12 COVER STORY
NEW YEAR RESOLUTION From the shadows of bankruptcy, the iconic imaging brand is emerging as a purely B2B technology company. Kodak’s local marketing head talks us through the journey of change so far, plus what’s next.
W
hen customers and employees joined Kodak’s president and chairman to ring the opening bell at the New York Stock Exchange on 8 January 2014, it symbolised the rebirth of an iconic brand. “It’s a new year, with a new company, a new stock and a new start,” Antonio M Perez, president and CEO of the Eastman Kodak Company, said to mark the occasion. After being a household name for over a century, the company had somehow slid, slowly but surely, until it found its name used as the go-to example of a painfully disrupted operation, the butt of jokes about how not to run a business. Which criticisms of the company were fair and which were not will be known only to those with access to the Kodak boardroom in the first decade of the 21st century, but the filing for Chapter 11 bankruptcy protection in early 2012 would have presumably been a relief for some – a time to step back, take a breath and make the changes that were required if Kodak was to live on. On 3 September 2013 it emerged, reborn, as a global B2B technology company. Common shares began trading eight weeks later, with a new symbol, KODK. The intervening year and a half saw major selloffs and structural changes. Kodak exited the digital image capture business. It exited the inkjet printer
MARKETING | FEBRUARY/MARCH 2014 | www.marketingmag.com.au
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KODAK MOMENTS business. As a step to ending bankruptcy, the company that invented the digital camera sold $525 million worth of patents. In this interview, Kodak’s local marketing boss, Tony Harvey, talks us through this major change journey, one that is still taking place, from the perspective of the Australia and New Zealand business.
Marketing: Tell us what it was like for the company to enter Chapter 11. It sounds very dramatic, but it’s not like it’s announced and then everything shuts down… Tony Harvey: No. It was a very open communication plan that we had to do. Chapter 11 in America buys you time to be able to reorganise your business in the right way, which is exactly what we did. We never really lost any contact with the customers.
So it’s a strategic move? The business needed to restructure, there’s no doubt about it. We had a lot of different parts to our organisation so we needed to sit back and see where our future was going to be, and then reorganise the business around that, which is what we did. And we’re seeing now the benefits, because those customers who we communicated with during the Chapter 11, we’re now continuing that close communication with because now we’re ready to work with them on the future. I think it would have been really hard to stop communicating, keep everything in the bunker and try to control it and then go back out to the market and say, ‘We’re here.’
What were the internal changes like to go through for the organisation? I actually think Kodak handled it exceptionally well because we made sure that all the staff members were very [informed]. It was a very open communication program, we had regular updates from America on what was happening. Steve Venn, the managing director, was always available to people to be able to talk to them if they had some concerns. And, personally, I think it was handled very, very well. There was nice open communication, people understood where we were going. I think we also understood, to be perfectly frank, is that each one of these businesses a good business. It was not that they weren’t a good business, it was just that we needed to focus our organisation on something, and the graphics is what we’re focusing on.
The change and the moving office has been a terrific opportunity to change the culture of the organisation.
