Fantastic presentations and provocative ideas at TEDTalks

Regular readers know we are huge fans of great presentations. Yesterday, someone pointed me to the BMW-sponsored videos of the Technology, Education, and Design (TED) conference from February 2006. Videos up so far include Al Gore, Sir Ken Robinson, Majora Carter, David Pogue, Tony Robbins, and Hans Rosling. I've only seen two so far, but in my opinion they are uniformly wonderful. I highly recommend Hans Rosling's presentation, who truly has the ability to make data about global economics and health live and breathe through visuals. And Tony Robbins, the life coach guru, is also truly wonderful, largely without visuals.

Of the presentations I've seen this year, these rank at the very top. They are time well-spent. And best of all they are free. And should you wish to listen rather than watch them, they are also available for downloading in iTunes for use on your iPod.

Technorati Tags: Communication, Presentations, TEDTalks, TED

Who is spending ad dollars where?

Advertising Age published its 100 Leading National Advertisers report this week. This is certainly one of the authoritative references on who is spending money where in Advertising, and best of all, it is free to download. Go get a copy; we'll wait.

One of the things we love about this report is that it correlates with the work done by someone whom we consider to be the dean of advertising research, Robert J. Coen of Universal McCann, who conveniently was featured in Stuart Elliott's column in the New York Times yesterday. We love Mr. Coen's work for two reasons:

1. His advertising numbers for 2005 were within 2% of ours, and


2. He is reporting the same declines in traditional advertising that our research shows, although to a much smaller extent

Seriously, this report has a wealth of useful information about leading advertisers, advertising strategies, and best of all, what mixes specific companies are using. With the shifts we've already seen in advertising mixes this year, it's nice to know where companies were before the traditional advertising market really started to crumble.

Technorati Tags: AdAge, Advertising, Marketing, Robert J. Coen, Universal McCann

A government initiative we can all get behind: Plain Talk

PRI's Marketplace is one of my favorite radio programs. This morning I heard this story on their Marketplace Takeout podcast about the push for plain talk in Washington State. My favorite bit was this:

The plain talk push in Washington state started last year when Governor Chris Gregoire issued an executive order. It requires all state agencies to write in clear language, short sentences and active voice.

Just bureaucratic nonsense? No way. Just the rewriting of one letter about the use tax in Washington brought in $800,000 more in use taxes.


Today, more than half the states have some sort of plain talk regulation, and even the federal government has a Plain Talk Web site (plainlanguage.gov, which, understandably enough, is hosted by the FAA who has a vested interest in clear communication for air safety). The only question is that with the government providing that clear language has a measurable return on investment, when is private enterprise going to get on board as well?

Technorati Tags: Communication, Communications, Plain Talk, Washington

The value of Apple's secret marketing strategy

Today's Wall Street Journal has a wonderful look inside all the security and secrecy used at Apple to create excitement around its brand. The article seems to think that all of this is over the top, considering the roadmaps continually announced by Microsoft and Intel that make their announcements anti-climaxes. But the article does note the results that Apple reaps from its novel approach:

The mystery helps Apple attract crowds at its retail stores and generally garner much more visibility than its relatively modest advertising budget would suggest. Apple spent $287 million on advertising last fiscal year, compared with $995 million for Microsoft and $1.1 billion for H-P, according to the companies' filings with securities regulators. While new wares from Dell Inc. or H-P rarely get front-page treatment, Mr. Jobs has repeatedly appeared on the covers of Time, Newsweek and Fortune showing off a new iPod or Macintosh computer.

Said another way, Apple achieves visibility and coverage worth at least $600 to $700 million a year from its tight-lipped ways, all because it doesn't pre-announce. We've commented before that we think that Sony's imitation of this strategy on its Playstation 3 gaming console is smart marketing. But today's Journal article proves that this isn't just good marketing; it's good business.

Technorati Tags: Apple, Business, Buzz Marketing, Marketing, PR, Secrecy

Intel throws XScale baby out with the bathwather

Intel yesterday announced that it is selling its XScale manufacturing business unit to Marvell for $600 million. The reasons? Intel wants to reduce costs and focus on its traditional processor business. Said another way, it's saying, "Smart devices and cell phones that need long battery lives? Who needs 'em?"

