Banking brands go into the red

May 27, 2009

images¡Qué sorpresa! Spanish bank Santander is scrapping the Abbey, Bradford & Bingley and Alliance & Leicester brands. A&L will be the last to go, at the end of 2010, when Santander covers over the last rebellious traces of orange and blue with its comforting corporate red and ‘Mr Whippy’ logo.

The root-and-branch £12m rebrand seems to have come as a bit of a surprise to director of brand and communication Keith Moor  – who earlier this year made the mistake of pouring cold water on the idea – but it should not surprise the rest of us. (Does the UK right hand really know what la mano izquierda is doing back in Spain, by the way?)

Despite the fact that Abbey, B&B and A&L have a long, and largely honorable, legacy, they are in extra time as brands.

Santander already owned Abbey and had earlier put a stop to a fluffy, and largely purposeless, corporate revamp of the brand.

B&B and A&L were booty hauled out of the credit crunch. The very fact that they nearly went bust before acquisition also sealed their future as brands. In a world where credit is tight, there is less room for marketing to manoeuvre. There will be no easy money on the wholesale market for the foreseeable future to facilitate product differentiation; and every reason for bringing expensive, badly run organisations under a more efficient, and austere, banking umbrella.

Which is why Santander is having such a good recession. It managed not to overstretch itself during the seven fat years, and now it’s getting its pay-off during the seven lean ones. “Customers trust us as a global brand and they feel very safe about their savings,” says Antonio Horta-Osorio, chief executive of Santander’s UK operations. Exactly.

More intriguing is where this brand-culling activity leaves Lloyds Banking Group. As former chairman Sir Victor Blank can testify, the grand strategic union between Lloyds and HBOS is not all it appeared at the time it was consumated, there being a number of bottomless black holes in HBOS’ balance sheet. Lloyds, too, will be looking for prudent savings and we have already witnessed one of them in its decision to put Clerical Medical on the critical list. Intelligent Finance, the internet arm, could well follow. And – who knows? – Halifax itself may not be safe. There are no sacred cows these days, now that the bull market of all bull markets is over.

Freddie Forsyth will turn you into a hero

May 26, 2009

Psst! Want to achieve immortality as a character in the next Frederick Forsyth thriller?

I hear the best-selling author of The Day of the Jackal, The Odessa File and The Dogs of War has come up with a novel way of raising money for his favoured charity, Leonard Cheshire Disability.

For a price, you can star in his next book, which is expected to be published in September 2010. I’m afraid there’s no hint of the subject matter, yet. But he does assure us, oh lucky one, that you will a force for the good. “The character can be male or female and will definitely ‘be a goodie rather than a baddie’, representing the forces of law and order! ”

The price is what your name achieves in auction, end date September 1 this year. The opening bid is £2,200, and it is being raised in increments of £100.

Interested? Here’s the link:

Think of the Hollywood possibilities.

A question of Judgement

May 23, 2009

Paul JudgeWe know all about politicians adapting the techniques of marketing to electioneering (see my piece on David Cameron the other day). But what happens when a natural marketer turns his hand to politics?

Last March, Sir Paul Judge – the man who famously bought out Premier Foods from Cadbury and then floated it for a good deal of money on the stock exchange – set up his own political movement, Jury Team. He’s sickened by  “the institutional corruption” of  British politics. And by what he regards as the pernicious influence of a “presidential” style of government gradually emasculating Parliament.

Now, with public outrage over the MPs’ expenses scandal at boiling point, he sees real opportunity for irreversible grass-roots reform. “The product offering from Jury Team is very good,”  he tells me, “But the problem has been getting our name out there. The European parliamentary elections on June 4 is our test market.” 

The “roll out” will be a General Election, which he predicts for the autumn. Find out more about Judge, his party and his plans in my forthcoming column.

MailOnline wants to charge

May 22, 2009

More grim tidings from the newspaper world as DMGT, the owner of the Daily Mail, reveals some pretty awful six-monthly results – a £239m loss. Most interesting was chief executive Martin Morgan’s comment: “The prudent way we are running DMGT is not to make the assumption that all the revenue will come back to previous levels.”

