Category: Mindless33703c5669

Selling Social Issues

6/5/2022

by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Besides being a tasty treat that almost everyone enjoys, ice cream is a ‘celebration food’ served at birthday parties and used to reward kids' sports team success. So, why did Walmart’s new frozen dairy flavor created to celebrate Black Americans’ emancipation leave a bad taste in so many people’s mouths? Moreover, what can the failure teach organizations about commercializing social issues?

In its ongoing search for profitable new products, the world’s largest retailer recently cooked up a novel plan—tap into Black Americans’ and others’ celebrations of Juneteenth, the federal holiday commemorating the end of slavery in the United States.

Walmart’s strategy to support the celebration involved a line of party products, including napkins, plates, and drink koozies branded “Juneteenth” using the black, red, and green colors often associated with Black liberation, and carrying the tagline, “It’s the freedom for me.”

Walmart also created a special food worthy of the branded partyware--Juneteenth Ice Cream, a frozen concoction resembling swirled red velvet cheesecake. However, it wasn’t long after the company launched its Juneteenth line that social media began to skewer it, as shown in these sample tweets:

“Walmart needs to do better. It shows the lack of understanding of the pain and suffering that made Juneteenth come about. It is absolutely insulting to have this special holiday turned into some commercial product.” (@The Next Ceiling)

“This isn't "wokeness", it's corporations trying to profit off of minorities by acting like they care about us.” (@DeadpoolLIFE69)

“So let me get this straight 🤔, y’all made more money keeping us enslaved after the Emancipation Proclamation, and NOW that it’s a recognized Federal Holiday y’all want to make MORE money off the same culture you enslaved??” (@MoodaSchmooda)

“White America: Mmmm...best thing we can do is some Walmart Juneteenth ice cream that we'll profit off of.” (@RedeemRobinson)

In the face of the backlash, Walmart made a quick pivot and pulled its Juneteenth-themed ice cream. It also apologized:

“We received feedback that a few items caused concern for some of our customers and we sincerely apologize. We are reviewing our assortment and will remove items as appropriate."

Companies are increasingly ‘hitching their wagons’ to social causes’—an alignment that many people prefer including 83% of millennials. Consequently, the approach often proves profitable. Furthermore, during recent years filled with race-related violence, many consumers expect companies to show their support for racial justice.

So, wasn’t Walmart right to support Black Americans by launching a line of Juneteenth products?

Although the Twitter feedback above is enlightening, social media responses often prioritize ‘quick and pithy’ over ‘thoughtful and measured.’ For that reason and to help me better understand how Black Americans might perceive Walmart’s tactics, I reached out to a colleague at my university who’s well-qualified to offer an informed perspective.

Dr. Todd Allen is Vice President for Diversity Affairs and Professor of Communication at Messiah University. He’s also the founder of The Common Ground Project, “a community-based non-profit dedicated to teaching the history of the Civil Rights Movement in the United States.”

When I asked Allen about Walmart’s Juneteenth product line, he shared these insights:

“I think the timing (a new holiday) and some people still feeling burned by the promises of 2020 (which haven’t necessarily resulted in the hoped-for transformative change) just made this too soon. The fact that they pulled [the ice cream] so quickly also makes me wonder who was in on the decision making in the first place. It seems like if the TV show Blackish were still on the air, this would be an episode.”

Allen also offered one word that captured much of what he shared, “context.” For instance, he mentioned that Walmart is not known for being progressive on racial issues. He also said that the company’s approach “felt just a bit too commercial and too opportunistic.”

So, what if the context were different? For another company with a more positive race-related track record, offering different products with better messaging, public perceptions may have been more positive.

Allen’s response and the idea of context got me thinking: Beyond just Walmart and Juneteenth, are there principles that all organizations should follow when connecting with social causes? There undoubtedly are many, but here are perhaps three of the most important questions to ask:

1. What’s the company’s track record on the issue? Whether it’s an individual or an organization, we’re more likely to trust the motives of someone who has already demonstrated genuine concern about the social issue at hand. In the case of Walmart and race, results have been mixed.

On one hand, in June 2020, the company pledged $100 million over five years to address racial disparities in the U.S. However, in January of 2022 a black correction officer sued Walmart for racial profiling when he was wrongfully accused of shoplifting, then in February, the U.S. Equal Employment Opportunity Commission (EEOC) sued Walmart because “Walmart violated federal law when it gave a Black female employee an unsanitary lactation space based upon her race.”

In contrast, Fundraising for a Cause, the world’s largest manufacturer of awareness products, enjoys strong credibility when it comes to earning income through social causes, partly because it’s owner and CEO, Karen Conroy, founded the company after her sister was diagnosed with breast cancer and also because her company passes significant profits onto her customers, e.g., they can buy 50 silicone bracelets for $40, sell them for $5 each, and net $210 for their cause.

2. What’s the nature of the product? There’s a place and time for most products; the key is to ensure that the product personality aligns with sentiments surrounding the social issue.

Juneteenth is certainly a cause for celebration but that’s because it marks the end to several centuries of enslavement. As such, the holiday understandably evokes mixed emotions that aren’t necessarily in keeping with an all-out party atmosphere, or at least not one worthy of a namesake flavor of ice cream. Would it be right to have a dairy treat marking the end of the Holocaust?

For comparison, Mennonite Central Committee (MCC) is a nonprofit organization that works in over 50 countries around the world to provide disaster relief, foster economic development, and promote peace. Among its biggest fundraisers are quilt auctions, which raise hundreds of thousands of dollars each year. Quilts are items of beauty and comfort that complement MCC’s three-fold mission.

3. Is the company adding value? Whether it’s a single salesperson or an entire organization, the measuring stick for any marketer is the value they add in an exchange. No company should extract more value than it gives.

It’s hard to know how much money Walmart would have made on the Juneteenth ice cream and other products. Knowing Walmart’s typical pricing approach, the profit margins on the items were likely low; however, selling them across more than 5,300 U.S. retail stores, even modest margins would have added up quickly.

Walmart also likely hoped to pocket goodwill from the products; however, the biggest grab by Walmart was its attempt to trademark (TM) Juneteenth, as if it had created the name, so that only it could sell Juneteenth branded products.

On a positive side, Walmart consumers could purchase the branded products at reasonable prices. However, it’s unlikely that Juneteenth-imprinted paper products and ice cream would deepen anyone’s understanding of and appreciation for the momentous historic event. If anything, Walmart’s products may have trivialized it.

Other companies have made money, in some cases very large amounts, from marketing race-related products; however, many times they’ve added extra value through education.

A good example of such value-added is the feature film Selma, “a chronicle of Dr. Martin Luther King, Jr.'s campaign to secure equal voting rights via an epic march from Selma to Montgomery, Alabama, in 1965.” An Academy Award nominee for best picture, the movie grossed over $66.7 million worldwide on an estimated budget of $20 million.

Selma was very profitable for Harpo Films and the other production companies that made the movie. However, those who watched the film also ‘profited,’ not just from two hours of entertainment but from a better understanding of a very important historic event.

As Allen suggested, context matters. Like others, he wondered why Walmart didn’t instead promote a Black-owned ice cream brand, Creamalicious, which it was already selling in its stores. Such an approach would have been a better context in at least two of the three ways described above.

Unfortunately, however, Walmart tried a more self-serving strategy that quickly melted. So instead of celebrating, the company is doing damage-control because of its “Single-Minded Marketing.”

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Will Heinz’s Halloween Promotion Scare Away Consumers?

10/23/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Halloween is a time when many companies give a glimpse into their dark sides, usually with carefully created, humor-filled ads. However, one iconic consumer product company’s frightful holiday tactic brings to mind the fearful parental warning, “It’s all fun and games until someone gets hurt!” Is Heinz’s gory Halloween promotion going to bloody its own brand?

The H. J. Heinz Company merged with Kraft Foods in 2015, creating one of the largest food and drink companies in the world, with an enticing selection of edibles, from Maxwell House Coffee, to Oscar Meyer Hot Dogs, to Philadelphia Cream Cheese. With such consumer product success, Kraft Heinz obviously knows something about branding, which makes Heinz’s decision to turn its ketchup into Halloween blood even eerier.

