Matt Braithwaite-Young (Principal, Turning Leaf Marketing) Interviews Sonal Moore (Principal, Moore & Moore IP): (for the audio link, click here)
[caption id="attachment_1786" align="alignleft" width="210"] Matt Braithwaite-Young Principal, Turning Leaf[/caption]
[caption id="attachment_1785" align="alignright" width="185"] Sonal Moore Principal, Moore+Moore IP[/caption]
Matt: Hi everyone, it’s Matt Braithwaite-Young from Turning Leaf Marketing here, and I’m delighted to have with me in this chat Sonal Moore from Moore and Moore IP. Welcome Sonal.
Sonal: Good morning
Matt: Thanks for getting together. This is our first time we’ve done one of these ‘hang out’ chats. But we thought it would be good to have a discussion today on intellectual property and marketing. And I’ve worked with Sonal for many years on intellectual property matters, and with some success.
Sonal: That’s right. We’ve done really well, the two of us. We’re a good team.
Matt: So Sonal, before we get started, maybe do you just want to tell everyone a little bit about yourself and what Moore and Moore IP does?
Sonal: Yeah, sure. So, I’m a lawyer in intellectual property, which is basically copyright, patent trademarks, confidential information. And I’ve been doing it for thirty years now. I’ve worked in a lot of the major law firms, and now … with my own firm… I’m specialising in providing the same sort of advice, but to smaller organisations.
Matt: So, as a marketer, we’ve been kind of brought up to think of lawyers and IP people as the natural enemy of the claims we want to make, and the things we’d like to say. Why do we need legal advice in the marketing world? What’s it all about?
Sonal: Well, it’s about not breaking the law really.
Matt: Oh, that old chestnut! (laughing)
Sonal: Yeah (laughing). The difficulty, especially over the last twenty years or so… consumer rights have been at the forefront of a lot of policy. And we’ve got the Australian Consumer Law now, which is designed to protect consumers. A big part of putting advertisements out, or doing promotions, is making sure consumers aren’t being misled or deceived. Marketing people, or the people selling the products, want to make big claims about their products. Our job is to make sure that those claims can be substantiated, and that people aren’t going to be misled by them.
Matt: There’s an interesting case I saw earlier this week, Maggie Beer was being pinged for saying (her brand is) “a Barossa legend”, and that was seen as potentially misleading.
Sonal: That’s right. Well, Maggie Beer… she is a Barossa legend… and that is part of her tagline.
Matt: I thought it was a bit rough.
Sonal: The problem is some of her products were not made in the Barossa. They were being made in Queensland or Victoria. So what the ACCC, which is the watchdog of consumer rights, said was that some people would be misled by the labelling. Because the Barossa Valley statement was so close to her name, people would go “Oh, this is all made in the Barossa Valley.”
Matt: I’ve always wondered why the beer companies are able to get away with this though – large German beer companies can brand their product “Bavarian beer” … and it’s brewed down the road from here. Yet they go after Maggie, and she’s just little.
Sonal: Well, they look at what consumers will believe, and what they will think. I suppose part of it is that maybe consumers understand that, even though it is called Bavarian, it’s not actually made in Bavaria. There are a heap of guidelines around dealing with when you can use a geographical name with your product. But that’s probably another discussion…
Matt: We’re drifting away from intellectual property. So… intellectual property and marketing … is this just arse-covering, or is there something more to it? (laughing)
Sonal: It’s a bit of both. Definitely arse-covering, so that if something goes wrong with the marketing campaign, marketers can say to their bosses, “We ran it past the lawyers”. But the other side is, it’s obviously very bad publicity if something goes out there. Just like Maggie Beer… you know, the news picked it up. There was another case earlier this year, which started a couple of years ago, between Optus and Telstra, to do with misleading and deceptive conduct in their advertisements. So it’s never good publicity for a company when the ACCC is taking action or investigating claims they’ve made. It’s a bit of both…
Matt: Optus is interesting though, because I heard that the little animal symbol Optus uses was going to be called Ollie. As in, Ollie Optus. But Telstra registered the trademark Ollie.
Sonal: Oh okay, I didn’t realise that, but yes, this happens. Look, to register a trademark, you have to have the intention to use. But obviously a company can go “You know, we’re going to look at maybe ten brands over the next two years. We’re not quite sure which one we’ll go with …” So a large company who has the funds may very well register all those names and have the intention to use. Some of them may end up blocking a competitor. And some of them, they will use, some of them they’ll give up. Clothing companies are quite notorious, and perfume… because they don’t know which brand they’re going to go with in two or three years’ time.
