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Groupon's Billion-Dollar Brand Miscalculation: They Don't Realize That They're A Commodity

OK people.

The next time you hear someone say that branding is fluff, start laughing.

Because Groupon just made a miscalculation about its brand that they will be crying mightily over in the end.

The Chicago Tribune reported today that Groupon turned down a $5-6 billion acquisition offer from Google.

They think they can do better?

The stupidity of this decision is rivaled, in my mind, only by Yahoo's decision to turn down Microsoft's offer to acquire it.

The only difference between Groupon and Yahoo! is that Yahoo! actually is a valuable brand, whereas Groupon is not.

Groupon is a commodity.

Anyone who can copy what they're doing (I give that one year to happen) and can figure out a way to actually brand themselves - as opposed to lazily relying on name recognition and email signups - is going to turn them into mush.

Bad decision, bad decision, bad decision. Seems to me it was based on blind arrogance and greed.

A lesson for the rest of us: Just because you're doing well, doesn't mean that you're a successful brand.

Sometimes it is wiser to, as they say, "take the money and run."

In this case, the $6 billion.

Winning the Wikileaks Brand War

Is Julian Assange a terrorist? Or is he a revolutionary, crusading for transparency because it makes the world's business and government institutions more ethical and the markets truly free?

 

If one takes the media as representative of the public, we are seeing the pendulum swing back and forth rapidly, with coverage of leaders and pundits decrying what Assange has done, while at the same time offering him a wide berth to express his views.

 

This blog is not about taking a side on that debate. What matters to me is the analysis of Assange as a brand-builder. As he told Forbes' Andy Greenberg in an interview published on November 29, "There's a network effect for anything to do with trust….that's why brand is so important."

 

Assanges' opponents are dealing with someone who not only understands branding but who in many ways seems a natural master of the art. Here are the brand principles he's following and how they can be combated.

 

#1 – Relevance and Credibility

 

Some may dislike it, but Wikileaks is both relevant—everybody wants to know what has been leaked—and credible: I haven't heard anyone suggest that the leaks are falsified. Transparency is "the" word of the day right now, and Assange has clearly claimed it, even though it remains to be seen how many laws he will eventually be prosecuted for breaking. Relevance and credibility go together, because just talking about the one, without delivering the other, wouldn't work.

 

#2 – Playing Offense Against An Enemy

 

Assange has gone on the attack. He has delivered the goods. He is sure of what he is doing—in almost a missionary-like way. He is thumbing his nose at the world. He is branding government and business leaders around the world as illegitimate in their activities. The fiercely proactive approach, together with the definition of an enemy to be overcome by his activities, is powerful.

 

#3 – Playing to An Audience

 

Assange has found a receptive audience. He is like the preacher of a religious movement: the Chief Evangelist for Transparency. He caters to his audience and his audience in turn supplies him with more material to distribute, thus building his brand.

 

#4 – Influencers With A Microphone

 

Assange represents rebellion against the status quo. This has an inherent appeal to the disgruntled, disaffected and disengaged. His strength is magnified by the fact that he is a techie, and his followers are the type of people who can work their way around any security protocol. More, it is the loud negative types who make a lot of noise on the Internet and ultimately affect the media and public opinion. So however small the number of people he reaches, their voice is much louder than the average person's.

 

#5 – Symbology

 

Assange has distinctive brand symbols that create awareness easily. He always looks the same, talks the same in interviews, and carries the same message. And the word "Wikileaks" has a ring to it. It sounds like something that everyone is collaborating on, and agreeing to, and that gives people information that they need from the people who are hiding it from them.

 

Brand vs. Brand: How to Combat Wikileaks

 

Assange has pulled the curtain back. And instead of going on offense—to take control of the conversation, offer an appealing counter-brand based on responsible transparency, and even engage Mr. Assange in a dialogue—we are seeing a range of reactions that go from "He's a terrorist" to "I don't see you, wah wah wah." This is not a recipe for effective strategy.

 

Let's be honest: Denying the Wikileaks' brand appeal is a waste of time. What matters is who has the sympathy of the public. Look at Robin Hood: He is still legendary for taking from the rich and redistributing it to the poor. Yet today we call that socialism and cry foul just at the use of the word.

 

Similarly there are those for whom Assange is just like Robin Hood: facilitating the taking of information from the powerful, casting them as evil schemers taking advantage of the masses (e.g. "if you're innocent you have nothing to hide,") and distributing the information for those who deserve it. To others he may be irrelevant. To yet others he is a dangerous man, one who must be stopped. But the point is, cultural belief does not create itself – it is created and perpetuated by people themselves. Assange is using the principles of branding to get the people on his side.

 

I know from my own experience that the more emotional you are about something, the more difficult it is to respond effectively. But when a crisis like this is going on, it is actually more important than ever to remain logical. And make no mistake about it: If there are no opportunities to communicate privately, it will create delays, misunderstandings, and other bottlenecks that can cause serious harm to the world's political and economic systems.

