As 2009 and the decade of the 00’s come to an end, it is interesting to think about what will make a truly good company in the years to come. In the past, companies that made a profit, paid taxes, and provided employment were thought to be ‘good’ based on financial success alone. When they exceeded financial expectations, they were considered great. The higher the profits, the stronger the brand image became.
Then the economic crisis hit, along with the potential destabilization of the entire system, and the wisdom of pursuing profits at all costs turned out to have a price tag after all.
Now once again, times are changing. Post our entry into the Great Recession, a ‘good’ company has been redefined as one that adds value outside the realm of financial success. At the same time, social media has deconstructed the closed corporate culture, creating a transparency that provides consumers with an inside look at a company’s guiding principles.
The rise of Corporate Social Responsibility (CSR) has taken hold, and consumers are increasingly choosing to support companies that hold dear their own values, rather than simply produce a profit.
Here is a current snapshot of Consumer Sentiment, courtesy of Tim Sanders in Saving the World at Work:
-65% of Americans are willing to switch to brands that are associated with a good cause if the price and quality are relatively equal
-Two thirds of recent college graduates surveyed claim that they will not work for a company with a poor reputation for social responsibility
-Almost half of all consumers say they use the Internet to figure out if the products they buy are socially responsible
As it turns out, CSR is good for business as well. A recent global McKinsey survey indicated that a corporation’s environmental, social and governance programs create financial value by enhancing the reputation of companies. New philanthropy is not about writing checks, but rather leveraging corporate resources to help the communities address problems like hunger, poverty, and literacy. Smart companies are satisfying customer needs while letting them feel good about their patronage.
Just like anyone who has gone through a crisis and come out the other side, Americans have recently grown up some. We now recognize the benefits of being outwardly focused, and are smart and connected enough to become very powerful advocates for change.
As we turn the page on this decade, it is encouraging to see that the change in ourselves as consumers has brought about a powerful change in the culture of American business. We now save our admiration for companies that deliver financially, but that are also grounded by a value system that mirrors our own. As Warren Buffet recently said at Columbia University, “Having sound principals takes you through everything.”
Let’s hope next year more companies start to realize that they can do well by doing good.
Thursday, December 10, 2009
Tuesday, November 10, 2009
Winston Churchill is Now on Twitter
Defining Leadership for the 21st Century
Winston Churchill was a leader that would fit right in with today’s social media culture. In his time, Churchill’s astute observations delivered with brevity and wit helped to build what would become his towering reputation. Although public speaking was the primary medium of the day, Churchill was a prolific writer who came up with some of the best, less-than 140 character quotes in history. Consider this example:
“History will be kind to me, for I intend to write it.”-Winston Churchill
A true leader can be defined as someone whom others are willing to follow, no matter the consequences. The ability to communicate a vision and set a new course of action during times of crisis is especially difficult. Churchill’s commanding presence on the world stage was a result of his talent to use language to persuade, convince and sway public opinion toward his way of thinking.
Today, the entire structure of communications as we know is irrevocably changed. While Twitter documents the minutia of our daily lives, Facebook showcases our weekend updates, and LinkedIn tracks our every career move. Corporate leaders have to work harder than ever to communicate their vision and get others to follow them. Social media has become the great equalizer. We now expect heads of companies to talk to us directly, to engage in online brand discussions, and to respond to questions in real time.
Many CEOs today are notoriously reluctant to engage social media. The confidence to share ideas and enter into public discussions through micro blogging does not come easily. The very idea of opening up to customers, constituents, and colleagues can be unnerving for business leaders. A common reaction is analysis paralysis. Companies decide to stay on the sidelines, opting for security over strategy.
Prior to the onslaught of social media, this may have worked. CEOs were shielded from public scrutiny. Companies controlled their message, and minimized communication channels. Today this is no longer an option. Companies can either talk about themselves, or somebody else will. The blogosphere is filled with commentary about brands, companies and the executives who lead them.
Those reluctant to engage in social platforms are missing the point. New ways to communicate directly with constituents is empowering. Leaders now have the potential to use words and ideas to build follower communities and brand enthusiasts. Micro blogging creates a personal narrative, which allows executives to be seen as real people. This skill can be learned and integrated into a company’s communications strategy. CEOs can directly influence public perception about themselves and their brands.
"There is no such thing as public opinion. There is only published opinion." -Winston Churchill
While many executives see only the risk of social media, others see the potential to demonstrate their commitment to customers and causes. Leaders like Tony Tseih of Zappos, and Jeff Swartz of Timberland are excellent examples of CEOs that successfully use Twitter to provide an inside look at their business. Mr. Tseih has been credited with a social media strategy that attracted the attention of Jeff Bezos, who acquired the company last summer. Mr. Swartz uses social channels to focus attention on climate change initiatives. Founder of Digg, Kevin Rose, is a prolific micro blogger. With over a million followers and 3,000 Tweets, Rose shares both business and personal insights on a daily basis. Like many early adopters, he uses Twitter as his own private broadcast network.
One of my favorite Twitter CEOs is Blake Mycoskie, the founder of TOMS Shoes. TOMS provides a pair of shoes to a child in need for every TOMS shoe purchase. Mycoskie tweets about the people he meets, international travel, and ideas that interest him. Continuous updates about work, play, and core values help to humanize a CEO, which in turn humanizes the brand. Over time this creates a new breed of loyalty; as customers begin to feel that they are following the tweets of a trusted friend.
A New Kind of Leadership
Winston Churchill’s style was to communicate constantly. He interpreted events as they unfolded, and explained what he intended to do about them. He was a real time communicator, which is analogous to today’s social media culture. During some of the worst bombing raids in Great Britain’s history, Churchill provided comfort to an increasingly desperate country with a few, well chosen words:
"These are not dark days: these are great days - the greatest days our country has ever lived."
Today we are all engaged in writing our own history, one micro blog at a time. That history includes defining who we are as people, as corporate citizens, and demonstrating values that go beyond bringing products to market. In a relationship economy, people are looking for a reason to work with you, to buy your products and to trust you. With the widespread adoption of social media, companies can shine a light on all the good they are doing for their business, community, employees and customers.