Yes, Heinz is suggesting that America’s favorite condiment for covering hamburgers at July 4th cookouts can also be used to coat Halloween costumes to give them a gruesomely bloody appeal.

Specially labeled Tomato Blood Ketchup is just one of the brand extensions. The company is also offering “Tomato Blood costume kits, masks and premade outfits themed around mummies, pirates and more,” all available on a company microsite, HeinzHalloween.com.

A YouTube video introduces the Tomato Blood Ketchup, which the microsite further describes as “a collectible limited edition 20 oz. squeeze bottle . . . the same classic Heinz ketchup you know and love, but with a spooky Halloween makeover.”

What should we make of Heinz’s move into the macabre? First, it’s important to note that Heinz is far from the only consumer products company that has sought to tap into the revenue potential of Halloween. Other brands that have created “Frightfully Fabulous Halloween Marketing Campaigns” include:

Butterfinger: mugshots aim to convict parents who have eaten their kids’ Halloween candy to turn themselves in.
Snickers: a grown-up trick-or-treater in a bear costume insists she really is a bruin.
Temptations: the cat food company recommends that pet owners feed its treats to their felines, so their cats won’t eat them.
Nike: has created a special Halloween-themed sneaker with orange and black colors, an illuminated outsole, and a “creepy spider pattern on the insole.”
Lego, Star Wars, Disney+: have partnered to produce a series of animated shorts with clever storylines based on Halloween themes.
Reese’s: a longtime Halloween favorite, suggests that all the Reese’s that disappear during the holiday have gone on to “a better place.”
Skittles: has released a special line of Zombie Skittles in Halloween themed flavors that include Mummified Melon and Boogeyman Blackberry.

The point is that other brands’ Halloween-themed promotions are heavy on humor and light on realism. For instance, no one would actually believe the Temptation commercial’s suggestion that a housecat would eat a person.

Contrast that humorous hyperbole with the bloody realism of Heinz Ketchup, which really does resemble plasma. If the next time you’re chopping vegetables for dinner you squeeze ketchup over your hand and wail in pain, members of your household will likely believe you’re badly injured.

Heinz Ketchup acting as blood has the ability to genuinely shock or sicken people unlike any of the other Halloween promotions mentioned above. Still, whether you’re a fan of Halloween or not, much of the holiday is increasingly about scaring and nauseating people, so in that grisly context, the tomato blood ketchup is not as outrageous as it otherwise would be.

So, most people can probably tolerate the idea and image of ketchup blood—there are things even more grotesque that people watch throughout the year in movies, TV shows, and online videos. Graphic violence that was seldom seen decades ago is now much more commonplace.

Some might say it’s a good thing that more people are now acclimated to the sight of blood, but what is that desensitization doing to society? Although it’s probably true that most of us are no more likely to kill someone, how do we respond when we see real bloodshed and violence on screen or in-person. Are we as likely to be appalled and to act against it?

A few weeks ago, on a SEPTA train outside of Philadelphia, a man raped a woman while several bystanders reportedly did nothing. Of course, intervening in an act of violence is no small thing. Still, if we weren’t exposed to so much violence and bloodshed, would we react differently when we see it? Is fake blood or anything that trivializes trauma adding a little more insensitivity to our collective apathy?

Such societal impact is certainly the most significant consideration here; yet, from a business perspective, there’s another important question to ask about the Halloween promotion:

Can Heinz’s own bottom-line stomach the bloodshed?

Of course, the campaign is the company’s own doing, so surely Heinz has conducted cashflow analyses to project how much marginal revenue Tomato Blood will raise against incremental costs for things like new labels and special promotion.

It’s fairly easy to estimate that net income. What’s much harder to determine is the blood’s long-term impact on Heinz's well-established brand. To that end, the AIDA model (attention, interest, desire action) may help.

On one hand, the uniquely appalling nature of Tomato Blood has gained Heinz considerable attention, or awareness that the brand wouldn’t otherwise have, e.g., news coverage, social media shares. Similarly, the mere idea of the repulsive product piques curiosity, or interest, and likely causes many people to want to find out more, just as I did.

For some people that attention and interest might also lead to desire, or identifying a need to use the product either as fake blood or to put on burgers, as well as to action, i.e., purchasing the bottles and/or recommending them to others.

On the other hand, there’s a real risk in associating a beloved condiment with a body fluid that many people literally "can’t stand the sight of."

Between 3 and 4 percent of the population has hemophobia, or an irrational fear of blood. For these individuals, even seeing blood on television can cause symptoms such as difficulty breathing and extreme anxiety or panic.

It’s easy to dismiss a relatively small group whose reactions to blood are clinically considered “irrational.” However, the same primitive reflex that causes some people to faint at the sight of blood exists in all of us to some extent.

How many people actually enjoy blood? It seems that a visual of the vital fluid makes most people at least a little squeamish if not nauseous. Given that widespread response . . .

Why would any brand, especially one whose consumption is predicated upon appearing appetizing, want to associate itself with such strong and innately negative reactions?

Human history and Maslow’s hierarchy have taught us that the motivation to eat is one of the most basic human needs and, if given a choice, people prefer to eat things that ‘pass the eye test’ and look appealing, if not delicious.

Food companies like Kraft Heinz usually go to great lengths in ads to make their products appear as attractive as possible. Some even use little tricks, like putting a light layer of deodorant spray on fruit to make it shine or substituting shaving cream for whipped cream, which looks better in pictures.

Industry insiders know that bad food experiences and negative impressions can be very difficult to overcome. I was one of many people who were slow to go back to Chipotle after about 1,100 of its customers contracted norovirus between 2015 to 2018. Many diners are even reluctant to return to a restaurant after finding something as simple as a hair on their plate.

More than what they wear, type on, or wash with, people are understandably very particular about the products they put in their bodies. Any kind of negative association real or imagined, can be difficult to overcome. So, it’s hard to understand why the manufacturer of a very popular tomato product would plant in people’s minds a seed of dissonance that could bloom into a very ‘bloody taste in their mouths.’

It’s hard to know actually how Heinz’s Halloween promotion will play out. It might offer a nice short-term shot to income, but it may also be a blow that bruises the brand while also helping make people a little more comfortable for gore. For these reasons, the matrix type for Tomato Blood is 'MM negative' for Mindless Marketing.

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Don't Be Naïve About Native Advertising

5/22/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Christmas Story fans remember Ralphie’s excitement in receiving a long-awaited Little Orphan Annie decoder ring, only to be disappointed by the unexpected product plug: “Be sure to drink your Ovaltine.” Slipping commercial messages into media content is nothing new, but digital media have exploded that potential with more and more companies trying to make their ads look like they're something else.
Native advertising is the term used to describe “paid advertising where the ad matches the form, feel and function of the content of the media on which it appears.” Think of the approach as camouflage for commercials. Just as hunters wear green and brown to blend into a forest, native ads mimic the look and feel of their media surroundings so people don’t perceive that they’re promotion.

Native advertising has likely existed for more than a century, one of the earliest examples being John Deere’s agricultural magazine The Furrow, which contained “articles on agriculture and farming tips” alongside ads for the firm’s agricultural products. The entire magazine was, in essence, subtle promotion for John Deere; still, readers could probably easily distinguish the publication’s articles from its advertisements.

Today's native advertising is much more stealthy.

Scrolling through a Yahoo.com news feed recently, I saw sandwiched between a Telegraph article about Prince Harry and a MarketWatch piece on COVID-19, an interesting black and white photo of a woman playing pool along with the intriguing caption, “Pics Show A Gross Past To How We Used To Live.” I barely noticed in small type “Ad Autooverload” before hitting the hyperlink.

The link opened a new browser tab for autooverlaod.com with header menu items that included “Racing” and “Supercars.” The page also featured the start of a slideshow titled “Amazing Wild West Photos.” What Lamborghini’s have to do with Wyatt Earp wasn’t clear, but one could imagine that the prolonged progression of “wild west” photos enhances Auto Overload’s web metrics (e.g., time spent on the site, page views) for purpose of appeal to advertisers.

The use of such native ads has been increasing steadily with no signs of stopping. Media from BuzzFeed to The New York Times have incorporated the promotional approach, with some suggesting that native advertising “will soon become as mainstream as the TV ad.”

