Commbank is determined to be different..well, just the agency.

The new Commonwealth Bank brand positioning by US agency Goodby Silverstein reflects a an out-of-touch management using poorly briefed and conceived programs to demonstrate successful internal reinvention.

While the company has been undergoing an internal five year transformation program, designed to re-engineer almost every aspect of how the bank works, the same cannot be said for the branding.

Firstly, the new Determined to be Different campaign launched this moth, is not even a brand positioning. It’s entirely disingenuous for the Bank to claim it as the next step from the Which? Bank campaign as this a tagline as an addendum to the transformation project, rather than brand being a central plank of it.

Secondly, Determined to be Different campaign is just too simply such an abstract claim to be believable. It's self centred, it's an unfunny parody, there’s no customer centredness and while some attempts at substantiation are carried via the website, these are the same empty statements.

So it’s one of the problems I constantly see with advertising led brand programs is this huge gap that exists between the change programs and an organisation's inability to run successful and parallel strategic brand programs.

And organisations who continue to do this runs the risk of getting caught in the gap, and I fear that’s what’s going to happen when customers start fronting up to the Commonwealth Bank, really daring them and wanting them to be different.

The logo wars 1: London Olympics vs Keith Haring.

Ever wondered if have seen the London Olympics 2020 logo before? It was developed by London agency Wolff Olins who claim that it was at the vanguard of such a new form of visual identity, that it would create a seismic shift and move the Olympic brand into the 21st century and to a new type of audience and markets.

Researching another blog for DIFFUSION, we couldn't help noticing the similarity between it and the work of 80s New York based artist Keith Haring.

Now what would Keith think?

Assume the position: branding in 2008

2008 marks the death of “fact free” brand decision making and branding programs as business looks for return on investment. Business will start to get that brand value needs to be understood, measured and acted on. Australian businesses are under increasing pressure to understand and evaluate how their brands impact their bottom lines. Responsibility will start to shift out of marketing departments and into corporate strategy. We will see a move away from a reliance on traditional empiric and historical research models to the use of brand analytics that are forward looking and provide prescriptions for responsible corporate action.

Here’s how we see this shift happening:
Any brand activity can now be subjected to massive and organised digital surveillance. Companies will soon get the idea that their brands and reputations need to be both guarded and monitored. BRAND MONITORING has exploded in the US, particularly amongst digital brands and within the online activity of all brands, and in turn companies will look for more sophisticated ways to measure and understand brand effects in the market.

To do this they’ll need to ratify brand value using BRAND ANALYTICS. It might better be called Brand Valuation 2.0 but it goes well beyond the balance sheet. Analytics creates predictive models around how to build brand value, and how to provide better and more insightful answers to business questions around demand, brand and performance.

Once they get a handle on both brand activity and value they will see that traditional BRAND POSITIONING IS DEAD and move to the new DYNAMIC POSITIONING models. Defining brands to capture a point in a marketplace presupposes that markets and customers are static and clearly defined. It’s a machine age view. We’ll need to throw out the USP along with the single fixed brand idea. Today’s brands need to be dynamic entities, given both direction and momentum, and allowed to change within markets.

While no one says brand identity guidelines are about to be abandoned (after all someone has to define physical and functional attributes of the brand), there will be more reliance placed on BRAND PORTFOLIO MANAGEMENT approaches using BRAND ENGAGEMENT across all stakeholders. It’s not enough to know the touch point, you need to know how to manage the interaction to ensure the integrity of the response and consequent action. This is going to even be even more important as stakeholders push for more meaningful corporate social responsibility programs.

Challenging old notions that corporations own themselves, the concept of the SOCIAL OWNERSHIP OF CORPORATIONS will become a marker for a much larger trend. CSR will increasingly become an element of brand vision and strategy. Business will have no choice but to become more transparent, more comfortable in its own skin, less inclined to communicate through stage managed campaigns and communications and ultimately begin to acknowledge their part in the fabric of the world.

image copyright Keith Haring

Return on influence: metrics and measurement for brands in social media.

One of the emerging dynamics of social media is the compelling need for companies and organisations interested in tracking their brand, positioning, reputation and saliency within this space is to have some way of measuring return on both investment and influence.

Many organisations want to be able to measure their involvement or even assess potential returns prior to investment but are slowly coming to the realisation that traditional web-based analytics alone are not going to do the job, so the next question is crucial – what and how should be measured?

The crux of the issue is that regardless of the success of brand monitoring companies like Neilsen BuzzMetrics and TNS Media Intelligence/Cymfony, at this point in history their work is both highly speculative and also completely unique to the interpretation of the entity doing the measuring.

While the ability to track the tone, perception and nuances of discussions around a company and its brands, either via social media or even within it, cannot be achieved through web metrics or traditional advertisement measurement alone, the real problem is that even among the eight or so market leaders Forrester Research identified last year, there is no universally agreed standard upon which to base either measurement and metrics.

Certainly, the measurement attributes identified by Factiva, one of the vendors included in the Forrester study, could likely be considered to be part of any brand monitoring mix but this mix is also likely to be far more dynamic than anticipated.

Last year Factiva tried to get an understanding of the prevailing thinking, hosting a roundtable of influential bloggers and social media critics which identified the following measurement attributes (I've left out explanations of those that need no explanation):

1. Analytics and activity

2. Community activation/call to action

3. The "Conversation Index", define as the ratio between blog posts and comments-plus-trackbacks. This attribute is one subset of measuring participation and engagement but when I look at the majority of external corporate blogs alongside trackbacks and comments even in our brand sector, the actual ratio is low.