Leaders cannot be all things to all people, but they can certainly be true to themselves. Developing a culture where executives are forthcoming and transparent will change the leadership dynamic forever.
If Winston Churchill really were on Twitter, this would have been his most insightful Tweet ever.
“You have enemies? Good. That means you've stood up for something, sometime in your life."
Winston Churchill was a leader that would fit right in with today’s social media culture. In his time, Churchill’s astute observations delivered with brevity and wit helped to build what would become his towering reputation. Although public speaking was the primary medium of the day, Churchill was a prolific writer who came up with some of the best, less-than 140 character quotes in history. Consider this example:
“History will be kind to me, for I intend to write it.”-Winston Churchill
A true leader can be defined as someone whom others are willing to follow, no matter the consequences. The ability to communicate a vision and set a new course of action during times of crisis is especially difficult. Churchill’s commanding presence on the world stage was a result of his talent to use language to persuade, convince and sway public opinion toward his way of thinking.
Today, the entire structure of communications as we know is irrevocably changed. While Twitter documents the minutia of our daily lives, Facebook showcases our weekend updates, and LinkedIn tracks our every career move. Corporate leaders have to work harder than ever to communicate their vision and get others to follow them. Social media has become the great equalizer. We now expect heads of companies to talk to us directly, to engage in online brand discussions, and to respond to questions in real time.
Many CEOs today are notoriously reluctant to engage social media. The confidence to share ideas and enter into public discussions through micro blogging does not come easily. The very idea of opening up to customers, constituents, and colleagues can be unnerving for business leaders. A common reaction is analysis paralysis. Companies decide to stay on the sidelines, opting for security over strategy.
Prior to the onslaught of social media, this may have worked. CEOs were shielded from public scrutiny. Companies controlled their message, and minimized communication channels. Today this is no longer an option. Companies can either talk about themselves, or somebody else will. The blogosphere is filled with commentary about brands, companies and the executives who lead them.
Those reluctant to engage in social platforms are missing the point. New ways to communicate directly with constituents is empowering. Leaders now have the potential to use words and ideas to build follower communities and brand enthusiasts. Micro blogging creates a personal narrative, which allows executives to be seen as real people. This skill can be learned and integrated into a company’s communications strategy. CEOs can directly influence public perception about themselves and their brands.
"There is no such thing as public opinion. There is only published opinion." -Winston Churchill
While many executives see only the risk of social media, others see the potential to demonstrate their commitment to customers and causes. Leaders like Tony Tseih of Zappos, and Jeff Swartz of Timberland are excellent examples of CEOs that successfully use Twitter to provide an inside look at their business. Mr. Tseih has been credited with a social media strategy that attracted the attention of Jeff Bezos, who acquired the company last summer. Mr. Swartz uses social channels to focus attention on climate change initiatives. Founder of Digg, Kevin Rose, is a prolific micro blogger. With over a million followers and 3,000 Tweets, Rose shares both business and personal insights on a daily basis. Like many early adopters, he uses Twitter as his own private broadcast network.
One of my favorite Twitter CEOs is Blake Mycoskie, the founder of TOMS Shoes. TOMS provides a pair of shoes to a child in need for every TOMS shoe purchase. Mycoskie tweets about the people he meets, international travel, and ideas that interest him. Continuous updates about work, play, and core values help to humanize a CEO, which in turn humanizes the brand. Over time this creates a new breed of loyalty; as customers begin to feel that they are following the tweets of a trusted friend.
A New Kind of Leadership
Winston Churchill’s style was to communicate constantly. He interpreted events as they unfolded, and explained what he intended to do about them. He was a real time communicator, which is analogous to today’s social media culture. During some of the worst bombing raids in Great Britain’s history, Churchill provided comfort to an increasingly desperate country with a few, well chosen words:
"These are not dark days: these are great days - the greatest days our country has ever lived."
Today we are all engaged in writing our own history, one micro blog at a time. That history includes defining who we are as people, as corporate citizens, and demonstrating values that go beyond bringing products to market. In a relationship economy, people are looking for a reason to work with you, to buy your products and to trust you. With the widespread adoption of social media, companies can shine a light on all the good they are doing for their business, community, employees and customers.
Leaders cannot be all things to all people, but they can certainly be true to themselves. Developing a culture where executives are forthcoming and transparent will change the leadership dynamic forever.
If Winston Churchill really were on Twitter, this would have been his most insightful Tweet ever.
“You have enemies? Good. That means you've stood up for something, sometime in your life."
Monday, October 19, 2009
In Wine there is Truth. Social Philanthropy has Arrived.
Last week Biz Stone announced that Twitter will launch a program in partnership with Room to Read, the non-profit literacy organization headed by CEO John Wood. Crushpad, whose mission is to democratize the wine industry, will collaborate with Twitter, whose mission is to democratize access to information throughout the world.
Social Philanthropy has arrived. Twitter staff will participate in making two wines, a Pinot Noir and a Chardonnay with Crushpad (www.crushpad.com), a San Francisco based custom winery. We the people are invited to follow the progress of winemaking on Twitter, and pre-order the wine at a reduced $20 dollars per bottle here www.fledglingwine.com.
The best part is that $5 from every bottle will go directly to Room to Read, an organization that BRANDfog supports through our work and that of our CEO clients. Room to Read enables literacy programs in some of the poorest regions in the world. BRANDfog supports this organization based on one simple truth. If you can read, you can do anything.
You can follow updates, participate in a Social Philanthropy, and feel good all at the same time at: www.fledglingwine.com. What a great corporate holiday gift idea.
Social Philanthropy has arrived. Twitter staff will participate in making two wines, a Pinot Noir and a Chardonnay with Crushpad (www.crushpad.com), a San Francisco based custom winery. We the people are invited to follow the progress of winemaking on Twitter, and pre-order the wine at a reduced $20 dollars per bottle here www.fledglingwine.com.
The best part is that $5 from every bottle will go directly to Room to Read, an organization that BRANDfog supports through our work and that of our CEO clients. Room to Read enables literacy programs in some of the poorest regions in the world. BRANDfog supports this organization based on one simple truth. If you can read, you can do anything.
