Flame-Grilled Whopper Marketing Strategy
To the amusement of many, Burger King has thrown its crown in the ring for net neutrality. Recode’s Tony Romm correctly diagnosed the move as a calculated effort by the nation’s third largest burger chain to grab some attention: “It is the age of brands — or rather, #woke brands, those hyper-aware corporate behemoths with gargantuan marketing departments that see in every social and political cause du jour an opportunity for 15 minutes of web infamy.”
BK’s move away from the marketing slogan of my youth, “Have it your way” is complete; its net neutrality video touts the virtue of making the Whopper “the same for everyone”. The intermediate slogan, “be your way”, is also toast.
The burger franchise doesn’t appear to understand what net neutrality actually means, and neither do its customers. Everyone in the video expressed confusion about the idea and annoyance with the prank. But this is the way public campaigns for wonky policy issues usually go.
Silicon Valley is Equally Confused
When these issues escape the beltway and make it to talk radio and late-night TV, an awful lot of detail gets lost. During the SOPA controversy of 2011-12, digital piracy was conflated with free speech by companies that profited from it and dissenters were punished.
Redfin founder Glenn Kelman wrote a famous blog post on the anti-SOPA movement titled “SOPA Witch-Hunters, Count Me Out“, seeking a calm and rational discussion of the problem of rampant copyright violation:
I just don’t like bullies. Especially hypocritical bullies. If you actually believe in free speech, and not simply the free distribution of other people’s intellectual property, you should let journalists, law firms and investors exercise their rights to it alongside your own. And yes, working on a bill in an open, democratic process is a valid expression of speech…
And like all violent ideologues, we have convinced ourselves that the issue is so pressing it demands extreme action. The stakes in this case are usually described as “breaking the Internet,” when in fact it’s already broken: not for the folks profiting today from the Internet, but for all the folks who create the beautiful books, articles, movies and music that the Internet is so often used to steal.
The sentiment didn’t last long. Within hours, Kelman recanted, begging Silicon Valley to forgive his heresy. But the Internet is still broken and there’s no remedy in sight. Redfin has, of course, joined the net neutrality bandwagon with a statement no more sophisticated than Burger King’s.
Silicon Valley becomes Hip to Branding
Branding has long been key to product differentiation in the fast food business. While there’s no real difference between Coke and Pepsi, McDonald’s and Burger King, Chipotle and Qdoba, or Subway and Quizno’s, branding campaigns seek to create one.
Chipotle set out to differentiate itself from the rest of the fast food market by claiming to have made its food more pure and natural by removing preservatives and sourcing locally. Because it didn’t bother with conventional safety measures following this transition, it sent dozens of diners to hospitals with infections of E. coli, salmonella, and norovirus – and did so again and again.
Chipotle’s problem came down to preparing food in restaurants, where workers are underpaid and poorly trained. Its solution is to conform to the fast food industry model, where skilled workers prepare food in canteens and then ship it to stores to be reheated and served.
Its problem was a business model developed from a branding campaign instead of the other way around. Facebook has a similar problem now that its business model is based on addiction.
The business model dilemma is the root of Facebook’s fake news problem. While the platform was created “to help people stay connected and bring us closer together with the people that matter to us“, it has become a news publisher.
Facebook is a pretty bad publisher, shielding us from important breaking news, locking us up in ideological bubbles, and showering us with fake news that’s more fun than the real stuff. But there’s more money in publishing than in keeping us connected to our cousins and high school buddies.
And Facebook is addictive because it keeps us coming back for the likes, shares, and affirmation. It wasn’t designed to be “evil”, but over time it has followed the path of profitability in a completely unregulated market. Because the Internet promotes the formation of dominant firms, Facebook has become like kudzu, an invasive species with no natural predators.
So Facebook has developed a business model that effectively prevents it from being a benefit to consumers. This problem has become so bad that even George Soros is advocating treating it like a tobacco company.
