Proof of marketing 101: easily pronounced stocks do better on the market.

The science journal Nature has an article demonstrating that Easily pronounced stocks perform better as investments. This quote sums up the research nicely:

For those of you struggling to pick a winner in the complex world of stocks and shares, help is at hand. A psychology study has found that, at least in the short-term, stocks with names that are easier to pronounce consistently outperform those with more confusing monikers.

According to Adam Alter and Daniel Oppenheimer, psychologists at Princeton University, New Jersey, it's all about fluency. When people try to understand complicated information, they tend to focus on the simplest parts. This means that people naturally favour things that are more fluent, and easier to think about.
....
Oppenheimer says that considering psychological factors such as name choices could help to improve economic models. Because shares are traded by human beings, he reasons, behavioural foibles will undoubtedly influence how the market works.

Regular readers will know that we at Blackfriars deeply believe in "less is more" as a mantra of marketing strategy, based upon numerous psychological and cognitive studies. But it is reassuring to know that these same concepts work as well in stock markets as they do in the marketplace.

Technorati Tags: Nature, Stocks, Psychology

Microsoft calls Sony's PS3 kettle black for Blu-ray bundling

You have to love Microsoft's hyper-competitive streak; it produces such amusing stories. Today, HDBeat notes that Microsoft Europe bosses are Sony "forcing" consumers into Blu-ray purchases. The article cites a GamesIndustry.biz article with the following quote:

“Sony are now making people pay an extra few hundred pounds for a Blu-Ray DVD drive which we don't know is going to be the standard in the next-generation DVD formats,” Thompson insisted.

“This is the company that brought out Betamax – we don't quite know where they're going to go with this,” he added, in a pointed reference to Sony's defeat in the format war against VHS.
....
Thompson's frank views were backed by Europe boss Chris Lewis, who added: “[PS3's] is an interesting price point that in my view forces the consumer down a choice path in a way that I'm surprised to see.”

So let's get this straight: Microsoft is arguing against the dominant player bundling a feature into its new product. And if that's their position, can the EU use those statements in its antitrust case? After all, if we substitute product names and companies in the quote, we get some interesting conclusions:

“Microsoft is now making people pay an extra few hundred pounds for Windows media player which we don't know is going to be the standard in the next-generation player formats,” Thompson insisted.

“This is the company that brought out Microsoft Bob – we don't quite know where they're going to go with this,” he added.

Microsoft can argue all it wants about PS3, but I think one of the commenters on the story at HDBeat has a good handle on what this all means:

These comments suggest to me that this guy doesn't think people actually want a 360 so therefore have no choice but to buy a PS3. I think Microsoft are getting scared that the PS3 is going to out sell the 360 even with it's higher price.

We noted last year that Sony's high price may actually be a very savvy marketing strategy where high demand is likely to outstrip supply. After all, why should eBay sellers reap big profits when Sony could be? But if Microsoft is currently engaged in trash talk about PS3 before the product even launches, you know that this is going to be a marketing battle royal.

My prediction: anyone planning to get a PS3 for Christmas should order it as soon as retailers will accept pre-orders. No matter how many Sony makes, they will be sold out. Sony's pricing and marketing strategy is both burnishing their brand as the premiere gaming system and maximizing the value of their launch production runs. And since when does Microsoft think that maximizing profit is a bad thing?

Technorati Tags: Business, Games, Gaming, Marketing, Microsoft, Playstation 3, Pricing, Sony, XBox 360

Spymac.com gets the all-in-one Apple TV vision

Michael Simon at Spymac.com has visions of a thin bezel, a glowing Apple symbol, and a 42-inch Apple TV to be the centerpiece of a home entertainment experience based on Front Row. Of course, this mirrors our prediction from last year of an all-in-one Apple flat panel system and Internet TV network that takes the hassle out of HDTV home theater. Sounds like the pieces might be finally falling into place. Look for an announcement around August/September if it happens this year.

Technorati Tags: Apple, HDTV, LCD, Marketing, Plasma, Predictions, TV

Data followup: Google Adwords trounces email marketing in efficiency

We noted at the beginning of the month our ongoing disappointment with the efficiency of our email marketing attempt to get people to complete our Q2 marketing survey (which, by the way, is just winding up). As some of you may remember, the stats looked something like this:

Emails sent: 11,261
Bounced: 342
Removed: 302
Net sent: 10,919
Emails opened: 1,783
Click throughs: 30
Cost: $3,000
Surveys completed: 10

That's a 0.3% response rate off the net emailing. Each click-through cost roughly $100, and each survey about $300.


