Wednesday, December 9, 2009

Tiger was the king of the endorsement jungle

I didn't really want to weigh in on this, but I can't resist a few musings.

The idea behind a celebrity endorser is that the celebrity's halo transfers over to the endorsed brand. In brand jargon this is called "secondary association" transfer. In the case of Tiger Woods prior to the scandal, Woods had extraordinary universal marketing appeal. His records on the golf course enabled him to halo "performance" and "champion" on to a brand that he endorsed. As the king of golf, a game about honesty, sportsmanship, sophistication and integrity, Tiger's celebrity could also transfer these desirable associations to a brand that he fronted. With such a winning combination of associations to transfer, it is not surprising that execs from Nike, Gatorade, Gillette, Tag Heuer, Accenture, Electronic Arts, Disney, Asahi Beverages, Buick, Wheaties, and American Express lined up to have their brands have their brands linked to the King of Endorsements. And line up and pay out they did. Over his career, Woods has had a revenue stream of more than $5 Billion - the lion's share coming from endorsements. He is the first billion dollar athlete and has been called the world's most marketable athlete.

So as the Web, TV, and tabloids further saturate with Mr. Woody's sexcapades, "silence monies", and nasty talk about Mrs. Woods, we can make some educated guesses regarding how much of a financial hit Tiger will take- at least from an endorsement perspective. In other words, which brands are most likely to dump Tiger and which brands are most willing to hang on to him. Here, I argue that the brands most likely to dump Tiger are:

1. Brands which used Tiger for "honesty, sportsmanship, sophistication and integrity" endowments
2. Brands that have a family orientation.

Alternatively, the brands most likely to stick with Tiger are:

1. Brands that have the most to lose from him going down (translation: those brands that have invested the most in him (e.g. Nike $30million per year)). Incidently, Nike stuck by Bryant after his alleged rape.
2. Brands that use him for the "championship" endowments, assuming Tiger continues to perform.

What are your thoughts on this? How much of a fall will Tiger take on endorsements? Would you continue to use him to promote a brand?

Sunday, November 22, 2009

Top 40 Generic Brands - in Alphabetical order

Advertising builds brand awareness and image. This in turn drives brand sales, loyalty, margins etc. But, what happens when advertising and marketing get “so successful” that consumers associate the brand name to the product so precisely that the TM name starts to lose its meaning? How common is this issue? I’ll start this topic off by chronicling my Top 40 “genericized” brand names with a few comments. Any surprises?

Astroturf __ Do you know who said this: "I owned an El Camino pickup in the '70s. It was a real sort of Southern deal. I had Astroturf in the back. You don't want to know why, but I did." By the way, is he sure it was Astroturf brand and not another competitor making artificial turf?" (Answer: Bill Clinton)

Band Aid __ "Mommy I got a booboo. I need a sterile strip."

Chapstick __ Wyeth brand of 'lip balm'.

Coke __ How would the cliche teen movie pick-up line sound if it became "Hamburger, fries, a cola and your phone number please."

Crock Pot __ The original slow-cooker.

Dumpster __ An American brand of trash receptacle that was founded by the Dempster brothers.

Fiberglass __ A brand of glass-based insulation. The company did an interesting job of differentiating its brand with its pink campaign in the 1980s.

Frisbee __ It`s a lot more fun for Skippy to catch a Frisbee than a `flying disk`.

Google __ "While most of the generic brands were the first to successfully commercial in their industry, what is so interesting about Google is that was about the 20th entrant into this space. If you don't believe me, Google it."

Hula-hoop __ Technically, it's just another brand of "toy hoops".

Jacuzzi __ "Generic product is ""water-jet bath."" The Italian sounding name gives it some geography of origin sex appeal."

Jeep __ Chrysler's brand that is the original SUV.

Jell-o __ Kraft's "geletin dessert" that is soon to be celebrating 100 years.

Jet Ski
__ Zooming around on a Jet Ski sounds a lot cooler than 'personal recreational watercraft.'

Jumbotron __ Sony's brand of stadium display screens. Sony JumboTrons ceased being sold in 2001, when the company decided to exit the business.

Kleenex __ "Could you please pass me the 'paper tissues' please?"

Lego __ Construction toy' brand based in Denmark.

