The Brand Man Speaks

Will quickie marriage (72 days) significantly damage Kardashian brand?

When I started to write this piece my own first question was, why does anybody care? Fortunately or unfortunately the Kardashian Klan have built a nice multi-million dollar business all about nothing or  better known as being famous for being (untalented) and famous.

However, there is enough interest in the question of whether Kim Kardashian had built a real brand or just a marketing fad, flash in the pan. In my opinion Kim has yet to "earn" rights to be called a true brand. Most of her antics are PR stunts (and let's not forget without a sex tape she would be absolutely nothing and we wouldn't be wasting our time on this) and not brand building efforts. Launching perfumes, apparel lines, getting paid to appear at clubs and bars and getting married on a reality show for $17Million doesn't not make a brand.

People are more fascinated with her nothingness as entertainment and not about a vision, a journey or some meaningful element to make people believe something she is offering has any real value. Her deal with Sears is a ridiculous one. Kardashian wouldn't be caught dead in a Sears unless she was picking up a paycheck for an appearance.

Now let's address this divorce business. Maybe had she made it past a year or even six months she would have some credibility. But this 72 day PR game wasn't love or a real marriage. It was a paid for "appearance" event in which she got paid in cash and in kind. Poor guy, hope he didn't really see anything in or have feelings for her. I also hope he is laughing to the bank for all this mess. Although he comes off more of an embarrassment to himself than she does because she is not in the least bit embarrassed about being a shill for anything or everything with a payday attached.

Now you might feel that Kardashian isn't much different than Paris Hilton. I beg to differ. Whether you liked it or not she had a particular way of being, a slogan ("That's hot") and a sense of style (not necessarily one you might like). She acted in a TV show that was somewhat entertaining. Kim Kardashian is a poor (woman's?) man's version of Hilton. Hilton had pedigree for her debutante behavior. Kardashian's father was an unknown until the O J Simpson case (like instant fame, "new" money). The Hiltons have been a fixture in America for years.

Will the business of Kardashian be hurt by this divorce? Likely. It exposed her as having nothing honest or real about herself and her so-called fans will probably feel cheated, lied to, deceived but quickly wake up from their delusion of fascination and become disgusted. No journey here just a young girl trying to make a buck. I would suggest Ms. Kardashian be careful not to spend all her quickly earned cash too fast because the gravy train is likely to end soon.

Watching out for you everyday.

Eli

Netflix isn't Doomed.

So says Holman Jenkins Jr. in an opinion piece in the Wall Street Journal today. I do not agree. His conclusion? Despite the huge fall off in subscribers and the costs involved in obtaining more streaming content (of value to subscribers---not just stuff nobody wants to watch) he believes both investors and subscribers will see that no one source will meet their needs because of a fragmented marketplace for at- home entertainment content and that Netflix is still a good value and will survive.

The Netflix premise that took consumers on a "journey" was for a very good price (less than going to the movies) you had a bunch of choices that you could order online delivered right to your door sometimes next day for viewing for as long as you wished. Brand loyalty was built on this premise along with a very identifiable icon, the red Netflix envelope. Streaming was the next order of business but there were many subscribers who wanted both, one or the other, but wanted the choice their way. I am one of the those folks who wanted it his way. Both DVDs and streaming at a fair price. I was a huge fan of Netflix so much so that I bought the stock because I believed the vision and the journey was exciting to many millions of people despite the other options out there and on the horizon.

However, (and I will keep reminding people for some time to come) great companies should not fail to understand that building that brand loyalty is as important (if not more so) than what may appear to be great strategic business modeling to analysts. Many analysts said that Netlfix couldn't maintain the value proposition they had given consumers for much longer and the price increase was a necessity for survival. That may be true. Unfortunately, when a key element of your brand strategy involves price-value you have to be extremely careful when you increase your pricing structure not to go to the point (too quickly) where price elasticity of demand along with sheer shock value hits consumers hard in the face.

