What the ?!?! happened to ?Whatif!

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

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

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

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

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

Apple's iPhone goes 3G and downunder.

Apple's new 3G iPhone looks set for a June global launch in Australia.

According to a New York Times article on Sunday, Apple is likely to launch it's 3G iPhone in June. The new phone has been designed to to further increase its appeal to both consumers and carriers in Australia, Asia and Europe.

A number of Australian carriers, including Vodafone, are known to have been internally trialling the phone on their networks for months now. The trials and the arrival of the 3G version confirm that the new iPhones will now be able to run on Australian 3G networks.

The launch of the new phone seems designed to coincide with the opening of Apple's Australian flagship store in Sydney. Part of Apple's global rollout, the flagship stores are designed to not only enhance the brand but underpin Apple's direct sales strategy.

The NYT reported that analysts and the industry were expecting Apple to introduce the 3G phone to ensure Apple's Steve Jobs meets his 10 million iPhone sales forecast by the end of 2008.

More than 1.7 million iPhones were sold by Apple last quarter with Apple struggling to meet demand in particularly in the US and Europe. However, this contrasts with reports of lagging European sales being blamed on Apple's network exclusivity, pricing and lack of 3G capability. Complicating demand issues is the widespread belief that more than 1 million unlocked phones have found homes outside the US and are not in official carrier forecasts.

Meanwhile, competition is expected from Samsung's Instinct and LG's Vu, both very similar to the iPhone. Both were premiered at the Las Vegas CTIA Wireless 2008 earlier this month and are expected to launch on US networks soon. They will also pose a significant threat to Job's ability to meet analysts' expectations and will add urgency to the 3G launch.

Prada and Starbucks: the non-place of retail.

In his eponymous essay and book Non-Places: Introduction to an Anthropology of Supermodernity (1995) French anthropologist Marc Auge coined the phrase "non-place" to refer to places of transience that do not hold enough significance to be regarded as "places."

In Auge's original concept non-places were those spaces you typically encounter when travelling such as airports, bus terminals, hotels, shopping centres and supermarkets and which you often only remember in very generic terms.

But the concept of non-place is now increasingly engulfing many more places as brand owners and their brands struggle with brand differentiation and experience.

I was recently struck by the comment in a recent review of Taylor Clark's Starbucked: a Double Tall Tale of Caffeine, Commerce and Culture, where the enclaves of Starbucks were described as "non-place" and could just as easily be in "Manchester, Mumbai or Montreal" given the scale of its globalisation.

The two key issues non-place raises is: does globalisation make it possible for ANY brands to create real and unique spaces? do the elements of branding actually work against the development of these kinds of spaces and experiences?

In the first instance, globalisation is designed to bring about both ubiquity and consistency in the performance of the brand and in the consistency of experience. For retail brands there should be little difference between your experience of your brand in one country versus another. This is best demonstrated by luxury brand, Prada.

Given the brand strength of their various marks and portfolios, luxury retailers rely particularly on the elements of place to support their brand positioning. Location, store fit out, visual merchandising, service and stock are all shared elements. In Los Angeles, the Rem Koolhaus Prada designed store might look like a garage - it has no fascia and unlike most stores on Rodeo Drive, is open to all. Despite Koolhaus' experiments with reversing a traditional store layout (the stairs face backwards and are used as more of a display area, the overall design, layout and availability and display of product still remain essentially consistent with the Prada brand identity and system.

While Koolhaus tries to subvert our notions of a retail space, I felt it was as much a a non-place as a Gap or a Starbucks, because my experience was essentially the same as any other Prada store I had been in from Rome to Sydney. As Auge puts it Prada presents "the clean, cold lines of non-place" and in what he describes as the "supermodern".

Auge describes a place "as relational, historical and concerned with identity, then a space which cannot be defined as relational, or historical, or concerned with identity will be a non-place". In simple terms, Prada's place branding is so concerned with the assertion of its own identity everything else seems opaque.

This failure supports the second issue, if branding is designed to contribute to the creation of meaning, why in the same instant does it also create non-identity and non-space and perhaps the answer lies in the non-critical application of branding.

Branding works best if it can create, manifest and control the experience of identity. However, the application of logos, design systems, visual positioning, tone of voice which all in their own way produce brand and product expression and convey core messages and meaning, also work best in an environment that can be ordered. This is the purpose of branding, to create that order through a shared and understood experience.

If we take Starbucks as an example, it is fairly easy to see how Auge's non-place can be applied and how branding works against the brand. Firstly, the stores have been designed against a specific set of criteria with user experience mapped through identified touch points. These touch points, whether they are transactional (lining up at the counter order and pickup the coffee) or visual (the logo) are part of a series of cues for messaging the brand, and provide an incentive to buy and consume product.

