Formula E = Sustainable Racing?

In its own words, the FIA Formula E championship was created to “demonstrate the potential of sustainable mobility to help create a better, cleaner world.”

In practical terms this means 100 percent renewable electricity, and tyres that last an entire race and can then be recycled.

Mea Culpa – I am not going to consider the enormous logistical effort and emissions associated with getting the Formula E circus from one city to the next. For now, let’s set that aside and think what makes this business model work.

Back in 2014, when Formula E founder Alejandro Agag approached Toto Wolff, the head of Mercedes-AMG Petronas Motorsport, to gauge his interest in signing Mercedes on to the new series, Toto dismissed the idea, doubting that electric racing was different enough from F1 to attract a big enough fan base. Toto was unconvinced: “I didn’t think it would survive the first three years.” “There is no sport larger than F1 if you consider there are 21 races each year, whereas the Olympics is every four years,” Toto added. “It dwarfs everything out there.”

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Alejandro Agag, CEO of Formula E Holdings.

Five years later, Formula E has attracted a wide range of participants, including Mercedes and Porsche, together with teams from other OEM’s including Audi, BMW, DS, Jaguar, Mahindra, NIO, Nissan and Venturi. One financial attraction for OEMs is that Formula E participation requires a fraction of the investment that is needed to become competitive in F1.

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Torger “Toto” Wolff, Team principal & CEO of Mercedes-AMG Petronas Motorsport.

The Audience

Now in its sixth season, the Formula E championship has succeeded in mobilizing a new audience and created a distinctive public profile that has rewarded sponsors and backers alike, not least in connecting them with its younger, urban audience. Fully 50% of engagement on the Formula E Facebook page is from people in the 13-17 and 18-24 age groups, according to figures from Formula E. The company says that the 18-24 category is their second-largest “follower group” on the social network, after the 25-34 year-olds. I would be interested to see the absolute numbers because I know very few people under 30 who are active on Facebook!

Formula E’s TV audience is growing at quite a pace – however, this may be due to a focus on doing deals with “free to air” television groups, such as the BBC in the UK, where races are more likely to attract big audiences, this approach precludes deals with pay-TV groups that would generate income for Formula E. Like all early-stage companies Formula E is growing its base – the profits will hopefully come later.

Formula E has also developed some novel ways for its fans to interact directly with the races:

Fanboost: Enables supporters to give their favorite driver a five-second power boost. Fans vote for the drivers online, using the Formula E app or via Twitter. The three drivers with the most votes receive a turbo boost of power, which they can use during the second half of the race. Giving the drivers a (possibly unfair) advantage over the rest of the pack, and for traditional motorsport fan, this is unthinkable.

Attack Mode: Drivers can unlock a short power boost by driving off the racing line. Organizers decide the location of the trigger point an hour before the race starts, which means teams don’t have long to adjust their race strategy. The lack of pitstops for the new Gen 2 cars in Formula E probably necessitated the introduction of his new variable to create an element of strategy.

Victory in Formula E races is not just who finishes first — you have to go as fast as you can on as little energy as possible. Michael Carcamo, global motorsports director at Nissan, says that “the whole point” is to “extract the maximum energy from the powertrain while using minimum energy.” The sport is more than a race series, Michael says, as it embodies a serious social purpose by showing how technology can tackle global problems such as climate change and air pollution.

The Formula E Gen 2 cars are more potent than Gen 1, with a top speed of around 280kph (174mph), and improved battery life. Before its introduction, drivers had to switch vehicles mid-race, which simulated an F1 pitstop but also served as an uncomfortable reminder of the limitations of electric technology. The swapping of cars rather than just battery packs also confirmed that battery swapping isn’t the solution some imagine it to be.

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Mercedes-Benz EQ Formula E Team joins the grid for the 2019/20 season.

Sidebar: The forty Gen1 cars which were owned by Formula E and leased to the race teams were sold off to collectors and museums with prices ranging from $200k to $300k – depending on their race history.

Formula E racing takes place in city-center locations. This approach has enabled the series to operate in a manner similar to attending a football match. Fans can get to events on foot or by public transport – there is no public parking at events. The absence of emissions and the reduction in noise attracts families with young children. Interestingly, the last two races of season 6 will take place in London’s Docklands, where part of the circuit will run through the Excel arena, another unique development. Cities now pay fees to host a round of the Formula E championship.

The Sponsors

Formula E appears to be working for the sponsors, recording TV audiences of up to 411m people in 2019, a 24 per cent rise from a year before, albeit significantly short of the1.6 billion cumulative broadcasting audience for Formula 1 over the same period. However, Formula E backers are patient.

“e-mobility is at the core of what we are doing. Studies tell us that the younger demographic wants to be connected with brands that convey an authentic purpose and mission.”

Nicolas Ziegler, head of markets, brand and events, ABB.

“Formula E is not just a car race; it is a race with a purpose: to create enthusiasm for electric mobility, to promote research and development.”

Marco Parroni, head of global sponsorship at wealth manager Julius Baer, an official worldwide partner to the championship.

“The appeal, first and foremost, is the association with innovation, teamwork, and sustainability.” “Those are the pillars that we want our brand associated with.”

Gary Grose, Argo Group’s global marketing and communications leader.

“Porsche’s all-electric consumer model, the Taycan, is on sale and by 2025 we want 50 percent of new vehicle sales to be electric. We are looking for a competitive environment to prove what we are capable of developing,”

Malte Huneke, project leader at Porsche.