Just in case it does not, Morgan is actively looking into alternative revenue models. It seems the MailOnline would like to charge for its “deeper” celebrity content. Though there’s an appetite strong enough to overcome any micropayment barrier, I doubt charging for internet content will do much to repair DMGT’s wrecked financial model. But Morgan’s comment does demonstrate a growing will to get tough with freeloading internet culture in the wake of Rupert Murdoch’s recent initiative.

Why Pringles have left P&G with a bad taste in the mouth

May 20, 2009

imagesWhat are Pringles? It turns out this philosophical question is of more than academic interest. The wrong answer will cost their maker, Procter & Gamble, millions of pounds in unpaid taxes.

In my naiveté, I had always assumed that Pringles were a kind of potato crisp, interestingly sculpted and shot through with some flavour enhancer more compulsive to humans than a dose of aniseed slipped to our feline friends during a “blind test” TV cat food ad .

Not so. The potato content is less than 50% and Pringles are apparently manufactured from some kind of dough, which makes them more akin to a cake or biscuit than a crisp.

And the point I’m making is? Well, last year this helpful if perverse interpretation enabled P&G to convince a judge that Pringles are exempt from VAT. Foods are usually exempt, but for some reason potato crisps are not.

Ah, but now it transpires they’re potato crisps after all – according to three Appeal Court judges, who overturned last year’s High Court verdict. Which means that the Revenue will be relieving P&G of up to £100m in back taxes and about £20m a year “going forward” (as they say). Unless this one meanders all the way to the House of Lords…

A tax specialist at Ernst & Young praised the “simplicity and common sense” of the judges but claimed a great opportunity had been lost for providing “coherent guidance” on whether snacks were, or were not, liable for VAT. Quite. My case rests.

Webcameron’s searchlight on corruption

May 19, 2009

David CameronHere’s an interesting story (though not one of our own as it happens). Tory Central Office has had the smart idea of buying up the rights to any search tags on Google relating to ‘mps expenses’ and the like. Anyone keying in a related phrase will find themselves being offered a sponsored link to David Cameron’s Webcameron on You Tube, or the Conservative Party portal if you prefer (Demand an election now). Switch to a soulful, grave but nevertheless statesmanlike PM-in-waiting, commiserating with viewers over the appalling misconduct of some of his MPs (Willett, Duncan, Letwin, Hogg, Maude etc), and promising to make full amends the minute voters let him in. Once again, Cameron is streets ahead of the competition in deploying his cyber tactics.

While we’re on the subject of related sponsored links, try It gives a blow-by-blow account of every dastardly deed with some fun interaction thrown in.

Is Sainsbury’s King’s crowning achievement?

May 19, 2009


Justin time?

Justin time?

Another set of dreadful results from Marks & Spencer: annual pre-tax profits down nearly 40%, and the dividend sliced by a third.

Could anyone else, in the circumstances, be doing a better job than executive chairman and retail doyen Sir Stuart Rose, who must shortly retire from M&S? Headhunters are actively putting together a list of potential successors. Strongly favoured is Justin King, who has turned around the once-hopeless case of Sainsbury’s. King says he’s not for sale, at the moment. All the same, he’s beginning to look like the uncrowned monarch of British retail.

More on King’s reputation in this week’s column, out tomorrow.

Allen’s half the man he thought he was

May 18, 2009

Woody AllenWe now know that Woody Allen’s reputation is worth only half what he thought it was. But, at $5m, it’s still quite a lot compared to yours or mine. That was the sum fixed out of court to settle an acrimonious libel case with American Apparel owner Dov Charney after Charney took Allen’s name in vain by featuring him, without his consent, as a Hasidic jew in a series of billboard posters. The image was pinched from a slapstick personality who appears momentarily in the film Annie Hall.

Now if I were Charney, I’d say: cheap at the price. It’s an old trick, meretricious maybe, but effective in drawing attention to your brand name. And last employed to great sensationalist effect by Oliviero Toscani in the service of Benetton, featuring such timeless tastelessness as the AIDs patient and prisoners on death row ads.

