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.    

αντιο κοκα κολα!

Translated as, "Goodbye Coca Cola", this post is in reference to an article I saw on Bloomberg News. As a Classics Major, and a Hellenist at that, I am always interested in what I see regarding Greece. I was lucky enough to visit for 2 weeks in 2008 on a school trip and fell in love with not only the language and culture, but now also the land, people and everything else about the country.

The article is all about the enormous affect that one MNC can have on a country's market. The Coca Cola Hellenic Bottling Co. is leaving the Athens stock exchange for London next year, and is projected to shrink the total market cap of Greece's stocks by a little over $8 billion dollars (from 39.2 to 31 billion). Coca Cola HBC happens to be the largest company in Greece in terms of market value, and managing director of Attica Wealth Management in Athens goes so far as to say the loss of just this one company on the Athens Stock Exchange is likely to make Greece resemble a developing country economically. Shockingly enough, Coca Cola HBC operates in almost 30 countries and does 95% of its business outside of Greece.

The company cites its decision to move as a result of downgrades from both S&P and Moody's, both of which were based on concern about the Greek economy and the surrounding crisis. They are going to list on the London Stock Exchange and are relocating to Switzerland due to both "economic and regulative stability", and to benefit their shareholders and make borrowing easier.

With the absence of this company, the National Bank of Greece will return to its position as largest stock on the ASE (Athens Stock Exchange). The Greek government will have to work hard to keep other companies on the ASE. This single company switch alone put the Greek market below the market value of Vietnam.

I'm personally not sure the significance of the value of Vietnam as a benchmark, but think that a percentage may have been a more effective measurement tool. Although this is what made the headlines, this was possibly the least shocking part of the whole article. At this point, in 2012, I did not expect Greece to be far above Vietnam so am wondering if they specifically found a random country's value and just said "yep, this was a number involved with the difference of the value of Greek equities" or if there is a relationship between Greece and Vietnam that I do not know about.

Interesting article, nonetheless. Here's the link if you'd like more specifics: http://www.bloomberg.com/news/2012-10-15/coca-cola-quitting-athens-leaves-market-trailing-vietnam.html

Speaking of China...

This is inherently humorous and so typical of Trump. I follow him because the majority of his tweets are over-the-top/ opinionated/ unprofessional and I sometimes burst out laughing just at the tone of them. He kind of sounds like a competitive soccer mom trashing his 12 yr old daughter's opponents.

Before I make fun of someone...

I was clicking around on nytimes.com and found an article written by Thomas Friedman about China. Titled, "China Needs Its Own Dream", I was assuming that this article would be about the talk of China in the upcoming election or even about Chinese encroaching on intellectual property or being "cheaters", or perhaps even another apocalyptic article about the education race and how China is going to take over the world fast. I expected lots of the usual panic (which I poked fun of him for in class), and then realized that the article is very closely linked to my first essay. I am now wondering if I have been poking fun at my own writing style and paranoia this whole time!

This article is all about the upcoming Congress of the Communist Party in China, and what the key issues will be there. The key issue that Friedman discusses is the undoubtable monstrous growth in the Chinese population (particularly the middle class) and how that will lead to overconsumption. He  points to studies that show the Chinese will quickly (I believe the number was seven years for Shanghai) begin to deplete their resources- such as water. He is very wary of the concept of the "American Dream" and what that means in terms of consumption, and argues that the Chinese must alter this dream of success to decrease consumption.

The Chinese are currently holding meetings, forums and are educating citizens on how to design a new culture that would create an emphasis on efficiency. This efficiency includes sharing, city planning and new technologies to improve life without adding to the quantity of resources and space taken up. There is a new sense of innovation that is tackling these two issues, particularly targeted at the youth of Shanghai.  China's current five year plan intends to cut consumption of water and energy compared to its GDP, but it does not seem to have a great plan in mind for educating the average consumer on sustainability.

He ends the article with the paradox that Xi Jinping will face that has not been faced by any of his predecessors. He is hoping for increased population to stabilize party control, but at the same time will need to find a way to sustain this growth in terms of resources. Finally, he says that the new "Chinese Dream" must intertwine the concepts of success and happiness with environmental consciousness.

Summit Agenda

The Concordia Summit Agenda has finally been updated. The cool thing about the Summit is that nobody really has any idea what is going to happen during the event until all of the guests have confirmed whether or not they will attend, and then the agenda is structured based on attendees and what they are willing to speak about. Strategically placed this Thursday, it is always set during the week of the UN General Assembly, with hopes that a good amount of foreign officials can attend while  they are in NYC already.

It looks like this year, the Summit is going to overlap quite a bit with specific aspects of our International Political Economy class- more so than just the Public Private Partnerships discussion. The first plenary session will be a Q&A with Senator John McCain, entitled "America's Role in the World of Globalization". I will have to post again on what he will say, but I imagine that there will be quite an emphasis on free trade and our role in foreign investment, not unlike funding the setup of telecommunications in India back in the nineties. Perhaps education will also be a big part of this conversation.

There will also be a panel on Mitigating Risks of The Global Economy via Public Private Partnerships. The introduction will be given by George Logothetis, an incredibly well-spoken CEO and Chairman of the Libra Group (see here for highlights of his take on the overcoming the Financial Crisis in Greece: http://www.youtube.com/watch?v=9lVEnBej5q4). The panel will be comprised of representatives from Poland, the Inter-American Development Bank, Latvia, the Eurasia Group, and Greece.

Finally, one more thing I'm really bummed that I will be missing relevant to our class is a segment on Reconstruction and Economic Growth in Haiti. The current Prime Minister of Haiti, Laurent Lamothe, will be giving the address himself, and I think it will be interesting to see what kind of suggestions he has. Lamothe was educated in the United States and went on to found a telecommunications company, quite unlike many uneducated and struggling Haitians.  I wonder if he will bring a more technological perspective in investment in Haiti, or perhaps it could be focused on infrastructure or labor, maybe tourism. I'm very interested what his specific ideas are to make Haiti attractive to foreign investment.


Here is an updated copy of the agenda for tomorrow's Summit, in case anyone is interested in what kind of issues it covers. I hope I can find a way to access video clips or perhaps even online streaming later, these were two options we had discussed during the summer.
http://theconcordiasummit.org/2012-summit/agenda.html