Category: Honesty7883a9b09e

Should Social Responsibility be Selfless?

1/16/2022

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

While people gave gifts to loved ones last month, the world’s largest pizza chain was providing presents to some very surprised recipients—other restaurants. True, “it is more blessed to give than to receive,” but was Domino’s philanthropy actually aimed at putting itself on the receiving side?

As you may have seen in the 60-second spot from its feel-good campaign, Domino’s bought over $100,000 in gift cards from local restaurants and gave them to its own customers.

It doesn’t take much business background to know that the goal of an enterprise is to build market share for itself, not competitors. Even Vickie Corder, one of the restaurant owners who appeared in Domino’s commercial, was astonished by the action: “I can’t believe one restaurant is buying another restaurant’s gift certificates.”

Why would Domino’s want to support its competitors’ sales by buying their gift cards, and even worse, giving them to its own customers, making them less likely to buy Domino’s pizza? Some of the ad text suggests an altruistic reason: “Domino’s wants to help the people and restaurants in our local communities.”

One might take that explanation at face value. After all, the firm did fork over $100,000. However, for a company with annual revenues of $4.37 billion and operating income of $801 million, $100,000 is immaterial. There’s also some understandable skepticism--Why haven’t we heard before of Domino’s feelings of responsibility for other restaurants?

Instead, some of the chain’s social responsibility has looked more like ‘marketing gimmicks,’ such as its “Paving for Pizza” program, aimed at filling potential pizza-delivery-wrecking potholes, and its “carryout insurance,” guaranteeing free replacements for customers who inadvertently fumbled their pies.

The vast majority of people probably never had a poor pizza experience resulting from either of those issues and never will, so it’s realistic to suggest that in both instances Domino’s was making much ado about nothing, positioning for the free publicity that each unconventional campaign elicited. So, is gifting other restaurant’s gift cards just another attempt to gain exposure through oddity?

The gift card campaign certainly seems like it could be another gimmick; yet, there are some notable differences, namely that COVID has put unprecedented pressure on restaurants, causing many to shutter their doors permanently. In fact, Domino’s commercial mentions that “over 110,000 U.S. restaurants have closed since March 2020.”

That to say, unlike the exaggerated ideas of potholes pummeling delivery vehicles and consumers carelessly dropping carryout orders, the pandemic’s negative impact on restaurants has, unfortunately, been very real.

The ad also mentions a related phenomenon that COVID didn’t cause but did increase: the use of third-party delivery companies. During the height of the pandemic when most restaurants’ sit-down dining was paused, more and more people started getting restaurant food delivered to their homes and offices by providers like Grubhub, Uber Eats, and DoorDash.

Although selling food, whether for dine-in or delivery, seems like a good thing for restaurants, apparently the math doesn’t work well when third-party delivery companies are involved. Irene Li, another restaurant owner interviewed in Domino’s ad, affirms the profit predicament: “[Third-party delivery fees] take a huge chunk of our bottom line; all of that comes out of our pocket and goes to them.”

Others have echoed her concern, including NPR, which reported that apps often charge commissions of 17% or more, in addition to delivery fees. Likewise, the LA Times found that one local restaurant paid $35,000, or roughly a third of its annual rent, in delivery fees, which led the Times to recommend, “The next time you order takeout, call the restaurant [directly].”

Domino’s suggestion that delivery apps wreak havoc on restaurants’ bottom-lines is on-point; however, the pizza chain is also very well-known for doing its own deliveries. Does that mean that Domino’s is selflessly looking out for others? Not exactly.

Apparently, some of the many people who have grown accustomed to the third-party apps for food delivery have also used them to place orders for pizza, doing to Domino’s the same fiscal damage described above. In fact, another Domino’s ad has suggested such delivery difficulties, warning consumers that third party delivery firms charge “surprise fees,” but it will reward certain loyal customers who use its app with “surprise frees,” or, free food.”

Likewise, during an interview on CNBC’s Mad Money, Domino’s President and CEO Ritch Allision suggested that third-party delivery apps have, to some extent, stunted the company’s growth.

All this to say, by buying and giving away other restaurants’ gift cards, Domino’s has brought added attention to an issue that doesn’t just hurt its local restaurant competitors. It also bruises Domino’s own bottom line.

The question, then, becomes, Is it right for Domino’s to help itself while helping others?

Before considering the ethics of this query, it’s worth noting that Domino’s strategy does seem to be effective marketing. The unconventional approach gains attention, and the corporate social responsibility builds goodwill.

What’s more, because delivery is both the focus of the ad and a key component of the company’s value proposition, the promotion is more meaningful and memorable. When people consider Domino’s brand, the company wants them to think of food delivery, which the commercial accomplishes.

So, what about the marketing’s morality? One consideration could be the amount Domino’s spent on the gift cards ($100K+) versus how much it’s paid for the ads. Excluding production expenses, U.S. television broadcasting costs alone, average about $115,000 per 30-second spot, which means the campaign’s promotional budget certainly far exceeded the value of the gift cards.

The extreme imbalance may make some rightly question the company’s motives. Although Domino’s franchisees did assume some risk by giving other restaurant’s gift cards to their own customers, most people who eat out probably patronize multiple restaurants, making it unlikely that Domino’s lost business. In fact, free gift cards may have led some of their recipients to reciprocate by buying more pizza.

All said, it’ hard to paint Domino’s promotion as selfless: The company benefited from the tactics as did the other restaurants and those who scored the free gift cards. So, is such mutual benefit problematic?

Most business exchanges result in win-win outcomes. From the clothes we wear to the computers on which we type, we’re usually very glad we have those products and not the money we paid for them. Meanwhile, the marketers are grateful for our money and don’t want back their products.