You can follow updates, participate in a Social Philanthropy, and feel good all at the same time at: www.fledglingwine.com. What a great corporate holiday gift idea.
Tuesday, October 6, 2009
Panic Can Also Spread Virally
This fall the H1N1 Swine Flu has the potential to cause irrational fear and widespread panic, in addition to the real threat of sickness and death. The government is trying to ready themselves for both aspects of the potential epidemic. The real risk is the spread of the contagion across the population, but health officials are also bracing themselves for misinformation that can spread fast and furiously through social media channels.
Swine Flu vaccinations began this week, and health care workers, pregnant woman and child care providers are among the first to be vaccinated. Although deemed perfectly safe by the C.D.C, officials are worried that unrelated health problems may mistakenly be connected to the Swine Flu vaccine. Separating the incidents of naturally occurring strokes, heart attacks, miscarriages and death from the coincidence of receiving the vaccine will be a big challenge for health officials this year.
Managing the public perception about the Swine Flu, and keeping the population calm and well informed is shaping up to be the Super Bowl of public relations challenges for the government . With incessant social media chatter and the 24 hour news cycle, serious consideration needs to be given to the question of how we can control the flow of global information during times of crisis.
Fortunately, the C. D.C. is prepared to provide rapid-fire communications and information which is widely available through many social media channels. Press conferences can be seen live on the agency’s website, flu.gov, and updates are available through many social media outlets such as Facebook , Twitter, MySpace, and YouTube. All of these channels and more can be found at http://www.cdc.gov/socialmedia/.
So what else can the C.D.C. do for population? In addition to providing an outgoing, one-way flow of information, the C.D.C. would be wise to take advantage of the higher level of engagement that social media offers. By monitoring and then quickly responding to trending topics on Twitter, Facebook, YouTube and the blogosphere, they can build credibility and defuse rumors and fears before they can spread virally and cause real harm.
Swine Flu vaccinations began this week, and health care workers, pregnant woman and child care providers are among the first to be vaccinated. Although deemed perfectly safe by the C.D.C, officials are worried that unrelated health problems may mistakenly be connected to the Swine Flu vaccine. Separating the incidents of naturally occurring strokes, heart attacks, miscarriages and death from the coincidence of receiving the vaccine will be a big challenge for health officials this year.
Managing the public perception about the Swine Flu, and keeping the population calm and well informed is shaping up to be the Super Bowl of public relations challenges for the government . With incessant social media chatter and the 24 hour news cycle, serious consideration needs to be given to the question of how we can control the flow of global information during times of crisis.
Fortunately, the C. D.C. is prepared to provide rapid-fire communications and information which is widely available through many social media channels. Press conferences can be seen live on the agency’s website, flu.gov, and updates are available through many social media outlets such as Facebook , Twitter, MySpace, and YouTube. All of these channels and more can be found at http://www.cdc.gov/socialmedia/.
So what else can the C.D.C. do for population? In addition to providing an outgoing, one-way flow of information, the C.D.C. would be wise to take advantage of the higher level of engagement that social media offers. By monitoring and then quickly responding to trending topics on Twitter, Facebook, YouTube and the blogosphere, they can build credibility and defuse rumors and fears before they can spread virally and cause real harm.
Wednesday, August 12, 2009
Philanthropy is the Gateway to Power
“Philanthropy is the gateway to power… there are few people who decide what will happen in our world. You have been invited to join them – pull back the curtain and take your seat.” Roger Sterling, Mad Men
While watching Mad Men Season 2 last week, suddenly, mid-episode, I was brought up short by a show-stopping quote from Roger Sterling. Sterling, the senior partner at the fictitious Sterling Cooper Agency circa 1962, tells his Creative Director Don Draper that he’s been invited to join an arts foundation board. Looking puzzled, Don asks “What does that mean?” Without skipping a beat, Roger Sterling says “Philanthropy is the gateway to power.”
And so it was. For generations, it was the wealthy and powerful that sat on Foundation Boards and decided how important resources would be distributed and determined who had the most urgent need. Philanthropists from that era supported societal institutions, like the New York City Public Library, the Ballet, and the Metropolitan Museum of Art. Less attention was paid to local community organizations that struggled daily with the more pedestrian problems of hunger, unemployment, and education.
But times have changed. With the emergence of global social media and the lightning speed of the Internet, the ease of mobilizing people through Twitter, Facebook, LinkedIn, and a hundred other channels is staggering. We can now use technology to unleash support and create awareness with a broad base of social givers. People of all stripes are engaged with causes, political events and environmental issues. The term for this is “new philanthropy,” which means employing accountability and entrepreneurship to address some of the most troublesome societal problems of our time, such as poverty, global literacy, and disease.
In my business, we help CEOs to get involved with philanthropy on a number of levels. Without exception, the CEOs we work with are high achieving, passionate, hard driving individuals by nature. Powerful and influential, they are natural-born leaders whom others tend to want to follow. When it comes to philanthropy, they lead by example.
When CEOs engage with a cause they care about, everybody wins. The philanthropic organizations benefit from the passionate enthusiasm of a leader who spreads the word and influences others to get involved. The CEO experiences a deep level of satisfaction from producing results, and truly making a difference in the lives of others. The companies enjoy the invaluable benefits of brand association with a philanthropic enterprise. Employees have the opportunity to get behind a good cause, and take ownership over what their brand represents to the outside world. Not a bad way to become a good corporate citizen.
To use a quote from JKF’s 1961 inaugural speech that even Don Draper would appreciate,
“The torch has been passed to a new generation of Americans…. The world is very different now, for man holds in his mortal hands the power to abolish all forms of human poverty. “
While watching Mad Men Season 2 last week, suddenly, mid-episode, I was brought up short by a show-stopping quote from Roger Sterling. Sterling, the senior partner at the fictitious Sterling Cooper Agency circa 1962, tells his Creative Director Don Draper that he’s been invited to join an arts foundation board. Looking puzzled, Don asks “What does that mean?” Without skipping a beat, Roger Sterling says “Philanthropy is the gateway to power.”