Well, after running Google Adwords for about three weeks, we achieved the following results:

Impressions after three weeks: 952,787
Clicks: 355
Surveys completed: 64
Cost: $1,116.59

On AdWords, we ran both cost per click advertising and impression-based ads. Our response rate on the advertising was only 0.03%, mostly driven down by our CPM advertising; our advertising on selected web sites on an impression basis actually had about double the response rate (0.07%) because of better targeting. However, our cost per click overalll was only $3.15, and our cost per completed survey is just $17.45 instead of $300.

The numbers speak for themselves. Anyone who isn't considering Google advertising should ask themselves why not. And people who think email advertising is a great way to reach people had better have great opt-in email lists.

Technorati Tags: Advertising, AdWords, Business, Direct email, Google, Marketing, Marketing measurement

Back from Destination Imagination Global Finals

[Laser light show and pyrotechnics at Destination Imagination Global Finals 2006]

We're back from the Destination Imagination Global Finals 2006, and what a show it was. We saw kids working in teams and creating solutions to problems on time and under very tight budgets. We witnessed a machine that continually shot ping-pong balls across a 20 foot space at more than 100 miles per hour. We saw plays that would have done well in any drama competition. And most of all, we saw kids who worked hard, took risks, and weren't afraid to fail. It was probably one of the best weeks I've ever had.

Anyone wanting to see more pictures from the event should go to globalfinals.org. Those that would like to involve their children or school in the program should go to idodi.org. I highly recommend it.

We now return to our regularly scheduled blogging.

Technorati Tags: Destination Imagination, Global Finals

Buying PC time? It just doesn't make sense

The silly season has begun. Today's Wall Street Journal cites a program Microsoft is testing to
rent PC time as a way to reach developing country users who wouldn't be able to afford a PC. As the article notes:

The program allows suppliers to cut the initial price of PCs and lets consumers pay for them over time with the prepaid cards.

"You can take this barrier of the relatively high entry price of a PC and maybe drop it by half," said Microsoft Senior Vice President Will Poole. In Brazil, a trial of the program was able to offer $600 PCs for about $300, he said.

This, of course, is the rent-to-own model taken to the developing world. But the quotation feels wrong too. $600 PCs for the developing world when they sell for $249 here in the US? What about the Chinese Linux computer for $149 or the $100 laptop project? This marketing program seems more intended to get developing countries hooked on Microsoft subscriptions than to actually help users. And when marketing programs benefit primarily vendors instead of customers, they rarely do either.

Here's a thought: if Microsoft wants to do something for the developing world, why don't they buy them some computers with the $34 billion they have in the bank?

Technorati Tags: Marketing, Microsoft, PCs, puppy

Traveling for a week

[Fireworks display at Destination Imagination Global Finals 2005]


I won't be regularly updating the Blackfriars Marketing blog for the next week. I'm driving to Knoxville, Tennessee to see one of my sons compete in the Destination Imagination Global Finals held there. This is the culmination of a year of creative problem solving by his team of seven middle school kids. After winning first place in their regional and state competitions, they will now be performing and competing with nearly 800 teams from up to 40 countries. I think of this as the Olympics of Creative Kids. Opening ceremonies begin on Wednesday, May 24, and the event closes Saturday night, May 27.

I will try to provide updates and pictures from the event, as well as commentary on the marketing I see there, but I can't be assured of having Internet connectivity. So until Tuesday, May 30, wish us luck!

Technorati Tags: creativity, Destination Imagination, Global Finals, problem solving

Traveling the next few days

We're flying off to Chicago to meet with some clients, so blogging will be spotty if at all the next few days.

Technorati Tags: Administrative

Consumers will resist the Urge

Today's Boston Globe front page boasted "MTV-Microsoft duo takes leap onto iTunes's stage", replete with a photo of two iPod ads (more about that below). And the article continues this optimistic view:

Analysts say the partnership of the world's largest software company and the marketing muscle of MTV poses the most serious challenge yet to Apple's dominance. "They are probably the strongest contender to come into the market for some time," said Phil Leigh, a senior analyst for Inside Digital Media, an Internet-based trade publication in Tampa, Fla.

Observers of this battle between Microsoft and Apple regarding digital music will recall that we've heard these words before in 2004 when Microsoft prepared its Janus digital rights management system, and launched its MSN music store. And we heard more noises last year around this time from Microsoft about its own subscription system that it would sell through its partners. And then later we heard that Yahoo music was going to be the iTunes-killer, based upon Microsoft's software and digital rights management.

There are three marketing problems here. One is that URGE offers no real differentiation from either iTunes or other Microsoft-based music stores, other than the MTV brand and programming. Without big differentiation, there's no reason to change. Secondly, the store is incompatible with the dominant portable music platform, the iPod, making the available market for music buyers a niche. And third, Microsoft's primary offering is that of a subscription, where consumers are overwhelmed by the tyranny of too much choice. Every other Microsoft-based music store has run into these problems, and all have failed to make a dent in Apple's dominance to date.

