Monthly Archives: September 2011

Marketing Doctor John Tantillo’s Winner and Loser of The Week: UBS and Facebook

 
 

Brand Winner…

And Loser…


 
 

Marketing Doctor John Tantillo’s Winner and Loser of The Week

Winner:  UBS

 

Loser:  Facebook

                                              

WINNER:

After so much government support and so much criticism, how could UBS have let it happen?

I’m talking about the news that yet another “rogue” trader has “lost” billions for a major bank – $2.3 billion to be exact at UBS.

But the fact is that with even the best controls in place, it will always be impossible for banks to completely prevent things like this. 

After all, trading is a risk-taking activity and trying to curtail too much risk could result in much lower returns –the kind of loss of revenue that would make $2.3 billion look small by comparison.

The loss has caused the CEO, Oswald Gruebel, to step down.  The UBS board apparently didn’t want this to happen, but Gruebel was insistent and they accepted it.

Gruebel has a great reputation and from everything that we know this substantial trading loss was not his fault, but his move is decisive and sends a clear and healthy message: even the people at the top can be held accountable.

Banks have suffered in the last two years from many things, but the worst thing they’ve suffered from is themselves: the unchecked perception of arrogant and untouchable management that sail through the disasters that hurt the little guy without so much as a scratch.

Starting with Gruebel’s resignation, UBS seems determined to do something different.

Sergio Ermotti who is replacing Gruebel in the interim and is likely to become the new CEO permanently has the right attitude: “We want to turn this disaster into an opportunity.”

Bravo.  Finally, some straight talk. 

The rogue trade was a “disaster” and for UBS to simply acknowledge it like this is refreshing and a confidence-builder.  But it’s also Ermotti’s seizing on the idea of positive transformation that’s refreshing. 

The bank is going further by outlining a review that would immediately reassess and aim to revamp risk controls, while also stepping up the pace of its restructuring.

The key to crisis management and brand-revitalization is to tackle the problem head on, admit mistakes and then deliver a clear process for fixing things. 

UBS knows that its clients expect nothing less and they seem ready to deliver.  What they did this last week is a good first step.


LOSER:

It might seem funny to choose one of the world’s leading technology companies as this week’s loser, but brands are made not born. 

Each decision made by a brand that flies in the face of what its Target Market wants is a bad one.  And bad decisions erode brands.  A series of bad decisions can destroy them…

Unfortunately, there are bad decisions and then there are bad decisions.

That is why Facebook is our loser this week.  Not only has it recently decided to launch another new layout that none of its users seem to have asked for but the reasons for this move are embedded in a core philosophy –founder Mark Zuckerberg’s philosophy— that may not mesh with the Facebook Target Market or with the way the Internet fundamentally works.

Here’s what I mean.

Apparently, employees at Facebook refer to something called “Zuckerberg’s Law.” 

This “law” basically holds that the amount of personal information people share about themselves doubles every year.  Facebook’s mission is to get their users to share as much personal information as possible.  Obviously this information is very valuable from a marketing sense.

Mr. Zuckerberg wants his company to have greater insight into what he calls “the open graph” which is basically understood as the connections people have to other people and to the things they care about like books and movies and music.

To this end, Facebook is introducing a new profile known as “Timeline.”   Basically it is a way for people to archive their lives online via Facebook.

Now, here’s the problem. 

It doesn’t look like Facebook is introducing Timeline as a service as much as it is forcing its users to migrate onto Timeline whether they like it or not.

Bottom line, the company’s mission and Zuckerberg’s Law –and maybe even Zuckerberg’s commitment to a kind of lack of privacy that many don’t want— looks like its driving this change.

The might seem like a natural driver for ad revenue.  Fact is, Netflix is joining forces with Facebook and seems to support the notion that only those companies that seize the opportunity of full-blown social sharing will prosper in the future. 

But as The Economist points out, MySpace made the mistake of trying to become just such a central hub, but it failed because it force-fed content.

The magazine argues that Facebook’s “Timeline” isn’t force-feeding and, folks, that’s probably true from a mechanical point of view… 

But it sure sounds like the company is force-feeding its philosophy.  After all, you can’t help but think that Mark Zuckerberg isn’t too far from being that socially awkward boy depicted in the recent movie –I’m talking about someone who wants to be a part of something socially but doesn’t fundamentally know how.

