Web Pulls Ad Buyers From TV

Tags: Advertising, Marketing

OK, I'm ten days late with this one.

The LA Times noted that Web ads are now pulling Ad buyers from TV. This reinforces the trend we noted in the May Blackfriars Report and in a previous blog entry. But I like the quote at the end.

Douglas W. McCormick, a former cable executive who now runs Internet company IVillage Inc., says the shift of advertising dollars to the Web reminds him of the days when broadcasters dismissed the threat cable posed, only to see cable make strong gains. He predicted that the upfront ritual would become a Madison Avenue relic.

"This type of inefficiency and glitz are going to go the way of a three-martini lunch," he said.

Is the enterprise software licensing business dying?

Tags: Software, Marketing

IT Manager has an article online asserting that the enterprise software business appears to be in rapid decline. I find this of interest because one of my research reports at Forrester in fact predicted that we would see about a 20% decline in software licensing revenues by 2004/5. Open source is one reason, but it is only a piece of the puzzle. Part of it is that so many of these pieces of software don't deliver on what they promise and come with no warrantee of any kind (Blackfriars has written about that here). Something has got to change there if software companies want that trend to reverse.

New Samsung 50-inch plasma display

Tags: HDTV, Plasma, Marketing

Akihabara News today ran a Samsung announcement of a 50-inch plasma display with a claimed 10,000:1 contrast ratio. That means that difference in light between the brightest white pixel and the blackest black pixel in a test image is a factor of 10,000. Panasonic has traditionally boasted the highest constrast ratios -- currently 4,000:1 -- for plasma displays, but even they would admit you will never see those values in real pictures.

Samsung is clearly waging a specmanship war with Panasonic on contrast ratio. But we have to give them credit -- at least they are not just competing on price. At Blackfriars, we always say that price is the last refuge of the good marketer, but in high tech, it often gets the most attention, simply because it is a feature everyone understands.

Why flat panels?

Tags: HDTV, Plasma, LCD

A few people have wondered why Blackfriars, as a communications company, would write about HDTV and flat panel displays. Here are three reasons:

1. They are cool. Flat panels are probably some of the coolest pieces of technology being built today. No other products have the visual pizazz and Wow! factor that a huge plasma display does.


2. We're eclectic people. We like stretching and thinking about things a little removed from our mainstream business.


3. They are broadband to your brain. The highest bandwidth path to your mind is through your eyes. Flat panel displays allows us to exploit that high bandwidth channel in more ways and in more places. High definition displays mean that we can use more of the power of your visual cortex without distracting you.

Blackfriars believes that flat panel displays will change our lives as much in this decade as the Internet did in the last. Just like the Internet, they will need to hit critical mass before the effect is noticed. But when we get there (probably about 2008 or so), watch out -- both content and the technology leaders will change forever. More about what happens then in future articles.

Flat panel price cuts: the first battle in a long war

Tags: HDTV, Plasma, LCD

Reuters today has an article about the upcoming war between the LCD and plasma makers for high definition flat panels. Manufacturers are rapidly ramping up investments in LCD technology, which is used extensively in everything from cell phones to computer displays. Meanwhile, Plasma has the bulk of the HDTV market today. But everyone is placing big bets on production facilities for the next battle in this war:

LG Electronics, Samsung SDI, Panasonic products maker Matsushita Electric Industrial and Pioneer Corp. are betting on plasma technology.

"We expect production costs to drop by some 20 percent with the introduction of a new technology called 'single scanning' that halves the number of driver chips required to display images on the screen," said G.W. Kim, a spokesman at LG Electronics.

Pioneer said it would raise efficiency by consolidating different panel sizes into three from six.

Asian LCD makers plan to invest more than $51 billion in production over the next decade, which could lower costs dramatically.

"Nearly all of Taiwan's major display makers focus on LCDs as they think the future mainstream TV products will be below 40 inch," said Ben Lee, head of Nomura International's equity research in Taiwan.

LG.Philips LCD, the world's No.2 LCD maker, unveiled a $5.3 billion plan in November to build an advanced factory line for mass production in the first half of 2006.

Bigger rival Samsung Electronics just started volume production of high-end panels at its joint venture with Sony, while Sharp Corp. plans to invest 160 billion yen to open a new plant in 2006.

