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  • Tech and its cults of personalities

    Tech has always played a key role in humanity, whether it is putting a man on the moon or literally saving the world when we were in a footrace with the Nazis to split the atom. So this tech universe sometimes seems like magic, for example, the ability to send a message into the universe and understand the world that we live in can border on fascinating and enthralling to the common man. It's sometimes no wonder that tech CEOs can sometimes seem otherworldly, and sometimes even godlike. We've seen this happen in Theranos with Elizabeth Holmes, and now with FTX and its overhyped CEO, Sam Bankman-Fried. The most important part here of realising is how marketing and founder branding was ultimately responsible for both companies' sense of legitimacy and played a huge role in their user growth until finally, the overhyped, unsustainable image came crumbling down. It looks like FTX's downfall would lead to a riveting book, written by none other than "The Big Short" author Mike Lewis, where I would surmise that sordid details of how FTX's lavish marketing and celebrity sponsorship spending would probably read as a measure of the hubris of Sam Bankman-Fried. Ironically even more so considering that just a few weeks ago FTX was valued at $32 billion US dollars. Before its collapse though, the FTX founder and chief executive had garnered a reputation for being one of the loudest voices of the Web3 industry, being active on social media, politics and in the press. The funny thing is that Sam Bankman-Fried told everyone what he was doing. It was no secret about his appetite for risk, and he even went so far as to outright say that quite a number of associated crypto exchanges were "secretly insolvent". Even when declaring his net worth to be a whopping $10 billion, he was frank enough to say that it was in "mostly illiquid" assets, and in interviews with Forbes and Bloomberg, he didn't disagree with the idea that he was in the "Ponzi business". But with the ecosystem of hope and awe that was built around him, few really heard what he was actually saying, so much so that one of the titular investors, Sequoia Capital finally wrote its $213 million FTX investment down to $0. This was not according to the plan But that was not how it was meant to go, according to the legions of crypto fans, and big-name Silicon Valley venture capitalists, who were so busy heaping praise upon this demigod of the industry, as they continued to fail in ensuring his business had an iota of legitimacy. With the embrace of philosophies like effective altruism, promoted by social media influencers like Nas Daily, Sam employed a masterstroke of adding morality to his ruthless and precarious money-making. This rare façade of an altruistic billionaire was maintained by lavish spending on professional sports teams, stadiums and donations to multiple charities. Playing both Washington lawmakers, with large sums of political donations he managed a workforce who truly believed (or rather pretended to) in Bankman-Fried's mission to earn stupendous amounts of money only to give it away. On one hand, the famed crypto leader told Congress that the industry needed "disclosure and transparency", and on the other hand, his myriad of secrets was held closely between friends, leaving even the highest levels of his executives completely in the dark, on the true nature of FTX's financials. While the book will definitely turn out to be a riveting read, this is a morally challenging example of what effective branding and marketing could do. Bolster the reputation and the outlook that a brand and/or company is doing so well, that it can afford to tell you about it. Ask the many normal people (and professional investors), who have lost enormous amounts of their money, some of them losing their entire life savings altogether, about whether such a company that didn't have their business fundamentals sorted, should even be allowed to advertise so extensively. Too good to be true Rings absolutely true here. I mean does the sound of a Bahamas-based firm run by a 30-year-old, with no actual board of directors, that deals in trading complex and rather unclear digital financial instruments, sound just a tad bit risky to the casual observer? It is an understatement to say that the company spent heavily on marketing, some hundreds of millions of dollars with publicly reported tags. In the second half of 2021 alone, FTX signed deals with the NBA's Miami Heat, Major League Baseball, the Golden State Warriors, the Washington Wizards and Capitals, the F1 racing organization and finally esports giant TSM. A basic question, how could a company that hadn't even existed for three years, sign a 19-year contract with the Miami Heat? That's a grand total of $375 million in the above commitments, and that doesn't even include any of the fees given to individual sports athletes or their sponsorships, since they weren't publicly disclosed. One particularly well-aged Super Bowl spot from 2022 cast the comedian Larry David as a nay-sayer to revolutionary inventions like the wheel, coffee, the American experiment, Nasa's lunar module, and then eventually, FTX as an easy way to get into crypto. Aaaaah, I don't think so, and I'm never wrong about this stuff. Ever. This was expensive advertising played in prime-time spots during the Super Bowl in 2022, averaging $233,000 per second! Legitimacy through advertising? FTX's most visible promotional efforts were surrounded by sports. Umpires in Major League Baseball all carried the FTX logo on their shirts, Tom Brady and Gisele Bündchen were also involved in multiple ad spots. Steph Curry, and Naomi Osaka were key ambassadors, and in Formula One, Mercedes-AMG Petronas were partners. This was no shot in the dark either, Bankman-Fried even shamelessly noted that the high-reach sports marketing effort worked tremendously in introducing the brand to a new consumer market. Clearly, this has penetrated more than everything else we've done combined, in terms of people's perception of us And herein lies the danger, just like there is no overall regulator for crypto exchanges, the lack of ethics and a moral compass abound in advertising. It's hard to pin down, should we blame the advertising agency? Because after all they were just servicing the client with creative ideas, and if the senior management of FTX itself had virtually no clue about the major problems abound at FTX, how could an external service provider like an ad agency know? But if anything else, this lesson definitely teaches us the dangers of how effective branding and marketing can be weaponised by a brand and executives with no moral compass...

