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Some Good Payout for John Krasinski

5/31/2020

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

Life for Dunder Mifflin paper salesman Jim Halpert revolved around two things: pleasing Pam and pranking Dwight; it was never about the money. Now some suggest that John Krasinski's acting is even better than we believed after he surprisingly cashed-in on his homespun, positivity-in-the-face-of-a-pandemic YouTube program. Millions enjoyed watching Some Good News, and many people contributed content, so should Krasinski pocket millions for selling the series?

It was seven years ago when Krasinski first had the idea for Some Good News (SGN), but he only decided to capitalize on the concept after an isolation-induced tweet on March 25, in which he asked his followers to share things that made them feel good or smile. The tweet astoundingly received over 3,000 comments and nearly 20,000 likes.

Seeing the virus-plagued public’s voracious appetite for feel-good stories, the actor/director/producer launched SGN on March 29, with production partner Allyson Seeger. Together they aired eight YouTube episodes, overflowing with pleasant programming from regular people, as well as occasional celebrity cameos by the likes of Oprah Winfrey, Brad Pit, and former Krasinski coworkers from The Office.

In the first episode, former Dunder Mifflin manager Steve Carell (aka Michael Scott) stopped by to chat about favorite Office memories, which garnered over 17 million YouTube views. The other seven SGN installments also drew big audiences, each in the millions.

That kind of instant internet success rarely goes unnoticed, especially when featuring a star like Krasinski. Soon corporate sponsors such as AT&T and the Boston Red Sox entered the action with giveaways, while others floated a much bigger proposition—purchasing the series.

At first, Krasinski resisted the “wave of incoming calls from a wide variety of suitors,” but at some point, in the midst of a “massive bidding war,” the paper salesman conceded and decided to close “an expansive deal with ViacomCBS,” the value of which “has yet to be reported,” but is very likely “rich.”

For many, Krasinski’s media contract changed the narrative from Some Good News to One Big Sellout. Fueling the social media storm were tweets of disappointment and anger, some snarky, others more serious:

So he made 8 YouTube videos comprised largely of unpaid contributions from fans, sold the brand to a major conglomerate, and isn't even going to make it anymore? Just cashed out? Does this rub anyone else the wrong way, kinda? (@Lons, May 22)
Remember when he created this free feel good YouTube show to “make people feel good” and now he is................selling it for $$$? really cool, 100% honorable (@lindseyweber, May 21).
Super awesome how you found a way to take a genuinely heartwarming viral series and sell out to the highest bidder (@kswa1987, May 22).
This whole 'Some Good News' sh-- was so transparent. John Krasinski basically monetized feel good stories when there was an opportunity to do so. It's just all about money while, appearing relatable to the unwashed masses, and it's super obvious (@EckhartsLadder, May 26).
You are profiting off Some Good News!?! I bought you hook like me and sinker... believed you were just trying to bring goodnesses to light. Going from YouTube (free) to a pay service...so disappointed...sellout!!! (@hydenson, May 22).
The "Good News" that @johnkrasinski had on his program is that he is now a sell out and putting his program behind a paid service so way less people can see it. He has made money off his "Good News" program while people are dying, laid off, can't get food, etc. Smart, John (@JustAHikerinVA, May 22).

When so much harsh criticism is hurled at one of America’s most admired celebrities, one has to wonder if maybe there’s some merit to the sentiment: Did Jim Halpert’s biggest sale come at the people’s expense? Answering four key questions may help clarify the controversy:

1) Was creating SGN part of some diabolical plan? Lest we forget, the same actor who played Jim now portrays a more cold and calculating character, CIA analyst Jack Ryan. In fact, Krasinski has blamed Jack Ryan for selling SGN; although, it’s not exactly like it sounds—more to come below.

It's hard to know for sure, but there’s little to suggest that it was Krasinski’s original intent to build up SGN only so he could sell it to the highest bidder. In fact, most evidence points to the opposite, for instance:

He launched the first episode saying, “I am John Krasinski, and if it isn’t clear yet, I have absolutely no idea what I’m doing.”
Among the show’s “low production values,” his daughters drew the SGN signage behind the ‘news desk’ and his own hand held the spinning globe used in the show’s opening.
The Hollywood Reporter claims that “His original plan was to continue to make SGN for the free and wide audience that YouTube provided” and that he “initially resisted the urge to sell the series.”