Our take? Plasma is still winning now when the top resolution of most programs is 720p. But we are already seeing much higher definition 1080p demonstrations, and at this resolution, LCD technology seems to have the edge. So while plasma TVs will be the hot product for a year or two more, expect LCD technology to start eroding plasma's edge and to become the preferred technology. Why? Because LCDs aren't just produced for TVs -- they also are being bought for the 200 million PCs produced each year as well. As a result, LCDs will have a volume edge over plasma, and that should drive prices down faster.

A (long) flat-panel walk through at Best Buy

Tags: HDTV, Plasma

After experiencing about 100 different plasma displays at the Consumer Electronics Show in January, I thought I would visit my local Best Buy and play the analyst again to see what the plasma buying experience is at retail. After all, plasma prices have already declined about 10-15% this year, and the expectation is that they will be down about 30% by Christmas. Like nearly everyone who is interested in the topic, I've read all the Internet material I can, including the AVS forums on flat panels, but I wanted to see some images with my own eyes.

Some calibration of me as a TV customer. My current TV is a 25" 1986 Sony XBR CRT, which was a very high quality monitor in its day, but is now approaching 20 years old and is not HD-capable. My current home computer display is a 22" Apple Cinema LCD display (yes, my computer display is nearly as big as my TV). On the TV front, I do own a TiVo box and digital cable. So I'm ripe for an upgrade to something gorgeous and flat, wallet permitting.

Now a caveat about evaluating TVs in retail. There's a psychological effect that most retail stores try to capitalize on which is that buyers will be drawn to the brightest picture they see. Therefore, almost all TVs in stores are in what is called "torch" mode. That is, they have their brightness, contrast, and color controls set for maximum attraction. Unfortunately, these settings typically create some of the worst pictures. So many retail environments are probably the worst places to evaluate flat planels.

And here are my quick reactions from my first flat panel shopping expedition.

• All of the flat panels looked amazing compared to what I am currently used to. It took probably five minutes for me to desensitize my eyes from HDTV dazzlement. Watching 20 or 30 high definition streams -- which by my judgement were mostly 720p -- just made me go "Wow" for a while, but not think critically. But after about five minutes of being dazzled, I could finally start seeing differences among the displays. Keep that in mind if you go shopping; let yourself get acclimated before you start evaluating.
  


• My favorites were Panasonics, Pioneer, and Sony. My favorite true HDTVs were 1) the 50" Panasonic TH-50PX50U (about $5K), 2) a 43" Pioneer PDP-4351HD (about $5.2K), and 42" and 50" Sonys (their XS955 series) which were even more. (I think they were $5.5 and $6.6K). I also liked the Philips 42PF9966 with Ambilight ($3.3K). All felt like they would be wonderful TVs to put in the family room, but all had different strengths.


• EDTV is quite good. The Panasonic 42" TH-42PD50U EDTV was one of the panels I had wanted to compare, simply because it is not a true HDTV. This EDTV has a resolution of 852x480, but will accept any digital HDTV signal. AT first blush, it looked great. And why not -- conventional wisdom is that EDTV is about 90% as good as full HDTV. But after staring for a while at a distance of six feet, I could start to see the screen door effect (SDE) from the large pixels (i.e., if you sit too close to an EDTV, it is like watching TV through a screen door). I could also see the "jaggies" effect of not having enough resolution on letters and logos. Interesting. it's not a profound problem; in fact, compared to my current TV, it would be great. But given the changes coming in HDTV, an EDTV is really a 2-5 year investment rather than something you'd want to keep forever. Still, for someone who is constrained by budget, this is a great way to gain a flat panel experience for viewing standard TV and DVDs, and most people would think it was HDTV.


• A 50 inch TV is much bigger than I thought. One of my favorite TVs was the Panasonic 50", but gosh, it looked like a monster; a 50 inch TV feel HUGE when you are used to watching a 25 inch one. The 50" Panasonic TH-50PX50U is considered to be the best bang for the buck, but the one I looked at had some odd "clay-face" gray scale artifacts -- cases where what should have been continuous shades turned into polygons because of not enough bits in the color. Panasonics are supposed to not exhibit that effect at all, and yet it was the worst of the bunch, even though it was perhaps also the sharpest TV in terms of detail. This was almost certainly a case of a set not being properly calibrated for best picture.


• Pioneer was good, but expensive. The Pioneer PDP-4351HD I liked a lot because it has a softer more vibrant picture than the Panasonic. And since it was a 43-inch panel, it appeared sharper. No real criticism of it other than the price: about $5.2K.


