Thursday, February 12, 2015

When The Ship Starts Sinking

President Mikey’s butt’s in trouble… and a bit more than 90 days ago.

Fourth quarter sales dropped 21% at McDonald’s and global sales are down.

Going over to the developing country with the golden arches isn’t too golden any more.

In the weekend edition of the Wall Street Journal, there was an article about McDonald’s Asian sales entering into the “grind down” mode.  The article went on to talk about how a release of sales information the first of the week would further turn the spotlight on a corporation that’s facing disturbing performance.

Before I go too much further in this commentary, I want to make sure that readers understand that what McDonald’s is facing is not something that only McDonald’s is encountering.

The WSJ article that ran over the weekend talked about how mature brands are facing edges of cliffs. 

On Monday, Radio Shack declared bankruptcy.

Last month, Coke laid off more than 2,000 corporate staff and its sales – and profits – continue to roll down hill.

Target is in the process of closing down Canada.  My bet is that we will hear about that brand shortly and its slide down the slopes.

McDonald’s ad agency, Leo Burnett, is just starting to air a new ad campaign.  Mikey even made commentary in the WSJ weekend that he’s looking forward to the campaign helping to turn around sales.

The ad agency folks are smiling up there on Michigan Avenue humming along with the song “I’m Lovin’ it” in the new spots as they deposit those production checks in the bank. 

As those customers go to McDonald’s and face a menu of more than 100 items, place orders with individuals who cannot figure out just how much change to give back and then wait there as their order is prepared with the “made-ahead” microwaved-to-order ingredients, I’m not too sure that many can related to those new spots. 

BUT… what the heck, those agencies are getting their buck and that McDonald's CEO can always go out and put the account up for grab and the prostitute-agency holding companies will be out there with their fancy clothes and digs before that ink dries on the Facebook post.

In today’s WSJ there’s a guest editorial written by the past McDonald’s CMO, Larry Light.

When I saw the editorial, my first thought was that this was going to be a very defensive article and Larry was going to be all out defending what’s going on with the McDonald’s marketing as it faces the challenge of social media and the Millennials.

BTW… that’s a common line of define that the prostitute-agencies and the “in-the-trenches” CMOs make.

After reading the editorial, I wanted to send Larry a congrats letter on “seeing the light.”  What he says in the editorial is smack on track with what brands like McDonald’s, Coke, Target and other mature brands need to embrace.

Here’s in a snapshot what he says in the editorial…

Stop the hemorrhaging – if a brand is losing its core customer base, ask the fundamental question first… is it because they are “dying off” or because the brand experience that they have sought is not being delivered.

Focus on the direct competition – who’s stealing away the share directly… yes, Chipotle is reaping in Millennials, but McDonald’s is not Chipotle.  It’s like a 60-something Boomer that thinks those BOTOX injections will make them look like a Millennial FOX News host.

Restore your claim to fame – in this case, restore fast-food to fast.  If Target’s claim to fame is “cheap, hip and cool,” I am not so sure how baby clothes and diapers is going to reel back in the folks that used to shop there. 

Keep the brand experience defined and focused – if its burgers and fries, stick to burger and fries.  Monkey see, monkey do is so true in the CMO rooms of brands today.  Last night I saw a new Domino’s Pizza “brand” ad that declares that Domino’s Pizza is no longer the brand.  Now its just Domino’s and the spot goes on with pictures of chicken wings, sandwiches, salads and even nachos. 

The loons reside in those corporate and prostitute-ad agency headquarters.

Re-energize the plan to win – Larry uses the phrase “laser focus on the customer” and goes on to comment that the customer focus has been lost by large global brands in the last decade.  I agree 100%.

What I would add to Larry’s list is simple.

Get your butt out of the office -- Go talk with customers and others like your customers that don’t even get near your brand.  A colleague of mine just spent 60 days up in Chicago with McDonald’s ad agency working with them on a project for another client in consumer package goods. The creative team, the account planning team, the client management team never once went out into the Chicago ‘burbs and walked into a grocery store.  They never once bought the product and cook up a lunch using it.

Realize that the ad agency cares more about their glamour than yours… A fundamental way of understanding this is to challenge them on coming up with something that your customers are emotionally craving and not what you told them or what they dreamed up. 

As I wrote in the last blog, I am not in the business to do dumb stuff.

I am the first to admit that every year in February, I get a tad down-in-the dumps.  I get tired of the cold nights, the darkness at 7pm and the clients that seem to go back to doing the same dumb-butt things that they did the prior year.

But then I get a chance to go out and take a couple of field trips and talk with real people.  I hear more about what’s real rather than imagined or declared.  I see people actually engaging with brands. 

I experience the brand experiences.

For all the money in the world, if I were locked up in a corporate headquarters or residing with a prostitute-ad agency, I would not last long.

My bet is that those CEOs and CMOs like those cited here in this blog will soon experience not lasting long too. 

Sunday, February 1, 2015

The Super Fantasy Of Mass Brands

Just returned back from the grocery store… a Kroger “mega-store” to be specific.

Went and got the pizza, wings, nacho chips, brownies, olives, cookies and the Red Bull for the Super Bowl party tonight.

Every year a small group of my friends get together to cheer on the team we place money on. 

I know that many are favoring the Patriots, but I cannot cheer on a team that cheats to win.

Like many, we are more attracted to watch the commercials than really the football.  And… we often gather with expectations of seeing some brands doing some great stuff, only to be disappointed quickly by junk.

