Curated by Stuart Fogarty stuart@admaticallycom for AFAO'Meara Advertising, Streamabout The Video Agency and Admatic Ireland.
All comments will be posted - promise!
The death of brands as we know them, is nigh. We think. A product brand is something which consumers are prepared to pay a higher price (a premium) for, largely, because they know what to expect in terms of taste, packaging, quality, cleanliness and so on. Brands come with a global standard. You trust it. So when you buy Persil, you know what you're getting, or Guinness. Anytime, everytime, anywhere in the world. You pay more for that standard (and so you should because it costs more to achieve). So brands demand a premium price. A 'personal' brand is similar, but one endorsed by a person (obviously) but more of a celeb - like a perfume from Kim Kardashian - so you're buying into her recommendation, her lifestyle. But of course, all brands reflect your lifestyle. And because you're different to me, with different outlooks on life, we buy different brands. If you're an Outdoor type, you smoked Marlboro. If you were a creative type, you smoked Camel. And brands were built on Advertising. You saw them on TV, heard their story, you recognised them in-store and you felt happy about buying them. You kept buying them too, because they worked, you felt comfortable with them and therefore, you had loyalty to them. That brand loyalty at least, has definitely changed and that's the key to this. Consumers are now far more promiscuous and will try new brands, new products for new reasons and be more prepared to switch easier. Prepared to switch for Functionality/Purpose and value reasons and hence for example, the rise of discount grocery retailers who sell products, brands you don't really know, you've never heard of - but you buy them largely because they're cheaper and they 'do the job'. Or at least, you try them. You switch without really thinking. Whereas in the past, you'd have stuck by your loyal favourite brand. Craft beers another example. In fact, you'll move away from the traditional brewery brands and try a craft beer because it's different, it's cheaper. It serves its purpose and probably, costs you less. Because of digital too you switch. You've tried new services that have been able to be created over the last 10 years - Iphone, Amazon, Facebook, Twitter, Netflix - which will become brands in their own right..... if they're not already....but they're more services than products. However, they've accelerated your promiscuity. So the consumer (you) is more prepared to switch away from traditional, global brands than ever before. Digital too, has also opened up a revolution in advertising which is outside of the manner in which we've promoted brands for the last 70 years anyway. That's also having an impact. Because.... the most effective Ad is recommendation (always has been) and digital allows you to get personal, instant recommendation. Word of mouth. For example, a Facebook friend tells you about a new beer and how great it is, so you try it. On Twitter, a pal has told you about a new healthy Soya milk or warned you about the dangers of sugar. So you switch on their say-so. And therefore, traditional brands lose loyalty on which the brand was based because of another recommendation. Advertising only really works once - it's an attempt to get you to try a product once because if you like it, you'll stick with it and they'll get repeat purchases. That's the essence of brand loyalty. The essence of brand revenues. Repeat business. But if you keep switching.....brands cannot depend on those repeat purchases. We've got used to farmers markets and artisan suppliers. We use sites that we didn't know before. We download new Apps. We've got happy with a new beer or a new washing powder and we'd rather support those smaller businesses, than the global, big brand giants. We'd even rather get our news from outside the norm media players despite the 'trust' issues. Because that's what digital does. It encourages you to try new things. It's the great 'brand-leveller'. Hence we've opted to buy from sites that are cooler, better, more like us and not the global sellers. Boo Hoo, Asos, Misguided, Ebay.....(If you look at the top 50 Fashion brands in the UK, not one is a traditional high street name). To try new things, to try new brands. So there's more of a generational shift happening away from the traditional big global household brand name. Or, should we say, brands don't work they way they used to. They no longer can depend on the repeat purchase of brand loyalty. And that impacts on Advertising and notably, Ad Agencies who used to manage these brands. Like for example, the way AOL have set up their own in-house Ad Agency just to deal with their AOL digital clients (called 'Partner Studios'). Because no one understands how to produce creative work for AOL, than, AOL. More of that will happen as Ad Agencies have been slow, defensive, about digital over a long time and because, the old brand rules have changed. So their old skills are becoming redundant unless they're prepared to tool up.
Traditional Advertising is even possibly becoming wallpaper as viewers leave to other media and have a new Ad cynicism. Media too has changed. Despite huge audience shifts to all things digital, most of the Ad dollars remain with traditional media. Programmatic buying will disrupt that. As for brands? Well, it's a long road to reposition a global brand into something new even if it could be done. Diageo's move into craft beers under totally new branding, is one way, but it might be seen for what it is. The only real way is to go back to purpose. Go back to trust and go back to the reason the brand originated from. Give the consumer knowledge to make the choice rather than song-and-dance glamour. The days of 'aspirational' advertising to create desire, create demand are over. Advertising needs to be stripped back. Tell the story that relates to consumers and don't cynically exploit things like sports sponsorship, csr or charity - it's seen through. So too, copy platforms built around fickle, unbelievable concepts like "we believe in friendship". And therefore, don't behave like a global brand player of old. Go back to the reason you exist. If it get clothes whiter, say it. If it tastes good, tell it. If it's quick to make, show it. And use online to tell that story. And if your brand doesn't have that defining USP (unique proposition), drop it. Move on. The global brand aspirational days are over. And the heavy impact of TV Advertising is dwindling. We think. Smell like a Man at the top of the page. There's honesty for you. Trust, like these at the bottom of the page. The world just changed.