• The Sony's were elegant -- and even more expensive. The Sony KDE-42XS955 ($5.5K) and KDE-50XS955 ($6.5K) (why can't manufacturer's use names -- or at least shorter numbers) were both lovely as well. The general consensus is that they make a lovely panel but then overprice it. That is possibly true, but they do a great job on style and ergonomics. I loved the little spot-lighted Sony logos....


• I couldn't properly evaluate the Philips. They did have the Philips 42PF9966 with Ambilight, but I couldn't do a direct comparison with the other panels though because it was on a different aisle, next to the EDTVs. The Ambilight is a very clever idea because it improves their black perception by raising the ambient light. But because it was separated, it was very hard to evaluate objectively.

So what are my takeaways from this first retail shopping trip? I had three.

1. Flat panels are very hard to resist. It took most of my will power to keep my plastic in my wallet. And why not? Even EDTV flat panels have nearly twice the vertical resolution as my old Sony CRT. Just like color TV was the aspirational product of the 1960s -- everyone and their brother wanted one and saved their pennies to buy one -- I believe flat panels will be the aspirational product of the 2000s.


2. I'm also still fairly interested in the Panasonics, both the industrial versions (which aren't sold at Best Buy) and the consumer products. They are cheaper than the consumer versions, and are supposed to be great. Their reputation for having great bang for the buck remains, even after seeing the 50 inch panel that was poorly adjusted. But I wouldn't be able to buy one until I had seen one properly set up.


3. I was surprised at how much I liked the Sonys. I started this quest thinking I wanted a 42" Sony KDE-42XBR950 (the 42 inch luxury Sony panel) to replace my current XBR. Online, these panels have a reputation for being OK, but way overpriced. But even with the more mainstream XS955 line, they just look cool, and their picture quality was still first rate. So I'm back to my standard model of consumer electronics: there is no free lunch. You pay more, you get more. Simple story. We use Apple products here at Blackfriars because they look great, work well, and yes, they cost a little more. There's no reason that flat panels should be any different.
   

More on Apple/Intel

Tags: Apple, IBM, Marketing

Today's Wall Street Journal has another article on Apple's possible interest in Intel chips, this time regarding its effect on IBM's chip business, who is the current Apple supplier for G5s. The theory being passed around over the past day is that the discussions with Intel were really about putting pressure on IBM to supply Apple a better deal on its chips.

There is no question Apple wants both faster and better chips to power its computers. But one section of the article really destroys the idea that Apple might go with Intel Pentium processors:

Mark Stahlman, an analyst at Caris & Co., says the surfeit of console chips that will need to be produced almost certainly will keep the East Fishkill plant fully occupied, even if Apple weren't a customer. Next year, IBM chips will be inside both Sony Corp.'s new PlayStation console and Microsoft Corp.'s new Xbox. IBM already makes chips for the third major console, Nintendo Co.'s GameCube.

Still, Mr. Stahlman notes the flip side of console fever: Apple long has benefited from being IBM's marquee chip customer, and as such has gotten close attention from Big Blue. Now, he says, with extra attention being lavished on game consoles, Apple is "about to be second or third in line," because IBM chip production for the game boxes exceeds what is required for the Macintosh line.

OK, so lets play this scenario out. Apple is currently one of IBM's premiere customers. It is using a processor that has the same architecture as that being used in all three gaming consoles; in fact, Apple G5s were used for all the Microsoft XBox 360 demos being played at the E3 conference last week. And as IBM produces more processors with that architecture, IBM's chip volumes will rise, and the prices for the chips will fall. Apple ends up in fat city, with higher margins for its products, or the ability to cut prices, or both.

Compare this with the Intel scenario. Apple jumps ship from IBM where it is the second or third most influential customer to a vendor where it would be about 10th in line and have no influence. When Intel introduces a new processor, would Intel ship first to Dell or to Apple? It just doesn't make sense.

The bottom line: Apple isn't going with any other processors for Macs. But what everyone should be looking for is what new products are coming where the processor doesn't matter. And that's an area where the competition between IBM and Intel makes some sense.

Messaging the Senate

Tags: Politics, Communication

We normally don't talk politics in this blog, but there is a communication story in the latest news cycle. Now that there has been a compromise in the Senate battle over filibusters, I think it is worth noting that this is one of the case where the Republicans flat out-messaged the Democrats, despite their messaging war room. Republicans were united in their use of the phrase "Up or down vote" as a rallying cry for their position. Can you remember any sound bite for the Democrats? I can't.

