Experience the Message

WHAT'S THE EXPERIENCE? GOOD OR BAD?

FULL DISCLOSURE: One of my clients is the Axe brand. I did not work on this campaign, so I am not fishing for compliments or disparagement, either. I just want -- and have still to personally formulate -- an opinion on this campaign.

(But please, as our mothers said, if you have nothing good to say, hit me offsite on my email).

 Here's the gist of the campaign, as written in the New York Times (the New York Times!):

Unilever owns Axe, the personal care line that goes after young men using unusual marketing tactics, like taking over a Hamptons club for a summer. To introduce a leather-scented deodorant called Axe Instinct, Axe sought out about 20 street musicians and college bands in several cities, using Craigslist, MySpace and other Web sites. In exchange for an estimated $1,000, Axe asked the musicians to put up “Axe Instinct” signs, offer free deodorant samples when they play and, a few times a day, sing a ditty “Look Good in Leather” that Axe is using in its commercials. The musicians’ stints started in September and run through the end of the year.

“Our biggest thing is not about what they look like but the authenticity of them,” said Jay E. Mathew Jr., marketing director for deodorants at Unilever USA. “We want people that, this is what they do every day.”

Asked if it was authentic to have street performers singing a corporate jingle, Mr. Mathew said he thought it was. “The song itself is a song that was created in 2002 and not something we created for just the ad — it was an existing, organic type of music. We thought it fit perfectly with the campaign.”

So, waddaya think? I think that reading the article is a good idea, because it concludes with this:

A guy with a backpack dropped in a dollar and walked off smiling, and a man in an old-fashioned train conductor’s cap carefully placed a brochure in the case as if it were a $20. If people noticed the Axe sign, they didn’t say anything or appear to do double-takes.

“You know, when I’m playing in the middle of the subway, I’m noticing how there’s so much commercial branding all over the subway now, the stairs have products on it, logos, every single space in the subway is kind of a big commercial now,” Mr. Ryan said. Maybe the Axe effect was supposed to be subliminal, he shrugged. At least he supported the cause of deodorant use.

“If there was more of that stuff going on in the subway, it’d be a better place,” he said.

You decide.

BELOW-THE-LINE IS THE NEW EXPERIENTIAL?

Looks like the venerable BusinessWeek magazine is jumping on the experiential bandwagon. According to this article:

...more attention is being paid to what lies below the line. One top marketing executive at a major retailer estimates that his company has doubled such spending, to about 20% of its overall marketing budget, in the past five years. A survey by Veronis Suhler Stevenson found that spending on below-the-line initiatives accounted for 62% of total marketing spending in 2008, up from 57% in 2004, while standard advertising accordingly fell 5%....

....So can campaigns such as Metrotwin or BabyCenter be deemed advertising or not? A promotional vehicle or an actual media property? Good questions. Or, rather: good points regarding how blurred the lines between everything are becoming. In many cases, "it's hard to tell, in terms of intent, what is advertising and what is promotion," says John Rose, a senior partner at Boston Consulting Group, which touched on the issues "below the line" raises in a recent research paper.

The context of the article is the economic downturn, equating the slowdown in the marketplace with the contraction in traditional ad spending. Anyone who has been paying attention to how advertising adn marketing is done in hyper-developing countries will immediately recognize that the advent of below-the-line is directly related to a growing middle class with poverty-class values. What does it matter if its promotion versus advertising to a Paulistano in Sao Paulo or a Mumbaiker in Mumbai? The experience is the message, people.

EXPERIENCE IS PEOPLE

I just landed in Vancouver for a speech on the Brand New World -- for which, parenthetically, I am grossly under-prepared.

That's not the point. The point is this. We all hate to fly. Those of us who do it often try to whittle something positive off of the experience, whether its an upgrade or an on-time departure.

We whittle. And we withstand.

On this flight, on United First Class, I was presented with this card on my fourth screwdriver:

Here's what was written on the back of the card:

How cool is that?

Well, maybe all you cool cats out there still think that United is a piece of shit brand. Maybe.

But for me, Gina B. is freakin' awesome. And so is United.

I'll be here tomorrow if you want to discuss.

SHAMELESS PLUG (SORRY)

Readers of this blog know that I rarely mix business with pleasure. In other words, I tend not to write about my clients' campaigns and my role as ECD on their business. But I'd like to share this campaign, as it has swept the awards circuit for promotional ideas including the Effie, the Reggie and the Pro Award (which was handed out late last week).

The program leveraged consumers’ social-networking skills to create a never-been-done-before promotion that sent 300 people on a trip to the destination of their choosing.

Now in its 16th year, the Pro Awards recognize outstanding promotion marketing campaigns in the United States. Finalists are automatically entered into the international Globes competition to compete for Best Promotion in the World.

THE END OF ADVERTISING AS WE KNOW IT?

IBM Global Business Services seems to think that the end is nigh. You be the judge.

Download The End of Advertising As We Know It.

RANDOM ARTICLES OF NOTE

Sorry for the delayed posts. IN honor of my scattered itineraries and ridiculous schedules, I'm using this post to throw a bunch of articles your way that should get the brain synapses sparking again. Hopefully.

From Ad Age, this article explores the gold standard of customer loyalty programming that Harrah's Casinos are deploying. I wrote about Harrah's in my first book, and other than the Ritz-Carleton this chain is truly at the forefront of delivering unparalleled customer experiences in the guise of a loyalty program.

