The Remarkable Opportunities of Unbundled Media

Terry Heaton’s essay: TV News in a Postmodern World
“…driven by the very real demand of less time, we’ve begun the process of tasting that which is unbundled. We unbundle television shows by skipping the commercials with our DVRs. We unbundle CDs by downloading the songs we want. We unbundle the national media by subscribing to specific RSS feeds. The signs of a burgeoning unbundled media world are everywhere.”
What Terry doesn’t say: we are unbundling reality: our politics, our minds, our society, and our souls as well…

Google Analytics: Another Dagger in the Heart of Microsoft?

Take a look- Google Analytics gives you a free ride into the world of web behavior, and it’s integrated w/ adwords.
Here’s the pitch:
Google Analytics tells you everything you want to know about how your visitors found you and how they interact with your site. You’ll be able to focus your marketing resources on campaigns and initiatives that deliver ROI, and improve your site to convert more visitors…. blah blah blah
So what’s really going on? Here’s what: Microsoft used to own your desktop, but Google will own your universe. Google will learn how users behave across websites, beating Alexa/Amazon.com at its own game and setting the stage for the final fight with Microsoft.
Every website manager will sign up for free, and Microsoft can them make them part of their network- from Adsense, to Adwords, to the applications which will replace Office.
BTW, did I forget to mention that Google is also buying cable companies? I’m sure Microsoft is freaking out right about now. This is going to be a war.
MEMO to Microsoft: guys, open up!!
On the privacy front:
# We may use personal information to provide the services you’ve requested, including services that display customized content and advertising.
# We may also use personal information for auditing, research and analysis to operate and improve Google technologies and services.
# We may share aggregated non-personal information with third parties outside of Google.
# When we use third parties to assist us in processing your personal information, we require that they comply with our Privacy Policy and any other appropriate confidentiality and security measures.
# We may also share information with third parties in limited circumstances, including when complying with legal process, preventing fraud or imminent harm, and ensuring the security of our network and services.
# Google processes personal information on our servers in the United States of America and in other countries. In some cases, we process personal information on a server outside your own country.

Do no evil, Google.

ZIBS: The Latest Collection of Branding Articles

The Zyman Institute of Brand Science at Emory University just put out a collection of branding articles:
– “Branding as Cultural Activism” by Douglas Holt
– “The CEO as Brand Guardian” by Will Rodgers and Christian Sarkar
– “In Search of a Reliable Measure of Brand Equity” by Jonathan Knowles
– “How Market-based Assets Generate Customer Value” by Raj Srivastava
– “Brand Hijack: When Unintended Segments Desire Your Brand” by Greg Thomas
– “ZIBSForum: The Power of Retail Branded Experiences” by Sarah Banick
– “The Power of an Emotional Connection” by William J. McEwen
– “ZIBSFORUM: Emotion Mining – Leveraging the Emotions Underpinning Brand Behavior” by Greg Thomas
– “Restoring the Power of Brands” by John Hagel III
[OK- so I wrote one of ’em.]
Visit zibs.com

Have We Given Up on Science?

Are U.S. Innovators Losing Their Competitive Edge? asks as article in today’s New York Times.
The article cites a report from the National Academy of Sciences which tries to ring the alarm: “Although many people assume that the United States will always be a world leader in science and technology, this may not continue to be the case inasmuch as great minds and ideas exist throughout the world. We fear the abruptness with which a lead in science and technology can be lost – and the difficulty of recovering a lead once lost, if indeed it can be regained at all.”
The report cites China and India among a number of economically promising countries that may be poised to usurp America’s leadership in innovation and job growth.
“For the first time in generations, the nation’s children could face poorer prospects than their parents and grandparents did,” the report said. “We owe our current prosperity, security and good health to the investments of past generations, and we are obliged to renew those commitments.”
The Industrial Research Institute, an organization in Arlington, Va., that represents some of the nation’s largest corporations, is also concerned that the academic and financial support for scientific innovation is lagging in the United States. The group’s most recent data indicate that from 1986 to 2001, China, Taiwan, South Korea and Japan all awarded more doctoral degrees in science and engineering than did the United States. Between 1991 and 2003, research and development spending in America trailed that of China, Singapore, South Korea and Taiwan – in China’s case by billions of dollars.
Read the report. Here’s the TOC:
1 A Disturbing Mosaic
2 Why Are Science and Technology Critical to America\’s Prosperity in the 21st Century
3 How is America Doing Now in Science and Technology
4 What Actions Should America Take to Remain Prosperous in the 21st Century
5 Ten Thousand Teachers-Ten Million Minds
6 Sowing the Seeds
7 Best and the Brightest
8 Innovation Incentives
9 What Might the United States Be Like if it is Not Competitive in Science and Technology
Ouch!
BTW, the National Academy of Sciences also has this report available online: Science and Creationism: A View from the National Academy of Sciences, Second Edition (1999)
Heck, just listen to what Peter Drucker had to say.
All is not lost, yet. But we took a wrong turn somewhere.
The article raises another point:
“The inventiveness of individuals depends on the context, including sociopolitical, economic, cultural and institutional factors,” said Merton C. Flemings, a professor emeritus at M.I.T. who holds 28 patents and oversees the Lemelson-M.I.T. Program for inventors. “We remain one of the most inventive countries in the world. But all the signs suggest that we won’t retain that pre-eminence much longer. The future is very bleak, I’m afraid.”
Mr. Flemings said that private and public capital was not being adequately funneled to the kinds of projects and people that foster invention. The study of science is not valued in enough homes, he observed, and science education in grade school and high school is sorely lacking.
But quantitative goals, he said, are not enough. Singapore posts high national scores in mathematics, he said, but does not have a reputation for churning out new inventions. In fact, he added, researchers from Singapore have studied school systems in America to try to glean the source of something ineffable and not really quantifiable: creativity.
“In addition to openness, tolerance is essential in an inventive modern society,” a report sponsored by the Lemelson-M.I.T. Program said last year. “Creative people, whether artists or inventive engineers, are often nonconformists and rebels. Indeed, invention itself can be perceived as an act of rebellion against the status quo.”
Which brings us to Richard Florida

