Advertising & Branding

The township of Soweto is famous worldwide for its apartheid era images of riots and poverty. Images coming out of the area these days however are often of fashionable young South African’s partying, as numerous brands are using the township as staging post for reaching a rapidly growing black middle class (nicknamed “black diamonds” by marketers for their increasing spending power).

The Soweto Wine Festival expects over 5,000 visitors and is an essential part of the Western Cape based wine industry’s attempt to reach this new market. They describe their audience as:

“black middle class Sowetan residents (commonly referred to as Black Diamonds) and VIP’s plus ex-Sowetan residents who travel from the suburbs to enjoy these evenings with their friends and family, who reside in Soweto. Saying this, we are experiencing more and more black South Africans that reside all over Gauteng, coming into Soweto to enjoy this groundbreaking festival.”

Another increasingly popular event, targeting a slightly younger but similar audience, is the Soweto Beach Festival. Soweto being several hundred kilometres from the sea is held at Power Park Dam, with 400 tons of beach sand imported for the event. The event, sponsored by a host of drink and lifestyle brands, features performances by some of South Africa’s leading musicians.

Other (heavily sponsored events) in Soweto include a beer festival, a spirits festival and the Tour de Soweto (bike race) amongst others.

OK: We’ve tried to stop talking about the idea that some folks are developing a negative association with brands that are Olympic corporate sponsors, but we keep seeing signs for it. A poster at this pro-Tibet protest in Union Square suggests that brands like McDonalds, VolksWagen, adidas, Samsung and lenovo are sponsors for ‘China torture’.

Beyond the Chinese government, there’s a huge nation of everyday people who are proud and excited about the spotlight on their country, and the continued protests must be confusing and saddening for them. Unfortunately, the anger the Chinese people feel seems to be directed back to the ‘foreigners’ rather than the folks upstairs who are causing the protests.

Westminster council has placed a dozen JuicePoint recharging posts for electric vehicles. Drivers of electric cars can pay an annual fee of £75 and pull up to any of the street posts. These posts are in addition to 48 charging points already found in the council’s parking lots.

A recent report by the councils suggests the following cars and vans can use the points already - or very soon:

• G-Wiz
• Mega City
• Electric SmartCar
• Modec
• Faraday
• Mega van
• Piaggio Porter
• Toyota Amberjac
• Cleanova
• Think City Car
• Ford Think
• Citroen Berlingo

EcoMark from Westminster Council

Tyler Brûlé ends the May 08 issue of his Monocle magazine with an interesting observation piece on the meaning of local products. With the rebirth of locally-made businesses, he wonders if consumers are going to begin to wonder why they’re paying premium prices for products that are made cheaply in Asia and whether these consumers will continue to buy into a brands that leverage national heritage if all their production is outsourced elsewhere.

From Melbourne to Gothenburg to Minneapolis, retailers of everything from vegetables to fine knitwear are surveying the landscape, speaking to consumers and responding accordingly. When these businesses venture out into the wholesale market to purchase goods they’re disillusioned by rails filled with expensive, shoddily stitched garments made in countries with dirt-cheap labour costs and questionable employment laws. They’re unimpressed by porcelain companies that still sell their Swedishness but manufacture in Thailand. They’re worried that there’s no respect for finish or detail and that some of the world’s most respected premium brands (many gobbled up by dim private equity firms all working to the same, short-term strategies) have squandered everything in order to improve their margins while unwittingly offloading the real intellectual property - the painters, pattern makers, seamstresses and master carpenters.

I once asked the owner of a major Italian luxury goods house if she felt she was duping her consumers by playing up her brand’s Italian heritage while quietly manufacturing in China. She responded by saying she was creating jobs in China and that customers no longer cared where things were made and didn’t think about things like “mark-up”. I then asked her why, if she was so proud of her job creation in Shenzhen, wasn’t she proudly promoting this fact on her hangtags and labels? At this point the interview was brought to an abrupt close.

Few companies want to confront the follow-up question. Other than price, what’s the difference when both an original and a fake are cut, stitched, glued and bolted together in China, Vietnam and other low-wage markets? Is it really justifiable to get angry with consumers for opting for a fake when the mark-up for an original is extortionate and there’s no real difference in quality or the working conditions for the people that made the items?

Monocle

They teach you in business school that any venture worth doing needs to be scalable. You must at some point be able to get exponential returns from an existing set of assets in order to be successful. Rebelling against the so-called head-count model (additional sales require additional manpower), new design firms and marketing consultancies like MNML and Fuseproject are now increasingly doing equity-based deals that Anomaly made famous. Deals like these give agencies a financial stake in projects they undertake, allowing them to make real money throughout the life of a co-created product or service rather than just at the pre-launch. In this month’s issue of I.D., Mitch Pergola, Fuseproject’s business strategist (more firms may need one of these in the future), describes the process:

There’s a lot of due diligence required. It’s very similar to a venture fund. Some clients will come to us with an idea and say there’s an opportunity now, and so we’ll load that in terms of royalties, for short-term ROI. But another project might require a lot of R&D, in which case we’d focus more on equity, for long-term ROI.