2) Did Krasinski ‘use’ people to make the program? There’s little doubt that SGN wouldn’t have succeeded without the voluntary contributions of a wide variety of regular people. Did the unpaid populace get a raw deal in that exchange? Probably not, for these reasons:

It’s unlikely that anyone was promised compensation for their participation, i.e., they did so eagerly for free.
Those whose content SGN featured enjoyed what was likely for them a very exciting once-in-a-lifetime experience.
No one needed to pay to watch SGN. People could view it for free on YouTube.
Krasinski gave far more to SGN than anyone else. For instance, he “self-financed and self-produced” the show from his own home; he utilized his considerable professional talent; he leveraged his own fame to attract followers and his personal connections to enlist other A-List celebrities. Which of us can get the casts of Hamilton or The Office to show up on our Zoom calls?

3) Did Krasinski have a right to sell the series? It certainly seems like he was entitled to monetize his investment for the reasons suggested above and because of the following two points:

The show was his baby. He created and developed it through much of his own time, talent, and resources.
He made no promises about what he would do or not do with the show. A few of the negative reactions shared above suggest there was some sort of implied social contract: “John, you keep producing SGN at your expense, a few of us will contribute content to each show, and millions of people will watch if for free, indefinitely.”

4) Did his reasons for selling make sense? Most people, understandably, have focused on the considerable cash Krasinski will likely collect from the sale. As the first point below expounds, there’s nothing inherently wrong with making money, but there are also other reasons why selling SGN was the sensible thing for him to do.

This blog has suggested many times: If you can give someone good value in an exchange and make money for yourself, it's a good thing. Furthermore, unless someone else is supporting us, we all need to make money in order to take care of our own needs and hopefully help others in need. Even if Krasinski doesn’t need more money, it doesn’t mean he shouldn’t earn more and maybe use it to benefit others. The fact that he had the conscience to create SGN suggests he’s the type of person who is likely to do so.
Krasinski is a busy man. Besides being an actor (e.g., Jack Ryan), a director, and a producer, he’s a husband and a father, and he probably plays several other significant life roles. So, we can believe him when he recently explained that continuing to produce SGN “wouldn’t be sustainable with my prior commitments.”
More people may be exposed to good news. In justifying his decision to sell, Krasinski added that he was excited about the potential for SGN to be seen by “so many more people.” Of course, millions were already watching the show for free on YouTube, but his suggestion is more than a convenient excuse or wishful thinking. It’s reasonable to believe that an organization with the experience, resources, and reach of ViacomCBS could carry the concept of SGN much further than a guy (even a top celebrity) working out of his living room. Plus, if SGN gains even broader appeal, it’s likely to attract knockoffs from other media, which wouldn’t be a bad thing for a society desperately needing to focus more on the positive.

Do all the above bullets mean that Krasinski’s decision-making was perfect? No. Before the sale was announced, he could have clearly communicated his intentions, which wouldn’t have satisfied everyone, but it would have significantly softened the blow. As such, my own takeaway from the events are:

Good marketing communication responds considerately in a crisis.
Great marketing communication avoids a crisis by anticipating reaction and proactively shaping the narrative.

As a rule, people are much more accepting of unpleasant information when we tell them in advance, rather than letting them hear it later from someone else.

So, back at Dunder Mifflin, maybe Michael gives Jim a little grief for not telling him he had such a big deal in the works. Still, The Office’s manager is elated that Halpert scores the Scranton White Pages (it’s a hypothetical metaphor; you have to watch the show). In the end, everyone can appreciate that John Krasinski’s sale of SGN was “Mindful Marketing.”

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Profiting on Others' Pain

5/17/2020

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

You’ve heard the saying, “Misery loves company.” Here’s an even hotter take: Misery makes money. Oftentimes the bigger the problem, the bigger the payout for solving it, but is it right for companies to monetize consumer misfortune, particularly during a pandemic?

Even as industries from airlines to entertainment struggle to survive the COVID-economy, some firms are enjoying record levels of revenue. For instance, Peloton, maker of those expensive in-home ‘exer-cycles,’ has seen sales surge so much that it plans to reduce advertising spending by 50% over the next three months.

“Spinning” isn’t the only pastime the pandemic has accelerated. People are more often binge-watching movies, having dinner delivered, and meeting friends online, which have boosted the bottom-lines of companies like Netflix, DoorDash, and Zoom.