Politics is just like business. People can't decide about whether to buy your position or your product unless they know what it stands for. And sixty-four dollar phrases like "protecting the right of the filibuster" just don't help people understand. What would Blackfriars suggest instead? How about talking about the end goal, not the procedure itself? Something like "Justices for all, not just for the majority" would at least provide a position that everyone could understand.

Growth in HDTV

Tags: HDTV, Plasma

Today's Wall Street Journal has a special section on old and new media. One of the more interesting sections is some data on the growth of digital TVs in the US, saying that digital TVs and set-top boxes are about to break the 50 million mark world-wide in 2005. Check it out, but you will need to have javascript turned on to view it -- it's an interactive page.

Podcasting in iTunes and why Yahoo is no threat

Tags: Apple, iPod, Marketing,

Also in today's WSJ, there's a great article about Steve Jobs adding the ability to listen to Podcasts, independently developed Internet radio shows, through iTunes. He also cast significant doubt on Yahoo's ability to erode iTunes dominance:

Mr. Jobs also cast doubt on Yahoo Inc.'s announcement of a $60-per-year music subscription plan, saying that price point was "substantially" below Yahoo's costs and would be raised. Mr. Jobs then claimed Apple employees had a betting pool on when Yahoo would raise the $5-a-month rate, with Mr. Jobs putting his money on five months.

One of the better moments was when Steve took a poll of the audience.

Mr. Jobs was mindful of the presence in the audience of his longtime rival, Microsoft Chairman Bill Gates. At one point, he polled the audience to see how many had iPods. Seeing quite a bit of upraised hands, he peered into the crowd and asked, "Bill, do you have your hand up?"

Why Apple going Wintel won't happen

Tags: Apple, Marketing

Today's Wall Street Journal reports that Apple has been exploring the use of Intel chips for its Macintosh line. Blackfriars notes more what the article doesn't say rather than what it does. Yes, the two companies had talks. But note that there is no claim that Apple is investigating using Pentium chips; this deal could literally be as much about using 802.11 chips for its notebooks as about the main processors. Further, using Intel chips on Apple machines would not guarantee software compatibility with Windows and Wintel machines; there are many other architectural differences between the platforms than just the main CPU.

This is a great example of something that is technologically possible, but would be a marketing disaster for Apple. The company would have to explain to developers why they have to develop multiple versions of their software, explain to customers why their old hardware would become obsolete, and explain to Wall Street just how this would benefit its bottom line. It just doesn't make sense.

In short, an Intel CPU in a Mac is not going to happen. But you might certainly see Intel CPUs such as its Xscale processors in iPods and other Apple products where software compatibility isn't such a marketing factor, and that might make a lot of sense. And there are already Intel processors in products like Apple's disk array for its XServe servers. In short, there are many reasons why the two companies might be talking, but creating a Macintel is not one of them.

The decline of advertising noted by NYTimes

Tags: Advertising, Marketing

Stuart Elliott today writes about the trend of advertising moving away from the traditional 30-second spot toward more nontraditional forms of advertising and marketing. The numbers presented in this article on advertising spend are remarkably close to the advertising numbers we will be publishing in our "Sizing US Marketing" report on June 1, but our data says that the advertising decline is actually a little more pronounced than reported in the article. Still, the article is pretty clear about the forces we have previously noted behind the decline:

The origins of the industry's current problems are many: the dot-com bust, the fallout from 9/11 and the explosive growth of technologies that help consumers avoid ads - like digital video recorders, iPods and satellite radio. Madison Avenue is still trying to regain its footing. Industry employment, which peaked at 496,500 in 2000, fell 14.4 percent, to 424,900, last year, according to the Labor Department.

....

Ad spending in the United States, which once grew reliably year after year, declined in 2001 for the first time in four decades - and by the largest percentage since the Depression year of 1938. While ad spending has rebounded since then, the growth rate is slower than during its heyday of the 1990's.

Tagging for the Blackfriars Blog

Tags, HDTV, Plasma

I've been working this week on making improvements to both Blackfriars' Web site and this blog. You will probably notice that most posts now begin with a category tag. This allows me to start organizing our content by subject and by linking to other posts of similar topics. I'm currently linking my tags through Technorati, but will be checking out other tagging portals as well. Comments, as always, are welcome.

