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No sympathy here as auto woes hurt Big Advertising

I just learned Detroit’s Big Three automakers account for six percent of the revenues of the world’s four largest advertising holding companies. Meaning, if the automakers go down, it will be a painful blow to the firms most responsible for promoting their products. Hmm, let me see if I can work up some sympathy here. Sorry, no can do.

These are the very same agencies that consumed countless barrels of creative fuel bringing us the dream of owning Hummers, Escalades, Expeditions, Yukons, Navigators, Suburbans, Tahoes and other gas-guzzling, climate-killing hogs. I wonder who came up with that delightfully clever idea two years ago by GM to hand out 42 million toy Hummers in McDonald’s Happy Meals and Mighty Kids Meals. Once the kids get their meals, the parents will reach for the toy, and voila, next thing you know they’re with their kids in the Hummer showroom.

The major holding companies — Interpublic, Omnicom, Publicis, WPP — all count a Detroit automaker at or near the top of their list of largest clients. They’ve happily allied with an American industry that Fortune magazine wrote last year has been “getting a free pass on fuel economy for more than two decades. Instead of devoting its considerable technical resources to improving gas mileage, it has been cranking up the horsepower of its engines and selling modified trucks as SUVs.”

And now the Big Three automakers are cranking up the pressure on Congress to bail them out, while the Big Four ad conglomerates hold their collective breath. Detroit automakers are the poster children for environmentally and, now, economically and socially destructive behavior. While the atmosphere warmed, vehicles got bigger. While fuel prices rose, sales of big autos tanked. And while sales disappeared, so did the hopes of local communities whose economies are devastated by auto plant closures.

I’ve seen little evidence any of this has dented the conscience of the world’s leading ad executives. No doubt they’ve been too busy counting profits from their share of the billions Detroit has spent on advertising, including $4.6 billion in measured spending in 2007 alone.

The day of reckoning is now here for big advertising, just as it has been for their auto clients and their clients’ employees and communities. Good folks in advertising, PR and marketing are losing their jobs. My wish is they now find work supporting companies and industries that actually care about our planet’s future.


Will business pick up the signals?

What a different world we awoke to on November 5. For most of us voters, the future looks a little more hopeful, less divisive. For the rest, well, let’s just say not everyone was feeling the love we Obama supporters were feeling.

I’m not certain what this staggering political act by the American electorate means for those of us in business. But I do think voters sent some strong signals our way.

I keep returning to what Rob Walker, author of the recently published book Buying In, calls the “fundamental tension” of modern life: “We all want to feel like individuals. We all want to feel like we are part of something bigger than ourselves.”

Obama personifies this tension. Many see in his achievement the hope and possibility that any individual anywhere can achieve his or her dreams, no matter the odds. Others are drawn to his larger calling to fulfill America’s promise of a perfect union.

Thomas Friedman quotes Harvard University political philosopher Michael Sandel in his New York Times column about Obama’s victory: “Obama’s campaign tapped a dormant civic idealism, a hunger among Americans to serve a cause greater than themselves, a yearning to be citizens again.”

Sandel and Friedman weren’t addressing business directly, but I can’t think of a greater insight for business to take from this election.

With few exceptions, businesses have catered exclusively to our desire to feel like individuals. Our products and our marketing have appealed overwhelmingly to the fulfillment of personal needs and wants through consumption. And because it was good for business, we managed to elevate the role of Americans as consumers above all others, including citizens.

If Sandel is right, Americans want more. Not more stuff; more opportunity to make the world a better place and more leaders who inspire the greatness in all of us. Businesses must recognize the pendulum is swinging away from the all-consuming, me-first excesses of the past quarter century. Those that respect and engage customers and other stakeholders as whole human beings — ready to “serve a cause greater than themselves” — will lead the way in our brave new world.

One great cause is sustainability. Like civil rights, the sustainability movement is a struggle for the ages. From where we stand today, the challenge of preventing catastrophic climate change, healing our natural systems and creating more equitable economies appears as a mountain summit beyond reach. Will the climb be worth the effort? What do you think the civil rights warriors who can now stop dreaming of an African-American president would say?


What we still control in these uncertain times

Last night I offered the opening thoughts for a discussion group around sustainability. I took my inspiration from Al Gore, whom I heard speak last week at a political fundraiser in Portland. Gore asked the rhetorical question: This feels like the end of an era and the beginning of a new one, doesn’t it? The audience collectively nodded and murmured yes, yes, it does. It does feel like we’re in the midst of a very dramatic shift right now and are entering unchartered territory. Gore said what we were all thinking.

