Volume 80: The future’s so bright...

1. The future’s so bright...

Tl:dr: AKA keeping two truths in your head at the same time.

It’s funny how seemingly contradictory data points can create extreme cognitive dissonance when we're in such volatile and ambiguous times. Like Google buying a $2bn office in Manhattan and the Pret index hitting its highest point this year suggesting that people are steadily going back to the office, contradicted by the fact that the Empire State building is in trouble and that no new office buildings in DC are scheduled for completion after 2022, which suggests that perhaps we are not. (As an aside, DC normally sees 1-2 million square feet of new office space added per year, so to have none in the forecast is a very big deal). Then we have travel. On the one hand, we have airline and TSA data showing considerable softening under the weight of a Delta outbreak. On the other, the CEO of Airbnb, Brian Chesky, talks about a fundamental transformation in travel.

This highlights a thing that’s always important in ambiguous times, which is that two seemingly oppositional things can, in fact, be true at the same time. That the heavily vaccinated Wall Street population might indeed be headed back to the office at the same time that commercial office space more broadly is in trouble. And that travel numbers really can be down at the same time that there really might be a revolution happening in travel.

You see, out of crises, opportunities always emerge. When conditions change, there’s always someone ready to take advantage of the opportunities created. Take the financial crisis of 2008, which is the last major crisis we faced. Out of that disaster, a side effect was interest rates dropping to near zero. In a zero rate environment, capital flows to where it can make a return, which meant a lot of additional money flowing toward venture capital. Without that, it’s entirely unlikely we’d have seen brands we now take for granted like Uber, Airbnb, Lyft, DoorDash, Peloton, etc. growing to even a fraction of the scale they have because they wouldn’t have had access to the kind of capital they’ve been given.

On the opportunity front, the financial crisis also created the perfect conditions for Klarna and Afterpay to be as successful as they’ve become. For a generation of millennials, watching parents lose their homes and be crushed under debt created a greater degree of caution in their relationship to money. More specifically, a considerable cohort decline to use credit cards, relying on a debit to make purchases instead. With this as a background, an interest-free option to make purchases in 4 smaller installments doesn’t feel like debt at all, which is why it’s no surprise that the average age of a Klarna customer is 33.

Coming out of the COVID crisis, we’re still in a zero rate environment, only this time it’s been juiced even harder by unprecedented injections of capital into the global system by governments desperate to keep their economies afloat. As a result, there’s even more capital sloshing around in the system looking for a return, and again, much of it being driven toward venture investing. So, where are the opportunities?

Well, let’s narrow things for a moment and think only about work for a second. The longer we don’t go back to the office, the less likely we all will, which means there’s no doubt that more of us will be doing more of our work from wherever we please than ever before, which means a shift in value from commercial to residential real estate, opportunities for new kinds of office experiences at, or close to home, opportunities for new kinds of software to support both synchronous and asynchronous work, opportunities for new kinds of recruitment matching, and likely opportunities for new kinds of schooling experiences for kids that are less tied to a single location. At the same time, the office spaces we do use are likely to be very different. There will likely be opportunities for truly collaborative spaces possibly enhanced by professional facilitators, and spaces designed for extreme focus, spaces that allow us to play with materials and experiment, and spaces that fundamentally don’t feel like work at all but are just great places to be. But, unfortunately, we’re also likely to see opportunities for new forms of surveillance designed to enable the worst instincts of the most insecure managers. And this is just scratching the surface of a single aspect of post-pandemic living.

So, as much as I find myself saddened and angered and confused daily amid the interminable drag of the pandemic, I also have to remind myself that there are tremendous opportunities ahead and that one of the unintended side effects of governments pumping so much money into the system is that there’ll be plenty of capital to make it happen.

2. What’s in a name…or a ticker?

tl;dr: Quite a lot if stock market performance is anything to go by.

Naming is one of the fundamentals of branding, but it’s so very hard to get right. As I often say to clients, you can make almost any name work if you spend enough money on it. I mean, think about it, Verizon works even though it’s a terrible name. Pretty much the only thing that doesn’t work is complete genericism, which is why Booking doesn’t work, even though they’ve spent billions of dollars trying to turn it into something. So what does a great name give you? Well, it won’t make you instantly more successful, but ideally, it should help you stand out and be memorable, so the dollars you spend building equity in it are well spent. Something not enough clients, frankly, think about. I’m looking at you instantly forgettable Momentive, which used to be memorable SurveyMonkey. (BTW> If anyone has a clue what an “agile experience management company built for what’s next” is, please let me know).

