Obama goes back to Bush playbook and declares war on “price gouging” oil companies

"I’m concerned about higher gasoline prices. The government has the responsibility to make sure that we watch very carefully and investigate possible price-gouging, and we will do just that." — George W. Bush, 4/17/2006

Congress is vowing to take actions that it believes will reverse runaway crude and gasoline prices. Oil rose above $136 a barrel on Monday – more than double what it cost a year ago – and gas hovered around $4.07 a gallon.” – CNN, 6/24/2008

"We are going to make sure that nobody is taking advantage of American consumers for their own short-term gain." – Barack Obama, 4/20/2011

Whenever the price of gas spikes the call goes out from Washington to investigate price gouging. Unfortunately, this leads to one of the great intellectual challenges of capitalism: Defining price gouging. Problem is no one can separate “taking advantage of consumers for short-term gain” from what is usually called profit taking.

To quote Collateral Damage Sr.: "In a society that has a free market fetish, if not a religion, what is price gouging? Is nine percent profit gouging the price? Or 15 or 50 percent? At what price point does profit change into gouged profit?"

Well, here are a few samples from people who have tried to split that particular hair.

First, former Rep. Bart Stupak, (D-Mich), from 2006:

When we were doing the Energy Policy Act last fall, in the town of Midland, right by my district there, gas went up 90 cents in one day. Now, is that not gouging?

If you take a look at it, from September 2004 until September 2005, refineries have increased their prices 255 percent. Isn’t that gouging?

I mean, I think we all know what gouging is. What we need is a federal standard so we can hold the oil companies’ feet to the fire and make sure we know what factor goes into every gallon of gasoline, so at least the American public will have some transparency and get a fair shake on what goes into a price of a gallon of gasoline.”

Next up:

New York State law prohibits price gouging during a state of emergency. The law specifically provides that, in order to prevent any party from taking unfair advantage of consumers during an abnormal disruption of the market, the charging of "unconscionably excessive" prices is prohibited.”

I like that one the best because it is by the former Attorney General/Governor of New York, Eliot Spitzer. Did he wonder about price gouging as he paid all those ladies of negotiable morality?

And finally this one from the very accurately named blog, Neutral Source:

There is no objective definition. Economists–who specialize in price theory and the behavior of markets and can study these things ad nauseum–have no definition for it, either. In fact, economists have avoided the term as if it were a social disease. A review of all the microeconomics textbooks on Neutral Source’s bookshelf reveals that none have as much as an index entry.”

Price gouging, like porn, is in the eye of the beholder. One thing everyone agrees on about it is that it is always committed by someone else.

For businesses price gouging is "when my competitor gets away with charging more than I thought to charge."

For the general public, price gouging is when a company that I don’t work for or have investments in is charging me too much. Profits are when my company is making enough money to not lay me off.

Actually addressing this problem would involve fundamental changes in our system that are much needed but which no one is willing to actually contemplate. Instead we will get more of this Kabuki Theater. The next act will come when the oil companies declare their quarterly earnings. This will be followed by bi-partisan denunciation of  their “excessive profits” and a number of bills will be proposed which will go nowhere.  Then the oil companies will attempt some sort of PR move to show that they are really nice guys and that will be that.

 

Transocean cites safety record in doling out bonuses despite 11 deaths and totally screwing up the Gulf

Never, ever, let it be said that mere facts will come between an executive and his or her bonus. Transocean which – along with BP – is responsible for 11 deaths while creating the worst environmental disaster in US history, used its safety record as the reason for giving out exec bonuses.

According to the company’s financial proxy:

"Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record." Based on the total rate of incidents and their severity, "we recorded the best year in safety performance in our company’s history."

Transocean’s PR person (now there’s a job for you) said, "The statements of fact in the proxy speak for themselves” before adding the requisite comments about feeling bad for all the little people.

It is worth noting that the company’s execs did NOT get their bonuses the year before because of safety issues. It really isn’t reasonable to expect them to go two years without bonuses. That could lead to the departure of all the great talent that got the company to where it is today.

Let us not think that Transocean is alone. Our good friends in the banking industry have been doing the exact same thing even while they were destroying the economy.

The past few years have been very rewarding for bank employees. OK, maybe not the government rescues, stagnant loan books, layoffs and litigation. But none of these disasters hurt pay at banks.