Many companies deal with increasing prices all the time as a course of doing business. When you do so in such a way to make the consumer stop in their tracks to say, "wait wow that's a big increase do I still need or want this service?", you are in trouble. If you don't have a very demonstrable plan to show those consumers the value they are getting (as well as if you are smart--adding more value along with the price increase) you are taking a huge risk that likely will alienate your core audience and destroy your business.

In my opinion that is what has happened to Netflix and although I would love to see them fix this mess and get their stock price back up (for me to break even) I just haven't seen or read anything that convinces me that this will occur. I also know that the company's cash flow has been greatly weakened by the greatly devalued stock and huge subscriber base loss over the past few weeks and there is now question if they can survive to pay their current bills, forget acquiring more content.

Lesson: Never underestimate your customers, their emotional connection to your brand or their expectation of your product or service.

Watching out for you everyday.

Eli

 

Newspapers and their future: From Masters of the Universe to near extinction in less than a decade . [First in a series]

The newsprint version of the newspaper business has cancer but it was preventable and it may be still treatable. It was self-inflicted not caused by changes in the marketplace as the industry asserts. The top players were threatened by the new medium of the internet and instead of turning their fears into a triumph they succumb to them. Why? The newspaper industry’s “Old Guard” didn’t understand it and didn’t make any effort to master it. Instead of embracing the internet quickly they fought it, mismanaged it and forgot a very important element of great branding.

During the late 80s and early 90s I was a branding consultant to the newspaper industry.  Unfortunately, I rarely saw eye to eye with the traditionally minded senior executives of the day. It was at the time the internet was just starting to be recognized as a new force in communications and newspaper companies were trying to figure out how to deal with this game-changing tool. We know today most missed the boat and in an attempt to play catch up ended up using the internet medium poorly or incorrectly. While devoting so much money and energy to the new medium newspaper companies lost sight of reinforcing what made a newspaper in print form special and meaningful accelerating its rapid decline to where we are today.

What fascinated me was how many newspaper companies feared the internet and wanted to approach their re-branding efforts from that point of view. It seemed akin to the time when radio met television and radio broadcasters feared TV would eliminate their medium.

We know today that did not happen. Radio serves a place in both the information and entertainment world as does television. Companies became involved with both businesses and learned to use them for the unique elements each presented instead of trying to have one dominate the other. Radio thrives today along side television as two different mediums that deliver different kinds of experiences successfully to broad audiences.

The same should have been true for the newspaper industry.  Here’s why it wasn’t.

The key is the concept of branding is not often well understood by top executives primarily interested in the bottom line. They see marketing, especially branding efforts, as expenses and not investment spending. In the case of the newspaper industry, brands are not about the delivery systems they use. Newsprint, smart-phones and tablets are distribution channels. Brands are conceptual emotional contextual in nature. In the case of newspapers, the brands are the New York Times, Wall Street Journal, Chicago Tribute all in the information dissemination business and for years the masters at it. Many newspaper companies failed to integrate the internet as a new distribution system reaching new audiences (and eventually current audiences as well). Instead they saw the internet as a new brand and started building from scratch loosing focus on what a brand is.

In my opinion newspapers allowed the internet to become an entity beyond their control when in its infancy they could have become dominate players.

Today the internet offers thousands of new sources of news and information using the unique tools of this delivery system to reach all types of audiences all over the world 24/7. Today newsprint versions of newspapers are disappearing like dinosaurs but this didn’t have to be and just maybe this erosion can be stopped as they serve an important role in the information business and as a part of our way of life. Part of the problem likely lies in the fact the newsprint version of news hasn’t evolved in terms of quality and production values over the decades. It’s been cheapened to save money which has made it less attractive and competitive. The user experience has suffered.

Over the next few weeks I will examine other aspects of the decline of the newspaper business and what options might still be out there for its revival. Great brands weather storms even if they are deadly hurricanes. One aspect I will examine is the user experience with newspapers on the web, smart-phones and tablets. The news is not very good and I will explore why.

Next in the series: What did one of the world’s greatest techies think about newspapers and their future? What can we learn from his vision?

Watching out for you everyday.