Managing Ignorance: The Passing of Peter Drucker


Farewell Peter Drucker.
The biggest business thinker of them all is gone. Perhaps business will start listening to him now. A sad day.
from the NY Times:
Peter F. Drucker, the political economist and author, whose view that big business and nonprofit enterprises were the defining innovation of the 20th century led him to pioneering social and management theories, died yesterday at his home in Claremont, Calif. He was 95.
His death was announced by Claremont Graduate University.
Mr. Drucker thought of himself, first and foremost, as a writer and teacher, though he eventually settled on the term “social ecologist.” He became internationally renowned for urging corporate leaders to agree with subordinates on objectives and goals and then get out of the way of decisions about how to achieve them.
He challenged both business and labor leaders to search for ways to give workers more control over their work environment. He also argued that governments should turn many functions over to private enterprise and urged organizing in teams to exploit the rise of a technology-astute class of “knowledge workers.”
Mr. Drucker staunchly defended the need for businesses to be profitable but he preached that employees were a resource, not a cost. His constant focus on the human impact of management decisions did not always appeal to executives, but they could not help noticing how it helped him foresee many major trends in business and politics.
He began talking about such practices in the 1940’s and 50’s, decades before they became so widespread that they were taken for common sense. Mr. Drucker also foresaw that the 1970’s would be a decade of inflation, that Japanese manufacturers would become major competitors for the United States and that union power would decline.
For all his insights, he clearly owed much of his impact to his extraordinary energy and skills as a communicator. But while Mr. Drucker loved dazzling audiences with his wit and wisdom, his goal was not to be known as an oracle. Indeed, after writing a rosy-eyed article shortly before the stock market crash of 1929 in which he outlined why stocks prices would rise, he pledged to himself to stay away from gratuitous predictions. Instead, his views about where the world was headed generally arose out of advocacy for what he saw as moral action.
His first book (“The End of Economic Man,” 1939)was intended to strengthen the will of the free world to fight fascism. His later economic and social predictions were intended to encourage businesses and social groups to organize in ways that he felt would promote human dignity and vaccinate society against political and economic chaos.
“He is remarkable for his social imagination, not his futurism,” said Jack Beatty in a 1998 review of Mr. Drucker’s work “The World According to Peter Drucker.”
Mr. Drucker, who was born in Vienna and never completely shed his Austrian accent, worked in Germany as a reporter until Hitler rose to power and then in a London investment firm before emigrating to the United States in 1937. He became an American citizen in 1943.
Recalling the disasters that overran the Europe of his youth and watching the American response left him convinced that good managers were the true heroes of the century.
The world, especially the developed world, had recovered from repeated catastrophe because “ordinary people, people running the everyday concerns of business and institutions, took responsibility and kept on building for tomorrow while around them the world came crashing down,” he wrote in 1986 in “The Frontiers of Management.”
Mr. Drucker never hesitated to make suggestions he knew would be viewed as radical. He advocated legalization of drugs and stimulating innovation by permitting new ventures to charge the government for the cost of regulations and paperwork. He was not surprised that General Motors for years ignored nearly every recommendation in “The Concept of the Corporation,” the book he published in 1946 after an 18-month study of G.M. that its own executives had commissioned.
From his early 20’s to his death, Mr. Drucker held various teaching posts, including a 20-year stint at the Stern School of Management at New York University and, since 1971, a chair at the Claremont Graduate School of Management. He also consulted widely, devoting several days a month to such work into his 90’s. His clients included G.M., General Electric and Sears, Roebuck but also the Archdiocese of New York and several Protestant churches; government agencies in the United States, Canada and Japan; universities; and entrepreneurs.
For over 50 years, at least half of the consulting work was done free for nonprofits and small businesses. As his career progressed and it became clearer that competitive pressures were keeping businesses from embracing many practices he advocated, like guaranteed wages and lifetime employment for industrial workers, he became increasingly interested in “the social sector,” as he called the nonprofit groups.
Mr. Drucker counseled groups like the Girl Scouts to think like businesses even though their bottom line was “changed lives” rather than profits. He warned them that donors would increasingly judge them on results rather than intentions. In 1990, Frances Hesselbein, the former national director of the Girl Scouts, organized a group of admirers to honor him by setting up the Peter F. Drucker Foundation for Nonprofit Management in New York to expose nonprofits to Mr. Drucker’s thinking and to new concepts in management.