Someone once said that the definition of insanity is doing the same thing over and over and expecting different results. URGE is Microsoft trying the convince consumers that the tyranny of too much choice in music is no big deal, and that they should throw away their iPods because they need more choice. I expect consumers will ignore this URGE, big time.

Full disclosure: I do hold a small position in Apple stock.

Technorati Tags: Apple, Attention Economy, iPod, iTunes, Marketing, Microsoft, Movies, MTV, Music, Opinion, URGE

Coke joins J&J in passing on the TV network upfront sale

According to Ad Age, Coca Cola has joined Johnson & Johnson and also will not buy upfront TV ad time, although it will be sending executives to the upfront presentations. The networks have to be worried about this trend; after all, Coke bought more than $190 million in TV ad time last year.

So where is all that money going? Well, truth be told, what's most likely is that advertisers are just holding the money back, intending to buy specific show and commercial spots a la carte later in the year when they know more about their needs and how the fall lineups stack up. But the article cites another trend at J&J that we have also seen in our marketing research:

According to people who have spoken with J&J executives, the company plans to shift more of its marketing spending to nontraditional media -- 20% or more of the budget, according to one of the executives.

With Johnson & Johnson spending more than $1.3 billion on advertising last year, that could mean $260 million moving into non-traditional marketing -- and you can bet a large chunk of that will come out of the TV advertising budgets.

Technorati Tags: TV, Coca Cola, Johnson & Johnson, Advertising, Marketing, Non-traditional marketing

Telcos play the fear, uncertainty, and doubt card to avoid net neutrality rules

Today's Associated Press article titled "High-Definition Video Could Choke Internet" smells like a telco news release disguised as a story. The argument is a simple one: if consumers download more than a little high-definition video, the Internet will collapse. The sky is falling. Worse, the cost for telcos will go up.

What the article fails to mention is that consumers are currently being sold services by those same telcos promising flat-rate, multi-megabit downloads via DSL, so that they can compete with the cable internet service providers. Stories like these are attempts to change the flat-rate pricing model so that they can charge consumers more if they actually use the service. Sign up for a service, and then change the service offering after have signup so consumers pay more. In any industry other than telecom, this would be called bait and switch, pure and simple. And it would be illegal, just as car dealers raising the price of a car from that advertised is illegal.

One other point: notice that the service being trotted out as the bogey man here is HDTV. These same telcos who are claiming that there is no network Internet bandwidth for HDTV will also be happy to sell you a FIOS or IPTV HDTV subscription themselves. They just don't want consumers getting those services over the Internet without them getting their cut. So the notion that "The Internet can't handle it" rings a bit false in that context.

Consumers shouldn't forget that subscribers already have subsidized these telcos to build out fiber networks through tax incentives and other fees. And content providers aren't exactly thrilled about this situation either. Is it any wonder that both Warner Brothers and Apple are investigating using BitTorrent to distribute this type of content more efficiently using peer-to-peer technology?

Technorati Tags: Broadband, Internet, Marketing, Network neutrality, Telcos

The New York Times chimes in on the Attention Economy

Two articles in today's New York Times converge on the same driving force we mentioned was reshaping the media markets last week: Advertisers are relentlessly pursuing shrinking consumer attention, caused by the tyranny of too much. The first of these articles talks about how Interpublic Group is studying how to reach consumers who are splitting their attention between TV and the Internet. It cites an important point that certainly bodes ill for the shared attention model.

It does seem certain, though, that a viewer who is multitasking is not doing those activities with equal interest. "Terms like multitasking imply equal attention," said Mike Bloxham, director of testing and assessment at Ball State. "But cognitive science tells us this isn't possible. You have to give priority to one in order to absorb the messages."

And while the article concludes by saying that these types of studies haven't affected the TV advertising business yet, the other article in the Times today observes that at least according to upfront advertising sales, the affects of the attention economy are already being felt by the TV networks.

Last spring, during the upfront market ahead of the 2005-6 season, advertisers agreed to buy an estimated $9.1 billion worth of commercial time on the six biggest broadcast networks. That was slightly less than they bought in the upfront before the 2004-5 season, suggesting that the movement of money to the new media was under way.

Because of the uncertainty that new media are bringing to this upfront market, analysts are not offering as many forecasts as they usually do. Some predict the total could increase modestly, by $100 million to $300 million, because of the appeal of the new-media opportunities. Others say those media outlets will only slow the flow of ad dollars from broadcast TV, resulting in a total similar to or down slightly from last spring's.

