Issue: Proposed Sirius/XM Satellite Merger
Commentary by: David Vinjamuri
FCC Chairman Kevin Martin’s comment last week that the proposed $13 billion dollar “merger of equals” between Sirius Satellite Radio and XM Satellite Radio faces “high hurdles” is a disturbing sign that the U.S. government is out of touch with consumers, technology and brand competition.

The primary question the government must answer in any proposed mergers is – will this merger ultimately benefit or harm consumers? Will this create a monopoly or enable more competition? A decade ago, when satellite radio was first licensed, it seemed that satellite radio would be the dominant audio broadcast technology in the near future. Consumers would eventually migrate to satellite radio, shunning traditional radio. Particularly in cars, satellite radio would become the primary entertainment option.

Under these circumstances, it made sense that there should be at least two satellite competitors and that these competitors would not be allowed to merge. Circumstances have changed.

Today’s consumer has a myriad of choices for in-car entertainment and in-home entertainment. In fact, the biggest alternative to traditional radio has come from an unexpected source – Apple Computer. The iPod’s popularity has even forced automobile makers to scamble to accomodate iPod connection to the car radio, after decades when car makers refused to put even a simple external input jack on car stereos.

There is also renewed competition from terrestrial radio in the form of digital radio, which promises similar quality to satellite radio.

Finally, the FCC could not have foreseen that the fierce competition between Sirius and XM in the face of many other consumer entertainment options would leave both companies weak and unprofitable. The bidding war for talent that culminated in the Sirius acquisition of Howard Stern (for a reported $500 million) and NFL rebroadcast rights and XM lockup of Major League Baseball.

The resulting situation is not good for consumers. Sports fans must choose between baseball and football, or the near-impossibility of having two incompatible satellite radio systems in a single vehicle or household. Entertainment fans must side with Oprah (XM) or Howard Stern – not that we suspect they have many fans in common.

If all this seems obvious to the average reader of this advertising blog, it is disturbingly not obvious to FCC Chairman Kevin Martin. Like airline CEOs who never travel in coach or food company chiefs who never eat their own products, we wonder if Martin has spent much time driving himself through rush-hour traffic in the past few years. Does he not see the legions of people fumbling with their iPods in the car (let alone the man we recently spotted eating a bowl of cereal with milk in his Lexus)?

The best thing for consumers, and for brands, would be to allow two weak companies to form one stronger one. Instead of fighting each other they can prepare themselves for the larger challenge of competing against digital radio and MP3 players. They can also spend more time developing their content.

If not, we’ll just sit back and watch the FCC force another VHS/Betamax battle on innocent consumers.

Issue: JetBlue Strands Thousands, Creates Customer Bill of Rights
Commentary by: David Vinjamuri

Watching the media this week, one might think JetBlue is going the way of most of the legacy carriers – becoming a haven for bad customer service and employee discontent. This advertising blog believes that the disaster for JetBlue may instead save the company. Here’s why:

Last week was by all accounts the worst week in the seven year history of JetBlue. The company which has long been a media and Wall Street favorite dismayed consumers, investors and management last week. Jetblue stranded thousands of flyers in a cascading series of flight cancellations apparently caused by poor management decisions around an ice storm in New York on Valentine’s Day. The worst complaints against the airline from disgruntled customers centered around planes that were kept on the runway for up to 11 hours with overflowing toilets and without food as well as swamped customer lines and an apparent lack of a system to reschedule thousands of flight crews during a major weather event.

JetBlue CEO David Neeleman who has been in the media spotlight all week today detailed a new “Customer Bill of Rights” which he believes will move JetBlue to the front of the industry in crisis management and consumer responsiveness. The JetBlue Customer Bill of Rights includes the following:

1. Notifications – JetBlue promises to give customers prior information when it learns of delays, cancellations or diversions and their true causes.
2. Cancellations – If JetBlue cancels a flight more than 12 hours in advance, customers can opt for a full refund instead of rebooking. If JetBlue cancels within 12 hours, customers get a roundtrip voucher as well as rebooking.
3. Departure Delay Compensation – (For “controllable irregularities”) JetBlue will give customers $25 vouchers for 1-2 hour departure delays, $50 vouchers for 2-4 hour delays, 1-way flight travel vouchers for 4-6 hour delays and roundtrip flight vouchers (for the amount paid for the delayed trip) for delays of six or more hours.
4. Denied Boarding Compensation – JetBlue will pay customers $1,000 for denied boarding
5. Ground Delay Compensation – JetBlue will give customers who experience an arrival ground delay compensation identical to the #3 above. JetBlue will give customer who experience an uncontrollable (i.e. weather or air traffic) departure delay $100 for 3-4 hour delays and roundtrip travel vouchers for longer delays.

