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11/28/2007

Mutual of Omaha's Wild Media

In my post yesterday, I mentioned that the writers' strike would give corporations an opportunity to explore alternative advertising approaches. A friend of mine responded to my post wondering if we were going to see a return to "the days of 'Mutual of Omaha's Wild Kingdom'?" Certainly looks that will be one of the models. This article from The Hollywood Reporter article mentions Johnson & Johnson funding an after-school type program for its Accuvue brand. I think you'll see a lot of brands funding entertainment content that is directly targeted to their core audience.

Ultimately, from an entertainment perspective, you can envision a world in which all content is available on-demand (you know, like it is on the Internet), supported by a brief advertisement like this (or something similar). I would hope this has all of the interested parties - the networks, movie studios, and cable providers, to name a few - shaking in their boots and looking for a way to participate in the obvious future, rather than impersonating an ostrich and sticking their head in the ground like the music moguls.

Isn't it inevitable that the television simply becomes akin to an all-you-can eat buffet, pulling content from a million sources, rather than a pre-set menu prepared by the mediocre chefs at NBC Universal, Viacom, and Disney and delivered to your table by those ill-tempered waiters at Time Warner, Cox and Comcast?

Suggests some interesting questions:

How long before cable companies become nothing more than ISPs?
If they can't charge exorbitant fees for access to their slate of channels and to use their inadequate set-top boxes, they become little more than an ISPs with a good set of pipes. Which brings up a corollary question: How long before those pipes become totally unnecessary?

Do the studios have any value beyond the intellectual property they already have?
If the control of content is wrested from the studios, what value do they provide? They've got some big studios they could rent out. And, presumably, a lot of cameras and lighting and what-not. But with production increasingly happening on location and the cost of technical production going down, that's not much value. What they do have is all the stuff they created in the past. In the case of Disney, they have power of their characters, their back catalog, their brands and their creative departments. They've basically got Mickey Mouse, The Little Mermaid, ESPN and Pixar. A lot, to be sure, but it certainly isn't the impenetrable wall they have today.

What happens when that wall comes down?
You can certainly see how some of those media properties become less valuable in the future. What happens when the NFL doesn't need to deal with the cable companies or distribute their product through Disney's ABC Sports and ESPN anymore and simply can instead offer their games (all of them) on a pay-per-view, on-demand basis? Could this be what the NFL is thinking with its much maligned NFL Network? Remember: the NFL didn't get to be the juggernaut it is by playing softball and being stupid. Don't you think the NFL (in this case, the content creator) would jettison these partners immediately if they could charge a small fee to customers to watch the games or keep all of the ad revenue for themselves (or both)?

Play that scenario out with any piece of content. Was that James Dolan that just fainted?

Granted the NFL is the NFL. But what happens when a venture capitalist and a small production group get together and create the next Heroes? Do you think they'll be running to sign a distribution deal with NBC or trusting that the inherently viral nature of the Internet will take care of that pesky issue for them?

Will all of this make search and social networking even more important in the future?
If the TV becomes an empty vessel for endless content, the viewer has to find what they want, right? Google made finding content easy. Apple made finding and acquiring music easy and legal. Facebook and myspace have made internet communications more personal and fun. Won't some combination of this become the new interface for that empty vessel formerly known as the television set?

So much for TV Guide.


UPDATE: Is TiVo making a move?

 

Posted by Todd Merriman on November 28, 2007 in Customer experience, Digital lifestyle, Marketing communications, News, Technology | Permalink | Comments (1) | TrackBack

11/27/2007

Opportunity Strikes

The writers' strike in Hollywood has generated a lot of interesting commentary, most of it (not surprisingly) applauding the chutzpah of the writers and chastising the fossilized studios for their shortsightedness. Two of the more interesting stories - this L.A. Times article and this blog post by Netscape founder Marc Andreessen - present compelling new visions for the future of entertainment, a future owned by the creators rather than the distributors. But I think there is a player in this drama that's being neglected and their role might ultimately be the most transformational... the advertisers.

