Fitbit After the IPO. Now what?

fitbit ipo wall street

Fitbit has a massive IPO, but will it remain in good shape? (Photo: Eric Thayer – Getting Images)

June of 2015 and Fitbit, founded in 2007, finds itself not so much at a crossroads or the precipice, but atop a mountain peak. Having just went public with a $6 billion valuation, the company’s founders James Park and Eric Friedman now must avoid the mistakes of other ‘first to market’ products, fend off 2nd wave rivals, and keep consumers excited about the future of the brand. This is a decidedly difficult challenge that will require no small amount of technical innovation, but also a deep understanding of changing consumer behavior, cultural trends and internal issues.

Taking on Challengers

Fitbit will face challenges on the high end from the Apple Watch, and downmarket from brands like the Chinese brand, Xiaomi, whose Mi Band has a US retail price of $14.99. We’re going to see some serious market segmentation and here’s where it’s critical for the Fitbit brand to do some heavy lifting. If the wearable fitness tracking market gets commodified, Fitbit will be in trouble. They have to make it about something more than just a computer on your wrist. Their latest ad does that well I think:

It’s not about the features, it’s about how the product changes your life.  The question is going to be, how big a segment can Fitbit carve out. They probably won’t get the hardcore athletes, who will gravitate towards products made by adidas, Under Armour or whatever Nike ends up doing. Trendsetters (chasers?) with money will go for Apple and people who are wearable tech-curious may go for a cheap entry-level brand.  But there are a huge number of people like those in the ad. People who are just trying to stay healthy and live an active lifestyle. Disclosure: I would put myself in that category and yes, as a matter of fact, I do own a Fitbit device.

Avoiding the Icebergs

As Brandchannel notes:

To some observers, Fitbit’s position now is reminiscent of where BlackBerry was just a decade ago: “Like Fitbit, BlackBerry was the established market leader with a ubiquitous gadget and a lower-priced alternative to Apple’s shiny new iPhone,” explains Business Insider. But now BlackBerry is barely viable in any form. Could the same sort of fate befall Fitbit?

It’s a good question, and one I’m sure Friedman and Park are asking themselves. There’s no shortage of analyses on what went wrong with Blackberry, but in the end, it comes down to adaptability. How will Fitbit evolve to both stay ahead of the competition and will the leadership be able to stay united in plotting a new course for the company, something Blackberry struggled to do effectively?

A Faster Horse

Visiongain has assessed that the value of the global wearables technology market in 2015 will reach $16.1bn. Predicting too far in the future about a new technology can be dangerous. Perhaps the dark side of wearable tech will turn people off, but it’s quite likely that number in the foreseeable future the number of people buying these types of products will only rise. As more consumers enter the marketplace, it will be tempting for brands like Fitbit to incorporate more features into their products. Focus groups will tell them, “Yes, that sounds like something I would totally use!” when asked about adding something to the product or platform. 

Fitbit needs to take a cue from Apple here. Nobody was screaming for the iPod, iPhone or iPad before they were introduced, but they become products that consumers instantly understood they needed. Fitbit would be wise to hire someone like Grant McCracken to help them understand culture and their potential place in it. In fact, Grant has written about Fitbit previously:

…Fitbit is designed to capture data generated by any activity. But notice the tone, the reckless, frenetic charm of this spot. It’s not about anyone’s ego. There are no beautiful people here. No celebrities. It’s a “Here Comes Everybody” exercise, to use Shirky’s phrase. There are a variety of deep cultural reasons why diversity is so important when crafting cultural meanings.

They business world is littered with brands that caught the cultural zeitgeist, briefly, before slipping away. Do you still own a pair of Crocs?  Staying fluid enough to move with culture and consumers is a difficult thing, but critical for brands like Fitbit.

 

 

An Open Letter to Silvia Lagnado, McDonald’s New CMO

In the spirit of Bud Caddell’s, An(other) Open Letter to Marissa Mayer, let’s talk about McDonald’s, and the challenge facing their new CMO, Silvia Lagnado. Her task is not an easy one. It’s been reported that the company has shut down 700 stores in the first half of this year. The Wall St. Journal had this graphic which puts things into sharp relief:

Josh Bernoff has a pretty sharp criticism of McDonald’s and their roll out of the new Sr. management hires with, McDonald’s Announcement of Marketing Hires Isn’t Very Meaty.