The underlying issue here is that Intel isn't making the monopoly profit margins it used to, and it is embarrassed by the fact that much smaller AMD is now making comparable margins. So it hopes to cut its way back to the old days when power-belching Pentium dinosaurs ruled the earth. Too bad global warming (or in the case of Dell notebooks, battery-fueled conflagrations) is going to make that impossible.

We're all in favor of companies that focus on their core competencies. But frankly, jettisoning the Itanium line would have saved Intel millions more than getting rid of Xscale. And with the sale of Xscale, Intel is forfeiting its only real play in the hundreds of millions of cell phones sold each year. This is one of those deals that gives up future growth for near-term profits.

And in case anyone didn't notice, AMD is running full-page ads in the New York Times claiming it is "The Smarter Choice". Not only is that a clear, clean message to buyers, but it indirectly is implying that buying Intel is dumb. Let's hope Intel's business deals don't prove AMD right.

Technorati Tags: Advertising, AMD, Analysis, Dell, Intel, Marketing, Marvell, Processors, Xscale

Power to the people formerly known as the Audience

Pressthink.com has a brilliant piece on the shifting of power in media titled, The People Formerly Known as the Audience. It should be required reading for every media and program executive. Those that ignore it had better have a job in some other industry lined up; they're going to need it. No, not because the people will revolt. More because they'll be laid off as traditional marketing dollars move online and become more results-oriented.

Technorati Tags: Advertising, Media, Publishing, Publishing 2.0

Jellyfish reinvents the shopping experience for the Attention Economy

[Picture of Jellyfish.com business model; click for one you can actually read]



Today, eCommerce shopping engine Jellyfish has launched a pay-per-action ad network with a truly innovative twist for the attention economy: Jellyfish splits the ad revenue it receives on a transaction with the buying consumer. In essense, Jellyfish is paying consumers for their attention to their ads through cash-back incentives.

This is a beyond cool idea. Scott Karp over at Publishing 2.0 has figured this out as well. It's a complete rethinking of how advertising revenues should flow in an environment where attention is scarce instead of plentiful. We wrote earlier this week about Google's test of pay per action advertising, but this concept takes it all a step further. Welcome back to Internet time. Let's hope Jellyfish is on Google's radar for acquisition, particularly as it prepares to launch its GPay payment system; Jellyfish is a big deal, and it is a company Google should be working with rather than against.

Full disclosure: I have no positions or relationship with Google or Jellyfish.

Technorati Tags: Ad networks, Business, eCommerce, Google, Internet, Marketing, Opinion, Publishing 2.0, Jellyfish

If a communication can fail, it will -- unless it succeeds by accident

Lee Gomes at the Wall Street Journal wrote a quite interesting interview with Nicholas Epley, of the University of Chicago Graduate School of Business, who comments on the communication hazards present in e-mail. This is a topic we frequently refer to in Blackfriars' communications training courses in the context of Osmo's Wiio's Laws of communication (click here for a humorous exposition of those laws along with many corollaries), which you can boil down to:

Jos viestintä voi epäonnistua, niin se epäonnistuu.

Isn't that profound? Isn't it so true? I always love those Finns -- always kidding around. Must be from all those saunas.

For those that don't speak Finnish (myself included), the English translation has even more meaning, specifically:

If a communication can fail, it will.

As it turns out, Epley sums up the article in much the same way, albeit more cautiously and with many more words:

You should have a general lowered confidence in your ability to communicate things. You also want to be really careful about what you communicate with email. It's great for some things, it's not great for everything. Negative information or emotional information you should handle by phone, or face to face.

There's some scientific justification for these claims. One of them is that we only derive about 15% of the meaning of a communication from the words used; the other 85% comes from other non-verbal cues and information. As a result, we shouldn't be asking why email is so frequently misunderstood. We should be asking, "How do people understand our emails as well as they do?"

Oh, and what Epley says about email goes double for blogs.

Technorati Tags: Communication, Communications, Psychology, email, Wiio

Amateurs imitate; professionals steal

We blogged last year about Sony's wonderfully surreal Bravia ad (run only in Europe, we believe) that featured 250,000 colored superballs flying down the hills of San Francisco. Well, Tango (a UK fruit drink brand) has done their own mashup of the ad using fruit flying down the same hills. Some of the events in the new ad pay homage to the original in very funny ways. Clever.

