Archive for August, 2009

Jay Leno’s Branding Strategy: Mass Over Class?

August 28th, 2009

What is the Jay Leno brand? As far as I can see, there are two versions, and they couldn’t be more polarized.

First, there’s what I would call “Edgy Jay.”  This is the Jay of the late 1970s and 1980s, when he was a refreshing, inventive stand-up comic. A few years ago, I saw this Jay emcee an awards ceremony honoring entrepreneurial companies (including my employer at the time), and he was hysterical. (The big winner that night was the octogenarian ultra-entrepreneur, Jeno Paulucci, who brought his attractive 20-something granddaughters with him. Just before closing the show, Jay said something like, “And girls, don’t forget–After Granddad falls asleep, give my room a call!”)  And the other night I saw him on “Real Time with Bill Maher” on HBO, and I found him to be every bit as quick, biting and provocative as Maher.

But then there’s what I’d call “Dull Jay.”  This is the dumbed-down Jay Leno who hosted “The Tonight Show” for 18 years, and based on the uninspiring, derivative TV commercials I’ve been seeing lately, this is the Jay who will be hosting “The Jay Leno Show” starting in September. Clearly, this Jay has a very different target audience than “Edgy Jay,” and based on the solid ratings “The Tonight Show” received throughout his tenure, a much larger audience as well.

As you might have guessed, as an audience member–as a consumer–I much prefer “Edgy Jay.” However, as a business person, I understand that “Edgy Jay” is not for everyone, and that there’s a bigger market for “Dull Jay.” Thus, I can’t fault Jay Leno for embracing “Dull Jay” as his primary branding strategy–although I’m pretty sure he doesn’t refer to it using that phrase!

(For what it’s worth, I also suspect that deep down he much prefers being “Edgy Jay” to “Dull Jay,” which may be why he still emcees awards ceremonies or appears on Bill Maher’s show. He just needs to be sure he doesn’t overexpose “Edgy Jay” to his primary target audience, or he could damage his brand equity.)

Your business might have to choose from similar options: Do you pursue a niche strategy that allows you to delight a relatively small segment of the market, or do you go after the mass market with a product or service that is less likely to delight but also less likely to turn people off? The latter might seem like the obvious choice because of the bigger scale, but it also likely means that you’ll face much more competition and need much deeper pockets.

When I worked as a marketing director for the E. & J. Gallo Winery, each year we hired the top graduates of the top school of oenology in the country (UC Davis), and most wine industry observers would tell you that Gallo’s winemakers were unmatched in their expertise. However, Gallo’s goal at the time was to be the biggest winery in the world, which it achieved by formulating and producing wines that appealed to the palates of millions of everyday consumers rather than thousands of wine snobs. Had Gallo wanted to, it could have produced exceptional $300 and $400 bottles of wine, but the market for good-tasting $10 jugs of wine was much more lucrative.

The mass market strategy has proven to be the way to go for Gallo, and for Jay Leno. However, Gallo had tremendous financial resources, and Leno had access to the massive clout of NBC. Without those advantages, you’ll likely find that targeting a niche with an “edgy” approach will have much better odds of success than going after the mass market with a “dull” offering.

So what’s your preference: mass, or class?

Credit Card Marketers: PartnersFirst Puts Customers First

August 26th, 2009

Marketing isn’t what you say; it’s what you do. In light of that, is there an industry that has done a worse job of marketing–or treating its customers–than the credit card industry? Think about it: First, they ask you to become a customer, often luring you with powerful enticements. Next, they follow up by begging you to spend more money with them, such as by transferring other account balances or using checks that they send you (which you never requested, by the way). Then, all of a sudden, they decide to jack up your interest rate and your minimum payment, even if you’ve never missed a payment. In short, they seductively reel you in and literally go out of their way to put you into a financial situation that can become onerous at best and disastrous at worst. Why would any customer who has gone through this experience reward such a company with its loyalty? 

(Note: I’m not saying that customers aren’t guilty of having charged more than they should have; I’m just saying that considering the complicity of the credit card companies, their shabby treatment of their customers is unconscionable.)

