Several online merchants reported record sales during the holiday shopping season, including online retail giant Amazon.com, which said popular items were iPod music players, video games, coats and jewelry.
Amazon said it had its best holiday sales season ever, with more than 108 million items ordered. The busiest day for the world’s largest online store was Monday, Dec. 12, when more than 3.6 million items were ordered, or 41 items per second. The most expensive item purchased during the period was a pair of diamond earrings worth $94,000.
A study from Nielsen/NetRatings, Goldman Sachs and Harris Interactive found that between Oct. 29 and Dec. 16 holiday online retail spending reached $25 billion, a 25 percent increase from the same period last year. Shoppers spent the most on clothing, followed by computers and hardware, consumer electronics, books and toys, and video games, the study found.
Read all about it >>
William Dunk: Systems on the Edge of a Nervous Breakdown
Says Dunk:
“The world of broken systems is also a world of broken communication where citizens will have to be ingenious beyond belief to fight entropy. Broken systems turn ordinary citizens into guerilla fighters.”
Read Dunk’s brilliant “letter” here >>
Better yet, subscribe:
Simply send an email to join-globalprovince@lyris.globalprovince.com. Leave the subject field and the body of the email blank. You will automatically be subscribed to the Global Province.
Linking Strategy to Execution
One of these company’s got their strategy right, the other was not so lucky. Of course, it wasn’t luck…
Read this MercerMC commentary on strategic planning >>
The Amazon.com Work Process in Pictures
From BusinessWeek: See how the world’s largest online retailer ensures that gifts get delivered on one of the busiest shopping — and shipping — days of the year.
Here >>
UK Organic Food And Drink Market Now Worth £1Bn
Sales of organic food and drink have almost doubled to more than £1 billion in just five years, reveals a new report.
The organic market has mushroomed in value by 94 per cent between 2000 and 2005 to reach £1.2 billion this year, say consumer analysts Mintel. And they tip the blossoming organic sector to double in value again in just five years to be worth £2 billion by the year 2010.
Now – with organic products championed by TV chefs including Jamie Oliver and Rick Stein – just one-in-three (29 per cent) of British adults say that they never buy organic, down from some 37 per cent just two years ago.
The research also found that organic goods can no longer be seen as the preserve of affluent “foodies.”
Julie Sloan, Mintel’s senior market analyst, said: “Among those who have bought organic produce in the last 12 months, there is in fact surprisingly little difference between the better off ABs and those in the middle income C1 group.”
Go there to read more >>
Jesus, CEO – The Marketing of Virtue
Virtue is now, packaged, branded and sold.
America’s most successful churches are modelling themselves on businesses, says the Economist.
Is this Peter Drucker’s fault? He was good friends and a strategic advisor to Rick Warren, for example…
Tough decision: join your tennis-&-golf-club OR the church-club…? What would Jesus do?
Eric Schmidt’s 70 Percent Solution
In an interview in Business 2.0, Google’s CEO explains the magic behind Google’s success: 70/20/10.
What is 70/20/10? It’s how they spend their time at Google:
– 70 percent on the CORE BUSINESS (AdSense, AdWords, Google Search)
– 20 percent on RELATED PROJECTS (Froogle, Google Desktop, Google Local, Google News, Google Print, Google Stocks, Google Toolbar, Google Video)
– 10 percent on NEW BUSINESSES (Blogger, Google Mini, Google Movies, Google Reader, Google Talk, Google Wi-Fi, Picasa)
Here’s how Schmidt describes it:
“…how it works for management: We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative — which I haven’t kept up with myself. God knows what they’ve done in the last week. I’ve been too busy on core search and ads.”
There are some more interesting things in the article. Read it here >>
For more on the Google R&D process, read my post: Google’s Product Development & Management Process Revealed >>
The Bean-Counters at CFO.com Give it Freedom
I just got an email from CFO.com; apparently the website is free again:
“After careful consideration and dialogue with our readers, we have decided to once again make CFO.com a completely free website. All current and archived content, including Buyer’s Guides, CFO magazine archives, Today in Finance, and more, is available to everyone at no charge.”
I could be mean and say their content wasn’t good enough, but instead I’ll say- “Welcome back to the advertising business-model!”