I don’t for a moment accept Charney’s tortuous explanation that the Allen image in some way drew an ironic parallel between his own situation and that of Allen as two social outsiders. He’s having a laugh, but at least it’s quite funny.

Whether his brand of sensationalism actually sells clothes, any more than Toscani’s, is open to debate. But maybe I’m straying from the point.

The BBC is not an island unto itself

May 18, 2009

Is that the echo of hollow laughter I hear? Why yes, it’s the sound of commercial broadcasters sniggering over BBC Trust chairman Sir Michael Lyons’ impassioned defence of the licence fee’s integrity.

Apparently, Sir Michael doesn’t believe in top-slicing it, not for Channel 4 or anyone else. And he’s prepared to die in a ditch over it.

Well, he would say that sort of thing, wouldn’t he? When have turkeys ever voted for Christmas, after all? But before we get carried away with smug self-satisfaction at the BBC’s dilemma, let’s at least concede that he has a point in flagging up the public interest.

Well padded and complacent the BBC may be, but the commercial sector is, and always has been, incapable of supplying the deficit. Innovations, such as iPlayer, have come about precisely because the BBC can take a longer view on product development, unbeholden to the quarterly earnings obsession of institutional shareholders.

Lyons fears that top-slicing and David Cameron’s proposal to first freeze then review the licence fee annually (instead of five-yearly) amount to the same thing: an assault on its status as something quite distinct from general taxation. Once the licence fee becomes simply a means of raising money for other purposes, it will be death for the BBC  by a thousand cuts (and subsidies). Not unlike the way a substantial portion of National Lottery revenues is finding its way into underpinning London 2012, as opposed to the good causes which are a fundamental part of its charter.

Slow financial emasculation is bad enough, but the Cameron plan hints at a darker agenda. It may well open the way to overt political interference in the BBC’s news agenda. Would you trust the central cast in our House of Frauds drama to play fair over news values? That’s a rhetorical question.

Why the fat’s in the fire for KFC

May 13, 2009

1-KFCGrilledChicken-051109“We had very big projections numbers on this, but not in our wildest imagination could we believe the response we’ve gotten…But, in fact, it’s been so big, it’s been overwhelming.”

Who’s this speaking? Some frightened executive at Hoover, perhaps, after its infamous promotion went so wrong? Well, not far off. It’s US KFC president Roger Eaton fessing up to one of the worst marketing disasters in years on the Oprah Winfrey show.

Eaton is a very experienced operator. Over 13 years, he’s handled numerous senior marketing and operational roles at Yum Restaurants, which owns KFC. KFC itself is a blue-chip retailer with turnover of about $5.3bn in the States and something like 5,300 franchises. As a marketing operation, they don’t come much more professional than that.

So, how has KFC managed – in a matter of days – to seriously alienate three of its main constituencies, consumers, the media and its franchisees?

Like many of these things, each individual step of the operation looked well thought-out, sensible even. It was the overall contingency planning that was abysmal.

KFC has a pressing problem – its core product, fried chicken, isn’t very healthy. Enter KFC grilled chicken, a constructive alternative. Sounds all right, until you remember the “F” in the middle of the brand name, and hear that the creative concept was “Unthink KFC”. 

But all this was a mooncast shadow compared with what came next. Someone had the bright idea of promoting two pieces of the new product plus a biscuit free on the Oprah Winfrey show, provided viewers downloaded a coupon within two days. Guess what? The offer was brilliantly successful and jet-propelled the retailer to the number one topic on Twitter.

And, guess what again? The company couldn’t fulfil the offer and rapidly had to revoke it . “Riots” were reported in New York KFC outlets. Consumers complained about rude service from franchisees who were caught on the hop, and the media took pot shots at a PR team (led by, would you believe it, someone called Schalow) that wasn’t up to the job.

So, KFC has handed out 4 million free meals in two days and a lot of free Pepsi to the 6 million or so people who couldn’t participate. And what it got back was a bloody nose.

Give him credit though. When the chips were down, Eaton dealt with the crisis manfully. He didn’t hide under his office desk (see Hoover). He took control immediately things went disastrously wrong and fronted the TV apology personally, on the very programme that had proved his nemesis.

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