Why should the opening of Apple's Developer Conference be the iPhone launch day?

According to a source at Cingular, CNET claims that Apple's iPhone will be released on June 11. That likely is no coincidence, since that date is also the start of Apple's World Wide Developer's Conference (WWDC). However, given that the WWDC is slated to focus largely on Mac OS X 10.5 (Leopard) topics, it does beg the question, "Why generate iPhone buzz on the start of a conference focused on another technology topic?"

Blackfriars' answer: Because we believe that the iPhone is only the first in a series of Leopard-powered appliances. We've already seen that Apple TV runs a version of Mac OS X. New iPhone-derivative iPods likely will as well. Expect there to be others. After all, we're still waiting to buy our Apple-branded flat-panel HDTV.

Technorati Tags: Apple, Apple TV, Cingular, HDTV, Home theater, iPhone, iPod, iTunes, Marketing, WWDC

Marketing 2007: rough waters ahead

Today, Blackfriars is putting our Q1 2007 marketing report to bed. I'll save the details for the formal press release next week, but you can the gist of the report from the title: Marketing 2007: First Quarter Budgets Tumble. It's ugly.

The really bad news about this is that marketing spending is a leading indicator of the economy. Think about it for a moment. If your local dry cleaner, pizza parlor, or hospital cuts its marketing budget, what do you think happens to its business as a result of that? After all, companies invest in marketing because it generates sales in the future. So if they don't invest in marketing, it means that the company doesn't get those sales. Oops.

Now to be fair, this view is simplistic, and it is only one factor in business results. But cuts in marketing budgets in general are a bad omen for future business and almost never create growth without special circumstances. So you heard it here first: a slowdown is on the way.

Technorati Tags: Blackfriars, Economy, Marketing, Marketing 2007, Opinion, Recession

Pricing 101: think like a retailer, not like a widget-maker

Tuesday's Wall Street Journal had an excellent feature on how Parker Hannifin Corporation's CEO Donald Washkewicz examined the company's pricing strategy when he took over and found it to be flawed in a much-too-common way:

For as long as anyone at the 89-year-old company could recall, Parker used the same simple formula to determine prices of its 800,000 parts -- from heat-resistant seals for jet engines to steel valves that hoist buckets on cherry pickers. Company managers would calculate how much it cost to make and deliver each product and add a flat percentage on top, usually aiming for about 35%. Many managers liked the method because it was straightforward and gave them broad authority to negotiate deals.

But Mr. Washkewicz thought that Parker, which had revenues of $9.4 billion last year, had stuck itself in a profit-margin rut. No matter how much a product improved, the company often ended up charging the same premium it would for a more standard item. And if the company found a way to make a product less expensively, it ultimately cut the product's price as well.

We here at Blackfriars always like to say that competing on price is the refuge of the incompentent marketer. Yet here was a $9 billion company that wasn't even competing on price -- it was competing on a percentage of its cost. No wonder it was stuck in a profit rut; I'm surprised one of their competitors wasn't taking them to the cleaners.

Fortunately, the company had an executive willing to question "how things always had been done."

While touring the company's 225 facilities in 2001, Mr. Washkewicz had an epiphany: Parker had to stop thinking like a widget maker and start thinking like a retailer, determining prices by what a customer is willing to pay rather than what a product costs to make. Such "strategic" pricing schemes are used by many different industries. Airlines know they can get away charging more for a seat to Florida in January than in August. Sports teams raise ticket prices if they're playing a well-known opponent. Why shouldn't Parker do the same, Mr. Washkewicz reasoned.

Today, the company says its new pricing approach boosted operating income by $200 million since 2002. That helped Parker's net income soar to $673 million last year from $130 million in 2002. Now, the company's return on invested capital has risen from 7% in 2002 to 21% in 2006, putting it on the verge of moving into the top 25% of Mr. Washkewicz's list comparing Parker with "peer" industrial companies.

The moral of this story is that companies should set prices according to the value of products in the eyes of the customer. Unique products like iPod music players, BMW cars, and FedEx overnight delivery change their customer's lives for the better and command prices that reflect that fact. Companies that don't market and price the unique value of their products shortchange themselves, their employees, and their shareholders. And executives that remind companies of that basic marketing lesson will boost their own value too.

Technorati Tags: Donald Washkewicz, Dynamic pricing, Management, Marketing, Pricing, Parker Hannifin

Apple TV possibly has digital video recorder capabilities planned

[Click here for a larger version]

One of the footnotes in Ars Technica's excellent in-depth review of the Apple TV box had a link to the image above. What is shown there is a list of Automator actions shipped as part of the Apple TV software.

For those not up on Mac OS X, Automator is a system for automating workflows in Mac OS X. It uses published actions by programs, allowing authors to sequence actions in different programs and link their outputs and inputs together using a graphical interface. Unix geeks can think of it as a graphical interface for shell scripts, but because Automator actually uses published Apple Events, it differs in detail and its ability to use individual functions of large programs.

What's interesting about the picture above is that the published Automator actions for Apple TV include:

• New Audio Capture


• New Video Capture


• Start Capture


• Pause Capture


• Stop Capture

Sure sounds like someone at Apple has plans for Apple TV to grow Digital Video Recorder (DVR) functions. Perhaps these hooks are there to facilitate the deal with Miglia we forecast a couple weeks ago?

Technorati Tags: Apple, Apple TV, Ars Technica, Automator, Digital Video Recorder, Mac OS X, Miglia, DVR

Another vote on Leopard's secret ingredients: it's all 3D, all the time

Ars Technica's Infinite Loop blog has, in my opinion, unraveled one of the top secret ingredients in Apple's upcoming Mac OS X 10.5 release, aka Leopard: complete 3D graphics and animations. Given what we know and have seen of Leopard features such as Time Machine and the new iChat and in existing apps like FrontRow, this would make perfect sense, especially if it were implemented in OpenGL. Applications get their own canvases in a 3D world, and the OS is responsible for keeping those canvases updated and visible in various orientations. One visual 3D imaging model for all apps that the OS manages and keeps sorted. Sweet.

Now to any Linux geek worth his salt, this sounds like no big deal: it's like Beryl (movie at the link), XGL/Compiz and a bunch of other compositing interfaces available today on Linux. But unlike Linux, Apple has no requirement to support every flavor of graphics card in the world, and that's a good thing in this case. Apple's attention to interface smoothness, consistency and detail will create a user experience anyone can use, and won't require users to gather eye of newt and sacrifice a goat to get the graphics drivers to work.

What this means for Apple users is that we can expect a new Finder in Leopard. I've written before that I believe that Leopard will also support Multi-touch gestures and new sensors to take the user interface the next step for users. From a competitive point of view, this 3D Finder will probably be the biggest shot across the bow for rival Microsoft. Why? Because the Aero 3D interface is the major differentiator today for Vista over Windows XP; most of the other features of Vista are significantly less visible to average users. But on Vista, these features are usable only on the highest end PCs, while I believe that Apple intends its 3D features to become a part of every device it builds. That means we'll see 3D features on iPods, iPhones, Apple TV boxes, and of course in Leopard. And since some of these features will be built into hardware devices, it will be straightforward for Apple to patent and protect these features as it has with the iPhone

The bottom line: I second the notion that a 3D finder is one of the secret ingredients of Leopard. That's a little bit like saying vanilla is the secret ingredient in both a vanilla ice cream and a great creme brulee. It can be just a flavor or it can be the base of a transporting dessert. It just depends on how the chef uses it.

