Want to Save the World? Buy Better Stuff

Global warming is real and it is bad.  Dan Rather told us 40 years ago that if we ignore the role of emissions on climate, we would have big problems. We did, and we do.  Can’t say no one told us.

Now what?  Many of us are trying to be better global citizens, but we are doing it wrong.  We are trying to buy different stuff, but that is not the whole answer. 

CONSUME LESS.  

For a marketer, selling less is anathema.  For a consumer, buying less leaves you (sadly) with a huge void.  But to be a good global citizen, we need to figure this out.  The most responsible choice you can make about your car is just to keep driving the one you have.  Drive it 20 years.  And then buy another one that will last 30.

Same with clothes.  And furniture.  And every thing else you buy.  We are addicted to consumption, so we buy cheap stuff made in countries with little environmental regulations and then throw it out to buy more cheap stuff.  (In the meantime, the regions in the US that use to make goods don’t; and their residents die from opioid addiction and heartache.  But that is much too big an issue for this humble scribe to take on).

There is an opportunity here to change the paradigm.  Dove wrapped a bar of soap in an inspiring campaign for beauty equality, and it moved millions.  Imagine a message to buy a great product that lasts a long time, and that allows  you to feel part of something much bigger.  Potential to inspire? Absolutely.

Selling consumers, with a message that too much consumption is bad, is not the bunny hill of marketing.  It needs to make it’s point without seeming off-putting or TOO serious, and some degree of humor/irony/lightness is essential to help the medicine go down.

But think about it.  Leading a movement toward a sustainable future by staking your claim for the quality and durability of your product.  Could that work for you?

There are already brands succeeding with this approach, in wildly different markets, from Weathertech to Patek Phillippe.  I’m looking at you, Miele.  And Mercedes Benz.  And Craftsman.  And Prada.  And Timberland.  And anyone who can legitimately make a claim for quality and durability.  

It’s doable.  And it is a big idea.  Think about it.

Back to the Future

The world of digital marketing is blowing up, and it will never be the same.

Thank God for that.

The root of this dumpster fire goes all the way back to 2013, with Edward Snowden.  Europe saw the extent of digital snooping that the US government engaged in, and they were alarmed.  The snowball of privacy regulation started then and there, and almost ten years later, the snowball has picked up a lot of snow as it has rolled downhill.

Privacy laws change everything. Targeting is not as effective, and measurability (what people did after they saw the ad) becomes even more limited.

Even Facebook knows that the gig is up.  Established, successful companies don’t often decide to change their identities.  Facebook knew that their old business model—premised on the illusion of  targeting and measurability—would no longer work.  Good for them for getting out in front of this. 

Targeting was always overrated; even Apple says that untargeted ads work just as well for them as targeted ads. 

Measurability was worse than overrated.  It was a crock, sold to senior executives who craved numbers to inform their decisions.  Any numbers, even bad ones.   Marketers suspected something—all of us who did business with Facebook and Google knew from selective disclosure of data that something was amiss—but anyone who was skeptical of the revolution was committing career suicide, speaking in a voice that couldn’t be heard in a hurricane anyway.

More on that for another day.  But what it dd was focus executives more on where the messages were communicated, and less on the content of that message.  Which is why ads stink.

When you are wasting 50% of your ad budget on targeting that is overrated; believing in the false premise that you can SEE how effective the ads are; AND your content stinks, you really aren’t getting much from your enormous marketing spend.

There is a better way. 

Reduce digital as a percentage of your marketing spend.  Just try it.  Just spend less and less each quarter, and see if it makes a difference to your actual business performance (hint: it won’t).

Beef up your creative spend.  We don’t NEED any of the shit we buy anyway.  As a culture, that ended back in the 1920’s and 30’s.  We buy because we WANT.  Want is an emotion, and it is triggered by compelling, deeply rooted messages.  Sales for Dove grew from $2.5 billion to $4 billion over ten years on a vision for beauty equality. They turned a bar of soap, that lives unseen in your bathroom, into something that gave a psychic benefit.  Absolutely amazing work.

Beef up the tools you give your creatives.  Creative tools, you say? What are those?  Coming soon, but here is a hint.  If history shows us one thing, over and over, it is that we never learn from history.

The Myth of Facts

Facts.  The word is used as if they come from an oracle. 

Often, they don’t.  Often, when you hear “the fact of the matter is…”,  you should check your wallet.  Fast.

There are facts, and there are facts.  There are indeed 332 million people who live in the US.  As of today, Apple is worth $2.5 trillion.  Woman really do spend more than twice as much on shoes as men do.  These things are countable and observable and unambiguous.