In my opinion, people predicting an increasing upfront market are banking on the "greater fool" theory: there's always a greater fool than you to buy what you're marketing. But sooner or later, advertisers are going to figure out what Johnson and Johnson already has: that committing to to an up front buy of TV ad time is a bad bet when the media landscape is changing. My prediction: the upfront TV sales will fall 3-5% short of what they were last year. And that's just the beginning of the changes coming in the scarce attention economy.

Technorati Tags: Ad networks, Advertising, Attention Economy, Consumers, Internet, iTunes, Marketing, Opinion, Psychology, TV

The relentless pursuit of shrinking attention -- part 2

[Media's attention cycle; click for larger image]


In yesterday's post, I linked to Scott Karp's insightful analysis that just at a time that advertising revenues are shrinking, almost every major high-tech company is looking to advertising for growth. That may sound like a great land grab strategy in the seemingly-unlimited publishing space of the Internet. But advertising as a business made the most sense sense when content was scarce and attention was plentiful. But with the boom in content and the decline of attention because of millions of Internet pages, hundreds of TV channels, and countless electronic gadgets, the business has now changed.

It's perhaps easiest to understand this change in the context of history.

Fifty years of the media attention cycle

We start in the bottom right hand corner in the 1950s. In 1952, there were only about 10 million TVs in the US serving less than 10% of the population. TV content often consisted of pointing a camera at a radio show or a news broadcaster and transmitting the results. Content was scarce. But viewer attention was also scarce, since TV didn't reach the bulk of consumers.

But some companies saw opportunities to reach audiences through the creation of branded content. Some early experiments included Kraft Television Theater with its broadcasts of theatrical productions, Colgate Comedy Hour, and Coke Time. And as those experiments drew audiences and more TV sets, the shows became more elaborate and expensive, requiring more advertisers. At the same time, the advertisers looked to reach broader audiences. Attention was plentiful, and the business model changed to address that opportunity to capture attention. Advertising-supported networks grew to dominate the TV business in the 1960s and 1970s, and businesses threw dollars at TV to reach the growing attention pool of most consumers.

With billions of dollars being spent on TV advertising, new networks and technologies were born to capture those dollars. Cable TV flooded consumers with Advertising-driven custom content ranging from 24-hour news and weather to infomercials. Advertisers noted this new tyranny of too much advertising and starting using other techniques such as product placement to capture consumer attention. As we moved into the 1990s, that flood of content grew to a deluge as the Internet began to allow anyone to create and distribute content. Content was king -- but it was king to a shrinking attention span because of multiple competing media types. Consumer attention available to address any particular piece of content started to decline, and the business models starting moving to the top right-hand quadrant of our graph.

Now, our media world is dominated by branded guides to content such as TiVO for television, Google for the Internet, and social network guides such as Digg.com or Memeorandum.com. Yes, advertisers are spending money to reach consumers here, but they are spending less to do so. And with content plentiful and consumer attention scarce, there is little pressure to raise advertising prices. The advertising economy is now experiencing deflation as dollars move from TV to other media. And it won't be long before TV advertising dollars start to deflate also. After all, how much longer can TV networks continue to ask for more dollars to reach a ever-smaller audience?

What the end of the media cycle means

Where does this trend leave us? Scott Karp noted his conclusion by titling his article 2.0 Business Model Doomsday Scenario. He also notes a possible outcome in his subsequent article, What If No One Will Pay For Content?

What if the economics of media in the 21st century begin to look like the economics of poetry in the 20th century? — Lot’s of people do it for their own personal gratification, but nobody makes any money from it.

We have evidence of this happening already in the newspaper business as well as in magazine publishing. So Scott may have this right for older media types. As as noted above, this trend is overdue for TV as well.

But the end of the media cycle doesn't mean that all the companies close their doors and the medium disappears. With newspapers, major markets that used to have five major newspapers have shrunk to one or two, but few markets have no newspapers. At some point, the media cycle stabilizes again in a "scarce content/scarce attention" model, and branded content returns again in the environment of less competition.

Internet blog counts are now doubling every six months. But consumer attention isn't growing to match that new-media tyranny of too much. That means that for the vast majority of blogs, attention per blog is decreasing rapidly. Blogs may be the poetry of the 21st century -- lots of people do it for personal gratification, but few garner enough attention to thrive as advertising-supported enterprises.

I say few, not none. Just as with newspapers, the strongest and biggest brands will survive. Look at Google. Its revenue stream comes from a stage 2 advertising-supported network and stage 3 advertising-driven custom content. Further, it is the strongest stage 4 branded guide to content on the Internet, comprising the majority of Internet searches. And where does it put its investments? Into Google News, Earth, Google Notebook, Google Trends, Google Video, Google Calendar, and a host of other branded services. Google has positioned itself to be a dominant provider of branded content to start the next 50-year media cycle on the Internet.