Technorati Tags: 3D, Apple, Beryl, iPhone, iPod, Leopard, Microsoft, Multi-touch, OpenGL, XGL, Vista

Silly predictions of print journalism's demise

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

There is much strurm and drang this morning in the blogosphere about a rumor that the San Francisco Chronicle is in trouble, based largely on a posting by Tim O'Reilly on Friday. And after extrapolating the death of all print newspapers from that rumor, we have everyone from Dave Winer saying we have to reform journalism schools to teach blogging skills to Michael Arrington saying that journalists should stop worrying about whether printed statements are right or not, and rely on commenters to do their fact-checking.

Judging by the blogosphere's reaction, I'm really happy that Web content is free; at the moment, I feel that it is worth every penny I am paying for it. My reason: people are confusing the business of publishing newspapers with the discipline and art of journalism. It's kind of like saying that because symphony orchestras struggle for subscriptions, we need to stop sending musicians to conservatories and start hiring groups of street musicians. While it may appeal to fans of street musicians (of which I am one), I doubt it will do much for the advancement of classical music.

Yes, traditional newspapers are struggling. There's too much supply and not enough demand in many markets, and that's part of a larger cycle of media expansion and contraction, as I've written before. But to say all newspapers are going to be out of business in the next 10 or 20 years is just silly. Like it or not, communities will need simple ways to distribute basic news and advertising. Yes, newspapers that don't have a clear dominant position in a market may die, but there will always be one newspaper. Why? Because your local car dealer and dry cleaner need a place to put their ads. Because the city council needs a way to distribute its proceedings that provably does not discriminate against low-income citizens that don't have computers. And because ordinary people like to read the sports news about the local teams. And despite the world-wide reach of online media, that very world-wide reach dilutes the value of online to those constituents.

There's an easy way to think about how dead the newspaper business is. Let's assume that both major newspapers in Boston, the Boston Globe and the Boston Herald, cease paper publication tomorrow and go entirely online. How long do you think Boston would not have a printed newspaper? I believe it would last somewhere between two and four weeks, the time necessary for a new entrant to arrange printing and distribution. The printed ad revenue, while seeming paltry to some, is still millions of dollars a year. That's just too attractive a revenue stream to turn down. I wouldn't guarantee the newspaper would be in English -- Spanish and Chinese newspapers seem to thriving -- but there would be a newspaper.

So assuming we have a newspaper, do we need journalism? With all due respect to Michael Arrington, I think we still do. For while the blogosphere is wonderfully rich and interesting, the signal to noise ratio isn't nearly as high as your average newspaper. And bloggers aren't necessarily invested in the mission of journalism, which is relentlessly seeking the truth and reporting it. One of the great things about the journalistic tradition is that a reporter has to convince at least one other person -- his or her editor -- that the story they wrote is true before it gets published. It's not much, but it is one person more than citizen journalists have to convince. In a world where we all struggle with the tyranny of too much media, that raises its credibility immensely. Journalism is what makes the newspaper worth a dollar a day instead of being free.

So don't despair about the rise and fall of newspapers. Markets are good at finding out what people want and what they don't. But good journalism will continue to be valuable both online and in print. The fact that newspaper bathwaters are getting a little shallow doesn't mean we should throw baby journalism out with it.

Technorati Tags: Advertising, Blogosphere, Dave Winer, Journalism, Michael Arrington, Newspapers, Opinion, Publishing, Tim O'Reilly

Lexus aims to become a marketing as well as auto leader

The Wall Street Journal had a great article on Saturday that described
Lexus' long term effort to reposition its brand to the "prestige luxury" market segment. And to give them credit, they went about it in a smart way:

Now, with Toyota's sales hitting new records, it craves a makeover for Lexus. It wants to become a brand associated with the biggest names in luxury. Imagine "Louis Vuitton, Prada, Gucci and Lexus all mentioned in the same breath," says Brian Bolain, a Lexus marketing manager.

Marketing, the lifeblood of a luxury brand, isn't a traditional strength for Lexus, which is known more for reliability and customer service. History shows it can be very difficult to change consumer perceptions of a car brand. And luxury buyers, usually older, could be even more stubborn, as they are often highly loyal to the kinds of cars they've previously owned.
....
Lexus started its new push in 2005 when it assembled the super-affluent team -- nine Lexus employees from various departments including marketing and finance. The team interviewed car buyers who had at least $5 million in assets (excluding their primary residence) and who had previously owned a few luxury vehicles. More than half of the interviewees selected were men.

For the next two years, the team crisscrossed the country, asking 100 ultra-wealthy people such questions as "Why do you live where you live?" and "What do you do for enjoyment?" "We asked ourselves and these people a lot of questions," says team leader and marketing chief Deborah Wahl Meyer.

Said another way, these guys decided to focus on what the target customer in this market wanted and enjoyed, and then reshaped its development process to meet those needs. While marketing may not have been a traditional strength for Lexus, it sounds like it is going to be. If General Motors, Ford, and Daimler aren't taking notes, they should be.

Technorati Tags: Lexus, Luxury, Marketing, Prestige luxury

Friday night is hard drive upgrade night

Courtesy of some fine sales at Newegg.com and Other World Computing (macsales.com), I spent Friday night doing computer upgrades, specifically of hard drives. For about $100, my 1GHz Titanium Powerbook got a 120GB hard drive, my wife's 500MHz TiBook got my old 60GB hard drive (replacing the stock 30GB one which was amazingly noisy for an notebook drive), and my Quicksilver dual-800MHz G4 PowerMac got a new 12x DVD burner.

I had always heard that PowerBook hard drive upgrades were hard. They aren't. You simply need the appropriate Torx wrenches (T8s) to remove all the screws, and you have to be very careful not to break any of the ribbon cables during assembly and disassembly. But in the case of both Powerbooks, the backups and restores of the hard drives took much longer than their hard drive transplants. So if anyone is feeling like they need more hard drive space, don't put it off -- it's a cheap and not too hard upgrade.

One final note: this is a pretty good time to buy computer parts. March 31 is the end of both the month and the first quarter, which is typically a slow one for any electronics retailer. Discounting and specials come fast and furious as retailers try to unload excess inventory and get the best quarterly results they can. So if you're looking to upgrade your memory, hard drive, optical drive or just about anything that pushes electrons, monitoring dealmac.com, dealnews.com, newegg.com, and roosster.com can be well worth your while.

Technorati Tags: Apple, Computers, dealmac.com, newegg.com, PowerBook, roosster.com, Upgrades

Motorola imitates Dell in struggling to regain glory

Motorola's H5 Miniblue headset

Motorola's H5 jewel case for charging and storage

---

After four straight days of Apple stories, I have vowed to write about another company today. Today, it's Motorola's turn.

Today's New York Times noted Motorola's sudden decline from cellphone champ to marketing chump in the US market, citing disappointing revenues for the next two quarters. It's big problem: Motorola's hit RAZR phone is looking more and more like a one-hit wonder.

Edward J. Zander, the chairman and chief executive of Motorola, generally has little in common with Hollywood’s studio chiefs. But like them, his future may depend, at least in the short term, on whether he can produce another hit.

