"Facts do not cease to exist because they are ignored." Aldous Huxley

We always considered Enron and their efforts to commoditize all industries—from energy to ad space—an avowed enemy of branding. Real brands, as our readers know, are dedicated to solving customers' problems and pains better than competitors. Apparently, Enron was not interested in solving anyone's problems, but rather using marketing gimmickry to trick them into thinking that something marvelous was going on.

To Enron, marketing was nothing more than the way to make the con game work. The company hired Paul Rand, considered by many the father of modern corporate identity design, to create their logo. Under the arrogant tagline, "the world's leading company," Enron executives told their stakeholders—analysts, employees, lenders, and businesses—if you don't understand what Enron's value proposition is or exactly what we do, well you're lazy and stupid. "Our business is not a black box. It's very simple to model. People who raise questions are people who have not gone through it in detail, " ex-McKinsey consultant and then CEO of Enron Jeffrey Skilling told Fortune reporter Bethany McLean in an interview a year ago this month, soon after calling an analyst an "asshole" for asking too many questions.

Enron's positioning and communications strategy didn't stop with verbal abuse, however. No. For instance, they had employees pose as busy sales representatives to impress analysts touring the company, having them bring personal items like photographs and talking on the phone as if they were making a big sale. One analyst recalled to the Wall Street Journal, "the trading floor looked fully staffed…It looked like people were very busy." Enron of course denies they intended to mislead analysts; then again, CEOs of U.S. cigarette manufacturers said they didn't think smoking caused cancer.

Unfortunately for investors and employees, the deception didn't stop there. We all know about the off-book accounting practices Enron used to beef up its balance sheet and "even-out" the peaks and valleys of its commodity trading business. We disagree with Dynegy CEO Chuck Watson who said of Enron, "[it] never understood that business is not just about numbers and the balance sheet, it's about your brand, and the confidence you inspire." To Enron, branding was all cosmetic and their balance sheet was the lipstick in their purse. They used superficial, almost laughable in their conceit, techniques to convey their superiority and dominance.

No matter how dumbfounded Skilling, Kenneth Lay, members of the company's Board of Directors, Joseph Berardino, senior executives at Enron, and senior consultants at Andersen and Accenture act about Enron's accounting practices or the rapid decline of the company, they knew exactly what was happening—they had deliberately operated on image alone from the very beginning. Not to mention Enron's senior people all had plenty of time to abandon ship with a boat-load of cash before the Titanic sunk, while Andersen shredded documents. If they think they can make Andrew Fastow the Ollie North of the Enron scandal, they should think again. While clearly a deranged man, evidence indicates Fastow hardly acted alone or in a vacuum.

The writers at the Harvard Lampoon couldn't have written a better parody of a business if they had tried, but too many people have gotten hurt for the Enron debacle to be funny. Marketing and business is about a lot more than creating appearances; for anyone that doubts that, we suggest you make an appointment to visit what—if there is any justice—will be Enron's new corporate headquarters: a federal prison.

Take AT&T's Mlife spot, or what the USA Today called, "belly buttons urge callers to go mobile." After watching almost a minute of naked bellies and a woman giving birth, we were feeling so queasy that we just plain missed the connection between all the navel shots, the doctor reaching for scissors to cut the umbilical cord, and AT&T.

For weeks, we had watched the teaser advertising for "Mlife" which seemed to be describing some sort of insurance product. In fact, in an informal office poll, most people had thought the ad was a new Snoopy-less campaign for Metropolitan Life Insurance. It took us a few minutes to get the idea of "cutting the cord" and leading a truly mobile lifestyle with AT&T—Aha! So that's the "M" in "Mlife!"—but even though we were able to figure out the ad, we still didn't see how AT&T's Mlife would be any better than Sprint's, Cingular's, or another competitor's. We can't imagine many of the Super Bowl's estimated 80 million viewers spent as much time as we did trying to figure out the Mlife ad either.

Aside from the tubby tummies, we were also disturbed by the marketers who chose to advertise products and services that seemed totally out of place during the Super Bowl and didn't even try to blend in with sports-themed creative. It's generally accepted that the type and content of a program impacts the delivery of an advertising message and that "high involvement" programs improve the day-after recall of an ad. The more closely related the content of the program to the product or service promoted in an ad, the higher the impact of the program on the memorability of the ad. In the ad business, they call it "endemic" advertising. As an example, "Survivor" would probably impact the recall of a travel ad aired during the program more than the recall of a financial services company.