One interesting implication of this trend is that it democratizes accessibility to top tier design talent. Since most of the compensation for these firms will not be up-front and will be percentage based (and thus can be baked into the retail price), small businesses or even young entrepreneurs will be able to afford them. Expect to see more pretty things at competitive prices all over the world because of this.

We’ve been talking about pay by phone for a while now, but there’s something about this photo of a sign on a London parking meter taken by Nokia researcher Jan Chipchase that makes it feel very everyday.

JC

When a publisher and brand consultant came by to the PSFK offices the other day, he compared the Olympics in China with the 1936 ‘Nazi’ Olympics in Berlin and that brands that associate themselves with the Olympics may get seriously stung.

It’s a theme we explored when we criticized a blog’s coverage of Nike Olympic footwear and it’s one that the Economist looks at in details in its April 26 issue. In the article, the magazine wonders if the development of the image of the event as the “genocide Olympics” by human-rights activists threatens to lay waste to the $1 billion of sponsorship:

By branding the Beijing games the “genocide Olympics”, after the Chinese government turned a blind eye to the Sudanese government’s atrocities in Darfur, human-rights activists are threatening to lay waste to the $1 billion or so that sponsors have paid—and turn what they hoped would be an association with a joyous celebration of sport into a tricky exercise in reputational damage limitation…

To be fair, Coca-Cola is doing some good things in Darfur, from providing immediate relief on the ground to meeting other “stakeholders” to try to figure out solutions to the crisis. But is this enough to buy Coca-Cola the right to remain silent in public about China?… According to Arvind Ganesan, director of HRW’s business and human rights programme, the Olympic sponsors’ “silence on abuses in the run-up to the Beijing games makes their claims to support human rights especially disingenuous.”

It is tempting to dismiss this as yet another example of the old divide between political activists who favour protest and business realists who favour “constructive engagement”, which has cropped up dozens of times—not least during the debate over sanctions against apartheid South Africa…

Yet in many ways the battle over the Olympics paints a false picture of the current relationship between business and human-rights activists. What is striking today is how often activists, big firms and governments are now in agreement about the importance of human rights, and are working together to advance them.

Economist

Keen readers may have spotted that we’ve been featuring reports about the future decline of the suburbs for a few months now, and now Business Week picks up the theme and interviews author James Kunstler about how the end of the ‘automobile age’ will also damage the communities it helped to build. Kunstler sats that major instabilities in the system will change the way we produce food, the way we conduct commerce, and the way we move around:

What about biofuels?
We will use all of them, probably. But we will be greatly disappointed by what they can do for us. We certainly aren’t going to run Wal-Mart, Disney World and the highway system on any combination of solar, wind, nuclear, ethanol, biodiesel, or used french-fry oil.

Isn’t it a bit radical to declare game over for Wal-Mart?
It is part and parcel of the suburban predicament. How long can they maintain their warehouse-on-wheels as the price of motor fuels goes up?

How will the U.S. have to adapt?
Virtually anything organized on a grand scale is liable to fall into trouble—government, finance, corporate enterprise, agribusiness, schools. Our gigantic metroplex cities will prove to be inconsistent with the energy diet of our future. I think our smaller cities and towns will be reactivated. We are going to be a far less affluent society.

Business Week: Good-Bye, Cheap Oil. So Long, Suburbia?

Russell Davies has an essay over on his site about Pre-Experience Design and advertising. In it, he takes a look at advertising that appears very educational, like the Apple iPhone commercials, and says that they convey a sense of the simplicity of the product, positively improving expectations about how the experience is going to be. But there’s a problem because designers and product developers don’t work with marketers to collaborate on ‘expectation design’. He says:

Coffee served with fancy condiment dispensers nearby is reported as tasting better than the same coffee served next to tatty condiments. The price you pay for a drug alters its efficacy. If you want people to enjoy the wine you serve you’re better off investing in elegant glasses than decent wine. This is not new news. This is just how the brain works. Our feelings, our ‘experience of experiences’ is shaped by our expectations and it would sensible, if we’re trying to create great experiences, that we align the expectations to help the case we want to make.

….The problem is, I bet it’s not happening. I bet there’s not a decent-sized corporation anywhere that enables process and experience designers to collaborate on ‘expectation design’ with marketing and communications people. It just doesn’t work like that… I’m convinced that some sort of Experience Design will become the master discipline for businesses that want to be good at selling stuff.

russell davies: pre-experience design