22 May 2008

Police halt Bill Henson opening on child sexualisation investigation.

NSW Police closed down the opening night of Australian and international photographer Bill Henson's new show at the Roslyn Oxley Gallery in Sydney's Paddington this evening.

I was on the scene when two NSW Police walked from the building and advised the waiting media and bemused art lovers like myself that the gallery owners and Bill Henson had halted the opening pending an investigation by the NSW Child Protection Authority. Henson was seen leaving before Police made the announcment.

Police said they would be interviewing one of the subjects of the photographs and her parents.

Henson's work is renowned for it's use of young models set against lush and often opulent settings. He featured in a major retrospective at the NSW Art Gallery in 2006.

NSW Police were reacting to a piece by Sydney Morning Herald journalist Miranda Devine in Wednesday's edition which in turn fueled Sydney's incendiary talk back radio commentators with critics describing the images as contributing to the sexualisation of children.

Expect outrage from many quarters against the conservative Devine's outpourings and a backlash from both the Australian art world and media and the start of a new round of censorship.

20 May 2008

Brand heuristics: how we have all bought into the murky world of murketing.

I was recently sent a preview of New York Times' consumer columnist Rob Walker's soon to be released book Buying In and at the same time I was looking at some recent published research on the role of heuristics in consumer choice. It was timely.

Walker's book, also subtitled The Secret Dialogue Between What We Buy and Who We Are, underlines two main ideas - what he calls murketing and the creation of a desire code - as the basis of this "secret" dialogue.

Murketing, Walker defines, in two parts. First, it refers to what he describes as the increasingly sophisticated tactics of marketers who "blur the line between branding channels and everyday life", and secondly, through the "consumer embrace of branded, commercial culture" or what I would describe as participant marketing, "the modern relationship between consumer and consumed defined not by rejection but by frank complicity".

The second part of Walker's thesis surrounds something he calls the Desire Code, "the complex of factors, rational and otherwise, that spark us to make particular purchase decisions" but what he was really doing was identifying what neuroscientists and those at the sharper end of branding already have a name for - brand heuristics.

Brand heuristics IS the basis for the creation of the desire code. Essentially, heuristics are simple, efficient rules we use which are hard-wired by evolutionary processes or are learned via experience. They explain how people make decisions, come to judgments and solve problems, typically when facing complex problems or faced with incomplete information such as when they go to buy a particular product or consider a service. Heuristic rules work well under most circumstances, but in certain cases lead to what are described as systematic cognitive biases.

It is these cognitive biases which branding trades on. For example, in his 1899 book, The Theory of the Leisure Class, economic theorist Thorstein Veblen identified a penchant for people to perceive more expensive goods as being better than inexpensive ones (providing they are of similar initial quality or lack of quality and of similar style). He found this even holds true even when prices and brands are switched; so putting the high price on the normally relatively inexpensive brand is enough to lead people to perceive it as being better than the the other product that is normally more expensive. It's the typical Pepsi vs Coke taste test, which Walker also cites in his book.

Brand heuristics (and I have struggled to find a single simple definition) so here's mine: is a system of organised and systemic visual, verbal, olfactory and emotional cues and evidence that trade on and or create cognitive biases. In effect, this is Walker's desire code.

Walker sees the goal of branding to "narrow the range of actual differences in commodity attributes" to create "a different kind of value". And he's right. Brand heuristics puts in play, for good or better, the great sleight of hand. How else do you explain the desire to buy Hermes' Birkin Bag (see pic of Roger Federer from a recent campaign) for $16000 with a waiting period of six years versus an eBay knockoff for $169.99, which you can get now. Both, as Walker acknowledges, are likely to be of similar quality with little variation. So it's back to the desire code, the brand heuristics.

Or, as I have noted in DIFFUSIONblog 14/7/05 Replacing place, the specificity of luxury brands, what happens when Prada begins manufacturing their bags in the same factories that produce bags for Target?

It is murketing, as Walker puts it, that is being used to affect a great change in how we perceive and participate in brands. He cites examples of people signing up with "word of mouth" firms to become what are commonly called "brand ambassadors" you see on CraigsList postings who can spread the news about some new product or the hundreds of thousands of people submitting their own reviews of services and product offerings in places like Yelp.com and Trip Advisor.

So while Walker doesn't present us with a lot of new ideas here and he hasn't looked around at the research, he's good at filtering the ideas and packaging them up in a readable way. While many of these same examples cultural and brand critics have been citing for some time (it's the usual suspects like Timberland, American Apparel, Red Bull and iPod), what he does do successfully is popularise the idea of what I call participant marketing and the use of "desire codes" as a simulcra for brand heuristics, the successful and perhaps somewhat accidental exploitation of these hidden biases by both brand owners and their agencies.

Walker's book is released in the United States on June 3.

09 May 2008

Coles Express and predictable irrationality.

As gas prices rise around the world, it's not hard to see why consumers and governments are getting more and more irritated with gas retailers but perhaps they only have themselves to blame.

In Australia, the dominant supermarkets chains - Woolworths and Coles - have seen spectacular revenue growth from their entry into the petrol retailing market and a major contribution to this growth has been shopping docket priced discounts, mainly available through their supermarkets and liquor stores.

