Gap Yeezy does it.

This week global fashion house GAP announced a 10 year brand partnership with Kanye West’s Yeezy. West’s Yeezy colloboration with shoe brand Adidas had already produced something like $1b in new sales, so it’s probably a great thing for both West and GAP to ink a deal. 

Butwhat does it say about the GAP brand itself?

A quick survey of posts and discussion threads across Google will probably give you a good assessment of the current state of the GAP brand over the past five years. It’s trading on a legacy and is directionless and in decline. Sure, it’s still a billion dollar clothing house, booking $2.11b in sales in June but that’s down from $3.71 for the same time in 2019. A fall of near half is not unusual in these Covid times, when retail activity around the world has 

either paused or gone into reverse, but it does also expose GAP to its fundamental problem. 

What is its brand now and what is its strategy?

Much like JCrew, who recently fell into bankruptcy and administration after years of direction seeking, GAP continues along a well trod middle market path without much strategic and creative direction — neither fashion-leading like European rivals H&M and Zara, both of whom have managed to weather the vagaries of Covid or even price-led like the department stores Sears and Macy’s. The latter more likely than ever now to be suffering even more because of their market spread and reliance on hard real estate.

Put simply, Gap is behaving eponymously. It doesn’t serve a gap in the market, it doesn’t really know anymore what part of the market its appealing to, it’s continually discounting to maintain same store sales and its product isn’t particularly differentiated and not really that interesting — whether it’s the Gap itself or the brands it owns — Banana Republic, Old Navy or even Athleta — they’re all much the same and not very different without their fascias.

So while the Yeezy partnership seems a smart proposition and hopefully will rub off some valuable brand visibility alongside of cheap Yeezy sales volume, it’s only a patch and still doesn’t solve the issue — what is the Gap brand about and what strategy should it be pursuing to more fully differentiate itself in a crowded and a now declining market. 

And should, dare I say it — it become GapYeezy and fulfill the dreams of its erstwhile design partner Kanye, who was once the only black employee of a Gap store in his hometown Chicago and may even be more likely than West’s recently announced Presidential bid. 

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Facebook don’t be evil. It doesn’t suit anyone.

“We build technologies to give people the power to connect with friends and family, find communities and grow businesses.” from the FACEBOOK purpose statement.

One part of Facebook’s brand positioning (or is it Mark Zuckerberg’s?) is built around its desire to not be “arbiters of truth” and this position entailing non-censorship of political, violent or racist posts on its platform, is starting to look decidedly precarious. Not only does it reflect the company’s moral ambiguity but its especially exposed when it already imposes what it calls “Community Standards” and, for example, censors nude images in artworks on its platform. Thus the right to be somehow immune from the effects of purposeful and sometimes improper use of its technology to incite or malign becomes dangerous to defend.

Already this week large corporate business such as big advertising spender Verizon are pulling advertising from the platform, not just for a month, but are permanently pausing their activity until they say Faceboook ‘can create an acceptable solution that makes us comfortable". In 2019 Verizon was estimated to have spent $2.64 billion across all media (see Verizon advertising spend) so its likely it will have some impact. This comes alongside an already announced month long advertising pauses from Ben & Jerry’s USA, North Face and Patagonia.

While it’s clear this is not going to make a big dent in the $4.9b revenues it reported in the first quarter of this year, its brand and brand reputation are likely to face further damage until Zuckerberg starts to align the business closer to those of others in the tech sector like Twitter and Google who have made better effort.

The problem with Facebook is that its failure to stamp out racism and violent posts on the platform doesn’t equate with very principled brand values - “be bold; focus on impact; move fast; be open; and build social value”. As an enabler brand, it sees its role as a technology creator and facilitator and thus a distant hands-off role with any ill use of its technology (like most brands in the sector). All of this starts to sound both morally ambiguous and dangerous as it continues to allow comment and images that flout social norms. The fact is that Facebook, in enabling this kind of misusage of its technology, has by its very nature become a publisher and thus an arbiter of morality (and that is just another truth), whether it likes it or not. Its 28 pages of “Community Standards” not only proves its acceptance of this role but it also continues to sustain the continued precariousness of such an argument.

Even as last year’s Facebook rebrand seemed to resolve some structural issues around the role of the parent company, it failed to address the dissonance in its brand values and now it finds its revenue base wanting, as Verizon does, it to act more judiciously. On Friday 26 June Facebook reportedly acknowledged what it describes as “trust deficit” in a call to advertisers, its basic inaction might soon translate to action once some significant threats are made to its $70b annual ad revenues by larger corporates around the world. In the end its not something Zuckerberg can tough out forever.

On Friday 26 June Zuckerberg announced several steps Facebook would take to eliminate hateful content in ads, stamp out false claims leading to the 2020 US elections, and make progress on racial justice. This was after Facebook CocaCola and Starbucks joined Unilever in the social media boycott and Facebook's share price fell 7%. He added Facebook would hide or block content considered hateful or that could harm voting, with no exception for politicians, as Twitter has done. 

The Death of HBO: "The king is dead, long live the king"

One of the problems for the current spate of repositioning and rebranding by digital streaming companies or any broadcast company for that matter, is getting to grips with constantly shifting technology and the expectations of customers and audiences on what their brand should deliver.

Most strategists insist brands should be simple and simply expressed, as do most customers but not so the heads of WarnerMedia. Earlier this month it announced it would be retiring its HBO Go service and then subsequently launched its new all-you-can-eat app based streaming brand HBO Max.

Here’s how WarnerMedia put it: the HBO Now brand would be folded into the HBO app and current HBO Now subscribers would still be able to continue accessing HBO and also HBO Max through a rebranded HBO app on the same platforms they currently use to view HBO Now. The company said they had differentiated HBO Max and HBO, by noting that HBO Max is an app that includes all of HBO together but with additional WarnerMedia content offerings. So why isn’t it called Warners? The HBO app will be a standalone streaming platform for the HBO service. Get it? No.

The problem for me as that WarnerMedia is treating both HBO and HBO Max as separate brands which as they are presented they are not and for many customers, they can’t see why they are different. For the mot part their visual and name assets are shared but their offers are, by their own admission, differently positioned though HBO is inclusive of Max. Even in their press releases WarnerMedia says that all of HBO’s content will be available on HBO Max, so how is that not confusing?

So if HBO is the brand, why is HBO Max not being treated as a true sub-brand with a differentiated positioning, offer and audience or is looking for one? There doesn’t seem to be a whole lot of thinking around updating each of the brand’s specific values and propositions. HBO has a lot of adult content, yet HBO Max is oriented towards family viewing but with parental controls of the adult content, much like Netflix. You get the picture or you do not.

It’s not particularly apparent what problem is being solved with the creation of this sub-brand. Wouldn’t WarnerMedia saved a whole lot of money and simplified it’s HBO brand platform by branding the entire offer HBO?

The next quarterly update on subscription numbers and value from WarnerMedia might provide some glimpse into what seems to be an apparent strategy fail.

Apple's brand strategy is stuck somewhere in 2011.

Ask anyone what they think Apple’s brand strategy is and you’ll mostly get an opinion that’s stuck somewhere between 1987–2011 and they really won’t be wrong. The reason — the brand strategy has barely moved on.

