Friday, May 30, 2008

Honda flies in face of reality



Speaking of planes, here's how Honda attempts to get consumers to actually watch a TV commercial. This spot aired live in Britain last night, showing a team of skydivers spelling out H-O-N-D-A as they plunge to earth. Incredibly silly ... and yet we watched the whole thing.

Honda and agency Wieden & Kennedy London get bonus points for airing the backstory on a blog and for a clever series of teaser spots that were unbranded, hinting at the upcoming jump. With 1 in 4 homes now possessing DVRs that can skip commercials, gritty realism is still worth a look.

60 seconds til landing



Photographer David Friedman has created a wonderful series of "60 seconds in the life of ..." vignettes, by isolating subjects and filming them from unusual angles. It's a nice, quiet reflection on how to really observe the world around us. Friedman is a former staff photographer for Ralph Lauren and we hear he once snuck on Neil Armstrong's spacesuit during a photo shoot, when no one was looking. Nice.

As noted by Andy.

WSJ to other papers: You're dying


Yikes. The Wall Street Journal is telling advertisers that it's a good buy, because its readers are growing ... unlike all those other off-the-cliff newspapers. Way to throw the entire newsprint industry under the bus, Mr. Murdoch.

Dammit, Advergirl. We'll never wear black socks again.


Are you about to meet with an agency team? Advergirl, aka Leigh Householder, advises you to size up ad agency personae by the types of socks they wear. Brilliant! For example, here is how she suggests you judge an agency sort who wears black socks.

Chances are you're talking to the new biz guy. Used to spending his day traveling from one cliché corporate headquarters to another, he's mastered the skill of the chameleon - blending in to his environs as if he had been there all along. Save the snazzy socks for those arty guys.

But, there's a chance, too, that you're dealing with the most treacherous kind of ad guy: the irrelevant middle manager who doesn't yet know he's irrelevant. This guy had a good year. An incredible year. A year that has made the agency loyal to him. Sadly, that year was over a decade ago. And since then, things have been ... well, slow and sometimes, frankly, embarrassing. But, like the aging athlete who once won the big game in high school, this guy still believes he's in the glory years. Align with him and take on all his gossipy baggage as your very own.

To tell the difference between these basic blacks, check the shoes. The new biz guy's will be plain and shiny. The irrelevant middle manager, genuinely bad. Possibly even striking a jarring and unpleasant contrast to his pants.


We're pleased to see our horizontal stripes make us the closer and strategist. Or, perhaps just a narcissist with funny-looking feet.

(Photo: Twenty Questions)

Thursday, May 29, 2008

Porn's unintended consequences


Ever think of the adverse impact of your marketing? Porn offers insight. Really.

Economist Daniel Hamermesh notes that a California assemblyman has proposed a 25% tax on pornography -- at first, a seemingly good way to raise money for state coffers until one follows the logical consequences downstream.

I don’t expect sales to be reduced much if porn prices rise ...
Hamermesh says. But demand is only one side of the market: A tax only in California gives producers an incentive to move their operations elsewhere. And that could create a net loss in revenue for the state.

Ah, unintended consequences. This plays out in marketing when an incentive designed to spur demand or change behavior ends up doing something else. Back in the 1960s, for example, the state of Vermont banned billboards to beautify the landscape ... which led to a rash of bizarre, giant roadside sculptures designed to attract attention to businesses. Marketing offers, coupons, discounts, and loyalty programs can all backfire if you are really guiding customers to do the wrong thing.

So when stimulating demand, think about porn. If you push too hard in one area, your customers may move somewhere else.

FCC to wireless: Keep your clothes on


It seems the FCC may give away a chunk of the electromagnetic spectrum on the condition that the winner (a) give away free wireless internet access and (b) block pornography. It sounds, at first glance, like a good deal. But who defines pornography?

The internet has blurred the lines between what is worthy of communications and what is smut, and part of its diabolical beauty is there is no one setting rules. Sure, there is awful stuff online. But if you search for breast health, researching a mammogram that will save your life, will that get blocked too? What if you want stock art that involves the human figure? What if you email an off-color joke to a friend?

Interesting quandary. We love the idea of free mobile internet everywhere, but don't like the idea of someone predicting what we adults should and should not see. Aren't the days of gatekeepers over?