As Andreessen correctly notes, traditional television is supported primarily by large national advertising campaigns from your favorite domestic beers, automakers and household cleaners. In an age when there were only three or four networks, big advertising campaigns seemed to make some sense. If you advertised on MASH, you had the attention of a third or more of the nation. But TV hasn't been like that for more than a quarter-century. The returns on network advertising have been diminishing rapidly while the prices for spots keeps going up.

I'm not an Ad guy, nor have I ever been, but it strikes me as incredible that this model has lasted as long as it has. I've watched Mad Men. I know Ad guys are fast-talkers, but that they've been able to continue this charade is kind of admirable. Corporations are paying twice as much to reach a fraction of the people they did 20 years ago. And it's costing them more than ever to produce the commercials. Throw in Tivo and DVR and many of the people who actually watch the show don't even watch the commercials. Who sees this as a responsible way to spend the shareholders' money?

What does this have to do with the writers' strike? Well, it finally gives corporations the opportunity to break from the nasty habit of network advertising. Most companies have dipped their foot into alternative ad models. Without a new season of Lost, they'll be encouraged to really dive into all the options out there. What will they find? A number of preferable alternatives which more directly engage their target consumers.

Advertisers will be free to explore a more social approach to marketing, taking advantage of the increasingly active user bases on social networking sites like Facebook and YouTube. Rather than passively running ads on television shows in the name of "awareness", they can more actively court consumers to participate in their brands and to become evangelists. With the internet there's hardly any need for awareness anymore. What corporations need is activity and consumers are more than willing to personally market a brand or product that is appealing to them. A successful approach to social marketing will require a great deal more management and represent a fair amount of risk compared to shotgun-style spots on ABC, but the reward should prove greater as well.

After the lost TV season of '08, a great number of advertisers might find they don't need to advertise much on network television anymore. And whatever the resolution to the writers' strike, if the advertisers don't come back, the network model will finally crumble and the new models which Andreessen  endorses will be well-positioned to flourish.

Posted by Todd Merriman on November 27, 2007 in Branding, Marketing communications, Technology | Permalink | Comments (0) | TrackBack

Virgin to Rock

The UK government's backing of Virgin Money to buy Northern Rock carries with it the potential for a much needed shake-up in the marketing of financial services.

Financial services firms these days focus on vague promises of "living richly" (as Citibank promised in its recent campaign in the US) or are reduced to competing on price through more competitive rates and free checking. A few, such as Commerce Bank, have been able to rise through the clutter by focusing on convenience and the Walmart-adapted strategy of simply greeting customers when they come through the door. These companies may know banking but, especially during this time of sub-prime turmoil, their brands are being hammered by bad publicity.

Enter Virgin which knows a thing or two about marketing and seems to have no fear about entering competitive and seemingly commoditized markets (witness Virgin America). Such markets are ripe with opportunity for a firm that focuses on creating unique value and marketing it effectively. Should be interesting to see whether Virgin can rock the market.


Posted by Mike Cucka on November 27, 2007 in Financial services | Permalink | Comments (0) | TrackBack

11/26/2007

Marketing in the Era of the Micro-brand

Yesterday's WSJ had an article (subscription req.) about the powerful opportunity that small business entrepreneurs have to build their brands.  Earlier this year, I was featured in an article on the same topic.

It's true that small businesses in today's market are playing on a somewhat leveled field. The corollary for big businesses is what they can do to differentiate their brands in the face of new competition from smaller players.

For most large, well-funded companies, the answer to this has been simply to acquire small businesses; either to bring on new talent and innovation or simply to forestall these competitors before they become a significant threat.

However, the real challenge for big companies is to begin thinking like these nimble new competitors. A big first step is getting beyond the outmoded habit of treating marketing as a awareness-building function. For most of these large players, awareness is the least of their worries. Instead they should charge their marketers with the task of defining new kinds of value for both new and prospective customers. Marketers within these companies have been stuck with the menial task of managing campaigns rather than using their understanding of the market to drive innovation.

Until this situation changes, most will be leaving themselves open to hungrier, more effective small competitors.

Posted by Michael Megalli on November 26, 2007 in Branding | Permalink | Comments (0) | TrackBack

11/22/2007

The Zune Brand

Zune I received my new 8GB green Zune yesterday. The product has been reviewed extensively, here, here and here, but I wanted to post about improvements to the brand. (Disclosure: Microsoft is a 1066 client, although we did not work directly on the Zune branding).