Mr. Zander arrived at Motorola early in 2004, a few months before the introduction of the unusually slim Razr V3, which went on to become the cellphone industry’s equivalent of “Star Wars.”

But an announcement on Wednesday confirmed what steady and substantial price drops for the Razr and follow-up models had suggested. Motorola unexpectedly cut its quarterly revenue forecast for the second time in two quarters, this time by $1 billion, and warned that the next reporting period would bring more bad news.
....
Mr. Zander now faces two somewhat contradictory tasks. In the short term, Motorola’s best hope for a quick turnaround is coming up with a successful sequel to the Razr. In the long run, however, several analysts suggest that Motorola needs to turn away from the hit-driven business model.

Looking over Mr. Zander’s shoulder through all of this will be the activist investor Carl C. Icahn, who holds more than 2 percent of Motorola’s stock and has been pressing the company for change.

Motorola's situation resembles Dell's crash all over again. Both companies were successful based on one specific differentiating factor. In Motorola's case, it was the RAZR product. In Dell's case, it was direct to consumer sales, build-to-order. But both companies relied on their cash cows too long and didn't come up with second acts. In Dell's case, Kevin Rollins, the CEO, had to take the fall. At Motorola, Zander hasn't been ousted by the board yet, but I would argue that's simply a matter of time unless something changes dramatically.

Sadly, Motorola has had hit products in its pipeline that have inexplicably disappeared. I wrote in early 2006 about Motorola's killer Bluetooth headset, the tiny in-ear H5 MiniBlue. It was announced and demo'ed to much fanfare at the 2006 Consumer Electronics Show in Las Vegas. But as of March 2007, we still can't buy one and there's been no explanation from Motorola. That says more about its business than any amount of analysis.

So what can Ed Zander do to keep his job? Well, for starters, he needs to buy some time for the new products Motorola has in its pipeline can get to the market. That means doing some symbolic gestures, like launching a stock buyback program (which he has already done) and cutting his salary and bonus until Motorola is back on track (he hasn't done that yet). But more importantly, he has to market Motorola and its brand, which hasn't been done in any serious way in almost three years. And he needs to start doing it now. If he has any cool products in the pipeline, now is the time to seed them with Walt Mossberg and other influencers in the marketplace to generate some excitement around the company. If he doesn't have any exciting new products in the pipeline, then he should start looking for a new job. It's really that simple.

Full disclosure: The author has no positions in Motorola, but is long Apple Computer, which will become a competitor of Motorola in June with its iPhone launch.

Technorati Tags: Dell, Marketing, Motorola, Ed Zander

Apple TV reinvents TV around what consumers want

Walt Mossberg yesterday praised the Apple TV device today in his Wall Street Journal Column, while David Pogue raved about its simplicity in today's New York Times. One of the reasons that Walt liked the device so much was its simple-minded utility:

Like the iPod before it, Apple TV isn't the first gadget in its category. Several other companies have made set-top boxes or even TV sets and game consoles that could link the TV to the digital content that people have on their computers. But none has found a mass audience for this functionality, mainly because they tend to be hard to set up and confusing to use. Apple is hoping that, just as the iPod trumped earlier, but geekier, rivals, Apple TV can do the same by making a complex task really simple.

Part of the secret of Apple TV is that, like most of Apple's products, it doesn't try to do everything and thus become a mess of complexity. It can't receive or record cable or satellite TV, so it isn't meant as a replacement for your cable or satellite box, or for a digital video recorder like a TiVo. It can't play DVDs, so it doesn't replace your DVD player. Its sole function is to bring to the TV digital content stored on your computer or drawn from the Internet. Like a DVD player, it uses its own separate input on your TV set, and you have to change inputs using your TV remote to use it.

Technically, the Apple TV may be simple, but its effect on the TV industry will be anything but. Why? Because TV business models that have thrived for the past thirty to fifty years that relied on:

• Advertising-supported TV. From Kraft Theater and the Hallmark Hall of Fame in the 1950s to Mobil-sponsored Masterpiece Theater in the 1980s and 90s, advertisers, not consumers, have always been the ones who paid for broadcasts. That meant that they determined what consumers got to see -- and what got left on the cutting room floor.


• Prime-time programming. Broadcasters place the best shows in 9 and 10 pm prime-time slots, hoping to get consumers to schedule their lives around the next episode of Lost or American Idol. But this also means that what good content a TV network offers is scheduled at the same time as other networks' prime content. Appointment-based TV also conflicts with real-world consumer activities like business dinners and PTA meetings.


• Bundled content. Cable companies (and now telcos like ATT and Verizon) have been able to charge high monthly prices by pointing at the value of hundreds of channels for one price. Never mind that 50% of those channels are running infomercials that deliver revenue to the cable operator or 75% of the audience will never watch a single show on the Golf Channel. Rather than miss the opportunity to watch an occasional program of Iron Chef on the Food Channel, consumers have just accepted content bundles as the way things are.

Apple TV is about to attack the fundamental assumptions underpinning the TV business just as the iPod cut the legs out from under CDs and radio stations. How? Because with Apple TV combining the flexibility of the Internet with a living-room, big-screen experience, consumers now will:

• Vote for programming with consumer dollars. When a consumer buys an episode of Grey's Anatomy from the iTunes Store, that revenue flows directly to the distributor of the program. Who cares whether Proctor & Gamble liked the show and felt it was worthy of their sponsorship -- iTunes cuts out the middleman and let's the consumer's voice speak in the language of business: in cash. A side benefit of actually paying for programming is that the consumer buys time as well; an hour show like Studio 60 plays back on Apple TV in just 44 minutes, with no need to skip commercials as they would on a TiVO.


• Watch what they want, when and where they want it. Want to watch American Idol on Wednesdays at 6 pm? Apple TV makes that just as easy as watching on Monday nights. Want to watch both Battlestar Galactica and Desperate Housewives, despite the fact they are both scheduled for Sunday nights? Just buy both shows and watch them whenever you want. Viewers can even take them to work to watch over lunch on their iPods if they want. Try that with a TiVO show.


• Enjoy TV programming a la carte. With Apple TV and iTunes, senior citizens don't pay for Disney movies and families don't pay for R-rated movies when Apple TV makes every show a conscious purchase. Does this mean a lot of niche channels will see subscriptions drop? Absolutely. But that just means their cable subscription numbers weren't real anyway -- customers who won't actually pay for a product aren't really customers.

In my view, cable companies like Comcast and Time Warner and TV-deploying telcos like Verizon and AT&T are going to be hurt the most by this Apple's new entry into the living room. Their entire business models are predicated on ever-rising average revenues per subscriber (ARPUs). But with average cable bills rising past the $100 mark and actual TV watching declining due to the flood of too many channels, consumers will defect to Apple's a la carte pricing model where they can control their monthly bill. That trend will call into question the returns on investment expected for $200 billion fiber rollouts.

Will we see these business changes overnight? Not a chance. The iPod took five years before it was an international phenomenon. I expect Apple TV to have a similarly long gestation period before it becomes a icon in living rooms and a part of the American consumer lifestyle. But in the process, we will see time-strapped consumers move away from today's bundled TV models that waste their time and toward Apple's pay-for-what-you-get model. Apple and iTunes will become what I predicted it would 18 months ago: a new pay-TV network for the consumer, including both free video podcasts and pay TV shows and movies.

