Posts filed under ‘Marketing’

Pile On Groupon

Groupon: time for a lot of PR and a new ad

The “fastest growing company ever” owns today’s fastest spreading controversy. Groupon has triggered outrage with Super Bowl ads that appear to mock serious issues, primarily China’s occupation of Tibet. Oscar-winner Timothy Hutton begins the key commercial by acknowledging Tibet’s woes only to segue into the virtues of fish curry from a Tibetan restaurant purchased at a discount thanks to Groupon. The ad’s tagline is “save the money.”

On the face of it, the ad appears to be a sophomoric satire linking a company’s everyday offerings with a global crisis, a la Kenneth Cole’s widely criticized tweets about the Egyptian uprising. Only later has it been explained that Save the Money is a legitimate cause-based program, not an iteration of Groupon’s discounting premise. The ad is meant to simultaneously spoof celebrity sanctimony and Groupon’s viral bargains. The problem is that Groupon is too clever for us. Its CEO, Andrew Mason, confirms as much in a next-day blog response that The Wall Street Journal calls a “non-apology apology.”

Groupon seems to be joining other web ventures that proved their clout with a Super Bowl sponsorship, although turning down Google’s $6 billion buyout is a much cooler demonstration. Amending a media mix (television now in addition to online) entails reaching out to new audiences as well as re-connecting with current ones. It calls for a basic message, not an obscure one made under the assumption that everyone already grasps the company. It can have humor–a Super Bowl advertising staple–but it must use that multimillion-dollar window to display the brand. So beyond their controversy, Groupon’s ads miss the mark as effective communications. Articles on the ads have cited the agency, Crispin Porter + Bogusky, as being known for edgy work. This invokes Al and Laura Ries’ warnings in The Fall of Advertising & The Rise of PR about shops that are more focused on artistic expression than marketing fundamentals.

Groupon has deepened its self-inflicted wounds with CEO Mason’s off-putting response on his company blog. He insists that the ads support real social causes (impossible to tell at first glance). He then points fingers at other offensive Super Bowl ads, primarily those that objectify women. He defends his ad agency, citing their precedent for irreverence with their commercials for Hulu.com. In short, Mason acts upset that people are upset with his company. He is going to need a lot more PR, an infusion of contrition, and a new ad:

SCRIPT: GROUPON “WE’RE SORRY”AD

A “backstage” setting with lights and cables visible. A clapperboard fills the screen, scrawled on its face: GROUPON “WE’RE SORRY” AD.

Clapper Loader (off screen): Groupon, take two!

The clapperboard claps and is pulled out of the shot, revealing CEO Andrew Mason sitting in a tall director’s chair. Standing around him are actors Timothy Hutton, Cuba Gooding Jr., and Elizabeth Hurley.

Mason: Hello, I’m Andrew Mason, CEO of Groupon. By now, you’ve probably heard about our Super Bowl ads that offended many people who thought we were making fun of important social issues such as human rights in Tibet.

We’re sorry. The ads were confusing and sent the wrong message. The right message is that Save the Money-dot-org is a real program soliciting donations and building awareness for worthy causes around the world. Groupon supports this program because while we’re working to save you money locally, we’re also thinking globally. Please visit Save the Money-dot-org to learn more and to give. Thank you for your understanding.

Timothy Hutton nervously leans toward Mason.

Hutton: Do you want us to say anything?

Mason (pleasant): No.

Hutton straightens back up. The foursome smiles and waves at the camera.

FADE IN: Groupon logo with titles beneath: www.savethemoney.org

FADE TO BLACK

—–

POSTSCRIPT 1: Groupon CEO Andrew Mason blogs a straight-forward apology on Thursday, Feb. 10, and pulls the ads.

POSTSCRIPT 2: Groupon fires Crispin, Porter + Bogusky with CEO Andrew Mason saying they placed “too much trust” in the ad agency. CP+B says it was simply end of project work and wishes Groupon well.

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February 8, 2011 at 3:02 pm Leave a comment

Steve Jobs: All Too Human…Again

Steve Jobs’ announced leave from Apple for health reasons harkens to his 2009 leave and the similar PR issues it created. Click here to read my post from that time, “Steve Jobs: All Too Human.” In the original post, I discuss an unclear line of succession at Apple. Since then, Timothy Cook as emerged forcefully as Jobs’ heir apparent, essential to Apple’s immediate stock price and long-term prospects.

