brand marketing blog

If you take a conservative ratio of marketing spend as 4% of sales, companies are committing princely sums to their marketing efforts. Let’s say you’re a small company turning over $3m, your marketing budget should be around $120,000 to $150,000 per annum.

Over a three year period that amounts to around $400,000, the price of a decent house. Now could you imagine spending $400k building a new house without consulting a designer or architect, and having no blueprint or plans to work from? Not really.

The remarkable thing is that as a brand marketing agency we come into contact with many smart business people that do exactly that – spend $400k on their marketing with no clear strategy or deep insights into how their customers make decisions.

Brand strategy isn’t necessarily rocket science, but it does require a structured approach and a bit of investment. Whatever road you choose, you’re going to spend the $400k, either badly with poor results, or smartly with good results. Doesn’t it make sense to invest $10,000 or $15,000 to ensure you spend your $450,000 smartly? Or am I missing a trick here?

I’d love to hear from business owners and marketing strategists alike on this topic.

The great news is that Wellington Airport in their infinite wisdom has decided to back down on their outrageous plan to build a monstrosity WELLYWOOD sign near the airport.

The facts of the matter have been well publicised so I won’t rehash that in this post, suffice to say that even the most arrogant corporate CEO (aka Steve Fitzgerald) is not beyond the accountability of his constituents.

There is no doubt in my mind that the extensive coverage and controversy that has raged around the sign was driven by social media, most prominently the Facebook page “Wellingtonians Against the Wellywood Sign” which garnered over 25,000 followers in 3 days. Thankfully the hope that I expressed in my previous post on the subject came to pass.

The dynamics of brand ownership has shifted irreversibly, helped along rather nicely by social media. In the traditional ‘TV Industrial Complex’ model (as Seth Godin refers to it), the corporation owned and controlled their brand. In the new social media network model, the corporation owns the brand but the consumer controls its outcome.

The following graphic illustrates this point.

It’s a pity that so many arrogant hard heads that run our large companies cannot dig their heads out of their arses long enough to wake up and realise that the world is changing faster than the rise in petrol prices (or landing charges in the airports cases).

I sincerely hope that the new proposed round of public consultation regarding the suitability of the WELLYWOOD sign sees it buried for ever. Go hard Wellington, the Coolest Little Capital in the World.

The Great Debate around the proposed WELLYWOOD sign is in full swing and who will win is anyone’s guess.

One thing that is certain is the role that social media is playing in this theatre production of The Good, the Bad and the Ugly. Within the past 48 hours since the news broke of the proposed sign, several Facebook pages have been set up, some in favour and others against.

Two contenders have emerged – ‘Wellingtonians Against the Wellywood Sign’ with around 14,000 fans at 10am on 23/5/11 and ‘Support WELLYWOOD’ (a group in favour of the sign) with around 10,000 fans.

It wouldn’t exactly be a novelty if consumer pressure through the use of social media forces the hand of Wellington Airport and their cohorts into scrapping this ludicrous idea. Although the Hollywood Sign Trust might stymie the plan before social media does its job, but one thing’s certain, there has never before been such a powerful broadcast medium where the power lies in the hands of the people.

Those in favour of the sign seem to be pro free choice and liberty, which is all fine and dandy. However, the business of international tourism and driving economic growth in the city is not something to be played around with, or to have some lofty ideal cast upon it.

Many companies depend on tourists and the positive reputation that Wellington enjoys across the civilised world. Jobs and livelihoods are at stake, as is the substantial investment over the past seven years in positioning Wellington as a sophisticated cultural centre and an exciting and vibrant place to visit.

Having Lonely Planet describe Wellington as the Coolest Little Capital in the World was not achieved by a tacky sign alongside the motorway somewhere, but by a skillfully crafted brand strategy and effective execution. I can’t imagine a better qualified or respected recommendation for a city that that.

Facebook and Twitter will be generating a great deal of publicity and ‘noise’ (something Wellington Airport CEO Steve Fitzgerald seems to think is the silver bullet to marketing success) right now for Wellington. However, is this the right brand message we want to portray on the world stage? Not all noise is created equal.