Apple TV may be a simple consumer electronics device, but it is one that will, nonetheless change the TV business. Today, Apple ads contrast "I'm a Mac" with "I'm a PC". In five years, they will compare "I have Apple TV" and "I have cable TV". Cable and telco executives will be asking themselves, "How did we let this happen?" The answer to that is simple: they gave the customer everything they could think of, while Apple TV gave customers what they wanted. And in business, that's a huge difference.

Technorati Tags: Apple, Apple TV, at&t, Business, Comcast, iTunes, Living room, Marketing, Opinion, Time Warner, TV, Verizon

Apple's increasing brand value

Leander Kahney, author of the Cult of the Mac blog over at Wired Magazine, has put his finger on a sea change in attitudes toward Apple. He identifies many different factors going into the perception, including bullish views by Wall Street analysts, money-saving success stories from colleges, and positive stories about Macs being good for business showing up in more places.

I think his conclusion that Apple is a serial innovator is right. But I think the bigger point is his last sentence: "What's changed is not Apple, but people's perceptions of the company." In marketing speak, that's called brand value. A company can't build brand value with a single product or marketing initiative; it comes from years of reinforcing messaging, processes, and products.

Marty Neumeyer, author of The Brand Gap,, has what we consider to be the best definition of brand:

"A brand is a person's gut feeling about a product, service, or company. It's not what you say it is. It's what THEY say it is."

It's no accident Apple was named the most admired company for innovation this year by Fortune magazine. Apple, Inc. will be thirty-one years old on April 1. Despite the glory of dot com and Web 2.0 startups, most truly great companies take at least a decade to prove that they are lasting successes to consumers and not just one-hit wonders. Apple may now be on the verge of doing just that.

Technorati Tags: Apple, Brand, Branding, Marty Meumeyer, The Brand Gap, Wired

Three more reasons Apple should be buying Miglia's add-on DVR solution

I speculated last week that Apple may buy Miglia to add DVR capabilities to its Apple TV set-top box. Yes, the Miglia TVMini HD+ makes a killer add-on to the Apple TV, but today, I realized that there are three more reasons why Apple should be buying the company or at least reselling their TVMini product:

1. Today's Register Hardware article titled Apple to revamp iMac as HD TV? reminded me that since the Miglia TVMini HD+ is a USB 2.0 device, it would be the perfect device to add HDTV to any iMac and turn it into the best small HDTV on the market. Not only would current flat-panel iMacs make wonderful high-resolution TVs to hang on your wall or put in your office, but they'd provide the perfect whole-house DVR solution, since any computer in the house could stream the recorded HDTV shows using iTunes. Such a device would out-TiVO even a Series 3 TiVO device in multi-computer households -- and wouldn't cost much more either.


2. Miglia's add-on HDTV recording solution means that one iMac design could support US, European, and Asian TV standards. Apple is fanatical about keeping the number of configurations of its computers to a minimum for manufacturing and inventory efficiency. Using a USB device to accommodate multiple TV standards means that the iMac would truly be a "world HDTV", something that just isn't possible with today's fixed function HDTVs.


3. HDTV content providers would suddenly have huge incentives to sign up with Apple's iTunes Store. At the moment, Apple only has a few studios providing content for the iTunes Store and almost no HDTV content. But as soon as consumers can start recording HDTV broadcasts and sharing those files in their homes, it won't be long before those same digital files show up on BitTorrent sites. Apple then has a very Godfather-like proposition for the studios: Distribute your content on iTunes and get paid for that distribution, or pirates will do your HDTV distribution for free. While not on a par with waking up to a dead horse, studio executives would understand the message as an offer they couldn't refuse.

When will we know if Apple is going this direction? Well, based upon my reading of the entrails of a recently sacrificed Sony PC, I see strong omens for an announcement in the next few weeks. Apple TV buyers have just received notices that their boxes are shipping, meaning that they'll get opportunities to see what works in their USB ports in just a few days. And we still hear rumors that Leopard, which may include new feature support for Apple TV functions, will ship either on March 24, the sixth anniversary of the original release of Mac OS X, or on April 1, the thirty-first anniversary of Apple Computer's founding by Steve Jobs and Steve Wozniak.

Technorati Tags: Apple, Apple TV, ATSC, HDTV, Internet, iTunes, Miglia, Opinion, PAL, Rumors

Apple versus Microsoft marketing: it's the difference between Time Poor and Time Rich buyers

I write frequently about the differing marketing approaches of Apple and Microsoft. But today, an article titled Time Rich or Time Poor? by Jeremy Liew over at Lightspeed Venture Partners really crystallized that difference for me. He defines the terms as follows:

Broadly speaking, there are two types of internet users, Time Rich (more time than money) and Time Poor (more money than time). I’d speculate that many of the readers of this blog fall into the Time Poor category, but the vast majority of internet users fall into the Time Rich category. If you’re starting a new internet company, its important to know who your audience is, and to make sure that you don’t let your own experience and that of other Time Poor people guide you wrong.

Jeremy then goes on to note that a lot of search engines, ecommerce, and comparison shopping engines are designed for Time Poor users, while social networks, social discovery, and video websites are designed for Time Rich users. And as he notes in the definition, there is a demographic gulf between the two groups as well: Time Poor typically implies money rich, while Time Rich implies money poor.

The "aha" moment I had today was that Apple's marketing is designed for Time Poor buyers, while Microsoft's is designed for Time Rich buyers.

Think about it. Apple sells computers using minimalist design, marketing, and interfaces. They clear away clutter and distill the experience down to a Zen-like minimum, assuming that the user doesn't have the time to wade through irrelevant data. Apple doesn't present a million options; instead, the interface says, "This is the way you do it." Want to buy a song for your music player? Buy it from iTunes. Apple doesn't provide choices because its customers are time starved and just want to get the job done.

Microsoft, on the other hand, is all about giving you the most options possible, assuming you will spend hours and hours weighing and evaluating each one. Its software is all about how long the feature lists are. Its wizards force you to evaluate many criteria in a step-by-step way to guide you to making a choice. Want to buy Windows? Here are six version to choose from. Want to buy a song for your music player? Here are five PlaysForSure stores to buy it from. Microsoft provides maximum choice because it believes its users are Time Rich and money poor.

We shouldn't restrict this marketing observation to just Apple and Microsoft, either. Google's minimalist interface is designed for the Time Poor; Yahoo's deep and link-rich enrironment appeals to the Time Rich. The Wall Street Journal? Time Poor. Digg.com? Time Rich. 200 channels of cable TV: Time Rich; TiVO: Time Poor.

Liew ends his article with the insight, "Know your audience when you build your site, keep the target clear, and you’ll have a better chance of meeting their needs." I believe that both Apple and Microsoft do exactly this with their products and marketing. That's why the two communities have such a difficult time understanding each other -- they are struggling to bridge the gap between the Time Rich and Time Poor. It also says that any attempts to convert the other's customers will require techniques that feel very foreign to each community. So next time Apple rolls out an ad that Apple users really hate, don't think that Apple has lost its marketing mojo; they may just be trying to appeal to Microsoft's target audience.

