Missed Merger Opportunity?

Last November, Publicis Chairman and Chief Executive Maurice Lévy, announced a merger to create an “unmatched leader”. This combination of two agencies was orchestrated to “serve clients that are transforming into digitally-driven businesses in a marketplace that is undergoing a rapid pace of change”. Levy was heralding the union of SapientNitro and Razorfish.

Both are veterans of the digital wars. They have lived through the dotcom bust, the advent and expansion of social media, and were independently trying to define what digital means to business before being combined. Undeniably they had two of the coolest names in the business.

Lévy noted at the time of the merger, “When we formed Publicis.Sapient we integrated the strongest set of capabilities in digital, consulting and technology amongst any of our peer group. We are now taking this next, important step, to further integrate these formidable assets. SapientRazorfish is a powerful new entity in the marketplace uniquely combining customer experience strategy, omni channel commerce, and technology deployment to create a new breed of digital transformation partner pointed at today’s most critical client need – reshaping their businesses for the future.”

That is a lot of industry jargon but you get the gist. What I took away from it is Publicis had no real merger or integration plan. They just hoped the merged management groups would create some magic. Along the way I am sure they hoped for cost savings by paring down staff and real estate.

Fast-forward four months and Publicis reported it would write down its digital arm, Publicis.Sapient, that houses SapientNitro, by roughly $1.5 billion or almost half of its initial valuation. Analysts and media saw this happening for a few different reasons. Some pointed to spending too much on Sapient (Publicis paid $3.7 billion in 2014}. Others suggest it has become a drag on Publicis’ overall business. While still another contingent believe the merger with Razorfish is to blame.

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This is not a Turf War: Consultancies as Agencies and Agencies as Consultancies

Consulting firms have always sized-up the marketing space as a potential service offering. They have flirted with it for decades. Most large-scale forays have ended up in retreat after just a few years. Meanwhile, ad agencies have long-looked to shore up their dusty, old revenue models and expand by purportedly delivering more strategic offers. This too, has been largely episodic and unsuccessful.

Stick around and I will tell you why neither have historically worked but why they may work now. First off let’s substantiate that this mash-up is taking place:

  • Eight of North America’s top 10 agencies are owned by consultancies. Accenture has acquired at least 40 of them. Deloitte, Accenture, KPMG, PwC, and McKinsey now have agency arms.
  • Deloitte is out to create “the world’s first creative digital consultancy.” Meanwhile, IBM’s digital agency unit, iX, has over 10,000 employees and 1,000 designers in 25 offices worldwide.
  • Del Monte Foods selected Epsilon as its U.S. creative agency of record reflecting a fresh focus on data-driven marketing and a move away from traditional advertising agencies.
  • PwC made waves in 2016 when they appointed their first Chief Creative Officer. It should be noted that PwC also named a Chief Purpose Officer, which seems very much like an agency-thing-to-do.
  • Omnicom created Hearts & Science, an integrated digital agency leveraging technology to scale customer relationships. It has attracted Proctor & Gamble and AT&T as clients.
  • Razorfish, a division of Publicis Groupe, partnered with Adobe to build its own digital marketing platform.
  • Starcom MediaVest Group launched marketing consulting brand Zero Dot and sibling Zenith soft-launched a media-focused consultancy called Apex.
  • R/GA and GroupM now offer broad-based consulting services for the purposes of higher margins while securing traditional ad business. This is the strategy of O&M’s strategy consultancy, Ogilvy Red. Carla Hendra, global chairman of Ogilvy Red, is quoted as saying, “If we sell $1 of consulting work, down the road it can lead to $3 to $4 dollars of communications work.”

Clearly, traditional lines are crossing and blurring but why?

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How to Differentiate Gum

Talk about a crowded category. It is tough to chew through all the options. How do you choose a gum brand? It is a rare product where price is not really a consideration. Let’s face it. Gum is a commodity. I would rather be a bottled water brand manager. When I walk up to the “wall of gum” in a convenience store I just grab what is convenient. Brand name, type of packaging, colours, logos, flavour, brand owner…none of it matters. But I do have a differentiating idea. Look for it after I prove my point of commoditization with these photos…

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New & Improved: This Branding Trendsletter Is A Must

Its not on any set schedule. We send out New & Improved when we have good stuff to share. Not only our own ideas, cases and thoughts leadership but the best thinking in branding, marketing, and thought leadership. Sign up here. If you don’t like it you can opt-out any time though we will go into a deep depression.