4. Demographic/s

5. Influential ideas or memes which the "intensity" or "velocity" of the spread of an idea or message over time. (A "meme" refers to an idea or discussion that grows and spreads from individual to individual into a lengthy chain of commentary. Rather like an idea train.)

6. Participation and engagement, where a recipient not only responds to a message but acts on it as well.

7. Reach, where it’s a lot less to do with sheer numbers than with influence.

8. Relationships and connections. For example, Factiva’s panel noted that a blogger may have a large, diverse audience but he or she may not have an intimate relationship with specific influential individuals within any given community.

9. Relevance, the question being how relevant to my company is a particular blog post among hundreds of a given meme?

10. Sentiment/tone/favourability

11. Content: the focus of coverage of social media. In most cases, this means a narrow, but extremely detailed focus on one subject or issue and it explains the importance of certain blogs over others within their respective niches.

Factiva’s panel concluded that to be successful companies need to use a combination of several key measurement attributes to understand and drive their own social media success for internal and external stakeholders.

Brand monitoring companies need to be able to help clients develop and execute plans which monitor and measure these changing attributes within a specific context and within a sphere of operations. Brand agencies then need to able to be bipartisan and develop strategy that acknowledges both measurement and metrics are dynamic and that a company's ability to identify those key attributes important to it might actually be limited. Setting these against a wider brand context and against other metrics might be another way of helping to define their brand influence.

Can Facebook get social advertising right?

Facebook is ratcheting up social commerce and wants to turn every member into a promoter for advertisers.

The New York Times reported overnight that Facebook founder Mark Zuckerberg announced the site would now feature what it describes as “social ads.”

On September 24 the company filed in the US to protect the trademark “SocialAds” in relation to “advertising and information distribution services, namely, providing advertising space via the global computer network”.

The new feature will be included in the news feed section of individual profiles and will enable advertisers to create their own profile pages and that will will let users identify themselves as fans of a particular product or service. For example, it might be that I might identify myself with Apple and so a newsfeed would be produced that says "Stephen Byrne is a fan of Apple". This message may also be featured in banner advertising which may include my picture or in single line text advertising that often runs as you load applications.

Facebook says it will initially offer social ads to advertisers for free but would continue to charge for banner advertising which could run with the endorsements.

“Nothing influences a person more than the recommendation of a trusted friend,” said Zuckerberg.

Facebook is also going allow advertisers to tap into the vast stores of data that its users provide, allowing advertisers to target users along geo, socio, demographic and psychographic.

In Australia Facebook has just over 1 million users (I checked) and is growing fast. Zukerberg was quoted as claiming it had 50 million global users with 25 million users visiting Facebook each day. It loads 65 billion pages on which advertisements can be displayed each month.

Zuckerberg is short on any projected ROI or effective measures of both the existing advertising and the proposed social ads but on the back of the recent $240m Microsoft investment, it's a direct threat to Google's highly successful AdSense network and surely competitor MySpace won't be far behind in developing a similar offer.

What's clear is that, as I noted in the previous DIFFUSIOBlog Intrusion vs seclusion, the move represents a new phase in the development of social exchanges. It will be interesting to see whether Facebook users will embrace it or whether it will be shunned.

Intrusion vs seclusion: some reasons why direct marketing is failing online.

Direct marketing is failing online because brand owners, marketers and their agencies are relying on old forms of marketing, according to the latest Harvard Business School research.

The paper, entitled Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers, released last month by Harvard Professor John Deighton and a Vancouver Research centre director Leora Kornfield argues that the much anticipated transformation opportunity in marketing created by digital interactivity is not unfolding along the lines of a traditional model of direct marketing.

Research like this is the elephant in the room for digital and advertising agencies and their clients, who continue to cling to the dated notion that consumers (of all kinds) really do look at this stuff and believe that digital based direct marketing is both cost effective and really has a demonstrable ROI.

Deighton and Kornfield argue that under the old model digital media would use the rich profiling data it gathers to create more penetrative marketing messages which would go more deeply and more precisely into consumer lives than broadcast media had been able to do.

Instead, they claim the threatened intrusion is actually delivering seclusion.

“The transformation is unfolding on a model of consumer collaboration, in which consumers use digital media that lie beyond the control of marketers to communicate among one another, responding to marketing's intrusions by disseminating counterargument, information sharing, rebuttal, parody, reproach and ... fandom” (they might be meaning Apple here or eBay’s newly created Neighbourhoods), Deighton and Kornfield said.

They describe marketers in peer-to-peer environments as an ”interloper, more talked-about than talking” and that marketing, against an old definition, may now be less a matter of domination and control, and more a matter of “fitting in.”

The article identifies five discreet roles for interactive technology:

1. Thought tracing: which is typically what Google does, and which allows advertising to be served on the basis of user's search terms and patterns of usage.
2. Ubiquitous connectivity: the notion of always on and connected especially with the increasing penetration and speeds of broadband alongside mobile phone usage. Microblogging via sites like Twitter is a good example and there are huge opportunities for marketers to exploit ideas around “attention banking”.
3. Property exchanges: in their ideal form best represented by the late lamented phenomenon of Napster and file sharing. More market acceptability of this has been built by eBay, Flickr and Youtube.
4. Social exchange: Deighton and Kornfield cite South Korea’s Cyworld, where 40% of all South Koreans maintain a presence and where 90% are in their 20s, generating $100 million in revenues each year (Wikipedia 2007). They identity the explosion of Facebook and MySpace as more recent Western examples but question whether this phenomena will “change society and therefore markets as much as the automobile did”.
5. Cultural exchange: they describe marketing as a “cultural producer”, aspiring to be an author in the culture of its customers. Most importantly for marketing to play this role it needs to be “welcomed, not resisted. “

The paper concludes that while meaning-making still remains the central purpose of marketing communication, the shift from broadcasting to interaction within digital communities is moving the locus of control over meanings from marketer to consumer and rewarding more participatory, more sincere, and less directive marketing styles.

