Under the Influence with Terry O'Reilly - S1E12 - Handcuffed By Brand Image

Episode Date: March 24, 2012

This week, we explore a very interesting marketing predicament: When brands get trapped by their own image. Every once in a while, expensive brand images circle around to damage the brand. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan. You just have to love storytelling. Subscribe now and don't miss a single beat. new year new me season is here and honestly we're already over it enter felix the health care company helping canadians take a different approach to weight loss this year weight loss is more than just diet and exercise it can be about tackling genetics hormones metabolism felix

gets it they connect you with licensed healthcare practitioners online who'll create a personalized treatment plan that pairs your healthy lifestyle with a little help and a little extra support. Start your visit today at felix.ca. That's F-E-L-I-X dot C-A. BetMGM is an official sports betting partner of the National Hockey League and has your back all season long. From puck drop to the final shot, you're always taken care of with the sportsbook Born in Vegas. That's a feeling you can only get with BetMGM. And no matter your team, your favorite skater, or your style, there's something every NHL fan is going to love about BetMGM. Download the app today and discover why BetMGM is your hockey home for the

season. Raise your game to the next level this year with BetMGM, a sportsbook worth a selly, and an official sports betting partner of the National Hockey League. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager. Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600 to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. From the Under the Influence digital box set, this episode is from Season 1, 2012. You're so king in it.

You're lovin' it in style. Your teeth look whiter than no, no, no. You're not you when you're hungry. You're in good hands with us. You're under the influence with Terry O'Reilly. If you've ever been to Amsterdam and stayed at the Hans Brinker Budget Hotel, chances are you would remember it. It is called the worst hotel in the world. The rooms are prison bare. They may or may not have toilet paper.

The linens are stained. The walls are full of graffiti. Guests smell weird things and hear small scuffling sounds under their beds at night. The halls are filled with cigarette butts. The reception area is filthy. The runny food is barely edible. And the staff is grumpy. It's not just bad.

It's terrible. But here's the thing. The Hans Brinker Budget Hotel is okay with that. It's been around since 1970. In the early 90s, the hotel's manager, Rob Penriss, met Eric Kessels, a junior art director at Ogilvy & Mather.

Penriss wanted fast ads, and Kessels proved he could do it by coming back with three campaign ideas in 15 minutes. Penriss said he was tired of hearing complaints from guests about how bad the hotel was. He wanted to manage expectations in his advertising. If customers expected nothing, they couldn't complain when they got it. So, what do you do when your product has no benefits, no unique selling proposition, nothing

more than the barest of essentials. You do the unthinkable. You tell the truth. So Kessels created an ad campaign that told customers that the Hans Brinker Budget Hotel was, quote, everything you've never wanted and more. The campaign hid nothing. As Kessels says in his book,

titled The Worst Hotel in the World, they leveraged the luxury of complete honesty. The campaign would sometimes feature the great things the hotel didn't offer instead of the awful things it did, like no bellboy, no pool,

no parking, no minibar. Sometimes the campaign would highlight what you did get by parodying the urgency of old-school advertising, like now a free key with your room, now free toilet flushing, now more rooms without a window, now even less service.

But all of this paled in comparison to the infamous flag campaign the hotel did. It has been called, and I quote, the turd that shook the world. In a guerrilla-style campaign, before guerrilla campaigns became trendy, the hotel created tiny little four-inch flags that said, Now, even more of this at our main entrance. The hotel staff

would wander the streets of Amsterdam sticking those little flags into every pile of dog droppings they could find. That stunt got news coverage from CNN, MTV, ABC, and almost every major news network around the world.

