General Marketing Thingys

Southwest is headed south.

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Southwest Airlines current logo

Over the last several weeks, Southwest Airlines has made some big announcements. First, it announced that its “open seating” policy will be a thing of the past, now switching to assigned seating and offering premium seating as early as next year. The other doozy they just dropped (it tickled me to write that,) is that the airline will now be charging for baggage.

There were some less-doozy-ish announcements too, like making its fares available on aggregators like Expedia, significant changes to its loyalty program and a partnership with Icelandair.

This reminds me a lot of that whopper of a whiff (now I’m on a roll,) by Dunkin Donuts a few years back. (See post here.) Let that – and the subsequent parting of the ways with CMO Tony Wesman – be a lesson on self-inflicted marketing wounds.

Now, turning back to this mother of a misstep, (it just comes naturally to me,) let’s look at how Southwest was different from all other airlines. First, it did not have assigned seating. You just got on the plane and sat where you found one. Second, it never charged baggage fees. In fact, you could check up to TWO bags for free. They had a robust and passionate consumer base that preferred Southwest’s quirky, “we’re-not-like-the-other-guys” approach. It’s what contributed to the idea that Southwest was the airline “with heart and hospitality.”

As an aside, Southwest was quite different operationally as well. They chose to fly the same airplanes (interestingly, the Boeing 737, which includes the 737 Max 8,) across their entire fleet. This meant that their maintenance and mechanical functions could be streamlined for both speed and efficiency. By not serving other manufacturers, Southwest never had to wait for an Airbus expert, or contact a McDonnell Douglas specialist, if some kind of maintenance was needed on an airplane. That same efficiency carried over to sourcing parts, and buying in bulk…all Boeing OEM and likely the same third-party suppliers.

When you look at any marketing category, it’s sometimes hard to see which player has an advantage, or if any player has an advantage at all. That was never the case with the domestic airlines category: Southwest was BY FAR the most strategically well-positioned brand in the category. Those consumer-facing and behind-the-scenes aspects of the brand made the company interesting. And different. And almost entirely focused on keeping costs down for the consumer, which was always welcome news in a world where the price of everything seems to be going up, up, up, and fast.

As a result, Southwest pretty much beat the snot out of their rivals. Planes always full. Reviews always positive. Loyalty always very high.

Southwest Airlines former logo

Enter Elliott Investment Management. They’re some hot-shot hedge fund that likes to get press by “activist investing,” which is code for acting like a big baby after you buy a significant stake in a company. Led by Paul Singer, their founder and lead investment officer, Elliott purchased a roughly 10% share (about $2 Billion) in Southwest Airlines in June of 2024, and began to systematically trash the house. First they called a “special meeting” to openly criticize the CEO and the board of directors for not chasing profits. Then they forced resignations and retirements of key executives, installed their own CEO and half a dozen other cronies, all of whom likely devised these “policy changes,” like trying to wring up to a hundred bucks more out of every Southwest passenger on every flight.

So – if you want to know why Southwest would basically chew off its own arm when it had an established and defensible market position, it might simply be because some rich dude in Palm Beach wants to show the world how big his balance sheet is, legendary brand position be damned.

IMHO, this won’t end well for Southwest in either outcome scenario. If the company makes these radical changes, and it starts to deliver a profit in a year or two that would be acceptable to Elliott Investment Management, then I’ll eat crow AND they will have done so at the expense of a wonderfully and strategically differentiated brand. They’ll just be another commoditized domestic airline that consumers will shop based on slim price margins and/or if they service a particular destination. I think I’ve heard of them…JetBlue, right?

And what if Southwest Airlines does NOT show a profit? What if they lose more money? What if they become poach-able by some other airline that finds their routes and their operations desirable? Well then, Mr. Singer, you’ve killed a very successful company AND a very important brand for no good reason.

And that’s why I’m miffed in my mittens: either way this goes for the company, a really strong brand dies in the process.

Listen kids, work as hard as you can to make your brand different in some meaningful way.

Be different.

STAY different.

Even at the expense of some nominal basis points in potential additional profit.
Real brands with real positions are hard to come by these days.

What’s next. For text.