Mutually beneficial exchange, in commercial and noncommercial contexts, is a very good thing. Some may argue that such a philosophy shouldn’t extend to corporate social responsibility, but why not?

Several years ago, two colleagues and I conducted research in which we identified three unique types of corporate social responsibility: donation, volunteerism, and operational integration. In the study we affirmed that helping others was very good, but implementing philanthropic acts that simultaneously furthered the economic goals of the organization was even better. The positive response to this article and another like it suggests that many others share the same viewpoint.

The reality outside business isn’t much different. When individuals give of their time, money, etc., benevolence in some form usually comes back to them. The stories found in the Go Giver artfully describe that phenomenon.

Domino’s did a good thing by buying and giving away other restaurants’ gift cards. Although it wasn’t a major act of corporate social responsibility, it was a meaningful one. The fact that the philanthropy also benefited the pizza chain, doesn’t stop the strategy from being "Mindful Marketing."

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Two Lessons TikTok can Teach Facebook

10/10/2021

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

Most of us have used social media to learn how to do something, from making bread to remodeling a bathroom. We often turn to such media for new skills, but what if these sites could educate each other? In the wake of the latest revelations about negative social media impact, it seems there are at least two lessons the up-and-coming platform could teach the seasoned pro.

It’s been hard to find news feeds recently that haven't featured Facebook. The iconic social network that’s often been the focus of questions from citizens and senators, was back in the spotlight after a former Facebook employee-turned-whistleblower appeared on 60 Minutes and exposed a series of alleged corporate abuses, most impacting consumers.

Francis Haugen is a 37-year-old data scientist and Harvard MBA who has worked for a variety of top-tier social media firms for 15 years, including a two-year tenure at Facebook. In her October 3rd interview on 60 Minutes, she didn’t pull punches in portraying what she believes is her former employers’ danger to society. Among her accusations were:

Facebook’s algorithms systematically amplify angry and divisive content, which are rewarded with more revenue, as other content doesn’t receive adequate returns.
Facebook employees are compelled to curate polarizing posts in order to drive site traffic, maintain user engagement, and ultimately keep their jobs.
“Facebook has set up a system of incentives that is pulling people apart.”

Two days later, Haugen testified before a Senate subcommittee, where she made several other stinging revelations:

Facebook has ways of determining people’s ages and could be doing much more to identify users younger than 13.
Hate speech and misinformation boosts meaningful social interaction (MSI), a key Facebook metric to which employee bonuses are tied.
Facebook’s “amplification algorithms” and “engagement-based ranking” drive young people to destructive online content, resulting in bullying, body image issues, and mental health crises.

Facebook has responded to Haugen’s accusations, including with a written statement to 60 Minutes in which it claims that polarization has decreased in countries where internet and Facebook use has risen. Also, in a Facebook post, CEO Mark Zuckerberg has suggested that Haugen’s revelations represent “a false picture of the company” and that the idea that the firm prioritizes profit above safety and well-being is “just not true.”

Unlike Haugen and Zuckerberg, most of us have no window into Facebook’s innerworkings. At best, we’re just one of world’s largest social media platform’s 2.7 billion monthly active users, meaning we have no way of knowing whose representations are really true.

Human nature and history tell us that both sides are likely right in some ways, and perhaps responsible for certain misrepresentations. That said, many people have experienced firsthand Facebook feeds strewn with angry and polarizing posts. Likewise, the company’s recent decision to pause its work on an Instagram product for children under age 13 seems to reflect some sense of mea culpa.

In short, it’s becoming ever-more-apparent, even to nominal social media users, that there are important issues Facebook needs to address more effectively. The question, then, becomes, “Who can teach Facebook how to rehabilitate its social impact?”

It must be hard for one of the largest and most influential companies in the world to accept advise from anyone, including members of congress, as evidenced during Zuckerberg’s many visits to testify on Capitol Hill.

That doesn’t mean that government regulation isn’t effective. It plays a critical behavior-modifying role. However, there are natural delays in passing legislation, and those lag-times are often exacerbated by the speed at which social media and related technology change. Furthermore, members of congress typically don’t understand an industry as well as those who work in it, particularly when the industry involves high-tech.

So, who also lives at the cutting edge of technology and could influence Facebook toward more positive social impact? One particular competitor could—TikTok.

I admit; on the surface, this suggestion seems almost ridiculous: With its own algorithms driven by artificial intelligence, isn’t TikTok part of the same problem?

In fact, I’ve expressed my misgivings about the influence of the widely-popular app that Search Engine Journal describes as having “the fastest growth of any social media platform.” In the end, however, I concluded that users’ abilities to restrict or stop using TikTok suggested that it was not truly addictive.

Of course, ‘not being part of the problem’ doesn’t necessarily mean that TikTok can be part of a Facebook solution. However, the social media upstart has recently taken two initiatives that align squarely with two of the main principles that Haugen suggested Facebook must learn:

1. To discourage bad behavior: Compared to the millions and millions of videos available on TikTok, it was admittedly a minor move when the app recently began to ban posts that referred to stealing school property—a disturbing late-summer trend among teens. Still, the moral stand that the company took shouldn’t be diminished. A TikTok spokesperson explained the ethos:

“We expect our community to stay safe and create responsibly, and we do not allow content that promotes or enables criminal activities.”

2. To support users’ mental health: Also about a month ago, TikTok unveiled “a slew of features intended to help users struggling with mental health issues and thoughts of suicide.” Among the app-related resources are well-being guides for those struggling with eating disorders and a search intervention feature that activates if a user enters a term like “suicide.”