BigCommerce reports that in the U.S. in 2020, over $47 billion was spent on native advertising and that 62% of all digital advertising, or “six out of every 10 digital ads were native ads.” Furthermore, native ad spending is forecast to increase by 21% in 2021 to a staggering $57.27 billion.

Of course, an increase in native advertising is not a problem unless native advertising is a problem. So, why are 51% of consumers who know what native advertising is skeptical about native advertising?

The example above from AutoOverload serves as a good case for analysis. People are rightly wary of the ethics of native ads like this one because they have a propensity to deceive in two closely-related ways, which also violate Federal Trade Commission (FTC) guidelines.

1) Clickbait photo and caption: A sultry photo alongside the enticing text “gross past,” “wild west,” and “rarely seen,” represent a hard reach to reel people into something that’s likely different than what they expect, in more ways than one.

The use of these visual and verbal elements fits the FTC’s description of bait advertising: “an insincere offer to sell a product or service the advertiser does not want to sell, in order to sell something else . . . .” Again, there’s no reasonable connection between old west photos and automobiles. AutoOverload seems to be taking the somewhat deceptive approach just to increase its site traffic.

The approach can be called “somewhat” deceptive because, the website does deliver a series of old west photos; although, from what I saw, they don’t live up to the promise of “wild.” The greatest deception actually might be of AutoOverload’s advertisers. These sponsors, which include Volkswagen, probably believe they’re paying for pageviews from people interested in purchasing cars—a conclusion that likely is often not the case.

2) Subtle sponsorship: Most of us have regretfully clicked on a sponsored article or post thinking it was an objective news piece or something a private person shared. The frequency of this common experience is largely attributable to what native advertising so often tries to do: Make people believe what they see is not an ad.

One of the easiest ways to do so is to downplay the ad’s sponsorship. The AutoOverload ad sought such subtlety by using the shortest commercial identifier possible, “Ad,” instead of “Advertisement” or “Sponsored Post.” The ad’s commercial nature also might have been overlooked because “Ad” and “Autooverload” appeared in a smaller and lighter color font than that of the headline text.

Such understated endorsements may seem normal, but that’s likely because native advertising has made them so commonplace. This subtle sponsorship stands in stark contrast to most traditional ads on TV, radio, and billboards where sponsors want to be clearly identified.

Why don’t sponsors of native ads seek the same recognition? They do want to be known, but they first want to make sure that people click on their ads, which individuals often are not inclined to do if they know they’re ads. The following two quotes from LinkedIn’s B2B University expose the sneaky strategy:

“Native ads mimic the look, feel, and function of a medium’s content, making it more likely that your audience will trust them.”
“Native advertising is designed specifically not to look like an ad, making it harder to ignore. Instead, it’s designed to look like the rest of the content on the page. As a result, consumers interact with native ads 20-60% more than traditional banner ads.”

So, native ads pretend to be something they’re not in order to increase the probability that people will mistakenly choose them. In other words, the goal of most native advertising is to deceive.

The irony of native advertising’s casual acceptance of deception hit me squarely as I was scanning a daily newsletter from the American Marketing Association (AMA) and noticed the headline “Transparency Is the Clear Choice for Salespeople.” The article summarized the findings of a study published in the Journal of Marketing Research titled “Open Negotiation: The Back-End Benefits of Salespeople’s Transparency in the Front End.”

Contrary to conventional wisdom, the researchers found that “customers to whom the salesperson revealed the cost of a car at the beginning of the negotiation spent significantly more in the back end than others.” In other words truthfulness and transparency from the beginning of the buying process paid off not just morally but monetarily.

These results reminded me that the AMA has identified five core “Ethical Values,” which include honesty and transparency. More specifically, one of AMA’s three “Ethical Norms” explains the aim of fostering trust in the marketing system:

“This means striving for good faith and fair dealing so as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery of distribution” [boldface added for emphasis].

Besides flying in the face the AMA’s clearly articulated professional standards, the deception-driven strategy of some native advertising also violates several specific FTC guidelines:

“When the first contact between a seller and a buyer occurs through a deceptive practice, the law may be violated even if the consumer later finds out the truth.”
“An ad is deceptive if it promotes the benefits and attributes of goods and services, but is not readily identifiable to consumers as an ad.”
“Disclosure must be clear and prominent.”
“Advertisers cannot use ‘deceptive door openers’ to induce consumers to view advertising content.”
“Advertisers are responsible for ensuring that native ads are identifiable as advertising before consumers arrive at the main advertising page.”
“Advertisements or promotional messages are deceptive if they convey to consumers expressly or by implication that they’re independent, impartial, or from a source other than the sponsoring advertiser – in other words, that they’re something other than ads.”

The last bullet suggests what is likely the main ethical issue with native advertising—feigned objectivity. In fact, the FTC understands well the moral rationale as it explains:

“Why would it be material to consumers to know the source of the information? Because knowing that something is an ad likely will affect whether consumers choose to interact with it and the weight or credibility consumers give the information it conveys.”

It’s like a new acquaintance inviting you for coffee “to get to know you better” and soon into your conversation, they start to ask your thoughts about cars while sharing their opinions of a particular make and several specific models. You’re surprised by the topic but support the discussion. Finally, near the end of your meeting the acquaintance reveals that they’re a car salesperson, and they ask if you’d like to schedule a test drive.

Unfortunately, some of us have experienced situations similar to this one, which felt uncomfortable because we want to know:

When the context we’re in is a commercial one, i.e., we’re being sold to.

When the person with whom we’re speaking is an agent of an organization or has some other financial stake in the product or company they’re describing.

There’s nothing wrong with a salesperson doing their job when we know who they are and what they’re doing. We expect them to tell us the good things about their products with little treatment of their weaknesses. Since, complete objectivity is not expected, we take what they say with a grain of salt.

In contrast, when talking with friends, family, or coworkers about products, we let down our perceptual guards and take what they say at face value because we believe they’re objective and unbiased.

To be fair, not all native advertising deceives to the same extent. Some ads very clearly identify themselves as sponsored content, and they provide the exact content they promise, offering real value through useful information or worthwhile entertainment.

However, any ad that tries to trick people into taking steps they wouldn’t otherwise choose is on legally and ethically shaky ground. Relationships that start with a lie usually don’t last, which is why ads that deceive represent “Mindless Marketing.”

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A Promotion Unlike Any Other

4/23/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Fans of The Office know that whenever Michael Scott attended another person’s party, wedding, or baby’s baptism, he would inevitably steal the spotlight, making the event about him. That kind of social sabotage makes for great TV comedy, but does a recent impromptu endorsement on golf’s greatest green signal that real life self-promotion is off the fairway?

The recent Masters Tournament seemed like a success, including that it crowned its first Asian-born champion, Hideki Matsuyama of Japan. However, “a tradition unlike any other” also showcased some cringe-worthy commercialism that led to the son of an all-time golf great losing permanent access to Augusta.

Perpetuating the Tournament's prestige, Masters’ organizers invited three of golf’s living legends to serve as honorary starters: nine-time major champion Gary Player, 18-time major champion Jack Nicklaus, and Lee Elder, the first African American to play in the Masters. It was at that ceremonial tee shot when the uninvited endorsement occurred:

“While Elder was receiving the accolades of Augusta National and surrounding patrons, Wayne Player, serving as his father's caddie, stood behind Elder clearly holding a sleeve of OnCore golf balls in such a way as to give the logo maximum visibility.”

Wayne Player has a relationship with OnCore Golf that includes serving as Tour Commissioner of the Player Amateur Tour, for which the golf ball brand is the title sponsor.

Social media quickly condemned Wayne Player’s “guerilla marketing,” calling the tactic “an embarrassment” and “undignified,” and suggesting he hijacked a special moment to “sneak in a free ad for golf balls.” Masters organizers apparently didn’t like the ambush advertising either: They’ve reportedly banned Wayne Player from the Tournament for life.

Those are harsh criticisms and consequences, especially given that considerable commercialism already surrounds the Professional Golfers’ Association of America (PGA) and the Masters.

The PGA’s Partners’ webpage reads like a Who’s Who List of corporate sponsors. “Official Partners” include the likes of AIG, Charles Schwab, Cadillac, John Deere, KitchenAid, KPMG, and Rolex. Then, there’s a whole other list of “Golf Retirement Plus Partners.” In total, 54 companies can claim they support the PGA.

