24 July 2010

FOUR POINTS: Will CSR Become Just Another Marketing Fad?

LEADER: Ben Gaddis
Location: Austin, Texas

Three months into the debacle that is BP/Deepwater Horizon and many questions still remain. Will this latest oil well cap succeed in keeping a lid on the spill? Will this event be the catalyst for a change in US energy policies? Have we fallen so far that Kevin Costner is our only hope for saving the Gulf Coast? I saw "Waterworld" and "The Postman". God help us. But as a marketer, what interests me most are the implications this disaster will have on marketing efforts going forward.

In this issue of FOUR POINTS we ask: Will the BP disaster cause companies to genuinely become more socially responsible, or will we see more short-term 'greenwashing' efforts?
Here's my take:

American consumers have a short memory. Marketers know that and will act accordingly. I predict that we will see most brands partake in somewhat half-hearted 'social responsibility' efforts over the next year, then shift their focus to the issue of the day. Why? Because American consumers are also fickle and the things that motivate their purchase decisions change faster than Joe Barton recanting his apology to Tony Hayward.

Here's an example. I live in Texas, and while the notion that everyone rides horses to work is far from the truth, everyone does drive a pickup truck. Everyone. Yet in the summer of 2008, as gas prices topped $3 a gallon, watching the evening news would lead you to believe that every rancher was trading his F-250 for a Prius hybrid. The media fuelled the flames and marketers followed. Every automotive advertisement focused on increased gas mileage, grocery stores gave away free gas cards, the travel industry panicked.

Then something odd happened. In the midst of the oncoming recession, the price of oil dropped drastically. All of a sudden, the media switched its focus from oil prices to jobless claims and sub-prime mortgages. And slowly but surely, those ads for trucks started to re-appear. Miles per gallon claims were replaced with the "Hyundai Assurance". Consumers had shifted their focus, and marketers followed.

Now this is far different from greenwashing. Those automotive advertisements were responding to a consumer backlash against price and not environmental issues. Or were they? The average consumer who switched from a truck to a hybrid stood to save a whopping total of ... $500 - $700 a year. That doesn't take into account the fact that a hybrid typically costs 15%-20% more than a standard vehicle. In fact, many of those consumers were reacting to their surroundings and what was being portrayed on the evening news. The media had essentially taken an issue that needed to be addressed -- sustainable energy -- and blown it out of proportion. They attributed the backlash against gas guzzlers not to price sensitivity, but to a concern about global warming and our dependence on foreign oil. A year later those problems still exist and yet we don't hear nearly as much from the media, and even less from marketers, about them. I believe we will see much the same scenario come from the BP event.

Over the next 6-12 months, consumers will face a deluge of advertising from companies touting their 'commitment' to social responsibility, and it will be effective ... for a while. The Dial commercial with the man in the white coat cleaning off an oil-soaked pelican will sell more soap. Oil companies, led by BP, will remind us that they are more focused than ever on preserving the environment and providing cleaner energy. Then the next big event will come along and consumers will shift their focus ... and most marketers will follow.

Most companies will take advantage of the short-term benefit associated with being 'socially responsible'; but few will truly embrace the idea. I believe those that do will reap the benefits for years to come.

POINT: Joy abdullah
Location: Kuala Lumpur

Given the controversy and online mileage generated for BP, the question that's begging an answer is, will most companies talke advantage of the short-term benefit of being socially responsible, or will they approach it from a longer-term, truly socially beneficial point of view?

A rise in global consciousness about our earth has come about. Just see the human chains of linked hands across global cities for the recent Earth Hour initiative, as cities around the world in diffferent timezones switched off their electrical apliances for an hour. This is the power of social connectivity.

So to the point of my post: What are the Islamic-based organizations, in spite of having an in-built shariah system of ethics and values, doing with regards to social responsibility? Given the prime importance of Shariah in Islamic finance, social responsibility is a commitment to moral standards as well as social norms. In essence, this means that Islamic financial institutions have a greater purpose than merely having Shariah-compliant products. Instead IFIs should be engaging in a higher proportion of productive profit and loss-sharing investments, and attempt to rebalance wealth distribution by investing in projects and countries with the greatest social and economic need.

