Political Strategy Teaches Brand Strategy a Few Lessons

I am pursuing a career in marketing/PR and as a Business Major at this school (there are really only 3 courses in the whole C-School that directly have to do with this career path), it's important to keep up with marketing/ advertising on my own. I found this article on AdAge, which basically sums up the takeaways of the most important advertising/marketing endeavor that the US sees: The Presidential Campaigns. While I have learned the importance of branding, I don't usually think of politicians as brands so much as pre-labeled believers of specific ideals. It was neat to see this tied together, something that I am very interested in but in a way I would not ordinarily relate it. Antony Young writes about the most important principles to get the vote, whether you are trying to win an election or gain market share in the paper towel industry.

1. "Focus on your Swing Voters"

Just how the candidate focused on OH, VA, CO, FL, etc., it is important to aim at the people who are not yet decided. He discusses the strategy of spending, and how air time during cable news was inefficient due to an already partial audience. The more you can influence the people that are up the air, the more you will get for your buck in advertisement. If people are already predisposed to one of two brands (or in this case candidates), a cheesy commercial is not about to change their mind.

2. "Remember Your Ground Game"

The Obama campaign boasts way more contact than the Romney campaign. Putting aside who won the election or why, it's an important lesson. Obama's campaign contained field offices and local structure that made the whole process more personal and memorable. This goes to show that media spending can be worthless without tying it all together. 

3. "Video Still Works"

The 2012 has jumped back to a TV election (since 2008 was considered "the Facebook Election"). Obama spent nearly twice as much as Romney on TV advertisement and also moved a lot of his campaign spending to online video. Hulu claims that the online video spending was up 700% from the last election. 

4. "Hyper-local is the New Black"

Online video allows for web integration such as Obama used during the campaign to pinpoint voting areas to encourage student registration in specific locations (such as Virginia Tech). Using local advertising is not surprising in politics, (such as Obama's targeting of blue-collar women in OH or Romney's targeting of Cuban-Americans in FL), it is quite important to consider the benefits of localizing brand messages. ex. How can Subaru make itself more appealing to somewhere Arizona, even though it's doing great in the Northeast? 

5. "Adaptive Marketing is Rising"

This is all about feedback and the importance of being able to readily adapt your campaign to consumer opinions and market research. This is such a primary part of marketing but sometimes companies get stuck and planted with an idea. It's so important to remain flexible and roll with what comes in. Young points out that of course marketers hear consumer responses- but the difference between general brands and the candidates is the speed and consistency with which they were able to respond. This doesn't necessarily require more money or different techniques- simply strategic integration and planning. 

6. "Long-Form Content Can Persuade" 

This section compares Romney's success in the first debate to the importance of not necessarily growth in numbers, but percentages, or market share. The entire presidential race is based on market share. It doesn't matter if Romney goes from 800 votes to 1000, if Obama is going to go from 900 to 1050. What is important is that in increasing votes, you are taking away "market share" of the other candidate. There is an ability for brands to completely turn themselves around quickly in order to the consumer response and take away from other lead competitors, except they don't necessarily need to win a number of items sold. 

7. "Negative Ads are A Negative"

Both candidates focused on bashing the other candidate in videos, according to Wesleyan Media Project, between June-October 2012, negative ads accounted for 62.9% of spots. Although they may seem obvious, consumers get discouraged by these types of ads and they can be horrible for brands. It is equally as tasteless for a presidential candidate to slash an opponent as Tide to advertise All not cleaning well. Both brands and candidates should focus on their own strengths instead of apparent stabs that make them lose accountability and look frivolous. 

While the article turned more from a how-to to a list of notes, it was cool to take a look at the "business" behind politics and getting the vote. 

Here's the article: http://adage.com/article/campaign-trail/brands-learn-2012-presidential-election/238178/ by Antony Young

Called Out!!!

So I'm sure everyone is plenty sick of my comments about Greece, but seeing as this is directly relevant to my book, Boomerang (there is a chapter all about Greek tax evasion and their terribly inefficient government), I thought it was a good post for now.

I found a short article in the Economist about a list that has recently been published in a magazine of 2,000 Greek citizens that were holding foreign accounts in Geneva (thereby avoiding Greek taxes).  The editor of the magazine claims that the list was in public interest, and that tax reforms have been too scant. The numbers show that 15,000 people had not been reporting these funds to the tax authorities, and the government  now plants to collect 2.25 billion in taxes on account of this.

The editor, Costas Vaxevanis has been recently tried (I do not know the results), charged with violating data-privacy, as the list included many elite Greeks. The former finance ministers are terribly embarrassed because they slipped on their duty to do anything about the known evaders. The lists they had seemed to be "mislaid"and then they dropped the matter, but it got into someone's hands (stolen) who gave it to the magazine.

This is the kind of incident that Michael Lewis would certainly have a lot of fun teasing in his book, if only it happened a few years earlier. The article ends reminding us that the EU and IMF are incredibly annoyed at Greece because of how much work they are putting in to put their economy back together when they can't even get their citizens to pay their taxes (A recent study implied that 30 billion euros of tax revenue is ignored each year because of this!)