Facebook’s challenges to more effectively discourage bad behavior and to support mental health may be somewhat unique, both in terms of their nature and magnitude. Still, TikTok now has 1 billion monthly users, up from 700 million just a year ago, and those users seem to deal with many of the same social concerns that Facebook users do.

Businesses routinely learn from others, often by observing and emulating them (e.g., developing new products). Facebook certainly can and likely does already do that, but maybe there’s another level of within-industry education that could occur.

This suggestion may be the most ridiculous one yet, but what if Facebook and TikTok cooperated? What if the two companies ‘compared notes’ and in some way worked together to address the physical, emotional, and social challenges that threaten both their users?

Of course, imaging any cooperation between such large and close competitors is practically unthinkable, but it's not unprecedented. Several decades removed, both Harvard Business Review (1989) and Forbes (2019) published articles citing such partnership examples, like General Motors and Toyota, and explaining the win-win outcomes that accrued from such “coopetition.”

What might Facebook and TikTok’s motivations be for cooperating? Perhaps they both would like to avoid probable government regulation. Or, they may want to see how they can advance themselves, without compromising their competitive positions.

Moreover, maybe Facebook and TikTok can recognize that personal and societal well-being are what matter most, and together they have the power to shape it like few others can. Actually, all three of motivations have merit and together they certainly represent “Mindful Marketing.”

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Help Wanted, Marketing to Prospective Employees

7/31/2021

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

While eating lunch at a favorite restaurant recently, my son and I noticed that the menu was much shorter than before. The Italian eatery was no longer even offering one of its standard selections, pizza! After our meal, I asked our waitress about the simpler spread. She explained it was because they couldn’t hire enough cooks to prepare additional entrées.

You’ve likely seen signs in restaurants, ads from retailers, and posts on social media from other service providers announcing pressing needs for more employees. While the recent labor shortage has been a boon to job seekers, it’s been a bummer for many businesses that find themselves perpetually understaffed. However, firms can turn their current recruitment challenges into opportunities if they rethink how they market to prospective employees.

Like many professors, I’ve invested considerable time helping students get jobs, both internships during college and career positions after graduation. What has for decades been largely an employer-oriented sellers’ market has suddenly shifted. Now employers are increasingly competing for new hires. As a result, it behooves businesses to go back to school and brush up on their marketing, not to attract customers but to contract employees.

In a few days, I'll participate on a panel for that purpose, joining three others to engage employers in a discussion of how to recruit college students and recent grads more effectively.

Being both a marketer and a college faculty member, I hope to offer a unique perspective, mainly based on two-plus decades helping get students gainfully employed. I’m fairly familiar with Gen Z’s preferences in the recruiting process. So, in case there’s any overlap between the panel audience and this one--spoiler alert! I’m sharing below my recommendations for more effective marketing to prospective employees.

It’s probably not surprising that this marketer’s suggestions flow from the 4 Ps. Although there are several strategies I could encourage for each marketing mix component, I’ve singled out two for each, not because they’re necessarily the most important ones but because they’re the features/benefits that young prospective employees increasingly seek, which means they’re ones upon which employers need to double down:

Product

Social Responsibility: Gen Z’s desire to align themselves with organizations that make a difference is well-documented. Its members want to have a positive impact on the world, and one of the best ways to do so is to work for “purpose-driven companies.” Firms should be able to communicate clearly and concisely to prospective employees how they help people and the planet.

Attractive Organizational Culture: Decades ago, when I was entering the job market for the first time, company culture was not on my radar screen. Now most new hires want to know 'what it will be like' to work for a firm. I often hear them offer desired descriptors like “low-stress,” “friendly,” and even “fun.” Interviewers should be prepared to talk about their organization’s culture and point to specific examples. They also need to model it in their interactions with prospects.

Place

Work On-Line: Through the pandemic, where work occurs has become an increasingly important point of interest. Many people with whom I’ve spoken have suggested that they’ve enjoyed working from home; in fact, they’d like to continue to work remotely at least some of the time. As might be expected, most Gen Zs are extremely comfortable with digital technology and very used to interacting with others virtually.
Work In-person: At the same time, people also mention that they miss the impromptu interactions that would occur in office hallways and around the proverbial watercooler. In taking jobs, many new grads move away from family and friends, so they’re hoping to make new, meaningful connections. One recent graduate told me it’s harder for her to develop those relationships just from online interactions. So, it seems that employers should provide at least some opportunities for face-to-face interaction.

Promotion

Timely Communication: This past spring a senior student of mine was interviewing with an organization. The process was going well, but more than once he expressed concern, e.g., “It’s been almost two weeks since my second interview and I haven’t heard from them.” Granted, two weeks is not an unreasonable wait, but employers should be sensitive to the fact that more job seekers today have multiple options. So, to not miss the opportunity to make a great hire, firms should at a minimum make clear their timeframe for follow-up communication and even better, move the recruiting process along a little more quickly than it has gone in the past.
Transparent Communication: In keeping with the previous imperative, many college students tell me how much they value transparent communication. Sometimes I push back and ask, “Do you really want to know everything an organization does?” They reply, “No, but we don’t like when they hide important things or try to put a positive spin on something negative.” In short, they want organizations to be open, honest, and genuine. Companies should be careful to model these values in their communication with prospective employees.