Of course, there also are firms that have benefited even more directly from people’s fear of infection: those manufacturing face masks, hand sanitizer, etc. Clorox and Lysol, in fact, are selling antibacterial wipes so fast, their production can’t keep pace with demand.

In a non-pandemic world, the notion of companies making money gives many people pause, so the illness-associated timing of the latest corporate windfall has likely caused even more to wonder: Is it right for firms to profit from people’s pain?

When you start to think about it, there are actually a number of businesses that appear to profit perpetually from consumers’ misfortunes, for example:

Auto collision centers
Divorce attorneys
Fire and flood restoration firms
Funeral homes
Pest control companies

These enterprises don’t exist unless individuals experience: crashed cars, ruptured relationships, domestic disasters, lost loved ones, and belligerent bugs. How do the owners of these organizations sleep at night, knowing that their gain comes from their own customers’ pain?

The third industry on the above list reminds me of a disastrous event our family experienced on a cold January morning several years ago. A pipe burst in our house, sending water streaming through several rooms. The remedy included, among other disruptions, gutting our kitchen and having workers walking around our home for several months. Fortunately, insurance covered the costs and the recovery company did a great job.

Did the restoration firm profit from our pain? I’m sure it did, but it also ‘healed our house’ and helped us recover from the catastrophe. When you think about it, all of the companies on the list above do the same sort of thing in different ways. They’re all in the ‘restoration business.’

If one defines pain as an unmet need, or when an actual state is different than a desired state, almost every organization is in the pain management business. Hospitals help people recover from physical and mental pain, grocery stores and restaurants overcome hunger pains, and educators try to alleviate the prospective pains of ignorance and unemployment.

So, it’s not just organizations that profit from other’s pain, individual consumers do too. When I buy a pair of shoes that work well, the benefits I enjoy exceed the price I paid, meaning I profited from the retailer’s pain—its need to sell shoes.

Provided that the pain management goes both ways, or there’s mutual benefit, profiting from others’ pain is a good thing,

Unfortunately, however, there can be cases in which rewards are one-sided, such as when a firm’s business model depends on its own customers’ failure, thus purposefully prolonging their pain.

One example involves predatory lenders. Such financiers intentionally choose customers who hold high credit risk and, therefore, are unlikely to meet their payment obligations. When the debtor defaults, the lender comes out ahead by foreclosing on the home, repossessing the car, etc. Any business model based on win-lose outcomes is unconscionable.

Another more controversial example involves casinos. I have no firsthand experience, but it seems self-evident that these companies don’t make money unless the vast majority of their patrons lose theirs.

A reasonable argument may be made that gamblers are really purchasing entertainment and an adrenalin rush, just like spectators at an exciting sporting event or theater performance. A telltale sign of the difference, though, is that ads for Broadway shows don’t carry a disclaimer, “Musical addiction? Dial 1-800-HAM-ILTON.”

Is it wrong for companies to profit from people during a pandemic or any other time? It’s fine if firms enable win-win outcomes in which consumers profit back by getting good value from the hand sanitizer, face masks, food, clothing, Netflix, or whatever else they need. Mutual profit is often a sign of “Mindful Marketing.”

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Coopting Commencement

5/3/2020

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

People are missing out on many favorite activities because of the pandemic, but not being able to eat in a restaurant or go to the movies are small sacrifices compared to the major life events some have been forced to forgo: weddings, honeymoons, graduations. Some caring companies have stepped in to ease the pain, but could their efforts actually be causing more harm?

As one who’s taught in higher education for two decades, I certainly appreciate the significance of college commencement. I’ve had a front row seat to thousands of students’ struggles and success over their four-year college careers, as well as to their graduation days, which are meaningful tributes marking the culmination of a lifetime of formal education.

When students’ academic journeys conclude, there’s tremendous relief and joy! The about-to-be graduates are excited, and their proud parents and grandparents are often even more animated—sometimes embarrassingly so. Families and friends want to be together to witness their loved one walk across the stage and to celebrate their momentous accomplishment.

Tragically, those celebrations will not happen on most college campuses this spring, as the coronavirus has pulled the plug on virtually all large group gatherings for the foreseeable future. While many formerly in-person experiences have been moved online, some with very little distortion, it seems impossible to replicate electronically the sights, sounds, and feelings of an on-campus commencement ceremony.