A review of call reports filed with the Federal Deposit Insurance Corp., compiled by BankRegData.com, shows that average compensation in the last few years rose — and at the same rate as it did before the crisis. Employees of the largest banks realized the largest gains. The increases significantly outstripped inflation and can’t be attributed solely to shifts in pay schemes or recovering profitability. Banking in general shielded pay from its cost-cutting ax.

Ah, personal accountability in action.

As American Banker points out: “Over the last eight years, average compensation for a full-time bank employee has risen 35% to $83,050, twice the rate of inflation. In 2003, the banking industry’s 1.3 million full-time employees took home $78.3 billion. In 2010, its 2.1 million employees took home $168.1 billion.”

How much of that do you think went to the tellers and branch managers?

Oh and don’t forget: It’s all those millionaire public-sector employees’ fault.

Did someone say, “Bikinis with push-up tops for 8-year-olds?”

Abercrombie & Fitch is selling the ‘Ashley push-up triangle’ top  which features thick padding in the cup to give the illusion of a larger chest size. What’s news about that? It’s for girls 8 to 14.

Yes, for a mere $24.50 you too can pimp out your not-yet-tween girl and remind her that its all about the cup size.

It’s good to see that old A&F (where my grandfather once went to kit-up for safaris) is keeping true to its newer brand promise of making money off the sexual exploitation of children. (If they’re going to do that shouldn’t they be a division of American Apparel? Here are the details on the latest in a long line of sex harassment suits against CEO Dov Charney.)

A few other things A&F has done to live up to its brand promise:

• Ads that feature shop assistants in lieu of models, often posing semi-nude.
• An ‘Impact Team’ to ensure all employees comply with its ‘look policy’.
• Paid $2.2 million to settle a suit over allegations it forced its employees to buy and wear its clothes while on the job.
• Paid $50 million to settle a discrimination lawsuit brought by pretty much every non-Caucasian who made the mistake of getting a job with A&F.
• Paid $13K to an employee forced to work out of site of the public because she had a prosthetic arm

Is this the worst ad placement ever?

Probably not, but it’s still impressive.

It’s a winner!

iPhone apps are the bleeding edge of marketing mistakes

The iPhone’s apps have been a marketing problem for Apple pretty much since they debuted. The problem is really that Apple wants to approve of all apps before they go on the store. This would be fine, if there was a consistent or even coherent policy guiding what goes in and what doesn’t.

This week’s examples:

Apple has removed an iPhone app from its online store created by Exodus International, an anti-gay religious organization that promotes the idea that homosexuality can be “cured.” … The app, launched in mid-February, initially received a 4+ approval rating from Apple, meaning it did not contain any “objectionable material.” … The app provided users with an event calendar, podcasts, video, “real answers,” “real stories” and links to Twitter and Facebook, and was designed to “be a useful resource for men, women, parents, students and ministry leaders.” … “We removed the Exodus International app from the app store because it violates the developer guidelines by being offensive to large groups of people,” Apple spokesperson Tom Neumayr told FoxNews.com.

SOMEONE APPROVED THIS? Are they hiring from the Westboro Baptist Church? Possible explanation: There is either a very stupid algorithm or person responsible for vetting these apps. And Apple takes the hit for it because they make it clear they are control freaks who get final OK. Google, however, says we will take something down if we get told about it: “While Google does not intend, and does not undertake, to monitor the Products or their content, if Google is notified …” Because Apple’s guidelines for what is acceptable in an app are  basically, “It depends,” they are guaranteed to continue to run into this problem.

Which leads us to example #2:

Senators: DUI checkpoint apps are “harmful to public safety” … The apps in question range from those that try to put DUI checkpoints on a map in real time to those that help users alert one another about police on the prowl for drunk drivers. One app that we found in the iOS App Store called “Checkpointer” specifically advertises its $4.99 offering as being able to save you “thousands of dollars by helping you avoid an arrest for a DUI.” (The company that sells Checkpointer also offers bail bonds, so it’s clear which demographic this company is catering to.) Another app called “Buzzed” says it will alert you when a DUI checkpoint shows up or is planned for your area, though it also offers a “call a cab” service based on your GPS location.

SOMEONE APPROVED THIS?

Meanwhile, those two having already been approved, Steve Jobs himself killed an app for detecting radiation – created by cell phones: “Tawkon, makers of a mobile application that measures cellular radiation, have been blocked from releasing their app for iPhone. In response, the company on Wednesday released the tawkon app for iPhone via the Cydia jailbreak.” Is there an app that turns the iPhone into a general-use Geiger counter? If so I know at least one major market for it.

