and the right to mortgage regardless of means. Lost are Countrywide and Lehman and countless brokers, originators, boilerooms and packagers who had no attachment to real property of any kind. Lost is the nonsense of Sarbanes Oxley, ironic that the 'transparency' regulation is utterly irrelevant on these invisible investments. Lost are the ratings agencies, who did what they've always done--rubber stamp the goods of their paying clients.
The rise of the technocrat in modern finance enabled new formulas for a new, shadow market. Based on reflections of other financial objects, their science was so sophisticated that markets were created to buy and sell nothing but the idea of the investment. Now politicians and pundits are getting off sound bytes about 'not contributing to the economy', but all of this stuff generated billions in fees, bonuses, travel expenses, Hermes bags and Greenwich ice skating rinks. They're railing against something new with an old handle. The object of their wrath isn't the contribution to the economy, but the concept that so much happened--both p and l--based on nothing.
There are so, so many causes of our current condition--the rise of the publicly held advisor, the loss of the partnership, the decline of manners, the rise of the machines and dark pools. Is it all inevitable? The technology that drives every aspect of the modern world is shifting the culture right out from under the feet of everyone under 33. The world is run on code. Whatever is written here, or in the WSJ or the briefs being filed right now against and on behalf of Goldman, are words only in appearance for it is unrecognizable code that will make them part of the ether and part of modern reality. And, if you've developed websites or algorithms you know that the thought process to develop that code is completely different from writing words. The differences here are the divide between the analog and the digital. There is no judgement in digital. There is no nuance. If it can be done, do it.
The abilities of the technicians beings hired by the most successful hedge funds and banks go far beyond the current scope of finance, accounting, law and investing. Science will keep them advancing. New laws and regulations will attempt to rein them in. Management needs to decide what their brief is--win by scorching the earth or not. And management needs to control them.
Markets are designed to create winners and losers and enable the exchange of value across players. Markets in the past were always driven by humans with judgement, ethics and experiences which tempered trades based on stuff--the debt, equity, receivables, gold, cotton, pigs--tangible, seizable stuff. Everyday, new code is written to reveal a new way to make a penny. This code operates at the speed of light, without human supervision or operation. The codes trades on the code. The code get progressivly more abstract and detached from the stuff we traded in the past. Smart people and history teach us that markets will out. There is pain and anguish, but precedents show that markets get what they deserve. If we are truly entering a different age, as scribes were from the printing press, then our sense of the efficacy of markets is based on a different definition of the 'market'. The market, if we look at the GS contretemps as a harbinger, is not based on assets or things but on code. And then our models for judgement, discretion, success and failure.
In a situation with such unprecedented complexity and so few truly knowledgeable players the only sensible strategy should be to keep the basic truths at a laser-like clarity and the courage to keeping asking idiot questions like 'if there's nothing (no thing) attached to the investment, is there an investment?'
Some simple observations:
Is having clients on both sides of a trade unique? No. IBs are in the middle of transactions all the time.
Is trading gambling? Yes.
Is gambling illegal? No.
While we're talking of financial regulation, is there a clear end to 30+% interest on credit cards? No.
The fundamental issue, it seems, not whether parties were betting on outcomes, but if there were any real assets attached to the paper they were betting on. All of the jargon shouldn't distract from the fact that there's nothing to a synthetic CDO. There's no where to go when it goes bust.
And that might be a basic change in the model of commerce. Where once the model was based on things--companies, factories, inventories, receivables, etc--now it's based purely on math. As we're learning over the course of the meltdown and the current recession-based recovery, there aren't any houses attached to the mortgages in the mortgage-backed securities in the collateralized debt obligations mirrored in the synthetic cdo's.
It even possible that's there isn't enough blame to go around. For as the winds of babel swirl, forgotten is Barney Frank's role in democratizing home ownership and the right to mortgage regardless of means. Lost are Countrywide and Lehman and countless brokers, originators, boilerooms and packagers who had no attachment to real property of any kind. Lost is the nonsense of Sarbanes Oxley, ironic that the 'transparency' regulation is utterly irrelevant on these invisible investments. Lost are the ratings agencies, who did what they've always done--rubber stamp the goods of their paying clients.