Pepsi Stock Tops Coke in Market Value
A landmark moment occurred this week in the cola wars. The value of Pepsi’s stock now exceeds that of arch-rival Coke. Scott Simon and New York Times business columnist Joe Nocera discuss the development in this NPR podcast.
John Hagel: Unbundling Time Warner
Three years ago, strategy guru John Hagel was urging Time-Warner to:
– Divest the distribution business and retain the content business.
– Create audience segment business units to address specific audiences that are economically attractive and fit with some of Time Warner’s existing properties – some natural examples: business executives, sports enthusiasts and teen-agers.
– Assign content businesses to report to specific audience segment business units (e.g., Sports Illustrated would report to the sports enthusiast business unit) or establish content production businesses as shared services units (e.g., Warner Brothers movie studio) to support the targeted audience segments
– Build distinctive overarching audience-centric media brands aggressively
– Invest in businesses and skill sets to deepen database marketing capabilities
– Acquire businesses selectively to broaden share of attention and share of wallet within targeted audience segments and develop licensing relationships to access an even broader range of relevant resources to serve target audience segments.
Read his latest blog post on the topic >>
What is Yahoo Really Doing?
“You can probably stitch together our plan from the moves we’ve made, the acquisitions we’ve made, the products we’ve put out to market,” says Bradley Horowitz, Yahoo’s senior director of technology development.
That plan: to try and make social search the next stage in the evolution of search engines.
First Yahoo bought photo-sharing site Flickr, and now it has snapped up bookmarking phenomenon Delicious. Why is Yahoo investing so heavily in the social networking stars of Web 2.0? And why team up with Six Apart to offer blog hosting?
“the real point seems to be the building of an innovative culture that can widen Yahoo’s lens.”
Read all about it in the Guardian
Why Do They Want My Phone Number?
Next time you go to the store and they ask you for your phone number when you’re checking out, just say “NO.”
Here’s an ABC News article to shed some light on the mess we’re in.
“The various data companies are trying to acclimate people to invasions of privacy. It started with the zip code and now it’s moved on to phone numbers,” said Chris Hoofnagle of the Electronic Privacy Information Center in San Francisco. “I’m willing to bet that retailers’ market research is showing a willingness of customers to share the telephone number, and that’s why it’s happening.”
It could open a person up to telemarketing — even if they are on the federal “do not call” registry. According to Hoofnagle, giving a phone number while making a purchase may establish a business relationship, and companies can call individuals on the “do not call” list with whom they have prior business relationships.
Susan McLaughlin, a spokeswoman for Toys R Us Inc., said its stores have asked for phone numbers for several years. She believes most customers have no problem voluntarily giving their numbers at the register — though it’s “no problem at all” if they decline. “It’s so we can send you offers, coupons, et cetera, and we don’t sell it to third parties,” she said. “I’d say the majority of people like getting coupons.”
The ToysRUs people just upset me. Next time they ask for a number, give them: 1-800-869-7787. That’s their “guest” line.
And don’t look to the government for help with privacy. They’re busy spying on you.
Innocentive: Open Source Innovation?
The answer to your problem lies outside your company. Why? Because there are more smart people outside your company than in it.
That’s the premise behind InnoCentive, a web-based community matching top scientists to relevant R&D challenges facing leading companies from around the globe.
Here’s how it works:
– Companies contract with InnoCentive as “Seekers” to post R&D challenges to the Innocentive web site
– Each Challenge includes a detailed description and requirements, a deadline, and an award amount for the best solution.
– Award amounts are determined by the Seeker and range from $10,000 to $100,000. You can view the list of previous award recipients here.
– The name of the Seeker company posting the Challenge remains confidential and secure.
– Scientists worldwide are eligible to register on the web site as “Solvers.”
– Anyone may view summaries of Challenges at InnoCentive.com. But to view detailed descriptions and actually work on challenges, registration is required.
– To register as a Solver, scientists fill out a short online form, select a username and password, and log in.
– InnoCentive has registered scientists from over 170 countries around the world.
