February 2013

Back in October, I talked here on Madison Ave Insights about the FTC’s just-released Green Guides and what they would mean for marketers moving forward. The FTC moved against unfounded and overused “environmentally friendly” and “green” claims in marketing for a range of products. The standards as established challenge the use of unqualified general environmental benefit claims and asks advertisers to scientifically prove specific green claims.

One industry with a focus on the environment that needs to adapt to both the demands of the marketplace and the restrictions of the regulators is the automotive industry. At the North American International Auto Show in Detroit in January, consumers saw the latest model introductions from the automobile industry – domestic and foreign – that presented consumers with each company’s take on the best options for price, performance, versatility, fuel economy and being green.

So what’s next for the auto industry in terms of the future – both the future of the environmental and continued explosion of digital?

The Way I See It

  • Automakers see a double edge sword – a marketing and sales benefit from better fuel economy, but at a higher cost to engineer and build vehicles that consumers will want and can afford. They are facing new regulations requiring them to increase fleet-wide average fuel use to 54.5 miles per gallon by 2025.
  • I see the cycle of government pushing the industry and the industry reacting to the push to be a dangerous paradigm in the current political climate. I see the need for industry to move forward independent of government prodding by satisfying consumer demand with products that are innovative and revolutionary.
  • I see automakers, both current and new, pushing forward with battery-powered, electric cars and pushing the envelope with new retail standards and business strategy. I see electric cars as being a true “environmental” automobile.
  • I see the automotive industry continuing its comeback and becoming even more important as major advertisers.
  • I see the need for breathtaking creative, brilliant strategy and greater use of digital, social media and mobile.

The Way The Industry Sees It

I sat down with Joel Ewanick, President and Managing Director of Global Auto Systems. Currently Joel is involved in several projects most noteworthy is as Special Advisor to the CEO of Fisker. Until last summer, Joel was the Vice President and Global Chief Marketing Officer of General Motors and prior to that Joel was Vice President of Marketing for Hyundai Motor America. In addition, he is best known for being the guy behind Hyundai Assurance. I asked Joel to discuss what’s next for environmental marketing and how the auto industry is evolving with the times.

Why is having an environmental strategy to the automotive sector important?  How does an automotive company present a credible environmental position?

Having an “environmental strategy” cannot be skin deep, it needs to run through the organization like blood through your veins and become a part of the company DNA. It needs to be a total commitment. If a company does not embrace an environmental position, it will be seen as a marketing gimmick – the “sexy” subject of the day, it’s pandering to the consumers. Eventually the consumer sees through it and calls it what it is, “greenwashing.” If a company genuinely cares about the environment, it should demonstrate it in products, offerings, and actions. It starts in the board room, from the top! A commitment from the companies’ executive management, if not – the accounting for such a commitment will eventually derail the programs. It doesn’t happen overnight – it takes time, research, and constant development – from raw material sourcing, to manufacturing, through the sales process, ownership and full circle to the recycling of the automobile at the end of its life. It all needs to be taken into account. As in any industry, there are leaders and there are followers, those who embrace a true commitment to certain technologies no matter the time and cost because it’s the right thing to do. They will reap rewards in decades to come. Fuel Cell technology is a perfect case. Some companies are demonstrating a total commitment to the technology and are in it for the long haul; while others have started but then backed off because the return on investment may be a decade away. These companies are not dedicated or committed, they will be followers.

The auto industry has new fuel efficiency standards to meet.  Do you think this regulation will change the current “fuel economy” advertising strategies?  Will the fuel efficiency standards make the importance of fuel economy claims less powerful?

What will make the claims powerful is the cost of gasoline.  If we continue to experience significant increases in gas prices, like here in California, where gas is at $4.15 to $4.25, consumers will continue to flock to more fuel efficient brands, like Hyundai. If prices stabilize, it will still be important, but it will likely over time become another given, a commoditized feature in all automobiles, like safety.  Volvo and Mercedes Benz owned safety, but through legislation, all cars are basically safe.  It is now a given.  Eventually this could happen with MPG as new technologies emerge.  In the end consumers will look for value, and gasoline, for the foreseeable future, is part of that value equation.

Continue Reading The New Auto Industry: Friend of the Environment and Tech Star

February 1st was a big day for the Federal Trade Commission (FTC). Not only did the FTC release its report regarding mobile privacy disclosures, it also announced that it had reached a settlement with Path, a social networking app, which agreed to pay $800,000 to settle charges that it deceived users by collecting personal information from their mobile address books without their knowledge and consent, and that it collected personal information from children without their parents’ consent in violation of the Children’s Online Privacy Protection Act (COPPA).