As a matter of fact, the Brinker still gets calls about it. It put the worst hotel in the world on the map. When a New York Times report stated that the general public's immune systems were becoming weaker and weaker because of an obsession with cleanliness, the Brinker Hotel jumped on the opportunity, harvested a pile of dirt from their rooms, and sent it to a lab for testing. Sure enough, the results showed the hotel was swarming with all kinds of unpleasant microbes. The resulting ad read,

Improve your immune system. You need contact with dirt to build up a natural resistance to germs. For this reason, the Hans Brinker Hotel is proud to offer you a wide variety of bacteria. They even ran a low-budget humorous TV commercial that showed giant bed bugs infesting the hotel, which you can see on our website. But here's the thing. Bookings spiked. Before the campaign in 1993,

the hotel had an occupancy rate of 45%. Within five years, it soared to 80%. And get this. Guests pay a little more to stay at the Brinker than they could pay at other budget hotels in the area. They just want to see how bad it really is. It's interesting to note that the advertising industry has many regulations when it comes to declaring a product is the best.

You have to back up a claim like that with reams of research and documentation. But there are no rules stipulating negligence when you claim to be the worst. The Hans Brinker Budget Hotel in Amsterdam aspires to have the worst image, not just in Europe, but in the world. Being bad is relatively easy. Being the worst in the world requires skill and determination, and the Brinker has made it an art form. In the world of marketing, an image is everything. It is what defines a product from the competition and attracts customers. And while very few brands aspire to be the worst in their category, a clear, unique brand image is the name of the game in my industry. Yet, every once in a while, something strange and unforeseen happens. Some products become trapped by their own branding.

The very image it has so carefully nurtured circles back to attack the brand, and in some cases kills it it's a rare and interesting phenomenon to be handcuffed by your own image you're under the influence it can be argued that the primary function of advertising is to create an image for products. The hope is that the buying public will like what they see, align themselves with the image, and buy the product. That image is based on the core benefit of the brand,

the reason it was invented, the problem it solves. It stands to reason that millions of dollars are spent building, nurturing and maintaining an image. Without it, a product is just another item, indistinguishable from the competition. It is the ultimate goal of every brand to have a distinct and popular image, one that becomes so intertwined with the product that the two become inseparable.

And occasionally, that becomes a brand's undoing. Take Apple. Just before the iPhone 4 was released, a prototype got into the hands of an online technology blog called Gizmodo. Apparently, Apple software engineer Gray Powell was celebrating his 27th birthday at a bar in Redwood, California on March 18, 2010,

and managed to leave an iPhone 4 prototype on a bar stool and then went home. At that point, someone named Brian J. Hogan found the phone, but didn't know who owned it. Interestingly, the iPhone 4 had been camouflaged to look like a 3GS, but Hogan cracked the cover and realized what he actually had in his possession was a prototype. He called Apple several times to report the lost phone, but was never taken seriously. So, he contacted Gizmodo to see if they were interested in buying it.

A scoop like that was big news for Gizmodo, so they offered Hogan $5,000 for the phone. Then, editor Jason Chen published a detailed analysis of the new iPhone on their website. Hey, I'm Jason Chen. This is the new iPhone. Here are some of the new features. You have the front camera, which is finally there. The story attracted all sorts of publicity. Apple wants its iPhone back. A tech website says it got its hands on the next generation iPhone,

which isn't supposed to be unveiled for at least a few more months. Well, here's the video Apple says they do not want you to see. According to Gizmodo.com, Gizmodo offered the phone back to Apple as long as Apple claimed it publicly. It was a shrewd move by Gizmodo because that request legitimized their story. And with that, the phone was returned. But a few days later, Gizmodo editor Jason Chen arrived home with his wife after dinner and found the police had kicked in his front door and were going through his house with a search warrant. It was clear the search had been instigated by Apple. In response to that story, Jon Stewart did a very interesting editorial on his daily show.

As I've mentioned many times on this program, Apple's image is that of the rebel. It stands for the underdog, against the big overlords like Microsoft and IBM. But when the police kicked in the door of the Gizmodo editor, it didn't make Apple look like an underdog. Apple, you guys were the rebels, man, the underdogs. People believed in you. But now, are you becoming the man? Remember back in 1984, you had those awesome ads about overthrowing Big Brother? Well, look in the mirror, man! Or actually, just look into the screen of your iPad before you turn it on, because it is surprisingly reflective. It's really beautiful.

Stewart's point was important. Apple was acting out of character. It was going against its own brand image. It wasn't supposed to be this way. Microsoft was supposed to be the evil one. But now you guys are busting down doors in Palo Alto while Commandant Gates is ridding the world of mosquitoes. What the f*** is going on?