It will be fascinating to follow the debate in social media and blogs and then to see how the brains behind the sign dig themselves out of the pooh. Fortunately there are more than enough ‘spin doctors’ in the capital, so putting a positive gloss on a disaster should be no problem for them, considering their extensive experience in that field.

It’s already old news that Wellington International Airport is proceeding with plans to erect a 3.5-metre high, 28-metre-long sign with the word WELLYWOOD emblazoned in the style of the iconic HOLLYWOOD sign.

This decision looks set to split the city faster than a seismic shift along the fault line, with a Facebook page already set up called ‘Wellingtonians Against the Wellywood Sign’ having attracted over 10,000 followers in the first 2 days.

As a non-resident of Wellington one might say this has nothing to do with me, but as an outsider I can see the wood (sic) for the trees in a less emotional way. In my opinion, the move to build this WELLYWOOD sign monstrosity is a brand marketing disaster.

I have been quoted in the Dominion Post and other media sources as saying that the city's overall brand is sophisticated and encompassed its culture and environment. I went on to say that the sign will position the city as a try-hard, a bit behind the times, as a follower.

Personally I think it is quite crass and it's going to downgrade the overall perception of Wellington as a cultural and elegant city.

I dug out the original 5-year brand strategy plan developed by Positively Wellington Tourism back in 2004 and proudly signed off by the then CEO, Tim Cossar. Its purpose was stated as “…an outline of what is needed to help complete Wellington’s metamorphosis from ‘cardigan capital’ to ultimate urban destination.”

In the plan, the key elements of Brand Wellington were described as:

CREATIVITY - Wellington is a hot-bed of creative thought. This is evident in all aspects of the city, from public art to theatre, from scenic tours to shopping.

NATIONHOOD - The Capital City, Wellington is uniquely positioned to tell the nation’s history through captivating and authentic experiences.

ACCESSIBLE NATURE - Wellington’s position between a stunning harbour and the South Coast makes it a natural paradise – yet coffee is only ever a short trip away.

CITY EXCITEMENT - Downtown Wellington offers the ultimate urban experience. Shopping, cafes, bars, restaurants and entertainment all fill Downtown creating a sense of excitement unique to Wellington.

Nowhere does it boldly state that Brand Wellington will be built around blockbuster movies. I do however concede that the movie-making industry is a valuable tourist attraction and something worth promoting, but not at the expense of the big picture.

Interestingly enough, current Positively Wellington Tourism chief executive David Perks said the WELLYWOOD idea received global media attention when it was floated 15 months ago. "One of the things for Wellington is that the world talks about us, and the sign is a mechanism for that."

Has he not read the original brand plan, which by all accounts has been exceptionally successful, hence the world is talking about Wellington?

If the WELLYWOOD sign had been announced on April 1st I would have taken it for the joke it is, but it is almost as if the hard marketing work over the past seven years has been shoved aside for a ’quick fix’ for the local tourism industry.

Wellington Chief executive Steve Fitzgerald said accolades such as Wellington being labelled as the Coolest Little Capital in the World by Lonely Planet were not enough to entice people to visit from big markets such as the United States, Britain and China. "The small learn to shout the loudest because they have to. It (the WELLYWOOD sign) is that sort of concept." Does Steve remember the saying, “empty vessels make the most noise”?

Breaking through the clutter with noise isn’t in itself a bad marketing ploy, however when the noisy message has little substance and is only a very small component of the overall brand (but will take centre-stage), it is likely to do more harm than good to Brand Wellington in the long term. Surely the marketing powers that be in the capital can come up with something a little more sophisticated than a large trashy sign.

Perhaps they have visited Matamata where the name ‘Hobbiton’ has been adopted to attract tourists. Sure that has worked for Matamata but let's be honest, Matamata isn’t exactly on a cultural and tourism par with Wellington nor does it have much else to offer tourists. So why the need to be a follower and a crass try hard, Wellington Airport?