What matters for marketers, say Deighton and Kornfield, is that the form of interactivity most attractive is the one which can facilitate personal identity projects and contribute to the collective making of meaning. And within this context, digital based direct marketing as it currently stands – the use of email, spam, banners, interstitials, splash pages, microsites etc etc - makes a marginal contribution to our identity and the creation of meaning.

As it stands the research is qualitative and largely desk research and while it suggests a direction for direct marketing, it doesn’t back its assertions with any quantitative evidence, though there is plenty around (we remember the Australian Financial Review’s digital unit telling us that click through rates on banners on it’s marketing pages were a mere .01%).

Maybe the best way to view this paper is as further evidence that more traditional passive direct marketing is not working in the new fragmented digital world. The challenge is how to stay ahead and engage an increasingly antipathetic target market.

Westfield tops global property brand charts.

Global property companies are increasingly acknowledging the value of their brand as a primary value driver.

Certainly DIFFUSION's experience working with companies Grosvenor and the Simon Property Group seems to demonstrate that building a brand centric culture will increasingly yield better bottom line results.

UK brand valuation company Brand Finance, acknowledged as one of the world's leading brand valuation companies, rated Australian property group Westfield at the top of its recent global property brand index report with a brand value of US$1.0bn (A$1.1b) alongside fellow Australians Stockland, the Goodman Group, GPT and Mirvac in its top 30.

According Brand Finance's estimates brand value contributes up to 3% of what they define as enterprise value (defined as the combined market value of the entity and debt of a business less cash and cash equivalents), and averages 1.6% of enterprise value. While it's report states this is low compared to heavily branded FMCG categories like Coca Cola, it describes the resulting brand values as "still highly material".

What's apparent with the index and in a sense explains the rise and rise of property brands like Westfield is that our perceptions are usually based on the brand's functional attributes - such as access and location. Something that Westfield has concentrated on with it's deliberate nodal location strategy (see map above). This is best illustrated by drawing from HG Well's War of the Worlds, which described how the Martian fighting machines would dominate an area by combining into a group. This is pretty much what Westfield does - visibility and dominance - and why the brand has proved so pernicious in the daily lives of people in Australia, New Zealand the US and soon the UK.

Interestingly, Brand Finance raises two questions I think companies like Westfield and other dominant property groups need to grasp:

1. What brand architecture will prove to be most effective in the future?
2. How can a coherent and effective brand message be communicated ?

As far as DIFFUSION is aware, none of these major property groups have a head of brand addressing these important issues, instead continuing to rely on their marketing and investor relations departments to be the sole determinants. The absence of a real brand strategy is palpable.

In a recent visit to Tokyo, DIFFUSION was struck by how its shopping malls had evolved to become much more experiential, with customer service emphasised at every touch point. Something that is mostly ignored by the majority of western mall owners, more content to wring as much income from both retailers and consumers through a turnstile mentality. Sure Westfield might have magazines and a valet service, but why do some of its suburban malls want to start charging for Sunday parking? Doesn't this run counter to functional attributes of the brand, like access.

It's a simple thing really. And I might add a third question:

3. What is the brand promise?

DIFFUSION hopes it will be seeing some answers at the mall soon.

Symbolic obsolescence defines this century.

The concept of symbolic obsolescence is so new that it has barely crept into our lexicon, but is already affecting brands and their consumption.

I could find some mention of the term in an a number of design journal articles dating back to 1994 and you will be able to do your own search of references, but I couldn't even find a dictionary definition.

So here's mine:

Symbolic obsolescence: the perception that something is obsolete (noun)

Symbolic obsolescence is not attached to planned or functional obsolescence, which is usually determined by the brand owner. However, it is likely that the brand owner can take some responsibility for its occurence because of the rapidity of continuous product or service rollouts. Often these are disguised as improvements but in many cases, the improvements are so minor or competitively mimic others. Symbolic obsolescence occurs because consumers perceive that their status as is either a group or individually is affected (usually seeking to elevate it) by not acquiring the product or service. In a effect it's a contemporary update on the old saying "keeping up with the joneses", something explored by English philosopher Alain de Botton in his book, Status Anxiety.

Symbolic obsolescence is already part of modern consumption. Whether it's the Titanium card, the newest credit card from American Express or in Apple's update to its hugely popular iPod range, the iPod Touch. Let me demonstrate what I mean by way of review.

Here's a review from popular blog Endgaget:

It's hard to argue that there isn't beauty in simplicity, especially when it comes to consumer electronics. But there's such thing as too simple -- and sometimes too simple can turn into crippled. Most of our complaints about the touch have to do with what it lacks -- not in general, but when compared its big brother, the iPhone. Had the iPod touch come out first, the lack of a hardware volume switch, integrated speaker, and all those apps might have been perfectly passable, but now the expectations have been set, and we can't see how taking things away from users can possibly add value. Everyone in this industry is trying to give their customers more, but with the iPod touch Apple gave its customers less in what should have been the best iPhone alternative on the market. This time around, in Apple's obsession to edit, they managed to leave some of the best stuff on the cutting room floor.

or this from Wall Street Journal tech critic Walt Mossberg:

Apple says the Touch was meant mainly to present typical iPod features, not to replicate the iPhone, and it included the Web browser only so users could get onto Wi-Fi to use the mobile music store in certain places that required a log-in screen.

