Key Points: 1. The US Justice Department fined Pfizer $2.3 billion for illegal marketing practices; taking doctors on golf trips, paying for massages, and the like to encourage off-label prescriptions of popular drugs. 2. With such a hefty penalty, conventional wisdom would say Pfizer’s market perception should suffer. By objective measures, that is not happening. 3. Pfizer has insulated its corporate brand by positioning its blockbuster drugs as the stars, and not marketing itself. That seems to be working. For now.

Remember the dad in “My Big Fat Greek Wedding”?

He used Windex® for everything. He went so far as to carry around a bottle at all times, spraying things (and people) at comically inopportune times. Clearly, neither the FDA nor our friends at S.C. Johnson and Company in Racine, Wisconsin endorse Windex for the treatment of cold, flu, arthritis, and acne. The depiction was so ridiculous, most (reasonable consumers) wouldn’t take it seriously.

Now, let’s change the scenario.

Imagine you are recovering from a surgical procedure. Let’s pick appendix removal, but it could be anything. Clearly, you’re in pain, and your attending physician prescribes a medication - in this case, Bextra®. She tells you to take the prescribed dosage as needed and come back in three weeks.

Let me ask you something: In that scenario, do you look up the drug name in the formulary? Did you learn your doctor just prescribed well beyond the recommended dosage? Did you also learn Bextra; was not approved to treat post operative pain? That is was really an arthritis drug? And a Cox-2 inhibitor? The same Cox-2 inhibitor class of drugs you’ve heard about?

But your doctor knows best, right?

Did you also know your doctor goes out to lunch each week with the Pfizer rep?

Do you still think your doctor has your best interests at heart?

The Justice Department didn’t think so.

About six weeks ago, federal prosecutors leveled the largest-ever penalty for illegal promotional activities surrounding several Pfizer drugs (Viagra, Zoloft, Lipitor, and Bextra among others). The statement went on to say Pfizer was the classic ‘repeat offender’, and the fourth such settlement in as little as 10 years for a grand total of over $13.3 billion in penalties.

Details notwithstanding (Bextra was voluntarily pulled from the market in 2005, and the specific charges relating to this drug were leveled against subsidiaries Pharmacia and Upjohn), there is little question this the practice of “off-label” promotion is (at best) “dirty marketing”, but the real question remains: Does it really hurt Pfizer? Put another way, is the penalty sufficient to change corporate behavior? Is even a record-breaking penalty fair?

There are a number of different ways we can approach this question. Let’s start with the Pfizer balance sheet.

As of the end of 2nd Quarter 2009, Pfizer had $2.244 billion in cash on the books. That seems oddly reminiscent of the $2.3 billion fine, and may have been used by the Justice Department in its penalty calculation methodology.

This fine wipes out all the company’s strictly liquid assets. Seems fair. However, although $2.3 billion is no chump change, Pfizer doesn’t keep most of its money stuffed in the proverbial mattress. Short term assets topped $71.5 billion for the same period. Now the fine is just over 3%. Hmm, perhaps not so fair. All assets: $139.3 billion. Fine: 1.65%.

Okay, so maybe comparing the fine as a percentage of assets doesn’t quite do it justice. How about comparing it against what Pfizer earns. That could be better. Pfizer dropped $8.1 billion to the bottom line in the second quarter. That puts the fine at about 28% of net income. Not immaterial. If I were a shareholder - especially a big institutional investor - I might be perturbed.

Cash aside, what Pfizer should be most concerned about is the affect on intangibles: Its market perception. Market capitalization is driven by shares outstanding multiplied by the share price at any given time. And if the market were concerned about Pfizer’s actions (and its ability in the future to market its next blockbuster), it surely would be reflected in the share price.

Well. Let’s see what happened. In the six weeks since the story broke, Pfizer’s stock rose about 3%. In fact, their stock matches similar jumps in the stock for industry competitors Merck and GlaxoSmithKline.

Huh. So investors didn’t really care. They likely see the fine as hefty, but not unusual given the company’s track record - more or less a cost of doing business.

But that’s not helping answer our question, is it?

One could make the argument that actions like this could eventually cascade on Pfizer, causing some sort of ‘Tipping Point’ that plunges the company into the drink. They would point to the double-edged sword of prescription drug consumer marketing, and the fickle tastes of the mass market. If people stop trusting Pfizer drugs, they might stop asking their doctor for them.

But I don’t buy it. I think all is likely to be forgotten once the next big thing comes around.

And what’s more, Pfizer has perfectly executed a classic brand insulation strategy. Instead of branding drugs as the “Pfizer Viagra” or “Pfizer Lipitor”, it’s just “Viagra” and “Lipitor”. As long as the general public doesn’t link the two (and studies show the don’t), Pfizer is in the clear. Investors will understand the link. So will doctors. But the rest of us largely won’t. That, I think, is the key reason Pfizer is likely to come out of this reasonably clean.

Of course, who knows what will happen in the new era of consumer generated media. This lack of transparency (and ‘ownership’ if you will) may catch up with the company faster than they think. It just hasn’t just yet.

In the meantime, I know I’ll be reading more labels, and asking more questions. Perhaps unfortunately, I won’t place so much trust in my doctor’s intentions.

I am not sure that’s a good thing.

Like it or not, welcome to consumer driven healthcare. Bring your helmet.

Related Links: Yahoo Finance Article

Key Points: 1. Most “special financing offer” auto advertising is so bland, you hardly notice. Not this time. 2. Porsche is under tremendous sales pressure, volume down some 27%, and special offers seem to be helping the cause. 3. However, price discounts undermine the value proposition of any brand - but especially lux brands like Porsche. Say hello to deteriorating margins.

Three words undeniably mean “sale” at your local car dealer.

Giant. Inflatable. Gorilla.

It conjures images of smarmy guys in plaid suits and plastic smiles. Add in stale popcorn and balloons for the kids, and you’ve got the makings of a busy Saturday afternoon.

When you arrive, you can count on a bevy of smart-sounding deals: X% financing (where “x” equals some number less than 1.0%), Cash Back deals, Bring Back deals. You can expect to learn what “taking delivery from dealer stock” means. You’ll start to wish you listened more carefully to the super-fast-disclaimer-talk the last time you saw the television ad.

It’s also pretty easy to guess what car nameplates you’ll see on the lot: Chevy, Ford, Dodge, Chrysler, Jeep, Buick, Kia, Hyundai. You might see the occasional Honda or Toyota, but don’t get your hopes up.

It is so common, and so predictable, that it becomes background noise. In the advertising biz, this type of promotion is akin to wiping your backside with your ad budget - no one is listening anymore.

But here’s where it gets interesting.

My wife and I were enjoying a quiet night at home when we caught this little advertising gem:

From who? A 1.9% financing deal? For what? A Porsche!

You’ve got to be kidding.

You see, when I grew up, if you had to ask how much the new Porsche cost, you couldn’t afford it. But clearly times have changed for our fancy pants German friends. They must feel like they’ve got to bust out the “monster sale” gorilla in order to get us to pile the kids in the station wagon and head down to our local Porsche dealer.

Just take a step back, however, and you understand the temptation.

We’ve all heard about “grim economic conditions”, and Porsche (counter to some not-so-sage prognostication a year ago) is not immune. Revenues are off 14% globally from a year ago for Porsche. Worse yet, sales skidded over 27% during that same time. (Translation: Entry-level buyers aren’t snapping up the lower margin Boxsters, but 911 sales are still okay).

In dollar terms, that a $4 billion loss on global volume of 34,000 units. Yikes.

The sales incentives do however seem to be stemming the tide: Q1 results are up 15% from a year ago. But it’s temporary. Our friends at General Motors rode this pony for years, right over a cliff. In 1994, the average GM vehicle left the lot only after a $900 sales incentive. By 2004, that number climbed to $4000. In other words, GM trained its customers to buy only when they saw the gorilla. Now I’m not saying Porsche is the next GM, but they had better be careful; former “high-end” retailer Macy’s is in a sales-incentive pickle, and may never climb out. Lux brands are not immune from the just-put-it-on-sale drug.

Of course, the Porsche group is a bit insulated due to its affiliation with Volkswagon and Audi, but the sports car moniker has struggled in recent years with its image. What used to be a pure sports car has become a crossover SUV (the Cayenne) and now a four-door sedan (the Panamera).

The real question is not the 1.9% financing sales incentive itself. The need for sales incentives is a symptom of a broader problem. The real problem is the degeneration of the Porsche brand. Without a clear differentiator between a Porsche and say, a Lexus, BMW, or Mercedes, the company forces itself to compete on their terms. Not smart.

Porsche would be well advised to focus on what it is good at: Rockstar-quality sports cars. Let Audi handle the luxury sedan and crossover market. Let VW speak to the people.

Because when everyone can get any kind of Porsche they want, why would you want it?

Related Links: Porsche 1.9% Financing Ad Autoblog Article Forbes Article Official Porsche Offer Site

Special Note:

The Federal Trade Commission recently passed an advisory stating that bloggers must disclose their financial ties to organizations they write about. Well, I’ve never received so much as a free pencil from any subject in any post over the last (nearly) four years. I don’t intend to start now. However, I would be happy to reconsider my position if Porsche would see clear to providing a complementary vehicle for an “extended test drive”. I am partial to the Boxster S, but really, any vehicle would do. Please? C’mon guys? Call me!

Key Points: 1. It may be a response to the globalization of the food supply, but locally-produced foods are a growing trend. 2. Following the same broad strategy as organics, local food producers use emotional appeals as well as raw facts to convince us to pay more. 3. In the end, however, globalization (and resulting efficiencies) may be too powerful a force for anything but a niche market presence for “local” foods.

I had every intention to buy Gold’n Plump chicken.

My wife and I were at the grocery store (which shall remain nameless) last weekend. And I was ready. I had seen the ‘local chicken’ ads on television and on billboards during my (some days too many) trips around town. They made sense to me. I was ready to ‘take a stand’.

When we arrived at the meat counter, I noticed a competing national brand on sale for 20 percent less money. But I was prepared. Locally produced food was important to me. I put it in the cart anyway.

That’s when I noticed the I-can’t-take-you-anywhere look.

My wife removed the two packs of skinless chicken breasts and replaced them with the other brand. (This was the same woman who made our children stand in line in the Mall of America rotunda and do the chicken dance in order to get a 4-inch plush chicken.) I decided not to make a scene in the store, but resolved to make my case on the drive home.

I mentioned why I thought it was important that we source our food locally whenever we can. It saves transportation costs, and it supports the local Minnesota economy.

My wife countered that “local” meant “neighbors”, not people on some farm she didn’t know. And what’s more, our food comes from all over the world. That’s why we can get blueberries in January, and pumpkins in May. Global food sourcing isn’t all bad.

Makes sense.

But what did it really come down to? Price. The other chicken was cheaper. Chicken is chicken. It might be a bit of a brash assessment, but I can’t imagine she’s alone.

“Buy American” didn’t really pan out; globalization is simply a more powerful force. The food industry may be one of the last industries to really globalize in the true sense of the word, but that day is coming. Fast.

But all that aside, I still think it makes sense for Gold’n Plump to keep working at it.

Strategically, playing the local angle makes sense.