I have had some criticism thrown at me regarding my stance on this issue, where Clint Heine and Friends disagree with the proposition that Wellington is sophisticated. Sadly Wellington is our most sophisticated city by New Zealand standards and in the absence of anything better we have to accept that fact, or move to Paris.

I can only hope that the owners of the HOLLYWOOD sign trademark refuse to provide permission or take out an injunction against this folly.

Common thinking is that quite often being the first mover puts you at an advantage over later entry market competitors. In theory this does hold some truth, but the reality is that simply being there first is no guarantee of initial or longer term success.

There are some fundamental considerations that may determine potential success...

Is the new service or product accepted by the market or does the first entrant need to create an awareness and acceptance of the offering? There is nothing more costly than creating and educating a market to new ways and could be so costly as to crush the company entering, unless they have deep pockets or substantial venture funding.

Particularly in the software and technology market, the transition within the product adoption cycle from ‘innovators’ to ‘market majority’ is fraught with difficulty. The concept is well defined as Moore’s Chasm; the failure to extend usage and adoption beyond the ‘innovators’ and ‘early adopters’. This has been the downfall of many first movers. Second entrants can then capitalise on the groundwork already done by the failed first mover.

If you have a legal patent that affords a number of years of protection then you probably have the best opportunity to build a first mover advantage, despite the issues detailed previously. An example of this was when Xerox invented photocopying and enjoyed 15 years of protection of their technology, going on to build a successful global empire.

Where the product or service has little or no patentable technology or methodology, the challenge of maintaining a market advantage is substantial. The easier it is to mimic or copy the product, the quicker the competitors will arrive. Quite often this is the case with software products, where due to various factors, legal protection is not available or not affordable. If there is money to be made, a raft of competitors will arrive, copy and out-market the incumbent.

To retain a first mover advantage, the entry company will have to aggressively deconstruct and re-invent their product and brand in order to keep one step ahead, constantly innovating and adapting to changing market conditions.

The advantage to market followers is that the first mover has done the hard yards, developing the market, learning what works and what is acceptable, usually at considerable financial cost. Market followers simply pick up from an advanced position and have the opportunity to improve on what’s already in place.

There are numerous examples of the follower improving on and stealing market leadership from the first mover:

• Google was not the first search engine, but learned from others and made a better product, now being the market leader by a country mile.
• Netscape was the predominant browser in the early days of the web, but players like Mozilla’s Firefox, Microsoft’s Explorer and now Google’s Chrome have taken ownership of the market. Chrome is a very late arrival, but is rapidly gaining substantial market share.
• Facebook was not the first player in social media, but through innovation, product differentiation and clever integration into people’s social networks and lives has become today’s leader.

There are also many examples of first movers that have retained a leadership position:

• Microsoft invented desktop computing and has managed for many years to be the dominant force, despite competitive and legal efforts to unseat them. The genius of Microsoft was not in creating a dominant market position, but in maintaining and extending it. Whilst they have been challenged aggressively, they still dominate in their core market.
• Interestingly though, in other areas where Microsoft has been a late entrant, such as in browsers and search engines, they have been unable to develop a dominant market position, despite having the benefit of learning from what others before them had done.
• In 1964, Phil Knight founded Nike as a specialist running shoe company. He created a new market for a new type of product, and today Nike is still the world’s largest manufacturer of running shoes and apparel. However, they didn’t achieve this by sitting on their hands.

One of the ways that today’s emerging online brands secure market leadership is through integrating themselves into the user’s lives’ or their clients business practices and methods. Cloud-based SaaS companies provide a great service at a low cost, one of the chief concerns against cloud-based applications is that of data extraction in the event of a falling out with the provider.

For those traditional advertising executives and ad agencies that might risk talking down the importance of Google AdWords as a credible advertising medium, wait till they read the stats of the top 10 paid search advertisers in America from October to December 2010.