However, one ‘institution’ is making a great effort to ensure that this spring everyone’s graduation (high school, college, or other) is memorable. It’s not an organization you’d likely guess, but it is one with which you’re probably familiar: Anheuser-Busch. The King of Beers will play the role of principal and president at a very unique commencement event.

Natural Light, one of Anheuser-Busch’s many beer brands, will host “a virtual college commencement ceremony on Facebook Live to celebrate graduates around the world.” The ceremony will take place at 7:00 pm Eastern Time on Thursday, May 14, on Natural Light’s Facebook Page.

Graduating seniors who sign up in advance will have their names read on a “branded commencement microsite” by celebrities Shep Rose and Arianny Celeste. The event’s speakers will include, among others, Dallas Mavericks owner Mark Cuban and ESPN sports commentator Stephen A. Smith.

It’s great to see companies giving to those who tragedy has impacted physically, emotionally, and socially. Anheuser-Busch has a history of such corporate social responsibility; for instance, it has “donated nearly 83 million cans of emergency drinking water to disaster relief since 1988.”

Given the personalities employed, “Natty’s Worldwide Commencement” is likely to be an expensive event for its sponsor, even though done entirely online. It looks like the company wants to lift the spirits of soon-to-be grads, but are there other reasons Anheuser-Busch is willing to go to such effort and expense to offer an education-related event for free?

The rather obvious answer is that the firm wants to ‘teach’ young people to drink more Natural Light. A recent article in Marketing Dive suggests the same motive:

“Natural Light is attempting to make up for [coronavirus-related] losses while drumming up brand awareness among its core college-aged consumers. By providing this experience to young consumers during a difficult time, the brand could build good will and position itself in a positive light to help it nurture a loyal following of beer drinkers in the future.”

The fact that Anheuser-Busch’s motives for the commencement ceremony are not solely altruistic isn’t necessarily a problem. I, for one, am a firm believer that individuals and organizations can and often do successfully maintain more than one motive at a time, i.e., they can realize multiple goals simultaneously. Whether it’s a marriage relationship or a customer relationship, people often receive benefits from others, even as they give them.

There’s also not necessarily anything wrong with a beer company building pandemic-era brand equity by tapping positive consumer sentiment. Miller High Life, for instance, is running a contest to help couples get married at home. Thanks to the Miller Brewing Company, three engaged couples will win a “Wedding at Your Doorstep,” which includes beer, a photographer, an officiant, and $10,000 for honeymoon expenses. The company even promises to cover cancelled wedding costs.

So, what could be problematic with Anheuser-Busch’s product positioning? The issue is the target market. The company seems to be specifically targeting college students and is likely appealing to those even younger with its Natural Light line, which contains teen-friendly flavors like Strawberry Lemonade Beer and Strawberry Kiwi [hard] Seltzer.

Natty’s Worldwide Commencement is one piece of evidence that supports the college-targeting claim, but there’s more, such as an Anheuser-Busch promotion offering free beer to anyone turning 21, and a YouTube-based campaign to find a summer intern. Based on such evidence, Marketing Dive has deduced: “Natural Light in recent years has narrowed its marketing focus to reach college students.”

What’s more, aspirational purchase behavior often leads to target market creep: People who technically are not part of a target market buy its products because they want to be like those who are the ‘in’ group. For teens, this behavior often translates into wanting a more mature appearance and purchasing items aimed at those older than them.

What’s the connection to Natural Light’s Worldwide Commencement? It has to do with demographics. The National Center for Education Statistics projected that about 19.9 million students attended degree-granting postsecondary institutions in the fall of 2019. Of them, approximately 4.27 million (21.45%) were 19 years old or younger.

Another 4.47 million were either 20 or 21 years old. A conservative estimate is that 25% of those students, or 1.1 million, will not turn 21 by the end of May, which means nearly 27% of college students in the 2019-2020 academic year are 20 years old or younger (4.27 + 1.1 = 5.37 million / 19.9 million = 26.98%). In addition, almost all high school seniors are just 17 or 18 years old.

Anheuser-Busch’s target market for Natural Light is troubling in two ways. First, other than some rare exceptions, the legal drinking age in the United States is 21. For older college students, that’s not an issue, but for 27% of them and virtually all high school students, alcohol consumption is illegal.

