Imminent Default, US Credit Limit, and Politcal Branding

Here we are, apparently on the edge of a default on our national debt as the U.S. Congress tries to forge legislation to increase the credit limit while including more than trillion dollars in immediate expense reductions. A solution may also be close. My question for the MarketingWitz fans: which party is doing a better job managing its brand during these legislation squabbles?

Regardless of your political leanings, this is an important moment for both political parties. The Republicans appear to be getting the better deal - expense reductions without revenue increases - yet cannot declare a big win because many in the party remain unsatisfied with the depth of cuts and lack of items such as a balanced budget ammendment attached to the bil. When all components of your brand are not aligned (think sales and marketing, or marketing claims versus product performance) the brand suffers with customers. Clearly the Republicans are not aligned and this will hurt their brand in the 2012 elections.

The Democrats have thier issues as well when viewed from a brand perspective. The President has worked for a larger deal and given significant concessions to the other party. Is this being positioned as a great compromise by a visionary leader or as a capitulation by a weak leader? Time will tell, assuming a deal is concluded before the default occur, but at this point the President appears to have been marginalized in the solution as final legislative deal-making has shifted to Congress. From a brand marketing perspecitve, what do you do when your flagship product (aka the President) has weakening sales? Do you rally around and shore up the core or cut and run by extending the brand to other flanking items?

It's an interesting way to look at the political environment as the nation deals with serious economic challenges.

Brand Value

Brand marketers can learn about ways to drive the ROI and value of their brands by learning from other disciplines. For example, in the world of business acquisition and sale the factors that are used to analyze core business valuation can be used to assess the strength and potential ROI of an existing brand. Buyers and sellers will conduct a SWOT anaylsis of the business, just as brand marketers anlayze the competitive strength of brands. In the acquisition world, the multiple used against EBIDTA is generally larger for larger businesses than small businesses. So to, this general rule might be applied to evaluate the relative strength of a brand. Larger share brands are generally (although not always - strength in a key niche can be valuable) more valuable than lower share brands, and there has been sufficient research conducted to document the strenght and added value of being the share leader. Business valuations typically also look at the concentration among key customers. Too much business with a core customer may lower the overall valuation because of the increased risk. This holds true for brands - too much concetration with WalMart can be dangerous for the brand. Business valuations may be lower for business where the owner is sole rainmaker and future sales are at risk when a change in control occurs. For brands, brand value may be at greater risk when a brand spokesperson or long-term brand leader has too great a role in the personality of the brand. So,take a moment and see what you can learn by looking at your brandin the eyes of a potential buyer.

Retail Banking Shows Us How To Brand in a Commoditized Industry

By the way, there are lots of similarities between the issues faced by the commercial printing industry and the issues faced by the retail banking industry. Retail banking is just further ahead on the curve. Banks went through a period of years in which retail banking became viewed as a commodity and “all banks are alike” so “just give me the best rates”. As much as banks tried toaster giveaways, nothing worked. As much as banks screamed “we provide great service”, nobody listened. Only in the past couple of years have banks learned that with an integrated rebranding effort they could attract new customers. In their world, they began to distribute banking access to smaller retail outlets closer to their retail customers (which is why there seems to be a bank going up on every corner!) and they began to use their retail space as selling space...that is, as a store (not just a waiting line with ropes and maybe a few chairs to wait in). Today, a contemporary bank is fully branded with visually integrated sales materials, site layout, building design and furnishings, logos, signage, advertising, and programmed digital communications in the bank - all geared towards selling and cross-selling. While retail banking is a far cry from industries such as commercial printing, it does demonstrate that the future is bright for traditional industries that can embrace technology , leverage branding concepts and adapt to changing customer needs not only in the services they sell and production processes, but also in how they communicate. Successful banks are moving away from the threat of commoditization. It can be done in other industries facing commoditization.

Is Search Media Buying (and SEO) Revolutionary?

I saw a recent article that discussed the changes than SEO is bringing to way media is planned and purchased. There is a bit of a dichotomy here - a seeming conflict about whether there is a an evolution or revolution occuring. On one hand, search (has anyone notices that "search" has become a noun??) changes the dynamics of the media environment for advertisers. The key is that the media can now anticipate the interest of a consumer and place the ad at the most opportune moment based on behavior (as the writer of the article, Chris Copeland of Outrider said, "seeing the field before we act"). It is revolutionary. At the same time, it is really only an evolution of the same predictive intent that media buyers have pursued for generations. Advertising in the World Series issue of Sports Illustrated because the content attracts male consumers 18-34 (or whatever) based on readership surveys and subscription data is just a more primitive attempt to anticipate reader inclination to accept and notice a Ford truck/Miller beer/Gillette razor ad. This more primitive model has been the model for over 50 years and is still controls the process for 95%+ of all media buying.

The search model would seem to be a more precise, more responsive method of anticipating the intent of the user. Evolutionary for certain, better for certain, but I wonder about whether it is revolutionary. The revolution will occur when the degree of predictiveness that can occur with online search is truly leveraged over into other media vehicles. (For example, when tv allows the advertisier to deliver custom spots into households based on the household demographics and which member of the household is watching a particular program. Cable is certainly moving in this direction.)

One final thought. The art and science of the search experts needs to be packaged and communicated to the marketers of brands in a way that takes the process out of the "black box" perception. The more the client marketer understands how search works and how it helps, the more they will be willing to invest, experiment and learn. Ask any traditional media planner/buyer and they will tell you that the best clients are those who truly understand the media planning buying processes and can work together with them to create great media solutions. Search (as a Noun) is still in its infancy relative to a marketers real understanding of the process and potential benefits.

Marketing as Art and Science

An analogy that I've used with younger marketers is one that is worth considering.

I love art, especially painting and sculpture. Marketers love to debate whether marketing is an art or a science. The pendulum seems to swing back and forth over time. Ultimately, I suggest that marketing is both art and science. Science measures the impact of the art. Scientific thinking also guides the rigor of marketers as they apply a defined process, and iterate learning cycles to fine tune tactics and maximize performance. Art applied gracefully to strategic thinking leads to breakthrough concepts, which can power any strategy to higher levels.

Marketing students often ask how brand marketers today determine which tactics to use. After all, it's become a cluttered consumer environment exploding with consumer messages. A story is often told of Michaelangelo approaching a block of stone and creating a magnificent scultpure (think of the David). Michaelangelo reportedly says he simply removes everything that does not belong in the final creation. Marketers can apply this thinking. The more clear the marketing vision and the more defined the strategy, the clearer the tactical decision becomes. Remove those tactics that do not fit with strategy and the result will be a clear approach to the tactical solutions.