Price

Appropriate Pay: Professional sports fans often hear of pro athletes wanting to “get paid.” It’s usually when a star’s current contract doesn’t compensate them in proportion to their productivity. College-age prospective employees don’t have contracts, but they should ‘get paid’ in the sense that they shouldn’t be lowballed; rather, they should be offered competitive salaries and benefits at if not above market averages. These young people aren’t looking to squeeze out every dollar they can, but they do have debt to pay and don’t want to have to live paycheck-to-paycheck. Similarly, unpaid internships should be a thing of the past.
Work-Life Balance: The greatest resource employees give organizations is their time. Although the prospective employees with whom I speak are very willing to work hard, they rightly want to have sufficient time for other needs and interests outside of the office. Employers should monitor and encourage healthy work-life balance. They also should be ready to tell prospective employees about their systems for maintaining an agreeable life equilibrium.

Some sectors, like healthcare, already know well the challenges of employee recruitment and retention: For years, hospitals have labored to hire enough doctors and nurses. Now, many employers share their pain. The above prescriptions can bring some recruitment relief while also helping firms feel better, knowing that they’re practicing “Mindful Marketing.”

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College Athletes Must Get in Condition for Commercialism

7/5/2021

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

College students enjoy talking about ads, especially ones that feature top athletes like Tom Brady, Serena Williams, and Lebron James. The NCAA’s momentous decision to allow college athletes to become paid spokespeople has leveled the promotional playing field, but are young, soon-to-be endorsers ready for the pressures they’ll face in a different kind of game?

In a landmark decision on June 30, the NCAA lifted its long-standing rules prohibiting organizations from paying student athletes to endorse their products. Now athletes in all three divisions can profit by leasing their names, images, and likenesses (N.I.L.) to the highest, first, or only bidder.

The rationale behind the NCAA’s prior rulings was to preserve amateurism and the purity of competition, uncontaminated by commercialism. The point of this piece is not to debate the pros and cons of paying student athletes, which many others have already done. Instead, it’s past time to ask if these young people are prepared for the new opportunities and challenges that come with being paid endorsers.

Already, many of the same college athletes who had simply enjoyed watching professional spokespeople now find that they are professional spokespeople, but is paid promotion a game they’re ready to play?

The clock had barely turned midnight on June 30, when several college athletes began to monetize their new marketability. The first was apparently Auburn University quarterback Bo Nix who signed a deal with Milo’s sweet tea at 12:02 am, July 1. Two others who quickly followed suit were twin sisters Haley and Hanna Cavinder, basketball players at Fresno State University, who inked an agreement with Boost Mobile.

For the Cavinders, the leap to professional endorsers should be a fairly smooth one. They are business marketing majors, but even more, they are already social media stars with over 3 million followers on TikTok and about 4 million across all platforms.

However, for other newly minted marketers with less knowledge and experience, the transition will likely be more challenging. Here are five things college athletes should understand in order to do well and good in their new commercial competition:

1) Marketing: One wouldn’t jump into a serious game of basketball, football, etc. without knowing the sport. Similarly, one shouldn’t enter paid endorsement without understanding marketing. Beyond an appreciation of the discipline as a whole (e.g., the four Ps), two concepts that every paid endorser should comprehend are target market and branding.

The sponsoring organization and its advertising agent should be aware of the target market they’re trying to reach in terms of its demographics, psychographics, and any other identifying criteria. Endorsers should have the same understanding so they can make their own assessment of personality-audience fit and use that knowledge to tailor their communication.

Closely related, an endorser should have a clear picture of the unique identity, or brand, they’re building for themselves and the branding of the sponsoring company. Although these personal and organizational brands will never be identical, they should be complementary. For instance, individuals trying to build their brands as ‘sophisticated and exclusive,’ probably shouldn’t endorse brands that are seen as ‘low-budget and casual.’

2) Contracts: Sponsorship deals are typically bound by contracts that specify the rights and duties of all parties, including those of the spokespeople. As such, college athletes should understand basic contract terms like offer, acceptance, breach, indemnification, and exclusivity. The last term is especially important in that contract terms might prohibit an athlete from signing sponsorship deals with other organizations, particularly competitors.

Another special provision often found in endorsement contacts is a character or morals clause, which “allows the sponsor either to suspend or terminate a sponsorship agreement in the event that the athlete, celebrity or other endorser violates the clause [because of] behavior that is criminal, that is scandalous, or that might tarnish the advertiser’s brand.” Most people have better sense than Ryan Lochte showed after the 2016 Rio Olympics; still, it behooves every college athlete to understand that by signing an endorsement contract they become more accountable for their actions, including their social media posts, than they ever were before.

3) Personal finance: Although those who feel they don’t have enough money may disagree, research study results support the premise that more money can mean more problems, at least in terms of added stress. A former NCAA athlete who now works in banking, believes that newly earned endorsement income can become a burden for college athletes who lack sufficient financial acumen and discipline.

A little over a year ago, Hunter Brindle was captain of Messiah University’s baseball team while he completed majors in economics and marketing. Now an investment advisor, he expresses concern that college-age spokespeople may not manage their endorsement money wisely, leading to unsustainable spending habits they’ll regret later in life unless they are financially informed:

“When your housing, utilities, and meals are all covered by a scholarship, loan, or your parents in one large payment, you develop the mindset that every dollar that enters your bank account is there for spending. Therefore, I believe it will be very common to see many college athletes spending any endorsement dollars as fast as they are coming in without realizing the potential future benefit those dollars could provide when they are someday trying to figure out how to put a down payment on a house. Because of this, I believe it could be extremely beneficial for athletes to participate in some sort of financial counseling as they enter college where the reality of real-life expenses is laid out before them.”