The question still remains: Like their conventional counterparts, would they view social responsibility as a strategic growth driver, or would it just be part of being a 'greenwash'?

POINT: Hilton BarbourLocation: London

To my mind, the worst label that any marketer can be branded with, is the one of superficiality. Where our efforts are so blatantly without brand authenticity that they become nothing more than lipstick on a pig.

While many in the UK have jumped to BP's defence in some misguided nationalistic fervour, some punters have pointed out that merely truncating your name from British Petroleum, liberally using the colour green in your logo, and splashing out on potted plants in your reception area, doesn't make you an environmenatlly conscious organization. Espcially when the company commitment to exploring alternate energy sources has never been financed beyond a pitiful 4% of annual expenditure. Kinda makes a mockery of the "Beyond Petroleum" tagline doesn't it? It lacks, ahhh, what's the word? ... oh yes, authenticity.

But enough about BP. Five months ago we were all haranguing Toyota for their pathetic safety record. A decade ago it was the financial toomfoolery of Enron and WorldCom. Let's admit it, the pursuit of profit will always provide incentive for companies to cut corners. That's not cynicism, that's just human nature.

But as marketers, where does our accountability begin and end? Would you counsel your C-suite colleagues to run a bunch of quality-focused TV ads like Toyota has started doing in the UK? Or would you refuse to do that until the quality control issues that landed you in hot water to begin with, had been addressed and those changes had been independently verified? Tough call with an annual bonus hanging over your head, isn't it?

Mark Ritson recently wrote a fantastic article, and follow-up, in the UK magazine Marketing Week on the differences between repositioning and branding. His point being that brands should concentrate on brand revitalization instead. A sage point. Look for the core elements of the brand (its history, its secret ingredients, its customer service) and find ways to contemporarize them. That, to my mind, has credibility. That shows authenticity.

In the UK, retailer Tesco is the most oft-cited example of a company genuinely committed to going green. This 2008 article from CEO Sir Tim Leahy unravels the motivation behind a total restructuring of the company's operating principles. Point being that marketing isn't leading this charge with some ads and PR releases, it is happening across all parts of the organization.

Therefore, unfortunately I have zero expectations that the BP debacle will lead to any genuine long-term environment CSR initiatives. Not without legislation, not unless the ultimate cost of the clean-up causes BP to collapse, and the potential for similar collapse causes real rumination amongst the Fortune 500. The reality I fear most is that most corporations will merely let out a sigh of relief, and thank their lucky stars it didn't happen to tem. Or, more pitifully, start running advertising campaigns lauding their CSR commitments.

However, I do have a more modest wish.

That is for marketers to see the BP rebranding exercise for the total BS it evidently is. And to ask themselves, when confronted by the desire to launch the next 'green', 'quality is our priority', 'we care for the future', 'we recycle because we care' or any other trendy new positioning, is it authentic? Is it true to the way our company actually operates, or is it just papering over the cracks?

If the answer if a resounding NO, I would hope they put the lipstick down, step away from the sty ... and make a stand for authenticity.

POINT: David Shaw
Location: Singapore

It's a strange world.

As recently as 10 years ago, you'd have been hard-pressed to find a green company operating profitably anywhere in this part of the world. When home is an island-nation with absolutely zero natural resources, you quickly grow a pragmatic perspective. I recall once wanting to print a brochure in bulk using recycled paper; when my boss realized it would add 50% to the printing costs, he nixed the plan. Tree-huggers were a foreign species back then. Business in Singapore was based on a 'deal' mentality. Capitalism was the order of the day.

Today the pendulum has apparently swung. Movies like 2012, Al Gore's An Inconvenient Truth and assorted angst over global warming have all served to raise the awareness of our fragile planet to tipping-point levels. Singaporean companies are much more inclined to wrap their brand and their product in a green sheen. You could easily be lulled into thinking it's St. Patrick's Day.