The rise of the technocrat in modern finance enabled new formulas for a new, shadow market. Based on reflections of other financial objects, their science was so sophisticated that markets were created to buy and sell nothing but the idea of the investment. Now politicians and pundits are getting off sound bytes about 'not contributing to the economy', but all of this stuff generated billions in fees, bonuses, travel expenses, Hermes bags and Greenwich ice skating rinks. They're railing against something new with an old handle. The object of their wrath isn't the contribution to the economy, but the concept that so much happened--both p and l--based on nothing.
There are so, so many causes of our current condition--the rise of the publicly held advisor, the loss of the partnership, the decline of manners, the rise of the machines and dark pools. Is it all inevitable? The technology that drives every aspect of the modern world is shifting the culture right out from under the feet of everyone under 33. The world is run on code. Whatever is written here, or in the WSJ or the briefs being filed right now against and on behalf of Goldman, are words only in appearance for it is unrecognizable code that will make them part of the ether and part of modern reality. And, if you've developed websites or algorithms you know that the thought process to develop that code is completely different from writing words. The differences here are the divide between the analog and the digital. There is no judgement in digital. There is no nuance. If it can be done, do it.
The abilities of the technicians beings hired by the most successful hedge funds and banks go far beyond the current scope of finance, accounting, law and investing. Science will keep them advancing. New laws and regulations will attempt to rein them in. Management needs to decide what their brief is--win by scorching the earth or not. And management needs to control them.
Markets are designed to create winners and losers and enable the exchange of value across players. Markets in the past were always driven by humans with judgement, ethics and experiences which tempered trades based on stuff--the debt, equity, receivables, gold, cotton, pigs--tangible, seizable stuff. Everyday, new code is written to reveal a new way to make a penny. This code operates at the speed of light, without human supervision or operation. The codes trades on the code. The code get progressivly more abstract and detached from the stuff we traded in the past. Smart people and history teach us that markets will out. There is pain and anguish, but precedents show that markets get what they deserve. If we are truly entering a different age, as scribes were from the printing press, then our sense of the efficacy of markets is based on a different definition of the 'market'. The market, if we look at the GS contretemps as a harbinger, is not based on assets or things but on code. And then our models for judgement, discretion, success and failure.
In a situation with such unprecedented complexity and so few truly knowledgeable players the only sensible strategy should be to keep the basic truths at a laser-like clarity and the courage to keeping asking idiot questions like 'if there's nothing (no thing) attached to the investment, is there an investment?'
Wednesday, March 17, 2010
One Positive?
originally posted FRIDAY, MARCH 6, 2009one positive? Woody Allen had a bit in his stand up act that went something like...'I'd like to tell you something positive...but I can't. Would you take two negatives'.
Two negatives would be good news in the current environment. There is no adequate description of the fear and pain that is rolling in waves through our society. Today's NYT business sections had only bad news. We are looking at the world's largest financial institution--Citi--yesterday becoming a penny stock. GE--mainstay of the DJIA sunk into the 5s this week. And no one know anything. The finest, most powerful investment banker in the world was left bereft of any effective ideas. Our new Treasury Sec seems like a fine young bureaucrat. A bank guy through and through, when what we need is a visionary with executional experience and skills. The teams working on the solution !@#$?? are filled with academics, toadies, theorists and patronage. One observation: THERE ARE NO PRACTIONERS. NONE. That's important because the bills and the checks are being written by people who have never seen the true workings of a market. They have never lived the market. They don't know what it is.And without that basic understanding, we--the country--slides deeper into the second world. Debt, diminishing educational standards, a growing population of the unskilled and unemployed.With most of contemporary finance focused exclusively on increasing their personal wealth, it is hard to conceive of a working financier who has the intellectual horsepower and knowledge of the markets taking the time to bring sense to this downward spiral.
I have an idea: Michael Milken. He saw the future several times. He's taken straw and turned it to gold--launching Fedex, Continental, and others. He has the horsepower and the respect of the markets. I worked with him in the past--and I can say There is no one else.I've not read that anyone in the administration has asked him.