A 2008 UK study found 49 percent of respondents wanted to eat more local food, and 66 percent wanted to return to a certain “seasonality” of food options. US studies tend to find numbers in the same range. Call it a bit of a “backlash” against the global food supply chain, but producers like Gold’n Plump are betting that will translate into a willingness to plunk down an extra 10 to 20 percent.

Why should they think so?

Organics, for one. A trade association study found the market growing at an annualized 18 percent clip. That blasts through just about any other grocery category, and gives many retailers hope they can reclaim margin dollars lost in the last 20 years. But the trend seems to be leveling off; new people are not jumping on board as fast as they once did (although organic sales are holding up reasonably well during this latest recessions). It seems as though the trend has maxed out the “easy switch” consumer, and now will face a tougher slog to convince more cost-conscious consumers to take the plunge.

But “local” foods - as a category - hasn’t quite picked all the low-hanging fruit. It’s got room to grow.

That takes us back full-circle to ‘local chicken’ and our local friends at local Gold’n Plump and the selection of a creative strategy.

The trick organics were able to pull off is not related to the “facts” surrounding health benefits. Information and education played a role, of course, but not the central one. Organic producers were able to get us to connect emotionally to our food. With many of us at least one generation removed from working in food production, that was no easy feat.

Gold’n Plump, and its locally-produced chicken angle, works to capitalize on the same emotional connection. Advertising paints the company as a “co-op” of sorts, featuring real farm families who produce food under the Gold’n Plump brand name. Another campaign (the ‘take a stand’ series) featured consumer instead saying why they felt locally-produced food was important. The latest outdoor ads use a similar concept, but dispense with the real human and move to the crime-scene chalk outline. Okay, those aren’t so good, but their heart’s in the right place.

All the logic makes sense. The broad creative strategy is sound. They just haven’t reached my wife. She’s a tougher sell.

Good luck.

Related Links: Gold’n Plump Company Site minnesotachicken.com Get Vocal About Local Facebook Page

Key Points: 1. A single print and broadcast ad from the World Wildlife Federation comparing the 9/11 terror attacks to the 2005 Tsunami death toll crosses the line. 2. But it is not that the ad shocks us - that’s not the point - the ad flies in the face of the mission of the organization, and undermines its reputation. 3. Corporate sponsorship, partnerships, and individual membership will likely suffer in the US, perhaps with irreversible damage.

I don’t have a problem with shock advertising.

I really don’t.

In some instances, violently abrupt advertising can help shake us out of our complacency and drive attention (and ideally, action) toward a worthy cause.

But it is so easy to get it wrong. The follow ad from the World Wildlife Federation is a case in point.

In case you can’t read the headline, here goes:

“The Tsunami Killed 100 Times More People Than 9/11. The planet is brutally powerful. Respect It. Preserve it. www.wwf.org”

There’s also a video version. You can catch it on YouTube.

I am not an easy person to shock, but when Bob Kay, Creative Director from Minneapolis-Based Mojo Group, passed this along, I thought I’d choke.

The ad was the brain child of Brazilian Ad Agency DDB Brasil working with the local office of the World Wildlife Federation. As Bob helped me understand, the ad ran in just one Brazilian newspaper for a reason: In order to enter the ad for consideration for an industry award, it needs to be published at least once. That’s really nothing new; agencies do it all the time to get edgy ads into competitions and (hopefully) gain a little notice for themselves.

I get it. That was the agency’s strategic objective: Win an award. (Which, it did, in at least one show).

That clearly was not in keeping with the strategic objective of the WWF.

Yes, it is abrupt. Yes, it gets attention. Yes, it drives the point home. And yes, for people in the United States, in conjures a horrible set of images and emotions. Our reaction is visceral and raw. We’re angered. I have no defense for the agency who created this ad, nor the creative professionals who pushed it though, nor the staff at the WWF field office who gave it the rubber stamp. The action is unconscionable.

But if all the ad did was make us angry, and yet was clearly related to the point at hand, I would be called to stand with the creative team as professionals in the field.

That’s not the case.

Let’s look briefly at the specific strategic reasons this ad has the potential to seriously harm the reputation of the WWF.

First, the ad is not in keeping with the mission of the WWF organization.

“WWF’s mission is the conservation of nature. Using the best available scientific knowledge and advancing that knowledge where we can, we work to preserve the diversity and abundance of life on Earth and the health of ecological systems by protecting natural areas and wild populations of plants and animals, including endangered species; promoting sustainable approaches to the use of renewable natural resources; and promoting more efficient use of resources and energy and the maximum reduction of pollution. We are committed to reversing the degradation of our planet’s natural environment and to building a future in which human needs are met in harmony with nature. We recognize the critical relevance of human numbers, poverty and consumption patterns to meeting these goals.”

How, precisely, does a connection to terrorist attacks in New York City help achieve any of those goals? Where in the mission statement does the WWF demand that we “respect the brutality” of the planet? Where - in all the literature and communication from the WWF - do they create an “us against the planet” dichotomy? They don’t. In fact, I’m not sure even Greenpeace or PETA would ever go this far.

The WWF presents an image of the planet as a beautiful and fragile place - a place deserving of our attention, our consideration, and our protection. It is a supremely positive mission. This ad, almost single-handedly, destroys that image.

Second, once the word gets out, what major US corporation or foundation will want to be associated with the WWF? I wouldn’t risk it. There are plenty of places to funnel dollars to environmental causes (Nature Conservancy, anyone?). According to WWF financial data, those dollars account for about 15 percent of its operating budget. And that doesn’t count corporate and government partnerships (like Wal-Mart, Coca-Cola, Build-A-Bear workshop, and several US school districts).

Kiss all that goodbye.

Finally, the United States accounts for 1.2 of the WWF’s approximately 5 million individual members. That’s 24 percent of all members who contribute the vast majority of the organization’s “Individual Contribution” revenue of over $87 million.

Kiss your membership from New York goodbye.

Why so doom and gloom? It was just one ad, right?

That’s how these things start. It just takes one ad mixed with a healthy dose of institutional incompetence to kindle this waiting brush fire.

The WWF’s weakly-worded September 3, 2009 press release largely attempts to blame its field office for letting the ad through. WWF President Carter Roberts’ video apology is even worse.

The WWF can’t shirk this one. The ad has the WWF logo on it. The ad was created by an agency the WWF hired. What’s more, the WWF knew about the ad for almost a year, and it did nothing until people began to take offense.

Stupid. Just. Flipping. Stupid.

In the end, I’m sure the Brazil WWF field office and DDB Brasil just wanted to do a shocking ad, get some creative recognition, and keep the broader public scrutiny to a minimum. But unfortunately, you can’t keep an ad like this a secret in the social media age. The advertising community might find it first, but it won’t stay hidden for long. We like to share.

If I were the WWF’s President Carter Roberts, I would be updating my resume.

Related Links: 9/11 Tsunami WWF Broadcast Spot WWF President Carter Roberts Apology WWF.org

Key Points: 1. The US Army spends 10 times what the average college or university spends for each new recruit. That just is not sustainable. 2. A combination of regulatory changes and careful data-mining - combined with smart sponsorship and coaching for the popular video game Halo 3 - are likely to turn the tide. 3. The inevitable targeting of younge r and younger children by recruiting messages could be seen as both a threat to the innocence of youth as well as an opportunity to communicate civic virtue to young citizens.

It costs the US Army, on average, $24,500 for each new recruit.

$24,500.

That may not sound like a lot of money until you consider the average university spends just over $2000 to achieve the same result. Street math: The Army spends 10 times what the U of M spends. Yikes.

Let’s do more math, shall we.

The US Army recruiting target (in May alone) was 3900 soldiers. Obviously, that number fluctuates, but let’s just say - for fun - that 3900 soldiers per month is about average. Translate 3900 soldiers into recruiting dollars and you get over $95 million per month. Let’s have more fun and multiply by 12. That’s over $1.1 billion per year.

If I were the Army’s budget planner, I would no longer be having any fun.

However you slice it, that’s a lot of money. The US Army needs to get more efficient.

And how might they do that? Well, suffice to say, this is not your father’s recruiter.

Of course, the US Army still maintains its mall stores, and its kiosks, and is a regular feature at the high school football game, and sets up shop in nearly every college campus.

But this is different.

In order to boost efficiency, the US Army needs to understand its recruiting pipeline. That means understanding kids. And that means understanding them well before they are of legal age to sign on.

But the Army has always had a problem: They can’t sign on anyone under 17, even with parental consent. They can’t market to them or try to recruit them either. Few other marketers have that same level of restriction, and most of them (liquor, dance clubs, etc) find creative advertising ways around that. A recent survey found that three out of five of teens’ favorite SuperBowl commercials were beer ads. Enough said.

Now, the Army uses traditional advertising as well, some of which no doubt influences younger audiences. They’ve also had surprisingly strong roles in the summer blockbuster “Transformers” and “GI Joe” movies. Again, creative, but run-of-the-mill compared to new techniques.

The breakthrough came in a little-publicized provision of the No Child Left Behind (NCLB) Act passed by congress in 2002. It requires high schools to give recruiters the names and contact details of juniors and seniors. Schools that refuse can see their NCLB funding cut - not an option for many districts. A student may sign an opt-out form, but that is very different than an “opt in” form, and not every school district makes it obvious (or easy). If you now combine this data with other website statistics, SAT/ACT scores, and career exploration test info, you’ve got a data gold mine.

And they’re using it.

In concept, it’s quite simple: Just compare the data profiles of your existing recruits to young men and women you’d like to reach.

But beyond that, advertising researchers who specialize in opinion formation among children and adolescents know that by 16, 17, or 18, general thought patterns already are in place. In other words, your data mining efforts can only be so efficient. They’ll find people you might have missed, but they are unlikely to convince anyone who is not already predisposed.

So what to do?

How do you reach (especially early-teen boys) earlier?

Simple: Video games.

Specifically, the most popular video game in this segment: Microsoft’s Halo series.

If you’re unfamiliar, Halo is what’s referred to as a “first person shooter”. That means you see what the game character on screen would see as if you were really in the action. To put it mildly, Halo is a supreme boy-gasm. It’s got it all: Cool weapons, countless stupid aliens to destroy, coordinated strategy, and absolutely no real consequences.

Halo 3 - the latest blockbuster in the series - takes it to a new level with interactive, live, online gameplay with people all over the world. Microsoft made $170 million on the first day. It estimated 1 million players were online within 20 hours of the release.

Oh, and by the way, the US Army threw in $1.3 million to sponsor the game. For their money, they get more than just a link to the goarmy.com website. They get player data and information on those most interested. They get to paint a picture of the US Army as cool, tech-savvy, and team-oriented. They get a “Halo” affect.

That’s all well and good, until you consider how far down the age chart the Halo game reaches. Yes, it’s rated M for Mature - which means you need to be 16 or 17 to buy it depending on where you live - but industry estimates claim that at least 20 percent of the players are between 12 and 16.

Huh.

Makes you think a bit, doesn’t it?

Whether it’s right or wrong is difficult to say. No, the Army isn’t recruiting directly at my son’s middle school, but are they reaching him online? Do we think that’s okay? Is it the parent’s responsibility to filter that content and disallow games they don’t want their children to see? But maybe we should flip our pre-suppositions on their head. Should we be encouraging more young people into serving their country in all sorts of ways - US Army included? If so, what can we learn from the success of this partnership? Could we do the same thing with public infrastructure? Or disadvantaged neighborhoods?