Matt: So they just go for everything?
Sonal: Well, if they’ve got the money. Because, there’s a quite a long lead time between developing the product then engaging the marketing division… then the sales. So there could be a couple of years in it. And a lot of companies want to bed down at the beginning what their brand is going to be for that new product.
Matt: Ollie Optus sounds like that might have been a particularly defensive registration.
Sonal: It could have been. But how Telstra could have known they wanted Ollie, you don’t know. You have to have an intention to use. And then once you’ve registered, if you don’t use that mark within a period of five years, or if you haven’t used it for a period of three years… it becomes vulnerable to being taken off the register.
Matt: One of the things I come across a lot in consulting… particularly start-ups. They tend to go along and register a business name, and not actually register a trademark. Can you tell everyone just very briefly why it’s so important to grab hold of a trademark, and maybe a disaster story…. Not mine, because I can tell you, I’ve had a lot to do with this (laughing)…
Sonal: No, another one (laughing). The reason it’s important is because a business name doesn’t give you any ownership rights … any proprietary rights at all. So you have to have a business name registered to be able to conduct business under that name, but there are no ownership rights. The only way you can get ownership rights is to register the name as a trademark.
Matt: Is it true that a trademark owner could stop a business? A business owner could theoretically create a business name and that name could infringe trademark, so a trademark owner could stop them from trading under the name they’ve registered?
Sonal: That’s right. So if you register your business name, but somebody else has the trademark registration for the same name, they can stop you using it. If you are the first to use, even if you don’t register the trademark, you can say that you’re the first to use… and you would have been able to register it. And that will help you if someone tries to sue you. But it’s not ideal, because somebody else is using what you think of as your own name.
Look, I’ve had a few instances where I’ve acted for small businesses that have breached a business name. In fact, I’ve got one going at the moment. Eight years after my client started using his business name, somebody who’s got a prior registered trademark made a complaint. And he’s a small business in another state, and it only became an issue when he decided that he should get a website. And of course, once you have a website, people can search. You know, a lot of big companies are doing routine searches… and he got picked up. So, I’ll get him out of it. It will all be settled, it will all be fine. But it’s really important, if you’re deciding on a name, to check the ASIC register, and you need to see if you can get it as a domain name.
Matt: Of course, these days it’s much more complicated than just the trademark. You need the domain. ASIC is the business names register. That’s national now, isn’t it?
Sonal: That’s national now. So one search does that, and you need to do a search of the trademark register.
Matt: Let’s go back to trademarks for a second. So, disaster stories… what’s the worst thing that can happen if I don’t register a trademark on launch, and… give me a gory disaster story.
Sonal: Worse-case scenario, Matt… and I had this one years ago, when the trademarks register didn’t have nearly as many trademarks. So our client had not done a search of the trademarks register at that time. They were a large company expanding into a horse feed product. All their marketing material had been prepared. They had a massive launch planned, and one of my colleagues rang me and said, “Someone’s just mentioned trademarks - can you just register this trademark?” So we did a search, and the first thing we found was that the mark was taken. I rang her back and said “You can’t use it.” And her comment was, “Well, how do I tell my client after we’ve been advising them?”
Matt: So even lawyers leave IP too late?
Sonal: Well, this is twenty-five years ago, when lawyers in groups probably didn’t talk to each other as much. And intellectual property really has only come to the forefront of people’s minds in the relatively recent past.
Matt: So when should people start thinking about IP and engaging an expert like you?
Sonal: As soon as you’re thinking of either developing a new brand, or starting a new business. Everyone should at least do google searches at the beginning, to see if their name is being used, or if something similar is being used, and if you see someone else using the name you want to use, then immediately you have to change. If you can’t find anything immediate, then it’s a good idea to search ASIC to make sure the business name is available. And go to someone who can do a search of the trademarks register. You know, it’s not always as easy as putting in the exact name that you want.
Matt: Yes, so I’ve done a couple of self-registrations, and seen a couple of things go wrong myself. Not for clients I must add – but for our business. And one of the things that can go wrong is overlooking phonetic similarities.
Sonal: That’s right.
Matt: And another one is trying to register a descriptive term. Can you explain a little about where I went wrong?
Sonal: In order to be registrable, your trademark has to be distinctive. And it has to be distinctive of your goods and services. So, say for a law firm, like Moore and Moore IP. I couldn’t get something like “Lawyers” registered as a trademark. Because that’s purely descriptive, and other traders would want to use it.