1880, APRIL: George Eastman leases the third floor of a building on State Street in Rochester, New York and begins the commercial manufacture of dry plates. 1885: Eastman invents roll film, the basis for the invention of motion picture film, as used by early filmmakers and Thomas Edison. 1888, SEPTEMBER: Eastman registers the trademark Kodak. 1888: The first model of the Kodak camera appears, able to take round pictures 6.4cm in diameter and carry a roll of film of 100 exposures. Its invention marks the advent of amateur photography. 1895: The $5 Pocket Kodak is introduced, being able to slip easily into an ordinary coat pocket. 1900: The Brownie camera is introduced, creating a new mass market for photography. 1901: The present company, Eastman Kodak Company of New Jersey, is formed. 1930: Eastman Kodak Company is added to the Dow Jones Industrial Average, remaining listed until 2004. 1932: George Eastman commits suicide. 1935: Kodak introduces Kodachrome, a colour reversal stock for movie and slide film. 1936: Kodak branches out into the manufacture of handgrenades for the OSS (a US wartime intelligence agency). 1975: Steven Sasson, an electrical engineer at Kodak, invents the digital camera. 1976: The company sells 90 percent of the photographic film in the US and 85 percent of the cameras. 1994: Apple QuickTake, one of the first consumer digital camera, is launched, manufactured by Kodak. 2009, JANUARY: Kodak posts a $137 million fourthquarter loss and announces plans to cut up to 4500 jobs. 2009, JUNE: Kodak announces it will cease selling Kodachrome colour film, ending 74 years of production, following a dramatic decline in sales. 2010, DECEMBER: Standard & Poor’s remove Kodak from its S&P 500 index. 2011, SEPTEMBER: Kodak hires law firm Jones Day for restructuring advice. Stock drops to an all-time low of $0.54 a share. 2012, JANUARY: Kodak receives a warning from the NYSE (New York Stocl Exchange) that its average closing price has been below $1.00 for 30 consecutive days. From the $90 range in 1997, Kodak shares close at $0.76 on 3 January 2012. 2012, JANUARY 8: Shares close over 50 percent higher after the company announces a major restructuring into two main divisions, one B2B and one B2C. 2012: Kodak files for Chapter 11 Bankruptcy Protection, and the company’s stock is delisted from the NYSE, ending the day trading at $0.36 a share following the news. 2013, SEPTEMBER 3: Kodak announces it has emerged from Chapter 11 as a company focused on commercial customers.
www.marketingmag.com.au | FEBRUARY/MARCH 2014 | MARKETING
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18 FEATURE
REPOSITIONING
VALUE: MAKING WHAT’S GOOD FOR THE WORLD GOOD FOR BUSINESS Creating shared value between business and society is the next step for social responsibility and could be the new frontier for branding, writes Chris Byrne.
C
orporate social responsibility (CSR) is no longer a nice-to-have department; it’s front and centre of brand strategy and core to business. These are the words of Adland titan, Sir Martin Sorrell, signifying how important what was once considered a sideline reputation-building tactic has become. But, as CSR emerges as a guiding principle among leading brands, it’s evolving into something new. Academics Michael Porter and Mark Kramer sum up this evolution in their discussion-defining article – ‘Creating Shared Value’ (CSV) – introducing the concept of creating economic value in a way that also creates value for society by addressing its needs and challenges.
MARKETING | FEBRUARY/MARCH 2014 | www.marketingmag.com.au
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Capitalism and trust in business is broken‌ due to a narrow focus on creating short-term value for business.
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28
ADVERTISING
What Australians really think about it
THE MARKETER VIEWS ON ADVERTISING SURVEY WAS CONDUCTED BY MARKETING AND SET OUT TO CANVASS THE BELIEFS HELD BY AUSTRALIAN MARKETERS INTO WHICH COMMUNICATIONS CHANNELS ARE PREFERRED BY CONSUMERS, AND TO COMPARE AND CONTRAST THEM TO THOSE OF CONSUMERS THEMSELVES, AS STUDIED BY AUSTRALIA POST AND DETAILED IN THE REPORT, ‘CREATING CONNECTIONS THAT MATTER: HOW AUSTRALIANS WANT TO HEAR FROM BRANDS’. HERE’S WHAT WE FOUND.
HOW DO AUSTRALIANS FEEL ABOUT ADVERTISING? WHERE PEOPLE FIT ON THE RECEPTIVE-NEGATIVE SCALE, AND WHERE MARKETERS THINK THEY FIT.