All I can be sure of right now is how and why this strategy works. I’m no closer to answering the more important questions.

Related Links:

September 2009 Mother Johns Article goarmy.com Halo 3 Website

Key Points: 1. Apple’s latest operating system release, OSX 10.6 (code named “Snow Leopard”), spawned an unplanned grassroots effort to help real cats in the wild. 2. The attention is a boon to Snow Leopard conservancy organizations, due perhaps in part to unexpected Google search results, the speed of social media, and Apple’s status. 3. However, the real hook is the image Apple uses to promote its new product - so different from other Apple creative and so powerfully engaging.

This was never supposed to happen.

The new Apple Operating System - technically named Mac OSX 10.6 - simply was following the naming convention the company adopted when it released version 10.2. That was Jaguar. Then came Panther (10.3). Then Tiger (10.4). Then Leopard (10.5).

You get the idea.

The newest release - 10.6, or “Snow Leopard” - has been positioned by Apple as an important, but evolutionary release. Most of the upgrading this time around happened “under the hood”. In other words users won’t see too many new whiz-bang features. From that perspective, using “Snow Leopard”, versus the more distinctly named “Lion”, made product management sense.

From a business objectives perspective, it also helped Apple stay one step ahead of the upcoming Microsoft 7 operating system release.

But something odd happened on the way to market.

Snow Leopard, the operating system, began to create a groundswell of support for its namesake: the frighteningly-endangered real snow leopard cats.

It all started with a few dozen Mac specialist shops across the country.

In a move not sanctioned by Apple, these specialists decided to donate profits from their first sales of the Snow Leopard operating system to the charitable organizations that help the big cats in the wilds of the Himalayan region of Asia (where only an estimated 5000 cats remain).

Brad Rutherford, Executive Director of the Snow Leopard Trust, was bubbly.

“Apple is helping to show the world the beauty and majesty of this rare creature.”

He went on to say he believes Apple is bringing attention to the plight of an animal that doesn’t get the same name recognition other endangered species enjoy.

The Trust’s goal is $25,000. They’ll use that money for satellite tracking, habitat protection, and education. They’re at $8,400 now. But the donations are coming fast.

Now you might snicker at the seemingly tiny dollar amount to shoot for, but understand that your dollar goes a long way in that part of the world. What makes it more impressive is the skinny margins Apple specialists make (about $3 for each copy of the software sold; my educated guess). To get to $25,000, they’d need to move over 8,600 copies of the software. But with this kind of support, I think they’ll get there.

Beyond the fundraising boon, the more interesting question is why it happened at all. Why did people come out of the woodwork to help this animal when no similar action took place with Apple operating system software before.

Well, one explanation is the spontaneous behavior of crowds and the newfound power of social media.

The Snow Leopard product name certainly draws attention. It’s unique. It lends itself well to viral message transmission. People searching for information on the operating system no doubt ran across information on the real cats, likely boosting awareness. Social media allowed them to spread that newfound information fast.

I think that’s nice, but zoos have been trying this schtick for years, and they use social media techniques.

What makes this different?

Well, another explanation could be that it’s Apple, the company itself. As arguably the most influential consumer electronics manufacturer on the planet, what Apple does, people watch.

I think that’s part of it, but the real answer could be much simpler.

All we need do is look.

Mac OSX 10.2 - the Jaguar version - was the first to use the fur pattern from the real cat. Unfortunately, it looked like something you’d see in a Frederick’s of Hollywood. Gross.

Panther (10.3) mercifully ditches the cat fur look entirely, opting for the simple and distinct Roman numeral “X” with block serif edges.

Tiger (10.4) cleans up the design with simpler “X” in brilliant silver.

Leopard (10.5) gets the prize for cross-marketing punch using the violet galaxy in space behind it’s “X” - a nod to the Time Machine automated backup software built into this version.

Snow Leopard looks different. Very different. It uses a photo of the real cat.

And not just any photo, but a haunting image. This cat is engaging you with piercing cold eyes. He could be hunting you. He is not to be trifled with.

Sometimes, I think we can forget the power of an iconic image to focus public energy.

As much as I love the folks at Apple, I don’t think they planned this one. I think someone in the creative department just thought this would look really cool. It flies in the face of Apple design - it’s not minimalist. It doesn’t focus on the logo. Or the “X”. Or a color. It’s not clean. It’s not tight.

But it is not to be ignored.

As partial proof, this truly is the first Mac OSX release actually referred to by its code name, Snow Leopard, rather than just “OSX” or the version number.

For big cats everywhere, a sharp art director at Apple deserves a thank you.

Related Links: Apple Specialist Snow Leopard Adoption Program Snow Leopard Conservancy Snow Leopard Trust

Key Points: 1. Build-A-Bear Workshop and Ridemakerz use the same business model, with a different product, to target girls and boys respectively. 2. BABW invested in the Ridemakerz concept, and helped it along. It really should work. 3. But Ridemakerz really doesn’t work as well. My guess is that the real reason lies in the subtle differences between mother/daughter and father/son relationships.

My wife collects Build-A-Bears.

But not just any Build-A-Bear, she only collects the limited edition World Wildlife Federation “bears”. Last weekend, we stood outside the Build-A-Bear workshop at the Ridgedale Mall in Minnetonka, Minnesota - before the store opened - to be the first in line to purchase the newest WWF wolf.

We stood and waited alongside a group of 9 and 10 year old girls getting ready for a Build-A-Bear birthday party with their moms. We waited as early shoppers stood and gawked at the new (limited edition as well) Portuguese Water Dog Build-A-Bear, no doubt encouraged by the Obama girls’ choice of puppy. My wife chuckled at the fathers and husbands kept physical distance from the store. I didn’t chuckle. I was working on increasing my distance.

The whole surreal experience reminded me of an eerily similar experience about a year ago.

The store was Ridemakerz at the Mall of American in Bloomington. As one of the largest indoor shopping centers in the world, the MOA is a crucible for new business and marketing ideas. Truly, if you can make it there, you can make it anywhere.

Well, Ridemakerz didn’t make it there. And the question is: why not?

Let’s start with the briefest bit of background. Ridemakerz is - essentially - a Build-A-Bear for boys. Instead of (mainly) girls stuffing cute teddy bears, rabbits, and dogs, Ridemakerz invites guests to “pimp their toy ride”. Starting with a base model car or truck, (mainly) boys add on wheels, decals, exhaust chrome, ground effects, and sounds.

It sure seemed like the same Build-A-Bear Workshop business model. It even “felt” the same as I walked around with my sons. The same base+options product offering. The same birthday party flyers.

After some digging, I learned the Build-A-Bear Workshop (NYSE:BBW) is actually a significant investor in the Ridemakerz concept and helped the fledgling company pull together its business systems and marketing strategy.

Ridemakerz seems to build in the magic mix of what boys like - speed, energy, and physical damage (the sign on the door warned careless parents to watch their feet lest one of the out of control “Ridez” runs over their shoes). For an educational bent, they talk about the history of cars. To leverage brand equity, they’ve forged partnerships with major manufacturers - Ford, Dodge, Chevy, Mini, and Scion.

Logically, with that level of systematic similarity between the two companies, one would expect the Ridemakerz concept to work.

But consumer psychology, I think, tells us differently.

Ridemakerz was busy the day I walked in about 12 months ago. But the whole vibe was off.

Yes, fathers were in the store, but it was weird. Moms at Build-A-Bear delighted in the creation experience. They were thrilled with their girls’ completed bears. Dads at Ridemakerz looked at the mounting cost of car “options” with ever-growing dread. Most were much less than thrilled to be there. To other dads, the experience became something to conquer. Something to win. That wasn’t pretty either.

I think the key factor for success or failure lies in how moms and dads interact with daughters and sons. Of course, this is not true for every mom or every dad, but perhaps enough to make a difference.

It could be that what makes Build-A-Bear Workshop so successful is that it captures the emotional interaction and bonding pattern between mothers and daughters.

It could be that the male bonding pattern - shared experience (as in baseball games, bike rides, camping trips, or learning to ski) - are best nurtured without a “win” or specific tangible outcome.

It could be that the Ridemakerz car is a physical item to be objectively accomplished, speaking more to a male competitive streak than a father/son bond.

It could be that Ridemakerz new “virtual worlds” will create some of the separation needed for boys to enjoy the creation process by tapping into their love of electronic games.

All I know is that on an average weekend, the line at the Mall of America Build-A-Bear Workshop is out the door. And Ridemakerz is gone.

Build-A-Bear Workshop Ridemakerz. Ridemakerz New Virtual Worlds Report

Key Points: 1. The Hong Kong airport uses a mix of cheap technology and plain old-fashioned empathy to make its flying experience markedly superior to the US. 2. The US industry, by stark contrast, thinks customer service is something that happens only when convenient for them. 3. Some say airline traffic is down because of the recession. That could be. But a more likely explanation is that most people hate the experience.

I thought my friend Byron was joking.

After all, this story did come off his personal blog after a 16-hour-plus flight from Chicago to Hong Kong. I had every reason to think he was hallucinating.

He wasn’t.

The baggage claim system in the Hong Kong airport is like nothing US domestic airline passengers have ever seen before.

As Byron watched the bags circle the carousel, he noticed they were clumped in groups of three to four bags. In addition, they were all standing upright (on the skinny end). Interesting. Clearly, there was no way bags would magically exit the luggage shoot in this configuration, so Byron (being the enterprising Babson College student that he is) found out why.

He noticed the airport workers consciously grouping the bags together and sideways so that the handle faced outward toward the waiting passengers.

But that begged the question: how could the bags stay grouped once the machine kept shooting out bags? Wouldn’t they clump up, defeating the best efforts of the attendants to fix them? Well, no. The conveyer belt was equipped with a sensor to detect a group of bags on the carousel below. If it detected a group, it held up the bag until the next opening came, delivering it to the attendant to most optimally arrange it.

For anyone who’s spent more than a fair share of his life in an airport (like me, and I’d imagine, many of you), this was akin to manna in the desert.

But other than an interesting anecdote, and beyond generating a bit of indignant anger at our own backward system, what’s the big deal? What can this story tell us about the state of the airline industry?

Let’s reflect, shall we, on recent events.

In Rochester, Minnesota, 47 Continental Airlines passengers spent the night grounded in a crowded sardine can ExpressJet plane. Two weeks later, a plane bound for Minneapolis sat on the runway in New York City for four hours before returning to the terminal. A Sun Country flight was delayed six hours.

And these are just a smattering of recent examples. They don’t count the less-frustrating-but-still-unacceptable one, two, or three-hour delays. In the plane. As bathroom facilities reach “capacity”.

Here’s how the Air Transport Association (the airline’s trade group) responded:

“The [Air Transport Association] and its member airlines understand passengers’ frustration with long delays. Long delays of this nature are unacceptable and contrary to carrier contingency plans. Although we fully understand these concerns, we continue to believe that a hard-and-fast rule requiring mandatory deplaning of passengers after three hours will have substantial, unintended consequences, leading to even more inconvenience for passengers and ultimately more flight cancellations.”