Mr. Drucker’s greatest impact came from his writing. His more than 30 books, which have sold tens of millions of copies in more than 30 languages, came on top of thousands of articles, including a monthly op-ed column in The Wall Street Journal from 1975 to 1995.
Among the sayings of Chairman Peter, as he was sometimes called, were these:
¶”Marketing is a fashionable term. The sales manager becomes a marketing vice president. But a gravedigger is still a gravedigger even when it is called a mortician – only the price of the burial goes up.”
¶”One either meets or one works.”
¶”The only things that evolve by themselves in an organization are disorder, friction and malperformance.”
¶”Stock option plans reward the executive for doing the wrong thing. Instead of asking, ‘Are we making the right decision?’ he asks, ‘How did we close today?’ It is encouragement to loot the corporation.”
Mr. Drucker’s thirst for new experiences never waned. He became so fascinated with Japanese art during his trips to Japan after World War II that he eventually helped write “Adventures of the Brush: Japanese Paintings” (1979), and lectured on Oriental art at Pomona College in Claremont from 1975 to 1985.
Peter Ferdinand Drucker was born Nov. 19, 1909, one of two sons of Caroline and Adolph Drucker, a prominent lawyer and high-ranking civil servant in the Austro-Hungarian government. He left Vienna in 1927 to work for an export firm in Hamburg, Germany, and to study law.
Mr. Drucker then moved to Frankfurt, where he earned a doctorate in international and public law in 1931 from the University of Frankfurt, became a reporter and then senior editor in charge of financial and foreign news at the newspaper General-Anzeiger, and, while substitute teaching at the university, met Doris Schmitz, a 19-year-old student. They became reacquainted after waving madly while passing each other going opposite directions on a London subway escalator in 1933 and were married in 1937.
Mr. Drucker had moved to England to work as a securities analyst and writer after watching the rise of the Nazis with increasing alarm. In England, he took an economics course from John Maynard Keynes in Cambridge, but was put off by how much the talk centered on commodities rather than people.
Mr. Drucker’s reputation as a political economist was firmly established with the publication in 1939 of “The End of Economic Man.” The New York Times said it brought a “remarkable vision and freshness” to the understanding of fascism. The book’s observations, along with those in articles he wrote for Harpers and The New Republic, caught the eye of policy makers in the federal government and at corporations as the country prepared for war, and landed him a job teaching at Sarah Lawrence College in Bronxville, N.Y.
Writing “The Future of Industrial Man,” published in 1942 after Mr. Drucker moved to Bennington College in Vermont, convinced him that he needed to understand big organizations from the inside. Rebuffed in his requests to work with several major companies, he was delighted when General Motors called in late 1943 proposing that he study its structure and policies. To avoid having him treated like a management spy, G.M. agreed to let him publish his findings.
Neither G.M. nor Mr. Drucker expected the public to be interested because no one had ever written such a management profile, but “The Concept of the Corporation” became an overnight sensation when it was published in 1946. ” ‘Concept of the Corporation’ is a book about business the way ‘Moby Dick’ is a book about whaling,” said Mr. Beatty, referring to the focus on social issues extending far beyond G.M.’s immediate operating challenges.
In it, Mr. Drucker argued that profitability was crucial to a business’s health but more importantly to full employment. Management could achieve sustainable profits only by treating employees like valuable resources. That, he argued, required decentralizing the power to make decisions, including giving hourly workers more control over factory life, and guaranteed wages.
In the 1950’s, Mr. Drucker began proclaiming that democratic governments had become too big to function effectively. This, he said, was a threat to the freedom of their citizens and to their economic well-being.
Unlike many conservative thinkers, Mr. Drucker wanted to keep government regulation over areas like food and drugs and finance. Indeed, he argued that the rise of global businesses required stronger governments and stronger social institutions, including more powerful unions, to keep them from forgetting social interests.
According to Claremont Graduate University, Mr. Drucker’s survivors include his wife, Doris, an inventor and physicist; his children, Audrey Drucker of Puyallup, Wash., Cecily Drucker of San Francisco, Joan Weinstein of Chicago, and Vincent Drucker of San Rafael, Calif.; and six grandchildren.
Early last year, in an interview with Forbes magazine, Mr. Drucker was asked if there was anything in his long career that he wished he had done but had not been able to do.
“Yes, quite a few things,” he said. “There are many books I could have written that are better than the ones I actually wrote. My best book would have been “Managing Ignorance,” and I’m very sorry I didn’t write it.”

