Tuesday, October 02, 2007

Magazines as Curators

Magazines must keep an ethical separation between editorial and advertising. Obviously, we wouldn’t want advertisers buying flattering press coverage with their advertising money. But, what about the reverse? Should the editorial ethos of a magazine influence which ads it includes?

Recently, I was reading the Jul/Aug 2007 issue of GOOD magazine. Lots of articles about waste management, how much trash we accumulate, and what our trash says about us. Great advice on how to reduce our waste and consume products closer to home. The green focus of the magazine is unmistakable.

But, then I discover what I first think is a parody. But instead of satire, it’s a genuine ad for Fiji water with the headline: “From the end of – the end of the earth.” Amidst articles assailing the extravagances of today’s wasteful culture appears these words in the ad’s body copy:

Why travel all the way to the South Pacific islands of Fiji for a drink of water? Thousands of miles from the nearest industrialized continent, there is a virgin ecosystem at the edge of a primitive rainforest. Within this fortress, a natural artesian aquifer protects FIJI Water until it is bottles at the source and shipped to you. And the taste is miles from everything else.


Well, if GOOD wants to create positive change in our ecological behaviors (i.e., be a green curator), then why include any pages that betray that effort? Why take part in generating desire for water in the very plastic bottles the editorial side so eschews? And, especially one that is shipped thousands of miles from its source. Doesn’t advertising combine with the editorial content in affecting the experience a magazine creates? Or, do readers somehow compartmentalize advertising separate from editorial?

Anna Quindlen wrote in a recent Newsweek column about R.J. Reynolds new female-targeted Camel No. 9 brand. Turns out a group of Congressmen asked 11 women’s magazines to stop accepting ads for the new cigarette brand. None of the 11 decided to join the likes of Good Housekeeping which has not run cigarette ads since 1952. Most publications simply ignored the request. Vogue took what they thought was the patriotic highroad responding that the request was “at odds with the basic fabric of our country’s value system.” Free speech trumps any culpability in the part they play to increase demand for cigarettes with pretty pink foil lining. Or in any part they play in making lung cancer the number one killer of women (surpassing even breast cancer).

Quindlen concludes:

Cigarette manufacturers…have a compact with the bottom line. But magazines have a compact with their readers. And that means not only writing about products that will kill them, but forgoing ads for those products as well.

Sunday, September 30, 2007

Curator Culture

I took the summer off from the blog and presented Curator Culture at a few conferences. I also spent time writing a longer format article that I'm providing in its entirety here. Advertising Age published a version in its July 16, 2007 CMO Strategy column.



CURATOR CULTURE

By Steven Addis

Marketers are scared. YOU were named as Time Magazine’s Person of the Year and CONSUMERS took the nod as Advertising Age’s Agency of the Year. You have more power than ever. But it’s not your consumer power that terrifies marketers. It’s your sway over millions of other consumers as a curator. A curator with unlimited resources to research products, review them for others, and expose the disingenuous. A curator with the ability to transmit on a mass scale. And a curator with credibility corporations have all but squandered.

Companies used to be brand guardians and controlled every aspect of what we knew of their products. And, when I was growing up, we all got the majority of our information from three networks: NBC, ABC, and CBS. A guy named John Cameron Swayze demonstrated Timex watches by torturing them in ever more creative ways. The Maytag repairman was lonely. Doctors in white coats told us cigarettes were healthy. And we bought it all.

We sat back on the couch and passively let this sea of persuasion wash over us. The advertisers owned and controlled the tools of mass communication. And, who were we to doubt? We trusted what we were told because nothing could compete with the credibility of these demonstrations and expert testimonials. The communication was one-to-many, and this control was so complete that it seemed like it would last forever.

But the power that took decades to build has been wrested away by consumers in mere moments. The confluence of two major events hastened this shift. First, we discovered that we can’t always trust what companies tell us. And, secondly, the tools of mass communication are now in the hands of anyone with an Internet connection. The contemporary marketplace of infinite choices and instant access to resources has bred a generation of educated, skeptical, and resourceful consumers.

In some ways, we are connected as we were a hundred years ago, where one farmer might have asked another for advice on the latest equipment. Our network was the town hall or the church. Communication was one-to-one and we trusted our peers.