So lets return to that list of companies Scott mentioned in his original post:

Microsoft’s growth strategy: ADVERTISING
Google’s growth strategy: ADVERTISING
Yahoo’s growth strategy: ADVERTISING
MySpace’s growth strategy: ADVERTISING
Nearly every Web 2.0 startup’s growth strategy: ADVERTISING

How many of these companies are investing their advertising-driven profits to create new branded content for the next media cycle? I count two: Google and Yahoo. Microsoft's Internet efforts aren't profitable, and it keeps rebranding its Internet presence every chance it gets (MSN? Windows Live? Office Live? Xbox Live?). Few of the other Internet companies are profitable either.

There's no question Google has changed the face of the Internet forever by introducing terrific search services supported by pay-by-click advertising. It also has created the first micro-payments advertising network for other sites to profit from its advertising revenue stream. But make no mistake. Google is a media company poised to dominate the next media cycle, because it provides a branded antidote to the tyranny of too much and it was willing to invest in branded content. That should -- and will -- get everyone's attention.

Technorati Tags: TV, Internet, Attention Economy, Google, Branding, Web, Web 2.0, Eyeballs, Publishing 2.0, Consumers, Ad networks, MySpace, Business, Advertising

The relentless pursuit of shrinking attention -- part 1

Seems like everyone wants to be a hammer when the pile of nails is getting smaller.

Scott Karp at Publishing 2.0 uses Microsoft's adCenter launch to declare that Microsoft is no longer a software company. But he goes even further with his analysis with this table:

Microsoft’s growth strategy: ADVERTISING
Google’s growth strategy: ADVERTISING
Yahoo’s growth strategy: ADVERTISING
MySpace’s growth srategy: ADVERTISING
Nearly every Web 2.0 startup’s growth strategy: ADVERTISING

But then he notes that a advertisers are creating Internet content themselves like Subservient Chicken (Burger King) or Internet films (BMW) instead of buying ads. The result: just at the moment that nearly every Internet company has pinned their growth on on-line advertising, the big on-line advertisers are going direct to the consumer via the net.

Blackfriars' marketing research data about advertising reinforces Scott's analysis. Advertising spending is going down, and non-traditional marketing spends are going up. Scott's right: this is a recipe for disaster. And the notes the likely outcome in his followup article, What if no one will pay for content? In that article, he notes that Internet users go to sites like MySpace.com or Flickr.com not to give attention, but to get it. And that says advertising on those sites just is never going to be a good business model for them.

Advertising as a business made sense when content was scarce and attention was plentiful. But with the boom in content and the decline of attention, the tables have turned. More on what that means in part two of this article.

Technorati Tags: MySpace, Advertising, Eyeballs, Consumers, Attention Economy, Publishing, Web, Web 2.0, Publishing 2.0, Internet, Marketing

Warner Bros now plans to use BitTorrent for movie and TV show distribution

On the heels of the rumor about Apple integrating BitTorrent into it's upcoming Leopard OS, Warner Bros. announced plans to sell its movies and TV shows via BitTorrent. Sounds like the studios have figured out, "if you can't beat em, join em." And the fact that BitTorrent would reduce their bandwidth charges doesn't hurt either.

From where I sit, it sounds like peer-to-peer is finally going to be respectable again. I say again because the Internet actually predates client-server computing, and that peer-to-peer activity used to be the way everything got done. It's nice to see at least one studio finally realizing that technology can help them as much as hurt them.

Technorati Tags: Apple, BitTorrent, Movies, Leopard, TV, Warner Bros.

Sony preannounces PS3 and pays the price

Not surprisingly, Sony ignored my advice from yesterday and decided to try to prove that the PS3 wasn't vaporware with a press conference yesterday two days prior to the opening of E3. Full coverage of the press conference . And the Wall Street Journal today has a detailed analysis of the renewed competition between Sony and Microsoft looming over the next six months..

Overall, things went about as I suggested, with Sony talking about how the next generation of gaming starts with them and showing off their new motion-sensitive controller, which is a nod to Nintendo's innovation there. But Sony provided too much detail about what they are shipping and for how much, in my opinion. Further, Sony says that there will be playable games on the floor, which I think is a huge mistake. And not surprisingly, journalists such as those at Kokatu and at the Guardian are already reacting negatively, either saying the launch is screwed up or that there is nothing new.

You'd think that after being beaten by Steve Jobs in digital music that Sony would learn that pre-announcing products is about as effective as pre-announcing a surprise attack. It shouldn't be surprised if Microsoft now takes note of where Sony is heading and launches some programs to further erode its lead. That's the price of Sony's quick headlines at its event yesterday; I don't think it was anywhere close to worth it.