How about that for open source innovation? Vist the site >>
Pheed Read: RSS ads blow away Banner ads
Findings from a very interesting study on RSS advertising by Pheedo:
– Standalone RSS ads are far more successful than inline ads
– Placing RSS ads in every other post yields the highest percentage of click throughs
– RSS content CTR varies significantly based on day of the week
– Mid-week readership of RSS feeds highest
– RSS ads are outperforming similar Web ads
[standalone RSS ads= average CTR of 7.99% versus 20% to 1.17% CTR for rich-media ads]
– Bloglines leads RSS readers in market share
I must say I’m impressed by Pheedo.
Here are the details on their research.
Sense outta NonSense
Brand structure establishes the shape of how a company and its operating units and brands communicate…
also from Sense – page 9. Did I say it was brilliant?
RoCE: Return on Customer Experience
From Lippincott Mercer:
How structural equation modeling helps drive decision-making at a theme park
[click on image to enlarge]
see page 17 from this brilliant issue of Sense.
Happy Chrismahanukwanzakah!
Virgin Mobile pushes it – see www.chrismahanukwanzakah.com – a viral online campaign…
To me this is just tasteless and actually hurts the brand. Why? Because the soul of the Virgin brand is innovative, gutsy and classy. This ad falls short on the third attribute- classy.
Oh well.
Worst Practices in Business Blogging
“The days are over when a business could market a crappy product or treat their customers like marks and assume that the worst that would happen is that they get a few angry letters they could then just dump in the round file.”
So says David Kline in this post “Don’t Mess With the Blogosphere!”
Also: “How many more battered and bloody companies will have to litter the corporate landscape before business wakes up to the new, customer-empowered marketplace we’re living in?”
Good question, David.
The 80-20 Rule Online: 18% of Shoppers do 46% of Buying
Nielsen//NetRatings reports that nearly a fifth of the online buying population, or 18 percent, accounts for nearly half, or 46 percent, of total online spending. These buyers, dubbed “Most Valuable Purchasers” (MVPs) by Nielsen//NetRatings, spend more dollars online and make more purchases on the Internet than the rest of the online buying population.
The Nielsen//NetRatings MegaPanel online retail study segmented online shoppers into four categories based on the amount of their online spending (low or high) and their frequency of purchases (low or high). The MVPs, shoppers who spent the most money online and made the largest number of purchases, comprised 18 percent of the online buyers, driving 46 percent of total online spending. In comparison, those spending the fewest dollars online and making the fewest purchases made up the majority, or 55 percent, of online buyers; this group accounted for 21 percent of online purchases.
MVPs are heavy users of comparison shopping tools as compared to other online buying segments. In addition, they skew towards a higher household income, are more likely to be connected via a broadband connection, and are heavier Internet users in both overall time spent online and time spent on retail Web sites.
Takeaway: E-tailers should focus on building extraordinary online experiences for their MVPs. Also their demand generation tactics should target the MVP crowd.
Read the press release for details >>
BusinessWeek: Holiday Tricks
BusinessWeek reports:
“Forrester Research Inc. says online retail sales this holiday will surge 25%, to $18 billion. The increasingly strong profitability of Net commerce is giving retailers the chance to experiment with a stockingful of new sales and marketing tactics. They’re tapping into technologies such as blogs, social networking, and wireless phones to draw shoppers to their sites.
“The experiments are coming from startups to Web giants alike. Yahoo! Inc. is testing Shoposphere, a networking site within Yahoo! Shopping that offers thousands of reviews, blogs, and shopping lists generated by members. Rob Solomon, a vice-president at Yahoo! Shopping, says relying on users lets Yahoo serve markets too small to command space on its front pages.
and
“Yub.com, a site with thousands of product reviews, offers visitors cash-back rewards of up to 10% when they make purchases at more than 60 other sites, including Macy’s and cosmetics retailer Sephora. Yahoo plans to let people earn cash for posting reviews that lead other users to make purchases.”
Read the article >
What Would the Lord Sell?
The Economist says it all: “Onward, Christian shoppers”
“The reason for corporate America’s new-found interest in religion is simple: the market is booming. Packaged Facts, a market-research company, estimates that the “religious products” market was worth $8.6 billion in 2003 and will grow to $8.6 billion in 2008. Christian radio has seen its market share expand from 2.2% in 1999 to 5.5% today. The Association of American Publishers reports that the market for religious books grew by 37% in 2003. The definition of religious books is vague—but religious publishing is undoubtedly growing much faster than the industry as a whole.”
