Reporting on the elections

No no, not another post on body hair. Clearly I traumatized Schmitt, however, as our porn-star smooth host is now himself writing on body hair. Live and learn.

But before I get to serious substance, a quick airline update: On my flight to London last week American Airlines departed an hour late because the video system was malfunctioning. I thought to myself, who cares?!?!?! I'm going to miss my connection over this. Sometimes airlines, perhaps overly taken by the "experiential marketing" trend, forget that getting people to their destination on a timely basis is the most important experience in air travel. You have to deliver the basic stuff before you deliver the fluff. I barely made my connection on British Airways as a result. Incidentally, BA is simply outstanding. I ate some excellent chicken tikka masala on the plane, and I know my chicken. Unlike Schmitt, I don't fly business class, so I don't get to eat foie gras. I guess that if I got foie gras that I wouldn't care about being late.

So now to the elections. We're in the throes of the elections here in Israel, critical elections, but the Israeli voting public is bizarrely apathetic. This is a country where voting rates are typically in the 70-80% range, and with two hours to go the rates are currently about 50%. There seems to be a complete disaffection with politics and politicians. Small parties are expected to gain seats in parliament even though they represent extremely narrow interests--the green party and the retirees' party (yes, we have one) are expected to receive two seats each! And our parliament has 120 members! What's especially troubling is that the party that is expected to win, Ehud Olmert's Kadima party, has advanced a plan to redeploy and evacuate of most of the territory that we control in the West Bank (just like Ariel Sharon did in Gaza). This would reverse a 39 year history, and still no one is mobilizing to vote! Except, of course, for the retirees...

The Musical Art of Keynote Speaking

Last night I went to a concert of the New York Philharmonic. Great program: Schubert, Schoenberg, Ravel, and Rachmaninov.

I admit it: I am a sucker for “Rhapsody on a Theme by Paganini.” Most of this Rachmaninov piece (especially the beginning and end) is a virtuoso expression of passion (thus, “rhapsody”). But about three quarters through, there’s this soft, ethereal, jazzy theme (actually inverted theme) of Paganini, first played by the piano, then repeated in the orchestra, which stops time for a moment. And that moment is the big hit! The music’s passionate, frantic rhapsody gives way to a moment of simple humanity – whose popularity helped revive the career of the young composer.

It got me to think about keynote speeches. Leaving the bores aside, for many speakers, usually the good ones, the definition of rhapsody applies: they engage in “exalted or excessively enthusiastic expression of feeling in speech.” You know the type – berating the business audience like a football coach telling his team they can do more. Or pronouncing the gloomy state of their industry, or the fabulous new opportunities of the future, always in rising, passionate tones.

But what distinguishes the good speaker from the great, is the ability to pause at some point, step back from the rhapsody, and – for a short moment – grab the audience in a very basic, human way.

Just like Rachmaninoff.

(Posted by Schmitt)

Mapping the Consumer Genome

Breaking news from The Onion: marketing science has successfully mapped the human heart strings. At last the holy grail of experiential marketing has been discovered!

Among the initial findings:

"'Father dancing with his daughter at her wedding' causes a strong desire to buy a digital camera."

I guess ethnographic researchers can breathe easy now, and book tickets for their long-postponed vacations. We should expect more breakthrough cures to long-suffering ad campaigns to appear on a daily basis now...

Branded Entertainment: Here to Stay?

Everyone agrees that times are tougher for traditional ads. Even Madison Avenue, while testifying to the continuing power of a great 30 second spot (with the right brand, strategy, and creative) is searching for new ways to offer a “360 degree” approach to branding – where broadcast ads are just one piece of the puzzle.

One of the newer pieces that ad folks spend a lot of time thinking about is branded entertainment (or “brand integration” or “product placement”). The frenzy really started with BMW’s glamorous online films – big budget affairs with top-tier directors and a variety of stars, each featuring a cool storyline that involved a lot of driving around in a Beamer.

Since then, there’s been a wave of copycats trying to create content that is basically an advertisement that people will choose to watch. Some companies are making online movies like BMW’s, others are paying buckets of cash to feature their products on reality TV shows, or in big budget movies—whether it’s the cell phone used in The Matrix Reloaded, or the cars driven in The Italian Job.

Some folks like Scott Donaton of Ad Age herald this as the way of the future (see his book “Madison & Vine: Why the Entertainment and Advertising Industries Must Converge to Survive”).