Now, like then, we are connected through shared values and shared experiences – just on a much grander scale. The old tools of mass communication (like television advertising) pale in their ability to target, interact, or engender trust. Our new networks are one another through the natural evolution of email, instant messaging, blogs, peer reviews, and user-generated platforms such as MySpace and YouTube. Communication is now many-to-many with the ability to target with the precision of one size fits one.

This new generation is anything but passive. Consumers don’t just buy and use a product. They research articles, read peer reviews, seek out blogs, and in the process, become experts themselves. They then critique the product and freely share their opinions—they are the curators who drive commerce and culture. This power shift from companies—accustomed to marketing “at” a mass of consumers—to individuals, who curate on behalf of one another, profoundly changes consumer expectations, behavior, and branding as we’ve known it.

The power of influencers is not new. But having tools available to instantly convey personal opinions is a revolution. As the number of choices expand, our dependence on curators increases proportionally. Charles Eames said, “Beyond the age of information is the age of choices.”

But how do companies reach customers who now look to each other, rather than the companies, for trusted guidance? Finding and cultivating consumer trust in this economy of abundance means businesses need to understand, embrace, and harness the shift to become a “Curator Brand” – a brand that engenders such a level of trust and advocacy that it rises to the level of a peer. Here are some ways a courageous few companies are earning our trust.




FIND YOUR NICHE

Consumers reward the brands that speak directly to them. The more they feel understood, the more they bond. In spite of this, the natural tendency of companies is to extend their brands as wide as possible in the hopes that they might appeal to everyone. These mega-brands inevitably fall on their own weight as they lose the connection with their core audience.

Remember in the 70s and 80s, when Levi’s was the hottest jeans brand? As its core audience aged, Levi’s launched loose fitting cuts to hold on to them. What they neglected to see is that young people would no longer relate to a brand that their parents wear. Even after this, the company still chose the strategy to launch a low-priced Wal-Mart jean called Levi Strauss Signature, further “blanding” the brand.

This mega-brand strategy is on its last legs. Companies are realizing that the turbocharged word-of-mouth of today is changing the rules. People can easily search out the small niche brands on the Web that align with their personal needs.

These companies understand their audiences and prefer to go deep rather than wide. Small companies can do it with one brand, while large companies can manage a portfolio of narrowly defined brands. These brands unapologetically court their niche market and don’t concern themselves with alienating other groups. While it takes courage to do this, it pays off by establishing a strong, clear brand that makes its well-defined audience feel completely understood.

The evolution of Toyota’s brand is one of the best examples of portfolio management. Rather than stretching the its name to the point of dilution, Toyota acknowledges its limitations. First, it created Lexus for the luxury audience. Then, Toyota understood that it doesn’t (and shouldn’t) have the street cred to appeal to urban youth. So it created Scion without an explicit association to Toyota. With the Scion, Toyota created a carefully targeted brand that promotes this vehicle to the exclusion of other audiences. While other companies take pains not to offend, billboards for the Scion provocatively proclaim: “So wrong for so many.”

This contrasts Volkswagon’s attempt to move its mega-brand up-market by launching the $80,000+ VW Phaeton, in spite of its almost identical styling to Volkswagon Corp’s own Audi A8. The former CEO’s ego not only created a monumental flop (Phaeton was withdrawn from the U.S. market in early 2006 as sales fell below that of even the company’s rarified Bentley brand), it may have also confused the populist image of the VW name.

As people look to brands that more closely reflect their own values, large brands are at a disadvantage to smaller, more targeted ones. In fact, I believe leading brands are at their most vulnerable to nimble challenger brands. The best defense for large companies is to acquire these innovative niche businesses, like Nike’s acquisition of Hurley Clothing and Bauer Hockey. Yet, I believe it’s likely that the most successful brands of the next decade may not yet exist.


LIES, LIES, LIES

How fragile is trust? Everywhere you look, another lie is exposed. I don’t think there are more liars today; it’s just easier to expose them. People now have the power to combat those who mislead, helping others wade through the din of marketing noise. There’s a new generation of muckrakers helping us decipher fact from fiction.

The sincerely authentic brands have little to worry about. But brands like Harley Davidson are scarce, while the rest search for a way to connect with consumers on a deeper level. Sincere authenticity may be an impossible standard for most of these brands and the marketers behind them. It would be a big step if marketers could simply resist the temptation of being inauthentic.