Moneylenders in the temple?
The Online Holiday Shopping Rush
The fastest growing retail category on the day after Thanksgiving was toys/video games, with a 152 percent week-over-week growth. Consumer electronics followed close behind, and computer hardware/software rounded out the top three.
Daily Percent Change from11/18/05 to 11/25/05
Toys/Video Games 151.8%
Consumer Electronics 142.0%
Computer Hardware/Software 101.8%
Apparel 99.0%
Flowers and Gifts 95.3%
Home and Garden 87.3%
Shopping Comparison/Portals 84.0%
Jewelry 71.3%
Retail 40.5%
Books/Music/Video 3.8%
Total (across 10 categories) 38.7%
Source: Nielsen//NetRatings Holiday eShopping Index, November 2005
Keep Web Videos Under a Minute Long – Jakob Nielsen
“You can’t recycle video and expect to create a good online user experience.”
Jakob Nielsen in his latest Alertbox:
“While I’ll surely have many more guidelines later, for now the main guideline for producing website video is to keep it short. Typically, Web videos should be less than a minute long.
“A related guideline is to avoid using video if the content doesn’t take advantage of the medium’s dynamic nature. This doesn’t mean incessant use of pans, zooms, and fades to add artificial movement. It does mean that it’s better to use video for things that move or otherwise work better on film than they would as a combination of photos and text.
“Finally, recognize that Web users are easily distracted, and keep distracting elements out of the frame of your shots. If there’s a road sign in the video, for example, users will try to read it and will thus miss some of the main content.”
Nielsen’s remains at the vanguard of user experience design. Check out his “eyetracking” chart for web video and his 1997 post: “TV Meets the Web.”
Finally, here’s an interview I did with Jakob a while back:”Creating The Loyal Customer.”
Harvard: “Business! Start your Blogging”
“Bloggers have damaged a number of companies, but it’s time to think of the blog as your friend. Skillful blogging can boost your company’s credibility and help it connect with customers.”
Finally, the folks at Harvard think the blogging is OK for business. Thanks for the green light, but I still don’t see Michael Porter or Clayton Christensen blogging, or Dorothy Leonard for that matter… what’s up with that? Harvard, time to practice what you preach.
Here’s why businesses may want to blog:
“…a blog is an incredibly effective yet low-cost way to:
Influence the public “conversation” about your company: Make it easy for journalists to find the latest, most accurate information about new products or ventures. In the case of a crisis, a blog allows you to shape the conversation about it.
Enhance brand visibility and credibility: Appear higher in search engine rankings, establish expertise in industry or subject area, and personalize one’s company by giving it a human voice.
Achieve customer intimacy: Speak directly to consumers and have them come right back with suggestions or complaints—or kudos.”
Here’s their blogging endorsement.
Nation-Branding Using Sports Events
A.T. Kearney has a interesting report on how mega-sporting events can transform a city:
“Forgotten neighborhoods get desperately needed makeovers. Massive clean-up efforts curb smog and pollution. Transportation upgrades enhance mobility. Yet for every story of a city cleaned up, there is another of lingering debt and disrepair. Only a few large-scale events live up to their full potential. Even fewer deliver the promised long-term rewards. But for cities and nations that focus on both the immediate and the longer term, they do more than simply host an event, they build a legacy.
“Host nations are far less adroit at capturing the longer lasting, less tangible benefits that can result from a mega-event. These rewards reach into every part of an economy and culture by reinvigorating communities, improving health and educational systems, and cleaning up environments (see figure 1). Hosts tend to treat mega-events as prestige projects that are justified (accurately or not) through a measurement of tangible benefits minus tangible costs. Countries tag on some social programs to help make their case and obtain local support, but both the benefits and the add-ons are rarely integrated into broader national or regional strategies.
“A mega-event should be incorporated into a comprehensive national strategy that captures the tangibles while also advancing a nation’s social and economic development, inspiring passion and national pride, and building a global reputation—all of which can last a lifetime.”
Read the entire report here.
Online Shopping: Cyber-Monday Farce
Why does shop.org do something like this? So they can sell more stuff.
