The limits of Google.

Last month Millward Brown Optimor published their fourth annual BrandZ Top 100 Most Valuable Global Brands rankings and would have you believe Google's brand is worth exactly $100 billion. While I have debated the worth of these kinds of valuations and surveys in previous blogs, in the wake of the impending release of the Google Wave, it now seems a good time to consider the limits of the brand.

Some people think Google breaks the brand model i.e. no advertising on its home page, no advertising per se but both these measures are merely symbolic. While Google may have inspired what many see as a form of brand disruption, is game changing and is somehow Schumpeterian, it is a behemoth brand utilizing both the common architecture associated with monolithic status as well as exhibiting a traditional set of values not unlike Apple and Virgin.

Similarly, you could argue that Google has unlimited potential as a brand and its brand extensions merely reflect this. However, while Google is a highly successful company but with 97% of its revenues coming from Web advertising and 68% of that from advertising on its own Web sites, it is still very much a single proposition company.

Google’s market dominance means it has virtually reached the limits of organic growth and anything further can only come from transformation via acquisition and perhaps through product and service development, in much the same way Apple has. Sure it’s testing the field with Wave, Chrome and Android, which appear to be the spearheads of a greater platform strategy but if we take YouTube as an example of expansion by acquisition, it seems fairly evident that Google is a one-trick pony.

Since its 2006 acquisition of YouTube revenue estimates have varied wildly with analysts like Bear Stearns and Credit Suisse suggesting Google will see between $90 -240 million in revenues this year. It’s a big range but as the number three brand on the internet YouTube only made around $80 million last year and while that’s no small potatoes, it is struggling. Given Google’s 2006 acquisition of YouTube came with a $1.65billion price tag and Credit Suisse estimates operating costs at around $711 million this year. Therefore it’s reasonabl e to assume that despite Google’s deep pockets, the operating gap is not going to be tolerated for too long.

So what does this mean for the Google brand? Of course, YouTube’s traffic will continue to grow exponentially, with no clear end in sight as will the not inconsiderable cost of this business. Set this against mildly successful efforts at monetizing content via advertising and the overall state of the advertising market and you come back to the central problem for YouTube and ultimately, Google. The non-propietary nature of both its search engine and content that forms the basis of the Google brand and proposition is, at the same time, its achilles heel.

To get further understand these limits, look at the performance and what I see as the eventual fate of Yahoo. Like Google, nearly all of Yahoo’s revenue comes from search and display advertising. Since Google’s 2004 float Yahoo has been losing share in search and though Yahoo is still the second most popular search engine, its searches are inferior. While Yahoo’s content continues to attract users for the moment, its search traffic is secondary to choice of Yahoo as a portal. The problem is that while content from the portal generally helps generate search traffic, yet without either distinctive content (everyone accepts that content is no longer a competitive advantage) and superior search, Yahoo is going to decline. What is best described, as Yahoo’s kitchensink approach to both content and feature development, is not disimmilar to that of Google’s. In this market “innovation” is a very tired word. Yahoo has Flickr. Google Picasa. Yahoo has Finance. Google Finance. Yahoo has Mail. Google Gmail and now Wave. Yahoo has Groups. Google Groups. Now just think of Google’s failures with News, Lively, Orkut and Knol and then apply that to a similar Yahoo’s list of failures or better still AOL, its hard not to draw the conclusion that the direction for both brands is anywhere but down.

On revenue and market performance measures alone, Yahoo is a sombre example of how little stock one can place in single proposition revenue models. In 2004 Yahoo reported net income of about $238 million and had a market value of about $36 billion. At the same time Google's stock market value was around $16 billion based on a net income of around $106 million. Microsoft’s offer for Yahoo last year put its market value $45 billion, against a brand valuation 7.45 billion. It had barely moved and most people thought Microsoft was being generous and Yahoo missed the boat. Now with the rankings reversed and sobriety entering market valuations, Google’s Wave is looking like no tsunami.

This blog was originally published in Marketing Magazine on 11 June 2009.

Before your eyes: how our media use is a history of screens.

A short history of screens.

1. Around 1600 the camera obscura is perfected. Light is inverted through a small hole or lens from outside, and projected onto a surface or screen, creating a moving image
2. Mechanisms for producing two-dimensional drawings in motion were displayed in public halls by devices such as the zoetrope, mutoscope and praxinoscope were displayed in the 1860s
3. The development of the motion picture camera allows individual component images to be captured and stored on a single reel, "motion pictures” are shown onto a screen for an entire audience in the 1880s
4. The first commercially made electronic television with a cathode ray tube is manufactured by Telefunken in Germany in 1934
5. The first call on a hand-held mobile phone is made on April 3 1973
6. Apple Computers introduce the Apple II, the world’s first personal computer in 1977
7. Mattel introduce the first handheld electronic game Auto Race in 1977

According to the results of a landmark consumer media consumption research study released in March, it comes as no surprise that our dedication to screens know no bounds.

The research, commissioned by the US media measurement company Nielsen Media and its US Council for Research Excellence, followed 372 Americans in two full days of live media observation.

It was was designed to simultaneously observe and measure media exposure, life activities, locations for media use and where people spent their day. The mass observation study took place in six geographically disperse cities across the US. The final sample included 952 observed days and over three-quarters-of-a-million minutes of observation. A not insubstantial study.

The study found we spend on average, 67 percent of our total daily media time with live TV screen-based media (including DVRs, DVDs and games), about two minutes a day watching video via the Internet, and only a fraction of a minute watching mobile video. Even among 18-24-year-olds, the average amount of time spent watching live TV (209.9 minutes) surpassed even computer screen time (169.5 minutes).

If, as the study identifies, our total concurrent media consumption across all forms of media runs to eight and half hours per day, it also confirms our lives are now more tuned to screen time than first thought.

The research shows concurrent media use and exposure is almost the same for all age groups, media choice so rapidly changing that computer-based activities have replaced radio as our number two media. US consumers now spend on average two hours and thirty-three minutes on a computer, but only one hour and 49 minutes with a radio.

Contrary to current thinking, young demographics are not the biggest consumers of media. While the average adult spent 309.1 minutes watching live TV and 14.6 minutes playing back programming via DVR, the biggest consumers of media were in the 45-54 demographic or what the study called a “digital boomer.” Digital boomers spend nine and half hours per day using all four screens (TV, computer, mobile and out-of-home such as kiosks) compared to eight and half hours for all other age groups.

One of the most interesting findings was that on average live TV users were only exposed to roughly an hour a day of advertising and promotions. If proven by subsequent studies, this debunks much of what is claimed around the level of brand message exposure per day (at around 3000). As most live television advertising runs at 15 minutes per hour or so, on the basis of figures quoted in the study, these should be two hours on television alone or around 240 messages on live TV at 30 seconds per message). What’s difficult in this measure was “exposure” remains undefined and so do they mean a viewer actually watching advertising or just appearance? My assumption is they are defining it as active participation. For example, during the live TV commercial breaks people were observed shifting their primary attention to media such as print, phone and computing. This data seems to prove a widely-held but strongly debated view that consumers are avoiding most of advertising in programming when they view live TV. The long held view that consumers still “follow” a brand message as they shift from one media to the next also seems to be questionable.