(Photo: Rogiro)

Wednesday, May 28, 2008

Esquire: Americans are still bigots


Ah, prejudice, still alive and well in America.

Esquire reports that 61% of Americans would be less likely to vote for a political candidate if he or she were atheist; 45% would be less likely if the candidate were Muslim; 25% if Mormon; 15% if Hispanic; 12% if a woman; 11% if Jewish; 7% if Catholic; and 6% if black. The data, based on a Pew Research study of 3,002 U.S. adults, provides a glimmer of hope in that some minorities have made strides; the dark side is religious prejudice is at the forefront in how people trust others.

The impact on advertising is a bit sad. As much as many marketers and agencies would like to believe their audience is fair and enlightened, there is a difference between what people say they like and how they really feel. The pre-judging and pre-conceptions in the population need to be evaluated carefully, in a trifecta of advertising performance. First, don't offend. Second, generate a response. And third, be careful of the secret sexism and jingoism that could push some desirable prospects away, if they don't like the people in your presentation.

(Photo: Ferran Jordà)

Morning again



Here's an ad worth remembering: One of the most successful political spots in history. Copy so sweet, so simple, so timeless, it makes us feel good even today. Ah, but you can't go back.

Please, make us an offer


Ad design gets creative types in sneakers. Schedules get media planners in slacks. Direct mail gets analysts with calculators.

So who is managing your offer?

The "offer" in the ad message often falls between the cracks, because too often there is no clear party responsible for managing it. Creative shops do brilliant design and out-of-the-box thinking, but aren't pricing strategists. Media planners focus on making advertising targeted and efficient. Call center managers, marketing managers, direct mail agencies, customer analytics teams all have pieces of the marketing puzzle.

And the offer often touches on all, and yet none, of these disciplines.

So take this litmus test of your advertising "offer."

- Who is responsible for the offer?
- Does it target profitable customers?
- Is your offer aligned with the creative design and media plan?
- Will it generate sales at an acceptable acquisition cost?
- Is it structured to encourage repeat sales in the future from the same customer?
- Or will the offer discourage repeat sales by customers who remember the initial discount?
- Is there a plan to test and refine the offer?
- If you currently have a good offer in place, are you actively testing future offers for improvement?
- Has your call center received deep training on offers in place, and how to sell them verbally when prospects respond?
- Do you have measurement systems in place to monitor any adverse impact of the offer (customer confusion at the call center, perhaps)?
- Are all channels aligned, or do different offers in sales, web, media and direct marketing undercut each other?
- Are you watching competitors' current offers, and their response to yours?

Yeah, it's complex. So put a team in place. And make them an offer.

Tuesday, May 27, 2008

Soda pop studies, or how to keep research on track


We're knee-deep in research this week and constantly have to warn ourselves about chasing our own tail.

Let us explain. In research, as in particle physics, the act of observing a phenomenon can actually skew the results. Any data set is collected, and the process of collecting can pull you in the wrong direction. Say you launch a new campaign to sell a hydrogen fuel cell home energy system, and it costs $5,000, but you offer a very low subsidized price of $1,999 with aggressive financing ... hoping to make money on fuel supplies in the future. Consumers respond.

1. Does this mean new consumers are your ideal audience, and you can extrapolate their profile to the entire population for long-term growth?
2. Or does it mean your aggressive ad campaign simply attracted a certain type of price-sensitive shopper, perhaps responding to a short-term spike in home heating and A/C costs?

The potential error, above, is the very offer and media plan itself may have attracted the wrong type of consumer, or a consumer group that in no way represents your ideal demographic and geographic targets. Like a dog chasing its tail, measuring the early results of a product launch can lead you in circles.

The solution is to validate early or internal data with outside data sets. What is the broader market doing? Is competitor media spending in line with your early findings? Are there lists of consumers who have purchased similar services that you can overlay on the U.S., to validate the assumptions from your earliest customers?

Information is powerful, but always watch how it is collected and always test it for accuracy ... sort of like an industry soda study on little babies. (Tx Make the Logo Bigger)

Monday, May 26, 2008

Why Playboy is now free on your iPhone


Sure, Zinio. Use Playboy to get our attention.

Zinio offers magazine downloads to your computer or laptop that retain the exact layout of the magazines in their shiny paper glory. The trick is you still have to pay for the electronic copies (Macword is $19.97 for 12 issues, Cosmo $12 for 12).