But it seems ridiculous to me to sell a powerful device with Wi-Fi and a huge screen, and to leave out things like an email program, even though you can use Web-based email programs. I assume Apple was concerned that the less costly Touch might compete too much with the iPhone if it had these features. In fact, if somebody can jam a voice-over-Internet capability into the iPod Touch, it might be more of a threat to the iPhone, which is tethered to a single cellphone carrier, AT&T.

In Australia, where the iPhone is yet to released (strange decision from Apple but then again it's not even 3G), the release of the iPod Touch was seen as something we should hold our collective breath for. However, what seems clear from both these reviews is that the Touch is merely an interim lower storage device available in a lower price bracket to the iPhone, with a lot less of it's features. It plainly exhibits planned obsolescence as both reviews attest to.

However, as symbolic obsolescence it would be difficult to find a better example. In a year's time the coolhunter buyers of this year's Touch will be out buying their hopefully 3G iPhone (unless they brought in a hacked version from the US or Europe) and the touch will be relegated to eBay dustbin. Why? Because to have one and to display it, both among our peers and to society, defines us.

Just as Moore's Law helped define the inevitable rise and rise of technology at the end of last century, symbolic obsolescence will significantly influence almost all brand owners and our pattern of consumption of brands this century.

Yahoo7 tries another strategy shift.

Seven Network's announcement that it's Yahoo joint venture is undertaking yet another restructure not only points to a strategic shift in its operations but may also be a portent for the future of general media-based portals.

Last week Yahoo7's acting chief executive Rohan Lund, was reported to have presented yet another new strategy to arrest the site's declining fortunes as it continues to loose market share. The new strategy sees Yahoo7 abandoning what has been described as a "relentless advertising focus", to concentrate on both news and search as it seeks to oust Google as Australia's leading search engine.

According to reports in The Australian, the strategy is designed to do "anything to drive traffic to the portal" with Lund quoted as saying that the portal aimed to be home page for every Australian going online.

It's both a fairly naive assertion and a blind strategic assumption that against an ever changing landscape, Yahoo7 believes it can arrest the near 80% consumer and advertiser drawing power of Google.

And it's a lesson that Lund would do well to learn from his similarly well meaning predecessors.

For example, I've been online long enough to remember (and use) portals such as Apple's eWorld (see pic), Netscape, Lycos and Excite. All of which, except for eWorld, still exist in some form or another but whose drawing power in this market is either non-existent or negligible.

Hitwise, an internet ranking company who's data is based on market share of visits from a sample of nearly 3 million Internet users in Australia most recently ranked Yahoo7 in 10th place with just .9% of total Australian traffic.

This compares to Goggle's first place with a total share of nearly 10% of Australian traffic followed by 9MSN's meagre but significant 2.6%. Also in the top 10 is Myspace (2.17%), Hotmail (1.85%), Ebay (1.85%), Facebook (1.11%) and Youtube (0.95%)

Based on these figures theYahoo7 strategy has an uphill battle to overcome the status quo on both internet news and search.

And while some of its free-to-air news market dominance may also rub off on the online new service, what about the other Network 7 content and its ability to bring traffic and point of difference to the site?

Network 7's digital strategy is lagging behind both the ABC and Network 10 on areas such as after telecast access to immediate downloads. Downloading is becoming a huge threat to all Australian television networks as viewers become time shifters (as we have noted previously, even US television audience measurement is now done on the basis of total viewer ship including time shifting) and overall television viewing continues to decline.

It will be interesting to see if 7's Tivo marketing announcement is somehow bound into the notion of on-line content and directing free-to-air and subscription traffic flow, but right now it's fairly light on detail.

Further, the Yahoo and 7 team could flounder for the very reasons predecessors like Excite did. In 2001 former Excite founder William Hearst III, described the demise of the portal this way:

"The strategy was to build a national brand that could compete against AOL. To the extent that we spent money pursuing that strategy, which may not have
been the right strategy, perhaps, but to the extent that we spent money chasing that strategy, " Hearst said.

"One of the lessons--and I hate to say it--is that you can gain a tremendous advantage by partnering with big, well-established companies, and people are
going to continue to do that. But those companies are going to find it very difficult to put their new start-up venture ahead of their own corporate responsibilities. So when you have a start-up controlled by big, established companies, it's going to be a little different than a real, stand alone start-up."

And this is really the conundrum for Yahoo7. When the joint venture was announced in December 2006, it was widely anticipated by joint venture chairman John Marcom that it was "in a prime position to capitalise as viewers change the way they consume television programmes."

But since then Yahoo7 has been slow to move and perhaps its unwise pursuit of Google, Fairfax and 9MSN underpins how wrong footed it has been.

Interestingly, as Hearst notes, perhaps it's no longer the case that the nation's leading television company no longer needs Yahoo to be its digital arm and that going out as a real stand alone company (in much the same way Fairfax has) and building its own identifiable set of online brands and services from its massive content base should be re-examined.

Why companies are not marketing online as much as we would all like to think.