But peel away the patina, and you'll find few companies tracking sustainability metrics to purposefully position themselves for the future. Beyond token attempts to impose emission controls or measure a corporation's carbon footprint, there are precious few efforts to reduce the energy content of its products or raw material consumption; no investment in more fuel-efficient company vehicles; little reduction in energy consumption using motion-sensitive lighting in warehouses, solar lighting in lots and yards, and so on.

Yet a corporation's commitment to creating a sustainable workplace is probably the best indicator of its sincere effort to 'go green'. (While vehicles get the most attention, buildings actually use more energy -- and contribute more to global warming -- than cars, trucks and buses combined.) Make no mistake: Singaporean consumers want corporations to do the right thing -- it's just that, right now, they don't want to pay for it. Deep down, Singapore hasn't really changed that much. We're still the little red dot, striving hard to survive.

Will BP's oil slick lubricate any lasting mindset shift? At the risk of sounding callous, I suspect not. BP, its sub-contractors, federal and state governments, environmental activists, injured businesses and their insurers will all spend decades suing one another. The US Supreme Court, after all, took almost 20 years to settle the punitive damages arising from the Exxon Valdez spill off Alaska in 1989. But Exxon's stock price quickly recovered from that accident. (You didn't stop filling your gas tank at Esso now, did you?)

Countries, like traffic lights, turn green when it's time. You just can't rush these things.

10 July 2010

Just How Passionate Should You Be?

At 211 degrees Fahrenheit, water is very hot. At 212 degrees, it boils.

Just one degree can make all the difference.

When water boils, you get steam. And with steam, you can power a train.

That's why business and branding gurus will have you know, 212 degrees Fahrenheit is the place to be. It's where inspiration ignites, and ideas combust spontaneously. It's where your passion comes alive for all to see.

Fahrenheit 212 is making the most of this sweet spot. Part consulting firm, part product lab, part ad agency, the New York-based company is scorching the landscape with the buzz generated by its business model, stellar client list, and yes, the work.

But let me be provocative, and offer this adjunct proposition: that on a personal level, Fahrenheit 211 is the place to be.

Yes, at 212, you get steam. And sure, you can power a train. But what happens is, your assets get vaporized in the process. You get hot air -- but nothing left for the long-term.

Business today is about passion. You'll need it if you hope to ignite your best self. You'll languish if you're lukewarm.

I'm passionate about what I do. And I believe my work for my clients is the better for it. But yesterday I learned that passion has a tipping point. A no-fly zone that, if indulged, can end in a nosedive off a cliff.

Yesterday I forgot that beyond people judgement and process judgement, I need to exercise engagement judgement: the deft skill of knowing who to engage, when to engage, and how best to go about it, in order to get a win-win result.

Yesterday, I let my passion for my work run ahead of my regard for people. And as a result, moved from 211 degrees to 212 and probably more.

That's the difference one degree can make. That's the difference between being on the leading edge of your craft ... and the bleeding edge.

Fahrenheit 211 is the place to be. The best players are those who can turn up the heat -- without getting burnt.

03 July 2010

FOUR POINTS: Heck No, We Won't Pitch!


Hilton Barbour

I am a sucker for a good manifesto. Who isn't? It worked for Lenin at the Finland Station, and it convinced a ragtag bunch of smelly Frenchmen to storm the Bastille. You could say the right manifesto, at the right time, can change history.

A friend shared this particular manifesto with me recently. I didn't automatically reach for my pitchfolk, but it did give me cause to reflect.

Blair Enns has been running his Win Without Pitching consultancy for almost a decade -- and making a tidy pile by all accounts -- so he's definitely on to something. Blair believes, and I agree, that pitching is often more harmful than good. That building a specialization, a zeal for continuous learning and a pragmatic, grown-up attitude to remuneration will set certain agencies apart.

So why is it that the entire idea of pitching is the one subject that rankles most? Recently the entire Belgian advertising industry banded together to enact a week-long boycott against client pitching practices, which they condemned as reckless and fickle. I must admit I was impressed by the unity they showed, but haven't seen evidence that the exercise did any more than get some added press for the agencies involved.