Technorati Tags: Communication, Games, Gaming, Marketing, Playstation 3, Strategy, XBox 360

Why you won't be playing Playstation 3s at E3 this week

[Sony's Playstation 3 conceptual designs shown at the 2006 Consumer Electronics Show]

Several articles are out this morning (here's one), predicting that Sony will have Playstation 3 consoles at the Electronic Entertainment Expo (E3) this week and will demonstrate the power of their product as soon as this afternoon. Putting on my marketing hat, I have just one reaction:

Are you kidding? I wouldn't do that in a million years.

Yes, E3 is a big showcase for Sony. It is where they announced the Playstation 3 last year. Everyone is drooling in anticipation at seeing whether the console lives up to its hype and promise and so they can decide whether they want to preorder now for delivery in November.

Which is exactly why I expect to see only a trickle of new information from Sony this week. At this afternoon's press conference, I predict they will talk about the success of the Playstation Portable (PSP), announce the new PS3 controller, show a few movies, and call it a day. I don't expect any consoles on the floor of the show, nor any playable games.

Why not? Well, Sony has set the date of launch of the console for November. It's not November yet.

Let's face it, it's not like there is a lot of upside for any Sony announcement at the show. Every developer that Sony wants on board has already signed and is in the schedule for delivering Playstation 3 games. Any developer Sony wants to court, it can invite back to its hotel suite and show them console games until the cows come home. But going public with its product that won't be available for six months at the show will only provide information for its competitors, not win any new business.

Great launches and marketing programs are built on suspense, not on pre-announcements. By not announcing anything at E3 other than the controller, Sony will build more buzz about its console than any announcement would achieve. Yes, some of it will be negative, but you can be sure, everyone will talk about it. And with about 4 million XBox 360s in the market, that platform is going to be old news. All eyes will be on Sony.

So expect Sony executives to stand up at the show, smile, talk about how they are committed to delivering a great gaming experience, and then refuse to answer any detailed questions. It's not because they don't know the answers; it's because drama and anticipation is better marketing than any information they could give.

Technorati Tags: Analysis, Games, Gaming, Marketing, Microsoft, P2P, Playstation 3, Sony, Strategy, XBox 360

Get swag even if you don't live in Silicon Valley

Now this is marketing at its best.

Do you feel cut off from the hip coolness of Silicon Valley events? Do you wish you were the first one on your block with a "Get Flocked" T-shirt or a "Talk Nerdy To Me" sticker? If so, your prayers have been answered.

ProBlogger notes that ValleySchwag has just launched its $14.95 subscription service for the best of Silicon Valley tchotschkes or swag (they spell it schwag, but they are cooler than we). The subscription includes shipping and always has at least one T-shirt, so overall, it's a fiscally responsible deal, provided you need logoed T-shirts.

But this is one of those services that everyone is happy about. Marketers get distribution to an audience they probably wouldn't reach otherwise. People who don't live in Silicon Valley get some unique gadgets and clothing to show off. ValleySchwag develops a mailing list, a brand, and a customer base that it can use to sell other stuff. What's there not to like?

Technorati Tags: Marketing, swag, tchotschkes, ValleySchwag

Origami's reviews illustrate platform marketing failures

[Picture of Samsung Origami device]



The first reviews are in on Samsung's production models of Microsoft's tiny tablet PC that it buzz-marketed under the code name "Origami" and more formally referred to as an ultra-mobile PC (UMPC). David Pogue of the New York Times says:

...the Ultra Mobile PC feels so wrong. It aims to bridge the size gulf between a palmtop and a laptop, but winds up inheriting the worst aspects of each. Like a palmtop, it feels claustrophobic, clumsy for text input and, with its exposed touch screen, vulnerable. Like a laptop, it's expensive, has short battery life and requires two hands to operate.

Over at the Wall Street Journal, gadget reviewer Walt Mossberg hits similar notes with his review:

Unfortunately, the Samsung Q1 is so deeply flawed in key respects that it amounts to little more than a toy for techies. For everyone else, it's impractical and frustrating. Unless the UMPC can evolve significantly beyond this first effort, it may wind up as a footnote in the history of personal computers, rather than an exciting new category.

Today, people from Microsoft's A-list blogger Robert Scoble to mobile technology specialists like James Kendrick are complaining that the reviewers got the wrong impressions because 1) the price is too high, and 2) they weren't using it in the way it was designed. This is a classic technology push complaint: the technology is fine, but the product people marketed it wrong.

Now, Blackfriars pointed out Origami's marketing problems when Microsoft started its buzz-marketing push. Even when we were just seeing concept videos, it was clear these devices weren't designed to solve any particular problem. And worse, Microsoft marketed them as a "platform" -- an architecture designed to spawn many products from many manufacturers -- instead of products. That was the kiss of death; horizontal platform marketing never works.