Second, although many people do drink responsibly, there are potentially serious risks associated alcohol abuse, to which teens are especially susceptible. Here are some of the ‘sobering’ statistics from the Centers for Disease Control and Prevention:

Alcohol is the most commonly used and abused drug among youth in the United States.
On average, underage drinkers consume more drinks per drinking occasion than adult drinkers.
Those aged 12 to 20 years drink 11% of all alcohol consumed in the United States and more than 90% of the time are involved in binge drinking.
After drinking, 6% of youth drove and 17% rode with a driver who had been drinking.
Outcomes of underage drinking include changes in brain development, poor academic performance, social and legal problems, imprudent sexual practices, physical and sexual assault, and higher instances of suicide and homicide.
Every year, more the 4,300 underage youth die from excessive drinking.

Those who read my blog regularly might remember another time I took issue with marketers associating alcohol and academia. In January of 2017, I wrote a piece, “Alcohol Ads and College Athletics Don't Mix,” that questioned the NCAA’s designation of Dos Equis as “The Official Beer Sponsor of the College Football Playoff.”

It’s not that I thought another beer brand would be a better sponsor. I argued that having any alcohol company as an official sponsor of college athletics was “a paradoxical distinction that further propagates the false compatibility of beer and books, drunkenness and diligence, wasted-ness and wellness.”

In some ways, I believe Anheuser-Busch’s decision to sponsor a college commencement ceremony is even worse. First, its positioning as an event for ‘all graduates’ means it may reach an even younger demographic, which definitely doesn’t need any additional enticement to drink.

Second, while a graduation is a celebration, it should be a dignified one. Yes, people of age can choose to drink beer during a football game or soccer match, but they shouldn’t be drinking during a high school graduation or college commencement. Yet, that’s exactly what Natural Light encouraged in a Facebook post on April 9:

“Graduation ceremony cancelled? Sucks, but we got your back. We’re throwing a worldwide commencement ceremony for the class of 2020 . . . Plus, you get to drink beer.”

Another significant part of commencement is the stole that drapes over certain graduates’ shoulders, conveying special honors or individual achievement. As shown in a Facebook post on April 24, Anheuser-Busch has diminished that symbol of “prestigious recognition” by silk-screening Natural Light logos on a custom-made stole that it “might” send to those who like or share the post. Perhaps it's a stole for those who 'minored in binge drinking' and 'majored in partying.'

Finally, important but sometimes overlooked roles in a commencement ceremony are the people who read the names of the graduates. Where I work, those individuals are the deans of our various schools. As a graduate, it’s an honor to have your name read by an accomplished scholar or respected teacher. It’s another thing to have it ready by someone who’s resume includes “UFC ring girl” and “Playboy model.”

As a college professor and a marketer, I appreciate the need for partnerships between corporations and higher education. In fact, without the former’s support, most colleges and universities either could not exist or could not begin to serve students in the ways that they do. Tuition revenue typically cannot cover all operating costs or fund large capital projects like academic buildings, dormitories, and sports complexes.

Higher education needs business, and business needs higher education, for instance, to help prepare the next generation of employees. Everyone needs companies that respect the educational process and the people who participate in it, especially its young and most malleable consumers. Unfortunately, Anheuser-Busch’s global graduation ceremony is a thinly-veiled promotional-grab that offers no genuine respect for either.

Over the last month-and-a-half, I’ve been meeting via video conference twice a week with the students in our capstone marketing class, all of whom are seniors. Each time I see their faces on a computer screen, I feel for their loss—unable to enjoy campus life for their final semester. However, I’m sure each of these marketing majors, who have learned what it means to market for mutual benefit, can see past Natural Light’s benevolence façade and recognize the long-term risk its pop-culture ceremony holds for their peers.

It's nice that a star-studded event may temporarily lift the spirits of some of those most regrettably impacted by COVID-19. However, disregard for educational decorum and the well-being of those most vulnerable to alcohol’s harmful effects, earns Anheuser-Busch a degree in “Single-Minded Marketing.”

Subscribe to Mindful Matters blog.
Learn more about the Mindful Matrix and Mindful Meter.
Check out Mindful Marketing Ads and Vote your Mind!

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Some Good Payout for John Krasinski

Profiting on Others' Pain

Coopting Commencement

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