For its part, the Masters Tournament’s website contains logos and links for its three marquee sponsors, AT&T, IBM, and Mercedes, who reportedly treat invited guests to an incredibly indulgent tournament experience, all charged to their corporate accounts.

What may be even more noteworthy is that the golf balls Wayne Player held were far from the only promotion present at the ceremonial tee shot. Gary Player wore a PXG hat, whose golf clubs he endorses, and a Black Knight shirt—his own signature brand. Similarly, Nicklaus came outfitted in a bright yellow sweater and matching hat, both bearing his Golden Bear brand. Elder also wore branded apparel: a PNG hat and a TravisMathew shirt—the latter is part of a formal partnership with Elder that the company announced just days before the Masters.

Given all of the corporate/self-promotion already present at the starting tee, what was wrong with Player strategically displaying one small sleeve of golf balls?

There are two main reasons Player’s product placement was ill-advised:

It was unnatural: It’s typical for golfers and others to will wear branded apparel on golf courses and elsewhere. It’s strange, however, to see someone hold steadily a sleeve of golf balls precisely so its logo appears prominently in camera shots. That’s why when product placement is done well in movies and TV shows, the products don’t draw attention to themselves; rather, viewers simply see them as part of the scene, if they notice them at all.
It was uninvited: The very unique Masters moment belonged to Gary Player, to Nicklaus, and especially to Elder. No person or thing should have stolen the spotlight from them, at least not without the Masters’ express permission. Ultimately, Wayne Player pulled a Michael Scott, showing little social awareness and, instead, surmising that the situation should be about him, not just the others.

So, the next time you’re a caddie at the Masters . . . of course, that’s a situation most of us will never experience, which makes it even more tempting to point a finger at Wayne Player, shake our heads, and wonder how he could act so insensitively. The problem, though, is that the proliferation of social media has made it exceedingly easy for any individual or organization to do the same sort of thing and steal others’ spotlights.

On a corporate level, such commandeering might take the form of a company donating $10,000 to a worthy social cause, then spending $100K to brag about its kind-hearted contribution in TV commercials, print ads, and other media.

Individuals also are not immune. We should be especially careful not to steal the spotlight with one upmanship. For instance, when a friend or colleague shares a special accomplishment on social media, we shouldn’t ‘congratulate’ them with a reply like, “I’m so happy for you. I remember when I completed my first 5K three years ago. Now I’m getting ready to run my fourth marathon.”

A few years ago, the American Marketing Association published a piece I wrote about the “Three C’s of personal branding.” In the article I argued that communication, which is what many people solely associate with branding, should only be the “icing on the cake.” A strong personal brand, or corporate brand, must first include a foundation of “cake”: character and competencies.

When we steal another’s spotlight and try to make their moment ours, we not only misplace our personal marketing communication, we reveal the serious character flaw of callous self-absorption, which is very destructive to any brand.

No self-promotion should come at others’ expense. In fact, the best self-promotion actually benefits others.

It’s easy to argue that Wayne Player’s golf ball product placement at the Masters was a bad idea. It’s also easy for any of us to succumb to similar temptations in everyday situations and make another’s moment our own. Pulling a Wayne Player, or a Michael Scott, makes any of us guilty of “Mindless Marketing.”

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When TV Commercials Wink

2/14/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

As a Seinfeld fan, one of my favorite episodes is when George’s eye catches a piece of flying grapefruit, causing him to confuse everyone with his involuntary winking. Such hijinks are funny for a television sitcom, but what happens when commercials use conflicting verbal and visual cues, particularly on TV’s biggest stage?

Before the recent big game, a friend graciously invited my analysis of the ads—You don’t have to ask twice for my opinion on advertising, especially Super Bowl commercials, so I shared thoughts about one particular ad that seemed strange.

Toyota’s “Upstream” commercial featured the adoption story of Jessica Long, a 13-time gold-medal-winning Paralympic swimmer. Long’s rise to success despite severe adversity was inspiring; however, there was also something unsettling about the ad.

Pushing against the positive verbal messages of parental love and athletic achievement was a literal stream of cold, dark water that ran through every scene, including the family’s home and other indoor places. That’s a disconcerting sight that can cause anguish for anyone, especially those who have experienced floods in their home, school, or work.

The negative visual of flood water worked against the ad’s affirmative verbal messages, significantly diluting the positive affect Toyota likely wanted for its ad, and making it “Simple-Minded Marketing.” The automaker certainly had good intentions, but I doubt the inadvertently somber spot did much to boost the company’s brand.

I remembered this ad partly because of its unpleasant aftertaste but also because I’ve studied such verbal-visual disconnects before. Several years ago, I did research on the same phenomenon found in pharmaceutical ads, which are probably the worst offenders when it comes to sending mixed commercial messages.

When we watch a prescription drug ad, we usually hear a list of the medication’s side effects, which the Food and Drug Administration (FDA) mandates. However, as a narrator recites those potential negative outcomes, the commercial often shows very pleasant visuals, like the ones seen in this ad for Lipitor. At about 33 seconds into the spot, a narrator starts to quickly read several serious warnings:

“Lipitor is not for everyone, including people with liver problems and women who are nursing or pregnant or may become pregnant. You need simple blood tests to check for liver problems. Tell your doctor if you are taking other medications or if you have muscle pain or weakness. This may be the sign of a rare or serious side effect.”

Ironically, the visual backdrop for these weighty words is a guy and his dog taking a pleasant walk through the woods and later jumping into a lake for some swimming fun. Yes, we hear the side effects in such ads, but are we really listening to and understanding their gravity, given that very positive visual scenes distract us from those negative verbal messages?

That’s the question I set out to answer through research that began with a group of students in an Advertising Ethics class I was teaching. In a controlled empirical study that involved commercials for fictitious pharmaceuticals, we found that people do indeed discount drugs’ negative side effects when shown positive “dissonant” visuals at the same time.

I presented those findings at the American Marketing Association’s Marketing & Public Policy Conference in Washington, D.C., where a member of the FDA commended the research and asked for a copy of the presentation. Health Marketing Quarterly later published the study.

So, one “Simple-Minded” Super Bowl ad failed to make effective use of reinforcing, or “redundant,” visuals—no big deal. Actually, several other $5.5 million+ spots made the same mistake in similar ways and in doing so conveniently completed the other three quadrants of the Mindful Matrix:

“Alexa’s Body” - Amazon claimed the steamiest spot in this year’s Super Bowl. For nearly sixty seconds, a female Amazon employee fantasized about handsome Black Panther star Michael B. Jordan, who replaced the smart speaker in her lustful daydreams, which included Jordan removing his shirt and joining her in a bubble bath for two.

The commercial was uncomfortable to watch in mixed company and may have posed problems for parents, but the real issue was the spot’s repeated sexual objectification of Jordan. Role-reversal (a woman mentally undressing a man) may have seemed funny, but no one should be reduced to their body parts or have their personhood downgraded to a “vessel.” Similarly, it’s dangerous to objectify men as doing so suggests that it’s also okay to objectify women.

The ad involved dissonant visuals in that images of a sexy superstar have nothing to do with voice commands about ‘the number of tablespoons in a cup’ or ‘turning on the sprinklers.’ The pairing of an A-list celebrity with Alexa probably has helped keep Amazon’s smart speaker top-of-mind, but all the gratuitous sexual innuendo made the ad “Single-Minded Marketing.”

“Happy” - In its “Ultra” light beer ad, Michelob employed an entire lineup of past and present all-star athletes. For instance, there were still shots and/or video clips of Serena Williams, Mia Hamm, Anthony Davis, Usain Bolt, Billy Jean King, Arnold Palmer, Wilt Chamberlain, Jimmy Butler, Peyton Manning, and more.

I wonder whether Michelob got permission from all these athletes, or their estates, to associate their images with its brand, but assuming it did, there’s still another problem that directly involves dissonant visuals: People don’t ascend to those kinds of athletic heights by downing much beer. There’s little to suggest that alcohol enhances athletic performance; in fact, alcohol has exactly the opposite effect: It reduces aerobic efficiency, impairs motor skills, decreases strength, disrupts sleep, and slows recovery.