Gone are the days of Apple’s when dominant marketing savvy CEO in Steve Jobs who, alongside visionary designer Johnny Ive, could articulate a clear positioning via forward thinking human centred design. Current CEO Tim Cook’s Apple brand strategy appears MIA, uncentered and confused: what is it that Apple stands for these days — fun? humanity? simplicity? or as a friend described it, “reassuringly expensive”.

While Apple might be one of the world’s most valuable brands but this has been largely created on the back of a single product — the iPhone and by switching from product centredness to service led — Apple TV and Apple Music. Its reliance on what appears to be a legacy strategy has seen its brand positioning, particularly around design, largely abrogated to competitors like Google, Huawei and Samsung.

Just this week Apple released macOS Catalina, the new version of its standalone Mac operating system, which saw it dumping its nearly 20 year old iTunes sub-brand in favour of three branded apps: Apple Music, Apple Podcasts, and Apple TV. This at least makes some sense but there’s no longer any distinction between it’s app naming, its subscription service, its non-subscription music integration as well as its peripherals eg. Apple TV is both a service and device. And then there’s its Apple Match service.

Are we to assume that they are always going to be one and the same or will products and service delivery be a mash? Someone needs to get in there and give them decent nomenclature guidance.

And given all this, Apple no longer appears to have a head of brand. They haven’t had one since 2017 and perhaps that explains it.

Find out more in the latest edition of BRANDNEWs, a global newsletter to help you find out what brands are around the world are launching, who's failing and what brabd strategy is making an impact.

DIFFUSION launches BrandNews

DIFFUSION has just launched BRANDNEWs, a newsletter to help you find out what brands around the world are launching or have launched, who’s failing and what brand strategy is making an impact. 

BRANDNEWs is published weekly from 5 June 2020 and will provide category listings of newly launched and failing brands as well as some analysis about what brands are doing with their strategy.

The first 500 subscribers will get free access til end of June and thereafter there will be a small monthly or annual subscription charge via SubStack for all.

If you’re in marketing, branding, advertising, markets and research you’ll find BRANDNEWs indispensible.

Contributions are welcome.

Here’s some samples of what you might get:

BRANDNEW

Retail Fashion

1. Gauge81 was founded in 2019 is (pronounced GO-SH eighty-one) is an Amsterdam-based label that blurs the line between casual and evening wear. Gauge81
2. Kirin meaning giraffe in Korean) is a streetwear label founded by Korean DJ, fashion icon and designer Peggy Gou. The line first made its debut at Paris Fashion Week 2019.

BRANDFAIL

Passenger Car Rental and Hiring

Hertz USA, whose ownership also includes the Dollar and Thrifty brands, has filed for Chapter11 Bankruptcy protection. It blames the collapsing used car market in the US. 23 May 2020. Hertz

Retail Trade: Department Stores

Target/Kmart More than 160 Target stores in Australia are closing down and being rebranded as Kmart stores. 23 May 2020. Target to Kmart

BRANDstrategy

Tesla

The Tesla brand strategy is a minimalist futuristic green primarily automotive brand with a bare bones approach to marketing by founder and chairman Elon Musk using the marque as a platform for promotion including ferrying astronauts to for SpaceX, the world’s first private space flight on 1 June 2020 to a retail store that used to offer free rides in downtown Manhattan. Tesla has largely eschewed big budget advertising and focused instead on social media (Musk has 35 million personal followers), visual iconography via the (super)charging stations, distinctive livery and aural branding across the entire Tesla range. Even the launch of the Tesla Cybertruck in late 2019, despite controversy generated at the event, still didn’t dim the enthusiasm for the brand. Musk’s brand strategy is to build Tesla via a whole of brand approach, tying product development together with the green integrity of its electric battery to create a closed ecosphere around the brand.

When Every Thing Becomes Media.

“The message of any medium or technology is the change of scale or pace or pattern that it introduces into human affairs. The railway did not introduce movement or transportation or wheel or road into human society, but it accelerated and enlarged the scale of previous human functions, creating totally new kinds of cities and new kinds of work and leisure. ” (Marshall McLuhan, Understanding Media, NY, 1964, p. 8)

What McLuhan writes about the railroad applies with equal validity to the media of print, television, computers and now to the Internet of Everything (IoE).  The forerunner of this was the Internet of Things (IoT), which Kevin Ashton described in a presentation to Proctor and Gamble in 1999:

If we had computers that knew everything there was to know about things—using data they gathered without any help from us—we would be able to track and count everything, and greatly reduce waste, loss and cost. We would know when things needed replacing, repairing or recalling, and whether they were fresh or past their best.

In 2007 founding Wired editor Kevin Kelly went about paraphrasing some initial thoughts by Tim Berners-Lee, describing four stages of the communication evolution leading to the emergence of the  IoT.

In the first stage, Berners-Lee identified the linking of computers was the link-up the network of networks, or the internet. The second, he said was the linking up documents and pages or the web. Back then we were at the end of the beginning of the third stage, where data is unbundled and in a form that can be read by any device on the web or what Berners-Lee calls “the World Wide Database”. In the fourth stage, he foresaw a “drift towards linking up the things themselves. You want all the data about a thing to be embedded into the thing. What we ultimately want is an internet of things.”

But now that’s been co-opted  to become the Internet of Everything (IoE). In August Cisco seized on it, claiming naming rights, creating a hashtag and a dedicated domain but also telling anyone who wanted to hear that it will create $14.4 trillion in total value for private companies over 10 years.

Cisco defines IoE as bringing together people, process, data and things to make networked connections and as McLuhan had already rightly identified, with the ability for the technology to turn all that information into actions that create new capabilities, richer experience and opportunity in much the same way as the technologies of the railway, telegraph, sound and cinema did.

And they cite “Metcalfe’s law” courtesy of Robert Metcalfe, well-known technologist and 3Com founder, who described how the value of a network increases proportionately to the square of the number of users. It’s 1 + 1 = 3. Then mash it with Intel co-founder Gordon Moore’s Law and the explosive power of the idea is even more greatly magnified.

In that analysis Cisco say that by 2015 as many as 15 billion devices will be connected, with a forecast 50 billion by 2050. When these machines, this media interact with each other, trading data with little intervention and without our knowledge, it might be safe to say, the IoE will be here.

But my IoE looks like this: computers, handhelds, an IP-enabled desk phone, smartphones and maybe my car but it’s on board computer isn’t connected except at the shop. Oh and then there’s Peter, my local delivery guy, he has a handheld scanner which I try and scribble on. I’m sure that’s connected. Yes, there are chips in some of my credit cards but from where I am right now this is still very much early stage in Ashton and Berners-Lee’s Internet of Things or even Cisco's IoE.

And as a strategist, many of my clients can barely deal with the data they have available now, if they even have it. Yet, the Internet of Everything is going to arrive and they’ll still be trying to deal with stage 3 of Berners-Lee’s communication evolution. More so, we are yet to see how the IoE this will pan out for consumer control where, for the most part, those connected things will be delivering data back to origin points determined by the media creators and not by the users. When this happens, marketing may well become an arm of technology and analytics and their application overlayed by neuro-scientific and behavioral-based brand insight and thinking, media will be everything and it will truly begin to transform our lives.   