The realization that Formula E could help market the new generation of electric vehicles is why Mercedes joined the championship. Mercedes is planning to roll out ten all-electric models by 2022, and it sees Formula E as a platform to showcase its leadership in this emerging technology, according to Toto Wolff.

“The early adopters of E vehicles were switching to be conscious of the environment, but if you want to have a big movement of people adopting these cars, you need to address the heart.” According to Britta Seeger of Mercedes-Benz Cars.

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Britta Seeger, responsible for Mercedes-Benz Cars Marketing & Sales.

Formula E’s focus on marketing has drawn criticism. Red Bull consultant Helmut Marko once dismissed the series as “a marketing excuse from the automotive industry to distract from the diesel scandal.” He also scoffed that Red Bull would not join as they are “racing purists.”

Michael Perschke, chief executive of Automobili Pininfarina, would disagree. “I think Formula E will be for the next generation what F1 was for the last generation. Why? It’s an interactive series. It is not a format limited to the old Bernie Ecclestone system where if you paid hundreds of millions, you got in. . . It’s Racing 2.0.”

Financial Sustainability of Formula E

Alejandro Agag, stated the company’s revenues were more than €200m ($223m) in the year to July 31 2019, a period that covers the group’s fifth racing season. He said earnings before interest, tax, depreciation and amortization for the year were positive for the first time, at about €1m ($1.12m). Mr Agag added this had been achieved without cutting the group’s marketing budget of about €30m ($33.5m).

“Reaching break-even is a historic moment for us,” said Mr Agag. “For a business that almost didn’t make it after three races, now after 60 races we reach breakeven — and with strong revenue growth — and that is going to continue.”

He declined to provide a full financial breakdown of Formula E’s results, which are yet to be lodged with Companies House in London. But he said sponsorship, which accounts for about half of total revenues, had grown 25 per cent in 2019. That was on the back of four new corporate endorsements, with German electricals group Bosch, Dutch beer maker Heineken, French champagne brand Moët & Chandon and Saudi Arabian Airlines.

Sponsors “keep coming, and they keep renewing for longer and longer”, Mr Agag said. “What they want, and what they perceive, is that Formula E . . . is definitely a bet for the future.”

Formula E is based out of London, and its biggest shareholder is Virgin Media-owner Liberty Global, which has a 23.9% stake. Its other shareholders include Swiss bank Julius Baer and New-Wave, the ultimate parent of Weibo, China’s equivalent of Twitter.

According to Formula E chairman Alejandro Agag, the sponsorship market has changed. Corporate groups once paid for brand “exposure,” but online advertising platforms such as Google and Facebook have made it possible to target millions of consumers like never before. As a result, says Mr. Agag, partners now care more about the narrative they can spin through their association with a specific sport.

“Sponsors care about what stories they can tell of why they are partners with you,” says Mr. Agag. “We are in line with the movement that is helping preserve the environment, helping to fight climate change, helping to fight city pollution. Those are the kinds of stories that sponsors are attracted to.”

Chase Carey, CEO and chairman of F1, told the Financial Times that he saw Formula E as a “business to business proposition, as opposed to a sport.” In other words, the Formula E championship is a marketing ploy for companies that want to be associated with environmentalism, but not a particularly exciting event that audiences want to watch.

Less Carrot and More Stick in Europe

Europe’s carmakers are gearing up to make 2020 the year of the electric car with a wave of new models launching as the world’s biggest manufacturers scramble to lower the carbon dioxide emissions of their products. Some incentives remain to adopt electric cars, but what we are now seeing in the EU is the introduction of regulations and fines.

New European Union rules came into force on 1 January that heavily penalize carmakers if average carbon dioxide emissions from the cars they sell rise above 95g per kilometer. If carmakers exceed that limit, they will have to pay a fine of €95 ($106) for every gram over the target, multiplied by the total number of cars sold.

To illustrate the scale of this change, the excess emissions bill based on 2018 sales figures would have been a staggering £28.6bn ($35bn), according to an analysis by the automotive consultancy Jato Dynamics. “It is challenging for carmakers to change manufacturing infrastructure in such a short period,” says Jato analyst Felipe Muñoz.

Carmakers have successfully lobbied for a rule that means cars emitting less than 50g of carbon dioxide per kilometer are eligible for so-called “super-credits,” a controversial policy which means that every electric vehicle sold counts as two cars. That makes it easier for carmakers to meet their targets, even if average emissions from their cars are higher than the rules stipulate.

Which brings us to Tesla. The company is enjoying record sales up 50% in 2019 and a record stock market valuation, becoming the highest valued US automaker of all time, closing at $81.39 billion in early January 2020. With demand currently exceeding supply there is little incentive for Tesla to burn marketing dollars on Formula E. Furthermore in its current format Formula E offers no opportunity for Tesla to showcase its proprietary battery and motor technology.

The stars are aligning.

European car manufacturers are now highly motivated to build and sell electric cars to avoid substantial financial penalties. Formula E offers an exciting platform for car manufacturers to be associated with sustainability and the cutting edge of electric vehicle technology. At the same time, they are tapping into a younger, greener, more affluent audience – and hoping to persuade them to buy electric cars.

Along the way we might even get to enjoy some exciting racing based on sustainable technology. When diehard petrol head Jeremy Clarkson said he would rather watch Formula E than Formula 1, it perhaps marked a coming of age for electric racing.