Here’s Sun Country CEO Stan Gadek:

“Our pilots and dispatchers followed procedure and worked with controllers on the ground to get the situation rectified. Our flight crew did everything in their power to make the passengers as comfortable as possible and to keep them informed.”

Here’s a statement from Continental (who initially tried to blame its regional partner):

“We are working closely with ExpressJet to resolve the issues surrounding this extended delay as service provided to customers on this flight was completely unacceptable. We are apologizing to our customers and will be offering them a full ticket refund and a certificate good for future travel.”

Weak.

Oh, but it’s not just delays!

Check out the hit viral video “United Breaks Guitars” - the unfortunate story of Dave Carroll and the guitar that United baggage workers smashed to bits, United customer service couldn’t care less about, and United claims staff wouldn’t pay for.

It’s been viewed nearly 5.3 million times on YouTube. It’s 5-star rated by over 34,000 people. It has received 21,643 comments. Nearly all in support of David’s plight. The people are speaking.

To be fair, United eventually offered to pay for the guitar, but the damage was done.

Over two decades after deregulation, we have an airline industry in customer service freefall.

Doubt it? Look at the numbers.

A University of Michigan study posted the following dismal results. Southwest Airlines Co. had the highest passenger satisfaction score, 81 on a zero-to-100 scale. After that it was Continental Airlines Inc. at 68, Delta Air Lines Inc. at 64, AMR Corp.’s American Airlines at 60, US Airways Group Inc. at 59, Northwest Airlines at 57, and UAL Corp.’s United Airlines at 56.

And these numbers are up (!) 3.2 percent from last year.

If this were a school, Southwest would get a B-, Continental might squeak by with a D-, and everyone else would fail.

To make matters worse, passenger traffic is down. Sharply. The FAA expects traffic to dip another 8.8 percent. That doesn’t bode well for an industry on the brink of collective bankruptcy.

Some say “its the economy stupid”. I disagree. I say “its the service stupid”. Airlines have allowed their reputation deteriorate to such a low level that it can no longer be leveraged as an asset to build their business. More than that, the mere mention of their name spawns contempt and disgust. Without a brand, the airlines will discover, they will have trouble maintaining a business at all.

How do you fix it? How do you get people to want to fly again? How do you get people to start taking airline service seriously again?

I’m not sure. But the first thing I’d do is take a trip to Hong Kong. And pay very close attention.

Related Links: YouTube: United Breaks Guitars

Key Points: 1. Lund’s and Byerly’s entered into a partnership with the Double R Ranch to provide premium beef for its retail grocery stores, taking advantage of building its footprint in a rapidly growing segment. 2. However, it can be hard to distinguish the Lund’s and Byerly’s effort from similar efforts at other major grocery chains, where the “partnership” is more marketing creation than physical reality. 3. In the long-term, however, an authentic branding position has better staying power than a simply imaginary one.

I love the meat counter at Byerly’s.

They still have actual butchers. Not that I would blame most people for not knowing one when they saw one, but nowhere else can use ask tough questions about meat preparation and cooking and actually receive intelligent answers. It’s just about heaven for an armchair chef.

It was at the meat counter in the Roseville Byerly’s a few weeks ago when I happened to notice signs for the Double R Ranch. The six-foot banners featured pictures of Marlboro men on horses in view of picturesque mountains. As I waited in line, I noticed the couple ahead of me gesturing to the same banner and joking that the actual “mountains” were likely a feedlot somewhere in Iowa.

Inwardly, I laughed a bit. This wouldn’t be the first time I’ve seen “stock art” used to create an image that wasn’t really accurate (”Ice Mountain”, anyone?).

It wasn’t until I got home, and my wife mentioned reading an article about the Double R Ranch in the Byerly’s magazine, that I came to realize the Double R Ranch was in fact a real place, with real people, and a real business partnership.

But I had to wonder, how many other people immediately dismissed this as yet another marketing creation?

Who could blame them?

Locally, at least, buying beef can get pretty confusing. Cub Foods has its “Stockman and Dakota” line of premium beef. It uses dark, rich colors and enticing grilled meat photos to create the allure of a top steakhouse. Target goes a step further with its mythical “Sutton” and “Dodge” characters, representing a butcher and a restaurateur. Cub Foods still has a semblance of a meat counter, but Target really does not, so it created the idealized image of the people they were missing.

Neither approach is necessarily good or bad. Cub uses the approach to bolster its “discount” image. The progeny of SuperValu has built its brand around low prices; that position does not necessarily translate well into “premium quality” meats. Target, similarly, knows it needs to “humanize” the meat counter to drive sales. Their operation is highly efficient, with meat packaged (largely) before it gets to the store. That efficiency drives margins, but not if people don’t want to buy it because it seems “manufactured.”

Why is this a big deal?

Well, industry analysts say the promotion of premium quality meats (especially beef) is no accident. Premium beef is a briskly growing portion of the grocery business. It drives people to the store, and can be a particularly effective loyalty wedge for consumers.

To put it in real terms, Progressive Grocer estimates the annual premium beef market at over $75 billion, growing at a clip of over 5 percent per year.

There’s no other category quite like it.

That brings us back to the situation at Lund’s and Byerly’s.

How do you convince people that you have something real? Something of tangible value? In this specific case, that the Double R Ranch is a real place, raising animals with impeccable standards, and delivering distinctive taste?

Well, Lund’s and Byerly’s customers tend to be a bit more engaged than the average shopper, which helps. But to attract more people into the store, what’s the real hook?

Here’s the good news. Building a true brand - something that has the power to change behavior - is more than a “creative” exercise. The other half of the branding equation is authenticity, or rather, the objective truth that forms the foundation onto which a brand is built.

A true brand cannot exist without both.

With creativity only, your brand is a smokescreen. Consumers will eventually figure it out. With authenticity only, no one remembers your brand (or worse, they confuse it with someone else’s - much like the people I saw in line at the meat counter). It’s likely to die on the vine.

But luckily for Lund’s and Byerly’s, there’s one catch: Creativity and authenticity are not created equal. You can fix creativity. You can present a more compelling vision. But you can’t fix authenticity. You can’t make something real that isn’t. At least not for the long-term.

The Double R Ranch is a real place, with real people, that produce a great product. Even the most cynical among us appreciate a good thing when we see it.

Lund’s and Byerly’s just needs to keep at it.

Related Links: Double R Ranch Stockman and Dakota Sutton and Dodge

Key Points: 1. Abercrombie & Fitch publicly said is abandoning its premium price strategy and focusing its offerings in order to boost earnings. 2. Lowering prices, however, is a dangerous slippery slope in the fashion world. Shoppers devalue the brand, and will only buy when there’s a bargain. 3. Youth trends are fickle, but Abercrombie & Fitch could have positioned itself for success if it had only reinvented itself sooner. It is likely too late now.

I thought I’d never see it.

A sale. At Abercrombie & Fitch.

Middle school has arrived for our family, and so has a certain sensitivity toward the clothes we buy our oldest son. Needless to say, I found myself at the kid-version of the popular Abercrombie & Fitch. This is the store with less soft core imagery than the adult version, but basically the same clothes, the same undeniably pungent over-cologned aroma, and the same lucky-I-have-rock-n-roll-ear-damage music volume.

But despite that, the clothes are well-made, and they are popular. So I sucked it up, walked inside, and prepared myself for jean prices topping three-digits. Thankfully, regular price for the kid’s jeans is $59.90. Bad, but better than I thought. But what’s this?! A mark-down? I got out of there for $39.50 a pair.

That’s almost Levi’s pricing.

Something was up, and I was right.

A company press release last week said Abercrombie & Fitch had had enough. After 18 months of the stick-it-out recession strategy, the company reported its third quarter of double-digit sales declines. Lower-priced competitors American Eagle and Aeropostale were gaining ground. The premium price strategy was over. Abercrombie & Fitch is ready to bargain.

More than that, the release was rife with other mea-culpas. It was a bit embarrassing.

Abercrombie & Fitch noted it was closing Ruehl, its store for 30-somethings, admitting it didn’t really understand how to market to older folk. Duh. Here’s a store where you could buy nearly exactly the same clothes your teenager wears, for 30 percent more money.

Apparently, Abercrombie & Fitch doesn’t understand underwear either. The company also noted that its Gilly Hicks intimate apparel brand would “refocus” on the company’s 20-year-old core market. (I didn’t think Abercrombie & Fitch models wore underwear.) A quick note: Whenever you hear of a company - any company - noting that it will “refocus on its core business”, that means it can’t find it corporate butt with both hands.

Abercrombie & Fitch is in serious trouble.

First and foremost is the risk associated with abandoning a premium price strategy.

When you begin to lower your prices, especially in the fashion world, you risk disconnecting the inherent value position customers place on the “highest priced” items. If it was exclusive, and now everyone can get it, it is no longer as valuable. More damning is the transition to a “sale jumper” mentality for your customer base. This is Macy’s problem. They can’t sell anything without well-publicized sales and deep discounts. Customers have been trained to wait for them, and they don’t buy unless they get one. Abercrombie & Fitch can forget about selling anything for full price ever again.

Certainly the company can expect a short-term boost as shoppers (like me) will hit the stores to scoop up bargains. The strategy will also help Abercrombie & Fitch capitalize on its popularity while it can.

Of course, we all understand corporate earnings pressure, and there is no doubt the current recessionary environment plays a role, but this isn’t really a reflection on the economy. That’s an excuse and a red herring. Abercrombie & Fitch didn’t materially suffer during the last recession.

The real issue for Abercrombie & Fitch is not pricing, it is product development. The undeniable reality of a fickle youth fashion market, and the killer 7-year cycle, it catching up with them.

We’re already seeing the “beach casual” look fading, to be soon replaced by something new.

Trends aside, being on top carries its own set of risks. Abercrombie & Fitch has been a lightning rod for criticism of its hyper-sexual image in conservative circles, blasted for implicit racism in mainstream media, and lampooned by the liberal circles on the now-defunct MadTV.

But as long as your popular in the fashion world, none of that matters.

It sure does now.

Perhaps there’s not much Abercrombie & Fitch can do. They’re trying to work in more dresses and feminine clothing options, but I can’t see the company turning this around.

The only way to survive in the fashion world (especially youth fashion) is to reinvent yourself, not lower your prices.

Abercrombie & Fitch simply waited too long.

Abercrombie & Fitch Official Site ANF Stock Tracker Mad TV Abercrombie Skit

<em> Key Points: 1. Petey (the urine cup) and Pokey (the syringe) take an ironic twist on the kids’ mascot theme in order to grab attention. 2. They could be particularly effective with young adult healthcare consumers who don’t tend to pay attention unless they need to.  We’ll see. 3. Compared with poor generally healthcare advertising, HealthPartners made the kind of gutsy move the system clearly needs more of. </em>

The look on my wife’s face was priceless.

Last weekend, our family decided to brave the road closures around Lexington Avenue in St. Paul to visit Como Park.  Even though the family favorite polar bears are off exhibit until next year, the park has come along way since lions were kept in the rusty metal cages up front when I was a boy.

Outside of the new visitors center, rounding the corner to the sea lion tank, stood - no joke - a walking urine cup mascot.  Trailing close behind was another HealthPartners employee handing out cards promoting same day test result services available at HealthPartners clinics.

