SparkBlog by The Hartman Group

The branding triumph we call the real estate market

For those playing in the brand community, one of our basic goals is to achieve a product premium. That is, to convince a consumer to part with significantly more money for our product as compared to our competitors.

This premium could be achieved through measurable quality or performance cues—as in the case of, say, BMW—but it need not be. In many cases, premiums are achieved simply by creating the illusion or allure of desire. Not surprisingly, the latter is often a more common strategy for branders because it doesn’t require them to actually create a better product. Instead, they simply work hard to convince you of the products allure.

And in our recent musings on the US real estate market, it dawns on us that one could make a strong argument that the selling of real estate is perhaps the single biggest branding triumph of the past century. How ironic that the selling of dreams works remarkably similarly whether the product is real estate, wine or confidence?

Despite overwhelming evidence that equities have always outperformed real estate markets in nearly all places and times in the modern west, US consumers appear increasingly willing to pay sizeable marketplace premiums—for the “privilege” and status of home ownership.

As economist Robert Shiller notes, the real (i.e. inflation adjusted) home prices in the US have increased an average of .4% per year since 1890. A one half of one percent gain pales in comparison to the performance of the S&P 500 over the past 35 years, yet alone the performance of even the most mediocre of mutual funds, but still, we continue to throw money toward our dreams.

But what’s most interesting here is the source of the agency. In the case of great branding triumphs, we usually find a humble executive willing to step up and take the credit.

And in the case of real estate, it appears we have nobody to blame except our own foolish selves. As the growing literature of behavioral economics points out, our irrational behavior likely results from more foundational failures of judgment and calculation. To cite but one example, many of us are smitten by real estate’s allure with stories of properties purchased in 1948 for, say, $16,000 and later sold in 2004 for, say, $190,000.

Compared to equitymarkets, that investment’s something of a joke.

As Shiller notes:

“The appearance is that the investment in the house did extremely well. But the consumer price index rose eightfold between 1948 and 2004, so the real increase in value was only 48 percent, or less than 1 percent a year.”

We’ll take the S&P 500 any day.

Of course, the more sinister question lurking here is this: How far are we willing to go as individuals, family’s and a people to risk our economic future on something so seemingly trivial as a brand?

Avoid the looney Zune?!?!?!?

It is really something of a rare event when a print journalist unleashes a tirade on a consumer product. Even in the worst case scenario, when the manufacturer has completely missed the mark and brought to market something as atrocious as, say, Fruitopia, it’s always easier to err in the direction of silence and devote the precious print space to something more intriguing.

So we were as surprised as anyone to stumble across Andy Ihnatko’s systematic trashing of the new Zune player in last Thursday’s Chicago Sun Times.

He begins innocently enough by noting the (predictable and expected) setup challenges (you’ll need to be fully versed in creating .DLL files just to get the thing working), before moving on to a full-scale vitriolic rant. Here’s just a few paragraphs of what to expect:

“Yes, Microsoft's new Zune digital music player is just plain dreadful. I've spent a week setting this thing up and using it, and the overall experience is about as pleasant as having an airbag deploy in your face.

"Avoid," is my general message. The Zune is a square wheel, a product that's so absurd and so obviously immune to success that it evokes something akin to a sense of pity.”

Among the complaints:

• Songs are purchasable only with “credits” (ensuring less credit card fees for Microsoft along with the ability to challenge Apple’s 99 cent pricing structure)

• All around poor user interface.

• Zune is incompatible with Windows Media Player, the familiar hub of the Windows desktop media experience. This puzzles us to no end.

• Zune’s one supposed “feature”—the ability to broadcast wireless content to other players—is so heavily enshrouded in DRM that the feature functions more like an advertisement than a true product benefit. Any content shared wirelessly disappears afte 72 hours, only to be replaced with a link to the file on Microsoft's store.