4) Time-management: College places time pressure on every student, but regular practices, workouts, and games, mean that athletes must work even harder to balance their schedules. Messiah University’s men’s soccer coach Brad McCarty, who has led his teams to five NCAA Division III Championships, believes the addition of endorsements makes athletes’ time management all-the-more critical:

“One of the biggest challenges student-athletes face is the balance of time and resources. Regardless of the level—D1, D2, or D3—NCAA athletes are having to juggle homework, exams, study groups, practice, games, lifting, fitness, nutrition, sleep, relationships with teammates, dating relationships, spiritual development, social media, jobs, etc. College athletes interested in finding ways to be a paid endorser takes time/energy, but they already don’t have a lot of margin in their lives.”

McCarty goes on to say that athletic departments will be important players in helping their athletes navigate the new commercial environment.

5) Respect for others: The first four items college athletes need to understand are squarely in their own self-interest. However, they also should be cognizant of the impact their endorsement decisions may have on others, including some already inferred above:

Teams: Athletes who are good enough to receive sponsorship deals are naturally among the best on their teams, which means their coaches and fellow players must depend on them to avoid distractions and perform at high levels in order to help the team succeed.
Universities: Any organization’s brand is partly a function of the personal brands of its leaders and other members, e.g., Apple and Steve Jobs; Tesla and Elon Musk. College athletes must realize, therefore, that their endorsement decisions reflect on their institutions, which is why Brigham Young University has adopted an N.I.L. policy that prohibits its athletes from endorsing products like alcohol, tobacco, gambling, and adult entertainment.
Society: College athletes already serve as role models for many people, especially young fans. As they evolve into multimedia influencers, athletes should be aware that many more people will emulate their words and actions in ways that can produce broad positive or negative impact in areas such as physical health, mental well-being, interpersonal relationships, and environmental sustainability.

The five preceding prescriptions can challenge anyone, including young athletes who lack certain life experience and who need to focus on their sports and their education. As such, these new endorsers will require the guidance of many others, including their coaches, athletic departments, and institutions, as well as other individuals who can offer them informed and unbiased perspectives on personal branding and integrated marketing communication.

College athletes are some of the most gifted individuals in the world. With the support of others and their own self-discipline, they can continue to excel in their sports and in the classroom will also becoming producers of “Mindful 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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Is Excedrin Out of Its Mind?

5/8/2021

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

Businesses need to do many things well to be successful, but the most basic is getting people to buy their products. So, why would a company that markets migraine medicine want to help people find other ways to deal with their headaches? What is Excedrin thinking?!

GlaxoSmithKline (GSK), maker of Excedrin, one of the world’s best-known pain management products, recently decided to target video gamers, a cohort whose long hours of intent focus on video screens often create the condition the brand is built to cure—headaches.

It’s not surprising that gamers are susceptible to headaches. Research by Limelight Network found that video game players spend an average of six hours and 20 minutes a week participating in their pastime. However, that average is deceptive: Binge-gaming is on the rise, and most gamers report “having played for more than four hours consecutively.”

A ‘half-workday’ or more glued to a video screen could give anyone a migraine. It’s not surprising, therefore, that Excedrin’s website claims that “89% of gamers have experienced gaming related headaches.” It also adds that “80% simply play through the pain.”

Targeting gamers for headache remedies seems like a no-brainer, especially given Excedrin’s well-tailored creative strategy. For instance, in a 15-second spot that looks like a video game, an animated Guardians-of-the Galaxy-like team called “the Healing Academy” rushes to the aid of a young gamer whose headache has him crying out, “I’m fading.” Tablets taken, the gamer quickly recovers and the ad ends, “Excedrin, game over for headaches.”

GSK’s promotional mix includes several similar short spots as well as banner ads and sponsored posts on Facebook, Twitter, and YouTube. The firm is also leveraging increasingly effective influencer marketing in the form of professional gamer Matthew "Nadeshot" Hagg, who has 1.6 million followers on the live game-streaming platform Twitch.

GSK’s strategy for targeting gamers seems very well-played. However, there’s another part of the brand’s approach that could have many marketers hitting pause and that might make investors ill: Excedrin is also trying to help people avoid headaches.

On a company microsite specially created for gamers, the company references an exploratory study that tested “a simple 6-step routine to mindful gaming designed to improve focus and optimize performance in gamers.” The six steps, which are designed to “help manage the risk of headaches,” include the following tips:

Don’t play angry
Look away from the screen for 20 seconds now and then
Listen to some relaxing music after a long stretch
Pause the game and relax your mind by sketching or doodling
Put down the controller and give yourself a hand massage
Close your eyes and do some deep breathing: inhale through your nose, exhale through your mouth

Excedrin has enlisted 12 Twitch influencers as hosts of branded gaming livestreams, the most notably being Nadeshot, who talks about “the six-step mindfulness routine” during his live play on Twitch.

At first glance, Excedrin’s migraine mitigation strategy sounds good—helping people avoid headaches is a noble endeavor—then one realizes that fewer headaches mean fewer pills popped, lower sales, and less income for the company. It seems like Excedrin is creating a headache for itself.

The company’s strategy has made me wonder, what if I wrote an article, “Six reasons you shouldn’t attend college”?—it probably wouldn’t sit well with my university. Likewise, would an attorney author, “How to represent yourself in court,” or a public accountant pen, “Why to do your taxes on your own”? The likely answer to each is ‘no.’

However, there are other examples that affirm Excedrin’s tips for headache-avoidance. An online search quickly led me to an article, “Safe Driving Tips to Help Avoid Collisions” by an unlikely contributor—an autobody repair shop. Similarly, it may be surprising to see that a physical therapy center has published a piece, “Injury Prevention in Young Athletes.” Aren’t these organizations jeopardizing their own bottom-lines?

The two different sets of examples create confusion because they conflate problems with solutions and preventive measures with cures.