Gap And MySpace re:brands in crisis.

One of the problems of rebranding led by high profile logo redesign is that it can expose the  lack of thorough consideration of what the process itself is designed to achieve.

It now seems Gap and now MySpace have fallen victim to the inevitable focus on the pretty picture, rather than the big picture.

While no one would necessarily argue that either companies are suffering. Gap has annual sales of US$9.12b and MySpace is still the world's second largest social network with more than 50m users. However, both have significant brand problems which no logo redesign is going to solve, even if the claim is that this is only one part of a more r/evolutionary path.

In Gap's case, the brand has been struggling with frumpy perception issues for years as its core product has come under threat from more highly attuned brands like HandM, Uniqlo and Zara. It hasn't been helped by falling sales. Same-store revenue at Gap stores fell 1% in September but it wasn't as bad as the 8% drop in 2009.

MySpace has also been similarly blighted. Global revenues are expected to fall by 21% this year, under News ownership its suffered from constant management flux, a falling headcount and Qantcast estimates US visitors are leaving in droves with numbers down by 10m between April and September.

And obviously Gap didn't see anything worth learning from Kraft Australia's painful debacle last year when it crowdsourced its new iSnack 2.0 as the new name for an extension of its popular Vegemite brand. Despite the use of a highly anonymous panel of "brand experts" to vet the process (I suspect they were all internal), the result was a resounding public relations thud and a frank mea culpa from Kraft that 48000 submissions later, the name was axed. Gap pretty much followed the same sad route.

The lesson: unrestrained crowd sourcing of an extremely popular and well known brand is inevitable folly. More so, don't focus on the tactical.

Perhaps Gap recognised this when it posted on its Facebook page what could only be regarded as the beginning of a reversal: “Thanks for everyone’s input on the new logo! We’ve had the same logo for 20+ years, and this is just one of the things we’re changing. We know this logo created a lot of buzz and we’re thrilled to see passionate debates unfolding! So much so we’re asking you to share your designs. We love our version, but we’d like to… see other ideas. Stay tuned for details in the next few days on this crowd sourcing project.”

Gap North America president Marka Hansen later engaged in further dissembling on Huffington Post claiming that the rebrand came from a desire "to see how our logo - one that we've had for more than 20 years - should evolve. Our brand and our clothes are changing and rethinking our logo is part of aligning with that.

"We want our customers to take notice of Gap and see what it stands for today. We chose this design as it's more contemporary and current. It honors our heritage through the blue box while still taking it forward, " she said.

While Hansen said Gap was "listening" and would continue to take customers on the "journey" and consider their design submissions, the damage to the brand and reputation is already irreversible. Even more laughable now that the new logo has been dumped.

Put simply, Gap recognised there was a problem with the old logo and claims it's doing something about product and stores, but a brand is the sum of all parts. Hansen as a senior executive should know better, Gap needs radical brand reinvention not revitalisation. If Gap has been in a three year turnaround, as Hansen claims, where's the resulting sales? The brand tracker? And more importantly, what's the strategy? It really needs to start with some clarity of brand vision bought out of deeper customer insight as well as a braver sense of brand stewardship. All of which might have gone AWOL at Gap, a fact clearly exposed last week and confirmed when it announced plans to dump the new logo as quickly as it showed it to Facebook.

One would hope MySpace management has been watching Gap's PR tsunami and sees something to learn. It's new logo is not even launched yet. But the conversation has started, MySpace might want to rethink its already creaking credibility.

Transmedia is not new. Transmedia strategy is.

There is a significant opportunity now for a paradigm shift in the development of transmedia strategy for brands.

While there was a mild peak in interest in transmedia and the discussion around transmedia strategy in 2006/7 with the publication of Henry Jenkins' Convergence Culture: Where Old and New Media Collide , the buzz died soon died down to be replaced with discussions around narrative exposition and the centrality of the brand story.

One of the problems of Jenkins' critique is that the role of brand has largely been underplayed in subsequent discussions of transmedia. The assumption that brand assets like fictional content, media property and entertainment franchises are so evolutionary that they appear largely ownerless and un-branded, perhaps even disenfranchised by transmedia as well, seems naive. Now with the confluence of technology and brand creating ever more powerful social media platforms, brand owners have begun to realise that significant revenue streams have gone largely unexplored and undervalued, the argument for transmedia strategy now seems unequivocal.

Still brand development and planning continue to remain resolutely in brand strategy and advertising planning silos, rather than in the more convergent disciplines such as PR and social media which now cover "influence" rather than platform-based awareness. All the while the simplification of technology production and wider device access is radically increasing the ability, scale and scope of individual and audience collaboration and co-creation in brand development, it is still rare for brands and the campaigns that follow to embrace more than one or two transmedia approaches, even better still a full and lengthy transmedia strategy.

I believe much of the problem lies in three parts. Firstly, both a disavowal and a general ignorance of the role brand and brand creation has in the development of the transmedia assets. Secondly, the tactical short-term focus most brands have on brand deployment and engagement and subsequently followed by the action of their agencies. Thirdly, this concentration on short term campaign development (linked to agency renumeration and commission structures), replaces the more favourable strategic objective of long term brand equity building.

The above video is a broadcast of slides for my lecture to a Masters class at the University of Technology, Sydney. It is simply an introduction, designed to inform a larger discussion on the emerging role of transmedia strategy in brand and marketing planning.

Some thoughts on transmedia strategy, brands and the future of media planning.

How can brands plan and deliver unified long term strategy, build value and engagement in the message fog created by continually splintering and fractured media and audiences? The answer might be in the new field of transmedia strategy.

A transmedia strategy is designed to create an evolving and "self saucing" brand story through interaction between brand owners and their audiences. A transmedia strategy is contextual and continues the life of brand by permitting constant brand renewal through a process of reinvention and re-engagement. In a transmedia strategy, a brand's core ideology and brand platform has to have been developed sufficiently for brand messages to be coherently delivered to different audiences via a variety of media forms over a long period of time, rather than in the current highly geared campaign format and timeframe. Derived from transmedia story telling with its high profile examples like the multi-storied/multifabled Matrix and Star Wars saga brands, in a transmedia strategy messages have much less need to be integrated as they are independently delivered by a wide variety of media over time but can still contribute to the evolving brand.

Behind transmedia strategy is the idea that a campaign should be seen as less a campaign but more an episode or chapter, executed by discreet media opportunities for the evolution of a brand. Each of these media opportunities - whether they be for brand building or for deliberate interaction - can sit independently but is designed to contribute, over time, to the development of the brand.

Consider it this way: transmedia enables brands to more effectively deliver messages and communicate ideas to its targets and is better able to meet the overall brand aims. Take, for example, a traditional government-funded social marketing-based brand campaign. Most of these campaigns, for all their apparent success, are built around traditional bursts of media and rarely funded more than annually and are often highly television media dependent and here lies the opportunity for long term brand building.

Almost any government funded and long term social-based education program is ripe for a transmedia strategy. That these campaigns prominently emphasise display media such as television, internet advertising, cinema and print is often because of their inherent visibility (politicians like this as well) and well, because the agencies involved are not only better rewarded for this media but still regard it as the most able to deliver core messages to the widest possible audiences, regardless of its effectiveness and ability to create change.