In other news, I've been noticing that my blogging on flat screen TVs -- that is, plasma, LCD, and other similar digital displays -- is some of the blog's most referenced content. Since I'm analyzing that market on an ongoing basis, both for myself and as a way to help out friends as well, I'll be writing more on that topic over the coming months. My initial prediction: these new flat screen TVs will be as hot this decade as PCs were in the past twenty years. But these won't be your parent's TVs. Not only can they be hung on walls, but they will provide access to a much wider variety of content, including cable, HD-DVDs, Internet streams, game consoles, and other sources. These TVs are just big computers with consumer user interfaces, but they will change our relationship to the electronic world forever. More to come soon.

Gates: 'Information overload' is overblown

Communication

We blogged yesterday that Gates acknowledged the issue of information overload. Apparently, not so much. I have to admit, it did sound out of character for Gates, a man not known for his minimalism.

Samsung's new 40-inch OLED HDTV

HDTV

Akihabara News has some great pictures of Samsung's latest new technology for high definition TV: OLED. What is that? It's a display that uses organic light-emitting elements instead of using a crystal to bend light (the technology used in LCDs) or ionizing gas to create light (as in plasma TVs). Many people are excited about this because OLED displays can be very bright, very thin (this one is less than an inch deep), and very power efficient. The Samsung display is the largest OLED announced to date.

Google Adds Front Page Content

Google

The New York Times and most other major new outlets are talking about Google's addition of personalized news items, stock quotes, and weather to its home page. Personally, I was concerned that the company had lost its minimalist user interface, but actually, they did a decent job. Contrast it with Yahoo's rather overwhelming home page, and I think it demonstrates what how much more Google thinks about human interface design.

Bill Gates Takes on the Tyranny Of Too Much with 100 CEOs

Communication

Businessweek writes that "making sense of the info glut" is the topic of Bill Gates' 9th annual CEO Summit. Well, at least he is thinking about it. But somehow, the quote from the article didn't make me feel like Bill thinks this applies to his products:

Office, which evolved from the suite of word-processing, spreadsheet, and e-mail programs into a whole family of products, will continue to grow in its newest iteration. When Office 2003 launched, it included 26 programs, servers and services. Microsoft vice-president Chris Capossela says the newest version will add some more, including business-intelligence software and expanded collaboration offerings.

Xbox 360 not compatible with current games - vnunet.com

Marketing

VNUNet.com is reporting that the new Xbox 360 won't run old games. Funny -- there were a couple of reports from E3 yesterday that said it would. If this is the case, this is a marketing (and design) blunder. Think about it: you are the #2 platform in a market, and unlike #1 and #3, you tell all your loyal customers that if they want to pay you money for your shiney new platform, they have to buy all the games they have come to love on your platform again.

Playstation 3 and Nintendo Revolution will both be backward compatible. With Playstation 3 spec'ing out ahead of the Xbox, this one issue could knock Microsoft back down to #3 in the platform wars again.

Google: Feed store

Google

The Google Blog notes that it can now provide ads for RSS and Atom syndicated content. This is a big deal, now that mainstream browsers like Firefox and Safari support feeds. Next thing you know, Google will be providing ads on networked laser printers and Tivos.

Steve Jobs and the tyranny of too much

Marketing, Apple

Steve Jobs will speak next week at the Wall Street Journal's D conference. Last year, he was particularly eloquent on a topic near and dear to our hearts: the need to limit messages to the market to avoid overwhelming consumers:

"'We innovate, and let's say we've got a dozen major breakthroughs a year: we can advertise three or four of them; if we do more the consumer thinks we're a little nuts,' he said."

In other words, Apple not only understands the tyranny of too much, it uses it to guide its product strategy.

It will be fun to hear what Steve has to say this year at D about music. Despite the doom and gloom being forecast by people in love with the subscription music model, Blackfriars predicts Apple will stay the course in digital music. Why? Because subscription models require users to deal with the tyranny of too much music every time they load their computers with music. Who wants to pay even $7 a month for that when what you really want to hear is music that you like?

Nickle and diming consumers

Marketing

Today's New York Times has a great article "shrouding", the numerous options and fees that are being used to pad profits of everything from restraurants to computer printers. This sounds like just good business right?

It sounds that way until you start thinking about what it says about the corporate brand. Today, nearly three quarters of the senior executives Blackfriars survey believe marketing is the public face of corporate strategy. So what public face do consumers see when they have lots of additional charges and fees added to their bills? Terms like "sneaky", "tricky", and "rip-off" come to mind. Are those the attributes that you want associated with your company and brand?

