Jaffe Juice

My friend, Pete Sealey, sent the below email to me and other friends of his looking for feedback.  My reply to Pete was that I am in complete agreement with him.  I have been a Facebook user for a little less than a year now and I have noticed quite a few of my Facebook "Friends" are already doing much of what Pete suggests will be commonplace for families in the future, especially those familes that are geographically spread out.  I also believe that as more adults discover and use Facebook, many who had thought about creating their own web site for sharing content and even for managing a small business will find they can do plenty on Facebook without the bother of developing and hosting their own site.  I would love to hear from you and get your thoughts on these phenomena. 

-  Jim Garrity 

When my friend Marco della Cava of USA Today asked me to comment on what I feel will be a significant trend in 2008, I was quick to suggest the “maturing” of the user base of the social networks such as Facebook will be very important:

"In the 1950s, multiple generations lived if not with each other then certainly in the same town. Today, that model is dead, and sites like Facebook are essentially a replacement for that nuclear family," says Peter Sealey, a longtime tech-industry marketing adviser and founder of The Sausalito Group.

"Adults will turn to these sites to ask three questions of their loved ones: How are you? Where are you? And what are you doing?" he says. "The conversation on these social networking sites will flow between kids, parents and seniors."

Sealey says the increasing pace of everyday life makes the once simple act of picking up a phone to see what book a friend has read seem time-consuming.

"With social networking sites, you can tell friends what movie you've just seen or find out that your mother is going to be playing bridge for the day, seamlessly and efficiently," he says. "As the Wi-Fi network grows nationally, this is the way we'll stay in touch."

I would welcome your reaction to this position.

For the full article, appearing in USA Today on Monday December 31, see the attached PDF file.

Pete

By Marco della Cava, USA TODAY

Get real: People will want to connect in 2008

Along with all the warm and wonderful holiday cards I received this season the mailman also delivered a personal letter (it does start out "Dear Stanley Rapp...") in squint-sized type from my credit card-issuing bank.  When it comes to illustrating what it's like to be the abused consumer I wrote about recently, this letter is a beauty.

It starts out well enough: "As your credit card company, we value your business."  Then comes the bad news.  A "default" has been committed.  Yes, I confess, -- just this one time -- I did a terrible thing.  My payment arrived 24 hours after the dreaded monthly deadline.  Five years of never being delinquent doesn't mean a thing.  As a de-valued customer, I now have the privilege of paying 29% interest on my credit card.

And that's just a part of the IRM (Insult Relationship Management) practiced by this and almost every other card issuer.  The letter goes on to inform me that I can contact the bank when my account reflects a six month history of timely payments and they will then evaluate my account for a possible reduction in the interest rate.

Honestly, I'm not making this up.  Six months of good behavior and they may or may not do something about the exorbitant rate and begin treating me like a valued customer again.

Sorry, my dear bank, I'm not waiting around to be pardoned.  With great pleasure I will choose the best offer found in my mailbox next week from one of your competitors.  Most likely it will offer little or no interest on transferred balances  for the next six or more months.  You won't have me to push around any more -- and you can now spend at least a hundred dollars in acquisition cost to replace me (could be more with your three tenths of one percent response rate to acquisition mail...).

One of my New Year's resolutions will be to always mail my payment to your competitor at least 5 days before the monthly deadline.  Thanks for teaching me a lesson at your expense.

-- Stan Rapp

For many years, there has been so much talk about the wonderful experiences awaiting us as digital technologies/media converge.  However, convergence and wonderful experiences still seem to be pretty far from reach today.  From what I experience and what I read in a variety of sources, no one seems to have a clear vision of how to make this work simply and seamlessly for a world of confused consumers.  Likewise, advertisers and agencies struggle to determine how to build brands and sell products in what will someday be a converged world.  I am no electronics engineer nor web aficionado, but I can picture what nirvana would be for me as both an advertiser and a consumer if someone can figure out how to put all of the parts together.

I find it very easy to envision what the ideal environment would look like, but I don’t have a clue how it gets integrated and how many players need to collaborate in order to bring this world to us.  For me, it would look something like this:

·         As a consumer, I would have a very easy-to-use media server in my home connected wirelessly to as many screens in my house as I want, be they HDTVs, computers, mobile phones, etc. 