Read the BusinessWeek article “Cyber Monday, Marketing Myth.” Well done, BusinessWeek.
But the Best Buy site was down:
Reputation Management: Doug Smith’s Recommendations to Harrisinteractive
For several years, Harrisinteractive of the Harris polling company has done an annual survey of the ‘reputation quotient’ of what it calls the 60 ‘most visible’ companies. The survey asks respondents to evaluate companies against 20 attributes ranging from social responsibility to financial performance to product quality. Each of the twenty can earn a top score of 7 and a low of 1.
Here’s what Doug Smith thinks…
Country Branding: The Futurebrand Version
Why do so many PR and branding companies have the worst websites? Because they don’t understand how branding works online.
In spite of their website, they’ve done some interesting work at Futurebrand. I’m talking about their Country Brand Index.
Apparently Italy ranks as the top overall destination, according to a global survey that identifies countries as brands… Australia and the U.S. take the second and third positions.
China is the “most improved” country brand, the U.S. is “best country brand for business travel” and Italy is the “best country brand for art and culture.”
“If a ‘brand’ is defined as an experience, then some of the world’s most powerful and recognizable brands should be countries. The challenge the industry faces is that it must move away from the traditional reactive and tactical marketing approaches and instead, create and deliver an overall brand experience that drives sales and turns visitors into country-brand evangelists,” says Rene A. Mack of Weber Shandwick, the agency involved in the creation of the index.
He’s right and wrong. Your travel experience in a country is not the same as the country’s brand. These days its important how you act in public. Like children, some countries behave better than others. Some are unruly, some loud, some mild-mannered…
A better survey is the Anholt-GMI Nation Brands Index. I talked about it in a previous post – The Rise and Fall of Brand America.
Also: see what Peter Drucker thinks. You have to listen to the whole thing!
Shooting Birds or Catching Fish: Dunk on Branding
William Dunk gets it.
Here’s a letter he posted on his Global Province site back in 2004.
“Basically there are a couple of ways of making sales. Either you shoot them down or they come to you. For most of the mass market era, we took a shotgun, cost be damned, and pumped lead into the skies, hoping to knock as many pigeons—i.e., customers—down as possible. Right now, as we transition out of the mass era, we are using rifles, and assuming that with careful targeting, we can hit a choice quail, duck, or wild turkey on the wing, and then send a bird dog out to retrieve. The idea is to hit many less prospects, but to hit the choice ones that count. You should understand that any form of marketing that has targeting in its name is expensive and probably a poor return on investment. Nonetheless, targeting is the craze of this moment.
“But then there’s catching fish. We put a worm or fly down in the water and wait for the fish to come to us. Stream fishing. It’s more subtle. Less energetic. We use the inquisitive hunger of fish to lure them into our clutches. Sight and sound and touch are compounded. This is allure. It’s very, very related to “word of mouth,” which, at the end of the day, is the most effective form of marketing.
“We think longer term that it’s time to lay down lures in the water. That will drive companies to provide horribly accurate product information that tells the user how to get good results at low cost from a product, even suggesting alternatives to their own that may work better for some applications. Straight poop becomes the strongest form of advertising.”
He’s describing double-loop marketing… read the article.
Using Cheerleaders to Sell Drugs
“Exaggerated motions, exaggerated smiles, exaggerated enthusiasm – they learn those things and they can get people to do what they want.” – LYNN WILLIAMSON, an adviser at the University of Kentucky, on why so many former cheerleaders are hired as sales representatives for pharmaceutical companies.
This article in the NYTimes says that drug companies hire “sexy drug representatives as a variation on the seductive inducements like dinners, golf outings and speaking fees that pharmaceutical companies have dangled to sway doctors to their brands.”
“In a crowded field of 90,000 drug representatives, where individual clients wield vast prescription-writing influence over patients’ medication, who better than cheerleaders to sway the hearts of the nation’s doctors, still mostly men.”
“But pharmaceutical companies deny that sex appeal has any bearing on hiring. “Obviously, people hired for the work have to be extroverts, a good conversationalist, a pleasant person to talk to; but that has nothing to do with looks, it’s the personality,” said Lamberto Andreotti, the president of worldwide pharmaceuticals for Bristol-Myers Squibb.”
Right.