So the question is, can Apple retain its image of being the hero of the underdogs, the rebel in the face of the big corporations, now that it's become the second biggest company in the world? A brand image is a powerful thing. Like a knife, it's sharp on both sides. And we'll be right back. New year, new me.

Season is here and honestly, we're already over it. Enter Felix, the healthcare company helping Canadians take a different approach to weight loss this year. Weight loss is more than just diet and exercise. It can be about tackling genetics, hormones, metabolism. Felix gets it. They connect you with licensed healthcare practitioners online who'll create a personalized treatment plan that pairs your healthy lifestyle with a little help and a little extra support. Start your visit today at felix.ca. That's F-E-L-I-X dot C-A. If you're enjoying this episode, why not dip into our archives,

available wherever you download your pods. Go to terryoreilly.ca for a master episode list. It was originally designed and built by AM General Corporation, which was formerly AMC Jeep's General Products Division. They were called High Mobility Multipurpose Wheeled Vehicles, HMMWVs, or HUMVs. They were created to fulfill a $1.2 billion contract with the United States Armed Forces in 1983. But it was the Gulf War that provided a coming-out party for the Humvee. The public first laid its eyes on the unstoppable vehicle via news reports that showed the Humvee in active action storming across the desert. President George Bush Sr. and General Norman Schwarzkopf visited the troops in a Humvee. It was a bold vehicle with a no-holds-barred military design that suggested it could drive through anything a war could throw in front of it.

In many ways, it was a perfect symbol of American superiority on the battlefield. A.M. General had planned to sell a civilian model as far back as the 80s, but that plan got kick-started when Arnold Schwarzenegger saw a convoy of Humvees while filming a movie. He was so enamored that he personally asked A.M. General to build him a customized street-legal version. It's really

no surprise, in hindsight, why Schwarzenegger was so taken with them. They were the automotive equivalent of his movie image, an overly pumped-up, overly-torqued, unapologetic box of testosterone. So, in 1992, when the first Hummer rolled off the line, the keys were given to Arnold Schwarzenegger in a ceremony. Please join me once again in acknowledging Arnold and Ken. Give them a big welcome.

Ken Kleiner's vehicle is sitting back there, which will be driven out in just a moment. Arnold, if you'll follow Adair Fritz, he'll take you to your vehicle with the keys. Thank you. And just remember, I'll be back. The undeniable selling feature of the Hummer was that it was a lot of truck. And for the launch, they needed a lot of voice.

That's when dealers heard James Earl Jones. From the sands of the Persian Gulf to the showrooms of America. Yes, today is the day. Hello, this is James Earl Jones, and while I may be thousands of miles away in Africa on location, I want to wish each of you my best on this exciting day, and I do mean exciting. Someone once said, it ain't bragging if you can do it. Well, Hummer can do it. The vehicle that earned its stripes in the Persian Gulf, the most serious 4x4 in the world, built smack dab in the heartland of America.

As craftsmen, we all want our work to speak for itself. Well, believe me, Hummer speaks volumes. As I give voice to the Hummer legend in the months ahead, please know that I'm elated to be a part of your team and hope to meet you soon. Until then, my greetings to those who build the Hummer and those who sell it. The legend grows. Some early models had a gross vehicle weight rating of 8,500 pounds, making it technically illegal for some streets in the U.S. The H-1 model could climb a 22-inch vertical wall, navigate a 60% grade, traverse a 40% grade slope with a full 3,500 pounds of payload,

and operate in up to 30 inches of water. Because everybody needs that in the city. Exactly. It gave off three in the city. Exactly. It gave off three times the emissions of most other vehicles and squeaked out 10 miles per gallon in the city. There was no doubt about it. The Hummer image was that of a big, mean, gas-guzzling SUV on steroids. And that image would eventually do the brand in.