Forward-thinking fashion retailers are using experiential marketing as an instrumental tactic in their marketing arsenal. This article about Mark's Work Warehouse is a great example of using experiential marketing to allow consumers to test out their clothes. Nice idea!

According to this article, the UK has become the first major economy where advertisers spend more on internet advertising than on television advertising, with a record £1.75bn online spend in the first six months of the year.

An article on how to build an app for your brand is here. Here's another article on apps from the NYT. Hey, apps are the hot mot du jour.

The latest pop-up concept from Vacant -- who arguably started the whole enchilada -- is explained here.

Enjoy the reading!!!!

MORE EXPERIENTIAL GENIUS FROM GIGUNDA

It must be awesome to have a client/agency relationship that Gigunda enjoys with P&G. Together, they are leading the great thinking in creating relevant, memorable and totally contextual brand experience.

Take Potty-Palooza, for instance. A public bathroom in Times Square brought to you by Charmin. Genius.

Or the Tide Clean Start program. Absolutely inspired (and inspiring) work.

The types of experiences that P&G is infusing their brand marketing with is truly revolutionary for a marketer -- like franchising Mr. Clean car washes, for instance. And the ideas that an agency like New Hampshire-based Gigunda is delivering are at the vanguard of that revolution.

So kudos to Ryan FitzSimmons, founder and chief executive of Gigunda, for opening a store/experience place for kids called Make-A_Messterpiece, where kids create art and crafts while getting dirty. So is it any surprise that this experience is "sponsored" by Bounty.

According to a Reuters newspiece:

The studio is the first of possibly hundreds of facilities that would allow Bounty to test new experiential marketing and support its advertising campaign that encourages simple, if messy, pleasures like sleepover parties.

While P&G doesn't own the 15,000 square foot studio in an upscale shopping district north of Chicago, the household goods manufacturer collaborated on planning and the Bounty logo and products are prominently featured.

Great work. Great idea. Welcome to the brand new world of brand experience.

THE NUMBERS LIE

For a few years now, the two advertising and marketing mediums that have been showing the best growth and acceptance is online marketing and experiential marketing.

So it's time to get down to brass tacks. The money may be flowing into Internet marketing, but the results have not. Can the same be said about experiential marketing?

According to this article:

Click fraud continues to plague online advertising, but many just want to sweep it under the rug. Radar Research managing partner Marissa Gluck calls it "the dirty little secret of the online ad industry that no one wants to talk about."

Perhaps that's because data released Thursday in a study conducted in July reveals that more than half of ad impressions and 95% of clicks in online ad buys were fraudulent. Gluck compiled and analyzed the findings published by ad optimization company Mpire, Seattle, Wash., with help from its AdXpose technology.

Nearly all the fraudulent traffic was hidden behind numerous layers of nested I-Frames -- ad units pulling ad content from other sources that can hide URLs and in-view data. The test shows significant impression fraud and URL padding in standard run-of-network (RON) online ad buys.

"There's an enormous amount of budgetary and impression waste taking place because of click fraud," Gluck says. "Ad networks, which have traditionally been seen as suspect, need to eliminate click fraud if they want to be taken seriously by advertisers."

EXPERIENCE THE MESSAGE SPEECH: PART 6

EXPERIENCE THE MESSAGE SPEECH: PART 5

EXPERIENCE THE MESSAGE SPEECH: PART 4

EXPERIENCE THE MESSAGE SPEECH: PART 3

EXPERIENCE THE MESSAGE SPEECH: PART 2

EXPERIENCE THE MESSAGE SPEECH: PART 1

RESEARCH WITH THE EXPERIENTIAL MARKETING FORUM

The Experiential Marketing Forum, in partnership with IMI International, is proud to announce the release of new Experiential Marketing Research.  We will be providing EMF members with monthly insights and perspectives on topics that matter most to experiential marketers around the world.

This research is designed to be relevant, timely and informative, IMI International's best-in-class insights will allow the Experiential Marketing Forum community to experience elements of the vast database of insights and best practices that IMI International has developed.

To download the XM Research, register for the EMF then login and download the PDF from the member's main page or from the File Sharing Center (EMF Research category)

THE POP-UP EXPERIENCE

Readers of my blog and books know that I am enamored (sometimes overly so) by great executions that provide ample consumer delight, engagement and results.

So it's no surprise that I would be writing again about the concept of pop-up retailtainment and/or branding. And lo-and-behold, Ad Age -- the bible of the 30-second panacea -- has a front (home) page article on the emerging growth of pop-up as a brand building tactic.

Brushfire Marketing, which worked with the New Jersey Division of Travel and Tourism on the Jersey Shore Store, said the temporary shop garnered nearly $1 million in earned media. The agency said the store led to 46 broadcast segments and 21 print and online placements. On average, 1,000 visitors passed through the store each week and 500 pieces of collateral were handed out daily.

Yet the budget for the store, which was open from just before Memorial Day through Aug. 9, was "very small," said John Leonardi, president-CEO of Brushfire Marketing. It cost about $20,000 per month to rent the 2,500-square-foot space on Broadway between 11th and 12th streets in Manhattan, and that, he said, was the bulk of the budget.