Technorati Tags: Advertising, Sony, Tango

Indications of Advertising's Internet Revolution

Jeff Jarvis over at Buzz Machine has a terrific compendium of articles today claiming that advertising is the next business to be restructured and reinvented by the Internet. Regular readers of Blackfriars know that this is one of our regular soap box issues, but it is always nice to see major players in the industry start wondering whether that light at the end of the tunnel is actually a train heading toward them. He quotes Maurice Saatchi at Cannes with a particularly great story about how marketing suffers from the tyranny of too much:

Research by M&C Saatchi showed that 80% of marketing directors agree strongest brands can be described in one word. But only 10% of the marketing directors could describe their brands in one word.

Nowadays only brutally simply ideas get through. Reducing the complex to the simple requires the painful necessity of thought. The ruthless paring down of paragraph to sentence and sentence to word.

“It is said that Charles Dickens was paid by the word. Times change. Now marketing directors’ pay should be inversely proportional to the number of words in their strategy statemment.”

Less is more. . . .

And lest anyone think that this is idle blather, he also notes that Ad Age just today is predicting that the upfront TV season will fall about $600 million short of last year. That would be one of the largest upfront shortfalls in recent history. Six hundred million here, six hundred million there, pretty soon that starts to add up to real money. And while the article didn't lay the shortfall entirely at the feet of the Internet, it did note that advertisers were looking at more cross-media strategies including Web advertising.

Technorati Tags: Ad networks, Advertising, Buzz Machine, Marketing, Saatchi, TV, Tyranny of too much

Google tests a killer marketing tool

Seeking Alpha founder David Jackson noted yesterday that Google has just launched a cost-per-action ad service, and John Battelle, author of "The Search", has noted the implications of the service as well (that is notable since John has his own ad network, FederatedMedia.net). What does that mean? It means that an advertiser can place an ad, and only pay for it if the customer does a specific action, like buy a product, or join a list.

David interprets this move as a ValueClick-killer and just another affiliate program. But to me, the real power here is that Google now is becoming a one-stop shop for everything a marketer wants to drive buyers down the awareness funnel toward purchase. Google's CPM ads build general brand awareness. Cost-Per-Click ads allow marketers to test and refine messages that cause buyers to act. And now with Cost-Per-Action ads, marketers have a advertising tool that delivers a defined return-on-investment.

Why is this such a big deal? Because a marketer can now pitch the CEO with the following story:

"If you give me a million dollars to spend with Google, I can provide you with ten million in sales. Interested?"

With defined ROI like that, advertising with Google becomes a no-brainer. If Yahoo, eBay, MSN, and Amazon aren't worried about their advertising businesses, they should be. With more than $1 trillion being spent each year on marketing, Google has the potential to attract billions of that spend by providing clear, measurable results. No one else has demonstrated their clarity of vision around Internet marketing. If they don't watch out, Google could be the Microsoft of Marketing in a few years.

Full Disclosure: I have no positions in Google, Microsoft, Yahoo, eBay, or ValueClick

Technorati Tags: Ad networks, Adsense, Advertising, AdWords, Amazon, Federated Media, Google, John Battelle, Marketing, Media, New media, ROI, Search, SeekingAlpha, Yahoo

Microsoft developing *another* music store?

Someone seems to keep recycling this press release and reporters keep printing it.

Friday, we saw this news story titled, Microsoft developing a rival to Apple's iPod, which, despite its title, is actually more about Microsoft developing its own music store.

Again?

It was only last month that we heard that iTunes was doomed because of URGE, the new collaboration of Microsoft and MTV, which has since been deemed somewhat less than an iTunes-killer. And almost exactly a year ago, we heard that Microsoft was developing its own xPod. And this doesn't even count the numerous stories about Yahoo's, Wal-Mart's and Amazon's music stores that always seem to be labeled iTunes killers because they are using Microsoft technology.

There's one ray of hope here. If Microsoft actually develops an xPod music player and a music store, it will have no more excuses for delivering a poor user experience. It will have exactly the same tools and resources that Apple does. And if it can't copy Apple's user experience a full five years and countless millions later, the company will have no one to blame but itself.

Technorati Tags: Apple, iPod, iTunes, Microsoft, MTV, Music, xPod, URGE

Apple movies by the end of the year?

According to Reuters, Apple is negotiating to offer movie downloads by the end of 2006. Blackfriars predicted last year that once TV had established a beachhead for Apple, movies were the logical next step. Expect that you'll be able to buy movies from the iTunes movie store by the end of the year.