Two negatives would be good news in the current environment. There is no adequate description of the fear and pain that is rolling in waves through our society. Today's NYT business sections had only bad news. We are looking at the world's largest financial institution--Citi--yesterday becoming a penny stock. GE--mainstay of the DJIA sunk into the 5s this week. And no one know anything. The finest, most powerful investment banker in the world was left bereft of any effective ideas. Our new Treasury Sec seems like a fine young bureaucrat. A bank guy through and through, when what we need is a visionary with executional experience and skills. The teams working on the solution !@#$?? are filled with academics, toadies, theorists and patronage. One observation: THERE ARE NO PRACTIONERS. NONE. That's important because the bills and the checks are being written by people who have never seen the true workings of a market. They have never lived the market. They don't know what it is.And without that basic understanding, we--the country--slides deeper into the second world. Debt, diminishing educational standards, a growing population of the unskilled and unemployed.With most of contemporary finance focused exclusively on increasing their personal wealth, it is hard to conceive of a working financier who has the intellectual horsepower and knowledge of the markets taking the time to bring sense to this downward spiral.
I have an idea: Michael Milken. He saw the future several times. He's taken straw and turned it to gold--launching Fedex, Continental, and others. He has the horsepower and the respect of the markets. I worked with him in the past--and I can say There is no one else.I've not read that anyone in the administration has asked him.
Thursday, February 18, 2010
World Class B2B
The Cases For World-Class Marketing
The question arises frequently with companies that have primarily or exclusively B2B customers: ‘Why spend enormous amounts of money on marketing when our customers are already identified and already know who we are?’
Much of the accepted wisdom is that since the subject matter in B2B is the hard parts and high-end intellect of products and services aimed at the corporate audience, they don’t need to be ‘marketed’. Messaging is often amateurish and writing and design standards are not in keeping with the levels of excellence applied to R&D or investor relations. The marketing function is often under resourced and more service than strategic than it could or should be.
Many B2B marketers believe that developing a world-class brand will be expensive. But most of the time, these companies already are spending significant sums on trade shows, vertical ads, collateral and consultants and can benefit from strategic review and analysis to optimize these existing investments.
We disagree. With all the accepted wisdom.
Complex. Cynical. Compelling.
We have built an industry-leading practice at developing world-class brand and marketing solutions for companies with complex value propositions and hard to reach, cynical audiences by understanding that these audiences are more demanding and tougher to sell to than any consumer who’s considering which soft drink, running shoe or sofa to buy. The typical audiences for B2B include the investment community—analysts, fund mangers and high net-worth individuals, upstream corporate managers—CEO, CFO and board directors and functional management. Audiences also include the myriad influencers of typical large corporate purchases and increasingly include procurement and purchasing managers who apply entirely different criteria to the issue. Regulators and government are part of the equation. And, one should never forget that part of every corporate marketing investment should be retaining, attracting and motivating the workforce. These audiences have even less time and have a much higher level of knowledge and understanding which place greater threshold of excellence on the brand and marketing efforts, for they have no time for missteps in the strategy or naiveté in the copy.
These factors make it essential that communications programs compel the audience to act.
It’s More Fun Than Soda
B2B branding and marketing is unique—clients have more complicated messages and have multi-layered value propositions which must be translated to a memorable, competitive set of words that work in an annual report, at a trade show, in a sales meeting or in an elevator. This work supports large corporate purchases made by the leaders of industry. The stakes are higher. The risks, greater. And that’s why it requires the best.
World-class B2B branding clarifies complex brand portfolios making it easier for the sales force to cross sell and easier for analysts to perceive value in the corporate holdings. Great B2B generates returns by giving workers pride in the company and increasing productivity and loyalty. We pride ourselves on creating solutions, which add-value to the enterprise by finding synergies in marketing spending across divisions and regions, by creating common vocabularies, which multiply the effect on any single pitch meeting, ad or sales pitch.
Most importantly, branding and marketing enable management to control the dialogue about their company and to exert more influence about their industry debate. A world-class brand immediately sends an immediate signal of leadership and focus to all your relevant audiences and competitors.
