What Will Amazon Do If Walmart Goes All White-Label?

In the next couple of years, Walmart will start selling private-label products to replace every branded product they offer, a source familiar with Walmart practices told LAUNCH.

Walmart has 30+ private labels that cover essentially every category at Walmart from food to clothing to office supplies. Walmart competitor Amazon, which is apparently opening its own retail stores, also has white-label products but not nearly as many, with only three brands: AmazonBasics, Pinzon for kitchen products and Strathwood for homes.

If Amazon decides to create more private-label brands, it would have significant leverage over pricing of top brand products and pose even more of a threat to Walmart.

As Mashable reported in June, Amazon surpasses Walmart in areas like customer service ranking, acquisitions, online presence and even prices. Still, Walmart is ahead of Amazon in terms of revenue, bringing in $408B+ annually while Amazon's revenue falls at $34B annually.

LAUNCH has contacted Walmart and will update this story if we receive a response.

In February 2010, Walmart sent Glad and Hefty packing as the retailer decided to consolidate and only offer its own private label, Great Value, and SC Johnson's Ziploc for plastic sandwich-sized bags.

A month before Wal-Mart gave the big boot to Glad and Hefty, the company started leveraging its global scale to lower the cost of goods and accelerate speed to market for consumers. In doing so, they created Global Merchandising Centers, a change in structure and alliance with global sourcing organization Li & Fung.

"The core of the company’s overall global sourcing strategy will be to continue increasing direct sourcing for the company’s private brands," a 2010 Walmart press release states.

As president and CEO Bill Simon said at a Goldman Sachs conference in September 2010, Walmart is a house of brands.

"They show our product better -- excuse me -- they show our value better," Simon said. "When the price of Oreos in my store is less than the price of Oreos in a competitor's store, there is no doubt who the price leader is and where the basket win is. And we would prefer to show that as value. Private brands are still important to us. They play an important role in our business, different by category. They will fill holes or gaps in our offering."
As of 2009, private brand merchandise for labels like Faded Glory and George clothing represented $100B+ in Wal-Mart purchasing annually. As the Financial Times reports, with sales annual sales of $400B+, "Walmart is famously tough in negotiating with its suppliers, exploiting the scale of its buying to gain discounts." However, it acquires less than one fifth of those goods directly from the manufacturers and has generally made its purchase on a country-by-country basis.

“Our new strategy and structure should drive significant savings across the supply chain," Walmart vice chairman Eduardo Castro-Wright said in 2010.

Walmart introduced its Great Value brand in 1993, which spans more than 100 categories, and relaunched it in 2009 to span 100+ categories and offer products like pizza, ice cream, organic cage-free eggs.

"This is an opportunity for us to provide solutions to our customers at a time when they need to save money," Wal-Mart Senior VP Andrea Thomas told FORTUNE.

Great Value is the largest of Walmart's private brands but others include Ol'Roy dog food, named after one of Sam Walton's hunting dogs, and Equate health and beauty products.

Walmart began offering private label brands in 1991 with the launch of Sam's Choice, a brand of drinks produced by Cott Beverages exclusively for Wal-Mart.

The HTML5 boom is coming. Fast.

The tech industry’s movers and shakers have been saying for months now that the HTML5 is very important. New data released Friday indicates that HTML5 is not just going to be big, it’s going to be huge — and it’s coming fast.

More than 2.1 billion mobile devices will have HTML5 browsers by 2016, up from just 109 million in 2010, according to a new report by ABI Research. Much of this growth will be thanks to Apple’s massive support for the HTML5 platform, according to the study. And Apple is also likely to be one of the biggest beneficiaries of the technology’s wide scale adoption. Because Apple has so much control over its software and devices, it will be most poised to take full advantage of HTML features as they emerge in the coming years.

As is often the case in business, where there’s a winner, there’s usually a loser. HTML5 could largely replace Abobe’s proprietary Flash technology. And HTML5′s swift ascent could render Flash irrelevant in short order. “I think the disappearance of Flash is closer than people think,” ABI senior analyst Mark Beccue said in a press release accompanying the data.

HTML5′s projected growth is all the more impressive considering that the actual standard is not officially expected to be completed until 2020, according to the World Wide Web Consortium (W3C) standards body. But that won’t stop companies and independent engineers from developing and deploying HTML5 features, ABI said.

Indeed, Facebook CTO Bret Taylor has said his company is putting a “huge amount of our investment” in HTML5, and Google recently debuted its first homepage doodle composed entirely with the HTML5 mark-up language. It may seem like buzz about HTML5 is everywhere already, but if the latest research is correct, we’re only at the beginning.

The Unspoken Evil Of The RFP

The RFP must die.

Or at least the way the process has evolved in today’s marketing world should. On the surface, it seems innocuous. A company or organization issues an request for proposal (sometimes masked as a ‘request for quote’) to several agencies, consultants for firms. They sometimes include ridiculous assignments jammed into even more ridiculous time frames and even sometimes have the audacity for the responder to commence work on creative concepts and ideas that solve the prospective client’s communications problem.

Then the company collects the RFPs, steals the ideas and doesn’t even change the account from the agency they were working with.

The frustration of the RFP process
If you work in advertising and this hasn’t happened to you, how’s day three on the job?

RFPs from government agencies have spiraled out of control to a level that’s beyond even discussing. I recently received an RFP from a government agency that was 58 pages in length and somewhere along page 29 mentioned they wanted ideas to activate around (and I quote), “so-called social media.”

While I resisted the urge to reply to the contact person with a loud and swift, “Go to hell,” I didn’t respond.

The Problem With RFPs
Agencies want new business. Clients know this and have learned over the years that agencies will jump through crazy hoops to get it. Clients want fresh ideas. Agencies know this and will sometimes undercut their own value by sharing some of those in an RFP or pitch for new business. Clients have learned over the years that there are more agencies in need of new business than there are great ideas, so they use the imbalance to their advantage.

The majority of RFPs, in fact all but one that I’ve ever seen, require creative concepts in order for the agency to be in consideration. The one that I saw that didn’t, I wrote for a client.

This is nothing short of extortion. Especially when the RFP stipulates (which it normally does, or the agency is dumb enough to) the ideas are transferred and owned by the client regardless of the agency’s win or loss of the business.

So clients take advantage of agencies. Agencies know if they don’t adhere to the idea giveaway, their competition gladly will, so they have little choice but to participate.

The brand is to blame for asking for work without pay. The agency is to blame for giving away work without demanding compensation.

But neither side is likely to take the high road on the ethical side of things, so we have ourselves a Catch 22.

The Only Hope
All that an agency can hope for is market share or diversification of revenue that is so overwhelming they don’t need the new business bad enough.

In early 2009, while still working with Doe-Anderson, a great full-service advertising agency in Louisville, I had the task of putting together a digital marketing dream team of partners for a major brand. I hand-picked several of the top boutique firms specializing in social media, email marketing, search engine optimization, mobile marketing and design and called them each to talk about participating in my little RFP process. I clarified that I would not ask for their creative work, that I only wanted to hear how they would approach solving the communications problem at hand and how they would fit in with a large, multiple-agency team to work on behalf of the client. From that information, I would ask them each several questions and then choose the firm in each category I felt was the best fit for our needs.

When I called one of the companies I was told, “I’m sorry, we don’t respond to RFPs.”