 

Adrian G Stewart

Adrian G Stewart

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Why We Race……..

Since the late 1800’s the engineers who designed and built self-powered vehicles have always sought to measure themselves against their competitors by racing against each other. Whether it was cars, motorcycles, boats, or planes, they wanted to race.

Most of these early races were to demonstrate durability and endurance, some of those early races live on to this day. The most famous – and longest-running – endurance race of them all, the 24 Hours of Le Mans, first took place in 1923.

However, the commercialization of motorsport in the mid and late twentieth century also brought a need for entertainment to motor racing. The races became more prominent, the drivers became famous, and this attracted new sponsors from outside the industry. Initially, tobacco companies became involved, but today the sponsors are more diverse, with companies like Red Bull being active in multiple forms of motorsport. As well as new sponsors, new endurance events flourished, events such as the off-road Dakar Rally.

As we start 2020, the original lure of motor racing remains as strong and perhaps stronger than ever, and the challenge of measuring yourself – against competition and, more importantly, against your boundaries holds the same fascination that it ever did. Racing has always been driven by the need to go beyond expectations, to motivate teams, and to excite supporters.

Many times, you will hear about the technical developments that trickled down from the racetrack to the road car. Rearview mirrors, direct-shift gearboxes, disc brakes, active suspension, four-wheel drive, multi-function steering wheels, and the monocoque chassis – the list continues to grow.

Racing serves as the incubator for technology and a way to rapidly test innovations — materials, design, and testing all developed for maximum performance during the competition in endurance racing. Audi, BMW, Honda, Jaguar, Mercedes, Nissan, Porsche, Toyota, and others use racing to develop technologies that ultimately benefit all road users.

But these hard advancements in technology are the result of multi-million-dollar budgets and belong to the big names in racing. If that’s the case, why do so many companies race with the same determination and passion but on a smaller scale?

I believe it is because the soft benefits of racing can be just as significant as the hard-technological developments.

Racing creates a unique environment. An immovable date – the race will take place on a specific day at a particular time, at a certain place, whether your team is there or not. It’s not a deadline that can be slipped or postponed. Head to head competition – you are pitting yourself directly against other teams, some will win some will lose. Your race opponents are frequently your commercial competitors. Winning or losing will affect who wants to buy your products and even who wants to work for you. Public Audience – you are putting your technology, your team, and your reputation on the line in a public forum win or lose everyone will witness the outcome. You can’t use PR spin to reframe the race outcome in some favorable way, you were either on the podium, or you weren’t. Commitment – being on the podium is exciting, winning is fantastic, consistently winning races and claiming the championship is the result of season-long commitment.

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Isle of Man TT Zero 2016: Adrian Stewart (team Brammo/Victory) Hirotoshi Honda (team Mugen).

From 2009 to 2017, I was the Marketing Director at Brammo Inc. We designed and built electric vehicles by developing our proprietary battery and motor technology. We raced – sometimes we won, and sometimes we came close.

Isle of Man TT 2015: Bruce Anstey, John McGuinness and Lee Johnston

Isle of Man TT Zero 2015: Bruce Anstey 2nd, John McGuinness 1st and Lee Johnston – team Brammo/Victory – 3rd place.

The impact of the racing team on the whole company (about 100 people) was profound. Our commercial goals were top priority, which meant the race program had to be worked on after hours, and the races were always at the weekend, so other than the professional riders, no one on the team was paid beyond their regular salary and expenses.

Isle of Man TT Zero 2016: William Dunlop - Team Brammo/Victory take 2nd place.

Isle of Man TT Zero 2016: William Dunlop – Team Brammo/Victory take 2nd place.

The camaraderie that developed among race team members was enduring. In that regard, the race program was one of the most effective team-building exercises I have ever participated in. The mutual respect that developed at the racetrack transferred into the work environment. Pride in the race team went beyond the race team members. Race winning bikes were displayed in reception together with cups and trophies. Physical evidence that everyone saw every day, and that reminded us all of what comes from extraordinary efforts.

For me, the hard and soft benefits derived from racing are invaluable. However, going forward, we need to retain the innovation and teamwork while making racing sustainable. The Isle of Man TT Zero was ahead of its time. Can the ABB FIA Formula E and FIM.

Adrian G Stewart

Adrian G Stewart

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Generation Z – What Makes Them Different?

While talk over the last decade has largely focused on understanding the work habits and attitudes of Millennials, it’s already time for a new generation to become the focus of attention.

Generation Z
Generation Z

Generation Z, the group born after the Millennials, is entering their early adult years and starting their young careers. What makes them different, and how will they approach things differently than past generations? Let’s start with a quick recap of the Generational landscape.

The Generations

The underlying belief is that generations share historical or social life experiences, the effects of which are relatively stable over the course of their lives. These life experiences tend to distinguish one generation from another. Because of this, we can’t readily predict when one generation will end, and another will begin or what will be enough of a change to tip us over the edge from one generation into the next.

Broadly accepted age definitions used by demographers and researchers are:

  • Generation Z: Birth years; mid-1990s to mid-2000s. No consensus exists regarding ending birth years.
  • Generation Y (Millennials); Birth years, early 1980s ending in the mid-1990s to 2000s.
  • Generation X: Birth years; early-to-mid 1960s ending in early 1980s.
  • Baby Boomers: Birth years; from early-to-mid 40s ending in early 60s.