For those of   you not keeping score, a few of Apples other app mistakes:

• Apple rescinds cancelling cartoonist’s app after he wins a Pulitzer
• Apple bans & then brings back some boob apps
• 10 Apps Apple changed its mind about (Apple is particularly sensitive about apps that show scantily clad women … unless you are the Sports Illustrated swimsuit issue.)

 

Dove ad makes a big before-and-after mistake

 

Image via Sociological Images

Now clearly all the women in this ad from Oprah’s magazine are supposed to be showing off the wonderful “after” effect of using Dove soap. It’s just that the women (who are shaped like actual women – bravo, as usual, to Dove) are arranged by their skin’s melatonin content and therefore seems to say that the woman on the left … Well, you can see it for yourself obviously.

As the great blog Sociological Images notes:

I continue to be puzzled that multinational corporations with resources for large-scale marketing campaigns so often stumble in awkward ways when trying to include a range of racial/ethnic groups in their materials. This seems to occur by not sufficiently taking into account existing or historical cultural representations that may provide a background for the interpretation of images or phrases in the advertising. In this case, the arrangement of the models combined with the text above and below them unfortunately intersects with a cultural history in which White skin was seen as inherently “more beautiful” than non-White skin (not to mention thinner bodies as more beautiful than larger ones).

BTW, have I mentioned what a great blog Sociological Images is, lately? Have I urged you to read it daily, as I do? What’s that? I haven’t? Well, shame on me.

A pictorial guide to why I’m over “Breast Cancer Awareness” marketing

 

A pink oil delivery truck? Whiskey Tango Foxtrot? I was driving around Boston the other day and I saw one. Then I Googled it to get a picture and found out it was one of TWO local oil companies doing this. Then my friend Karen sent me a link to the pink recycling can. So I thought I’d put together a pictorial guide to some of the odder pink breast cancer items I could find. VOILA!

Ask yourself a question: Do you know anyone who isn’t aware of breast cancer?

From my original post on the topic:

Back in the day – in this case the early ‘90s – I had many friends with HIV and/or AIDS. One of whom, a true gentleman named John Kelley, wore on his jacket a Star Trek badge (right) and a red ribbon which many people were wearing then to show they knew AIDS existed. When asked about this heraldry he would respond, “Because Star Fleet cares about AIDS.” (RIP, dear John.) Which is pretty much where I’m at with all the pink that washes over marketing each October.

Let me make one thing very clear: Like everyone else, I know many people who have had breast (and other types of) cancer. One of those is Mother CollateralDamage. So it will not surprise you to learn that I, like everyone else, don’t like cancer. Now plenty of companies have done a lot to help fund research into preventing breast cancer and to them I say, “You may stop reading now.” The other day the family was driving by the HQ of New Balance sneakers and we noticed a large pink ribbon affixed to the building. Mrs. CollateralDamage: “They’ve earned it.”

But the problem is that many companies are now just slapping pink on the product or advertising and claiming they support “Breast Cancer Awareness.” As a commenter on a wonderful NYT column about Pink Ribbon Fatigue put it, “Buying stuff with pink ribbons will send some money to research and/or outreach, but it hard to tell how much that Yoplait helps. Posting ‘awareness’ status updates on facebook does absolutely nothing – I have yet to meet a person that wasn’t aware of breast cancer’s existence."

I hope you don’t see an ad more offensive than this today

The always-brilliant website Sociological Images found this appalling ad for an Australian “luxury” real estate development. My first response after “This has got to be a hoax,” was how unsafe these places are when you have a resident scared out of her wits tied to a chair and calling the cops. This doesn’t make me want to live there, it makes me want to live anywhere BUT there.

Nothing says great living quite like the threat of rape.

Round-up of the week’s odd marketing stories

Anti-Religion ad banned: Last month the South African Advertising Standards Authority banned an ad from a church for claiming miracles, this month UK’s ASA banned posters from the British Humanist Association asking people to check the “No Religion” box on census forms. The reason? They had the “potential to cause widespread and serious offence.”

575-pound spokesman for Heart Attack Grill dies: ‘Heart Attack Grill is an unabashedly unhealthy restaurant – the menu consists of huge burgers, milkshakes and fries cooked in lard – and having such a big man as a spokesman was part of its tongue in cheek “glorification of obesity.”’