Half of me screamed, “WHAT? DO YOU KNOW WHICH BRAND YOU’RE PASSING ON?” And the other half screamed, “GOT ANY OPENINGS?!”

It turns out that particular firm had developed several products around its niche and had the advantageous position to only work with companies they wanted to work with. They told me they don’t respond to RFPs because if the client in question wants the best in the business, they don’t need to compare and contrast, they just hire them. They only wanted to work with people who wanted to work with them. Period.

On one hand, it reeks of arrogance. Here’s hoping they never fall off that pedestal and need clients. On the other hand, it’s where I would want my agency or consultancy to be and I admire the hell of them for taking that stand.

If only everyone did.

The Solution
Like any long-standing, traditional process that has morphed into a problem (i.e. – health care, government bureaucracy, doctor’s visits) there’s no one solution to the RFP problem. It will take a combination of a lot of things to fix:

• Companies and brands need to recognize that creative concepts are an agency’s bread and butter and shouldn’t be asked for without compensation
• Agencies need to place a better value on their work and either ask for compensation, ownership or refuse to provide creative concepts
• Agencies that undercut competitors by violating that stance should be penalized somehow

Will any of that happen? Probably not. Ad agency and PR firm creative concepts aren’t exactly earth-shattering utilities that need some sort of regulation.

But sooner or later agencies are going to realize the cost-benefit of the dog-and-pony show isn’t in their favor and stop responding. If you think the current state of marketing is bad now, just wait until the crappy firms get all the business.

In that scenario, everyone loses.

There’s a ‘menaissance’ in the ad world

Ralph Gilles is preparing to cash in on a new breed of manlier man.

The president of Chrysler’s Dodge division earlier this year launched commercials titled “Man’s Last Stand,” showing guys making sacrifices for their woman (“I will put the seat down”), but ultimately asserting themselves by choosing a Dodge Charger muscle car. For this fall, Mr. Gilles is rolling out what’s already been dubbed the “man van:” a special version of the Dodge Grand Caravan that will tout power suspension rather than cup holders for soccer moms.

After years of focusing on women or the softer side of men, marketers increasingly are trumpeting traditional male strengths in what some are calling a “menaissance.” Companies ranging from Chrysler to Procter & Gamble (Old Spice, Gillette) and Levi Strauss (Dockers pants) are cranking up the testosterone levels in their marketing and merchandise in a bid to recapture their core base of male customers.

“For me, as a man, I feel: ‘Has the man been forgotten?’ ” said Chrysler’s Mr. Gilles, a 40-year-old father of two who drives a Caravan minivan. “The man has a lot of buying power ... We do believe there’s an unserved need out there that we’re going to go after.”

“It’s a celebration of manhood – of being a man’s man,” said Alan Gee, chief creative officer at GJP Advertising in Toronto, whose clients include retailers and car dealers. “We are seeing a resurgence of it. There’s a pride in focusing on that aspect of brands by focusing on men in that way and urging them to buy more products.”

Whether the menaissance is a real social trend or an ad-industry invention is debatable. Either way, for marketers the rewards can be considerable. Since P&G launched its “The Man Your Man Could Smell Like” ad campaign for Old Spice, featuring former National Football League wide receiver Isaiah Mustafa chiding “lady-scented” body wash, business has taken off. According to researcher Neilsen Co., the line’s U.S. body wash sales surged 27 per cent in the past six months and 55 per cent in the past three months. Amid a hugely popular two-week online ad blitz, they’ve rocketed 107 per cent in the past month.

“This is not the time to try to be selling eye shadow for men,” said Robb Hadley, category manager for men’s grooming at P&G in Canada. “It's not just about being a man's man. It's about being a man – today's man is making his own choices about what's important to him and how he wants to live his life.”

Many of the manly efforts have emerged among businesses, such as Dodge and Dockers, that have been squeezed by the recession and shifting consumer tastes. Men’s grooming lines have also felt the pain, with sales growth having slowed to 1 per cent last year from 7.6 per cent in 2006 in the $616-million sector in Canada, researcher Euromonitor reports. Men were sticking with their three-blade Fusion razor rather than upgrading to a premium-priced five-blade Fusion Power system, Euromonitor analysts found.

In response, P&G launched its new Gillette Fusion ProGlide razor in June, handing out tens of thousands of free samples to men who became brand ambassadors and, in some cases, flaunted their muscular physiques in ads. While Gillette marketing used to focus on stereotypical heroes such as astronauts, its research found that young men wanted to be treated as “real guys,” Mr. Hadley said, adding that the new razor’s sales are double the company’s initial forecast.

Even Canadian Tire Corp. Ltd. is rushing to bolster its business by returning to its roots as a man’s store. It is more prominently displaying its auto-related departments after years of adding more picture frames, candles and other home decor products to lure women. “Five or six years ago they slanted the store too much to the female shoppers,” CEO Stephen Wetmore, in the job since early 2009, said recently.

At Dodge, a recent minivan spot used a male rather than a female voiceover to grab men’s attention for what has become known as a soccer mom’s vehicle. The ads aim to broaden the vehicle’s appeal to men by showing the minivan in action-filled shots with a new tagline – “it has everything so you can do anything.”

Today, a growing number of U.S. men are registered owners of cars (59 per cent, up from 51 per cent four years earlier) while there are fewer female owners (41 per cent, down from 49 per cent), according to Strategic Vision NVES studies. Marketers often assume that women drive 80 per cent of auto purchasing decisions when, in fact, they are involved in only 65 per cent of them on average, according to Maritz Research.

The popular Mad Men television series and its retro-styled ad men exemplify the upswing of interest in the masculinity of yesteryear. The show’s Sixties look of slim-fitting suits, narrow lapels and skinny ties has resonated with men, helping perk up sluggish business at mainstream men’s clothier Moores. “It’s a dress-clothing menaissance,” said Richard Bull, the chain’s vice-president of merchandising.

Last fall, high-end retailer Brooks Brothers issued a Mad Men Edition suit, which sold out quickly, said fashion director Glen Hoffs. “Retro styles are often an easy way for men to understand fashion. Retro gives them a context and conjures something familiar which helps them to feel more comfortable.”

Dockers set out to turn heads by redefining masculinity in its latest ads, which urge men to “wear the pants,” said Jennifer Sey, vice-president of global marketing. The company needed to return to its roots of men’s khakis after having lost its focus by wandering into women’s wear and other segments, she said. The company is trying to entice men to buy its new retro tapered styles in a diverse array of colours and patterns.

“Men have lost their footing a little bit about what it means to stand up and be a man today,” Ms. Sey said. “He should be able to change a diaper and a tire.”

News.me Moves to Usurp The Daily

With iPad exclusive newspaper The Daily set to be launched by News Corp tomorrow rival publishers are moving to counter the new threat, chief amongst them the New York Times which has begun work on an app of its own, News.me.

Rather than tackle The Daily head on however News.me is adopting a more sociable approach, prioritising the best read and most shared stories from Twitter and bit.ly.

Signing in via your Twitter account a stream of news stories and videos which are currently being viewed by your followers are shown, including news which is being recommended to your followers by their followers.

This is achieved via a banner of followers displayed across the top of the screen from which the user can click on individual profiles to find out what they are reading. Tapping on a story headline will expand the news to full screen.

As the app is displaying content licensed from other news organisations the app is expected to carry a subscription charge when it launches, even though the content is freely available on the web.