·         The media center would have Tivo-like capabilities and the user would be able to port content and store it on stationary as well as portable devices for time and location shifting. 

·         The server would have 3-5 terabyte capacity for storing thousands of hours of HD quality programming. 

·         The media center would have the capability to receive input from a variety of sources including:  satellite, cable, off air antennas, telephone companies, etc., etc., etc.  The media center would seamlessly give users access to content, irrespective of the source.

Sooner or later, these technological challenges will be overcome.  On the other hand, for those of us who like to take our media with us in order to watch what we want to, when we want to, Digital Rights Management protections are likely to continue to frustrate us in our efforts to do this for a very long time.

When it finally does happen, convergence is fantastic for enlightened advertisers, agencies and media companies. They will have the ability to deliver highly targeted media and advertising to consumers.  By knowing preferences of users, they will be able to utilize unusual forms of messaging to entertain consumers with topics of personal interest to them, while also promoting brands and products.  This somewhat addresses the ad skipping concern that advertisers have today in that it has been proven that people who skip ads, tend to skip ones of personal interest less frequently than those of little or no interest.  Another key benefit for advertisers, already being experienced by Tivo, is the incredibly rich, reliable viewing data available in their database to advertisers and broadcasters, alike.  The data are so conclusive that inevitably, advertisers will demand and get performance-based pricing on all of their cross-platform media buys.  Chief Marketing Officers will then be so accountable that the average tenure will jump much higher than today’s 23 months or so.

When I think about the obstacles to be overcome to accomplish the above, I am overwhelmed.  My list, which I am sure is incomplete, includes the following:

• Complexity for the consumer – it is frequently reported that roughly half of the TV sets in homes today that are HD ready are being viewed by their owners with non-HD programming.  Apparently, they think that the old model of plug the cable into the back of the set is all you need to in order to see the beautiful pictures they see in the stores, in bars and in friends’ homes.  The added irony here is that these very expensive TVs show analog pictures much more poorly than the old analog sets.  Add to this the complexity of all of the devices that need to be integrated in order to have a desired home theatre experience, not to mention the issue of keeping track of all of the remotes in order to operate.  Yes, there are some good integrated remotes available today, but the average consumer would struggle to program them.
• Digital Rights Management – I certainly don’t claim to know all of the ins and outs of DRM, but it is clear that content owners’ desire to protect their assets flies in the face of consumers’ desire to view what they want, where they want and when they want. 
• High speed networking will likely come in the next few years at speeds that can efficiently handle HD content.  Today, when I record an NFL game in Hi Def (four hour recording) on my HD Series 3 Tivo, I can download it to a laptop via my wireless home network but it takes about 10 hours to do this! 
• Cross-platform integration by content providers, advertisers and agencies.  The networks continue to move very slowly in this regard and will, ultimately, get it.  The view by the content providers/distributors seems to continue to focus on each delivery platform as if it lived in a vacuum.  As a result, it still is up to the consumer to figure out how to navigate across all of the delivery systems.  And few companies have a clue as to what consumers are viewing, where and when they are viewing it.
• Consumer electronics companies – does any one of them have a vision for how they will integrate all of this in the future?  Seems as if most manufacturers tend to take their own product-centric view of how they can take existing products and adapt them to do more.  Is there a company that is using research tactics such as ethnography to understand how consumers truly do consume media in the real world?  I don’t see any evidence of any company anywhere in this space that understands my world, and I know I am not alone.
• Is anyone doing breakthrough work in new, cross-platform advertising approaches?  5-10 second pre-roll spots online are a pretty lame adaptation of the old world advertising model to the emerging world we find ourselves in.  I challenge networks and agencies to really develop innovative approaches in this arena.

There is so much more to this than my somewhat informed point of view reflects and I am sure there is a lot that I don’t get.  I do believe that my concerns are real and I hope that thought leading companies will develop and launch some breakthroughs in these areas, sooner rather than later.

-  Jim Garrity

I had an interesting travel experience last week.  As I was leaving Columbus the local paper, The Columbus Dispatch, had a banner headline across the front page with arresting news: "Melting of Arctic Ice Speeds Up."  The story described the acceleration of global warming and suggested that we may have passed a dangerous tipping point.  One eminent scientist raised the possibility that all the ice could be gone in five years.  Not good news. 