So when a furore broke over Coles' petrol pricing policies this week, it best illustrated the predictable irrationality around our brand based buying decisions.

Not less than two government pricing watchdogs, the Australian Competition and Consumer Commission and the new petrol price commissioner (yes, they do have one!!), warned Australian motorists to consider alternatives to the Coles Express stores following a survey into prices paid at the pump.

According to the price commissioner, Pat Walker, motorists who regularly used Coles Express discount dockets (available only after a $30 purchase in Coles Supermarkets and other Coles Group stores and offering an intial $0.03 off the per litre price), should shop around before buying petrol at Coles Express.

The Commission identified about 30 Coles Express sites in Sydney that were selling petrol for 155.9 cents a litre, when the average price was 143.3 cents a litre.

Although differences of 15 to 20 cents a litre among service stations were typical, the Commission had issued the statement because it believed the discrepancy was significant and was worried consumers might be buying out of habit.

The Commissioner's statement illustrates the kind of irrational behaviour identified by MIT professor Dan Ariely in his recent book, Predictable Irrationality: The Hidden Forces that Shape our Decisions.

In more than 20 years researching behavioral economics, Ariely discovered that people tend to behave irrationally in a predictable fashion. Drawing on psychology, economics and behavioral economics, Ariely's book demonstrates why cautious people make poor decisions about sex when aroused, why patients get greater relief from a more expensive drug over its cheaper counterpart (a 5 cent aspirin vs a 50 cent one), why we steal hotel soap. Or, in the case of Coles Express, why consumers are willing to buy petrol at more than 12c above the market rate just because they might benefit from a 3c cent or more discount.

According to Ariely, our understanding of economics which is currently based on the assumption of a rational subject, should, in fact, also be based on our systematic, unsurprising irrationality. It's also something that quantitative analysts in the financial markets have been dealing with for years.

Ariely argues that predictable irrationality provides an opportunity to gain a greater understanding of previously ignored or misunderstood forces (emotions, relativity, social norms and dare we say, brands) that influence our economic behavior brings a variety of opportunities for both consumers and brand owners to reexamine both individual motivation and consumer choice.

What's most interesting about the Coles Express example is that Ariely's predictable irrationality is being reinforced at the brand level. The station signage, ticketing and shelf ticketing provides a strong visual reinforcement of this irrational view that the consumer is actually saving. The constant message, right down to product naming, is always "saving".

Whether people associate Coles Express with value and hence saving, or its just plain laziness, can only really be explained by this predictable irrationality. And the brand messages simply serve to reinforce the perception of saving, even if it is, as the petrol price commission and the ACCC point out, it's not the case.

02 May 2008

Woolworth's Thomas Dux challenges Coles.

Woolworths is set to add to Wesfarmers' supermarket woes with the first of its new Thomas Dux branded stores opening in Sydney.

With another store already earmarked for an August opening in Sydney's Paddington, Woolworths says the stores will concentrate on offering mainly fresh foods and a larger deli in smaller format supermarkets under the new brand. Some of the brands to be included in the new store include one's already stocked at Woolworths' deli counters as well as new ones such as Simon Johnson.

In a local release, Thomas Dux Grocer is described as "a bunch of people passionate about food" who care about "what you care about" and aim to make the food shopping experience "so much better." It's going to be prove challenging as no supermarket brand in Australia seems to be able to do this with all relying on similar strategies to maintain market dominance, yet with none with a particularly differentiating brand strategy.

The move marks a new chapter in the attempt by both Woolworths and Coles to capture what is an increasingly savvy grocery customer and replicates similar IGA formats in Victoria and Queensland.

The look and feel of Thomas Dux (retro name and logo) is very much in line with similar format stores in London for small grocers such as Shepherd Foods and Partridges, and the reliance of fresh and specialist lines for stores replicates similar strategies used by US organic grocer, Wholefoods.

Both Coles and Woolworths look to be under threat by changes announced last week by the Australian Federal Government which will see the market set opened up to international competition. Already US big box superbrand Costco is set to open in Victoria later this year.

Coles is increasingly seen to be on the backfoot in its battle to maintain the Australian supermarket duopoly (Australia is one of the world's most lucrative supermarket battlegrounds deliverying higher than world average margins).

While Coles is currently undertaking a major review of both its media and advertising buying and strategy under new CEO Ian McLeod, no new brand strategy has been revealed. It was the absence of a coherent strategy that so successfully undermined John Fletcher's tenure in the role.

01 May 2008

What the ?!?! happened to ?Whatif!

Global brand innovation agency ?WhatIf! has closed down its Australian operations.

According to a press release, UK based ?What If! commenced operations in Australia in 2001 and had a team of 25 in its Sydney offices. The office was closed on 31 March.

The business had an impressive client list that included businesses as diverse as ABN AMRO, Babcock and Brown, Bluescope Steel, Unilever and Westpac.

In October 2007 the company appointed Nudie founder Tim Pethick to head up the Australian arm. Pethick was contacted for comment on this post and his comment is found below.

In a case of a near Soviet-style disappearance, the details of the Sydney operation are no longer found on the UK based website.