A record 70,000 vehicles were sold in 2006, but the climate became a flashpoint issue for the public that year, especially after Al Gore's film An Inconvenient Truth, and the Hummers' decline began. Even its biggest fan, Mr. Schwarzenegger, had to distance himself from Hummers. As governor of California, he had signed a bill creating America's first cap on greenhouse gases, part of a plan to reduce California's emissions 25% by 2020 and 80% by 2050. Then came the spike in gas and oil prices in 2008, followed by a crippling recession. The Hummer became a symbol of everything that was wrong in the world.

Demand dropped to just 9,000 vehicles per year, prompting GM, who now owned Hummer, to put the brand up for sale. There were several interested parties, but no deal could be made. As a result, the very last one rolled off the line on May 24, 2010. The very things that had made it unique made it a liability. The Hummer had been done in by its own image. New routines, new locations. What matters is that you have something there to adapt with you, whether you need a challenge or rest. And Peloton has everything you need, whenever you need it. Find your push. Find your power.

Peloton. Visit Peloton at onepeloton.ca. BetMGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, you're always taken care of with the sportsbook Born in Vegas. That's a feeling you can only get with BetMGM. And no matter your team, your favorite player, or your style, there's something every NBA fan will love about BetMGM. Download the app today and discover why BetMGM is your basketball home for the season.

Raise your game to the next level this year with BetMGM. A sportsbook worth a slam dunk. And authorized gaming partner of the NBA. BetMGM.com for terms and conditions. Must be 19 years of age or older to wager Ontario only. Please play responsibly. If you have any questions or concerns about your gambling or someone close to you, please contact Connex Ontario at 1-866-531-2600

to speak to an advisor free of charge. BetMGM operates pursuant to an operating agreement with iGaming Ontario. In 1998, a dot-com company was started to cater to the pet world. It was called Pets.com. The idea was to sell pet supplies to people over the Internet. It had a near-perfect domain name. It was an early entry into the online pet space. It was bankrolled by Amazon.com.

It had an award-winning website and eventually went public with a very successful IPO. It had everything going for it, including a very funny, high-profile image campaign that was loved by the public. Pets.com created a sock puppet spokes-dog. The commercials were shamelessly funny, and in many of the scenes, you could actually see the puppeteer's arm.

And if you look closely, there was a wristwatch around the dog's neck. The commercials had a fast, cheap look to them, which was perfect for the offering of fast, cheap pet supplies. Deliveries for pets.com! Purely in an advisory role. I like your shorts. You're a good-looking fella. I hope they're home. supplies. I got it, I got it. Spinning wheel, round and round. Pets.com, because pets can't drive.

The Pets.com sock puppet became one of the favorite mascots on TV, and it even appeared on the Super Bowl. The commercial showed the dog's owner leaving to go shopping for pet supplies, with the dog puppet singing sadly about being left behind. Cost of the commercial? 1.2 million dollars. Okay, Nino, I gotta go to a lot of stores to get what you like. I'll be back. If you leave me now, you'll take away the biggest part of me. Ooh, no, baby, please don't go. Ooh, girl, I just want you to stay. Hey, man, I'm getting car sick. I think I'm gonna poop.

That ad was ranked number one on the USA Today ad meter with the highest recall of any commercial on that Super Bowl broadcast but something was going horribly wrong in its first fiscal year it made revenues of only six hundred and nineteen thousand dollars yet spent over eleven million dollars on advertising it was also spending millions on infrastructure and warehouses. The main benefit of Pets.com was to offer discounted pet food

and free shipping. But it appeared that it was providing an answer to a non-existent problem. People seemed happy picking up pet supplies while they shopped at grocery stores. And for those who did choose to use pets calm the basic promise of cheap supplies and free shipping couldn't be met there was no way to turn a profit it was selling merchandise for one-third of the price it paid to obtain the products in the first place by the fall

of 2000 dot-com bubble notwithstanding pets Pets.com wound down and assets were sold off. It had gone from an $82.5 million IPO to liquidation in only 286 days. It is one of the most famous dot-com stories because it was hung by its own petard. The image it created was for affordable, convenient pet supplies, but it couldn't deliver. As an analyst said, there's nothing worse in marketing than having everyone know who you are and no one interested in what you sell. It was created in 1937 by the Carley Company of Chicago and trademarked in 1946. The Federal Trade Commission had objected to its main claim that a person could lose up to 10 pounds in five days without dieting or exercising.