"It's one-on-one marketing," Mr. Leonardi said. "In a recession, when marketers are looking for alternatives, they need to ask how can they do something different, something maybe less expensive, something that's not a long-term investment."

For more on pop-ups on ETM, go here or here. Or read a deeper dive here.

EXPERIENTIAL RETAIL AT ITS BEST

Readers of this blog -- and both my books -- know how much I admire the experience of the Apple retail stores, especially the Genius Bars. Apple's strategy of connecting with their customers one-on-one is certainly paying off, according to this Bloomberg article:

Apple, based in Cupertino, California, increased revenue at its stores by 2.5 percent in the first six months of the year to $3 billion as the rest of the retail industry suffered. During the same period, sales at all U.S. retailers fell 9.2 percent compared with the first half of 2008, according to the U.S. Commerce Department.

Even more interesting is how valuable the Apple retail space is on 5th Avenue in New York:

Apple’s Fifth Avenue emporium probably has annual sales of more than $350 million, topping any of the chain’s other outlets, said Jeffrey Roseman, executive vice president of real- estate broker Newmark Knight Frank Retail in New York. The location is 10,000 square feet, putting its sales per square foot at a minimum of $35,000, based on Roseman’s estimate.

That’s the equivalent of selling one Mercedes-Benz C300 sedan per square foot. Apple may be the highest grossing retailer ever on Fifth Avenue, said Faith Hope Consolo, chairman of the retail leasing and sales division at Manhattan-based Prudential Douglas Elliman Real Estate. Apple doesn’t disclose store-specific revenue, said Amy Bessette, a spokeswoman at the company.

By comparison, the sales floor at Tiffany & Co. sells as much as $18,000 per square foot, Consolo said. Another famous Fifth Avenue jeweler, Harry Winston Diamond Corp., sells between $12,000 and $13,000, she said. When asked to comment on Consolo’s estimate, a spokesman at New York-based Tiffany said the number was too high. Toronto-based Harry Winston doesn’t provide individual-store performance figures, said a company spokesman.

So next time a client begins to doubt the experiential engagement model, take a trip to NYC and show them the best and greatest retail operation in history.

LOVE THIS. WHAT MARKETING SHOULD ASPIRE TO.

10 Things You May Not Know About Our World’s Emerging Hyper-Markets

1. In 2007, for the first time in history, China, India and Russia combined accounted for more than half of the world’s economic growth.

2. By the end of this year, seven of the world’s 10 largest malls will be located in China.

3. Indian business leaders work the longest, at 57 hours per week, and were the third-most stressed workers in the world behind China and Taiwan.

4. In 2007, the hottest-selling cosmetics item in India’s smaller cities was skin-lightening creams for men.

5. India has 380 universities (Canada has 66) and 11,200 higher education institutions that produce about 6,000 PhDs, 200,000 engineers and 300,000 science graduates and post-graduates.

6. China is the biggest blogging market in the world. It is also the biggest IM market in the world.

7. The United Nations Human Settlements Program projects that one-quarter of the global population will live in so-called slums by the year 2020. 

8. More than half of all cell phone users now live in developing countries, making the mobile phone the first electronic technology to garner more users in the Third World than the First.
 
9. In a fight against “visual pollution,” all billboards and outdoor signs have been outlawed in Sao Paulo, a city of more than 16 million inhabitants.

10. Homebuilders in an exclusive suburb of Moscow typically offer to throw in a helicopter with every purchase of a new home. Until this year, there were more billionaires in Moscow than in New York.

SHAMELESS PLUG: TRENDHUNTER INTERVIEW

This interview was great to do. The folks at Trendhunter are stellar and are really at the forefront of finding the next big thing.

Here's my interview with Trendhunter. Good questions. As for the answers....? Eh. You be the judge.

COMING TO A THEATER NEAR YOU!

Bear with me as I stumble through this analogy. Imagine a brand's entire marketing mix -- ATL, PR, retail, digital, etc. -- as a feature film. (How many times have you heard that branding is all about telling stories?) It's a long and artfully crafted narrative that uses a number of techniques to create a memorable impression and resonant empathetic attachment to the story.

Here's the dubious analogy: if a brand's marketing mix is the movie, then the brand's experiential footprint is the movie's trailer. Experiential efforts seek to distill the brand's essence -- established through its marketing mix -- into a freakin' cool 3-minute montage that shows the best parts of the movie but leaves the cliffhanger intact.

In honor of this tenuous postulation, allow me to pass on IFC's Top 50 Movie Trailers to you. There is a lot to learn about marketing (and its evolution) from a movie's trailer, which is quite experiential in nature and easily the best way to get a consumer's interest in one movie about countless others.

COOL USE OF CROWDSOURCING: ENJOY

CANNES WE DO IT? YES WE CAN!

If there is any lingering doubt that we are in the midst of fundamental transformations in the advertising and marketing industries, just read the beginning of this press release from June 30th:

CANNES, France, June 30 /PRNewswire/ -- DDB Brazil and Tribal DDB Worldwide took home top honors at the 2009 International Advertising Festival at Cannes.

DDB Brazil was recognized as Agency of the Year, while Tribal DDB in Amsterdam was awarded the Film Grand Prix for the Philips interactive film "Carousel," an award that Advertising Age called "a clear admission the age of interruption is over" and that the festival said recognized work being done on all screens, not simply television. To see the work click here: www.philips.com/cinema.