Now I'm sure many readers will jump up and say, "The PC was the most successful platform ever created! What do you mean platform marketing doesn't work?" I say it because it is true. The PC was never created to be a platform, nor was it marketed as such. The reason the PC succeeded was that IBM marketed PCs as a very specific and very successful product. The PC only became a platform when IBM dropped the ball on its PS/2 products, and Compaq and a variety of other clone makers picked it up. But the IBM PC was already a huge success before PCs as a category became accepted. The product launched the platform, not the other way around.

Geoffrey Moore noted in his book, Crossing the Chasm,a product needs to be a complete solution to a specific, desperate customer need to cross the chasm from early adopters to the mainstream majority of customers. Initiatives that just try to build up a lot of momentum and jump across the chasm are called "Evel Knievel" launches, and they usually fail with spectacular results. The Origami platform is following the Evel Knievel trajectory because of its non-specific platform marketing. Let's hope that the OEM marketers introducing Origami products figure this out; otherwise, these products will never get past their small early adopter clique.

Technorati Tags: Crossing The Chasm, Geoffrey Moore, Marketing, Origami, PCs, Platforms, Reputation, Samsung, UMPC

Microsoft Adcenter: Google imitation is just flattery, not any lack of innovation

I was reading CNET's preview of Microsoft's new AdCenter competitor to Google Adwords, and it struck me that the campaign creation menu looked awfully familiar. So here's the question: is AdCenter an example of Microsoft innovation when they copy Google's ad creation sequence step for step? Just compare the screenshots below and decide for yourself. Note particularly the sequences at the tops of the pages.





[Microsoft AdCenter Screenshot]






[Google AdWords Screenshot]

Note to Microsoft: to win a marketing battle, you have to differentiate, not imitate.

Technorati Tags: Adcenter, Advertising, Adwords, Google, Marketing, Microsoft

Financial services taking an interest in net neutrality?

Speaking of net neutrality, Wired News notes that some of the financial services firms are suddenly noticing that the lack of net neutrality protection in the upcoming telecom bill could result in them paying new access fees. The article notes that they almost missed the issue because it was being duked out in the commerce instead of the banking committees.

I think the most interesting point here is that interest in Internet policy, access, and fees is no longer restricted to the telecom and consumer industries. I believe that this issue will become much more visible -- and subject to more lobbying too -- once it emerges from committee onto the floor of the House and Senate next week.

Technorati Tags: Internet, Network neutrality, Telecom

Apple's Torrent technology could dodge Internet payola schemes

According to Mac OS Rumors and The Register, Apple is considering building in an encrypted BitTorrent client into it's next version of Mac OS X, Leopard.. BitTorrent, for those unfamiliar with the technology, is a peer-to-peer file-sharing package. The concept being bandied about is that Apple would use this technology to distribute very large files such as movies both faster and without paying for quite so much downstream bandwidth.

Apple has a history of introducing new technologies to ensure faster and more efficient downloads. It was one of the first companies to widely embrace Akamai's content distribution network for movie trailers. And introducing an encrypted BitTorrent client in Leopard would be using its customers as a distribution medium, Apple would provide incentives such as credits at the iTunes Music Store and Apple Stores to those customers for the use of their bandwidth.

But there's another business reason that Apple might want to introduce this technology. With the future of Internet "net neutrality" in doubt due to Verizon and at&t posturing to introduce new premium access fees for content providers, Apple may be looking for ways to bypass this carrier surcharge. Just as Apple built Mac OS X to run on Intel to hedge against PowerPC production issues, this may be another hedge against other businesses trying to piggyback on new business models that Apple creates. By engaging its loyal customer base as a software distribution network, Apple could both significantly reduce its bandwidth bill while avoiding the need to pay for premium delivery.

But at the same time, Apple could be looking to create an even more powerful marketing network of product advocates. By engaging its customers to help it with content distribution and compensating them for it, Apple turns its customers into Apple distributors. For those journalists who struggle to deal with "the Apple faithful" (as they are often called) now, watch out. If this new technology takes hold, the bond between Apple and its loyalists may become even stronger.

Technorati Tags: Apple, at&t, BitTorrent, Consumers, Customer loyalty, Network neutrality, P2P, Verizon

Comparing direct email with Google AdWords

For the last couple of years, I've been a pretty big skeptic about email marketing. Yes, it is cheap, but because of spam filters and general tyranny of too much email, it seems like a very poor way to reach people.

But recently, Blackfriars decided to do an experiment. We've currently surveying for our Q2 marketing research, and we wanted to drive US business executives to our survey. So, we thought, why not rent a list of 10,000 business executives, email them an invitation, and see what happens?