Actually, I suspect that most customers of these credit card companies don’t consider themselves to be loyal to them, and that they’re still with them only because they can’t afford to pay off their balance. I would hope, however, that at the first opportunity these customers will abandon their current credit card companies never to patronize them again.

If they do, there is a new credit card company that appears to be much more deserving of their loyalty: PartnersFirst. This refreshing new company offers much lower interest rates and doesn’t levy annual fees or late-payment charges. In the words of founder and president Hal Erskine, “I realized there was an opportunity to give cardholders a square deal and still make a profit.”

I’ve always felt that if you want to launch a new business, you should do it in an industry where the existing companies aren’t giving customers the quality and service they deserve. PartnersFirst has done exactly that, and I for one will be cheering for them to finish first.

Bud Light and Miller Lite: Advertising Lightweights?

August 15th, 2009

When you have a commodity product that tries to appeal to virtually everyone, it’s hard to create compelling advertising.  Exhibits A and B: the latest Bud Light and Miller Lite ads, which make about as much of an impression on the brain as their beers do on the palate. 

Both of these beers’ nondescript, low-flavor profiles are designed not to generate raving fans, but to avoid turning anyone off. Unfortunately, when you avoid the risk of turning anyone off, you also default the opportunity to turn anyone on.

While their new ad campaigns aren’t impressive, at least it’s some consolation that the two brands are taking two different approaches.  For several months now, Bud Light has been trying impress us with the beer’s “drinkability,” a euphemism for “goes down–and tastes pretty much like–water.” Unfortunately, the ads suffer from two fatal problems. First, unlike prior Bud Light campaigns, the ads aren’t particularly entertaining. Second, and more important, the fact that the product is drinkable is not exactly a revelation or, for that matter, even interesting. I mean, are there really any beer drinkers out there complaining that light beers have too darned much flavor and don’t go down easily enough?

Miller Lite, on the other hand, has suddenly decided to reveal that their beer is “triple hops brewed,” and always has been. Huh? Perhaps this is supposed to make viewers think, “Gee, I guess Miller Lite has much more flavor than was apparent to my taste buds.  Silly me!” A new light beer that truly has more flavor than the current offerings might be news, but an old, traditional light beer suddenly talking about its brewing process is boring at best and weird at worst.

In my view, the smartest advertiser among the major light beer brands is Coors Light, which has consistently positioned itself as the most refreshing light beer and the one that tastes best ice cold. Its story goes well beyond “drinkability”, and the brand’s mountain heritage adds credibility to the “ice cold” angle. Moreover, when I see a Coors Light ad, it makes me want one–especially when it’s hot outside. On the other hand, when I see a recent Bud Light or Miller Lite ad, it makes me want to change the channel. (As I’ve blogged previously, while past Bud Light campaigns were very humorous, I’ve never felt that they were effective at giving viewers a reason to buy the product. True, it’s by far the number one-selling light beer, but I attribute this to the combined power of a huge media budget and the Anheuser-Busch distribution system rather than the quality of its advertising.)

To be clear, I’m not saying that Coors Light tastes signifcantly better than Bud Light or Miller Lite. However, if I’m going to have a light beer, I’m looking for refreshment more than flavor, and Coors Light strikes me as being just a little more refreshing than the other two brands. Perhaps it’s no surprise, then, that Coors Light’s sales trend has been far more positive than its competitors’ for the past several years.

In defense of the Bud Light and Miller Lite ad agencies, boring products don’t easily lend themselves to provocative advertising. Still, Coors Light’s agency has not let this handicap get in its way, which is why I consider it to be the heavyweight of light beer advertisers.

Give CA CEO a C in Advertising

August 11th, 2009

One of my rules over the years has been to avoid companies whose CEO makes himself or herself the focus of the company’s advertising. CA, a leading IT services firm, recently began running an ad showcasing its CEO, John Swainson. It will be interesting to see if CA will be the latest embodiment of this rule, or if it will somehow manage to be the rare exception.

From everything I’ve read, CA appears to be a successful, well-run company. They’re the biggest independent IT management software company in the world, and they’re growing both sales and earnings despite a rough economy. But while they may know a lot about IT, they don’t appear to know much about effective marketing communications–at least not yet.

