Sub-prime Then. Environment Crisis Now

While the world is yet to come to terms with the financial crisis in the past few weeks, George Monbiot of The Guardian reports on another huge collapse that no one’s paying attention to. Pavan Sukhdev, the Deutsche Bank economist leading a European study on ecosystems, reported that the world is losing natural capital worth between $2 trillion and $5 trillion every year as a result of deforestation alone. The losses incurred so far by the financial sector amount to between $1 trillion and $1.5 trillion. Sukhdev arrived at his figure by estimating the value of the services – such as locking up carbon and providing fresh water – that forests perform, and calculating the cost of either replacing them or living without them. Monbiot says that therefore, the credit crunch is “petty” when compared to the nature crunch. He also cites that the reasons for both crunches is mostly of the same nature – in both cases, those who exploit the resource have demanded impossible rates of return and invoked debts that can never be repaid. In both cases the likely consequences have continuously been denied. Read more in his very interesting article here.

Citizens Bank’s Green$ense

Citizens Bank has launched it’s Green$ense Campaign which pays customers ten cents for every electronic transaction they make but only up to $10 per month and $120 per year. The transactions include purchases made by debit card, paying bills online or have an automatic payment charged to their accounts. Each month the bank will automatically deposit Green$ense cash into the customer’s checking account and send them an email notifiying them of their monthly Green$ense deposit. The bank is taking the idea forward interestingly by giving away debit cards made of recycled plastic and enabling their website with a Payment Impact Calculator where people can actually see the difference and by giving tips on how people save on various bills by being eco-friendly. The campaign rolls out in print, radio, outdoor and television with headlines reading “Being eco-friendly just got eco-nomical” and “The environment is like a bank account. Every little bit helps.” But thinking about it in depth, will this really mean that people are going green? A customer could use his card to buy things like fuel and paper plates, stuff that eventually only adds to pollution.

If Banks Go, Do Logos Stay?

That’s the big question we’re asking the banks whose logos are defunct because of them being bought out or being nationalized. A post on Creative Review tracks how bank logos change over time. Ever since the early 90s, banks have been attempting to project a friendlier, less formal image. Heraldic devices and serif type were steadily ditched in favour of rounded edges and updated typography. Everything became shinier, more colourful, less forbidding. It was all about innovation and modernity as banks started to project themselves as dynamic global brands, reflecting a shift in their management style and business aims – the upshot of which we are now experiencing. Of course, all that the logo designers explained that the logos signified has now fallen flat. For example, Landor’s now defunct logo for Morgan Stanley (designed in 2001) had “the directional triangle… pointed toward growth and financial success”. “The firm needed to shift its image and be seen as more modern and innovative,” Landor explained. Unfortunately, this spirit of “innovation” is now more typically characterised as reckless risk-taking. Coming back to today, dynamism, innovation, modernity – these aren’t messages that people really want to hear or believe from banks at the moment. So what should the banks go back to now?

How To Be A Good Advertising Professional

DigiCynic or Jerome Courtial is now a planner with WK Amsterdam. Recently he wrote a long post on what he thinks is needed to be successful advertising professional. His 12 point road map. Be curious, have integrity, become a good diplomat, love your job, be nice to people and meet a lot of them, be confident, become an expert, look for new creative opportunities, learn to collaborate, understand human nature, be a better presenter, and harness the power of stories. We couldn’t agree more. Read more.

Brand New Religion

Graeme Douglas is a planner at WK London. Last year he came into prominence for a paper he wrote for IPA. Read his views on how brands can learn from faith based religion and grow their powers. Read the full essay.

A Second Life For Second Life.

2007 was the year of Second Life. Cover stories were written, brands decided to build experiences, blog posts raved about the future of this virtual world. In fact this newsletter too had many stories on how brands and consumers were experimenting with this new form of life. Then towards the end of the year the noise died down. Experts started to write off the places, brands started to leave their islands, just as quickly as they had arrived. Now there’s new life emerging in this virtual world, with marketers looking at the potential of these virtual spaces. Rather than try to recreate brand the way they are in real life, the second generation of Second Life entrepreneurs have a new approach, bring something relevant to the community. Like when Colgate discovered that SL Avatars are not born with natural smiles, they decided to distribute smiles and solve a real need that users of this world had to live with. Read more in Fast Company.

Understanding The Real Value Of Brands. Comparing The Best In Class Measuring Tools.