Sometimes companies are driven successfully by personal philosophies.  I’m thinking the early Ford Motor company and its founder’s relentless commitment to modernization.  

But sometimes, personal philosophies can cloud the vision and mar the brand. 

Isn’t it possible that Zuckerberg’s philosophy carried Facebook to this point but might not carry it farther? 

After all, people are becoming increasingly concerned about the dangers of too much sharing.  And, fact is, there are many people who like Facebook but simply don’t share Zuckerberg’s anti-privacy philosophy.  And what’s this about people who are de-friended being able to see that they’ve been de-friended (see this Fox link for the story).

The point is this: great brands do two things: they anticipate a Target Market’s needs before the Target Market is aware of them and, more important, they respond to the Target Market’s needs as the Target Market understands those needs to be.

Where’s the market research backing up Facebook’s big move to “Timeline” and this kind of sharing?  They have switched formats before to great outcry will it happen again? 

Following a philosophy in the marketplace is fine; following a philosophy that’s contrary to what your customers what you do if you want to lose those customers.

How different last week’s winners: Google and Zagat –a pairing that was all about delivering what their Target Markets want with the openness and choice that the Internet is founded on.

And this just in…  As I prepared to post this, the news came in that Facebook may have been tracking its users even when they’re logged out.  This is serious if true, so stay tuned.

And, remember, it’s always easier when you keep marketing and branding in mind. 

 

 

TODAY’S TANTILLO TAKEAWAY –  Always check your personal philosophy against what your Target Market wants and believes.

 

 


 

 

 

 

 

Marketing Doctor John Tantillo’s Winner and Loser of The Week: Google-Zagat and The 92nd Street Y

 

Brand Winner…

And Loser…


 
 

Marketing Doctor John Tantillo’s Winner and Loser of The Week

Winner:  Google-Zagat

 

Loser:  The 92nd Street Y (a/k/a 92Y)

                                              

WINNER:

A little over a week ago, Google bought Zagat, probably one of the most esteemed restaurant review services around.

What a move!

Zagat is an essential tool for the serious restaurant goer, but in recent years the company has been fighting increasing competition and digital trends.  Their iconic burgundy guidebook still sells robustly, but newer sites like Yelp and Open Table have been grabbing market share as consumers increasingly use locally-driven online services to navigate the restaurant terrain.

But with this unification of two brands, I think we’re going to see the excellence that is Zagat gain the great next-generation advantage that is Google. 

Apparently, Google was working hard to gain a foothold in the local advertising market and was targeting services like Yelp –which the company tried unsuccessfully to buy a few years ago.  Of course, Zagat provides a way into that market through their very relevant local content.

The benefit for Zagat is that they get to come out from the web paywall that the service has been hidden behind (literally, because search engines rank such sites lower).  The brand will get the kind of hyper-visibility that only Google can deliver.

But from a brand perspective what’s important here is that the brand essentials of both companies are being put to work perfectly.  Google’s powerful capacity to unite searchers with what they need is being linked to Zagat’s legendary credibility and quality in terms of review content. 

Bottom line, Google has always been about supplying the most relevant result and Zagat has always been about supplying the best (read relevant) information to the restaurant searcher.  In many ways, the two companies have always been in the same business –what Google does here is add reach while Zagat adds depth.

One other thing is really worth noting.  Tim and Nina Zagat who have been the founders and mainstays of their company since the beginning worked hard to make this happen.  Not surprising, these are the same folks who turned booklets based on ratings from friends more than thirty years ago into a powerful business.

You see, Tim and Nina had tried to sell the company before but had no luck when they couldn’t find a buyer to meet their price.  But with Google, they identified a brand that could really benefit from this union and they pursued it.

According to The New York Times DealBook, Tim and Nina made sure to get noticed by the decision-maker at Google who could make this happen. 

Apparently after earlier deals had gone nowhere, they had asked Goldman Sachs and others whether Google might be interested in their company only to be told fuggedaboutit.