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This week, it was announced that Apple is adopting RCS (Rich Communications Service) as a standard feature on its next iOS version. RCS is aptly named, as it does enable more rich forms of communication to be sent over the texting network. (Textwork? Nextext? Just spitballing.) Now, instead of just text in a blue – sometimes green – bubble, or the occasional animated GIF from friends or bit.ly link from brands, images and videos can now be shared, and even interactive features.

Obviously, this news is rife with marketing and business implications.  A survey from Juniper Research, a UK-based telecom research firm, found that “business messaging traffic will grow from $1.3 billion to $8 billion in 2025.” Wowzers. That’s a lot. And soon. Some of that growth is to be realized in no small way by Apple’s 900 million devices entering the fray.

RCS is also notable for providing end-to-end encryption so that messages can’t be intercepted. Apple, who has been prickly about privacy, especially as it relates to marketing via mobile devices, probably saw this is an opportunity to deliver more robust services to iPhone users while toeing the line of its newer, harsher security stance.

As it relates to marketing, the possibilities seem both endless and exciting. More rich media often holds the door open for more robust and interactive engagements. Surveys. Games. Direct app downloads. Oh my!

So, could this be a kind of renaissance moment for the oft-maligned outpost known as direct marketing? Methinks perhaps. Instead of just offering the standard “reply STOP to opt-out” or  “1 to reply YES” options, recipients of RCS messages can now explore the brands’ text-messaged offerings in private, low-risk interactions and decide (if the brands do this correctly) on a number of engagement pathways.

So everybody wins: brands get to design and deliver more interesting and more entertaining features directly to consumers to increase engagement and drive whatever metrics they’re chasing. Consumers get to engage with cooler marketing tactics while still feeling in control of the conversation (remember, you can opt out or just delete anytime you like.) Heck, direct marketing wins by getting a slick, new, digital shot in the arm.

But the real winners? It’s the carriers.

That’s right. AT&T, Verizon, T-Mobile. At least in the United States, they stand to gain most from this boon since they’ll be double-dipping their way to some of that 4X growth predicted by Juniper in their report.

For Dip 1, it will cost brands more to send these richer engagements across the texting network (Textnet? TheNextwork? Still working on ideas.) through the various third party mass texting platforms that enable them. Because the platform rates will go up on a per-message basis as well to cover the increased carrier fees. Hmmm.

And for Dip 2, carriers will quietly pass additional fees on to consumers on their monthly bills. That old “text and data fees may apply” disclaimer is now going to cost a titch more than it used to the more you start opting in for these newer, brighter, more colorful and more animated engagements. The fees will be nominal to each consumer, but across these networks of hundreds of millions of subscribers, it will amount to some delicious over-the-transom revenue from both sides of the marketing equation. And with no additional infrastructure costs.

Well done, you sneaky little bastards.

Here’s mud in your A.I.

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If you’ve been paying attention to the industry news, there’s been a LOT of chatter about AI, (artificial intelligence,) and its various applications. And some of them are really intriguing and useful. With the ability to run predictive diagnostics, artificial intelligence (better described as data-driven machine learning,) is ideal for applications that can benefit from robust and speedy automation.

As is our way, it doesn’t take long for something useful and intriguing to be repurposed into something base and silly. Case in point: AI is also being used now for some fairly sophisticated parlour tricks, like recreating the Mona Lisa.

(Moves soapbox to the foreground.)

But the application of AI in marketing, and most specifically in the creative process, is really (in this sentient blogger’s opinion,) an overreach.

There’s no data set for creativity. In fact, there are no rules. What makes something “creative” is that it is indeed CREATED. By a human being. Part of why we buy paintings, and music and novels and sculpture is because we know there’s a backstory of someone who sweat it out in a studio or at the typewriter. Someone whose fingers bled. Someone who made mistakes, and tried variations, and threw whole passages in a trash can. We celebrate that humanity and that pain and the entire process when we consume anything creative. Not just the end result.

The same is true in marketing. Writing anything – an ad, a blog post, a commercial script – is hard. It’s taking business rules and mandatories into consideration and asking a creative person to then do intellectual gymnastics, linking sometimes disparate ideas in unexpected ways, without a net. Can you write an algorithm for that? Sure, but the results are likely to be shit – the kind of shit a hack would conjure.

For instance, you’ve probably seen these kinds of promotions for having AI write your next blog post.

