April 2008

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GM Can’t Spin

Poor General Motors. They are cutting production, the second half of this year, of 140,000 heavy duty pick-up trucks and SUVs. What visionaries! What news! 

I’m sure they’d prefer to be holding press conferences and issuing press alerts about some brand new energy efficient models and efforts in alternative fuels, but noooooo. GM is in the papers for announcing cutting car models that nobody wants. 

 
Mr. Wagoner, McCann-Erickson, why are you hiding the good news? I know there must be some good news in there somewhere!
 

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Just got back from Web Expo 2.0 in San Francisco. Zude had a booth and it was packed all three days, and even one night with Robert Scoble stopping by http://scobleizer.com/2008/04/24/exclusive-first-look-at-new-zude-mashup-capabilities/. Zude is a social computing platform that lets users of any technical stripe create and manage their own web presence.  Web 2.0 Expo is an enterprise show favoring IT types, so it was pretty cool to see all the people lined up at the booth interested in our consumer web application.

 
Zude recently attended two consumer shows: South By Southwest and Canadian Music Week, the demographics for which were generally younger than for Web 2.0 Expo. Two interesting observations about the demographic comparisons: the IT community was much more interested in social networking and social media than I had expected, perhaps even more so than at the music shows. And secondly, IT people still love paper. At SXSW the attendees were almost defiant in their desire to stay away from paper, yet at Web 2.0 Expo, we had to run out to Kinko’s a couple of times to reprint data sheets. Old school and new school. Interesting.
 

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Two Americas?

I’m in San Francisco at Web 2.0 Expo and the price of regular is a millipede under $4.00. Yesterday’s newspaper reported that MacDonald’s monthly same store sales slowed for the first time in 5 years. Hmmmm. So, I posit, the price of gas and the lagging economy are taking a toll on the lower rungs of the demographic ladder. Less $4.00 lunches due to $4.00 gallons of gas. 

 

Today’s paper says Apple had its best quarter ever. Mac sales are soaring. The iPod category is maturing, so says Apple defensively, sales were somewhat flat. They only sold 10.9 million units this quarter. Yahoo reported strong earnings and I keep hearing luxury car ads on the radio. Okay, they are used luxury car ads, but luxury nonetheless.

 

The Economist says explorers may have found the third largest oil source in Brazil and that scares me.  

 

We need a new president. 

 
 
 

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Newsday, Long Island’s daily newspaper, earned $80 million dollars (before taxes, etc) last year. The Tribune Company is selling the property and Mort Zuckerman and front- runner Rupert Murdoch are its pursuers. Mr. Murdoch has reportedly offered $580 million for Newsday and it’s a very good value. 
 
The paper, you see, has monopoly status on Long Island, home to some of the highest wage earners in the country. At one time Newsday was the 6th leading daily newspaper in the U.S. but it never really delivered on its full potential. With some proper handling and if it expunges its NYC envy, the paper has amazing upside.
 
Long Island is a unique place. Many unique places, if fact, and writers who love and live here if given a targeted mission are likely to double the circulation of the paper in no time. And let’s not even get into the web side of Newsday’s future. With smart care and feeding of Newsday.com, it could dwarf the paper in 10 years.
 
I hope Mr. Zuckerman wins the battle. The future will look rosier for Newsday if he does.   
 

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 Rupert Murdoch is at loggerheads with The Wall Street Journal’s top editor Marcus W. Brauchli, and it looks like Murdoch is going to win.  They are at odds over the direction of the paper.  Mr. Murdch wants to compete with the New York Times and increase coverage of general news and politics.  Mr. Brauchli and the Bancroft Family, the Journal’s previous owners, wish to see the paper stick to its financial roots.  As do I.
 
If you take Wall Street out of the Journal you have a newspaper without a conscience.   Wall Street is like no other street in the world.  It and the financial industry need its own newspaper. Money is important. And ever shall be in America. Mr. Murdoch, it’s okay to make little satisfying changes, but this overhaul needs to stop. And, please leave the “Marketplace” section alone. It’s quite good.
 