Michelob’s suggestion that happiness helps athletes win may have some truth to it, but there’s clearly much more to athletic achievement, namely physical and mental discipline both of which alcohol easily impairs. For that reason, it was irresponsible of Michelob to show images of athletes in uniform, on their courts, fields, etc., along with alcohol-friendly soundbites such as, “fueling the run toward greatness” and “something more vital.”

How ironic and tragic it was that Kansas City Chief’s outside linebacker coach Brit Reid, son of head coach Andy Reid, caused a multi-vehicle accident days before Super Bowl, apparently due to alcohol impairment. The accident caused him to miss the game and left a young girl fighting for her life. Alcohol and athletics definitely don’t mix, and it’s doubtful that such precarious positioning will give Michelob’s brand much boost, which makes the beermaker’s ad “Mindless Marketing.”

“Get Back to Nature” - After the three commercials just described, it’s easy to be suspicious of all Super Bowl spots, believing that most played with consumers’ minds and sacrificed social mores. Thankfully however, the preceding ads were exceptions. Most of the commercials employed redundant, not dissonant, visuals that appropriately reinforced their verbal messages.

One of the best examples of such visual-verbal consistency was Bass Pro Shops and Cabela’s 60-second spot that featured clips of ordinary people planning for and enjoying beautiful places in the great outdoors while hiking, fishing, camping, and more.

Sprinkled into some scenes was gear that one could probably purchase from the outfitter, but none of the product placement was overdone; rather, all subtly and artfully supported the simple call to experience nature. Consequently, viewers were likely both to remember the firm’s ‘enjoy the outdoors’ value proposition and to believe its closing promise, “We’re there for you.”

Bass Pro Shops and Cabela’s commercial wasn’t the only advertiser to hit a home run in terms of verbal-visual consistency that was both effective and ethical. A couple of other best-practices ads belonged to Huggies for “Welcome to the World, Baby” and to Indeed for “The Rising.”

A wink is the epitome of a dissonant visual—it slyly states, “Don’t believe what I’m saying.” Advertisers shouldn’t ‘wink’ with their ads, i.e., use dissonant visuals that contradict their spots’ verbal messages. Instead, commercials should enlist strategically-chosen redundant visuals that reinforce the right verbal messages. In Super Bowl ads and in other communication, that consistency makes for “Mindful Marketing.”

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Natural Light Imitates Art

1/23/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Often those fortunate enough to earn a college degree proudly display their diploma in their office or another personal location. Now the credentials of one large group of college grads are on exhibit in a much more public place—New York City's Grand Central Terminal. But, at a station known for transportation, is the art’s creator paying homage to higher education or throwing a college degree under the bus?

The intensely competitive alcohol industry has led many beer manufacturers to become very creative marketers: from elaborate point of purchase displays in retail stores to highly produced commercials during Super Bowls. Now the world’s biggest brewer, Anheuser-Busch InBev, has found an especially innovative way to broadcast a brand message—a work of art, in the heart of New York City, valued at $470 million!

The exhibit, called “the Da Vinci of Debt,” is a collection of 2,600 real diplomas that Natural Light, one of Anheuser-Busch’s signature brands, has rented from degree earners. Resembling a blizzard of super-size snowflakes, the white diplomas cascade downward from ceiling to floor of Grand Central Terminal’s Vanderbilt Hall. It’s an installation that’s both impressive in its grandeur and appealing to the eye.

So, what’s behind Natural Light’s foray into ‘fine art’ and its claim to have constructed “the most expensive piece of art in the world”? The company says it wants to bring attention to the burgeoning problem of student debt, which helps explain the firm’s valuation of the exhibit at $470 million--the average total cost of a four-year college education times 2,600 degrees.

As someone who’s taught in higher education for 20 years and paid for two children to attend college, Natural Light’s cost estimate seems right: $470 million divided by 2,600 diplomas is $180,769 per degree, or $22,596 per semester. Unfortunately, this price has risen precipitously over the years, increasingly exceeding families’ abilities to pay, save for significant financial assistance, often in the form of student loans.

To some extent, faculty members like me are responsible for the extreme price up-tick: Employee salaries often represent organizations’ biggest costs. However, higher ed’s steeply-sloped expense history is more complicated.

When those who attended college several decades or more ago visit campuses today, they’re often awestruck by the number and nature of amenities today’s students enjoy: from beautifully-appointed apartments, to state-of-the art classrooms, to expansive sports centers. These expensive and largely consumer-driven upgrades also have contributed to rising college costs.

Regardless, it’s important to affirm Natural Light’s suggestion that student debt is a serious problem. That doesn’t mean, though, that the Da Vinci of Debt is an impeccable piece of art: A real concern is that the exhibit conveys a misguided message: That a college education is not worth its price.

Some may not gather that interpretation from the exhibit, which is good; however, it’s reasonable to believe that many who see or hear about the art will draw the conclusion that those willing to part with their diplomas must feel dissonance about their degrees.

Unfortunately, some do get a less-than-ideal return on their college investments for various reasons that can include choosing the wrong school or major but more likely stems from failing to take their academics seriously—a tragic misstep that’s ironically related to Natural Light. I’ll say more about that and two other 'art ironies' in a moment.

First, it’s important to note that the experiences college students enjoy and the relationships they form are often invaluable, or at least defy quantification. At the same time, some like Georgetown University’s Center on Education and the Workforce have calculated the typical financial payback a college education offers:

A Bachelor’s degree is worth $2.8 million on average over a lifetime.
Bachelor’s degree holders earn 31 percent more than those with an Associate’s degree and 84 percent more than those with just a high school diploma.

So, is a college degree expensive? Yes. Is it worth the cost? Yes, provided that the student properly ‘consumes the product,’ which leads to the three art ironies referenced above.

Irony #1: Most Anheuser-Busch executives hold one or more higher education diplomas.

Here is a partial list of Anheuser-Busch’s U.S. leadership team members and their degrees:

Nick Caton, U.S. Chief Financial Officer: Bachelor of Science in mathematics from Stanford University; Juris Doctorate from Yale University
Agostino De Gasperis, U.S. Chief People Officer: Bachelor of Commerce degree from the University of Toronto
Ingrid De Ryck, U.S. Chief Sustainability and Procurement Officer: bachelor’s and master’s degree in business engineering from the Katholieke Universiteit Leuven
Benoit Garbe, U.S. Chief Strategy Officer: MBA from Harvard Business School
Craig Katerberg, General Counsel: degrees from the University of Chicago and from Northwestern University School of Law
Elito Siqueira, U.S. Chief Logistics Officer: a degree in mechanical engineering; two executive MBAs; completed supply chain programs from the Massachusetts Institute of Technology and Stanford University

This list could include several other Anheuser-Busch executives, with equally impressive pedigrees, all of whom appear on the company’s website. It’s unusual for businesses to mention their leaders’ academic credentials so prominently, which makes Anheuser-Busch’s higher ed highlighting even more unique.

Moreover, given the positions these individuals hold with a firm that ranks #205 in Fortune’s Global 500, it seems that all have gotten good returns on their college and master’s degrees. I wonder if any of them regret the educational expenses they incurred, or if they chose to include their diplomas in the Da Vinci display.

Irony #2: Beer and higher education are notoriously bad partners.

Unfortunately, alcohol abuse on college campuses is legendary: If you haven’t witnessed it personally, you’ve likely seen it portrayed in movies or on TV. I’ve written two other pieces that have highlighted the coed alcohol epidemic:

The first piece questioned Dos Equis being made “The Official Beer Sponsor of the College Football Playoff.” In light of the destruction alcohol has done to so many young lives, I argued that college-related events should never have a “beer sponsor.”

The second piece had a similar theme, but this time the event was graduation and the sponsor was . . . wait for it . . . Anheuser-Busch. Yes, Natural Light was making the same dangerous association of beer and books, attempting to put an intoxicating brand spin on what should be a very meaningful if not solemn ceremony.

I wonder how many people have had their college careers completely derailed by alcohol, or graduated but so frequently missed classes or walked around buzzed that they failed to gain nearly what they should have from their college experience.