Generation Y (Millennials) compared to Generation Z

While generational differences cast a wide net and don’t necessarily apply to everyone, here is what demographers and researchers have identified as some of the key similarities and differences between Generation Z and Generation Y (Millennials).

Generation Y (Millennials) compared to Generation Z

We often talk about Generation Z as consumers but what can we expect when Generation Z becomes part of our workforce?

Generation Z does not remember a time when the internet did not exist – and as such, it’s not surprising to learn that 50% of Generation Z spends 10 hours a day connected online, and 70% watch YouTube for two hours a day or more.

Generation Z have some unique and somewhat unexpected traits. Generation Z prefers face-to-face interactions in the workplace and expects to work harder than past generations. Generation Z is also the most diverse generation (49% non-white) and values racial equality as a top issue. Finally, Generation Z is possibly one of the most practical generations, valuing things like saving money and securing stable employment.

What do Generation Z want from employment?
Want to learn more? Here is a previous OOKII post about Generation Z

First published by Adrian G Stewart at OOKII.Company

Adrian G Stewart

Adrian G Stewart

 

 

 

 

SOURCES:

mediakix.com, huffingtonpost.com, forbes.com, globalwebindex.com, businessinsider.com, thedrum.com, thinkwithgoogle.com, wpengine.netdna-cdn.com, inc.com, diversitybestpractices.com, adeccousa.com, medium.com

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Turning Employees into Social Media Advocates

Employees are a largely untapped resource for social media amplification. This is a point of view reinforced by research like the Edelman Trust Barometer, which estimates that content shared by employees receives eight times the engagement of content shared on brand channels.

The problem with this point of view is that it is a simplification of a somewhat complicated dynamic. While data may support a rich opportunity for employee amplification on social media, there is also a significant hurdle to that opportunity: employees are fearful that employers will negatively perceive their social media creation and consumption. In fact, more than one-third of employees express distrust for their employer, according to the Edelman Trust Barometer.

Activating employees on social media is not as simple as motivating an underused resource. In all likelihood, there is an abundance of fear uncertainty and doubt to overcome in order to earn the opportunity for employee advocacy on social media. And even then, employers must set reasonable expectations based on what platforms employees use, how they use them and the type of advocacy and amplification that you expect.

What follows, are 10 ways that you can empower your employees to be advocates for you on social media, to enable genuine and straightforward ways for your employees to share your messaging and develop reasonable expectations of the audience that you’ll reach together with the type and frequency of amplification that you can expect. The general public trusts your employees far more than they believe any other facet of your organization, so taking the time to foster employee advocacy should be an essential aspect of your social outreach.

Employees are powerful social media advocates

Employees are powerful social media advocates…..

 

1. Be Clear, Consistent, and Supportive in your Social Media Policy

If you Google “employee social media,” you will see a good deal of advice about social media policies. If you read some of these policies from a corporate perspective, they seem reasonable. “Consult HR if you have further questions,” What employees hear is “Do your best for no reward and if all goes wrong you are on your own…”

Demonstrate clarity and consistency by publishing a strong social media policy. The most important thing that you need to communicate to your employees in a social media policy is what Miles and Mangold call a “demonstration of partnership.”

Most employees come into a company in a non-marketing role and may not understand how their social media can help (or hinder) the company. They may even feel apprehensive about the co-mingling of their personal lives and their work lives. To overcome this, employees need:

  • Understandable guidelines.
  • Management buy-in.
  • Training and guidance.

There are compelling reasons to encourage employee social media use, employees tend to be better informed and they can express themselves in a way that they may not be able to in a work context.

2. Understanding the Egocentricity of Social Media

Humans are inherently egocentric. One of the most prominent places that we exhibit this egocentricity is on social media platforms. Susan Krauss Whitbourne asserts that we post egocentric content on social media platforms that can be easily misinterpreted by other people. In addition, we are often sensitive to an “imaginary audience,” defined as the way that we imagine other people will react to us.

Sharing on social media is all about the person who is doing the sharing. So you need to answer the question – What is in it for me?

Because of our sensitivity to how “imaginary audiences” will react to content, you cannot expect an employee to share or amplify something that they perceive wouldn’t put them in high esteem with their audience. The idea is that employee motivation to post on social media is specific and personal. There are multiple sensitivities that you have to consider when you ask an employee to advocate for your company on social media.

3. Training and Guidance

Employers can be held liable for the actions their employees take within the course and scope of employment. If your employee posts false statements or rumors about a competitor or co-worker on Facebook, you, the employer, might be exposed to potential defamation claims.

Training is where you demonstrate your commitment to social media use, and model transparency by having a dialogue with employees about how to behave when using social media in an advocacy role.

At OOKII we suggest using an outside firm to lead your social media training. An external social media expert usually has more enthusiasm and a better understanding and experience of different social media platforms. Training is where you help your employee advocates to align their messaging with what you want them to share.

4. Tailor Training to the Channels Your Employees Use

There are many different social platforms and myriad reasons that people use each. You’ve likely got a localized population of employees that express specific social preferences, and despite data your potential audience through employee advocacy is the network that they have wherever they have it. You may be able to persuade a Snapchat networker to share something on Facebook, but your message will impact like the sound of one hand clapping.

