U.S. News Media: Reporters of Information or Creators of Branded Content?

In 1961 Robert Minow, then chairman of the FCC  famously called television a ‘vast wasteland’ and admonished network executives that ‘your obligations are not satisfied if you look only to popularity as the test of what to broadcast. You are not only in show business…It is not enough to cater to the nation’s whims---you must also serve the nation’s needs’.

Robert Minow: TV 'Vast Wasteland'

And the networks responded. From the 1960’s to 1980, Networks came to regard the quality of their news coverage as a source of prestige, not a source of profits. As such, network news was a perpetual ‘loss leader’ but news programming was revered.  

Networks were quick to forgo commercial programming to cover breaking news events. From JFK’s assassination to the moon landing, to the Watergate hearings, events were covered with little commentary and no commercial incentive as they unfolded. Thus the narrative was the same across networks. The difference was whether you chose to hear about these events from Walter Cronkite or David Brinkley, and how you chose to react to them.

Information or Content?

But that is no longer the case. As big changes have occurred in media companies, technology, and audiences, news sources seem to be behaving more like creators of branded content, than reporters of information. 


What's the difference? Information is defined as ‘facts provided or learned by something or someone’. Branded content, on the other hand, is defined as ‘a form of advertising that uses the generating of content as a way to promote the particular brand which funds the content’s production.’ 1

Facts or Brand Myths?

In promoting themselves, brands selectively communicate facts that support their story.  Great brands often augment those facts by creating myths that build perceived brand value. Was Apple, the world’s most valuable brand, really started in Steve Job’s garage? Steve Wozniak says ‘not exactly’.2 Was Johnny Walker whiskey, the most valuable spirit brand, really ‘born in 1820’ when Johnny opened his first store?  No, the first blend wasn’t created until after Walker’s death. But despite their lack of veracity, these myths become gospel to these brands' evangelical-like followers. And their belief in these myths ultimately contributes to these brands' real economic value.

And that is what seems to be happening to the news. One need only look at the home pages of some US media giants to realize how dissimilar the news seems across sources.  Rather than covering events, each source appears to be curating stories that support their own brand narrative, seemingly in an effort designed to strengthen their connection with a specific audience.

In fact, according to Business Insider, since purchasing the Washington post Jeff Bezos 'has taken a hands on approach on the business and technology sides to reinvent the paper as a media and technology company.

'That's helped it take a more data-driven approach. It now employs common web strategies like "A/B testing" to track how different headlines and story framings affect readership for each story. It also created a program that takes articles from other publications and asks readers which ones they'd rather read.'

Thus, where current events used to unite us in common experiences, branded content serves to divide us through alternative realities. Consequently, we see people who wear the badge of their favorite news source as proudly as Ford or Chevy owners defend the virtues of their trucks against one another. 

How did this all happen? 

Three factors, all fueled by enabling technology seemingly converged to get us here:

1. The 'Baby Jessica' Factor - the need to feed CNN's 24 hour news cycle, in absence of any significant breaking news
   
2. The 'OJ' Factor - forever blurring the lines between news and entertainment
   
3. The 'Mickey Mouse' Factor - media consolidation that puts the ownership of news brands in the hands of entertainment companies
   

Where do we go from here?

Certainly, we can't go back in time. But if the name of the game is finding an unserved audience, perhaps the next big news brand will go back to covering events with no commentary, and let the 'do it yourself' news audience interpret the facts for themselves. Considering  that, according to Gallup, American's trust in the news media has fallen from 76% in 1972 to 32% today, there may just be a market for facts. After all, I hear that trust is a very strong foundation upon which to build a brand.

1 Source: Wikipedia
2 "The garage is a bit of a myth. We did no designs there, no breadboarding, no prototyping, no planning of products. We did no manufacturing there. The garage didn’t serve much purpose, except it was something for us to feel was our home. We had no money. You have to work out of your home when you have no money."  Steve Wozniak, Bloomberg Interview 2014

Moving Towards 'Generation None': The Implications for Ad Agencies and Brands

This weekend, the New York Times ran an opinion piece about ageism in the workforce. As longevity increases, and pensions are not what they used to be, many older workers are choosing to stay in the workforce longer...but they are not always welcomed with open arms. In fact, the article states that 2/3 of older job seekers have experienced age discrimination. 

New York Time Opinion Piece on Ageism

http://www.nytimes.com/2016/09/04/opinion/sunday/youre-how-old-well-be-in-touch.html?_r=0

Ageism appears to be a broad societal problem that affects some industries more than others. In fact, it is far more egregious in the advertising business. One need only compare the age distribution of the ad industry to the total workforce to see how young the industry skews, and how few opportunities there are for those 45 and older. 