The Daily, in contrast, will produce its own exclusive content via a team of 100 journalists.

Email Etiquette for the Super-Busy

by Jocelyn K. Glei

In a recent blog post, venture capitalist Fred Wilson talked about his ongoing struggle with email management and the various solutions he’s tried, concluding: “Every time I make a productivity gain, the volume eventually overwhelms me.” It’s a familiar problem. We’re all extremely busy, and we all get too much email. So what to do? It’s time for a more mindful approach, one that fully embraces a “less is more” strategy. To help you get started, we’ve assembled a cheat sheet of our email best practices. And, trust us, it’s not just about being more polite, it’s about being more efficient and getting the responses you need.

1. Be concise.
Do you like getting long emails? No? No one does. A good rule of thumb is to strive to keep emails to one line or less. If they can’t be that short, challenge yourself to keep them as concise as humanly possible. Your contact is just as likely to be checking the message on a smartphone as on a desktop computer, and shorter is easier to digest – which means you’re more likely to get a response.

2. Communicate “action steps” first, not last.
It’s standard practice to begin an email by summarizing what happened at a meeting or during a phone conversation, then following on with any “action steps” that emerged. But this makes it easy for the most important information to get lost in the shuffle. By reversing this order – and listing actions steps first and foremost – you keep the attention on the items you want to draw attention to.

3. Number your questions.
This is Email 101. If you’re not doing it already, it should be standard protocol to break out multiple points or questions as numbered items in all email correspondence. If you don’t, you risk having that customer or client only respond to the first question that happens to catch their eye. (And now you have to write another email to ask them about it again.)

4. Make the way forward clear.
Emails that offer nothing but a “What do you think about X...?” are generally ineffectual. Always be proactive and take the lead in your communications so that the way forward is completely clear. If you’re proposing a deal, do a bullet-pointed outline of the parameters from the get-go. If you want to “run something by” a superior, share your approach and ask them if they agree. They may not, but giving them a starting point, something to react to, is MUCH more likely to get a response than waiting for someone else to make the first move.

5. Include deadlines.
Some people think that handing out deadlines can seem dictatorial. On the contrary, I’ve noticed that successful busy people welcome a deadline. It helps them integrate the tasks into their schedule. If a response from them is imperative, politely include a deadline: “For the project to stay on track, I need a response from you by 1/18.” If a response is optional, communicate that as well: “If I don’t hear back from you by 1/18, I’ll proceed with the solution I’ve proposed.”

6. Use “FYI” for emails that have no actionable information.
Some emails need to be shared to keep everyone in the loop. But non-actionable correspondence should be labeled as such – so that it can be prioritized accordingly. At the Behance office, we use a simple “FYI” tag at the top of all emails that contain information that you are not required to act on. It allows for easy filtering of non-actionable emails, whether by scanning visually or setting up a rule in your email client.

7. Tell them that you’ll get to it later.
If someone sends you an urgent email that you can’t get to today (or this week, or this month), write them a quick note to let them know, specifically, when you will get to it. You’ll quell their anxiety, and save yourself a future nagging email from them. It also preserves goodwill: Explaining now why you won’t get to something until later is much more effective than apologizing later.

8. Don’t send “Thanks!” emails.
If you don’t have anything substantive and/or actionable to say, don’t send the email. Refraining from sending the one-word “Thanks!” email is tough, because it can feel ungrateful. But at this juncture, we’re all probably more grateful for one less email.

9. Never send an angry or contentious email.
Email is a severely limited medium when it comes to conveying tone, which is why angry emails are never a good idea. More often than not, they just create more anxiety – and more email. Occasionally, writing an angry email can be therapeutic. If this is the case, get it off your chest, and then delete the email. When a confrontation is brewing, a conversation in person or on the phone is almost always best. Emails leave too much room for misunderstanding.

10. Never “reply all” (unless you absolutely must).
If you’ve received an email sent to a large group of people, do your best to avoid replying to all when you respond. If that person was qualified to send the email, typically they can be relied on to be the point person who collates the responses. Keep in mind: If using the “reply all” feature really seems necessary, you are probably having a conversation that would be better (and more efficiently) had face-to-face.

Say no to double spaces after periods.

Can I let you in on a secret? Typing two spaces after a period is totally, completely, utterly, and inarguably wrong.

And yet people who use two spaces are everywhere, their ugly error crossing every social boundary of class, education, and taste. You'd expect, for instance, that anyone savvy enough to read Slate would know the proper rules of typing, but you'd be wrong; every third e-mail I get from readers includes the two-space error. (In editing letters for "Dear Farhad," my occasional tech-advice column, I've removed enough extra spaces to fill my forthcoming volume of melancholy epic poetry, The Emptiness Within.) The public relations profession is similarly ignorant; I've received press releases and correspondence from the biggest companies in the world that are riddled with extra spaces. Some of my best friends are irredeemable two spacers, too, and even my wife has been known to use an unnecessary extra space every now and then (though she points out that she does so only when writing to other two-spacers, just to make them happy).

What galls me about two-spacers isn't just their numbers. It's their certainty that they're right. Over Thanksgiving dinner last year, I asked people what they considered to be the "correct" number of spaces between sentences. The diners included doctors, computer programmers, and other highly accomplished professionals. Everyone—everyone!—said it was proper to use two spaces. Some people admitted to slipping sometimes and using a single space—but when writing something formal, they were always careful to use two. Others explained they mostly used a single space but felt guilty for violating the two-space "rule." Still others said they used two spaces all the time, and they were thrilled to be so proper. When I pointed out that they were doing it wrong—that, in fact, the correct way to end a sentence is with a period followed by a single, proud, beautiful space—the table balked. "Who says two spaces is wrong?" they wanted to know.

Typographers, that's who. The people who study and design the typewritten word decided long ago that we should use one space, not two, between sentences. That convention was not arrived at casually. James Felici, author of the The Complete Manual of Typography, points out that the early history of type is one of inconsistent spacing. Hundreds of years ago some typesetters would end sentences with a double space, others would use a single space, and a few renegades would use three or four spaces. Inconsistency reigned in all facets of written communication; there were few conventions regarding spelling, punctuation, character design, and ways to add emphasis to type. But as typesetting became more widespread, its practitioners began to adopt best practices. Felici writes that typesetters in Europe began to settle on a single space around the early 20th century. America followed soon after.

Every modern typographer agrees on the one-space rule. It's one of the canonical rules of the profession, in the same way that waiters know that the salad fork goes to the left of the dinner fork and fashion designers know to put men's shirt buttons on the right and women's on the left. Every major style guide—including the Modern Language Association Style Manual and the Chicago Manual of Style—prescribes a single space after a period. (The Publications Manual of the American Psychological Association, used widely in the social sciences, allows for two spaces in draft manuscripts but recommends one space in published work.) Most ordinary people would know the one-space rule, too, if it weren't for a quirk of history. In the middle of the last century, a now-outmoded technology—the manual typewriter—invaded the American workplace. To accommodate that machine's shortcomings, everyone began to type wrong. And even though we no longer use typewriters, we all still type like we do. (Also see the persistence of the dreaded Caps Lock key.)