The study now ranks computer-based time as the number two media category after live TV. Including web use, email, software and internet messsaging, computing time exceeded broadcast radio average duration by 40 per cent. The study suggests computing has now replaced radio as the number two media activity. Radio is now number three and print number four. Print covered major US newspaper and magazines with use around 22 to 41 minutes per day. Claims for the death of print are no longer an exaggeration.

The Council for Research Excellence study shows our typical daily media consumption goes beyond TV to a growing prevalence of new digital screen-based channels. One of the by-products is the finding that suggests we may actually be seeing far less advertising than first thought. Indeed, high levels of media exposure and our attentiveness to advertising may be seemingly unrelated and those oft cited high levels of advertising exposure, possibly no more than a frabrication by media planning and advertising agencies.

While the screen and our fascination with the images upon it have been around for centuries; the variety of screen-based communication channels, our use of their content continues to expand and grow at speed.

Portions of this blog were originally published in the Times of Malta's Technology Sunday supplement on Sunday 24 May and in Marketing Magazine Australia on Tuesday May 26.

DIFFUSION for national adoption brands.

DIFFUSION have been appointed to develop the brands of Orphan Angels and Australia's National Adoption Awareness Week.

National Adoption Awareness Week, which will be held this year from November 16-22, aims to encourage, listen and acknowledge all adoption-related journeys and experiences.

Orphan Angels, founded by Deborra-lee Furness and Janine Weir, focuses on assisting global orphan projects and improving Australia 's adoption practices. One of its major projects is the National Adoption Awareness Week.

Orphan Angels President Janine Weir said the group was excited to be working with DIFFUSION as it looked to develop both Orphan Angels and the National Adoption Awareness Week brands.

“This year we’re looking to create even more connections between Australians who are touched by adoption. DIFFUSION’s appointment will enables us to better understand how we can use brand to leverage it and encourage more participation in this year’s event,” she said.

DIFFUSION strategy director Stephen Byrne said the agency was excited with the appointment, given the group’s work was high profile and the agency was continuing to expand its work with organisations that had both national and international reach as well as important social agendas.

DIFFUSION was recently appointed to develop the brand strategy for the Lowy Cancer Research Centre at the University of NSW.

When brands fail, does brand valuation too?

Last month Wally Olins, the man synonymous with the London brand agency that still bears his name, pronounced brand valuation an “utterly meaningless process”.

The bedrock on which many brand consultancies, accounting and valuation firms have built their reputations and practices, Olins pulls no punches on the value of brand valuation, describing it as “about as meaningful as sticking your wet finger in the wind and shouting out a number.”

He says this “ apparently rational process” is conducted through a “series of complex, arcane and to a lay mind more or less incomprehensible statistical measurements” but which ignores a number of well known truths.

“The truth is that brands of all kinds jump around all the time. They are in fashion, then they go out of fashion. They are well managed, then they are badly managed; brand managers become too risk averse or take too many risks.”

And his point is well made. Here in Australia we only need to look at a company like Babcock and Brown (B&B). Founded in 1977, this international finance and investment company had at one time 28 offices and in excess of 1,500 employees worldwide including offices in Europe and the United States. In December 2006 it had a market capitalisation of just over $8.5 billion and in 2007 its share price peaked at AU$33.90 but by December 2008 its share price had nose-dived by 99.6% to AU$0.14, representing a market capitalisation of less than $50 million. Last week the company was placed into voluntary administration.

Here Olins’ point is easy to support. Obviously, if a brand like B&B has no financial value (as the B&B board announced in January) - on what basis can any brand valuation be made?

Similarly, as BusinessWeek ranked Citibank the number 11 brand in the world in 2007 with a valuation of U$23 billion by 2009 some estimates put its brand value at around $9 billion and with that its ranking would fall to around number 40. No one can or would dare predict what Citibank’s brand value will be by the end of 2009. And given the level of US government assistance (US$25 billion to date), it’s brand may yet cease to exist (like I saw Washington Mutual close it’s doors and disappear overnight) and what then is the meaning of any valuation?

It Olins is does oversimplify of the brand valuation process in that it does examine both net present value as well as attempts to construct an idea of future value. However, he is right about how often brand valuation is trumpetted as an absolute measure of value and that, almost without exception in most valuations I have seen, the process takes no account of what either customer or market perception and sentiments is for a brand.

And Olins is only half right when he says brands have “no objective, absolute value” but the truth is that brand valuation can be used to establish an objective value but its ability to measure “absolute” value that is somewhat questionable.

The four standard brand valuation methodologies accepted by both the Financial and Accounting Standards Board and the International Accounting Standards Board for use on balance sheets around the world do provide an objective guide to what people should pay for brands. However, they can, in no way, be used to demonstrate absoluteness

The real fact is that by any measure there has only been a small reduction in the brand value of most of the world’s top brands and as market conditions and sentiments change values continue to change. Last week brands like Apple, Google, UPS and Amgen were being touted as possible replacements in the venerable Dow Jones Industrial Average for stricken companies like Citi Group, General Motors and General Electric.

Brand values do reflect balance sheets, market trends and sentiment but can only do their best to take account of black swan moments. In that way there can be no absolutes, and that is meaningless.

This blog was also cross-posted in Marketing Magazine Australia on March 17.

DIFFUSION's take on taglines out in India.

We're out in the world.

DIFFUSION strategy director Stephen Byrne quoted in a new article published this month by leading Indian business and marketing magazine, 4Ps.

DIFFUSION branding new Lowy Cancer Research Centre.

Shameless plug but here's our latest press release:

Strategic branding agency DIFFUSION have been appointed to develop the brand strategy for the new Lowy Cancer Research Centre.

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

It will be one of the largest dedicated cancer research centres in the southern hemisphere and Australia’s only fully integrated adult and childhood centre.

DIFFUSION strategy director Stephen Byrne said the agency was excited with the appointment, given the Centre’s important work and international reach.

Martin Lindstrom's Buyology: why every idea you ever had about why we buy won't be changed by what you read here.

Sydney-based author Martin Lindstrom’s Buy-ology might have made a brief appearance on the New York Times bestseller list in November buoyed by some good reviews, but by my standards and those professional marketers, strategists and critics of neuroscience around the world, its a mishmash of spectacularly insubstantial claims drawn from a single set of research experiments backed by cribbed online references and enthusiastic, anecdotal and sometimes annoying marketing evangelism. 



The whole premise of Buy-ology is that brand and purchase decisions are not made on any rational basis but by stimulation to certain sections of the brain. Lindstrom’s neuromarketing experiments use two types of brain-scan technology - functional magnetic resonance imaging (fMRI) and SST, an advanced form of electroencephalography (EEG) - to test how various marketing stimuli can affect the subconscious. While the book quotes a number of well known research studies and runs to over two hundred pages, less than a quarter is actually devoted to detailing and recording the results of its four experiments, its the entire basis for his argument.

