Capital C

Morning Coffee

Sometimes the simplest of action, like a sip of coffee can reveal a more complex plot line.  Take the battle of the beans that is happening between Starbucks and McDonalds.  When the economy was booming, Starbucks could do no wrong - opening stores at a prolific rate, driving same store sales through product and service enhancements, while McDonalds - faced with an out of date menu, struggled in many ways to survive.  Today the reverse has happened, Starbucks profits plunged 97% last quarter, same store sales fell almost ten percent, while McDonalds engineered a massive turnaround, including double digit increases, mostly attributed to stealing morning traffic with better coffee. -tc

The Placebo Effect

Marketers sell ideas. Even if it's the most technical product, they're selling the idea of that solution, and the belief system around it. This is the protective brand membrane; but it's all placebo.
The brand is only as effective or efficient as you believe it to be. If the sales person made you feel special, and the product reflected your personality, you're more likely to bond with it and overlook it's shortcomings. The other element is what psychologists call the 'endowment effect'; we start to love what we own just because it's ours. In the end, it's all placebo, built through brand experiences.

Canada can win in this economic downturn

This is a first of a series of articles I am writing on the economy and what I think Canada should do.

The world economy is in a free fall as liquidity and consumer demand dry up.  The irony is the bandits who created this mess through undisciplined leverage, are now rushing to taxpayers for an obscene amount of capital to try and stimulate the marketplace, at the very least find a foothold where they can establish a base.
The reality is that we are in uncharted waters, and no one knows what impact, positive or negative, will priming the pump do.
What we can do is make sure that in Canada we are making responsible decisions with our tax dollars, as every dollar we borrow will have to be paid back at a time when Boomers are heading into retirement.
This is the time to look hard at our economy, on a sector-by-sector basis, and decide where our priorities should be.  For example the automotive industry – will the North American manufacturers, saddled with uncompetitive labour costs, ever be able to compete?  Are the billions of dollars they are looking for simply putting a band-aid on a wound that will never heal?  Should we have public debate to see if there are better places to invest that money, so that we create sustainable industry that can employee those workers for the rest of their life?
We could certainly put these skilled individuals to work repairing Canada’s infrastructure.  Our electrical grid, our roads and sewers, our health care is desperately in need of repair.   Can we incorporate leading green technology into these projects to not only make and leave a smaller eco footprint, but to create expertise that we can market to the world?
Another area I would look to is our oil sands.  Oil might be $50 a barrel but the reality is that we are consuming more than we are finding, and we are years away from losing our dependency.  Companies that pledged $120 billion dollars in capital for oil sands development are now revaluating or delaying their commitment. What kind of incentives could we provide to motivate them to continue to develop this treasure, in an environmentally friendly way?  In return I would demand an aggressive return on our investment in terms of future royalties.  In other words I would be their partner versus their parachute.
Are there more sectors to invest in?  Next column lets talk creativity. - Tony

Don’t Advertise on Social Media

This is an odd title for an agency’s blog post but check out this study by Exact Target and Ball State University reported by eMarketer showing social media behind word-of-mouth and even old fashioned email, as a preferred form of advertising. I have a theory as to why that’s so. When college students think of social media advertising, they think about the interruptive banner ads that appear on social networking sites and these are notorious for their abysmal click-through rates. Hey, as soon as they hear the word “advertising”, they automatically associate the word with any content that interrupts what they’re already doing. Content passed along by friends through social media is probably thought of as word-of-mouth and if you must think of the medium as a channel, that’s probably the best fill-in-the-blank to the statement, “Social media marketing is like _____ channel”

I prefer not to think of it as a channel at all. “Channels” connotes one-way communications. I like to think of social media as a conduit that carries conversations between people. If you’re a brand, you have two courses of action. Listening to conversations about it and respond appropriately; or facilitating the conversations by either creating talk-worthy content or providing a platform for talking.

Just don’t think about it as advertising. It’s a multi-faceted practice that combines market research, PR advertising, and customer relations all rolled into one.