Community Focusing on the people behind the headlines

About this blog

M&M’s Blog goes behind the headlines to offer a running commentary on the business dynamics within the international media and marketing industry. The M&M editorial team joins forces with industry experts and local market heroes to balance a bird’s eye view of global trends with the importance of local insight.

Subscribe to blog feed

Go Back

Reputation

• Netflix: proof that the consumer is boss after all?

  13 December 2011

   

  Back in July, I wrote a post that questioned Netflix’s decision to increase prices, “Is Netflix courting disaster with its latest price hike?” As I have noted elsewhere, sometimes it is worth losing price sensitive customers in order to boost margins.

  However, I would have expected the company to research its pricing decision ahead of time, rather than relying on feedback from irate customers and closed accounts. And if it had carried out the research, maybe its share price would look a lot better than it does now.

  Back in July, Netflix introduced a new pricing plan: $7.99 a month for Netflix Instant Streaming, $7.99 to receive discs in the mail but $15.98 for the combo. The latter price represented a 60% hike over the previous fee of $9.99.

  Customers weren’t happy with the surprise price hike, and Netflix responded publicly by positioning the pricing move as a mistake. But in an email apologising for having “messed up” by announcing the new price scheme, Netflix chief executive Reed Hastings, added fuel to the fire and promptly compounded the mess. His e-mail introduced to users that Netflix was to be split in two. The DVD service was to be rebadged as Qwikster and separated from the streaming service.

  If the pricing announcement was a big mistake, then this one was a monster.

  How on earth anyone believed that the announcement that Netflix was to split into two separate services would be well received, I have no idea. Instead of one account, they were asking you to manage two and pay for the privilege? Get real!

  Qwickster proved quick to stir customer’s anger. After angry complaints and an epidemic of defections, Netflix announced that Qwikster would not become a reality and the DVD and streaming services would not be split after all. The announcement did little to stem the bleeding. In the last quarter, Netflix has lost 800,000 users and seen its share price plummet.

  Thus ends a quixotic attempt to place business needs over consumer needs. It is a classic example of completely misjudging customer sentiment. In an interview with Andrew Goldman at The New York Times, Hastings refers to the debacle as follows:

  We simply moved too quickly, and that’s where you get those missed execution details.

  The problem is that an execution detail for Netflix is a very big deal for the end user. Rather than researching alternative names for the DVD service (as reported in the article), Hastings and team would have been far better off talking to existing customers about their plans. It could have saved a lot of money and embarrassment. Netflix might then have realized that the affection people have for the service is entirely based on the ease and simplicity of the user experience, not love for the intangible Netflix brand.

  So what do you think? Do you agree with my assessment? Why did Netflix get it so wrong?

  This blog post was spotted on Straight Talk with Nigel Hollis

  Comments (0) | Permalink

  Posted by: Nigel Hollis

  Tags: Online, Reputation, Video

• Tell Me Lies…..

  29 September 2011

  …. Sweet little lies. Am I surprised that my Reebok Easy Tones do little to banish my flabby thighs or my dimply bum? No, not really. And did I need to be told by a regulator that Reebok peddles dreams and just tying my Reebok shoe-laces will hardly shift those calories? Again, no, not really.

  The US consumer watchdog the Federal Trade Commission has forced Reebok to pay out $25m (£16m) to settle its false advertising claims of “slim and slender legs” and refund thousands of people who bought its  EasyTone and RunTone shoes, because Reebok failed to substantiate its claims that the shoes could strengthen hamstrings, calves and buttocks “just by walking.”

  This is not the first time that a regulator has come down on an advertiser selling impossible notions of beauty with such force. In the UK, the Lib Dem MP Jo Swinson was able to convince the Advertising Standards Authority to clamp down on L’Oréal for featuring overly airbrushed images of Pretty Woman Julia Roberts and supermodel Christy Turlington.

  The problem with this kind of heavy handedness is that the consumer seems to have been forgotten. I do know that buying a pair of toning Reebok does not mean that I can forgo my gym membership. But I don’t want someone to shout that out loud to me. As a punter I consume beauty magazines, spend all my hard earned money buying dreams that help me sleep easy. Because I dream that I will one day wake up, look in the mirror and find myself morphed into the next Kate Moss. I might be a slave to the idea of unattainable beauty, but I am also aware that it is all a lie.