IBM Goes a Blogging

From AdAge:
IBM SEES BLOGGING AS MARKETING’S NEXT BIG THING
Company’s ‘Blogger in Chief’ Encourages Employees to Publish to Outside World
Far from viewing workday blogging as bad thing, IBM sees it as the next big thing for marketing.
Eyeing blogging’s potential as a way to influence potential employees and business partners, IBM began formally offering blogging tools to its workers six months ago. The tools came complete with a list of a dozen guidelines assembled, in true new-media fashion, by contribution to an internal “wiki” (an open-source encyclopedia) over a 10-day period.
IBM’s ‘blogger in chief’ “Other companies have fired people for blogging, but IBM is encouraging it,” said Christopher Barger, Big Blue’s unofficial “blogger in chief.”
The list offers simple, almost common-sense pointers, such as follow the IBM business code of conduct; respect copyright laws; and don’t reveal proprietary information. The company now has 15,000 registrants on its internal blog, with more than 2,200 of those employees maintaining external blogs. Wikis and RSS feeds are used internally for collaboration and automated information feeds.
Its embrace of digital marketing also extends to podcasting, with the company creating podcasts around cultural tech themes such as the home of the future, the car of the future and the store of the future.
Bonding technique “Marketers should look at blogs as a real-time cheat sheet on how to be relevant with customers,” said Intelliseek’s chief marketing officer, Pete Blackshaw. “The name of the game is to be as conversational as possible vs. being static. … It’s a bonding technique with your consumer.”
It’s also an established technique among tech companies such as Microsoft and Sun Microsystems that also have extensive employee blogging and emerging media programs. Microsoft blogger Robert Scoble (known also by his blog’s name, Scobleizer) and developer network Channel9 have gone a long way in helping reverse the company’s so-called evil empire reputation.
In some respects, employee blogging is reminiscent of traditional employee testimonial advertising — after all, if pilots and flight attendants can extol the virtues of Southwest Airlines in ads, why shouldn’t IBM’s own experts open blog discussions with consumers?
“What [Vice Chairman] Bob Lutz is doing with the General Motors blog [fastlane/gmblogs.com] is not much different than what Lee Iacocca did in the ’80s,” Mr. Blackshaw said. “It’s all about being genuine and relevant and conversational with consumers.”
The problem, however, can sometimes be the tenor of the conversation and whether employees running amok on the Internet fits with a well-crafted, traditional marketing strategy.
“If employees are given appropriate guidelines, it can certainly be right on strategy,” said Jonathan Paisner, brand director at CoreBrand. “The broadcast model of a centralized voice saying this is our one voice out to the world isn’t realistic anymore.”
Different for tech companies
Experts caution that tech companies should be viewed differently than other companies when it comes to new media in that they likely have uncommonly large number of purveyors, experts and leading-edge adopters who are more comfortable with these technologies. That comfort goes a long way in personalizing brands and creating one-to-one relationships with customers. While IBM says it does not want to use new media as traditional sales and marketing tools, it has succeeded in opening discussions in health care and video gaming with “outsiders,” which in turn could lead to new business relationships.
“This is a way to get our expertise out there, not by shoving it down people’s throats, but by just starting conversations,” Mr. Barger said. “It expands our reputation, perceptions and reach of IBM, at the same time expanding the number of people we can learn from.”

Guy Kawasaki: “Don’t worry, be crappy”

Guy Kawasaki says he’s “living proof that if you do one thing right in your career, you can coast on your reputation for 20 years.”
Don’t believe it. This is a man of action, and shares his philosophy in this Always-On article:
“I think the world is essentially divided into two groups: the prototypers, the people who build stuff, and the typers, the people who think the key to entrepreneurship and innovation is Microsoft Office. If you think that the key to innovation and entrepreneurship is Microsoft Office, something is wrong with you. If you’re thinking, “I have to write a business plan with Word; I need to create a pitch with PowerPoint; I need to build a 30-page financial model with Excel,” you’re on the wrong track. The key to all of this is to prototype, not type.”
Also:
“I look at that computer now and say, ‘My God, there are elements of crap in it that really embarrass me.’ It was a revolutionary product, don’t get me wrong, but we charged $2,500 for a computer that had 128K of RAM, and we were proud of that. We thought this was an ocean of RAM. And there was no software, no hard disk—which was OK because if you don’t have software, there’s nothing to copy to the hard drive. No color, no fast printing, no fast networking. What crap. But it was revolutionary crap. Don’t worry, be crappy. Ship it then test it. Don’t wait for the perfect world where chips are cheap enough and fast enough: Ship it; get your product out there.”

Seismic Shifts in U.S. Media and Advertising Industries: A Report

“Fundamental Shifts in the U.S. Media and Advertising Industries” – a report from the New Politics Institute.
Findings include:
• Extensive audience migration across and within media formats is driving major shifts in advertising spending, benefiting formats with targeting ability
• Advertisers are shifting ad dollars to digital media slower than they should given the cost and effectiveness of digital media
• The most innovative advertisers will utilize sophisticated direct marketing techniques (e.g., segmentation, targeting, etc.) and will adjust the digital marketing vehicle mix for each customer category
• Effectively creating “at scale” digital campaigns and integrating them into traditional marketing requires direct marketing skills that traditional marketers, particularly brand marketers, often lack
• Commercial advertisers are rapidly shifting dollars to internet advertising, in particular internet video, and are aggressively experimenting with new formats such as wireless and videogame advertising
Download here.