The problem with typewriters was that they used monospaced type—that is, every character occupied an equal amount of horizontal space. This bucked a long tradition of proportional typesetting, in which skinny characters (like I or 1) were given less space than fat ones (like W or M). Monospaced type gives you text that looks "loose" and uneven; there's a lot of white space between characters and words, so it's more difficult to spot the spaces between sentences immediately. Hence the adoption of the two-space rule—on a typewriter, an extra space after a sentence makes text easier to read. Here's the thing, though: Monospaced fonts went out in the 1970s. First electric typewriters and then computers began to offer people ways to create text using proportional fonts. Today nearly every font on your PC is proportional. (Courier is the one major exception.) Because we've all switched to modern fonts, adding two spaces after a period no longer enhances readability, typographers say. It diminishes it.

Type professionals can get amusingly—if justifiably—overworked about spaces. "Forget about tolerating differences of opinion: typographically speaking, typing two spaces before the start of a new sentence is absolutely, unequivocally wrong," Ilene Strizver, who runs a typographic consulting firm The Type Studio, once wrote. "When I see two spaces I shake my head and I go, Aye yay yay," she told me. "I talk about 'type crimes' often, and in terms of what you can do wrong, this one deserves life imprisonment. It's a pure sign of amateur typography." "A space signals a pause," says David Jury, the author of About Face: Reviving The Rules of Typography. "If you get a really big pause—a big hole—in the middle of a line, the reader pauses. And you don't want people to pause all the time. You want the text to flow."

This readability argument is debatable. Typographers can point to no studies or any other evidence proving that single spaces improve readability. When you press them on it, they tend to cite their aesthetic sensibilities. As Jury says, "It's so bloody ugly."

But I actually think aesthetics are the best argument in favor of one space over two. One space is simpler, cleaner, and more visually pleasing (it also requires less work, which isn't nothing). A page of text with two spaces between every sentence looks riddled with holes; a page of text with an ordinary space looks just as it should.

Is this arbitrary? Sure it is. But so are a lot of our conventions for writing. It's arbitrary that we write shop instead of shoppe, or phone instead of fone, or that we use ! to emphasize a sentence rather than %. We adopted these standards because practitioners of publishing—writers, editors, typographers, and others—settled on them after decades of experience. Among their rules was that we should use one space after a period instead of two—so that's how we should do it.

Besides, the argument in favor of two spaces isn't any less arbitrary. Samantha Jacobs, a reading and journalism teacher at Norwood High School in Norwood, Col., told me that she requires her students to use two spaces after a period instead of one, even though she acknowledges that style manuals no longer favor that approach. Why? Because that's what she's used to. "Primarily, I base the spacing on the way I learned," she wrote me in an e-mail glutted with extra spaces.

Several other teachers gave me the same explanation for pushing two spaces on their students. But if you think about, that's a pretty backward approach: The only reason today's teachers learned to use two spaces is because their teachers were in the grip of old-school technology. We would never accept teachers pushing other outmoded ideas on kids because that's what was popular back when they were in school. The same should go for typing. So, kids, if your teachers force you to use two spaces, send them a link to this article. Use this as your subject line: "If you type two spaces after a period, you're doing it wrong."

Correction, Jan. 18, 2011: This article originally asserted that—in a series of e-mails described as "overwrought, self-important, and dorky"—WikiLeaks founder Julian Assange used two spaces after every period. Assange actually used a monospace font, which made the text of his e-mails appear loose and uneven. (Return to the corrected sentence.)

How Apple Could Fall Without Steve Jobs

BY KIT EATON

Apple's CEO is suffering the after-effects of cancer and a liver transplant, and his latest medical leave has the tech world agog over Apple's immediate plans. So we have to wonder: Can Apple survive a post-Steve Jobs future? We've looked at where Apple is right now, where's it's going next, thought about how Apple's competitors have fared in history and tried to imagine what may happen to Apple when Jobs finally relinquishes the big chair.

What is Apple now?

Apple is, whether you're a fan or a hater, one of the most important technology companies in the world right now--both from a consumer electronics angle, and as a driver for change in the entire technology sphere. Over the last ten years it's reinvented how people think about digital music, home computing (now chic, versus its ancient geek status), what digital device design can be like, how home entertainment systems can work slickly, how smartphones look and feel, and what it means to have a handheld computer that reacts to touch. That's a big--and important--list.

Apple's done this by making bold, decisive decisions about product features and design, departing far from the industry "norms." It's done this thanks to a tight-knit team ofdesignershardware and software experts, marketing geniuses and management gurus. This team has one focus: Steve Jobs, whose vision and drive are legendary. All the key decisions that have driven his company have involved him making the ultimate yes or no call--most notably he's reported to have held off on an iPad-like machine for years and years, until the market and the tech was ready. Just look at how well that's paid off.

Apple is the most successful it's ever been, and Jobs is at its core. But Steve Jobs is not Apple, and Apple is not Steve Jobs.

What will Apple do without Steve for the next several months?

Last time Steve took medical leave, Tim Cook held the reins--and got payed over 12 milliondollars for his efforts. Cook managed the company slickly in Steve's absence, presiding over a suite of hardware and software upgrades of significant scope--including the iPhone 3GS and Snow Leopard Mac OS. We didn't see "visionary" new product releases, but that had little to do with Cook: Such events take years in planning, prototyping and ultimate execution, and Cook's time in charge simply coincided with a period where Apple was consolidating and evolving its existing products.

Now Jobs needs R&R again, and Apple's in another phase of consolidation. The iPad 2 is due imminently--but the iPad 1 already did the tricky paradigm-shattering. The iPhone 5 is due around mid-year and though some expect it to be a complete design re-think, it's likely that in terms of tech it'll be an incremental device with better, more clever guts. We're expecting an evolution in Apple's signature Mac computers, but these will happen on design decisions that Apple's already been testing for a few years in the MacBook Air and iPhone (slimmer unibody formats, solid-state drives and so on.)

The biggest thing Apple will reveal this year will probably go unnoticed by much of the public: It's A5 (A8?) chip which will sit inside the iPhone, iPad and Apple TV will likely be a ARM Cortex A9 dual-core evolution of the Cortex A8 single-core chip that's inside thecurrent iPad. It'll set the bar for the industry, so it's absolutely crucial for Apple. But it's been in design and development for years--all the key decisions are already made.

In other words, Apple's set for the rest of 2011, and probably early 2012 already.

What Apple would do in the months after Jobs left

Assuming Jobs recovers well from what some are seeing as a normal lull caused by the trauma his body's suffered, he'll be back at Apple in 2011. But ultimately he'll have to go, whether he falls too ill, whether he decides to refocus his energies on his family as he gets older, or whether Apple's board will (in concert with him, and acting with characteristic managed PR slickness) decide it's time to usher in a new era.

In the immediate aftermath of Jobs' departure, and no matter who succeeds him as CEO, there will probably be no immediate change of Apple's fortunes in the marketplace. All the key technological and design decisions for at least a year or two into the future would've already been made, and would be in development. No one steering the firm would want to upset the sales momentum the company has patiently built up.

The financial world would react differently, paying acutely critical attention to what Apple's new management did, but the company's immediate future would probably be stable.

When Apple's managers and key talent leave

Then things will change. Soon after Jobs leaves, we imagine numerous high-ranking people inside the firm will find new things to do with their lives too. No matter who replaces Jobs, working for a firm with a revolution-inspiring genius at its core is different to one without such a figure. Some key design or management people would probably leave even if Apple were headed-up by a similarly dynamic new CEO, simply because they got used to working for Steve.