RECEPTIVE
PASSIVE
NEGATIVE
‘Ad junkies’
‘Ambivalent passives’
‘Grumpy rejectors’
Actually enjoy advertising sometimes. What consumers say: 17% What marketers think: 17%
Think it makes little difference to them. What consumers say: 11% What marketers think: 17%
Think it’s often annoying, distracting and seems to be increasing. What consumers say: 9% What marketers think: 16%
‘Affirming realists’ (largest group)
‘Blindfolded ignorers’
‘Aggressive aggressives’ (smallest group)
Think it can occasionally be entertaining or informative. What consumers say: 45% What marketers think: 17%
Think it’s annoying at times but tend to ignore it. What consumers say: 12% What marketers think: 17%
Think there is too much of it and they can’t stand it. What consumers say: 6% What marketers think: 15%
MARKETING’s take: People are nowhere near as negative about advertising as marketers
think they are. Or perhaps given the even distribution, marketers are unclear on this one.
TOP 10 MOST EFFECTIVE ADVERTISING CHANNELS THE PROPORTION OF PEOPLE THAT FEEL EACH CHANNEL IS EFFECTIVE.
VOTE FLYERS1
Rank What Australians say 1. Catalogues and flyers (62%) 2. TV advertising (52%) 3. Press advertising (40%) 4. Radio advertising (32%) 5. Personalised direct mail (29%) 6. Email marketing (25%) 7. Outdoor advertising (23%) 8. Social media advertising (17%) 9. Online display advertising (12%) 10. Telemarketing (4%)
What marketers think Email marketing (69%) TV advertising (56%) Personalised direct mail (54%) Catalogues and flyers (53%) Social media advertising (49%) Radio advertising (47%) Online display advertising (44%) Outdoor advertising (40%) Press advertising (37%) Telemarketing (17%)
VOTE EMAILS1
MARKETING’s take: Measurability does not equal effectiveness. And nobody likes telemarketing.
MARKETING | FEBRUARY/MARCH 2014 | www.marketingmag.com.au
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and what marketers think they think… TOP 3 ATTRIBUTES OF EACH CHANNEL
POSITIVE 5
MARKETERS
Press advertising
LESS BELIEVABLE
LESS TRUSTWORTHY
MORE TRUSTWORTHY
LESS RELEVANT
MORE RELEVANT
HARDER TO IGNORE
OFTEN BORING
OFTEN ENTERTAINING
OFTEN UNINTERESTING
OFTEN INTERESTING
AUSTRALIANS
OFTEN INFORMATIVE
Catalogues and flyers
EASIER TO REMEMBER
ATTRIBUTES 5
EASIER TO UNDERSTAND
CHANNEL ^
EASIER TO REFER TO LATER
WHY CONSUMERS AND MARKETERS THINK EACH CHANNEL IS EFFECTIVE (OR NOT).
EASIER TO IGNORE
Based on the top three attributes identified by respondents who reported each channel as useful.
AUSTRALIANS MARKETERS
Personalised direct mail
AUSTRALIANS MARKETERS
Outdoor advertising
AUSTRALIANS MARKETERS
TV advertising
AUSTRALIANS MARKETERS
Radio advertising
AUSTRALIANS MARKETERS
Email marketing
AUSTRALIANS MARKETERS
Online display advertising
AUSTRALIANS MARKETERS
Social media advertising
AUSTRALIANS
Telemarketing
4 NEGATIVE
MARKETERS AUSTRALIANS MARKETERS
MARKETING’s take: The attributes of each channel are generally uncontentious, but the
degree to which certain attributes matter might be underestimated by marketers.
CHANNELS ON THE PATH TO PURCHASE IS THIS A CALL CENTRE?
WEBSITES
22%
TV ADVERTISING
38%
CATALOGUES & FLYERS
40%
PERSONALISED DIRECT MAIL
43%
PRESS ADVERTISING
EMAIL MARKETING
46%
RADIO ADVERTISING
61%
SOCIAL MEDIA ADVERTISING
New Customer – Considering Options
OUTDOOR ADVERTISING
CHANNEL 5
ONLINE DISPLAY ADVERTISING
POINT OF PURCHASE ^
TELEMARKETING
AUSTRALIANS SAY THAT CERTAIN TYPES OF MESSAGES AND COMMUNICATION CHANNELS MAY BE MORE USEFUL AT PARTICULAR POINTS IN THE PURCHASE CYCLE.