But people are already getting sick of product placements. There’s a really funny parody video online lampooning Tyra Banks’s hocking of products on “America’s Top Model” – and a spoof of the subservientchicken website making fun of The Apprentice’s brand huckstering (www.subservientdonald.com)

Businessweek’s David Kiley writes this week about Ford’s new online movies to promote its Lincoln and Mercury brands. But he complains that the cars hardly even appear in the movies—just some eccentric cereal-obsessed characters in their 20s who are supposed to inspire affection in Gen Y web surfers that will mystically rub off on the brand.

Has all this brand integration gone too far? Or is it just being executed in a crappy manner? (no news there – bad marketing stinks, no matter what trendy medium you use) BMW eventually got out of the movie-making business while they were still the top model to be beat.

When Donaton spoke at Columbia University last year, the discussion stayed mostly on the business models (yes – if we all start TiVo’ing out the ads, the networks will try to put products into all the shows to keep afloat). But it didn’t really zero in on the key question: when does this work and when does it not?

Is branded entertainment viable as a marketing tool that can be used for a variety of brands, and in a way that appeals to, and influences consumers? Or is this just another rotten idea like advertisements in the back of taxicabs?

Will marketers figure out how to make it work well like BMW did, or will they be hanging their head in shame at dinner parties of the future when people say “So, what do you do?” and they answer “Product placement.”

Image Management of the Stars

The Wall Street Journal recently noted an interesting new trend among the stars – fake paparazzi photos. You’ve probably seen the images of Britney Spears’ bulging belly or a half-asleep Julia Roberts before makeup on the celebrity rags while waiting on line at the supermarket. But the WSJ notes how many stars are effectively casting themselves in a more flattering light:

Now many stars including Gwyneth Paltrow, Angelina Jolie and Jessica Simpson are fighting back. They are hiring their own photographers to capture supposedly private rendezvous, tipping off reporters to their whereabouts and developing relationships of mutual back-scratching with magazine editors.

So is this a deceptive practice among the stars who stage the photos and the magazines that knowingly publish them without telling readers, or a justified strike back against the paparazzi? Or is it just great image management? You decide.

On Schmitt and body hair

Dear fellow Schmitt groupies,

Today is my first post as an official Schmitt blogger. I will be posting my thoughts occasionally, and will be answering questions from fellow Schmitt admirers. Occasionally I might even convince guru-wannabe Gupta to post a thought or two. I might have to pull him by his moustache to do it, but that's not a problem because I'm bigger than him so I can always threaten to beat him up (I love Gupta, I really do, but sometimes he needs to have his arm--or 'stache-- twisted).

Next week I'm going to Israel, so I should have plenty of things to report. First there's my flight over, on American Airlines to London and then British Airways to Tel Aviv. Like Schmitt, I'll also post my thoughts about how bad airlines have gotten. Unlike Schmitt, I don't fly business class, so you won't hear me complain about how the b-class pijamas cause chafing. Back where I sit we don't get pj's, only a bag of pretzels served by a flight attendant with enough cellulite to melt an igloo. Second, there will be a parliamentary election in Israel on March 28th. It looks like Ehud Olmert will be our next prime minister. This is an example of a non-brand benefitting from the fact that other candidates have tainted brands. Olmert is like teflon; he's the most indicted (yes, as in indicted by Jack McCoy on Law and Order) Israeli politician ever, yet he's never been found guilty. Somehow his legal troubles haven't stuck to him. Of course non-brands only get to be non-brands for only so long, but in Olmert's case he'll have to pick an identity well after his impending victory in the elections. Lucky guy.

My last comment of the day has to do with body hair. All I have to say in that regard is that Schmitt must have some Chinese in his ancestry (maybe Schmitt's real name is Schming). The guy is smooth like a porn star. In contrast, our erstwhile hairy friend Sanjay Sood and our balding new product development expert Olivier Toubia are clearly descendants of King Kong. They remind me of a guy that I used to play basketball in grad school with, Goodloe White. Goodloe was so hairy that you could flick the sweat off his chest hair in the course of a game. He was like a human sprinkler system.

Kisses to you all!
Levav

Co-Creation and the SCHMITT Blog

Today marks a turning point for the SCHMITT blog.

Why today? The winds of change are blowing. Everywhere I turn, I hear news that the old command-and-control marketing will no longer do. Brands can no longer be built by monolithic leadership alone. The new watchwords are transparency, openness, and consumer participation.