Technorati Tags: Apple, Digg.com, Google, Marketing, Microsoft, Time Poor, Time Rich, TiVO, Yahoo

Open sourcing US business listings promises a sea change in marketing

How many phone calls does your business get every day asking to verify its listing in an online directory? If you're like us, you probably get five or six of these calls a week. And frankly, we've started declining to verify the information, since we know that they are simply exercises in creating marketing mailing lists that are going to be sold to other companies.

Now, every marketer at some point or another has looked for mailing or business listings for marketing programs, so we understand the need for this type of data. Companies like infoUSA and DirectMail.com are happy to provide marketers with such lists with prices ranging from $50 to $1,000 per thousand names, depending on how targeted they are. The only problem: many of those lists are out of date and contain large numbers of unverified entries that don't produce results. Heck, we're still getting mailings for companies that haven't occupied our office space for over five years. Worse, many of those lists don't have geocoding of the data, making targeted mailings or real-world marketing programs hard to manage. We documented our experience showing Google Adwords significantly outperforming an email marketing list from InfoUSA last year.

iBegin Source, a new open-source business focused on local search, promises to change this business in a significant way. It uses Wiki technology to allow businesses to add and modify their own listings. It provides non-commercial access to its lists for free, and commercial access to geocoded lists for $1,000 per state, or $40,000 for the entire country. When I looked at Massachusetts, which has more than 283,000 businesses listed, that works out to about $3.50 per thousand names. And with commercial access, iBegin feeds you regular updates to the list, so it doesn't go stale. But more importantly, it allows businesses to update the list themselves and notifies users of the list when that happens. This one feature is probably one of the biggest differentiators for iBegin and could improve business marketing efficiency dramatically.

iBegin only launched on March 15 this year, so it is too early to predict its success. But in our book, they've broken new ground in sourcing US business lists -- and in the process, may have put a lot of mailing list brokers out of business.

Technorati Tags: AdWords, Direct mail, Google, iBegin, InfoUSA, List brokers, Local search, Marketing, Wiki

JetBlue makes good on its consumer promise not to strand them.

We criticized JetBlue recently for downright stranding its customers on the runway inside their airplanes in a recent winter storm. The company responded by running ads saying that it had erred and it would do better in the future. Amazingly, the company seems to have lived up to its word. Today, JetBlue grounded 230 flights due to an impending winter storm to avoid similar scenarios.

What else can we say, other than, "Good job!" It's never easy to cancel flights, but it's the preferred alternative to packing customers in pressurized aluminum tubes and then leaving them stranded on the runway. JetBlue did the right thing by its customers today, and that's the best way to rebuild its business.

Of course, it would be even better if customers could easily see what flights have been cancelled on the front page of JetBlue's Web site, but we'll take what we can get.

Technorati Tags: Airlines, Customer Service, JetBlue

Hardball competitive marketing: Microsoft offers enterprise credits to ditch Google and Yahoo

John Battelle, author of The Search, has PowerPoint slides describing Microsoft's enterprise marketing program to provide software credits to companies that configure their computers to use Microsoft Live Search and services. Varying degrees of credits are offered for differing amounts of commmitment by the enterprise, ranging up to the maximum compensation for removing all toolbars and encouraging emails from the CEO to drive compliance. Oh, and use of Internet Explorer 7 is mandatory.

Hmmm. Wasn't there a similar program designed to get companies to use Internet Explorer when Netscape was gaining market share? Next thing you'll know, we'll hear assertions that Microsoft Live Search is built into Windows and despite the efforts of thousands of Microsoft programmers, can't be removed.

Our take: We have to agree with Batelle's assertion that this could work in organizations that are already all Microsoft; it's straight out of the same playbook Microsoft uses with hardware OEMs. All we can say is that if Microsoft spent nearly as much attention and money on marketing programs to develop customer value as it did on killing competing companies, it would be making a lot more money.

Technorati Tags: Co-marketing, Incentives, Marketing, Microsoft, Netscape, The Search

Poor marketing leads to Zune discounting

That didn't take long. Blackfriars had noted in January that Apple's iPhone announcement cut the legs out from under Microsoft's Zune marketing program. Well, it now appears that both OfficeMax and Office Depot are heavily discounting their Zunes to $179.99 and $199.99 respectively.. A quick Froogle check shows a variety of them available online at prices ranging from $219.99 to list. This just shows the business results a company gets when they choose to do extremely weird marketing.

However, to be fair, we should recognize another possibility: it's possible that Microsoft may be preparing a second generation Zune for launch, and these stores are dumping inventory in preparation for that event. After all, Microsoft has been pretty clear that this was just the first in a family of Zunes. And it wouldn't be a bad marketing plan to put out a new Zune in the months before "Dad and Grad" season. Let's just hope they refresh the marketing plan as well as the device.

Technorati Tags: Marketing, Microsoft, OfficeMax, Office Depot, Zune

Miglia: a possible Apple add-on for Apple TV devices

Given that Apple charged the credit cards for early Apple TV buyers this week, we should start seeing those Mac mini-esque set top boxes showing up in homes next week. But as customers put up their photos of their unboxing experiences, I'm sure a lot of them will be asking, "Tell me again what that USB port on the box is for?"

Well it sounds like the folks over at The Apple Blog have figured out a reason. Remember how critics of Apple TV have complained that it can't record? Well, it turns out the makers of the Miglia mini HD have been chatting with Apple in a friendly way for a while now. Further, all Miglia products are now gone from the Apple Store. So what is up with that?

Here's our marketing-colored glasses speculation: Apple may be planning to buy Miglia to add TV recording add-on capabilities to iTunes and Apple TV.

Let me explain what I mean to the people who just went, "iTunes? I thought this was about Apple TV?"

Think about the typical application for Apple TV. It goes in the living room, and connects directly to your HDTV. What else is in there? Your TV antenna or cable connection, almost certainly. What better place to put a TV recording device?

The problem, though, is that Apple TV only has a 40 GByte hard disk. That's not going to store much HDTV content; you're going to get two or three movies at most. That doesn't make a great DVR experience. But if the a Miglia TVMini HD+ could export the HD content it is recording back to a bigger disk on an iTunes-enabled Mac using Apple TV's 802.11n Airport Extreme wireless network? Ah, now you're talking.

The fact that the Miglia TVMini HD+ is an external USB device allows Apple to integrate the function without having to send the Apple TV back to the FCC for recertification. But why buy the company though?

Well, you're going to need some serious software integration on the iTunes end to recognize the Miglia device and use it properly. That's not exactly in Apple's interest if Miglia remains completely independent. Further, if the function becomes popular, Apple might want the flexibility to build the device into future Apple TV products. It makes a whole lot more sense for them to lock up the company now and get them developing on Apple's roadmap.

Apple wants Macs to be the hub of your digital life. Steve Jobs has been building that vision piece by piece for more than five years now. Miglia would be just one more piece of the puzzle -- and a pretty clever one at that.