  Just, tell me more.

  Comments (0) | Permalink

  Posted by: Sonoo Singh

  Tags: Reputation, Branding

• How far should you extend your brand?

  20 September 2011

  One of the most powerful ways to generate additional profits from a strong brand is simply to extend it to new items, product categories and countries. The rewards seem obvious. Now you can sell more stuff to more people, more often. But there are risks as well. When it comes to line extensions, one of the risks is that new items will simply cause confusion and hinder people from choosing the brand at all.

  The fact that too many items can actually reduce sales is highlighted by Barry Schwartz in his book, The Paradox of Choice – Why Less is More. Evidence from multiple sources finds that when people are faced with more choices they either don’t make a choice or are unsatisfied with the choice that they do make. A broader issue arises when the brand loses clarity because it is available in a wide variety of categories, unrelated to the brand’s original reason for being.

  Of course, it helps if your brand actually stands for something in the first place. A recent report by SymphonyIRI finds that in the U.S., brand loyalty declined in 55 of the top 100 consumer packaged goods (CPG) categories during the past three years. The biggest drop was observed in the refrigerated salad/coleslaw category. With more than 100 brands of refrigerated salad/coleslaw available today, consumers purchased an average of 2.5 brands during the course of the year, and there was a marked increase in the proportion loyal to private label products.

  I don’t know about you, but I do not see much difference between products like these. I suspect many people apparently loyal to a brand of refrigerated salads are, in fact, simply buying the same one through habit, and that more choice simply makes finding their usual brand more difficult.

  

   I find a similar thing when it comes to buying toothpaste. This time it is not a matter of which brand to buy, but which variant. There are just too many versions to choose from. When it comes to most product categories, I invariably resort to the “same as last time” heuristic. The trouble is, that’s tough to execute when last time's purchase is not immediately obvious. It forces me to consciously consider what I am buying. Do I want whitening, breath protection, gel or paste? If I am that engaged with the decision, it is only one step further to consider whether I want Colgate or Crest.

  Over the last few years, several brands have discovered that less is more when it comes to line extensions. In the crowded confectionary category, both Nestlé’s Kit Kat in the UK and Hershey’s Reese’s in the U.S., cut back the number of extensions and saw an improvement in sales and equity. In the two years after Kit Kat simplified its line-up in the UK, sales grew by 19 percent overall. A recent report by Landor suggests that Reese’s equity improved dramatically following its simplification.

  It seems likely that the benefits of simplification are twofold. First, it makes the consumer choice easier and more satisfying. And second, it allows the company to focus its resources behind a limited number of items for advertising and sales promotion. So the question is, how come some brands go too far in extending their brand? How might a brand figure out how much is too much?

   

  This post was spotted on Straight Talk with Nigel Hollis

  Comments (0) | Permalink

  Posted by: Nigel Hollis

  Tags: Reputation

• Why Facebook, Yahoo and Microsoft are all still better than AOL

  16 September 2011

  Tomorrow marks the four year anniversary of AOL, once the largest ISP in the US, announcing plans to become an online advertising business. Here is a quick look at what AOL has done over past few years to mark this rebranding effort and a benchmark of how far they have got to go:

  ...

  September 17, 2007: AOL announces plans to relocate its corporate headquarters from Dulles, Virginia to New York City and combines its various advertising units into a new subsidiary called Platform A. AOL acquires Advertising.com.

  October 15, 2007: As part of the impending move to New York and the restructuring of responsibilities at the Dulles headquarters complex, AOL CEO Randy Falco announces plans to lay off 2000 employees worldwide by the end of 2007.

  October 16, 2007: 750 employees are laid off at Dulles in a bid to refocus on online advertising. 400 more were laid off a few months later.

  2008: AOL creates animated cartoons to explain behavioural targeting to its users, showing how a user’s past visits to other websites could determine the content of advertising they would see in the future.