But Is it really true that more people prefer the taste of Pepsi than Coke?  If 50% of people in a survey say that they will buy a product configured and priced in a certain way, will they?  Are woman actually attracted to the kind of man they say they are attracted to?

Uh, maybe not.  These “facts” come from asking people questions.  The way that you ask these questions can critically influence the answer.  When and where you ask these questions can critically influence the answer; so can the order of questions asked.  These facts are not facts. They are artifacts of a research approach that often is designed to produce the answer you think you already know, which is the conventional wisdom, which is the most digestible answer, which is the answer that your audience really wants.  So you give it to them, because that is in your self-interest.

Yes, it is true that more people prefer Pepsi in taste tests than Coke, even though Coke outsells Pepsi by 2 to 1.  Pepsi is sweeter than Coke, and if you just taste a sip, it tastes better to most people.  However, if you drink a whole glass, that sugary taste becomes less appealing, and the more balanced taste of Coke wins out.   And really, how much have you learned from a taste test, knowing that there are a whole range of deeper emotions around packaging and childhood memories and association and the FEELING you get consuming a product?  Not much.  The taste test “fact”, on its own, says almost nothing.

The association between stated preference and actual behavior is shockingly low, in any case.  More than 60% of consumers participating in an in-home test of a new appliance said they were likely or very likely to purchase the appliance in the next three months.  Eight months later, only 12% had made the purchase.  When asked later, most consumers who said they would buy but didn’t’ couldn’t explain their behavior. 

In another interesting experiment, woman were asked to describe their ideal man, and then were unknowingly recorded at a social event approaching men they did not know, with researchers comparing the characteristics of men approached with those the same woman reported on a survey as appealing.  Suffice to say that the relationship between stated preference and actual behavior was low (probably shouldn’t  say more!)

Even if you do everything perfectly, what people say and what people do are often very different.  95% of thought occurs in the unconscious mind; you aren’t even  aware you are thinking.  When asked questions about why they do things, and how they would respond to a certain situation,  people generally answer from their conscious mind.  Those thoughts are generally more accessible, and they are often less personal, less emotional, more rational.  In other words, exactly how you want to talk to a stranger.

In the real world, things are different.  If 95% of thought is in your unconscious mind, it is probably true that 95% of your decisions are made there too; the conscious mind just exists to rationalize that decision.

The lesson?  Always distinguish between real facts and stated intentions that masquerade as facts. And probe hard to get deeper into your customers mind.  When you are in a region with a lot of snakes, and you see something coiled under the bush, your unconscious mind (images and associations stored years ago) is what drives your behavior; you have no time to think.  It usually guides you pretty well, and to really understand customer’s, you have to try to get there.

Bravo Rolex

The experiment at the Oscars worked.  Having no host put more focus on the art;  the show’s pace improved (36 minutes shorter than last year!); and the presenters had more time to present their A game.

But that’s besides the point.  The point is Rolex, who gave a master class on luxury marketing.  Here is what I saw.

Use TV Selectively:  TV is too mass for most luxury brands most of the time. Moreover, there is such a thing as too much advertising in this segment, reducing the special, aspirational element required to sell a luxury product.  When you see Rolex, you know you are watching a big, tent-pole event, which reinforces the special quality of the brand.

Forget CPM:  Luxury brands need to show up looking good.  Your customers are buying more than a product.  Present yourself that way, even if it costs seven figures in talent and $2.2 million every 30 seconds.  There is nothing glamorous or luxurious about a digital banner ad, or the local news, or The Price is Right.  They can easily be worse than doing nothing.

Sell the Company, Not the Product:  Rolex focused on master craftsmen in the arts to tell their own stories.  The ads had nothing to do with watches.  Most people buy companies, not products, and Rolex simply associates themselves with excellence.  Are the watches themselves the best product you can buy?  Who knows and who cares.  Rolex takes a much more subtle and emotionally powerful approach.

Sell an Identity:  No one needs a luxury product. They just want it, because these products are rare and say something distinct about their owner.  Is there anything more important than what other people think of you?  Rolex sells accomplishment, and associate themselves with championship events in many spheres to make that point.  It works.  They don’t waste words or attention bandwidth on the technical qualities of the product, because for most people, they don’t matter.

For companies that make products, that is often all they want to talk about.  Learn from someone who has been doing it for a while.  Bravo, Rolex. 

Media Mix and Luxury

No one NEEDS a luxury product.  You WANT it.  Want is an emotion.  Luxury products have to be clearly, objectively outstanding at SOMETHING.  This is where the selling proposition starts.