And so it was. For generations, it was the wealthy and powerful that sat on Foundation Boards and decided how important resources would be distributed and determined who had the most urgent need. Philanthropists from that era supported societal institutions, like the New York City Public Library, the Ballet, and the Metropolitan Museum of Art. Less attention was paid to local community organizations that struggled daily with the more pedestrian problems of hunger, unemployment, and education.
But times have changed. With the emergence of global social media and the lightning speed of the Internet, the ease of mobilizing people through Twitter, Facebook, LinkedIn, and a hundred other channels is staggering. We can now use technology to unleash support and create awareness with a broad base of social givers. People of all stripes are engaged with causes, political events and environmental issues. The term for this is “new philanthropy,” which means employing accountability and entrepreneurship to address some of the most troublesome societal problems of our time, such as poverty, global literacy, and disease.
In my business, we help CEOs to get involved with philanthropy on a number of levels. Without exception, the CEOs we work with are high achieving, passionate, hard driving individuals by nature. Powerful and influential, they are natural-born leaders whom others tend to want to follow. When it comes to philanthropy, they lead by example.
When CEOs engage with a cause they care about, everybody wins. The philanthropic organizations benefit from the passionate enthusiasm of a leader who spreads the word and influences others to get involved. The CEO experiences a deep level of satisfaction from producing results, and truly making a difference in the lives of others. The companies enjoy the invaluable benefits of brand association with a philanthropic enterprise. Employees have the opportunity to get behind a good cause, and take ownership over what their brand represents to the outside world. Not a bad way to become a good corporate citizen.
To use a quote from JKF’s 1961 inaugural speech that even Don Draper would appreciate,
“The torch has been passed to a new generation of Americans…. The world is very different now, for man holds in his mortal hands the power to abolish all forms of human poverty. “
Wednesday, July 22, 2009
Social Media Engagement Leads to Increased Revenue
In a compelling study just released by Charlene Li and the Altimeter Group, a link was firmly established between social media engagement and better financial performance for 100 most valuable corporate brands. This was accomplished by correlating the company revenues of these brands with their social media activities over the past 12 months. The brands that had the most strategic interaction through social media platforms enjoyed revenue increases of 18%, while the least engaged companies saw revenues drop by 6% on average over the same period.
To sum up the study’s findings, the key to brand success for the top 10 companies was effective engagement across more than 10 discrete social media channels, including blogs, Facebook, Twitter, wikis, and discussion forums. The winners took a conversational approach to social media channels, and really listened and responded to the comments of constituents.
The reason I like this study is that it helps to validate the ROI of Social Media Branding for companies, and from there it is just a short intellectual leap to understanding the importance of Social Media Branding for CEOs as individuals.
Others have written about the urgency for professionals to make the most of their own unique “personal brand” to advance their careers. I know from experience that executives can derive great benefits from leveraging social media to brand themselves, and to use this platform to wield a great deal of influence among their peers. In other words, social media can solidify personal brand reputations and help executives realize their full potential in the marketplace.
If there is one thing we’ve learned at BRANDfog, it is to believe in the power of social media branding as a tool to broaden life experiences, reshape reputations, and cultivate a wider circle of influence. Social media branding provides senior executives with the means and opportunity to become thought leaders, influence the market, attract new talent, build relationships and expand professional networks.
To sum up the study’s findings, the key to brand success for the top 10 companies was effective engagement across more than 10 discrete social media channels, including blogs, Facebook, Twitter, wikis, and discussion forums. The winners took a conversational approach to social media channels, and really listened and responded to the comments of constituents.
The reason I like this study is that it helps to validate the ROI of Social Media Branding for companies, and from there it is just a short intellectual leap to understanding the importance of Social Media Branding for CEOs as individuals.
Others have written about the urgency for professionals to make the most of their own unique “personal brand” to advance their careers. I know from experience that executives can derive great benefits from leveraging social media to brand themselves, and to use this platform to wield a great deal of influence among their peers. In other words, social media can solidify personal brand reputations and help executives realize their full potential in the marketplace.
If there is one thing we’ve learned at BRANDfog, it is to believe in the power of social media branding as a tool to broaden life experiences, reshape reputations, and cultivate a wider circle of influence. Social media branding provides senior executives with the means and opportunity to become thought leaders, influence the market, attract new talent, build relationships and expand professional networks.
Friday, June 26, 2009
Using Social Media to Do Good
We've all seen Ashton Kutcher rise to Internet glory by amassing a Twitter following that now numbers more than 2.3 million. So in a year of soaring unemployment, housing & health care misery, and political instability, who cares about a movie star with a megaphone?
Well sometimes people can surprise you.
A few celebrities and big brands are turning their captive Twitter audiences into “followers” of another sort, by asking them to join into conversations about helping others and donating their time to worthy causes.
Ashton Kutcher and Demi Moore are working with KelloggCares to raise funds to feed the hungry in the US, and using their substantial Twitter following to get people involved. Mashable is transforming social media influencers into cause-marketing advocates by launching The Summer of Social Good. This is the first large scale online charitable campaign to raise funds strictly through the power of Social Media and the Internet. The best part, 100% of the funds collected will be donated to four charities, including Livestrong and the Humane Society.
Social media, celebrity endorsements and the interactive Web have enabled many charitable organizations to extend their geographic reach and increase awareness for many of the philanthropic causes that are especially relevant in today’s economic climate.
It’s always a good time to unite people toward the common good.
Well sometimes people can surprise you.
A few celebrities and big brands are turning their captive Twitter audiences into “followers” of another sort, by asking them to join into conversations about helping others and donating their time to worthy causes.
Ashton Kutcher and Demi Moore are working with KelloggCares to raise funds to feed the hungry in the US, and using their substantial Twitter following to get people involved. Mashable is transforming social media influencers into cause-marketing advocates by launching The Summer of Social Good. This is the first large scale online charitable campaign to raise funds strictly through the power of Social Media and the Internet. The best part, 100% of the funds collected will be donated to four charities, including Livestrong and the Humane Society.