This spring, Zinio has a special promotion allowing iPhone users to subscribe to free magazines, from BusinessWeek to Playboy. Zinio does have a beautiful Reader program, and using it you can't help but realize that most HTML layouts still suck. While online layouts have lousy composition and encourage you to click away on any link that triggers your ADD, magazine layouts are designed in a beautiful chronological fashion.

Zinio probably hopes that users of new, better mobile screens will get hooked on magazines that look like the real thing in their hand. Maybe, but we'll see if these users pay once the promo is over.

Via Gizmodo.

Saturday, May 24, 2008

X-raying the behavior of people, not data


It's both groovy and scary that MIT researcher Sandy Pentland has figured out how to track your chance of success in life with a cell phone. Think of behavioral targeting on steroids, and you get the idea.

Just as internet advertisers now use "data mining" and "click streams" to follow your online web visits to serve you targeted ads, the MIT idea is to use a cell phone to track your movements, social connections, and even the tone of your voice for "reality mining." New cells phones can monitor GPS location, movement (with accelerometers), thus motion and body language, and tone of voice — things Forbes notes can determine the outcome of negotiations and purchase behavior. For example, MIT studies have found that evaluating the tone of a salesperson's voice can predict outcome of a buyer saying yes with about 89% accuracy. Sandy notes, "Humans have a kind of second language that we're not conscious of, a signaling language."

In essence, this type of tracking will create a real org chart of humanity — who travels where, connects with whom, and communicates in a way most likely to make transactions or productivity or flu outbreaks happen. On the positive side, ad personalization and economic studies will be empowered. On the negative side, privacy will be a thing of the past.

(Photo: Meredith Farmer.)

Friday, May 23, 2008

Rolling Rock's Moonvertising



That's right. Ads on the moon. An idea so simple, you wonder why it hasn't been done before.

Rolling Rock has launched Moonvertising, a dramatic response to the current media fragmentation that makes traditional broadcast so problematic. Today 1 in 4 U.S. homes has a DVR allowing consumers to skip commercials; younger demos are moving online and multitasking with cell phones and iPods. But the moon is hard to miss.

Bluetooth headsets are out


You look like a dork. Really. As an agency, we have a policy of not disparaging brands or products, but we can't hold back. It's time to stop putting these things in your ears, people.

We could do an analysis of how Bluetooth wireless earpieces are a case study in conflict between technological usability (the desire to speak on the phone wirelessly) and human psychology (the innate aversion people have to bodies or things that look slightly unreal, first called the Uncanny Effect by German psychologist Ernst Jentsch back in 1906; you know, the creepy feeling you get when walking past wax dolls at Grandma's house late at night).

But it's simple. There's a reason Steve Jobs included a wired headset on the iPhone. Wireless earpieces look stupid.

Zappos pays employees $1,000 to quit


Zappos, the hip online shoe company that's pulled massive traffic via tiny ads in the backs of magazines, offers new employees a "Quit Now" bonus of $1,000 after the first week on the job. About 10% of call center employees take it. As John Moore notes, brilliant.

Why would Zappos do this? To cull the herd. Zappos has a culture where employees love the company and go above and beyond, and so it wants to know if you are in or out. A little cash today avoids a lackluster employee tomorrow.

Thursday, May 22, 2008

Jamie Livingston took a photo every day, until cancer won


Photographer Jamie Livingston took a Polaroid picture almost every day for 18 years, from March 31, 1979 through October 25, 1997 — the day he died. The photos show him grooving at a concert, celebrating an independent film festival, stockpiling the photos themselves, getting married (above), and lying in a hospital bed dying from cancer. Before Blogger was born, Jamie had learned how to record and share a life.

We've thought recently that Twitter, the text-messaging-what-are-you-doing? service that allows anyone to share tiny thoughts with the public, is in essence a rolling memory bank for someone's life. You can go to any person on Twitter, at www.twitter.com/benkunz (or whatever name), to see their thoughts, moment by moment, going back in time.

As video capture becomes more common, people will begin recording images of their lives, too. As we try to network and self-promote and communicate with each other, we're etching a history of ourselves into the internet. Sort of like Jamie Livingston.

(Thanks to Make the Logo Bigger and Chris Higgins. Complete Livingston photo series, posted online by his friends, here.)