So here’s the four earth shattering results Lindstrom claims may set off “the biggest branding revolution in 50 years”. It will save you buying this book.

The first experiment, using SST-ECG measured the impact of product placement in television programming and finds that “ we have no memory of the brands that don’t play an integral part of the storyline of a program”. The second, using fMRI on cigarette smokers, tested the effects of “overt, direct and visually stimulating images” and its relationship with subliminal advertising, finding that its iconography and images themselves not logos that actually stimulate purchase behaviour. The third experiment using fMRI tested whether “sports, and sports heroes activate the same areas of the brand as religions did” showed “the emotions we experience when we are exposed to strong brands” is similar if not “almost identical” to the emotions generated by religious symbols. Finally, his fourth experiment, using fMRI on an unknown number of subjects (Lindstrom forgets to tell us how many participated in half these experiements) was designed to “determine whether a signature sound – like the Nokia ring tone – makes a brand more less attractive”. The shocking result: most brands do well when “sound and vision are combined in a congruent way”. Unless you’re Nokia because after a decade or so of use, its ringtone now has a strong aural disassociation. Lindstrom found this result so disturbing he had to give the company a call and tell them!

Lindstrom claims all these “controversial” and “spectacular” findings come from a three-year, $7 million experiment testing 2081 volunteers in the US and Europe (he says they were also from Japan and China but I can’t find these in the results). Buy-ology doesn’t substantiate either the costs or the length of the study period. For example, the commercial cost of fMRI can be around US$525 per hour with standard scans taking around an hour. New fMRI scanners cost anywhere between US$1m and $2.3m and portable scanners around US$2m, so perhaps he had to buy a scanner or two but I seriously doubt this. The point is that he only conducted three fMRI experiments on at least 65 people. Also the standard cost of an ECG scan in the US can range from U$100 to more than $500, depending on the purpose and type of test i.e., asleep or awake, invasive vs non-invasive electrode implantation. Lindstrom’s was non-invasive and his 400 subjects were awake. You do the math.

Untested is Lindstrom's discussion of mirror neurons, behavioural priming and somatic markers, which he tries to draw a line from his own experiments via some scholarly studies he found online. But Lindstrom’s experiments do attract an even bigger question about neuroscience and marketing – whether this kind of research is actually a useful predictor of behaviour. Lindstrom might be fairly certain of this science but most critics of the use of such limited research insist it's too early in the field of neuromarketing to draw these kinds of absolute conclusions. According to Sheffield University School of Psychology Professor Lawrence Parsons, “we don't really know what we are seeing when we watch the brain work. Is it the thing itself - the thought, the flash of insight - or just an aspect of it, the bark rather than the dog?”

It’s clear to me Lindstrom’s claims require substantial research to draw any probable link between the outcomes of these experiments and predictors of future purchase behaviour. Right now his results just show a degree of correlation between stimulation and behaviour, they don’t prove a single basis of causation.

Last year I read a New Yorker article on the roots of psychopathy, describing how researchers have being using a portable fMRI scanner to scan the brains of US prison inmates to uncover the basis of psychopathy. It suggests that if a “biological basis for psychopathy could be established” then pharmacological treatments could be developed. Might not similar treatments be developed for behaviours such as impulse buying and mall rage? These experiments have been conducted for years and have drawn the kinds of accusations which put them in the same category as nineteenth century phrenology. Yet, unlike Lindstrom, none of these researchers dare draw any final conclusions. The field, like neuromarketing is so new, researchers believe they will need more to spend the next ten years and maybe another 10000 scans linked to prisoner DNA, biographical data and case histories before anyone thinks the data makes sense.

In one interview last year Lindstrom said, “If I wrote a serious, heavy book, no consumers would read it” and a trawl through Amazon reader reviews on Buy-ology will confirm that. A Some advertising agency planners might like this book and a few business and industry people might be gobsmacked, but you won’t read anything here you don’t already know already or can’t find online. But if you like this kind of marketing sooth saying the globetrotting Lindstrom will be in New York and San Francisco in March presenting his exclusive Buy-ology symposiums, digging “wider and deeper than it was possible in the book alone, into the research findings and their implications for marketers and advertisers”. I can’t wait.

This review was also published in Marketing Magazine Australia blog on 19 January .

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See this is the future of television2: new broadcast business models need airing.

As television audiences and ultimately revenues from traditional advertising continue to erode, free-to-air (FTA)network broadcasters need to move towards new business models, better embrace brand opportunities and adopt increasingly newer technologies.

While in Australia and throughout the rest of the western world, network television is still widely regarded as the best means to deliver the highest number of eyeballs for an advertiser. Increasingly this view is being challenged. First, by the decline in core audience numbers and secondly, from generational abandonment by would-be viewers who can now source their information and entertainment needs from a variety of media sources that sit outside traditional FTA business models.

While the ownership models of FTAs have changed, revenues have remained high and consistent for the past decade and there continues to be increasing aggregation to more whole-of-media models (where media ownership laws permit), there is little change in the way current revenues are realised.

Globally FTA networks are still stuck in a late 1940s model of advertising and sponsorship (worse still are newspapers whose models are more 18th century) barely moving beyond offering air-time to sell soap powders since the first broadcasts in the 1930s.

In 2007 total Australian FTA advertising revenues rose to $3.7 billion, an increase of only 8% from 2006 (ThinkTV/Free TV Advertising Revenues, 2008). Pay or subscription TV with revenues of $275 million, deriving around 92% of revenue from subscription, appears to have also stalled at 27% penetration in Australia despite advertising growth of around 29%. However, this seems unlikely to rise, even with adoption of personal video recorders (PVRs) such as TiVO or Foxtel's IQ.

Against this total Australian internet advertising revenues increased 34.5% to $1.34 billion. According to AdNews online advertising revenues represented the fastest growing media sector, only surpassed by total print media at $4.7billion and total TV revenues.

While FTA’s obviously enjoy a predominant position in Australian and other global media consumption in 2007, the 8% increase in advertising revenue can mainly be attributed to rate card increases.

And while they have sort to extend their brands and access to online advertising dollars through joint ventures with predominately US owned portals. Jointly, the combined media of Nine MSN, Yahoo7 and News Digital media have a market share less than 15% of the total online advertising market.

It is now generally accepted that audiences for FTA are in decline and this is likely to worsen. Between 2001-5 it was 1.4% annually or 5.6% compounded, leading the charge is the 16-39 demographic, who have declined almost 17% in absolute terms across the same period.

The flight from FTA viewing reflects a broadcasting landscape that has become less about centralised technology and more about access viewers or users have and engagement to content via a variety of platforms and devices.

In March 2008 the Boston Consulting Group warned FTA networks were in danger of losing significant revenue because they were not connecting with viewers but in reality there was no significant change throughout 2008.

So rather than fear the move away from traditional models that have changed little since the birth of television, FTA broadcasters may find embracing the brave new world is not the death knell but an opportunity for new business models and revenue streams through better brand and audience engagement. There are four I believe could work.