Technorati Tags: Apple, Apple TV, HDTV, iTunes, Miglia, Opinion, Speculation, TV, TVMini HD

Wired tries out open source journalism

I wrote yesterday about how exploding content and shrinking consumer attention are undermining existing media and journalist business models. Well, today, Wired Magazine has announced a project that instead of fighting that trend, is using it to generate content. Wired has announced an experiment in new, new media called Assignment Zero that will investigate the wisdom, creativity, power, and potential of crowdsourcing:

This project offers any willing contributor the chance to do the work of a reporter, writer, researcher or editor in a joint investigation by Wired and NewAssignment.Net. When Assignment Zero ends, NewAssignment.Net will publish the results -- articles, interviews and assorted data. Wired magazine contributing editor Jeff Howe will write a feature-length article that will run on Wired News.

When the project concludes in two to three months, we hope to have produced the most comprehensive knowledge base to date on the scope, limits and best practices of crowdsourcing, whether that be in reporting projects like Assignment Zero, scientific research networks like Innocentive or T-shirt design companies like Threadless.com.

Assignment Zero sounds fascinating, so I joined up this morning, offering myself as an interviewee and a writer. This open journalism project parallels the branded content model I identified as open analysis when SeekingAlpha.com's content was syndicated to Yahoo! Finance. It should provide diversity of opinion, transparency of process, and rich content. I'll let you know how the reality of the project stacks up against its promise as the experiment goes on over the next two or three months.

Technorati Tags: Brand, Branding, Journalism, Open analysis, Open source, crowdsourcing, Wired

Advertising's shift away from TV, radio, and Internet banners

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




Today's Wall Street Journal notes that in 2006, advertising spending for the top 50 US advertisers on measured media dropped 1.5%, while advertising spending overall grew 4.1%, according to a report from TNS Media.

While some of the decline may reflect overall cutbacks in ad spending by big marketers, it likely signals that big companies such as Procter & Gamble are reallocating some of their ad budgets to new Internet ad venues which aren't measured by TNS -- such as paid-search advertising, social networking and online video.

Not surprisingly, the report showed that growth in ad spending on traditional media, particularly newspapers and radio, continued to slow dramatically while spending on Internet display ads is accelerating. But it also highlighted a significant slowdown in ad growth among cable channels, after several years of robust increases.

An important methodology note is that this report is only about the top 50 advertisers, so the long tail of the other 7 million businesses in the US is largely unrepresented here. Blackfriars marketing sizing data for 2006 (which tries to represent all US businesses) showed significant growth in non-traditional marketing of all types, accounting for 7% of all marketing budgets, and Web site and Internet media -- the media TNS classifies as "unmeasured" -- was 6% of marketing budgets. Heck, even Microsoft is noticing that online piracy of software is actually a form of marketing for it. So Blackfriars agrees that businesses are allocating dollars to media forms that don't fall into nice, tidy categories. The big challenge is figuring out which businesses and which categories.

But I think the bigger question here is how well traditional, advertising-supported business models are going to stand up over the next five to ten years. According to the Project for Excellence in Journalism, news journalism is already being forced to reinvent its business model because of audience fragmentation and the subsequent collapse of advertising revenues. Cable TV may see similar drop-offs in advertising support as the tyranny of too much content dilutes its audiences as well. I know I have become addicted to watching my favorite TV shows without commercials via TiVO and iTunes, even when I have to pay for those services. My limited free time is worth more to me than the $1.99 I have to pay to watch a TV show without commercials.

We're now at the end of a 50-year media cycle where exploding content and shrinking consumer attention will destroy many business models for media and advertising. When we reach the end of such a cycle, business brands look for new ways to promote themselves. Fifty years ago, advertisers fled radio to establish branded content on TV. Now businesses are moving away from traditional media to new branded Internet properties like YouTube and podcasts on iTunes. No one should expect that the money won't move with them.

Update: CNNMoney weighs in with a similar view on the same advertising topic with The death of the 30-second TV commercial.

Technorati Tags: Advertising, Analysis, Attention Economy, Blackfriars, iTunes, Journalism, Media, TiVO

Microsoft admits piracy is actually a form of marketing

Microsoft has always viewed unauthorized copying of its software as a lost sale and has built rather absurd systems like Windows Genuine Advantage (WGA) to regularly force its own customers to prove that they have legal Windows copies. Well, the school in Russia that ditched Windows in favor of Linux because the local police brought charges against it for piracy have changed Microsoft's mind. Microsoft business group leader, Jeff Raikes, recently admitted at an investor conference that it benefited from piracy, saying:

"If they're going to pirate somebody, we want it to be us rather than somebody else," Raikes said.
....
"We understand that in the long run the fundamental asset is the installed base of people who are using our products," Raikes said. "What you hope to do over time is convert them to licensing the software."

We think he left out a word. We think the quote should have read "satisfied people who are using our products." And that isn't going to happen until Microsoft figures out it must treat users as paying and future customers, not theoretical lost revenue.

Technorati Tags: Linux, Microsoft, Jeff Raikes, Software, Windows, Windows Genuine Advantage

Apple 5th Avenue location: It's a store! No, it's a billboard!

Here's one to take up with the Outdoor Advertising Association: Apple has transformed one side of its designer 5th Avenue Store in New York into a giant translucent billboard advertising platform for the iPhone. Rumor has it that New York City's signage police may have required Apple to take it down, but even if that is true, the buzz created by it appears to have been worth whatever fine Apple may pay.

This flagship Apple location and transparent cube may yet create a whole new marketing opportunity for the company if it can resolve issues with New York City zoning. Imagine a simple colored light show on the inside of the cube on Apple special event nights. Or projected fireworks displays on the Fourth of July for those not willing to trek down to the Harbor to view them. Apple may yet get permission for its iPhone billboards, but even if it doesn't, it may just become more creative in promoting its brand if not its products.

Technorati Tags: Advertising, Apple, Fifth Avenue, New York City

Seven steps to Apple's marketing mastery

USA Today printed a great article on Friday about Apple's marketing savvy. The big money quote was from Harvard Business School professor David Yoffie, who said that the iPhone launch generated about $400 million in free publicity for Apple, an unprecedented amount.

But the meat of the article was more intriguing. Using analysis from a variety of marketing professors, USA Today distilled out seven marketing tactics that put Apple's marketing head and shoulders above any other company in high technology. Those seven tactics were:

1. Make innovative products. This one is a "Duh.", but clearly is the foundation of what makes any company great. Bad products never make a good business.


2. Keep it simple. This factor differentiates Apple from nearly every other company in the uber-geeky high tech industry. Simplicity sells to everyone from high-school dropouts to Ph.Ds who just don't have time to hassle with products that take hours to figure out and debug.


3. Create truly memorable ads. Amazingly, Apple spends less on airtime for its ads than its competitors do, choosing instead to invest in developing and refining ads that bolster and burnish its brand (how's that for alliteration?). It's just like Apple products: they don't worry about distribution until they've made something great.


4. Find an enemy. I don't completely agree with this one. Apple doesn't so much attack enemies as emphasize differentiation with other companies. It isn't afraid to name names, though, and that sets it apart from most other high-tech firms. But this is really more about being different than tearing down competitors.


5. Work the taste-makers. Apple pays to make get its products into the hands of analysts, movie stars (remember the iPods in the goody bags at the Oscars?), and decision makers [Aside: Apple is also one of the few high-tech firms that tracks its loaner gear assiduously and asks for it back. Compare that with the Vista laptop giveaway fiasco from Microsoft in terms of brand building]. It also emphasizes premium product placement in high-demographic shows like 24, Sex and the City, Seinfeld, and others. The company is undoubtedly looking for just the right venue to place its first iPhones on TV next fall. Expect to see them on the hottest upscale shows.