Check out the graphic eye candy below to give you an idea of the content…like these wonderfully designed headers…

And how about this proprietary content?…

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Revitalizing a Wine Brand: Making Mateus Relevant Again

I was born in 1965 in Winnipeg, Manitoba. That sentence reads like a dual confession and I have one more to share before this is over but we will get to that shortly. Any how, from the 1960’s to 1990’s, wine took a backseat to beer and spirits in Canada. In Manitoba, Old Vienna beer and any rye brand dominated for decades. When wine did grace the table or flowed at a party, invariably it was Black Tower, Blue Nun, or Baby Duck.

Black Tower suggested Teutonic dominance with its once clay bottles. Blue Nun had a pleasing name and label that implied organized religion had blessed your choice. Baby Duck was hugely successful. It sold 8 million bottles in 1973 alone. The name prompted many imitators. In the 1970’s, you could buy Canada Duck, Love-A-Duck, Kool Duck, Daddy Duck, and Fuddle Duck (say this last one three times fast). One brand even tried a poorly thought-out deviation and went by the name of Cold Turkey.

With all due deference to Black Tower, Blue Nun, and Baby Duck, they were outclassed by a fourth 158243774_-mateus-rose-pink-wine-bottle-candle-brazil-nuts----1powerhouse. Do me a favour. Close your eyes. Now picture a wine bottle unlike the standard. In this one, the 750ml of wine was contained in a squat teardrop shape. Remember it? I am speaking of Mateus. Following consumption that bottle often housed a succession of candles in its tapered neck. Waxes of different colours would run together in pleasing collages. In Manitoba, drinking Mateus and displaying the empty bottle as part of your household decorating suggested European refinement at its best (I am not joking).

Now take a break and allow yourself an eye-roll or laugh. Everyone pokes fun at Mateus. They attack the quality of the wine and claim in a self-deprecating way just how silly they were to ever drink it in the first place. Still, this indicates a fond nostalgia that the brand has never capitalized on. In its heyday, Mateus sold 4 million cases annually in the United States alone. The wine’s owner, Sogrape, now makes less than 2 million cases a year in total. This, to me, is a huge opportunity.

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The Marketing of Advice: Lessons in Professional Services Marketing

How do you differentiate a law firm?

What makes an ad agency relevant?

How can you tell one accounting firm from another?

Can brand-building really help a consulting firm win more business?

The business of professional services is to take away problems and to capture benefits. This is why they exist. This applies law firms, consultancies, advertising agencies, architects, wealth management or private banking services, creative agencies, and accounting firms. If they do it right they are rewarded with long-term, mutually beneficial relationships.

Professional services are fascinating and offer amazing lessons in strategy and management for businesses in any industry. In fact, Tom Peters, management consultant and author, has said, “The professional service firm – with its obsession with clients and projects – must be the new organization model.”

Professional services are tough businesses and tough to brand. They offer intangibles that hopefully lead to tangibles and, in my professional experience, need help in branding, marketing and business development.

Professional Service Essence

Whether it be a consulting, accounting, law, advertising or architecture firm, common characteristics apply. Each involves a specialty that demands highly talented people (who can be highly demanding). Most firms also share the pursuit of a new and big idea that can be repeatable and trainable to efficiently and effectively grow revenue. And though their services are offered to a broad spectrum of clients, they must be delivered in a customized manner through high levels of face-to-face interaction.

The essence of professional services is that they prepare clients for the future, preempt the undesirable, control what can be controlled, and identify new opportunities.

Based on these commonalities, firms tend to share the same business model. They often rely on the notion of leverage in organizational design for profitability, structure and process, and career path strategies. They quickly develop the posture of being either a hunter or farmer. Then they endlessly debate how best to go to market and usually arrive at an unnecessarily complex matrix involving some combination of service, geography, industry, and/or client segmentation. This means they end up boring the market because they are talking to themselves.