It is in downtime times like these that the true value of brands start to get questioned. Managers and marketers start to look at ROI numbers and how they are delivering for the brands they own.

Jonathan Knowles of brand consultancy Wolff Olins has a detailed post on the state of brand measurement and draws our attention to some of the most well established brand measurement tools. He lists out two kinds of outcomes when it comes to measuring brand equity.

He writes
There are two promising candidates for how this equity can be measured:
>> The first type of approach measures equity in terms of “outcomes,” such as the extent to which customers are prepared to stake their personal or professional
reputation behind a brand by recommending it to others or the price premium they
are prepared to pay;
>> The second type of approach measures equity in terms of the scale and nature of
the utility that the brand delivers to customers.

In the first case the measurements tend to be simple, according to Knowles. As simple as asking people their “willingness to recommend to a friend”. Simply understand a brand’s net promoter score (number of people willing to recommend a brand) to understand the growth prospect of a brand. You can read more about this approach in the book The Loyalty Effect by Fried Reichheld here.

Another well worn approach is understanding how many people are “willing to pay a price premium” advocated by Columbia University Professor Donald Lehmann. You can read an excerpt of this approach as you scroll down.

While the author loves the simplicity of the “outcomes” approach, he thinks that these approaches are limited in their ability to provide insights into what really creates this equity.

He moves on to compare the second lot of measurement tools. Ones that try to identify the size, scale and sources of equity. These well established tools include EquityEngine from Research International, EquityBuilder from Ipsos, Y&R’s BrandAsset Valuator, Brand Equity Model from Kevin Lane Keller, Brand Dynamics pyramid from Millward Brown and WinningBrands from AC Nielsen.

Jonathan Knowles concludes: Of potentially greater importance than a credible ROI model for marketers is the development of a robust methodology for defining and measuring brand equity in a way that meets the financial requirement for an asset, namely that it represents a source of incremental cash flow over time. This means that the focus needs to be on the metrics that capture and explain customer behavior, not simply customer attitudes. Such a measure of brand equity will represent, to quote Tim Ambler of the London Business School, “a reservoir of cash flow, earned but not yet released to the income statement.

Read the article in full here.

In Good Times And Bad, Socially Responsible Investing Grows.

This press note from Social Investment Forum tells us how socially responsible investing is growing around the world. And this has nothing to do with the current downturn. Infact from 2005 to 2007, socially responsible investing assets in the U.S surged 18 percent, outpacing broader managed assets. The report identifies $2.71 trillion in total assets under management using one or more of the three core SRI strategies – screening, shareholder advocacy, and community investing. Read a more detailed note here

What’s In A Name? A Lot, If You Are In Banking These Days.

NameWire, the brand naming blog has an interesting post on how the financial downturn and the crises in the banking industry will change many unconnected things. For instance many of the large banks that went down these past few weeks were active sponsors of sporting events and had their brand names attached to sporting venues. If Citi Bank has bought Wachovia, will a sporting area named after Wachovia be renamed after Citi? According to this post many more such ball parks, stadiums and arenas could soon undergo a name change. Also, now that words like investment bank and investment banker are not the most fashionable things out there, we could see some rethink even in the space. NameWire points to another story at ThoughtGadgets that looked at why the $700 billion bailout failed. Was it a case of band branding the article asks? The bailout according to CNN was opposed by most Americans and one of the reasons for it was that most people could not explain it easily. Read more

Looking Behind The Financial Crisis. Deregulation Or Over Regulation?

The guru of 1 to 1 marketing Don Peppers looks at the recent crisis as he writes…“the occasionally dysfunctional workings of a representative democracy.” Although many politicians and much of the mainstream media would like you to believe that it was rampant deregulation of the financial industry that “caused” the economic crisis we now face, don’t believe it for a minute.
The fact is that deregulation is almost certainly not the culprit. For one thing, the least regulated sectors of the financial markets have been the least affected by the malaise. Hedge funds, for instance, are still functioning smoothly and efficiently. It’s the more heavily regulated commercial banking sector that’s freezing up. Rather than deregulation, the immediate cause of the liquidity crisis is over-regulation – or at least, the wrong type of regulation.
Don puts the blame squarely at the feet of the government, both the Democrats and the Republicans and the law makers who with good intensions perhaps added to the conditions that precipitated the crisis in the sector. Read the whole
post here…