The first manifestations of the the Zune brand felt over-stated and clumsy. The announcement videos were so far out as to be unapproachable. The awkward "Welcome to the Social" tagline was a well-intentioned attempt to differentiate based on the innovation of wireless sharing. But when this functionality fell short of expectations, mostly due to the 3 plays/3 days DRM limitation, there went the brand differentiator.

The newest brand positioning is less ambitious and ultimately far more successful. I'll admit that when I first saw the ads I was a little skeptical of the "You make it you" concept. Patrick Daughters' trippy, down-the-rabbit-hole advertising was beautiful, but ultimately a every good value proposition must be based on real value. I wondered if "making it you" was a big enough promise. The execution of the brand in the customer experience has convinced me that it does.

The Zune Originals idea is brilliant, simple and flawlessly executed. The range of artists commissioned, the quality of the illustrations and the pleasingly tactile end result all amounts to a very satisfying and unique brand experience. By giving the customer a hand in the creation of the product, the "make it you" idea is paid off very well. I can't think of a more successful mass customization of a consumer electronics product.

A recent visit to the Zune "store" within my local Target felt more like the Zune v1 branding, but with a much better line-up of accessories and better product displays.

Microsoft knows that it is facing an uphill battle against iPod/iTunes. In this second act the Zune team has hit upon a brand concept that both complements the Microsoft brand and serves to differentiate against the established player. The challenge now will be to sustain the brand over time and resist the urge to go into continual reinvention mode.

Posted by Michael Megalli on November 22, 2007 in Branding, Digital lifestyle, New product launches | Permalink | Comments (0) | TrackBack

11/20/2007

Kindle or kindling?

The entertainment world has been transformed by digital technology. Television has been reinvented by digital video recorders. Apple is now the most significant music company in the world. It's hard to find a field of entertainment that hasn't experienced some kind of upheaval with the emergence of convenient digital technology. Every field, except books, of course. Consumers just haven't jumped at ebooks the way they did iPods.

Amazon thinks its new wireless reading device called Kindle is going to succeed where others have failed. But at $399 will consumers toss aside their paperbacks and embrace ebooks? Amazon seems to be betting heavily that they will given the prominence of the launch and the marketing support behind it.

Amazon's got a number of obstacles to overcome beyond the high price tag. Kindle is being called the iPod of the ebook market, but Apple succeeded with iPods for a couple of reasons that aren't necessarily true of Kindle.

First, there was a built-in market. Digital music consumption was growing independent of the availability of quality players and convenient (and legal) music sources. The iPod's success was as much a function of iTunes, which made finding your favorite music easy, cost-effective and legal, as it was of the simplicity and appealing look of the device itself. It's not clear that there's much of a market for ebooks. Amazon's basically trying to create a market whereas Apple created a superior product and improved the distribution system in an existing one. Amazon faces a much stiffer challenge here.

Second, music is a much different product than books. Music does not really have structure. The CD had already more or less destroyed the aesthetic appeal of records. Cover art, liner notes and other non-essentials had been sufficiently marginalized by the time digital music arrived. Consumers were quite willing to trade a large CD collection for a single device which would allow them to play whatever song they want wherever they want - at home, in their car, on a jog, whatever.

Books are much more complicated. They are essentially content, yes, but the physical appeal of books is far more significant. The touch of a book, the effect of the paper on your eyes, the font on the page, all of these aesthetic qualities are a major part of the book reading experience. If there were demonstrable value in having access to myriad books at one time (as there is in having access to one's entire music collection) it might be enough to overcome the emotional connection a consumer has with a book. But apart from the convenience of having a multiple books at your disposal on a long vacation, there aren't many instances where a consumer really needs access to all the content Kindle provides.

The Kindle does offer a number of useful features. An owner can sample books before buying. He or she can have top magazines and newspapers delivered directly to the device and access top blogs. But other devices, most notably, cell phones allow you to access many of these sites as well.

I suspect digital books will one day find their niche; it seems inevitable. If Amazon is betting on them becoming mainstream in the same way the mp3 player has... well, let's call that a longshot. I just don't see that many people spending that kind of money for something with pretty minor utility.