Herb Kelleher: The Complete Interview

Here’s the best executive interview I’ve read in a long time. It took place back in 2003, but it reminds us why Southwest Airlines has succeeded where so many others have failed.
A few excerpts:
“We’ve never tried to lecture other companies as to how they should behave, what kind of environment they should try to create, because there are a hundred roads to Rome and you can get to Rome by any one of those roads. But our focus has always been on the well-being and the joy that we want our people to experience.
“I just always have felt that people should be natural in their behavior, that they should be able to derive enjoyment from whatever they do. When they derive enjoyment they tend to work together better, they tend to be more productive. One time a ramp agent wrote me, he said, Herb, I’ve caught on to what you’re doing, you’re making work fun – and home is work. Now, I’ve never repeated that to anybody because I thought that wouldn’t make me very popular in certain quarters but he did get it. And you know I don’t think that in order for people to be effective they have to act like automatons.
“We don’t hire a great many people in management positions from other airlines, but we have hired some over the years where we felt that the expertise was required as we grew. And it’s interesting to see their response because they get into the Southwest environment and for awhile they are like a new dog in town, just kind of sniffing around, because they want to see if this is legitimate, whether it’s genuine, whether it’s heartfelt. And after about six months, I would say, you get either one of two reactions: they feel liberated for the first time in their business lives and they say, “Hey, this is for real. I can say what I want to. I can joke. I can be friendly with people.” Or in some cases they say, “This makes me feel very insecure, the fluidity of it is daunting to me. I need a more structured environment than Southwest Airlines has in order for me to be comfortable.”
“one of the things that I want to tell you with respect to a mission statement is that a lot of people hire outside people to prepare their mission statements. My suggestion is that if you need someone outside your company to prepare a mission statement for you, then you really don’t know what your mission is and you probably don’t have one.
“the thing about it is that a group got together and said, We want to define spirit. And I said, I don’t think you want to do that. Because Wordsworth said, “It’s murder to dissect.” And I think it’s murder to dissect to take a concept like that and make it too narrow and make it confining and a strait jacket instead of as expansive as anybody wants it to be. So we’re not going to define it. As long as it’s a positive attitude, that’s the Southwest Airlines spirit. Don’t chain it. Don’t put it in jail.
“we’ve said we’re in the customer service business and we happen to operate an airline. But then any business is about providing great customer service to the people you serve. We just happen to be in one branch of the customer service business. And if you have a great customer service organization it doesn’t matter whether you’re flying people or selling steel or cleaning houses or whatever it might be.
“when we built this building I said give me an interior office because fundamentally bureaucrats scrap over space, which in and of itself I think should be somewhat meaningless, physical space. It’s the space between your ears that should be the important thing. So I did say, I want an office without a window, away from a corner.
Read the complete interview here.
We should all be so lucky to work with a leader like this!

The Green Business Plan Contest

ECOnomics: The Environmental Business Plan Challenge: GE and Dow Jones are looking for great business ideas that combine environmental innovation and profitability, because they truly believe that “green” business represents good business.
So if you’re a university student, an MBA candidate or a confident entrepreneur, submit your business idea and you could win $50,000. If you have an enterprise to help the earth, it’s time to get it off the ground.
Contest begins: Saturday, October 15, 2005 12:01 AM (ET)
Deadline for entries: Thursday, December 15, 2005 11:59 PM (ET)
Open to residents of the 50 United States and the District of Columbia who are 21 years of age or older.
Enter here >>

Sears: Are they going the way of K-mart?

Sears, Roebuck and Co. this week launched what it is calling its first fully integrated campaign in years. The effort, “Wish Big,” includes television and print advertising, event marketing, in-store signage and cross-promotion activities, in-mall advertising, direct mail, online programs and public relations. [in Brandweek]
Maybe they need to just work on their strategy. Here’s what a recent article in the Chicago Sun Times had to say about that:
A Wall Street analyst gave voice Monday to rumors that Sears’ ballyhooed strategy of building new stand-alone stores is in trouble.
Sears is counting on its newest store, Sears Essentials, to compete with big-box rivals such as Target, Kohl’s and Wal-Mart, while also selling refrigerators, treadmills, lawn mowers and patio furniture.
Sears has denied reports that it is slowing or halting its plans to convert 400 Kmart stores into Sears Essentials stores within three years — at a cost of about $3.5 million per store. But Sears hasn’t yet announced how many Sears Essentials stores it will open in 2006.
Furthermore, two top Sears executives integral to the strategy have left or are leaving the Hoffman Estates-based retailer, Gregory Melich, an analyst at Morgan Stanley & Co., said in a note to investors Monday.
Catherine David, a former Target executive that Sears named to oversee Sears Essentials and two other stand-alone stores, left the retailer in September.
Sears hired David in July 2004 to turn around the struggling Great Indoors home-decor chain, which Sears had downsized a year earlier to 17 stores.
Sears also is losing Luis Padilla, another former Target executive and a merchandising whiz credited with putting the “chic” in Target’s “cheap chic” reputation. Padilla is leaving at month’s end, following Sears Chairman Edward S. Lampert’s decision to install his own top strategists.
Furthermore, Sears is investing less than its retail rivals in its stand-alone stores, and has cut its advertising by more than 40 percent, Melich wrote.
More than 50 percent of Sears Essentials stores are within five miles of a Target, a Lowe’s or a Home Depot, giving them tough conditions under which to compete, he said.
Other analysts have questioned the Sears Essentials format as unfocused and underwhelming.
“The store seems a hodgepodge of everything, and there’s no clear message to consumers about what to expect,” said Kim Picciola at Chicago-based Morningstar.

