Brand Illusions

The PowerPoint presentation surprised Joe Crosby. But the ripple effect it produced really knocked him for a loop.

Crosby manages the DoubleTree Club Houston, which received a scathing e-mail complaint from two businessmen who were turned away one night at 2 a.m. after an unapologetic night clerk gave away their reserved rooms.

The December complaint, which came in the form of a 14-slide presentation titled “Yours is a Very Bad Hotel,” ricocheted around the Internet like a virus, reaching hundreds of thousands of people on five continents.

Crosby, who was prominently named in the presentation, has been fielding about 15 phone calls and 20 e-mails per day from worried or indignant travelers. (He answers all of them.) The complainants accepted DoubleTree’s apology but turned down gift certificates for a two-night stay, asking the hotel to make a charity donation instead. (DoubleTree parent Promus Companies matched the hotel’s donation to Houston Toys for Tots.)

“I have to give them a hand on the preparation of their report,” says Crosby. “They’re Web designers, so they’re familiar with PowerPoint and how to spread their message online. When you first read it, it’s funny. But then you see they were treated badly.”

The two Seattle-area consultants told Crosby they sent it to just four people. “They didn’t think it would go this far,” says the manager, doubtfully.

The Internet lets consumers complain faster and more loudly to a wider audience than ever before. But the power of complaint isn’t the only thing putting brands in the center of the bull’s-eye.

Brands are the currency of protest, and two trends are converging to squeeze them even harder: Mainstream consumers are losing their appetite for buying, and activists keep pressuring corporations by attacking their icon brands and outing disingenuous marketing. Those factors are expected to grow (to different degrees) over the next five to 10 years, exacerbated by ever-increasing price competition which devalues brand distinctions.

As promotion practitioners increasingly dedicate themselves to building brands, they should know how consumers feel about branding in general. Are marketers pushing the wrong buttons? What warning signs should they be watching?

Growing Restlessness

Consumer revolts against corporations have been on the rise since the “Battle in Seattle” protest-cum-riot that shut down the December 1999 World Trade Organization summit (as tens of thousands of protestors voiced opposition to global free trade that would handicap developing nations). Protest may swell this quarter in a post-holiday, post-Sept. 11 hangover, as recession-weary consumers dig in their heels.

Last November’s Buy Nothing Day — held the day after Thanksgiving for the last 10 years — jumped 50 percent from 2000 to 1.5 million participants, many of them consumers in their 40s and 50s who “bought nothing” for the first time, says Kalle Lasn, founder of Adbusters, the Vancouver, British Columbia-based group that started the event. The ranks of “more active” protestors nearly doubled to about 10,000, he says.

Grassroots watchdog groups are gaining members. Adbusters Magazine’s circulation is 80,000, and the group’s Culture Jam listserve (which shares information on activities like Buy Nothing Day) reached 60,000 members last year and collects another 1,000 or so each week, Lasn says.

Meanwhile, a Boston group called Infact has 35,000 members who pay $25 in annual dues. That’s the primary funding for the organization’s boycotts, which include a three-year-old drive against Kraft Macaroni & Cheese. (Why mac & cheese? “It’s central to [Kraft parent] Philip Morris’ corporate image,” says Infact executive director Kathryn Mulvey. “They’ve positioned it as an icon brand.”)

Fringe groups keep sprouting up. One newcomer is Fanclubbers, which urges consumers to buy an objectionable product and return it for a refund over and over until the store is forced to break its return policy. (Its first campaign, a two-day effort held last November, had some U.K. retailers so swamped that “after a while, the security guards and clerks couldn’t tell clubbers from regular customers,” says Lasn.)

Activists resent corporate power, and target icon brands because that’s where companies are publicly vulnerable. Mainstream America won’t likely march on corporate HQ or picket stores, but many consumers are sick of having so much stuff. Consumer researcher Yankelovich Partners calls it “the claustrophobia of abundance,” an attitude that was already underway in early 2001 but made worse by terrorism. “Sept. 11 gave people permission to … pull back from the rat race more than they would have otherwise,” says Yankelovich president J. Walker Smith.

Yankelovich predicts 10 years of “post-materialism” as consumers stop buying as much and simply enjoy what they have. Smith cites two reasons: Aging Boomers are paring down their belongings; and the nation as a whole is in a “hangover from the ’90s,” when “people in the most prosperous society ever realized they weren’t any happier than past generations.” That drives consumers to look for fulfillment not from material wealth but from a simpler lifestyle centered on family and community. (The Sept. 11 attacks reaffirmed those new priorities.)