Marketers can no longer rely on consumers believing what they hear. The Curator Culture cuts both ways—consumers reward the sincere and expose the disingenuous. As John Feldman, partner at the law firm Reed Smith said, “If you’re in the business of selling candy, sell candy; if you’re in the business of selling burgers, sell burgers. Where marketers need to tread carefully in this high-stakes game of ‘gotcha’ is in dressing up products as healthy when they’re not.”1

It’s only a matter of time before Pepsico is exposed for the insincerity of its Smart Spot program. Pepsico places this green symbol on products where some bad ingredient has been removed or reduced. So Diet Pepsi, Cap’n Crunch’s Swirled Berries, Baked Cheetos, and Diet Mountain Dew carry an endorsement that implies positive nutrition simply because Pepsico sells a product that’s worse. Rather than “astroturfing” brands as healthier than they really are, companies like Pepsi are better served by simply being honest by creating a portfolio of nutritional choices.

Pepsi’s tactics contrast to those of a courageous independent New England grocer named Hannaford Supermarkets. Hannaford offers its customers Guiding Stars, an honest rating of the nutritional value of its products. An unbiased board assigns a number of stars to each food item Hannaford sells, often to the disdain of its own vendors.

An infamous example of corporate duplicity was the controversy surrounding the Working Families for Wal-Mart blog. At first glance, the site appeared to be a grassroots organization countering the public criticism of Wal-Mart by union-backed groups like Wake Up Wal-Mart and Wal-Mart Watch. But it was later revealed that this site was actually created by Wal-Mart and their public relations company, Edelman. Wal-Mart was publicly flogged for creating the impression of spontaneous, grassroots behavior.

This reflected poorly on both Wal-Mart and Edelman. Quickly learning the lesson, Edelman’s CEO, Richard Edelman, apologized on his blog for not being straightforward about the identity of the bloggers and accepted responsibility for the implied deception. He left the opportunity to comment on his post open. Although many took this opportunity to attack his judgment, his transparency helped heal some of the damage done by the fiasco and worked towards restoring the company’s integrity.

When a company doesn’t present itself authentically, its image has a lot to lose. It’s a WIKI world where the world is watching and instantly exposes those who obfuscate, validates the honest, and rights the wrongs.




YOU SHARE THE BRAND

In the current zeitgeist, the “tell-and-sell” approach of traditional advertising is waning. Today’s consumers have become accustomed to having a growing impact on the success of a brand. So, when a company invites its customers to participate in their brand, it’s saying that it values them and their opinion.

It can begin with small gestures, like when M&Ms let consumers vote to pick their new candy color. Converse allows users to design their own shoes online, offering almost infinite possibilities. LEGO allows users to design and buy their own custom LEGO models, and share their designs with others in the online gallery.

Sharing the brand can also include courting the curators directly. Director Bryan Singer interrupted shooting for Superman Returns to fly halfway around the world to meet with fans at Comic-Con in San Diego. He spent hours meeting with nontraditional media, taking hard questions about the movie from its most passionate fans. His gesture won rave reviews from the online community and excellent publicity for the film.

Brands such as Doritos and Chevy have allowed consumers to create their television commercials. While I believe this particular tactic will be a short-lived novelty, it does signal the shift to share brands with consumers. Consumers have come to expect such level of participation in the brands they buy. And, even if they don’t take advantage of the access, the inclusion is critical to creating armies of brand curators.

It doesn’t take going to great lengths to give your consumer a seat at the table. Leaders of companies like JetBlue and Sun Microsystems are using blogs to provide a glimpse into their operations. Targeting their most involved and potentially loyal customers as well as their internal audience of employees, these companies are hooking a new generation on corporate transparency. And once transparency becomes the norm, expectations are changed forever. Those who lag will be deemed “closed” and less trustworthy.


BRAND AS ADVOCATE

We trust peers who share our experiences (e.g., parents, car enthusiasts, etc.) or share our values (e.g., political organization, church, etc. ). We regard these communities as peers whose mutual self-interest guides us in choosing products or political candidates. How can a company marketing a product compete with such shared advocacy? Some companies actually rise to the level of peer by putting the consumer’s interests above its own.