1. The Social Network model

This model is around a network portal where a consumer can get their information, social and entertainment needs met in one place. This would allow someone to manage, distribute and mix and match media as it is loaded onto a device of choice and share this directly with communities of interest. In the future, a FTA may look a lot more like a cross between FaceBook, Google and YouTube. The Social Network will also enable advertisers to target individuals directly or as a group and more precisely as they will choose to self identify, often on the basis of receiving free content or because they want to know about an advertiser’s product. This makes them both highly valued and a targeted set of eyeballs for an advertiser and enhances revenue opportunities.

2. The Long Tail

FTA networks have been relatively poor in optimising their return from commissioned and original programming. In a long tail scenario, an FTA could both bundle and sell branded programming of any vintage and in any classification via aggregator stores of their own creation or through established outlets such as iTunes, Amazon and Hulu. All of this could be contained within variant pricing models, dependent on the nature and type of of viewer demand.

3. Contextual programming device neutral

In much the same way YouTube is now streaming to a variety of mobile devices and most recently TiVo, contextual programming model derives its income from a pay per view independent of the device. This will enable the FTA networks to maintain control of content as the content it will continue to be stored by the network or its proxy and stream to the chosen device. Further, viewers may choose to receive advertising in exchange for lower content charges. This is way beyond current deals done on offer for mobile television by mobile phone carriers in Australia with the most recent examples, Vodafone’s newly launched Mobile TV or Telstra's BigPond TV.

4. Increased branded merchandising and branded product placement in original network owned programming

US research company PQ Media estimated that Australian companies spent A$137.8 million placing products and brands in TV programs and films in 2005. Australia is the third-biggest product placement market in the world. Against total revenues, contribution for branded merchandising and products this represents less than 0.4% . In 2007 US product placement grew by an estimated 31% with projected spending of $3.79 billion across film and television. In the branded merchandise area, even the lowly SBS network made $48m in 2007 from business interests, including branded merchandise versus $37m from advertising. There are massive and unrealised potential opportunities for FTAs to exploit this area - both in building their own brands (an area they seem to overlook), in network owned production and through product placement opportunities.

While most FTA networks are unlikely to publicly acknowledge their diminishing returns for their advertisers, they urgently need to look at new business models which better identify what and to whom they are delivering and where they can attact new income streams. Up to now FTA network business seems to have ignored the massive changes which have occurred in the rest of media and other sectors, perhaps because their product has continued to be delivered free into low cost devices. So while FTA network owners and shareholders may see some comfort in rising advertising revenues, what does seems inevitable like an inverse version of Moore’s law, is change and like newspapers, some kind of arresting demise.

AusSports viral video has a lend of Brits.

After being trounced by the British at the Olympics, the Australian Sport’s Commission's new viral campaign to attract rising Australian sports stars for 2012 Games has caused a bit of a stir back in the Mother Country.

AuSports “Let's rip those Brits to bits” campaign has caused a minor furore, with the Pommy press unsure whether to take the portrayal as a national insult or a bit of a lark with even the Sunday Times drawn into the debate asking if “the Aussies have lost the plot?”.

“It reflects the depth of feeling among Australians that Britain finished above them in the Beijing medals table last summer and the determination of the Canberra government to redress the balance in four years’ time,” said the Times on the weekend.

The AusSports viral video campaign, developed by Sydney digital agency Bullseye, features a London chav in a hoodie, taunting young Australians about our low Beijing medal count and baiting them to stand up and be counted for the 2012 Olympics in London.

AuSports’ National Talent Identification and Development Program senior manager Morag Croser said it was anticipating a return serve from the British as a result of the campaign, despite the fact it’s not even the target.

She said AuSports expected British indignation would “be forthcoming" and I think retaliation even swifter.

The Poms took bragging to a whole new level after it finished with 19 gold medals to our 14 in China as it looks to cement a place in the pantheon. spending US$375m on its elite athletes in the London Olympics run-up compared to Australia’s US$140m.

AuSports said sporting superpowers America and China have talent pools in excess of four and 22 million respectively; the campaign is designed to increase the size of Australia’s pool, which AusSports puts at only 280,000 people.

It’s a point of national pride that we see ourselves as one of world’s leading sporting countries punching well above weight in Olympics since 1988. But being beaten by the Brits in the medal tally or, for that matter, being beaten by them in any sport is seen as somewhat of a national disgrace.

This blog originally appeared in AdAge on 17 December.

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Questionable identity: what General Motors can learn from adaptive instability.

Anticipating and mitigating the dramatic impact of organisational inertia on transformational brand programs can help companies better cope with a constantly shifting economic environment. Just ask US car makers.

It’s a key finding from a recent study by Harvard Business School’s Mary Tripsas on the interplay of “Technology, Identity and Inertia” within a new technology company.

While there is a wealth of knowledge around the brand dynamics that contribute to forming identity, Tripsas believes the specific relationships between brand, change and technology and the impact of inertia remain unexplored.

Tripsas’ study challenges the existing zeitgeist by arguing broader brand identities impose fewer constraints on how people view organisations. She believes those with more generic brands are better able to weather a range of changing external conditions because they can align with our wider expectations of what their brands mean.

Broader brand identities and brand architecture create flexibility for a company since they enable a form of adaptive instability.

Adaptive instability works when the external labelling of a company’s brand is fairly constant but enables an internal self label which can reflect internal shifts in a brand. BHP Billiton might be “a mining company” to all of us but it currently self identifies as “a global leader in the resources industry”, reflecting a dynamic strategy. Often it is no more than rhetoric but if a brand is internally viewed as both instable and adaptive, it is able to better respond and adapt to external environmental shifts without having to make major brand changes.

While Tripsas doesn’t say how this can be achieved, there’s been plenty of evidence to support how I believe a robustly formed brand identity supported by broader purpose and positioning statements can. For example, News Corporation has been able to better adapt to the changes wrought by the internet by positioning itself as “a diversified global media company”, rather than as a single media source company.
The same approach has been taken by oil companies such as BP and Chevron in the past few years as they moved away from external “oil company” to more generic “energy company” labels. Conversely, the American car makers such as General Motors (self label: the world's largest automaker) and Chrysler (self label: we build cars and trucks) would have done well to think about how they could be morphing their brands from their focus on pure manufacturing labels to offering broader “transport” options. The prescient Honda already self labels itself as a "mobility" company.

However, Tripsas warns if a brand is too diverse it also runs the risk of not aligning with external stakeholder understanding. It’s why the UK’s EasyGroup is such a great example of what NOT to do. Unlike the diverse Virgin group of companies, which operates against well articulated brand values and personality, I struggle to understand the fundamentals of the Easy brand beyond its ability to apply an Easy prefix to any business category from rental cars to pizza. Does anyone think Coles’ owner Wesfarmers actually has a brand? As an agricultural company it probably did but now its ambit stretches from retail supermarkets to coal mines, its even rendered label-less by its own description as “a diversified corporation”.

Even the brand essence of a company can direct and constrain action and generate inertia. Tripsas defines essence as a company’s “routines, procedures, information filters, capabilities, knowledge base and beliefs” but I call it core self belief. So when an economic downturn challenges an organisation and when pursuing change to meet that challenge violates core brand beliefs, organisations often pull up short rather than face the need for what Tripsas calls “systemic, major reorientations”. You only need to look at Woolworths bungled rebranding to see this in action.