Even a name can be quite hard. Something like “Moore Lawyers” could be a bit difficult because Moore is a common surname.
Matt: You can sometimes get that through, can’t you? If there are a certain number of names on the roll, or…
Sonal: Yes, under 260 I think it is. But there are difficulties there. Unless you can prove use you might have a problem, if it is directly descriptive. If you’re selling pens, you know, if you’re a stationery store, you couldn’t get…
Matt: Pen Store.
Sonal: Yes, Pen Store. You might if you have a really amazing logo. Because logos can become important. The other thing is the phonetic similarity. If you are a clothing manufacturer and you’ve got a famous brand like Christian Dior, you would not get through something like Khristian Dior spelt with a K or anything that is phonetically similar like that.
Matt: So people assume … they make a little change, and that’s going to get them through, and it doesn’t? So are the rules variable? Does it vary by country?
Sonal: It’s a bit of both. The way the system now works, is that there’s something called the Madrid Protocol. It covers a large number of countries, and has rules that guide applications and registrations. So you can make an application in Australia and if you actually want to get your trademark in quite a lot of other countries, you can actually do that from here, off the back of your Australian registration.
Matt: Okay, now that sounds a bit like a job for a specialist as well. Is that something that you for example would help with?
Sonal: It is. Also, IP Australia has a great programme called Head Start, which is there to help small businesses and individuals doing their own trademark applications. It’s easy if it’s a word, but I’ve had one person who wanted her logo registered, and what she did was… She just actually attached the entire banner from her website to the trademark application, thinking that the trademarks office would just pick up the logo, and in fact it was the whole banner which got registered.
Even with words, there are a few traps … you just want to register in plain, block letters.
Matt: So as a general rule, I was taught that logos are a relatively weak form of protection versus an all-capital wordmark. Is that the case?
Sonal: It depends. Wordmarks are great. Because the chances are that your wordmark is not going to change over time. So if you get plain block script, even if you begin to have some sort of stylisation around it, you’ll get the best protection here in Australia. I think the problem with a logo is, if it’s very distinctive, it’s going to be protectable… but if people start changing it, they probably don’t have to make too many changes in order for it to no longer be considered “deceptively similar” or “substantially identical” – so that’s where a logo begins to be a bit more difficult.
The other thing is that companies change their logos. You know, when you think that your…
Matt: What, marketing people change logos? (laughing)
Sonal: I know! Marketing people change logos! (laughing)
Matt: The three R’s of marketing…Rebrand, relaunch, resign.
Sonal: You know, the problem when you re-design something is that you’re no longer using what you’ve got registered. You have to re-register. It can be expensive. So again, I had a client who did her own trademark application for her name, which incorporated a logo. Somebody wrote a letter of demand to her in relation to it. So she had to change her name, but in doing that, she also then had to re-register the logo on it’s own… even though there was no problem with the logo.
Matt: …Marketers, stop messing with the logo! We get very bored with the logo, far before the customer gets bored with the logo.
Sonal: So, just skipping back to what you might have to put on your trademark application. The other thing is that you have to put in a specification, which is the list of goods and services you want covered. And that’s really where, I suppose, you’re paying for someone to get it right.
Now, if you do a Head Start application, you can just go through that pick list. But, let me say that there are a thousand things to choose from, and you have to go through the thousand things and choose which is the best. It will work well with simple products, like clothing, but if you’re doing something a bit more complicated, especially where services are concerned, then you’ll want to draft your own specification, and that’s where you’ll really need someone with expertise.
Matt: So what’s the difference between passing off and a trademark infringement? I remember the Red Bull/Livewire case as one example where someone succeeded. But I’ve heard that it’s very rare that people have actually been able to get a passing off action through.
Sonal: It’s getting more rare… so if you’ve got a registered trademark and you have to sue someone, the three claims you’ll normally make are: the infringement of the trademark; a breach of the Australian Consumer Laws (misleading or deceptive conduct); and passing off.
The beauty of a trademark infringement case is that if someone is using your mark in relation to your goods or services, that’s all you have to establish.
Matt: So there’s not a lot of grey area…
Sonal: You don’t have to establish reputation, so that is the beauty of a registered trademark.
Matt: Some people think that ethically, the ability to have a monopoly right over a word or an image is questionable. Are there differences in different jurisdictions… in terms of ability to get those rights?