Eli

 

 

 

 

Netflix: What are they doing with their brand? Destroying it? And this Qwikster DVD brand?

It was no surprise (full disclosure I own their stock) that Netflix's stock took a nose dive after the rather arrogant price raising strategy they took some weeks ago.

To anyone who has studied economics the law of elasticity of demand reigns supreme today as it has for years. To raise prices dramatically and NOT offer some value added to offset the price increase was clearly a very poor strategic move. Not only did Netflix lose many customers, many downgraded their services (including myself) and felt hurt by their actions. This brand had developed somewhat of a cult following. People were extremely loyal...to a point...but found this action unacceptable and insulting.

Today Netfix spun off its DVD by mail division into a new brand to be called Qwikster. Why you might ask? I asked the same question. For those of us who still have subscriptions to both DVDs and streaming the idea that one would have to deal with two different operations is just another nail in the coffin. Making it more time consuming to do business with this company will only serve to make more people drop the service and go elsewhere. More work less convenience, ugh. Not a good strategy.

I don't even like the idea that my familiar red DVD pack will no longer say Netflix but some obscure new name Quikster? Another ugh.

Some speculate that Netflix intends to sell off the DVD by mail business because that business model no longer works economically. Meanwhile, the stock plunges again down over 150 pts in recent weeks and there is nothing coming out of that CEO's office that makes anyone in my opinion think this business has anywhere to go but out of business as consumers lose all faith in this brand.

I believe we will see this as a case study of success mishandled turning a game changer into a game loser permanently. Sad, I don't think if the changes had been managed better, specifically rewarding customers who stayed even with big price increases with some meaningful value added experience that this would have blown up so fast and furiously.

The only way out now is mea culpa BIG TIME doing something fantastic for what customers remain, especially those using both services. Other than that, even I am ready to move on and take my loses.

Watching out for you everyday.

Eli

Netflix stock rises amidst a major down market set off by signficant worries about Japan and its global impact, why?

Admittedly, I am a fan of Netflix (own some stock and am a subscriber) and watch consumer companies from the perspective of empirical evidence. That is why I am not surprised by Netflix's recovery from a few weeks of declines after many weeks of sharp increases in stock price.

Here is my reasoning, from a consumer marketing point of view.

Netflix was a game changer of sorts when it first surfaced and has helped dramatically change the way we view entertainment at home. Although the economy is improving, I still see consumers spending a lot of time at home enjoying their upgraded entertainment viewing options. Even today the average home has at least one flat screen, many have multiple units, some homes now have 3DTV. DVDs, DVRs, Apple TV Xbox, Playstation among many other toys allow consumers to make choices about their viewing options and times. With the technology to easily view major movies shortly after release either downloaded to your computer or streamed to your TV set, we have so much entertainment at our figure tips.

The key is I do not see consumers spending much more time OUT of the home for some time to come. Since Faith Popcorn and her concept of "cocooning", Americans as well as consumers around the globe have spent trillions upgrading their home environments to make them more comfortable and not worth leaving. With the housing problem still at hand, it is still too expense for many to go out to the movies, dinner and pay parking etc than staying at home.

And this week, after the disaster in Japan, most financial markets are reflecting gloom and doom, with good reason. However, as things get worse again economically around the globe before we see another turnaround, it is more likely that consumers will retrench into the home environment more, cut back on travel, dining out and other disposable income activities.

Another reason for Netflix success:They seem to be pretty shrewd business folks keeping satisfaction high among users while providing frequent new opportunities for their loyalists to stay loyal.

Additionally, the idea that the Netflix brand name will appear of many TV set remote controls in the very near future (if not already) is a huge win for the entertainment provider keeping their ID in front consumers everyday and having virtually no competition in front of the consumer when they begin the entertainment choice process. How amazing is that?

Pretty amazing to me.

Watching out for you everyday

Eli

Grammys and Tonys rock; and why the Oscars is always so boring

After watching the Grammys last night I was excited to discover music groups and solo acts that I had never heard of before who were awesome and engaging and worth exploring. The night also explains why the Oscars and the Golden Globes are so boring.