Online video Advertising is growing faster than most other mediums (!) and other digital formats. That's not me or Streamabout saying it, but a new BusinessInsider Report. They estimate video advertising revenue will grow by nearly 20% year-on-year through to 2016 anyway. The only growth as fast, is mobile. Total Revenue will be circa 5 billion usd in 2016 from 2.8 billion now. And that money will come from? TV Equally too, as a consequence, more video placements are, and will, open up, reducing media costs. We know too that video ads have the highest click through rate (CTR) at 2% so they deliver value, if you get the views. The point is not just producing digital video, but what you do with it afterwards - something that companies like Streamabout are offering. It's becoming campaignable rather than 'one offs' and that's key. Video Ads are more engaging too, longer and better than any TV Commercial and with the benefit of direct targeting as well as digital analytics. After all, when did you last click a TV Commercial.
New BusinessInsider Reports that Digital Video Advertising is growing faster than all other online formats, except mobile. They predict it will grow at 19% per year compound through to 2016. Traditional online display is growing at circa 3%. Online video revenue is currently circa 3 billion and that will double to 6 Billion by 2016 and video ads have the highest click-thru of any digital format at circa 2%. So they're more effective because simply, if you watch a 2 minute video, you're more likely to be engaged and want to follow-up. It generally supports all the other reports and opinions that the Internet is all about video. Viewers like them, publishers like them, advertisers like them and they have the real potential for sharing. In fact, not having digital video as part of a campaign, is becoming a conspicuous gap. It's almost becoming standard. They're easy to get done, inexpensive and engaging. Some will make you laugh, some will make you cry but it's an opportunity for storytelling that's missed on a 30 second TV commercial. In fact, it's the freedom of space that every Ad Agency creative has always wanted. But one thing is for sure....if you haven't got an online video, you've no chance of it being seen.
Starbucks is really beginning to lose its gloss as a brand. And it's their own fault. Under scrutiny recently about paying low tax (alongside Google, Amazon et al) it made a publicity moment by saying that it was prepared to enter talks with the UK Government in order to actually pay more tax. Good move...perhaps. They've paid relatively little UK tax and route their profits to that transparent tax country, Switzerland. Clever maybe, immoral definitely, but from a brand perspective....disaster. At the same time, on almost the same day, it started a process to reduce staff benefits and by implication, is getting its staff to pay the increased tax. Faced with massive protests this Saturday by UK Uncut (http://www.ukuncut.org.uk/), it paid 8.6 million in tax over 14 years on sales of over 3 billion. Its tax practices have been branded "immoral" by The House of Commons's Public Accounts committee. Starbucks has now decided to cut the lunch breaks of its 7,000 staff, sick leave and maternity benefits. It has also removed managers cash incentives (they now get a plaque instead - Yippee!) and workers have to sign their new employment agreement. In a real mealy-mouthed way it has done away with giving new mums on its staff a hamper and instead they get, a card with a Starbucks bib (!). I'm sure they're thrilled! Congratulation and Birthday staff cards are gone too. I'm not kidding you. Starbucks say the two matters - tax and employee benefits - are totally unrelated, although they told staff not to discuss the new terms. But those staff are of course Social Media savvy and strong Bloggers so they've unleashed an insider Social Media army against themselves. If you're in any doubt, you'll find them here, courtesy of The Guardian. http://www.guardian.co.uk/business/interactive/2012/dec/03/starbucks-uk-employees-new-contracts?intcmp=239
Started in Seattle 1971, it is the largest coffeehouse in the world, present in 61 countries.
This was a brand that had everything. Innovation, coolness, music, store hipness and in a matter of weeks is in danger of losing it all. The tax issue may claim more big brands, yet.
Now they're being faced with a boycott and further protests. I was not terribly surprised to see a demonstration in Dublin on Friday outside their high profile outlet on Dame Street. The 'People before profit' alliance headed up by Richard Boyd Barrett in attendance, staged a peaceful lunchtime picket. In parts of the UK, it has not been so peaceful.
It's clear that Starbucks have minimised their Irish tax position as well. According to The Irish Times, filed company accounts showed it paid less than 40,000 euro in taxes between 2005 and 2011 - 6 years. At the same time, it paid 5.7m euro to its parent in so called "royalty" payments thereby diminishing the tax it was required to pay in Ireland. It is exactly these "royalty payments" that have created their UK problems. Starbucks Ireland accounts show it made a "profit" for the first time last year of 524k euro on which it paid under 35k on tax - less than 10%. Only once in the previous 6 years did it record a tax payment - of 4k in 2008. Interestingly, in claiming "losses" that year of 5.5m euro, it still paid 1.3 million in royalties to its parent. The Irish tax regime to attract investment at the standard 12.5% rate, has been constantly controversial. In the eyes of some, it is designed to promote widespread global tax evasion and is not based on the PR spin of investing in a young, vibrant Irish economy. Starbucks will suffer as a brand, in these days of austerity because consumers don't like greed and corporate greed especially. Vodafone is now starting to get a mention. Notably too, a brand like Starbucks always had a bit of a "hippy honesty" and clearly their halo has slipped, or it was all pretend anyway. Image over substance. Other brands that have the same issues will fall under the spotlight and be punished for it. Brand anger. A lot of people have themselves major difficulty in paying their tax and it will seem grossly unfair that corporates can avoid tax without penalty and largely, with Government consent. As consumers suffer more and more, these issues are going to generate anger and brands are going to be punished. Starbucks suck will be a mantra. It's a new issue that finds itself under the marketing umbrella, caused by austerity. And it signifies a change in consumer attitude that's going to grow. Brand anger.
The death of brands as we know them, is nigh.