A Message From Our Sponsor
ConstellationNY helps companies become more relevant and responsive to their markets. We create marketing solutions, which place our clients in leadership positions in their industries. Our world-class solutions start with a deep understanding of where management wants to be in their business and what issues are shaping their industry. We create focused and competitive value propositions for complex brand/product offerings. We create all the expressions of these strategies: website design and content, advertising, collateral, event management, sales strategies and e-mail marketing, customer segmentation and direct marketing.
No matter how specialized a market or product is, the audience’s perceptions of quality, innovation, and value is shaped by the brands they encounter throughout the world. So, even if your brand competes in an extremely vertical market, its website design and content will be judged by the very best of website design—so making B2B messages smartly designed, well written and intuitive isn’t vanity.
It’s good business.
The question arises frequently with companies that have primarily or exclusively B2B customers: ‘Why spend enormous amounts of money on marketing when our customers are already identified and already know who we are?’
Much of the accepted wisdom is that since the subject matter in B2B is the hard parts and high-end intellect of products and services aimed at the corporate audience, they don’t need to be ‘marketed’. Messaging is often amateurish and writing and design standards are not in keeping with the levels of excellence applied to R&D or investor relations. The marketing function is often under resourced and more service than strategic than it could or should be.
Many B2B marketers believe that developing a world-class brand will be expensive. But most of the time, these companies already are spending significant sums on trade shows, vertical ads, collateral and consultants and can benefit from strategic review and analysis to optimize these existing investments.
We disagree. With all the accepted wisdom.
Complex. Cynical. Compelling.
We have built an industry-leading practice at developing world-class brand and marketing solutions for companies with complex value propositions and hard to reach, cynical audiences by understanding that these audiences are more demanding and tougher to sell to than any consumer who’s considering which soft drink, running shoe or sofa to buy. The typical audiences for B2B include the investment community—analysts, fund mangers and high net-worth individuals, upstream corporate managers—CEO, CFO and board directors and functional management. Audiences also include the myriad influencers of typical large corporate purchases and increasingly include procurement and purchasing managers who apply entirely different criteria to the issue. Regulators and government are part of the equation. And, one should never forget that part of every corporate marketing investment should be retaining, attracting and motivating the workforce. These audiences have even less time and have a much higher level of knowledge and understanding which place greater threshold of excellence on the brand and marketing efforts, for they have no time for missteps in the strategy or naiveté in the copy.
These factors make it essential that communications programs compel the audience to act.
It’s More Fun Than Soda
B2B branding and marketing is unique—clients have more complicated messages and have multi-layered value propositions which must be translated to a memorable, competitive set of words that work in an annual report, at a trade show, in a sales meeting or in an elevator. This work supports large corporate purchases made by the leaders of industry. The stakes are higher. The risks, greater. And that’s why it requires the best.
World-class B2B branding clarifies complex brand portfolios making it easier for the sales force to cross sell and easier for analysts to perceive value in the corporate holdings. Great B2B generates returns by giving workers pride in the company and increasing productivity and loyalty. We pride ourselves on creating solutions, which add-value to the enterprise by finding synergies in marketing spending across divisions and regions, by creating common vocabularies, which multiply the effect on any single pitch meeting, ad or sales pitch.
Most importantly, branding and marketing enable management to control the dialogue about their company and to exert more influence about their industry debate. A world-class brand immediately sends an immediate signal of leadership and focus to all your relevant audiences and competitors.
A Message From Our Sponsor
ConstellationNY helps companies become more relevant and responsive to their markets. We create marketing solutions, which place our clients in leadership positions in their industries. Our world-class solutions start with a deep understanding of where management wants to be in their business and what issues are shaping their industry. We create focused and competitive value propositions for complex brand/product offerings. We create all the expressions of these strategies: website design and content, advertising, collateral, event management, sales strategies and e-mail marketing, customer segmentation and direct marketing.
No matter how specialized a market or product is, the audience’s perceptions of quality, innovation, and value is shaped by the brands they encounter throughout the world. So, even if your brand competes in an extremely vertical market, its website design and content will be judged by the very best of website design—so making B2B messages smartly designed, well written and intuitive isn’t vanity.
It’s good business.