Maybe they need to outsource their management…

NYT Refuses Sun Ad Bashing Dell

I must say I loved this ad from Sun. It’s actually fairly brilliant because it:
1) states Sun’s case in a humorous way,
2) highlights the different strategies the two companies are allegedly pursuing (innovation=Sun, low-cost=Dell),
3) beats Dell at its own game- price,
4) has an environmental angle,
5) tells us about the best server in the world!
6) trumpets open source messaging via Solaris…
I could go on and on.
Lucky for Sun that the NYT refused to print the ad, giving it even more buzz… All the news that’s fit to print, eh? They can print Judy Miller, but not an ad?
Well, the ad is on Jonathan Schwartz’s blog– which gives it that much more authenticity!
One more thing- will design and innovation rule the future of global competition? Sun thinks so.
I do too.

Video-on-Demand: Here it is, says Forrester

Interesting analysis from Forrester:
“The iPod video player doesn’t matter. Downloading episodes of Lost and Desperate Housewives to computers barely matters. What does matter is the crack in the traditional television business model opened by the Apple/ABC deal to allow consumers on-demand access to current hit TV shows. Unwittingly, Apple is building the proof of concept for the video-on-demand (VOD) business model. Demands by cable operators to put the same deal on the VOD tier, rebellion by network affiliates, and greater availability of niche content will fracture the old business model.”
The story here.

The Rise and Fall of Brand America

When we express a preference for French holidays, German cars or Italian opera, when we instinctively trust the policies of the Swedish government, comment on the ambition of the Japanese, the bluntness of the Americans or the courtesy of the British, when we avoid investing in Russia, favor Turkey’s entry into Europe or admire the heritage of China and India, we are responding to brand images in exactly the same way as when we’re shopping for clothing or food. But these are far bigger brands than Nike or Nestlé. They are the brands of nations.
Nation brand is an important concept in today’s world. Globalization means that countries compete with each other for the attention, respect and trust of investors, tourists, consumers, donors, immigrants, the media, and the governments of other nations: so a powerful and positive nation brand provides a crucial competitive advantage. It is essential for countries to understand how they are seen by publics around the world; how their achievements and failures, their assets and their liabilities, their people and their products are reflected in their brand image.
Simon Anholt has developed the Anholt-GMI Nation Brands Index – the first analytical ranking of the world’s nation brands. This report: Nation Brands Index – Q3 Report, 2005 tells us how nations view each other. Good stuff.
But even more critical, perhaps, is Anholt’s book: Brand America: The Mother of All Brands.
Here’s how the book is advertised on Anholt’s website:
Q: When is a country like a brand?
A: When it’s the United States of America.
America is more than just a country: it’s the biggest brand in history. Launched as a global brand, managed like a global brand and advertised like a global brand since the Declaration of Independence, America has deliberately marketed itself – as well as its products and culture – with skill, determination and sheer, hardnosed salesmanship.
But today, it’s a brand in trouble. Brand America shows, for the first time in print, how the world’s most successful brand grew to greatness, how close it now is to throwing it all away, and how it might win back those disillusioned ‘consumers’.
For anybody who has ever wondered what was the secret behind America’s greatness, and what happens next to the world’s sole superpower, Brand America is essential reading.
It’ll change your mind about brands, about countries and about America for ever.
Here’s what Phil Kotler had to say about the book:
“Anholt and Hildreth are to be congratulated for raising the issue of why Brand America is suffering a strong decline around the world. They trace American history, the values of Brand America and the growth of anti-Americanism, and offer stimulating suggestions for how to repair our broken image.”
Read it. That’s Brand America: The Mother of All Brands.

Why “Customer Service” is a Joke

Most companies assume they’re giving customers what they want. Usually, they’re kidding themselves. When Bain & Company recently surveyed 362 firms, they found that 80% believe they deliver a “superior experience” to customers. But when they asked the firms’ customers, they found that only 8% are really delivering.
Talk about delusion. Why this huge discrepancy?
The folks at Bain found two reasons for the gap:
“The first is a basic paradox: Most growth initiatives damage the most important source of sustainable, profitable growth-a loyal customer franchise. To increase revenue and profits, businesses do things like raising transaction fees that end up alienating their core customers. Efforts to pursue new customers compound the problem, distracting management from serving the core.
“The second is that good relationships are hard to build. It’s extremely difficult to understand what people really want, keep your promises and maintain a dialogue to ensure you meet customers’ changing needs. Even initiatives to “better understand” customers can backfire, drowning firms in a sea of data.”
I’ll give you the third reason: management confuses actions and activity with outcomes. Just because you have a customer feedback program in place, doesn’t mean it’s effective. The appearance of virtue is not virtue.
More from the report: “Even initiatives to “better understand” customers typically backfire. A company can get so engrossed in collecting and sifting through data on patterns of use, retention, purchases and other transactions that buyers become numbers rather than people, segments rather than individuals. Companies become deaf to the real voices of real customers.” [emphasis added]
Download the report here.

How We Buy: Search!