I don’t think McDonald’s problems are a quality issue, or an economics issue. I don’t think it’s bad management or paradigm shifting technology. What McDonald’s is facing is a culture issue.

A new generation has grown up with different attitudes towards food, marketing and brands. They have different expectations about their experiences.  I think it would be wise of Lagnado to look at McDonald’s longtime partner, Coca-Cola, to see how they have managed to stay relevant as times have changed. Coke has down a wonderful job of understanding the key role it plays in consumer’s lives. It’s not merely a beverage, it’s a social catalyst. Coke continually looks for ways to engage people in new and interesting ways.

 

 

More recently, their “Share a Coke” campaign has struck a chord as well:

In both of these cases, Coke, the mass-iest of mass products, has taken themselves down to the individual or small group level to connect. Could McDonald’s have created a similar video to the vending machine one above? Of course. Imagine a video of someone placing a regular order via the Drive-thru, and receiving instead any number of ‘surprise and delight’ moments.  What if you could order your Big Mac any way you wanted it, and the wrapper said Big ____ and the fry cook put your name on it with a Sharpie? Now you go to your table full of friends not with four Big Macs, but with a Big Steve, Big Susan, Big Jay and Big Ashley.

Adweek put together a piece recently, compiling tips on making The Golden Arches a “Modern, Progressive” Burger Brand” from several experts. I think all the experts made good points, but didn’t necessarily address a larger cultural issue and the real opportunity that McDonald’s has.

The first tip, from David Gaspar, managing director at DDG, is titled, Embrace Innovation.  Gaspar encourages McDonald’s to be aggressive in trying new ideas. In principle it makes sense, but McDonald’s has a very thin line to walk.  Those turned off by McDonald’s right now aren’t going to come running in the door because Ronald McDonald is hitting them up on Snapchat or to try some new faux-artisanal sandwich. You also run the risk of alienating the core base with too much innovation.

The second tip is to Create Transparency. Alla Gonopolsky, planning director at Havas Worldwide, New York noted the ‘Our Food, Your Questions‘ campaigns, but thinks they need to go further. She’s right, and going further is considerably harder. The challenge becomes building transparency into the process, rather than making it a reactionary tactic.

Next comes Rebuild Loyalty. According to David McIninch, vp of marketing at Acquisio, “McDonalds always owed its success to customer loyalty.” I’m not sure I agree with that premise. I think it was more a matter of ubiquity or uniformity. But loyalty is a key element. How can McDonald’s make people loyal to the brand through ways other than, as McIninch suggests, “technology and [a] move toward mobile loyalty programs.”

For the fourth tip, Adweek went back to Gonopolsky who urged them the Brand Globally. This is an interesting idea, and Gonopolsky notes that, unlike Coke, the McDonald’s product does indeed differ regionally with unique menu items. There’s a missed opportunity here. Why not do a cultural exchange with items from the McDonald’s Japan menu making their way to South Africa, and vice versa. Create videos recording the experience and you’re ripping a page right out of the Buzzfeed playbook:

Finally, Martin McNulty, CEO of Forward3D encourages McDonald’s to Be Proud of the Burger. Listen, within five miles of my house I can instantly think of five places I would go if I wanted a really good hamburger. McDonald’s is not on the list. Fighting a burger war is not a winning proposition for McDonald’s.

So, what do I think McDonald’s should be doing? I don’t think it’s about the product, and I don’t think it’s about technology. Beyond my earlier assertions to follow in the footsteps of Coca-Cola, I think McDonald’s should explore a broader societal/culture positioning that can have a real impact.

McDonald’s could define itself as a leader in training and education for the youth of America. It could do so by raising the minimum wage of it’s workers and for those in high school, the addition wages could be put in accounts to be used for college. The company could partner with institutions of higher learning and Coursera to create affordable education programs in management, food science, marketing and other fields. In this way, McDonald’s could return to its roots – how many successful people started their careers at the fast food joint? – and also firmly embrace innovation.