This ‘Bill of Rights’ is a huge step forward in an industry which seems intent on doing the minimum for the consumer at all times. Firstly, it treats the customers time as something of value – a concept no other airline currently embraces. Secondly it seeks to set up a direct value trade for unexpected wastes of the customers time. Third, it addresses the awful industry practice of overbooking in a way that is certain to satisfy customers and deter over-ambitious airline revenue management programmers. Finally, it shows that JetBlue is taking responsibility for the mess it made last week and owning up to some of the bigger flaws not just in its sub-industry-grade performance last week but in the state of the industry at large.

This is a blessing at a time when JetBlue needed one. It may be exaggeration to say the bloom was off the rose at JetBlue, but increasing departure delays, soaring fairs and more consumer complaints last year opened the question of whether JetBlue could stay special as it became a large, mainstream carrier. Just as with the frog who will sit in a pot of water as it is slowly raised to a boil, JetBlue seemed indifferent to these individual issues because it could not perceive the entirety of the effect on the consumer experience viewed from the outside.

The New York ice storm and the weaknesses it revealed in the command and control systems at JetBlue as well as training gaps were akin to dipping the frog in boiling water from the outset – JetBlue now seems intent on jumping out of the pot.

To be sure, the performance has not been perfect. JetBlue CEO David Neeleman seems harried and unfocused in his video message to consumers. Some of his media performances were good but in others he seemed defensive and vague, as in his call-in session on NPR. CEO’s ought to be taught that every good media appearance during a crisis begins with a specific act of contrition – you need to state exactly what your company did wrong and what the effect was on consumers. This shows that the company is taking responsibility and that the CEO has empathy for the consumer. Then the CEO must explain what mistakes the company made beyond weather and uncontrollable events and detail a plan of action. Only then can the CEO get into the nitty gritty of arguing over whether the government should step in with regulatory action or what compensation consumers should receive.

On the whole, though, we think JetBlue has taken an important step forward. Other media darlings should examine themselves in the cold light of day to see if they are still fulfilling the brand promise. If they don’t, a JetBlue disaster may be their worst nightmare – and their only chance for redemption.

Brand: Doritos (Frito-Lay/PepsiCo)
Execution: TV (Live the Flavor, Checkout Girl) Super Bowl
Target: Young Snackers
Rating: ****
Reviewer: David Vinjamuri

Description:
The winner and runner-up  of a submit-your-own-ad contest by Doritos, both of which aired on the Super Bowl.  The first spot, “Live The Flavor” by Dale Backus and Wes Phillips has a driving, Doritos-munching guy starstruck by a woman who is also eating a big bag of Doritos.  With an Aria from ‘La Traviata’ playing in the background, the man and woman make eye contact, causing the man to wreck his car and the woman to fall on her face.  The words “Spicy, Cheesy, Crunchy, Bold and Smooth” are interjected to descibe the both the Doritos and the action.

The second spot, “Checkout Girl” by Kristen Dehnert has a man purchasing groceries at a supermarket. As she scans a bag of Doritos she says, “I like these – nacho cheese – old school.”  After scanning the next bag she says, “Fiery Habanero – YEAH – those are HOT!” becoming much more animated.  Then “Oh – Salsa Verrrrrde,” and she purs at the guy who purs back.  “Blazin’ Buffalo and Ranch?  Giddy-up!” Then we see a bag of Doritos exploding against a black background and the www.snackstrong.com URL.  The spot ends with the woman, hair disheveled rising up to her intercom mike and saying, “I’m going to need a cleanup on register 6.

What Works:
Bob Garfield’s negative take on these spots aside, these spots are remarkable for both strategy and execution.  Both are on-strategy for the Doritos brand whose brand character is bold and unconventional and whose brand strategy is to be an enabler of social connections.  Both are also extremely well produced, with good pacing, engaging storylines and good visuals.