Also winning at Cannes was DDB&Co. Istanbul, which was the No. 3 ranked agency in the world, clearly bringing to life the DDB network mantra that great creative work can and does come from anywhere around the globe.

There's an entire chapter in my latest book about the burgeoning "phenomenon" of sourcing creativity from across the globe. I guess the old guard at Cannes woke up to that reality this year for the first time.

BRANDS: ALL IN YOUR HEAD

This is a pretty cool project:

http://www.brandtags.net/

And please read this article from Fast Company to better understand the future of branding.

BREAKFAST WITH JOE PINE

I normally don't gush. Nor do I tolerate any sort of celebrity worship, where normally reasonable and intelligent people fall apart at the sight and touch of a VIP. But this morning I had breakfast at The Drake in Chicago with Joe Pine, author of Mass Customization, The Experience Economy and Authenticity.

Truly a visionary. And a really swell dude.

Check him out at TED. (You know you made it when they let you talk at TED.)

So I guess I'm gushing a little if I'm posting about it. He had oatmeal. I had eggs over easy.

BRILLIANT MARKETING

Want to know the future of advertising and marketing? Just listen to the last sentence in this video: "they didn't advertise to people; they put people in it."

AN EFFING EFFIE!

I purposefully keep my blog free of work examples from my professional life as an ECD for an experiential marketing agency. And I certainly never share news of any awards or industry recognition.

I prefer this space to be reserved for authorship and inspiration, rather than a cheering section for the daily grind.

However, I am too tempted to share the news that a campaign idea of mine for Orbitz.com has won a Silver Effie. Which is cool! I like the premise of the Effies. It's all about results, baby.

Pardon my shameless plug. It hasn't been the first time. ;-)

THE RISE OF THE PAUPER

The consumer world is becoming poorer, and it has nothing to do with the economy. It has everything to do with the fact that there are 4 billion poor people who are yearning to join the consuming ranks, and those who are emerging into the middle class in countries like India, China, Brazil, Russia, Vietnam, Hungary and Mexico are recreating the way we are shop for and value brands.

This New York Times article takes a look at an emerging consumer in the US. The title of the article probably says it all: "Trying to Pitch Products to the Savers."

The reluctance of consumers to spend — coupled with a sudden sharp rise in the savings rate — has left even the savviest marketers scrambling to reconsider their strategies.

For instance, the Procter & Gamble Company, the nation’s largest advertiser, announced last month that it would adopt a “surgical” approach to reducing prices in categories in which Procter brands are being perceived as costing too much compared with competitive products.

In the same article, the notion of value is underscored and how experiential approaches are at the heart of a brand's positioning on the value spectrum.

And at Procter & Gamble, a line featuring new products that cost $42 to $62 each — a far cry from the price of a bar of Ivory soap — is getting a value designation because, ads assert, it performs like product lines costing much more.

The line is called Olay Professional Pro-X, part of the Olay skin-care brand. A print campaign from Saatchi & Saatchi in New York, part of the Publicis Groupe, that is scheduled to begin in July for the Intensive Wrinkle Protocol — a regimen kit of three products — will carry this headline: “As effective at wrinkle reduction as what the doctor prescribed. At half the price.”

The Pro-X items cost two or three times as much as the products in another Olay line, Total Effects, which cost about $20 to $25 apiece.

“It is getting into higher price points,” said Tim Bunch, Olay Pro-X brand manager at Procter in Cincinnati. So “if you’re going to lay down that type of money,” he added, “it ought to be for a brand you believe in.”

And this article in Ad Age will drive the point home:

The heavy betting -- and it goes well beyond Cincinnati -- is that America will eventually shake off recession but keep saving and spending more responsibly. We'll borrow only when we must. We'll pay bills and debts immediately. We'll save up before we buy big things. New England Consulting Group reported last week that people buying more store brands now don't have any plans to trade back up, and that recession-induced shopping habits are likely to persist "long after it's gone." All that has left many marketers trying to adapt with strategies such as lowering some prices, offering multiple product lines at varying price points and giving reluctant consumers reasons to buy by tying into causes such as environmentalism.

APPLE DAY CARE

So I get this in my email, and I think to myself: is this cool or pandering. It takes me about 10 seconds to decide that it's cool: Apple wants to show my kids a good time. And I think to myself: maybe Apple knows something about raising kids that I don't know. Hell, I'm still learning Garage Band. So yeah, Apple, maybe I will send my kids into your store. Thanks for the offer.

And then the big thought occurs: Imagine if this email came from Microsoft. Creepy, right? My kids at a Microsoft camp? No fucking way.

And there, my friends, is the difference between the two brands. There is the notion of brand trust and respect. The idea that an experience with a brand can extend far beyond a transaction. The concept that a brand based on experiential engagement with its customers can roll out an extension like a summer camp for kids called Apple Camp -- well folks, that's just the difference between a brand of the future and a brand of the present.

IS A MOVIE TIE-IN EXPERIENTIAL?

I just read of this new deal between Burger King and Paramount Pictures:

Burger King has for the first time committed to one movie studio for its summer movie marketing. And in turn, Paramount Pictures is for the first time engaging in three consecutive move tie-ins with the same brand.