I do so love it when a marketing plan works out....

Technorati Tags: Apple, Marketing, Movies, iTunes, TV

The sad state of marketing in June 2006

We officially announced the new Blackfriars Marketing Index last week, noting that it rose to 146 for Q2. We're still working on getting the press release out, but I thought I would try to give people a flavor of the current state of US marketing as the result of analyzing this data for the last two months. And by tapping all our resources of sophisticated statistics analysis, deep marketing expertise, and decades of writing and analysis, we've been able to sum up the Q2 state of marketing in the US in a single sentence:

US marketing has a serious case of the blahs.

Our data shows that marketing budgets and spending have gone pretty much nowhere but down over the last three years. Actual spending in Q1 2006 was about 54% of an average quarter in 2003. And while Q2 planned budgets are up significantly, the real question is not whether companies will under-spend those budgets, but rather how badly they are going to under-spend them.

Now, I'm sure some skeptics will be sitting back and saying, "Is that so bad? Frankly, I can't see what we get from those millions spent on marketing other than ads." I know other executives who when asked about marketing say things like, "I don't need any #@#$% marketing; I need sales! Lets take those marketing budgets and spend them on sales people." In both cases, these executives don't understand marketing's real role in business. It's really simple, actually.

Marketing's role is to identify what customers want and to serve those customers at a profit.

Now while that's a simple statement, there are three important parts to it:

1. A set of customers. You can't be everything to everyone. To market successfully, you have to identify a subset of everyone that you can satisfy and delight; otherwise, you are doomed to failure.


2. What customers want. Products are only a piece of this. Customers may want everything from whiter teeth to better relationships. Good marketing helps customers understand how what your company does makes their lives better.


3. Serve those customers at a profit. I always say that there's a large set of customers that want a $5,000 Lexus LS430. Unfortunately, that would be hard to deliver at a profit.

So if businesses are under-spending on marketing, what does that mean? It means three things based on the definition:

1. They aren't identifying the right customers as much. It costs money to identify and target customers. Companies that don't do that identification broadcast their message instead. That means their business becomes less efficient.


2. They are providing less of what customers want. The only way to deliver what customers want is to communicate with them regularly and ask. Companies cutting back on marketing tend to cut this first. It's a bad sign.


3. They aren't going to be as profitable.. With poorer targeting and a vaguer idea of what customers want, businesses won't deliver as reliably on their brand promises. That means profits will decline over time.

We'll see how accurate this prediction is, but the marketing numbers we're seeing today say that we're about to see a pullback in the US economy over the next six to twelve months. And given the shortfall in Q1 marketing spending, it may not be a small one.

But there is a bright spot in this forecast: companies that spend aggressively on marketing during recessions do very well when the economy recovers. In the last pullback, it was Apple that spent marketing money and triumphed with the iPod. Stay tuned: we may see some new market leaders emerge from this.

Technorati Tags: Advertising, Blackfriars, Blackfriars Marketing Index, Business, Market research, Marketing

Blackfriars Marketing Index on its way

Regular readers have probably been wondering when we are going to publish our Q2 Blackfriars Marketing Index and report. Well, if things go according to plan, we'll have the index and report out this week on Thursday June 15.

What's been the holdup? As a strategic initiative, we've begun building a standing panel of business executives for our surveys. Using a panel rather than a new random sample of the Internet population every quarter should give us better and more consistent data for our surveys. Further, we hope to be able to grow the panel to be large enough to regularly gather more information by vertical industry.

This is a big, long-term investment for us that we just started this quarter. As a result, we had to do our survey with both our old and our new survey system and merge the results from two different systems. Needless to say, the process took much longer than normal.

The good news, though, is that we've done a lot of rethinking of our data and how we use it, and we believe that this quarter's reports will be some of our best ever. In particular, with this report, Blackfriars introduces a new chart type called the Blackfriars Marketing Spectrum that
colorfully illustrates the 12 different categories of marketing spending. If you pre-order the report now at The Blackfriars eStore, you'll get the report for $100 off, and you can see for yourself on Thursday.

Thanks for your patience. And if you're a business executive that knows your organization's marketing budgets and spending and would like to help us in the future with our research, please join our marketing panel at here. Successfully completing our 10-minute survey will earn you a free copy of the report that your survey data contributes to, a $495 value.

