ICYMI | 万一你错过了| 당신이 그것을 놓친 경우에 대비해서

Reading Time: 2 minutes

The Kraft Heinz experiment in radical cost-cutting has failed. | LinkedIn – imagine if 3G Capital had succeeded in their hostile bid Unilever as well?

Number of ‘McRefugees’ increasing, study finds | HKEJ Insight – a seven fold increase over 6 years. More on the background on McRefugees

Luxury Brands Learn How to Speak Streetwear Their Own Way | High Snobriety – High Snobriety on the luxury fashion hybridisation. If you like that article you’ll love Louis Vuitton, Supreme and the tangled relationship between streetwear and luxury brands

Explaining p-values with puppies – Hacker Noon – best bit of content that I’ve read all week

LG’s Dual Screen foldable phone breaks apart – BBC News – probably much smarter approach. I still don’t get what the use case is

Malaysia Airlines pitch called off – agencies get apology from CEO and compensation – Mumbrella Asia – be a client organisation like this

Chinese Whispers: Tourists Spend Less on Luxury Goods When Traveling in Japan and Hong Kong, and More | Jing Daily – the massive size of China’s e-tailing sector is insane

Forrester: Why Brick-And-Mortar Is Failing Luxury 02/25/2019 – the failure is department stores rather than ‘owned’ stores. You could also argue that department stores are primarily aimed at the mid market part of luxury which is being crushed

Why Meituan Dianping is one of Fast Company’s Most Innovative Companies – recommendation of services a bit like Amazon’s product recommendations

CYC – Technology overview – one of the best critiques of machine learning that I’ve seen. Cyc have spent decades building rules to move towards artificial intelligence. They now have products that do narrow jobs in certain verticals (PDF)

‘Huawei Mate X’ foldable phone leaks ahead of unveiling – 9to5Google – where’s the screen from; I thought this was Samsung exclusive technology. Why would they help Huawei?

U.K. cites big se­cu­rity is­sues with Huawei (The Washington Post), 21 Feb 2019 – Huawei shockingly slow at fixing Infosec issues

PR trends and Edelman’s recent results

Reading Time: 4 minutes

David Brain has written a good PR trends piece over at his blog on Edelman’s recent results. In particular, David focuses on the PR industry’s reaction to those results (some find it amusing to see the class swot get a B-grade). There is a temporary amnesia of other agency group problems. Go and have a read of David’s piece here.

struggles

PR Week ran a piece asking if Edelman’s problems were down to the agency focus on creative talent? This quote from Fleishman Hillard’s Jim Donaldson digs into some of the perceived challenges:

“We have a slightly different approach based in part on the fact I’m not aware of a huge amount of success coming from bringing traditional ad creatives into PR agencies,” Donaldson (below, with deputy CEO Ali Gee) tells PRWeek. “That doesn’t mean this particular hire [Judy John] won’t work; maybe they’ll crack the formula. But it’s not necessarily the way we’re looking to pursue it.”

“Partly it’s a financial thing. They can be enormously expensive. But also we haven’t seen it work elsewhere, so we look for a different sort of person that approaches things from a slightly different way.”

Fleishman’s approach is to drive creativity throughout all parts of the agency from the bottom up, rather than bringing in crack teams of creatives.

PR Week – Edelman’s ‘earned creative’ is noble, but does it work?

Now you’re all caught up here’s my thoughts on David’s piece:

  • Richard’s approach isn’t right for every PR business; but that that doesn’t dispute the validity of his approach at Edelman. I still speak with corporate agencies who are still trying to ‘work out digital’. And these are successful businesses; who have had good growth and peer respect. We have PR agencies at all stages on the adoption curve . Secondly, if you are in a large marketing combine, there is a strong incentive to either integrate a la Ogilvy or hand it across the silos

There are reasons why Fleishman Hillard et al are more conservative in there approach. PR Week covered some of the reasons. Some of the industry commentary in PR Week I viewed with a certain amount of skepticism. Here are some others to consider:

  • Having brought both digital and ‘ad agency style’ strategy to PR agencies, I know that can be hard to implement and make it stick. It’s even harder to bring it to management teams who don’t really want it. The C-suite of a global agency say one thing, but getting to regional and country level is very different. It’s a miracle we have any pioneer thinking in the PR sector at all. As an owner-manager Richard has more power than most
  • The wrong lessons were learned from the digitisation of political campaigning during the Obama elections. Some agencies thought they could replicate it as they were political wonks and roll into consumer marketing. They messed up and are now gun shy in creative and digital. I was in meetings watching agency execs talk on the benefits of democracy and political campaigning. This was in China. It was after the 2008 crisis diminished the western system’s legitimacy in the eyes of Chinese people. There are some specialists like Blue State Digital who have been much smarter

Richard is probably having a diminished reward for his change at a time when marketing functions are changing dramatically:

  • Inhoused advertising and creative teams are now doing major strategy work. In addition to the original rapid response, tactical content. Organisations like Oliver are providing the flexibility of agenciey style staffing to inhousing operations. So brands get the best of both worlds. Its part of the uberisation of services. Oliver does run the risk of disruption by the likes of Adecco or Manpower
  • Vendors such as Adobe have stripped out some of the pockets of agency value pricing out of digital build and measurement work. Once configured automated marketer friendly reports are a lot easier and automatically distributed. You can put up local / brand specific websites much faster than legacy systems in use like Vignette / Open Text. (I don’t mean to pick on Open Text, but they are an iconic player). Having gone through the painful process being the client on the build of a global web template, I can appreciate the gains made. The template is then rolled out to local country websites via the company-wide CMS. You could have teams doing this process across tens of brands at a time around the world
  • There is a changing media agenda to a more media neutral media approach is healthier for brands than digital at all costs. Anything that promotes more critical thinking around paid and earned digital is good for the industry in the longer term. It is important to remember that thought leaders like disruption commentary has an implicit agenda. McKinsey and Deloitte look to have a series of ongoing projects in a client, rather than solving a problem. The digital disruption meme has meant that businesses have taken their eye off long term brand value. Until recently, the digital disruption meme prevented critical evalution of channels. This has changed. But with CMOs staying in their roles for short tenures, brand building may not be secure in its place on the agenda

Is there a luxury smartphone segment?

Reading Time: 3 minutes

There are luxury smartphones, but is there a meaningful luxury smartphone segment?

From Apple’s iPhone price inflation to Huawei and Blackberry’s Porsche Design devices, manufacturers have looked to cater to a ‘luxury’ consumer.

Prior to this is you had the Vertu phone with its concierge service and niche players like Goldvish catering for the the Gulf based clientele and Russian entrepreneurs. TAG Heuer tried launching its own phone.

The Pierre Cardin approach to licensing

Prada and Bang & Olufsen had collaborations with Korean manufacturers. Even Dolce & Gabbana allowed their names to be used on a gold anodised Motorola RAZR. But these brand licensing deals rather like what Pierre Cardin were famous for in the 1970s and 80s.

There was little input in the product beyond doing a launch.

Luxury is an attachment

Luxury brands have been smart enough to jump on the tech bandwagon in their product accessories. I used to have a Coach-made pouch for my Palm V courtesy of Sun Microsystems that I got given as part of a conference goody bag. (The dot-com era meant that money was thrown around willy-nilly).

There were a variety slide in pouches from the likes of Louis Vuitton for Blackberry devices and Apple iPhones respectively. This then evolved into cases like Moschino’s famous ‘McDonald’s fries’ box.

moschino

Where’s the missing space?

We know that China has become the workshop of the world. We know that Qualcomm’s reference designs, Google’s Android and Jolla’s Sailfish OS make smartphones easy (relatively speaking) to roll out.