In news coverage, Texas really doesn't exist


You know that guest at the party who just won't shut up?

New York and Washington, D.C., are a bit like that in how these areas of the U.S. take an unfair share of news coverage. An analysis of the datelines in 72,000 news wire reports generated the map above, where you can see certain urban portions of this country grab an unwarranted share of reporting. Some of this is due to population; a lot else to hot air. Texas has more than 20 million people and barely gets mentioned.

Worth remembering as you plan your advertising media: It's one thing to chase your target demos, but don't let your innate bias to the metro centers of buzz lead you to ignore the people who live in less noisy states.

Look at the map, honey, there's a Google news alert


Yeah, some days we get tired of writing about Google's innovations, but the addition of news to Google Earth is a landmark in journalism. Google has added a feature to its free 3-D mapping program that allows you to click "news" as a layer, and then zoom in to areas around the world and see headlines and articles pop up.

The revolution here is the addition of geo-location to timeliness and relevance. Viewers can take an almost God-like stance, swooping down on the planet to peruse the latest happenings of mankind. Perhaps a hint of things to come on your cell phone, as Google Android and other software makers add GPS location to the features that serve up content, communications and ads. You also get a whiff of why old newsprint can't compete for consumers' hunger for information, right now, right down the street.

Wednesday, May 21, 2008

$6 gas: Are you on defense or offense?


Companies and politicians are reacting in one of two ways to the growing energy crisis -- you know, the rumors of $200-a-barrel oil. Alaska is playing defense, proposing to give each state resident $100 a month for gas. GOP senators proposed $100 rebate checks for all Americans back in 2006 when gas first approached $3 a gallon, and now that it's headed for $6 the same ideas may arise.

On the offense, Toyota just sold its 1 millionth Prius Hybrid last week, and Honda announced yesterday it would roll out four hybrid models next year.

It occurs to us that, whatever your politics, Americans will have to change their habits as energy prices spike. Our entire lifestyles are based on cheap energy: 40-mile commutes, large houses with central A/C, big-box retail stores filled with cheap goods rolled by diesel across the nation, bottled water brought in ships from Fiji. Energy has pumped up our lives like a bloated balloon, and now $6 gasoline may let some of that air out.

Forget politics. The high costs are coming. What is your business plan to deal with the changes your consumers are about to make?

The brilliance and big problem of Google Health


Google Health launched yesterday to give patients a simple way to maintain a personal health record. It will probably fail, despite Google's billions and drugstore partners, because physicians have no market incentive to share information.

To understand the problem, let's first put a human face on it. The photo above is our mom, a cancer patient being admitted to Dartmouth-Hitchcock, one of the best hospitals in the United States. The procedure was about her 25th at this hospital, yet she was asked to fill out a form listing past surgeries and current prescriptions.

Mom is sharp, but she takes about 30 pills a day and her body has more scars than an Iwo Jima vet. If her surgical success depends on her personal memory, well, that's not a great idea.

Now we won't go off on the stupidity of this; Dartmouth is a fine hospital and is simply doing what physician groups do around the United States -- using isolated information systems that don't talk to anyone outside the walls. The problem is physicians have reason not to share.

You see, hospitals are just like the United States Postal Service. USPS makes a lot of money from some customers (businesses who ship packages) and loses a boatload of cash on others (Aunt Ginnie who needs letters delivered in rural Oklahoma). Physician groups have the same customer value issue. They make a huge profit from some patients (knee replacement, bariatrics) and lose money on other patients (inner city emergency care). Hospitals have to provide both levels of service, so it is vital that they attract lots of high-profit patients to offset the losses elsewhere.

Sharing information via a personal health record would disrupt that model. What happens to a surgeon who "owns" your personal records if suddenly those records are easily transported to any other expert in the country? Think how much the competing surgeon groups would love to have a quick, complete history of your health.

And this, dear patient, is why unified health records do not exist in the United States.

There is hope. Other industries, finance in particular, have built unified views of customers because they realize sharing information outweighs the costs. Your credit score is a perfect example of every lender and transaction being recorded instantly and shared, to help banks offset the risk of giving loans to deadbeats. But this system only works because the market benefit -- avoiding risk -- outweighs the market cost -- giving away competitive information.