6. Offer surprises. I've written previously that Apple's secrecy about unannounced products adds about $600 to $700 million to its bottom line just from increased PR coverage. Secrecy and surprises drive buzz -- so long as you exceed everyone's expectations in the end.


7. Put on a show. One of my continuing themes in this blog has been about Steve Jobs exceptional willingness to distill, focus, and present a corporate message effectively. This doesn't happen by accident -- it happens through months of hard, detailed work behind closed doors to get everything exactly right. And yet the billionaire CEO of Apple still spends the last few days leading up to a keynote rehearsing over and over again to make it all come alive. Would that all executives focused as much on communicating the benefits and value of products their companies have spent billions developing.

I've written previously about the marketing wisdom in the recent book Made to Stick by Chip and Dan Heath. It's no accident that at least three of these seven essential elements of Apple's marketing correspond directly to the key qualities of ideas made to stick. There's no magic to Apple's marketing other than a near obsession with getting both the products and the marketing right. And that one differentiator is probably more important than any of the others.

Full disclosure: The author is long Apple stock at the time of writing.

Technorati Tags: Advertising, Apple, Communication, Made to Stick, Marketing, Presentations, Product placement, Public Relations, Secrecy, Stories, USA Today

How the information explosion drove us to iPods

Articles about data and storage were big last week. It started with this IDC paper forecasting that the amount of digital information we generate will exceed our ability to store it this year. Om Malik then observed that this is despite amazing improvements -- greater than 100% per year currently -- in disk density and capacity over the last 50 years. That's growth that's even faster and more disruptive than Moore's Law underlying chip improvements.

Mike Gunderloy at WebWorkerDaily sees opportunity in this new explosion of data, with knowledge workers becoming the new magpies who pick through the huge pile of shiny data we are all creating [Ed. note: Mike gets the Blackfriars Oscar for best metaphor this year]. But while I love the metaphor, the report itself has none of the same gravitas of prior sizings done at Berkeley, largely due to absurd statements like this one in the executive summary:

"In 2007 the amount of information created will surpass, for the first time, the storage capacity available."

Now consider the meaning of that statement for a moment. As a society, we're generating more information. Granted. But we can't store it? How did it get here then? Where did it come from? IDC has a lovely graph illustrating what they mean as shown below:



Note that the actual crisis The problem, though, is that it ignores what I see is the real reason that storage is growing so fast:

Most of our storage growth is due to information we don't want to keep or copies of existing information, not new information.

Now to give IDC its due, they do mention this little detail in the full paper as follows:

About one quarter of the digital universe is original (pictures recorded, keystrokes in an email, phone calls), while three quarters is replicated (emails forwarded, backed up transaction records, Hollywood movies on DVD).

A majority of these bits represent images, both moving and still. This is because one digital camera image can generate a megabyte or more of digital information, and video or digital TV can generate a dozen megabytes per second.

....

Not all of the bits in the digital universe will necessarily need to be stored - such as digital TV signals we watch but don't record, Web pages that disappear when we turn off our browser, or voice calls that are made digital in the network backbone for the duration of a call. On the other hand, we may want to store them. Personal video recorders and set-top boxes may store them temporarily, anyway; whether we program them to do so or not.

Much of the information crisis IDC highlights is data we may (and probably should) throw away, or copies of information that we already have. I, for one, don't ever want to see the Head-On commercial ("Apply directly to the forehead!") ever again, so that's a terabyte or two of video saved right there.

So what should we take away from the IDC report? Well, how about the fact that we are making more and more copies of data. And we're doing that because while processing and storage are growing like gangbusters, Internet bandwidth to the edge of the network is growing at about half that rate. I graphed this trend about five years ago when I was at Forrester Research; I've reproduced the chart below:



Looking at the chart, we can see that processors get about 50% faster each year, disk storage gets about 62% bigger each year, yet the bandwidth to our desktop improves only about 27% a year. That means our devices are growing more storage because they can't get to the information stored on the Internet quickly enough and therefore have to make copies of that information to make it useful to consumers. Said another way, we don't have enough wireless broadband to stream music to us everywhere, so we buy ipods that store it. We don't have access to every movie we want on an airplane, so we bring movie copies on DVDs. We don't have enough bandwidth to our homes to provide us with on-demand versions of every TV show we want to watch, so we store TV shows on our TiVOs. Storage and bandwidth are a tradeoff -- and at the moment, storage growth is making up for our paucity of consumer network bandwidth.

So is the explosion of information a crisis? Yes, but three quarters of that crisis is caused by not having ways to get information to where it is needed. Jonathan Schwartz, CEO of Sun Microsystems, recently said in a speech that it was faster to send a petabyte of data from San Francisco to Hong Kong by sailboat than through the Internet. We can assemble the petabyte of data easily. We can't deliver it where it is needed easily. And that's the true information crisis.

Technorati Tags: Bandwidth, Broadband, IDC, Information, iPod, Opinion, Storage, Technology

The secret to Apple stores: they sell benefits, not products

Fortune magazine has a great article on Why Apple is the best retailer in America. They cite a figure I've referenced before: the fact that Apple pulls in about $4,000 per square foot in its stores, compared with $2,600 for Tiffany & Co. and a measly $930 for Best Buy. But I thought the most telling part of the story was about an experience Jobs had when they were designing them back in 2000:

"One of the best pieces of advice Mickey ever gave us was to go rent a warehouse and build a prototype of a store, and not, you know, just design it, go build 20 of them, then discover it didn't work," says Jobs. In other words, design it as you would a product. Apple Store Version 0.0 took shape in a warehouse near the Apple campus. "Ron and I had a store all designed," says Jobs, when they were stopped by an insight: The computer was evolving from a simple productivity tool to a "hub" for video, photography, music, information, and so forth. The sale, then, was less about the machine than what you could do with it. But looking at their store, they winced. The hardware was laid out by product category - in other words, by how the company was organized internally, not by how a customer might actually want to buy things. "We were like, 'Oh, God, we're screwed!'" says Jobs.

But they weren't screwed; they were in a mockup. "So we redesigned it," he says. "And it cost us, I don't know, six, nine months. But it was the right decision by a million miles." When the first store finally opened, in Tysons Corner, Va., only a quarter of it was about product. The rest was arranged around interests: along the right wall, photos, videos, kids; on the left, problems. A third area - the Genius Bar in the back - was Johnson's brainstorm.

"When we launched retail, I got this group together, people from a variety of walks of life," says Johnson. "As an icebreaker, we said, 'Tell us about the best service experience you've ever had.'" Of the 18 people, 16 said it was in a hotel. This was unexpected. But of course: The concierge desk at a hotel isn't selling anything; it's there to help. "We said, 'Well, how do we create a store that has the friendliness of a Four Seasons Hotel?'" The answer: "Let's put a bar in our stores. But instead of dispensing alcohol, we dispense advice."

In 2000 when Dell was king of PCs and low prices were the mantra of PC retailing, this insight was complete heresy. But it also held the key to Apple's retail success: sell Apple benefits and experiences, not Apple products.