LA Clippers celebrate Black History month after Black History month ends: Not surprising really. As AdFreak points out “given [team owner Donald] Sterling’s standing as a poster boy for racial intolerance and bigotry, I’m amazed he missed it by only two days. By all accounts, this meathead is about as racially progressive as Archie Bunker. This is a guy who paid $2.73 million in 2009 to settle a federal lawsuit that claimed he discriminated against blacks and Hispanics when renting apartments in L.A.”

Del Monte unveils individually plastic wrapped …bananas. In case that wasn’t silly enough, the company claims the biodegradable wrappers are part of a “green initiative.”

Aussie schools sell booze for fundraising:  “The Australian National Council on Drugs (ANCD) has written to every school principal in the country asking them to reconsider the sale, use and promotion of alcohol products when raising money. In the open letter, chairman Dr John Herron said there were concerns students were being used as "couriers" between school and home for advertising material, forms and payments for alcohol as part of fundraising activities.”

First Galliano, now Japanese boy band causes a Führer

You would think by now everyone would have figure out the rule that No Nazis is Good Nazis. While this is universally true it seems the business world in particular has a problem remembering it.

Although former Dior designer John Galliano’s besotted ode to Herr Schicklgruber has captured the most headlines, he isn’t the only public figure with a swastika issue. In Japan (no slouch itself when it comes to fascist World War II atrocities):

Sony Music Artists Inc. apologized Wednesday on behalf of its popular boy-band Kishidan, after the group performed on MTV Japan in outfits that Jewish groups said looked like Nazi uniforms.

That description makes the whole thing sound like an acute case of oversensitivity, but if you watch the group’s video for its song Kira Kira! you see that Kishidan is astoundingly clueless in its use of imagery.

No Nazis is Good Nazis

First we have the band – with haircuts that would make Flock of Seagulls blush and outfits that are definitely inspired by The You Know Who – being faux gunned down by someone wearing Soviet-like army garb. (As you will recall, Commies were one of the other groups the National Socialists were going to save Germany from. How’d that work out, anyway?) This is followed by the band members being beaten up by

1. Someone in metallic Japanese feudal armor
2. A dominatrix who has definitely seen The Night Porter too many times
3. The Russian, again; and
4. A zombie. Don’t ask me why. (It’s time to let the whole zombie thing go. Either that or someone needs to tell a story from the Zombie’s point of view. Sparkly Zombies!)

Finally a virtuous and seemingly virginal Japanese school girl held captive by a sadistic robo-teacher takes a bullet for the band. This is easily the most incomprehensible Japanese film I’ve seen since Gegege no Kitaro and not 1/100th as entertaining.

Best quote in the story is from Rabbi Abraham Cooper, associate dean of the Simon Wiesenthal Center who “said he thinks the incidents reflect a hole in Japan’s education of World War II. “

“Generally my experience has been in speaking with young people they don’t necessarily know very much other than that Hitler was a strong leader or that aesthetically this is very striking and interesting. For a lot of young Japanese they don’t even understand. When these controversies come up their initial reaction is ‘what’s the controversy? What did we do wrong here? What did Nazi Germany do?’”

The war is a bit of a touchy subject in Japan. Almost as touchy as it is for the Chinese, Koreans, Philippinos, Allied vets and others the Japanese visited themselves upon.

I don’t think this band is pro-Nazi as much as they are idiots. Reminds me of Walter Sobchak’s line from The Big Lebowski: “Nihilists! Fuck me. I mean, say what you like about the tenets of National Socialism, Dude, at least it’s an ethos.”

Restaurant chain learns mass-murder doesn’t make for funny advertising

For some reason The Hacienda restaurant chain thought an ironic reference to Jonestown was the basis for an ad. Billboards in South Bend, Ind., read “We’re like a cult with better Kool-Aid’ and ‘To die for.” (Did someone tell them South Bend is a hot-bed of irony? They were misinformed.)

The ads were up for two weeks before the company finally got the message this wasn’t such a good idea.

“Our role is not to be controversial or even edgy. We want to be noticed – and there’s a difference,”said Jeff Leslie, vice president of sales and marketing at Hacienda, which also owns the La Senorita restaurant chain in Michigan.

Kudos to Mr. Leslie for not taking the easy way out and throwing his agency under the bus.

The article contains a great look at how this cluster frack came about:

Every year, Leslie said company leaders look at their restaurants, the economy, their customers, and the competition to determine an idea or theme to use for advertising.

This year, Hacienda decided to use “You belong.” You have a place at home, a place at work, and a place to dine, gather and celebrate at Hacienda. As they brainstormed about how people belong to clubs and teams, they discussed how an entity can develop a cult following of like-minded people.