And I'm torn. Should I be professionally happy this happened? After all, I've often spoke about the experiential potential of these types of partnerships, most notably what 7-Eleven did when they partnered with The Simpson's film release. I think film integrations are inherently experiential, as the brand can leverage a story, the characters and all the emotional connections that are familiar and empathetic to the audience.

The same, parenthetically, applies for branded partnerships with games and gaming platforms, as Burger King did with X-Box 360 and Mountain Dew did with the Halo 3 launch.

So this newly-announced partnership should be good news for experiential thinkers and practitioners. And the movie tie-ins are definitely on-target and on-demo:

Burger King is underway with a flurry of activities around “Star Trek,” which opened May 8, and will continue the activations around “Transformers: Revenge of the Fallen,” opening June 24 and “G.I. Joe: The Rise of Cobra,” set to be in theaters Aug. 7.

But this flurry so far has been based around a TV spots where Klingons take a guy's Whopper (and girl) friend away with them, and the in-store premium is a commemorative cup. Not a lot of Big Thinking going on here. The campaign so far, quite frankly, is anti-experiential.

So, should we be worried? Will more branded deals like this take marketing and advertising forward, or will we go back to the same tired methods like this: a TV spot and gift-with-purchase? Will movie studios help or hinder the marketing industry? And will we as consumers buy the hype?

BRAND NEW WORLD: A LOOK INSIDE...

So, the book is doing well in Canada. Right now, it rests as the #1 book on Global Marketing on Amazon.ca. I hear there are a stacks of the books at Chapters -- so, please recommend it to anyone interested in learning about the new global marketing paradigm shift!!!!!!

I'll be adding a widget from my publisher soon for an inside look into the book, if you'd like to preview it.

And if you like it (or not!), I urge you to review it on your blogs and personal pages. Thank you!!!!

NICE COMMENTARY, GOOD THINKING

He's done it again. Here's a really good post by Erik Hauser, a visionary XM thinker, in Chief Marketer magazine. Kind of reminds me of my Foreword in Experience the Message.

BRAND NEW WORLD UPDATE

Hi friends,
Brand New World is the #1 title for Global Marketing on Amazon.ca. I'm very stoked. In honor of our brand new world, please find this super cool concept called Playing For Change:

BRAND NEW WORLD IS NOW AVAILABLE!!!!

Brand New World has now been published in Canada and will soon be (hopefully) available in the US and across the world.

For anyone wishing to get a copy (or copies!!!!!), you can find it on Amazon.ca, Chapters.Indigo, and Concordia University Bookstore, or at any major bookstore in Canada.

I'm proud of this work, and I would be honored, humbled and excited for readers of this blog to review it and rate it for others on the sites where it's available.

Or feel free to reach out to me privately for suggestions and critiques. I will apply them to future work. You know how to reach me.

Thank you in advance!!!!!!

Max

MY FAVORITE EXPERIENTIAL SPOT

Jim Stengel, former CMO of Procter & Gamble admitted in this interview that this is his favorite commercial.  I write about this because ever since it came out a few years ago, this has been my favorite commercial as well, a spot that is as experiential as it gets. It may have something to do with the fact that I just had my first child at the time, but this work from Saatchi & Saatchi sort of changed my life through a deeply personal experience. I thought I'd share it with you here:

HOLY SHIT: PUBLISHING IS NOT DEAD!!!!

In the book Brand New World, I touch on the notion that exclusive and limited-edition brands (and the marketing around them) will be a prevalent form of beating consumer malaise, and more importantly, brand piracy. 

So check out this "limited edition" magazine! Swedish magazine Tare Lugnt have released their third issue as a tattoo!!!!

What an experiential thought! To the extreme. Click here to see how it was, um, published.

And certainly, no one can copy this experience. What an amazing, and totally brilliant, idea.

RECESSIONARY RETAIL

Report: Discounting Damages Brands...according to Brandweek (duh):

The Dollars & Consumer Sense 2009 study, released today, finds that consumers often have a negative reaction when they see the price slashed for their favorite product or service.

In fact, 70 percent of respondents to the Yankelovich poll said such cuts probably mean the brand was overpriced in the first place. And, 62 percent said they assumed that the product was old and they were just trying to get rid of it.

"People are suspicious if you significantly discount your brand,” said J. Walker Smith, president of Yankelovich Monitor and executive vice chairman of The Futures Company. “If you make significant changes in your value proposition it can confuse them. You have to give them reasons to buy stuff as opposed to just lowering prices as a knee jerk reaction to the economy.”

Earlier this year Saks Fifth Avenue announced it was retreating from a discounting strategy after it lost nearly $100 million in Q4. CEO Stephen Sadove said the chain would add a mix of lower priced items instead. The assumption became "they are just overpriced all year long," said Smith.

Brands that do not discount achieve a positive halo among many consumers, per the study, which polled 1,0002 consumers in January. Sixty-four percent of those polled said they assume the product is either extremely popular or a good value if they maintain their price.

And then there's this story, from the WSJ:

Consumers are now challenging high prices after seeing designer clothes marked down by as much as 75% in recent months....Addressing fears of continued discounting, Neiman Chief Executive Burton Tansky told investors Wednesday, "Full-price selling is what we are concerning ourselves with."