Junk that some CMO allocated at least a million to produce and another $4 million for the :30 spot.

The last couple of years, I have made commentary through this blog on the best commercials and the worst commercials.

This year, I am not going to do it. 

Part of the problem is that mass brands are struggling to stay afloat.  McDonald's sales are on a sliding decline.  Coke laid off 20% of its staff.  Chrysler's barely surviving after a government bail out.  Sears, JC Penney and Radio Shack are on IV.  Even Target is facing a not-so-rosy future. 

Ad agencies hate it every time the reality is brought to the table.

Most of the commercials that will run tonight are in the movie, soda drink, beer, and automotive business.  Viagra, Levis-Wrangler and men’s cologne spots will be in the mix too.  After all, football still is a men’s sport. 

Sure, we will see a couple other more “niche-brands” advertise. But then after the spots run, wonder whether the CMO is having an affair with the ad agency A/E. 

My purpose in writing this blog this year is to shed light on the fact that mass marketing is truly dead. 

Now I quickly raise observation how many other marketing leaders agree… but they also quickly make commentary about how social media is changing the dynamics of marketing today.

I know many may think that this is blasphemy, but social media, in many ways, is actually another diverted form of mass media too. 

Shoot, how many of the “high and mighty” ad agencies and social media-specialty agencies post their Facebook pages and seek to boost their “likes” from just about anyone that’s out there that happens to hit their page.

For years – wait for decades now – I have been harping to client and colleague alike that there really are no mass brands.  None.

And yet, this past week, I have had three meetings with some new venture companies that are declaring that “everyone” is their target market. 

There’s a story on the front page of this week’s Atlanta Business Chronicle about two guys starting up a new social media site that are aiming to become the next Facebook. 

By the way, both of those guys are barely legal age to drink. 

Not here to necessarily stop the youthful aspirations of Millennial entrepreneurs, but you would think that the editorial staff of the Atlanta Business Chronicle would have a bit more of a realistic vision.

The social media world has moved quickly from the first couple of brands on the scene to the evolution of niche brands. 

Just this past week, there was a story that ran in the Wall Street Journal that Pinterest is struggling to get a broader diversity of both men and women to interact on the website. 

Not too many guys… even my fellow gay buddies… have scrap books.

Maybe the Atlanta Business Chronicle is thinking that these two guys can bring back those faded times of the past when Atlanta was "high-tech" with Mindspring and WebMD.  

A past client of mine in House & Home – a flooring brand – spent a lot of money with EXPERIENCE in the development of a market segmentation model and the identification of four very distinctive market groups – all great opportunity – but all distinctively different from one another.

Even when the client was making the investment, there were members of their marketing and corporate leadership that had difficulty with the idea of “splicing and dicing” the marketplace. 

Their media buying firm was beside themselves.  They kept asking over and over and over again… why are we splicing up the marketplace and targeting media when we can get a whole lot more reach and cheaper prices if we buy it on a mass level.

(By the way, if you are using a media buying firm right now… you need to make an appointment with your doc to get a health and mental check-up)

This past week, I visited the flooring brand’s website. 

No niche target to be found.  They had pictures of their products in settings that ran the gamut from the “Ethan Allen look of old” to the “Haverty’s look of today.”  They had created an online resource center for individuals that had lots of hype about it being online, mobile and electronic. 

If there was any targeting at all, it was the targeting strategy of their past re-channeled in an “online” context.  

The only niche targeting I could see was that families are still a center point of text and human interaction with their product and their charity outreach channeled around a national pediatric care hospital.

So much for implementation of smart marketing, niche targeting and investment return.

My inspiration for writing this blog was actually not the Super Bowl Game tonight.

My inspiration came from the current issue of Dwell Magazine. 

I will make a $100 bet that the editorial team of Dwell Magazine is NOT on a mission to win over all the home dwellers out there – shoot, not even all the Millennial home dwellers. 

Dwell has a very defined target group that transcends conventional demographics and enters into the psychographic and geodemographic dynamics that drive a lot of what we do here at EXPERIENCE in crafting brand strategy with our clients.

There’s an ad in Dwell for Lindal Cedar Homes.  

Lindal is a brand that’s been around for a loooonnnngggg time.  The company is probably best known for their home building kits they packaged for second homes – a lot that were based on the old “A-frame” style -- birthed in the ‘70s.

Both the pictures featured in the ad and event the short copy was geared totally around the Dwell niche market segment of today in 2015 and beyond. The architecture is more 2015, its eco-green, the plans are actually smaller in square footage and foot-print and the feel is a blend of the past and today. 

Lindal Cedar Homes has changed with the times and has crafted a brand to deliver around a niche market segment.

This blog is actually the first one to post in 2015. 

This year I turn 56 years old. 

I have made it a mission this year to ask prospective clients a simple question when I receive a phone call or we sit down for coffee... tell me about who makes up your brand’s audience group potential. 

If I hear terms like “everybody,” I will ask a quick follow-up question... does that represent opportunity or obstacle in moving your brand forward.


You can bet what the answer is to that question that will lead to a continued conversation. 

By the way, the other thing about the current issue of Dwell that got my attention is a feature story on a cool Millennial couple that engineered a house with a roof top deck up on Capitol Hill in Seattle. 

As I said at the beginning of this blog… I cannot cheer for a team that cheats to win. 

Roll Seahawks.