January 18, 2011 at 10:27 am Leave a comment

Turning the Tide, Part 2

Can the king of the laundry aisle dominate dry cleaning?

Tide, Procter & Gamble’s megabrand, is expanding its horizons again. Last year, I blogged about the introduction of Tide Basic, a stripped-down version of the detergent intended to ply budget-minded consumers. Now, Tide is going beyond a line extension to a brand extension. The New York Times reports that P&G is introducing Tide Dry Cleaners.

The new dry cleaning stores are franchises, with each outlet using versions of Tide for wet laundry and offering discounts and giveaways on P&G products. Drive-through service, 24-hour pickup via lockers, and environmentally friendly practices further distinguish the chain. The iconic Tide bullseye is prominent in the signage and staff wear branded orange shirts.

There are challenges for P&G. The NYT article points out what many of us would assume: the dry cleaning industry is suffering amid the economic downturn. Cultural shifts are hurting cleaners too as business attire is becoming a week of casual Fridays. Case in point: I wore suits in my last corporate gig as AVP, Marketing Communications, for a nationwide lender. Jacket and tie have not been de rigueur during my subsequent two years as an independent consultant.

P&G is one of the biggest and most brilliant consumer product corporations on the planet. Just one of their brands–Pampers, Gillette, Mr. Clean, and CoverGirl are but a few–can dwarf entire companies in revenue and awareness. Billion-dollar sales are beautiful, but flatlines are dismaying. The NYT article explains that lack of sales growth in the U.S. is the impetus for the Tide venture, a way to leverage the brand anew.

Tide may already be in the clean clothes business, but placing that bullseye on a dry cleaning chain constitutes a brand extension, the application of a brand known for one type of product or service to a new category. It isn’t the same as a line extension, a new product/service in the brand’s established category. Tide is a study in line extension. A quick count on their website revealed more than 30 varieties of the detergent itself. Tide Stain Release and Tide on the Go add several more SKUs. When it comes to the perils of extensions, I go with the long-standing warnings of Al and Laura Ries. Al’s landmark book Positioning offers cautionary tales of numerous extensions. In dissecting Gap’s rebranding fail, Laura blogs about their diffusion in the pursuit of babies and teens.

Some may argue if such extensions are “line,” staying within category, or “brand,” venturing into a separate realm. Some may say that Tide proves line extension works, given its dominance in detergent with 30-plus permutations. Decision makers in Cincinnati have said that the dry cleaning foray is a natural. It isn’t.

P&G is getting into real estate, labor and operational issues that do not figure in selling the primary Tide brand. And no, these things are not just “the franchisees’ problems.” If P&G is concerned about a saturated, mature market blunting Tide’s growth, the answer is not trying to penetrate the saturated, mature market of dry cleaning. But can the mighty Tide brand grab share in a sector where mom-and-pops still reign? My dry cleaner is not worried.

When picking up a sportcoat and three shirts, I asked the proprietor of Wendy Cleaners about the P&G threat. He said that his customers value expertise and believe in supporting small businesses. He also said that the special detergent he uses for wet laundry is better than Tide. He didn’t ask when I’d start bringing in more suits again. He knows things have changed.

December 19, 2010 at 12:29 am Leave a comment

ROI U

My alma mater

In recent months, for-profit colleges have received heightened scrutiny regarding recruiting practices, tuition costs and resultant student loan burdens, and the real-world value of the certificates and degrees they issue. The Obama administration has sought restrictions of federal aid for schools whose students have to spend over 8% of their starting salary on loan payments after graduation. This measure affects career colleges offering vocational programs such as culinary arts and medical support.

For-profit proponents present a slippery slope argument that the career college regulation is part of greater designs to “rein in” the industry. Many cite unfairness in holding for-profit schools to standards not extended to other institutions. Harris Miller, president of the Association of Private Sector Colleges and Universities, says the new regulatory formula would flunk most medical schools.

Journalists and politicians are finding their story angles. ABC News conducted an undercover investigation into University of Phoenix misleading prospective students about future employment opportunities and encouraging them to take on maximum student debt. Many media accounts point out the vast cost discrepancy between for-profit schools and community colleges, an argument that  Sen. Tom Harkin echoes. Harkin has held hearings on for-profit schools and called for industry reforms.