  February 6, 2008: Time Warner CEO Jeff Bewkes announces that Time Warner will split AOL's internet access and advertising businesses into two, with the possibility of later selling the internet access division.

  April 14, 2008: AOL signs online advertising deal with Verizon. 

  April 2009: Tim Armstrong, formerly with Google, is named Chairman and CEO of AOL.

  November 23, 2009: AOL unveiles a sneak preview of a new brand identity which has the new logo Aol sumperimposed onto figures (for example, a goldfish, a rainbow, a tree, a postcard).

  December 10, 2009: The new logo is enacted onto all of AOL's services, just as Time Warner splits from AOL.

  September 28, 2010: AOL signs an agreement to acquire TechCrunch to further its overall strategy of providing premier online content.

  December 2010: AIM eliminated access to AOL chat rooms noting a marked decline of patronage in recent months.

  February 7, 2011: AOL buys the Huffington Post for $315 million.

  March 11, 2011: Staff cuts continue at AOL. Just two days after finalising its purchase of The Huffington Post, AOL plans to cull almost 20% of its 5,000 strong global workforce.

  March 16, 2011: AOL repositions itself as a key destination for women, as part of a shift in strategy that will see it put the brands of recent site acquisitions above its own.

  March 2011: AOL steps up promotion of new ad-serving platforms

  April 11, 2011: ADTECH, AOL Advertising’s global ad serving platform, announces a new addition to its suite of ad management offerings, ADTECH Lite.

  September 16, 2011: ADTECH, a leading provider of ad serving technology and part of the AOL Advertising.com Group, announces that the company will be using the forthcoming ad:tech London event to present its latest ad serving product, ADTECH Canvas, to its customers.

   ...

  Despite AOL's effort, online display ad publishers Facebook, Yahoo, and Microsoft remain well ahead of AOL. In effect, according to comScore figures in the US, AOL's 3% market share of display ad impressions in Q1 of this year pales in comparison to Facebook's 31.2%. Clearly, AOL has failed to make an impact in the past four years, where does it go from here?

  Comments (0) | Permalink

  Posted by: Juliet P. d'Arguesse

  Tags: Reputation, Display

• How advertising treated 9/11: a 10-year retrospective

  08 September 2011

  How did the advertising industry react to 9/11? Some exploited the tragedy while others paid tribute to it.

  One quick disclaimer, as a New Yorker who was there when it happened, I have a hard time stomaching the insensitivity of some of the ads that came out in the hopes of capitalising on the tragedy. While some of these were for good causes, it just seems wrong to use the gravity of the situation for another cause. I understand that leveraging the emotions around one tragic event might help get people to understand the gravity of another issue, but I am skeptical people would continue to respect a brand after doing that. Do you agree?

  On the other hand, some ads beautifully paid tribute to what happened. What do you think?

  How should brands react to such tragedies? It will be interesting to see what kind of ads are aired this weekend in the US during 9/11 tribute programmes,  travel or life insurance perhaps?

   

  1. This Spiderman trailer got canned due to the depiction of a helicopter caught in Spiderman's web between the Twin towers.

  2. A lovely tribute ad from Budweiser...

   

  3. A United Airlines television advertisement which aired in 2001 in response to the 9/11 terrorist attacks.

   

  4. A look at some flat-out creepy pre 9/11 ads.

   

  5. From US Ad council comes a heartwarming response to the attacks.

   

  6. Another tribute to 9/11 by Verizon filmed at the Statue of Liberty.

   

  7. Here we see a French ad from Solidarites informing us that drinking bad water is much worse than 9/11, and the Titanic disaster too. Isn't it obvious?

   

   

  8. From El Pais: what's wrong with this picture? Hint: Have you been to San Francisco?

  

   

  9. From New Zealand comes an anti-smoking campaign. Smoking is gross, but really?

  

   

  10. The Moscow News is a free English-language newspaper launched by an American socialist in 1930. Still feeling the cold war? Some people will ride off of anything for a bit of fame.

   

  11. Dubai: The Khaleej Times, another attempt to get people to stop smoking.

  

   

  12. This ad is for the French ecological organisation Defi pour la terre. Another attempt to save the planet thanks to 9/11.