Such lackluster collegiate performance correlates with low GPAs and lack of good post-college employment opportunities. I wonder how much alcohol abuse has increased the cost of college and made it more difficult for graduates to pay off their diploma-related debt?

Irony #3: Anheuser-Busch doesn’t mention student debt relief among its social initiatives.

In 2018, to the company’s credit, Anheuser-Busch launched “an annual College Debt Relief program” that annually awards “$1 million to students under financial pressure.” The plan is to pay out $10 million toward college debt relief over 10 years.

Of course, $10 million is a ‘drop in the keg’ compared to the $1.7 trillion level college debt is projected to reach in 2021, but no one company can be expected to do it alone. By the same token, however, Anheuser-Busch had total operating income of over $16 billion in 2019, and in the same year spent $1.53 billion in the U.S. on advertising.

A million bucks a year is a nice donation, yet it does seem somewhat paltry for a firm dealing in billions of dollars. Perhaps that’s the reason Anheuser-Busch makes no mention of education or student debt relief on its social responsibility website page, “Purpose Beyond Brewing.” The one CSR area that comes closest is “Economic Impact,” but that page just describes the company’s commitment to care for employees, support the restaurant and bar industry, and create jobs for farmers.

So, under which of Anheuser-Busch’s expense lines does student debt relief really belong? Is it serious social responsibility or is it a straightforward advertising-spend?

Regardless, I’m not sure how much the Grand Central Terminal art exhibit will make a positive impact for Natural Light. The brand communicates many countervailing messages, such as images on its website that seem more like an ode to spring break in Fort Lauderdale than any serious concern for student well-being. That disconnect and relative lack of exposure may doom Da Vinci.

Admittedly, the author of this piece has an employment-influenced bias in favor of higher education and against alcohol consumption by young people. He’s also not an accomplished art critic. Still, his professional opinion suggests that Natural Light’s Da Vinci of Debt is a monument to “Mindless Marketing.”

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Committed to Cursing

1/5/2021

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by David Hagenbuch - professor of Marketing at Messiah University -
author of Honorable Influence - founder of Mindful Marketing

Do you have a resolution for 2021? According to Parade, the most popular annual self-promise is to lose weight. Given interests in appearance and health, it’s understandable that many people want to watch what they put into their mouths. What’s surprising is that individuals seem increasingly unconcerned about what comes out of their mouths. In fact, an ad campaign from an unexpected source is encouraging people to let profanity fly.

One might guess the campaign comes from a company like Budweiser, which a few years ago ran an infamous Super Bowl ad featuring outspoken British actress Helen Mirren who delivered a caustic anti-drunk-driving rant that had parents rushing to cover their kids ears. Amazingly, the current profanity-laced campaign is from the Mental Health Coalition.

Actually, “laced” is an understatement. The 90-second spot’s central theme and action are the F-word and its accompanying hand gesture. Why so much obscenity? The premise is that since people have suffered so much over the last 12 months from a global pandemic, racial injustice, and an extremely combative election, the best thing to do is to blow off steam by telling 2020 exactly what we thought of it.

The ad ends with a fittingly obscene call-to-action: “Text [middle finger emoji] to 1-877-EFF-THIS and donate $5 to the Mental Health Coalition.”

Why would the Mental Health Coalition want to connect its mission and brand to cursing? The rationale is not as tenuous as you might first think. In fact, there’s a body of literature that suggests that expressing anger through swearing is good for mental health.

One study, which asked participants to submerse their hands in ice water, discovered that swearing increased pain tolerance by nearly 50%. Other research found that people could achieve greater physical performance, pedaling a bike, when employing profanity.

Writing for Psychology Today, Neel Burton, M.D., a psychiatrist and philosopher who teaches in Oxford England, offers “The seven best reasons for swearing,” which he suggests are:

Pain relief
Power and control
Non-violent retribution
Humor
Peer and social bonding
Self-expression
Improved psychological and physical health

It’s hard to argue against empirical science and respected health professionals, but it seems that the preceding research and writing gives less than adequate treatment to a pair of important considerations, which the following two questions address:

1) What’s the long-term impact of swearing on self-concept? Even if uttering a curse word helps reduce pain in the moment, it seems that swearing could affect one’s extended mental health, which is partly a function of others’ perceptions of us.

First, to be forthright and hopefully avoid seeming self-righteous: I have sworn. I’m not sure that any of those irreverent expressions helped me in the moment, but one thing is certain: I never felt good afterward about what I said; rather, I regretted each of those instances.

While it’s uncomfortable for me to admit that I’ve sworn, it would be very painful if I had to think of myself as ‘a person who swears,’ and it would be unacceptable if I in some way encouraged others to have such a perception of me. I don’t want to swear and, for various reasons that include my faith, I would never want swearing to be something that defines me.

A few years ago, triggered by what I saw as a troubling increase in casual cursing, I wrote an article for The Marketplace, “Don’t curse your own brand.” In the piece I identified five adjectives, or “unbecoming brand qualities,” that profanity projects: unintelligent, angry, unproductive, indecent, and untrustworthy.

Granted, it may be more important for some people/professions to maintain the impression of piety than it is for others. Still, a vulgar vocabulary fuels the preceding unfavorable perceptions in others, which is hard to believe have a positive net impact on anyone’s self-concept.

2) What’s the impact of profanity on others? Almost all of the research and writing of others I referenced above suggests that ‘You should swear because it’s good for you.’ Largely missing in the analyses is the affect that one’s cursing has on those exposed to it, especially if the unpleasantries are directed at them.

Burton does mention that swearing can foster “peer and social bonding.” I believe there are better ways to foster social bonds than swearing, but I can understand how cursing could work to that end, if it’s ‘friendly’ and mutually accepted.

In most instances, though, being on the receiving end of a curse word is not appealing. That’s why in any kind of potentially volatile situation, from a customer service encounter to a hostage negotiation, swearing rarely helps. In fact, it usually increases the tension by making people more uncomfortable, angry, or upset.

Overlooking the impact of cursing on others is probably the biggest irony of the Mental Health Coalition’s ad campaign. On the organization’s own website, its homepage expresses an important truth: “The language we use is powerful, so let’s talk about it.” Yes, words are powerful, and, contrary to the “sticks and stones” adage, poorly chosen ones can hurt deeply.

Of course, being bullied or shamed can’t be good for anyone’s mental health, but how that belittling often occurs is particularly pertinent here. A report on workplace bullying by Safe Work Australia found that “The most common forms of bullying included being sworn at or yelled at (37.2 per cent).” Others affirm the connection between cursing and bullying, for instance:

“Shouting and swearing while doing criticising is bullying” (Business-Live.Co.UK)
An example of bullying is “yelling or using profanity” (Canadian Centre for Occupational Health and Safety)
A report from an Anita Hill-led Hollywood Commission for Eliminating Harassment and Advancing Equality in the Workplace identified “swearing” as a specific act of bullying that with other undesirable actions can serve as “a gateway to sexual harassment and other abusive conduct.”

To summarize:

Cursing --> Bullying --> Low Self-Concept --> Poor Mental Health

These relationships are a big miss of the ad campaign, but there’s one more notable fail: Tourette syndrome, “a neurological disorder characterized by repetitive, stereotyped, involuntary movements and vocalizations called tics.” Though rare, some individuals with the disorder experience coprolalia, which includes “uttering socially inappropriate words such as swearing.”

Although Tourette’s is a disorder of the nervous system, not a mental illness, one can imagine that people who suffer from the syndrome are easy targets for bullies, and that those social interactions could be especially strained if the individual’s specific symptoms include swearing.

At the risk of getting waylaid on memory lane, many of us can remember a time, not that many years ago, when it was unusual to hear people swear outside of an R-rated movie or a locker room, both of which carried ‘language warnings,’ express or implied.

Now it’s not unusual to be shopping in a grocery store or watching ESPN and hear conversations punctuated with profanity. It’s also puzzling that, unlike those in the Mental Health Coalition ad, the people cursing often don’t appear to be angry or upset; rather, swearing has simply become part of their routine communication. Do ads like the one in question normalize such indecency?

The Mental Health Coalition serves a very important societal mission in aiming to “to end the stigma surrounding mental health and to change the way people talk about, and care for, mental illness.” Unfortunately, however, its ‘swearing ad’ curses that very purpose, making the campaign an unfortunate example of “Mindless Marketing.”

