January 2009

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Let’s face it, the economy has sucked for the last 3 years. Why else would Hyundai have grown into one of America’s best selling car brands? It’s just this year the economy is dinging the top rungs of the ladder. Hard. And it’s not trickling down, it’s pouring down.

Marketing has always been about the 4 Ps (Product, Price, Place and Promotion). Most marketers rarely concern themselves with the price P. Though they spend some time with Product and Place (the sales channel) they focus mainly on Promotion. Well, when the economy sucks price becomes very important. And when price is important the cost of goods going in to the product are important. The entire supply chain is important and manufacturers view with a close eye suppliers, efficiencies, headcount and margins. It creates a thinning of the herd, as it were, which isn’t a bad thing long term.

Amazon reported its best ever December. Why? Because it is a price and value leader. Its cost of goods is low thanks to volume, it doesn’t have to promote, shopping is easy and people are confident in the brand. As more people get hooked on shopping Amazon, it will be hard for them to go back. When the price is right, people spend.   Peace!

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ThemTube


When is YouTube not YouTube? 

The answer: When Google makes a deal with Hollywood to include stars and starlets in professionally developed, made-for-web content and host it on YouTube.  That’s just what is happening as they negotiate with The William Morris agency to get professional programming on the net, bypassing the TV model. The idea is a good one, but it shouldn’t be marketed as YouTube. The new entity needs its own name and brand.  The people still want to broadcast to the public and they don’t want to compete with Blake Lively. Leave TV rebroadcasts to the Hulus of the world. Leave YouTube to the consumer generated segment and create a new online property for the pros.

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 I’m pulling for Yahoo and I’m pulling for Carol Bartz, its new CEO. Anyone worth his or her salt (whatever that means) has had some tough years. Yahoo is no different. Internetly speaking, Yahoo’s a geezer. So is AOL. At beer parties the technorati are embarrassed to say they work at AOL. And at MIT graduations, kids don’t toss their caps in the air screaming “Yahoo.”

Now that the venture dudes are feeling the pain, they’re spending hundreds more hours focusing on corporate leadership and strategy.  And — check it out — even TechCrunch has grown a whisker. The best businesses have always been built upon the fundamentals: leadership, strategy and revenue generation. Even creatively-driven businesses like advertising have always been built upon solid business fundamentals.   

Yahoo is going to focus. It is going to make big money. It is going to re-gather itself and command tech respect. It was a leader…and will be again. Just consider these growing pains. Peace!

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If ever a brand owned an idea it was Coca Cola. McCann-Erickson got it. Early Coke brand managers got it. The people definitely got it. The idea was “refreshment.” Coke ads made you feel in your bones the total and utter refreshment from its unique, thirst-quenching taste. 

(Not a big Coke drinker, I once came off the Appalachian Trail parched, craving a Coke. I found one and it was other-worldly.)

Pepsi which has always had smart marketers on its team realizes “refreshment” is Coke’s provenance and has for the most part stayed away. But today Pepsi is jumping on the word in its new “refresh everything” campaign tied to change in America.  As it is with much of Pepsi’s work, this is a borrowed interest approach (not based on an inherent product quality) so it won’t be that effective. And the consumer generated content side of the program is a bit weak. But Pepsi will spend so it may muddle the “refreshment” waters.  

Coke needs to defend its refreshment position and it needs to do it now. Get back to what refresh meant.  

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Measurement in marketing is the “only” thing. Are sales increasing? Where? Who’s buying? Who’s not?  How are the ads communicating? What are the ads really saying to consumers about the product? Answers to these questions can help build effective programs. No doubt.

But then there is ROI. Return on investment. If you’re in a marketing or meeting and people are prattling on about ROI, you can bet they aren’t getting it. The whole ROI movement began in the 70s with the birth of direct marketing. Then promotion became the ROI pop marketing darling. Today it is pay-per-click and Internet marketing. But what often falls by the wayside while the Excel geeks are crunching the ROI numbers is the role of the strategy. More specifically, the brand strategy. This needs to be measured first and foremost. Return on strategy (ROS) is a marketing building block most overlook. And it is a long term recipe for failure.

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The Geier Plan.

Philip Geier was the chairman of the Interpublic Group of Companies (IPG), an advertising agency holding company, while it was riding high in the 80s and 90s. A cigar-chomping, Ben Benson’s Steakhouses-eating executive, Mr. Geier oversaw some of the top agencies in the world, including McCann and Lowe. He is a brilliant business man. When a huge bank account was up for grabs and the final decision to be made between McCann and another agency, Mr. Geier (it is my belief) offered the bank all of IPGs global banking business. Winning idea!