The Grammys and the Tonys (for Broadway performances) are designed to entertain, educated, fascinate and open the door to new experiences for the viewing public. It's a free mega-entertainment event that's some of the best television you can watch on non-cable TV.

Last night I discovered Esperanza Spalding for example....an amazing dynamo of jazz talent that honestly I would never have heard had it not been for the Grammys. Wow factor. (Thank god it wasn't that Biebette talentless child!). And what about all the acoustical talent? Incredible music, pure, energetic, exciting to watch. If anything, for me, this night of television reawakened my interest in new musical acts and specifically a desire to go to iTunes and (pay to) download a lot of new stuff. The evening should prove very profitable for the music industry.

And who will forget the aging but ageless body of Mick Jagger who never disappoints. And Barbra Streisand. Well, her voice is not quite what it was but still amazing nonetheless even if she looks pretty chunky she still is an American icon. Having so much diversified talent on one show is just what television should be about. (I even like the fact that the Grammy academy head is named PORTNOW...probably was PORTNOY and got lost in translation somewhere along the way).

In contrast, the Oscars (in just a few weeks) is the emperor's new clothes. Lots of artifical hype and self-congratulations about and for mostly mediocre talent. It is always boring (except women and some men like to watch the red carpet who is wearing what schtick) too long and rarely does it send me to go see a movie I hadn't already passed on. At least the Golden Globes are short and to the point. The Oscars are way too long. Maybe they should have a one hour red carpet event with 30 minutes of warp-speed award presentations and that would be it. Short, slightly entertaining and boom done.

I will probably buy the Grammy album featuring the music from last night plus watch the show replay to learn more about new talent and drop some dime becoming better acquainted with them.

Watching out for you everyday.

Eli

 

Apple TV: one step for technology; huge leap for regular mankind

It should come as no surprise to my readers (blog and twitter) that I am an unabashed fan of Apple. Virtually all my tech toys and gadgets are made by this company. They top my "best brand" list year after year. They understand how to connect with customers better than anyone. Even with a few miss-steps loyalists like me remain steadfast in our commitment to the brand and its products.

So, Today, I ventured into the next realm of technology (for me). I had an Apple TV device hooked up in my home and it is truly life changing and transforming. I had received many positive comments about the device but it wasn't until I had it hooked up and began to explore its possibilities that I realized how incredible this small simple and very inexpensive device is and will be.

As many more people enhance their homes with technology supporting the notion that "cocooning" is indeed a way of life for more and more folks around the globe, you can see why with advancements such as Apple TV.

Being able to connect all the systems together is awesome and awe inspiring to me. This "toy"  is likely to be indispensable to many. This makes it clear again why Apple's stock continues to zoom upwards.

Even friends who heretofore were not Apple friendly have been wowed by Apple TV. I think like the iPhone, Apple TV will bring a lot of new customers to Apple and its other products.

Watching out for you everyday.

Eli

The Brand Man Speaks launches "@elitalks" on twitter for current updates on marketing news

Beginning today, The Brand Man Speaks launches its first twitter account @elitalks to provide its readers with faster more current and sometimes of the moment comments on what's happening in our world of consumption.

Using twitter for its greatest strengths, @elitalks will comment on news, rumors and information as it happens/surfaces that sparks a Brand Man response or reaction.

Please sign up for my twitter account.

Thanks

Eli

Luxury Watch maker Tag Heuer drops Tiger Woods as endorser

As expected luxury watch maker Tag Heuer has announced it will drop its alliance with now disgraced professional golf phenom Tiger Woods. The company will not be using any image of the golfer in its holiday ads or any ads for the foreseeable future.

Tag Heuer follows Gillette and accounting consultancy Accenture who have in one way or another dropped Woods from their campaigns.

The major hold-out so far is Nike which has the most at stake in this gamble. As reported in numerous retail news stories in the media most Tiger Woods merchandise is being sold at discounted or clearance prices as consumers, especially women, shun the golfer's apparel because of his lies deceit and infidelity.