Like it or not, pitches are part of the fabric of the advertising industry. Or are they?


Clients say it's to get fresh thinking and insight on their strategy. That's valid. Sometimes it's a smokescreen to get 'free' thinking or to give the incumbent a kick up the posterior. That's BS. Some cover a portion of agency pitch time (good) while others don't (cheap). Some are genuinely looking for agencies that they want to build a healthy, respectful peer-to-peer relationship with, and will act accordingly. That's Nirvana and, like the five-leafed clover, they have been known to exist in nature.


Agencies will throw themselves into them, or not. I've walked away from pitches where you just knew a tsunami of pain lay in wait. But there have been other pitches more akin to BP's Deep Horizon -- capitalized all our resources, created sleepless nights and unbearable tension, and only succeeded in spreading toxic excrement everywhere.

So why, for the love of God and small children, does this charade continue?

The recession? Sure. Deperate times call for desperate measures. Every client needs to squeeze every last ounce of efficiency and fresh thinking out of their agencies, or find one willing to do the job for less that the incumbent. Every agency, especially those in global networks with scary bunches of shareholders, needs to show how they are going to get that elusive 15% annualized growth. I get it. I don't applaud it, but I get it.

Why is it that both agencies and clients can't move to a framework where common sense and business acuman prevail:

1. Do your research. Which are the agencies doing strong work that results in quantifiable results? Which are acknowledged masters in your sector? Start there.

2. Chemistry. Meet these guys, find out if you really like them. Our work can be bloody stressful, so wouldn't you rather be surrounded by people you get on with?

3. Stop the beauty pageant. Asking for strategy and creative from 15 agencies? You're having a laugh. That's merely a sign of laziness, or worse, arrogance on the client's side. You'll waste less of your own and your agencies' time if you pick just 4 who meet the criteria above.

4. Be quick in making a decision. Elephants have shorter gestation periods than some pitches. Repitching erodes goodwill (and the will to live) and starts everyone off with a pissy attitude. Stop it. Make your choices, make them quickly and then let the losers get back to more profitable things.

For agencies, the advice is probably similar: Grow a pair. You know if you're getting messed around. Your agency reputation, staff morale and personal integrity have to be worth more than any pitch. And if you think you're going to change how you're treated after you win the business, you're too naive to have the job you do.

POINT: Kuala Lumpur

Joy Abdullah

The malaise of pitching afflicts the advbertising industry all over. KL is no different. In fact, given the industry size, there is a paucity of large-spencing clients which makes it a buyers' market: the clients call in all agencies, accredited or not. Some of the big agencies (nowadays) refuse to pitch without the pitching fee. To which clients pay the 3 or 4 top level agencies, call in other smaller ones, and have, at any point in time, a total of 8-10 agencies pitching for business that's worth approximately US$300,000 (in annualised billings)!

Pitching is expected and done in order to keep the agencies' lifeblood (revenue) flowing. Even on established contracts, clients call in others to pitch for sub-brands and in some cases for different communication channels.

So the million-dollar question is, can a service business succeed without pitching?


New business can be generated provided the creative services industry is willing to change. For change comes about if one believes it can be done and goes out to better oneself. Change to group together as an industry and have, for starters, one standard financial term.

Let's look at the business model differently. Take a leaf out of the books of the big management consulting firms and we'd note that most of the twelve proclamations in Blair Enns' manifesto are what make up their business models. They command respect and are sought after by the corporate and public sector for their specialized services.

So specialize, develpop conversations with prospects and current clients, present and discuss simplistically (be basic), listen to cliewnts' needs, have self-value and ask for the appropriate financial remuneration upfront. All of these will enable a company to develop a strong pull for its services.

At the end of the day it goes back to the fundamental ethics of benefitting the other person in order to benefit oneself i.e. when you help someone benefit, he/she develops trust in you and trust is a MUST in ensuring sustainable and profitable business.