A new McKinsey survey of marketing executives from around the world shows that in marketing while companies are moving online across the spectrum of marketing activities, there’s also a problem with Web 2.0.

In July McKinsey surveyed 410 marketing executives from public and private companies around the world, representing industries such as business services, energy, retail, technology, and telecommunications. It asked respondents about the frequency and effectiveness with which they applied Web-based, digital techniques to five core marketing functions: sales, service, advertising, product development, and pricing. It also asked about future plans for digital marketing, including where respondents anticipated spending more money in the future.

However, while the survey shows marketing making a swift transition online, executives also indicate that they are making less frequent use of digital tools, including e-mail and informational Web sites to Web 2,0 tools such as wikis and virtual world.

Their concern, and one that DIFFUSION has seen echoing around the world since the first dotcom collapse, is the lack of capability and knowledge at companies and their agencies as well as an absence of meaningful metrics. It’s particularly notable that more than half of all current advertisers surveyed by McKinsey see this as a barrier—a proportion significantly higher than it is among nonadvertisers. Perhaps, it’s more to do with the fact that media agencies are still selling along traditional lines (see DIFFUSIONblog The Future of the Media Agency 21 July 2007) and so the real returns are still be masked by a fondness for brand building campaigns, rather than tactical activitiy focussed around identifying and selling to distinct customer needs. Hence, pay per click advertising looks great on paper but in reality, if its only ever awareness, and never translates to sales then there is a problem.

It’s also going to be a similar catchcry for companies looking to to reach customers through Web 2.02 tools such as blogs, podcasts, social networking (witness the corporate shutout of Facebook rather than embracing it as a social commerce tool), virtual worlds, widgets and wikis (increasingly being used by corporate to manage company perceptions externally). As the survey notes, will my company and agencies be able to keep up with what are ultimately ever expanding technologies and more competitive usage of these added to increasing customer sophistication and what is now the sheer visibility of global access to goods and services.

The survey reports that in 2010 respondents expect a majority of their customers to use the web as a funnel to discover new products or services online and a third to purchase goods there. A majority of the respondents also expect their companies to be getting 10 percent or more of their sales from online channels in 2010 — though, twice as many companies as have hit that mark today. But while these expectations appear to be driving plans for future spending, at least in some areas, DIFFUSION believes that companies who don’t plan for this expenditure and build capability around it are going to be left behind, not only by competitors but by their customers.

Social retailing goes beyond the media.

As both MySpace and Facebook begin to battle it out for the social media ascendancy, it’s becoming increasingly apparent that for retailers and advertisers (check brand owners) will soon to need to invest in this space to see how they integrate their ecommerce efforts with the customer intimacy social media promises. And this goes way beyond the current brand advertising or brand advocacy.

Social retailing, a term coined earlier this year by US technology consulting firm IconNicholson, combines mobile communication, online networking sites like Facebook with traditional off and online merchandising and it’s coming to a store near you.

In this increasingly brave new world a typical scenario could see us and our friends are constantly online and ready to advise whether those pants really do make our bums look big. And if we do actually venture into a store, RFID tags on items will enable in-store personalized commentary to be displayed about the products we are looking at. Checkout lines nonexistent because we are there either for a pickup, self checkout or even to buy items with our cellphones whilst browsing the store. If we’re signed up to the our local malls, retailers will already know our interests and text-message or bluetooth us personalized coupons and offers as we walk through their doors.

It is a view that has the backing of global technology research firm Gartner, identifying two new groups of emerging online shoppers, what it calls the "solo hunter" and the "social gatherer" in its report Social Shopping Will Shape the Future of E-Commerce released in May this year.

"Online vendors of goods and services that ignore the social dimension, as exemplified by the 'social gatherer' archetype, are ignoring a potentially large revenue component," said Ray Valdes, author of the report.

"These vendors are, in a substantial sense, 'leaving money on the table'.

"Social shoppers seek not just artifacts or information for future use but also an enhanced emotional connection to other participants in the shopping experience.

"Despite a seeming lack of preoccupation with purchasing a particular item," the report continued, "it is possible that the total transaction amount in a social-shopping journey will exceed that of a solo foray; therefore, e-commerce vendors that ignore this dimension are leaving money on the table."

The Gartner report concluded that immersive virtual environments like Second Life and social networking sites like Facebook and MySpace have both an advantage and DIFFUSION notes the opportunity in “supporting peer-to-peer interaction across multiple vendor locations and in enabling spontaneous human social engagement at varying levels of intimacy, allowing collaborative purchases to occur,"

But as we noted in (see DIFFUSIONblog Minority Vision 18 March 2005) some aspects of social retailing are being hampered by the limits of the current technology. As Valdes notes "The limitations of technology on the Web today allow only indirect support for social shopping," he maintained. "The technology platform needs to evolve for more direct support in a more integrated manner."

And this is the immediate opportunity for a whole group of stakeholders including media owners, retailers and advertisers (check brand owners) to start to develop real social communities of interest beyond the solo hunter. Australian companies like Westfield, the world’s largest mall owner, could combine with a social networking site like Facebook or social shopping site Kaboodle to develop a social retailing property for it’s own global portfolio.

Abercrombie to launch Gilly Hicks Sydney but it won't be in Sydney.

American clothing brand Abercrombie & Fitch (A&F) is set to launch what is being described as an “Australian-themed“ lingerie concept store, but not in Sydney.