That begs two questions: Will people turn their backs on icon brands to demonstrate their growing regard for simplicity? Will that mood make anti-brand protests more palatable to mainstream consumers?

“People aren’t sick of brands, but they’re sick of the proliferation of brand messages,” says Scott Davis, managing director of brand consultancy Prophet, Chicago. “They don’t want to go through the mental gymnastics of choosing a new brand if they already have one they like. They’re tuning out a lot of the noise.”

Says Smith: “People are overwhelmed by being marketed to so much. They’re starting to feel weary of unrelenting marketing. They’re more adept at seeing marketing, and have more technology — like TiVo — [that lets them] avoid it.”

“People have experienced everything and now they’re paring down,” says Mary Carroll, vp-consumer insight and strategy at Kraft Foods, Glenview, IL. “They’re asking, ‘What is important to me?’ It’s not just a random jettisoning of things.”

Mainstream Malaise

Adding fuel to the fire was the wave of self-aggrandizing jingoism found in many post-Sept. 11 marketing efforts. It took less than three months for many Americans to resent the notion that consumption equals patriotism. Older generations especially bristled: “They remember winning World War II by being frugal,” says Lasn. “Even people who [support] the government have been spooked by this contradictory statement.”

Holiday sales bear that out. December same-store sales were up 2.1 percent over 2000, per check processor TeleCheck Services, Houston. The Bank of Tokyo-Mitsubishi put December 2001 same-store sales up only one percent, compared to a 6.7 percent leap in December 1999 and a 0.7 percent rise in 2000. And December sales for discount, department, and chain stores were down 3.9 percent from November, per Instinet Research’s Redbook Retail Sales Average.

“Corporations are trying to use [national] unity as a cover to push more products on people,” says Infact’s Mulvey. “That’s inspiring resistance and disgust. People want to rally to resist terrorism, but they aren’t convinced that consuming is the solution.”

The other point ticking off consumers is that they’re starting to see the puppet strings of marketing that relies on staged word of mouth.

“Undercover marketing” is the latest rage. In 2000, Sony launched PlayStation II in New Zealand with faux protest marches and fake car crashes (the latter in the form of wrecked autos planted overnight with the cooperation of local police). The brand blamed the civil unrest on kids’ obsession with PlayStation. The “street theater” won a special Grand Prix award at Cannes for agency 141 Communicator.

In Chicago last May, IBM got a wrist slap and an $18,000 cleaning bill from city hall after a sidewalk graffiti campaign for its Linux software didn’t wash — literally, then figuratively. More commonly, liquor marketers send hipsters into bars to buy branded drinks for stylish wannabes in surreptitious endorsements.

Here’s the risk: The more marketers manipulate word-of-mouth, the less genuine it feels — and the more suspicious consumers become of any endorsement.

Badads.org regularly alerts its newsletter subscribers to deals such as grocer ShopRite buying naming rights to an elementary school gym for $100,000, or Bulgari paying for product placement in a novel by Fay Weldon. So these kinds of scripted word-of-mouth efforts are ripe for expose.

Freelance journalist Kate Kaye rails against “human media buys” on her two-year-old Web site, LowbrowLowdown.com: “Call me a drama queen, but I really believe that our society is shifting now that self is being co-opted by slogans and sales pitches. … As more and more marketing campaigns hinge upon our willing participation in product promotion, it’s becoming easier and more advantageous for advertisers to rely upon us to do their dirty work for them.” (Ironically, Kaye is also managing editor of the Web site for new-media consultancy Emerging Interest.)

Kaye, whose self-published Sales Pitch Society has attracted readers online, resents the growing trend of “experiential” campaigns which “create word of mouth, track it, and have it in the strategy instead of letting it be a happy accident.”

Will marketers co-opt word of mouth so extensively that they invite backlash? Will consumers feel duped by conversations that seem spontaneous but are actually paid endorsements?

No, says Jonathan Ressler, president of Big Fat, Inc., a New York City agency specializing in undercover work. “If you do it right, people never know [they’ve heard a marketing pitch]. It’s just a matter of presenting stuff in a different channel and trusting consumers to be smart enough to make their own choices. All it does is deliver the message more effectively than advertising.”

Undercover marketing can keep buzz going, but can’t work alone to create it. People who are genuinely passionate about a brand won’t anger other consumers, Ressler contends. And paying the common man for word-of-mouth work is “no more disingenuous than Tiger Woods in a Buick [ad],” he says. “Does anyone really think he drives a Buick?”