Pharmacies are the first to start building unified records; MedCo and RxAmerica have partnered with Google, because the unified view of a patient could make ordering pills a lot safer. But hospitals and physician groups still have little incentive to join. The only hope is that some hospital somewhere will realize giving patients control over their information may be a competitive advantage -- a new way to help that sets them apart.

For now, Google Health invites consumers to upload and manage their own information. Good luck remembering that tonsillectomy, and downloading the file to your surgical team next time you're bleeding in the emergency room. We love Google's initiative and hope it succeeds. But the reality is for many years more, your docs will ask you to fill out a form.

Google CEO Eric Schmidt gives a brilliant view of the problem here:

Tuesday, May 20, 2008

Good Westin, bad Westin


Integrated marketing is a simple idea but hard to pull off. Westin gets it right by catching us with train car cards and a full-page ad in Esquire at the same time. We're busy business people, and in that flash of connection as we read and relaxed on the train out of NYC we realized a night at Westin sounds pretty damn good.

The sweet cognitive resonance of advertising when it works!

But alas, Westin, your Starwood Preferred Guest loyalty points program needs SERIOUS work though. Tell your local hotel managers to stop tacking on those hidden surcharges, as in that mysterious $59 that hits our AmEx even though the entire room is supposed to be free. We think you know what we're talking about.

Still, we dig that heavenly bed. Let's meet at the Stamford bar and hash it out.

Monday, May 19, 2008

Words and ads we don't yet know


Tessellated. 

We came across that word tonight reading The Economist, and honestly didn't know what tessellated meant. That's what we get for reading news from the Brits. But wait ... the entire sentence said "the building is decorated with tessellated plates of aluminium, a pattern inspired by the geometry of an insulin crystal," and in our mind we saw a glimmering tower with diagonally criss-crossed planes.

Aha! The context of the sentence helped us understand a word we didn't know. (Tessellate means to decorate with mosaics, or to cover a surface by repeated use of a single shape. And yes, those Brits also misspell aluminium.)

We've noted before that the reason babies learn language quickly is they process the context of words against thousands of other variables. Adults who encounter advertising are also like that; we run the marketing message against all the other communications and history in our mind to see how to interpret it. This is why European ads in magazines often place a small logo of the brand in the bottom right of the layout, a conceit that Americans are not used to. Yanks who view such ads are often puzzled at first, but Europeans know where to look, and so "get" the brand message.

This is also why we Yanks focus so much on sex in advertising, because, well, our society thinks a lot about sex. We see what we want to see, especially in ice cubes.

Context is a bit of a trap for ad creatives, though, who may focus so much on the product and client that they miss how consumers will judge the ad amid real-life distractions. Will the message work in a newspaper surrounded by copy for plumbers and banks? Will your icon make sense if years of other impressions have trained consumers to think of something else?

It's a good pop quiz for your creative team. What have the past 20 years of media taught consumers to expect in this brand category? Does that clarify your message, or confuse it?

The brand continuity of stop signs


One peril of the networked age is everyone wants everything to be new, improved, wired ... including brands. We recently thought of the stop sign, which was born in Michigan in 1915 and after several design variations, including a yellow phase from 1924-1954, was finally made red to align with the "stop" signal in street lights. Today, the sign is recognizable around the world (photo from Thailand, above).

The best brands understand the power of frequency and endurance. Alas, the typical chief marketing officer changes posts in the U.S. every two years, and so the new executive in marketing often wants to tweak the brand. If you're changing just for the sake of change, maybe it's time to stop.

Breeding ground for customer contempt



Who is talking about your brand? Are you listening?

Andy up in Vancouver knows a guy who is a little upset with the local railroad for damming up a salmon-spawning stream. A few years back, this gentleman might have written letters to CP Rail management to complain. Now he's posting 20/20-style documentaries on YouTube about a tiny little culvert that blocks the poor fish from their betrothed.

Many organizations focus loyalty programs on their most valuable customers; airlines and hotels chase business people who spend big bucks with points programs, because the math is obvious. Get your biggest customers to spend more. But in today's age of social media, not watching the little guys on the other end of the spectrum could be costly.

Saturday, May 17, 2008

AOL walks away from its brand


Forget naked Scarlett Johansson. Now, brands are getting undressed, too.

AP reports that a host of new AOL sites are targeting niche audiences by leaving the AOL brand behind. WalletPop for personal finance, Spinner for hip music, and StyleList for fashion push the AOL name to near invisibility — apparently, big ol' AOL is a little stodgy. For example, if you visit Asylum, an edgy new site for men, you'll only see tiny AOL links in the submenu ... beside a near-naked Scarlett Johansson.