5. Make Sharing Content Easy

There are many creative ways that you can enable sharing for employee advocates. Remember employees must be able to share your content as easily as possible. In addition to some simple sharing buttons (which almost every platform has and can be embedded on most sites), here are a few best practices:

Create content with sharing in mind. Share job openings and corporate announcements via social media or through a vehicle like an email with social sharing enabled. The corporate statements may not be super popular, but job opportunities allow your employee advocates to be a resource to their network and to provide you with some great new employee advocates.

Be sure to tell your employees which social platforms your company posts most frequently to and encourage employees to follow you on these. One-click sharing is a straightforward way to gain amplification with minimal effort.

6. Appreciate Your Employee Advocates

There is evidence that explicit reward systems or gamified incentives may increase employee advocacy for short-term campaigns. McKinsey found that non-cash incentives such as recognition from immediate managers and leaders were as beneficial as external rewards for employee advocacy.

There is not a lot of hard data on the effectiveness of particular incentives towards employee engagement, however anecdotally there is a lot of evidence to support this form of external motivation.

7. Promote Employee Content

If you study people who are using social media effectively, one tactic that many people and more important accounts use is to retweet or share something that an account with fewer followers posts.

Therefore, one way to show gratitude and appreciation for employee advocacy is to share (retweet, repost, share) social content that your employee advocates share to their networks.

People tend to trust employees more than they believe PR, marketing or corporate leaders. Retweeting or sharing an employee post is akin to sharing an endorsement from a person with more perceived credibility than you.

8. Create Opportunities to Showcase Employees

A proven tactic for blogs is to invite guest contributors from time to time. It’s common to ask the contributors to share their published work on their social channels.

Humans want to be acknowledged and affirmed for the things that they. You can tap into this desire for by incorporating employee contributions in your content marketing or even some “employee of the month” or other recognition award. Your employee will want to share this. Their friends may also want to share this. Employee content is a great way to generate additional enthusiasm and goodwill for employee advocacy.

9. Set Reasonable Expectations

Employees no doubt think about their invisible audiences and how they will be perceived. There is a lot that goes into the decision to be an employee advocate. Employee advocates should be used sparingly. Trust is an essential driver of interaction on social media, and you want your employees to be perceived as genuine and authentic by their audience. You do not want employees to overshare. It dilutes their credibility with their audience.

10. Be Genuine

Employees need to speak in their own voice if you want genuine, positive engagement

When maintaining your employee advocacy program, businesses and leadership need to demonstrate authenticity. From a PR perspective we are trained to stay on message, and often this obstinance is perceived by nearly everyone as disingenuousness. Being regarded as inauthentic when trying to encourage employees to help promote and amplify your company through earned media is pointless.

First published by Adrian G Stewart at OOKII.Company

Adrian G Stewart

Adrian G Stewart

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Marketing Marijuana – and some of the weird rules

Because cannabis is becoming legal on a state by state basis the regulations around its marketing are equally fragmented. If you take the fragmented state by state approach and layer on an inclination by states to develop elaborate regulations, rules and taxes. Some of what follows is hard to believe – a case of fact being stranger than reality.

CBD Extraction at Chalice Farms

 

Arizona. If you want to learn about licensed medical marijuana dispensaries in Arizona, you will have to undertake some primary research because Arizona doesn’t share its list of licensed dispensaries with anyone but registered medical marijuana patients.

California. When transporting cannabis goods, you are prohibited from using watercraft, drones, railways, human powered or unmanned vehicles.

Connecticut. Typically, businesses are illuminated at night for a variety of reasons, including to deter theft. The lighting usually includes a sign with the business name/logo that lights up to promote the business while the owner sleeps. Don’t look for such illuminated signs at medical marijuana dispensaries in Connecticut because all illuminated signs are forbidden in the state for marijuana dispensaries.

Delaware. In Delaware, print and broadcast advertising is not allowed. Instead, medical marijuana-related advertising is only permitted in directories and phone books

Maine. Edible medical marijuana products are legal in some states. If you live in Maine and have a doctor’s authorization, you can buy edible medical marijuana products, but they’ll cost you a bit more than they would elsewhere. That’s because the state adds a 7% Meal Tax on all edibles.

Michigan. The Marihuana Tax Act of 1937 spelled marijuana as “marihuana,” so why change it now? Michigan still uses that spelling in the Michigan Public Health Code and in the Michigan Medical Marihuana Act passed in 2008.

Nevada. Nevada’s signage rules limit marijuana dispensary signs to using just two font styles. The state prefers sans-serif fonts. While serif fonts might be okay, script, decorative, and gimmicky fonts are not okay—ever.

Oregon. Signage rules in Oregon are quite easy to follow because the only font allowed is bold, 80-point Times New Roman or Arial. No other sizes and no other fonts are allowed.

Massachusetts. Medical marijuana dispensaries are not allowed to produce or sell any kind of T-shirts, novelty items, or promotional gifts.

Washington DC. In Washington, DC, marijuana may not be sold anywhere that also sells gasoline, apparently to prevent impaired driving. But that’s not all. Marijuana cannot be sold in any location that also offers auto repairs.

It’s complicated even confusing – choose a marketing agency that reads the small print, so you don’t have to.

 

First published by Adrian G Stewart at OOKII.Company

Adrian G Stewart

Adrian G Stewart

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Cannabis – Revenue Growth and Taxation

s part of our ongoing involvement in the legal cannabis marketplace this article is designed to help explain market developments to a wider audience.