This helps explains why I’ve been feeling so much uncertainty lately, something I’m sure I share with many millions of others across our country and globe. Endings and beginnings are inevitably messy and halting. And this historic period we’re living through now is bound to be all of that and more. I told my fellow discussion group members that on a walk this weekend, I asked a therapist (my wife) what she would say to a client who’s struggling with uncertainty. She replied, without hesitating, “I would ask them what it is in their life they think they can control.”

Great question. I decided to answer it for myself. The exercise was eye-opening. Even as the economy threatens to collapse and news on climate change grows more ominous by the day, I found within a few minutes of pondering this therapist’s question there was much that remains within my control. Here’s what I jotted down:

my responses

my beliefs

my vision for the future

my stories

my awareness

my actions and behaviors

my intentions

my goals

my hopes

my creativity

my determination

my purchases

I could have kept adding to the list, but the point was made. Yes, we live in a time of great uncertainty and there’s so much outside of our control. More importantly, there’s still so much within our control. This is as true for businesses as it is for individuals. Now is an important moment for those who own, lead or manage businesses to ask what they still control and can accomplish even as customer spending slows and markets and economies contract. It’s easy to move into reaction mode, letting uncontrollable external forces dictate your every action and keep you working in fear of what lies ahead: loss of business income, potential layoffs, maybe even business closure.

Operating from a commitment to sustainability, I believe, provides the anchor in this perfect storm. It keeps our minds, decisions and actions rooted in care for what really matters: the health and welfare of the planet, our employees, customers, communities and other stakeholders. Sustainability is not a line item to be cut when times are tough. It’s a belief in how to conduct business. It’s also a response, vision, awareness, intention, goal, hope and set of actions. All of these things are within our control as businesses. And that’s something we can all hold onto as our world heaves and sighs into a new era.


Marketers’ choice: ‘Lead, follow, or get out of the way’

Consumer spending is falling fast. While that’s bad for the economy, it’s good for the environment. Excessive consumption produces waste and pollution streams that are destroying our planet. The question now is how are we going to respond to the economic crisis at hand. If our elected officials and business leaders seize the moment, the consumption downturn will ignite a movement that saves our economy and our environment for generations to come.

And maybe, just maybe we marketers will heed the call to help lead the way.

In the near term, an environmental benefit will be of little solace to those whose jobs depend on consumer spending, which is to say most of us since consumer spending comprises nearly two-thirds of our economy. It’s all-but certain the current financial crisis will slip into an economic recession, perhaps as rough as any we’ve experienced in decades.

As painful as the near future may become, the glass half-full view reveals the opportunity ahead. Financier George Soros explains:

You see, for the last 25 years the world economy, the motor of the world economy that has been driving it was consumption by the American consumer who has been spending more than he has been saving, all right? Than he’s been producing. So that motor is now switched off. It’s finished…You need a new motor. And we have a big problem. Global warming. It requires big investment. And that could be the motor of the world economy in the years to come.

Over consumption, made possible by easy access to debt, explains much of the financial mess we’re in today. And a consumer economy, stoked by cheap, abundant fossil fuels, is a principle cause of global warming. In the end, reliance on consumer spending is both bad for the economy and bad for the environment. Other than that, it’s great.

What makes the coming elections so critical is the next president and Congress will decide whether we as a nation will fundamentally change the underpinnings of our economy. If we simply find new ways to prop up our consumption-based economy, we will hasten the day of reckoning that climate change requires. If we embrace the environmental and social challenges of climate change as the economic opportunity of our times, we can all look toward the future with hope.

For marketers, the opportunity is to finally begin leading the world in the right direction. If “the motor of the world economy” has been consumption, the fuel has been marketing. Marketers create awareness and demand for goods, services and ideas. The problem is we’ve used our talents overwhelmingly in support of unsustainable economies, employers and clients.

But that can change. Imagine if we were to unleash our creativity and persuasive abilities in service to freeing our economy from dependence on fossil fuels and mindless consumption. I’m convinced the impact would be both enormous and swift for our climate, environment and economy.

I don’t know whether the collective parts of the marketing industry — branding, advertising, PR, direct marketing etc. — are up to the task. The industry is so deeply enmeshed in the profitable, but dead-end ways of consumerism. So be it. The train is leaving with or without us. In the words of Thomas Paine, our choice is simple: “Lead, follow, or get out of the way.”


Financial crisis tests sustainability commitment

I remember July 2001 well. It was the month someone pressed the dimmer switch on the high tech marketing business I co-owned. For the first six months of the year, our business soared. It was the best financial stretch in our eight years as a firm.