So we did. We rented a US business executive list from InfoUSA.com for $300/M, or $3,000, did the email blast, and waited for the survey responses. And as of about six days later, we got the following results:

Emails sent: 11,261
Bounced: 342
Removed: 302
Net sent: 10,919
Emails opened: 1,783
Click throughs: 30
Cost: $3,000
Surveys completed: 10

That's a 0.3% response rate off the net emailing. Each click-through cost roughly $100, and each survey about $300.

Now our experience and our research say that online advertising should be a lot more cost effective, so we decided to give that a try. So over the weekend, I pulled together a simple text Google Adwords campaign, and launched it on specific sites such as seekingalpha.com, cestockblog.com, and several others. Our results there are quite interesting:

Impressions after two days: 4,598
Clicks: 4
Surveys completed: 4
Cost: $16.29

Our response rate on the advertising is only 0.08%. However, our cost per completed survey is just $4.07 instead of $300.

My conclusions are pretty simple:

• Broad-based direct email is a bad bet.. The killer for me in the email campaign was that 4/5ths of the people we emailed never even saw our invitation. What was billed as a $300 per thousand list rental was actually more like $1,400 per thousand for opened invitations. While better lists and better targeting than those provided by InfoUSA would certainly help, the proliferation of spam and the broad use of spam filters have turned direct email into a very poor marketing tool.


• Google ads are hugely efficient. With a cost per completed survey nearly two orders of magnitude better than direct email, Google proves itself to be hugely cost-effective for marketers, easily justifying why it was able to pull in $1.7 billion in revenue this quarter. It's simple, it's easy, and it works.

I'll update these statistics as I get more data from Google. But I think we can safely predict that we won't be doing a lot of broad direct email invitations any time soon.

P.S. If anyone wants to participate in our survey, the link is on the right hand side of this page at the top. Or, you can just click here for information on participating.

Technorati Tags: Ad networks, Advertising, AdWords, Direct email, Google, Marketing, Marketing measurement, InfoUSA, Targeting

New Apple ads differentiate, differentiate, differentiate, differentiate, differentiate, and differentiate....

Anyone who hasn't seen the new "Get A Mac" Apple ads should. As with all Apple advertising, these six ads epitomize strategically clear marketing. Each emphasizes exactly one differentiating aspect between Macs and PCs. And they provide a wry chuckle for the casual viewer as well.

Technorati Tags: Advertising, Apple, Marketing, Differentiation

Google and the long tail of time

I noted earlier this week that the managing editor of WSJ.com noted an article I had written 10 years and two jobs ago, having tracked me down via Google. Now Chris Andersen, author of The Long Tail : Why the Future of Business Is Selling Less of More, notes that he now sees 39% of his traffic going to posts more than a month old. Of that, only 12% doesn't come from search engines. Said another way, his archives of postings account for 27% of his traffic, courtesy of the long spidering arms of Google, Yahoo, and MSN.

What does this mean for marketing? A few things:

• More content equals more traffic. Jakob Nielsen notes that with 10 years of archives, 80% of his 30 million pageviews has come from archived stories. Authors should recognize their archives as being significant assets and do whatever it takes to preserve them.


• The tyranny of too much is making getting noticed harder. Anyone authoring a new article or thought competes not only with other current ideas, but also with the billions of other pages already published on the Internet. Getting widely noticed is only going to get harder with time because of the long tail, a fact we observed a while ago thanks to some excellent research by Umair Haque.


• Personal and company brands are persistent and long-lived.. While the long tail is wonderful for Web site traffic, it also means that our online views and mistakes will live with us nearly indefinitely. Those who build strong and positive brands will benefit. Those who flip-flop, antagonize their readers, and generally serve their customers poorly will find it hard to recover. Internet brands will become more permanent than those in the real world because of the Google's immutable gaze.

Perhaps this is a time when one of the old saws of email netiquette rings particularly true:

"Never post anything you wouldn't want printed on the front page of the New York Times."

The only difference now is that your moment of infamy on the front page of the New York Times will last indefinitely -- or at least will when newspapers figure out that they should unlock their archives.

Technorati Tags: Google, Long tail, Newspapers, Publishing, Reputation, The Long Tail, Tyranny of too much, Writing

Best marketing video for an imaginary product

The folks over at Cult of Mac found a wonderful video on Google promoting the fictional Apple iTALK. The creators say up front that they made it all up. But doesn't the video treatment make you want one? I tell you, if Apple marketed that phone, my Nokia 3650 would be sent to recycling soon after -- and I have loved that phone.

Technorati Tags: Apple, Cell phone, Nokia, Video