Source: US Department of Labor

The market case against ageism

While the New York Times article focused on the merits of the work ethic and economic impact of older workers, in the advertising business there is a strong market case for an increase in older workers. The fact is that the market conventions that fueled the youth culture of agencies no longer apply.


One of the fundamentals ingredients of great advertising is deep customer insight that allows marketers to connect emotionally with their audience. That is why, historically, the age distribution of the U.S. population (and many other countries) drove much of the focus on hiring youth. As illustrated in these historical charts, for decades younger age groups represented the bulk of the population. While the population 'bump' may have migrated a to be a bit older over time, the 'cliff' at the the older end of the spectrum remained the same. 

During those same decades, audiences had relatively few media choices. Thus it made sense for agencies to skew their workforce to the under 45 crowd, as they would likely have greater insight into the prevailing mindset that was shaping the popular culture of the time.

Moving Towards 'Generation None'

But looking forward, we see a different picture emerging :

The 'cliff' is not as steep, and will all but disappears the next 20 years. More importantly perhaps, is that there are no real 'bumps'...the distribution curve is flattening out. We will have a population with no dominant age group...not the Boomers, not the Millennials, and not Gen Y or Z...essentially we are moving to 'Generation None'. Combine this with the  growing multicultural composition of the population, and the increasing fragmentation and customization of media and content, and you are left to wonder if we will be a nation of subcultures in which there is no dominant popular culture? In such a scenario, mainstream agencies will need to better serve a variety of subcultures.

One need only look to follow the money to realize that insight across all age categories should be valued by brands and their ad agencies.

In looking at the top ten advertising spend categories, most have a broad appeal that both mirrors and evolves with general population trends. Thus older buyer influence must be considered across these categories. Additionally, there are some categories that skew older, including three in the top ten: automotive, financial services, and pharmaceuticals. Yet, based upon the composition of the advertising workforce, it is highly likely that ads for these categories are being made by someone much younger, who may lack the insight necessary to deliver a compelling message. Perhaps that explains why these three categories generally exhibit some of the most formulaic banality in advertising today.

And while big agencies have earnestly begun addressing other diversity issues such as gender and ethnicity to better mirror the population, there has been much less focus on ageism. But if deep customer insight is critical in developing great advertising, then the ageism conversation needs to be elevated to a similar level. And the answer is not, as some have done, by developing niche agencies catering to Boomers, but rather by integrating a broader perspective across all subcultures into mainstream ad agencies.

  

Elon Musk's Master Plan Reveals His Secret: Tesla Was Never In The Car Business

This week, Elon Musk revealed his 'Master Plan Part Deux'. Within 24 hours, Tesla stock price had fallen 3.4%, and the press was less than kind in its critique of the plan.

Criticisms harped on several themes: that he was taking on an even bigger task than building a car company before he'd proven that his car company was viable; that he lacked focus; that the plan was too all encompassing and therefore unrealistic.

Is it possible that this criticism missed the point completely? For this criticism is based in the assumption that Tesla is in the car business. But it never has been. And in fact, 'part deux' is incredibly consistent with statements Mr. Musk made ten years ago. 

In revealing his first 'secret master plan' in 2006, he stated that Tesla's purpose was 'to expedite the move from a mine and burn hydrocarbon economy towards a solar energy economy.'

Revisiting Tesla's purpose frames 'part deux' in a new light, and diffuses much of the criticism. Moving too fast? Not when changing peoples' mind about what an electric car can be is just a baby step in transforming the mine and burn economy. Lack of focus? Not when focus on the end game hasn't wavered in 10 years. Too all encompassing? Not if you are set to transform an economy.

In his book, The Disruption Dilemma, Joshua Gans makes the case that if disruption is coming from a new way of putting the parts together, the solution cannot be to keep them separate--that you must build your entire organization around the new approach.

Likewise, one might argue that you must build your entire brand around the new approach.

So, as a brand, Tesla must leapfrog the competition bringing forward thinking brand values to the market, to support his ultimate purpose. 

Why? Because even though Tesla has excelled in over-delivering in the coveted automotive differentiators of styling, performance and safety, Musk knows that these differentiators are becoming less meaningful. And by shifting his focus beyond the car and driver, Tesla will be the first automotive brand to credibly define the new automotive differentiator...sustainability.

Other automotive brands struggle with this word. They know that increases in use of fossil fuel and coal in smog-choked countries like China is not sustainable. They know that increasing the number of personal vehicles in congested mega-cities like Mumbai and Guangzhou is not sustainable.  They know that rising global traffic accident fatality rates beyond the current ~1.24 million per year is not sustainable. Simply put,the current automotive model is not sustainable to the environment, to the economy, or to society.