What’s really happening there? I don’t claim to have knowledge of any of their algorithms, but I’d bet my last dollar that these are search bots that crawl the web for every piece of content written in the last 10 years about a particular subject. They ingest this huge data set, pick out bits and pieces using sorting criteria that prioritize those with the most clicks, comments and instances, and then rearrange and reconstruct a new version for you.

That’s not creating. That’s recreating at best. And theft at worst.

ChatGPT, the latest and supposedly greatest iteration of AI language prowess, has added a sexy wrinkle into their algorithm. Instead of just swiping content and repurposing it, it adds a level of dialogue formatting to make it sound more conversational, and thus more natural and believable. It claims to “answer follow-up questions” and “admits its mistakes.” And given that it is machine-based learning, it gets “better” the more often it’s used. (It’s driving educators crazy, as students who use it can be deemed to be cheating, not researching.)

What a paradox: a machine learning model that improves the more often it’s used, but also degrades the craft proportionately in the process. [Some disclosures: OpenAI, the company behind ChatGPT is funded in part by Sam Altman, Elon Musk, and just got a billion dollar injection of capital from Microsoft.]

In a recent viral kerfuffle on social media, recording artist Nick Cave (throaty lead singer with The Bad Seeds) reacted to a song that was “written” by ChatGPT “in the style of Nick Cave.” He could not have put it any better:

“Songs arise out of suffering, by which I mean they are predicated upon the complex, internal human struggle of creation and, well, as far as I know, algorithms don’t feel. Data doesn’t suffer. ChatGPT has no inner being, it has been nowhere, it has endured nothing, it has not had the audacity to reach beyond its limitations, and hence it doesn’t have the capacity for a shared transcendent experience, as it has no limitations from which to transcend. ChatGPT’s melancholy role is that it is destined to imitate and can never have an authentic human experience, no matter how devalued and inconsequential the human experience may in time become.”

Okay, back to marketing, and particularly the art of writing good advertising. Part of the craft is developing a sense of counterintuitive thought and embracing lateral thinking. Another big part is the symbiotic relationship of the headline and the image. But so much of modern advertising is about contextualizing the brand into the cultural moment from which it arises.

Think of how many great headlines and taglines would never – could never – be written by AI, by virtue of this necessity for divergence and a sense of the cultural periphery.

“Think Small” from DDB was a radical notion at the dawn of the 1960s. As Americans – less than two decades removed from World War II – were upwardly mobile, one of the most pervasive (and comical) trends in automobile-dom was an oblique obsession with size. Bigger was better, and American cars looked like ocean liners. The nation was also wildly nationalistic at the time, and DDB’s assignment was to sell a small, quirky German car to this audience.

To get to the heart of these cultural undertones and suggest an opposite notion was a radical idea. And paired with the spare art direction (bless you Helmut Krone) and that sea of white space, it became a touchstone for our industry. Could AI ever reach that level of insight? Of rebelliousness? Of sheer chutzpah?

“Think Different.” When this campaign (from TBWA/Chiat/Day) was released in the 1990s, it was paired with images of pioneering artists, thinkers and doers, like Einstein, Picasso and Miles Davis. It also featured zero body copy. What’s so interesting about the head/tagline is that it’s not even good English. But it was a fine encapsulation of the Apple brand in that moment and what it stood for. Would AI dare to break grammar rules to create an emotional response?

I suppose it’s mildly ironic, or at least cheeky, that I chose two classic advertising examples that use the word “think” in the headlines. And perhaps that’s exactly what I’m driving at, and what Nick Cave was fuming at.

Maybe I’m an old fart, but I prefer the consternation. The suffering. The pacing and the waiting and the wondering if this “idea” has legs. Give me time to think about what’s going on in the world. Give me the sudden burst of insight when the neurons start to fire. Give me the end of the sentence that starts with “wouldn’t it be cool if…” Give me a person, thinking about another person, and getting them to actually think different.

There’s nothing artificial about that.

A marketing strategist walks into a retail store…

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Stop me if you’ve heard this one before. You go to a retail store. Let’s call it Guitar Center. You’re looking for a new gig bag for your Fender bass, because your old one has seen one too many gigs and had one too many beers spilled on it. (Okay, maybe you were also hoping to find a MusicMan four-string with the maple neck and dual soapbar humbuckers…sigh.)