Social media, celebrity endorsements and the interactive Web have enabled many charitable organizations to extend their geographic reach and increase awareness for many of the philanthropic causes that are especially relevant in today’s economic climate.
It’s always a good time to unite people toward the common good.
Tuesday, June 23, 2009
Twitter, YouTube and the Iranian Revolution
The central principle of any dictatorship is control. Dictators want to control what people say and do, by controlling what they see. They also want to control all the money, but that is a different story.
Transparency is the enemy of a totalitarian state. What is so fascinating about the Iran revolution is that Twitter and YouTube are playing such an integral role in the overthrow of a dictator in an ancient civilization.
By the way, I'm not sure from my reading that the guy they want in is any better than the guy they want out. But technology and the Web are emboldening and facilitating what would have simply been repressed and silent rage at a fraudulent election. http://tiny.cc/atmKf
Transparency is the enemy of a totalitarian state. What is so fascinating about the Iran revolution is that Twitter and YouTube are playing such an integral role in the overthrow of a dictator in an ancient civilization.
By the way, I'm not sure from my reading that the guy they want in is any better than the guy they want out. But technology and the Web are emboldening and facilitating what would have simply been repressed and silent rage at a fraudulent election. http://tiny.cc/atmKf
Tuesday, June 2, 2009
When the Agency Model Breaks
When demand for hard data from Brands reaches critical mass, the agency model will break and be rebuilt around two fundamentals, Best Creative and a Technology Data Practice.
Advertising's new model
Clock-watchers no more
May 14th 2009 | NEW YORK
From The Economist print edition
A movement to pay advertising agencies for value, not hours, takes off
EMMA COOKSON, the boss of BBH, a global advertising firm, says her industry has been “approaching and avoiding” a change in how it is paid for many years. Avoidance, however, may no longer be an option. On April 20th Coca-Cola said it would adopt a “value-based” compensation system for the advertisers that do work for its 400 brands. Rather than paying advertising agencies for hours worked, Coke will pay for results achieved.
The industry, already sick because of the recession, turned a bit bluer in the face at the news. Global ad spending is expected to decline by nearly 7% in 2009, according to ZenithOptimedia, and by around 9% in America. Carmakers and other faltering firms have cut marketing budgets, and work is harder to come by. There have been lay-offs. It is hardly an opportune time to discuss a change in compensation models. Billable hours have been the standard way of doing things since the 1970s. Assessing a campaign’s value is much harder.
Coke, however, thinks it can do just that. Its new model guarantees to cover advertising agencies’ costs, plus a bonus of up to 30%. The bonus depends on a number of metrics, including the agency’s overall performance, and the sales and market share of the products being advertised. Coke insists that its aim is not to cut costs but to inspire creativity and efficiency. Procter & Gamble, a consumer-goods giant which has also ditched hourly fees in favour of performance-related fees for 12 of its brands, says the same thing.
Coca Cola
What is it worth?
Although the recession may give companies an immediate reason to reassess how they pay their advertising agencies, it is not the sole impetus for the switch.
Discussions about finding better ways to reward agencies for their creativity have been going on for years. The American Association of Advertising Agencies estimates that about 10% of compensation agreements are value-based. Coke’s announcement of its new approach will probably spur other firms to follow suit, and Coke has said that it wants its model to become the standard for the industry.
The shift away from the billable hour, however, may take a while. Some agency executives are sceptical about being paid for value, because it is so subjective. They interpret talk about value as code for cost-cutting. Jeff Goodby, co-founder of Goodby, Silverstein & Partners, an advertising agency, dislikes the fact that Coke’s new policy guarantees only recouped costs. If he is going to take on a project in which he assumes risk by not knowing his profit margin in advance, “There has to be a big pot at the end of that rainbow,” he says.
But some advertising agencies have voluntarily moved away from billing by the hour and towards contracts that reward value. Jeff Hicks, chief executive of Crispin Porter + Bogusky, says this approach has helped his agency work more closely with clients by aligning the agency’s compensation and the advertiser’s profitability. Others, sensing the limitation of being paid by the hour, are trying to develop new ways to capture the value their work can create. For example, BBH recently launched a unit, called Zag, which designs and markets its own products, such as ready-made foods.
Advertising is not the only industry where there is discussion about whether to pay for time or results. Some accounting, consulting and law firms are also scrapping the billable hour, often at the request of their clients. Ron Baker, author of “Pricing on Purpose”, a book on pricing strategies, thinks service agencies need to grasp that they sell ideas, not time, and that ideas should be generously compensated. Imagine, he says, if J.K. Rowling had been paid by the hour to write about Harry Potter.
Advertising's new model
Clock-watchers no more
May 14th 2009 | NEW YORK
From The Economist print edition
A movement to pay advertising agencies for value, not hours, takes off
EMMA COOKSON, the boss of BBH, a global advertising firm, says her industry has been “approaching and avoiding” a change in how it is paid for many years. Avoidance, however, may no longer be an option. On April 20th Coca-Cola said it would adopt a “value-based” compensation system for the advertisers that do work for its 400 brands. Rather than paying advertising agencies for hours worked, Coke will pay for results achieved.
The industry, already sick because of the recession, turned a bit bluer in the face at the news. Global ad spending is expected to decline by nearly 7% in 2009, according to ZenithOptimedia, and by around 9% in America. Carmakers and other faltering firms have cut marketing budgets, and work is harder to come by. There have been lay-offs. It is hardly an opportune time to discuss a change in compensation models. Billable hours have been the standard way of doing things since the 1970s. Assessing a campaign’s value is much harder.
Coke, however, thinks it can do just that. Its new model guarantees to cover advertising agencies’ costs, plus a bonus of up to 30%. The bonus depends on a number of metrics, including the agency’s overall performance, and the sales and market share of the products being advertised. Coke insists that its aim is not to cut costs but to inspire creativity and efficiency. Procter & Gamble, a consumer-goods giant which has also ditched hourly fees in favour of performance-related fees for 12 of its brands, says the same thing.
Coca Cola
What is it worth?
Although the recession may give companies an immediate reason to reassess how they pay their advertising agencies, it is not the sole impetus for the switch.