Apple's new management will then have a two-handed problem: Managing the company's future technological direction, and recruiting new talent to replace key staff at critical moments in new product design cycles.

What will happen to Apple's image?

Apple's image may then change. Assuming a new tight-knit and dynamic team pushed the company forward from the top, it still won't be Jobs' company--whatever new products it makes won't necessarily be the same as Jobs would have chosen.

This could push Apple's image in one of two directions. It could become even more successful. Jobs isn't the only genius in the world, and some of his decisions over the last many years have seemed odd--the weird "hobby" status of the Apple TV for one, the war with Adobe over Flash technology as another, along with examples like the bull-headed pursuit of FireWire tech while everyone else chose USB. A scenario wherein a post-Jobs Apple was easily churning out equally fabulous tech is not impossible to imagine.

Or Apple's sheen could begin to fade, with future products missing their mark and failing to please a hungry public. This could happen because too many critical employees may leave, taking their vision and expertise with them, and Apple's new management may lack the drive and focus that Jobs has.

This is, perhaps, the most likely scenario: Apple without Jobs is still Apple, but it's easy to see several missteps taken by the new team, versus the rare errors Apple's made over the last ten years. For one, Jobs is driven by his inner energy, and the sense of urgency that comes from a serious illness like pancreatic cancer--we can't imagine the new team feeling that same dynamic urge.

What Apple's customers would do then

Part of Apple's success has come from the astonishing mass appeal that surrounds its smooth, desirable consumer electronics. Apple fans have long been privy to the joy of a computer that "just works" (despite the bitterness and hype of the Mac-versus-PC war, this fact is largely true) but the iPod and iPhone demonstrated this to the broader public. Clever marketing, product placement in key TV shows and movies and smart design-choices supported this. As has a succession of newer, cleverer, more impressive products.

If a post-Jobs Apple falters in several decisions, and produces devices that fail to wow Joe Public, the interest in Apple will quickly fade. Joe is fickle, as we all know--Microsoft was once King, now Apple is, and that cycle will go on.

What will happen over several years

Apple is massive enough to roll on, and any new management team will probably be smart enough to let things evolve slowly, not being brave enough to challenge the Jobs design legacy with bold new products. This would be a successful strategy, at first.

But ultimately this doesn't create dynamism and growth, and Apple would begin to behave like a supertanker--difficult to slow and impossible to turn. Microsoft went there, as didYahoo, and while these once world-leading giants are still incredibly important, it's hard to argue that they're pushing the boundaries of technology any more.

If that happens Apple could slowly slip into the same faded-opulence status occupied by some of its current and previous competition, feeling like a technological great that once was, instead of a young, dynamic, world-changer. This would affect how its investors behave, and what kind of talent it can recruit.

To read more news on this, and similar stuff, keep up with updates by following Kit Eaton on Twitter.

The Definitive Guide to Facebook Publishing & Moderation

This is a great article from Buddy Media. It outlines some of the do's and don'ts of responding to Facebook comments on your brand's Facebook page. It deals with responding to negative and positive comments/feedback, profanity, answering requests for information, and giving guidance/advice among other issues. If your organization is new to Facebook, this is
worth a read.

Download the article here.

Verizon Wireless Finally Gets Apple’s iPhone

SAM GUSTIN, WIRED MAGAZINE

The wait is over.

Verizon Wireless, the nation’s largest wireless mobile provider, announced Tuesday that it will offer Apple’s wildly popular iPhone to its nearly 100 million customers, breaking 4 years of exclusivity by arch-rival AT&T.

Verizon’s iPhone launch will intensify the already ferocious competition raging in the mobile phone market between the iPhone, Research in Motion’s Blackberry line of devices, and handsets powered by Google’s Android mobile operating system.

For Apple, the Verizon deal opens up a vast swath of the market for its signature product, the iPhone, certainly one of the most iconic mobile devices of the last decade.

“This will be the first iPhone for millions of Verizon subscribers who have not had the ability to access Apple’s hardware or the App Store,” said Rana Sobhany, an expert on Apple’s mobile products and the author of Mobilize: Strategies for Success from the Frontlines of the App Revolution.

“Verizon’s customer base will immediately scramble to download millions of apps within the first 30 days,” Sobhany added.

Verizon president Lowell McAdam made the announcement at an event in New York City on Tuesday morning. He said the iPhone 4 would be available to Verizon customers early next month.

“We’re incredibly pleased to give Verizon customers the choice they’ve been waiting for,” said Apple chief operating officer Tim Cook.

The Verizon iPhone launch follows years of speculation about how long AT&T’s exclusive contract to sell the device would last.

“It just goes to show that if the press writes about something long and hard enough, it will come true,” McAdam quipped.

Investors pushed AT&T shares down 1.8 percent Monday ahead of the Verizon announcement.

The two giant wireless rivals have already commenced bickering about the iPhone. In a statement, AT&T spokesman Mark Siegel said the company’s GSM technology is faster than Verizon’s CDMA technology, and warned Verizon customers to get “ready for life in the slow lane.”

“AT&T is known for a lot of things, but network quality is not one of them,” shot back Jeffrey Nelson, a spokesman for Verizon Wireless.

Wall Street Apple analyst Gene Munster predicts that Verizon will sell as many as nine million iPhones in 2011. Other analysts forecast sales of as many as 13 million units.

But Dan Hays, an analyst at consulting firm PRTM, thinks those estimates are high, and is calling for five to seven million handsets to be sold.

“While the launch of the Apple iPhone on Verizon’s CDMA network marks a turning point for the US wireless market and shifts the competitive landscape for high-end wireless subscribers, we believe that current estimates of its potential sales are overblown and fail to contemplate the likely benefits to Verizon’s other smartphone devices,” Hays said in a research note.

AT&T is moving to diversify its product line after several years in which the iPhone anchored the company’s stable of devices. This year, AT&T plans to introduce 20 new phones, including 12 powered by Google’s Android operating system, in addition to Blackberry devices and phones running Microsoft’s WindowsPhone7 software.

“AT&T is clearly reducing its dependence on Apple,” Gleacher and Co. analyst Mark McKechnie observed.

For its part, Verizon will likely pay a steep price for the privilege of selling the iPhone, according to Bloomberg. The company could spend as much as $5 billion in 2011 subsidizing customers’ purchase of the phones, which it will sell at a discount in order to induce new subscribers to sign up for a two-year contract.

Apple shares opened trading Tuesday at over $340 per share, up more than 50 percent in the last year.

Photo: Verizon Wireless CEO Dan Mead and Apple COO Tim Cook at VZW iPhone launch, New York. Credit: Sam Gustin/Wired.com

Twitter Endorsements Face OFT Clampdown

Watchdog says online companies who did not disclose paid-for promotions by celebrities and bloggers were deceptive.

How does a celebrity declare their affiliations to certain brands in fewer than 140 characters? Many may have to learn, after a clampdown by the government's consumer watchdog on non-declared endorsements in blogs and on social networking sites such as Twitter.

The Office of Fair Trading (OFT) has begun a crackdown on Twitter users and bloggers using their online presence to endorse products and companies without clearly stating their relationship with the brand.

In the first of its kind, the OFT has brought a case against a PR firm that was discovered to be paying bloggers to write effusively about its clients. The watchdog has launched an investigation into Handpicked Media, which operates a commercial blogging network – insisting that it must clearly state when promotional comments have been paid for.