But as I flew across the country and saw a variety of our nation's newspapers it seemed that the news of the planet's impending doom had only reached Columbus, Ohio. The New York Times had no mention of the development.  The Wall Street Journal devoted only 20 words.  USA Today - nothing.  CNN - forget it. 

So what does all of this have to do with marketing?  If you believe, as I do, that perhaps the biggest story of our time is the man-made destruction of this planet as we have known it, how do we break through the miserable performance of the news media to bring the "Inconvenient Truth" to people across America?  Anyone out there with any ideas, please share them.  Anyone with a connection to the non-profits that are struggling to make us aware of what is happening, pass along any contact name you have - there is a terrific ad agency out there that would love to do some pro bono work.

America depends on marketers to keep the economy afloat by persuading the consumer to part with cash.  Marketers need to give thought to how those skills can be used for something more than improving the bottom line.

-- Stan Rapp

Thanks to Joseph, I will be sharing my thoughts with you while he is off in Africa chasing Wildebeests. My focus will be a current favorite subject on my mind (and in my public speaking) – the mistaken beliefs held by many of today’s marketers. It may be a new world, but many miss-takes are already etched in stone. Over the course of the next month I will post a snapshot of some of today’s most common mistaken beliefs about marketing. 

For starters, hardly a day goes by without a reference in the business press to the newly empowered consumer. In FastCompany’s fascinating article this month about the Mad Men on Mad Avenue you’ll find still another reference to the power of the consumer. Not so long ago no less than The Economist proclaimed in a cover story, “The Consumer Really is King and Queen Now.” 

Baloney! 

Serfdom would be a better description of the present state of consumers in America - they have never been more abused and confused at any time I can remember. Bit by bit the structure that once served consumer needs is being replaced by a cold-hearted service economy. Some of you are too young to remember when the gas station attendant filled your tank, cleaned your window, checked your water and smilingly sent you on your way. Nowadays you’d be hard-pressed to even find a gas station offering Full Service (unless, of course, you live in New Jersey, where Self-Service is against the law…). These days you pump the gas, pay with your credit card, and never interact with a human being. Have you ever thought of sending ExxonMobil a bill for your services?

Of course, you had better pay the minimum due on that card on time or your friendly neighborhood bank will hike your interest rate over 30%. And when you take that credit card to the mall to do some Holiday shopping at your favorite department store is there anybody on the floor to answer a question or direct you to what you want to find?

Or how about this dandy: http://abcnews.go.com/Business/story?id=3361743&page=1

If you call Sprint customer service one time too many – look out! They will terminate your service and kick you to the curb. 

The evaporation of service in our service economy represents both an enormous failure on the part of marketers and also an enormous opportunity for marketing smarts. Which bank is going to be the first to end the credit card interest hike abuse of their customers? Which department store is going to be the first to ensure that the shopping experience is such a pleasure that you’d rather shop in the store than online? And which advertising agency is going stop conspiring with marketers to take advantage of customers for short term gain rather than being the Great Defender of the American Consumer?

-- Stan Rapp

By now, hopefully you're enjoying Jim Garrity's postings. Expect one from Stan Rapp this week as well and to wet your appetite, his bio is below:

Stan Rapp is a direct marketing icon who has twice served as Chairman/CEO of global advertising agencies with revenues in the hundreds of millions of dollars. Rapp has been recognized by Advertising Age and the advertising Club of New York as one of the 101 individuals who shaped advertising in the 20^th Century. He is co-founder and former CEO of Rapp Collins Worldwide, the largest marketing services company in America. While he was CEO of McCann Relationship Marketing (MRM) and served on the Board of McCann Erickson WorldGroup, the MRM direct marketing agency’s revenue increased seven-fold in five years. He is co-author of the bestselling book, MaxiMarketing, which first predicted the change from mass marketing to one-to-one marketing a generation ago. He has also written five other widely read business books.  In his latest endeavor as Chairman of the newly-established Engauge enterprise, he has joined with pacesetters from the communications, digital and direct advertising world to create a much-needed 21^st Century agency model.

You may have read in the December 3^rd issue of the Wall Street Journal that on the same day, two global brands with mega budgets separately announced that they were consolidating advertising agencies – each moving from numerous agencies to one.  At both Dell and LG, the moves come fairly soon after bringing on board new Chief Marketing Officers.  Is this the expected “new CMO makes mark by quickly changing agencies?”  I don’t think so – I believe that in each case, it is a brilliant move (although, I would suggest that the need was so logical, that rocket science was not required to get there).  Nonetheless, I salute both companies for doing the right thing, something that surely required overcoming significant obstacles –with many more to be encountered going forward.