Progressive Insurance boldly assumes the role of consumer advocate as part of its identity. Progressive gathers car insurance quotes from its own company as well as its competitors, and puts all of the quotes right on the homepage. As their ads state, sometimes Progressive offers the lowest price, sometimes it doesn’t. This straightforward approach allows Progressive to position its brand as a peer looking out for you. And it backs it up in the most credible way possible. The result is a company that garners trust and credibility with its customers. The tactic also draws traffic to its site, which improves its search engine success. And, it works – Progressive is the number one search result on Google when you search for “auto insurance.”

Consumers are probing deeper into the products they buy. They want to know how the products are made, the labor conditions, and the social responsibility of the makers. Companies are racing to learn how they can be better corporate citizens and appeal to the changing sensitivities of their audiences.

Other companies create advocacy by bringing complementary and even competitive brands into their sphere. They surround themselves with an ecosystem of other brands that extends the utility of their brands, adds cachet, or quickly leverages trends.

While Apple has been criticized for its closed operating system, its retail strategy is remarkably open. Apple stores don’t just carry Apple products. They also sell carefully selected products from partners like Bose, Epson, JBL, and Canon. This allows Apple to jump quickly on trends such as new styles of laptop cases and, therefore, extend their own brand. This type of brand interaction affords a company like Canon the cachet of being merchandised in Apple’s temples of urban hip. The positive association of the Apple brand rubs off on every product in the store (if it’s in the Apple store, it must be good). But, most importantly, Apple offers competitors’ iPod speaker systems right next to its own to insure that consumers at every price point have optimum utility of its core iPod. Apple sells more iPods while leveraging an ecosystem of brand choices, positioning the company as the consumer’s advocate. Apple rises to the level of a trusted peer, becoming a curator brand.


THE COURAGE TO DIFFERENTIATE

The new consumer values originality and can easily perceive “me-too” brands. The courage to differentiate from other brands is a weapon against mediocrity. Nobody rushes to share a mediocre experience with a friend. But, I underscore “courage,” as most companies’ tendency to frame brands errs to the familiar, leaving the courageous few to be envied.

No matter how the tools of communication evolve, consumers still relate to a great story. If a brand is the sum total of consumers’ perception of a product, then branding is the collection of stories that affect that perception. But, now that technology is in the hands of the populace, companies no longer control the message’s delivery. It used to be that putting a TV commercial on a particular program meant that the ad would be viewed by the number in that audience (minus those who got up to use the bathroom). But, thanks to a lot more channels and commercial-skipping DVRs, it’s becoming far less likely that the message will be heard. Viral marketing is based on chance and hope because the audience decides what is viral-worthy. Passing an email with a YouTube video link is the 21st century’s version of word-of-mouth.

If companies regard their audience as potential curators of products, of experiences, of stories, they are far more likely to give us something that will provoke us to engage and evangelize. Southwest Airlines understands the power of the story. Since its beginning, Southwest has made its marketing message about “love.” Its NYSE ticker is “LUV,” promotional gel luggage grips are given to loyal customers as “luv handles,” and they held a “luv story contest” inviting people to share love stories related to Southwest for a chance to win prizes. In fact, over its 35 years, pretty much every promotion for Southwest has integrated the idea of “luv.” It has paid off with a distinctive, friendly, accessible image that has a very distinct personality and character in a crowded marketplace.

And Southwest employees have true brand instinct: the visceral understanding of what’s on-brand and what’s off-brand. You can feel this instinct when interacting with its employees and with those of other service brands such as In-N-Out Burger, Four Seasons Hotels, and Starbucks. I believe this comes far more from the intangible understanding and appreciation of a brand’s spirit than from training sessions and manuals.





BRANDING ELATION

A common misconception is that the opposite of dissatisfaction is satisfaction. Satisfaction falls in the middle of the continuum. The opposite of dissatisfaction is something more like elation. Satisfaction should be the bare minimum companies expect from us.

The brands that realize that they can provide beyond the minimum will connect more profoundly with their customers. JetBlue doesn’t just give its customers a small packet of peanuts for travel. Rather, they include snacks like Terra Chips, pistachio biscotti, and jumbo cashews—and they certainly don’t charge for them. Every seat has DirectTV and XM Satellite Radio, and in select airports, free wireless hotspots are provided. Best of all, they keep their prices competitive, which has earned them a loyal, evangelistic customer base. This, coupled with its CEO’s sincere apology posted as an online video, got them over a dramatic lapse in their service last winter.