As the saying goes, I have a dog in this fight. I hold a bachelor’s degree in Marketing from the University of Phoenix. I support for-profit schools and I’m a member of the slippery slope contingent (yes, I learned in class at UoP that “slippery slope” is a fallacious argument–unless one presents a logical chain of events and is ready to accept a “middle ground” conclusion.) For-profits will face more regulation because they draw 85% of their revenue from federal funds in the form of grants and loans. The Obama administration is demanding to see a return on investment, the ROI mantra constantly heard in the business world. It’s a justifiable claim. For-profit schools are much like defense contractors: big-time capitalists dependent on government largesse.

The concern centers on the fairness of that ROI measurement. Will for-profit schools confront tougher standards and restrictions than public and private schools? Will for-profit schools become a political punching bag, prompting more government regulation and intervention? Are parties with interests that conflict with for-profit schools driving the debate?

To this last point, there is a push for students to choose community colleges over for-profit schools with the cost factor a major rationale. (Another note: I hold an associate degree from Los Angeles Pierce College, so I’m a community college fan too.) With the Obama administration simultaneously backing increased community college enrollment and curbs on for-profit schools, it’s easy to speculate a hidden agenda. The stumbling block for the community college plan: these are public schools under tremendous budget pressure, currently reducing classes and educational opportunities.

The “ulterior motive” arguments get more compelling with Steven Eisman speaking to Congress about the need for stricter controls over for-profit education. Eisman is a portfolio manager who has been identified as a short-seller of for-profit education company stocks, making money when those stocks drop in value. Per conventional wisdom, more government oversight would mean less profit and growth, driving down stock prices.

The for-profit education industry faces considerable PR and marketing issues. In his Washington Post op-ed, Harkin describes the schools that spend close to 30% of revenue on advertising. There is an implicit tie-in to tobacco and fast-food: the image of big companies mounting big campaigns that persuade people to make poor choices. An industry criticized for having the audacity to advertise means one thing: it’s in crisis mode, which is a job for public relations. There has been a fair amount of media coverage and op-eds supporting the industry against more government control and emphasizing the shortfalls of relying more heavily on strapped community colleges. I personally liked students from for-profit schools rallying at the Capitol with shirts reading: “My education. My job. My choice.”

Unfortunately, the for-profit industry’s primary value proposition has become its biggest liability: “we are the schools for working adults who want to advance their careers.” The jobless recovery makes the inherent vocational pitch ring hollow. The go-go years for the industry may be over. University of Phoenix has announced changes to its recruiting process that may decrease enrollment, in turn necessitating higher tuition. Less service for more money. Now who says for-profits aren’t just like other schools?

Read my other post about for-profit schools: An Education Outside the Gates.

October 19, 2010 at 2:36 pm Leave a comment

“Smart Power” Is Smart Marketing

The Wall Street Journal recently covered defense contractors moving into the realm of “smart power,” nation-building programs used in concert with military presence to promote America’s strategic interests in “hot spot” regions.

Some of these smart power programs include:

  • Lockheed Martin: training prosecutors in Liberia.
  • Northrop Grumman: training Senegalese peacekeeping troops in basic human-rights law
  • BAE Systems: providing anthropologists to accompany US troops to improve their cultural understanding in Iraq and Afghanistan

The Wall Street Journal article points out that such programs are not the typical purview of defense contractors. That’s correct; in fact, the smart power services seem to clash with the very brands of multi-billion dollar corporations known for military hardware. But a closer examination of these companies’ fundamental positioning shows that smart power is a smart marketing move.

Defense contractors’ embrace of smart power represents the upholding of existing brands with new products that accommodate shifting trends. Business history is replete with companies that failed to change with the times; Good to Great and Creative Destruction are catalogs of such failures. As the WSJ piece states, the Obama administration may be axing the F-22 fighter and new helicopters for the president, but they are pushing for more smart power programs. Lockheed CEO Robert Stevens asserts “(t)he definition of global security is changing.”

Smart power also has a positive PR effect for defense contractors as it demonstrates their facility and willingness in being part of humanitarian solutions. This can help their standing with the public and government leaders.

“Defense contractor” describes an organization that provides services and systems to help protect America and its interests. The Obama Administration has decided that a move to smart power, in essence preemptive “Marshall Plans,” is America’s best defense. With their new smart power programs, companies like Lockheed Martin, Northrop Grumman and BAE Systems are showing they will not surrender their “defense” positioning.

March 24, 2010 at 12:27 pm 1 comment

An Education Outside the Gates

On December 30, Bloomberg BusinessWeek posted an article by Pulitzer Prize-winner Daniel Golden, “For-Profit Colleges Target the Military,” with the subhead “Online universities are raking in millions by signing up soldiers as students. But how valuable is the education they’re delivering?”