21%
9%
8%
7%
4%
New Customer – Making Final Decision
65%
43%
39%
43%
37%
25%
21%
8%
8%
7%
5%
Existing Customer – Cross-Sell
66%
42%
41%
44%
33%
25%
21%
8%
7%
7%
6%
Existing Customer – Retention
53%
26%
38%
65%
23%
55%
14%
10%
5%
6%
5%
Switching Customer – Options
68%
40%
35%
46%
33%
29%
21%
9%
7%
8%
5%
Switching Customer – Making Final Decision
68%
40%
35%
48%
33%
29%
21%
8%
6%
8%
5%
Infographic developed by Marketing (marketingmag.com.au) and Transmission (transmissiondesign.com.au). Sources on these pages: ‘Marketer’ data was collected by Marketing. It polled 301 marketers nationally in November and December 2013. ‘Consumer’ data was collected for Australia Post and ADMA by QOR. It polled 9641 Australians nationally in July 2013.
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MARKETING’s take: Marketing goals should not only determine creative strategy, but channel selection as well.
www.marketingmag.com.au | FEBRUARY/MARCH 2014 | MARKETING
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38
CASE STUDY
A dorky, endearing, safedriving star is born CAMPAIGN: RHONDA CLIENT: AAMI AGENCY: BADJAR OGILVY
BACKGROUND The motor insurance market in Australia is mature, highly competitive and its growth has plateaued. Nowadays the only real way to grow is to steal customers from competitors. And therein lies the challenge. Customers come into the market 52 weeks of the year, so there is a constant challenge for brands to ensure their brand is top of mind when the time comes for consumers to enquire about a policy. However, insurance is a commoditised market and, according to consumers, there is very little differentiation between insurers, which leads to lethargy when it comes to deciding whether to stay or change brands. Brands have constantly tried to differentiate themselves or be noticed, but they are mostly still overlooked. But if people won’t take notice of brands, how do they distinguish themselves and stand out from the crowd? And how can AAMI get people to switch from their existing insurer to grow its brand?
OBJECTIVES A market-leading brand such as AAMI still requires business growth to meet corporate objectives, irrespective of the fact there is little market growth, consumer inertia and a perceived lack of brand differentiation. The business objectives required that the campaign increase opportunity calls. That is, new policy quotes, which is the key metric in which the advertising is judged. In other words, we had to drive potential
customers to the phones or the website to get an insurance quote.
STRATEGY The overarching strategy behind this campaign was to give the AAMI Insurance brand a personality, something that Australians are entertained by, relate to and can engage with and remember for 52 weeks of the year. The strategy was built on the following insights. The consumer insight Most insurance customers in Australia rarely get anything from their insurer. They pay their premiums in the hope that they’ll never have to make a claim. In the event they do, their insurer provides a service that ensures they get back on the road as quickly and pain free as possible. But what about those customers that don’t make a claim? They have safer driving records and cost their insurer less money, so shouldn’t be paying the same premiums as those who do claim. The brand insight AAMI had recognised those customers that don’t make claims and had developed the Safe Driver Rewards product with its additional benefits. We had used the product previously and believed it could be leveraged to a greater extent to exploit its potential if we found the means to communicate it in an interesting way. The cultural insight As we started creating this campaign, we built on the needs within our society for people to be appreciated, to be recognised, to be wanted.
AUSTRALIA’S LOVE AFFAIR WITH THE CHARACTER REACHED A PINNACLE WHEN WE WATCHED OUR FAVOURITE SUNBURNT REDHEAD FLIRT WITH A CHARMING YOUNG BALINESE RESORT WAITER.