There are some other retailers that have figured this out. Davis Freeberg writes over at SeekingAlpha.com that he's particularly pleased with Staples' approach to marketing on TV. Why? Because unlike competitor Office Depot, Staples is now spending more of its marketing money on product placement in TV shows like The Office instead of buying 30-second commercial spots. Staples realized that integrating their products with a TV show produced more customer benefit than interrupting their favorite TV show with a commercial. In short, it left them smiling rather than frowning at the marketing experience.

So here are two questions for all business owners and marketers out there:

1. Are you selling benefits or products?


2. Are you delivering an experience that makes customers happy to spend as much money as they can afford with you, or one that leaves them wanting to spend the least they can?

Answer the questions carefully; the answers to these questions are the difference between the best and the worst of US retailers.

Technorati Tags: Apple, Apple Store, Marketing, Retail, Steve Jobs, Tiffany

The presentation Zen of storytelling, with Ira Glass

Garr Reynolds of Presentation Zen yesterday posted an article about storytelling featuring commentary and video (shown above) from This American Life presenter Ira Glass. If you're not up for watching the YouTube video, Garr kindly summarizes the major points Ira makes in his article.

Anyone who has been drawn into an episode of Ira Glass's This American Life or Garrison Kieler's Prarie Home Companion intuitively knows the power of stories. The question to ask is, when were you similarly drawn into a presentation or event at work?

I believe too many businesses shy away from telling stories, despite the fact that they are one of the most compelling ways to convey a message. Blackfriars thinks storytelling should be at the center of any good presentation, screenplay, or influencing conversation. It's also one of the SUCCES criteria for ideas that are Made to Stick as described in the book of that name.

So next time you are thinking about presenting an idea to a group, read over the points in Garr's article and consider whether you can get your point across with a story and a reflection on its message. Then ask your audience whether they thought your presentation worked. The ending to your story may surprise you.

Technorati Tags: Ira Glass, Made to Stick, Presentation Zen, Presentations, Garr Reynolds, Stores

More products now available from Blackfriars

Blackfriars has been stealthily updating the numbers and types of products clients and visitors can buy through our site. As of today, not only can you buy our research from the Blackfriars eStore, but you can also buy products we recommend through our Amazon Associates Store. This is in addition to the Blackfriars logo'ed shirts, hats, and coffee mugs from CafePress we added late last year.

Thank you to all who have requested these additions, and look for more additions as we get more requests.

Technorati Tags: Amazon, Blackfriars, CafePress, eCommerce, Stores

Best book this year: Made To Stick

Want to improve how you communicate? Look no further than Made to Stick by Chip and Dan Heath. One of the speech coaches we work with, Syms Wyeth,, recommended the book to us, and we've been enjoying it ever since. Even if you just use their SUCCES formula on the back cover -- Simplicity, Unexpectedness, Concreteness, Credibility, Emotional, and Stories -- to guide your next meeting or presentation, you'll be a better communicator. If you actually read the book, you'll be entertained, intrigued, and convinced that drinks with strangers are really a bad idea. And you'll always remember the book if you see it -- it's the orange one with the gray duct tape* on the cover.

* Five years with the Destination Imagination program has taught me to accept both duct tape and duck tape interchangeably and to acknowledge that there are about 500 different colors of duct tape, despite the fact that 99% of the population never sees any color of duct tape but gray.

Technorati Tags: Communication, Destination Imagination, Duct tape, Made to Stick, Marketing, Sims Wyeth

Blackfriars blogging news: Searchfeed.com out, Wordpress coming

About a month ago, we decided to try some new pay-per-click advertising from Searchfeed.com. We figured it couldn't hurt, might help. As of today, we're pulling it, and going back to running Amazon and Google Adsense ads. Why? Well, for one thing, we lost about two-thirds of our Adsense revenue because we gave up our best slot for Searchfeed. And secondly, the Searchfeed ads just weren't very good. Live and learn.

The second bit of blogging news is that we'll actually be ditching this template in the not-too-distant future as we move to a Wordpress-powered blog. I still have a fair amount of work to do to modify the Wordpress templates to do all I'd like them to, but it just feels like we've outgrown our Blogger training wheels from two and a half years ago. Leave a comment if you have suggestions for templates and blog features you'd like to see here, and I'll try to accommodate as many requests as I can. One feature I am looking to include: the ability for readers to choose some elements of the look and feel to accommodate their needs.

Finally, if you have specific topics you'd like to see us write about, please send them to me in either an email or as a comment here. This year, I've written more about Apple and the iPhone simply because that appears to be what readers read. But if there are other specific topics that you'd like to read more about, I'm happy to take requests.

Thanks to all who read this blog, and I hope you like the changes that you'll see over the next few months.

Technorati Tags: Adsense, Advertising, Blogs, Wordpress, Searchfeed.com

Skepticism versus analysis on Apple's future

I wrote an article on Friday noting Apple's positive prospects for 2007. Seeking Alpha reprinted the same article on Monday with a substantially more hypeful title, and that generated some very skeptical responses from the likes of Paul Thurrott and Digg members, claiming that they only believe Gartner and IDC market share numbers, not the ones I cited.

Having done similar sizings of markets when I was an analyst, I understand the skepticsm. Every sizing has some amount of bias and inaccuracy due to methodology and survey limitations (let me know if you want concrete examples; suffice it to say that no one has perfect data here. Want proof? Here's the first one: Gartner's and IDC's numbers never match). Further, both Gartner and IDC tend to revise their market share numbers a lot as new data comes in. Therefore, the real trick in getting a clear picture of where markets are going is in looking at lots of data from many sources and synthesizing them into a coherent whole, not focusing on a single source of data and claiming it is "the" number.

Along those lines this morning, I noticed that more data is supporting the pro-Apple view I noted in my article on Friday. One of the data sources is the US Department of Transportation, who has banned Windows Vista because of its incompatibilities with existing DOT applications. The article noted says they are considering both Apple Macs and Linux for new applications. Prudential Securities notes that it believes that the near-concurrent release of Apple's Leopard and Adobe's Creative Suite 3 will unleash a flood of pent up demand for Apple computers. Further, according to Google CEO Eric Schmidt, Google and Apple have "are working on many more projects together." (side note: if Apple and Google are collaborating, they have a combined cash horde of $24 billion to influence the market. That's only half of Microsoft, but it's a force to think about). And finally, George Scriban, one of the Blackfriars blog readers notes that Apple will will likely exceed the 100 million iPod mark this month rather than next. That means that the iPod halo effect is a few million customers ahead of the schedule I cited in my article.

My overall point: the trick in being an analyst or a great marketer is seeing the obvious before anyone else does. That means sometimes taking chances on being later proven wrong. There's a ton of news saying that technology buying behaviors are changing, and many of those factors favor Apple. Those who see the change earlier than others have more opportunities to profit from the trend. Those that follow the herd will tend to get slaughtered. The big difference between the two strategies is whether people have the courage to believe their eyes.


UPDATE: Another data point this morning: Fortune Magazine just rated Apple the most innovative company, #2 in computers and #7 most admired company in the world.

UPDATE 2: Thank you to Paul Thurrott for his kind words today in response to this post, especially given our disagreements on what the data means. Gee, maybe this is the dawning of a new age.



Full disclosure: the author is long Apple shares at the time of writing.

Technorati Tags: Analysis, Apple, Department of Transportation, Gartner, Google, IDC, iPod, Marketing