  

   

  13. Another French ad Courrier International. Ugh, if only the Twin Towers had been a bit shorter (franchement!) !!

  

   

  14. To commemorate the 10th anniversary of 9/11, State Farm partnered with award-winning director Spike Lee to film a touching tribute to thank the heroes of New York. Nearly 150 school children (ages 8-11) from the New York City area visited four firehouses and thanked the firefighters through song.

   

  Some of the ads were found here.

  Comments (0) | Permalink

  Posted by: Juliet P. d'Arguesse

  Tags: Reputation

• Britain's reputation up in smoke?

  10 August 2011

  No one can deny that 2011 has been quite the rollercoaster year for Britain (and there's still over four months left!). The world admired the wedding of Prince William to his beloved Kate, and thought twice about royalty. I mean, hey, I come from two countries that have outright rejected royalty by either sending anyone with a trickle of blue blood to the guillotine or by appointing our first president, not king! But even I thought twice about royalty on that day, as I admired the fairy tale story unfold (always dreamt of witnessing a true fairy tale!). I digress. What's most important here is the fact that I was proud to be living in London and to be a part of it all. London shone on that day (OK not the weather), but all eyes were on England and its glory.

  This couldn't have been better timing, as the global capital was preparing for next year's Olympics. VisitBritain lauched its $162m global marketing campaign featuring Britian's finest, Judi Dench, Rupert Everett and many more. I'm not going to lie, Lady Dench completely sold Kent. I've been trying to plan a weekend there ever since.

  Cut to 7 weeks later and England's reputation is at stake. The severity of the riots took us all by surprise, and VisitBritain has been forced to suspend its marketing campaign. It seems too early to determine what will really happen in terms of Britain's reputation abroad. As crisis management expert Alex Woolfall rightly said, "If the story becomes 'one week of summer madness', then it will come and go and people will move on. But if this drags on, or worse, that it looks like there is a genuine inability to stop it, then that really does start to change perceptions."

  I had a look on Twitter to see what the people had to say on the subject. Some people seemed concerned about London's reputation...

   

   

  While others seemed to think people should not concerns themselves with such a frivolous issue at this stage... Fair enough!

   

  And after a call-out to our followers, Chryso Savva summed up the overall feeling:

   

  I have to agree with Alex Woolfall. When the Parisian riots erupted six years ago, French tourism was resilient and hopefully this will be the same for England. I happen to live in a fairly touristy area of London and was surprised to see yesterday late afternoon after being sent home early that my neighbourhood was completely normal with tourists flooding the streets as usual.

  But one can't help but wonder how this recent activity has been affecting the Olympic sponsors and guests out there. There is no doubt that London will do everything in its power to bring its reputation back on track. As the Olympics Minister Hugh Robertson says, "We have a commitment to deliver a safe and secure Games and we will do so. All the evidence shows this trouble is low-level criminality driven by messages on social networks and not some new, emerging security threat."

  However, Paula Radcliffe on Twitter last night voiced the fear that only time will tell, "In less than one year we welcome the world to London, and right now the world doesn’t want to come."

  Comments (0) | Permalink

  Posted by: Juliet P. d'Arguesse

  Tags: Reputation, Branding

• Blackberry’s reputation and the London riots

  10 August 2011

  Could Blackberry experience the same problems of undersirable customer associations like Burberry? About six years ago, Burberry was suffering something of an identity crisis. The historic British brand, famed for its beige check fabric and trench coats had once been a desired designer on the backs of A-listers everywhere. But by 2005, the name Burberry had become synonymous, in the UK at least, with the much maligned ‘chav’ class. For the uninitiated, the term ‘chav’ has come to be applied to a disruptive youth sub-culture, epitomised by loutish behaviour, a penchant for ostentatious jewellery and most famously, Burberry print clothing. The theory that the term originally derives from the acronym “Council House And Violent” might be apocryphal, but is an engaging story nonetheless.