What is extraordinary about these spots is that they were both produced by amateurs rather than advertising agencies.  While marketers can argue whether these spots were the most effective of the Super Bowl, nobody will argue that they certainly were not the worst spots of the Super Bowl (this advertising blog would put them in the top 10) – and that in itself is remarkable.  This Super Bowl represents a distinct step forward for consumer-generated media where the best consumer efforts are very hard to distinguish from professional efforts.

Consumer-generated media is a tricky proposition and we would not advise brands to begin handing the keys to the media plan over to consumer wily-nily.  And we also can see that the creeping professionalism of the consumer-generated spots can make these more like visual resumes for aspiring filmmakers than spontaneous engagement from he brand faithful.  But they have several advantages over traditional agency advertising.  They are less expensive to produce, they follow creative lines that agencies would often not venture down and they have ancillary benefits like PR exposure and a sweepstakes effect.

What Doesn’t:
Viewed purely as professional advertising, both of these spots would be good but not great.  It seems possible that people outside the advertising community could create effective ads that are vastly different from traditional advertising – the same way a blog is different in tone and substance from a print news column.  The problem here could be in the judging process.  Did Doritos allow itself to be open to truly revolutionary work?  As we only saw the finalists for this competition we cannot say.  Certainly most brands want to save themselves from a Chevy Tahoe fiasco, but more openness might be better in spite of the risk to the brand.  Doritos might have played it a bit too safe.

Branding Bottom Line:
A zesty effort from Doritos has us craving more.

Brand: Emerald Nuts
Execution: TV (Super Bowl), Viral Video
Target: Attention-Deficit Viewers
Rating: **
Reviewer: David Vinjamuri

Description:
The spot opens to a shot of an office clock as the voiceover says, “Around 3pm when your blood sugar and energy are low,” here we see an office worker falling asleep, “some say that Robert Goulet appears – and messes with your stuff,” here we see Robert Goulet sliding down a rope and messing with the stuff of the sleeping office drone. He then moves about the office, tap-dancing on a sleeping woman’s desk and taping another man into his Steelcase chair and wheeling him down the corridor. “But the natural energy in just one handful of Emerald Nuts,” the narrator continues as we see an alert young man standing in a break room, tossing a nut into his mouth, “is enough to keep Robert Goulet away. Until tomorrow anyway.” Suddenly, Goulet is spider walking back away from the office, clinging to the ceiling on all fours. The spot closes with a package shot of Emerald Nuts. The viral video (see link above for YouTube posting) is a moc-documentary version featuring interviews of the affected workers.

What Works:
Emerald Nuts first broke out with a Super Bowl spot two years ago, expectations were high for their return in 2006. The spot that actually broke was bizarre, to say the least, featuring the tagline “Eagle-eyed Machete Enthusiasts Recognize A Little Druid Networking Under The Stairs” which spells out Emerald Nuts. (see our review here) We can safely say that the new Emerald Nuts Super Bowl spot is not the disaster that spot was. In fact, this spot is entertaining, cohesive and actually attempts to create a selling proposition for the product. The ‘Robert Goulet – office vandal’ angle is fresh and startling and it does grab the attention. It is also funny and well-executed. There is an attempt to brand Emerald Nuts with a verbal mention midway through the spot and the closing shot of the Emerald packaging.

What Doesn’t:
This advertising blog is a fan of Bob Garfield (particularly his 2004 article ‘The Chaos Scenario’ which has been proven true by subsequent events), but his choice of this spot for four stars as the top pick of the Super Bowl illustrates a repeated problem we have with agency-side critiques of advertising. The question we should all be asking is whether this spot will build the Emerald Nuts brand and whether it will sell more nuts. Garfield suggests that giving office workers energy at 3pm is a brilliant new USP (unique selling proposition). We might agree if we had not been exposed to twenty years of Snickers advertising which has been focused on ‘pick-me up energy’ in office and other situations. So although we agree that the execution of this spot is inspired genius (and Robert Goulet’s dead-pan vandal is hysterically funny), we think the brand positioning is imitative and not ownable.