But they saw the sense in joining forces with Google and persisted.  In 2008, they sat in the front-row at a presentation by Marissa Mayer, Google’s vice president for local maps and other content.  They gave her their business cards.  Not long after, the Zagats were sitting in the front row of another Mayer presentation.  This time they brought her brochures for their wine club.

Mayer decided to arrange a meeting and the Google-Zagat pairing eventually resulted.

The lesson is this: no one will work harder for your brand than you –not even professionals (like Goldman) are going to have an advantage in that department.  The Zagat’s knew what their company had to offer Google and they made it happen.

For now Zagat’s headquarters is staying put at Columbus Circle.  Mr. Zagat said he believes the area has better restaurants than Chelsea where Google is located.


LOSER:

Here we go again, folks.

Name changes that forget the brand underneath.

Not too long ago I talked about the mistake the YMCA was making in changing its name to “the Y.”  Here’s that link (it’s under the loser section by the way).

Now it’s the 92nd Street Y, that esteemed Jewish community and cultural organization in New York (no relation to the YMCA) that has decided to update. 

They will be calling themselves 92Y.

This is an even worse move that YMCA’s because at least YMCA has been called “the Y” for years.  As far as I know, 92Y is an invention pretty much out of thin air and the kind of marketing hocus pocus that gives marketing a bad name.

Bottom line, does the target market for the 92nd Street Y actually think of the organization in these terms?  I doubt it.

Sure, the 92nd Street Y is probably tempted to shorten because a) it sounds hipper and b) they now have another location so the idea of using the full name (92nd Street Y in Tribeca) might sound a little silly.

But, fact is, brands shouldn’t tamper like this with their names.  The 92nd Street Y stands for over a 125 years of activity and, according to Wikipedia, serves over 400,000 people annually.

My hope for them is that they rethink this.  From what I can tell they seem to be straddling the name change with their collateral material offering both versions.  Maybe they’re only trying it out –still a bad idea from a brand clarity point of view—but at least they can walk away more easily if it doesn’t catch on.

And, remember, it’s always easier when you keep marketing and branding in mind. 

 

 

TODAY’S TANTILLO TAKEAWAY –  No one can fight for your brand like you can.

 

 


 

 

 

 

 

Marketing Doctor John Tantillo’s Winner and Loser of The Week: Carol Bartz and Saab

 

Brand Winner…

And Loser…


 
 

Marketing Doctor John Tantillo’s Winner and Loser of The Week

Winner:  Carol Bartz

 

Loser:  Saab

                                              

WINNER:

Public Relations 101 would probably call this week’s winner, Carol Bartz, the recently fired CEO of Yahoo, a loser.

But PR 101 would be very wrong. 

And that’s why I’m a fan of what I call Targeted Relations –not public relations.  After all, why worry about what the whole world thinks when only a particular portion of the world and its opinion matters to you.

First, let’s look at what happened.

Carol Bartz had been at the helm of Yahoo for a little over two years.  The company had been in decline before she arrived. 

It was three years ago that Microsoft made a bid for the company that was rejected by the board because they believed it significantly undervalued the company.

That bid was for $44.6 billion.  Today, the company is worth half that.

Sure, Bartz presided over the decline.  But she had been brought in to help turnaround a company that was already declining and, moreover, facing the kind of major market changes that in the tech world often prove irreversible.

But the part we care about is her firing and how Bartz responded.

Executives are fired all the time, but the unpleasant reality is covered up by euphemisms that suggest the executive simply can’t wait to have more time to focus on new, exciting opportunities or spend more quality time with his or her family.

Well, apparently Bartz would have none of that.  She publicized her firing and the way it was done. 

Bartz already has a reputation for “salty language” and calling it like she sees it, but after she was unceremoniously dismissed in a phone call from the chairman, she really hit back.

She called Yahoo’s board doofuses and in a move that must make the public relations’ folks cringe said they had “f- me over.”

Again, PR 101 advocates smooth exits for all parties during such corporate divorces.  The thinking goes that it is professional for the CEO to pretend that he or she still cares about the company that he or she is leaving and the best way to do this is to act as if everything is amiable among all top level management.

By these rules, Bartz failed.  But these rules don’t really get what’s going on with Yahoo or with its relationship with Bartz.  Bartz was always a company outsider and it makes little sense for either Bartz or Yahoo to pretend as if her interests and the company’s interests were or should remain in some kind of perfect alignment.