In a statement, the OFT said online advertising and marketing that did not disclose paid-for promotions were "deceptive" under fair trading rules. "This includes comments about services and products on blogs and microblogs such as Twitter," it said.

Celebrity twitter endorsements are already big business in the US, where artists such as Snoop Dogg can earn a reported $3,000 (£1,900) for sending a tweet endorsing a product. But the US Federal Trade Commission insists that such endorsements must contain the words "ad" or "spon" to show the reference has been paid for. Such a requirement does not currently exist in the UK.

"Celebrities can be great influencers, whether they're on TV or tweeting," Arnie Gullov-Singh, chief executive officer of Ad.ly, which pairs celebrities and companies, told Business Week in a recent interview.

Reality TV star Kim Kardashian, who has more than 5.6 million followers, can collect up to $10,000 for tweeting, Gullov-Singh added. "Her price keeps going up. The most effective ones can get six figures a year, and in some cases six figures a quarter."

Launched in 2009, Ad.ly uses more than 5,000 celebrities and experts to promote products such as Coke, Toyota and Microsoft in the US. It now plans to launch the service in Britain.

"A year ago, celebrities were wary about their reputation, about selling out, but when they saw how easy it was to earn up to $5,000 a tweet, they flocked on board," said Gullov-Singh.

It is a business that could boom in the UK, after Range Rover became one of the first companies to dip its toe in the water. It recently signed up 40 stars – including ex-GMTV host Ben Shephard and model Daisy Lowe – to drive its new Evoque 4x4 and tell their followers about the experience, according to Marketing Week.

Complimentary tweets about the cars have appeared on Twitter. In November, fashion designer Henry Holland, who has more than 133,000 followers, tweeted: "CAN'T WAIT FOR MY NEW RANGE ROVER..!!!"

A Range Rover spokesman appeared to confirm to the Mail on Sunday today that the company had an arrangement with certain celebrities. He said: "We enlisted the help of a number of people with high profiles on Twitter. They get the loan of a vehicle which they can use, drive around and take pictures of.

"Under the terms of the deal they tweet. That's the idea. They tweet about the car."

A different Range Rover spokesman later denied that the company gave incentives to celebrities to tweet about its cars.

Actor Liz Hurley has also written in glowing terms about certain products, with her Twitter page including more than 10 references to cosmetic company Estée Lauder's product range. She. The self-described "mum, model, actress, bikini designer and organic Farmer" has been the face of the company for 17 years, but her Twitter page has no mention of her affiliation.

Media commentator Mark Borkowski said there was little doubt that celebrity endorsements would become increasingly common in the UK. He believes the industry could follow the example of the US where the number of followers a celebrity has determines how much their "advertising space" is worth.

"Celebrity endorsements go back to cigarette advertising in the 1900s. All we are seeing here is a change in the medium. "Twitter is a very powerful medium," he said.

But celebrities endorsing products had to be honest and open, he added. "If people are open and there is a conversation about it, then fine. The problems come when people endorse covertly, that puts the whole thing into jeopardy."

In that case the OFT would have to intervene, although twitter users themselves might be better arbiters. "People can see through these things, and having the twitter cloud against you is a powerful thing."

Article Courtesy of Alexandra Topping, Guardian.co.uk: http://bit.ly/dHy6eI

The Future of Advertising

DANIELLE SACKS, FAST COMPANY

Advertising is on the cusp of its first creative revolution since the 1960s. But the ad industry might get left behind.

Twenty creative directors, planners, media strategists, and account executives from agencies across the country are down on all fours on the floor of a 100-year-old tenement on Manhattan's Lower East Side. They are each staring down at a blank poster-size sheet of paper, contemplating their most abject fears about their careers, their livelihoods, and their future. They have reason to worry. They are, after all, in the business of advertising.

This slight three-story brick building on the edge of Chinatown has been taken over by Hyper Island, a school based in Sweden renowned for producing the most coveted digital talent in the ad industry. That school is located in an old prison on the Baltic Sea, and students are taught that there are no boundaries when it comes to digital marketing.
Last summer, the Swedes at Hyper Island recognized that where there's panic, there's opportunity, and opened this New York branch. Like the many foreigners who settled in this downtown locale before, the school arrived with its own set of promises -- to drag the denizens of Madison Avenue into the 21st century. While its students back in Sweden are "digital natives," these elder New Yorkers are "digital immigrants," who have gathered for three days of hard-core immersion in dealing with the chaos digital technology has wrought on their industry. "Something digital immigrants would do," explains one instructor, "is make a phone call to make sure someone received an email."

Most of the men and women here -- average age: 38 -- have worked at agencies for more than a decade. Such tenure used to be considered an asset, but these days it's more of a liability. They're all well aware that coding is now prized over copywriting and that a résumé that includes Xbox and Google is more desirable than one featuring stints at BBDO or Grey.
Step one of their therapy, of course, is admitting there is a problem. In this room where Swedish pastries litter a couple of Ikea tables, they have been told that their first assignment is to "put [their] digital stinky fish on the table." So each supplicant finds some space on the floor and rolls out that big blank sheet of paper. Eventually, everyone writes something, and after a few minutes, the group gathers in a circle -- a safe space -- where one by one they voice their insecurities. The first person stands up. "I walk around in fear and loathing, dazed and confused," he says. Another confesses, "I'm a person who's petrified to fail." One by one, they exhale the cold fears of an entire industry: "I feel like I'm standing here and there are a thousand baseballs dropping from the sky and I don't know which ones to catch." "I left my cushy job at a global agency. Actually, I didn't leave; I was pushed out." "I kind of feel like the digital world is a gated world. It's wide open, but I don't even know enough to walk in." "This whole 'collaboration, we'll work together as a team' breaking down of the creative director and art director team -- I find it fucking difficult."

Depending on how you look at it, the next 72 hours are either a communal hazing or a primer on today's rules of marketing. Creative teams, the participants are told, now need to behave more like improv actors -- "story building" instead of storytelling -- so they can respond in real time to an unpredictable audience. Marketing actually needs to be useful -- "use-vertising" instead of advertising -- which means that you must think more like a product developer than an entertainer. While campaigns once promised glossy anthemic concepts, perfected before being shipped off to the waiting client, digital is incremental, experimental, continually optimized -- "perpetual beta" -- and never, ever finished. "Digital will fuck you up and the way your agencies are built to make money, staff things, price things," says the instructor. "You guys have to change your DNA, and you're going to have tough decisions." Later, there's an entire lesson on letting go of egos. Throughout the session, instructors remind the novitiates that these new rules are certain to change completely, and soon.

[ CHAOS ]
Like a beetle preserved in amber, the practice of advertising has sat virtually unchanged for the last half-century. Before 1960, ad making was a solitary practice. Copywriters toiled away on words to pitch a product, then handed them off to an art director who translated them into an illustration or photograph. Creative director Bill Bernbach (the B in DDB) changed all that when he recognized that pairing wordsmith and artist could spark genius. That simple move ignited the industry's creative revolution, raising the practice of advertising from sleazy salesmanship to some permutation of art.
The ad business became an assembly line as predictable as Henry Ford's. The client (whose goal was to get the word out about a product) paid an agency's account executive (whose job was to lure the client and then keep him happy), who briefed the brand planner (whose research uncovered the big consumer insight), who briefed the media planner (who decided which channel -- radio, print, outdoor, direct mail, or TV -- to advertise in). Then the copywriter/art director team would pass on its work (a big idea typically represented by storyboards for a 30-second TV commercial) to the producer (who worked with a director and editors to film and edit the commercial). Thanks to the media buyer (whose job was to wine-and-dine media companies to lower the price of TV spots, print pages, or radio slots), the ad would get funneled, like relatively fresh sausage, into some combination of those five mass media, which were anything but equal. TV ruled the world. After all, it not only reached a mass audience but was also the most expensive medium -- and the more the client spent, the more money the ad agency made.