The legal cannabis industry experienced 37% growth in 2017 to reach $9.5 billion in consumer spending globally. Fully $8.5 billion, was generated in the US market, where 31% growth was driven by the five states; Alaska, Colorado, Nevada, Oregon and Washington. 2018 growth figures will include California which became operational on January 1st.

What does this mean in terms of consumer numbers? The number of adults who can purchase cannabis legally on a global basis went from 17 million to 47 million. That figure is now over 75 million with the addition of Canada.

By 2022 it is confidently predicted that cannabis spending in the United States will grow to $23 billion while global sales will reach $32 billion.

Growth in Legal Cannabis Spending

GROWTH IN LEGAL CANNABIS SPENDING

Cannabis Consumers

Marketing teams are starting to build an understanding of cannabis consumers, Arcview have used the following to segment adults in markets where cannabis is legal.

  • Consumers—adults who have consumed cannabis in the prior six months
  • Acceptors—adults who may consider future consumption
  • Rejecters—adults who say they would not consider future consumption of cannabis

According to BDS Analytics ­e Majority of US Adults (21+) and Canadian Adults (18+) are Consumers or Acceptors.

Cannabis Consumers USA v Canada

CANNABIS CONSUMERS USA V CANADA

The legalization and regulation of cannabis sales is a global trend. While North America is expected to continue to generate the majority of legal spending, top international markets are significantly contributing to spending as well. South America has some of the most liberal medical programs and is the home of the first federally legal adult-use market in the world in Uruguay. Followed recently by Canada.

Germany has positioned itself at the top of European legal markets

The United Kingdom and France are currently very limited markets.

It was always assumed that legalization would have nothing but a positive effect on the market as a whole. However, the two largest, and most recent, California and Canada have illustrated how uncertain legalization can be. Strict regulatory regimes limit the legal market’s ability to compete with well-established illegal growers.

“Sin Taxes” and Cannabis

Government wants to cash in on cannabis but needs to find that sweet spot that generates revenue without limiting demand for legal product.

Sin taxes have a long and varied history both worldwide and in the United States. One of the earliest examples of a sin tax is Britain’s excise tax on distilled spirits, which was enacted in 1643.

Alcohol, Tobacco, Casinos/Gambling, and more recently Cannabis and Sugary Drinks are being taxed. Governments have long sought to benefit from consumers’ tastes by taxing their vices.

It wasn’t lost on those states that have legalized the use of recreational cannabis that with legalization comes the ability to generate tax revenue.

Let’s take Colorado as an example. Colorado legalized the recreational use of marijuana in 2012 and the state began to regulate sales of marijuana on January 1, 2014. The tax is structured as an approximately 15% tax on the average market rate of wholesale cannabis, plus a 15% state tax on retail cannabis sales, a second state sales tax of 2.9% on retail and medical cannabis, local sales tax, plus local marijuana taxes (i.e., a 3.5 % tax in Denver), creating an average overall tax rate of approximately 34% for retail purchases of cannabis.

There were over $1 billion of marijuana sales in Colorado 2016, bringing in over $152 million in tax revenue for Colorado as of February 2017 for its year-to-date fiscal year. This is significantly more tax than the state’s collections for other sin taxes. In comparison, Colorado collected approximately $70 million in liquor excise taxes in January through November 2016.

While recreational cannabis remains illegal at a federal level and therefore unable to be taxed at a federal level the various states and local governments have seized the opportunity.

Of course sin taxes aren’t just about raising revenue they are also about influencing consumer behavior. Economists, behavioral scientists, and lawmakers have long debated whether sin taxes are actually successful in discouraging the behavior that governments are seeking to adjust. Studies show that a number of factors come into play in determining how successful a sin tax is, as well as the behavior it is seeking to adjust. However, the longer a tax is in place, the more difficult it may be to determine if the tax is actually curbing the behavior, or rather, other societal, social, or cultural pressures are causing the change in use.

Where do those taxes go?  The answer is quite complex, this graphic sums up the beneficiaries.

 

Colorado Cannabis Tax Revenues

COLORADO CANNABIS TAX REVENUES

First published by Adrian G Stewart at OOKII.Company

Adrian G Stewart

Adrian G Stewart

 

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What Can We Learn from Better Place?

Better Place Server Room

Better Place Server Room

Some of you will remember Better Place, for those who don’t here is a quick recap.
Better Place was a venture-backed international company that developed and marketed battery-charging and battery-switching services for electric vehicles. The majority of its planning and operations were guided from Tel Aviv, Israel, where both its founder Shai Agassi and its chief investors resided. The company raised and spent $850m of investor funds, its peak year was 2012, and it filed for bankruptcy in May 2013.
In July 2013, an attempt to acquire Better Place was made by the Sunrise group that offered $5 million for Better Place’s assets in Israel, and $7 million for its intellectual property, held by Better Place Switzerland. The deal was never concluded. A second deal this time with Success Assets fell through in August of the same year.
In November 2013, the court-appointed receivers decided to sell the remaining assets of Better Place in parts and liquidate the business. Which is where I came in. The Better Place intellectual property was acquired jointly by Terracap Ventures of Canada and Brammo Inc. the two companies formed a joint venture company called ChargePeak. I was appointed project director of ChargePeak, in addition to my responsibilities as marketing director at Brammo.