This is far from unprecedented.  In the mid-nineties, it took a new CEO at IBM (Lou Gerstner) and the CMO he brought in and empowered (Abby Konstahm) to make a dramatic, sweeping change.  In the case of IBM, they moved from roughly 400 global agencies, to one (Ogilvy).  How much sense did this make for IBM?  Think about it.  They had a single, iconic brand that was being managed, by and large, by IBM marketing staffs around the world along with these 400 agencies.  Great brands are built by rigorous consistency in every possible customer/prospect interaction.  How consistent can the image of one company be when messaging is being developed by thousands of IBM marketing and agency professionals?  The simple answer is “not very.” 

But moving from numerous agencies to one takes great courage and a fair amount of patience.  By the time you get to the situation where there are 400 agencies working on one brand, there is tremendous inertia to overcome.  Inevitably, senior executives running business units around the world treasure their independence (after all, they are accountable for producing revenue).  Significant cultural differences in large, global companies like IBM, Dell and LG make the challenge so much  greater. 

In the case of IBM, it took a marketing-savvy new CEO who intuitively realized that a marketing makeover was necessary.  He reached out to Abby Kohnstamm who had worked for him previously, believing she could pull this off.  Additionally, he had the insight to know that he needed to give her great, visibly supported latitude to get the job done. 

This winning formula worked and, in my opinion, a dozen years later, the benefits of this bold move continue to accrue.  This once stumbling brand has regained its former exalted status.

During my time at Compaq in the mid-nineties, my official marketing responsibilities involved direct control over the North America region, with “oversight responsibility for the Compaq brand, globally” (the company was barely ten years old and very lean in hierarchy and bureaucracy e.g. no corporate marketing organization existed).   This proved to be an impossible role.  I hosted quarterly Global Brand Council meetings involving marketing and agency teams from each region.  These meetings were very polite and collegial, and many strong relationships were formed over the years.  Inevitably, a combination of my lack of global line authority , coupled with cultural differences and regional desires to retain autonomous control over the Compaq brand in their respective regions were problematic.  We agonized for many months just to agree on a single, global brand positioning and we finally got there.  When it came time for the regions to execute campaigns reflecting this positioning, however, it was almost comical how far from the agreed-to positioning so many of the campaigns had drifted. 

The situation with Dell consolidating with the holding company, WPP, will be interesting to watch.  Giving a holding company all of your business has been tried before, usually with a distinctive lack of success.  Bank of America, notably, tried this a few years ago, handing all of their business to the holding company, Interpublic.  Cultural and internal political issues within each of these very large companies inevitably resulted in this bold attempt failing.  A more recent attempt at moving BofA’s business to Omnicom, with BBDO as the lead, appears to be experiencing a similar outcome.

WPP, on the other hand, has committed to literally build a new company to work on the Dell business.   I would liken this to what we experienced with the First Union/Wachovia merger which we literally treated as a true merger of equals.   If WPP can create a new company with a new culture and no internecine baggage to deal with, it just might work.  If Dell and the new WPP company can work together in true partnership from the outset, I believe it will work.  With Sir Martin deeply involved in this venture and determined to make it work, odds are it will.  It certainly will be interesting to follow. 

=  Jim Garrity

I am pleased to have been asked by Joseph to be a guest blogger for this month as he enjoys some quality time in Africa.  I am further pleased to be joining Stan Rapp in this capacity.  In the spirit of "joining the conversation," it seems appropriate to me that I should not presume I might know what this community would want to hear from me about, I am reaching out to you to ask for your suggestions of topics you would like me to address.   I have spent the better part of the last ten years as CMO at Wachovia and before that, in marketing leadership roles at IBM and Compaq for the prior 29 years.  Given this range of experiences, I would be quite comfortable addressing a range of topics across a broad spectrum including, but not limited to,  general marketing, accountability, innovation, CMO challenges and perils, emerging media, brand building, marketing challenges in a merger environment, agency relations, sponsorhips, etc. etc. etc.  I hope to hear from you.

- Jim Garrity