That was then. Over the past few years, because of a combination of Internet disintermediation, recession, and corporate blindness, the assembly line has been obliterated -- economically, organizationally, and culturally. In the ad business, the relatively good life of 2007 is as remote as the whiskey highs of 1962. "Here we go again," moans Andy Nibley, the former CEO of ad agency Marsteller who, over the past decade, has also been the CEO of the digital arms of both Reuters and Universal Music. "First the news business, then the music business, then advertising. Is there any industry I get involved in that doesn't get destroyed by digital technology?"

Thanks to the Internet and digital technology, agencies are finding that the realization of their clients' ultimate fantasy -- the ability to customize a specific message to a specific person at a specific moment -- is within their grasp. It is also one very complex nightmare. After all, digital isn't just one channel. It's a medium that blooms thousands of other mediums. Brad Jakeman, who formerly led advertising at Citigroup and Macy's, says the explosion of platforms like search, geotargeting, the iPad, and mobile apps means fragmented media budgets and fragmented consumer attention. "The irony is that while there have never been more ways to reach consumers, it's never been harder to connect with consumers," explains Jakeman, now chief creative officer at Activision, the gaming company. The death of mass marketing means the end of lazy marketing. At agencies, the new norm is doing exponentially complex work. Think of the 200 Old Spice YouTube videos whipped up by Wieden+Kennedy in 48 hours. "Creating more work for less money is the big paradox," says Matt Howell, president of the Boston agency Modernista.

And the Internet has turned what used to be a controlled, one-way message into a real-time dialogue with millions. "Our power has been matched and, in some categories, rivaled by user influence," says Nick Brien, CEO of Interpublic Group's McCann Worldgroup, who notes that sites such as Engadget and Yelp can make or break a product. The opportunity for marketers is that instead of having to pay for their message to run somewhere, they can "earn" media for free, via consumers spreading YouTube clips, Groupons, and tweets as if they were trying to saturate their networks with photos of their newborn. Says Jon Bond, cofounder of Kirshenbaum Bond Senecal + Partners who left his agency last year to launch a startup: "Marketing in the future is like sex. Only the losers will have to pay for it." But the dark side of a transparent marketplace is that marketers have never had more of an opportunity to rub consumers the wrong way and be publicly skewered. The days of lathering on a brand message that a product may not live up to are long gone.

All of this has made life much more confusing for the client. At a time of shrinking budgets, chief marketing officers don't know where to turn. They have little confidence that old-world agencies know how to navigate the chaos, and they don't know which newcomers to trust. "It's the most treacherous job in corporate America, blamed for everything and credited for nothing," concedes Jakeman, who notes that the average CMO tenure is down to 22 months.

With clients in a tailspin, the very role of agencies is in question. Many CMOs are shunning "agencies of record" relationships -- the plum long-term, retainer-based deals that have been the bread and butter of full-service firms. After an agency review last year, Angelique Krembs, marketing director of PepsiCo's SoBe brand, opted to work with only shops that specialized in digital, PR, or promotional work, excluding all generalist firms. "I didn't see it as us ditching a creative agency. We were going beyond traditional," says Krembs, in words that can hardly be reassuring to the old line. "We realized it was unlikely we'd find everything we wanted in one place." That's apt to become the norm as a generation of senior marketers emerges from the digital side, rather than from classic marketing educations at P&G or General Mills. For example, the recently appointed president of marketing at Sears, David Friedman, was recruited from the digital agency Razorfish.

Squeezed by clients, agencies are also beset by a host of new competitors attacking from every direction. Technology companies have commoditized much of the "art" of that old assembly line. Producing an ad doesn't have to be an expensive multiperson affair these days, given that commercial-quality high-definition video can now be shot on cameras that cost less than $2,000. Consultancies like Accenture and Sapient are branding themselves as digital agencies. Tech titans like Microsoft, IBM, and Google are rolling out tools that replace agency analysis with digital measurements that can predict the best targets for a campaign and quantify its success. Google, arguably the industry's most polarizing frenemy, is helping agencies use its planning and analytics tools, while at the same time automating their media-buying jobs. "With infinite ad inventory on the Internet, you just can't have people do [media planning] anymore," says Dan Salmon, an analyst at BMO Capital Markets who covers advertising and marketing services. "It's now being done by a piece of software."
Technology startups also digitize away agency roles. MediaMath, DataXu, and X + 1 are racing to deliver automated ad-buying platforms; Buildabrand.com has reduced the branding process to an algorithm that produces customized logos in five minutes; Lotame is doing audience data management, which tracks every dollar spent and how it performs. Web 2.0 stars like Facebook and Foursquare are starting to work directly with brands, sometimes cutting agencies out of the conversation entirely.

The attack on the industry is also coming from agency expats. Former Crispin Porter + Bogusky exec John Winsor recently opened Victors & Spoils in Boulder, Colorado. Victors & Spoils has virtually no staff and "operates on the principles of crowdsourcing" -- currently the most vilified term in the agency world. Since its launch last year, Victors & Spoils has lured marketers at General Mills, Oakley, Virgin America, and Harley-Davidson, which just ditched its agency of record of 30 years. "Many agencies are hanging on to this idea that creativity is theirs to own and sell," says Harley CMO Mark-Hans Richer. "[Victors & Spoils] offered a great place to start versus sitting across from a creative who spent weeks crafting the perfect idea and gets upset if you want to change a word." Says Victors & Spoils chief creative officer Evan Fry, who's also a Crispin alum: "I think the new model is scary because all of us in the ad industry want to feel, at least from a creative point of view, that we have something no one else has. So if you're really good at it, you had to go to Creative Circus or Portfolio Center; you had to pay for it. Then you had to toil to get into a good shop. Then you had to get lucky to get on the good briefs. For someone to come out and say, 'We think a lot of people can offer great ideas' means, 'What, I'm not special?' "

For the enterprising client that can see clearly through the chaos, this new world holds promise. Kraft, for instance, has assembled a growing Rolodex of 70 new specialist partners. This isn't some fringe brand -- it's Kraft, the country's largest food marketer, which spends some $1.6 billion on marketing every year. The company is so open to new thinking that it recently hired a startup called GeniusRocket to develop a new campaign for the relaunch of its Athenos Hummus.

Continue reading the article at http://bit.ly/axWMwh

Starbucks’ Serves Up a Very Dumb Idea

What could Starbucks possibly be thinking?

The international coffee powerhouse has just served up a worse-than- decaffeinated branding strategy by choosing to eliminate its entire name from its logo.

The original logo had the word "Starbucks" on top of a green mermaid image and the word "Coffee" below. Both words were in large letters, all capitalized. Now those words are gone and only a slightly souped-up version of the green mermaid remains. If they wanted to emphasize a new side to their company, Starbucks could have just gotten rid of the word "COFFEE." But get rid of both?