It's a fascinating move, as the whole groundswell of microsites and blogs and hub-and-spoke strategies for disseminating messages make the old portals disappear. Today, AOL no longer matters in many categories, but AOL has bravely recognized this. Mike Rich, a senior VP at Asylum, noted that research showed a name like AOL Men "wouldn't connect." So Asylum it is.

How about your brand? Does it work for everyone, or should you start putting on new clothes?

Friday, May 16, 2008

Inspiration from Oscar Pistorius


Next week we're starting a project, and we're going to try to look at things from a new angle. Sort of like Oscar Pistorius.

Oscar was born with a defect in his lower legs which required a double amputation at 11 months old. He's grown up to be a world-class sprinter, thanks to prosthetics known as Cheetahs, and is now so fast that track and field's governing body has been debating whether to let him run in the Olympics. Today an arbitration court overturned a prior ban, and now Oscar is going to try to qualify.

Many marketing campaigns are a bit like competitive races, where so many factors affect performance. Oscar has inspired us to try to see past barriers, and to find a new way to get to results faster. Also, we're gonna stop complaining about the painful callus on our right foot.

Thursday, May 15, 2008

The (gasp!) sexiness of Miley Cyrus


So young Miley Cyrus rises to fame on Hannah Montana, gets her pop country singer Billy Ray a job on the set, becomes a cash cow for Disney, poses almost topless on a Vanity Fair cover, and now this week at age 15 gets castigated on blogs for looking a little too provocative with a milk mustache. (Ad blogger Steve Hall deconstructs America's can-you-believe-it-but-let's-look-closer obsession here.)

Sex works in advertising because it is an irrepressible part of our response mechanisms, and one that may be the most easy visual. (By comparison, it's really hard to communicate the scent of fresh-roasted meat in magazine or TV creative.) Societal mores aside, the human physiology is ready to reproduce around age 13, and young teenagers respond to any whiff of hormones. The very fact that there is a lower limit to what society approves of in sex, officially, means the people who want to get a response are going to step slightly across that line.

Marketers behind such Miley "scandals" may stage these events because they know there is a difference between what people say they don't like and what they respond to. The same parents and teens upset that a glowing Disney star would look so provocative are chasing her all over the internet and buying all her DVDs and MP3s.

In a way, the Miley scandals are a bit like a gruesome highway accident, that thing on the side of the road that reminds you of your own physical rawness, forcing you to slow down and look even if you really don't approve of the bodily concept. Sex and fear, anger and shock heighten impressions and extend recall. We're not suggesting that snapping photos of a 15-year-old girl in a sheet is right. We're just saying that major entertainment companies who pose teenage girls in tight tank tops with milk drizzling from their lips know exactly what they're doing.

Why 40% off may be better than a low price


It's funny how your consumers remember the first thing you tell them.

A recent study suggests percent off is a much better approach than a low price point. It seems that if your first marketing message focuses on a specific price, consumers tend to remember it -- and it will come back to haunt you.

Here's an example. Imagine you sell widgets for $115, and your ideal customer would buy three widgets a year. To lure a new customer, you offer the first product at a special introductory price of $69. The customer buys, happy, but then when you try to sell the same customer again at the full price of $115 she balks.

Why? She remembers your first pitch, for $69, and now $115 seems a lot higher.

Now, start over. If you lure the first customer with a "40% OFF" offer, she may be tempted to buy. Then, when you try to sell the customer the second time at the $115 price point, she is less likely to recall that she paid only $69 for the first widget -- because you didn't focus on it.

It's a funny habit of humanity, how people respond to different price offers that mean exactly the same thing. Percentages are attractive lures, and they avoid potential lethal effects on future sales from customers who remember the introductory price. Now, if only someone could explain why gasoline prices come in 9/10s of a penny increments.

(Summary of the study by Devon DelVecchio, H. Shanker Krishnan, & Daniel C. Smith here.)

Free lunch today: How McDonald's flips the bird


Interesting bit in Advertising Age this week on the age-old marketing question of discounting. If you give stuff away, do you erode your brand?