  • From the worst to the best commercial in the world

    In 1983, a small ad agency Chiat/Day created a commercial that one Apple executive at the time referred to it as, "the worst commercial I've ever seen." Today, close to 40 years later, it is considered one of the best ad commercials ever created, and has inspired or down right been copied by Fortnite and others. This is the story of the ad that ignited the imagination of millions worldwide and yet continues to inspire ad professionals to this day. Its 1983, Apple was preparing to launch a product that had been in development for over 5 years. The Macintosh Computer... It was built to be the first mass-market personal computer systems with a graphical user interface, a built-in screen and a mouse. A far throw from the computers of that day, which were either typographical focused DOS interfaces or UNIX interfaces, where the utility of such computers were only targeted towards computer engineers or their like. Steve Jobs believed that the Macintosh computer system would democratize the access of the public towards computer systems. It would give the average person access to technology that was previously reserved for research institutes, NASA, governments and super large corporations that could afford this expensive piece of technology. This new product or piece of technology was revolutionary and a damn big deal, the product launch needed to be even bigger. So, Steve Jobs called on Lee Clow and the Chiat/Day ad agency to develop a campaign for the product launch. Now remember this was before the advent of social media, Google and any sort of digital marketing. The Superbowl ad spots were coveted by the entire advertising industry, and the half-time ads were often better than the game itself. With costs averaging around $5.6 million for 30 seconds of view time, these halftime ad slots were one of the most coveted and expensive places to advertise in the world. So when Chiat/Day determined that a commercial during Super Bowl XVIII would have the widest reach, the challenge had just begun. But, that was dependent on the commercial really standing out, it needed to capture that attention. I want to do something great Clow very early on understood Job's vision for the launch, "I want to do something great. I want to do something that nobody else would do." So with that limited brief, the agency got to work and began brainstorming ideas, and it wasn't long before the commercial had some premise. It would be inspired by George Orwell's dystopian novel, "1984". In it, technology is used by the government and corporations to control the masses. Steve Jobs, on the other hand was an ardent believer that the Macintosh computer could be used to empower the individual. So Clow and his team were able to convince the legendary director, Ridley Scott, to join the project. As Scott said later about the storyboard pitch, "This was such a dramatic idea that I thought it would either be totally successful or we'd all get put in the state penitentiary." The commercial was then shot in London with an unprecedented production budget of approximately $900k. Scott wanted to tell the story of a dystopian future where the masses are held prisoner under a despotic government, with the set being dark, grey and extremely industrial. Dozens of identical looking men with grey uniforms march towards an auditorium. With everyone being transfixed by a man on a large screen speaking about the "unification of thoughts". Suddenly our hero runs into the room. She hurls a sledgehammer and destroys the screen. A bright flash of light... A bang... And an announcement from the narrator. On January 24th, Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like 1984. After the filming ended, Clow presented the commercial to Steve Jobs and then CEO John Sculley. They both loved it. Sculley then approved the agency to purchase 90 seconds of ad time during the Super Bowl for a total of $1.5 million. Oddly, and very unexpectedly, few people seemed to agree with Jobs and Sculley. And the commercial performed horribly in focus groups. Apple's entire board of directors hated the commercial - The company was launching a product to compete with IBM and the ad didn't even show what the hell the new product was! The board even went so far to demand that the agency sell back the ad spots to someone else and recoup their losses. But Jobs and Chiat/Day still firmly believed in the commercial. So, the agency sold 30 seconds to another advertiser. But, with a wink and a nudge, Clow "conveniently" couldn't find another buyer for the other spot. Masterpiece for a revolution And, on January 22, 1984 the commercial ran during the Super Bowl XVIII. Their firm belief in the creative output that even the board of directors couldn't see, paid off and within days local cinemas and TV stations continued to bombard the air waves with the unique ad. Within a record 100 days, Apple sold 72,000 computers, thus generating $150 million in net sales. Advertising legend Regis McKenna would later refer to the ad as "more successful than the Mac itself." Apple's masterpiece went on to win the best Super Bowl spot in 40 years and was awarded amongst the greatest commercials ever made. Cleverly Steve Jobs used the blue tones of the ad to subconsciously connect IBM with the dystopian future of