Yahoo and Compete, Inc., recently announced key findings from a new study which tracked Internet search and transaction activity specifically related to retail apparel Web sites over one year.
The study found that search was used by 20% of the 25 million unique monthly visitors engaging in apparel activity on the sites Compete tracked.
For the study, “Search and the Engaged Customer: An Apparel Study”, Compete analyzed the online shopping behavior of its panel of two million Internet users and conducted a survey of over 400 apparel shoppers who used search, visited one of 49 apparel retailer or manufacturer sites and subsequently purchased apparel offline. The study observed both Web search and sponsored search activity across Yahoo!, Google, Ask Jeeves, MSN, Lycos and Hotbot.
Key findings from the study include:
Search Influences Offline Purchasing. According to the findings, 78% of people who purchased apparel offline after using Internet search reported that search influenced their store visit and purchase. Nearly half (47%) of these buyers have also purchased apparel online and spend 26% more on apparel annually than those who do not use search.
Apparel searchers are highly engaged shoppers. The study found that, over a 60-day shopping period, apparel searchers spent more than 30% more time when visiting retail sites than non-search visitors and were more likely to engage in site activities such as customizing a product image, viewing shipping methods or return policies and submitting an email name. The research also showed that apparel searchers were also more likely to make a purchase (online or offline). Apparel searchers generated an average online conversion rate of 21%, compared with the 18% average conversion rate generated by non-search users.
Consumers use search throughout the buying cycle. Consumers conduct multiple searches and use search throughout their purchase decision, with 21% reporting they use search to find out about new styles and brands, 27% using search to find out about sales and deals and over 50% using search to find a store address, phone number or website.
“It’s clear from these findings that consumers are using search for multiple objectives throughout their apparel shopping process,” said Diane Rinaldo, retail category director, Yahoo! Search Marketing. “Search provides retail marketers a way to reach their customers in a comprehensive manner that allows them to effectively tie together their online and offline sales, enhance brand awareness and increase market share.”
Hmmm. All roads lead to Google. It’s funny, but I’m beginning to feel sorry for Microsoft.

Google’s Product Development & Management Process Revealed

From Marissa Mayer via Evelyn Rodriguez. Download here>>
Thanks for taking notes, Evelyn!
Some highlights:
Small, Agile Engineering Teams
• 3-person units (like start-ups!)
• Unit is a project – they don’t have departments
• Unit is co-located (sit next to each other) also with PM
• Engineers work on project for 3-4 months, then transition to next project
• Very fluid
• With 180 engineers, they can work on 60 projects – so they can afford to invest
on high-risk, high-return projects as well. (They call high-risk projects “Googlettes”)
• Each project manager works with 9-10 people across units. For example, maybe a category such as “Enterprise Infrastructure”
• The technical lead in each unit of 3 is responsible for technical excellence of project.
• Documentation
– Very sparse, only what is needed in Product Requirements Document
(PRD)
– Eric Schmidt: “Late binding decision-making process”
– Evolves based on feedback
– Includes information on general market size, revenue in PRD but believe that “if you build something users use, there will be a way to make money”
• Large Projects
– Example: Enterprise Product – broken into logical modules, thus 4 units
(of 3 people) = 12 people
• Monetization teams
– Larry Page: “No such thing as a successful failure; if it is useful to people, later we can make revenue from it in a logical way.”
Focus on providing value to user first.
– Then create team to execute the “monetization” of most useful products/services.
• Marissa (speaker) was on team to monetize search
– Created AdWords, etc.
This is very, very interesting. Beeg trouble for moose and squirrel, er, Microsoft!

The Advertising Saturation Point

For every automobile, and maybe every product, there’s a threshold beyond which your ad budget is wasted.
That’s the premise of this startlingly clear analysis from Evan Hirsh and Mark Schweizer from Booz Allen Hamilton’s Cleveland office. They ask:
“…What if there was an optimal level of advertising spend for any given product — beyond which the money was completely wasted?”
And explain:
“Economists often speak of “price elasticity”: When prices rise or fall, consumers respond by changing their purchase strategies. That is why price increases do not automatically lead to equivalent rises in revenues. The same kind of elasticity exists with advertising. For any given brand in any given market, there is a saturation point for advertising spend. Up to that point, increases in the ad budget will generate results; but once the market for a product or service is saturated, no matter how much a company spends on advertising, it will not produce enough added sales to justify the cost. The best possible budget places just enough ads to reach the saturation point, and not a dollar’s worth of advertising more. Companies that follow this principle will optimize their overall profitability because they will spend on advertising only what they can recoup in revenues.”
An important wake up call for marketing and advertising strategists everywhere. Download here >>

