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Mike, interesting analysis. From a marketing perspective, do you have any take on social and ethnic media issues? I'm thinking of, for example, Calgary Mayor Nenshi's social media based campaign, or the Tories' reportedly heavy use of ethnic media. These are relatively cheap forms of marketing, and to be honest with you, these days if I'm reading a hard copy newspaper, it's as likely to be a local, free paper as anything else.

"what does marketing have to do with economics?" In reality, marketing is (or at least should be) a subfield of applied microeconomics. In my mind there are two basic aspects to marketing: consumer behaviour and product differentation. The former is simply behavioural economics and the latter is industrial organization - turning your good or brand from perfect competition (where there is zero economic profit) to one closer to monopoly/oligopoly/monopolistic competition, where consumers see the products sold by other firms as being imperfect substitutes

Mike - excellent post. If I may gently "correct" :) you. Ronald Coase in his Nobel acceptance speech said to the effect that the dark and dirty secret of economics is that economics does not have a "theory of the firm" - what is called micro is merely and only a production function.

This suggests (I argue) that what economists call microeconomists is NOT micro - it is meso economics - as they study industry structure at the mezzanine level in between the firm and macro econ.

Micro economics - properly understood - is in fact, business strategy (grounded in Michael Porter and as you noted, I.O. or Industrial Org). And then to really annoy my marketing colleagues, I tell the students that marketing is merely the way that we teach Bus Strat at 2nd year - a preliminary understanding or introduction to business strategy - which they will study more deeply at 4th year. :)

Now to turn to serious matters. Did the Libs lose due to poor messaging? Or was it bad strategy i.e. your mission, your existential raison d'etre.

You hit the nail on the head by noting two fundamental strategic contradictions - the party of national unity brought in a leader who had been outside Canada for 30 years (and spoke French with a Parisian accent) - and 2. the party of fiscal prudence made over the top, profligate promises. Both actions undermined their core competitive advantage - their very being, their identity.

At that point, messaging does not help - if you do not know who you are or what you stand for.

It is the elevator pitch problem in raising VC capital. The NDP and Conswervatives can summarize their existential being down to probably one sentence in 10 seconds.

The NDP stands for social justice, better wages, better pensions for the little guy and the rich are going to pay.

The Conservative Govt is going to protect the citizen’s job, the citizen’s money and the citizen’s safety.(as John Ibbitson so succinctly summarized).

And the Liberals?

Thanks for the kind words!

Although I seem to spend all day playing on Twitter, I'm far from an expert on social media issues. I should ask my wife your question - she'd probably have a better answer than I would.

But for any kind of marketing/communications, the first question you need to ask yourself is "what are we trying to accomplish with this?" Ian is bang on when he says:

"At that point, messaging does not help - if you do not know who you are or what you stand for."

It seemed this election a lot of candidates were on Twitter because they felt they had to be on Twitter. But they weren't using it for anything meaningful - just a bunch of tweets on how great it is to meet everyone at the door, etc. Social media is a means to an end, not the end itself. (In other words, the medium is *not* the message)

You see this a lot in the private sector as well. The Onion had a great parody of this.

"And the Liberals?"

It's really tough. My message would have been around good, moderate Canadian governance. Admittedly that's not a particularly inspiring message. Andrew Potter had a good piece describing the difficulties of pitching a middle-of-the-road message. I do think hammering the Tories on 'trust' issues was a giant mistake. I think painting them more as reckless would have done better, if coupled with a budget proposal that would have quickly eliminated the deficit. They have a lot more credibility than there than they do on trust issues.

I don't want to make too much out of this. There's a lot of pieces out there that are summing up the Liberals problems down to one single point. As a marketing person this was the one point I happened to notice and can speak to.

Also, I forgot to mention:

"This suggests (I argue) that what economists call microeconomists is NOT micro - it is meso economics - as they study industry structure at the mezzanine level in between the firm and macro econ.

Micro economics - properly understood - is in fact, business strategy (grounded in Michael Porter and as you noted, I.O. or Industrial Org). And then to really annoy my marketing colleagues, I tell the students that marketing is merely the way that we teach Bus Strat at 2nd year - a preliminary understanding or introduction to business strategy - which they will study more deeply at 4th year. :)"

I couldn't possibly agree with this more. Well put!

Thanks Mike.

BTW, Christopher Caldwell, a journalist with the Weekly Standard in Washington, also writes for the Financial Times. He has written a sympathetic and insightful analysis of Ignatieff, examining the problems that face intellectuals who enter electoral politics.

http://ipolitics.ca/2011/05/07/christopher-caldwell-%e2%80%94-elxn41-as-seen-from-abroad/

Christopher Caldwell from COLUMNISTS May 6, 2011
Out with the intellectuals Stubbornness, caginess and occasional sycophancy are needed to defend oneself in politics:

http://www.ft.com/cms/s/0/df5a0cc8-780f-11e0-b90e-00144feabdc0.html#axzz1LmtV7aF0

Mike,

If you were running the Liberal marketing campaign when the Conservatives started those attack adds on Ignatieff - the ones with the slogans: "He didn't come back for you" / "just visiting" -- what would you have done to counter this?