The ChargePeak Mission
ChargePeak is a joint venture between Brammo and Terracap Ventures that intends to provide a fully-integrated electric vehicle (EV) solution to utilities through an electric vehicle utility platform as a service (EVU PAAS). ChargePeak will leverage their recently acquired Better Place assets to provide this solution.
Critical to the adoption of electric vehicles is the robustness, efficiency, and availability of the supporting infrastructure: charging stations and a grid management system. Because battery charging requires large amounts of electricity, the mass adoption of electric vehicles presents a significant challenge to existing power grids. Better Place validated their solution to this problem in Israel by creating a nation-wide, fully integrated, proprietary network management infrastructure with the capability of effectively managing the power grid.

Next stop Tel Aviv
The acquired IP included all the software systems that had been developed by Better Place. The systems were still running and being used to manage the Better Place charge point network and support the 1000 or so customers in and around Tel Aviv. The iconic battery-swapping stations were all mothballed. The software environment was made up of hundreds of virtual machines running in a third-party data center.
The patents were managed by a Tel Aviv law firm, the ongoing cost of maintaining dozens of global patents is not inconsiderable.
Throughout my time in Israel and Denmark, I met with many ex-employees, contractors, and consultants and had access to the Better Place systems. What follows is my view of what went wrong.

Lack of Choice
There was only one type of vehicle, and it was not popular. Better Place had expected to sign multiple OEM’s but only Renault/Nissan signed up. The vehicle selected was the Renault Fluence ZE – the EV version looked identical to the petrol version. This situation was exasperated when the Israeli importer of Renault cars refused to cooperate, and Better Place had to set up its own import and distribution business.

RENAULT FLUENCE ZE DASH DISPLAY SOURCE: ADRIAN G STEWART

RENAULT FLUENCE ZE DASH DISPLAY SOURCE: ADRIAN G STEWART

RENAULT FLUENCE ZE IN TEL AVIV SOURCE: ADRIAN G STEWART

RENAULT FLUENCE ZE IN TEL AVIV SOURCE: ADRIAN G STEWART

Range
Driving range for the Renault Fluence ZE was 25 percent less than Better Place had anticipated when planning its network, resulting in poorly located battery-switching stations and increased “range anxiety” for drivers. Subsequent versions of the battery pack would improve this but that they also added an element of uncertainty when switching – customers did not know what version (different capacities) of the pack would be installed until it was in their vehicle.

BATTERY-SWITCHING STATION INTERNALS SOURCE: ADRIAN G STEWART

BATTERY-SWITCHING STATION INTERNALS SOURCE: ADRIAN G STEWART

MOTHBALLED BATTERY-SWITCHING STATION TEL AVIV SOURCE: ADRIAN G STEWART

MOTHBALLED BATTERY-SWITCHING STATION TEL AVIV SOURCE: ADRIAN G STEWART

No Financial Advantage
There was no incentive for electric vehicles. In Israel, the majority of ‘C’ class vehicles are leased by companies and provided to employees as company cars – part of your employee benefits package and the cars come with a company card to pay for all your fuel.

Switching Stations
The sophisticated fully automated battery-switching stations cost six times more than Better Place had expected, because the stations worked only with the Fluence ZE It was estimated it would have cost another $1 million to retrofit each station for additional vehicle types. In total there were 21 battery-switching stations when Better Place ceased trading. For legal reasons, Better Place was prevented from locating their battery-switching stations at petrol stations. As a result, the battery-switching stations were located in unattractive low-cost industrial zones.

Charge Points
The charge points cost more than l0 times the original estimate, once installation costs, including multiple visits by technicians were accounted for.

BETTER PLACE CHARGE POINT IN TEL AVIV SOURCE: ADRIAN G STEWART

BETTER PLACE CHARGE POINT IN TEL AVIV SOURCE: ADRIAN G STEWART

REBRANDED AS E-ON IN DENMARK: SOURCE ADRIAN G STEWART

REBRANDED AS E-ON IN DENMARK: SOURCE ADRIAN G STEWART

 

 

 

 

 

 

 

 

 

In March 2008, Deutsche Bank analysts issued a glowing report on the company stating that its approach could be a “paradigm shift” that caused “massive disruption” to the auto industry, and which had “the potential to eliminate the gasoline engine altogether.” Three months later, the same institution issued a second report, finding “electric vehicles destined for much more growth than is widely perceived”. The same report stated that “improvements in battery technology will allow for increased power, increased electrical propulsion, and bigger gains in fuel economy.”

First published by Adrian G Stewart at OOKII.Company

On 26 May 2013, Better Place filed for bankruptcy.

Adrian G Stewart

Adrian G Stewart

 

 

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News Feed v. Stories: Casts Uncertainty Over Facebook’s Future Performance

Facebook’s stock was down almost 20% at the time of posting this article on Thursday at 9am PST. This fall came after the company reported slightly disappointing results for the second quarter and issued a growth warning.

Facebook stock falls in reaction to slowing growth.

FACEBOOK STOCK FALLS IN REACTION TO SLOWING GROWTH.