the ad. As he said in his own words: It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers, initially welcoming IBM with open arms, now fear an IBM-dominated and -controlled future. They are increasingly turning back to Apple as the only force that can ensure their future freedom. IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?” The greatest impact But the greatest impact of the "1984" commercial was that it changed Super Bowl ads forever. Apple inadvertently invented the Super Bowl commercial as we know it today - A massive, one-time production meant to capture attention and inspire awe. Every single big budget Super Bowl commercial since then has been an attempt to replicate that magic that Clow and his team were able to create for Apple. To this very day, the "1984" commercial continues to be the bar that many other companies measure their ads against. Ironically there have even been copycats, like Fortnite with their inspired shot which was aimed as a direct attack on Apple. Apple's App Store policy must allow in-store app payments to be handled through Apple, and revenues of 30% are directly grabbed by Apple. In fact it went so far that Apple removed Fortnite from the App Store, effectively becoming the very corporatist giant it started out disrupting. And in the same spirit of defiance, it ends exactly like the Apple ad did, but with one key addition. Epic Games has defied the App Store Monopoly. In retaliation, Apple is blocking Fortnite from a billion devices. Join the fight to stop 2020 from becoming “1984.” But the symbol of empowerment remains, and Apple yet remains a tool for combating conformity and asserting originality. Which begs the question, you as brand managers or your brands conforming, or are you willing to make a stand and make some noise. If so, lets talk!

  • Building a formidable brand community

    From 1973-1983, Harley Davidson's market share went from 78% of the US market to 23% as Japanese manufacturers flooded the market with high quality, low priced bikes. In response President Reagan introduced a new protectionist trade bill, granting Harley Davidson protection against foreign brands that sought new markets in North America, by introducing entry duties up to 49.5% of their wholesale value. While the Gephardt trade bill granted certain protections to Harley Davidson, the company realised that it needed another edge, and started to use the emotional appeal that hooked customers into something bigger than just technology/features. The real power of Harley Davidson is the power to market to consumers who love the product. The adventurous pioneer spirit, the wild west, having your own horse, and going where you want to go - the motorcycle takes on some attributes of the iron horse. It suggests personal freedom and independence. This come back from a near extinction refocused Harley Davidson into its loyal community and galvanized the brand so that twenty five years later, it held a top-50 global brand valuation at $7.8 billion. A group of ardent enthusiasts that was focused around the lifestyle, activities and ethos of the brand, enabled a reorganization of the brand's purpose to focus on its community, building it to be one of the earliest and largest brand communities the world admires today. Think about it, automotive brands have tried (some successfully) to take a page out of the Harley Davidson playbook and capture that community within their own brands. Enfield (an Indian brand), boasts a smaller enthusiast base, and so does numerous automotive brands like Mercedes, Audi, Lamborghini, etc. In today's turbulent world, people are hungry for a sense of connection: and in leaner economic times, every company needs to find new ways to invigorate enthusiasm into their brand and outreach activities. But while companies try and try to aspire to customer loyalty, experience and brand authenticity that robust communities deliver, few really understand what it takes to achieve such benefits. Much worse than that, companies hold serious misconceptions like a brand community exists to serve the business, or that the brand community must be tightly controlled, moderated and limited. However the reality is far from that. An effective brand community exists in service to its members, who participate for a variety of reasons and motivations, from building relationships, cultivating new interests and contributing to each other and society at large. Secondly a brand community always defies management control. Effective brand stewards create environments which people and communities can thrive and excel, somehow designing multiple experiences that appeal and cater to various audiences. So let's get started in dispelling these popular myths around brand communities, so that you have an exact measure of what it takes to build and invigorate your own brand community. Brand community is a marketing activity This couldn't be farther from the truth. The reality is that brand communities is a key business function and isolating community building efforts within the marketing purview is a mistake that is going to cost you down the line. Following the 1985 buyback that saw Harley Davidson leverage control back of its company, the management reformulated the competitive strategy and business model around a thriving brand community that was rooted