Loved the post...

Hi Wendy,

Great question! I wish I had an answer to that beyond 'they shouldn't have selected him as leader'.

The only thing that comes to mind is some kind of campaign like Buckley's where you turn a weakness into a strength "Tastes awful but it works". I have no idea how you'd pull that off here, though.

How to make Iggy sellable - now there is a heck of a challenge. Best to follow the method Bush perfected - take your opponents strength and make it a weakness instead. The Conservatives claimed high ground on the economy/fiscal management (somehow) so the Liberals should've attacked that instead - $10 billion surplus now a $50 billion deficit in under 5 years, taxes on jobs skyrocketing by up to 35% if you re-elect them, taxes on income trusts after promising not to - that would've been a great line of attack. Sadly, the Liberals neutered themselves on that line by voting for a lot of that stuff or putting it into their own platform (or at least not promising to reverse course).

But if they had to respond to 'just visiting'...hrm...not sure what could sell there. It made no sense to me at any point having Iggy as leader, but their #1 backup choice was Bob Rae who also makes no sense. I thought Kennedy would've been a decent choice (had left wing cred, personable and tv friendly) but he is gone now. The Liberals really did themselves in with a series of poor choices since Martin was pushed out the door and even before then.

The intellectual they should not have hired is not Iggy but PET.
As a man of principles, he alienated the West and betrayed Québec. After that, there was no majority the Libs could garantee Ontario and then no crumbs to distibute to the Atlantic.
The sad part is how many people assisted in this ( to borrow a Québec saying) auto-pelure-de bananisation (auto-self-walking-on-a-banana-peel), Specially the bit about Toronto losing his actual-metropolis-with de-facto-capital status to Calgary. Toronto is still the biggest but , whatever they might think, they no longer control the narrative.

BTW: there are posts so good (this one) and discussion so to the point (Ian Lee) it's tough to add something meaningful...Anyway, I need time to prepare my first mesoeconomics course.

So...based on these great responses (and some of the Twitter banter this morning), maybe the answer is that no-marketing campaign could have saved the Liberals from themselves. Maybe Iggy was more of a symptom than the problem itself. Turns out, it wasn't a Seinfeld _election_ about nothing--it was the Liberal Party that has become the Seinfeld Party, drifting and lost.

Iggy was the brain of the dinosaur. Still walking,unaware he was already dead.

Louis St. Laurent, Lester "Mike" Pearson and Trudeau were all courted by the Liberal backroom power set and moved directly into leadership (or close enough). Iggy's strategy and path to the Commons wasn't untested and wasn't new either. But times have changed. He lacked, critically lacked, retail political skills which are more important now than then and also didn't have the experience of how to deal with the down-and-dirty procedural fights of minority parliaments. Harper and Layton already had those skills and it showed. It gave them a critical edge both during parliamentary sessions and during the campaign.

I am also concerned that parts of the Liberal Party keep trying to recreate Trudeaumania. They want a celebrity leader who can waltz into the Commons and lead them to a majority. I respect Justin Trudeau as an MP and he is certainly entitled to his own choices and path in life, but to expect him to be the reincarnation of his father is not fair to him, to the Liberal Party and is simply unrealistic.

Furthermore the Liberal party needs a solid, coherent platform. They need an idea, something they can plug away during Question Period for years with. As I have said before in Canada retail fundraising is the only kind allowed anymore. In order to do that effectively you need ideology to sell to your base, you need a idea that defines your brand to the public and you need to pump out the fundraising letters (full of tropes that they are) to get that money out. If you don't have that spark of an idea, that doesn't work and you wind up in the political poorhouse, both in terms of money and seats.

Determinant - I think you're dead on about Iggy's lousy political instincts. I can think of at least half a dozen occasions in the past 3 years in which he either blew a great opportunity or set himself up to look foolish.

I think our collectively inability to respond to the "he didn't come back for you" line of attack is a symptom of the fundamental underlying problem facing the Liberal party. I mean, why did Iggy come back to Canada? Surely, that's a standard question every politicians gets asked: "why did you get into politics?" And it's a fair question, what did Iggy (and the Liberal party generally) want to offer Canadians that the Tories or the NDP wouldn't or couldn't offer? If the Liberals had any ideas for new or innovative policies or ideas for doing something differently from the Tories, they could have come back with a "He didn't come back for you, he came back [to introduce innovative policy 1, 2 and 3]". Ok, not brilliant, but it's not as if the Tory attack ads were brilliant either.