Secondly, because customer experience is so managed within the store to maximise sales, the brand is only ever going can only deliver a ubiquitous experience. It is as
Starbucks chairman Howard Schultz said, the brand has last lost its soul (see DIFFUSIONblog 3/5/07) If as Auge claims place is "relational, historical and concerned with identity" then Starbucks branding is never going to deliver anything but a partial sense of this.

In an internal memo published last year Shultz describes "the commoditization of the Starbucks experience", he laments the the loss of "the romance and theatre" of the traditional Italian espresso machines, which have been replaced by "cooking cutter" formats and automatic machines. And it is is this sense of place created by the "romance and theatre of the machines", which is what I think is part of this non-replicable brand experience. They are intrinsically linked to the European cafe experience, which tends to be seen as non-commodified, unique and very very much about Auge's idea of "place", the Italian lifestyle.

So what can retail brands do? Auge describes the place and non-place as "polarities" and with the latter never fully resolved and this is where I think retailers need to address. If we are all supermoderns, wondering from place to non-place as we traverse the globe and even our own countries in the search for authentic experience, we need to start to encounter retail experiences which relate to a sense of place, are embedded in historical context and contribute to the creation of personal identity. The desire for a Prada suit might deliver some aspects of this but the store as the mechanism of experience is flawed. Branding needs to be far more self critical and ready to fall outside systems and formats. Its why love boutiques and flea markets. They are unordered, lack any brand homology and are always different.

Colour wars 2: Darrell Lea defeats Cadbury

In the latest round in the international colour wars, pint sized chocolatier Darrell Lea has defeated international retailer and bully boy Cadbury Schweppes for control of the colour purple in Australia.

In DIFFUSIONblog 25/5/07 we reported that Cadbury had won an appeal in which it claimed that since 1995 it had achieved a substantial, exclusive and valuable reputation and goodwill throughout Australia through the Pantone 2685C colour purple.

It alleged that since 2001, Darrell Lea had consistently used a colour bearing a "striking and obvious" likeness to Cadbury's purple in its signage, badging, wrapping, store fit-out and point of sale facilities.

The Australian Federal Court has now dismissed the latest application by Cadbury Schweppes that the use of purple by Darrell Lea amounted to misleading and deceptive conduct.

Justice Peter Heerey said he was not persuaded that Darrell Lea in using purple had passed off its business or products as those of Cadbury or had contravened Australia's Trade Practices Act.

"I am not satisfied that such usage has resulted, or would result, in . . . purchasers of chocolate being misled or deceived," Justice Heerey said.

Cadbury had claimed customers the use of the colour purple affected customers ability to discern the difference between the two company's products.

But Darrell Lea counterclaimed Cadbury's knowledge was limited to inspection of goods on display and physical surroundings. The claim was correct as the original evidence presented in an audit of colour use made no attempt to actually observe brand experience.

"Cadbury Schweppes has deliberately established a connection between our shade of purple and Cadbury chocolate, and many consumers associate Cadbury purple with Cadbury chocolate,'' Cadbury managing director of Mark Callaghan said in a statement.

"We remain totally committed to protecting our brand identity and Cadbury will appeal this decision.''

As we noted this the second appeal Cadbury has lost. In the original April 2006 hearing, a Federal Court judge dismissed Cadbury's claim. In the disputed hearing the court ruled Cadbury did not “own” the colour purple and that Darrell Lea's use was not likely to convey to a” reasonable consumer” that it was associated with its rival.

The field of brand identity can be somewhat murky and "locking up" what are essentially public colours without a similar attention to the impact of the rest of the identity system can be fraught with danger, as Cadbury continues to find.

Yahoo, slow death of a portal?

Microsoft's increasingly aggressive stance on its Yahoo bid looks certain to be bolstered by recent figures on Yahoo’s overall performance as a search vehicle.

According to SearchEnginewatch nearly 10 billion "core" searches were conducted in the US in February, accounting for a 6 percent decline from January search activity.

Altogether search queries were down at all the major search engines. Google serving 5.9 billion search queries, down 5 percent from January. In February, Google's share of searches was 59.2 percent, up from 58.5 percent.

Yahoo's search share slipped from 22.2 percent in January to 21.6 percent in February. Overall, it served 2.1 billion searches, down 8 percent from the previous month.

In March, much the same scenario has also been played out over at Hitwise, whose measures have Google owning around 67.25 percent of all US searches for March. Yahoo! Search, MSN Search and Ask.com each receiving 20.29, 5.25 and 4.09 percent respectively.