The FTC’s report entitled “Mobile Privacy Disclosures: Building Trust Through Transparency” provides specific recommendations on improving mobile privacy disclosures for mobile platforms, app developers, advertising networks, and other third parties. Most notably, the report recommends that mobile platforms provide “just-in-time” disclosures to consumers and obtain their affirmative consent before allowing apps to access sensitive content, such as geolocation data. The report also recommends that mobile platforms consider providing “just-in-time” disclosures and obtain affirmative consent for other sensitive content, such as contacts, photos, calendar entries and audio/video content. The report further recommends that mobile platforms consider developing a one-stop “dashboard” approach to allow consumers to review the types of content accessed by the apps they have downloaded as well as icons to depict the transmission of user data. The report recommends that mobile platforms consider offering a Do Not Track (DNT) mechanism for smartphone users and makes several other recommendations aimed at providing better disclosures to consumers regarding mobile privacy.

The report also makes a number of recommendations to app developers, including that they have a privacy policy that is easily accessible through the app stores, provide “just-in-time” disclosures and obtain affirmative consent before collecting and sharing sensitive information, improve coordination and communication with ad networks and other third parties and participate in self-regulatory programs and industry organizations. In addition, the report recommends that advertising networks and other third parties communicate with app developers so that those developers can provide truthful disclosures and work with platforms to ensure effective implementation of DNT. Finally, the report suggests that app developer trade associations, academics and experts develop short-form disclosures for app developers, promote standardized app developer privacy policies and educate app developers on privacy issues.Continue Reading FTC Announces Mobile Privacy Disclosure Guidelines

It’s finally here. Football fans everywhere have spent the last year counting down to Super Bowl Sunday, the main event for the NFL. But advertising and marketing executives have spent the last year actively planning for Super Bowl Sunday. And let’s face it, a lot of people who are not football fans watch the Super Bowl for one thing: the commercials. The ads typically dominate water cooler conversation the next day, and now take over social media and traditional media as well – for many, the final score doesn’t even matter.

In ad land, Super Bowl Sunday is a holiday. A lot of us are like little kids on Christmas – only we’re glued to the television instead of staring at the chimney waiting for Santa to slide down. Year after year, brands deliver. The ads are creative, hilarious, inspiring. We talk about them for a year after they air… until the next Super Bowl. Which brand do you think will have the most popular ad this year?

The Way I See It

  • For advertisers, Super Bowl Sunday is the biggest day of the year. I see brands paying millions of dollars for 30-second spots during the Super Bowl and investing in ads that they hope will draw lots of sales and big returns.
  • I see brands using Super Bowl commercials not just to entertain, but increasingly to engage the consumer offer by incorporating social media or mobile elements to their TV ads.
  • I see each brand that advertises trying to push the envelope with creative spots that will stand out to consumers – helping the brand to achieve a coveted spot as one of the top ads of the year, but also boosting sales for the brand.
  • I see advertising executives from all ends – creative, compliance, consumer, privacy, legal – coming together to create ads that define their brands, attracting consumers and creating buzz – and making sure that the buzz around an ad translates into buzz around a brand, which is often easier said than done.
  • What is the lesson for advertisers from the “blackout in New Orleans”? How do you protect yourself when there is a problem at a live event? I see advertisers thinking about integrated campaigns not just on the positive side – how they can all work together, but on the negative side – what happens if something goes wrong.

The Way the Industry Sees It

I sat down with Jeff Klein, Senior Director of Marketing at Frito-Lay to discuss advertising during the Super Bowl and the importance of the NFL’s biggest game for the advertising industry.

Doritos’ “Crash the Super Bowl” has become one of the most anticipated consumer contests of the year and is very successful, having won the USA Today ‘Ad Meter’ polling in three of the last four years. On a larger scale, consumer engagement through the use of contests, giveaways, and social media engagement, has become a huge trend for brands around the Super Bowl. Do you think consumers now have different expectations about the types of initiatives that brands will launch around the big game? How has consumer engagement with Super Bowl advertising evolved in recent years?

I think expectations of brand communication and activation have evolved considerably regardless of the communication medium, but they are certainly amplified at the Super Bowl. The days of talking at your consumer and expecting some sort of action are long gone. It’s more about consumer engagement – how can you continually engage your target in a conversation that goes well beyond the 30-second ad. How do brands achieve this on the world’s largest advertising stage? That depends largely on a brand’s narrative, but you can bet there will be innovative ways to extend their messaging beyond the game. Doritos literally invented the crowdsourcing model around the Super Bowl, and a few brands have been inspired to take similar approaches. It works for Doritos because it’s authentic. It’s not just a Super Bowl campaign, it’s part of our brand’s DNA.

90% of Super Bowl ad spots were sold by early September 2012 – just over five months before the game airs. What makes so many brands look to invest in this expensive space year after year? What is it about the Super Bowl and its viewership that holds such importance for brands?

For brands, it is absolutely a huge investment, but it also offers a unique communication opportunity in today’s fragmented media environment. From a pure eyeballs perspective, no program comes even close to the reach Super Bowl offers. There are few opportunities better in the year to drive awareness of a brand’s positioning, innovation, or programming – and the timing of the game allows you to set the tone for the year. Beyond this, it’s important to understand that not all Gross Rating Points (GRPs) are created equal. It’s very easy for consumers to avoid a brand’s messaging with technology. Not only is the Super Bowl virtually DVR proof, but people actually tune-in FOR the commercials.

Continue Reading Advertising’s Big Night: Super Bowl 47