As trite as it sounds, consumers do feel special bonds with the very few brands that rise to the level of peer. If you think of brands as friends, you trust the ones who don’t let you down, make you feel special in some way, and bring other friends into your circle.

Where the brand and customer meet, you’ll find shared values and experiences. When a company focuses on a well-defined niche, its consumers feel understood. When a company is honest and authentic, its consumers feel free to trust. When a company shares its brand with its consumers, they make them feel valued. When a brand is a sincere advocate, its consumers feel engaged. When they have the courage to truly differentiate and they give people something great to curate, consumers become spokespeople and tell others. While you might not be able to put your finger on exactly why you love the brands you do, they stand out above the others by instinctively understanding the power of the Curator Culture.


1 - Stephanie Thompson and Lisa Sanders, Advertising Age, January 17, 2007


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Steven Addis is the CEO of Addis Creson, a Berkeley, CA based branding firm. Beginning his brand strategy career at The Clorox Company, Addis’ company has worked with leading national and global brands such as Kashi, Intel, GE Healthcare, Caesars Palace, 24 Hour Fitness, Pottery Barn Kids, and Sephora.

Tuesday, March 06, 2007

Find Your Niche

Credibility is a key element in activating the Curator Effect. Consumers reward the brands that speak to them. The more direct the dialogue, the deeper the connection. Perhaps the most important tool to inspire evangelism and word-of-mouth is finding your niche. This means knowing what business you’re in, knowing your audience, and demonstrating that you authentically understand them and even share their experiences and values.

Toyota has no fewer than 16 sub-brands. I consider Matrix, Corolla, Camry, etc. sub-brands because the primary brand is still Toyota. If you asked a Camry owner what brand of car they drive, I suspect the answer would most likely be "Toyota" or "Toyota Camry." (An exception might be Prius. The Prius has become the iPod of cars because it has eclipsed its parent brand.) Yet, when Toyota wanted to deeply resonate with the luxury buyer, it knew the Toyota name would hinder that connection. Thus, Lexus was born. Same process for targeting the urban youth market with Scion.

Product segmentation is achieved through sub-brands that each target a different demographic and pychographic profile. But, we should not expect a single name to credibly cross wider chasms. Toyota practices sound product portfolio management with its sub-brands and brand portfolio management with its separate brands such as Toyota, Scion, and Lexus.

Even with the Lexus case well established, Volkswagen chose a different route. It’s previous CEO wanted to follow VW’s audience as it grew out of the populist brand into the higher priced luxury market. Even though its brand portfolio included Audi, it launched the VW Phaeton. Almost indistinguishable from the Audi A8, the Phaeton priced out at $75,000 to well over $100,000 for the 12-cylinder version.

At the launch, reps from the company were asked a few questions about the strategy:
Q: Who exactly is the target customer?

A: Fiercely individual self-made people who aren’t label-conscious. They’re expected to be aged 50 to 55, 75-percent male, 85-percent married, 75-percent college graduates, with a $300,000 median household income…

Q: Won’t the Phaeton just erode Audi sales?

A: The company feels that the Audi A8 and VW Phaeton have such completely different personalities that they will appeal to different customers altogether. The aluminum Audi weighs so much less and feels so much sportier that it is seen as a BMW competitor, while the VW should appeal to a more comfort-oriented Mercedes intender.
This implies that Mercedes and BMW don’t compete with each other. But, far more importantly, it shows that VW did not understand the meaning of its brand and where it could credibly extend. Of course, you don’t have to take my word for it…

When VW pulled Phaeton from the US market, even its Bentley brand was outselling the Phaeton.

Toyota, on the other hand, understands the range of its brand and is courageous in marketing each brand in the manner that best positions it. Most companies don’t allow one division to disparage another. But Toyota is not shy to position hybrids against gas-only engines. And, while most companies take great pains to not offend anyone, Toyota lets its brands speak directly and resonantly to its audience, as in this Scion billboard:

Tuesday, December 05, 2006

The New Network

I grew up with three networks: NBC, ABC, and CBS. Fox came along later. Then cable drew me away from the networks and, today, I rarely set my TiVo to network programming. Websites such as YouTube and Blinkx are networks for the new attention spans. But, the first "network" that comes to mind for most today is their network of friends (online and off).