In the case of a social marketing anti-smoking brand campaign such as Australia's long running Quitnow, traditional display media is exclusively used to deliver core messages to primary targets. But sometimes radio, PR, advocacy and now social media can also be more actively being leveraged to deliver actual engagement and achieve behavioral change.

However, with a transmedia strategy communication tasks and some of the targets can be more precisely and discretely divided between media, rather than looking to, as is often the case, to heavy spend across all media just to ensure TARPs, message spread and often annual budget exhaustion.

Take for example, the Australian Government's long running National Tobacco Strategy. With a transmedia strategy, the strategy aim could now be to create a fully integrated long-term brand play by starting to treat the Quitnow centred campaign as a more fully developed and evolving brand, rather than achieving implementation objectives via tactical and limited campaigns, which is now the case. Though the National Tobacco Campaign’s discreet approach has been highly successful for some of its target audiences, the continuing fragmentation of audience and media no longer guarantees success will be as likely or as easy. These days communication objectives can no longer be met by bursts of high cost but pocketed media activity.

A highly geared campaign emphasis on television spots in these types of campaigns does elicit specific audience actions that may fulfill some campaign objectives, but will it achieve “effective contribution” for the campaign? What is the state of audience fatigue with these messages? TARPs, in my opinion, is a singularly disingenuous measure these days, created when television was media dominant. Television is evolving and is now more suited to developing a character-based narrative for campaigns and not just for awareness raising. For example, the campaign's TV advertising should move away from the wave of “shock-and-awe” led campaigns to develop ad series built on connected family scenarios on smoking and its consequences. Each scenario emphasing life stages or turning/stress points.

With cigarette smoking the most social of habits, what's suprising in this Australian example, is this has not played a more significant part in campaign planning. The role of digital in delivering often low cost measurable target audience awareness, engagement and access to support should be framed within a component social media strategy, that both contributes to the anti-smoking brand like Quitnow but also works independently and alongside complimentary campaigns run by various state organisations and cancer groups. As it is the campaign's leading online property, the Quitnow website is severely underdone and it desperately needs expansion. My to-do list might include a Quitter’s page with first hand stories and opportunities to input approaches and solutions; a Quitnow YouTube Channel featuring the television spots or extended to become episodes; links to a Facebook page and other social media comment badging; deeper and more comprehensive SEO given Google’s new search algorithm ( with the possibility of guerilla tactics like link baiting); Wikipedia links to the archives and all existing Quitnow campaigns; Twitter brand conversations from anti-smoking brand ambassadors as well as a focus on separate non-English Speaking Background and indigenous channel development. In a transmedia strategy all of this is designed to develop the brand's narrative and contribute to more active engagement - something that just won't come anymore from simply calling a telephone number.

Australia's anti-smoking strategy was developed when media consumption patterns and accompanying planning were largely dominated by television and other increasingly redundant display media. Sure it worked then but effectiveness is now acknowledged as diminishing for a variety of reason but with no recent measures available to track audience fatigue and a flagging strategy, I'm left feeling that the "tried and true" approach doesn't cut it anymore. A transmedia strategy can deliver long term brand development and engagement, allows agencies to develop more active and discreet campaign media expansion over time, prioritises audience media use and allocates discriminant awareness and engagement tasks to each media against core brand messages. Media buying can still continue to be driven by TARP, GRP, CPA or any other measure a brand owner might use. Transmedia strategies requires insight, daring and vision and an acknowledgement that social marketing campaigns need no longer be driven by visibility imperatives but by more effective and newer patterns of brand involvement.

There's nothing like the question of identity.

There's nothing like international television advertising for a country to create seismic ructions around questions of national identity, but that's just the effect the newest There's Nothing Like Australia campaign from Tourism Australia is having.

With a collapse in April inbound tourism numbers to Australia from the key markets of the US, UK (both down 6%) and Japan (also down 20%) unlikely to abate, the ink has hardly dried on the launch of this three year $150m campaign before questions are arising not just about it's ability to rescue an already Australia's ailing tourism sector but more importantly it's also raising the question - who or what is Australia? And how should Australia be seen overseas. And who should be in charge of its image?

Only last month Australian Trade Minister Simon Crean announced the launch of the new $20m Brand Australia logo and tagline to promote Australia's image overseas.

“Australia Unlimited has the breadth to market all of Australia’s strengths - grounded in our commitment to innovation and quality,” Mr Crean said.

“Australia Unlimited is aimed at taking us beyond tourism messages. It will deliver a national brand for Australia through a consistent image and a consistent message.”

With AusTrade and M&C Saatchi handling the tricky business of Australia's image among business and Australian Tourism and ad agency DDB managing the consumer image both domestically and overseas, the main issue again seems to be what are the core and central messages and images that should be used to promote Australia as both a brand and a destination. Right now (see above) they appear discordant.

At the launch today Tourism Australia chief Andrew McEvoy claimed its research found "80% of Australians wanted to promote their country as a travel destination so we invited them to share their pictures and stories at the campaign website.

“Australians have identified our people, wildlife, beaches, the reef, the outback, vibrant cities and laid-back lifestyle as the things that make Australia a unique and special place to visit. These suggestions are highlighted in all the elements of the new campaign." Unreservedly so it seems.

Regardless of the perceptible quality problems with both campaigns, it seems that while the core of both and the unifying concept is claimed to be Australia's people, there is still little agreement in both as to what Australia represents as a brand and how it should be portrayed, except for readiness to slide back to traditional imagery.

Brand Australia says it wants to take Australia "beyond tourism messages. It will deliver a national brand for Australia through a consistent image and a consistent message."Yet while the sample images it uses seem modern, they are cold and generic and could be interchanged with almost any wealthy western country's brand.

But the new There's Nothing Like Australia with it's singalong and imagery rendolent of "wildlife, beaches, the reef, the outback, vibrant cities and laid-back lifestyle" seems in stark contrast to Brand Australia's desire for "a more contemporary and multi-dimensional light than has previously been delivered". Right now neither serves to build on the other and both seem so fractious as they may even cancel each other out.

Late in the eighteenth century Australia was referred to as Terra Nullius, it's a narrative strain that remains at the heart of the Australian psyche and neither of these programs resolve.

DIFFUSION and Lucas make their mark on new Lowy Cancer Research Centre.

DIFFUSION and Lucas Melbourne's work has featured in the opening of the new Lowy Cancer Research Centre in Sydney on May 28 2010.

The new centre features a bold strikeout sans serif word mark incorporating colours from the building’s architects Lahz Nimmo.

The new centre was opened by Australian Prime Minister Kevin Rudd, NSW Premier Kristina Keneally and its main benefactor, chairman of Westfield Corporation Frank Lowy.

DIFFUSION principals Stephen Byrne and Monique Defina-Nancarrow and Lucas were responsible for the development of the new centre’s brand strategy, positioning and creative brand development. It was a year long project working with a joint working party between the two institutions as well as key sector influencers and stakeholders.

DIFFUSION strategy director Stephen Byrne and Lucas director Chris Lucas said they were proud to have been invited to develop the “make your mark” on cancer graphic idea - part of the main platform for the centre’s brand.