But most damning of all, Ihnatko takes Microsoft to task for putting the interests of the music industry ahead of the all powerful consumer:

“Companies such as Toshiba and Sandisk (with its wonderful Nano-like Sansa e200 series) compete effectively with the iPod by asking themselves, "What are the things that users want and Apple refuses to provide?"

"Microsoft's colossal blunder was to knock the user out of that question and put the music industry in its place."

Ihnatko’s prediction: “The Zune will be dead and gone within six months. Good riddance.”

via | Boing Boing

Thanksgiving moment of Zen...

We at Tinderbox couldn't think of a more fitting tribute to the Thanksgiving holiday season than to share with you, our devoted friends and family, our favorite recipe for stuffing.

In this case, we defer to the fifteen year tradition that is White Castle Turkey Stuffing.

Heres to wishing all a safe, sane, nutritious and, most important of all, tasty holiday.

On Robert Altman's passing...

Sadly, we now walk in a land with one less giant.

While film fans may squabble about the relative merits of his films (Have you ever sat through O.C. & Stiggs? Does anyone remember Popeye?) there is little dispute of Robert Altman’s contributions to his craft. To quote Elliot Gould:

“Bob’s legacy will continue to nourish filmmakers and artists for generations to come. He was the last great film director.”

And, we might add, there may well be no more.

And while many of Altman’s contributions to the craft are now mainstream, few recognize how truly innovative and radical his approach was when he arrived in the early 1970s.

From the chaos and cacophony of the opening scene of M.A.S.H., many understood that, for better or worse, filmmaking would never be the same. And while the scholars are wont to proclaim Citizen Kane the great American masterpiece, my vote always goes to Altman’s Nashville, a timeless critique of the American penchant for vanity and cowardice.

His fondness for interlocking narratives (now de rigeur in films such as Pulp Fiction or Crash), extended tracking shots designed to test the audience's patience, and throwing scripts to the wind scared the living beejesus out of most in Hollywood.

As well it should!

For it was this underlying fear that revealed a darker, more sinister secret. Namely, that the supposed “creative” industry that was Hollywood wasn’t very creative because, well, it was an industry.

You see, industries have processes and rules and ways of doing things. Industries exist to get things done and to do so efficiently and predictably.   

Industries allow us to pay the mortgage and work well into our 70s.

As a general rule, industries despise creativity because creativity questions the very rules and methods which allow the industry to thrive.

And this, of course, is the central tension for those in the innovation business. How can we attempt to be even half as creative as someone like Altman when we’re working within the confines of these strange creatures we call industries?

Last night while driving home from work, we listened as Elliot Gould was interviewed on NPR’s All Things Considered. You could hear the emotion in his voice as he was reminiscing of his friend and colleague. With the audible equivalent of tears in his eyes, he shared his favorite Altman quote:

“I learned how to put it together in chaos and therefore I create chaos in which to put it together”

We couldn’t have said it better.

And while we're at it, Mr. Altman, we forgive you for Popeye.

Tokyo Design Week

While we weren’t able to traverse the globe for Tokyo’s legendary DesignWeek, PingMag offers some fabulous coverage . We were most taken by two of their favorites. How's this for the latest thing in outdoor furniture by Nichiesu

And who could not like the “Tattoo” frying pan from Emanuel Babled. Now you too can have fun decorating all manner of meats, sandwiches, omelets and quesadillas with a pretty flower pattern. The thing would also double as a branding tool for all the young hipsters into the body modification scene.

Coming to grips with design’s true impact on our civilization

If you read magazines, newspapers or websites, spend a lot of time at business conferences, of happen to be in the marketing community, you are by now very aware of design’s alleged importance in successful business strategy.

The only problem is that until (very) recently, the business community had absolutely no reason to ever really cross paths with the design world.

Designers were freaks inhabiting loft spaces who used old doors as desks or lived in socialist gulag states like Denmark or the Netherlands. Meanwhile business folks were found in the tops of tall buildings, buried behind desks of paper.