So the claim was softened and the product still found loyal customers. It was a diet candy called AIDS. I've tried fad diets, powders, pills. Still, my weight's been up and down like a yo-yo, until the AIDS plan taught me how to take off weight and help keep it off. AIDS may taste like a candy, but AIDS contains one of the most effective appetite suppressants you can buy, and there's no stimulant in AIDS that could make you nervous. With AIDS,

I ate less, so the weight came off. To help keep it off when I sometimes want things loaded with calories, AIDS helps put me in control. Let the AIDS plan teach you how to take off weight and help keep it off. Try peanut butter AIDS. It was spelled A-Y-D-S. The product was a brand name for boxed candies that were used as appetite suppressants for dieters. They were available in several flavors and promised to eliminate cravings for calorie-rich desserts. It was a success, and sales grew every decade.

AIDS peaked in the late 70s and early 80s. Then, in 1982, NBC broadcast its first report on a mysterious new disease that didn't have a name. Scientists at the National Centers for Disease Control in Atlanta today released the results of a study which shows that the lifestyle of some male homosexuals has triggered an epidemic of a rare form of cancer. Little was understood about the disease at that time. Soon, it became known as GRID, or Gay-Related Immune Deficiency. But scientists questioned the accuracy of that name, as the disease did not reside exclusively in the gay community. As a result, the disease was renamed AIDS,

for Acquired Immune Deficiency Syndrome. While the news would begin to report about AIDS more frequently, it would be actor Rock Hudson who gave it an international profile. Just what is wrong with Rock Hudson? Tonight, the 59-year-old actor remains in a Paris hospital undergoing tests, but the nature of his illness has become clouded in mystery and confusion. When Hudson died in 1985, it signaled a turning point

for the public's awareness of the disease, and it put AIDS on the government's agenda. And on hearing of his death, the House of Representatives agreed to double the amount of AIDS funds for research next year. There will now be $190 million. At the same time, the AIDS diet supplement had

just enjoyed its biggest year ever. But just three years later, sales had fallen by over 50%. To suggest in advertising that a product called AIDS could help you lose weight was now completely inappropriate. The makers of AIDS tried to save the brand by changing the name to Diet AIDS, but trying to distance AIDS diet pills from AIDS the disease proved impossible.

The product was trapped by its own image trademark and weight loss benefit by the end of the 80s the product was finally discontinued after 50 years of success it is the cruelest of fates to spend millions creating a brand image, only to have that image bring down the company in the end. In the case of the Hummer, it was a matter of terrible timing. First, climate issues mounted, then oil prices soared, then a hobbled economy drove a stake through its heart as the final coup de grace.

Plus, the image of the Hummer couldn't be reverse-engineered. It was burned into our consciousness as a gas-guzzling alpha truck, so no one would ever buy a hybrid Hummer, literally or figuratively. In the case of Pets.com, it had absolutely everything going for it, except a market. It had created one of the most successful advertising campaigns of the year that promised cheap, convenient pet supplies, but it couldn't deliver. Like the Hummer, its very image was its demise.

Then there was AIDS, a long-established product that ran smack into a heartbreaking worldwide issue with the same name. And the 50 years of entrenched branding behind it ensured it had no future. There are no guarantees in the world. And even when it appears you are doing everything right, everything can go wrong. Unless being wrong is right. Just ask the Hans Brinker Budget Hotel in Amsterdam

when you're under the influence. I'm Terry O'Reilly. Yes, hello, this is Bert Hackert calling from Hans Brinker Budget Hotel in Amsterdam. I'm just calling because we're not very happy with the information that you relayed on your radio show about our hotel. And actually we are much worse than you describe. So this is very important to us

and we're so angry that we would like to offer you a room. So let that be a lesson to you. Under the Influence was produced at Pirate Toronto in New York. Studio scheduling and shipping handled by the ever-vigilant Tina Mertzke. See you next week.