When describing their success drawing young people to Atlanta, the president of the city's Chamber of Commerce recently told the NY Times:

“What we’re seeing is the jury of the most skeptical age group in America has looked at Atlanta’s character and likes it,” Sam A. Williams, the president of the Chamber of Commerce, said.

But Mr. Williams acknowledged the difficulty of replicating that phenomenon on purpose.

Had the chamber tried to advertise Atlanta, he said, “we might have screwed it up —because they’re much more trusting of their own network than they are of any marketing campaign.”

“You can’t fake it here,” he said. “You either do it or you don’t.”

Amen.

Slapping a logo, jingle, and a tagline on a city undermines the objectives of the branding effort to begin with. A sense of place needs to be real, not manufactured.

Chicago has done a great job by carefully choosing development that fits its artistic heritage. Millennium Park, for example, vibrantly appeals to both tourist and native. Unlike my neck of the woods in San Francisco, where the biggest tourist areas are anathemas to locals (Fisherman’s Wharf, Pier 39), Chicago successfully blends the needs of both and leverages the visions of Frank Gehry and Rem Koolhaas in the process.

Sunday, December 03, 2006

Godin's Guacamole

The people who effect change these days are the influencers who pay attention and care enough to tell others. Blogging is one of their most potent tools as they curate ideas, products, services, and what's right and wrong with society. I predict that it will be the blogs, for example, that uncover the scandal of what's in the packaged foods we eat. One of my recent posts included the unfortunate trend of marketers spinning food as healthy when it has no basis other than being marginally better than the even worse choices.

Seth Godin's latest post strikes a similar tone by sharing the ingredient statement for Kraft's Guacamole. Glad to see it.

Friday, December 01, 2006

Don’t fight the power shift, embrace it!

Sitting in Apple’s new Fifth Avenue store at 1am a few weeks ago, it struck me that the people were not shopping as much as just being. The space felt more like a progressive public library or piazza, than a retail store. Rather than controlling the experience, Apple simply facilitates it. There’s clearly something quite different here. People are free to surf the net, take photos (something that would get you kicked out of most retail stores), and simply use the space and the tools as they wish. The transparency of the building’s fa├žade is an apt metaphor for the open and welcoming energy of the store. By facilitating the experience and then stepping back, Apple has created stores that really are more like fashionable rec centers.

So, how can your business create a community that will, in turn, breed more community?

I don’t believe the answer is a superficial one. Apple stores are not just retail entertainment. People at the Apple store were engaged through their own productivity and discovery, not just because the elevator is a beautiful clear cylinder. But, let’s not underestimate the power of the Apple brand image. Just as every aspect of its computers and iPods is thoughtfully designed, the stores are beautifully designed and visitors feel cool by being part of that cool image.

Of course, Apple’s advertising plays into this aura of hipness. But, Apple’s brand building retail strategy demonstrates the need to focus on far more than advertising to bond consumers to brands. With audiences scattering due to infinite media choices, marketers are scrambling to find the right places to put their ad dollars. But, instead of focusing on the tactics of dealing with these ever-fragmenting audiences, marketers should really be concentrating on the vast shift in the elements of influence and trust. The changing media is just the symptom. What’s really behind the fact people are watching YouTube instead of network TV is a new consumer behavior that regards overt marketing messages as noise and the actions of those they trust as gospel.

The confluence of several trends contributes to the shift: increased number of media channels, the shear amount of limitless online content (products, ideas, news, and stimulation of every kind), corporate and political scandals that breed cynicism, and a new consumer who has quickly adapted to the power of knowledge through collective research and peer review.

Rather than moving advertising money around to scattershot marketing messages, marketers should take the time to understand—even embrace—this new consumer behavior. All marketers should ask themselves:

How can I share control of my brand with my audience?

It can begin with small gestures like letting consumers vote on what the next M&Ms color should be. Or, it could take the form of letting a customer of a professional services firm set the fee structure to reward positive results.

Apple does it by allowing customers to feel the space in Apple stores is theirs.

What a brand means to people and how that meaning is established and nurtured helps delineate the truly great brands. Inspiring a blog posting that extols the meaning of your brand is far more potent marketing than placing a banner ad.