Both McDonald's and Dunkin' Donuts are betting no. Today, May 15, both food chains are giving away millions of free chicken biscuits and ice coffees, respectively. Former McD's CMO Larry Light tells Ad Age that the strategy of sampling is different than discounting; meaning a small freebie entices repeat consumption, while simple price cutting can erode the brand. Light's current consulting firm Arcature has a study showing that 80% of consumers prefer a free sample to a coupon, and one-third said they would come back to buy again.

However, this data is misleading, because not all business models have the built-in repeat purchase patterns as popular national food chains. A typical consumer might visit McDonald's or Dunkin' Donuts scores of times each year, so there is a high likelihood that a small freebie today will entice the consumer to buy again in his or her next visit to the retail location. For other businesses where the innate consumer repeat purchase is very low, discounting against perceived reference prices might encourage more sales than freebies while protecting margins (after all, the margin on "free" is zero).

Marketers should monitor giveaways carefully for the overall impact on total consumer consumption, cost per sale, and lifetime value. But if you do have free food, please give us a call. PS: McDonald's, your chicken for breakfast idea is a brilliant way to repackage your existing products. We smell a hit.

Wednesday, May 14, 2008

Microsoft blows a space launch


Yes, Microsoft deserves praise for unveiling a truly wonderful WorldWide Telescope on Tuesday. We hear the images are breathtaking. Trouble is, Microsoft built the free software download so that only PC users can enjoy swooping 3-D tours of outer space — and not people who use Macs.

This is a bit dense-headed of Microsoft, since Apple now accounts for 21% of the U.S. computer market. Whoops, did we say 21%? That's right — if you only count consumer PCs. There's a big myth out there that Apple only has 2.9% of the global computer market, which is technically true, but Fortune notes that Apple's computer share among U.S. consumers is 21% if you exclude those boring business enterprise sales, a market in which Apple does not compete.

It gets worse for Microsoft. The incredible success of the iPod and iTunes has not only pushed Macs to 1 in 5 U.S. consumers at home; Apple computer sales grew 37% in 2007 vs. the remaining industry's 15%. Steve Jobs is gaining, and gaining fast.

So now Microsoft finally unveils a sexy piece of software, which unlike Vista, works. It has a killer opportunity to show Mac users, who are graphics-heads, that Redmond can really deliver a spectacle from outer space. The reviewers say Google Earth just can't compete. And yet ... Microsoft shuts the Mac boys out.

We were so tempted to show our kids a cool Microsoft program, and soon our kids will need computers. But since the door is locked, we'll probably buy them both Macs.

Global warming and the politics of advertising


Ever wonder if Obama or McCain would be better at selling your product?

In 2008 it's worth considering politics in your advertising strategy. For example, a recent Pew study found that there is a huge split among Americans who believe in global warming, right down party lines: 84% of Democrats think the planet is cooking vs. 74% of independents and 49% of Republicans.

We're not saying who's right or wrong (after all, what do 649,000 years of carbon dioxide-temperature correlations really tell you?). The point for marketers is your own product or service may create splits among party lines, especially if your brand is divisive among liberals and conservatives.

Do you sell oil? Energy? Meat? Automobiles? Education? Theater? Adjusting your ad media not only for demographics, but for political views within those demos and the geographic locations of the most receptive, may make sense.

Graph: U.S. Environmental Protection Agency.

Twitter's emergency response


Blogger Robert Scoble beat the international news wires in reporting the horrendous earthquake in China Monday, because he began receiving Twitter feeds as it was happening. This is fitting, as AFP notes that the original inspiration for Twitter was inventor Jack Dorsey thinking about emergency dispatch systems.

So much on Twitter is trite. Some of our own recent posts have all the intelligence of bad bumper stickers. But sometimes, in periods of emergencies or news or simply chatter about Hillary Clinton primary victory speeches, the ambiance of humanity talking immediately about events in play gives news a new meaning.

A look in the brand mirror


Brand managers, take a deep breath. Last Friday Noah Brier announced an online experiment in which people could "describe" brands with a single word. In just five days the wisdom of crowds weighed in on brands ranging from ABC to Zune -- and now 77,000 results are presented in a tag cloud format.

Consumer conceptions may be startling; Toyota scores with huge words for QUALITY and RELIABILITY, but the big old BORING pops up as well. Who would have thought?

Well, maybe. We tested the voting process and note that once you start clicking, you really d