Sonal: Where the ethical issue arises, and where the law supports it, is that you can’t get names that are not distinctive. So if it’s distinctive, and don’t forget, a lot of the time (and marketing people will know this the best)… a lot of time and effort have gone into creating a name and a logo for your business or for your product. So there is that… if you have expended that time and effort, you should be able to protect it and stop other traders from using it. It also helps consumers, because they won’t be confused about where goods or services have come from.
Matt: Which actually goes right back to the very intent, and the start of, branding. One of the very first brands was Sunlight Soap. Soap used to be carved off like a slice of butter by your local grocer, and then… I think it was Lord Lever decided to develop a stamped, packaged bit of soap, so you could tell it was pure. And this was the purpose of brands - to help people be sure they were getting what they paid for.
Sonal: Yeah, and look, before we had the internet, and before we had so many small businesses … before we had global businesses, it was all much simpler for marketing and branding people. Things are becoming more complicated, because so many more people have registered trademarks. The fact is, you can come up with a brand you want to use, and there might be a very small business over in the hinterlands in Western Australia who had the foresight to register the trademark for the same goods and services, and that trademark is valid all around Australia.
Matt: Yep, first in, best dressed…
Sonal: That’s right.
Matt: You mentioned globalisation, and we talked before about the internet. Something that’s happened with a few of our clients is, they would like to have a domain, but someone’s squatting on it, or the domain they’d like to have is just unavailable. So, are domains an issue that you’re dealing with, and what are some principles? Can you stop someone from using a domain? What happens?
Sonal: Domain name disputes are actually becoming bigger, and are a part of what I do. In fact, all of the domain name disputes I’m working on revolve around the use of “.com.au”.
Matt: And are there a lot of these?
Sonal: Yes. And you can take a dispute up with WIPO (World Intellectual Property Organisation), under their rules…
Matt: Sounds expensive…
Sonal: It can be cheaper than court. But I’d probably see about ten decisions a week, and that’s not all the decisions that are coming down. It’s just the WIPO decisions…
So, say with the .au dispute, there are three elements you have to prove. There are more and more of these disputes happening and they are still expensive. I think it costs $2000-3000 to actually start the dispute process with AuDA… which is the Australian Domain Association. You can file either under the AuDA rules, or you can file with WIPO. There are different ways of doing it. It gets a bit complicated, but it’s still about $2000-$3000. You then have to pay to get your evidence. You have to make submissions about why that person shouldn’t have that domain name. A panel will review it and make a decision, and you don’t get any costs back.
Matt: Is there an appeal process?
Sonal: You can’t recover your costs. There’s no appeal process…
Matt: What’s the lesson then?
Sonal: Well, the lesson is that it’s cheaper than going to court, because, if you’re a company that could be like $6000 just to start the proceedings.
Again, in order to really found your domain name dispute, the first element you have to show is that that domain name is substantially identical or similar to a trademark. If you don’t have a registered trademark, you have to prove you have a substantial reputation. So if you’ve got a registered trademark… it’s much easier.
There’s actually a recent case over the name ‘Central Coast Locksmith’, which is pretty descriptive, so you think “How could you get that through as a trademark registration?” Basically it started with a dispute over a domain name, centralcoastlocksmith.com.au. One company had been using centralcoastlocksmith, and actually had an application to register the trademark on foot. They lost the domain name dispute, but at the end of it, the panel said “If you get your trademark registration through, you might be able to come back and lodge another dispute action.” So , what’s happened now is, Central Coast Locksmith has been accepted for registration of a trademark, but the domain name owner is now opposing that registration, so it’s got a long way to go…
Matt: One question that comes up a bit with our clients when they’re trying to pick up a domain is around whether to buy the domain from a cheap US domain provider for $4.95, or pick up a domain from an AUDA member seller. Is there any difference - I mean does it give you any additional protection if you’ve bought something from an AUDA reseller? Or in actual fact, might you just as well go for the cheapest domain name registration you can find?
Sonal: Yes, it doesn’t matter who you get it from, because there are a certain number of authorised registrars who can have them. From personal experience, I think it’s more to do with how well that registrar supports you, like if you want hosting etc…
Matt: Like the actual registration itself, if you needed to manage a dispute, you can manage it anywhere.
