November 2008

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What’s the idea with CD revenue? Atlantic Records digital sales just exceeded CD sales. Revenue is growing from ringtones, ringbacks, licensing from TV shows and satellite radio. Revenue from expensive-to-press and expensive-to-distribute CDs is plunging. But as I’ve said before, the real rub for artists and the real villain in the reduction of music revenue is single song sales. If Lil Wayne only has 5 songs on your iPod, rather than 3 albums worth, you are missing out on the total Lil Wayne experience.  Plus you are more likely to burn out.

Smart artists like Kid Rock want you to buy the whole album. He’s got lots of stories to tell. Lots of rhymes. A fan who listens to all of “Rock and Roll Jesus, not just “All Summer Long,” will become a more loyal fan of Kid Rock. A more committed fan. A more viral fan. A drunk-dialing fan. A ticket buying fan. S/he knows what the record execs will know in about 2 years. (Record execs are a little slow, if you haven’t noticed.) Single song sales are killing the business.  Peace!

 

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HP. Beep-beep.

 

Hewlett-Packard’s purchase of EDS is beginning to make sense to me. The NY Times announced today that HP’s ProCurve corporate networking hardware unit is beginning to eat up some of Cisco System’s marketshare, albeit still with a long way to go (7% HP, 77% Cisco.)   It seems the EDS group may just act as a great sales conduit between its services customers and HP’s ProCurve networking gear. Services people, in order to be good, must really understand business and process and when they do it puts them in great position to recommend product. Accenture has made boat loads of money selling its own software recommended by its services people, why can’t HP can do the same?

Before Mark Hurd took over, HP was resting on laurels and ink cartridges. Its PC business was doing okay, but the company was quite sluggish. Carly Fiorina did not really understand the computer and peripherals business. HP just reported flat quarterly net income, but a revenue increase of 19%. In today’s economy? What does that tell you? It says “beep beep, company moving forward.”


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In a brief created earlier in the year for a social media music product I wrote “a musician is never more in touch with his or her art than when performing on stage, looking into the eyes of fans.” You’ve heard the expression “You feel me?,” well, unless their vision sucks (physically or metaphorically) artists should be able to look into the eyes of fans and tell if the song is any good.  If it’s connecting. Even with an audience of suburban white kids, many of whom couldn’t find the beat in a James Brown song, an artist can tell.

This ability to “watch” the target is missing from much of marketing today. If creative teams, as they are coming up with words and pictures, envision the facial expressions of consumers hearing or seeing their messages, it will help them sell. It’s a projection exercise.  The strategic ideas (science) are hard enough to come up with, but the creative ideas that actually touch peoples’ souls (art) are where the money is. 

While I do my strategic rant about “What’s the idea?,” creative people should be asking themselves “What’s the expression?” And if they can’t visualize consumers’ responses to their selling messages — if it’s too hard — then they are writers and designers, not communicators. 

 

 

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Yesterday I posted (If I called it writing, I’d have to proof) about the social graph — the relationship between consumers tied together online. Today I am going to see The Nightwatchman. The Nightwatchman is Tom Morello, lead guitar player of Rage Against the Machine, who may be rock’s best guitar player. Mr. Morello, in his spare time, wanted to teach himself to sing, so he decided to take his guitar to small venues and book himself anonymously as The Nightwatchman.

With rock, Tom, and word-of-mouth being what they are, people started to catch on. Those linked by computer (MySpace and Facebook,) those linked by cell phone, and those linked by barstool and coffee couch began to discuss this phenom with the guitar and gritty voice and now he has an album and big tour.

This is a perfect example of the social graph working. Tom is cool, he’s the “haps,” and someone easy to recommend, but what about other product categories that might not be as “social?” Cold sore ointment? Drunk driving lawyers? Wrinkle cream? How likely are marketers of these products to use the social graph to generated sales? Surprisingly, more than you’d think. Someone I know had a medical problem that was not particularly good social conversation. So she went on anonymous message boards and learned lots. That was social. It was just anonymous social. Over time this type of social media will be a good place to meet recommenders and friends. Online friends. What should call online-only friends? Any ideas?  “Fronds?”  

 

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Social Graphing

The best definition I’ve heard for social graph or social graphing is “mapping the online relationships between consumers.”  Ad Age reports this week that evidence is emerging that one can predict purchase behavior among people who are linked together online. In other words, someone on Facebook who likes Ludacris is likely to “friend” someone who likes Ludacris or who may have a predisposition toward Ludacris.