in the organizations' business ethos and philosophy. Instead of focusing on just the marketing function of the organization, Harley Davidson re-engineered every aspect of its organization - from its culture, operating principles to its governance structure to drive is community strategy. The 'brotherhood' of riders, united by a shared ethos, offered Harley a means to strategically reposition itself as the only motorcycle manufacturer that understood bikers on their own terms. To reinforce this community forward positioning, and further strengthen the connection between the company and its customers, Harley ensured that all community outreach functions were staffed with employees rather than contractors. This had a unforeseen effect, many employees became riders, and many riders become employees. Executives were expected to spend face-time with customers, thus allowing them to close the feedback loop, and bring valuable insights into the boardroom. This philosophy was further reinforced with new employee orientations, and all brand/company decisions were rooted in the community's perspective. Thus making the community the true owner of the brand and the company executives and staff, their stewards. Brand Community exists to serve the business Executives often tend to forget that their consumers are actually people with a multitude of needs, wants, interests and responsibilities. Building a community doesn't mean that you focus on driving up your sales numbers first, but by helping people to truly meet their needs. The status quo doesn't matter with brand communities, and is not about trying a new identity through brand affiliation, instead people participate in communities for a variety of reasons - to find emotional support, connect with like-minded people, explore ways to contribute to the greater good, and to cultivate their interests and skills, just to name a few. Decathlon in its early days offers an example of how a community can give rise to a brand. For instance, the retailer consciously decreases profit margins of its products year on year to pass on the benefits to its buyers. As Olivier Robinet, CEO of Decathlon Australia said, What I have in mind is to sell at the lowest price we can. A lot of companies think exactly the contrary, they want to sell at the highest price they can at the highest margin. We want to … sell at the lowest margin we can. Our margin decreases every year and that’s a big topic for us. It is a brand that wants to sell at the lowest possible profit margins, a brand that measures the effectiveness of their business objectives by looking at how happy its customers and employees are and yet, it has outpaced competitors (established brands) in the most complex and demanding markets. While the company localizes its expansion strategy to suit the needs of the country they are setting their foot into, there are a few parameters that they don’t compromise on. The store space is one such factor. When retail spaces are shrinking and the world is moving online, the sports retailer chooses to open outlets that are the size of a warehouse. The size of the retailer’s flagship store in Emeryville, California is 47,000 square-feet! "Third place" brands like Gold's Gym and Starbucks tap into this sentiment by providing brick and mortar venues that foster interaction. In these cases, brand loyalty is the reward for meeting people's needs for the community, and is not the core motivation for the creation of the brand community. Robust communities take a life of its own. They are not built on the brand's reputation, but on an understanding of their members core values and motivations. Putting the brand second is virtually an impossible task for a marketer to do, but it is absolutely essential if a strong community is the ultimate goal. Build the brand and the community will follow There are three basic forms of community affiliation: pools, webs and hubs. Really effective and meaningful community strategies continue to combine all three in a mutually reinforcing way. Members of pools are united by shared values or goals (think vegan or Apple devotees). Brand management practices have been rooted such that managers in a pool based approach focus on communicating a clear set of values that connect your potential customers to the brand. Unfortunately, pools only deliver very limited community benefits. People tend to share an abstract and sometimes vague set of beliefs but build few interpersonal relationships. Meaning that over time engagement drops, and community members eventually drop out of the pool. The solution then is to focus on building webs and hubs to further strengthen and build the community. Web affiliations are based on strong one-to-one connections. These are by far the strongest and most stable form of communities because the people involved in them are bound by many and very varied relationships. Looking at a key example, the Harley Davidson museum for example, fosters webs of interpersonal relationships on their campus. As museum visitors peruse through the exhibitions, they come across these custom inscribed, stainless steel rivets that are commissioned by groups or individuals. As they reflect on the stories told by these rivets, they engage with each other and soon find themselves comparing interesting inscriptions, engaging in interesting