While beer, soda, and fast food are to the Super Bowl what fortune cookies are to Chinese food, did the companies that ran ads for tax preparation and flu medication know that the Super Bowl is a football game? Who's thinking about taxes and the flu while they're carousing with friends, eating, and drinking? They aren't thinking about it and they aren't about to start even with the prompting of ads—particularly ones that were as strange and dry as H&R Block's and Roche Pharmaceutical's spots were.

As we read the day-after reviews and rankings of the ads of Super Bowl XXXVI, we couldn't help but notice that many advertisers seemed a tad defensive about their decision to buy time during the Super Bowl. "Last year, we saw our brand awareness jump 64% from January to February," E*Trade's chief communications officer told AdWeek as justification for the company's buy and sponsorship of the halftime show. Especially with the uncertainty in financial markets today, we wonder how much brand awareness will translate into sales for E*Trade, a company that had a monkey deliver an unclear message.

We think for E*Trade and for many others, Super Bowl XXXVI will turn out to be as big a disappointment for them as it was for the Rams.

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The exceptionally fickle teen market has broken many a retailer. The Gap, for instance, made an unsuccessful bid to woo teens—with a total annual disposable income estimated at $120 billion—with trendier items at the expense of older consumers. Hot Topic, however, a mall-based clothing and merchandise retailer with 346 stores nationwide, has found a way to do what has seemed impossible for other retailers: target teens and make money doing it. Though same store sales have decreased slightly in recent weeks from the same time period a year before, the company's net sales increased by 31% from 2000 to 2001 without discounting and advertising.

"We don't run a promotional business. We're a regular-price store," explained Hot Topic's CEO Betsy McLaughlin in a recent interview. Unlike other fashionistas and retailers who try to make the trend, Hot Topic follows the trend and offers appropriate merchandise in response. "Our entire business is based on direct feedback from the consumer," explained McLaughlin.

Hot Topic's founder Orval Madden saw an opportunity for offering fashion related to music and opened the first store in California in 1989. But the store didn't offer clothes for the teen masses, instead focusing on a specific segment of 12- to 22- year-olds who followed bands on the opposite end of the spectrum from Britney Spears and NSync's pop. The company licenses logos from bands, as well as produces its own private label of alternative wear, creating an in-store experience similar to the mood of the music videos and clubs target customers watch and frequent. In addition to clothes, male and female customers can find other music merchandise like CDs, posters, shoes, accessories, and make-up.

Just as it doesn't treat the total teen market as a homogeneous group, Hot Topic also recognizes teens come in all shapes and sizes. According to the Centers for Disease Control and Prevention, 13% to 14% of U.S. kids in this age bracket are considered overweight. Based on information like this and from customers who complained about squeezing into size 6 vinyl pants, senior management at the company responded with plus-sizes of items and recently launched a new brand of stores called Torrid specifically for the plus-sized segment within their target group.

Though they target the cutting-edge, Hot Topic's business success comes from age-old marketing fundamentals.

For more insightful marketing discoveries, visit http://www.copernicusmarketing.com/discover/index.htm

Have a hot discovery for our next release? Contact us at info@copernicusmarketing.com

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After reading about Andersen and Andersen Consulting's (now Accenture) role in the Enron debacle, we decided to revist a book we thoroughly enjoyed when we first read it a few years ago, Dangerous Company. The book offers insights into what exactly management consulting firms and the armies of MBAs they dispatch do for clients. In many cases, they work in semi-secret, hatching disastrous plans and make recommendations that are completely detached from reality. As a result, companies have folded or been irreparably damaged at the hands of the so-called "experts."

In other situations, where the client remains actively involved in the process, the outcome has been very favorable for the company. The main lesson from the book is that while an outside perspective is extremely valuable, it takes more than simply hiring a McKinsey or Boston Consulting Group to fix a company.



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Slowly but surely, marketers are beginning to recognize that U.S. Hispanics, with an estimated $561 billion in purchasing power, are far more heterogeneous than they are homogeneous, with diverse attitudes, behaviors, and cultural influences. Rather than take a marketing program developed for the general consumer market and translate it into Spanish, an ever-increasing number of companies have dedicated teams developing culturally relevant programs specifically for Hispanic consumers.

As marketers have become more sophisticated in their approach to communicating with multicultural audiences, they've encountered problems in understanding and quantifying the impact of general market efforts on Hispanic consumers. Particularly when it comes to buying media, clients and business acquaintances have started asking us, "How do I know what my general market media buy is doing for me in marketing to Hispanics?"

At the recent Marketing Consumer Products to U.S. Hispanics conference, we presented a tool for marketers struggling with this question to use to more efficiently allocate media dollars: media optimization technology. With media budgets—particularly multicultural media budgets—facing cuts, it's more important than ever to use tools like the media optimization model we talked about in the presentation, to make the most profitable decisions to build your brand and bottom-line.

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