Yet, most automotive brands, who are in the primary business of manufacturing personal internal combustion vehicles for driver's use, cannot put sustainability at the front and center of their brands. Instead, they relegate it to a CSR initiative, while conveniently taking pieces of sustainable solutions and retro-fitting them into their current brand definitions. That's why BMW's describes autonomous driving as expanding the definition of driving pleasure, while Volvo uses it to support their already strong safety equity.

But the future of our global economy is dependent, not on the rise of personal transportation, but rather, on the rise in clean, safe, efficient forms of transportation that will allow individuals and societies to thrive. And that's why, despite short term investor skepticism, Tesla is really the only sustainable transportation brand  in the market.

(authors note: Tesla's stock price has rebounded, and at this writing is up slightly from pre-part deux prices. Is this reaction to the announcement that Tesla will speed up the completion of its gigafactory, seen by most investors as an integral part of Tesla being a viable car company...or perhaps a sustainable transportation brand?...stay tuned.)

Is it Worth Investing in the Mitsubishi Brand? Some Alternative Scenarios For Nissan to Consider

Last week, Nissan announced that it will purchase a controlling interest in beleaguered Mitsubishi Motors, after Mitsubishi suffered a significant setback when caught cheating on emissions tests. 

'Nissan Chief Executive Carlos Ghosn said the two would now share and jointly develop technology, and could realize 'billions' in synergies by coordinating purchasing, plant utilization and cooperating in growth markets. (1)'

Mr. Ghosn also said, 'We are determined to preserve and nurture the Mitsubishi Motors brand. We will help this company address the challenges it faces, particularly in restoring consumer trust in its fuel economy performance.' 

Does it really make sense to 'preserve and nurture' the Mitsubishi brand? Is is just a matter of restoring trust in fuel economy? Or does the problem with the brand run much deeper? Does the newly formed alliance run the risk of squandering some of those 'billions' by investing in the Mitsubishi brand at all?

The fact is that Mitsubishi is a lackluster niche automotive brand  (FY15 global sales totaled around 1 million units) that has languished for years due to previous scandals and mismanagement. As a matter of fact, most analysts were sounding the death knell for Mitsubishi in the US market prior to the emission scandal. And even its purported strength in ASEAN is more than likely driven by the supply of low priced vehicles from its plants in Thailand and the Philippines, rather than real market demand. 

Source: Automotive News

So while Mr. Ghosn talks of brand value, his real motive is likely to give him a new opportunity to work his famous cost cutting magic to deliver shareholder value. 

And while the 'billions' in potential synergies make this deal attractive regardless of brand value, is there a way that this acquisition could help Nissan solve some of its own brand challenges? Could Mitsubishi play a completely different role in Nissan Motor Corporation's portfolio of brands?

A few thought starter scenarios:

1: A Jump Start for Datsun ?

Three years ago, Nissan re-launched the lower priced Datsun brand in India. Two years ago, it launched Datsun in Indonesia and South Africa. Sales have yet to meet expectations. By combining Mitsubishi and Datsun in these countries, could the existing Mitsubishi dealer body give Datsun a ready made distribution network? Could Mitsubishi's Kei Cars and inexpensive pickup trucks combined with Datsun's Go model create an 'instant' full line of low priced products to serve the market for which Datsun was created? Done well, a Datsun rebranding could help erase Mitsubishi's baggage while jump starting Datsun progress.

Datsun would be poised to fast track expansion not only in its current markets, but in other developing LatAm, Southeast Asia and African markets where Mitsubishi already has a presence. 

2: A New Eco Brand?

The Nissan-Renault alliance has been a pioneer in electric vehicles. But sales have ramped up slower than expected, and scale is the key to electric vehicle profitability. Given their small role in the larger Nissan and Renault portfolios, electric vehicles have not received the attention that they require from the sales and marketing organization to succeed. 

What if the Alliance was to launch an all-new, all-electric brand for the mass market? In this scenario, Mitsubishi's relatively small size can be turned into a valuable asset. Mitsubishi has fewer dealers who are very used to operating with limited product portfolios. This is the ideal situation for an all electric franchise. In addition, it plays to Mitsubishi's strengths in Japan as an eco-friendly fuel efficient brand. And by focusing all sales and marketing efforts on electric, Nissan Motor Corporation just might just be able to be the first manufacturer to deliver 1 million electric vehicles.

3: A Transformation Hot House?