If anyone knows about the power of advertising, the power of the consumer spending, it is Mr. Geier, so his full page newspaper ad yesterday to Timothy Geithner, the Obama team, and other financial opinion leaders to issue American families stimulus checks with a twist was worth reading. Unlike bail-out checks, Mr. Geier wants to issue money that “can be used only for consumer purchasing over a short period of time.”  It’s a bit complicated, but doable. Certificate checks will be issued which must be spend quickly and must be paired with real money to make a purchase. The solution will  jump start sales and build consumer confidence.

Glad to know that Mr. Geier (The Geier Group) is still chomping. I think it’s time to get him back to IPG and allow Michael Roth to take a sabbatical.

                                        

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What’s the idea carbon footprints?

The Coke vs. Pepsi argument has always been about taste and marketing. Some say the taste difference is hard to tell. The difference maker has long been the marketing — the words, songs and colors. Today, Pepsi has found another means to change the game: It is looking into the carbon footprint of its products. First out of the box: Tropicana orange juice.

Now this may seem irrelevant today and it may even seem a little off-message, but believe me carbon emissions are important and will grow in importance. So much so that Coke will need to match Pepsi very soon in its efforts.

Carbon emission, it will turn out, are not only bad for the planet but for individuals health. As China and India start selling $2500 cars without catalytic converters, emission will grow at unprecedented levels. And health issues will become quite noticeable. Like asthma in the Bronx. In years the "haves" (have low emissions) will be fighting with the "have nots" (high emissions).  Carbon neutral companies will very much be in favor. Their products will actually seem to taste better and perform better. Peace!

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Microsoft is a pisser. I once heard you couldn’t work for them unless your IQ was like a zillion. And you had to pass some sort of gnarly logic teaser tests. “If a train is going 60 miles an hour….”  Microsoft has spent so much money on marketing over the years one would think they’d know what they’re doing, but my take is they over_think too much. Everything is so complex.

Here’a an example. I read a leaderboard display ad in the business section of NYTimes.com. It read: It’s everybody’s business to think globally. Does your enterprise software know how people really communicate? Ask for people_ready unified communications. (Note the hyphen/underscore). Upon click it took me to not a landing page (a time-tested lubricant for creating action), but to big portal page filled with many choices – 23 in fact. The main choice was an article presented, thankfully, in executive summary form entitled “Working in a blended world.”  But I didn’t just leave the world’s greatest newspaper site for an article written by Microsoft, so I moved on. Another choice which seemed "on" the leaderboard message was in the form of a badge which asked “Are you spending your time the right way?” Check out Harvard Business Ideacast. I clicked there and it led me to copy about a productized offering (I think) called Time-Boxing, which actually was somewhat intriguing, but it was way buried and it took forever to find it.

Then I went to read an article on the portal and it offered me a PDF reader of something called .XPS, the Microsoft version of an “enhanced” reader. I clicked on the XPS, out of curiosity, and was asked to download the application. I clicked out using the red “X” and it wouldn’t let me leave. I had to close the window using a "close both tabs?" button. Frustrayshhhhhh.

 

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News is money!

What’s the idea with The New York Times?

Over time, The New York Times Corporation has borrowed $1.1B to help fund its money making efforts and the notes are coming due.  From the funding of internet property About.com to investment in the Boston Red Sox baseball team to ownership and leasing of a brand new building in New York City’s Times Square, the management of this glorious news corporation through lack of focus has allowed itself to falter. With a cash infusion of $250 million from Mexican mogul Carlos Slim Helu – talk about angel investors – the Times Corp. may live to see another day.

I wonder how many senior Times executives looked at Samuel Zell’s purchase of the Tribune Company and foresaw that crash and burn. I’ll bet many. Yet did they not see what was happening to their own organization?  This lack of focus and defined business objective should have been obvious to any good financial reporter. 

By managing so many different and diffuse businesses, the Times Corp. took its eye off the real prize: Become the world’s best, most ubiquitous news organization — enabled by the Web. Warren Buffet would agree that news is money. The Times has so far missed the opportunity. Peace!      

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IBM is back.

What’s the idea with IBM?

Well, it’s nice to see IBM advertising on TV again. I watched a couple of its ads during the NFL playoffs yesterday and there was something reassuring about them.  (It’s been a while.) One ad talked about the computing power of a pedaflop, whatever that is. IBM’s new editorial-like “Think” campaign is intended to get people thinking about solving the planet’s problems. And this thinking, they infer, will be best supported by massive, raw computing power. It’s a nice idea. And timely. The print works better than the TV and though the TV doesn’t mention the “Think” device, the idea holds together.

IBM is making money. It is making big ass computers. And it’s making some noise. In a tough economy, this is good to see. Especially after all those dollar menu ads by McDonald’s. Peace!

 

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