Some people may dress alike or eat the same food or visit the same restaurant or drink the same drink – like margaritas, Leslie said.

“You start playing with headlines,” he said, “and that’s how we ended up with the outdoor board. But we are not getting the reaction we expected. It went the wrong direction, hit a nerve, and we have come to realize we should not have done this billboard. We lose the core message.”

Remember: Anyone can make a mistake but to really screw up you need a committee.

Illegal immigration + video game = stupid

You’d think the formula would be self-evident but … noooo. Last year Spain’s Popular Party put up a game that let players bomb illegal immigrants. This year we have Smuggle Truck a game for iPod and iPad from Boston’s own Owlchemy Labs.The aim of the game is to keep immigrants in the bed of a truck as they speed through the border lands. Hit a bump or jump a canyon and men, women or kids fall off.

No sooner was the game announced then controversial hijinks ensued. No surprise that many immigrant rights groups found it offensive. Well, no surprise to you and me. Owlchemy said in a post on its website:

"Smuggle Truck was inspired by the frustration our friends have experienced in trying to immigrate to the United States. With such a troublesome issue being largely avoided in popular media, especially video games, we felt the best way to criticize it was with an interactive satire."

“Such a troublesome issue being largely avoided in popular media, especially video games”??? Ah yes, video games – always my first source for satirical commentary on the news.

Bad week for Groupon – UK says ad exaggerated savings

The Advertising Standards Authority STRIKES AGAIN!

The ad on the Groupon MyCityDeal site offered customers a four-course meal for two with a bottle of wine, or two pints of any alcoholic or soft drink, at the Wagon and Horses restaurant for £24, rather than £92.

Groupon claimed this was a 74% discount, however, one customer complained the number was exaggerated.

In its defence, Groupon said the calculation of the offer price was made on the basis of the most expensive items on the menu at the time it signed the deal with the restaurant.

The ad’s small print, which had been incorporated following a similar ASA adjudication last month, said the discount is based on "highest price".

Church banned from advertising miracles

South Africa’s Advertising Standards Authority has told The Christ Embassy Church to stop making claims on national television that it can treat diseases such as AIDS through faith healing. “The ruling came after the Treatment Action Campaign (TAC), South Africa’s main HIV/AIDS lobby group, filed a complaint against the church, which has paid programming on the private e.tv channel featuring people recounting how they have been cured by Christ Embassy.”

How would the ASA rule on other miracles? Can a church say that it will provide you eternal salvation? Forgive your sins? Make you one with the universe? Have interesting sermons? Once you get rid of miracles what else does a religion have to sell?

Really, if the US stopped companies from advertising miracles it would kill the beer and diet commercials immediately. It wouldn’t stop there, either. Any number of film directors would no longer be able to claim their movies were “good.”

The other fascinating thing in this is, “What is a commercial?” What if a religion simply broadcast religious services? This is a very germane question. Last year,

the ASA ruled that the content of the Christ Embassy television show was not an advertisement, but sponsored programming, and it therefore did not have jurisdiction over its content. The TAC then appealed, which led to the ASA ruling that found the programme to be: an advertisement, as defined by ASA’s code; promoting faith as a means to cure illness or disease; promoting Christ Embassy as the place to seek this cure, and; violating ASA’s code because it offers a product to cure a disease for which it has not received Medicines Control Council registration.

The church would be appealing on the grounds that the television programme was not an advertisement and that the church did not intend registering with the Medical and Dental Council. "The product is called faith," [Attorney Sean] Sim told the Mail & Guardian.

Art by Nathan Coley

Groupon tries to spin away from its Super Bowl ad

After offending pretty much everyone – including the Chinese government – with its horrible ad which said, “You can’t save Tibet but we can save you money at a Tibetan restaurant, Groupon is hoping spin will save it from having to say it’s sorry.

Groupon founder Andrew Mason wrote in his blog:

"We would never have run these ads if we thought they trivialized the causes — even if we didn’t take them as seriously as we do, what type of company would go out of their way to be so antagonistic?

A really, really stupid one. That’s what type.

Kudos to Groupon for so quickly going from a neutral brand to one with significant negatives. Not easy to do when your sole public purpose is to help people save money. The ad also pulled off the unique trick of being the first thing that both the Tibetan exiles and Chinese government have ever agreed on.

Here’s my favorite piece of fallout: Even the owner of the Himalayan restaurant mentioned in the ad, is pissed at them.