You walk in – on a Monday morning at 10:30 where you’re maybe the ONLY customer – and browse the bags. Two are on display. One cheapy-thingy on sale for $49.99, and one demonstrably superior name-brand bag with lots of padding, secret pockets and the extra thick handle. No price on that one. Hmmm.  Maybe someone will come by and help. You’ll look around and do that neck-and-eyebrow-raise thing, so someone will know you need help. After five to seven minutes of being ignored, you’ll walk out. Your first and sadly, only, thought is “I’ll just get it on Amazon.”

Think of your own recent experiences in big- and medium-box retail stores. How many of us have gone to a store in the hopes of finding that “perfect” item only to find that it isn’t on the shelf, or isn’t available in the correct size? We’ve even gone to the store in the hopes of finding something we weren’t expecting and being pleasantly surprised, just because we were in the “shopping” mood. We’ve all done it. That’s one of the real allures of brick and mortar retail. But very often, those hopes are dashed by any number of obstacles: traffic, a messy store, lack of trained sales or service professionals, and of course the old standby: the in-stock conundrum. 

On its own merits, the brick and mortar interaction provides a unique personal experience (and the associated dopamine rush) of acquiring something you want or just found out you want immediately. That’s the buzz of retail: “I will walk out of this store and have this thing that I want. Right. Friggin. Now.” Pretty nifty. And it has served retailers well for more than a century in our modern economy. Cue the trendy décor, the zippy displays, the music playing, yada, yada, yada.

But one of the many issues that retail now faces – an issue it has been avoiding the last decade and a half – is competition. Not competition from like purveyors, that’s always been there. But a more intellectual, conceptual competition, from a now-proven and alternative option of almost-real-time satisfaction of needs, but with greater/broader filter-able choice, and often at a similar or sometimes lower price point. And in consumer consciousness, choice is a mammoth motivator. Online shopping has removed borders, opened up consumers to entire lines of inventory, and added convenience across every possible variable.

This competition has come into sharp focus because consumers are also smarter now than they’ve ever been. Not necessarily on an IQ level, but on an informational level. We know that there are more than two colors of that dress we saw in Zara. We know that there is more than one charging base option for that hammer drill we saw in Home Depot. (And we know that there are more than two kinds of bass guitar gig bags, and that they should have a price tag on them! Ahem.) We KNOW, because we saw them online, when we did our pre-shopping research.   

And there’s the rub. Retail offers instant gratification, yes, but at a premium, and with noticeable limitations, particularly in the amount of both inventory and information available in-store. And today almost every consumer experience, in almost every category, starts with an online search.

In order to survive and even thrive, retail has to now compete the way any brand category competes against direct and indirect competition: by outlining and exploiting a discernible difference, and then promoting an entirely different kind of experience. (In a manner similar to how cruise ships compete against other forms of travel.)

Retail has to deep-dive into what the online channel cannot physically or intellectually deliver, put a package of features together, deliver them well and consistently, and promote the snot out of the “new” and exciting experience. Heck, they could even lobby to have JD Power or some other authority rank “best retail experience” or “best in-store vibe” as new categories, if they don’t already.

And retail is chock full of delicious experiential differences that online will never be able to deliver. Not even in a metaverse: Trying things on. The new car smell. Seeing the HD picture in person. Playing the guitar for half an hour in three different amps. Hitting the new irons. Sitting on the couch.

If retail wants to survive into future decades, it’s going to have to differentiate on those attributes that online shopping simply can’t offer. We may – dare I say it? – return to a world where retail stores are wondrous destinations staffed with super-knowledgeable professionals that make the buying experience really fun and interesting…and worth “the trip.” Consumers would go for that.

The reports of the cookie’s death have been grossly exaggerated.

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“The death of cookies,” to borrow a phrase, is (mostly) fake news. I wouldn’t be concerned with this topic, except that so many reputable media outlets have been publishing misleading and sensational headlines about it.

Take a look:

Adweek sent an email special report with the headline:  “The Death of Cookies.”

AdAge with Cheetah Digital posted on social with the same frenzied phrase: “The death of cookies”

And Segment (Twilio’s customer data platform) went even further with this social gem: “Digital Advertising in a Cookieless World.”