Online paid search activity represented a US$3.4 billion market during this 3-month period. The top 10 paid search advertisers by spend were:

• Amazon: US$51 million
• AT&T: US$27 million
• Capital one: US$26 million
• Target Department Store: US$26 million
• Expedia Travel: US$23 million
• eBay: US$22 million
• Progressive: US$19 million
• Sprint: US$17 million
• Geico: US$16.5 million
• State Farm: US$16.2 million.

What isn’t so evident is what the actual ROI for online paid search is. It’s obvious that it must be generating a decent return based on the growth figures bandied about and the massive spend by the top 10, but wouldn’t it be great to see a comparison of ROI per $1 spent for traditional media vs. paid search. Anyone aware of such a survey?

My guess is that the numbers would show how traditional media advertising is rapidly losing (has already lost?) its ability to ‘cut-through’ and deliver a targeted message compared to the narrowly targeted nature of paid search.

Ignoring the traditional vs. online ad debate, it is self evident that achieving an organic Page 1 ranking in Google is becoming increasingly difficult. It is obvious to conspiracy theorists like myself that Google is not making it any easier for the ‘little guy’ to be found, other than by driving them to paid search (read more here http://www.boldhorizon.co.nz/brand-marketing-blog/index.php/google-strangles-organic-seo).

Like it or not, the future of direct advertising (outside of social network activity) lies in paid search, and Google AdWords is king. Facebook paid search has yet to deliver the targeted capability of AdWords, especially to the B2B world.

For advertising agencies that have depended on generous media commissions over the past years, the future looks mighty bleak, unless they cut out their multiple layers of account management and re-engineer their business model and fee structure.

There are undeniably strong signs that information consumption habits are changing irreversibly, particularly evidenced by the plummeting revenues of newspapers, magazines and printed classifieds. In fact over the past ten year’s newspaper classified revenue has fallen 92%.

Mobile devices such as smart phones and tablet computers like iPad are starting to make a material impact on how we receive and read information and documents. Recent stats show that 78% of business people use their mobile device to check email, which means that virtually everybody that can check email on a mobile device, does.

According to a study by Pew Research Center, 47% of American adults use their mobile phones and tablet computers to get local news and information. Consider that 60% of consumers are purchasing goods and services on their mobile phones and you have a real trend happening here.

In fact, predictions are that by 2013 more people will be accessing websites via their mobile phones and tablets than by desktop PC’s and laptops.

So what’s the takeaway for marketers? We need to leverage these new mobile platforms to more effectively distribute content, be that magazines, newsletters or company marketing brochures.

Flipping books (also known as e-books or flash flip books) are an ideal and affordable way to publish your documents online. Most flipping book publishing platforms offer a range of powerful features that enhance the readability, enjoyment and engagement for the reader.

Marketers are now also able to integrate access between their online publications and social media platforms like Twitter, FaceBook and LinkedIn through the social sharing options, encouraging deeper engagement and extended exposure across communities.

Click on the links below to view examples of flipping books.
http://www.boldhorizon.co.nz/e-books/health-at-home/
http://www.boldhorizon.co.nz/e-books/kce-ar-2010/

As with most SEO practitioners, I’ve frequently advocated the use of article marketing as a means of generating keyword targeted content with the potential for good backlinks. Until recently this has been the case, but Google has now thrown down the gauntlet on this form of content and backlink creation.

Their most recent ‘Panda’ or 'Farmer' algorithm update has targeted ‘spammy’ content sites, which include article marketing sites. This change has been implemented to ensure that only relevant and genuinely popular content is shown in Google SERP's (search engine ranking pages).

In a recent video post, Matt Cutts, Google’s head of spam elimination, expanded on the undesirability of articles generated through article sites. Whilst he doesn’t definitively disclose Google’s official position in this regard, he may just as well have done so. For when Matt Cutts talks, everybody listens (or ignore him at your own peril).

So it looks like another tool in the SEO armoury has just flown out the window. I stick by my belief that Google will slowly strangle SEO until the art is simply that of accurately identifying page content for indexing purposes. It will continue to become more difficult to appear on Page 1, other than through paid search AdWords. I’m not convinced that profit by way of CPC is driving the latest anti-spam strategy, but it certainly plays into the game of having to part with money to have your content appear in Google search. More on the subject in this recent post.