Discussions about finding better ways to reward agencies for their creativity have been going on for years. The American Association of Advertising Agencies estimates that about 10% of compensation agreements are value-based. Coke’s announcement of its new approach will probably spur other firms to follow suit, and Coke has said that it wants its model to become the standard for the industry.
The shift away from the billable hour, however, may take a while. Some agency executives are sceptical about being paid for value, because it is so subjective. They interpret talk about value as code for cost-cutting. Jeff Goodby, co-founder of Goodby, Silverstein & Partners, an advertising agency, dislikes the fact that Coke’s new policy guarantees only recouped costs. If he is going to take on a project in which he assumes risk by not knowing his profit margin in advance, “There has to be a big pot at the end of that rainbow,” he says.
But some advertising agencies have voluntarily moved away from billing by the hour and towards contracts that reward value. Jeff Hicks, chief executive of Crispin Porter + Bogusky, says this approach has helped his agency work more closely with clients by aligning the agency’s compensation and the advertiser’s profitability. Others, sensing the limitation of being paid by the hour, are trying to develop new ways to capture the value their work can create. For example, BBH recently launched a unit, called Zag, which designs and markets its own products, such as ready-made foods.
Advertising is not the only industry where there is discussion about whether to pay for time or results. Some accounting, consulting and law firms are also scrapping the billable hour, often at the request of their clients. Ron Baker, author of “Pricing on Purpose”, a book on pricing strategies, thinks service agencies need to grasp that they sell ideas, not time, and that ideas should be generously compensated. Imagine, he says, if J.K. Rowling had been paid by the hour to write about Harry Potter.
Sunday, May 31, 2009
A Kinder, Gentler Logo for Hard Times
Warmer, Fuzzier: The Refreshed Logo
Bill Marsh and Alicia Parlapiano
Published: May 30, 2009
The world economy is in mid-swan dive. Wallets are in lockdown. So how does a company get people to feel just a little bit better about buying more stuff? (And perhaps burnish a brand that has taken some public relations lumps?)
Behold the new breed of corporate logo — non-threatening, reassuring, playful, even child-like. Not emblems of distant behemoths, but faces of friends.
“A logo is to a company what a face is to a person,” said Michel Tuan Pham, a professor of marketing at the Columbia Business School. “It’s hard to memorize facts about a person when you only know their name but you haven’t seen their face.” So logos remind consumers about companies’ traits and pluck at emotions — “the glue that ties all the information about the brand name together,” Mr. Pham said.
The economy, environment, image repair — new logos may address all of these. They are also meant to stand out in a crowd, but there are striking similarities among recent redesigns.
TONED-DOWN TYPE Bold, block capital letters are out. Their replacements are mostly or entirely lower case, softening the stern voice of corporate authority to something more like an informal chat.
“Logos have become less official-looking and more conversational,” said Patti Williams, a professor of marketing at the University of Pennsylvania’s Wharton School. “They’re not yelling. They’re inviting. They’re more neighborly.”
Blogs and e-mail, Ms. Williams said, may be encouraging a quieter, calmer, lower-case branding vernacular. Who isn’t tired of screeds that assault the reader via THE CAPS LOCK KEY?
Letterforms in many new emblems are lighter and rounder — an extended family of homogenized fonts that would be comfortable on a local newsletter or generic Web page.
FRIENDLY FLOURISHES Kraft Foods has joined Amazon.com and Hasbro, all represented by logos that smile. And to further lighten the corporate mood, whimsy in the form of sprigs and bursts has been appended to several big brands.
Wal-Mart’s old mark was navy blue, but it felt Red State. The company has been under heavy attack for its labor and environmental practices, bruising its brand in bluer quarters.
A major image overhaul is under way, and a new logo is starting to appear across the country. The military-style Wal-Mart star has given way to a yellow twinkle that punctuates a new message: this is a company that cares, with fast and friendly service and a fresh, innovative outlook, according to Linda Blakley, a Wal-Mart spokeswoman.
Ms. Williams, of Wharton, said the softer Wal-Mart logo serves another purpose: to stand apart from the bright reds and louder typography of its main competitors, Kmart and Target. While Target’s design says bold and cutting-edge, Wal-Mart’s sends a signal that it is approachable and sincere, she said.
HAPPIER COLORS “The economy is the No. 1 influence this year,” said John H. Bredenfoerder, a color expert and design director at Landor Associates, the brand-consulting company that produced the new Cheer detergent emblem. Amid all the gloom, he said, “people need a little joy in their lives.”
Cue the new logos: electric blue type with accents in school bus yellow, red, purple, orange and green.
Last year’s top influence, green for sustainability, remains; leaves still sprout across the corporate landscape.
Mr. Bredenfoerder said that blue was also gaining as a stand-in for the environment (think of earth’s blue orb as seen from space, or clear blue waters) as well as for fresh optimism. But please, make it a joyful sky blue — not dark, corporate-titan navy.
Bill Marsh and Alicia Parlapiano
Published: May 30, 2009
The world economy is in mid-swan dive. Wallets are in lockdown. So how does a company get people to feel just a little bit better about buying more stuff? (And perhaps burnish a brand that has taken some public relations lumps?)
Behold the new breed of corporate logo — non-threatening, reassuring, playful, even child-like. Not emblems of distant behemoths, but faces of friends.
“A logo is to a company what a face is to a person,” said Michel Tuan Pham, a professor of marketing at the Columbia Business School. “It’s hard to memorize facts about a person when you only know their name but you haven’t seen their face.” So logos remind consumers about companies’ traits and pluck at emotions — “the glue that ties all the information about the brand name together,” Mr. Pham said.
The economy, environment, image repair — new logos may address all of these. They are also meant to stand out in a crowd, but there are striking similarities among recent redesigns.
TONED-DOWN TYPE Bold, block capital letters are out. Their replacements are mostly or entirely lower case, softening the stern voice of corporate authority to something more like an informal chat.
“Logos have become less official-looking and more conversational,” said Patti Williams, a professor of marketing at the University of Pennsylvania’s Wharton School. “They’re not yelling. They’re inviting. They’re more neighborly.”