 

So the response to Assange has to be cool and collected. There has to be a strategy that at its heart puts him on the defense in a war of ideas. However, we are seeing the following instead—quite similar, in fact, to the attitude portrayed toward the fascinatingly destructive and mischievous Joker in the movie Batman (note that the Joker also had a "moral agenda" regarding hypocrisy and the importance of chaos to social functioning).

 

The following five themes are being replayed over and over in the media:

 

·         He is bad. He has hurt everybody.

·         He is irrelevant.The documents weren't that important anyway. (The opposite of #1)

·         He will be punished for the laws he's broken. (And if he hasn't broken a law yet, we'll create one just to prosecute him for.)

·         He can't be trusted. He is a criminal and a rapist too.

 

Doesn't anybody see how much power is being given to this single individual, how much all this negative attention is reinforcing the brand?

 

5 Specific Suggestions

 

To defeat an Assange on a branding level, at least 5 things have to happen:

 

·         #1: Acknowledge the positive things he has done by launching appropriate investigations.

·         #2: On a global level, commit to reforms that will help achieve the valid goals he specifies in a more socially constructive way. Perhaps there can be a way to share information that achieves the same goals, but in a more responsible way.

·         #3: Put Assange in charge of leading those reforms in some way, if possible.

·         #4: Engage Assange's followers rather than just telling them that "he is bad."

·         #5: Turn the transparency lens on Assange in a more intelligent way than simply calling him a criminal. The only impact that has is to turn him into a rebel hero, especially when he is on the lam. Fund a TV show, a movie, etc., analyzing who he is and what drive someone like him to act this way.

 

The Moral of the Story

 

In the end, you don't win branding points by denying the success of your competitor or by calling him or her "bad." The reality is, brands are morally neutral – the only thing that matters is whether you've successfully played the game. And Assange is successful, in the sense that when you think of transparency you do think of him.

 

Let's look forward to a future where abuse of power is unthinkable. In the meantime, if we really want to, we can find a way to brand a different kind of system, one that engages people to follow the law while also enabling meaningful and productive transparency.

 

 

5 Project Management Skills That Will Help You Manage Your Brand

Project management is not always fun, but it can be rewarding. Here are 5 key skills you need to know or learn. I've paraphrased and interpreted them based on "The Five Dumbest Things A Project Manager Can Say," a terrific e-newsletter from 4pm.com. (Note: I am not endorsing this vendor, but I did take a class with them and was happy with it.)

Truthfully, most of this is about being a psychologically balanced person with emotional intelligence and plain old common sense.

However, as we all know, once the pressure is on, common sense is sometimes the first thing to go.

1. Be realistic about deadlines.

Don't be so eager to please that you promise the sun, moon, and stars. Or, as they say, "Underpromise and overdeliver." No matter what the customer asks of you, if you can't do it, you can't do it.

2. Address conflict openly and constructively.

The beginning of a project is the time to surface conflict, not hush it up. If you try to create artificial agreement too early on, you'll end up with a dissertation instead of a realistic scope of work.

3. Give the team members some breathing room to do their jobs.

If you insist that your way is the only way to do things, everybody is going to come to you before they make a decision. Guess what? Nothing will get done and definitely not on time. Unless you enjoy staying up all night at work the night before the project, along with your angry team (the ones that haven't deserted you, that is).

4. Insulting the team members.

Nooo....you would never do this, I know. But don't even do it in a subtle way. You want your staff to be not only empowered but engaged. Not only is it morally right on your part to treat them well, it is a win-win: demoralized people will just as easily sit around and shoot the breeze as do your boring project work. And they definitely won't stay up all night for you when a deadline looms.

5. Throwing your weight around when the customer wants to change everything.

This seems like a contradiction right? #1 was all about asserting yourself to keep things realistic. But if you've established a relationship where the customer is able to get away with crazy demands, guess what? You're in it till the end. Next time, make the rules clear upfront and you'll have less of a problem later on. Because what the customer wants is still of primary importance - it's just your job to give them a clear picture of what is and isn't doable.

At 240 Calories A Bottle, Coca-Cola Gets It

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This morning I was astonished to see that Coca-Cola Classic had put the calorie count of the beverage on the bottle, very prominently. One 20 ounce serving is a full 240 calories. It’s sugar water, not health food, and by giving you the calorie count they are telling you that they know that. It’s a message that, together with the ingredient label, says, “I’m not going to try to fool you - I am an unhealthy indulgence. Buy me if you want.”

In doing this, Coca-Cola continues to show a mastery of branding that is nothing short of amazing. They are accused of peddling junk food, and there they go admitting it. Emblazoning themselves with the evidence.

I can’t think of any other brand even remotely as smart as this one. They understand their flagship brand so well that they’re not threatened by health food activists, concerned parents, or sugar-busters in the least. Their target audience is going to buy the soda regardless of the calorie count. So there isn’t any need to deceive.

