Questionable Messages & Off-the-Mark Marketing

Many of us in the IU community have been glued to the tube during March Madness. According to some accounts, the American workforce loses nearly $200 million from work time lost as a result of watching games, analyzing brackets, and making "informal" wagers. (I thought I was looking good picking UNC-Ashville as the first 16 seed to beat a 1 seed, but Syracuse had something to say about that.)

As a marketer, I am always interested in March Madness because of all the promotions and marketing efforts that take place. As much as $545 million is being spent on TV ads alone, and I can only imagine how much is being spent on promotions and marketing programs -- all to attract customers to brands. Just the simple use of words like "slam," "dunk," and "hoops" can make PR people, brand managers, and ad execs go crazy with the promos.

But have you ever thought about a promo that has gone beyond its value? As you look at your portfolio, have you ever questioned a company for its marketing activities? Should we, as investors, question our companies for their chosen promos?

This idea came to light because of two marketing initiatives I recently saw: one for a well-known athletic apparel company and one for urologists. Yup, you read that right. Let me explain.

To recognize Ireland right before St. Patrick's Day, Nike (NYSE: NKE) named one of its limited-edition shoes the SB Black and Tan Quickstrike, after an alcoholic beverage made by mixing stout and lager (usually Guinness and Harp or Bass). Looking beyond the beverage, one would learn that the Black and Tans were a British paramilitary group who used brutality to suppress an armed Irish revolution and was known for ruthless attacks against Irish civilians. The president of the Irish Lobby for Immigration Reform said the shoe's name "would be the American equivalent of calling a sneaker 'the Al Qaeda.'"

I cannot say I disagree with the rationale of those who would be offended, but what surprises me more is that a company as large as Nike didn't do its homework. Something that seemed so tongue-in-cheek has now become foot-in-mouth.

The second incident comes courtesy of a Massachusetts urology group who thought March Madness would be an ideal way to market vasectomies. (I cannot make this stuff up.) The thinking behind the promotion was that if guys are going to lie on a couch watching basketball, why not do it while getting snipped? I can see the logic... for about four seconds. Certainly, the practice got attention, but did it get any clients? Did it add value to its brand? Did the short-term hype and social media attention translate into any new business?

I have a sense of humor, and I strive to be creative with client promotions when and where appropriate. Still, when looking at the places where we work or invest, calling a marketing effort into question is as much a responsibility of an active investor as any form of communication.

With that in mind, we thought our readers might want to weigh in on some of the marketing efforts we are considering rolling out over the next few months.* All feedback is welcome.

• IU would partner with the Occupy Wall Street movement for a real investor uprising on Wall Street, complete with a Scott Raynovich mug shot (wearing an IU T-shirt, of course).
• To help alleviate the country's deficit, IU would form an alliance with the United States Mint and Comedy Central to produce Funny Money. We want to lend our brainpower and insight to answering our nation's top economic problems.
• And we cannot forget forming a partnership with the HJ Heinz Company (NYSE: HNZ) to produce Secret Sauce. After all, IU is the reason all our portfolios will grow by leaps and bounds, right?

And if you act now, we'll throw in a visit to the urologist and a pizza.

*These are not real. We're not that crazy.