The eponymously named Gilly Hicks Sydney, or Concept 5 as it is known internally, is set to open its first store on January 2008 in Natick, Massachusetts along with other stores in Connecticut and New York. A quick scan through CraigsList this week and we found they are also advertising for staff in the help wanted section locations at both Smith Haven Mall Long Island and Westfarms Mall New Haven.

A&F specialises in what it calls “casual luxury" apparel for college students ages 18 through 22. The company already operates four brands throughout the US: Abercrombie & Fitch, abercrombie, Hollister Co. and RUEHL No.925.

What the allusions of the new brand to Sydney are, we can only guess. Perhaps it's to do with sun, surf and a great outdoors lifestyle or perhaps even a long lost Sydney relative, though anyone with the name will be laying claim to this title.

What is known is that A&F has secured trademarks for the Gilly Hicks name and a set of beach-oriented symbols in the United States and the UK (it was registered in June) in recent months, documents shows. Insiders report that Gilly Hicks will include underwear, loungewear and a personal-care division.

According to the August Trademarks Journal, the UK trademarking was in four classes including footwear, headgear, intimate apparel and intimate apparel accessories, athletic wear and athletic wear accessories, swimwear and swim wear accessories, fashion accessories, bags, fragrances and jewellery

A&F has already filed for trademark protection for both the "Gilly Hicks" and "Gilly Hicks Sydney" names, along with symbols including conch shells, nautilus, scallops and sand dollars. The shell logo is believed to be part of the main brand identity.

The company has filed similar applications in Arizona and Hong Kong, according to public documents. DIFFUSION understands A&F will open up to 100 stores but there is no word on how the stores actually relate to Australia or whether they will borrow from similar “Australian” themed stores here in Australia such as Beach, RMWilliams and Rodd and Gunn. Maybe it's more Outback Steakhouse than Bondi Icebergs. In the end Australians may still be holding their collective breaths for word of any of A&F branded store in this country. Or for that matter, A&F at all.

Mass luxury is just another takeout.

Earlier this year DIFFUSION (DIFFUSIONblog 7 May Status Abandonment) wrote about how the democratization of luxury brands seems to be destroying those aspects of a luxury brand (exclusivity, price, access, aesthetic) that denote them.

Now Newsweek fashion writer Dana Thomas's new book Deluxe:How Luxury Lost Its Luster serves to reinforce our belief that the pursuit of massive profit by the world's corpratised luxury goods conglomerates is truely blurring the distinction between luxury items and soap powder.

The gist of Thomas' book is that this pursuit of profit has only served to rob luxury brands of their essence. This is very much reflected in a recent report on the mass luxury market which told how LVMH's Bernard Arnault's decision in 1996 to take the company into the mass luxury market was really a question of both survival and growth.

Arnault argued that like haute couture, which has been static or in decline since the 50s, many of LVMH's luxury brands would eventually go the same way unless it embraced a form of market democratisation.

Thomas' book seems to confirm this, arguing that luxury brand owners like LVMH are well aware that their products have been so conflicted by this change that the drive for both profit and growth will mean it is going to be virtually impossible for them to turn around their vast behemoths and return to what is for many, a somewhat richer past.

Brisvegas! nothing is better than a strategy.

DIFFUSION recently spent the weekend in Brisbane, Australia's fastest growing capital city. Often referred to as BrisVegas by locals and visitors alike, the city is now seeking to rid itself of the moniker.

Tired of what they describe as a now "hackneyed" tag, Brisbane Marketing's David Regan and Tourism Queensland's CEO Anthony Hayes have set themselves the (un)enviable task of "discovering" the "essence of Brisbane".

"We are going to try to distil the essence of Brisbane . . . find out what is it that makes Brisbane so special," they said in a weekend Courier Mail article.

According to the article, the pair want to "find" a new slogan (the current is "Not Just a Sleepy Town") and branding that can be used to promote Brisbane at home and and overseas in much the same way "I ♥ NY" is associated with the Big Apple, New Zealand's "100% Pure" and Victoria's Jigsaw and romantic Melbourne campaigns, both of which have been running since the the early to mid 90s.

What's interesting about the announcement is that these pair ARE actually charged with marketing the city, but their expertise is seemingly being challenged by their inability to "discover" or even distil the brand essence of the city themselves or through their organisations. A task that DIFFUSION would consider would be an essential part of their roles.

They said the first stage of their work would include a "slogan search" which would involve focus groups and which would be used to gauge interest and knowledge of Brisbane businesses and attractions.

The problem with approaches like these rather than focussing on a long term brand strategy like Melbourne has done (they are currently up to phase 8 of a campaign which commenced in 1992/3) and then developing a series of campaigns from this, they appear to be going the way of advertising agencies looking for big ideas in the short-term fix of a nifty slogan or tagline.

Both Brisbane Marketing and Tourism Queensland would do well to read something like Richard Florida's The Rise of the Creative Class and focus on urban renewal and how the city is once again encouraging the inward flow of creative talent, just two of the big positive impacts coming from its mercurial growth.

The need to develop alternative monikers to BrisVegas, love it or hate it, is just a diversion from really understanding and building on the brand essence of a city or any product for that matter (see DIFFUSIONblog 10 October 2005 Place Branding), something that requires both time and a real sustained strategy.

Schrager and Marriott to create new boutique hotel group.

According to an article in this weekend's New York Times and by a blog by Marriott CEO Bill Marriott, the boutique hotel owner and luxury property developer Ian Schrager is set to partner with Marriott International.

"We're really excited about this because Ian obviously invented the boutique hotel concept and is certainly one of the most creative forces in the hotel industry today," said Marriott.