The new model is aptly titled “co-creation.” In it, consumers help to create the products, services, and brands they desire. The open-source model (started in software, with Linux, etc.) is coming to marketing. By involving customers more, companies lose some control, but gain the possibility of much more passionately involved stakeholders in their brand.

The old model of Disney suing schoolchildren for appropriating the image of Mickey Mouse is just no longer workable. Today’s marketplace winners are not a handful of mega-brands built by decades of advertising; today’s winners are brands that passionately engage consumers, and let them have a hand in shaping them.

Blogs are, in fact, heralded as one of the new technologies that can give consumers that hand in the process. Blogs allow for greater participation, interaction, and transparency. So why not this blog?

I have decided to bring co-creation to the SCHMITTblog. Instead of writing all posts myself, I will be inviting a handful of passionate brand evangelists to serve as contributors to the blog.

David Rogers and Nick Peterson, of the Center on Global Brand Leadership, have both collaborated with me on books, classes, consulting, and branding operas. Professor Jonathan Levav (a.k.a Levav) has already proven his mettle in the comments section of this blog (see his notes on body hair). In time, other contributors may be added.

There is a risk, of course, in opening up such an established brand as SCHMITT to the unpredictable hands of others. But the rewards and possibility of co-creation is too great to pass up.

Enjoy the new, co-created, SCHMITTblog!

-Bernd H. Schmitt

Blogging to Build Business

Thanks to Steve Rubel, whose "Micro Persuasion" blog today points out an article by David Hayes in today's Kansas City Star that assesses the rising use of blogs as a strategic communications tool by business.

From Microsoft to Monster.com to Sprint Nextel and General Motors -- blogs are being used in old-tech and hi-tech companies to communicate better with customers and with internal audiences.

Obviously, allowing or encouraging a company's own employees to blog raises the risk of less centralized and controlled communications. But it also can allow for more immediate and effective communications.

Robert Scoble should be a boss’s worst nightmare. He’s been known to openly criticize the company he works for, with thousands of opinion-leaders listening in. In the process, he’s become one of his company’s most publicly recognizable employees. But, at the same time, Scoble and a group of employees like him have done something millions of dollars in advertising couldn’t. They’ve made Microsoft Corp. — long considered to be one of the most predatory businesses in the world — seem a lot more human.

Read the whole article here.

Don't Be So Specialized

Excellent essay posted by Olivier Blanchard (a fellow Corante marketing network blogger) this week about the importance of hiring people who aren’t hyper-specialized. As he discusses, this is especially critical to strategy & innovation.

To think big, teams needs people with a broad range of interests (not just a wizard at hedge fund financing, but an avid mountain biker, German opera enthusiast, etc.). I find this is critical to having people who can look at a business or organization from different contexts, able to benchmark from outside their industry, and get ideas even from beyond business altogether.

Besides, these people are much more fun.

Labour-Reform Pain Hits German Theater

I have had it! A week ago, I tried to see “Maria Stuart,” a Schiller play, in Munich. There was a strike by the stage designers! So the actors basically sat on chairs and read the text. When I protest and say “this is not what I paid for,” I am told that this IS the “full performance”--because they will speak each word of the play! So, what do we need those stage designers for, if the “product” is just the actors speaking the text?

A few days later, at the beginning of a performance of “King Oedipus” in Heidelberg, the director of the theater appears with a union representative, thanking him (I repeat: thanking him) for the fact that everyone appeared at work today. The union guy then gives an inflammatory speech, about “too much stress.” To which, I respond – to the shock of the audience – “Stress is good!”

Yesterday, the performance of “Macbeth” in Munich is cancelled – due to illness! What???

Germany has twice as many theaters as the entire U.S. German governments have pumped money into the arts for decades. At one point the cultural budget of the city of Frankfurt was 25% of the entire city budget. Berlin continues to have three opera companies and dozens of orchestras. So now–finally--the budget of some cultural institutions is being cut a little–and everyone screams!

The Radisson SAS Customized Experience

I am staying in the fabulous new Radisson SAS hotel in Frankfurt. Sure, it’s a chain. Sure, they knocked off – excuse me, benchmarked – the W Hotels and others for experiential ideas. But still, this hotel is soooo original.

At the check-in, flatscreen TVs show images of the four different room styles you can choose from (“Fashion,” “Fresh,” “At Home” and “Chic”). A great example of customer choice in experience design—let the customers segment themselves!