Education, poverty, equality, opportunity. Those are big issues, and maybe they are more than a burger place can handle. But I think they’re worth taking on if McDonald’s wants to regain its position in the hearts and minds of a new generation.

Here’s A List Of The Least Despised U.S. Brands

On Wednesday, AdWeek ran an article titled, The Best Perceived Brands of 2013It was a recap of a recent YouGov Brand Index survey that “measures consumer perception of brands by asking consumers if they’ve heard anything negative or positive about them and assigns a score ranging from 100 to -100 by subtracting the negative from the positive feedback.”  Here’s a look at the top brands courtesy of a AdWeek graphic:

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Now here’s what I find fascinating. Everyone one of the top saw a year-on-year decline in brand perception. And these are the cream of the crop! On average the Top 10 brands dropped nearly 7 points. Put another way, the Top 10 brands averaged a score of a little over 26 points. The 6.9 average drop amongst them from 2012 represents a more than 25% decline in brand perception.

If I follow the methodology correctly the Top 10 are receiving roughly three negative pieces of feedback for every positive one. Nike, the darling of every marketing case study has a score of 16.5. What in the world is going on here?

It seems to me that there is something fundamentally wrong culturally. The would appear to be a massive gap between how brands would like to be perceived and the reality of the situation.  If the scores are any indication, there isn’t a magic bullet solution here either.

Dissecting the Top 10 is a fascinating exercise as well. You’ve got old, traditional brands like Ford, V8 and Cheerios right next to Amazon and YouTube. Media outlets like History Channel and brick and mortar locations like Lowe’s.  If I were to take a stab at it, I think all 10 are perceived as providing value, or empowering people in some way. Take control of your health (Walgreens, Subway, V8, Cheerios), DIY (Lowe’s, YouTube), on-demand (Amazon, Kindle). Ford and History channel are interesting. They both are a nod to nostalgia, perhaps even patriotism on some level, but neither brand feels stuffy or out of date.

It would be worth a deeper dive to see if there aren’t some other insights that can be derived from this survey.

 

 

 

 

The Death of Facebook?

Menlo Park, We’ve Got A Problem

Facebook’s got a problem. One that I saw coming last year (Ed. note: I certainly wasn’t the only one).  I was at a Facebook event in

Facebook Has A Facebook Problem

Facebook Has A Facebook Problem

New York as they explained to marketers how their system worked and how marketers could best leverage the platform. I remember sitting there and thinking, “So, this EdgeRank system is going to let Facebook determine what people see and don’t see in their feeds? Facebook is going to manipulate that so brands will have to pay to be in people’s feeds.” Again, I wasn’t the only one who came to that conclusion.

Fast forward to December 2013 and what do we see? Headlines like this:

Facebook Admits Organic Reach is Falling Short, Urges Marketers To Buy Ads – AdAge

Facebook Wants to Be a Newspaper. Facebook Users Have Their Own Ideas. – All Things D (WSJ)

Facebook Brand Pages Suffer 44% Decline in Reach Since December 1 – Ignite Social Media

Facebook Finally Admits That You Do Have To Pay For Ads To Reach Your Fans – J Campbell Social Marketing

That sounds problematic.  While this is certainly an issue of Facebook’s own doing, there is a fundamental misunderstanding of the platform behind this.

People Are From Mars, Brands Are From Venus

What we’re seeing is a mismatch of purposes. What people want to do on Facebook and what brands want to do on Facebook are, depending on your outlook, either simply different or fundamentally opposed.  I have over 1,000 connections on Facebook and the amount of times I’ve seen those connections talk about brands, unaided and with positive sentiment, is something I could count on one hand. Complain about a brand? Sure, all the time. Make fun of a brand? Frequently.  Most people just aren’t on Facebook to have a “relationship” with a brand. They want to wish a cousin happy birthday; talk about the big game on Saturday; post a photo of their daughter going to her first day of 5th grade; or share a video of an adorable dog trying to catch its own tail. These are all personal, intimate expressions of people connecting with other people.