   

   Burberry had extended into leisurewear in the 1970s, which led to the brand becoming a favourite designer label of the football hooligans in the 1980s, the precursors to the modern ‘chav’. The Burberry brand was beginning to suffer, and current COO Christopher Bailey has worked hard to distance the company from its adoption by the chav sub-culture. His efforts have been largely successful at protecting the authentic Burberry brand, thanks in part to an ad campaign that restore the quintessential ‘Britishness’ of the brand, and the label’s rediscovery and updating of classic designs from its past.  The idea of fake Burberry has become part or the stereotypical chav image.

  In the wake of the riots that have taken place in London recently, the local media has discussed extensively the role of Blackberry’s BBM service by the criminal elements involved in the looting and destructive activity. The term ‘BBM’ has joined words like ‘hoodie’ 'end' (gang) and ‘fed’ (policeman) in the lexicon of London riot reporting. Much has been made of the anonymous nature of BBM, which has enabled ringleaders to incite rioting behaviour and co-ordinate gang activity ahead of the police. There have been several calls by politicians for the BBM service to be disabled by Blackberry owners Research in Motion in an attempt to curb gangs planning further activity. The company website was later hacked and a message was posted on the official Inside Blackberry blog, warning Research In Motion against cooperating with the UK police.

   

  

  Once the riots have been suppressed and the inquests and recriminations have begun, the role of social media channels, and BBM in particular, will be under scrutiny. Blackberry’s ground-breaking messaging service will become indelibly linked to the greatest civil unrest in the UK for a generation, and unlike Burberry,  RIM and Blackberry don’t have an artistic pedigree to fall back on to restore its brand equity. Some very muscular PR, if not a name-change, is in order I think.

   

  This post was spotted on Right Brain, Left Brain on Cream Global.

  Comments (0) | Permalink

  Posted by: Mark St Andrew

  Tags: Reputation, Branding

• Canada’s Eska Water pulls racist ads

  08 July 2011

  Canada's water is a precious resource. One that we, as Canadians, need to think and use responsibly. Bottled water companies like to take our water and sell it back to us, sometimes from our own tap at up to 10,000 times the price.

  Aboriginal Canadians living on native reserves rely mostly on bottled water for daily consumption because most don't have access to clean drinking water.

  According to Project Blue, Canada's national water campaign, 90 reserves are still under boil-water advisories while 2,145 homes have no water service at all, in a country where water is abundant.

  A recent ad campaign by Quebec bottled water company Eska, depicts three men as aboriginals, using stereotypical native imagery. The ads were rolled out across Montreal's transit system and instantly solicited calls for a boycott.

  On Canada day, 1 July, Clifton Nicholas started a boycott of the company as a result of the campaign and to draw attention to the imagery used in it. Due to the fact that not all Natives in Canada have access to mainstream news outlets I assisted him with creating a YouTube video where he explains why he thinks the ads were culturally insensitive.

  Nicholas questions why it is okay to depict natives as savages, and asks if the company would use imagery such as someone in blackface, or dressed up as an Hasidic Jew.

  
  

   

  The first person Nicholas had to convince to stop buying Eska water was his own mother, who lives in Kanehsatake, a Mohawk community in Quebec known for the 1990 Oka Crisis, where a stand-off took place between Mohawks and Canada's armed forces.

  It wasn't just the Mohawks who were raising awareness about the problems with this advertising campaign, the Algonquin Anishinabeg tribe (Eska water is sourced in the Algonquin) called the ads "racist" and "degrading."

  To Nicholas, the fact that Eska water is coming from aboriginal, native land in Canada makes it that much more of a pressing issue. On 7 July, Eaux Vives, the company which owns Eska water decided to pull the advertising campaign. Eaux Vives president, Jim Delsnyder wrote, “All television, print and collateral representations of the campaign will be removed from market as quickly as possible.”

  As for Nicholas, he's elated that seven days after calling for a boycott on Facebook, national media picked up the story with The Globe and Mail and Le Devoir newspapers writing about the YouTube video and boycott. “I'm feeling great about this, but oversight is needed when it comes to this sort of advertising. More importantly, access to clean, safe drinking water is still needed in aboriginal communities all over Canada.”