Education, legal representation, and tax preparation are preventative solutions to the probable problems of unemployment, a negative legal judgment, and an audit by the IRS. In the same way, safe driving helps to prevent car collisions and stretching helps avoid athletic injuries.

For an attorney, authoring “How to avoid a lawsuit” is different than writing “How to represent yourself in court.” The first piece is an effort to help people prevent a problem, while the second is a possible solution that wouldn’t only divert business from the firm, things probably wouldn’t end well in court for the self-represented defendant.

So, Excedrin’s mindful gaming tips are preventative measures, aimed at avoiding a common problem for gamers. Yes, fewer headaches mean less demand for migraine medication, but several other factors will likely more than offset any such sales decrease for GSK:

More consumers will know about Excedrin: The public relations exposure that Excedrin is enjoying because of its educational efforts likely means that many more Gen Zers and others who had never heard of Excedrin before are becoming familiar with the brand.
The health tips will create goodwill and trust: Consumers appreciate when companies do things for them without asking for anything in return. Such benevolence builds goodwill. It also engenders trust, as people are more likely to put faith in organizations that aren’t simply looking for sales.
The medicine will make its way into more people’s consideration sets: I’ve been familiar with Excedrin for as long as I can remember, but I don’t think I've ever tried it; I’m not sure why. I only ever consider Advil and Tylenol. I’m not a gamer, but now I’m thinking of trying Excedrin sometime.
People will reciprocate: Often when someone gives or does something for us, we wonder, 'What can I do for them?' Besides being more top-of-mind, Excedrin will benefit from people who have appreciated its headache advise buying the product as a way of repaying the company for its kindness.

So, even if Excedrin’s headache prevention tips stop some people from getting migraines, many more people will be familiar with the brand, appreciate its altruism, trust it intentions, add it to their consideration sets, and purchase the product, partly to reciprocate for its good deed.

Another way to view it is Excedrin is greatly increasing the top of its sales funnel, or its brand awareness, which will inevitably mean more consumers taking action. Granted, the headache tips may somewhat reduce the need for migraine medicine, but gamers and others will still get headaches at times, and more of those who get them will now turn to Excedrin.

As significant as these consumer outcomes are, there’s another consequence of the company’s strategy that’s equally important: the impact on employees.

People want to give their time and energy to worthwhile causes. They want to work for organizations that have a meaningful purpose. Probably few people get excited about making ‘pills,’ accounting for ‘pills,’ or marketing ‘pills.’ However, it would be motivating to work for an organization whose mission is to help people feel better so they can do what they want and need to do.

GSK seems to be such an organization. The company’s “About us” webpage beings with:
“We are a science-led global healthcare company with a special purpose: to help people do more, feel better, live longer.”

The choice of words is telling. GSK could easily say something like, ‘We want to be the premier producer of headache medications. That wording, however, would suggest that the firm’s first priority is its bottom-line and that helping cure customers’ headaches is just a means of getting there. Instead, GSK emphasizes that helping people feel better is what matters.

Employees, not to mention customers and investors, can get excited about that kind of a focus on a greater purpose.

Of course, individuals and organizations can put anything on a website. That’s why Excedrin’s headache avoidance tips are so important: They show that the company truly supports what it says: It puts its medication where its mouth is.

When companies put people ahead of profit, something counterintuitive happens—they make money.

There are hundreds of pharmaceutical companies in the world. According to Pharmaceutical Technology, GSK has annual revenues of over $44 billion, which makes it the world’s sixth largest pharmaceutical firm. In 2020, GSK had income of over $7 billion. All that to say, GSK’s focus on helping people feel better appears to be paying off.

One way to know that someone loves you is seeing them sacrifice something to make you happy. Whether people buy its medications or not, GSK seems to want people to be happy.

It may look strange for a company to lead prospects to a solution that avoids its products. However, such a selfless approach does not go unnoticed; in fact, it’s one that most people find endearing. Excedrin’s effort to prevent headaches before they happen isn’t naïve; it’s actually “Mindful Marketing.”

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Recoloring History

3/12/2021

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

February’s Black History Month was an important reminder of the impactful roles people of color have played in our world. History should be about what actually happened; however, some entertainment has actors playing roles that were really performed by people of other races. Now a media icon’s popular streaming series is shining a light on such controversial casting.

In online entertainment, where content is king, Netflix’s original series Bridgerton, about the lives of Regency-era nobles, has risen above the populace to become a royal success. Other period pieces like Game of Thrones and The Crown also have shown viewers’ appetites for aristocracy, but Bridgerton is different in one very visible way.

Playing the roles of English nobles and others, people of color are many of the series’ leading actors, for instance: Regé-Jean Page, Ruby Barker, Jason Barnett, Martins Imhangbe, Sandra Teles, Anand Desai-Barochia, and Golda Rosheuvel. In fact, Rosheuvel plays one of the show’s highest-ranking royals, Queen Charlotte.

Although some believe that the real Queen Charlotte “descended from a Portuguese branch of nobility with African ancestry,” even a casual royal-watcher knows that the bloodlines of English nobles are rather consistently Caucasian. So, to see persons of color playing the parts of dukes and duchesses is at least surprising, and some might say ‘historically inaccurate.’ Either way, Bridgerton begs the question:

Should an actor of one race portray a person of another?

First, it’s important to recognize that Bridgerton is not exactly breaking new ground. A few months before COVID closed the curtain on live performances, my wife and I had the privilege of visiting Philadelphia and seeing one of the best examples of diverse casting: Hamilton. The musical mega-hit features many people of color portraying individuals who in reality were white, e.g., George Washington, Thomas Jefferson, Aaron Burr.