Friday, January 15, 2010
'Gambling? Here in the casino? I'm shocked, shocked'
Oh the hew, cry and shock we've shown at being clued into Tiger Woods' lifestyle. Of the many aspects of this that gives one pause, a few additional comments:
1. his arrogance and omnipotence: a thirty-something who's made over a billion dollars. His world is a bubble floated exclusively by and for the people with only one job--service Tiger. Yes Tiger. That's amazing Tiger. You're right Tiger. He goes nowhere, speaks to no one, buys nothing without having first had someone set it up for him.
2. the cocktail waitress and the party planner. We've devolved to the point where celebrity is so all-pervasive that celeb service workers are transacting in the glow themselves. Could anyone have predicted that we'd see headsets and clipboards become status symbols?
3. pro athletes all have groupies. See Claude Raines' 'Casablanca' title quote above. Ever been in the lobby of a hotel where an NBA team is staying? Ever read a rock band tell-all book? Ever read People? The Star?US? Of course we have. But the pious and sanctimonious copy pouring out of mass media is because moral shock is the only handle any of them have been given as a lead to cover the story. Greater minds than mine are required to parse why bottom-feeders like these groupies, like TMZ or Radaronline can assume outrage when their brands are based on their own sleaziness. However, the outrage at Woods is fake and will only last til the audience gets bored with the angle. Because it's not the sex--see Kardashian, Hilton, et al who've used scandal to move up the food chain. It's not marriage--see Bryant, Spitzer. And I don't think it's this great disparity between the 'nice young man' imagery of his branding.
4. talent drain and laziness. The media could find another way to cover this. Woods' handlers could try strategy other than 'he's using this time to work on himself and his family to repair the blah blah blah and we ask you to respect the privacy blah blah blah'.
The surfers and the bouncers who make up the reporting staff at TMZ don't have the ambition or the skills to look for a story. The current methodology is to get in the way of the story--or the SUV on the way out of the club/hospital/barneys. Tiger's management, and given the size of the Woods business, is large, highly paid and has access to anything is stuck on a playbook that's become a reflex for a celebrity in trouble.
A Counter-Intuitive Strategy
Approach the public with the truth. Understand that they viscerally understand the way pro sports and entertainment work. Explain that in the life of a Tiger Woods, these situations are everywhere. That groupies have been part of this world and handlers get paid to smooth it out since people have been famous. That it's not only Woods is behaved scandalously, it's the reporters, PageSix, his fellow players, the networks, the law firms and the management companies.
Woods already lost the Accenture deal because the gap between the 'ideal' and the news was too great. More importantly than any single endorsement deal is that this whole fandango revealed a fatal flaw in the Tiger brand strategy--no authenticity. In the culture where almost everything is plastic, authenticity is the most valuable commodity. The only chance to get some back is to suck it up and face the world with the real story.
What would the lead to the story be then?
1. his arrogance and omnipotence: a thirty-something who's made over a billion dollars. His world is a bubble floated exclusively by and for the people with only one job--service Tiger. Yes Tiger. That's amazing Tiger. You're right Tiger. He goes nowhere, speaks to no one, buys nothing without having first had someone set it up for him.
2. the cocktail waitress and the party planner. We've devolved to the point where celebrity is so all-pervasive that celeb service workers are transacting in the glow themselves. Could anyone have predicted that we'd see headsets and clipboards become status symbols?
3. pro athletes all have groupies. See Claude Raines' 'Casablanca' title quote above. Ever been in the lobby of a hotel where an NBA team is staying? Ever read a rock band tell-all book? Ever read People? The Star?US? Of course we have. But the pious and sanctimonious copy pouring out of mass media is because moral shock is the only handle any of them have been given as a lead to cover the story. Greater minds than mine are required to parse why bottom-feeders like these groupies, like TMZ or Radaronline can assume outrage when their brands are based on their own sleaziness. However, the outrage at Woods is fake and will only last til the audience gets bored with the angle. Because it's not the sex--see Kardashian, Hilton, et al who've used scandal to move up the food chain. It's not marriage--see Bryant, Spitzer. And I don't think it's this great disparity between the 'nice young man' imagery of his branding.