Deflection is the key to Deregulation
Facebook isn’t special. The Internet loves a monopoly because it permits businesses to scale indefinitely. In the absence of regulation or meaningful market boundaries, companies that are so good at one thing as to dominate a market can move into related or similar markets and repeat their success. This is the story of Google, Amazon, and Netflix.
Silicon Valley investors realize that the only force that can limit the success of these octopuses is government. So it’s necessary to direct the attention of regulators away from Silicon Valley firms.
Because it was once possible for carriers to limit the growth of Silicon Valley firms, they’re been the traditional whipping boy. The value of net neutrality is in keeping regulators from worrying about the effects of Silicon Valley on society.
Silicon Valley Will Eat Itself
Not only are regulators beginning to pay attention to the Internet as a whole, the growth of Internet monopolies has created a weird new form of competition. Essentially all the companies that build platforms eventually compete against each other, and must compete in order to grow. So some form of market discipline is not only possible but inevitable.
Investors can deal with internal competition in the Valley by diversifying their portfolios. They can limit regulation by putting up a united front in favor of the deflection. Hence, all of the smaller players are making noise – at the behest of investors – about net neutrality.
But net neutrality produces bad side effects for the Valley in two ways: it can limit the ability of platforms to grow and it can dull innovation. It’s probably no accident that two of the five biggest tech firms grew up outside Silicon Valley, Amazon and Microsoft. Their businesses are also more innovative than those of the other three, Google, Apple, and Facebook.
Platforms of Different Kinds
Google, Amazon, and Apple are the most interesting of the bunch and their business models overlap quite a bit. They all build gadgets, platforms, and networks, and they all make a lot of money selling other people’s stuff.
Google makes phones and home gadgets and sells ads from a variety of companies to a variety of web sites. Apple makes gadgets – a lot of gadgets – has an OK network and sells media on the iTunes and app stores. Amazon does all of of that as well, with a focus on retail and an extremely powerful network. It is well positioned to compete strongly with Google in the ad business someday soon.
We can see from mature markets such as food and cars that effectively identical products have no choice but to use branding strategies to set themselves apart. While some of these branding strategies appear to be product differentiation, the basis of the differentiation is often so shallow that it’s really branding in disguise.
Magic Yogurt and a Backlash
Returning to food, take a look at what’s going in in the market for kids’ yogurt. Essentially this is a product that consists of smaller portions with higher sugar content than conventional yogurt. In essence, all yogurt is just fermented milk. Kids’s yogurt is bought by moms, so success in this business is a matter of tricking the buying demographic (with guilt and fear) into overpaying for the same product everyone else is selling.
Stonyfield Farm shows how this is done with a video that does the same thing to conventional yogurt that Burger King does to the Internet: create a false problem and offer a solution that favors the company. For bonus points, Stonyfield labels critics trolls and shills, just as Engine, Free Press, and similar organizations attack critics of net neutrality.
But a backlash is building against deceptive branding strategies for food; read the comments on the Stonyfield video. While a backlash is also building against Google and Facebook, that movement has not yet recognized net neutrality as the branding strategy for Internet monopolies.
Will there be a Net Neutrality Backlash?
Net neutrality supporters love pointing to polls indicating broad popular support for ISP regulation. I tend to discount these polls because they’re so broadly worded that I would agree net neutrality is a good idea. (Some parts of it certainly are, of course.)
It becomes easier for smart young people to reject campaigns as the advocacy for the issue becomes dumber. Millennials were once very keen on organic food, but they’re losing the faith.
As the champions of net neutrality have shifted from academics to PR campaigners and fast food merchants, the arguments for it have become easier to disregard. It’s obvious that Burger King and Redfin feign support for this form of regulation because they want us to think they’re the good guys.
But at the end of the day, Burger King is still trying to clog our arteries, Stonyfield is loading kids up on sugar, and Redfin is trying to sell us more house than we need. As more companies co-opt net neutrality for virtue signaling, the concept loses more and more of its appeal.
So thank you, Burger King, for jumping the shark.