The $127 million research facility is at the University of New South Wales’ Kensington campus and houses 400 cancer researchers from both UNSW and the Children’s Cancer Institute Australia for Medical Research (CCIA) is the largest in the southern hemisphere.

Brandfail: Sydney Australia 2010.

Recently launched brands for the Australian government's Australia Unlimited and the NSW government's new Sydney.com are sorry reminders of what happens to nation and city branding that have been defined by unremarkable strategy.

Australia's newest branding exercise was decided on last year after the Australian Government handed over $20 million to global ad agency M&C Saatchi promote the new brand over the next four years.

The Brand Australia website says the aim of the new brand was to "better position Australia as a global citizen, global business partner and world class destination."

According to the Brand Australia FAQ, the Brand Australia program "is about providing an overarching, strategic approach to positioning Australia in the global marketplace."

However, launching a visual identity first seems less a strategic response and more a creative and tactical one and smacks of a committee based approach.

Austrade, the organisation tasked with managing Saatchi's and this new branding, added that now "the hard work begins to develop the brand architecture" along with any co-branding. This only begins to confirm my belief in the seeming lack of strategy in this whole exercise. Even the most rudimentary of brand strategy texts would tell you that brand architecture would be developed prior to any rollout and this would include all aspects of the identity and associated sub-brands including any other brand extensions.

To say that strategy is a secondary to strapline and logo development, suggests this project is subject to political expediency in an election year driven by an "advisory board", said to be made up of prominent business people and marketers from Austrade.

Worse still Saatchi’s slogan was taken to international research panels with the full knowledge that the it was already trademarked by News Ltd, who in their munificence, have now “lent” it to Austrade and the Australian government. In my experience I would usually be reluctant to present an already trademarked name, unless the client clearly briefed this in and understood the risks.

And the Australia Unlimited logo is itself is in an unremarkable and unownable sans serif typeface in Australia’s official colours and framed by stylised boomerang parenthesis. It’s like a gaudy airport tourist trap store identity, exactly the sort of thing you would expect an ad agency with an advisory board as clients to come up with. But don’t forget there has been no formalised strategic development from this. It’s all still to come.

But let's head back to the idea of nation branding and there's no better place to start than the Brand Australia FAQ.

Successful nation branding identifies any gap between a country’s reputation and its actual capabilities and contributions, then addresses this gap with a program that better communicates the country’s offering.

The irony is that it is wider than what Austrade thinks it is, yet it has been tasked with managing this rollout.

A nation brand represents a country as a whole. It is broader than a tourism or ‘destination’ brand and promotes a wider range of capabilities across business, culture and community.

Where's the gap between the perception of Australia and it might be positioned? What is it? How is it captured by the Australia Unlimited visual identity, strapline campaign? Is it the success stories of ordinary and some exemplary Australians? How will this position Australia? What is the brand idea, the core proposition that has been is communicated by the tagline "Australia Unlimited"? Australian’s unlimited? None of this is either sufficiently differentiated nor strongly put yet.

Already announced is the publication of a magazine for launch at Shanghai World Expo. A magazine? It’s all tactical and so old media, reflecting similar tactical campaign profiles for the previous Australia campaign..something that Austrade might say has nothing to do with it but was yet positioned as another national branding exercise.

Australia might currently be positioned ninth in 2010 on the Anholt-GFK Roper Nation Brands Index but its the same spot it occupied the previous year. Conversely, it's ranked number three on Futurebrand's 2009 Country Brand index - so you can draw your own conclusions as to the validity or worth of any of these rankings survey over the next. The point is that promoting a survey as some kind of evidence of possible success or otherwise in these stakes seems to me to be oversimplifying the benefits of nation branding.

If place branding is about the development and presentation of a core set of brand attributes to represent and promote a place, then the latest Sydney branding exercise is, like the Australian Unlimited identity, a failure before it begins.

Subject to even less fanfare is the launch of this new logo/wordmark for Sydney (you'll see my fuzzy version had to be lifted from the Sydney.com page where it competed with other versions of the Sydney logo). Again, the product of an Events NSW Government committee, the launch has been both low key and perhaps embarrassingly touted as part of the new Sydnicity campaign from NSW Tourism. No media storm and apart from seeing it framing the arrival of Jessica Watson's landing on the steps of the Sydney Opera House, almost invisible.

The logo is itself an undefined tech looking curlique set against another sans serif Sydney word mark. Again, like Australia Unlimited, the same questions arise around the strategic requirements for this rework.

If Sydney needs to be rebranded to compete against a more complex and multi-facetted Melbourne, then where is the evidence that supports this approach? Where is the proof that this approach is evidence of best in class for the country’s only global city, a crown Melbourne might soon wrench away? Melbourne’s rebrand is part of a well documented complex and successful branding and marketing strategy for the whole of Victoria, so why hasn’t Sydney followed suit?

Perhaps both cases illustrate that nation and city branding,should always be built on uniquely defining long-term brand strategies rather than tactical and often reactionary approaches, driven by the current political exigency. Otherwise, like the next election campaign or the last minister responsible, their impact will be limited, their influence questionable and they might not get another term.

Enter at your own risk: the real value of social media-based brand engagement.

Let’s be straight. Brand engagement does have quantifiable financial benefits. Increasingly this type of engagement via social media also has quantifiable benefits, it’s just no one knows what exactly they are, yet. So while the latest and only social media study reluctantly admits this, real financial bottom line value is still only partially proven.

By any standard definition brand engagement is an emotional connection or attachment developed during repeated and continuing interactions with a brand. Over time this should accumulate through satisfaction, loyalty, influence and excitement and other factors. Organizations who engage customers to the point where they are moved to a behavioral change do so by creating opportunities for emotional connections through consistent and positive experiences. Social media seems an opportunity for some brands to develop such opportunities, albeit at least turn any negative ones into positive.

However, alongside other media and non-media forms, social media is and should be regarded as just one part of a suite of engagement channels for brands. So, for example, a brand’s appearance or lack of presence on Twitter or Facebook, might harm its perception or level of engagement, it’s just that it won’t hurt if the current levels of engagement are low. And regardless, for some industry sectors it purely demonstrates a rational and logical extension of their core business activity.

In July the WetPaint/Altimeter Group released its ENGAGEMENTdbReport aimed at measuring how deeply engaged the top 100 2008/9 global brands were in a variety of social media channels and, more importantly, understand if a higher engagement correlated with financial success. Unremarkably, the study understated one of the key defining aspects of these rankings – that the level of financial success generated by the brands had already put them a top 100 brand. A position not defined by some other event or cause like social media.

WetPaint/Altimeter claimed their study not only measured the level of engagement but also the depth. They evaluated and scored each brand’s engagement in various channels and found the more a brand leverages multiple channels, the higher the level of engagement is (seems to make sense!) Ranking Starbucks as the most engaged brand, with a presence across 11 social media-based channels, they also linked exponential growth in the depth of engagement with continued growth in the channel.

Not surprisingly, it also found engagement differs by industry and with media usage. So the most engaged industries are naturally Media and Technology and the least, Financial, Apparel and Food & Beverage. In addition, the study found distinct target audiences can influence the level of engagement eg. Toyota’s media channels used to promote Prius are different to those used by either Mercedes or Porsche, again this would simply represent segmented buyer behaviours.