Needless to say, there was plenty of pointing and laughing. <!–more–>

I asked the kids if they wanted their picture taken with Petey P. Cup (also, no joke).

No takers.

Now before you laugh too hard, when was the last time you paid close attention to any health plan advertising?  Ordinarily, it’s just plain ordinary.  We’re the best hospital.  We’re the best clinic.  We have the best doctors.  You’ll get the best care.  Pretty cringe-worthy stuff at best.  Forgettable at worst.

You are unlikely to forget Petey or his cousin Pokey, the walking syringe.

Crafted by local ad shop Preston Kelly, the funky mascots have their own website and even their own Facebook page (now boasting over 1400 fans).

According to the word in the biz, the mascots are targeted at younger healthcare consumers - late teens to late twenties - who are conspicuously absent from their yearly physicals.  They say young adults understand the obvious irony, and the abruptness of the campaign will break their complacency and get their attention. More to the point, it will get them into the clinic.

Undoubtedly, a walking urine cup is hard to miss for those of us outside that age bracket as well.

Color me iffy on the whole premise that all young people need is an awareness boost to get into the clinic.  The fact remains that unless they have a specific (or chronic) medical condition, the invincibility factor is still pretty strong.

I’m sure HealthPartners is tracking the numbers, though.  If the data prove me wrong, kudos.

What might be more interesting is the juxtaposition between this effort (collectively part of HealthPartners “A new way to look at healthcare” campaign) and its rival Blue Cross Blue Shield of Minnesota and its well-underway “Do/Groove” campaign.

Yes, the aims are quite different, but clearly Blue Cross took the more conservative approach.  Not that it is not a creative or appropriate effort.  As we say in the trade, the campaign has legs.  We’ve seen neat television spots with people spontaneously dancing waiting in line, dozens of outdoor/billboard spots, and countless specific reminders of fun ways to get exercise each day.

What makes the Blue Cross campaign successful is its longevity and its flexibility.  And it is very, very good.

All in all, I’m not sure HealthPartners’ effort quite (yet) gets to that level.

We’ll have to wait and see.

But here’s why Petey and Pokey are so important to healthcare advertising.  They represent a pretty gutsy move on the part of a major healthcare player.  Just put yourself in the pitch meeting, suggesting to one of the largest healthcare providers in Minnesota that they send a walking urine cup and syringe into public places with the “HealthPartners” name all over them?  I could name a half-dozen large organizations town that would have quickly shown you the door.

Even though Petey and Pokey do not cross the line from kitschy to poor taste, to move forward with this creative direction took real courage.

I’ll be the first to admit I would prefer the other health plans in town <em>not try</em> a game of shock-value one-upsmanship, but finding new ways to reach new groups of people is a critical element of improving the healthcare system for everyone.

Let’s hope we get that kind of courage to try new things in the ongoing healthcare debate.

Related Links: <a href=”http://www.peteyandpokey.com/”>Petey and Pokey website</a> <a href=”http://www.facebook.com/peteypcup”>Petey and Pokey Facebook page</a> <a href=”http://www.do-groove.com/”>Blue Cross’ Do/Groove Campaign Site</a>

Key Points: 1. There is little doubt the “Cash for Clunkers” generated intense activity and excitement, running out of money in the space of one week. 2. However, the real-dollar impact on the auto industry (or on any other tangible measure you like) of the program is modest at best. 3. The true impact is psychological, working quite efficiently to change the public outlook.

Incentives matter.

I was on the phone last week catching up with the professor who taught me that essential marketing truth more than 15 years ago. He was just back from a trip to Europe. What struck him was how Europeans drove. They owned small, efficient cars that they did not drive very often. In most of the EU, gas ranges from US$5 to $8 per gallon, so it’s not hard to understand why.

On the other hard, Europe has no “car culture” to speak of, and plenty of efficient transit options.

All of that got the good doctor thinking about the old Jeep in his driveway and the “Cash for Clunkers” program (Car Allowance Rebate System - or CARS - is the neato government acronym) and how he could drive a more efficient vehicle.

He’d never get $3500 to $4500 for the vehicle on the open market; the Jeep was worth $1000 tops.

What struck me wasn’t the program, or his rationale, but rather how excited he was. He’s a marketing guy. He understands the psychology going on in his own head.

Clearly, he was not alone.

By now, we all know the program ran out of its initial $1 billion within the space of a week, and the US House clamored to approve another $2 billion to keep CARS going.

We know why they did it, right? It moved lots of cars. It’s helping the auto industry. It’s a back-door way to improve average vehicle efficiency and reduce the amount of oil the US uses each day.

Maybe.

But let’s examine the evidence.

Take the first point: That the CARS program helped move vehicle inventory, helping dealers and the industry. When you look at the new vehicle sales trend, we were on track in the US to sell 10 million new vehicles in 2009 versus 12 million the year before. Even with the initial $1 billion incentive (translating to about 250,000 vehicles), economists estimate only 40,000 of those vehicles would not have been bought anyway. In other words, do the math against a 2 million vehicle deficit. Important for local dealers and inventories, yes, but in the grand scheme, less important.

Take the second point: That the CARS program helps overall US auto fleet efficiency. Hmmm. There are about 241 million vehicles registered in the United States. Even if you count all 250,000 new cars from the program, that’s about one percent of the total fleet. And even if the cars pulled off the road were the worst of the worst cars fuel economy-wise, I’m not sure that will make a material difference in the 378 million gallons of gas Americans use each day. A “drop in the oil barrel” to modify a phrase.

So again, the point remains: Incentives matter. But in this case, the real question is, “How?”

The answer struck me as I listened to MPR’s Midmorning program on my way to a client appointment on Friday.

Charles Wheelan, author of the “Naked Economist” column, made a critical point regarding this recession (and really, any recession): The recession is over when you think it’s over.

The fundamentals in the economy, he went on to say, of course make a difference, but it is the psychology of the average person that can change the entire dynamic.

An interesting discussion, but I still hadn’t put two and two together.

That was Joel Jack’s job, the general sales manager at Richfield, Bloomington Honda. He was on briefly after Mr. Wheelan to discuss the impact of the Cash for Clunkers program on sales at his dealership (which meant brisk business compared to just a month ago) as well as answer some questions.

To paraphrase: People in new cars feel good. There is just something about it.

He nailed it.

The CARS program means much more for the collective psyche than “cash in my pocket” programs from either the current or the previous administration. Direct cash incentives work, but they are short-lived (and a buzz kill if you are sitting on debt that needs to be repaid).

It’s all about the “new car” - and not the impact on the industry, but the impact on our psychology. Americans (as opposed to Europeans - where this wouldn’t work) are attached emotionally to their cars. We’ve got plenty of research that shows how people’s mindset changes when they pull away from the lot in a brand new car. Body posture. Outlook. Pride. Happiness.

Strange, really, when you think about it in abstract terms: This $1 billion is a mere nothing compared with the $700 billion stimulus package and $700 billion TARP program, but we’re getting the inverse psychological benefit from this relatively tiny investment.

A new car simply impacts us in a visceral way that banking system relief and infrastructure projects just don’t.

Agree with government stimulus or not, if you agree the recession will end when we think it does, this was a damn smart investment.

Related Links: CARS Program Information Fuel Economy Rules

Key Points: 1. FantasySoapNet.com was a short-lived experiment bringing the fantasy sports idea to soap opera viewers. 2. The temptation is strong; fantasy sports leagues are huge moneymakers, in addition to providing a wealth of psychographic data. 3. But soap enthusiasts didn’t buy in like the guys did; what sounded like a great idea simply died on the vine.

Last week would have been a good fantasy soap week.

ABC’s General Hospital featured no less than complications from a miscarriage, a tearful admission from a son who ran his mother off a deserted road, and a character seemingly back from the dead.

From my count, that would have been in the 100 to 150 point range.

Points? Yes, at FantasySoapNet.com, you watched your soaps for points. Just like a fantasy football league, the soap league allowed you to select your “team” from among several soap actors and actresses. You could even add specific “moments” to your team (such as “wearing red to a funeral) just like you might add a guess on the point spread for Sunday’s game.

You earned those points in a variety of specific ways. The “bread and butter” emotional moments (pleading, threatening, and confrontation) all net you three points each, but the big issues (like marriage, life and death, and paternity) can score 50 points each.

And just like fantasy sports leagues, you could play for yourself, create a group, or compete with others for pride and prizes.

Sounds like an interesting idea, doesn’t it?

So why did ABC pull the plug? And why after only an 18-month stint? That’s where this soap opera gets much more interesting.

Let’s start with why ABC would choose to go down this road in the first place.

It’s not to say that a fair number of women don’t enjoy fantasy sports, but the numbers don’t lie: Fantasy football, baseball, and basketball are predominantly male pastimes - somewhere past 90 percent of participants. And ABC should know. Its ESPN property manages leagues, and they have the player data.

The data they have on the guys is pretty enticing. Fantasy sports leagues make money in a few ways. First, many leagues have a small entrance fee (perhaps $10 to $20). Although that’s not a huge moneymaker (even for a 20,000 competitor league, that might net $200 to $300K), it means credit card information is “on file”, and that’s a huge time-saver in the “buy-up” process during the season.

As a second revenue stream, smart business leagues feature additional opportunities to buy apparel, tickets, and research data services. A credit card on file vastly increases the likelihood of a pull-through on that transaction.

But perhaps the most important benefit of the fantasy league is the tremendous engagement of the players themselves. Fantasy sports take overall involvement in your chosen sport to a completely new level. It’s not just statistical research on players and match-ups, but viewing involvement in not just your home team’s game, but nearly every game played. In other words, fantasy sports enthusiasts have a stake in several teams and games - not just their own. From a network perspective, yes, that boosts ratings, but even more importantly, that level of involvement provides the network with a treasure-trove of demographic and buyer behavior data.

From your actions in the league, a good statistician can create a pretty compelling profile. Are you impulsive? Reasoned? Loyal? Do you “sulk” after a big loss and disengage? For how long? Do you tune in or tune out during specific times of the season (which might indicate family time away?) Do you think an advertiser might want to know all that? Do you think they’d pay extra to get it? Yeah. They would.

Call it “a waste of time” or “legalized sports betting” or anything you like, fantasy sports tops $2 billion in annual direct revenue, not counting the sale of advertising data, and over 20 million players in the US alone.

So I guess it’s pretty natural ABC would want to bring this golden-egg-laying goose over the fence to soap land.

The market for daytime drama, like the market for sports games, is quite mature. In addition to the television properties themselves, the industry writes innumerable weekly print publications and spawns several popular websites.

The target audience spends significant time at home, understands how to use a computer, and is a regular internet user.

It sounds like a perfect match.

But it didn’t work for ABC. And the real question is: Why not?

A few possible scenarios.

ABC might have felt as though the experiment wasn’t worth the investment. Fantasy sports leagues require a healthy investment in IT infrastructure and maintenance. That seems a bit odd, though, as the network’s IT department understands the ins and outs pretty well from its ESPN platforms.

It could be just a case of “big company decision making”, and a reluctance to stick with an entrepreneurial idea. An organization as large as ABC/Disney tends to go big or go home. FantasySoapNet.com always seemed like a “cute little idea” that never got the funding or energy it needed to be successful. The site is an amateurish mess compared with even second-tier fantasy sports sites. I’m not sure it really ever had a chance. It’s Possible.