Blogs and e-mail, Ms. Williams said, may be encouraging a quieter, calmer, lower-case branding vernacular. Who isn’t tired of screeds that assault the reader via THE CAPS LOCK KEY?
Letterforms in many new emblems are lighter and rounder — an extended family of homogenized fonts that would be comfortable on a local newsletter or generic Web page.
FRIENDLY FLOURISHES Kraft Foods has joined Amazon.com and Hasbro, all represented by logos that smile. And to further lighten the corporate mood, whimsy in the form of sprigs and bursts has been appended to several big brands.
Wal-Mart’s old mark was navy blue, but it felt Red State. The company has been under heavy attack for its labor and environmental practices, bruising its brand in bluer quarters.
A major image overhaul is under way, and a new logo is starting to appear across the country. The military-style Wal-Mart star has given way to a yellow twinkle that punctuates a new message: this is a company that cares, with fast and friendly service and a fresh, innovative outlook, according to Linda Blakley, a Wal-Mart spokeswoman.
Ms. Williams, of Wharton, said the softer Wal-Mart logo serves another purpose: to stand apart from the bright reds and louder typography of its main competitors, Kmart and Target. While Target’s design says bold and cutting-edge, Wal-Mart’s sends a signal that it is approachable and sincere, she said.
HAPPIER COLORS “The economy is the No. 1 influence this year,” said John H. Bredenfoerder, a color expert and design director at Landor Associates, the brand-consulting company that produced the new Cheer detergent emblem. Amid all the gloom, he said, “people need a little joy in their lives.”
Cue the new logos: electric blue type with accents in school bus yellow, red, purple, orange and green.
Last year’s top influence, green for sustainability, remains; leaves still sprout across the corporate landscape.
Mr. Bredenfoerder said that blue was also gaining as a stand-in for the environment (think of earth’s blue orb as seen from space, or clear blue waters) as well as for fresh optimism. But please, make it a joyful sky blue — not dark, corporate-titan navy.
Wednesday, May 27, 2009
If Obama Were a Brand, He'd Be a Porsche
Let’s face it. President Obama is one cool customer. Through a global economic meltdown, two wars, and a potential pandemic, Obama is a study in composure and confidence. With the intense media coverage of the First 100 Days, the President remains poised and polished. He genuinely appears to be comfortable in his own skin. At a press conference last month, Obama calmly diffused the growing panic over the Swine Flu by telling Americans to wash their hands. No kidding. And the press responded as though he had imparted great wisdom.
What’s more, Obama really seems to be enjoying himself. He is frequently seen laughing his head off with David Axelrod, or playing basketball with Reggie Love, or simply relaxing with his kids and the first family dog. In his appearances on both 60 Minutes and Jay Leno, Obama demonstrated his intellectual acumen in global matters, while tossing off jokes about everything from Air Force One to the over-protectiveness of the secret service. Last week at the White House Correspondent’s Dinner, Obama joked that Dick Cheney couldn't make the event because he was working on his memoir entitled “How to Shoot Friends and Interrogate People.” He also playfully hinted that Hilary Clinton would like very much for him to contract the Swine Flu.
Obama’s unflappable style has now crystallized into his personal brand. Like all good brand-makers, he has established his reputation through consistency, always appearing thoughtful and resolute in the face of adversity. We know Obama is reflective. We know he will speak calmly and pause before answering any questions. No wonder Saturday Night Live continues to make fun of his cool, controlled demeanor and lack of temper. In a hail storm of calamities both big and small, Obama wears sunglasses.
The branding of Obama on the digital airwaves began early and without his consent, back when the Obama Girl video hit YouTube in the summer of 2007. It was viewed at least 13 million times on YouTube, twice the number of views for any of the official campaign videos. The video was followed by the Obama Hope poster, which was created by a graffiti artist and was by definition user-generated content. The poster became an iconic campaign image for the first African American president of the United States, effectively linking Barack Obama’s image with the word Hope. In a weird Internet-culture moment, the Hope poster also went viral and together these two pieces of content seemed to solidify the pop-icon status of Barack Obama.
If you compare political branding fundamentals with that of commercial brands, you will see that the goals are not much different. Corporations desire a strong brand image in order to sell products, while politicians sell ideas. Just as Obama’s image will shape the perception of America on the world stage, the brand image of business leaders formulates the perception of their products and companies. With today’s powerful social media tools, it is critically important for corporations to develop brand personalities that positively represent the company.
There are many CEO personalities that enrich a company’s culture, and help to establish a brand’s reputation. Think of Richard Branson, Martha Stewart, Steve Jobs, and Larry Page and Sergey Brin. These companies benefit from the strong association between leader and company. Brands that do not have an iconic founder handy can still participate in this game. With the emergence of so many new social media channels, it is becoming mandatory that brands develop and groom executives to represent the company across the web. A smart and trustworthy spokesperson will become the public face of an organization, and will humanize a brand within social media circles.
Today, social media for business is like one big American Idol contest. New platforms enable companies to amplify their message and promote their best talent, but ultimately customers will vote on what they like and don’t like. Too often public chatter about a company is largely ignored by senior executives until it is too late. A company’s silence in the media-sphere creates a vacuum which is naturally filled with user commentary. A few individuals can create a great deal of pain for a brand by spreading inaccuracies and disinformation, which then gains traction through repetition across the blogosphere. Conversely, active participation by a company’s management can insulate a brand from one-sided, unflattering content. Brand perception can be influenced by engaging directly with customers through many digital channels.
Obama is the first president to extend his brand image through social media. In a role reversal of the usual formula, the new administration is leading, rather than following private industry with the adoption of social media. The tech-savvy Obama team has established a presence on many networks including Facebook, Twitter, MySpace, Friendster, LinkedIn, YouTube, and iTunes. They have even created an official White House flickr channel to disseminate photographs in real time, along with a White House blog. With these initiatives, Obama has ushered in a new generation of leadership. He is creating a government that is accessible and participatory, using multiple Internet channels to quickly and effectively connect with the public.