But what interested me the most, despite all claims to the contrary, was that the study admitted NO ONE has the data to determine whether there is a direct cause and effect between financial performance and social media engagement. While it claims companies “deeply and widely engaged in social media surpass their peers in terms of both revenue and profit performance by a significant difference”, it also points out these findings don’t necessarily imply a causal relationship between these two but POWERFUL implications, whatever that might mean.

So while it comes as no surprise that one of the least connected brands at 98 was AIG, the world’s most successful brand Coca Cola is tagged as a wallflower and is down at no 51. Go figure the financial relationship there between brand and performance.

There’s nothing particularly revelatory in statements like “a customer oriented mindstep stemming from deep social interaction” generates superior profits thus enabling further engagement investment and a virtuous circle of increasing profits. But social media is, within the primacy of media, a marketing and communications tool for brand engagement in the same way point of sale, packaging, store design, direct mail are.

So how does the Wetpaint/ Altimeter study contribute to the dearth of research on the effectiveness of social media?
1. Social media engagement effectively enables direct and two way communication for the brand. This is new
2. Brand engagement can be better managed and measured via social media
3. The cost and revenues that accrue from this engagement can be directly measured and accounted for
4. Social media is purely digitally driven. Though the by products from which it is derived are not
5. Social media brand engagement is governed by levels of participation in the same way any other engagement is. Active, latent, pro-active etc
6. Social media enables deep and broad brand engagement
6. Digital brands aren’t necessarily social media brands but it doesn’t hurt they are

What the study also reveals is that social media enables brands via this form of agency to quantify the value of the brand engagement and subsequently contribute to brand valuation. The contribution of brand engagement to financial value is already factored in many valuation models but this partition of the contribution is something that can effectively stand alone. We are yet to see how that might happen and who might use this.

So while the WetPaint/Altimeter study contributes to our understanding regarding the level and extent of brand engagement via social media, there’s really not enough evidence here of a direct financial return is not surprising. Indeed page six of the Altimeter report confirms the link between social media engagement and financial performance is not proven. Unlike one of the often quoted quantitative models, the Harvard Business School’s Sears Model, which proves a direct correlation between internal employee brand engagement and financial return in the vicinity of around 20%. .

And another study conducted in June last year for Adobe (not ranked by Wetpaint/Altimeter) by Forrester Consulting developed another model and demonstrated a 66% return. This study examined the total economic impact and potential return on investment companies might realise by increasing investment in engagement initiatives, with an emphasis on using both existing and emerging technology touch points such as social media.

It wasn’t extensive research (200 companies surveyed and six in-depth interviews) but Forrester did use what it calls a Total Economic Impact (TEI) methodology to measure impact. TEI not only measures costs and cost reduction (areas that are typically accounted for within IT) but also weighs the enabling value of a technology in increasing the effectiveness of overall business processes such as customer communication.

Forrester found three main results – firstly, increasing investment in online customer engagement through Internet-based channels improved the efficiency and effectiveness of customer interactions and the customer experience. Secondly, improved efficiency translates to reduced overall cost of sale as well improved internal staff productivity (much like the Sears Model) and thirdly, like the Wetpaint/Altimeter study, improved effectiveness translates to improved top line revenues resulting from higher purchasing frequency and improved customer value. Overall, the value of the ROI around 66%.

However, while the study focused on Adobe products and their introduction as part of a wider technology strategy, it still confirmed one of the main but unproven conclusions from Wetpaint/Altimeter. Those organisations with higher financial returns were those that developed a deep connection with their customers using online channels such as social media, ultimately raising customer awareness and purchase intent. Just ask Dell about its oft cited Twitter experiment.

In a turning bay: some questions on the future of brands in social media.

This is a conversation I had recently on the future of brands and social media with Jenni Beattie, Director at Digital Democracy, a Sydney based digital communications consultancy.

Stephen Byrne: I want to start with some work Forrester did in April last year when they outlined the five phases of the social web. They are:

1) Era of Social Relationships: People connect to others and share

2) Era of Social Functionality: Social networks become like operating system

3) Era of Social Colonization: Every experience can now be social

4) Era of Social Context: Personalized and accurate content

5) Era of Social Commerce: Communities define future products and service

Forrester study found that the technologies will trigger changes in consumer adoption, and brands will need to follow, resulting in these five distinct phases.

I don’t think technologies are going to be the only triggers for new consumer adoption. My view is that the marketing of brands as we know it in a state of flux. What we are seeing, to use a French phrase, is an “eventment”, where for example, social media and technology are combining to mitigate against many of the old marketing paradigms. You only have to look at what’s happening on the agency level.

Jenni Beattie: I believe the marketing of brands as we know it has fundamentally changed. Today consumers expect to have a say, be able to feedback and make a mark on a brand. This can be as simple as using review features on websites to user generated content such as naming a brand.

After spending time in digital market research, you can see how the social web is impacting that discipline. In the past it was very much a parent-child relationship with the researcher asking a very set question and the respondent answering. Today, more interactive forms of research such as online community research are taking place with a more ‘organic’ flow to the questioning i.e. the participants driving and forming part of the research. Good examples of innovative research can be seen from international companies such as Fresh Networks and PeanutLabs.

SB: In the final phase Forrester projects consumers will rely on their peers as they make online decisions, whether or not brands choose to participate. Socially connected consumers will strengthen communities and shift power away from brands and CRM systems; eventually this will result in empowered communities defining the next generation of products.

I’m not sure if I accept this phase. It’s like the worst effects of crowdsourcing and consensus politics. I don’t think we’re going to get an entirely technology driven brands, as Forrester’s analysis implies, but there is certainly some dramatic changes occurring with regards to consumer empowerment and in terms of brand preferences.

JB: There will be an increase in consumers defining products and services. Online branded communities created by Dell, Starbucks and P&G are already helping give customer feedback and in turn helping to define the future products and services.

A good international example of innovation and consumers defining brands was when The Grocery Manufacturers Association (GMA) of the USA awarded Kettle Foods, Inc. one of the two 2008 Awards for Innovation and Creativity. Kettle Foods, Inc. won the award for its “People’s Choice” campaign. The campaign combined “consumer interaction, PR and R&D into one program. According to the press reports the company has had than 11,000 new business leads, more than 7,000 new flavour suggestions, and 75,000 unique Web site visits all for a low cost investment”

As far as power shifting away from CRM systems I don’t believe that to be the case. CRM will reinvent itself, Gartner refers to this as Social CRM. Gartner analysts say “There’s operational CRM, analytical CRM, and now there’s collaborative or social CRM”. Today CRM budgets are looking towards more social applications such as Twitter that are at the coal-face of customer service.

SB: Right now there seems to be a lot of confusion between social media and the definition of community. The idea of community is right now as fairly elusive one and is being bandied about like it’s some sacrosanct term. Community built around consumption is, for me fairly transitory. It reminds of an unruly mob during the time of the Paris Commune. We’re not going to get a whole lot of sense out of this right now.