Here's the link:

http://econ.trib.al/e4370t

Michael Lewis- Boomerang

     

     One of Michael Lewis’ notable traits as an author is his capability to simplify complex situations so that they are accessible to the average reader. In his book Boomerang, he not only puts things in understandable, easy to read terms, but he has mastered the art of useful and humorous similes and examples. Michael Lewis covers five recent history examples of financial turmoil in Boomerang: Iceland, Greece, Ireland, Germany and California. His essays include a traditional financial explanation of what caused each crisis, integrating social analysis of the key actors and their surrounding cultures. Although I believe the articles have been published separately, they all tie in very nicely together and make reference to one other.

     He begins the book by introducing Iceland, a country once known for its high Human Development Index, education, and rationality. Despite these characteristics, Iceland has allowed their market to blow up into a mess of historical proportions- partially due to their attitude, behavior, inexperience and blissful ignorance. The rapid expansion of the Icelandic banking system resulted in a bubble. People were buying assets with money that they had not earned, and also began to artificially inflate the values of those assets, so the banks could generate huge, but imaginary profits.  The Icelandic krona gained value, and the buyers were trapped with these assets as the currency fell again, and people rushed to trade in their kronur for foreign currencies. Lewis compares their willingness to take risks in the financial markets to their habit of dauntless fishing on the dangerous seas and their professional manner to their brutish everyday “male” interactions.

     Moving on to Greece, he conducts interviews with several interesting people, including strictly unidentified tax collectors and monks. Perhaps the most interesting part of the Greece story I had not known about was the amount of tax fraud and evasion- it seems more common than underage drinking in the US. Another somewhat obvious angle to the Greek story is the complete chaos that the “old” government was running- it is inefficient in most departments, poorly organized, corrupt, and mostly a result of sheer laziness and stubbornness. Finally, he delves into the Vatopaidi Monastery scandal- the story of how a bunch of monks basically scammed (they had “ancient documentation”) the government into giving them a ton of commercial real estate in return for a government owned lake that was deeded to them centuries earlier. Between the references of the ancient paperwork, trust and confessions and mystery of Lewis’ visit, it began to look a lot like a Dan Brown novel. He explains the importance of independence in Greece and how although everyone is friendly, they do not trust each other, causing a national tension that boil over into EU relations (later discussed in Germany section).

     The Ireland chapter is probably the most predictable of his sections. Foreign Direct Investment led to the explosive growth of the Irish economy, giving banks the option to lower interest rates. The banks then gave out irresponsible loans to developers, thus triggering the Irish real estate bubble. This period of economic prosperity, commonly referred to as the Celtic Tiger, attracted an influx of Polish and Eastern European migrant workers. Lewis likens the Irish real estate bubble to a family lie: “It was sustainable so long as it went unquestioned and it went unquestioned so long as it appeared sustainable” (91). In order to survive, the Irish banks had to take out loans from the European Central Bank. An interesting cultural note that Lewis includes is the national reaction to each respective crisis. When the Greeks were throwing Molotov cocktails through office windows, the Irish either remained quiet, optimistic, or sported apathetic signs that read “Down with this sort of thing” (123).

     While the Icelandic, Greek, and Irish stories all involve the complete downfall of their economies, the German case is if anything the opposite. He explains that Germany is the only country in this book where the financial sector was affected without many local economic consequences. He discusses the stereotypical German characteristic of “clean on the outside, dirty on the inside” to explain their performance in the collapse of other markets (136). They wanted to be involved with the catastrophe, however not the center of it. The Germans had not expected the need to bail out other countries when they became the keystone of the EU and seem annoyed at the Greeks’ inefficiency. The German economic stability is explained by the fact that the Germans, no matter how low the interest rates got, would not succumb to excessive consumption, simply because it is not their way- they find it tacky. They are not saying that the Germans are the shrewdest, as illustrated by their foolish purchases of sub-prime bonds. Perhaps Lewis sums up the main argument in our course- “The global financial system may exist to bring borrowers and lenders together, but over the past decade, it has become…a tool for maximizing the number of encounters between the strong and the weak, so that the one might exploit the other” (153). Some Germans have suggested splitting the Euro into two different currencies, one for the more reliable, stronger countries and one for the weaker countries in the EU.

     Lewis concludes that the world has an opportunity to bounce back (like a boomerang) from such situations in his case of the Americans in California. He discusses the realization that so many of the municipalities and states of the US had pension plans that were grossly underfunded (like Greece) that it put the state of California deep in debt. This is to show that imprudent financial decisions are not only affected on a national level, but also on the state/county/city level and the chain reaction that ensues. He closes the book by speaking about the ambivalence toward future consequences when valuing current rewards, yet oddly states that sometimes there is a solution and it is an optimistic one. This was a surprisingly cheesy ending when the rest of the book was so clever and punchy.