Sonal: That’s right, it’s really the functionality you get once you start getting your website up. So the other thing to look at is cyber-squatters. You know, people who pick up domain names just because they can. That’s a question I get asked a lot. “What should I register? Should I register .com or .com.au? Because traditionally .com has been used if you’re more of an international business. .au if you’re in Australia… Because it’s not that expensive, you know, as a new business, you might want to think about registering both, and just getting your .com and your .com.au, then decide which one you want to use. But there’s not going to be any harm. I also have clients who will go for a few of the common mis-spellings of their name.
Most important is to get your trademark registered, so you can actually stop other people…
Matt: So what I’m hearing you say is that it all starts from a trademark registration, because without that, everything else gets a lot harder.
Sonal: Yeah, if you’re setting up a new business or a new brand, do those searches of the trademarks register.
Matt: What about copyright? I had a nightmare experience, nearly 20 years ago. I was running a range of soups. There were something like 50 or 60 products, and they all needed new photography. I went away and did full pack photography for 50 products. And then the photographer said something like “Actually, now you need to pay me $2000 a product over what our contract was, because I own the copyright to these images…” Which was a bit of a shock to me and my boss at the time. What had happened was the law had changed.
Sonal: Until probably just before then, if you commissioned a work, you owned the copyright of the photographer. And then the law changed so that the photographer actually retains copyright. The trick with that is, you really need to think through where you might want to use these photographs. A lot of commercial contracts will say you get a license for a year or two years or whatever, to use the photographs on packaging, or for an in-store promotion, etc. I’ve actually been involved in a case where it was the flipside. I acted for the photographer whose photograph ended up on a billboard. Like a two storey high billboard. And that had never been paid for, it wasn’t part of the deal. It’s just a question of having those discussions… just like any other commercial arrangement… and thinking about where you may want to use in advance. And before using the images, checking with the photographer to make sure you have the rights.
Matt: So it is possible to have the copyright assigned, but the assumption is that in the absence of an assignment, the creator owns the copyright?
Sonal: Yeah, so the law is that unless you have an assignment in writing, signed by the creator, there’s no assignment.
Matt: Is that right? It has to be in writing? Is this the case for copywriters as well? Say I write some advertising copy for a client … does that apply as well?
Sonal: Yeah, as an independent contractor, you own the copyright. And unless you assign it, you retain it. So you obviously have given some sort of implied license to your client to use it…
Sonal: Interestingly enough, this year, I’ve been doing a lot of discussions around tables where there are both website developers and people seeking their services. And so we get into copyright tensions between the client and the website developer – who as an independent contractor, is the copyright owner.
Matt: That could include the content, the design…
Sonal: The logo… sometimes website developers will actually get involved in designing the logo for a business, which goes on the banner… all of that. And what I say is that the website developer may own the layout and things, ‘cause they may want to use that again. But really, the client should be able to own the content and the logo… get an assignment. Because especially in this day and age, when people set up as website developers, they may not be around in three or four years.
Matt: Oh, it’s a classic problem, yeah. I imagine this becomes an issue if you want to sell a business or license something, and all of a sudden a buyer says “I can’t establish that you own what you’re trying to sell me.”
Sonal: Huge where that’s concerned. Also huge when somebody starts copying you. Because unless you own the copyright, or you’re the exclusive licensee in writing, you can’t make a claim to stop somebody else copying what you have.
Matt: So if you see great slabs of your own copy used in other people’s websites… like on the other side of the world… is there anything you can practically do?
Sonal: You know, if it’s someone on the other side of the world, there’s not much you can do. If there’s someone within Australia and you are the copyright owner, you can write letters of demand, and they work quite well. If they’re copying everything and it’s a bit of an obvious one, an actual reproduction of a work you own, then they’ve infringed your copyright.
Matt: So one issue of for a lot of marketers, is the issue of talent, and featuring someone’s visage in advertising or whatever. What are the things that marketers should look out for with talent? Do people own their faces? How does this all work?
Sonal: So we’re a bit different in Australia to America. In America they have personality rights, where people can sue if someone uses their likeness and things like that. We don’t have that here. The real issue is a misleading and deceptive conduct one, or a sponsorship and endorsement one. So if you use a famous person’s likeness or name to promote your goods or services, consumers will think that you have some sort of affiliation or connection with them… and if you don’t, that’s misleading. Look, it’s important if you’re going to use talent that you get the right releases from them. And again, you think about where you’re going to want to use their image. You need to give a lot of thought towards where you’re going to want to use it, and have those discussions.