But, something I didn’t realize until recently is that businesses with memorable ticker symbols often see higher stock performance relative to their peers. A phenomenon that’s been researched and tracked as far back as the mid-1980s, which makes the recent use of “DNA” as a ticker by Ginkgo Bioworks, seem like a very smart move.

Of course, it isn’t always sweetness and light. At the beginning of the pandemic, a little-known Chinese company with the ticker ZOOM saw trading in their stock halted because people thought it was the video conferencing tool that actually trades as ZM. Or Ethan Allen, the furniture company, which changed its ticker to ETD this year because its long-term symbol ETH was being systematically confused for cryptocurrency Ether.

Now, this might not seem like much, but as we see stock trading shift more rapidly into the consumer sphere, companies are going to have to think not just about having a memorable brand name, but a memorable ticker symbol too.

3. Beanz Meanz…zzzz.

tl;dr: More? Seriously? That’s it. That’s the best you can do?

I have many happy memories of Heinz Baked Beans. I’ve eaten them for breakfast, lunch, and dinner, atop toast, under a pie, and straight from the can with a fork. Along with back bacon, beans are undoubtedly the comfort food I missed the most when I moved to the US (American baked beans, by comparison, are disgusting. Loaded with vast quantities of sugar and bits of random pork gristle.)

Anyway, for as long as I can remember, the tagline for Heinz Baked Beans has been “Beanz Meanz Heinz,” until now. This week, they reported the intention to change it to…drumroll, please…. “Beanz Meanz More.”

Sigh.

Why would they change something that’s worked so hard for the brand for so long for something so, well, generic? Well, apparently, it’s an attempt to connect beans to their health benefits, of which I quite honestly didn’t realize there were any.

It’s no secret that brands like Heinz and other industrial food companies that trade in heavily processed foods high in salt, fat, and sugar constantly complain that consumer tastes are changing toward leaner, healthier, fresher fare. But that doesn’t quite tally with the continued rise of obesity, diabetes, and other conditions directly connected to these foodstuffs. And while I do believe that for certain segments of the population, these tastes are changing, it’s also a convenient excuse to justify declining sales at brands that have also been reducing their marketing expenditures. (Brand arbitrage being a favored tactic of 3G Capital, the controlling shareholder of Kraft-Heinz).

Putting excuses to one side, I can take two views on this. First, if we’re to borrow from the work of Prof. Sharp and his merry band of Australian Marketing Scientists, they’d more than likely tell you that “Beanz Meanz Heinz” is a distinctive brand asset that should be doubled down on rather than changed because their research shows that long-lived assets build the memory structures that increase the likelihood of branded beans like Heinz being purchased ahead of a store-branded competitor. Playing devil’s advocate, however, I could also say this looks more like code-play than a complete change because everyone already associates “Beanz Meanz” with Heinz, and so there’s room to play and create a little surprise with the “more.”

If we look at what Heinz is saying, however, they don’t mention code-play at all, instead characterizing this as a shift in the “brand platform” as a part of a broader “purpose drive,” which I take as code for “hired a new advertising agency.”

Now, I sincerely hope that by “purpose,” Heinz and their new agency doesn’t mean the British American Tobacco, Mars, or Mondelez interpretations of the term, all of which are jaw-droppingly mendacious and, quite frankly, farcical.

Unlike cigarettes, candy, or cookies, at least with baked beans, there’s some actual protein, and maybe they are kinda, sorta healthy if we squint a bit and choose to ignore the rather high sugar content.

However, even if you’re shifting your brand strategy toward a healthier message, I sincerely question the need to change such a long-lived tagline. And as for purpose, I’m not sure there’s much going on here. That’s not to say that I’m against corporations taking a more responsible stance. I am very much for greater responsibility. It’s just that meaningful corporate citizenship isn’t going to come from the advertising wing of the marketing department of a single brand within a massive corporate portfolio controlled by one of the world’s most aggressive investment firms just because an ad planner at their new agency read methodologically dubious reports from Deloitte and Accenture saying people value brands with a strong social purpose more highly than those that do not.