But here’s the problem: It.  Isn’t. True.

So let’s get to the bottom of why all these authorities are spewing all this gunk.

The first thing that’s important to know is that there are two primary kinds of cookies:  these are called “first-party cookies” and “third-party cookies.”  (I know, it’s weird that there’s no “second party cookies.” Somebody got ripped off in this deal.)

First-party cookies are data files that are shared between your browser and any website you visit.  When you visit a site, especially a site that you may go back to multiple times, say a news site like NYTimes.com, a small text file is generated and stored on your browser. It contains information about you (nothing too personal, unless you choose to save passwords via your browser, and please don’t do that,) like the browser you’re using, the operating system, where you’re located (via your IP address,) and even the browsing history.  They were originally created to optimize the performance of websites.  Since there’s a history encoded in the cookie, the website does not have to fully reload each time you visit it – it sort of restores the previous session, and then updates the site with its latest content. This is why your shopping cart on e-commerce sites is “remembered” and preferences on other sites are stored.  Each time you go back to the site, the cookie is updated with more information.  So it’s a bit of a history log between your browser and a specific domain. 

Disclaimer: This is an oversimplification of first-party cookies, but it will serve to help distinguish it from the other type.

Third-party cookies are different in many ways. First, and most important, they are stored under a different domain than the one you are visiting. They are typically “shared” from the domain you’re visiting with – you guessed it – third parties. The most basic example is this:  you go and visit NYTimes.com to read the news, and you see banner ads on the top and along the right side from a brand like Toyota. Since NYTimes is a publisher, and has sold advertising space to Toyota, they may have also agreed to share your data, and allow Toyota to drop a third-party cookie to track your browsing behavior.  The thinking with this was “it would help Toyota to know what other kinds of sites readers of the New York Times might visit, and what their browsing behavior is, so we can build a better profile of potential targets.” 

Disclaimer:  this is also an oversimplification of third-party cookies, but it should serve to help distinguish it from the other type.

Okay.

So, the headlines you’ve been reading are misleading, because they leave out a very important qualifier: the only thing that’s “dying” is the third-party cookie.

Pushing out headlines like “the death of cookies” or “a cookieless world” is like saying “music is dead” just because we’ve banned Justin Bieber. It’s sensationalizing the story at best. It’s clickbait at worst.

First-party cookies are here to stay, and there’s no way they’re going away, since it would cut off hundreds of billions of dollars in revenue being transacted every year. First-party cookies form the basis of ad targeting, retargeting, (yes, you can still be retargeted via first-party cookies,) display advertising (banner ads,) most social media platform algorithms, and the mighty Zeus of them all, search engine marketing and its associated retargeting.

[The post ends there, but I have a few words to say about WHY third-party cookies are getting the axe.]

The whole kerfuffle over third-party cookies is generally about privacy, and not having one’s data shared without one’s knowledge. But who are we kidding? Our data is getting shared every day, all over the place, whether we a.) like it or not and b.) know it or not.  Did you ever Google yourself? I’m sure you didn’t actively and purposefully put all that information there – it was aggregated from across the web without your knowledge or consent. How do you think data marketing companies make money? They go and mine data they already have, or it’s getting shared with them from retailers, credit card companies, and others. Yes, GDPR legislation has been adopted, but all it effectively does is add another annoying click before I get to the content I want on any new website. Ugh. And if the last year has showed us anything, (since third-party cookies have started phasing out and Apple’s iOS tracking regulations have been adopted,) it’s that you can still run effective and even mobile-friendly ads without third-party cookies and nobody is any worse for wear.

This author’s preference is to have his data shared (no social security numbers, credit card numbers or bank account numbers, thank you very much,) so that my general Internet experience is more carefully curated and more fully tailored to my preferences. Killing third-party cookies was accelerated as a knee-jerk reaction to the 2020 election and fears of the “echo chamber” effect, and more sensitive issues like child welfare, gender identity, and other possibly incriminating privacy gaffes. All the while, forgetting that you can still be retargeted via first-party cookies. They could have worked that stuff out and still made the Internet an interesting and contextualized place.

If Toyota wants to follow me around for two weeks to find out that I’m not a fit for their brand, so be it.  At least I won’t see ads for the 2022 Camry hybrid anymore.