Bottom line, Yahoo is a company with thousands of employees that is in a fight for its life.  Bartz is a fighter and she was brought in to help Yahoo fight.  Her brand is not the corporate shrinking violet and the story now looks like this: Bartz wanted to fight for the company but the board did not.

In her remarks, she didn’t scorn Yahoo.  She affirmed her support for the employees of Yahoo but struck out at the management that she seems to believe is hurting the company.  In fact, the manner of her firing was more evidence for Bartz of bad management by the board.

Fact is, Bartz has accomplished two things by being bold and uncensored.  She has re-affirmed her own brand.  Sure, she was fired but she is clearly a powerhouse and my guess is that someone is going hire her again and soon.  And two, she used communications to re-position the argument in her favor.  Now it looks like the board, not her, is the problem.

In this case, to thine own brand be true could never be truer.


LOSER:

It looks like Saab, the Swedish luxury car brand, might be about to become history.

A court in Sweden has denied it a lifeline –it is trying to voluntarily reorganize.

The problems might date back to its relationship with GM.

You might remember a fairly recent TV ad that made the connection between Saab and jet engine technology.  The ad didn’t do too much to help the withering brand and its no surprise why.

Apparently when a GM executive was asked what the Saab/jet campaign was supposed to be telling Saab’s target market and potential buyers, he shrugged and said “I don’t know.”

Wow!  Talk about forgetting the importance of knowing your brand before you even lift a finger to promote it.

Bottom line, companies fall apart long after their brands do.  But this collapse is sad to watch because, after all, Saab is a name that people recognize. 

It might be that China will still rescue Saab with a buyout, but even if it does, the Saab people must remember what it was in the first place that made their cars so sought after in the past.  Brands are more than names and whoever tries to revitalize Saab must find what it was about the car that made the name so strong.

One place to start might be some market research, so an executive connected to this brand will never again say “I don’t know” when it comes to why Saab buyers are Saab buyers.

And, remember, it’s always easier when you keep marketing and branding in mind. 

 

 

TODAY’S TANTILLO TAKEAWAY –  Use the essential features of your brand to determine what communications rulebook applies to you or your company.

 

 


 

 

 

 

 

Marketing Doctor John Tantillo’s Winner and Loser of The Week: Lonny and City Hall Nanny Statism

 

Brand Winner…

And Loser…


 
 

Marketing Doctor John Tantillo’s Winner and Loser of The Week

Winner:  Lonny Magazine

 

Loser:  City Hall (Nanny Statism)

                                              

WINNER:

This week’s winner is all about Target Market and content.

I’m talking about the online-only magazine Lonny that is tearing up the magazine world and showing that an online model that keeps its Target Market in mind and its content valuable and targeted can work.

Lonny, a bi-monthly, home décor magazine, was launched two years ago but already it gets 200,000 unique visitors a month and 30 million plus page views per issue.

And unlike its print competitors, it is free to the reader.

Some of the publicity has come from the fact that whereas the rest of the magazine world seems to be shuttering titles, it was refreshing to see a launch of something that met readers’ needs and was sustainable.

Lonny is powered by advertising, but here’s the takeaway: that advertising wouldn’t be there if the readers weren’t and those readers wouldn’t be there if Lonny wasn’t able to deliver the kind of content that they wanted.

This might seem obvious, but how many great magazines have forgotten this in recent years.  When Gourmet shuttered its doors, the people calling the shots made the mistake of thinking that a name is all you need to have a brand.  Nope. 

A brand without the content and connection to its Target Market is like a vacant storefront with the name of the business still stencilled on the window.

Here’s my take on Gourmet, by the way.

Bottom line, Lonny has found a way to connect with readers who grew up on print and those who didn’t by combining traditional-style magazine content with a network of a wide-range of influential bloggers in the home décor space.

While their competitors struggle with the high costs of print and probably have to curb the cost of getting the content that brings in the readers, Lonny is in the position of not having the hefty print overhead and being able to pay for that content.

Fact is, Target Markets can’t be fooled because they are target markets precisely because they are looking for something that you can provide –and if you don’t then they will go elsewhere.