Mr. Golden explores several themes:

  • For-profit universities are aggressively recruiting members of the armed forces, claiming 29% of all active-duty students and 40% of the half-billion dollars in tuition assistance for these students
  • Classes are accelerated and certain degree programs are notably shorter than similar ones from brick-and-mortar schools
  • Online programs are not subject to the same level of government review as classroom instruction provided at bases by traditional schools
  • Online degrees are no guarantors of career advancement once graduates leave the military and may actually inhibit placement due to their lower reputation compared to degrees from brick-and-mortar schools

While it focuses on the experiences of students in the military, Mr. Golden’s article ultimately adds to the negative coverage and commentary regarding for-profit universities and online degrees. This is a sore subject for graduates of such programs, myself included. I hold a bachelor’s degree in Business/Marketing from the University of Phoenix Online and I am currently studying online for a master’s degree in Organizational and Professional Communication from the University of Denver.

I wanted to find out more about the journalist who wrote yet another slam against for-profit schools and online learning. Daniel Golden received a Pulitzer Prize in 2004 for a series of articles in The Wall Street Journal on the “admissions edge given to children of alumni and donors” at top-tier universities. The articles led to his book, The Price of Admission. Its subtitle: “How America’s Ruling Class Buys Its Way into Elite Colleges–and Who Gets Left Outside the Gates.”

Amid the start of Winter Quarter at DU, I read Mr. Golden’s book. Detailed and damning, it takes on the legacy system and related preferential admission practices in the Ivy League and at other esteemed schools such as Stanford, MIT and Duke. Mr. Golden gives no quarter to his own alma mater, Harvard, for bending the rules for privileged applicants when grades and test scores fall short. He is unafraid to name those whose children have benefited from the system, including Vice President Al Gore, Senator Bill Frist and mega-agent Mike Ovitz. He calls Asian-Americans “the new Jews” for being excluded from top schools as spots are saved for others. The book is an allegory of America as our ideals of meritocracy succumb to the sad reality of aristocracy.

Now I’m upset that Mr. Golden has trained his sights on my educational bastion–for-profit/online–just as many Ivy League alums and administrators were undoubtedly enraged when he produced his Wall Street Journal series and The Price of Admission. But in considering the varied college constituencies Mr. Golden has stirred up in his career, a phrase on his book’s dust jacket becomes poignant: “Outside the Gates.”

For-profit schools and their defining offering, online degrees, are the educational salvation for people who are the farthest outside the gates. These are the students already committed to a life-path, be it military service, or families, or careers (usually stymied by lack of a degree). These are the students called “nontraditional,” from a 19-year-old Marine in Afghanistan to a 42-year-old single dad in Southern California (yours truly when I enrolled at University of Phoenix Online in 2004). These are the students who become the graduates who hit new barriers to their career advancement when their degrees are disparaged.

Putting it mildly, it’s ironic that anyone would consider an online degree less valuable or genuine than the traditional variety as we move our lives to the Internet. You can work, play, shop, socialize and seek a soulmate online. Just don’t get an education there. Admittedly, this is a hard argument to win if you never get an interview because HR reflexively hits “delete” on certain résumés.

In an example of this practice, Mr. Golden quotes Mike Shields, retired USMC colonel and current HR director of Schindler Elevator who consistently rejects military candidates for his company’s management development program “because their graduate degrees come from online for-profits.” Mr. Golden reports that the ex-colonel will send such candidates to the front lines in non-management positions.

I know directly that blind rejection of online degree holders denies companies smart, industrious and qualified employees. Setting aside personal bias for myself and my wife (we met as online students), I cite my former and current classmates (including people in the armed forces) and online graduates I have met outside of my classes. “Cajun” is a member of the latter group, a blogger who gives unvarnished accounts of distance learning under a nom de plume. He is bright, passionate, deeply informed on education and business issues, and going for his second master’s degree from an online school, Bellevue University. Cajun rebuts Mr. Golden’s BusinessWeek article on numerous points.

Ultimately, online degrees are a convenient target because they are the distinctive symbol of for-profit universities, the institutions that have led this form of learning. The complaints against for-profit universities center on their very description: businesses with a profit motive, seemingly more beholden to stockholders than students. The problem with such noble umbrage: money is at the heart of higher education, from private schools placating donors to public schools appeasing budget-controlling legislators and tending their own endowments.