The second issue with this spot is that for the general, less ad-obsessed public, Robert Goulet may end up being far more memorable than Emerald Nuts as the brand associated with this commercial. Yes, that’s right, we did just say that Robert Goulet overwhelmed another brand in a commercial.

Emerald is still struggling to find out what is unique about the brand – or at least unique about nuts in general. Attempting to own an occasion makes more sense that a features-and-benefits pitch, but unfortunately Emerald chose a value proposition that Snickers already owns. Still, this is a much improved effort over the 2006 disaster.

Branding Bottom Line:
Emerald takes a big step forward but fails to deliver the nuts.

Brand: GM (General Motors)
Execution: TV – Super Bowl
Target: Japanese Car Buyers
Rating: ****
Reviewer: David

Description:
A robot on a GM assembly line drops a bolt.  The line stops as an alarm goes off.  The supervisor looks frowningly at the robot who looks and sounds ashamed.  All of the other robots and human workers look on.  The robot is let go and looks dejected.  He sees GM cars drive by and sadly remembers his job.  He tries a series of jobs including selling real estate and being a fast food drive-thru speaker box.  In abject desperation he throws himself off of a bridge.  All of the previous is to the song “All by Myself”. Then as the GM robot is sinking through the water he wakes up and realizes that he had a bad dream.   He is on the assembly line at night when it is not running.  The GM logo appears and a voiceover says, “The GM 100,000 mile warranty.  It’s got everyone at GM obsessed with quality.

What Works:
This is a brilliantly executed :60 second spot whose strong storytelling lent itself well to the epic nature of the Super Bowl.  The animation of the robot with minimalist movements and R2D2-like sounds adds a personality to a piece of metal and steel not unlike the personality that cars assume in the hands of their owners.  The spot singlemindedly focuses on the humiliation the robot feels for making a mistake on the assembly line which does support the underlying brand positioning of “obsession with quality.”  The over-the-top soundtrack works because the idea of a robot with emotions is amusing and novel, at least for an industrial robot.  The execution of this spot is nearly perfect given the concept.

What Doesn’t:
We think General Motors has made a strategic mistake with this spot by putting it under the GM logo.  Although General Motors and the GM brand name are familiar to most consumers, the brand is too broad to support such an ambitious claim.  Japanese companies still personify quality and GM’s attempt to pull the mantle of quality onto its shoulders is not credible.  Moreover, it’s not clear that a consumer buying a Chevy or a Saturn will think “GM quality” and associate it to these brands during purchase.  As well conceived and staged as it is, the mandate of this spot is far too broad.

A smarter path for GM would have been to pick a specific brand and focus relentlessly on improving the brand image along the lines of quality or durability.  Using the robot to launch a defiant “American Quality” pitch for Cadillac or Saturn would have been more effective.  Above all, GM needs to avoid challenging Toyota directly on quality (and arguing with consumers deeply held beliefs about this issue) and find a niche within this brand equity to own.

Bottom Line:
GMs robot has more personality than any Buick.

Issue: A slow Super Bowl for new Advertising Ideas
Commentary by: David Vinjamuri

The Super Bowl is the last refuge for destination advertising in America, the last place that people actively seek out television advertising instead of shunning it.

Given that, it’s a shame that advertisers did not make better use of the opportunity this evening. Although there were some interesting themes this year, the strongest trend seemed to be a resurgence of animals in advertising. Although we thought the Blockbuster spot was fairly well executed and the dog spot by Budweiser predictably tugged at heartstrings, the Bud Light Gorillas and Taco Bell Lions were less memorable.

This Super Bowl also cemented a trend that has been growing throughout the year – consumer generated advertising. The two spots, a Frito-Lay and one for the NFL were both interesting and stronger than the average agency-produced spot for this Super Bowl.

Two standounts in the largely undistinguished field were the General Motors “All by Myself” robot spot, touting GM’s 100,000 mile warranties and the Coca-Cola Bottle spot promoting black history month and the historic black coach matchup at the Super Bowl.

Picking the worst spot might be difficult this year, but the spot most likely to damage the career of its actor goes to Revlon and Sheryl Crow, with a tedious and undistinguished ad for hair color. Kevin Federline dreaming of stardom while working at a fast-food restaurant gets an honorary mention.

More to come this week, but these are our first thoughts.