In July, it was as if the previous half year became an instant, distant memory. We’d become a victim of the tech implosion that followed the dotcom bubble burst. Virtually all of our clients slashed their marketing budgets in unison when it became apparent their revenues were falling far short of annual targets.

The summer outlook turned bleak. And then came 9/11. Suddenly any hope for a soft landing for the economy and our firm vanished. The next two and half years became little more than an exercise in survival. But eventually we got through it. And happily, by 2006 we had nearly grown back to our pre-recession peak.

I left my firm and high tech two years ago to work with companies on the sustainability path. Even so, memories of 2001 and after are still fresh. As bad as things became then, this moment is even more worrisome. Are we in for the Big One: the Category 5 hurricane, the 9.0 earthquake?

My rational voice reminds me my worst fears never materialize. They didn’t a half dozen years ago. My insecure voice replies, “Yes, but maybe this time they will.” And so it goes, back and forth.

You may have a method for keeping fears and insecurities at bay. Mine is to move outside myself, to become more aware of the needs of others. I have the good fortune of health, home, family, friends and financial savings. As this recession tightens its grip, more Americans are losing their jobs, homes and nest eggs. And it appears things will get worse before they get better.

A turn of events like this tests our commitments to sustainability. Are sustainability values only to be embraced during economic prosperity? The answer is obvious. There’s no escape clause from sustainable business practices when recessions hit. It’s true we may have less money to invest in environmental initiatives, employee benefits or community programs. But we can still make a difference through our time, ideas and creativity.

I’ve seen enough from the unrestrained capitalism of the last 25 years to conclude this: Humans acting in their own self-interest in free market economies do not produce a massive trickle-down flow of goodwill to those less fortunate. Nor do they automatically protect and preserve our natural resources. If they did, we’d have no need for a sustainability movement.

A recession teaches us the invisible hand of the market isn’t a helping hand. It’s incapable of caring about anyone or anything. A commitment to sustainability asks us to do the caring. Now would be a good time to renew our vows.


Imperfect triple bottom line far better than alternative

Sustainable Industries magazine asks the question: “Is triple-bottom-line accounting really possible?” From their reporting, the answer appears to be not yet. The article quotes a San Francisco attorney:

“The notion of triple-bottom-line accounting assumes or incorporates the idea in the nomenclature that there’s a standard…The reality is, there isn’t.”

He is referring to the absence of a unit of measure that works across each of the three dimensions of economic, social and environmental accountability. Right now, environmental or social investments or decisions tend to be evaluated by the one measurement businesspeople best understand: financial ROI. In other words, the one bottom line that has always been with us. As a result, decisions that would appear to benefit the environment or community, but hurt profitability, are too easily dismissed. As in, we can’t afford to do the right thing.

I believe we are making the notion of the triple bottom line (TBL) too complex. And that’s preventing businesses from embracing its simple principle, which is to strike a balance among the sometimes competing interests of making money, protecting the environment and supporting our communities.

As Sustainable Industries observes, financial accounting over the course of many years has “established standardized, legal frameworks for what to measure, how to measure it, how to report it and how to interpret it.” The environmental and social components of the TBL are far from reaching that status. And yet, businesses can’t let that stop them from at least trying to find balance in their decision making, even when social or environmental outcomes may be difficult to measure and value.

Consider today’s financial crisis. Fingers are pointing in every direction, and there is indeed plenty of blame to go around: greedy investors, lenders and home buyers, lax regulators, gutless politicians, to name a few. But I can’t imagine we’d be in this mess if business was guided by the triple bottom line, even as it’s loosely understood today:

  1. Would mortgage lenders concerned for their customers and communities ever have offered $400,000 loans to people with no proof of income or assets?
  2. Would Wall St. investors ever have purchased these so-called subprime loans and packaged them for sale as low-risk securities if they were thinking of more than just maximizing profit?
  3. Would government ever have let investors acquire and trade trillions of dollars of these securities without public scrutiny if they actually felt obligated to protect the individual taxpayer?

We’re seeing now, in the prospect of a $700 billion taxpayer bailout, what this country’s obsession with making money has cost us. The financial bottom line alone is like the presidency without Congress and the Supreme Court: There are no checks and balances. The only brakes on economic excesses are wrenching recessions, if not depressions, after which we’re back to business as usual. How quickly did we move from the dotcom bubble to the housing bubble?

To return to the question the magazine asked: Maybe triple-bottom-line accounting isn’t possible. But there’s no excuse any longer for pretending our unfettered pursuit of profit is the answer.