Matt: And in Australia, there seems to be a bit of misunderstanding, but if you take a photograph for your website, you’ll own the copyright for that website, but if there’s a person in that image, in some countries you will need to get their permission. Am I right that in Australia you can actually take photos of people without their permission, which might not actually be legal in say, France…
Sonal: Yes, because we don’t have the same sort of laws, but we do have a whole heap of privacy issues. Laws are getting more strict, so that’s a whole other discussion… I would always be very careful. Personally, I wouldn’t like to see my photo up on somebody else’s website when I haven’t known that it was going to happen. So I would always say to clients “really, don’t do it”. That person could complain there’s misleading and deceptive conduct, and they could complain that you have breached their privacy … and you’ve got to be especially careful obviously with kids. It’s not really intellectual property related, but I always say to my clients, “Whatever you put up on your website, make sure you’ve got the rights to it…”
Matt: And you’ve mentioned privacy, since that’s probably the number one issue with marketers at the moment, when it comes to legal… assuming they’ve sorted out their trademarks. We’ve had some new laws come in just this year in Australia that are quite serious with some quite serious penalties. Can you just outline briefly what’s at stake, and what marketers need to think about?
Sonal: Okay, so, what’s good for small business is that the privacy principles, which came in in March, only apply to companies that have an annual turnover of more than $3million a year, or if you’re in the health services industry, because then obviously you’re getting very private and sensitive information. Mind you, not to say small business doesn’t need to worry about it. People who consider themselves to be a small business might still be making over $3million.
Matt: Is that a revenue measure? Or a profit measure? If you’re selling cars, you could do that figure very quickly, for example… or houses…
Sonal: I think it’s just annual turnover. It’s probably what you gross.
Matt: An estate agent might hit it in week one of the year...
Sonal: That’s exactly right. So basically there are two policies. One is your external policy that your clients can see, and anyone visiting your website. And a lot of that has to do with the fact that so much information is now stored in the cloud or overseas. And so making sure that when you collect information that is personal or sensitive, you’re disclosing to people where that information is being held… and where it could be stored.
Matt: So the penalties for not complying with this stuff for marketers are quite severe?
Sonal: I don’t know off the top of my head, but they are severe. You don’t want to be the first person to be prosecuted for a breach of the privacy principles.
The bottom line is, people need to start reading the contracts they’re entering into. Even marketers. I think when people are considering storage and back up options, there’s a great tendency to just go “Oh, I’ve heard of this great new thing, let’s use that…” and not really look at what’s being promised.
Matt: Someone said that if you read every terms and conditions of everything that you signed up for online from top to bottom, there’s a million years of reading. You’d never get out of the office.
Sonal: No, but the important ones… that’s why you have lawyers…
Matt: There you go! (laughing)
Sonal: You know, liability issues, maybe insurance, maybe limitation of liability clauses in your terms and conditions when you’re dealing with your clients, or customers’ disclaimers. A lot of it’s common sense. And the tension, getting back to what we were discussing at the very beginning, between marketing and the law… marketing people are creative, and what they want to do, naturally, is to get their ideas out into the marketplace as quickly as possible, and then, on the commercial side, they have budgets and restraints …
The bottom line is that if there’s anything that you’re worried about, or even if for a split second you go “I wonder if this is a problem…” then you should probably get it checked out.
Matt: Absolutely. One last area I want to touch on is consumer law. I have clients wondering what they now need to put into packs, and on packs… regarding guarantees, warranties, that sort of thing. There was a change a couple of years ago…
Sonal: A new law came in a few years ago, where if you give a warranty against defects, you have to have certain wording in it. And you have to cover off certain things. A warranty against defects doesn’t have to be on the pack, but there might need to be something inside the pack – an additional document. It’s difficult. I had a jewellery client who said, “How do I put that inside a box with a ring in it?” A link to your website where the warranty is, is not sufficient. It has to go at the point of sale. A lot of companies actually stopped giving a warranty against defects because it’s quite onerous.
Matt: And the warranty against defects is an additional warranty that people offer above the standard consumer warranty in Australia.
Sonal: Yes. And the other side of the changes were new consumer guarantees - consumer goods come with a guarantee that they’re of acceptable quality. And that’s hit the people who give extended warranties. There’s an argument of “Why should I spend more money to get an extended warranty? Because if my product breaks after the standard one-year guarantee, then it’s not of acceptable quality… I don’t need to pay for extended warranty, I’ll just use consumer law.” It’s hard to define the reasonable lifespan of a product … the more expensive it is, the longer you expect it to be okay.