 

Social graphing uses online degrees of separation to predict purchase likelihood whereas old school researchers study demographics, psychographics and media consumption as predictors.   If you Wikipedia “social graph” you get “social networking,” so it’s clearly still an emerging practice. That said, with a little leadership, social graphing will be a huge business driver in the next 3 years. 

 

Does anyone want to buy the URL socialgraph.com? You’ll never guess who owns it. Peace!

 

 

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Jerry Yang is stepping down at Yahoo (without a named successor) and PepsiCo has removed long-time ad agency BBDO in favor of white hot TBWA/Chiat Day.  Change is in the wind.  Yahoo needed to do something, though I’m not sure removing Yang does anything. The number 1 website in terms of traffic, they still do not know what they want to be. The next CEO had better have a focused strategic vision beyond “I wouldn’t have f’ed up the Microsoft deal.”

 

As for TBWA/Chiat Day picking up PepsiCo, it is the second black eye they have given BBDO in the last couple of years; taking Visa was the first.  Both these agencies are on a par if you ask me with the slight edge going to TBWA thanks to good leadership (Tom Carroll and Lee Clow) and the ability to do striking, simple work.  But “Life Takes Visa,” though a fine line, hasn’t yet been actualized.  

 

These two changes are incremental, certainly not seismic. And so are they changes at all? Nah.

 

But ladies and gentlemen, change is in the wind and it is to those who take advantage of it – with tight strategic understanding – that the spoils will fall.   

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I blasted Enfatico and Dell yesterday for a campaign idea that isn’t…and today I see one that is. It’s from IBM. Both campaigns operate in a similar space. Dell is teaching us that individuals can make a difference in business by “taking their own path.” IBM, with its new campaign, teaches us that people can make a difference on the planet by assembling and using data in smart ways, under the rubric "think."  The Dell approach uses borrowed interest while IBM’s uses core brand values. The way technology insinuates itself into these stories will impact the companies respective bottom lines.

 

 IBM highlights global problems like healthcare, drinking water, traffic, congestion – all fixable with smart data analysis and machines. Dell uses warm and fuzzyish people stories outlining personal and professional change, which even in India where the campaign is breaking, is just not right for the times.

 
I wonder if IBM regrets selling the ThinkPad brand? When this campaign works and if IBM steps up, Lenovo might just be back in the fold before you know it. Think.

 

 

 

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Enfatico, the new Ogilvy comms agency set up to handle Dell Computer, has launched what appears to be its first global campaign.  Not global in terms of multinational offices – nooo – global in terms of integrated communication and offices.   I read in the comments on jaffejuice that Enfatico’s blog has a paltry two posts as of today, so I took a look. Ouch, he’s right. And that’s where I learned of the new Dell campaignAnd that’s where I watched some of the most inane communications ever witnessed. 
 

This is like 8th grade marketing stuff. “Take your own path” as an idea is so old an Altzheimer’s patient would remember it.  Apple’s “Think Different” was the same idea, but done by an ad agency. This effort, highlighting business people from India and their shining paths, feels like it was produced in the basement of strip mall by two kids with a boom mike and a Commodore computer.

 

T. Boone, wake up sir!

 

 

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Sitting around the big screen with a bunch of guys watching football the other night, one remarked how McDonald’s didn’t advertise like it used to.  “Remember how they used to be all over the place?  Their business isn’t good,” said this gentleman.  Marketing student that I am, in a very non-confrontational way (burger politics) I offered that McDonalds’s is actually doing quite well, thanks to the dollar menu and the softening economy.  Something in my memory telling me that quarterly sales have continued up since the introduction of salads and the “I’m lovin’ it” idea.

But this one consumer is not seeing the advertising. And though I know he really is seeing and hearing it, he doesn’t remember.  Something is missing lately from McDonald’s advertising. They still have that wonderful ba-tah-bah-bah-bah mnemonic.  The brand proposition is still somewhat tight (family and fun.)  New products (Southern Chicken sandie) are on target.  But the ads are too diffuse.  What’s the idea?  

Remember SNL’s “more cowbell.”  McDonald’s needs more red and yellow.  They need to better understand the “it” in “I’m lovin’ it.” And they need to find relevance beyond value.  Peace!  

 

 

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