4. talent drain and laziness. The media could find another way to cover this. Woods' handlers could try strategy other than 'he's using this time to work on himself and his family to repair the blah blah blah and we ask you to respect the privacy blah blah blah'.
The surfers and the bouncers who make up the reporting staff at TMZ don't have the ambition or the skills to look for a story. The current methodology is to get in the way of the story--or the SUV on the way out of the club/hospital/barneys. Tiger's management, and given the size of the Woods business, is large, highly paid and has access to anything is stuck on a playbook that's become a reflex for a celebrity in trouble.
A Counter-Intuitive Strategy
Approach the public with the truth. Understand that they viscerally understand the way pro sports and entertainment work. Explain that in the life of a Tiger Woods, these situations are everywhere. That groupies have been part of this world and handlers get paid to smooth it out since people have been famous. That it's not only Woods is behaved scandalously, it's the reporters, PageSix, his fellow players, the networks, the law firms and the management companies.
Woods already lost the Accenture deal because the gap between the 'ideal' and the news was too great. More importantly than any single endorsement deal is that this whole fandango revealed a fatal flaw in the Tiger brand strategy--no authenticity. In the culture where almost everything is plastic, authenticity is the most valuable commodity. The only chance to get some back is to suck it up and face the world with the real story.
What would the lead to the story be then?
Too Much Is Not Enough
Remember that old 80s mantra.
Times change. Too much is way more than anyone needs or can stand.
Marketing organizes and expresses brands to connect with an audience in meaningful ways and stand out from the crowd. But over the past few years, lots of major media opportunities have become numbingly overexposed. In the drive to deliver “eyeballs” or consumer impressions, successes big and small, proven or potential, are repeated to the point that instead of being meaningfully connected, the audience is meaningfully disconnected.
In the media business, we’ve seen the exponential multiplication of any piece of programming that even hints at being successful. Ratings jump, and network execs jump to put in new orders and clear the schedule for more nights. Really, does anyone want to see Howie Mandel for 4 hours every week?
Let’s look at car racing. Originally a rather niche sport, albeit one with a rabid following of loyalists, NASCAR had an image and a reality that aligned with real needs in the audience. Each broadcast was eagerly awaited by its fans. And a group of niche-y advertisers found a relevant and exciting environment for their brands. With the rise of multi-billion, multi-network television deals, the sport has fundamentally transformed. Drivers are cloned through relentless media training into slim, 5’7’’, tow-headed, second-city weathermen.
NASCAR drivers have ceased talking to their audience with any genuine feeling or even personality. They master the ability to walk away from a 180 mph crash and congratulate the sponsor for supporting such a hard-working crew. The adage of race on Sunday, sell on Monday has been recast. It isn’t about Ford guys and Chevy guys — it’s Home Depot vs. Frosted Flakes. Sponsorship has reached the point of diminishing returns. Yes, the merchandizing runs across many platforms, from key rings to jackets to branded vacations — but how much can they mean when they’re everywhere? And, with NASCAR broadcasting Craftsman Trucks on Friday, Busch on Saturday, and Nextel Cup on Sunday, it’s overload for even the faithful. Ratings are down.
In baseball, Fox’s innovative coverage of the game is so innovative that it is hard to know exactly what we’re watching. Constant re-plays start blending together with the actual plays, and where are we? There are, of course, other examples of brand over-proliferation. New product extension gives us 22 different types of Band-Aids to choose from, an infinite number of toothpaste variants, and 15,000 new products in supermarkets every year.
So what?
It is certain that brand proliferation and extension generate incremental monies. But long-term, does it help or hinder the franchise? And, does it help or hinder the consumer?
The absolute truth is that brands reflect a specific bond between its values and those of its audience. The greater the specificity, the stronger the bond. Look at the difference between Microsoft and Apple. We are not advocating ignoring new revenue or gaining more shelf space. But, constant brand proliferation will diminish the bonds that consumers have with the brand. And that will lead to less ability to maintain strong margins. And that will accelerate the brand’s drive to commoditization.
And, there’s no profit there.