  Posted on behalf of Adam Bemma

  Comments (0) | Permalink

  Posted by: Martina Lacey

  Tags: Reputation, PR

• A moral compass that points two ways

  04 July 2011

  Nike is a company that bases its strategy on the celebrating the cult of the individual. This strategy has brought with it plenty of success, not only did it triumph at last year’s FIFA World Cup, but it also ranks as the most valuable sports brand in Interbrand’s top 100. However, by elevating the status of the individual also comes risks.

  Nike are the sponsors of adulterous Tiger Woods, who shattered his family image when it emerged he’d picked up a host of extra-curricular friends as he travelled the world with his golf bag providing the perfect alibi.

  They also backed one of the NBA’s biggest stars in the shape of the LA Lakers’ Kobe Bryant who faced the long wrangle of a court case over allegations of sexual assault.

  And the Tour de Force of the Tour de France, Lance Armstrong always found it difficult to shake the stench of unproven allegations over performance enhancing drugs.

  

  But the case of Michael Vick is a special one. Not only because he was convicted and jailed for arranging underground dog fighting, but also because unusually Nike didn’t stand by their man, dropping him with a verbal barrage.

  

  For the uninitiated, here’s just a quick peek at the rap sheet that Vick met in court:

  -  Hanging dogs with a wooden plank between two trees

  -  Drowning dogs by placing their heads in a five gallon bucket of water

  -  Breaking the back and necks of dogs by slamming them into the ground several times

  -  Shooting dogs with handgun

  -  Electrocuting dogs at a property owned purely for the purposes of arranging dog fights.

  M&M is all for giving second chances and trusting in the rehabilitative powers of prison, but to swing so wildly between the two – acting with moral outrage only to later champion the resurrection of a fallen hero (and undoubtedly relishing the notion that all publicity is good publicity) – is hypocrisy of the highest order.

  Expect the next Nike sports watch to come with a compass that points both north and south.

  They should also be ashamed if produce any more ads like this

  Comments (0) | Permalink

  Posted by: Josh Colley

  Tags: Reputation, Talent, Sponsorship

• Diana at 50: What if?

  29 June 2011

  With what would have been Princess Diana’s 50th birthday coming up at the end of this week, Newsweek has taken the controversial step of imagining what her life would have been like if she were still alive today.

  The July cover issue features a startling computer-generated image of what would have been a 50 year-old Diana, walking alongside [her daughter-in-law] Kate Middleton. British journalist and Newsweek’s editor-in-chief, Tina Brown, is the brains behind the article which has been widely criticised as ‘just plain bad taste’. Agreed!

  

  So how would the Princess’ life have panned out, had she not died in the fatal car crash of 1997? Well according to Brown, she would be “still great-looking: that’s a given” – but a regular client at the botox clinic. Diana would be living in the Big Apple – having dumped Dodi Fayed, her boyfriend who also died in the crash – and have been through numerous nuptials. And she would have made peace with Prince Charles and her arch-nemesis Camilla Parker-Bowles, so much so that they became Facebook friends.

  The article goes to the trouble of showing a mock-up of what would be the deceased Princess’ Facebook page (well of course she would be a regular Facebooker!) Apparently she would have 107,625 friends including a host of celebrities such as U2 singer Bono, Chelsea Clinton, footballer David Beckham, Harry Potter author J.K. Rowling and tennis champ Rafael Nadal, topped off with wall posts from Sarah Ferguson and regular ‘pokes’ from French president Nicolas Sarkozy. Oh and she has 10 million Twitter followers too...

  The tactless article has a lot of people talking and has easily raised Newsweek’s fledging profile. I know they say that there is no such thing as bad publicity but what value does this story attribute to the Newsweek brand? Is it seen as the place to tackle the big global, economic issues of the day or the place where you fantasise about dead icons as a cheap way to get some attention?

  I wonder what will feature on Newsweek’s cover next week, perhaps the newly named International Monetary Fund chief or Greece’s bailout. Actually, it will probably be a story about Marilyn Monroe, JFK and Heath Ledger all walking into a bar...

  Comments (1) | Permalink

  Posted by: Jenni Baker

  Tags: Twitter, Reputation, Facebook

2. 1
3. 2
4. 3
5. Next page