Nylon __ From toothbrush tips to women's stockings, Dupont's brand keeps you looking your best. Maybe not when you consider 70s fashion.

Pingpong __ The Olympic event is "table tennis"- and this is dominated by the Chinese. I wonder if they practice on the Ping Pong brand

Play-doh __ How strong is this brand name in the consumer's mind? The brand recall from the smell alone is close to 100%.

Plexiglas __ There are lots of competing brands of transparent thermoplastic. Eg. Policril, Plexiglas, Gavrieli, Vitroflex, Limacryl, R-Cast, Per-Clax, Perspex, Plazcryl, Acrylex, Acrylite, Acrylplast, Altuglas, Polycast, Oroglass, and Optix. But, Plexiglas is the only one we've ever heard of.

Polaroid __ Shake it like a Polaroid picture.

__ Unilever TM of "iced pop". That's the real ice ice, baby.

__ There is nothing better than safety cotton swabs.

Rollerblade __ "It’s a beautiful day today. Let's go 'in-line skating.'"

SaranWrap __ Good old 'plastic wrap' keeps my food fresh.

Ski Doo __ Bombardier Recreational Products brand of snowmobiles.

Slinky __ Also had one of the coolest jingles of all times. It's Slinky, it's Slinky. For fun it's a wonderful toy. It's Slinky, its slinky. It's fun for a girl or a boy.

Spandex __ You have to love the stretch of the polyurethane-polyurea copolymer synthetic fiber.

Speedo __ It may be small and tight, but did Bob really get a ticket for wearing a bathing suit that was a Speedo brand?

Styrofoam __ Dow brand of extruded polystryene foam.

Swiss Army Knife__ MacGyver was that much cooler because he had a Swiss Army Knife and not just a multi-function pocket knife.

Taser __ Electro-shock weapon

__ The generic term for the trademarked Trampoline was a "rebound tumble" but only recently did the brand lose its TM designation.

Vaseline __ Unilever brand of "petroleum jelly".

Velcro __ Brand name of a fabric hoop and loop fastener. An ingredient brand is Nylon.

Xerox __ The classic example of a generic brand.

__ A Greek vase from 500BC shows a boy playing with a string-based retractable double disc toy. But in 1928 the toy was marketed as YoYo.

Zamboni __ The inventor's name "Frank Zamboni" suits the ""ice resurfacing machine" so perfectly.

ZIP code __ An expired trademark of the US Postal service. Who knew?

Friday, November 13, 2009

Where is the love?

So what are the most loved and hated brands? You have your opportunity to rate brands you love, hate and are ambivalent towards at BrandMojo. The site includes both traditional and non-traditional brands. Any guesses on the most loved / hated brands?

Wednesday, November 11, 2009

Why Spiderman and I love brands.

There's no doubt that brands are tremendously valuable. In his book, the Brand Gap Marty Neumeier lays out a calculation on Coca-Cola to show that the Coke brand is worth around 60% of the company's overall market value. For the record, the Coke brand is evaluated at just under $70 billion (Interbrand). Whether you're looking at Hermes, McD's, or President's Choice, you arrive to this conclusion: brands are among the most valuable assets that a company has. This even applies to business to business companies. Check out Intel or IBM's balance sheet and its very clear that there is a disproportionate value coming from intangible assets and brand. What is particularly interesting is just how valuable these assets are in aggregate. According to the Economist on Brands and Branding (2009), if you add up the value of Interbrand's Top 100 brands, you have $1.2 Trillion in value - equivalent to the 11th largest GDP in the world squeezed between Brazil (#10) and India(#11). That's a lot of economic clout. However, I don't love brands because they are valuable or powerful. The reason that I love brands is the same reason Spiderman would: Brands mean accountability and responsibility. As Uncle Ben told Spidey: "With great power comes great responsibility" and brands inherently can't shirk either accountability or responsibility. Let's look at a couple of examples.

Brands force accountability
Strong brands are underscored by favorable brand image (Keller, 1993). In other words, reputation matters. Have a good reputation and customers come back. Screw your reputation and customers flee. Since a brand (and its underlying reputation) is one of most valuable assets that a company has and since the brand can live forever, companies have every incentive to manage it responsibly. If it is not managed that way, accountability will be forced upon the brand.