But brand and strategy are not mutually exclusive. Unfortunately most firms have aligned brand to their marketing rather than to their strategy and subsequently ahve limited capacity for change. If a firm’s brand is expressed through elements of its strategy, does this mean a change in strategy necessarily then implies a change in brand and vice versa?

Tripsas concludes brand is not just one more factor to consider when unravelling sources of internal inertia during changing circumstances. A brand is a guidepost. Where a new dynamic such a global recession requires changes to the brand, simply altering routines, capabilities or beliefs without acknowledging the broader implications can be problematic and, in some cases (back to the US car makers), devastating.

This blog was also published in Marketing Magazine Australia on 8 December 2009.

It's about face: has David Jones given Miranda Kerr the flick?

Has Miranda Kerr, the new face of Australia’s oldest department store brand David Jones (DJs) been quietly replaced? So what happens when you realise your brand face doesn’t quite match the company it keeps?

Earlier this year DJs face supermodel Megan Gale stepped aside for lesser mortal and fellow model Kerr to be annoited the new face of DJs brand. Kerr did figure prominently in DJs Summer 2008 launch but since then has been a negligible presence in its national advertising and promotion.

DJs originally hired New York based Kerr to replace Gale on the catwalk for its bi-annual season collection launches in February and August as well as be its face in catalogues and advertising campaigns. Gale, it said, would continue in the lesser brand ambassador role.

But it’s Gale not Kerr who figures prominently in DJs major media campaigns, dominates its online presence and is widely featured in a national launch of a new American Express branded store card.

During the April baton change DJs pointedly said customers would undoubtedly embrace Brisbane born Kerr’s “warm and engaging nature." A direct link was made to her “Australian attributes”, describing her as a “ natural beauty with great sense of humour, a down-to-earth attitude and a love for Australia”.

Brushing away criticism Kerr was an unknown, DJs CEO Mark McInnes said her personality type could easily represent the brand, describing her as fashionable, approachable and aspirational.

“We want fun, fashionable and aspiring women representing our brand who are definitely not the Lindsay Lohans of the world," McInnes decried.

Yet, like Lancome’s sacking of Isabella Rosellini, L’Oreal telling Natalie Imbruglia she was no longer “worth it” and Versace’s disastrous hire of Madonna in 2005, doing good face doesn’t necessarily translate to sales if the fit isn’t right.

Kerr seemed to me to come across as neither a sophisticate nor particularly alluring in the Summer 2008 campaign; her self consciousness almost like that of a gawky teenager. More Hannah Montana than Lindsay Lohan.

Rather than adding to DJ’s brand equity and increasing it’s appeal, Kerr appears to have done neither.

Death of Print 2: Sensis and the final days of the phone book.

When did you last use the print edition of a phone directory?

In Australia the first directory was on a single sheet and listed just 44 numbers, now more than 100 years later it’s still in print but looks likely to go the way of the rotary dial phone. Here’s a couple of recent and related events that suggest publisher Sensis needs to prepare for the inevitable:

• Print company PMP’s contract with Sensis for production of Australian White Pages and Yellow Page directories expires on 30 June 2009;
• A new GPY&R Yellow campaign for Yellow Pages announces the release of a handy sized print version for use in the car;
• Google and Telstra subsidiary Sensis announce they have signed a deal to integrate the data from Yellow Pages business listings into Google Maps Australia;
• Total worldwide smart phone shipments hit new peak of 39.9 million in Q3 2008 while in Europe almost 40% are GPS enabled. In Australia, 3m will ship constituting 30% of all mobile phone sales.
• Google announce a new iPhone application that runs a voice translation service which enables users to speak and ask for the name of a service or store near their location and have it sent to their phones.

According to Sensis, its Yellow Pages print version does AUD$1 billion in advertising annually and the Yellow Pages Online a further $100 million. Last year more than nine million print copies of its White Pages were distributed in Australia with Sensis claiming a 99% penetration rate into Australian households. But the events above threaten these brands’ relevance and could convey them to the dustbin of history.

The long decline in landline connections can be linked to falls in use of both print editions. In February Sensis parent Telstra announced, somewhat half heartedly, that it had arrested some of the decline in its fixed line services. In fact, the decline was just 2.1 % against a 2.5 % decline in the previous six months to June, the annual decline still around four or five per cent.

But there maybe something more significant going on with Sensis’ so-called Yellow and White Pages Networks, with both registering significant online declines in viewership this year. Alexa data puts Yellowpages.com.au views of its online edition down a massive 10% for the last quarter and Whitepages.com.au down 3%. This contrasts with White Pages’ claim in March it was number one for business search and Yelllow Pages announcement in November that more 11 million Australians used its service every month.

While competitive intelligence service Hitwise’s latest figures has White Pages with an increased market share of 10.89% for the same period but this is only 0.19% of all use across the entire online market with Google’s Australian operation dominating the market with 8.38%. White Pages is not even a top 20 site in Australia. Similarly, Hitwise has Yellow Pages increase market share by 7.25% for the period for a total share of only 0.11%. Up against Google, Microsoft and Yahoo, it is a minnow.

Sensis’ deal with Google Australia seems to at least acknowledge that its market share is close to a fiction and it needs to better position its brand to take advantage of the much anticipated growth in location-based services coming from the explosion in smart phone use.

By year’s end around three million smart phones will have shipped in Australia, most with built-in GPS such as the iPhone and Nokia Navigator. Portable navigation devices like Mio and TomTom, primarily used in cars, seem already to have been sidelined as carmakers increasingly include it as standard and users opt for more personal technologies. Already Nokia is the third largest provider of mobile navigation across all platforms in Europe. In this scenario, the release of the new Sensis Yellow Pages directory for car use seems both archaic and a folly.

Sensis says 25% of all phone books don’t get recycled but end up as doorstops or propping up computers. Perhaps these users are the only demographic that’s going to find it hard to lose the phone book. Regardless, PMP might want to check its contract when it comes up next year. My feeling is Sensis is losing its way and needs a better strategy that increases relevance, brand visibility and usability for a complete multiplatform environment, otherwise it might see more of its brands (think Trading Post!) analogous to a doorstop.

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Brand Australia, I've seen the trailer.

The Country Brand Index (CBI) now ranks Australia as the top country brand in the world. While it may suggest some homogeneity around our identity, I’m wondering whether the latest Tourism Australia (TA) campaign is made disingenuous by its link to Baz Luhrmann’s depiction of Australia in his eponymous period epic.

A plethora of film tie-ins and promos: from a range of smartly designed but nostalgic Australiana homewares from production designer Catherine Martin right through to the much vaunted TA hook-up, serve to present an identity now blurred by brand and film image.

The Luhrmann/TA TV and cinema ads opportunistically piggy back on Australia-the-film and add confusion to Australia-the-country’s identity. It’s a marked contrast to TA’s previous prognostications that it would shift perception of Australia-the-country-the brand away from a focus on natural scenic beauty. While subsequent brand refreshes in 2003 and 2004 were designed to emphasise a broader cultural context, its 2007 campaign again refocussed on natural beauty but the earthy humour was considered derisory.