But it doesn’t end there, and if all you offer people is marginal improvements in function for double or triple the price, you can probably go home right now.  Luxury products are about psychic benefits; the coldest place most of us go with our North Face fleece is the frozen foods aisle at Whole Foods.

This recognition is critical when thinking about media mix.  PR is essential, because it is less obviously tacky and commercial and needy.  Events work because they feel elite and clubby.  Product placement works because, really, who doesn’t want to be James Bond?

These three tactics are the foundation of luxury marketing.  It is where tactics start, and for many brands, it is where they end.  None of these are even counted in most tallies of measured media.

These tallies suggest that digital, print, and TV have roughly equal shares of media spend for “luxury” brands.  For “ultra-luxury”, TV almost goes away, digital drops, and print goes way up.  Most of the TV left at this point is for tent-pole events like the Masters or the Oscars.  “Regular” programming drops off for many reasons, but brand adjacencies are a big one.  What ultra-luxury brand wants to follow the commercial aimed at frequent urinators running on the nightly news?

Now we are down to print and digital.  Digital buys you cheap brand awareness, but most luxury brands care less about brand awareness than a mass brand would.  They care more about brand-building.  Does anyone think of digital as a brand-building medium?  Can you think of any luxury brand built on digital advertising?  There is NOTHING about banner ads that says luxury and glamour.  At all. 

Print can.  High quality paper, crisp images, larger ads that let you see the product in more detail.  Done well, it screams love and craft, in a way conveying taste and authority.

CPM doesn’t even enter the discussion.  For most luxury brands , that is the last discussion you should be having.  If consumers evaluated luxury products on such purely numerical terms, almost no one would buy one.  Think more like your customers, and you will be much better off.

Reflections on the LA Auto Show

I attended the LA Auto Show last week.  All the product experts have already weighed in on what they liked.

That isn’t my thing.  Presentation is, and three brands stood out.

Rivian:  Rivian?  Yes, Rivian.  They have been working quietly for about nine years on a line of electric trucks, and LA was their coming out party.  And with an opening night featuring Rhianna; the LA Times headline calling CEO RJ Scaringe “the version of Elon Musk you’d want your daughter to marry”; and one of the most genuine and feel good press conferences I have ever attended, Rivian just killed it, from start to finish.  Most automotive startups notoriously underinvest in marketing.  They are usually run by technically trained people who simply aren’t comfortable hawking themselves or their products.  They make good neighbors, but they are not making the right business decision.  There are already 650 very good cars out there, and the world does not need another one.  It has to WANT ONE, and Rivian did a great job making us all WANT the venture to succeed.  Big kudos to their whole team.

Volvo:  Any brand that comes to a car show and then leaves their floor space mostly empty is taking a big risk.  This one worked.  Volvo is trying to distinguish itself as a new generation transportation  solutions provider. Their display drew your attention to the beautiful, multi-cultural, black and white portraits of CUSTOMERS surrounding you, and to boards that showed all the input they have received from CUSTOMERS on what they expect a mobility provider to offer.  In sum, they made a statement that this is about you, not us, and it worked.

Jeep: Ok, I said I am not a product expert, but anyone can look at the new Gladiator, the first convertible pick-up truck in a long, long time, generously imbued with Jeep DNA, and conclude this one will sell. Yes, the wheelbase is too long for an off-road vehicle, and yes, it looks like an awful lot of weight for an old V6 to haul around, but I don’t think these issues will make a whit of difference. There is NOTHING that looks like this; it just puts a smile on your face. In a world where all the vehicles are good and sound, design (and being different) matters more than ever.

The Importance of Place

Marketing is four p’s: product, price, promotion, and place.  Selling necessities is more dependent on the first two p’s: product and price.  Promotion and place play a bigger role when selling more discretionary goods. 

But here is the thing: virtually everything we buy is discretionary.  We stopped buying out of need, oh, eighty years ago.  Who really needs a whole aisle of shampoo?  When my dad was a child, shampoo wasn’t even a product; soap worked just fine.  Don’t even get me going on the dog food aisle.

People buy things they WANT, not things they need.  The number of choices for even the most basic necessities are too numerous to count. WANT is an emotion.  Promotion and place matter, because they are critical to providing the emotional satisfaction we get from spending.

Restoration Hardware gets it.  When you visit one of their design centers, you want to join the club.  It doesn’t matter the stores have no inventory: RH representatives order goods from the RH web site, just like you could do at home.