Of course, Apple still owns its brand, but it is sharing the experience in ways that allows it to avoid the pitfalls of companies that are still just trying to figure out where to advertise.

Tuesday, November 21, 2006

Who to trust?

How fragile is trust? Everywhere you turn, there’s another lie exposed. I don’t think there are more liars today, it’s just easier to expose them. People now have the power to combat those that mislead, helping others wade through the din of marketing noise. There’s a new generation of muckrakers helping us decipher fact from fiction.

In the last post, I referenced an NY Times article about a supermarket chain that has adopted a nutrition ranking system. Hannaford Brothers of New England shows the courage to take on those who supply its livelihood with its “Guiding Stars” program. The goal is to help its customers eliminate any confusion regarding manufacturers’ health claims. The one to three star rating identifies good, better, and best relative to criteria set by an advisory panel of nutritionists and one doctor. A 3-star food has “more vitamins, minerals and/or whole grains and less trans fats, saturated fats, cholesterol, added sugars and/or added sodium.”

What’s most interesting about this Guiding Stars program is that Hannaford is NOT a “natural” grocer like Wild Oats or Whole Foods. For its 150 stores, it chooses to carry the wide array of products found in most grocery stores. In fact, 77 percent of the 27,000 products Hannaford evaluated are awarded no Guiding Stars at all.

By drawing attention to the healthy products, Hannaford is curating in a way that proves it has the customer’s best interest at heart. And, the chain is doing so with objectivity. So much so, that it has faced criticism from the very brands it sells:

''We don't like the idea that there are good and bad foods out there, and these sort of arbitrary rating systems,'' said John Faulkner, director of brand communication at the Campbell Soup Company. The Healthy Request line of soup, he said, was ''aligned with the government definition of what healthy is.''


A lot of brands meet only the very minimum standards provided by the government–a government heavily lobbied by food manufacturers. For a major chain to take such a definitive stand is just more evidence that the curator effect is radically changing how companies relate to their customers.

Food manufacturers are in a tough spot at the moment. As they race to pull out all the science-driven ingredients developed for the convenience generation, they expose themselves as the culprits. If hydrogenated fats are so bad, then why have they used them for so long? The answer? Shelf life. And, that’s the other problem these companies face. Current distribution processes account for very long shelf lives. Manufacturers can ship far and wide and load retailers up on promoted items for long periods. Time’s been on their side.

But times are changing. So companies like Pepsico retool existing products while also developing and buying brands that cater to the monumental shift in consumer attitudes. These brands carry none of the parentage of the manufacturer. Small and authentic now trumps large and omnipotent.

I suspect the most trusted brand names in 10 years will either be tiny, obscure brands at the moment or ones which don’t even exist yet. Undoubtedly, certain mega-brands will decline as curators help us distinguish between truth and smoke screen (again, please see Richard Edelman’s mea culpa).

The power is now in the hands of the retailers and the consumers. And curators like Hannaford will multiply, exposing us to long hidden truths about what we’ve been eating. Companies that embrace the shift to transparency will be the winners. So, big companies are doing what they can to act and think small.

Take Pepsico. Recently they developed and started selling a new beverage in Whole Foods called Fuelosophy, but of course the product label makes no mention at all of Pepsi’s parentage.

Here’s what our good friend Steve Gundrum, ceo of Mattson, told AdAge:
(NOTE: only subscribers can view the full article)

"Every company I work with is designing products distinctively different than regular grocery products to appeal to the natural-foods channel," said Steve Gundrum, president-CEO of product-development firm Mattson.

To do so, giant marketers need to change their thinking. Mr. Gundrum said Whole Foods is "not a reseller of branded package-goods like other retailers. They're really a curator of brands and products that fit their consumers' lifestyle" -- which means consumers trust products carried at Whole Foods and are willing to pay far higher prices for them.


Another example of the retooling of existing brands, are Pepsi’s Tostitos. On the packaging of two of its 13 types of Tostitos (the Blue and Yellow Corn Restaurant Style chips), Pepsi screams “NATURAL” across the top in big letters. But if you take a closer look at the nutritional content, you’ll see that the product delivers 6 grams of fat in every ounce (that’s 10% of the recommended daily allowance—just for a bag of chips!).