Technorati Tags: Blackfriars, Blackfriars Marketing Index, Market research, Marketing, Surveys

The overlooked online demographic: older consumers

Today's New York Times has some data that many online marketers will find remarkable: consumers over 55 are buying more online than their younger counterparts.

"This group has been kind of overlooked until now," said Heather Dougherty, an analyst with Nielsen/NetRatings, an online consultancy. "But the older boomers are far from newbies at this point. We're not talking about people who are 100 years old and haven't seen a computer."

Ms. Dougherty said a recent Nielsen survey found that 27.4 million people age 55 and older bought something online in the last six months, compared with about 26 million a year ago. By contrast, the number of adults who bought something online in the last year actually dropped, to 107.4 million from 112 million.

Given the increasing role that online advertising and activities are playing in marketing budgets (something we'll have more on later in the week when we release the Q2 Blackfriars Marketing Index and report), every marketer should take a look at this data. Older consumers may be harder to serve, but they represent 55% of all consumer spending in the US. Marketers that address their needs and interests stand to reap big rewards.

Technorati Tags: Demographics, Internet, Marketing, puppy

The next generation of high-definition flat panels

The opening of the World Cup tonight coincides with a week in which a number of large, new flat-panel displays were announced. Coincidence? I don't think so.


Seriously, this week saw Panasonic introduce their ninth generation commercial line of plasma displays, which have been very popular with high-definition TV enthusiasts who integrate them into home theater systems. With some of the best black levels in the business and a list price of US$3,995, these systems should help Panasonic retain its number one spot in manufacturing plasma displays.


During the same week, though, Sharp announced availability of its new 65-inch Aquos liquid crystal display (LCD) TVs, model LC-65D90U. This theater definition 1080p panel, while not the largest currently available (that would be a 100-inch one made by LG.Philips), at least the 65-incher will probably cost less than your car, although that depends on your automotive taste. Current street pricing for the LC-65D90U is around $14,995.


So what's the marketing spin on these introductions? Simply this: new products tend to push down the prices on older products as retailers try to move out older inventory in favor of new. Both the 8th generation Panasonic panels and the smaller Sharp products should decline in price over the next few months; savvy buyers will keep an eye on this older stock. You can monitor the Amazon availability and prices through the links below.

Technorati Tags: Flat Panels, HDTV, LCD, LG, Marketing, Panasonic, Plasma, Sharp

Get ready for the Blu-Ray blitz

HD Beat and High-def DVD Digest notes that Sony will launch its marketing blitz for Blu-ray next week. Word has it that Sony will have Blu-ray players in their top 10 stores. The real question will be whether they will operate better than Toshiba's first HD-DVD players, which, quite frankly, have debuted to mixed reviews. Would you really want to wait up to a minute for your DVD player to figure out how to play your DVD? How about having your high-definition signal limited to 480p unless you use the HDMI output, which by the way, is buggy and generates errors?

All that said, let's hope Sony takes the high road and doesn't resort to simulated comparisons against standard definition video that artificially make traditional DVDs look bad. While we applaud Toshiba's use of differentiation, artificially making the competitive technology bad undermines their brand value and trustworthiness. Yes, this is a marketing war, but despite Seth Godin's book, not all marketers are liars. Marketers like Sony can do better by articulating why their products are great and delight their customers. Given the recent successes they've had with their Bravia and PSP lines, I expect that their Blu-ray demonstrations will be similarly high-caliber. We'll see next week.

Technorati Tags: Blu-Ray, Business, Consumer Electronics, Digital home, DVD, HD-DVD, HDTV, Marketing, Sony, Toshiba, TV

Netflix's secret weapon: the long tail of movies

David Leonhardt at the New York Times poses an intriguing brain teaser about why NetFlix's DVD rental business thrives:

Out of the 60,000 titles in Netflix's inventory, I ask, how many do you think are rented at least once on a typical day?

The most common answers have been around 1,000, which sounds reasonable enough. Americans tend to flock to the same small group of movies, just as they flock to the same candy bars and cars, right?

Well, the actual answer is 35,000 to 40,000. That's right: every day, almost two of every three movies ever put onto DVD are rented by a Netflix customer. "Americans' tastes are really broad," says Reed Hastings, Netflix's chief executive. So, while the studios spend their energy promoting bland blockbusters aimed at everyone, Netflix has been catering to what people really want — and helping to keep Hollywood profitable in the process.