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I’m a big Coke fan. I don’t drink it all that much, though I had a couple of swigs of my wife’s Diet Coke last night, but I certainly follow it as a marketer. Coke is an amazing brand. Having worked at McCann-Erickson the ad agency that did Coke’s best work, I saw first hand the brand at work and the hold it had on its drinkers.
 
But Coke marketing has become watered down. Not the formula, God forbid, but the marketing. Coke has too many brand extensions, too many internal competing products (waters, juices, energy drinks) and an overall loss of brand commitment. But Coke is still Coke and after consumers have tried all that other stuff, they still come back. So why does Coke continue to compete with itself.  It’s silly. It used to be the world’s most recognized brand. Now it lies fallow.
 
Were I the head of Coke I’d get rid of all the waters, juices and energy drinks. I’d get McCann back and rekindle the “thirst” of Americans and those in need of refreshment the world over. I’d take the money from all the sold off non-Coke properties and put it with the legions of displaced marketing executives on something new. How about a healthy fast food restaurant chain? Or a new sport? (That’s right, a new sport.)
 

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HSBC is a bank among banks. Their branding idea, however, is actually pretty inventive.  It struck me first when viewing some wonderful outdoor advertising in NYC. Developed by JWT, the outdoor showed the same picture multiple times with alternating headlines. One series showed the same colorful shot of a piece of sushi. Beneath one shot was the word “tasty” the next the word “nasty.” 

 

The idea behind the advertising is points-of-view alter everything. I spoke with the planner at JWT who confirmed that the bank is “digging deeper with customers” to really know what’s on their minds. This one execution did a great job of conveying that premise. Most banks say things like “our bankers get to know you like neighbors” or some other fluff, but that claim is so stale it doesn’t process. HSBC’s spin is fresh. 

 

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I’ve seen the entire history of the Internet and Internet marketing unfold and it’s fun to compare selling and marketing techniques across media and over time.
 
Before the Internet, print was a very strong selling medium. Newspapers and magazines provided marketers with long-form communications vehicles through which to sell goods and services. Research was employed to help gauge a print ad’s selling effectiveness, telling marketers if an ad was seen, remembered, read partially, or read completely. Rarely, though, could one determine if an ad was acted upon. 
 
One of today’s dominant sales channels is the Internet, and with so many people comfortable buying over the Internet (32% of web shoppers have been doing so for 7 years) it’s amazing that marketers are only now beginning to ask some of these same selling questions. On the Internet there are numerous techniques to find out what is working and what’s not. Techniques to find out what web pages people are visiting.  How long they are staying. What they acting upon. What they are sharing. What they are filing away. And most important, what they are buying.
 
Research departments in the 60s and 70s would have killed for this type of information, yet today many companies are still not asking the questions or using the tools. The tools are all related to usability and communication.  Come on people, let’s use them.
 

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I’m a Sony guy. If I see the name Sony on an electronic product I’m predisposed toward purchase. Quality, fidelity, and craftsmanship are a couple of the qualities I assign to Sony products. I’ve even written here about Sony’s lead in TV, and how its TVs are superior. 
 
Well lo and behold, Sony’s flat panel LCD TV business is unprofitable with a market share lead in the US that is fractional. Who is nipping at its heals? Visio. Who? Visio.
 
Ever shop at Sam’s Club or Costco or a similar warehouse store? If so, then you’ve probably passed some Visio TVs.  More likely than not you’ve passed them in carts rolling out the door. These flat panel TVs are about half the price of the big brands like Sony and Samsung and people are buying them with their 50-packs of toilet paper.
 
Contract manufactured in Asia, with spectacular targeted marketing, companies like Visio and Olevia are biting off some serious share. 
 
If you market where the price shoppers are – and today, who isn’t a price shopper – and offer a product that is half the traditional price, you are likely to gain consideration. Perhaps not the first time, you walk past the TV on the way to find your groceries, but the 4th or 5th time. So long as that TV is still pounding out brilliant pixels, it is wending its way into your heart. Sony better get with the price program.
 

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