Coca-Cola sells a lot of products. The brown fizzy sugar-water for which they are famous is only one of them. I’d like to see them sell organic food, which they may never do. But the bottom line is, they are on the cusp of a movement that will become standard for every brand in America and the world. And that movement will be about transparency – in terms of ingredients and operations – to the greatest extent possible. As long as they are honest about what they do, in effect giving people a choice of buying or not buying, I think they are ethical.

This is the opposite of what many people think about companies like them. Companies that are accused of promoting obesity, nutritional deficiency, labor exploitation, the objectification of people, a culture of superficiality, environmental toxins, you name it. People say that these companies are inherently “bad.”

I completely disagree.

Brands give us what we want. They give us what we pay for. Vote with your pocketbook and you will get something else. If we are getting all of the above, then we are the ones at fault.

Taking this a bit further, I disagree with the premise that emotional branding (or marketing an image in order to obtain a premium price) is inherently bad, either.

People don’t just spend money in order to survive. They also spend money to support the images they have in their heads. They spend money to create an identity. They reward themselves by buying things. And they distinguish themselves from other people through spending.

All of these activities, and more, are accomplished by buying brand names.

The fact of the matter is, people need brands. The human mind requires an outlet. Fantasy, imagination, and choices – even those that are deemed culturally unacceptable – are important to one’s health and even one’s spiritual development.

Some people are concerned about the fact that brands exploit your fantasies to make a buck. Well, that is true. But as long as you, the customer, willingly go along with that scheme, I don’t see the harm.

Coca-Cola freely admits that fantasy and memory association is the basis of its brand. That is probably how they have the confidence to admit that they’re selling sugar water in a fancy bottle and associating it with so many American cultural icons that to dislike it is almost un-patriotic. Think about it: Coca-Cola is woven through religion (Santa Claus), art (Norman Rockwell), sports (football-Mean Joe Green), and more.

Oddly, I don’t even like Coca-Cola, or any kind of soda, usually (except diet cherry, of either Pepsi or Coke, which I admit is pretty good, though it gives me sugar cravings). When I haven’t had it for awhile, it actually looks disgusting. Yesterday I had to dispose of some, actually, and as I poured it out I saw the brown liquid filling the sink bowl and grimaced. I wondered how anyone could put that garbage down their esophagus.

But a world without the choice to drink that junk would be a world much worse off indeed. Nobody wants the food police to dictate what they can and can’t eat.

Branding is just a tool, not an instrument of harm in and of itself. If you, as a brand owner, sell a good product at a fair price, treat your employees well, pay your taxes and give charity to the community in some way, that is about as spiritual as a functioning economic system can get.

127 Hours of Product Placement

Consider this.

I go to see a movie about Aron Ralston, a hiker who has an accident so bad that he nearly doesn't survive.

The movie portrays his accident vividly, gruesomely, and in every physical detail.



Yet what do I notice equally as much as his plight?

That he is starving with thirst (see bluish, cracked lips in the photo) - and thinking about a Gatorade, orange flavor.



Distracted from the plot, I think to myself, how much did Gatorade pay to get their product placed into this movie so obviously? (In the film, hiker Aron Ralston dreams about a bottle of Gatorade, placed on its side, the orange liquid sloshing up and down. Inviting him to drink.)

Gatorade is made by Pepsi. But Pepsi doesn't dominate the movie. Coca-Cola is there too. So is Scooby-Doo.

In fact there are so many product placements, but they're so well-done, that I can't tell whether the hiker is really obsessed with brands, and the movie documents this, or whether the movie was somehow compromised to enable the placements.

I couldn't even remember all the placements in the movie so I had to look them up:

"Gatorade makes a prominent appearance, and when his water runs low, Aron fantasizes about cold drinks -- and viewers see actual TV ads for Sunkist, Coke, and Perrier. Mountain Dew and Scooby-Doo are also mentioned."

Ralston, in fact, is very into brands. He actually speaks to the audience, to tell us not to buy the (I'm paraphrasing) "generic brand of Swiss Army Knife that comes with the cheap flashlight."

Being a brand-conscious person, it is perhaps not surprising that Ralston is very conscious of himself at all times. He doesn't just hike...but rather he videotapes himself hiking. And photographs himself. Much of the movie is about this need to document every moment of his life.

It's interesting how, 5 or 10 years ago, his behavior would have seemed odd or strange to the average person. Today, it's 100% normal.

Brands have changed us in a significant way. We have gone from living life directly, to experiencing life in terms of how it will look later on, both to ourselves and to others.

We have learned the lesson that we are all brands...but has the lesson gone too far?

As a hiker who is so aware of the physical world, who seems to literally see and smell and taste things more vividly than everybody else, Ralston seems like the exact opposite of someone who would be carried away by image. And yet he is.

127 Hours is a great movie by the way, I highly recommend it. Despite all this talk about branding stuff, I was deeply moved.