Another customizable theme: the lobby area is no longer a strict space divided into coffee shop, business center, core lobby area etc. – instead multi-function spaces (a bar here, a workspace there, some place to hang out) that can be customized.

Below the roof, there is a "wellness space" with solarium, massage, gym, "infinity pool," etc. And broadband wireless access is free throughout the hotel, just as it should be (I view this like electricity and water).

Great job! I hope they will roll it out all over Europe!

Absolut Brand Mistake

Absolut vodka is one of my longtime favorite brands. For years, their brilliant experiential campaigns (endless creative ideas based on the unique shape of the bottle) proved the potency of a great experiential brand. After all, if vodka is legally defined as “an odorless, colorless, flavorless alchohol,” then how else can you account for a premium price in the category? Absolut also showed the power of sticking with a good strategy, and of building brand equity for the long term.

But a new ad campaign this week has drawn my attention to the fact that even the best brand managers can sometimes make a very basic mistake.

In case you didn’t know (I’d forgotten), Absolut recently added a new “super-premium” brand of vodka. Apparently the company decided that the brand it had poured millions into was not strong enough to compete against today’s “super-premium” newcomers, at a 50% price markup. This I find mystifying. Can’t a great brand take a little heat?

But worse, was their brand architecture choice – a new, endorsed brand. They called it “Level”--with a similar bottle shape, but only very unobvious text at the bottom whispering “spirit of Absolut” -- so that it’s very easy to not even realize that Level is an Absolut brand.

What a perfect example of the wrong brand portfolio strategy. If they truly needed a new brand to move up, then the smart strategy would have been a sub-brand like “Absolut Ultra” that leveraged the existing brand equity. This has been done very effectively in the liquor industry, e.g. by Johnnie Walker scotch, which has a “Johnnie Walker Blue” scotch (aged more years, etc.) that is about 500% more expensive than their premium Johnnie Walker Black. This sort of brand extension capitalizes on the enormous awareness and positive equity built up in the original brand, allows you to move into a new price point where the original might not reach, and even reflects the “super premium” shine of the new brand back onto the original. (Johnnie Walker Black looks a little better when you notice its cousin Blue costs $199.)

I would applaud Absolut for guts if they were finally throwing some resources behind “Level” and the new communications were creating an exciting customer experience unlike anything else in the category. But so far, I’ve seen a website and print ads which look just like every other “cool” new vodka on the block.

Absolut, come back from your madness!

Help for Bloggers

In Giessen, Germany today (not to be confused with "Glessen," where a Fedex was erroneously sent to me). One of my favorite sources for keeping up on news when traveling the world is the Onion. No passwords, totally free. Very cutting edge news.

I read an article there this week titled "I Can Write 600 Words About Anything." I'm advising this as an excellent primer for anyone planning to enter the world of blogging.

Conference on Innovative Marketing (Bloggers welcome)

A follow-up to my 2/27 post: we have now set the dates for the event I mentioned where we were hoping to include the Whopperettes.

The 2006 Innovative Marketing Conference will take place June 8-9, 2006 at Columbia Business School, under the theme of “Building a New Marketing to Meet a Changing Market.” It is being co-presented by our Center on Global Brand Leadership, and by Corante, a blog media company.

The event should be very cutting edge, drawing on the Center’s researchers, and top-level alumni and corporate sponsors, and Corante’s large community of bloggers working in topics of innovative marketing. There will be one highly-interactive day for senior (CMO, VP) level marketers and a second “big” day for a large audience with speakers on the new trends that are reshaping marketing—the rise of search, mobile media, changing role of advertising, demand for ROI measurements, integration of marketing with H.R., etc.

More info will follow as we start to announce speakers and many more details. But mark your calendars for June 8-9!

Flash Mobs Against Branding

I read a fascinating article this morning in the Wall Street Journal about the rising popularity of team purchasing in China, known as "tuangou."

Groups of shoppers interested in purchasing the same products meet online to organize buying groups for everything from bathroom fixtures to cars. These groups then gather as "flash mobs" at local merchants to gang up and demand bulk discounts. In cities like Shanghai, where consumers have a larger choice of brand name products than ever before, many sellers are giving in to the demands of team purchasers. In one example, the owner of a kitchen cabinet shop was explaining the high quality materials and craftsmanship of his cabinets when a member of a 12 person buying group demanded, “Forget quality. Let’s talk about price!”