But RH understands the seduction process.  Beauty that surrounds you.  A smile and a refreshment from a representative who genuinely seems happy to be there serving you.  When you leave, some house-porn in the form of a ridiculously expensive catalog,  just to remind you of how you felt when you were in the store.

It is working: sales have grown almost a billion dollars since 2013, to  $2.5 billion.  

Quoting from Gary Friedman, Chairman and CEO:

“We don’t build stores.  We create inspiring places that blur the line between residential and retail, indoors and outdoors. Spaces that are more home than store. Spaces filled with fresh air and light, that are an integration of food, wine, art, and design.”

In sum, they let you project yourself into this life.  Sure, the product and the price matter. But they aren’t all that matter.  At all. Otherwise, RH would close all these wildly expensive places and catalogs, and reallocate the savings to better product and lower prices.

Balancing the four p’s is critical to getting a business right. (Just ask Sears).  Promotion and place often feel like discretionary spending to the operationally oriented executives that typically occupy the c-suite.

Just remember: to get consumers to spend money on things they don’t really need, maybe you should too.

The Beginning of the End

Are you old enough to remember when there were travel agents?  I am.  Every town had one, and most towns had many.  They used to provide personalized service for people planning trips.

Until the internet connected regular people with more travel options than they could ever imagine, at lower prices than agents charged because agents had to pay assistants and rent and business insurance and on and on.  Now, the only people who use travel agents are people that spend more money on vacations than the rest of us do.

There are many more stories like that.  Just swap out travel agent for retail stores or music or print journalism or Blockbuster Video or landlines or ……you get the idea.  The internet has disintermediated lots of businesses  (was “disintermediate” even a word before the internet?).

Another death is in process.  It’s early, and if you aren’t close to the marketing profession, you haven’t heard.  But, in five years, you will be reading LOTS of stories….on the end of ad agencies, as we know them.

I can hear you now.  Aren’t business services different?  Uh, no.  Big brands will always be able to afford big agencies, with fancy offices with lots of account executives and strategists and researchers and account planners.  They continue to employ them because it’s easier, and individuals know how to work within that system.

Eventually, though, if something can be found better and cheaper, better and cheaper wins.  There are no inherent economies of scale to creativity, to story-telling.  More and more, brands are looking for little bits of digital content at relatively low cost, because the digital appetite is virtually insatiable.  The days of  just making a commercial a couple of times a year, with big crews and big budgets, are long, long gone.

The nature of the task for video content has also changed.  Overt product overtures to “buy me” don’t work anymore,  with millennials and affluents and other groups too numerous to mention tuning them out.   Marketing is more about storytelling and emotionally connecting and turning a stranger into a trusted friend.  Does that sound like a commercial to you?  Does that sound like what your agency is  equipped to provide?

There is a better way.  More on that later.

Marketing Luxury Products

When Jesse James was asked why he robbed banks, he responded simply: because that is where the money is.

Where is the money now? And how best to reach it with marketing?

Here are a couple of relevant thoughts.

It is in households headed by a group marketers ignore: over 55 years old.  High net worth households have always been older than the general population, but the difference has increased over time.  Wealth peaks between the ages of 55 and 65.  Indeed, even at 70, median net worth is about double what it is at 40.  Only about 20% of the millionaires in this country are less than 45 years old.

These households spend less time on the Internet.  Up to 50 years old, everyone spends time on-line; between 50 and 64, it is almost everyone.  Over 65, almost 1/3 of the population do not spend any measurable time on-line.  Only 40% engage with Facebook.

They care a lot about privacy.  Many don’t even talk about their financial status with their children.  Their life has taught them to be suspicious of ulterior motives.  Overselling to them is a path to failure.  Remember that the next time you set your retargeting parameters.  Stalking is a relative thing.

They respond to emotional messages.  There is no rational basis for luxury goods, and they know it.  Don’t fetishize the product; connect more deeply.  They aren’t buying a product anyway; they are buying a better version of themselves.  The younger aspirational buyers care more about horsepower than the real ones.  All  they care about is how the product makes them FEEL.  Is Rolex really the best performing watch?  Who knows?  Who cares?

Marketers have gotten really young, as the profession has changed in a fundamental way with the growth of digital options.  The mismatch between who is doing the marketing and who is doing the buying has never been larger, and that is never a good thing.  The UHNW consumer lives life differently and consumes media differently, and the result is a very different path to purchase.

It's Official. Stores Suck.

After one of the longest and strongest periods of economic growth in the post-war era, brick-and-mortar retail continues to struggle.  Credit Suisse predicts that 25% of U.S. mall space will close by 2022.