What’s most likely, however, is that after an initial set of interested buzz, the idea never really took off. Perhaps soap viewers were already deeply involved in their programs, and didn’t want to get to that next step. Perhaps the psychology around engagement is just different than sports leagues. I can’t say for sure, but I think that’s it.

Why do I say that? Simple. After 18 months in operation, not a single viable competitor emerged. Not one.

If there were a market for this, someone else would have jumped in.

Related Links: Visit the defunct FantasySoapNet.com Get them while you can! Discounted FantasySoapNet.com t-shirts at the ABC store.

Key Points: 1. When the shop is slow, Jiffy Lube technicians take the opportunity to drive impulse decisions from passing motorists using direct monetary incentives. 2. The immediacy of the technique makes it quite smart for the chain; Jiffy Lube has reasons for its customers not to think too hard about their decision. 3. While smart, the idea is easily imitated. Jiffy Lube might be wise to consider spicing up the incentives to drive business and boost its brand.

We were on our way to the Pine Tree Apple Orchard in White Bear Lake when the service light came on.

The service light meant, of course, that our 2005 Honda Odyssey wanted its oil changed. Surprisingly, it was at that same moment that my wife spotted a poor, dejected soul standing in front of the Jiffy Lube station holding a small sign that read “$24.99 Oil Change”.

I was content to wait until later in the week to get the work done at the dealer. My wife was not. We stopped.

Having a few minutes to kill (and after declining a half-dozen offers for additional service), I decided to ask the manager how the promotion worked. He mentioned I was getting the “$5 off” deal because I stopped after responding to the technician’s street-side offer. I would not have received the discount otherwise. Whenever the shop is empty, technicians pick up the appropriate offer sign (sometimes $5 off, sometimes $10 off) and try to encourage drivers to pull in for service. If the tech is successful, he or she also receives an incentive.

Not a bad idea, really.

Of course this wouldn’t work for every service business, but encouraging idle technicians to wave in new customers is preferable to them lounging around inside. From the franchisee’s perspective (and most Jiffy Lube’s are), every idle moment costs money. Technicians are on the clock. They might as well take an active role in the sales process. Finally, the action is easy and immediate. It addresses the issue (no customers) only if the situation exists. In other words: Don’t give out a special deal carte blanche, only do it when you need to. A guy on the street corner with a sign might seem crude, but it is actually a highly efficient sales promotion.

But there’s a bit of a bigger picture issue at work.

Deep in the midst of a recession (as much psychological as it is economic), consumers are rethinking many of their purchases. Jiffy Lube’s clientele are no different. Auto dealerships (strapped for cash from record-low vehicle sales) are turning to their service departments like never before to drive business. Many are incentivizing new car buyers to use their service bays (by dramatically improving service and reducing wait times) instead of third-party providers such as Jiffy Lube. That is leaving Jiffy Lube in the unfortunate position of competing for owners of older vehicles who have less incentive to purchase profitable add-ons.

Add to that the industry’s wavering hold on the “3,000-mile-oil-change” argument, as auto maintenance minder technology reminds newer car owners of the need for new oil at more-realistic 5,000-10,000 mile intervals.

Add to that the lagging Jiffy Lube image problem, where unsuspecting consumers were charged (in some cases) for services paid for, but not performed. That sting is not gone.

You could make an argument (and I would subscribe to it), that the sales promotion I described was just about perfect to combat those problems. Heck, it grudgingly worked on me. The promise of an immediate bargain can often supersede more rational thinking and spur an impulsive decision.

Again, not bad.

But isn’t there a part of you that wishes this genie couldn’t go back into the “high school sports team car wash” bottle? It seems to be catching on with going-out-of-business retailers. In fact, it seems to be popping up everywhere.

And that’s really the crux of the branding problem for Jiffy Lube.

Branding is all about separation. About “owning a space” in your customer’s mind. Degree of Differentiation is the fancy language, but what it really means is that you are doing something that no one else could easily (or legitimately) repeat.

This Jiffy Lube sales promotion comes down to just one thing: Price.

There is no shame in driving business with short-term incentives, but Jiffy Lube is beginning to use it as a crutch. The simple fact is that it won’t last long: Any competitor can lower their price. Any competitor can copy the technique.

Yes, I would argue oil change service is a commodity service. And it is tempting to think it all just comes down to lower prices and greater throughput. But I am not so sure.

Jiffy Lube is the largest player in this market space (over 30 million customers per year), and as such, commands enviable market power. It supports a variety of charitable and automotive educational causes. Because of its market position, it tends to support them in a big way.

Here’s an idea. Why not leverage those associations? Why not give people an incentive by making a donation to one of Jiffy Lube’s supported organizations? How about $10 to the American Heart Association? Or $10 to Cars for Courage?

I’d be happy to stop for that.

Related Links: http://www.jiffylube.com/ Shell Oil: Jiffy Lube’s owner Watch a Jiffy Lube undercover report

Key Points: 1. FDA-approved eyelash enhancer Latisse may not seem like a big healthcare deal, but its ads are a great way to show how persuasive strategy works in big pharma advertising. 2. The ad uses classic techniques (primacy/recency, visual supremacy, and disassociation) to sell its message. 3. It uses those same techniques to downplay potential side effects. It may not be a big deal with Latisse, but other drugs are not so benign.

In the pantheon of big issues in healthcare, this has to rank near the bottom.

It’s called “hypotrichosis”, a medical condition in which the sufferer does not grow adequate eyelashes.

Now before you laugh, the eyelash serves a meaningful purpose. They protect the eye against foreign contamination; they are a first line of defense for one of the body’s most sensitive organs. Like most primates, humans are highly visual creatures, and the eyes are the center of that attraction. More specifically, human beings find large eyelashes attractive (evolutionary psychologists say) because they are a competitive advantage in a world of airborne dust and dirt.

For those poor souls who fail to grow eyelashes, or fail to grow them thick enough, medical science has come to the rescue with bimatoprost, the FDA’s first approved drug to lengthen lashes, marketed under the trade name “Latisse”.

But unlike its chemical twin used to treat glaucoma, Latisse isn’t meaningfully positioned as a medical product. Latisse ads are more reminiscent of a Revlon cosmetics pitch.

Certainly, condemning the marketing strategy for Latisse as vain and shallow would be an easy target given the enormity of the problems in the healthcare system. But I’m more comfortable allowing you to draw your own conclusions regarding the relative worth of this new product in the grand scheme.

What’s much more interesting to me are the subtle and not-so-subtle rhetorical strategies employed to get you on the phone with your doctor today while at the same time downplaying the potential side effects.

Why’s this important?

You may not be in the market for eyelash enhancement, but you may find yourself in the market for a cholesterol drug or a new diabetes treatment. The stakes are high.

Let’s begin, shall we, by dissecting the latest Latisse broadcast advertisement into its component storyboard.

Opening Scene

Script Summary: Speaker asks the viewer if she wants to grow longer, thicker lashes (presumably rather than extending them artificially). Voice/Music: Female voice, sensual tone against a upbeat tempo. Visuals: Exciting animation of the key concepts along with cut shots of supermodel and actress Brooke Shields.

Introduction of Latisse

Script Summary: Latisse introduces as the first FDA approved treatment proven to grow longer, thicker lashes. Voice/Music: Brooke Shields is speaking now, introducing the product. Music remains, softer. Visuals: Camera tight on Brooke, alternating with the product logo and the initials “FDA”.

Obligatory Warning Message

Script Summary: Potential for permanent side effects such as browning of the iris (likely permanent, but not a big deal - I guess - if you already have brown eyes), as well as warnings against using the product in conjunction with drugs for lowering eye pressure, namely the same drug, marketed under the trade name Lumigan. Voice/Music: We are back to the first woman’s voice in monotone; significantly toned down music. Visuals: Brooke Shields having fun interacting at a cocktail party; certain warning language in white type reversed out of the darker bottom third of the screen.

Close and Call to Action

Script Summary: If you want to grow longer, fuller lashes, ask your doctor. Voice/Music: Music returns up-tempo; back to Brooke Shields speaking directly to camera. Visuals: Tight camera on Brooke; website address.

If you read carefully, you’re bound to notice this ad doesn’t seem all that unique. You’ve likely seen dozens of other drug ads structured in nearly the same way. Why do they do it? Why does it work so well? Let’s examine the rhetorical devices.

1. Primacy/Recency: We tend to remember the first thing we hear and the last thing we hear. We tend to gloss over the message in the middle. Every good speaker knows this; that’s why they open strong and end strong. This Latisse ad opens and closes with the same key message: Grow longer, fuller eyelashes. We remember that. We gloss over the discussion of side effects.

2. Visual Supremacy: Remember, humans are visual animals. We tend to believe what we see over what we hear. We are very adept at recognizing visual cues. The ad focuses on Brooke Shields - her great cheekbones and dazzling eyes. In fact, Latisse hardly could have made a better choice for the target demographic. We are inclined to believe her. And why shouldn’t we? The ad looks like a cosmetics ad. And cosmetics are safe. Why shouldn’t Latisse be safe too?

3. Disassociation: Used in the Latisse ad to subtly downplay the severity of the warning messages, the script and the voice convey a serious message, while the visuals focus on Brooke Shields having fun. The verbal message and the visual message no longer agree. Which one takes precedence? You guessed it.

In the end, we are left with the impression that Latisse will do what it promises with an absolute minimum of risk. Like any product, its promoters want to downplay any negativity. I can’t blame them for that. That’s what advertisers do.

But there’s more to it than that.

Potential side effects of any drug are important. And they are being purposely downplayed - not just in this ad and not just for this drug, but in nearly every pharmaceutical ad you see. I could have used almost any of them to illustrate the persuasive devices used.

You can’t be a good consumer of healthcare products without being a savvy consumer of healthcare information. I hope this helps.

Watch the Latisse Ad Visit Latisse Online

Key Points: 1. Minnesota-based Victory Motorcycles leverages its parent company’s expertise in small engines to break into the motorcycle market. 2. But it doesn’t shy away from the fight: The company focus on high-end touring and custom bikes boldly puts them up against Harley-Davidson. 3. Victory has a fighting chance, but its growth will remain stunted unless it defines more clearly what it stands for, rather than focusing on Harley.

I am not a motorcycle guy.

That’s not a negative statement. Nor is it a positive statement. I just have no real experience with motorcycles of any kind.

But despite that, an ad at the Blaine, Minnesota Green Mill caught my eye. The basic ad copy read: If you were interested in an American-made bike, and if you cared about performance and reliability over “just a brand name”, then you should ride a Victory Motorcycle.

The ad mentioned a few specific performance and reliability measures, but made no specific mention of the “other” American-made motorcycle in question. But for a branding guy, there was no question to which brand Victory was referring. Of course, Harley-Davidson.

As soon as I realized the comparison, it became brilliantly clear the uphill challenge Victory faced. From a branding perspective, the upstart fights against (perhaps) the best-regarded American vehicle brand for the last 30 years - a symbol of rebellion, style, and guts. It’s as American as apple pie, and more “American” than Chevrolet.

My first thought was “good luck”. Victory has no chance. The fight against the Harley brand was a money pit and ultimately doomed to fail.