NetFlix is catering to the Long Tail of consumer interests, demonstrating that there is just as much business available in a large number of less popular titles as there is in the small number of blockbusters that the movie studios are promoting. And while one can argue that so much choice might create a tyranny of too much choice for consumers, NetFlix sidesteps this issue by giving users Internet tools designed to reduce the number of choices to a manageable number: recommendations from friends and other viewers, automated collaborative filters, and user-created ratings.

Leonhardt points out that while new technologies like video on demand and iTunes downloads will compete with NetFlix, they pose no real danger because:

• VOD and downloading services offer only about 1,500 titles. So long as download services concentrate their efforts on the hits, the long tail of consumer interest in movies says that NetFlix can make as much or more money renting a large library.


• Hollywood agreements will continue to make downloads less desirable than DVDs. With most wide distribution rights already sold to channels like HBO and others, VOD and iTunes aren't getting first-run movies any time soon. And with digital downloads of movies today still taking a day or more, consumers will want DVDs delivered by mail for years to come.

NetFlix ability to thrive on mail-order DVDs isn't the end of this long tail argument though. It also means that the battle for next generation DVDs still matters. Many have claimed that downloaded movies would mean that no one would care about whether HD-DVD or Blu-ray wins the battle between Toshiba and Sony to set the standard for next generation DVDs. Given the unsolved problems of both bandwidth and title depth for downloads, consumers will still ask for silver disks for home movie night. And despite various claims and delays, our call remains that it's Sony's Blu-ray that will carry the day..

Technorati Tags: HD-DVD, Movies, Marketing, NetFlix, DVD, Tyranny of too much, Long Tail, Internet, iTunes, Blu-ray

Something different: Inside the box marketing

Sun CEO Jonathan Schwartz has blogged about it. So has Boing Boing and The Financial Times. The story is about The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger. The book describes how the introduction and marketing of the standardized shipping container changed the world. It's the next book up on my list to read because it proves that real innovation is possible through the use of standards that no one company owns. We see the effects of this today in the world of blogging and the Internet, but it runs counter to many initiatives currently ongoing in digital media and publishing. Check it out.

Technorati Tags: Books, Logistics, Marketing, Standards, The Box

Who says artists can't market?

Copyblogger recently noted how Swiss artist Sala's One Thousand Paintings project has blended marketing and art. Sala has painted one thousand paintings of the numbers 1 through 999. They are priced at "$1,000 - number each", but he started selling them at a 90% discount. Every 100 paintings he sells, the discount decreases by 10%. So the paintings start off cheap, but as more people discover the project and buy the paintings, the more money they bring in.

As Copyblogger Brian Clarke notes, the offer is the art.

Let’s take a look at the psychological elements of the offer that make it irresistible to its target audience:

• Uniqueness – If this isn’t remarkable, I don’t know what is. It just about goes without saying that an extremely unique idea must be present in order for the concept to have any chance of going viral.


• Scarcity – The limited number of authenticated paintings creates scarcity, along with the fact that only one of each number is sold. Scarcity is a fundamental attribute of all original art that increases in value, and also helps increase the buzz that is already in motion.


• Urgency – The pricing scheme prompts people to buy the initial paintings, which increases the buzz even more, until the proverbial tipping point when others are prompted to buy even more paintings before the next incremental price increase, and so on.


• Value – Beyond the story behind each painting that provides its aesthetic value, the above elements are likely perceived by buyers as creating a valuable secondary market for the paintings that can lead to later financial gain.


• Exclusivity – All of the above combined results in the Holy Grail for art, collectibles, luxury and performance products to name a few — exclusivity. Not everyone can have one, and that’s why the offer becomes irresistible.

How is it working? Sala has sold 522 paintings as of this writing. And given the momentum that has built in the past month, after four months of slower sales, I expect he'll sell out soon because he used the principles of good marketing. If that isn't a work of art, I don't know what is.

Technorati Tags: Art, Exclusivity, Marketing, One thousand paintings, Scarcity, Uniqueness, Urgency, Value

URGE's iTunes-killing threat: over so soon?

We noted last month that without some much-needed marketing focus on what consumers actually want in a music service, the joint venture of MTV and Microsoft called URGE was doomed to repeat the failures and struggles of all the other Janus-based music stores Microsoft has launched. Well, this one appears well along that path. Today's Seattle Times notes that Urge has nice features, but it's no iTunes. And of course, the Seattle Times is probably as good as it gets for giving Microsoft the benefit of the doubt; Microsoft's headquarters is in the newspaper's back yard.