Now TA’s back to Australia-the-country-the-brand filled with natural beauty and an invitation to go walkabout. This time they’ve added Luhrmann’s beautifully shot sunburnt country but the only real difference is a whitewashed Aboriginal narrative borrowed heavily from a couple of Nic Roeg and Peter Weir films. Let’s not overlook the fact the message is delivered by a character featured in both Australia-the-film and the campaign.

Australia-the-country-the-brand’s number one ranking might have everything and nothing to do with the success of TA’s campaigns. Last year visitor numbers to Australia-the-country fell by between 4-5 per cent and so has the TA's inclination to link this to their campaigns. CBI’s international travellers might indeed love Australia-the-country-the-brand-the-film, but I’m not sure which version they think they’ll see next time they visit.


This blog was also published in AdAge's Global Idea Network.

Beyond Seiko. Defining emotional technology.

There isn't a definition for emotional technology, despite it being used as a band name and some scant references to the term in post-modern discourse.

Yet in 2007 Japanese watchmaker Seiko began referring to its watches as using emotional technology. Since then press releases and advertising clips from the company have described how:

SEIKO believes that the wristwatch is, above all, an intimate accessory. The best watches live in harmony, and interact, with the wearer and its functions offer the user a re-assuring and emotionally satisfying bond.

SEIKO's technological development is focused on the creation of 'emotional technologies'. Emotional technology creates the interaction between the wearer and the product.

From here it’s easy to deconstruct a definition from Seiko's text, set it within a meaningful context and even go beyond. First, technology is the product, not the mechanical or electronic drivers used to build or drive it. Second, emotional technology is defined by the creation of emotional intimacy between a user and the technology. Finally, this is measured by the level of comfort and efficacy derived from the technology and from the experience of closeness with it. For Seiko or any other technology brand, this occurs on between user and brand as well as on a collective basis.

Intimate engagement with technology is gauged by both degree of closeness and time. Technology needs to meet user expectations across the full span of a relationship, not just at purchase. Apple’s high rate of product innovation is not only the commercial imperative of in-built obsolescence but also the emotional commitment by users to its product. There is no better confirmation than hysteria surrounding the iPhone release or the opening of a new Apple Store (see below). Each demonstrate how Apple has a much better understanding of its users than most technology makers (think Sony’s Walkman failure and more recently, Motorola’s struggles) and has constructed this with real purpose.

The level of association between user and technology requires constant and increasingly intimate communication. Overt and expressive it includes visual branding, general advertising, promotion and communication. It also occurs by non-direct forms via personal proximity, audio and kinetic branding and technology design. While most technology branding does the former well and most do some form of the latter - the visual ubiquity of Apple’s white iPod headset, audio branding by Sony Ericsson or the distinctive design of a Dyson, all come to mind - few are exemplary in generating a high degree of intimacy.

Like all good relationships the success or failure of an emotional technology is affected by its nature, trust and the culture in which it operates. Mobile phones are more able to build trust and therefore a higher degree of intimacy than a washing machine, simply because the level, degree and type of relationship is different. Culturally, as Seiko notes, this "reassuring and emotionally satisfying bond" with a mobile phone is also going to be different for the 14 year old Gothic Lolita in Tokyo and the Gossip Girl fan in Manhattan. For each the basis of a more intimate engagement is determined by both usage and degree of customisation.

Importantly, emotional technologies need to ensure brand and product attributes are clearly defined, understood and shared. To see this is linked to brand success take a look at Saatchi’s Love Marks top 50. Without spelling out the obvious, the idiosyncrasy of this list is almost wholly dependent on the degree of intimacy and identification people feel between themselves and brands. Apple, the iPod and Google all occupy top 10 positions, while the Technology top 50 has Sony, TiVo and Sonar top 10 followed by Atari, Nokia, Nintendo, Canon, Blackberry and Nikon.

Seiko, for all its investment in its ownership of "emotional technology” is yet to make the list. Ironically it’s an old technology watch brand that does. No surprises, its Rolex.


This is an alternative version of a blog which originally appeared in Marketing Magazine on November 10. http://www.marketingmag.com.au/blogs

Brand priming or why Reidel glasses make wine taste better.

What makes wine in a Reidel glass taste better? Is it because Reidel is called “The Wine Glass Company” and it claims its glasses make wine taste all the more better than any other? How come a Tiffany diamond engagement ring set the benchmark for all others? And why do people queue for the latest release of the Apple iPhone, when they wouldn’t for any other phone? Does brand exposure influence a wider range of behaviours than we previously thought? Can exposure to specific types of brands and their associate brand messages really unconsciously influence our behaviour?

That’s the inference from a Canadian study Automatic Effects of Brand Exposure on Motivated Behaviour: How Apple Makes You "Think Different", which explored whether our unconscious can be so primed by exposure to certain brands they can create automatic and predictable behaviours and performance.

Published early this year by the University of Waterloo in Ontario Canada and Duke University in the US, the study looked at whether the generally accepted priming effects applied to our social behaviours can be applied to consumer behaviour and how brands can influence this. If so, can so-called brand primes shape our behaviour and how do they does this happen?

Priming occurs when mental constructs are created around or by a particular situation. For example, it’s been well documented that exposure to the “elderly” can often cause behaviour we have already hard wired around this stereotype: so people who have been primed “elderly” may walk more slowly and display poorer memory than those who haven’t primed. Traditionally Most behavioural priming research hasfocussed on activating such these constructs via exposure to related words. If you prime someone with words related to “rudeness” they’ll probably behave rudely.

It is already accepted that exposure to brands can shape consumer decision-making. One US study found that consumers exposed to low-end brand names such as Wal-Mart chose products of higher value but lower prestige in contrast to those people who have been exposed to high-end brand names such as Barneys New York. Another found that as the frequency of exposure to a brand increases, so too does our tendency to choose that brand (this is not the same as frequency of message or frequency of advertising). Yet most research has been limited to exploring the consequences of brand exposure for subsequent brand or product choice. Does the impact of brand exposure end with purchasing decisions or can it actually extend to behaviours unrelated to the products the brand represents? In other words, so if words and exposure to certain people can cause people to behave rudely or walk more slowly, can brands also evoke both cognitive and motivational effects?

Much of the psychological value we get from brands appears to come from their ability to help fulfill our personality and identity. In representing desired personal qualities such as sophistication or manliness, brands such as Tiffany's or Jeep are goal-relevant in nature, symbolizing our aspirations and unattained goals. In particular, some brands may come to represent "be" or ideal-self goals (e.g., to be sophisticated), which describe people's aims to improve themselves. Just as exposure to certain role models such as people who represent success can inspire certain goal-directed actions, so too should exposure to brands that symbolise success at a given goal. Through associations with desired human qualities, goal-relevant brands can trigger these ideal-self goals and shape behaviour. For example, Nike is associated with traits such as 'active' and 'confident.' These characteristics are generally seen as positive, so the brand plays a motivational role, symbolising a desirable future and an ideal self.