Then there’s these dire warnings coming from people like Forrester, that brands will be excluded from consumer choice because somehow they are now being defined by communities and no longer by the brand owners themselves. I think this is both disingenuous and untrue. Forcing brands out of their hands via social media created communities is only part of the story. While even as early as 2005 Tomi Ahonen and Alan Moore warned marketers, in their prescient work Communities Dominate Brands, that if they didn’t cut loose the shackles of the traditional advertising agency and TV network model they would lose their brands. I’m seeing many of the same warnings again this year, particularly in the wake of the great financial crisis. But what real, if any, changes have we seen to this paradigm? No brands have fallen by the wayside because they didn’t have a social media strategy or because they continued advertising in traditional media.

JB: Brands may not fall by the wayside as such but brands will become stronger because of their consumer engagement strategies. For example, the well known Dell Hell scenario certainly impacted on that organization negatively but by engaging with the community they have come back stronger and more relevant to their client base. If they hadn’t done that who knows where that organisation will be.

Some brands come to social media like Dell in a ‘reactive’ fashion knowing they now need to engage with consumers due to a negative event/issue. Other brands initiate the online engagement strategy ‘proactively’, understanding it will add value to their knowledge base, understanding the client better, product development and customer service.

SB: Ahonen and Moore predicted the consumer and their connected communities, would select the products and brands that are engaged in the most relevant dialogue with them. Somehow this would become the centre of a new modern and sustainable marketing model. While I think there are some massive shifts occurring, I don’t think we’re quite there yet with this because I’m not sure anyone understands these kinds of ROIs yet.

JB: First of all, it is important not just to focus on ROI but measurable goals and each company will have varying goals. Social media marketing is typically a long term investment so to set short term ROI goals is going to be difficult. Setting ROI for a specific short-term campaign is more logical i.e. we spent X dollars taking this campaign to the market place and X dollars in sales. There are many intangible benefits from social media marketing such as increased loyalty from customers, insights and R&D innovations and better customer service many of these are hard to equate with a dollar value.

There is a balance when setting ROI expectations. Many social media audits have an AVE advertising value equivalent metric assigned. This stems from the AVE metric that the public relations industry used but discredited about a decade ago saying it was simplistic and backward looking rather than useful for future strategic planning. Unfortunately, just as in the traditional PR world many c-level execs still want the $ figure and so in the social media marketing world the metric is still used but with some hesitation.

SB: There’s already a view that Web 2.0 and pervasiveness of new community archetypes make demographics dead, but I don’t see this is as too different to these axiomatic definitions of community.

JB: If companies were using demographics as the only avenue for ‘understanding ‘ their customer then, yes demographics are dead. Companies need to have a relationship with the customer rather then simply put them in isolated boxes. Let’s face it boomers today don’t act like middle-aged people years ago – times have changed so the context for those demographics has to change as well.

As far as using demographics to reach consumers via social media marketing, that is still relevant but rather than just understanding income levels and postcodes we need to understand how they relate online and what sites they are using. We need to understand their technographic profile. For example, women 55 plus and men 55 plus operate differently online understanding this will mean you can engage with them more effectively.

Gartner published research on what they call Generation V (virtual) indicating that the generation isn’t defined by specific demographics but by the way they use technology i.e. a behavioural categorisation. Elements of this categorisation incude accomplishments, how they build and share knowledge and their preference for different media channels.

Let’s not throw out the ‘baby with the bathwater’ demographics are not dead but demographic elements need to be relevant to social media marketing.

SB: One of the things I am seeing is the built around the question of measuring influence in social networks and communities. I’m not sure if brands are really measuring this and how much use, if any, they are making of influence metrics.

JB: There are a myriad of ways to measure influence in social networks and the impact of social media marketing. Normally there is a mix of qualitative and quantitative measurements.

To set your measurements you need to set your marketing objectives and relate the metrics to those. For example, if you want to raise awareness of a new product or service attention metrics such as the amount of views of your content are important if you are after sales metrics than you need to look at actionable clicks rather than just views.

I like to break the metrics down into Visibility Metrics (i.e. getting seen) and Engagement Metrics (what people do once they see your content site). So, for example. engagement metrics would include items such as links shared, comments on blogs etc.

SB: I don’t think we’re really in a position to say that brands and companies without a social media strategy are going to find that customers will go elsewhere.

JB: Yes, It may not be quite as apocalyptic as that but recent research looking at brand relationships has shown that on average they are 15% stronger for digital consumers. Even products such as motor fuel and hair care (as shown below) can be impacted favourably by engaging with the consumers online.


Some brands will have more synergy with social media marketing than others. A good example is the non-profit area, where there is already a lot of passion and energy around their company or cause. For example, the United Nations Refugee Agency recently launched their Causes page on Facebook. They reached 50,000 members in just under seven days, raised just over $50,000 and boosted their Facebook fan page to 20,000 fans.

Having said that even brands that you would think would have less ‘talkability’ in social media such as tax (think H&R Block) have done well using social media strategies.

Let’s not forget that while some may think that social media marketing is radical and very new in reality Doc Searls and David Weinberger (the founders of The Cluetrain Manifesto) were spouting social media marketing many years ago.

SB: One of the problems is how social commerce is really going to work. Given the growing failure of traditional advertising in almost all media forms, the real question now is how are brands going to be sold in the future.

Facing the break boundary: how advertising agency models no longer work.

I attracted a lot of traffic recently to this blog from some comments I made on AdAge on the commoditisation of agencies. One of the things I said was that the traditional agency model was no longer relevant and agencies needed to either adapt or die. And as the makers of a new season of MadMen announced this week its to premiere in the fall, I began to look around for some new thinking on the traditional agency model and found, as market analysts might say, there’s not a lot of guidance. So here’s mine:

1. The agency model as we know it now well over 70 years old and is tied to media types whose basis was honed during the 1930s and 1940s. Agencies are now at a significant break boundary.
2. On the basis of measured spending alone, there is a question over the continued viability of agency models as billable spends are in significant decline across all segments, except digital, research and PR
3. The full service agency model is no longer a differentiator
4. Increased concentration of agency ownership into massive global networks enshrines the traditional agency model to it's detriment
5. Vertical integration of the agency model and its assumption from within by client organisations foils agency growth expectations
6. Enhanced technologies disintermediates agencies and enables client side assumption of agency value add services on a lower cost basis
7. The increasing ineffectiveness of traditional agency work is a direct consequence of a fractured and media environment

Now let’s look at the foundation of all this sturm and drang.

1. The traditional advertising agency model is dying because traditional media advertising and marketing is in state of extreme fragmentation and change.
What we are seeing is what media theorist Marshall McLuhan described in his seminal 1967 work Understanding Media what economist Kenneth Boulding called a "break boundary, a point at which the system suddenly changes into another or passes some point of no return in its dynamic processes” .

Understanding Media 38

“One of the most common causes of breaks in any system is the cross-fertilization with another system, such as happened to print with the steam press, or with radio and movies (that yielded the Talkies). Today with microfilm and micro-cards, not to mention electric memories, the printed word assumes again much of the handicraft character of a manuscript. But printing from movable type was, itself, the major break boundary in the history of phonetic literacy, just as the phonetic alphabet had been the break boundary between tribal and individualist man.

In the last ten years we have seen a number of significant break boundaries as traditional media forms, in particular, newspapers and magazines, largely abandoned by both readers and advertisers in favour of screen based digital delivery of both content and advertising alongside increased usage and proliferation of connected screen based devices.