The WSJ confirms the TV upfront ad market soft

Advertising

We've just published the latest Blackfriars Marketing Index and our latest marketing budgets and spending report, Marketing 2005: Q2 Marketing By Vertical. Both of these analyses say that advertising spending is starting to slow in favor of other types of marketing.

Today's Wall Street Journal confirms that effect in the upfront TV market. But they attribute most of the effect to companies being selective in what they buy. Blackfriars attributes it to the fact that TV ads continue to buy fewer viewers each year for more money, and worse, it isn't even a directly measurable marketing channel. We believe that this is simply one more data point in a long term trend that will erode advertising's traditional dominance of marketing budgets.

Executives can't write

Today's New York Times has a reader opinion piece noting that one of the big impediments to business today is that people can't write. Why? Because too much of English education has been focused on passing tests instead of actually developing on-demand writing skills. Blackfriars would have to agree; we've seen press releases published with Flesch readability scores of zero or lower. And companies then wonder why they don't get good press.

From the shameless commerce department: If you are receiving written work from your staff that is incomprehensible, Blackfriars does offer a half-day course called Writing Simply that can help address this problem. We can't replace several years of good English courses in high school, but we can help people develop clear business writing skills that even those several years of English didn't teach you.

Commercial over; now back to our regularly scheduled blogging.

Microsoft, Yahoo, Apple and Google, Oh My!

Robert X. Cringley is at it again, and he's talking about all our favorite and least favorite companies. But I think the most interesting take is that Google is making an audacious grab for control of the Web. I think that's a bit of overreaching, but as always, it's an interesting scenario to think about. A great read.

Startup 101

Guy Kawasaki gives a quick tutorial on start-ups in today's Forbes. He touches on some communication issues in the process. My favorite answer is the last line below (and it's true!)

Is there a business plan model that most VCs prefer?

Is this a trick question? Let's assume it's not. VCs want a 20 to 30 page document (including any appendices). It should cover these major areas:

Executive summary
Problem
Solution
Business model
Underlying magic
Marketing and sales
Competition
Team
Projections
Status and timeline

You should boil down your projections to one page. Include not only your "conservative" drug-induced financials but also the key metrics of your company such as the number of customers or installations. Frankly, of these 20 pages, only the executive summary counts.

How bad communication caused panic in the currency markets

Today's Wall Street Journal has a great article about how a bad translation of a news story caused billions of dollars of currency trades and speculation in the Chinese Yuan. Who said communicating clearly wasn't important for business?

Here's a good question to think about: how would your company's press releases fare if they were translated into Chinese? Would they be clear and understandable or would they be likely to be misinterpreted? As a rule, if a communication is one that can't be translated easily, its meaning probably isn't that clear in its native language either.

A new group studying brand

In reading an article about the rebranding of Kentucky Fried Chicken, I happened to notice that my alma mater has created the MIT Consortium on Brand Culture Convergence. Whenever MIT picks up one of these ideas and runs with it, the results are usually interesting. I'm putting their blog on my list of RSS feeds; I'm sure they will have interesting ideas.

One idea that I've gleaned from that blog just tonight is the fact that there are multiple fast food chains revisiting their brands. A coincidence? I'm not so sure. Fast food doesn't exactly have the best brand promise nowadays.

ITunes Music Store moves toward sales of video as well as music

Today's Silicon.com article discusses some of the new video content that Apple is selling on the iTunes Music Store now. Recent upgrades to iTunes itself that allow full-screen video display using the new H.264 codec indicate that Robert X. Cringley's prediction might be coming true. If Apple starts putting digital HMDI outputs on Mac Minis, it could do the same thing it did with the iPod: create an entirely new way to distribute and consumer digital content. If it does that, the networks should start worrying.

Advertising advertising

Today's New York Times boasted a special advertising section promoting the upfront TV advertising season, with many gushing plaudits of the effectiveness of TV advertising. But the very fact that TV and cable networks are taking out massive print ads promoting their medium speaks volumes about that business -- and the news isn't good.

The bottom line: TV advertising is getting more expensive to reach a smaller audience. And overall, we are starting to see data that indicates that US companies in general are dedicating a smaller percentage of their marketing budgets to advertising and devoting the dollars freed up to other more measurable marketing media such as direct or Web marketing. For example, in Q4 2004, advertising was more than 30% of marketing budgets. In Q1 2005, it averaged 24%. That's a huge change.