I’m comforted to know that our doctors, with all their years of “education,” are swayed so easily… Sex still sells. Maybe we should use cheerleaders as environmental lobbyists…
Neil French: The Strategy Interview
November 2005 – Strategy Magazine
One is enough
Q’s and cocktails with…Neil French, outgoing worldwide CD, WPP Group
by Lisa D’Innocenzo
By now, you surely must have heard about the Neil French kerfuffle. The short version: Last month, he resigned his post at WPP because of reaction to controversial comments he made about female CDs during a Toronto event, organized by ad site ihaveanidea.org.
Strategy interviewed French a day before that fateful night and felt he made some salient points about the state of the industry, as well as what it takes to be brilliant. So, despite the fact that he called said reporter “Sweetpea,” we thought this was still worth a read.
LD: What do you think of the state of the ad industry?
NF: What in Canada? Please don’t ask me, because I don’t know. I could have got somebody to brief me about Canadian advertising. That would have been wrong, because it’s like a politician being told what to say. I don’t do that shit. I’ve never been to Canada before – what the hell would I know about Canada? I like the place – I love the weather. [Spoken on a 28 degree day in late September.]
LD: How about overall?
NF: There’s this hysteria on at the moment about how television is dead and it’s all going to interactive. That’s such bollocks. Yes, in the Western World there are a lot of computers out there and interactive thingy-bobs. But actually 90% of the population of the earth is not sitting in front of an Apple tonight. You go to some huge shack city in Brazil, or Thailand, and that light from the shack is a television. Why is everybody panicking? I remember when radio was dead. I remember when newspapers were dead. They’re fine. Now television is dead. No it’s bloody not. It’s just a lot of inept people who think that with the next thing, there might be some good ads. There won’t be of course, because they are genetically inept.
LD: What do you think of the fact that more money is going into interactive then?
NF: If you put everything into mobile, it’s going to piss people off much more than the television ads. Mostly mobile’s used by kids. They are going to make the phone calls, they are going to text their mates, they do not want to be interrupted by some jerk who wants to sell them a soft drink. So this is more likely to burn out very quickly. They will watch the stuff they want to see, and that’s when you get them. Yes, TiVo can make sure you don’t watch the ads, but if it’s a really good ad that appears during the moto racing or the soccer, you’ll leave it on to hope the ad comes on. I’ve heard people say this: “I love this one. I’m not going out for a pee.” It’s human nature. If the media buyer’s clever enough, it’s going to always be in the same program. Having your ad liked by the consumer, that’s the Holy Grail. No more conversation needed on that subject; move on.
LD: So what does it take to make a good ad?
NF: Talk to people. That’s all it is. When Winston Churchill said: “We shall fight them on the beaches,” he was talking to one bloke. Every single person in his little house in the middle of England saw himself standing shoulder to shoulder with Winston, with a pitchfork in his hand on the seashore. And when Hitler said: “We’re going to take over the world; we’ve had a rough deal,” every soldier at Nuremberg, said: “He’s talking to me, and I must not let him down.” So good or evil, the great communicators talk to one person. That’s what advertising does – I’m talking to you, this is the right car for you, or beer, or insurance company, or whatever the hell it is. Only for you. Luckily, there are millions of people like you and they will all buy it, but you don’t say that in the ad. There’s no you plural in advertising, it’s you singular.
LD: How come more advertisers don’t get that?
NF: Because 95% of the people in this business are buffoons. They’re clowns. The creatives blame the clients and the suits, and that’s only because the suits frequently come into advertising because they couldn’t get into banking or retail, so you get an awful lot of those. But the client has every right to make his own decision on his own product. It is our responsibility to explain to him why this will work better than that, and if we fail to do that, we don’t deserve to do good advertising.
LD: What work have you seen recently that gets it right?
NF: I have to bring this one up, because it’s a great example of talking to the audience. It was an ad [I did] for [Panadol] in China. They researched aspirins and the Chinese got a bit upset that it said: “Take two,” because they thought: “It seems like such a waste, using all these aspirins up.” So they brought out the single pill.
If you want to talk to people, tell them something that’s relevant to them, and then twist it in the direction of your product. So I wrote the line of “One is enough,” and the picture was a picture of George Bush and George Bush. It was huge.