This is one of the stupidest moves I’ve ever seen from an established company.

Remember when Prince changed his name to an unpronounceable symbol (that some later referred to as “Love Symbol #2”)? That didn’t last long. I guess we can call Starbucks’ move its Prince-identity crisis.

My guess is that the inmates have taken over the asylum and decided that the company is simply so well known that a graphic treatment can tell the whole story. And, also, that eliminating the words will permit expansion into new business areas.

This brand confusion seems to originate at the top, where Howard Schultz, Starbucks' long-time CEO, seems on the one hand to be talking about a new future for the company as it approaches its 40th anniversary, but simultaneously insists that the company's aim remains the same: to be the number one purveyor of high-quality coffee in the world.

This much I can guarantee. The wordless logo won't provide Starbucks or anyone else with any clarity, it will reduce recognition and the all important repetition of its name in the marketplace and the minds of consumers –it’s a fundamental branding mistake.

Current and future customers have been totally forgotten in this self-absorbed decision. If the deluge of angry comments about the logo change is any indication, current customers worry that the company they have come to love has abandoned its roots. Future customers risk simply being confused about what it is the company does.

Why? Because it is incredibly hard to build brand name recognition in our competitive world and it is the height of arrogance to ignore the importance of your brand's name and how your customers perceive you. --After all, we think and say the WORD "Starbucks"... we don't think and say, "green blotch with mermaid symbol." In the marketplace, it's the Starbucks’ name that matters.

Logos have to use our common language. You can’t foist some private code onto people just because you think it’s cool, clever or memorable. Logos must re-enforce and support how the customer relates to your brand. Logos are there to remind present and future customers of the brand and the products associated with that brand. Simple...straightforward...and...repeatable is the name of the game. Moreover, in an important way, logos aren’t really even the company’s property alone –they belong to the customer.

Federal Express wisely adapted to how people referred to them when they shortened their official name to "FedEx." Everybody was already saying it anyway. Kentucky Fried Chicken did the same by abbreviating to KFC. People encounter a brand name and a logo and they it make their own.

Good branding is alive to actual needs and customer behavior not the product of pie-in-the-sky concepts that might sound great around the corporate conference table or at high-end spitball sessions.

No one referred to Prince as "Love Symbol #2" or "the artist formerly known as." And no one refers to Starbucks with something other than the name Starbucks.

Coca Cola, which took a wrong marketing turn with New Coke but recovered, has never pulled something as dumb as this --and if anyone could get away with no name, Coke could –after all, its classic red and white colors even shaped our modern image of Santa Clause.

Procter & Gamble was originally a candle maker but that didn’t stop them from branching out into a multitude of products including soap and food without changing their name. Their key was brands. To the extent that the P&G name helps one of their products, they use it, but if it doesn’t help, they don’t and the product stands on its own name.

Bottom line, people buy brands, not companies. Right now, Starbucks’ main brand territory is its coffee chain and related-coffee products. Nothing stops them from launching products without their name attached.

Moreover, there’s significant marketing precedent for using a great company name to introduce and support a new product in the marketplace. Take Kellogg's. Kellogg's makes brand-by-brand decisions on using its name. Cereals get the Kellogg’s monikers, upscale Carrs crackers don’t. Kellogg’s is a food portfolio company and their great name usually adds values to their brands.

Unless Starbucks plans on becoming an anonymous global corporate behemoth owning everything from uranium mines to dentures and occasionally selling coffee, they need to stop this madness now.

Fact is, if your name is recognized favorably don't change it. The first rule of branding is: do no harm.

Blackwater Security Starbucks is not. Starbucks might have gained some short-term publicity with this logo move, but the long-term consequences simply aren’t the worth the current buzz.

And, remember, it's always easier when you keep marketing and branding in mind.

Courtesy of John Tantillo from Fox News:
http://www.foxnews.com/opinion/2011/01/07/starbucks-serves-dumb-idea/

Study Reveals shift as Social Networks Become ‘Social Entertainment’

Research launched today by Edelman, the world's largest independent public relations firm, shows that consumers believe social networks provide a higher value experience compared with other forms of entertainment. Edelman's annual Trust in the Entertainment Industry survey, now in its fourth year, also reveals that the Internet, as a source of entertainment, is second only to television. The survey of 1,000 18-54 year olds in the United States and United Kingdom analyzes the issues that influence consumer trust in entertainment companies.

In the US, the rise of the Internet as a frequent source of entertainment is most dramatic in the 18-34 group, rising from 27 percent in 2009 to 42 percent in 2010. In the US, 32 percent of 18-54 year olds look most frequently to the Web for entertainment (compared with 58 percent watching TV). The Internet also ranked second in the UK, with 30 percent turning to the Web most frequently, compared with 57 percent watching TV.


Social Entertainment

Seventy-three percent of 18-24 year olds in the US and 61 percent in the UK see social networks as a form of entertainment. Fifty percent (US) and 56 percent (UK) of respondents aged 35-49 also consider social networking sites as a form of entertainment. Despite the growth of social entertainment, consumers do not currently identify Internet brands as entertainment companies.

While social networking sites may not yet be recognized as entertainment companies, they are leading the way in terms of adding value to the consumer experience of entertainment. The majority of respondents in both the US and UK felt that social networking sites provide better value than music, gaming and television companies.

Gail Becker, President of Edelman's Western region comments, "While not surprising that TV tops the list, seeing the Internet rank second as a source of entertainment - evolving from its origins as a source of information - is significant. We believe that all companies today exist in this new era that we call social entertainment and we will continue to see its influence on how consumers and companies engage with entertainment and with each other."

The study also reveals consumer attitudes towards the exchange of personal information in return for free entertainment. Eighty nine percent of those in the UK say they would not be willing to give up personal information to access free entertainment.

Jonathan Hargreaves, Managing Director of Technology, Edelman, Europe adds: "The study shows that consumers do value privacy but perhaps they are not considering the personal information that they already distribute freely via social networks. Social entertainment impacts the role of privacy – both in how individuals behave online but also in terms of how entertainment companies use customer information. This new era has created a shift in the trust dynamic and businesses must consider the implications of this in order to nurture future trust in a brand."


Freedom of Content

In the 2008 study, free content was the dominant issue. This year's study shows it is the ability to access content across devices, not cost, that is of significance to consumers.

- 65 percent of US respondents think it is important that they are able to access their entertainment on a number of different devices

- 59 percent of UK respondents think it is important that they are able to access their entertainment on a number of different devices

- 58 percent (US) and 53 percent (UK) of consumers state they would be willing to pay for content if they were able to move it across devices

Spending

Spending on entertainment continues to stay strong according to this year's results.
On average, US respondents spend $47 per month on entertainment content
On average, UK respondents spend 25 pounds Sterling per month on entertainment content
83 percent of US and 76 percent of UK consumers state that ease of purchase influences their decision to pay for content
In the UK consumers who think social networking is a form of entertainment are more likely to have spent more money on entertainment in the last year


Impact on Trust

- Those that state that they trust entertainment companies are also more willing to pay for content

- Quality (65 percent US and 58 percent UK) and Pricing (65 percent US and 58 percent UK) have the most impact on consumer trust

- 32 percent of UK consumers and 28 percent of US consumers trust entertainment companies
Trust was at a three-year high among those aged 18-34