During my recent business trip to the U.K., I wrote a post on the subject of green marketing, comparing the state of the art between the U.K. and U.S. I concluded that there was a big opportunity for U.S. companies to take advantage of the growing sensitivity to the issue in the States. So when I saw an article titled “Green Bubbles Pop Too,” I had to read it. While I had expected a piece of conservative propaganda I was mistaken. There is much that I agree with.
The article by John Rooks (click here for his blog) is straightforward and compelling. Drawing on Hegelian Dialectic he suggests that:
In terms of the “Greening of America,” it feels like we are currently on the thesis end of the pendulum, with a fair amount more left to go to reach the apex. And then the backward slope begins. The bubble pops at the top.
With regard to green marketing he concludes,
But when the stories (about climate change) start to drop below the fold, when consumers start to care just little bit less, and when Green is no longer a competitive advantage, the “for profit” Greenies will turn and vogue becomes passé. So how can it hold on? Well, as a marketing advantage, it can’t.
I have no doubt that John is right. Green marketing cannot be a long-term advantage—but then that is true of every product and marketing innovation. The “Red Queen Effect” will inevitably take its toll.
The term “Red Queen Effect” was first coined by Leigh Van Valen, an American evolutionary biologist. The expression refers to the Red Queen’s pronouncement to Alice in Lewis Carroll’s Through the Looking Glass that “It takes all the running you can do to keep in place!” Though the Red Queen was running, she was going nowhere, because everything around her was running too.
As applied to business, the Red Queen effect describes situations in which firms need to escalate investment to maintain their market position, while the returns on those investments are diminishing. Many suggest that Red Queen competition results from management preoccupation with operational effectiveness and cost control at the expense of strategic differentiation.
My observation, albeit not backed by any empirical data, suggests that exactly the same effect applies to brands within a product category. As John suggests in his article, as soon as one brand takes the initiative to “go green” and appears to benefit from that tactic, then other brands will inevitably follow, thus negating the competitive advantage of the first mover.
John ends his article by considering two alternative outcomes when the green marketing bubble pops:
- Green Fever goes away because it is a trend, a fad. News stories drop off, the chasing arrows shrink smaller on the back of packaging again, people stop bragging that their letterhead is 100% FCS Certified and Acid Free. Some small vestiges will still remain, and progress will have been made. New products were launched and the consumers will be more aware. But the trend died… popped.
- It sticks. People keep pushing corporations to deeper levels of sustainability. Greenwashers fall on their face because it’s an unfulfilled promise, and then they mean it and real change happens. Green becomes ubiquitous. Smaller, plucky green companies struggle to regain any competitive advantage. When everything is green, green means nothing. (The study of green language is already there.)
John concludes that either way, as someone who runs a green marketing agency, he’ll be out of a job. But I suspect John’s logic is flawed and his conclusion overly pessimistic.
I think the second outcome is more likely than the first. If green marketing were only a marketing tactic, then Outcome 1 might be in the running. But as it is, climate change is likely to provide some pretty compelling reminders that all is not well with this world, and, as I suggested in the previous post, I suspect climate change will become a central issue on the political agenda. This will plant the issue firmly in the popular psyche, where it will take root and grow as companies jump on the green bandwagon.
Instead of one bubble, I envisage a series of escalating bubbles as new events focus attention on the issue. A good analogy would be to Internet advertising, where we saw a boom, a bust (though not back to zero) and now another boom. Political elections, increased frequency and severity of meteorological disasters, new reports on climate change, and marketing campaigns—all of these will combine to heighten and entrench the issue in popular culture.
With this model in mind, marketers need to commit themselves to a long-term investment in green marketing. And though the Red Queen Effect will take its toll, savvy marketers will always find a way to innovate and tilt the playing field to their advantage. John, I suspect you can have a job for as long as you want it.
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August 10th, 2007 at 12:04 pm
Nigel - Thanks for a stimulating post. I only have time now to throw out a few thoughts that came to me as I read your post. I hope I have time over the week end to respond in more depth.
From what I know of your business, its main focus is on advertising to consumers. In the green arena, business-to-business and the public sector are the prime movers. (Full disclosure - my job is green buying for the State of California. Let me add that these comments are my personal views and in no way reflect the position of the State of California or any of its agencies.)
Thought One: You may have noticed real estate ads in the NYTimes Sunday magazine or other higher-end publications that refer to ‘LEED’ certification. The LEED standards are promulgated by the Green Building Council. They are primarily aimed at energy efficiencies, but also cover indoor air quality, recycled materials, etc. It seems to me that including a reference to LEED suggests that the advertiser thinks that readers will know what it means, and be swayed.
Thought Two: Green really is not a fad. Mr. Rooks may not be aware of the price premium that “100% FCS Certified and Acid Free” letterhead commands. An organization that goes that extra distance when it could settle for “printed on recycled content paper” has made a real committment in its operations. There is an on-going opportunity for B2B green advertising, and for markets that probably dwarf consumer demand. Consider copy paper usage in a even a small office with the amount typically used at home. To cite one representative example, Office Depot has prepared a “Green Book” catalog with over 2300 products it has deemed environmentally friendlier that alternatives. A large portion of these are comparably or even lower priced than the alternate products. People who use 100% post-comsumer recycled content paper at work will increasingly want to use it at home. They may also be more inclined to look for recycled-content paper towels and napkins.
Thought 3: Most public sector entities at all levels and most large corporations have established “Environmentally Preferable Purchasing” programs. The State of Claifornia, along with many others in the public sector, is committed by a Governor’s executive order to “Build Green” according to the LEED standards. The prevalence of these green programs necessarily raises awareness of the critical importance of new paradigms in our economy among employees, vendors and contractors. These programs stimulate a structural demand for green products of all sorts. (California spends over $14 billion annually in goods and services.) I have personally seen many co-workers carry this awareness over to their personal spending and consumption patterns. I have also seen employees generate a grass roots demand for ways to “work green.”
Thought 4: In a different vein - A great deal of “green advertising” is regarded as “greenwashing,” meaning talking the talk without really having product attributes to back it up. As you know, this sort of advertising is barely regulated except in instances of outright fraud. My guess is that this is the sort of advertising will diminish because it will have no credibility.
Thanks again for a stimulating post.
August 28th, 2007 at 11:41 am
Hi Pamela,
Thank you for adding your comments to the post. Apologies that it has taken a while to reply to your comments.
You suggest that business and the public sector are the prime movers in the green arena and this may well be true. They do after all have the ability to provide green products and services while regular citizens can only choose what to consume and who to vote for. However, that does not mean the consumer is irrelevant. They have to see the value of what is being offered to them. Labelling which is unfamiliar and potentially confusing or misleading is not going to be more of a hindrance than a help. I personally have never heard of LEED standards in spite of a passing interest in green buildings. It suggests to me a need for an industry or public sector information campaign to make sure people a) understand the issues, and, b) can easily understand the appropriate labeling. This said I have little doubt that when employers walk the talk employees are likely to pick up the habit of buying green.
With regard to greenwashing I do not think it will diminish because it has no credibility. Instead, I would suggest that greenwashers will find that their competitors use their unsubstantiated claims against them. Advertising of this type simply creates a “weakness” that others can exploit by pointing out where the greenwasher falls short.
Thanks again,
Nigel