Sure, there were famous designers whose work somehow crept into everyday life, but only in a garish three-generation-removed sort of way. The original Eames chair was a masterpiece of modernity, but the business community waited for years before releasing their pale, inexpensive imitations to the masses.

And now all of that has changed. Flexibly-aligned business units, post-Fordist production systems, CAD and rapid prototyping now allow us to create custom-fabricated goods to meet any design specifications imaginable to the human brain, inexpensively, and with incredible speed and precision. But honestly, what does all of that high-falutin’ talk really mean?

It means we can now produce physical objects in real time based on nothing other than  a sketch in three dimensional space.

Put more simply, we can now design directly onto space.

The Swedish design group FRONT have developed a technique which allows anyone (artist, designer, hack, child, monkey, squirrel, etc.) to literally draw a sketch in three dimensional space and then inspect a real, physical, solid replica of the object cast from plastic in a matter of minutes.

That is correct.

If you can sketch your idea into three dimensional space, these folks can produce a physical prototype in minutes.

via | Core77

Just in time for Halloween...

As a special tribute to Halloween, we’ve compiled three of the most frightening things we’ve recently stumbled across.

1) The first is fairly straightforward. While working our way through the pages of Frightcatalog, we found this treasure, the fully-animated Vomit Barrel.

As the name might imply, this is a life-sized replica of a zombie perpetually heaving its guts into a barrel. Just so you don’t get any crazy ideas, the barrel is marked “INEDIBLE.” Best of all, the vomit function activated by motion sensor and includes all relevant sound effects. Perfect for your next Rob Zombie show...

There’s even a video of the Vomit Barrel in action after the jump.

2) Next, we turn to NACS Online (The Association for Convenience and Petroleum Retailing), where we find the following listed under Cool New Products:

Introducing the Monster Chili Cheesedog, from Don Miguel Mexican Food!!!

As the copy entices:

“Forget the mess and hassle of the traditional cheesedog. The 1/3-pound Monster Chili Cheesedog gives your customer a better tasting, more portable alternative. The Monster Chili Cheesedog is perfect for the roller grill or hot to go. It is also available not fried, so customers with deep fryers can also take part in this delicious new idea that will keep consumers coming back.”

Ma, it’s time ya done fire up the deep fryer, we got Monster Chili Cheesedogs a comin…Yup, I done hear that train a comin...

3) And finally, we saved the most frightening for last.

For reasons unclear to all, someone got the bright idea of doing a Bob Dylan Broadway musical choreographed by Twyla Tharp, the mind behind Billy Joel’s recent revival. But rather than tackling sticky subject matter—like, say, the long-standing allegations that Dylan used Ramblin Jack Elliot as an entre to Woody Guthrie’s world before turning his back on both greats—this is straightforward Broadway treatment.

And what would such treatment look like? Will the motorcycle wreck get a new dance move?

To quote Terry Teachout of The Wall Street Journal, “"The Times They Are A-Changin' is so bad that it makes you forget how good the songs are.” Or, as The New York Times Ben Brantley suggests, a “systematic steamrolling of Bob Dylan.”

But don’t trust us, see for yourself. Happy Halloween!

Friday's cool product

Meet Fred.

Fred is a new brand of water.

Fred fits in your pocket, more like a trusted friend than a nagging visitor.

Fred also hosts a trendzine called the Fredspot.

There you can read about William Oceans noble experiment to wear the same pair of jeans for 3 months without washing.

Whatever.

Chris Anderson's Zeitgeist

As some may be aware by now, Wired guy Chris Anderson presented at Pop!tech last week and made waves by not talking about the now well known long tail metaphor. Instead, he riffed on what happens when “things get to be free” or, in fancier parlance, economies of abundance.

As in, what happens when, say, computer chips become crazy powerful because they’re loaded with thousands of free transistors…Well then, you start designing playful GUI interfaces a. la. the Macintosh and liberate folks from having to use those old-fashioned command-line interfaces many of us still miss...