I believe ultimately Nike is going to have to take a stand by dropping the use of Tiger's image in its stores and by reducing the displays of Tiger's logo'd apparel from main view in its stores. As this saga continues to play out with no honest information forthcoming, Nike will be hard pressed to stand by and wait. If more negative information surfaces the damage will be great to them. This is especially true because they bank on Woods' overall image to enhance the total Nike brand not just Tiger Woods branded clothing.

Watching out for you everyday.

Eli

Tiger woods: This brand in free-fall may significantly impact sports endorsements in the future: Update: Gillette and Accenture put use of Tiger officially in phase out mode

THIS POST HAS BEEN UPDATED. SEE BOTTOM FOR DETAILS

Nearly two weeks after the 2:30AM car crash that has led to the acknowledgment of infidelity by the world's richest Golfer and best known athlete, Tiger Woods, we still don't fully know what happened to cause this to become the most notable celebrity misstep in years maybe decades.

What I do know is that the damage is significant and the Tiger Woods Billion Dollar brand is in free-fall. His agents and handlers are of course saying any loss of endorsements is pre-mature but I'll bet senior marketing management and lawyers at Tag Heuer, AT&T, NIke, Accenture, Gillette among others are up sleepless nights trying to figure out how to manage this PR disaster and discern whether or not they can can him. (I'll bet GMs decision to drop Tiger last year as an endorser of the Buick line because of financial difficulties at the automaker is heralded as "brilliant" somewhere inside that company).

Tiger announced today that he is leaving the game of golf "indefinitely" to figure out his life. A little late for that huh? You should have done some figuring before Thanksgiving and leaving all those emails and voice mails. Was Tiger so naive to think none of these women wouldn't go public for big money?

One TV pundit I saw insisted that he "knew" the contracts with Tiger were "ironclad" and nothing could force sponsors to stop paying him. I find that hard to believe. Virtually all endorsement contracts I have seen or have worked on in my career always had a back door out clause if the celebrity failed to perform or caused the sponsor's company or brand harm by his actions. Even if this were true..that all deals were unbreakable....it doesn't stop sponsors from not using him in their ads (I think all endorsement uses of TW have been stopped to my knowledge as of this point) and I do not expect them to use him in anyway for an indefinite period of time.

Wood's story continues to get worse and the lack of information keeps the story top news and only causes more financial harm. He is the butt of late night comedians and the internet is on fire with "have you heard" jokes about Tiger. Certainly no longer the perfect sports role model.

Speaking of which, because Tiger Woods was the single largest sports endorsement brand on the planet (as far as I know) this completely unexpected incident will certainly make all companies that use celebrities, especially sports stars re-evaluate hiring these folks in the first place. If Tiger can fall so hard and fast it proves the risk/return is becoming too great. My understanding is more companies are sponsoring sports teams or events rather than specific performers to reach their targets with far less risk. It is clearly possible the fall out from Tiger Woods infidelity may change an entire industry permanently. 

The Tiger story goes way deeper. It impacts Television sports, ratings and revenues. Tiger helped build this sport into a more democratic one bringing millions of new fans and dollars to the industry of Professional Golf. When he last left the game for medical reasons, TV viewership dropped dramatically as did ad revenues. This will happen again, except, if and when Tiger does return to televised golf, the ratings will likely soar, at least in the short term and golf on TV will be hot again. It does remain a serious question: Might Tiger give up the game permanently to find "religion, healing, forgiveness and family"?

Watching out for you everyday.

Eli

UPDATE: As of late today, both Gillette and accounting consultancy Accenture have announced they will put their marketing efforts behind Tiger Woods on hold indefinitely with Gillette indicating it will phase out use of the golf phenon relatively quickly. $$$ signs are dropping. I'm expecting more fallout within days. Word also has it that Tiger's yacht "Privacy" docked at Miami Beach Marina is being prepped for departure. Access to its dock has been restricted/keys changed even name on boat is being covered up. Privacy at sea shortly? Likely