MARKETING | FEBRUARY/MARCH 2014 | www.marketingmag.com.au
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The channel insight We wanted to deliver high impact and the most reach to drive awareness among our broad target audience and spark a national conversation, hence traditional mediums such as TV, press, outdoor and online were important. PR and social media also played roles in driving engagement and allowing consumers to interact with the campaign.
EXECUTION We developed a character that AAMI could use across all communications, 52 weeks of the year and beyond, to highlight AAMI’s point of difference in the insurance market in a fun and entertaining way. That character was Rhonda: an awkward but loveable safe driver. For Australians to warm to Rhonda, she had to be relatable, approachable and
certainly not intimidating. There needed to be a little bit of Rhonda in all of us. Launching in September 2011, Rhonda was first introduced to Australians as she was being celebrated by her colleagues, cheered by the masses and applauded on a grand scale for her safe driving. The slightly dorky, but endearing Rhonda was blasted across the country on TV, in press, outdoor, online and social media, and essentially became the face of AAMI’s Safe Driver Rewards product. In March 2012, we then met her again on vacation on the beaches of Bali, bearing her pasty skin, bright red hair and ‘beautiful brake foot’ for a loveable but somewhat familiar masseuse (all paid for by the savings she made by being an AAMI Safe Driver Rewards customer). However, Australia’s love affair with the character reached a pinnacle when we watched our favourite sunburnt redhead flirt with a charming young Balinese resort waiter by the name of Ketut. And with this, a relationship blossomed. Not only between Rhonda and her beau, Ketut, but between Australia and these two lovable characters. Traditional media again played its role in ensuring the campaign reached its mass audience; however, social media played a vital role in sparking a national conversation about the campaign and sustaining its momentum. This was underlined by the creation of a Facebook page by an unknown fan, named ‘The sexual tension between Rhonda & Ketut’. With over 100,000 likes within a week of its creation, it became obvious that Australians were asking for more. And hence the love story of Rhonda and Ketut began… By establishing this odd but intriguing relationship, we now had a property AAMI could use to entertain Australians, while still serving them a commercial message. This property came in the form of a narrative, a love story. But, like any great love story, there must be a tension, something that captivates the audience and keeps them guessing what the next chapter may be. So in August 2013, we took Rhonda back to her high school reunion, where, with Ketut nowhere to be seen, she spots her old high school crush, Trent Toogood. Once again, Rhonda was blasted across the country in various media, but this time in the arms of
Trent, not Ketut. Through social media and PR, we invited Australians to be a part of the campaign and by voting ‘Who’s right for Rhonda’ they could ultimately decide what the next chapter of the Rhonda story should be. As we wait to see who’s going to win the heart of their favourite safe driver, there’s no denying that Rhonda, with some help from Ketut, has given AAMI and insurance a personality, and AAMI a point of difference in an otherwise dull and predictable market.
RESULTS Interestingly, as the narrative continues, we’ve seen life imitate art (or advertising in this case) as Rhonda now finds herself with the exact fame and anonymity that she received when Australians were first introduced to her being cheered by the masses for her safe driving. Consumer engagement There is clear evidence that Rhonda helped achieve consumer engagement versus competitor brands. YouTube views of best of any TVC in past 24 months: › AAMI: 322,434 (‘Rhonda Returns’ TVC) › NRMA: 42012 › RACV: 4729 › CGU: 26,996 › Youi: 26,337, and › GIO: 1572. Earned media The campaign generated over $1.5 million in earned media (Source: AAMI/Suncorp), via free media in news reports, talkback radio, Facebook, Tumblr and Twitter. The hashtag #Rhonda was trending on Twitter on the launch of the ‘Rhonda Returns’ ad. Advertising awareness Despite spending no extra money in media, advertising awareness also hit a record high of 72 percent, compared to the IPSOS norm of 33 percent. Consideration The campaign also saw an increase of 56 percent in spontaneous consideration for AAMI (source: IPSOS Research). This confirms a strong correlation between the advertising and the ultimate results. It clearly impacted non-customers who were encouraged to consider AAMI in a more positive light and obtain an insurance quote. M
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56
FUTURE OF TV
CITIZEN-CENTRIC MEDIA AND
THE FUTURE OF NEWS If they’re to survive total digital disruption over the next decades, incumbent media brands need to put power in the hands of the people, writes Susi Banks. But will an industry that’s long considered itself exempt from commercial forces embrace a customer-centric strategy?