Our business leaders have to be on the forefront of this movement as well. We need to understand Internet technology, mobile platforms, and the inherent ramifications of social media, and become active members in these communities. We are fast becoming a micro blogging culture, where the minutia of everyday life is shared with the world. Some call this the era of social colonization, where all products and services are reviewed by consumers in real time. Relinquishing the idea that it’s possible to control all brand communications is the first step to understanding the new rules of the game. We do know that customers expect to hear from brands on a consistent basis. Companies that satisfy this need will move forward quickly and experience a whole new level of customer engagement. Those who do not will continue to struggle.
One thing great leaders and great brands have in common is transparency. If you’ve delivered on the promise of the brand, then people will believe in you and they will trust you. That’s how you know that your branding is working. And although we have still difficult days ahead, the polls continue to show that as a nation we are feeling very hopeful. That’s how you know that leadership is working.
Ironically, journalists have likened Obama’s style to both Abraham Lincoln and Spock from Star Trek. A few publications have written extensively on the Spock analogy, describing the president’s ability to balance his finely tuned intelligence with a talent for restoring order and inspiring confidence. In the new Star Trek prequel, Spock’s father tells him “You will always be a child of two worlds.” Just like Obama, who was recently called “a cultural translator” by Salon magazine. That my friends, is branding.
What’s more, Obama really seems to be enjoying himself. He is frequently seen laughing his head off with David Axelrod, or playing basketball with Reggie Love, or simply relaxing with his kids and the first family dog. In his appearances on both 60 Minutes and Jay Leno, Obama demonstrated his intellectual acumen in global matters, while tossing off jokes about everything from Air Force One to the over-protectiveness of the secret service. Last week at the White House Correspondent’s Dinner, Obama joked that Dick Cheney couldn't make the event because he was working on his memoir entitled “How to Shoot Friends and Interrogate People.” He also playfully hinted that Hilary Clinton would like very much for him to contract the Swine Flu.
Obama’s unflappable style has now crystallized into his personal brand. Like all good brand-makers, he has established his reputation through consistency, always appearing thoughtful and resolute in the face of adversity. We know Obama is reflective. We know he will speak calmly and pause before answering any questions. No wonder Saturday Night Live continues to make fun of his cool, controlled demeanor and lack of temper. In a hail storm of calamities both big and small, Obama wears sunglasses.
The branding of Obama on the digital airwaves began early and without his consent, back when the Obama Girl video hit YouTube in the summer of 2007. It was viewed at least 13 million times on YouTube, twice the number of views for any of the official campaign videos. The video was followed by the Obama Hope poster, which was created by a graffiti artist and was by definition user-generated content. The poster became an iconic campaign image for the first African American president of the United States, effectively linking Barack Obama’s image with the word Hope. In a weird Internet-culture moment, the Hope poster also went viral and together these two pieces of content seemed to solidify the pop-icon status of Barack Obama.
If you compare political branding fundamentals with that of commercial brands, you will see that the goals are not much different. Corporations desire a strong brand image in order to sell products, while politicians sell ideas. Just as Obama’s image will shape the perception of America on the world stage, the brand image of business leaders formulates the perception of their products and companies. With today’s powerful social media tools, it is critically important for corporations to develop brand personalities that positively represent the company.
There are many CEO personalities that enrich a company’s culture, and help to establish a brand’s reputation. Think of Richard Branson, Martha Stewart, Steve Jobs, and Larry Page and Sergey Brin. These companies benefit from the strong association between leader and company. Brands that do not have an iconic founder handy can still participate in this game. With the emergence of so many new social media channels, it is becoming mandatory that brands develop and groom executives to represent the company across the web. A smart and trustworthy spokesperson will become the public face of an organization, and will humanize a brand within social media circles.
Today, social media for business is like one big American Idol contest. New platforms enable companies to amplify their message and promote their best talent, but ultimately customers will vote on what they like and don’t like. Too often public chatter about a company is largely ignored by senior executives until it is too late. A company’s silence in the media-sphere creates a vacuum which is naturally filled with user commentary. A few individuals can create a great deal of pain for a brand by spreading inaccuracies and disinformation, which then gains traction through repetition across the blogosphere. Conversely, active participation by a company’s management can insulate a brand from one-sided, unflattering content. Brand perception can be influenced by engaging directly with customers through many digital channels.
Obama is the first president to extend his brand image through social media. In a role reversal of the usual formula, the new administration is leading, rather than following private industry with the adoption of social media. The tech-savvy Obama team has established a presence on many networks including Facebook, Twitter, MySpace, Friendster, LinkedIn, YouTube, and iTunes. They have even created an official White House flickr channel to disseminate photographs in real time, along with a White House blog. With these initiatives, Obama has ushered in a new generation of leadership. He is creating a government that is accessible and participatory, using multiple Internet channels to quickly and effectively connect with the public.
Our business leaders have to be on the forefront of this movement as well. We need to understand Internet technology, mobile platforms, and the inherent ramifications of social media, and become active members in these communities. We are fast becoming a micro blogging culture, where the minutia of everyday life is shared with the world. Some call this the era of social colonization, where all products and services are reviewed by consumers in real time. Relinquishing the idea that it’s possible to control all brand communications is the first step to understanding the new rules of the game. We do know that customers expect to hear from brands on a consistent basis. Companies that satisfy this need will move forward quickly and experience a whole new level of customer engagement. Those who do not will continue to struggle.
One thing great leaders and great brands have in common is transparency. If you’ve delivered on the promise of the brand, then people will believe in you and they will trust you. That’s how you know that your branding is working. And although we have still difficult days ahead, the polls continue to show that as a nation we are feeling very hopeful. That’s how you know that leadership is working.
Ironically, journalists have likened Obama’s style to both Abraham Lincoln and Spock from Star Trek. A few publications have written extensively on the Spock analogy, describing the president’s ability to balance his finely tuned intelligence with a talent for restoring order and inspiring confidence. In the new Star Trek prequel, Spock’s father tells him “You will always be a child of two worlds.” Just like Obama, who was recently called “a cultural translator” by Salon magazine. That my friends, is branding.
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