By contrast, most brands are posting stock photos of their products or trying to solicit engagement with entreaties like, “share this post if you think Fall is the best season!”  That is when they can find time between bouts of self-immolation with posts that range from insensitive to downright insulting.

So, at its core we have a purpose problem, not a technical one, and brands are caught between Scylla and Charybdis. On one side they are being squeezed by Facebook, asked to invest money if they want to be seen by more than a small percentage of the people who have self-selected as being interested in the brand. On the other hand, be careful what you wish for because a lot of people would try to figure out how to turn off updates from brands if they were exposed to the pablum most brands turn out on a regular basis.

So, Should Brands Even Be On Facebook?

As exposure rates continue to decline (without paying to play), should brands even bother with Facebook? The answer, as with most cases in Social Media, comes back to this fundamental question: What do you want to do?

If driving sales is the primary business objective right now, and you need volume, I’m not sure Facebook is the best platform. Especially if you don’t have an established community of millions of people. But having some presence on Facebook certainly makes sense. People are there, they want to know that you are there. But maybe your Facebook presence should be less about your products and more about the story of your brand. Or what if it was completely focused on your employees? Or your customers?

The Problem Isn’t Facebook, It’s You.

Remember in Ferris Bueller when a stoned out of his mind Charlie Sheen is talking to Ferris’ sister in the police precinct. She’s telling him about the cosmic injustice she faces daily as Ferris lives a charmed life. He tells her the problem isn’t Ferris, it’s her. She should stop worrying about Ferris and just deal with her own issues. Very Zen.  Similarly, brands should stop worrying about Facebook and its constant tinkering with its own system and start worrying about the time of content they create – whether on Facebook or any other platform, from Twitter to YouTube to a website or mobile experience.

If you create content that contains value, that entertains, informs or educates, people will find it (and share it). If your content contains a human truth, if it speaks to people’s emotions, you’ll build a community that will want to engage with you.

Mars One – Redefining Human Achievement

“Ah, but a man’s reach should exceed his grasp,
Or what’s a heaven for?”

— Robert Browning

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It’s easy, in 2013, to look downward.  Partisan politics, a popular culture fixated on celebrity, and the ever-present threat of financial and environmental catastrophe.  As a result much of our public discourse has become petty. Small.

It’s frustrating because so many of the great challenges we face should be the source for a collective global rallying cry. If everyone was committed to ending hunger, we could. If all the nations worked together to eliminate environmental toxins, we could.

The frustration is compounded because I believe that fundamentally, at our core, humans desire, in fact need, to have something greater than themselves upon which to focus their energy.  I’m not a particularly religious person, but I’m not immune to the ideas of spirituality or the need to contribute to something beyond my own needs. It is through these larger accomplishments that our lives have meaning.

There are of course myriad ways in which one can contribute to society, important ways that can have an immediate impact on people nearby and across the globe. Recently my son and some friends collected more than 600 pounds of food for the local food bank. That is an action that has real, tangible impact.

But there is also a need for something even greater. A need to stretch the boundaries of human achievement, to redefine what is possible. For it is these efforts that, whether successful or not, inspire others to stretch the limits in other fields as well.

So it is with great pride and excitement that I can announce that I have been named to the Mission Advisory Board for the Mars One Foundation.

Mars One has the potential to truly be one of the history altering endeavors of mankind.  It is a story of human ingenuity, courage mars-one-colony-astronauts-2and a willingness to re-imagine what is possible. Every aspect of the project is about taking humanity to a new place – literally.

I am humbled by the opportunity to participate in some small way in this mammoth undertaking.  A review of the other members of the Mission Advisory Board speaks to the credibility and seriousness of the project. The fact that more than 200,000 people sent in initial applications to participate shows the global zeitgeist that Mars One is tapping into.

Of course as a marketing professional I was intrigued by the potential Mars One has as a commercial enterprise. Mars One Foundation CEO Bas Lansdorp has an ambitious plan for making this dream become a reality. The opportunities for brands, media outlets and most importantly regular people from around the world to participate in Mars One is virtually endless.  I think a wide variety of stakeholders will want to participate in Mars One for the same reasons I wanted to be involved – not only can I help make this project a reality, but merely by participating, Mars One gives me a purpose beyond the trivial or mundane day to day elements of my life.