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Peloton's Psychological Problems

12/13/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

“If my husband gave me a Peloton for Christmas, I’d give him divorce papers.” Such raw emotion has typified reactions to the spin cycle maker’s “Gift that Gives Back” commercial. People are permitted their opinions about the ad, and Peloton is entitled to explain its position, but a few principles from psychology might help both sides see how the cycle commercial could have avoided such a controversial turn.

Many reactions to the spot suggest that ‘no husband should surprise his wife with a piece of exercise equipment,’ regardless of her body-type. That’s a valid point; however, before dismissing Peloton’s ad as complete incompetence, Abraham Maslow’s classic hierarchy of needs may remind us that there is often more than one reason for riding a stationary bike:

Physiological Needs: Exercise doesn’t satisfy hunger or thirst; in fact, burning calories increases those needs. Similarly, anyone ‘spinning’ isn’t resting; however, exercise can lead to better sleep. That connection proves true for many, as it did recently for me: After walking around New York City one day with family for hours, I enjoyed one of my best night’s sleep in months.

Safety Needs: Exercise doesn’t immediately make us safe; however, cardiovascular fitness is an investment in long-term health, which connects to the second level of Maslow’s hierarchy. Many viewers of Peloton’s ad have bemoaned that “Grace in Boston,” an already slim woman, even needs to exercise, but they’re missing the point that working out isn’t just about losing weight. Thin people also reap health benefits from aerobic activity.

Social Needs: In one tweet about the ad, a Peloton user mentioned that she appreciates the bonding that comes with working out with others. People don’t need to be physically present to build relationships. Social benefits can also accrue when interacting in the virtual realm, which apparently happens for at least some Peloton users.

Self-Esteem Needs: All of us want to feel good about how we look and the kind of person we are. Sticking to an exercise regimen can bolster both of those self-concepts. Most viewers of Peloton’s ad don’t notice any physical change in Grace, but perhaps she experiences something intangible, like feeling more self-disciplined or self-confident.

Self-Actualization Needs: There aren’t many products that can legitimately claim to help people reach their full potential in some significant area of life, but a piece of exercise equipment used seriously might produce such top-level benefits, partly like the way basic training transforms marines. We don’t know exactly what Grace meant by the statement, “A year ago, I didn’t realize how much this would change me,” but if it wasn’t physical change, maybe a year of Pelton transformed her mentally or emotionally.

The five levels of Maslow’s hierarchy offer consumers useful lenses for processing the controversial commercial. A psychological principle can also teach Peloton an important lesson, summed up in one sentence: “Perception is reality.”

We perceive when a stimulus crosses our senses, we attend to it, and we make an interpretation, for example: “The big dog bounding toward me looks dangerous.” Sometimes our interpretations are correct; other times they’re wrong. However, whether they’re accurate or not, our perceptions determine our reactions.

As thousands of social media posts have suggested, people perceived things to be true of Peloton’s ad that the company apparently didn’t intend, for instance:

that Grace was initially overweight
that she wanted to become even thinner
that her husband pressured her to use the bike

Peloton can argue that these interpretations are incorrect, but ultimately the court of public opinion rules based on objective judgment of cues in the ad, prevailing social norms, and the broader cultural context, because perception is reality.

Some may suggest it was Peloton’s plan to cause a controversy that would capture publicity. If so, the company probably didn’t anticipate a 14% stock price decline in three days. Consumers can use Maslow to better understand what the cycle maker likely intended, but more importantly, companies like Peloton can learn to more effectively pretest their ads so corporate perceptions better align with consumer reality and don’t spin into “Mindless Marketing.”

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Dynamic Pricing or Discrimination?

6/14/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

Eric, a friend of mine who happens to be a CPA, realized he was running low on string for his grass trimmer, so he went shopping where he’d purchased the product before—Amazon. Finding what seemed like a good price ($18.94) for the same 3-pack of spools he bought a few years earlier, he placed the item in his cart. Then he discovered something that might make all of us question the prices we pay for products.

Eric decided to check the price for the same Amazon item, using a different web browser—one he had never used before to order from Amazon. Entering the website, he navigated anonymously to the item page, where his suspicion was confirmed: The price he saw was just $16.89, i.e., $2.05 lower than the price for the same item he had placed in his shopping cart minutes before.

Although most of us haven’t been so clever as to catch an ecommerce giant in apparent pricing hypocrisy, many of us probably have wondered whether Amazon and other online retailers were somehow taking advantage of us through increasingly-sophisticated pricing strategies. Responses to Eric’s Facebook post about the incident confirmed such concerns:

“I wonder if the price is also because you're a logged in Prime user in one and they compensate for some of the free shipping.”

“I’ve worked with some sellers on Amazon. They are a beast to deal with and it can really wreck a small business. And there is nothing the business owner can really do to combat their practices. They are the 8 million pound gorilla in the room.”

“I read [your post] out loud to my daughters, I thought it was so significant.”

“The exact same thing happened to me just recently. I was going to protest the increase in price over a year's time. What can we do?”

Frustration over similar experiences may lead to accusations of “price discrimination,” i.e., when a seller changes the price of the same product for different consumers. Generally speaking, it’s not fair to charge people different prices for the same item, but there are some seemingly legitimate exceptions, for example:

Quantity discounts: Buying a 36-pack of bottled water should be cheaper per bottle than buying a single bottle of the same water.

Good credit ratings: Individuals with better credit scores deserve lower interest rates on loans compared to those with weaker credit ratings.

New customers: The risk of trying a new business or products may warrant giving a discount to first-time buyers.

In reality, none of the preceding truly represents price discrimination because people can, if they choose, put themselves in the more favorable pricing position. For instance, they could: buy more bottles of water and store them, follow sound financial practices to improve their credit scores, or assume the risk of purchasing from a new company.

If Eric’s experience falls into any of these three categories, it might represent the last one. Perhaps because of his lack of history with the second web browser, Amazon pegged his subsequent shopping visit as that of a new customer and wanted to offer him an extra incentive for making a first-time purchase.

That explanation may be right, but it has some flaws, namely that companies tend to clearly communicate when they’re offering discounts for new customers; otherwise, loyal customers may locate the discrepancy, as Eric did, question the companies’ motives, and even become resentful: “I’ve given them my business for all these years; if anyone deserves a discount, I do.”

Chances are, Amazon wasn’t practicing any form of price discrimination. It’s more likely that Eric’s experience was a result of the strategy that many online retailers increasingly apply: dynamic pricing.

Dynamic pricing involves changing prices continually, based on prevailing market conditions, which includes factors such as consumer demand, purchase intent, and competitors’ prices, as well as company goals for customer acquisition, retention, and brand-switching.

If you’re thinking that dynamic pricing is a new phenomenon, you’re partially right. Sellers have lowered and raised product prices on the spot for millennia, based on factors as simple as weather conditions and buyers’ apparent interest.

Over the past 30 years or so, airlines probably have been the most common users of dynamic pricing, as they’ve perpetually adjusted prices to keep flights at or near capacity. To a lesser extent, those selling hotel rooms and tickets to popular entertainment events have done the same. Frequent historic fluctuations in gasoline prices also suggest dynamic pricing.

However, recent advances in digital technologies have really enabled dynamic pricing to thrive. For instance, from 2008 to 2010, the average time between regular price changes was 6.7 months. In the time period from 2014 to 2017, that average fell to 3.7 months.

Today, to implement far-reaching price change is no more difficult than a few computer key strokes, and it’s as easy as allowing a third-party software program, like an algorithmic repricer, determine when to make price adjustments and how big they should be.

Although Amazon, which reportedly makes millions of prices changes a day, is probably the greatest single user of dynamic pricing, it is far from the only retailer employing the strategy. Walmart, the biggest retailer in the world, has taken a remarkable step away from its long-standing ‘everyday low pricing’ strategy and embraced repricing software for its online sales.

Most other e-tailers are following suit. In fact, some predict that within 5-10 years, dynamic pricing will become so fine-tuned that “everything you buy will be based on personalized offers.”

So far this discussion has been about what has happened and will continue to happen with dynamic pricing. However, at the core of Eric’s experience is an ethical question: Should Amazon or anyone be pricing products this way? Or, as Nick Saunders, director of GlobalData Retail has said, just because something is technologically feasible “doesn’t mean it’s socially desirable.”