MARKETING | FEBRUARY/MARCH 2014 | www.marketingmag.com.au
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T
wenty years ago if you didn’t own a television you were an artsy, trendy, lefty, wearing a black turtle neck. Now if you don’t own a TV, there’s nothing unusual about it. Many young adults consume TV content solely on laptops, tablets and smartphones. And older adults are catching on too. Compared to the glory days of publishing, things are grim for news organisations around the world in terms of jobs for journalists and easy advertising revenue. But the paradox is that the public’s appetite for news is more voracious than ever. When Princess Diana died on a Saturday night in Paris in 1997 – Sunday morning in Australia – many people didn’t know until they watched the TV news on Sunday night, and some people didn’t know until they went to work on the Monday. This would be unheard of in 2013. Anybody who wasn’t in a coma or shipwrecked on a desert island could know within the hour.
NO NEWS IS BAD NEWS Heading up innovation at the ABC, Angela Clark believes the change coming centres on the concept of ‘citizen-centric media’, which basically means putting news back into the hands of the people. Clark cites the example of pre-media when people got their information from each other. This was centred on the things important to them, in terms of their family, their village and their means of making a living. With the invention of the printing press, the world changed forever. News-gathering and dissemination were taken from the hands of the people in villages, towns and farms, and given over to the hands of the newspaper proprietors, and eventually the TV networks. And now, the internet has put it back. Clark says we’re seeing seismic shifts in the way companies do business, from banks, insurance companies and even manufacturers. And news media is slowly learning to do the same. Although all companies will undergo digital disruption, none will be affected more than the media sector, which is facing 100 percent digital disruption by the year 2050, according to Clark. “If traditional media giants [in which Clark includes the ABC] are going to survive in the age of digital disruption, they need to put power in the hands of the people,” Clark says.
Newsgathering and dissemination were taken from the hands of the people in villages, towns and farms… now, the internet has put it back.
Clark says ABC Innovation has been conducting open research across the country, in places like Mount Gambier, Canberra, Geelong, Newcastle and Launceston – engaging with people and going into their homes to see how media and technology played out in their lives, investigating the relevance of ‘local information’ in the choices they made. “What we found was that people have to work hard to get the mix of news and information that is relevant for them. Not one media company had an offering that reflected their needs,” she says. “We also learned that while people don’t want ‘local information’ on its own. People find context in local relevance. It provides meaning about ‘who they were in the world’ and not just as a function of where they lived but of the stories and context that was both useful and had meaning for them,” she says. Not only did the internet break business models, non-media and non-content people started building businesses that no one had seen before. These social networks and online communities used technology and the networking capability of the internet to bring to life human behaviours that have existed for centuries. “It fulfilled our desire for connection, gave us the thrill of sharing information and the ability to join communities of interest – thinking about what people need first rather than last,” Clark says. “And media companies are now also embracing this approach. But I think this is often within the prism of an existing ‘media model’, much in the same way that most traditional retailers do when they execute an ecommerce offering.”
ALL BRANDS ARE MEDIA BRANDS Clark posits that traditional media organisations ‘tweaking’ their business model may never really work when they’re still thinking like printed newspapers and television stations. And some non-media companies that are a product of the digital age are doing a better job at being media companies than the traditional ones. Clark cites the example of clothing company Asos, which ships four jumbo jets worth of clothes to Australia each week. Its investor page describes the company as: a unique multi-channel shopping experience where twenty-something fashion lovers can network, share ideas, create their own style and, of course, shop.
There is a perception that there is a lack of fundamental soft skills that will inhibit their potential for leadership.
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