Schrager is to work with Marriott to design 100 boutique hotels for an as-yet-unnamed brand (we'd like this gig) in major cities across the United States, South America, Europe and Asia.

By tapping a range of renowned architects and designers, Schrager plans to give each property a distinct character (this is not unlike what he has done with the Gramercy Park Hotel and we hope he doesn't repeat what he did at the Hudson).

The hotels will be operated by Marriott and it hopes Schrager will lend what they describe as his "aesthetic ingenuity and cachet" with its own marketing and organizational muscle to gain entry into the boutique market, still regarded as the fastest-growing in the hotel industry.

DIFFUSION wonders whether the name, brand and experience will be distinctive enough to separate it from Marriott's other properties. Unlike Starwood's boutique W hotel group, which seem to have lost a lot of their shine and business, Schrager has continued to innovate with the properties like the recently opened Gramercy Park Hotel in New York.

Indeed, it seems was this hotel (see pic) that inspired Marriott to finally make the move into the boutique market.

Nestle not quite everyone's cup.

Australia's coffee industry is getting itself into a froth at international ffood company Nestle's attempts to trademark images of coffee in a coffee mug.

According to IP Australia, Nestle's application is for two images of coffee - a cup of black coffee in a white cup viewed from above and a red coffee mug, viewed from the front.

"We were convinced in the end and we were convinced by evidence of use that the company was able to supply, which demonstrated they had used that particular image repeatedly over a number of years, and that people in fact recognised it and associated it with their goods and services," the registrar for trademarks in Australia Ruth Mackie is reported to have said.

According to Mackie the image is visibly distinctive. In both cases, we assume the image is not generic as has been claimed by the Australian Coffee Association but is associated with Nestle's logo as in the Blend 43 pic above.

The normal approval process used by IP Australia involves an opposition period of three months, a review and then a final ruling made by the office.

What's most interesting is that opponents of the move seemed to have fogetten that Nestle has also been successful in registering the word "Decaf" in Australia without the level of opposition this latest application is enjoying.

A similar image dispute has opened between car maker Toyota and Qantas' Jetstar over the "jumping people" image. Toyota's claims copyright of the image through its long association with the O, What a Feeling campaign developed by Saatchi and Saatchi but there is no evidence that any trademark application has been lodgeed by Toyota or Jetstar for the image.

DIFFUSION assumes that any claim Toyota would make would rest on fair use evidence.

Is Virgin's new airline V and an old V?

What's in a name when you already use it?

Certainly it seems a case of recycling, a name when Virgin Airlines Australia announced the name of it's new US/Australia long haul airline last week.

V Australia is the official name of Virgin Blue's new long haul carrier, but a visit to parent company Virgin's website already lists Virgin Vie (pronounced V) and the V Festival (recently launched in Australia) as company sub-brands. So DIFFUSION really wonders if the airline has really thought through the whole naming and sub-brand process.

But what should we expect when the name came as a result of a two week competition ran by a radio station which attracted a total of 5942 entries, which included some what the airlines desscribes as "creative suggrestions" like "Randy Roo Airlines", "Choo Choo Flying Big Blue" and "Pineapple Airlines". Among the finalists were: Matilda Blue, V Australia Airlines, Australia Blue, Virgin Pacific, Amelia Blue, Didgeree Blue, Liberty Blue and Virgin Australia.

Here at DIFFUSION either Virgin Pacific or Virgin Australia would seem to fit with current nomenclature.

The company says the decision was unanimous but we're not sure if that was because Virgin Blue CEO Brett Godfrey really didn't have to pay any of the fees associated with a real name and branding project of this status, or just like Virgin CEO Richard Branson was more interested in the PR value.

Certainly it doesn't fit into any of the British namesake's nomenclature and is remarkably similar to Virgin's cosmetics company Virgin Vie, which DIFFUSION director Stephen Byrne worked on, or to the eponymously named V Festival.

But Godfrey claimed the new name was "nice and simple, easily recognised, both understated and obvious and has a clear Australian identity" (does he mean brand identity?)

Even more interesting was the inclusion of the Southern Cross in the new livery for the airline, yet another swipe at rival Qantas.

The livery, closer to former Qantas rival Ansett, features a smart silver fuselage with a red tail including the stars of the Southern Cross, elements of the Australian flag and the distinctive Virgin red.

"It is important for us to use the Southern Cross not only for its geographic connotations, but also for its place in Australian aviation folklore," said Godfrey.

When DIFFUSION checked, the name wasn't even associated with a local website or the huge Virgin.com portal.

Not much to notice in the Qantas rebrand.

As DIFFUSION mentioned in our 21 July blog Qantas needs more than a logo makeover the world's most profitable airline unveiled a new version of the iconic flying kangaroo last week.

In a company annoucement, Qantas Executive General Manager John Borghetti claimed the new design was part of Qantas' "increasing focus on contemporary design for its in-flight and on-the-ground products" but DIFFUSION accepts that the logo change was more to do with the requirement that the new logo fit the new A380s it will start taking delivery of this time next year.

Qantas went to Sydney based design company Hulsbosch for the work, rather than to a specialist brand agency.

Accompanying the logo redesign, is a change in the corporate typeface to a more modern grey sans serif for the airline.

What's most interesting will be to see whether customers will see any real benefit from the rebrand. In visual theory, it just registers against the Difference Threshold (or what is also known as "Just Noticeable Difference") under the widely regarded Weber's Law, which determines the minimum amount by which stimulus intensity must be changed in order to produce a noticeable variation in sensory experience. So the more sleeker, angular kangaroo is a slight variation on the 1984 rebrand.