On one hand, it does seem like dynamic pricing puts purchasers at an added disadvantage. Companies already have a natural information-advantage over consumers since “knowledge is power” and every business knows more about its products and its industry than does the average consumer.

What’s more, sellers have always known more than buyers about when prices will change, so with dynamic pricing dramatically increasing the frequency of those deviations, consumers experience even more uncertainty while sellers gain greater leverage.

But, the digital age also has been a significant boon to consumers. For much of human history, sellers only had to compete on price with competitors physically close to them. Sears, Roebuck & Co. and other catalog retailers changed that situation somewhat. The Internet and ecommerce have turned traditional retail on its head.

Now people sitting in their living rooms use shopping bots to search products from retailers around the world, while shoppers in brick-and-mortar stores pull out their smartphones and ask for price matches in checkout aisles.

In addition, dynamic pricing itself has produced some benefits for consumers. As described above, the strategy does favor individual sellers in specific transactions; however, the fact that all sellers can easily alter their prices means they must compete more against each other on price.

In short, buyers and sellers both enjoy advantages in the digital age with dynamic pricing—a phenomenon that Eric recognizes, as he astutely reflects:

“This [experience] strikes me as another example of the free market and competition driving markets and pricing. As much as I might not like it, in my opinion Amazon as the seller has every right to offer its goods to me, their customer, at whatever price point they desire. And I, in turn, have every right to buy it or not!”

“Furthermore, there are times when I might willingly pay a higher price from Amazon because of other factors such as shipping speed or knowing that Amazon customer service is incredible for dealing with product issues or returns. From Amazon’s perspective, if they do the hard work of building loyalty with me, their customer, then it’s their privilege to offer me goods at a price point which might, at times, be higher than necessary.”

“The risk they take is that if I conclude that Amazon is no longer competitively priced, they might experience a decline in my loyalty. Which undoubtedly is another data point Amazon tracks about me! If they sense my purchasing loyalty is deteriorating, I suspect their pricing algorithms will work to win back my loyalty!”

Although I haven’t asked Eric directly, I think we both agree that frequent price changes don’t necessarily mean price discrimination. In fact, dynamic pricing can be an example of “Mindful Marketing.”

Eric Wenger is managing partner at RKL, LLP in Lancaster, PA.

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Preying on Older People

4/5/2019

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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

As I chatted with prospective students and their parents at a luncheon in our college’s cafeteria, I suspected that something wasn’t going well for one of the families. While others talked and laughed around the table, one mom seemed distracted, checking her phone and whispering with her daughter. Then suddenly she stood up, apologized for needing to make a call, and walked quickly from the room, leaving us to wonder what was wrong.

Sometime later, she returned to the table with a look of relief. After others left, she told me what had happened. Her own mother, a senior citizen, had received a ‘distressed’ phone call from someone claiming to be her grandson, who said he was sick and needed money. Confused but ready to act, the grandmother called and left messages for her son and for her daughter, the mom at our table, who fortunately was able to explain to her mother that someone was trying to trick her.

I told the mom I was very sorry to hear what had happened and was glad she was able to intervene. I also said I could empathize because the same thing had happened to my mother just a couple of years before! Then the real irony of the situation hit me. Here was a family, attending a luncheon to talk with a professor about marketing, all while they became the victims of a ‘telemarketing scam.’ How could their college visit and any interest in marketing be redeemed?

People do some terrible things under the auspices of “marketing.” Granted, most people are probably quick to differentiate this type of telephone scam from any legitimate business; still, these calls and others involving more or less manipulation form a continuum that many likely lump together as telemarketing. Allow me to paint a picture of that spectrum as I see it, then I’ll return to the targeting the older consumers.

On one end of the scale, call it the left, are calls like the one described above, or worse. Some extremely ruthless individuals conduct “virtual kidnappings” in which they contact victims by phone or social media messaging and pretend they have abducted one of their loved ones in order to collect a ransom. Kidnapping is illegal and considered immoral by most rational people, so it’s nonsensical to support it as legitimate business or valid telemarketing. The practice also involves blatant deception and coercion in that the perpetrators lie to their victims and exert pressure to try to force them to act.

On the opposite, or right, end of the continuum are examples like this one: Your bank calls to ask if you’d be interested in a home equity loan or a great rate on a certificate of deposit, etc. You may or may not appreciate such calls, but you do know your bank is a legitimate business that can follow through fairly on its offerings. Furthermore, if product descriptions are accurate and you don’t feel forced to accept them, there is no deception or coercion.

Occupying the middle of the spectrum are a variety of other phone calls with different degrees of deception or coercion. For instance, at our home we regularly receive calls “about our electric bill.” The voicemail messages are vague enough to make me wonder if they’re from our current utility provider, wanting to correct some kind of billing mistake. However, I realize it’s actually some other company, hoping to gain our business.

Those types of calls are probably not coercive, i.e., if I ever spoke with one of their representatives, I could freely choose whether or not to make a switch. The initial calls, however, are deceptive and, therefore, unethical, which is not a good way to begin a business relationship or any other relationship.

Also in the middle of the scale are calls that say your computer’s software is out of date or it memory is running low, etc. Most of us recognize that those claims are untrue and there’s no way such outsiders could know if they were. So, most people see through the deception, ignore the coercion, and dismiss the calls as scams. However, not everyone does.

Not as technologically savvy as those in the younger generations, many older folks are unsure if the supposed computer issues are real or how serious they may be. So, their relative lack of knowledge makes them more easily deceived. Furthermore, concern that something bad may happen to their computer can coerce them to take unneeded action. Fortunately, however, many senior citizens will first call one of their children, grandchildren, or other trusted individual and ask their advice.

Any of us can be duped about products/services that we don’t know well. For older individuals, there’s the added challenge of declining mental and physical faculties. Their minds often aren’t as sharp as they once were. They may not process information as quickly or remember as many details, both of which can negatively affect their decision making.

In addition, declining physical skills further complicate decreased cognitive capabilities. As we age, our vision and hearing decline, which can prevent us from doing things like reading small print on product packages or catching every word a phone caller says. For these reasons older people are particularly vulnerable to illegitimate forms of telemarketing.

That last sentence and my earlier bank example point to my opinion that, despite the many bad examples, there are legitimate forms of telemarketing, namely ones that provide a fair value to consumers, that use honest communication, and that allow freedom in response, all while respecting individuals’ home lives. For instance, someone in need of extra money may appreciate a phone call from their bank informing or reminding them that it offers a good rate on home equity loans.

In contrast, telemarketing that’s fraudulent is against the law. Title 18 of U.S. Code § 1343 identifies such illegal activity as wire fraud, which involves any interstate or foreign commerce that uses electronic communication to gain “money or property by false or fraudulent pretenses, representations, or promises.” Using the phone to scam people is a “common example” of wire fraud. Those found guilty of wire fraud are subject to fines as high as $1 million and up to 30 years in prison.

However, fraudulent telemarketing is not just illegal, it’s also unethical. It’s deceptive to mislead others about who’s calling and the nature of the call. Similarly, it’s coercive to play on people’s emotions and/or to apply unnecessary time pressure in order to force quick action. It’s especially abhorrent to do those things to individuals who are more vulnerable to such tactics.

So, how did this professor try to help marketing save face with a family and young person considering a career in the field? I explained that such occurrences of coercion and deceit don't represent marketing's core tenet of mutually beneficial exchange. At the same time, such examples are good reminders that those of us in marketing need to work harder to distance such illegitimate behavior from proper practice of the discipline.

I also mentioned Mindful Marketing and the possibility of writing a piece related to the incident for the blog. We talked about more typical college visit items afterward, but as the family was leaving, the mom’s attention returned to the telemarketing scam, and she suggested it would be good if I’d write about those issues.

When Gallup presents its annual research about the honesty and ethical standards of various professions, telemarketers typically rank near the bottom of the results. There are legitimate forms of telemarketing, but phone scams aimed at our moms, grandmas, and other older people certainly aren’t among them. Given that these practices hurt those targeted and can land the perpetrators in jail, such schemes make it easy to call them “Mindless Marketing.”