conversations and building connections. Often leading to lifetime friendships, the museum through rivet walls strengthens the Harley brand pool by building webs around and in it. Members of hubs are united by their admiration of an individual (think Tony Robbins or Deepak Chopra). The hub is a very strong, though unstable form of community that is completely dependant on the central figure. Once the central figure is no longer present, the hub often breaks apart. However hubs can help communities acquire new members who hold similar values. Hubs can also be used to create or strengthen a brand pool, a strategy Nike has used since its inception, by associating with stars like Michael Jordan, Luka Dončić, Lebron James and many more. To build stable communities, hub connections must be bonded to the community through webs. Brand communities should be a form of hero worship for true brand advocates This couldn't be further from the truth. Smart companies embrace the conflicts that make communities thrive. Communities are always inherently political, and even with like minded people, there is bound to be conflict. Playstation gamers dismiss Xbox players, and PC players dismiss both. Apple enthusiasts hate Microsoft and Dell with a passion, and Tim Horton's lovers shun Starbucks and vice-versa. Dividing lines are a definer within any community, where degrees of passion and loyalty separate the hard core fans from the posers. Community is often than not about rivalries and lines drawn in the sand. Firms can reinforce these rivalries to engage fans to draw others to fan the flames. Pepsi and Coca Cola have always had a long rivalry that has taken on various forms in advertising campaigns. A group's unity is formidable when such conflicts are brought into the limelight. Some companies make the mistake of downplaying this rivalry instead of effectively using it. Take Porsche for example, its 2002 launch of the Cayenne SUV drew lines in the sand by past owners of the 911 refusing to accept it as a 'real' Porsche. Porsche tried to stem this divide, with a campaign that was complete with roaring engines, aimed at demonstrating that the Cayenne was a genuine member of the acclaimed Porsche family. But the entrenched community was not convinced. Smart managers know that singing praises will not force warring tribes to unite. Communities become stronger by highlighting, not trying to erase the borders that strongly define them. Outspoken leaders build strong communities Leaders and Evangelists play a role in any form of networking. They spread information, influence decisions and help new ideas get traction because they are outspoken by nature. But they are a misguided approach to community building. Robust communities establish their own culture by enabling everyone to play a role. From Burning Man to car clubs in your locality, successful communities give members opportunities to take on new roles, alternate between roles and further the community strength by introducing it to new audiences. People need to be offered a variety of roles, from active to passive, in small groups or large. Members of strong brand communities need to stay involved and add value by wearing multiple hats, and becoming more intimate with the community they are involved with. Successful brand communities are tightly managed and controlled. Control has been the norm when it comes to community management. Hasbro's suing of fans for publishing content based on its brands, is a clear cut example of community managers putting corporate interests over those of their customers or their community. Such efforts have led to much debate about how to control or assert over brand communities. But that's the wrong question. Brand communities are not corporate assets so control is always an illusion. But that doesn't mean brands need to forget their responsibility to their community. Effective brand stewards are your community's co-creators and by nurturing and facilitating this community, they are creating conditions for it to thrive. Companies build effective communities through a design philosophy that replaces control with a balance of structure and flexibility. Like the Nike+ online community, that cultivates peer to peer support and interaction by encouraging members to challenge and even trash talk each other. This has led to multiple offshots, the Nike Run Club, Basketball Club, Workout Club and so on, creating sub communities that thrive around common interests and goals. So do you think you are prepared? Almost every brand can seriously benefit from a community strategy, but not every company has the capability to pull it off. It takes a certain boldness to examine everything from company values to your organizational design. And it takes a certain degree of fortitude to meet people and engage with them on their own terms, give up control, and accept conflict as a part of the package. But the results are clear, a strong brand community increases customer loyalty, lowers marketing costs, makes your brand more authentic and opens up dialogue with your consumers on how to grow the business. The truth is very simple, when you get your community right, the benefits are irrefutable. So are you ready to start your own brand community, if so, get in touch with us.

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