We also know that luxury firms are not afraid of:

  • Global supply chains and manufacturing in China
  • Attempting to step into complex manufacturing (like Louis Vuitton and Montblanc’s entry into watchmaking) or to do technology

One only has to look at connected watches from the likes of Breitling or Louis Vuitton. Montblanc’s e-strap was way ahead of Sony’s WENA Wrist Pro Smart Watch Band.

We know that luxury brands have moved away from the the stereotypical luxury buyer being an older western person of means to a younger Asian person with family money. That’s why we’ve seen the coalescence of streetwear and luxury brands.

So where is the luxury smartphone? And why aren’t luxury brands embracing the space?

Price elasticity

I suspect that the issue is technology isn’t price elastic in the same way that luxury product categories are. Technology products by their nature are ephemeral. The benefits of technology products depends on network effects rather than exclusivity.

In his blog post, Is the pace of technology adoption really speeding up? Nigel Scott put together evidence to show that price points and technology adoption are intrinsically linked. We are not in a state of constant acceleration of technology adoption, but instead only adopt it when the price is right.

It would be reasonable to assume from this work that there is an inelasticity in technology pricing that makes luxury smartphones hard to sustain. It also explains why relatively low price accessories make more sense than ‘luxury’ smartphones. This seems to be a conclusion that Apple has some to (at least in China). It has rolled out discounts through third party channel members and made devices cheaper to purchase with zero interest financing.

This makes the moves by Huawei and Samsung beyond Apple pricing with their latest phone launches. These must be halo effect handsets with no expectation of real profitable production.

ICYMI | 万一你错过了| 당신이 그것을 놓친 경우에 대비해서

Reading Time: 1 minute

Mark Ritson: It’s time to shut down digital marketing teams for good | Marketing Week – return to media neutral and evidence based marketing?

Carmakers quitting Britain won’t blame Brexit – it’s not in their interest | The Guardian – classic reputation management; I don’t blame the Japanese for taking this approach

Europe lagging on 5G? Don’t be so sure, says Ericsson | total telecom – Ericsson believe that the move to speed up 5G rollout in Europe will come from Industrial, rather than consumer focused use cases. European government’s and operators are looking to fast track their 5G rollout programmes, dispelling the myth that Europe will be ‘late to the 5G party’, according to an industry expert

WSJ City | Key investors unhappy with SoftBank Tech-Investment Fund – not terribly surprised

Gender and box office performance: Applied Economics Letters: Vol 26, No 9having a male star in a film generated a premium in the neighbourhood of 12%, while female star had no statistical impact on a movie’s performance – is this down to the way that they are marketed or the way that male stars are perceived versus female stars? I also tend to follow directors because of the sense of style that they bring to a story. Their name is a mark of quality

Five for Friday | 五日(星期五) | 금요일에 다섯 가지

Reading Time: 1 minute

BMW’s X7 advert about the Legend of Old McLanden has been cited as a piece of feminist advertising. I won’t spoil it for you watch the clip and you’ll see why.

I think that its part of something different which has been less heralded: a return to craft in advertising. We’re starting to see a refocusing of marketing. Away from the shiny toys of ad tech and influencer networks back to advertising craft.

The Legend of Old McLanden would fit comfortably with the golden age of TV adverts and I think that’s a good thing for brand building. Especially when we usually only see this kind of thing during the Super Bowl.

I am a big fan of Visual Politik’s videos, but was unimpressed by this video on crypto currency. I get the attractiveness of a more decentralised internet, BUT I don’t buy into the cryptocurrency hype and believe that blockchain is at best a solution for niche problems.

The video reminds me a lot about the techno-utopian opinions of the early web, P2P technologies etc. It has value, but it isn’t likely to be transformative in the way its implied.

SK-II has a new instalment in its #changedestiny themed campaigns called ‘Meet Me Halfway’. This time they focused on the pressure that single Chinese women face during family gatherings for lunar new year.

It follows on the SK-II marriage market makeover campaign done in 2016.

Whilst many consumer brands have dashed into the influencer marketing space, it interesting that adidas and Diesel have developed contra-influencer content.

Diesel’s ‘Be A Follower’ campaign