Ernst Weber, a 19th century experimental psychologist, observed that the size of the difference threshold appeared to be lawfully related to initial stimulus magnitude. This relationship has since been known as Weber's Law.

We're not sure if either Hulsbosch or Mark Newson know about Weber's law, but certainly Qantas going to have to go a lot further to deliver tangible benefits to both customers and shareholder. Focussing on the perceptible physical displays (brand marks, livery, seating, cabin design) is far easier than looking at the more underlying brand problems than can cause sudden unexplainable shifts in brand perception. With a six year time frame to repaint the entire fleet with the new logo, they certainly have some time to get things right.

QANTAS needs more than a logo makeover.

Reports that Qantas is considering plans to "kill off" the bid red kangaroo logo, serves merely to sensationalise and simplify the debate on the process of rebranding.

Here at DIFFUSION, rebranding is more than just a tweak of the logo or change in the colour palette and if Qantas' latest remodelling of both its first and business class service is anything to go by, brand management is something that Qantas is not good at.

DIFFUSION recently flew business class to Los Angeles (at last on points) and was interested to see if the much lauded makeover by Australian designer Mark Newson has really made an impact.

Now Qantas business class is widely regarded as one of the world's best and sure, the flat seats were Newson's design as was the new Noritake crockery and the Alessi cutlery (even the plastic Alessi knife). But branding is in the detail and this seemed to lack.

The much vaunted Marc Newson designed amenities kit was merely a grey plastic shell box with Newson's signature embossed on the front with some in-flight men's cosmetics thrown in. All of this was in a grey cloth bag that also contained socks, a mask and a toothbrush - none of which fitted in the Mark Newson amenties box.

Nor was there any sign of the also announced Peter Morrissey pyjamas with the smart flying kangaroo logo on the front featured in the full colour campaign the airline had been running.. No, these were for "available on selected routes*" and the Sydney/LA route was obviously not one of them, despite the announcement by Qantas Executive General Manager John Borghetti that the collection would be offered to First and Business customers travelling on Qantas international services from 25 March.

So here goes the lesson. International business is an important part of the company's business and more particularly on the protected and coveted US route.

So with Qantas controlling more than two-thirds of the capacity on direct flights to the United States and now under threat from a new Virgin yet unnamed Australia/US carrier (for which DIFFUSION puts it's hand up to work on), so much so that the airline announced this month it would also be creating a premium economy section to sit alongside the revamped business class and to match Virgin's offering.

It would seem of some import that any brand decisions the airline makes, however small, will have a significant impact on future revenues. Those per kilometre revenues, according to Qantas' last Australian Stock Exchange announcement, rose by 1.6% on international routes this year against a 4.7% increase in revenues per seat.

And for Mark Newson, the company's unofficial "creative director", there are some salient lessons. Either manage the process well enough to know everything a customer wants will go into the amenities kit or make sure that Qantas delivers on the design experience you envisaged. Execution is always core of any re-branding exercise.

The future of the media agency.

DIFFUSION was recently asked by a London based agency to look at how media agencies build new business and access clients.

Here's our response.

Media agencies, like all within their category, need to re-examine how they engage with client’s brands and what their roles are in this process. Increasingly media agencies will need to take more of a stewardship role, rather than continue to adopt what I call the agent or carrier role. They will need to go beyond simple single channel thinking, creative responses and one-dimensional strategy and work more closely with client brands at much higher levels.

Agencies need to build excitement, momentum, loyalty, equity and, most importantly, business for their brands and those of their clients. Agencies will need to look at more complete brand portfolio approaches, where they look to work with clients to develop real brand management strategies that embrace every customer touch point; they need to conceive and develop differentiating ideas (for the most part they create non-differentiating ones); and execute with both creativity and thus daring media planning.

Agencies need to really understand the consumer experience – both how people interact with the brand online and offline – as well as how they consume and define the brands they use – will succeed.

Agencies will need to move beyond the idea of "campaign" or the success of campaigns, replacing this with a series of what I call client interactions or engagements within the development of the brand. They should be using all available data driven insights to inform the development of strategic brand portfolio (media) planning across the wide arc of a customer’s interaction with the brand, rather than those interactions which are linked to limited tactical assignments agencies are used to. Furher, agencies will need to create scaled solutions in specific emerging media channels, rather than continuing to cling to those compensations models that are unscaleable.

Increasingly media agencies must embrace those compensation mechanisms that reward the quality of the idea (and here I don’t just mean the advertising idea but a brand one), rather than simply the media idea itself, its execution and tailoring fees to the needs, circumstances and culture of each individual client, rather than a one-size fits all approach. For example, not charging clients fees upfront for any creative work, or charging only for data analysis. All of this needs to be addressed.

My experience with the now defunct 360 agency here in Sydney demonstrates the need for agencies to break down those internal silo approaches that effectively work against widening new business and start doing what they tell their clients to do, provide true integration rather than simply department-to-department billing in the guise of an integrated model. Silos don’t work simply because they foster inwardness and comfort and neither will the agencies that continue to embrace this. This includes media agencies. Welcome to the network. Where increasingly agencies will work within micro-network models to best meet client needs rather than continue to propound the full-service models, which most people will acknowledge are more puffery than reality.

Finally, media agencies need to concentrate on their chief differentiator – their people. In the end this is how businesses win business.