I hope to have many more updates for you in the future, but for now I encourage you to check out Mars One. See what sorts of people and technology partners are getting involved and watch some of the applicant videos. I hope that you’ll be as inspired as I am and will find a way to become part of the mission.

#Anchorman2 Isn’t A Movie

durango burgundyAnchorman 2 is a Transmedia Experience.

Or at least that’s what it has become. If you’ve been paying attention recently you’ve seen Ron Burgundy, the character created by Will Ferrell in the modern comedy classic Anchorman, all over the place.

 

In Dodge commercials

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On local news in Bismarck, ND

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At the Canadian Curling Trials in Winnipeg

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Of course this is all promotion for Anchorman 2, which hits theaters later this month. But it seems to me it is more than that.  I’m sure Ferrell, like other celebrities will make appearances, as himself, on Leno, Letterman, The Daily Show, etc., but it’s not often you see actors, in character, going to places like Winnipeg or North Dakota, and make no mistake, those locations are carefully chosen. They are chosen so as to be discovered, and shared, by Ferrell’s fans, who are rewarded for scouring the Internet and sharing their discoveries with the community.

No, Ferrell is engaged in another form of storytelling. He’s created a transmedia experience that is well, experiential.  Ron Burgundy now inhabits a sort of pseudo-fictional, quasi-reality that doesn’t just promote the “Anchorman Universe,” but expands upon it.  The Burgundy character is a cartoonish trope familiar to those well-versed in the Judd Apatow school of comedy. He’s the buffoonish man-child, egotistical, self-centered and infantile. In other words, he’s a lot like people you see on TV.

Burgundy’s appearances at various events and within car commercials break the barriers between performer and audience, but not in the same way that say, Garry Shandling broke the 4th wall on It’s Garry Shandling’s Show. Usually when performers engage more directly with the audience they break character – a knowing wink or nod, an admission that they know this is fiction, and they know that you know. But not with Ferrell/Burgundy. It’s more of a McSweeney’s style of humor. An “I know you know, and you know I know you know, but I’m not going to acknowledge it”-sort of performance art.  By maintaining the illusion, Ferrell/Burgundy pull us into their world while inhabiting ours. Ferrell’s comic forebearer is more Andy Kaufman than fellow SNL alum Chevy Chase.

But like another SNL ‘Not Ready For Primetime Player,’ Mike Myers, Ferrell is gifted at creating characters infused with a certain humanity that makes them believable while at the same time fulfilling the requirements of comic absurdity.  Their genius being the ability to inhabit these beloved characters but not be totally typecast by them.

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So we come to the question, what can a brand learn from this? How can a car company or a QSR or a CPG manufacturer leverage this sort of cultural capital?  Surely there is no shortage of brand characters out there. GEICO has come pretty close with the Caveman characters. (Full disclosure, I thought the Caveman-spinoff TV show was cleverly written.) Old Spice achieved a certain degree of transmedia traction with The Man Your Man Could Smell Like via the YouTube response videos.

But most brand mascots don’t have the multi-dimensionality or talent of Ferrell/Burgundy.  Perhaps the best move is in fact the one played by Dodge. Borrow the equity and interest of an existing character. It seems to be working, as sales of the Dodge Durango is up 59%.

With notable exceptions like John Carter we live in a world where the blockbuster hit is a self-fulfilling prophecy. Anchorman 2 is going to be a huge hit (BoxOfficeMojo predicts the film with double its predecessors take, raking in a total of $165 million). From movies to video games to awards shows and events, the opportunities for a brand to create a transmedia experience, rather than just a sponsorship or TV spot, are endless. Kudos to Dodge for not simply hiring Will Ferrell, but for understanding culture and figuring out how to triangulate between the product, the character and the actor.

 

Further Reading:

Transmedia Planning

Entertainment Weekly on Burgundy/Dodge Partnership

The New Yorker Explores the Viability of “The Blockbuster” 

Innovative Storytelling