But I was not sure my first impression was correct. It nagged at me. So I decided to do some homework. I learned something; and perhaps I can shed light on Victory’s (not so ‘pie in the sky’) chances against the rugged industry giant.

Born in 1998, Victory Motorcycles is part of Medina, Minnesota-based Polaris Industries. Yep, the same guys who bring you snowmobiles (snow machines?) during the winter months and ATVs for trail riding. That was news to me, and made my continued search even more interesting. This was a Minnesota company taking on the Harley marketing machine.

[It also jogged my memory on the now defunct Excelsior-Henderson Motorcycle Company (also hailing from Minnesota) and the innumerable problems that brought down that promising company.]

From the Polaris perspective, motorcycles make sense. Snowmobiles are a great market, but they are limited geographically and they are limited to the winter season. ATVs help break out of geographic and seasonal limitations, but they are off-road and specialty use only. Polaris knows a thing or two about building a solid small displacement engine, so motorcycles are a natural extension.

Beyond the manufacturing efficiencies and expertise, here’s where the market dynamics get interesting.

Motorcycles, as a market, can be sliced up into four major sub-markets: “Standard” bikes - utilitarian, but not scooters - from $2,700 to $4,000 and 50cc to 250cc “Performance” bikes - or ‘crotch rockets’ - from $5,000 to $6,000 and 251cc to 1200cc and up “Touring” bikes - the cross-country models, built for comfort - from $10,000 to $18,000 and 251cc to 1200cc and up “Custom” bikes - Harley’s main playground - from $12,000 to $25,000 and 251cc to 1200cc and up

Victory does not compete in every market, just the most profitable ones - upper end Touring and Custom motorcycles. Right up against Harley-Davidson. Without fear.

That upper-end market is a perfect choice for Victory as a small manufacturer, and also proves to be a market with lots of room for cannibalization (even in a rough motorcycle economy).

Okay. So Victory chose the correct segment. But will anyone buy the bikes?

To help answer that question, we need to look at the changing demographics of the motorcycle buyer. In 1985, the median age of a motorcycle buyer was 27.1. He was male (almost 100% of the buyers). He was unlikely to have attended college, and if so, did not complete any sort of degree. His average income (adjusted for inflation) was $25,600.

Fast forward 20 years. The median age is now 40.1. But it is not just that the average buyer got older - the whole segment grew. One in 10 owners is female. One in 10 owners has a Master’s or Doctorate degree. The average income has more than doubled to $55,850.

Wow.

Think they can’t afford high-end bikes? Think again.

So, let’s quickly summarize.

Smart move #1: Victory has the guts to go head-to-head with Harley-Davidson (and to a lesser extent, BMW and Honda) in its most profitable segment. Smart move #2: Victory has the buyer-psychology understanding to put an emphasis on performance and reliability, using its manufacturing expertise to bolster its position. Smart move #3: Victory has the pulse on the new demographic, understanding the importance of style to attract a new type of buyer.

Despite that, Victory has a small (albeit devoted) community of owners.

What is holding it back? The Victory brand position could use some work.

To come full circle to the ad I described earlier, Victory described more clearly what it is not (a Harley), much more clearly than what it is. A comparison is an interesting ad strategy, and certainly highlights points of difference, but even when you are smart enough not to mention your competitor directly, your advertising simply serves to remind your buyer of their more-popular option.

It is time for Victory to step up. They have to define what “Victory” stands for. Not what a Victory motorcycle is better than, but what it means to ride one.

And I think the current recession is a perfect opportunity. Buyers are scrutinizing and rethinking their purchases. If there is any chink in the Harley armor, it is its own success. Harley has become what its brand initially rebelled against. Harley is popular. Almost commonplace. Certainly a bit watered down.

There is always a place in the market for the new rebel. The new symbol of counter-culture on the roads. A new symbol for status and style.

That strategy may not get Victory to 25 percent of the market, like Harley enjoys, but its a start.

Nothing against Harley, but I’m rooting for ‘victory’ for the home team.

Related Links: Victory Motorcycles

Key Points: 1. Even in an age of geckos and cartoon crime-fighters, most insurance ad campaigns are pretty boring. Nationwide’s latest blitz is no exception. 2. However, one ad in the series - featuring an blind employee with Asperger’s - stands out and breaks through. 3. Some may make the argument that his disabilities are distracting, but I contend Nationwide made a smart and courageous choice to reach their target audience.

Aside from geckos and cavemen, insurance advertising is pretty boring.

That’s especially true if you happen to be one of the old-line insurance firms. Nationwide Insurance, and its latest broadcast campaign, certainly falls into that category.

The television spots feature actual Nationwide employees - adjusters, agents, and claims reps - in a effort to reinforce the overall brand position of the company (who’s “on your side”) with the actual people who are “on your side”. The “making it real” approach, as it were.

The employees relate stories about how Nationwide contributes to its communities, is ready to forgive an mistake (such as an accident or moving violation), and even has its own iPhone app.

Yawn.

Where have we seen this before? Let me count the campaigns: All State. American Family. Travelers. State Farm. New York Life. The Hartford. Remarkably unremarkable.

Except for one ad. One very important ad.

This particular ad features Nationwide employee Michael Piccerello. In his 30-second spot, he discusses how he sees customer complaints as opportunities to improve his organization. He tells us that he is there to listen, and then to see what he can do to make it right.

From my description (and without seeing the ad), you might be inclined to think that what makes this ad so important is that he is admitting the obvious: Nationwide, as a big insurance company, is going to screw up sometimes, and their call center folks see those as chance to improve, rather than assign blame. It’s refreshing to hear a company actually come clean.

That’s a good reason, but that’s not it.

When you see the commercial, you see that Michael Piccerello is blind. (The camera pans down so that you can see his service dog.) Additionally, he has Asperger’s syndrome, a form of high-functioning autism.

The ad takes you aback the first time you watch it.

We are simply not accustomed to seeing people with disabilities - especially mental disabilities - in a public role outside of the context of their disability. Let me put it another way. Michael is not talking about Nationwide’s services for people who have lost their sight. He is also not talking about Nationwide’s acceptance and hiring of people with Asperger’s. Rather, he is communicating an over-arching advertising message for his firm.

That’s what makes this ad so very unique.

It is one of the very first of its kind. A national campaign, featuring someone with physical and mental disabilities, whose primary message to us is not related to the disabilities themselves.

Nevertheless, it took great courage for Nationwide to take this step.

Because right under the surface - right under the veneer of civility - we see what some people are really thinking. In the blogosphere, without fear of personal identification and reprisal, we see just how ugly and vile people can be. I’ll let you read a few of the posts I found related to this specific ad yourself, but be warned, you may be disturbed by what you read.

However, in the interest of rhetorical criticism, I must address their underlying argument. Subtracting the profanity, crudeness, and epithets, it is summarized as follows: Michael Piccerello, and his obvious visible physical disabilities, distracts from the message Nationwide tries to communicate. Instead of leaving with the important and humble message of a company that makes mistakes, but will work to correct them, you are left fixated on Michael the person. Whatever your feelings may be towards him, those feelings will not relate to the core message of the campaign. Hence, the ad is a failure.

For some portions of the viewing audience, that argument may have some validity.

But I would make a different argument.

The purpose of advertising - good advertising - is to break our complacency. Otherwise, the ad is likely to fall into the background noise of an otherwise over-cluttered media landscape, where many of us simply tune out or TiVo through it. Advertising can shock us, it can make us laugh, it can make us angry, but in order to communicate, it cannot be boring. Michael makes us pay attention.

But what of the argument that Michael’s disabilities would distract us from he core message? Yes, the ad “shocks” us, but doesn’t it fail to communicate the real message? I would say “no”. The ad’s message will strike home with the correct audience.

Think about the target market for a moment. This person is 40 years old plus. This person is likely to have a spouse, children, a home, and more than one car. In the insurance business, that’s a gold-mine: Life insurance, college savings plans, homeowners insurance, retirement investments, and auto insurance. This is also a person who has seen enough of life to grow out of childish snickering at the sight of a person with disabilities. This person has likely worked with such a person, or been part of a PTA organization with such a person, or been taught by such a person in graduate school. In other words, they may be “surprised” to see Michael in an ad, but they don’t see him the same way those young bloggers do. To them, he is authentic. He makes you listen.

If we look deeper into the life experience of the people critical of Nationwide’s decision (from what they share publicly), we see they are not quite at the point in their lives where they are likely to see people with disabilities outside of the context of a special education classroom.

Is that to say all young people feel the same way? Goodness, no. Is that to say all people over 30 have matured beyond that narrow perspective? Sadly, no.

But it does mean that Nationwide made a smart move by selected Michael. He can break through the clutter. And that’s what makes him - and this ad - special.

Related Links:

Watch the Nationwide Ad

We still have a ways to go: www.diaryoffools.com godfatherweilhammer.blogspot.com www.belch.com

Gillette Children’s Hospital

Key Points: 1. Plastic water bottles are an undeniable environmental disaster, contributing tons of plastic each year to the Texas-size Pacific Garbage Patch. 2. Bottlers have an incentive to fix the problem and save their $11 billion cash cow. 3. But canteens - repositioned as fashion accessories - are making a strong return, and could eventually cannibalize 30 to 40 percent of the market.

In the middle of the northern Pacific Ocean, the currents converge just right.

They form a giant loop of swirling water attracting floating debris from the entire Pacific basin into just one spot. In the middle of this immense area of ocean is a growing island of floating garbage twice the size of Texas. It is a sea of unbelievable foulness filled with all manner of trash from North America, Russia, Japan, China, and Southeast Asia. And it’s growing.

By far one of the biggest contributors: The humble plastic water bottle.

Since the early 1990s, when the plastic water bottle became popular, billions upon billions have been manufactured. In the early days, virtually none were recycled. Many ended up in landfills, but countless more ended up in the Pacific drainage basin, eventually making their way into the Pacific Garbage Patch.

But we recycle them now, don’t we? Well, largely, no. Industry estimates suggest only 12 to 15 percent ever make it to a capable facility. And that number is good compared to the rest of the Pacific rim nations.

For bottlers, growing concern over the Pacific Garbage Patch (as well as a host of other environmental and business issues) is a big deal.

In the United States alone, bottled water accounts for a staggering $11 billion slice of the drink market. The average American consumed 28.3 gallons of it last last year alone, making it the second-most consumed beverage after only soft drinks.

Big players Coca-Cola, Nestle, and Pepsico have a profound interest in not allowing environmental concerns (and new concerns regarding the leaching of petro-chemicals into your water bottle while temperature cycling in transit) to derail this cash cow.

To respond, what has industry done? A few things: Bottlers have begun to reduce the overall amount of plastic used to make the bottle itself. This is good for the economics of the business, doesn’t hurt the drinking experience, and makes bottles easier to recycle. Some bottlers are experimenting with bottles made from corn-plastic instead of petroleum. A very interesting idea, but given ethanol’s run-in with the food/fuel debate, I suspect this particular technology may be short-lived. Other ideas involve creating easily degradable “bottles” - designed to decompose safely in landfills and water tables (or better yet, provide microbial nutrients as they do so). Very cool.

However, the biggest “threat” to the bottlers and their market is not necessarily a new idea, but a very old one: The canteen.

Oddly enough, the rise of the canteen as a viable competitor to disposable plastic water bottles is considered disruptive innovation. (Or perhaps more appropriately “disruptive re-innovation”).