For anyone interested in getting more data on marketing activity budgets, attitudes, and spending, you can pre-order our Q2 report, "Marketing 2005: Q2 Marketing By Industry" at our eStore here. We'll also be releasing in June a new report titled "Sizing US Marketing" that projects both the size and breakdown of US Marketing activity in 2005. Don't miss that -- how often do you get to participate in a market whose size is in excess of $1.0 trillion (yes, that's Trillion with a T)?

Appeals court upholds the right of citizens to bear TiVos

The US Court Of Appeals decided today that the FCC doesn't have the authority to dictate and enforce the broadcast flag for television. That decision is probably comparable to the Supreme Court decision that allowed the VCR industry to prosper: it upholds the right of citizens to bear TiVos.

Researching market research

BtoBOnline's Kate Maddox has an interesting article on the current prospects for market research. One of our favorite tidbits comes at the end, though, where one of her interviewees talks about the challenge more data poses to researchers.

"Almost every market research technique involves going out and talking to customers, but response rates are going down like a rock," [Don Schultz, professor emeritus-in-service of integrated marketing communications at Northwestern University] said. "You can build a very sophisticated sampling technique, but if you can't get anyone to respond, you have a problem."

Schultz said another problem is data overload. "Organizations have huge amounts of data and they don't know what to do with it," he said. "Most market research activities focus on getting more data, but what we really need is better analysis."

We couldn't agree more.

The Economist notes the rise of online advertising

The Economist commented today on Google's introduction of new forms and types of online advertising. They spend a lot of the article talking about the new types of advertising Google is allowing, but never quite gets to one of the most important differentiators of online: it's a measurable medium. With our latest data showing the marketing measurement increases executive satisfaction by 10%, to say nothing increasing average budget sizes, it's no wonder online advertising is getting traction.

An amusing comment about OS naming

Rob Enderle in TechNewsWorld is doing a quick and dirty comparison between Linux, Tiger, and Microsoft's Windows XP 64-bit Edition". His best moment is when he compares the names:

Tiger vs. Windows XP 64-Bit Edition

If this were a competition based simply on names Tiger would get my vote. The Microsoft product name is almost a sentence and the acronym WXP64BA looks like a password I would quickly forget. I don't know who is responsible for naming at Microsoft these days but he, or she, seems to be working way too hard to validate my old axiom: 'The only thing people will agree on when it comes to a new product name is that the person who came up with it is an idiot.'

I guess we could make it worse bay calling it the 'Windows XP 64-Bit Addition with SP 2 and knock three times on the ceiling if you want me Edition,' but I'm hoping coming up with names like that doesn't become the next big thing in Redmond."

The Globe complains about careful messaging and good marketing

The Boston Globe's Hiawatha Bray complained today that Apple allowed the New York Times and the Wall Street Journal to publish Mac OS X 10.4 Tiger reviews a day earlier than the Globe. He implies had he known of that two-tiered approach, the Globe might have been more reluctant to review the product. He goes on to run additional notes about how Apple likes to control its message.

Blackfriars thinks this is just a case of not understanding basic marketing. The two-tiered approach to reviews and publication is called an exclusive, and it has been a tool of public relations for decades. And it is not like Tiger had not been reviewed prior to last Thursday -- every major computer publication had seen betas and written articles on the features and benefits.

And control of the message? Yes, Apple likes to control its message. Frankly, we believe that most companies should exercise more message control, not less. Why? Because brand is made up of the public perception of corporate messages and products. Companies that let just any message out into the market end up with brands that are mush. Apple, on the other hand, just finished the year as the highest-rated global brand, and continues to garner value for its tight messaging. The buzz and brand value that Apple is generating far exceeds that of any other high-tech company at present.

Yes, Apple has been heavy-handed about suing Web sites who spread rumors about its new products. But Mr. Bray's prior columns opposing file sharing indicate he is in favor of companies controlling their intellectual property (and thereby their messages to the market), even to the point of allowing lawsuits against innocent users who have not broken the law (as some of the RIAA's lawsuits have turned out). But because Apple isn't Intel or Microsoft, Mr. Bray feels that such actions by a smaller competitor imply excessive control.

Apple is one of the very few companies to create must-have consumer electronics in the last ten years. We wish more companies were as careful and focused about marketing and communications as it is. As it is, it will be years before anyone else in high-tech -- with the possible exception of Google -- can catch them.