However, actors were crossing racial lines long before Hamilton hit Broadway in 2015. In fact, it’s easy to find such film examples over the past century, and it’s worth noting that in most cases the roles were reversed, i.e., white actors played either real or fictitious people of color, for example:

Angelina Joline as Mariane Pearl in A Might Heart
Ben Affleck as Antonio J. Mendez in Argo
Joseph Fiennes as Michael Jackson in Elizabeth, Michael, and Marlon
Mickey Rooney as Mr. Yunioshi in Breakfast at Tiffany’s
Laurence Olivier as Othello in Othello
Natalie Wood as Maria in West Side Story
Johnny Depp as Tonto in The Lone Ranger
Katharine Hepburn as Jade in Dragon Seed
Elizabeth Taylor as Cleopatra in Cleopatra
John Wayne as Genghis Khan in The Conqueror

So, what issues are really at stake when it comes to actors’ racial representations?

The most obvious seems to be historical accuracy. Participants’ personal identities (racial, ethnic, gender, etc.) are important for understanding past events and how they impact us today. For instance, it would be dishonest to depict WW II’s Tuskegee Airmen as Asian, Hispanic, or white, when almost all the squadron’s aviators were Black. Doing so also may steal a sense of pride from African Americans today.

However, does that same need for ‘identity accuracy’ apply to entertainment? Not necessarily. When we watch a television series, a feature film, or a Broadway show, we know that the actors are not the actual people—it’s a morally-acceptable accommodation that Alec Hill calls “mutual deceits.” Play-goers understand that Lin-Manuel Miranda is not actually Alexander Hamilton. They know that he's just pretending to be him for a few hours.

The same logical likely applies to Bridgerton. Even though some of the show’s characters were real people, like Queen Charlotte, it’s okay for people of other races to portray them, because it’s a largely fictional series that viewers know is taking creative liberties and not purporting to be very factual.

However, that artistic license shouldn’t be wielded with impunity. There still need to be standards, particularly related to portraying people in ways that reasonably represent who they are or were.

If an actor ever played me in a movie, which will certainly never happen, I’d be less concerned that the actor looked like me and more concerned that he acted like me. No one alive or deceased deserves to have their character defamed, which is an issue I’ve written about on several other occasions:

Accuracy consistent with the nature of the artistic creation (e.g., comedy vs. drama) is certainly important, but two other race-related factors also deserve consideration:

Opportunities: While it’s convenient to conclude that white actors can portray people of color and vice versa, that generalization fails to account for centuries of discrimination that have often kept from racial minorities opportunities afforded others, including work in acting. To help overcome that historical disparity, a case can be made that persons of color should receive added consideration for acting roles.
Representation: Similarly, it’s encouraging for people of any race, ethnicity, or gender to see themselves represented in desirable occupations. Acting is such a profession for many, but even more, actors paint pictures of career possibilities with each profession they portray, from A–accountants to Z–zookeepers.

Realizing that my own background and identity influence my thoughts on this issue, I asked an astute student of mine, Mikayla Broome, who is a person of color, to share her perspective. Not surprising, she offered insights that hadn’t occurred to me.

Mikayla first disclaimed that while Bridgerton seemed intriguing, her impressions of the show came mainly from seeing its trailer. She hadn’t watched any episodes because of their graphic sexual content—a good call that may be reason for future Mindful Marketing analysis.

In addition, she suggested that although she understood others’ affection for the show’s racial diversity, the setting in Regency-era England made the series seem "unrealistic" to her. In keeping with that sentiment, she would “have no problem with white actors depicting the characters.” She emphasized that was her personal opinion and she respected those whose attitudes differed.

Each of these reflections were instructive to me, but it was something else Mikayla shared that I found especially enlightening:

“I would be much more interested in a show depicting the lives of people of color in their own culture . . . like the royalty in Benin, Nigeria, the Tang dynasty in China, the Gupta dynasty in India, or Arsinoe the princess of Egypt. People of color love to see themselves represented on the big screen with cultural accuracy. We have such rich histories that I see no need to insert us into stories that are not ours.”

Again, Mikayla emphasized that her personal opinion didn’t negate the potential value of diverse casting like that described above. However, she rightly suggested that the bar should be set higher.

In the category of fiction, Disney has taken significant diversity strides with feature films like Mulan, Moana, and Coco. However, there also are so many inspiring stories to tell of real-life heroes from underrepresented people groups, such as those shared in Hidden Figures, The Boy Who Harnessed The Wind, and a Ballerina’s Tale—a documentary about Misty Copeland, the first black female principal dancer of a major international ballet company.

One might think that films featuring real-life diversity are kind-hearted charity works that do good socially but not well financially. According to research by UCLA’s Center for Scholars & Storytellers, that characterization is not the case. In analyzing 100 films released from 2016 to 2019, the study found that “films with diverse characters and authentic stories actually make more money at the box office.”

Interestingly, Mikayla is double-major in Dance and Business Administration. Perhaps her future will in some way involve bringing to light real-life stories of underrepresented people.

Lives are stories that intertwine to create a rich tapestry of tales that marketers and others need to tell well. At the same time, they should seek opportunities to share more real-life stories born from backgrounds of diversity.

In entertainment, it’s sometimes okay to recolor history, but it’s even better to depict individuals and events just as they were. Regardless how one might classify Bridgerton, true stories told accurately are more often “Mindful 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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General Motors – Going Electric, Going for Broke?