Brands need to think about media and delivery strategies that create and preserve the specialness of their messages. That will require better research and more specific understanding and definition of the audience. It will require understanding the nuance between a brand strategy and a media strategy. It will require communications that can prioritize the objectives to focus on an achievable goal. There will need to be, more so than ever, creative work that does more than simply entertain or create a sensation, work that “says” something meaningful about the brand’s place in the consumer’s world. That enhances the bond with the audience.
Eyeballs are good, but not if they’re glazed over.
Times change. Too much is way more than anyone needs or can stand.
Marketing organizes and expresses brands to connect with an audience in meaningful ways and stand out from the crowd. But over the past few years, lots of major media opportunities have become numbingly overexposed. In the drive to deliver “eyeballs” or consumer impressions, successes big and small, proven or potential, are repeated to the point that instead of being meaningfully connected, the audience is meaningfully disconnected.
In the media business, we’ve seen the exponential multiplication of any piece of programming that even hints at being successful. Ratings jump, and network execs jump to put in new orders and clear the schedule for more nights. Really, does anyone want to see Howie Mandel for 4 hours every week?
Let’s look at car racing. Originally a rather niche sport, albeit one with a rabid following of loyalists, NASCAR had an image and a reality that aligned with real needs in the audience. Each broadcast was eagerly awaited by its fans. And a group of niche-y advertisers found a relevant and exciting environment for their brands. With the rise of multi-billion, multi-network television deals, the sport has fundamentally transformed. Drivers are cloned through relentless media training into slim, 5’7’’, tow-headed, second-city weathermen.
NASCAR drivers have ceased talking to their audience with any genuine feeling or even personality. They master the ability to walk away from a 180 mph crash and congratulate the sponsor for supporting such a hard-working crew. The adage of race on Sunday, sell on Monday has been recast. It isn’t about Ford guys and Chevy guys — it’s Home Depot vs. Frosted Flakes. Sponsorship has reached the point of diminishing returns. Yes, the merchandizing runs across many platforms, from key rings to jackets to branded vacations — but how much can they mean when they’re everywhere? And, with NASCAR broadcasting Craftsman Trucks on Friday, Busch on Saturday, and Nextel Cup on Sunday, it’s overload for even the faithful. Ratings are down.
In baseball, Fox’s innovative coverage of the game is so innovative that it is hard to know exactly what we’re watching. Constant re-plays start blending together with the actual plays, and where are we? There are, of course, other examples of brand over-proliferation. New product extension gives us 22 different types of Band-Aids to choose from, an infinite number of toothpaste variants, and 15,000 new products in supermarkets every year.
So what?
It is certain that brand proliferation and extension generate incremental monies. But long-term, does it help or hinder the franchise? And, does it help or hinder the consumer?
The absolute truth is that brands reflect a specific bond between its values and those of its audience. The greater the specificity, the stronger the bond. Look at the difference between Microsoft and Apple. We are not advocating ignoring new revenue or gaining more shelf space. But, constant brand proliferation will diminish the bonds that consumers have with the brand. And that will lead to less ability to maintain strong margins. And that will accelerate the brand’s drive to commoditization.
And, there’s no profit there.
Brands need to think about media and delivery strategies that create and preserve the specialness of their messages. That will require better research and more specific understanding and definition of the audience. It will require understanding the nuance between a brand strategy and a media strategy. It will require communications that can prioritize the objectives to focus on an achievable goal. There will need to be, more so than ever, creative work that does more than simply entertain or create a sensation, work that “says” something meaningful about the brand’s place in the consumer’s world. That enhances the bond with the audience.
Eyeballs are good, but not if they’re glazed over.
Death Knell
'There's a lot of great work here.' With those words you can reliably expect to have said work never see the light of day. The kiss of death in a creative meeting.There are several other phrases that say one thing but are bulletproof signals that you're going down in flames.'You've given us lots to think about.''I want to share this with my team.''We're taking another look at our budgets.'The reason all these killers work so well is that it aims to the soft and open heart of a creative. One puts every bit of commitment, enthusiasm and ego into presenting and sharing new work. And, one is left hanging. Naked. Waiting. Hoping.The creative wants for nothing more than his audience to be receptive, welcoming. Nothing more than feeling the audience 'get it.'And when the response is one of these killers or others it hurts.
Subscribe to:
Posts (Atom)