The six-year boom in luxury goods came to a screeching halt last fall, as wealthy shoppers dramatically cut back on their purchases of designer clothing and other pricey items. Consultant Bain & Co. last month forecast global luxury consumption this year would drop 15% from 2008.

To avoid directly discounting merchandise, Neiman has resorted to some marketing tricks. Last week, for instance, it offered a $500 gift card for those who donated "gently worn" suits to charity. It also sent some regular customers a $50 "perk" card to use toward alterations.

Coaxing consumers back into the habit of paying full price is a crucial challenge for the luxury goods business. On Wednesday, Dallas-based Neiman posted a $509.2 million fiscal second-quarter loss. It took largecharges to the value of its stores and trade names, reflecting impairments linked to the recession. It was the first holiday-period loss since Neiman began disclosing quarterly results in 1994.

The company said sales for the quarter ended Jan. 31 declined 21% from a year ago, the second consecutive quarterly decline. It earned $44.3 million on sales of $1.37 billion a year ago.

"We have to get the customer to buy [at] full-price," said Ms. Goldberger, Neiman's vice president and divisional merchandise manager for women's designer sportswear. "If you offer the value up front, you won't get this discounting nonsense."

But then there's this.

THE "NEW NORMAL" EXPERIENCE

Although this article talks about consumer opinion about products and services, I couldn't read it without thinking that it applies to the relationship between agency and client:

"Value" is today's ubiquitous marketing cry, but pinning down what constitutes value from the consumer's perspective is the real challenge.

According to Mintel Senior Research Analyst Marcia Mogelonsky, the keys to influencing consumers now lie in understanding how they're coping with the "new normal" environment created by the recession and the brand attributes that underlie a perception of value: quality, creativity and trust.

Maybe that's why QuakerOats, according to this article, is making brand trust paramount in its marketing:

With more than a dozen lines of products using its name, Quaker Oats Company--itself a division of PepsiCo--is uniting all of its products under one tagline, with an image of the iconic Quaker Man image to back it up.

The effort--which begins in earnest on March 16 with television, print, online and out-of-home advertising--is the first time that all of the products have been united under a single tagline in the company's 130-year history. The tagline "Go humans go" is intended to evoke the oats as a "super grain" that helps power people's minds and bodies.

And in the meantime, Apple keeps shuffling along.

EXPERIENTIAL MARKETING IN A NUTSHELL...(WITH AN EMPHASIS ON NUT?)

THIS IS TOO DAMN AWESOME.

Taking a page from Radiohead and Nine Inch Nails’ recent forays into tiered and pay-as-you-wish pricing strategies for albums, former NIN drummer Josh Freese has developed a wacky but potentially smart pricing system for his new album.

At the first levels you can purchase the CD/DVD, or digital version of the album. Next is the $50 version where you get a t-shirt and a 5 minute thank-you phone call from Freese. $500 will get 15 people a signed CD, t-shirt, cymbal, diner with Freese and a session in a sensory deprivation tank. And it goes upwards in price, with the strange and wonderful bonuses getting stacked ever higher.
 
But there’s more, way more. For two lucky fans with a lot of disposable income ($20,000 and $75,000) you get to participarte in a carnival of “weird and cool stuff”  with Freese and his famous friends.

$20,000 (limited edition of 1)

-Signed CD/DVD and digital download. -T-shirt -A signed drum from the 2008 Nine Inch Nails tour. -Maynard James Keenan, Mark from Devo and Josh take you miniature golfing and then drop you off on the side of the freeway (all filmed and posted on youtube) -Josh gives you a tour of Long Beach. See his first apartment, the coffee shop on 2nd St where his buddy paid Dave Grohl $40 to rip up tile just weeks before joining “Nirvana.” See the old Vandals rehearsal spot, the liquor store he got busted using a Fake I.D. at when he was 17 (it was Dave from the Vandals old ID). Go check out Snoop Dogg’s high- school. For an extra 50 bucks see where Tom and Adrian from No Doubt live.=2 0For another $25 he’ll show ya where Eric from NOFX and Brooks from Bad Religion get their hair cut. -Spend the night aboard the Queen Mary and take the “Ghosts And Legends” tour. (separate rooms…no spooning.) -Josh writes 2 songs about you and it’s made available on iTunes and appears on his next record (you can sing back up on em, clap, play the drums, triangle, whatever….) -Drum lesson OR foot and back massage (once again…couples welcome and discreet parking available) -Pick any 3 items out of Josh’s closet.

$75,000 (limited edition of 1)

-Signed CD/DVD and digital download -T-shirt -Go on tour with Josh for a few days. -Have Josh write, record and release a 5 song EP about you and your life story. -Take home any of his drumsets (only one but you can choose which one.) -Take shrooms and cruise Hollywood in Danny from TOOL’s Lamborgini OR play quarters and then hop on the Ouija board for a while. -Josh will join your band for a month…play shows, record, party with groupies, etc…. -If you don’t have a band he’ll be your personal assistant for a month (4 day work weeks, 10 am to 4 pm) -Take a limo down to Tijuana and he’ll show you how it’s done (what that means exactly we can’t legally get into here) -If you don’t live in Southern California (but are a US resident) he’ll come to you and be your personal assistant/cabana boy for 2 weeks. -Take a flying trapeze lesson with Josh and Robin from NIN, go back to Robin’s place afterwards and his wife will make you raw lasagna.