Earlier this year, I wrote about Gannett cutting its workforce.  It’s worth reposting a portion of that here:

When the cost-cutting geniuses decided to stop publishing Gourmet magazine a few years ago, but still “monetize” the brand, they showed that they didn’t understand how media brands fundamentally work.

Bottom line, you simply can’t get rid of the talent, material and standard of excellence that is –in fact— your brand and expect what remains to have any value.  No matter how esteemed and established the name of your product is without the material, it ends up hollowed out.

In the last five years, the Gannett workforce has been reduced from 52,000 to about 32,000.  Mandatory furloughs are common and community newsrooms –once the backbone of this media company— are shrinking.

All the employees seem to be taking the hit, but the management is still awarding itself big paydays. 

There is no question that the Gannett business model is under assault from the Internet and mobile devices.  And there’s no question that cost-cutting is necessary.

But the issue for any brand is how you cut costs –especially a media brand like Gannett’s that requires talent and the right kind of spending to produce high-value content.  In Gannett’s case, the decision by management to keep executive pay packages rich while cutting into the livelihoods of the company’s employees not only looks bad but it badly hurts brand equity.

Why?  Because a media company’s brand equity is, more than almost any other kind of business, its content-producing employees.  This is especially true in journalism where journalists are used to working overtime without compensation just to get that next scoop or talk to one more source. 

Journalists have long put up with greedy management and executives who don’t necessarily appreciate the front-line realities of journalism, but the latest Gannett move injects insecurity into that equation.  A journalist will work hard and for less for a company that is going to be sticking around, but what Gannett management is doing reeks of a company squeezing out the last of the money from something that doesn’t have much a future.

My guess is that most employees must seriously be considering how to jump ship before it goes down and the best and smartest talent will make that jump before everyone else.

Folks, that’s not something you want, especially in tough times when shared sacrifice from top to bottom of an organization and the dynamic re-invention of a brand are what’s needed to avert disaster.  If Gannett management is serious about saving this brand then it needs to let everyone know that talented, dedicated people are what make a media brand –and it needs to join in the hard times.  End of story.

So, good luck to Lonny.  And may we all learn something about delivering for our Target Markets.


LOSER:

Folks, sometimes you really can fight City Hall and win.

Especially if you are the USDA, the city hall is in New York and it wants to take away people’s right to choose what they do and do not eat.

Here’s the story. 

A few weeks ago the USDA put the kibosh on Mayor Michael Bloomberg’s plan to make it impossible for people on foodstamps to use the foodstamps to buy soda.  City hall looks like it will continue to fight on with some version of its plan –so this is probably not over yet.

The idea apparently was to change the behavior of lower income people by forcing them to make healthier choices.

What a terrible idea.  I usually try to steer clear of politics, but when politics goes against the fundamentals of marketing I’ve just got to speak up.

Bottom line, this goes to the question of Target Markets and recognizing that things work best when you respect the consumer and try to satisfy their needs.

I’m all for people drinking less soda.  Especially kids who a recent study has shown seem to be drinking way too much.  But the fact is that you are doing no one any favors by banning something that they want and have a right to buy. 

From a health perspective it makes little sense.  After all, people’s eating habits take a long time to change and healthy habits have to come from the individual making healthy choices.  Removing one unhealthy choice –like banning the use of foodstamps for soda purchases—doesn’t help people learn how to become healthier eaters or establish good lifelong habits.

The USDA seems to get this.  They rejected city hall’s move on the grounds that it would be too hard to implement but also because USDA says it believes in using incentives rather than bans to influence behavior and raise awareness of healthy eating.

Basically, city hall’s move is nanny statism.  Telling a Target Market that it cannot have something it wants without telling them why or offering alternatives.  It’s bad marketing and bad government because it underestimates and misunderstands the consumer and, folks, it just won’t work.

At the end of the day, Joel Berg, executive director of the New York City Coalition Against Hunger, probably said it best: “This proposal was based on the false assumption that poor people were somehow ignorant or culturally deficient.”

And, remember, it’s always easier when you keep marketing and branding in mind. 

 

 

TODAY’S TANTILLO TAKEAWAY –  Believe in your Target Market and your Target Market will believe in you.