Matt: Yeah, if a drivetrain drops out of a car in three years and one month, you’d reasonably expect it to last a lot longer than that…
Sonal: That’s exactly right. They’re the two things… On the pack, the main thing is to tell the truth. Make sure that whatever you say is correct. I think of the case of Maggie Beer, because the Barossa Valley sign she has is on all her products, as part of her logo…
Matt: I thought that was a little bit rough, at the time. But I suppose they’re looking to make examples at the moment. The whole issue around consumer protection seems to be getting more and more airplay and more media attention.
Sonal: It is. They’re taking major enforcement actions. They’ve got a lot of powers since these new laws came in and they’re using them. Obviously bigger names are probably more at risk. Bigger companies. Because there is more likelihood consumers will be harmed.
Matt: What a discussion! We’ve been through IP, copyright, domains, infringement, compliance, website disasters….
Sonal: And that’s just the tip of the iceberg…
Marketing Leaders: The Global BIG 5 Digital Masterclass with Michael Leander
Did you know, women have a better sense of smell than men?
I was reminded of this the other day walking through Heathrow T3, when I noticed they are using scent machines in their ancient and very looooooong walkways to and from the aircraft stands.
[caption id="attachment_1744" align="alignleft" width="584"] Scent marketing machines at Heathrow T3[/caption]
The scent itself is barely noticeable. But the latest research suggests this isn't that important.
You see, in the early days of investigating scent, it was thought you could dlal up a distinct scent (for example, Lavender) and that it would have a particular impact. A bit like "aromatherapy" which turns out to be pretty much bollocks.
Turns out, the impact of scent is much more about making your brain feel "safe" in a second visit. This effect happens at barely detectable levels of scent. As we get more used to an environment, we tend to relax as our "threat detection" is turned down. And scent travels directly to the emotional part of the brain, the amygdala. So it is a very good way of relaxing people through signalling familiarity.
This is why you take your dog's blanket on holiday, of course.
So in the context of Heathrow, the most likely impact on the passenger's experience will be on repeat visits, when the passenger feels more relaxed and familiar than they otherwise would have.
This is quite clever, as airports are pretty high-stress places for most people.
The benefits for Heathrow of relaxing the passengers.... Less aggro? Higher customer satisfaction ratings? More compliance for boarding and customs? Greater turnover in stores? All are possible.
In other airport ideas, how about this one from Hong Kong?
We know that 'mirror neurons' fire in your brain when someone smiles at you. It's hard to believe... but someone smiling at you really does make you feel happier.
So if you own an airport and you want happy passengers, having airport and retail staff smiling a lot is a really big deal.
Which is why Hong Kong have the smile reward competition.
[caption id="attachment_1747" align="alignleft" width="584"] Smile rewards at Hong Kong airport[/caption]
I put my money on Scent and Smiles over "Big Data" - any day.
Would you buy a $200M car?
That's how expensive this bottle of scotch is, given its price relative to a bottle of Johnnie Walker Red.
Ouch. Status costs.
What's the permission key? Ahhh, this is about royalty.
You'll be doing it for The Queen, and to celebrate her 60 years of reign - not at all to show off to your fellow Russian oligarchs or drug cartel leaders….
Why Car Dealers Suck at Marketing and Sales
We recently conducted a survey of just under 100 car dealers.
The aim was to gauge usage and attitudes towards digital marketing.
You might be interested in the results, especially if you are a dealer doing marketing (hint: newspapers aren’t as important as they used to be) or if you’re involved in any franchise-based branded marketing.
Here are the topline results:- Overwhelmingly dealers see that online and digital success is imperative for overall business success (most see it as more important than press).
This is not surprising, because it is.
- Almost all dealers know that customers research their purchase online first these days.
Again, this rings true. Who in their right mind would go shopping for a car at a dealership without doing a bit of google work first? But here’s the kicker…
- 60% of dealers surveyed said they have “no” or “limited” online marketing, or are just “getting started”.
So despite the strong intent to succeed at digital marketing, there is a distinct lack of action to make it happen.
The question has to be asked – what’s holding them back?
It seems the problems lie in three categories - SKILLS, RESOURCES and TIME.
Dealers have staff to manage their website, however they are most commonly sales or marketing managers, or general admin (their PA).
This is a leading indicator of a skills and capability gap, which was supported by the facts that:
- 74% of respondents agreed or strongly agreed that they need more help with skills.- Only 39% have an external agency to help them.
And if digital marketing is being handled by sales staff who don’t know what they’re doing (and haven't been trained).. the big question is.....who THE FUCK is on the floor selling?