This doesn’t even seem possible.  Amazon has grown in a meteoric way over that period. Their valuation is now larger than Walmart, J.C. Penney, Target, Macy’s, Best Buy, Kohl’s and Sears.  Combined.

You don’t need a long recitation of causes.  Just google “why retail is dying” and you will see them all.

At the same time, you see Amazon and Warby Parker and Tesla and other strong brands invest significantly in physical stores.  Obviously, the concept is not dead.

Maybe the execution is.  The world is awash in things.  Americans spend $40B annually just storing stuff we have no use for.  We can buy goods anywhere and everywhere.  We have more retail space per capita than any major country in the world.

But experiences?  Connections?  We can never get enough of those, and if you look at the growth in the travel and hospitality industries, you see that craving.

The answer is simple: brands that sell product must offer much more.  You think Starbucks is selling COFFEE at $5 per cup?  Uh, no.  They are selling community and a sense of place, the white collar equivalent of the tavern next to the plant.

Who says it is OK to come in, linger for hours, use my bathroom and my wi-fi, and leave without buying anything?  A friend, that’s who.  That is what Starbucks is selling. 

That is the future of marketing: turning a stranger into a friend.  Not a satisfied customer.  A  friend.

Don’t fetishize the product, because the product is just a part of what your customer is buying.  When is the last time you met someone wearing a Rolex who dives to 100 meters anyway?  The scariest place most Land Rover customers venture is the parking lot at Whole Foods.  Both of these brands know that their customers aren’t buying products as much as a better version of themselves, and they both fill that more emotional need brilliantly.

Start selling direct, because that direct connection is a big part of what customers are buying.  It can be a digital or physical presence; when you achieve scale, maybe it’s both.  A good retailer carrying multiple brands can serve as an effective brand ambassador who does help form that connection with your brand, but it is harder, and the market is telling you that the ones who do it successfully are few and far between.  

Why is Facebook Running TV Spots?

All the smart marketing guys say TV is dead.  Yet whenever these 800 lb. gorilla digital brands get in trouble (I am looking at you, Facebook and Uber and Google), they look to TV.

Why?  Because TV has IMPACT.  Because TV makes an IMPRESSION.  And not the two second impressions that count in the digital world, but a real IMPRESSION at a moment that you are in a relatively passive state and more open to suggestion than when you are on your way to somewhere else.

70% of Tier One automotive advertising is still on TV, because in that world, brands matter.  A vehicle is one of the most ego-laden purchases you will make, and matching your personality to that of the brand is a critical purchase consideration.

Yes, if you have a ski resort, and it snowed today, there is no faster or more effective way to sell tickets this weekend than in the digital world.  Lower funnel marketing is critical, too.  But in an effort to make their jobs appear so complex no one else could do it, CMO’s have sold their executive management a bill of goods. 

Digital is not the right answer to every question.  Your media mix must incorporate what is required to turn a stranger into a friend, and the right mix varies a lot, based on what you sell and who you sell to and how well known your brand is and a host of other factors too numerous to list.

The amount of TV people watch has not changed much for a long time.  Screens keep getting bigger, and transmit more beautiful images every year.  With addressable TV more available, TV should hold its place in the media mix for markets where brand matters.

Ready, Fire, Aim

The digital world has a ravenous appetite for content.  Brands have so many parties involved in content generation that it is impairing the delivery of a cohesive and coherent message.  All the work starts from a different place, and brands often don’t have the technology platform to view it easily as a whole.

You can't move forward unless you understand where you have been, and the spaghetti mess of content out there speaks to that.  Quantity has trumped quality, and pressures to fill content quotas, driven by tactical/SEO considerations, has resulted in a mass of digital drivel.

Just stop and take a breath.  Great brands need to become their own content studios, and YOU must become your own showrunner.  Nobody else is doing it, and nobody is better prepared for the job. To do that, you need to answer a couple of critical questions.

·       Do you have a visual, searchable platform for marketing content that enable you to get all agency partners (digital, social, PR, retail, brand, etc) on the same page?

·       You probably have a brand strategy document.  Do you even have a content strategy document?  Has anyone ever forensically audited what you have done to assess what you are saying about yourself? 

·       How detailed are your creative briefs? Have you seen a movie script before? Where everything (dialog, foreground, background, expressions, music, etc) is described in the script?  How close do your briefs come to that? 

·       Can you schedule content easily across channels, to make sure that it evolves {from week to week and month to month} in a coherent way?

Answer these three questions with yes, and you are on a path to get so good at planning your own content that external costs, for agencies and content and production, declines.  Dramatically.