The vast majority of firms are challenged to define their own strategy. Firms are dominated by those who react to any opportunity and any expression of interest from a prospective client, making them quite willing to deviate from “strategy.” Or they chase management and service fads. Or they bluntly apply defined service offerings to a broad range of client business problems, epitomizing the maxim, “If you only have a hammer, everything looks like a nail.”

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Fun and Accurate “Truth Facts”

This Truth Facts website positively nails what we encounter in daily life. It takes those insights and creates pithy charts to illustrate the finding. Let the smiles and head nodding begin.

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Jeff in The Globe and Mail on Canadian Brands

This article originally appeared in The Globe and Mail.

It works for Canada Goose, but how far can ‘made in Canada’ go? by Shelley White

Sun, sand and surf are not three things we’re internationally renowned for in Canada. Yet one of our hottest exports of the moment is Shan, a line of chic, high-end resort and swimwear that is designed and manufactured entirely in Laval, Que.

In addition to flagship stores in Montreal and Toronto, Shan has boutiques in Miami and the Hamptons, and 65 per cent of its revenue comes from the 30-odd countries it ships to, says Jean-François Sigouin, vice-president at Shan.

Shan is a line of high-end resort and swimwear that is designed and manufactured in Laval, Que., which allows it to retain full control over its product. As 65 per cent of its revenue comes from abroad, the “Made in Canada” brand works for the company because its international buyers recognize that to mean quality, the company says.

The suits aren’t cheap – they run about $300 each – but that’s sort of the point, says Mr. Sigouin.

“The philosophy of the brand is to offer quality instead of quantity,” he says. By manufacturing in Laval instead of overseas, the company has full control over its product. “We are totally vertically integrated from the design to production to retail because we have everything in the same building.”

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Top-Drawer Business Books of 2016

Too many business book lists are narrow in definition. As Robert Weider said, “Anyone can look for fashion in a boutique or history in a museum. The creative person looks for history in a hardware store and fashion in an airport.” The Top-Drawer list is less traditional. That is why the list includes, and is sometimes dominated by, books not categorized purely as “business”.

We always avoid books promising four-hour workweeks because they are fables, over-simplified and prescriptive how-to works that are vacuous and dangerous, and so-called inspirational books that are trite, lite and ineffectual. These are all tossed aside when one experiences the blunt adversities found in actual commerce.

There are no shortcuts or magic panaceas in business. We have to do the work even when reading. As John Locke stated, “Reading furnishes the mind only with materials of knowledge; it is thinking that makes what we read ours.” We encourage you to read the selections here and make the knowledge yours.

The list includes books released in 2016 that are top-of-mind, notable, relevant, well written, applicable, thought-provoking, and innovative. Our last bit of criteria makes the selections tougher to determine and that is timelessness of content. We love sharing the Top-Drawer list because so much of success in business is predicated on great storytelling and these selections exemplify that skill.

This year 13 make our list and are presented in no particular order. For the first time, fiction efforts are included for the amazing lessons they carry if one is open to the education. For fun, we have included a separate list of 8 timeless business novels.

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The Best in Narrative Psychology

When you meet someone for the first time or reconnect with an old friend or go to a dinner party what takes place? Think of any situation where you are interacting with others. We share an anecdote from our day at the dinner party. We tell that old friend about what has taken place with our family and career. We attempt to connect with someone new by conveying our experiences and interests. This does not mean listing or dating activities. In every instance we use storytelling to communicate, engage, and relate.

Storytelling helps us make sense of our lives and the world around us. They are an incredibly effective method of finding and sharing meaning and context. Mary Catherine Bateson, writer and cultural anthropologist, believes that, “The human species thinks in metaphors and learns through stories.” We are hardwired for stories because we have been telling them for centuries.

Marketing and advertising practitioners continue to debate the application of storytelling in business. The most voracious advocates cannot see past the construct and even the hardiest critics employ storytelling. So why all this sharing of tales? Stories inspire and motivate. Stories make ideas stick. Stories persuade. Stories educate and entertain. That makes for good marketing.

A few years back at the Festival of Creativity in Cannes I had the pleasure of interviewing Arianna Huffington, Co-founder and Editor-in-Chief, of The Huffington Post. It was also a challenge as her handlers held me to just three questions. She once said, “People think in stories, not statistics, and marketers need to be master storytellers.”

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