While many agencies have tried adapt to this with development of digital arms, media planning and more recently, social media – the traditional agency has distinctly failed and is failing. The “MadMen” of the synonymous television series are now mere nostalgia.

2. In the first quarter of 2009 measured ad spending in the US declined by 14%.

MEDIA SECTOR
Media Type (shown in rank order of 2009 spending) % CHANGE

TELEVISION MEDIA -9.7%
Network TV -4.2%
Cable TV -2.7%
Spot TV -27.5%
Syndication - National 0.2%
Spanish Language TV -15.4%

MAGAZINE MEDIA -20.5%
Consumer Magazines -19.2%
B-to-B Magazines -25.5%
Sunday Magazines -23.7%
Local Magazines -25.3%
Spanish Language Magazines -20.5%

NEWSPAPER MEDIA -25.5%
Newspapers (Local) -25.1%
National Newspapers -28.5%
Spanish Language Newspapers -21.6%

INTERNET (display ads only) 8.2%

RADIO MEDIA -26.2%
Local Radio -26.8%
National Spot Radio -31.7%
Network Radio -11.2%

OUTDOOR -14.6%

TOTAL -14.2%
Source: TNS Media Intelligence 2009

According to TNS, the old media triumvirate of radio, newspapers and TV are the most heavily impacted. The global financial crisis has had a more profound effect on the advertising and marketing industry than predicted, a survey released in February by the US Association of National Advertisers revealed 93 percent of companies were identifying cost savings and reductions as opposed to 87 percent in a similar survey conducted by the ANA six months previously. Further, 37 percent of respondents planned to reduce budgets by more than 20 percent, up substantially from the 21 percent of respondents in the first survey. The top five areas where marketers planned to reduce costs or expenditures in marketing and advertising efforts were:

i)Departmental travel and expense restrictions (87 percent, versus  63 percent in the previous survey)
ii)Reducing advertising campaign media budgets (77 percent, versus 69 percent in the previous survey)
iii)Reducing advertising campaign production budgets (72 percent, versus  63 percent in the previous survey)
iv)Challenging agencies to reduce internal expenses and/or identify cost reductions (68 percent, versus  63 percent in the previous survey)
v) Eliminating or delaying new projects (58 percent versus  61 percent in the previous survey)

In this respect, agencies can no longer rely simply on expanding revenues from media and production budgets. The likelihood that these budgets will return to pre-GFC levels is unlikely given a number of break boundaries have now been crossed.

3. The mass commoditisation of the full service agency model is now increasingly contributing to its decline. The "full service" agency model is an anachronism belonging to 1950s MadMen, when creative and placement were the two axis under which an agency billed. The continued adoption of full service agency models are a failed attempt to roll all aspects of marketing and communication into a single place. Few agencies now succeed because now most can never competently and completely deliver on the whole service offer. Words like “360”, “holistic” and “integrated” are bandied about like some kind of emblematic imprimatur but there are 1000s of these agencies in the world and they all say and do the same thing.

4. In 2008 nearly 40% of all global advertising was managed by just four companies Omnicom ($13.359 billion), WPP ($12.27b) Interpublic ($6.693b) and Publicis ($5.1b) but according to a 2008 Harvard Business School study on concentration levels in the US advertising and marketing services (A&MS) industry concluded “the four largest holding companies captured between a fifth and a quarter of total revenue from the A&MS industry, a share that remained quite stable over the period 2002-2006. These estimates are lower by an order of magnitude than estimates often cited in the trade press.” However, the same study estimated that for US government censuses conducted between 1977 and 2002, the actual number of firms and establishments in advertising and marketing services increased at compound annual growth rates of between two and four per cent. But in 1997 long-term growth (coinciding with exponential digital growth) ended and the number of firms and establishments actually decreased from their 1992 levels. This decline continued in 2002 and continues.

So this decline in long-term industry growth is not only forcing concentration from within the industry at the network level but also to a further concentration of service offering to meet revenue expectations and as the number of firms with billable work continues to fall.

5. Increasing backward integration of marketing and advertising functions by client organisations poses a significant threat to agency survival. Last year the US Association of National Advertisers (ANA) released preliminary findings from a survey of large national advertisers and found 42 percent of ANA member firms had established internal advertising units. Cost efficiencies and savings were reported as the major reasons for pursuing the in-house route. The most effected areas, according to a 2008 Harvard Business School study on bringing advertising agency functions in-house, were technology industries (e.g., electronics, instruments) and the creative industries (e.g., publishing, motion pictures).

6. In a post on his blog in 2007 Scott Carp ex- Atlantic Monthly head of digital and founder and publisher of publishing website 2.0 announced:

“Madison Avenue should be afraid — very afraid. Online advertising is all about scaling the infinite complexity of thousands of media channels and thousands of micro targeted ad messages — yeah, like AdWords and AdSense. Sure, it’s going to be much harder for Google to pull this off with video and brand advertising, but in order for Madison Avenue to compete it’s going to have to be completely dismantled and rebuilt .

Of course, Yahoo and Microsoft (and let’s not forget WPP) are also competing with Madison Avenue — and with Google to become the ultimate vertically integrated media and advertising company .

But the game is all about scaling — and when it comes to scaling, Google will be hard to beat.”

Carp’s right on most counts. Google might be failing with YouTube but does beat agencies at their own game. Last month it even opened Agencyland, an educational portal for advertising agencies designed to educate agency staff on Google Advertising and also help bridge the gap between Google and the agencies. But Google’s global advertising system which its built on Adwords and DIY model is designed to bring a better ROI to advertisers, and for easier monetization for TV, cable, gaming and online publishers. Microsoft is already heading down the same route and places like LinkedIn and Facebook already allow users to effectively create, place and track limited but highly effective micro-targetted campaigns.

7. Not only is traditional advertising effectiveness in decline but the work of agencies themselves is being increasingly called into question. Even as far back as 2005 advertising and marketing theorist Philip Kotler predicted advertising agencies needed to transform themselves into communication agencies. Though many agencies say they have gone down this track, from the 90s its been largely media and digital agencies who have done this, while network owners have resorted to broadening skill reach usually via acquisition to offer clients the benefits of a full integrated agency network. In the end, the traditional agency, has been left largely untouched as have been the measures of its effectiveness. Awards nights for advertising effectiveness or creative design being seen to somehow assuage client incredulity over campaign success and fail. I don’t know how many pieces of creative work I have seen that lack any real ROI, even when it’s been a specific assessment criteria or when a campaign has been deemed a success largely on the basis of viewership figures alone. Set this against the granularity of data offered from digital, where every week one agency or another goes out to market with a new measure of advertising effectiveness such as Compete who launched yet another digital advertising effectiveness measurement system. Still traditional media doesn't seem to giving up. Just this week MRI in the US debuted its AdMeasure report, which aims to put magazine publishing ad effectiveness on the same level as digital.

Earlier this week Forrester Research reported that 60% of marketers surveyed would increase their digital spend by shifting funds from traditional spend. Direct mail most cited by 40% of marketers as being one being cut followed by newspapers (35%), magazines (28%) and television (12%). And while many agencies and their clients continue to create “interesting” advertising as in a recent Harris/AdWeek poll, interesting doesn’t quite equal influence. Nor purchase. Nor survival.