In 2008, twenty two customers died from listeriosis after eating Maple Leaf meat products. (Government of Canada). Maple Leaf management responded quickly and ethically. They performed a product recall, improved production processes, and introduced new safety standards. (In addition they have also been dealing with the victims' families). In this example, Maple Leaf seemed to take the "carrot" approach to repair the brand by taking accountability for their problem. But, even if managers did not want to go the responsible route, the brand would serve as a "forcing mechanism" to impose accountability as we shall see in the next example.

Remember the Exxon Valdez oil spill in 1989? The Wiki version of the story is that Exxon oil tanker was on autopilot when the ship accidentally struck a reef. The result- the oil tanker drained about 40 million litres of crude oil into the sea - one of the worst environmental catastrophes of all times. Exxon executives were very slow in response, resistant in taking responsibility, and inadequate in clean up response. It appeared that Exxon executives wanted to shirk the responsibility of the clean up. Here is an example where the brand forced accountability. The public image of Exxon suffered (and still does today) and through the will of the people who demanded Exxon take responsibility for its damaging actions, the government took the company to court. To date Exxon has spent approximately $2 billion cleaning up the spill (and $1 billion to settle related civil and criminal charges). While not perfect, accountability is enforced on a brand even when the company is reticent.

This takes us to aninteresting irony. There's a segment of folks who paint brands with an "unethical behavior" brush. Some of them say we that ought to get rid of brands because they dupe the consumer, disregard laws, pollute, and cheat. What is ironic about this is that if you really want to stop unethical behaviors in business (or anywhere), you need to have accountability for transgressions. This is precisely what brands do. Ultimately, the most valuable and powerful brands are the ones that have the greatest incentive to be responsible - and have accountability enforced upon them.

Tuesday, October 27, 2009

Three things you need to know about H1N1 & the H1N1 vaccine

So there's a new vaccine to shoot up. How big a deal is the H1N1? What about the vaccine? I've heard so many quack stories, that I thought I better figure out what's going on. Here are the three things that I came up with.

1. H1N1 is a nasty flu with bad effects and specific targets. My doctor who just attended a seminar on it told me that it is 3 times as contagious as the regular flu. It's also got a lot more kick than a regular flu. reports 2,000-8,000 people die from the regular flu in Canada in a typical year. How does that figure compare to mortality projections of H1N1? The WHO's worst case scenario for Australia( 6,000 deaths/. Applying that ratio to Canada, we can expect around 10,000 Canadian deaths. (Australia is a good reference point because it already had its flu season. It is also a developed nation with health care facilities similar to ours.) But there is something else that we need to know. H1N1 has decided to snipe at some particular target markets (this is a marketing blog so I better incorporate some marketing lingo). Mortality strikes the following segments disproportionately hard: People aged 35-55, women, and people with a weakened immune system or prior respiratory problems (e.g. rheumatoid arthritis, diabetics, pneumonia etc). In short, the risk of contracting the violent flu is very high. The risk of dying remains very low.

2. The virus is nothing new and the vaccine is a lot less "rushed to market" than it appears. A lot of elderly people already have immunity to it because H1N1's sister made her rounds years ago. This is particularly good news from a vaccine point of view because we have a history of learning from its sister virus. The vaccine launch, therefore, while expedited- is not as rushed as it may appear to be. We do know that about 1 in 1,000,000 who take the vaccine will suffer a neurological setback (almost immediately upon receiving the shot) which takes about a year to recover from. This ratio is pretty consistent with regular vaccine shots. We also know the vaccine takes about 2 weeks to provide proper immunity, so if you are in a high risk group, get the vaccine sooner rather than later.

3. There are a lot of incentives to push for the vaccine. Pharmaceutical companies have a lot of money to make, politician do not want to be blamed about doing nothing if the virus spirals out of control, companies need their employees to be healthy because sick workers reduce output, media is in constant demand for news and a little hype never hurt ratings, health organizations get more funding if they are doing something relevant etc. etc. etc.

Now some medical folks would say, "If we all take the vaccine, the virus spread is less. If none of us take it, we have the tragedy of the commons". This is a legitimate argument. But somewhere in the discussion we have to revisit old-school common sense. You know, the stuff mom said. Wash your hands. Avoid crowds. Stay rested. Eat vitamins and a well balanced diet. Avoid kissing someone sick. Behaviors have always had a disproportionately large impact on staying healthy. This has been true from the operating room (e.g. sterilizing equipment) to the bed room. This will likely also be the case with H1N1.