Shrooms?!? Roadtrip to Tijuana? Your own album? Brilliant!!! Check out the entire list here.

HOW TO WALK THE WALK

I love the attitude of this story and the brand. I love how ballsy it is.

Red Bull, with some assistance from Oakley, has just built a secret half-pipe on the backside of Silverton Mountain in Colorado for snowboarder Shaun White’s training purposes. The area can only be accessed by snowmobile or helicopter and is said to be closed off to the public. The price tag was $500,000, and it looks like it was worth every penny.

You see, that's how a brand leader acts. It does so without hesitation, without a need for justification and without the fear of middle-management blow-back. This is how you grow brand love. Any kid who has dreams of stardom -- especially as a snowboarder or skater -- will now dream of that stardom in the context of Red Bull and how the brand acts towards its stars and brand ambassadors.

Kudos, Red Bull. You are teaching us so much.

SOME NEWS OF NOTE

Here's a good one! Microsoft is planning on opening a number of proprietary brand stores throughout the United States. Taking a page out of the Apple playbook, the PC giant is planning on improving its brand image and access with the stores. According to this article in the New York Times:

The company had hired David Porter, a 25-year veteran of Wal-Mart Stores, as its corporate vice president for retail stores.
Mr. Porter, who is set to start work on Tuesday, is charged with improving the PC-buying experience. The company said his first task would be to set the timing, locations and design of Microsoft-branded retail stores, which will sell computers installed with Microsoft software as well as other company products.

Oh yeah, a Wal-Mart guy is gonna improve the experience. Good luck with that.

Offering up a yin to the this yang is this story from the NYT, detailing Nestle's Nespresso brand and it's impressive growth. It costs "seven to eight times as much" to make a cup of Nespresso brand coffee than it does to brew a traditional cup, and yet Nespresso's sales grew 30 percent in 2008:

While Starbucks usually gets credit for standardizing coffeehouse culture and taking it around the world, Nespresso is credited with standardizing premium coffee in the workplace and at home through its pod machine, which brews a cup at a time from small aluminum capsules that hold just enough grounds for a serving.

Nestlé probably did not invent the idea of the pod — the Italian coffee maker Illy claims that. But it parlayed it into a global marketing phenomenon.The brand is distributed in 50 countries and employs more than 2,500 worldwide.

Most sales come from Europe, but it is also available in Latin America and North America and has made inroads in traditional tea markets like Asia.Nespresso now has about 175 boutique storefronts where customers can buy machines, capsules and accessories, sip coffee and taste the lifestyle.And that lifestyle does not come cheap.

The coffee machines, which are co-branded, range from basic models by Krups and Magimix, which cost 149 euros ($189) at the Paris store, to a deluxe Miele digital model at 1,849 euros, not including installation.The makers keep the profit from the machines.

Nespresso sells the coffee pods, which are available only through Nespresso boutiques, online and by telephone. It charges around 45 cents to 50 cents for each capsule, which contains 5.5 grams to 7 grams of coffee. That price is seven to eight times the price of Colombian ground coffee in French supermarkets.

Word. The experience is the message, folks.

THE BRAND EXTENSION AS EXPERIENCE

I've written a number of posts on the branded brand, or the notion that authentic brand experiences can be communicated through innovative brand extensions and co-brand partnerships (think Nike+).

In my next book, I examine the branded brand even further, using learnings from the Chinese counterfeit and pirate scene as a glimpse into the future of branding.

P&G is doing the same. It has been perfecting the notion of creating experiential places to drive home brand equity and brand extensions. The Charmin Potty Pallooza campagn is a great example. So is the Tide Clean Start program.

Now, the WSJ reports, P&G will be forging a new business model: franchising car washes.

To jump-start plans for a nationwide chain of Mr. Clean Car Wash franchises, P&G in December acquired the franchise assets of Atlanta-based Carnett's Car Wash, which has 14 locations.

P&G is under mounting pressure to find new sources of revenue growth, particularly as more cash-strapped shoppers think twice about buying its premium-priced products. Wall Street is increasingly skeptical that the mammoth company can garner meaningful gains in its slow-growing product categories and a tough economy.

Known for exhaustively testing new ideas, Procter & Gamble has been quietly experimenting with service businesses in recent years. Since 2007, it has operated two Mr. Clean Car Washes near its Cincinnati headquarters. Last year, it unveiled three Tide dry-cleaning shops in Kansas City, Kan., area....

...P&G marketers are also eager to see if Mr. Clean Car Washes dotting roadways will help boost the image and exposure of the overall brand. Mr. Estruth puts it whimsically. Expanding into franchises, he says, is "broadening Mr. Clean's shoulders as a magical helper."

What do you think it will do for the brand? And don't you be surprised in other P&G brands are incorporated into the car wash experience.

MARKETING IS A RIGHT BRAIN BUSINESS

Rarely do I agree with articles in Ad Age, and rarer still do I agree with the old guard like Al Reis. But his latest column in the venerable ad bible is worth a read. In essence, Al says, "left-brain management will never understand right-brain marketing." Filled with old-time anecdotes and spot-on observations, Al does not disappoint in this one.

At one of his first meetings at IBM, Lou Gerstner was listening to a briefing by one of his lieutenants, who was using an overhead projector and transparencies. On the second transparency, Mr. Gerstner reached over, switched off the projector and said, "Let's just talk about your business."