Posted by Todd Merriman on November 20, 2007 in Digital lifestyle, New product launches | Permalink | Comments (0)

11/19/2007

Kellogg Kudos

The Kellogg School of Management is running an ad (e.g. BusinessWeek, Nov. 26th, p. 111) for executive education that does a good job of breaking free of the clutter. I wonder if the highlighted collaborative approach that inspires me to put my ideas into action is not a bit under-served by its broad promise to "fulfill my aspirations", but its heart is in the right place.

Posted by Mike Cucka on November 19, 2007 in Marketing communications | Permalink | Comments (0)

Commoditizing Themselves

Imag0016 The telcos are nothing if not consistently self-destructive. Imagine the luxury of having 60 million subscribers without any real alternative to your service. It's easy to think that in the day-to-day grind of watching the money roll in, one might forget that those people dealing with your call center or waiting in Soviet-era lines in your retail stores did not actually work for you but were your customers.

This evening I accompanied my wife on a trip to the Verizon Wireless store near our house. Her situation will be familiar to anyone who has done business with an American wireless provider: broken handset, 6 months left on contract. Its not a powerful position to find oneself in. Granted, she spends $100/month on service with Verizon, but this is clearly not enough of an incentive for the company or its well-staffed 6,000 sq ft suburban NY store to be able to help her within 40 minutes of our arrival and registration.

As I recently wrote, the telcos are on the brink of a self-inflicted brand crisis. They spend billions of dollars a year on ads pushing the commodity features of their networks (AT&T, reach; Verizon, call quality; Sprint, speed) while letting their brand bleed out in everyday interactions with existing and prospective customers.

Posted by Michael Megalli on November 19, 2007 in Telecom | Permalink | Comments (1)

11/17/2007

Telecomeuppance

I recently had an article published in the Wiglaf Journal about the brand turmoil in store for the telcos if they don't get smart about  how they think about marketing. These organizations (and many like them) need to realize that the brands that they are building through brute-force advertising are hollow. Most consumers continue to do business with the telcos simply because they don't have an alternative. For now.

Posted by Michael Megalli on November 17, 2007 | Permalink | Comments (0)

11/16/2007

Every B2B Business' 2nd Business

It used to be said that publishing was every business’s second business. That’s changed. Today, technology is every business’s second business, especially if you’re a B2B services firm—whether a business process outsourcer, financial services company, supply chain integrator, or consultancy.

Marketing technology comes with its own particular set of challenges and opportunities. This is particularly true since technology can serve as a key representation of the brand. And increasingly, it is a key differentiators.

For one, the creators of technologies tend to see their offerings as “products” and want to market them in this way, including developing proprietary names—even brand identities. But this, as investment banks are increasingly discovering, quickly results in a portfolio of disjointed tech offerings whose relationships to each other and ultimate end-value are difficult both to express and understand. Recently, Barclays, for example, has opted to create a single unified platform—BARX.

For another, B2B services marketers today are driven by the desire to create the perception of an integrated, seamless offering—often necessary due to having a collection of independently branded technology platforms, applications and tools in the first place. A patchwork of technology “brands” is a sure-fire way to dispel the notion of integration unless it is carefully managed and marketed. ADP’s portfolio, for example, includes EasyLaborManager and EasyPay and reinforces its “easy to use solutions” market positioning.

The result of this tension between product and service philosophies is that services firms under-leverage the true differentiating value of their technologies—whether selling tech related offerings, embedding technologies in existing services, or using technology as the means to enhance or create new services. There are times when it makes sense to brand technology ingredients and others when it does not. Consider and balance the opportunity to:

    * Exploit additional delivery channels (e.g. Mercer consulting creates technologies to help clients better manage their businesses and these, in turn, drive the market for consulting services)

    * De-commoditize the B2B offering (e.g. Xerox leverages its technologies as ingredients in the building and delivery of document management services)

    * Enhance (or simply control) the customer experience (e.g. Cardinal Health introduce applications that help to integrate processes across the healthcare/pharma supply chain)

B2B businesses can make better sense of their first business once they figure out exactly how it is complemented and enhanced by their second.

Posted by Mike Cucka on November 16, 2007 | Permalink | Comments (0)