Sunday, October 25, 2009

The Most Interesting Man in the World

Around 2000, Ad Age ran an article where they presented their Top 10 advertising icons of all times. The criteria they used included sales and "cultural impact". It's not really surprising that Tony the Tiger, Ronald McDonald, Pillsbury Doughboy (woohoooooo), Aunt Jemima, Betty Crocker, the Green Giant, Michelin Man, and the Marlboro Man (see made the list. One thing they have in common is that they have been around a long time. Aunt Jemima was introduced in 1893. The Michelin Man, 1898. The youngest character is the Energizer Bunny- and she's just entering her sexy 20s.

Eventually a Top 10 brand icon list will get revisited. When it does, there may new entrant: the Most Interesting Man in the World. His reputation may not be expanding faster than the universe, but it sure has spread a lot on You Tube with millions of ad views. His ads are certainly are effective too. Earlier this summer when imported beer sales dropped 11% - Dos Equis sales rose almost 20% (AdAge). This puts Dos Equis' sales on par with Stella's in North America. But, what about his cultural impact? He may have longevity as some kids say that when they grow up they want to become the most interesting man in the world. Now that's interesting.

For what its worth, Johnathon Goldsmith (the actor who plays the world's most interesting man) used to star in McGyver, Magnum and Murder She Wrote. Evidently Angela Lansbury from Murder She Wrote would question him just because she found him so interesting.

The road to hell is paved with good intentions...

I remember my father saying, "the road to hell is paved with good intentions." Now my dad didn't make up the line (A Google search revealed that Saint Bernard of Clairvaux said something along those lines in the 1100's) but the wisdom of that line can not be overstated. The line captures the blow- or unintended consequences - of well intentioned government decisions.

Smoking before sex.
It's not that long ago when governments started restricting tobacco advertising. I am not making the case that this restriction is a bad thing. After all, we don't want kids picking up the habit. And, the restrictions make economic sense especially in countries where health care cost is "picked up by the government" (assuming the health care costs of treating the incremental diseases caused by tobacco exceed the incremental revenue from the tobacco taxes).

Originally, the anti-tobacco legislation stated that tobacco brands could not promote their brands in any place that a minor might be exposed to it. What was the result? Big Tobacco shifted their promotional budgets to adult industries. That's right. The legislation helped to subsidize the smut industry.

Remember luxury tax on Monopoly?
There's no tax that could be more popular than a luxury tax. After all, who could oppose a special tax on the consumption of extravagant luxury items like a 100 foot yacht or Gulfstream jet? When this happened in the 90s, rich folks shifted their spending away from the taxed items and the folks who made the yachts lost their jobs. (An additional 1% tax on a $50 million jet is still $500,000 and a rich man stupid enough to snag trophy wife #4, is smart enough to know that the 500k can cover some part of alimony.)

A real road to hell.
Here's a favorite of Reuven Brenner. When governments got in to the business of highways and roads, the idea was that road building would create a lot of jobs. More roads would further stimulate car sales as drivers would have more places to go. This makes sense. But the blow here is crazy. Prior to the widespread access to free roads, people lived close to where they worked, partied, worshiped, and shopped. When the highways out of town got built, the rich and middle classes drove their cars and moved to the 'burbs. So, as the inner city was gutted of the key property stakeholders, crime rates rose. As the highways extended, cities sprawled. Traffic congestion emerged contributing to pollution, driver stress, accidental deaths, and years of lives wasted on highways. The average Torontonian commutes just under 80 minutes a work day. That's about 550 days of life on the real road to hell of good intentions.

So what's the so what? Coming soon... :-)

Time is money and timeless money.

By the time this is posted, the USA debt will be approaching 12 trillion dollars. ( Let's spell that out. $12,000,000,000,000. Man, that's a lot of zeros. Let's put this number in context. If you were to count from 1 to 12,000,000,000 at 1 count per second, it would take 380,508 years. Counting backwards in years, that's about 100,000 years before the first man ever walked (or stooped) our planet.