Next year’s big winner is going to be the Big Ad from Australia [for Carlton Draught]. It is the heaviest irony possibly ever used in advertising and utterly hilarious. If you look at it and deconstruct it, it’s the perfect ad for beer, without having to show a lot of people in the public going “yo-ho-ho.”
LD: Why do so many ads in categories like beer look the same?
NF: Why? I’ll tell you why, and this is where the client is to blame. He sees an ad, and says: “Oh, that’s good, can we have one like that?” And it’s the very thing he shouldn’t say. He should say: “Can we have one not like that.” Otherwise, how can a consumer, who doesn’t really care, ever differentiate? The client’s problem is only that his widget means to him his house, his wife, their kids, their education, their retirement and his funeral. Whereas to anyone in the street, it doesn’t come in the top million of things to worry about. Our job is to say: “This might be irrelevant, this widget,” but of course the client’s saying “No, no it’s really important; this is the best widget in the world.” But actually, they don’t care, mate. All we can say is: “When you need a widget, we do good ones.” So our job is to bridge the gap between the client’s enthusiasm and the audience’s apathy.
LD: How hard is that to do?
NF: It can be extremely difficult. The whole trick is to explain gently to the client why this is so. There are stupid people, but generally speaking the guy that runs the client is highly intelligent and highly motivated and a bit of a pirate. You don’t get to run a big brewery or big car company without being a little ballsy. Unfortunately for the hewers of wood and fetchers of water, further down the hierarchy, their interest is keeping their job.
I can’t remember a single occasion I’ve sold a decent campaign to anyone but the top guy. I did a campaign for Martel brandy, which was long copy and nobody had ever done long copy for brandy before. People down the line weren’t sure about it, but I made them let me present it to Edgar Bronfman, who in those days was the head of Seagram’s. The suits put me up front with great trepidation and I explained the ad. Edgar got it before I explained it to him. He understood the whole concept. He said: “Yeah, that’s great. We’ll go there. Looks like nothing we’ve ever seen before.” All the racks of suits sighed with relief because they didn’t have to make any decisions. At the end, he walked all the way down to the far end of the table, and said: “Neil, when these guys screw this up, you call me.” And I said: “You mean if?” And he said: “No, I mean when.”
LD: Are presidents getting more involved in marketing?
NF: No. I wish they bloody did. The only benefit of being old and wizened, like myself, is I can generally see the top man. Because I’ve been around forever, longer than God. The guy they want to see is the superstar, somebody like Bogusky, or an old bozo like me.
LD: How do you convince marketers to take a risk?
NF: Something I say to clients a lot is: “Are you actually just spending this money to mark time, or do you really want to make a difference? And how much of a difference do you want to make specifically? How much do you want sales to go up? How much can you supply if this was successful?” Ask all those questions and then you can say: “Now I know how brave you’re going to be. Not at all or very.” And of course, all bravery is risky, and so is safety.
LD: When do you know you can’t work with a marketer?
NF: There are three things important when running an ad agency. Someone called it the three F’s: fun, funds and fame. If a client gives you money and fame, that’s great. If he gives you fun and fame, but not much money, that’s still great. If he gives you lots of money and lots of fun, that’s ok. But if there’s no money in it, and no fun, but it will make you famous, you have to think about it. If it’s just fun, then you should have left years ago. One is bad. Two is ok, three is unbearably wonderful. After all, it is your life. The client doesn’t own you; you’re not a slave; you can say uncle.
LD: Why are boutique agencies becoming increasingly popular?
NF: The boutiques are attractive to big clients because they have a personal stake in the success of this relationship. The client joins and asks a smaller agency to help them in the knowledge that there might be a few moments of stress in this relationship, but in the end they will succeed. These are the mistresses, not the wives. The mistresses get the jewelry, the wives get the washing machine. It’s sad but true.
I was once talking to a boss of another very, very big agency. And I said: “You’ve had these clients so long. How do you do it?” He said: “Because they can’t be bothered to fire us.” It’s too much hassle.
LD: Like a divorce?