As one respondent put it, the biggest hurdles are …
"Time and IT talk - we just want to sell cars and service cars!”
Hooks, Hats and How James Bond Does Marketing
John from the pharma sector in Sydney wrote back with a question after my last letter....
I was just going to send him a personal reply but I thought you might be interested too.
Here's the question he wrote: "I was thinking about what you put in your first letter: that companies shouldn't do over segmentation. What do you mean there exactly? I thought that knowing your clientele as close as possible to the individual level was the best knowledge a marketer can have!"Yes, knowing your customer is important.
If you have a decent CRM you can scrape data from social media and then you'll know what your customer ate for breakfast!
But if you are finding a strategy, a nice, clear segmentation (and targeting) makes it easier for you to win in most categories.
Here's how I think about it.
Do you remember James Bond entering M's office?
Hooks, Hats and James Bond
Bond arrives, then - to impress Moneypenny - throws his hat over the room towards the hatstand. Of course it never fails to land right on the hook...
Well, you can think of your market segments as HOOKS.
And the different HATS you throw at them are the - targeted - offers, for each hook.
When you're like James Bond, and you hit the right hook with the right hat, you're doing marketing right.
Over-segmenting is doing too much of a good thing... Too many hooks, too many hats... Confusion...
A segmentation that involves more than 9 segments is not much use for planning. When you have more than 9 segments it causes more confusion than help because the (normal) brain can really only deal effectively with 6-9 chunks of information at once.
More often than not, you'll want a simple segmentation model that can be easily understood by the different groups you need to know your strategy; your board, executive, marketing, sales...
When segmentation goes bad: a true story
It's 1997... I was John West account manager and went to present a fancy new canned fish market segmentation to Graham, my grumpy buyer at Franklins. Problem was, my friends in marketing had 'discovered' a revolutionary new segment called "Oral Stimulation"...
The buyer stood up in the middle of his office and shouted:
"Hey everybody, it's Matt from Unilever - HE WANTS TO TELL US ABOUT ORAL STIMULATION!"
In hindsight we might have been over segmenting...
Oversegmenting can lose you money
I don't intend to bore you with it now, but it's also theoretically possible to lose market share by over-segmenting.... The reason is not just due to falling efficiencies - you can also reduce positive "spillover" effects from advertising and marketing.
Anyway, I reckon the Mad Men were pretty good at finding nice, easy to follow segments, then targeting them.
Those Mad Men: they kept it simple
Cigarettes for Macho Men (or for Stylish Women)
Travel for Business (or for Leisure)
Cars for Jones-Beaters (or for Practical People)
Shirts for Individuals (or for Adventurers)
For 9 out of 10 businesses a simple segmentation, and decent targeting against the main ones, will do the trick.
How about a checklist...
Are you oversegmenting?
If you can't answer YES to each of these, you might be oversegmenting:
- Does it feel useful? Make sense?
- Can you tailor your marketing in a meaningful way, based on the segments? (if not, you're probably wasting your time)
- Could you explain it to a buyer without cringing like I had to? Would your sales team think it's useful?
- Does it define who you could be chasing? Does it show you why, how or where to track them down?
- Is it feasible to segment and target down to this level as part of "business as usual"? (If not, you'll be back to "Price vs Quality" in a heartbeat)
Do you want me to send you the June marketing letter?
Marketing folks, would you like a copy of this month's Marketing Letter?
We're just posting them now (yes, it's a letter -old school) and you have 1 day to jump on my list if you want it. Info here: http://goo.gl/zZ6e7
This time, I'm reporting from last month's web testing conference in Austin, Texas, USA: "Web conversion optimisation."
What's it about?
Why are US firms spending 5% of their marketing budget on it?
Where to start?
Plus a few surprises for you - like the secret spying network used by US retailers. And an a/b test cheat sheet.
Go here: http://goo.gl/zZ6e7
Hope you like it...
What is it with the internet and cats?
At the recent Which Test Won conference in Austin, the speaker from "Getitfree" (a coupon and trial company) told the audience that adding a CAT to his landing page increased conversion by 11%.
Above: Get it Free's cat - the box is mine
The cat purrs. And the tone of the purr was also significant.
Testing in Austin
Q: What do you get if you combine boffins of A/B testing with a cocktail party?
A: A hypothesis to test!
A/B test (bourbon)
A/B test (BBQ) Yeeheh!
PS - Bourbon A was smoother, BBQ B had more char flavour!
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