The modern canteen is a holdover from colonial times and recent military history. Popular for backpackers and weekend adventurers up until the 1980s, the canteen fell out of favor as disposable plastic bottles became cheaper and more prevalent. In a world where every state park has a vending machine, why carry a canteen?

The current ecological climate is setting the stage for the rebirth of the canteen as a popular (and not a niche) option, but brand positioning will take it the rest of the way. Let’s briefly explore a few of the key planks in the positioning platform.

The first is a raw and rational economic argument. In some places (the Disney grounds come to mind) a bottle of water can cost $3.00. At the vending machine, perhaps $1.50. Even in the grocery store, you can hardly do better than $0.20. At an average of one water bottle per day (hardly a stretch), that’s a range of $76 to $1095 per year - with the median number somewhere around $250. Yikes. A good canteen will run you $30 to $40. Once. That’s a good ROI.

The second is the obvious ecological argument. The canteen (made with an inert inner wall of aluminum) is inherently safer than plastic, washable, and re-usable. In many models, one you get tired of it, the metals are sought after by recyclers and easily converted into something else. No more trash.

These are great reasons, of course, but they are nothing compared to aesthetic appeal. The smartest canteen makers are reincarnating the canteen as a sexy status symbol - a wearable icon of ruggedness, environmental stewardship, and fashion for men, women, and children of all ages.

Of all the reasons canteens - I think - will take off, I’ll put my money on sex appeal every time.

Now all that said, the humble canteen has a long way to go to break entrenched habits. However, a good guess is that they could peel away 20 to 30 percent of the water bottle market in the United States. That’s $3.5 to 4.0 billion per year. Or about 80 million units.

That might seem like a lot, but who thought we’d ever buy tap water in a bottle?

Stranger things have happened. Let’s hope this one does too.

Related Links: http://www.uscanteen.com/

Key Points: 1. Conventional wisdom tells us the down economy should negatively impact Weight Watchers International and businesses in its category. 2. However, Weight Watchers has positioned itself ideally in the public mind and within the medical community. 3. When the times comes (sooner than we think) for sliding-scale, health-impact pricing, Weight Watchers will benefit from insurance plans who adjust premiums based on health metrics.

We all know what it supposed to happen in a “down” economy.

We all know discretionary purchases will take a hit. We all know recurring monthly fees in the household budget will get another look. We all know people will forgo expensive healthy food in favor of cheaper options and greasy comfort food.

Apparently, investors and analysts also know those things, and have pummeled Weight Watchers International stock (NYSE:WTW) over the past six months, down some 40 percent.

All of which begs the question: Are the analysts correct?

Perhaps. First, Weight Watchers serves a “discretionary” niche market. Diet plans - as a segment - do well when the economy does well. As people have extra money, and also feel secure in their finances, they are more likely to engage in self-actualization behaviors. Weight loss is one of those. While we might think weight loss is a goal for many people, trend watchers know that in a macroeconomic sense, we need to be in a good collective mood to get started.

That feeling of psychological stress that comes from a tough economy leads directly to the second reason the Wall Street intelligentsia is down on WTW. Discretionary income issues aside, when people are stressed, they head to comfort foods. Those same analysts have boosted the stocks for snack cakes, fast food, and soft drinks.

Finally (and perhaps some consolation to the Weight Watchers board of directors), many major stocks are in the tank, and many for little or no good reason.

Let’s stop there for a moment. Does this just seem like a more detailed recitation of what we all know? Aren’t the analysts supposed to know things we don’t know?

Do we need to look a bit deeper? Perhaps beyond what we know?

I think we do. Three things come to mind in this case: The first relies on business fundamentals, the second on brand positioning, and the third on a fundamental shift in the health insurance business model.

Let’s start (briefly) at the beginning.

Founded in 1963 by Brooklyn homemaker Jean Nidetch, the now-public Weight Watchers International employs over 45,000 people in over 30 countries. Back then, we really didn’t measure “BMI” as a public health metric, and few outside of the medical community understood the technical definition of “obese”. These we the days before TV dinners and before McDonald’s hit every street corner.

Weight Watchers clearly was ahead of its time. The 1960s and 1970s saw an explosion in food choices - few of which for the better. Without good ways to understand how these new options impacted health and weight, people were unprepared for the consequences of a fast food lifestyle.

Weight Watchers taught people how to eat. They invented the “Points” system as an easy way for the average person to keep track of food intake. They borrowed the “group approach” that was so successful as a treatment model at AA, and refined it for their use. They built a community of “Lifetime Members” who no longer pay to belong, but continue to return and encourage new members.

Fad diets come and go, but Weight Watchers formula simply worked. In other words: Good fundamentals.

Let’s move on to a quick market positioning analysis. In my simple example, place “importance of group meetings” on one axis and “focus on selling food” on the other. Weight Watchers “owns” the space where the group is very important, but selling food is less important. That is, as opposed to a program such as “Jenny Craig”, where group meetings are less important, and purchasing food is very important. That’s not to say that you cannot follow Weight Watchers alone (you can, online), or that you cannot buy Weight Watchers branded food products (you can, in any grocery store). But they understand - through their history - what the most effective formula is. And they monopolize that space. No one else can touch them there.

So what does this have to do with the future of the company? Here’s where it gets interesting.

The academic and physician community also believes Weight Watchers has the right formula. They know that a diet that focuses on forcing people to eat a specific diet, or pre-prescribed food, is doomed to fail for most people in the long run. They also know the psychological impact of the group on initial motivation and long-term success.

We all know the cost of health care is too high. And it is only going higher. And a national obesity epidemic is making the problem markedly worse.

In an effort to begin trimming costs, health plans have begun to experiment with health-impact pricing. Yes, we’ve seen this before. If you are a smoker, you might pay a higher rate. On the positive reinforcement side, you may get a discount to belong to - and regularly attend - your local health club.

But what I am referring to a much more specific future. Imagine a scenario in which a health plan takes a look at more than just age and basic family history. Imagine a sliding scale of pricing based on weight, height, BMI, cholesterol, fasting blood sugar, and about 10 other blood chemistry metrics. These factors can be a powerful predictor of cost in the healthcare system, and health plans will need to do something about it.

With some of the “buy it on your own” plans, that day has already arrived. It is coming fast for the rest of us.

So, in that brave new world where your health plan will begin charging you for an out-of-whack BMI, consumers will have a direct financial incentive to do something about it.

And what company already has the credibility within the general public as well as the medical community to make that happen? Or more to the point, which company has already positioned itself to be ready for the inevitable?

You already know the answer: Weight Watchers.

Related Links: Weight Watchers International NYSE: WTW

Key Points: 1. Hemorrhaging job losses in the financial sector make recruiting easier for the CIA’s financial counter-terrorism division. 2. The agency should experience short-term success with a combination of decent pay, patriotic appeals, and challenging work. 3. Long-term image problems remain, however, and the CIA must act to retool its image to retain its young and talented financial agents.

Out of a job in the financial sector?

The CIA wants you. And they know they’ve got your attention.

Times are (comparatively) tough for freshly minted Ivy League MBAs. Hopes of six-figure investment banking careers are gone; this new crop of grad students has entered a brutal Wall Street job market.

To put it in real terms, the Financial Times reports over 130,000 financial sector jobs have been shed in the past 12 months. And as employment is often a lagging indicator of economic growth, this summer’s (and this fall’s) graduates had better keep their options open.

As (comparatively) sad as this situation may sound, the news is music to the ears of hiring managers at the Central Intelligence Agency.

Many of us tend to think of the CIA as the home of James Bond and Jason Bourne - slick and suave, traveling the world to take down bad guys in the middle of the streets of London, Paris, or Moscow.

But the truth is, a vast majority of the time, much more mundane. The CIA puts it bluntly: Global terrorism is our nation’s biggest threat. And terrorism is crime. A global, cross-border crime, but crime nonetheless. And crime, to succeed, must be financed. And it is the financial trail - if properly followed - that will lead you to the bad guys. To put it more simply: Follow the money.

For years, the CIA has had trouble recruiting the type of talent it needs to do just that. People skilled at unraveling complex financial transactions. People who understand shady financial tricks. Precisely the people now out of work, or newly minted and looking for work.

Now to the marketing challenge: Both short-term and a long-term.

First, the immediate concern: Recruiting.

In what must be called a classic application of opportunistic advertising, the CIA is reaching out to displaced and un-placed financial types with a combination of decent pay ($48,000 to $120,000 annual salaries), the promise of “patriotic” work, and the lure of “tough” cases to sink their teeth into.

And by all rights, this should work quite nicely. The pay may not be hedge fund quality, but it is a solid middle class wage. More to the point: It’s better than nothing. Secondly, patriotic appeals clearly work on a decent slice of the business graduate community - traditionally conservative, the appeal of serving your country (while not quite going as far as active military service) strikes home for many. Finally, and perhaps most importantly, is the appeal of the work itself. The CIA website - revamped exactly for this purpose - presents a picture of the work as global, far-reaching, and very, very challenging. That’s like dangling intellectual candy in front of the MBA toddler.

While the CIA will likely enjoy success in the short run, I am much more concerned about the CIA keeping its new talent.

That’s the long-term challenge. When the economy roars back, and the investment banks are hiring again, will even the most dedicated civil servant be tempted by triple the salary and executive perks? Undoubtedly, yes.

But this is not just economics (although money does play a key role).

The real problem is much more endemic: The CIA continues to struggle against long-standing image management issue.

You could sum up the problem in two broad points: First, the CIA as part of the “government” apparatus, and second, the CIA as inherently dangerous and un-American.

Famous quips from Ronald Reagan (”The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.’” and even better: “Government is not a solution to our problem. Government is the problem.”) summarized the resentment and distrust of a generation disillusioned by years of post-war government meddling and waste. While that may be true, it has effectively transformed the image of the “government worker” into a bumbling, ineffective, and sloppy bureaucrat. In other words, you wouldn’t spend the time and energy to get a Harvard MBA and then go to work for Uncle Sam.

Stemming from that negative image of government as a whole, is perhaps an even worse public perception of the CIA itself. One could argue the issue dates back to the founding of the republic, and the resistance to a national police force. In more recent history, CIA secret prisons, harsh interrogations, rendition, and wiretapping all contribute to an image of an organization that views itself above the law and morally questionable.

Whether “right” or “wrong” hardly is for me to decide, but the fact remains: Long-term talent retention at the CIA will depend in large part on the reshaping its public image.

Now to the big question: How?

The website rework is a great start, but the CIA needs to go one step further. Think of who the agency wants to recruit: A new breed of investigator. A twenty-something. Who’s good with numbers. Who’s even better with technology. Understands the global picture. This is a person raised on an image of “law enforcement” as decoding internet phishing schemes and avoiding online stalkers rather than the “beat ‘em up” police world of “Law and Order” on NBC. To reach these new agents, the CIA should build its new image of the agency around the image (the “characters” in the drama, if you will) of the agents themselves.

Salary aside, it all comes down to a battle for the hearts and minds of the best financial talent to serve their country in an area of critical need.

And image management can help the CIA win.

Related Links:

CIA Careers Website

CIA Career: Economic Analyst

In-Depth - Job Cuts in the Financial Sector