POINT: Texas

Ben Gaddis

Mr Enns' manifesto is inspirational, aggressive and in my mind, a bit aspirational. As agency folks we know pitching is not ideal but in most cases a necessary evil. In my humble opinion, our aversion to pitching has less to do wih protecting the quality and integrity of our work and everything to do with resources.

Most agencies are fully tapped resource-wise and pitches constantly threaten to be the straw that breaks the preverbial camel's back. Yet some of the best work I've seen comes out of competitive pitches because they force us to be instinctive, react quickly and in the end, go with our gut. What are we to do then? Don't stop pitching. Pitch less.

My belief is mot agencies should pitch 1/2 to 1/3 of the business they currently do. Then in turn, focus those saved resources on proactive business development. Here are a few criteria to help determine when NOT to pitch:

No Access
Great creative solutions are built on the understanding of a business problem. You can't deliver those solutions without a true understanding of a client's business inside and out. If a potential client doesn't allow for an hour's Q&A session with the decision-makers, it's probably not worth participating, even at the RFI stage. If they're not willing to put in that short amount of time, chances are you're not the front-runner, it's a cattle call, or they're not looking for a true partner.

How many times have you heard, "we don't really have a set budget, so we were just hoping that you could tell us what this would cost?" Wrong. Every client has a budget in mind, and typically the ones that have enough money to accomplish what they have laid out in the RFP are happy to share. No budget, no pitch.

Three's Company
I hate giving away creative as much as Mr Enns, but clients buy ideas and they want to see them before they do. However, giving them away is not the answer. Don't provide creative if there are more than three agencies, At that point, hypothetically, you have a 33% chance of winning. Knowing the budget and having met the decision-makers should allow you to reasonably determine whether to gamble on spec creative.

Sidebar: Since we've employed the system, every pitch we've participated in had less than three agencies in the final round. And one didn't even ask for creative. Maybe clients are catching on.

Although they seem simple, when combined with a commonsense new business filter, these criteria will typically reduce the number of pitches an agency participates in. We have cut the number of pitches by almost 1/2 and it's been remarkable.

What now? Here'a a thought. Take the resources you've saved and direct half their time towards proactively pitching target accounts you know you want to work with. Direct the other half of their time proactively solving your existing clients' problems, outside of what the dedicated teams are working on. My money, and experience, says those efforts will pay off twice to three times as much.

POINT: Singapore

David Shaw

In my previous lives, I was an advertising copywriter, then a client marketer. Both gigs gave me the unique privilege of experiencing the thrill of the hunt, as well as the chill of realizing that yanking my account away from an incumbent agency probably meant someone's ricebowl would be shattered, someone's head would roll.

You quickly learn to be responsible once you recognize the ripples of your actions.

So do I denouce the whole notion of pitching? Perhaps surprisingly, not entirely. As an agency creative director, I could see the value of putting the agency through its paces -- much like office towers conduct fire drills -- to see if protocols are in place and everyone knows their part. It's good to stress-test agency assets once in a while; it keeps folks sharp, and can enliven a slow month. But that's the operative phrase ... "once in a while".

You don't see fire drills conducted at your office every week now, do you? Yet that's what heaps of agencies do ... piching anything that moves. Like the inveterate gambler who walks into a casino knowing the odds stacked against him, agencies push their luck, hoping to strike paydirt. But even if they do, the rewards can be fleeting. Look at what's happened with Enfatico and their Dell jackpot.

It gets better. FMCG giant Reckitt Benckiser this week rocked India's ad industry by requiring agencies to pay for the privilege of pitching its local media account. Up to 10 media agencies have banded together to boycott the exercise, declining to fork out the US$10,000 pitch fee. ZenithOptimedia is one of only a few multinational agencies thought to still be in conversations with the client.

So what's an agency to do? My FOUR POINTS pals have served up some pragmatic advice, so I won't play the broken record, other than to commend British agency BBH for turning their philosophy of never doing a creative pith into a competitive advantage. Mind you, it was a competitive disadvantage for 5-10 years before they turned the corner -- but a principle isn't a principle unless it costs you something.

We should all be so ballsy.