In 2007 Hitwise had Yahoo with 21.26% of all searches and the year before that 22.30%. It represents not only a continuing rout by Google but also plays into suggestions that Yahoo’s market position is being eroded.

In Australia, the Yahoo7 alliance has been criticised for its inability to find focus with advertisers increasingly shunning the joint venture (See DIFFUSIONblog 23/10/07) and relegating it to a second tier advertising status.

In February Nielsen//NetRatings Yahoo!7 in third place in the market with 5 million unique users, though this figure is an aggregate and does not represent search only. It cites its recent content deals with Bebo and Disney as proof that its a real challenger to Google.

The Australian operations focus seems to be on stretching the width of advertising, rather than increase the range of opportunities for users and increasingly gain traction from engagement with the brand. In a mature market such as Australia, where Neilsen claims internet usage has peaked at 80%, the effort may go unrewarded and probably unrecognised.

This scenario is mirrored in almost all aspects of Yahoo’s attempts to rescuscitate its ailing brand.

The simple fact, as the statistics show, its market relevance with users and with advertisers is declining. From a content, usability and experience side, Yahoo now does little to differentiate itself from its competitors. Its competitors, particularly MSN, do nothing more than mimic the same.

Portals, like Yahoo, and before that Excite, Lycos and AltaVista (remember these!) all experienced year-on-year declining relevance and consequently market share as their brands no longer provided users with differentiating content and experience. It wasn’t about building advertising platforms, it was as Google worked out, about building a brand that delivered differentiating and innovative content and usability for users.

I'll let the statistics speak for themselves. According to SearchEngineWatch in 2001 Yahoo was the top search engine, referred the most traffic to web sites in the US, accounting for more than 38% percent of search referrals with MSN 15.9 percent, the nascent Google 11.3 percent and AOL 7.8 percent. Internationally, Yahoo referred 41.5 percent of all traffic, followed by Google at 13.9 percent, MSN 12.9 percent and AOL 5.4 percent.

As everyone knows, its a numbers game. And the numbers are real.

Jeans and the aesthetics of invisibility.

Since the 1950s the distribution and sales of jeanswear on a global basis has changed round a few times. Consumers used to associate price, quality and reliability of apparel merchandise with the retailer rather than with the manufacturer but this tended to swing around in the past decade back in favour of the manufacturer as designer. In the late 90s came the prolific growth of even more independent labels and the designer became more important. On the back of this retailers like JeansWest and JustJeans tried to arrest the flow with the launch of their own labels, but this was not enough. In Australia department stores like Myer and David Jones already saw something of this future, moving to stock branded jeans and own labels, whereas multiples stuck to own label.

So many of these denim retailers, have mistaken the significance of their labels for a brand in itself. The fact is a label is not a brand.

Increasingly denim labels have sort to find their own niche and voice (many successfully, Evisu is a good example). They have been looking to influence consumer choice with advertising, sponsorship and merchandising for their own labels against the tide of increasing product proliferation. As the large multiples have expanded both store coverage and product range, what’s been missing is that in this pursuit has been their brands - increasingly divorced from the customer base, both in terms of relevance and subsequently acceptance. The store brands have become something consumers no longer recognize as reflecting an aesthetic they even would be interested in.

Still all the major brands (Levis, Lee, Wrangler) continue to offer a wider range, prices and margins putting further stress on the lower end of the market. One of the major issues facing the multiples is that in this pursuit of a new positioning, brand equity might be damaged and profit margins invariably chewed up as once-loyal customers migrate to even less-expensive and more commodity brands. The acknowledged wisdom for the multiples is that is there are new opportunities to take jieans to two points along the scale - higher prices points vs lower price points – in both cases these are volume plays - but what is missing in this equation is how customers can truely align themselves with the æsthetic of the brand and not just the label, where that aesthetic has increasingly lost relevance with consumers

Add to this the sheer number of alternative denim labels in Australia as well as the opportunity to purchase globally via the internet, meaning there is no longer a mainstream for denim labels or indeed any mainstream for many apparel categories. The jeans market has become essentially dichotomic as customers have: invisible jeans (like Nobody, Nudie, Mavi) with no manifest branding compete with jeans that have a surfeit of branding (Levis, GStar, Ksubi), all of this because many types of customers exist simultaneously. And at the margins sit the Australian commodity brands like Jeanswest, JayJays and Just Jeans taking tilts at the newer labels while trying to sure up their markets against more overt labels. It’s no wonder mass market has an identity problem.

In the absence of what I see as a strong design aesthetic, reflected across all aspects of a brand, price becomes the only point of difference. The brand itself becomes irrelevant. invisible in the worst possible sense and the label a mere endorsement for a consumer price consideration.

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.