Management is verbal and analytical. Yet most marketing presentations are visual and emotional. They sell creativity when they should be selling logic.

Nice one. There are plenty more. But more true to the article is the notion that right-brain thinking is a must for successful marketing. I touch on this subject a bit in Brand New World when discussing the marketing and advertising coming out of India. The role of right-brain empathy is becoming instrumental in creating global campaigns and global brands.

THE PRICE OF EXPERIENCE

This interesting article in the New York Times revisits the Radiohead experiment of allowing its fans to pay what they want for a new album from the band. (I write about this in more depth in the upcoming Brand New World).

According to the article:

By letting Internet buyers name their price for its 2007 album In Rainbows, Radiohead introduced many people to the retailing strategy called “pay what you want.” A new article in the Journal of Marketing sets out to study the mechanism.

The experimenters, Ju-Young Kim, Martin Natter and Martin Spann, persuaded three small businesses in or near Frankfurt — a buffet restaurant, a movie theater and a delicatessen — to adopt pay-what-you-want schemes. On average, customers across the three businesses (who were not always aware of the products’ regular prices) paid 86 percent of normal rates. Customers were stingiest at the movie theater, where they seemed to think the posted prices were inflated. They were most generous at the deli, where they paid 9.8 percent more for hot beverages than the going rate, a finding that seemed linked to the amount of face-to-face chatter between customers and the deli owner. (Emphasis is mine.)

By providing a unique and beneficial experience -- choosing a price instead of having one dictated to the consumer -- we are able to experientialize the purchase decision. Check out the sidebar. People are into it. And when you personalize it with one-on-one interaction, the generosity flows.

Herein lies, perhaps, a significant step towards an experiential approach to retail beyond the physical experience of the store, the product and the message.

AN OLD INTERVIEW WITH A YOUNG MAN

The following is an old piece (circa 2005 or so) from the CBC in Canada concerning youth marketing and me, personally. The clip picks up a few minutes into the segment, presented by CBC's Jesse Brown.

Download the Interview

AND THEN THERE'S THIS....

Okay, see my last post below. This Apple app is the yin to it's yang:

A new application has been launched for the iPod touch to help gun users line up a clean shot at their target.

The BulletFlight app, which costs £6.99 to download from the iTunes store, has been developed by Runaway App to turn the iPod touch into a ballistics computer which the company says can provide “quick solutions in the field”.

Users can mount their iPod touch to their rifle, and then use the iPod’s touch-screen to tap in details about the wind conditions, ammunition type, distance to the intended target and even the wind speed.

Holy shit! I'm kind of speechless.

THE APP EXPERIENCE

I just think this is so cool. Art meets gameplay meets iPhone.

I suppose all iPhone apps are experiential in some way, but this type of execution is the tip of the proverbial iceberg in terms of how deep and engaging those app experiences could become.

SHAMELESS BOOK PLUG...POR ESPANOL!

Big up to all my Spanish-speaking readers!!!!

If I haven't mentioned it before (and I know that I did), here's the link to the Spanish version of Experience the Message.

EXPERIENCE A WAR

If you think that selling ice to Eskimos is a hard proposition, how about selling the US Army at a time of war?

I have written about the Army's experiential strategy to get more folks to join their ranks in both Experience the Message and the upcoming Brand New World (disregard the cover).
 
This latest effort by our armed services takes a page straight out of the experiential playbook and applies it to the retail space.

At the Franklin Mills mall in Philadelphia, past the Gap Outlet and the China Buddha Express, is a $13 million video arcade that the Army hopes will become a model for recruitment in urban areas, where the armed services typically have a hard time attracting recruits.

The Army Experience Center is a fitting counterpart to the retail experience: 14,500 square feet of mostly shoot-’em-up video games and three full-scale simulators, including an AH-64 Apache Longbow helicopter, an armed Humvee and a Black Hawk copter with M4 carbine assault rifles. For those who want to take the experience deeper, the center has 22 recruiters.

That's right, people. You can now shop for sneakers and join the army!!!! What a deal!!!!

EXPERIENCE THE ANGST

I had heard of a bunch of metal-heads in an Eastern European country had wired up a junk yard with speakers and would invite their fellow head-bangers to come over and smash shit up while listening to deafening speed metal. It seemed like a most beautiful and sublime idea to me, an idea that could probably be monetized but more importantly an idea that was experiential at heart and intent.

So its no surprise that Sarah's Smash Shack has opened up its doors. According to Iconoculture:

• What some might call a cheaper alternative to the therapist's couch, the Break Room at Sarah's Smash Shack in San Diego lets frustrated folk vent by hurling glassware and dishes, for as little as $12.
• Marketed as a cathartic good time, the Smash Shack provides breakables, a safe and sound-proof room and protective gear. Smashers are encouraged to bring their MP3 player to heighten the experience (may we suggest Smashing Pumpkins?).
• Sarah's Smash Shack offers discounts to police, fire, military, students and seniors. Shards are donated for art projects, or for $10, they'll box up your spent bits as a momento.

That's pretty cool. Of course, Greek restaurants in Montreal have been offering a little bit of therapy themselves, as a dinner is usually completed with a stack of dishes that are thrown against the wall.