At first glance, Facebook’s results for the three months ending June 30 weren’t as terrible as the market reaction would suggest. The company reported a record profit of $5.1 billion on $13.2 billion in revenue, both metrics are roughly in line with Wall Street expectations. It was the financial outlook, given by David Wehner, the company’s CFO, that really caused Facebook’s share price to take a dive. Wehner warned that operating margins would worsen over the next several years as expenses are anticipated to grow faster than revenue. He also warned that revenue growthwould slow down significantly in the upcoming quarters.
One of the reasons for the expected slowdown is the adoption of the Stories format, this format isn’t as easily monetized as the News Feed, another metric that could become cause for concern over the long run. Facebook’s user base has almost stopped growing. As the chart illustrates, Facebook added no daily active users in North America and Europe in the past quarter, this has a disproportionate impact because each new user in these regions generates multiple times the revenue a new user in other parts of the world generates.

Facebook user growth falls in its most profitable regions.

FACEBOOK USER GROWTH FALLS IN ITS MOST PROFITABLE REGIONS.

During a conference call with analysts, Facebook CFO David Wehner stated that sales growth may decline as the company prioritizes new formats like Stories and offers users “more choice around privacy.”
Facebook has found success with the three apps by emphasizing Stories, a visual and typically ephemeral format pioneered by Snapchat. But any benefits found there could come at the expense of advertising sales growth.
“The question is will this monetize at the same rate as News Feed,” Sheryl Sandberg, Facebook’s COO, said on the conference call. “And we honestly don’t know.”

First published by Adrian G Stewart at OOKII.Company

Adrian G Stewart

Adrian G Stewart

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Building Your Value Proposition

A quality value proposition is clear, easy to understand, and communicates the specific experience a customer can expect. The proposition must explain how the product or brand is different and superior to alternatives which claim to solve the same problem. Defining these criteria will help create an effective foundation for all your marketing efforts.

What is Value?

While the concept behind a value proposition is pretty simple, that doesn’t make coming up with one a straightforward exercise. The chances that you are doing something truly unique are very slim. It’s much more likely that there are many companies doing something comparable to you. The question then becomes how do you stand out in comparison to these other companies?  What are you doing that is relevant to the customer? And what are you doing that is relatively superior to everyone else?

Value Proposition Canvas

One suggestion is to look at the customer experience methodically, and to fill out an exercise similar to this Value Proposition Canvas.

The value proposition is the intersection between what you produce and the reason why people buy it.

  • Identify customer benefits
    Make a list of all benefits you offer to your customers
  • Link benefits to value offering
    Identify what value your products bring to your customer
  • Differentiate and position yourself
    Make it clear who the target customer is, what you offer to them, and how you are different
Value Proposition Canvas

Value Proposition Canvas

Make it clear who the target customer is, what you offer them, and how you are different.

Remember, the only thing that matters is what your prospect thinks. Just because you think it’s a benefit, the prospect may not. Your products and services do not intrinsically have benefits. They have features and functionality. Not everyone will perceive a feature as a benefit. Some will, some won’t. The challenge is finding those prospects with those problems who will perceive what you have as a benefit.

Which leads us into defining the customer persona.

Persona Canvas – a useful tool to help define customer personas

Once you’ve decided which to focus on, write on post-it notes what jobs your customers have to do. Don’t just think about functional jobs-to-be-done. Also come up with social activities and emotional charged activities.

Adrian G Stewart

Adrian G Stewart

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How to Turn Good Content into a Great News Story.

As we all read or listen to the news we have all developed an ideal of what a good news story looks like.

How then to take a product launch for example and make it news worthy? Well if you are Sir Richard Branson you may decide to abseil down the side of a building in a business suit. But if you aren’t Sir Richard you are going to need some creativity. Here are a few ideas.

Why Today?

Launching your story on a memorable day is a good example of building a story around the content. There are literally hundreds of awareness days. For example, June 21st is not only my birthday and usually the summer solstice, it is also World Music Day, International Day of Yoga and the International Day of Purpose. You can find an exhaustive list here: https://en.wikipedia.org/wiki/List_of_awareness_days

Not only are there awareness days there are weeks, months, years and even decades. Some are regional, some are national, and some are international.

By choosing a relevant awareness day for your product launch you can create a sense of urgency to your story this time element is important to journalists. Journalists are always looking for content that is relevant to their readers. There are even annual events like CES which are basically virtually dedicated to new product launches and introductions. You can read more about how to thrive at CES here. 

CES 2019

CES – the go to event for high tech product launches.

Human Interest

People are interested in people. This is at the heart of celebrity endorsement and the explosive growth of “influencers” and “opinion leaders” on social media.

Taking your product and illustrating how a typical customer might use it – how they would integrate it into their lives and what it might say about them is vital. You may call them case studies or simply customer stories it doesn’t really matter. If a picture is worth a thousand words, then a video is worth ten thousand. It doesn’t have to be a big budget production – most people will be watching on a five-inch screen while waiting for the train home.

Expert Opinion

Gurus, specialists, and experts are all have opinions that can be added to your content on your content. A supportive quote from and industry guru plus a picture of the said guru will go a a long way to build the story. Journalists with trade journals may well just run stories and quotations verbatim. Journalists at larger news organizations will want to talk with the source. Firstly, to verify its accurate and secondly to try and extract some unique comment. Make sure anyone you introduce to the media is media savvy and knows the difference between talking on the record and off the record. If in doubt don’t.

Organizations are putting vast amounts of effort into creating content that can used in blogs, websites, brochures and email campaigns. With a little creativity and some effort that content can be crafted into a story that will pique the interest of a journalist. If you don’t want to do it yourself, you can always contact a company like OOKII Company who will do it for you.

First published by Adrian G Stewart at OOKII.Company

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