Of course, the elephant in the room is that the car business is in the process of undergoing significant change. In as soon as 10 years, the business will likely look nothing like it does today. Car sharing, autonomous driving, new revenue streams will transform the business. Some pundits even suggest that as the industry transitions from a product to service oriented business, individual product brands will become irrelevant, much like aircraft brands are irrelevant to fliers. Instead, the differentiation will come purely from branded service offerings.

What if Mitsubishi became the Alliance's real time experiment for transformative business models? Could the Alliance pioneer a new service brand for which Mitsubishi plants become the exclusive supplier of vehicles used to test and fine tune new services and business models?  This would allow the Alliance the freedom to invest solely in developing and marketing the new service brand, rather than trying to build demand for Mirages or Pajeros.

While each of these scenarios come with their share of difficulties and risk, it's quite possible that the Nissan Alliance could achieve might greater ROI on it's investment in Mitsubishi by trying something new, than by trying to preserve and nurture the Mitsubishi brand.

(1) Source: Reuters

The Force Awakens: An Unlikely Leader of the Automotive Revolution?

For the past few years,Tesla has been the definitive poster child for automotive innovation. But lately, there is reason to believe that while Tesla may have started the revolution, the real winners might just be the same companies that have dominated the automotive landscape for decades and more. And the one best poised to lead the way may be General Motors!

From a business perspective, the winners of the revolution will be the ones who are first to deliver zero emission, fully autonomous transportation to the masses. But they will also need to be be the ones that are perceived as innovative, trustworthy leading edge brands.

The Business Case

For years, Elon Musk has been promising the $35,000, 200 mile range Model 3. Rumors suggest that he is getting ready to reveal it early this year. But Tesla has a history of revealing concepts up to 3 years before they are actually available in market. So it is unlikely that we will see a production vehicle until at least 2018.

And while everyone has been waiting for the Model 3, at this year's Consumer Electronics Show, General Motors revealed the Chevy Bolt ...an all electric, connected car with over 200 miles of range, and a starting price before government incentives of $37,500. It will be available for purchase before the end of this year, with transaction prices likely to be in the low $30,000's!

That's right, Chevrolet, the brand known for gas guzzling pickups and General Motors, the company that struggled with bankruptcy and massive recalls just a few short years ago is beating Tesla to market!

But just because GM and Chevrolet have won this battle, are they really equipped to lead the revolution? It seems much more likely than ever before. 

Consider the fact that General Motors has made a major investment in ride sharing company, Lyft. And last week, it announced the creation of a new, car sharing brand, Maven. 

Of course, General Motors is not the only car company experimenting with other mobility models. And while Lyft and Maven are steps in the right direction, car sharing as we know it today is still not the end game. Uber and Lyft rely on a peer to peer business model, with drivers responsible for car ownership and maintenance. 

But in a world of fully autonomous ride sharing, who will own the cars? Where will they be stored? Who will ensure that they are clean, adequately charged, and properly maintained? 

And while most conversations about autonomous vehicles center on urban transportation, Americans like their road trips. How will autonomous vehicles travel across the vast expanses between US cities?

A Secret Weapon?
Could the much derided dealer franchise system be the solution? After all, they have the real estate for storing vehicles not in use. They have floor plans to finance large inventories. They have service bays for maintenance, cleaning and charging. So repurposed dealerships could very well be General Motors real secret weapon. The fact is that ~25% of the 15,000 + car dealerships in the US are General Motors franchises...more than any other manufacturer. And these dealerships are not just in the large cities, but in virtually every small town in the US, in locations that can facilitate autonomous road trips.

The Brand Case

So now, the question remains, can General Motors be trusted? Can General Motors be seen as delivering products that are as innovative and desirable as Tesla, or even another likely competitor, Apple?  

They may have a good chance if they continue to use marketing and PR to leverage two of their biggest assets, Mary Barra and Chevrolet. Mary Barra has put a human face on General Motors...something that helps technology companies seem approachable and trustworthy. Her performance at CES left no doubt for her commitment to the future. And one might argue that her presentation skills are vastly better than Elon Musk's!

Chevrolet, at its core is a great American brand that suffered some setbacks in the dark days of General Motors. But Chevrolet today is a surprisingly innovative brand that's making great product again. Even its entry level products are sporting cutting edge safety technology...a precursor to autonomous driving. And this is why their 'focus group' advertising campaign is urging car buyers to rethink and rediscover the brand. In addition, as part of its partnership with Lyft, GM will allow drivers access to Bolts, raising Chevrolet's profile as an innovator.

So is General Motors a slam dunk for leading the revolution? No one is at this point. But even Elon Musk must be paying attention to this reborn competitor.