Monthly Archives: May 2015

The Real Verizon-AOL Rationale.

By
Steve Poppe
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BAM! (And I’m not talking Brooklyn Academy of Music.) Verizon has agreed to buy AOL for $4.4B and AOL’s stock price has jumped like a marlin. Here’s the quote announcing the deal from Verizon’s CEO:

“AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world,” Verizon CEO Lowell McAdam said in the statement.

A digital trailblazer? I haven’t seen a lot of trailblazing going on in 15 years. The purchase of TechCrunch was blaze-y enough, I guess, but that brand has laid fallow since Michael Arrington was moved aside. The story in Ad Age suggests a big part of the purchase rationale is AOL’s content, yet the real story is in the ad platform. Specifically, AOL’s ability to track users from desktop to mobile device. And now Verizon offers AOL the ability to collect data from mobile devices like few others. Also Verizon knows where you go on your desktop…and soon may integrate your TV.

The key to being able to do something smart with all of this data is having a single user identifier. A social security number, if you will, for each person on the web. My wife pays the Verizon bill and when I use my mobile to make business calls, her name comes up – so they have a long way to go.

Make no mistake, this deal isn’t about the content, that’s secondary.  It’s about advertising and data and analytics. Good work Verizon, this is a nice start. But don’t turn to AOL for you vision. Nuh uh!

Peace.

 

 

 

Apps that Behave…your change (phonetic).

By
Steve Poppe
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0

Behavior change start-ups (as opposed to technology start-ups) are really moving the VC market. Twenty years ago if you wanted to start a new commercial venture you needed real estate, manufacturing equipment, people to run stuff, a banker, insurance and office equipment. That’s where the money went. These days, a smart entrepreneur can develop a behavior changing business, using apps and software, in his/her home. (S/he doesn’t even need to move to the garage.)

uberUber is one such behavior-changing company. It doesn’t own cars or a drivers. Sure it has insurance and some office workers, but the “there there” is pretty thin. It’s all software. People bring the demand for cheaper transportation and they use their own devices. It is a logistics business, as Elon Musk says.

The best new products and services meet pent up consumer demand. When marketers find the pent up need and can use apps to deliver it, it doesn’t require a huge up-front cost. All you need is an idea, a couple of football fields worth of code, some Rackspace or Amazon cloud services and a VC with a little love.

Behavior changing start-ups are the haps now. Just ask Netflix. When you a launching one of these companies, ask yourself the marketing question “Who is going to lose the sale I am winning? And better yet, “What behavior am I changing that consumers are desiring?”Behavior changing start-ups are the haps now. Just ask Netflix. When you a launching one of these companies, ask yourself the marketing question “Who is going to lose the sale I am winning? And better yet, “What behavior am I changing that consumers are desiring?”

Peace.

Foster, Bias & Sales. An Agency In Transition.

By
Steve Poppe
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0

I’ve written a few times about my desire to open an ad agency named Foster, Bias and Sales – staying away from the surname convention. Foster meaning raise or promote. Bias intended to suggest “create bias” toward a product or service. And sales meaning, well, the cha-ching of the cash register.

I was reading about racial bias today in an Op-Ed piece by Nicholas Kristof which referenced some interesting studies of racial bias among children and realized my new agency should not attempt to create bias toward a product or service, but leverage existing biases. Big difference. By leveraging ingrained product context, one can create a richer purchase environment.

An example:

At a car dealership, to create bias towards Toyota a salesperson might cite JD Power data on safely. Or higher resale value after 5 years. These are good logical proofs of product value.

Were we to leverage existing consumer biases on behalf of Toyota, maybe we’d look at the percentage of Americans who only buy America made products. Those people who don’t like to buy imports. What would it take to get them to value the brand? That’s a negative bias. Let’s look at a positive bias. Toyota was once, if not still, known to be the best selling single car brand in America. Leaders and overdogs are sometimes thought to be complacent. How about turning that bias on its head. Position the brand not as the leader, but as the hungriest car company. A company with an underdog mentality. Almost start-up like.

I can’t tell you when, or if, Foster, Bias and Sales will launch. But it’s a great brand name and always evolving. Hee hee. Peace.

 

McDonald’s Wan Announcement.

By
Steve Poppe
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0

Mcdonalds_logo

I posted yesterday what I thought McDonald’s was going to do to turn around its faltering earnings. I was thinking reformulate, Steve Easterbook was thinking restructure. Financial announcements to investment jockeys are usually about business and operations and that was, indeed, what we heard. I was hoping, naively so, that McDonald’s was going to talk about menu changes and healthier-for-you options that would mirror the tastes of today’s demographic and psychographic. And perhaps take it a step further and lead those who don’t care about healthier-for-you fair down the path of improved diet offerings that still taste good.

Some of this is happening, but Mr. Easterbrook buried the lead. Mostly what he talked about was global reorgs, less layers of management and bottom-line alterations.

Changing McDonald’s into a healthier for you fast food chain cannot happen overnight. I get it. But it has to start somewhere. And it has…by removing antibiotics from the chicken it now buys. For me though, this was the lead and they did not go far enough. This is where the market is going. This is where leaders take the reins.

An announcement about reformulation not a reorganization would have been bold. Rome wasn’t built in a day. Perhaps we should give them another quarter or two.

Peace.

 

A McDonald’s Prediction.

By
Steve Poppe
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0

In twelve minutes (as I begin this post) McDonald’s Steve Easterbrook will outline his turnaround plan here. This is what I think he should do.

Offer a healthier adjunct menu a la Chipotle. No additives, no preservatives, lower salt – you get the idea. Reduce the number of poorer health products to a handful, but keep them available (for a while). Only allow sale of the healthier for you products in-store while relegating the unhealthier items through the drive-up window.

On the healthier-for-you side of the house, change the menu to add some tasty alternative fair: maybe more fish, veggie burgers, better cheeses, a new class of potatoes and nice drinks. They’ll need to be mass-produced to keep speed up, but that’s where the new innovation must come from. This is where the invention must happen. The price points will go crazy at first, as will earnings, but this is a way forward.

McDonald’s is a great American company. It has not charged with the times or evolved with the science discoveries known to the health and food business. It can. It will. I can’t wait to hear what Mr. Easterbrook has to say.

Peace.

 

 

The Engagement Bank.

By
Steve Poppe
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0

I know the world is a digital world. And I don’t want to go all “geezer” on you, but if I hear or read one more CMO or CEO say they “want to increase engagement” ima (sic) go all Baltimore. Yelp CEO Jeremy Stoppleman used these words yesterday to defend his poor quarterly performance. I understand that the product is an online content play, fueled by user activity, growth and advertising but the word engagement just feels so dissociated from sales and revenue.

In the heyday of TV Networks (last week?), earning calls didn’t talk about the act of watching TV or focus on the number of viewers? (Of course show ratings were important.) They top-bottom lined the bottom line — with gross ad sales and net revenue.

Here’s the litmus test: If you are looking to purchase an online property with your own money, who would you want in your meeting: the chief engagement officer or the chief financial officer?

Start-ups, growth companies and mature enterprises of the digital nature, need to keep their eyes on the prize. The stuff that goes into the bank. The bank bank. Not the engagement bank.

Engagement is a means to an end, some are forgetting the ends. Peace.

 

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