What a challenge for branding! Some segments of Chinese consumers are willing to pay a premium for brands. But the price-fixated, Internet-wielding "tuangou" mobs are going to pose a challenge for brand builders in China.

For those of you with a WSJ Online membership, you can read the full article here.

Whopperettes, Hold on to the Dream!

I was so inspired by the Burger King Whopperettes advertisement and website that I asked my office at the Center on Global Brand Leadership to see if we could involve them in an upcoming conference. The topic is the future of innovative marketing, so why not include the most innovative advertisement from the Super Bowl – but live and on stage? What a thrill, to host the kickdancing Whopperettes in New York, with their cutting edge show business branding!

The ad agency and Burger King were very helpful and their head of corporate communications worked with us to find a way to make it feasibly happen. We even reserved the Miller Theatre (Columbia University’s own Broadway stage) for a tentative date. But it turned out to be a bit more than we could muster – 92 dancers, pit orchestra, set design, and water ballet… hmm… no wonder the ad was so fun. Plus, it turns out the ad was shot in Brazil, so all the talent would need to be flow in. In the end, the price of the big show was too expensive. But maybe next year, we can get additional conference sponsors and dream big again!

“Frau Merkel, Tear Down That House!”

Report on the Acela experience (as promised in my blog yesterday): that brand has been kept up quite well! On time, funny announcements, pleasant environment, really quite good.

However, I was mortified, as a German by birth, by the experience at my destination: the German Society of Pennsylvania, where I was invited for a reception by the “Minister President” of the State North-Rhine/Westphalia as part of his visit to the US. The German Society occupied a ramshackle, 3-story townhouse, on an abandoned block of Philadelphia’s Spring Garden Street. I thought I was in the demilitarized zone of the Berlin Wall, circa 1987 (see photo)!

Perhaps they are keeping it this way as a symbol of German social and economic decay? But I’m quite surprised, because in Germany they always “restore” everything for millions of dollars. They could learn something from the dynamic Chinese capitalists, who never saw a 10 year old building they didn’t tear down.

What would Ronald Reagan say? “Frau Merkel, tear down that house!”

How Well is this Experiential Brand Holding Up?

I will be taking the Acela train from Penn Station to Philadelphia in a couple of hours. A few years ago, in 1999, I featured Acela as a great example of experiential design and marketing in my book Experiential Marketing (take a look at the pretty pics on pp. 40-41). I haven’t taken the train, though, in years and I wonder in what condition the seats and barstools will be by now. Is the brand still holding up? Will report tomorrow.

New Weapons of the Competitive War

The sun is still not up in Singapore, and Reuters reports that US defense secretary Donald Rumsfeld is saying the US government still functions as a “five and dime” store, while today’s weapons of war include email, blackberries, instant messaging, digital cameras, and blogs.

How come Rumsfeld gets it but many participants in the war of the competitive marketplace don’t? While most companies have by now figured out their internet strategy (sort of), they have no clue about their mobile-device strategy.

Yet, at a brand experience conference here in Singapore at SMU, I just learned that the Asian market is moving ahead. By the end of this year, industry experts expect audio and high quality video ad messages (in other words, sophisticated mobile commercials) to be broadcast to Asian consumers by leading brands on the latest cutting-edge phones. And of course, these brands can track which consumer gets which message when and how consumers are going to respond.

Call that the future of communications, coming in a few months (at least in some parts of the world). In comparison, on my American mobile phone I can’t even respond to an SMS messages while roaming in Hong Kong.

So, another reason to keep your US mobile in the pocket while in Asia: so that you don’t embarrass yourself.

Music-Powered Brands

The sun is not up yet in Singapore and I just called David Rogers (Associate Director of our Center on Global Brand Leadership) in New York. Rogers is also a composer, and he just had a piece played in Carnegie Hall at a sold-out concert last night. The orchestra was “Alarm Will Sound” an innovative young ensemble that champions “today’s music."

Brand managers could learn something from that ethos. I’ve noticed that lately all my favorite advertisements -- the ones that really suck you into a world of experience -- have original music. None of that "paying the Rolling Stones to use a rebellious sex song from 30 years ago" to sell your PC software. Or worse, using classical music to evoke a "sophisticated" feeling. Great brands require new music. Something totally fresh, perhaps a little silly (like the Whopperettes theme song that I featured recently here). Or a really new take on an old song (“I Love Paris” for Carls Jr.). Whatever it is, new music has the power to bring new life to brands.