This leads to the observation that traditional media is really much more the outcome of economies of scarcity rather than economies of abundance. There’s limited space on the newsstand, limited channels on your television, limited space on your grocer’s shelf etc. As a result, we tend to get these lowest common denominator products which are designed to offend no one and, in the process, have no sense of genuine appeal.

By contrast, things like the blogosphere and YouTube are described as economies of abundance, where without the limits of conventional economies, folks are free to express theirselves in ways previously unimagined (which ironically channels the familiar naïve, myopic optimism which has long plagued free-market economies).

Next Anderson hits on several of the critical trends emerging as we move from economies of scarcity to economies of abundance—and it’s a very familiar territory…You know, the old rule of turning everything on its head for rhetorical gain. …If scarcity is about paternalism, abundance is about equality…scarcity was top down, abundance is bottom up…if scarcity was about command and control, abundance about losing control…We seem to remember Clinton using this same “inversion” trick to trash big Bush in the '92 election.

Then Anderson touted his new management style “I just try to listen and do whatever my intern tells me to do…” (if the rest of us over the age of 40 did that, we’d likely be having a heck of a lot more fun…which I suppose is the real point...)

The talk then closed with a wonderfully produced video (done by others, no doubt) on the nature of abundance and long tails and new media and what not…

I think the real take-away here is not so much whether Anderson is right or wrong, or whether you agree or disagree with the fervor and optimism surrounding Web 2.0, consumer generated content and so forth. Rather, Anderson seems to have a knack for capturing that certain spirit of the moment—the Zeitgeist if you will.

And that spirit is alive and kicking and screaming to be heard in the following video currently making the rounds:

Product Music

One of the oft-unrecognized benefits of the internet, especially the 2.0 version, is the vast amount of historical media artifacts available for immediate retrieval. Out of print books and records, obscure films, underground comics and zines—these were once physical objects, typically produced in small numbers, which required great patience and tenacity to track down. It was not unusual to encounter collectors who had been searching for some highly prized artifacts for several decades.

While original media artifacts are always highly prized for their authenticity, there were many of us in the 60s and 70s who simply wanted the ability to listen to the music, to see the images or to read the words with our own eyes. Ownership is great for bragging and all, but it’s a lot more fun to share the cool stuff with others. Fortunately, today’s internet—what with its infinite series of tubes and all—makes most of that instantly possible.

Which brings us to today’s great find, product music. We’re referring here to the classic  industrial musicals of the 50s and 60s. Borrowing on the cultural legacy of the work song—a worker-created tune designed to alleviate the boredom of a physical, repetitive task—companies relied on elaborate song and dance numbers to promote enthusiasm and camaraderie among the employees. The main difference, which eerily foreshadows many contemporary developments, is that the songs were written not by the workers but, rather, were outsourced to professionals based on management’s whims.

The result is a treasure trove of surreal, whimsical ditties sung with an earnestness and enthusiasm which is no longer possible in the irony-infused, detached cultural pose of the present. Consider “Up Came Oil” (Exxon), “He’s a Penney Man” (J.C. Penney’s), and the classic “My Bathroom is a Private Kind of Place” (American Standards). The always entertaining WFMU blog has the whole catalog available for download in mp3 format. In a similar vein, check out an entire LP of Chevrolet Showroom Music from 1972. Our personal favorite is the “Test Track for Factory, Impala and Caprice.”

Upon listening to this music, one can’t help but to recognize that there was a time and place in which marketers were content to simply entertain. Compared to today’s world of hyper-targeted communications and messaging, where every word is focused-grouped ad nausea, with supposed scientific precision, the casualness with which marketers appeared to approach their craft seems darned refreshing. Today’s auto ads, for example, may communicate volumes of information about product performance or (supposedly) trigger aspirational emotions, but they aren’t very fun to listen to or look at.

While we’re surely not suggesting anything resembling another wave of ironic, nostalgia-based marketing, is it heresy to even suggest that the message might not be as important as the medium?