Brands are often linked to our personality traits in the same way symbols or representations of people can (i.e.Virgin is a young, fun out-there brand and if we use a Virgin product therefore it may represent who we think we are). Brands can also be symbols of aspiration, representing desired personal qualities such as sophistication or power (Bentley versus Maserati) and brand-priming may well motivate performance-based behaviour. The study wanted to know whether these types of behaviours actually do result from priming by brands.

In a series of lab experiments, the researchers had subjects look at a screen that displayed a series of flashing numbers and kept a running tally of the results. Interspersed between the numbers were subliminal flashes of Apple or IBM logos. The same subject group was then asked to perform a creativity-measurement task, in which they were asked to come up with as many uses as they could for the common house brick. In many replications of the experiment as well as with control groups, the researchers found that people exposed to the Apple brand not only came up with more uses for the brick but that these were also more creative than those exposed to the IBM logo or no logo at all. In effect, Apple made you more behave and think more creatively.

These experiments measured and manipulated qualities of priming but this new research demonstrates that brands can also serve as sources of unconscious performance-based behaviour. Recent theory has it that brand primes initiated goal-directed behaviour only when those brands were associated with qualities desired by the individual i.e. I want to be more creative (Apple) or I want to be more active (Nike) Meaning a brand can affect your output and, in the case of Apple’s brand, it may make you think and work more creatively What these findings may also enable us to predict is when the various types of priming effects occur and what the behaviours are likely to be.

In blind taste tests even the best Reidel glasses, as well as they are made, don’t actually make your wine taste any better than say a $10 glass from Target. Apple’s iPhone looks and performs well but it does is no better on a benchmarked performance basis than a Blackberry Bold or a HTC Touch Diamond. What these brands and so few others have has been able to achieve is what these researchers do indeed prove – regardless of the efficacy of a product or its service attributes, the prospect of superior performance can be primed and can directly our purchase decisions.

Brand priming might help to explain why brand promise is no longer going to be enough; the point of difference is going to have to be buried deep in a brand’s DNA. The saliency of a brand can no longer just be determined by more dominant operational and visual attributes but by triggers that prime our unconscious.

This is a longer version of a blog which originally appeared in Marketing Magazine on November 5. http://www.marketingmag.com.au/blogs

Why companies need to rethink rebranding: Research International's new logo.

One of the most important things a global rebrand has to offer a company is the chance to both refocus organisational culture and change market perception.

The effort behind a brand rollout should be commensurate with both the quality of the strategy and the design output behind it, so when global research firm Research International (RI) recently launched a new logo and strapline, it again drew attention to these issues.

This is something I touched on when I looked at Australian supermarket giant Woolworths and the glacial speed of its recent rebranding effort (DIFFUSIONblog 7/9/08). While Woolworths might have some trouble convincing people the new logo looks like either an unpeeling apple or a man with upraised arms but the new RI's logo is so over rationalised as to strip it of any real meaning.

It's yet another example of both poorly differentiated design (think of a hundred other company logo designs that use interwining strands on a globe eg. News Limited), capitalised sans serif type all of it rendered in trusty blue and orange accompanied by an equally generic tagline. The problem with this kind of rebranding is that it challenges the authenticity of a company's brand meaning and restricts the effectiveness of the messages it creates to back rebranding efforts.

That RI even bothered to trademark its new 3I (Insight.Inspiration.Innovation.) sphere logo and strapline seems ironic when you consider, as one of the world's largest research companies, it has built a major value proposition around the kind of insight its research can provide on global brand strategy. From the new website they describe how they are:

Insightful: when a major brand wants to rethink the entire global brand marketing strategy, they come to RI. We've been tying consumer motivations and behaviors to the bottom line for major manufacturers for many years.

But they are so far from it. Even from the press release that accompanied last month's launch, goes on to both deconstruct the meaning of the sphere and then destroy it all in the same breadth:

All this is represented by Research International's new Global Innovation Sphere TM logo, which symbolizes RI's status as a trusted global advisor, particularly in the innovation research sector. It is comprised of three key components: the globe, the interweaving bands, and expanding arrows. The globe symbolizes Research International's belief in the power of global marketing as RI boasts one of the largest research networks in the world. The interweaving bands symbolize RI's belief in the power of teamwork and the sharing of knowledge around the world. It includes RI's dedication to working in tandem with its clients, advising them throughout their marketing processes. The arrows symbolize RI's commitment to growth through innovation for our client's biggest brands. Collectively, the new logo aptly portrays the company's mission and ongoing commitment to helping clients find innovative solutions to their business issues.

Design rationalisation is important and few companies bother to make it public as part of the rebranding process, instead relying on one liners and leaving their agencies and other interpreters to do the explaining. But I mean really, why write this stuff?

How many times can the word "innovation" or any of its derivations be used in a single paragraph? What are RI's proofs for its use of the 3Is? What kind of changes in client motivation and behaviour do they think this will create? Why are they any different to any other of its other competitors who all claim similar innovation in their research methodology, insight into their client's business and who can also provide similar inspiration from their research results?

More than ever companies need differentiated propositions and positioning supported by simple brand messages, distinctive logos and wordmarks that are not restrained by epistolary explanation and an anemic strapline.

When brand value turns to zero.

Amidst the escalating world economic turmoil the world's most well known and successful financial brands have stared down possible dissolution, others simply disappeared and most lost substantial economic and subsequent brand value. Is brand value relevant?

On the back of the disappearance of Bear Sterns and Lehman Brothers, the takeovers of Wachovia, Washington Mutual, Northern Rock, Bradford and Bingley there is plenty of evidence there is evidence to suggest that the concept of brand value is being questioned.

Take Lehman Brothers as an example. In 2007 it had an estimated brand value of $8 billion, by September 2008 it had lost close to 78% of its brand value and when it filed for bankruptcy it still had $639 billion in assets under management before it was broken up and sold to UK bank Barclays (who basically bought the building for under $1b!) and Japanese brokerage firm Nomura but little brand value.



While conventional thinking has it that in either a merger or acquisition, brands and their equity come with the entity being bought, the Lehman Brothers example serves to challenge this thinking.

As financial markets have dried up, banks and other financial institutions have had no reference point against which to set the value of their investment assets. Between January and September this year brand valuation agency Brand Finance estimated the brand value of the 100 most valuable globally branded businesses had decreased by 4.2 percent, a drop of US$67 billion. Brand value is going to continue to decline as prices fall and markets become mere ciphers of liquidity.

While brands continue to remain quantifiable assets, their contribution to the equation of a takeover or merger price is now more difficult to extract.

In a takeover or merger brands are among the costs CFOs and their audit firms identify that contribute to any premium paid which exceeds net asset value (NAV) or, what used to be known as goodwill. Under current international accounting standards as much as possible of that margin must be explained by listing, along with their values, such intangibles as can be identified and which meet the standards' criteria. Residual amounts (brand value) that cannot be reliably explained remain goodwill. As such brand value is dumped into a bucket along with a whole lot of other assets that have been subsequently dramatically reduced. And as was the case with Lehmann's, their New York headquarters was worth more than their brand.