Take a look at what Mr Cutts has to say in the following video...

Hamilton marketing agency Bold Horizon has once again been confirmed as the major sponsor of the annual award, which over the years has become renowned for the challenging and thought-provoking entries it attracts.

Bold Horizon CEO Wayne Attwell said the opportunity to re-sign as sponsor of these awards is a great opportunity to extend the brand association with his expanding agency.

“Bold Horizon’s tagline of “we see what others don’t” has a close fit with the contemporary art award, where artworks often challenge people to look beyond their own perceptions and to see things from a fresh perspective. Being involved as the major sponsor of an award that is a leading event on the country’s art calendar has had positive spin-offs for the agency as we continue to extend our own presence across the Waikato and into other regions,” he said.

The award is hosted by Waikato Museum and offers $15,000 in prize money to the top entry. Up to three merit awards will also be presented this year during the official prize giving ceremony.

Entries are now open for the Bold Horizon National Contemporary Art Award 2011.

Judging this year’s award will be John Hurrell, who is an accomplished artist and is also well known in the national and international art scene as a curator, art writer and critic. Mr Hurrell was the art curator at Waikato Museum from 2001-2004. He now lives and works in Auckland where he writes art-related articles and manages EyeContact – an online magazine/art forum.

“Being naturally very excited about being the next judge of the Bold Horizon National Contemporary Art Award, I look forward tremendously to working closely with the museum staff to create a truly memorable visual event – with an exhilarating line up of entrants.

“It will be wonderful to get some sense of what is happening nationally and to distill that spirit into a dynamic and cohesive exhibition. I welcome entries from the full breadth of art practice – from photography through to performance art,” he said.

Last year’s winner of the Bold Horizon National Contemporary Art Award was Locust Jones, whose work titled ‘Lozenge of Dawn’ was a four-part work created from papier-mâche with gesso and ink text. Locust has described his practice as being inspired by world events, and said he scours newspapers, websites, and other information sources for subject matter.

Visit www.waikatomuseum.co.nz for more information.

Today’s article in the Herald titled, “We are a very ethical organisation - Foodstuffs on milk prices” is astonishingly exposing. It details the excessive markups and subsequent price that supermarkets charge for 2litres of milk.

According to a Foodstuffs insider and facts corroborated by independent TV3 research:

• PAK’n Save pays Foodstuffs $1.55 for two litres – sells it for $3.95 (155% markup)
• New World pays $1.75 – sells it for $4.09 (134% markup)
• Four Square pays $1.95 – sells it for $4.30 (120% markup)

Even considering the overheads of a typical supermarket, the huge sales volumes relative to the overall overhead cost would still make this a very profitable business. There are typically the core management and department staff, reasonably paid but usually worked to the bone, but a large percentage of supermarket staff are young students being paid the minimum wage.

Consider that via Eftpos and cash payments, virtually every sales transaction sees the money in the bank immediately. Overlay that with the well known fact that large retail chains screw their suppliers for extended payment terms (90 to 120 days is not uncommon), you can start to see that the real value of supermarketing is as a financial institution and not as a consumer goods provider.

Millions of dollars of turnover earning around 4.5% at today call rates for three to four months would add up to quite a tidy little income stream from interest. $5million on this basis would earn an additional $75,000 in interest, in addition to the in-store product margin.

Interestingly, if you look at Foodtuffs 2010 Annual Report, their retail sales turnover last year was $3.473 billion. If you apply the previous interest theory, the value added to this by interest would be $52 million per annum. The report also discloses that all profits after expenses from parent sales to stores are returned to their individual stores. This reportedly amounts to a further $102 million each year.

So back to the milk price. Does it seem vaguely possible that we are being slightly (sic) overcharged for one of the most basic nutritional needs? Gauge us on luxury products, but c’mon guys, show some heart to the populus.