How it Works: Double Loop Marketing™

I keep getting emails asking me how “Double Loop Marketing” works. Here’s a quick explanation.
Let’s say a company like Texas Instruments wants establish itself as a thought-leader in the RFID marketspace.
In the traditional PR world, they could issue a few press releases, give a few speeches, write a few whitepapers, and then hope the media would cover them.
But what if TI decided on a “Double Loop Marketing™” approach?
What if Texas Instruments brought together its partners, industry thought-leaders, R&D professionals, VC shops, and senior executives in an online thought-leadership-based “double-loop” site to:
– Learn about the latest trends and technologies in RFID
– Define and understand the specific factors that contribute to improving strategy
– Develop recommendations for creating a RFID management discipline within your organization
– Present sample business justifications supporting strategic and learning investments in RFID
– Foster discussion of lessons learned from early adopters
– Disseminate news, events, and thought leadership articles on a monthly basis
– Create a framework for measuring performance and ROI
– Build a worldwide community of interested senior executives and target them w/ e-mail bulletins that include messages from TI and its partners
– Develop industry-specific campaigns promoting the community – including offline events, publications, and more.
– Build a members-only community of practice around the gurus and leading implementors
The site would include blogs as well, from industry experts and TI subject-matter experts.
Of course the cost of something like that is far higher than funding a blog or two, but its impact on the marketspace is far more potent.
By building a thought-leadership hub on RFID, TI establishes itself as “the one to learn from” and as I like to say: moves from “mind share” to “wallet share”
Blogs on the other hand are better suited to the voice of an individual. So if TI doesn’t have the resources to build the “big” site I mention, they can still play by allowing one or more of their subject matter experts to start blogging on the ins-and-outs of RFID.
Of course, great care must be taken to make sure that the expert actually does have something to say, and is not the mouthpiece for a veiled PR initiative. Scoble at Microsoft and Schwartz at Sun come to mind instantly, right?
Not enough? Here’s a slightly longer explanation of Double Loop Marketing.

The Long Tail in Print: Buying Books a Page at a Time

The Amazon “Pages program” would “unbundle” books, by allowing customers to purchase and view the pages they want or need.
Amazon “Upgrade” will give customers the option to purchase a physical book and perpetual online access to the book. [I do like this idea- now I won’t have lug all my books around the world.]
When will this happen? Sometime next year… read about it here.
How does this compare with Google’s “Print Library”?
Here’s what the bloggers are saying:
“Suddenly the reason why publishers and authors are so pissed off at Google becomes a little bit clearer. They think that they’re going to be able to slice and dice their books, selling little pieces of the book as people want them. They’re taking a page from the entertainment industry — and, like that industry, they’re going to discover this plan won’t work very well. They’ve just added friction in the form of additional transaction costs, both mental and monetary to finding information.”
Techdirt
“Ultimately, it’s a very Long Tail idea, isn’t it? Allow people to buy stuff the way they want to, so that you can wring every last cent out of your content, by earning $1 from someone who isn’t willing to spend $10 for the entire book.”
Yellow Handman
“It’s figured out a way to please authors and publishers, spread around the money for everyone, and do the right thing for readers. Google should sit up and take notice.”
Konnecke.com
“It sounds intriguing – especially to folks who conduct research or who cite information. For example, I might want to cite a book in a blog post or an article or something, but not wait for the entire book (or even buy it). But to pay a nominal amount for access to a few pages – well, that might well be worth the cost.”
Walloworld

Adrian Slywotzky: Brand Investment Traps

“Brands have become increasingly fragile and difficult to sustain. Failure to invest in the right mix of activities at the right time risks eroding the brand. On the other hand, those companies that anticipate and avoid the common investment traps can reap superior growth in brand value over a long period of time.”
This from Andrew Pierce and Adrian Slywotzky in MMJ. Download here.
So what are the traps, you ask?
1. Failure to invest over time
2. Wrong investment mix
3. Wrong sequence
4. Myopic focus
5. Wrong touchpoints
6. Wrong positioning
7. Failure to adapt
8. Spending too little on too many brands
9. Overstretching the master brand
10. Dilution
11. Wrong metrics
12. Trying to turn around a dead brand
13. Failure to follow through
I’ll add #14: Executive-Ego-driven branding!

Forrester: It’s Still About Content

Forrester’s Chris Charron notes:
“Now that two-thirds of North American households are online, and broadband has reached 72.5 million US households, value has begun to shift from the business of connecting pipelines and selling products to the market for content. Home networks and cheap devices free media content from the shackles of space and time, opening up distribution, and creating the opportunity for new business models. Fasten your seat belts: The content explosion is only beginning.

Charron predicts:
“As video content breaks free from the constraints of space and time, executives should take some lessons from the music industry. Content executives who are looking at the risks and opportunities of online video distribution should take note:
– TV networks, movie studios, and cable and satellite operators will need to jettison the notion that revenue should derive from a single source, and embrace alternative ways of thinking about making money from video.
– To make alternative video distribution profitable, content producers should begin to focus on the small(er) screen and the creation of unique content that consumers will pay for to use on their mobile phones or iPods.
– Internet video — with its ad-supported model — will increase in quantity and improve in quality. Some of the currently free content will make the leap to fee-based offerings as the video iPod and similar devices prove their worth to content owners and consumers.
– Consumers will begin their own video explosion of video podcasts that will let them be seen AND heard, some with hopes of recognition that would mirror the mainstream success of Internet-goofball-turned-MTV-star Andy Milonakis.
– Traditional TV advertisers will be forced to find new ways to market their wares in portable video: Look out for sponsorships, product-placement, and long form showcase-style ads to become more prevalent.”

How to Spend your Marketing and Ad Budget

Kathy Sierra’s blog post should make you think twice.
Even someone as mainstream as Sergio Zyman says: “The problem in marketing today is that we spend 95% of our time and money on advertising and 5% on the rest of the stuff. What I propose to you today is to flip it around: Spend 5% of your time and money on advertising and 95% on everything else. If you do that, you’ll sell a lot more to your customers.”
I agree. That’s how I discovered Double Loop Marketing.