That strategy isn't available, though, when you don't really have any new ideas and when your record is one of propping up the government for 5 years for, basically, nothing in return (other than some glossy government financed propaganda advertising all their pork-barrel spending - there's an example of Iggy's tin-ear if you wanted one). "He didn't come back for you, he came back so Stephen Harper wouldn't have to get the support of the NDP and the Bloc" isn't likely to be a real vote getter. (In contrast, on those occasions when they suppported the government - the '09 fall fiscal update, and the June '10 support of the Tory immigration bill - the NDP got substantive concessions in return. Same with the Bloc in '06 and '07. The Liberals, both under Iggy and Dion, simply had no idea how to handle a minority government or how to ask for just enough that it looks like you're doing something, without giving the goverment an excuse to fight an election).

Moreover, the truth is, Iggy came back to Canada because he wanted to be the prime minister. Hey, as ambition goes, that doesn't make him a bad guy - although I suspect if you asked either Harper or Layton, their ambitions to being prime minister would be means to their respective ends (changing Canada towards their respective ideal), rather than an ends in itself. But the notion that someone can just swoop in, take over the Liberal party, and become prime minister more than hints at a whiff of arrogance, both on the part of Iggy and the Liberal party more generally, and wouldn't make for a good campaign ad.

Interesting/intriguing thread but subject to a number of critques... for lack of time I'll set out just one for discussion purposes:

1. The Premise - The Thread opens with the first blogger asking what is generally thereafter accepted as the seminal question "What on earth does marketing have to do with economics?"

Now... While I actually think there is a lot in the answer proposed and that marketing has a lot to do with economics (though I would challenge some points - typical economic debtate ensues... snore) I think a more seminal starting point would be:

"What on earth does a rational economic analysis of any kind, marketing or otherwise, have to offer as new and useful insight into the realm of political decision making and more particularly that level of decision making being analyzed (e.g. selection of party leaders, party branding, party success, voting patterns, individual voting decisions, etc.)"

That overarching question answered; one could then proceed to the particular subject matter under examination with a clear understanding of the useful purpose being served by the economist identifying what they see as the identifiable strengths & weaknesses of the Liberal (or any other) Party's brand & ensuing campaign in the first place.

Undeniably, political decisions have economic consequences but that does not necessarily equate to political decisions being taken in the same manner and method as economic decisions having the same consequences. I think, I hope anyway, that we can also agree that CDN voters have not yet been reduced to mere "consumers" and that our political "parties", "leaders" & "candidates" have not yet been, and may not ever be, reducible to mere "widgets/products". This poses a problem for most traditional theories of economics and consumer choice... there can be no "perfect competition" so logn as there remain any substative differences between parties, their leaders and their candidates... therefore to try to do an analysis that moves along a spectrum for perf. comp. to oligopoly/monopoly etc. becomes very hazy.

I look forward to your proposed tweaks to the model to address these using rational behaviour theory, ditching perf. comp altogther as hopefully wholly inapplicable to democractic politics (except maybe the Borg collective) and seeing if working with your buddies in comp sci they don't already have a model in place of some sort!

Seriously neat treatment though of a tough topic!

Speaking as someone who is neither a marketer nor an economist, I will venture that the Liberals' fundamental problem in this last election was one of strategic positioning, and it has been developing for the last 15 years. Most Liberals seem to describe theirs as a centre-left party; in theory they should appeal to a band of voters on both sides of the centre with the tail of the curve extending as far as the fringy left.

Two problems:

1) The fringy left has been broadening lately.

2) In reading the how-do-we-save-the-Party articles it is clear that the Liberals do not truly see themselves as a centre left party but as a "progressive" (read left) party which seeks to appeal to the centre for strategic reasons. The problem with that is that voters have come to share that perception, with the result that the Liberal appeal is more and more limited to the left of centre. Pas d'ennemi à gauche also translates as pas d'ami à droit.

The effect is that that the Liberal Party is now one hand clapping. Having ceded everything to the right of centre to the Conservatives, the party is now playing with only half the electoral deck, with the NDP claiming an ever larger share of that half. Neither Chretien nor Trudeau could have done much better than Ignatieff in such circumstances.

The Liberal Party is not going anywhere until it puts the centre back in the centre left; ie, it moves to the right and starts mowing Stephen Harper's grass. The strange thing is that none of the liberal-friendly commentaries is advocating this; if anything the consensus is that the Party should charge harder to the left, to rediscover its true self as an advocate for minorities, etc. Good luck with that!

BBQ: Thanks for the comment. I think it's pretty clear in the above that I'm *not* assuming rational economic actors, perfect competition or anything of the kind.

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