Any consumer impatience with marketing is actually an opportunity for anti-marketing marketing, says Yankelovich’s Smith, citing ads from financial services company Capital One which promise that cardholders will never get telemarketing calls.

“People buy problems to solutions,” Smith says. “If the problem is too much marketing, there’s a way to turn even that into a marketing opportunity.” Thus, giving consumers space becomes a competitive advantage. “People are trying to carve out a space that’s not completely filled with promotional inducements,” he says.

The Protestant Revolution

The same year the WTO meeting catalyzed corporate backlash, Canadian journalist Naomi Klein predicted in her book, No Logo, that college campuses would foment brand boycotts. Adbusters has been watching for a campus revolution for 10 years, says Lasn, estimating that 10 percent to 20 percent of students are actively “talking back against branding.”

Most protests get little attention outside their circle of devotees, but a few get concrete results. Philip Morris plans to change its name to Altria Group this year to distinguish the parent company from its domestic and international tobacco units and better reflect the breadth of its holdings. Pending shareholder approval in April, the change would distance the tobacco business from sister divisions Kraft Foods and Miller Brewing Co. The move comes two years after a cause-focused, $100 million corporate image campaign that PM calls a success — but which many critics call a sham (December 1999 PROMO).

Mulvey, whose Infact has boycotted Kraft since 1994 because of its tobacco ties, calls the name change “a desperate move to cover their tracks. It shows that their multi-million dollar attempt to clean up their image hasn’t worked.”

The boycott “doesn’t impact how we make major decisions on our business,” says PM spokesperson Peggy Roberts. “This is something we looked at over the years.” The change comes now because “we’re becoming a broader consumer products company” with the purchase of Nabisco, and the new name better distinguishes its five operating units (Philip Morris USA, Philip Morris International, Kraft, Miller, and PM Capital Corp.).

Infact cities a 2001 Harris Interactive poll that shows 16 percent of consumers familiar with Philip Morris joined the Kraft boycott — a significant number, since activists generally consider five-percent participation a success, Mulvey says.

But Kraft’s total mac & cheese sales have grown at least two percent per year since 1997, according to Information Resources, Inc., Chicago. The company’s 2001 sales were $585 million, up 4.4 percent from 2000 and nearly 20 percent from 1997, while market share rose to 80 percent in 2001 from 78.7 percent in ’97, per IRI. Sales of the flagship blue-box mac & cheese — the boycott’s target — fell nearly 34 percent from 1997 to $217 million in 2001, as its share dipped to 30 percent from 43.7 percent, IRI reports.

Kraft uses ACNielsen data, which shows blue box sales down four percent and share down one percent from ’97 to ’01. “We attribute that slight decrease in sales to the [1998] launch of Easy Mac,” says Kraft spokesperson Kris Charles. “We consider Easy Mac part of the overall franchise, which grew 16 percent” from ’97 to ’01.

Philip Morris also says its research shows that consumers think better of the company and consider it a more responsible corporate citizen since the corporate image campaign began.

When asked “Is Philip Morris changing for the better?” 61 percent of respondents in April 2001 said yes, up from 35 percent in September 1999, says Roberts. In addition, 47 percent said they have a favorable image of PM, up from 29 percent in ’99, based on phone surveys of 2,000 U.S. adults conducted by Roper/Starch Worldwide.

Infact claims that, since its 1977 inception, it has influenced Nestlé to stop marketing infant formula in the Third World, and pressured General Electric to exit the nuclear weapons business through a mid-1980s boycott. The group’s current pressure on tobacco companies includes support of a global control treaty under the guidance of the World Health Organization.

Why the rants? Because 51 of the top 100 economic powers in the world are corporations, Mulvey explains. (The other 49 are nation states.) “We show people how to use their economic power” alongside political power to further social causes, she says.

Historically, activism appeals to people in their teens to late 20s. But the Echo Boomers of Gen Y grew up surrounded by marketing and aren’t chafed by it as much as their elders.

“Most of us have grown up in over-saturation and automatically screen out things that aren’t of interest to us,” says Prophet’s Davis. Age doesn’t matter; personal interest does. “Consumers take advocacy into their own hands when it matters to them,” he adds. “It happens case by case, purchase by purchase.”

“I’d love to think people would backlash against insidious advertising, but I don’t have that much hope,” says Kaye. “People embrace brands, and I don’t see that changing.”