I’ve always felt that CEOs should be the focus of your advertising only if they bring badly-needed credibility to the brand–as Lee Iococca famously did for Chrysler in the 1980s–or if they possess exceptional charisma that can uniquely and effectively position the brand. Since Mr. Swainson is largely unknown and far from charismatic, it’s hard to see why someone thought it would be a good idea to make him the star of this ad.

The ostensible point of the ad is to educate viewers about what CA does. Having seen the ad several times, however, all I’ve learned is that CA makes really boring ads. And while Mr. Swainson may well be a highly capable CEO, he is not a particularly charming or telegenic spokesman. If anything, his drab business suit, dated hairstyle (too long on the sides) and monotonous, unsmiling delivery all conspire to fight the high-energy, state-of-the-art feeling the company was no doubt hoping to create.

Sometimes a starring advertising role for the CEO reflects an out-of-control ego that is dangerously manifesting itself in other parts of the company as well. I have no reason to believe that this is the case at CA. In fact, it may well be that Mr. Swainson and his marketing people are smart–and honest–enough to eventually realize that this ad is not doing the trick and that it’s time to go back to the marketing communications drawing board.

If that’s the case, I can’t wait to see their new ad and finally learn exactly what it is that CA does.

Starbucks Bucks Mac Attack

August 5th, 2009

In announcing Starbucks’ recent quarterly financial results, CEO Howard Schultz announced that the company’s coffee sales have actually been helped by the efforts of McDonald’s to eat into its market share. It turns out McDonald’s actually got more people thinking about coffee, and that many of them decided to get theirs at Starbucks rather than McDonald’s.

This anecdote reinforces two long-established and still-relevant tenets of marketing strategy. First, if you suddenly face a new competitor or an existing competitor that decides to up its aggressiveness, it’s often a good thing. The stepped-up competition will raise awareness of your category, and if you’re good at what you do, you should benefit from the increased exposure. There’s no need to panic, and certainly no need to do something rash like slashing prices to defend your turf.

Second, if you decide to enter a new category or ramp up your aggressiveness in an existing category, don’t do it by attacking the market leader. Not only are you likely to help them by by virtue of the attention you generate for them, you’ll come across as a poor knock-off at best or a cheap-shot, low-blow artist at worst. Instead of making your story what’s wrong with the market leader, make it what’s right with you.

As the late rocker (and marketing maven) Jerry Garcia once advised, don’t try to make people think you’re the best at what you do; make them think you’re the only one who does what you do!

Ally Needs to Ally with a Better Advertising Strategy

August 3rd, 2009

Have you seen the series of TV commercials in which an adult uses “fine print” to tease a child? In one, one girl is given a toy pony and then watches as a playmate is given a real pony; in another, a boy is allowed to play with a cool toy airplane for a few seconds, only to have it abruptly taken away and replaced by a sorry cardboard cut-out. These acts of meanness are supposed to be metaphors for how financial services companies use “fine print” to abuse their consumers. Clever, huh?

If you have seen these spots, do you remember who the advertiser is?  I highly doubt it.  The answer is Ally, which on its website bills itself as “a new bank built on the foundation of GMAC Financial Services.”  When I read this, I had a true LOL moment, having used this blog on numerous occasions to criticize General Motors for its automobile and truck advertising. The Ally campaign certainly rivals GM’s vehicle advertising for incompetence.  First, it commits advertising’s cardinal sin by failing to register the brand name–an especially flagrant foul given that this is a new company that badly needs to establish consumer awareness. Second, the story line of the commercials has virtually nothing to do with financial services; the viewer comes away with little or no understanding of what benefit is being promised. Third, the teasing of these children is downright mean; although this meanness is ostensibly meant to represent the way Ally’s competitors treat their customers, it seems more likely that Ally will be the brand associated with the meanness. It almost makes you wish for at disclaimer saying, “No child’s emotions were irreparably harmed during the filming of this commercial.”

In short, these commercials don’t effectively convey either the benefit being advertised or the brand doing the advertising, and those few viewers who are somehow able to identify the brand will likely associate it with meanness.

For a company claiming to know that consumers don’t read the fine print, you’d think that Ally would have the good sense to put its benefits–and its name–in the headline, rather than to associate itself with the teasing of innocent children. What consumers would want to ally with a company like that?