Technorati Tags: Apple, iTunes, Microsoft, Music, MTV, URGE

Vonage's surprise: Investors are smarter in Internet boom 2.0

Today, both The New York Times and The Wall Street Journal bemoaned the disappointing performance of Vonage's public offering this week. With Vonage's shares losing a third of their value in just a week, both publications are wringing their hands, asking what has gone wrong and whether this IPO indicates that something is wrong in today's market.

I allocated the vast resources of Blackfriars Communications to researching this question, and after billions of nanoseconds of research, I uncovered the real reason that Vonage's stock dropped in price:

There were more sellers than buyers for the stock. Why? Because the fundamentals of this company just aren't very good.

We predicted that this IPO was going to go badly back in February when it was announced. At that time I noted that demand for the stock was going to be poor because the company has no profits, no differentiation, and no strategy for changing its operation so there would be profits. Yet for some reason, investment banks and research analysts who took part in the offering seemed to think that somehow, somewhere, there would be greater fools than they to snap up the shares. Guess what: they were wrong.

The Vonage IPO was a liquidity event, pure and simple, for early shareholders who had little likelihood of getting their money back any other way. The only problem was that investors are a lot smarter about IPOs in this Internet boom than they were in 1999. Investors today want proof of profits, marketing, and strategy to earn their investment dollars. Vonage didn't have any of those, so everyone wanted to sell the stock rather than buy it, and the stock sank. I'm not surprised that the stock fell to $12 a share; I'm more surprised that it hasn't sunk further, and I fully expect it will.

Journalists shouldn't be asking what the market did wrong in the Vonage IPO; the interesting story is what the market did right.

Full disclosure: I hold no positions in telecom, Internet, or VOIP stocks.

Technorati Tags: Analysis, IPO, Marketing, VOIP, Stocks, Telcos, Vonage

There's no business like show business, especially for marketing

Today's New York Times has a great article aboutWal-Mart producing "Wal-Mart The Musical" for its annual meeting. We here at Blackfriars give Wal-Mart a standing ovation for using a musical play as a way to communicate. We've written and directed a couple of those for our clients, and they are hugely effective, particularly if you compare them with the traditional "death by PowerPoint approach."

As an example of how powerful plays can be at communicating messages, we had one client who wanted to launch 15 different products to their dealer network. If each product manager had been given 30 minutes to present their product, that would have meant 7.5 hours of presentations. Instead, we wrote and directed a 10 minute play that put the needs for the products in the context of real people and showed how the new products satisfied those needs. All the data we collected indicated that the dealers understood the products better and were vastly more engaged than they had been in prior years where more traditional presentations were given. We later put on a larger and more elaborate industrial play for the client's 650 person International sales force, which met similar acclaim.

To quote IBM's new ad campaign, "The only way to succeed in a globalized economy is to be different, unique, special." Ditching the PowerPoint in favor of a musical isn't the only way to be special, but it's a great way to start.

One final plug: for any marketers considering taking this approach, I highly recommend using a professional casting director and Equity actors, just as Ethos Design, the team that did the Wal-Mart production did. We always use them, and their skills can make a weak script look good, and a good one great.

Technorati Tags: Communication, Marketing, Music, Musicals, PowerPoint

Still a good idea: make vendors pay for bugs

My favorite security guru, Bruce Schneier, today penned an article at Wired.com arguing that vendors could significantly enhance computer security if they were liable for their security bugs and lapses. I came to the same conclusion three years ago and encouraged software vendors to warranty their products. Sadly nothing has changed in those three years; if anything, the problem is worse now than it was then.

This is a HUGE opportunity for high-tech marketers. Why? Because with most high-tech vendors selling their products "as-is", a company that actually guaranteed the quality of its products would immediately have huge differentiation in the marketplace. Ten-year, 100,000-mile warranties have worked well for companies like Kia and Hyundai to break into the US automobile market; they would work just as well for high-tech companies. Yes, any company offering such warranties would have to examine its product quality and make sure that it wouldn't be bankrupted by warranty repairs, just as every car company has to. But for those companies who did the right risk/reward engineering, such guarantees would set them apart from their competitors and force everyone else to catch up. The only question is who will have the guts to make such an offer first.

Technorati Tags: Marketing, Software, Warranties