Still, the detractors continue, the profit motive debases the curriculum and culture of schools like University of Phoenix. The focus is on vocational majors like Business and IT. Professors do not have tenure and most are adjuncts. A hurry-up mentality replaces the rich immersion of the traditional college experience.

Exactly.

For-profit universities distill a college education to its essentials and deliver it efficiently to people who need its benefits as soon as possible. Military. Minorities. Dropouts. Never-wents. Career changers. People outside the gates.

Prejudice against online degrees and for-profit schools is the new educational elitism and warrants the same scrutiny as unfair college admission practices. I’m optimistic that this prejudice will decrease over time as more people earn degrees from such programs and more brick-and-mortar schools offer online learning, such as my current school, University of Denver. But how much time will it take? How many more job applicants will be arbitrarily shut out after spending years completing degrees at accredited schools?

Going back to the article that triggered this post, I agree with Mr. Golden’s premises:

  • For-profit universities and online degree programs must be academically rigorous
  • Recruiting and financial aid must be transparent
  • Members of our military deserve a quality education subsidized by the country they defend

I disagree with his slant, exemplified by the title of the print version, “G.I. Bill of Goods,” and the line in his lead paragraph, “…for-profit colleges making money off active-duty military with subsidies from American taxpayers.” Mr. Golden does present quotes and anecdotes supporting for-profit/online, but it’s fair to say they are not the takeaways of his piece.

As a journalist on an education beat, Mr. Golden has advocated for those “outside the gates.” Giving for-profit universities and online degrees their due would be a proper addition to that advocacy.

January 7, 2010 at 10:56 am 11 comments

Barbie Battles Back

BarbieThe Wall Street Journal reports Barbie’s newest incarnation, the Fashionistas line, a trendier, more posable (12 joints) version of the iconic doll. According to the article, two new dolls are ready to challenge the champ–Liv dolls from Spin Master, best known for toys for boys; Moxie Girlz from MGA Entertainment, the company that lost a crushing legal fight with Barbie parent Mattel over the Bratz line.

Barbie is a company unto itself with annual sales topping $1 billion and a globally recognized brand. Its marketing issues resemble those of Tide detergent, another “company-within-a-company.” In an earlier post, I mention the orange monolith that is the Tide display in the supermarket laundry product aisle. That’s only outdone by the pink grotto which is Barbie’s turf in the typical toy store (even a manly guy like me will find himself there if he has daughters).

Like Tide, Barbie has a variant and sub-brand for every perceived customer, from “Peekaboo Petites” ready to throw down on Polly Pocket, to the “I Can Be” line which casts Barbie as a career woman, to “Barbie: Collector,” the $40+ resident of Mom’s knickknack shelf. Of course, there’s plain old Barbie in Fairy-Tastic, Wedding Day, and Fashion Fever formats. Ken better look out. There’s also a Barbie accompanied by Spongebob Squarepants.

Barbie suffers from line extension fatigue, as decried by my favorite branding experts, Al and Laura Ries. In their book, The Origin of Brands, Al and Laura assert that the effort to force existing brands into new positioning would be better spent creating entirely new brands to satisfy changing consumer tastes and needs.

Bratz fulfilled that new doll brand opportunity as it went sassy instead of statuesque, straight-up urban diva versus fantasy princess/Malibu beach girl/modern bride/astronaut/curio. The one problem: designer Carter Bryant was still in Mattel’s employ when he devised the “disruptive technology” doll. Mattel proved it in court and won a $100 million judgment against MGA Entertainment and the right to shut down the Bratz line–a business and legal miracle that allowed the big, slow established company to thwart the upstart that had absconded with its share, something the incumbent brand was unable to accomplish in the marketplace.

The irony: Bratz probably would have never seen the light of day had Carter Bryant submitted the concept to his bosses at Mattel. Just as Xerox squashed the personal computer technology developed at its PARC think tank, just as Kodak forgot the first digital camera came from its labs, Mattel would have seen the pouty, cooler-than-thou Bratz as an affront to its Barbie dynasty and shipped them to the dumpster.

Now everyone is trying to be Bratz, including MGA Entertainment with its comeback Moxie Girlz and Mattel with the Fashionistas. Barbie has morphed more than Madonna. It’s time for the true material girl to concentrate on her strengths and adjust sales and market share expectations accordingly.

October 21, 2009 at 9:52 am Leave a comment

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