2/6/2021

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

There’s news and there’s NEWS. The unexpected announcement that one of the world’s best-known companies, in an indispensable industry, had decided to convert all its product lines to clean energy was shocking NEWS that’s gained public praise. However, is this storied firm making a PR promise that its bottom-line can't bear?

About a week ago General Motors made the stunning announcement that it would “phase out petroleum-powered cars and trucks and sell only vehicles that have zero tailpipe emissions by 2035.” Companies revamp product lines all the time, so what makes this U-turn so extraordinary?

Throughout most of its 113-year history, the gasoline combustion engine has been the driving force inside the vast majority of the automaker’s products. Gas has been to GM like chicken is to KFC. In fact, GM could stand for Gasoline Motors.

GM has long-been known for gas-gulping sedans like Buicks and Cadillacs, as well as increasingly popular pickup trucks and SUVs, including one with one of the lowest MPGs of any noncommercial vehicle in the modern era--Hummer.

Not only has the company been an avid user of petroleum-burning technology, it’s also been a developer. For instance, “In 1971, GM pioneered the use of engines that could run on low-lead or unleaded petrol.”

Meanwhile, this world-leading automaker hasn’t exactly been heading the charge into electric vehicles (EVs). In 2016, Bloomberg estimated that GM lost $9,000 on every all-electric Chevrolet Bolt it sold, and in 2019, the company halted production of its Chevrolet Volt hybrid car. Both of these short-circuits likely contributed to projections that EVs would account for just “5 percent of the automaker’s total production by 2026.”

What’s more, in an effort to promote a gas-fueled future, General Motors joined a Trump administration lawsuit against California aimed at compelling the state to decrease its gas-mileage standards to the lower federal levels.

In short, “General Motors’ history hasn’t been especially kind to electric mobility.”

So, would a company kept afloat for so long by gasoline really want to sever that fuel line?

Given GM’s history and current product portfolio, it’s easy to suspect that the company is simply playing a PR card. Perhaps ‘no petroleum by 2035’ is a stretch goal that the company doesn’t actually expect to achieve, or the objective is just symbolic of the firm’s intent to be more environmentally-friendly.

Companies making such bold long-term projections can take cover in our collective amnesia. In 2035, will anyone remember what GM promised a decade and a half earlier, let alone hold the company accountable?

GM’s current CEO, Mary Barra, has been leading the automaker since January of 2014. Given the five-year median tenure for CEOs of large-cap companies, how likely is it that she’ll be at the helm in 15 years at the age of 74? If there is accountability for GM’s no-petroleum pledge, it probably will fall on one of Barra’s successors. That protection along with pressure for next quarter’s earnings could encourage a leader to promise anything!

However, GM doesn’t really need a confidence-building headline right now—the company is actually doing well. Since a low of $16.80 per share on March 18, 2020, its stock price has tracked steadily upward to its current price of $54.25, making a market cap of $72.54 billion. The company’s trailing twelve months revenues are $115.79 billion with net operating income from continuing operations of $3.39 billion.

Furthermore, many have an optimistic outlook on the firm, including 18 investment analysts CNN recently polled, all of whom gave the stock a “buy” rating. Given the momentum of its existing operations, maybe a better question to ask is: Is GM making a big mistake by promising to sever its gasoline fuel line?

One very good reason for wondering is that GM’s sales are increasingly skewed toward bigger products. In 2019, GM delivered 2,887,046 vehicles in the U.S., of which more than 2 million were full-size pickups, SUVs, and crossovers. Those bulkier vehicles need more energy to move their larger masses, especially if they’re hauling or towing things. That kind of power demand can be hard for battery power to support.

Political uncertainty is another issue. After the Biden administration’s win and call for more clean energy, GM withdrew from the California fuel efficiency lawsuit—a move that seems prudent now, but what happens if the pendulums of politics and consumer sentiments swing back, away from environmentalism, as they’ve done on more than one occasion? Will GM wish it hadn’t made such a life-changing commitment?

It’s reasonable to ask these kinds of questions about the authenticity of GM’s promise and the acumen of its long-term strategy. However, it’s still very likely that the company’s electricity-powered approach is its best path forward, for strategic and moral reasons:

No future in fossil fuels: Each year, more organizations and individuals convert their energy consumption to renewable sources such as solar and wind. Although economic influences like low oil prices may temporarily slow the trend, it will continue, especially with more pro-environment government policies, purchase incentives, and industry innovation, such as Apple’s potential autonomous EV.

Turning an aircraft carrier: Many of the newer EV producers are more nimble than GM because of their smaller sizes, flatter corporate structures, and more risk-tolerant organizational cultures. It typically takes an older, larger company longer to make a significant business model change, especially if the company is not privately held but needs to answer to shareholders.

A planet in peril: In the face of mounting evidence, it’s hard to overlook the negative impacts that CO2 emissions are having on the environment, including its animals, plants, and people. Even if GM could continue to sell petroleum-powered products for another hundred years, moral considerations like fairness to those breathing polluted air and stewardship of limited resources suggest that the company shouldn’t continue production as usual.

As often happens in the auto industry, GM’s changes will have some significant impacts on other companies such as its main suppliers, as well as on thousands of other organizations that automotive touches like service centers, gas stations, and replacement parts suppliers.

However, just as this large corporation’s changes will threaten certain industries, those that respond to the challenge and adapt may find great economic opportunities, like manufacturing batteries and operating charging stations.

GM’s 15-year conversion commitment is a big, bold move, yet it’s one the company needs to make for its own success, as well as for the wellness of our world. Maybe this major player’s actions will inspire others to take similar steps, making GM’s electrical charge even more “Mindful Marketing.”

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7 Comments

Natural Light Imitates Art

1/23/2021

5 Comments

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.”