NF: Absolutely. “God, this is a problem. Oh, well, stick with it. It could be worse, not much, but it could be worse.” How sad is that? There comes a time, where you’re going to say: “Actually, screw this.” Or go get yourself a mistress, for just part of the time. And that’s what these big clients do. “We’re tied up to the teeth with these people, but I hate the bloody work, so I’m going to get a babe, and go out to dinner with a babe a lot, which will be great. It’s much more fun, makes us feel good, and hey, then we’ve got to get back to the sodding wife again.”
There will be more and more boutiques. There was a point where it was just about the big, big blocks taking over, but then the big, big blocks [started] buying the boutiques. Why do they buy the boutiques? Not for the money they’re making. They buy them to give themselves a certain sexiness – a nice set of legs, or high heels.
LD: A boob job?
NF: A boob job! Very good. Absolutely. That’s exactly it. Let’s stick them on to the front and it looks like we have big boobs. It doesn’t work.
LD: Does it help to have an ego in the ad business?
NF: I taught myself self confidence in my early teens. I was very shy. Pain and agony, and beating down embarrassment, teaching myself not to blush and all those awful things. Ego is really: “Do you really believe in yourself?”
[In Canada], there’s a cringe factor. There’s the permanent apology. I mean, I love the fact that people on the street are all saying “sorry” all the time. But, come on guys. Politeness is great, but sometimes it’s not said in a politeness way, as much as a “Please don’t hit me” way. That’s sad. I remember a young guy, saying: “You’re an egomaniac. You’re all ego and no talent.” That may be true. I said: “Do you have an ego?” “No,” he says. “Do you bathe? Then you have an ego. You care about what people think about you. You take a shower, you care.”
Do you Speak Soccer?
Emerson Ferreira da Rosa in the Economist:
I am increasingly aware of how football has become an effective and universally known “language” that can project images of pure sport, beautiful play and enjoyment: a “language” that is used and appreciated all over the world. I am amazed at the number of dads who play football with their kids in Central Park on Sunday morning. In the United States soccer is starting to compete with baseball, American football and basketball. There is also a “desire for football” in China, in Japan—where Juventus recently played in a tournament—and in the Middle East. This shows us unequivocally that football can “speak” with the greatest simplicity—through different media, but above all through television—to millions of fans.
Read the article here >>
Rebranding Intel
“This might be the company’s most important makeover campaign ever.”
What’s the big deal? Apparently the Intel logo no longer has the “e” letter dropped, and the blue label is now wrapped around the corporate name.
The chip names are rebranded: single core Yonah processors will be named “Core Solo” and dual core versions will be called “Core Duo”.
Yawn.
The Hidden Drivers of Demand
Customer Value Engineering™ reveals what matters most, says MercerMC:
“Customers often start a negotiation by emphasizing price and product features. These things always matter, of course. But buying decisions encompass many other considerations, such as reliability, service arrangements, certainty of delivery date, and the opinions of users inside the organization or expert analysts.
“Cumulatively, these influences may account for 70% to 80% of the purchase decision. That’s why there is gold to be mined by truly understanding the customer’s world.
“The Customer Value Engineering approach goes beyond market research to uncover what customers will value and actually pay for, link these insights with the economics of the business, and create a process for building consensus and driving rapid implementation. It combines four capabilities:
– Uncovering the drivers of demand
– Segmenting customers in a smarter way than traditional categories of size or demographics
– Modeling the drivers of business economics to determine whether a given move will make or lose money
– Creating dynamic, robust modeling of the strategy that can evaluate “what if” scenarios and rapidly turn strategy into action with a minimum of risk
Download the article >>
The Birth of Internet TV: Finally!
AOL, Warner Bros Team for Online TV– In2TV.
The channels are:
– LOL TV (comedies such as Welcome Back Kotter, Perfect Strangers and Hangin’ With Mr. Cooper),
– Dramarama (Falcon Crest, Sisters and Eight Is Enough)
– Toontopia (animated shows like Beetlejuice and Pinky and the Brain)
– Heroes and Horrors (Wonder Woman, Lois & Clark: The Adventures of Superman and Babylon 5)
– Rush (action shows such as La Femme Nikita, Kung Fu and The Fugitive)
– Vintage (Growing Pains, F-Troop and Maverick)
Soon this will go global, and we’ll be able to watch TV from other countries on our “Internets.” Cricket, anyone?
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…