So what happens now?

Brands are assets in that they conform to accounting standards. As these standards develop and are refined, it's likely that in the future all brands will need be properly valued on the balance sheet. As far as consumer contribution and preference go towards a contribution to brand value, this is an issue as I pointed out in DIFFUSIONblog 22/9/08 The battle of the brands 2 that is still to be dealt with and that the value and return on marketing investment is required to provide for. And as consumer sentiment and therefore confidence in brands waxes and wanes, we are likely to see continued fluctuations in brand value that take no account of the balance sheet. It is clear that Alan Greenspan's idea of irrational exhubrance cannot exist in a whirpool.

It's just bad timing for Baz Luhrmann's Australia tourism campaign.

The launch of Australian director Baz Lurhmann's $40m advertising campaign for Tourism Australia might just suffer from a case of bad timing.

Two new film advertisements ("Come Walkabout" and "Boabs") have so far been produced which will screen in 22 countries, with the first ad shown in cinema's in the UK last week. It's hard to understand the logic of this media planning decision when none of the advertisements begin in London. The first two film ads featuring the bustling metropoli of New York and Shanghai, before moving to feature the Australian outback.

Altogether 11 different ads are to be shot in all Australian states and territories but it is not clear whether these will be Luhrmann produced film advertisements or a combination of online and print ads.

Each ad is to feature the keywords "arrived" and "departed", with the emphasis on replacing a stressful everyday life with a holiday that promises a traveller will return home a new person.

I wonder what kind of segmentation study, if any, was conducted by the agency for this new campaign and what input Tourism Australia had into both the content and timing of the launch, which seems more aligned with the much slated November release of Luhrmann's film Australia.

On the basis of the the "Come Walkabout" and "Boabs" film advertisements, did Luhrmann have exposure to Nic Roeg's Walkabout and Peter Weir's The Last Wave, as both seem very much in this tradition.

DIFFUSION understood Tourism Australia's strategy was to move away from the standard iconic images of brand Australia into a broader expression of the sum total of an Australia experience. On this basis, while the film ads are beautifully shot and produced there is no real movement away from what is already regarded as an atypical set of images of Australia.

Further, both ads appear targetted at highly paid DINK couples. I was in New York late last week and given that this segment is the one going to be most exposed to the global financial meltdown it seems a rather cruel and ingenuous campaign.

Put simply, bad and unfortunate timing and more of the same against a segment who may very well be concerned about their jobs and financial security than with a holiday in Australia.

Is $130m the only cost to Fonterra's brand?

New Zealand dairy cooperative Fonterra has been forced to write down $130 million this week as it's global brand reputation increasingly comes under attack.

The write down comes in the wake of the everwidening Chinese milk tampering scandal, which could result in one of the largest food recalls in the Asia-Pacific region.

One of the largest dairy companies in the world, Fonterra was widely regarded as a "clean and green" brand. Not only does the company own a 43 per cent stake in San Lu, the Chinese firm that sold the poisonous milk formula, but it seems on the face of it, the company's directors had prior to knowledge of the tampering but seemed unable to act on it.

A carefully stage managed press conference in Auckland New Zealand this week saw executives once again running for cover as they fended off press accusations that the company could have done more to avoid the scandal, which so far has claimed lives and hospitalised thousands of children in China.

Despite a presence on the San Lu board, who may have known about the introduction of the contaminant as far back February this year, Fonterra CEO Andrew Ferrier insisted their lack of knowledge of Mandarin hadn't have hampered their efforts to understand the extent of the tampering and in interviews said he "was appalled that this could go on."

Fonterra claims they first knew of the contamination in early August and took what it regarded as the best course of action, which was to work with the Chinese government on a product recall.

However, the depth of problem is demonstrated by the extent of the write down, as the company paid $100m for a 42% stake in San Lu, which is now valued at $62m and with some reports suggesting that San Lu's brand is now virtually worthless. It also seems likely to anticipate a much more substantial write down on Fonterra's brand value.

Fonterra appears to have stumbled at the farmgate - first denying knowledge of the scandal, failing to achieve a product recall and now having to admit it had knowledge of the tampering prior to it going public.

Fonterra would do well to have learnt a lesson from Perrier, once the leading brand of sparkling water in the US and the world.

In 1990 benzene contamination was found in bottles of its popular sparking water leading to a complete global recall of more than 160 million bottles which, like Fonterra, was also similarly poorly handled by its executives. The result was an overnight collapse in market share and a takeover by Nestlé in 1992. Perrier is yet to regain its pre-1990 marketshare.

As the scandal widens to Australia, HongKong and other Asian countries it seems that in this escalating attack on its brand reputation is likely to result in a significant drop in its share price, market share decline and community disquiet in its respective markets.

All of this could and should have been avoided if the company had some proper risk assessment and crisis planning in place. In short, this would involve training for its key executives so they can plan responses and ensure various constituencies are actively tracked. For a company of this size I would have expected this was mandatory. However, Fonterra appears to have already broken one of the cardinal rules for protecting brand reputation and ensuring trust - when in a crisis provide as much certainty as possible around how you are dealing with the problem. They haven't and now it's too late.

I wonder if this is going to be a long, slow debilitating drip.

The battle of the brands 2: new global brand survey just more deck shuffling.

There's nothing very surprising in BusinessWeek's annual survey of the 100 Best Global Brands, just that Google isn't already closer to the top of the pack and that it pre-empts the rapid decline of some world's major financial brands.

In its latest and eigth iteration, the brand rankings compiled from data from JPMorgan Chase, Citigroup and Morgan Stanley, see little shift in the dominance of global brands with the exception of Disney's failure to grow, Mercedes-Benz departure (down to 11) replaced by Google's (10) much anticipated entry into the top ten.

What's most interesting in this list is the fact that $157 billion Google hasn't already surpassed Microsoft (ranked 3) and that Swedish megaclothing retailer H&M is rocketing up the charts(22) while Thomson Reuters (44), Blackberry (73), Ferrari (93), Armani (94), FedEx (99) and Visa (100) are all marked as new entrants to the pantheon.

Behind Google, Apple (24, up from 33), Sap (31, from 34), Nintendo (40, from 44) and Amazon (50, up 62) all signalled significant growth off the back of strong sales and increasingly focussed efforts of true and marked differentiation via technology.

In what must have anticipated the seismic shocks in financial markets, big value declines were posted by Merril Lynch (-12%) Citi (-14%) and Morgan Stanley (-16%), while old school brands such as Ford (-12%), Gap (-20%) and Motorola (-10%) all struggled to hold onto their market and customer relevance.

Outside of the financial giants, Ford, Gap and Motorola have all been characterised as so bogged down in moribund cultures that their ability to innovate has had significant effects on their share price and caused subsequent declines in brand value.

Indeed for Ford, Gap and Motorola it must signal that lessons can be learnt, not from big ticket investing in advertising but in building cultures that are imbued by technological and design innovation, which big risers Google, H&M, Amazon and Zara already know.