People usually don’t support a cause until it affects them personally. One current hot button is marketing through schools, which prompts a fair amount of consumer and media attention because it affronts parents’ values for their kids. Anti-tobacco campaigns, meanwhile, gain ground by persuading their teen audience that tobacco companies have duped them directly.

When it gets personal, it counts.

Grading Brands Tougher

An October survey of 16,000 consumers conducted by research firm Brand Keys, New York City, rated the “survivability” of 149 brands by asking consumers which ones had their confidence, represented American values, and could withstand a wartime economy. Familiar icons such as Sprint, Wal-Mart, Sears, America Online, and Budweiser scored highest. (Rounding out the top 10 were Coors Light, Diet Coke, the National Football League, J.C. Penney, and KeySpan Energy.) What’s crucial is matching brand promises to consumer values, says Brand Keys president Robert Passikoff. “Most corporations have no clue how to measure customer values, so their communication processes have major faults,” he says. “Protests are a manifestation that people feel brands aren’t resonating with their [own] values.”

“Consumers don’t think [explicitly] about why they choose a brand, but the way they consider a product’s attributes — quality, heritage, value, service — reflects their regard for brands,” says Jeff Parkhurst, director of brand valuation for the U.S. at Interbrand Corp. The New York City-based consultancy calculates a brand’s “values” based on the reasons consumers give for buying them.

The company’s 100 leading brands have maintained their value since 1998, and consumer regard has remained steady, according to Parkhurst.

Many brand marketers dismiss activists as fringe radicals who don’t reflect mainstream consumer attitudes. Branding gives shoppers a valuable shortcut for making purchase decisions. Then consumers add personal meaning, based on the brand’s role in their lives.

“The evolution and emotion of a brand comes from consumers,” says Kraft’s Carroll. “Our job as caretakers of the brand is to understand consumers’ web of connections and reflect that back, so consumers see the brand in a way they recognize as their experience with the product. Great marketing reflects back what consumers think about the brand. And great marketing is a product of great connection with consumers.”

Kraft interviews consumers as often as weekly on lifestyle, brand attitudes, and product use. That overlays syndicated consumer research and sales data to show Kraft where its brands stand.

But today’s consumers have higher expectations, and they’re irritated when brands don’t measure up. And that gives activists an important role: “They call brands on the carpet,” says Davis. “That’s good for keeping products and services consistent with their brand promise.”

Davis cites McDonald’s low ranking in a customer satisfaction survey conducted by the University of Michigan last summer as a perfect example: Respondents were upset with the poor service they experienced because it broke the chain’s brand promise.

Either brand delivery has slipped or consumer expectations have risen in the last 10 years. Value and quality ratings have slipped in Q Scores, another measurement of consumer regard for brands. In 2001, only 27 percent of consumers rated a given brand highly for “good value,” down from 39 percent in 1991. And an average 33 percent gave brands strong marks for “high quality,” down from 39 percent in 1991, according to Marketing Evaluations, the Manhasset, NY-based research company which conducts the twice-annual Q Score surveys through its panel of 50,000 households.

In 2001, the average brand score was 29 — that’s 29 percent of respondents who knew the brand and called it “excellent.” The average score was 28 percent in 1991 and 29 percent in 1996.

“Over 10 years, consumers have been rating brands the same way,” sums up Marketing Evaluations president Steven Levitt. “They aren’t down-rating brands at all, but [regard for] quality and value are slipping.” That means brands have to try harder because consumer expectation is greater.

Advertising isn’t to blame: An average 24 percent of Q Score respondents say they “like the advertising” of a given brand, roughly equal to the 23 percent who said so in 1991.

Still, consumers are weary of so many ads in so many places. Some are pushing back with ad parodies (such as Adbusters) and letter-writing campaigns (Badads.org) to reclaim the organic growth of culture, which has been co-opted and fed back to consumers through marketing.

Promotion isn’t at risk of rejection as much as mass-media advertising. “The closer you get to the personal life of the consumer, the better off you will be. Marketing strategies that mesh with consumers’ everyday lives work better,” says Adbusters’ Lasn. “But the overall mood is set by the large multi-million-dollar campaigns, and they just won’t work anymore.”

Consumers still value brands. That’s a crucial asset for marketers. Here’s the caveat: Consumers are taking more control of branding power, and can leverage a brand’s strength against itself. So marketers must be honest with and live up to their promises — and watch their tone of voice so brand values aren’t turned against them in protest.

If you doubt that can happen, call Joe Crosby.