How can a simple consumer make any sense of so many nuanced product choices and arcane nutritional claims?

Well, Pepsico itself is seemingly lending a hand. It has developed what appears to be similar to the Hannaford Guiding Stars program. As part of its Smart Spot program, the company applies a green “Smart Choices Made Easy” graphic on dozens of its products. The company is also completely transparent about the criteria necessary to achieve a Smart Spot. There are three criteria, and the most important aspect of these criteria is that each is separated by “or” not “and.”

The Smart Spot criteria for food is:

Contains no more than 30% of calories from fat, no more than 1 gram of saturated fat and zero trans fats, contains no more than 60 mg of cholesterol and 480 mg of sodium, contains 10% or more of Daily Value (DV) of one or more of the following: Vitamin A, C, iron, calcium, protein, or fiber, and contains no more than 25 percent of calories from added sugar unless the product contains 10 percent DV of fiber*,

or

delivers a functional benefit via natural or fortified ingredients proven to be efficacious,

or

is reduced in calories, fat, sugar or sodium by at least 25% compared to base product or other appropriate reference product*

*Includes review by nutrition technology group


Again, the magic is in the conjunction OR. The third criterion essentially translates to: “we tell consumers this product is a nutritionally smart choice simply because we sell something that’s significantly worse.” As long as there’s a more evil counterpart, the real nutritional criteria go out the window (not that 480 mg of sodium is so great – you have to be at 140 mg to be called Low Sodium.

So, here are a few “smart choices” with their ingredient statements:

Gatorade® Endurance Formula Instant Mix:
SUCROSE, DEXTROSE, CITRIC ACID, SODIUM CITRATE, MONOPOTASSIUM PHOSPHATE, SALT, NATURAL LEMON AND LIME FLAVORS WITH OTHER NATURAL FLAVORS, CALCIUM LACTATE, CALCIUM SILICATE (A FLOW AGENT) MAGNESIUM OXIDE, YELLOW 5.

Cap’n Crunch’s Swirled Berries® Cereal
CORN FLOUR, SUGAR, OAT FLOUR, MALTODEXTRIN, BROWN SUGAR, PARTIALLY HYDROGENATED COTTONSEED OIL AND/OR COCONUT OIL, SALT, NATURAL AND ARTIFICIAL FLAVORS, MALIC ACID, SODIUM ASCORBATE, RED 40, NIACINAMIDE*, REDUCED IRON, ZINC OXIDE, YELLOW 5, VITAMIN A PALMITATE, BLUE 1, YELLOW 6, THIAMIN MONONITRATE*, BHT (A PRESERVATIVE), PYRIDOXINE HYDROCHLORIDE*, RIBOFLAVIN*, FOLIC ACID*, WHEY.
* ONE OF THE B VITAMINS.

Baked Cheetos® Crunchy Cheese Flavored Snacks
ENRICHED CORN MEAL (CORN MEAL, FERROUS SULFATE, NIACIN, THIAMIN MONONITRATE, RIBOFLAVIN, AND FOLIC ACID), VEGETABLE OIL (CONTAINS ONE OR MORE OF THE FOLLOWING: CORN, SOYBEAN OR SUNFLOWER OIL), WHEY, CHEDDAR CHEESE (CULTURED MILK, SALT, ENZYMES), SALT, PARTIALLY HYDROGENATED SOYBEAN OIL, MALTODEXTRIN, NATURAL FLAVOR, DEXTROSE, MALIC ACID, DISODIUM PHOSPHATE, SOUR CREAM (CULTURED CREAM, NONFAT MILK), ARTIFICIAL FLAVOR, BETA-CAROTENE, MONOSODIUM GLUTAMATE, LACTIC ACID, ARTIFICIAL COLORS (INCLUDING YELLOW 6), AND CITRIC ACID. CONTAINS MILK INGREDIENTS.


Yum.

What’s so smart about consuming those ingredients?

Hannaford has a handle on the Curator Effect and will be a force in bringing about positive change. The manufacturers will whine and continue with the faux-healthy adjustments to their products, but the shift is real and more companies should have the courage to lead the change rather than obfuscate and mislead. In fact, as Hannaford demonstrates, this strategy can differentiate a company by deepening brand meaning and trust.