Monthly Archives: April 2008

$4.19 gas, or why Apple will design your next car

$4.19 a gallon. Today, in central Connecticut. We actually turned our SUV around, pulled over, snapped this photo — and realized, like that little corn we ignored on a foot until it struck a deep nerve, man, we have a problem.

You see, we Americans are an insular lot. Most of us couldn’t name four countries in Africa if you paid us (Egypt is in Africa, true or false?), yet the news rumblings are starting to get through. Costco is rationing rice; James Kunstler predicts peak oil will end suburban sprawl; The Economist says another 100 million people will tip into absolute poverty due to food shortages this year. When the price of bread and milk and, yes, gasoline goes through the roof, we get it.

And that means design will change.

Not design in a trivial sense; not layouts or brands or women’s clothing. We mean the design of how people live. Kunstler explains better than us that as oil supplies are tapped out, all the cheap habits based on petroleum will be squeezed away — long commutes, big-box stores filled with oranges from California, even the plastics that create the keypad on the computer in front of you.

Which means people will need new designs to structure how they live. Some marketers are ahead of the curve on this. BP rebranded beautifully a few years back as “Beyond Petroleum.” Honda has launched a hydrogen-powered car prototype that could be fueled from a home power station, circumventing the need for hydrogen gas stations on every city corner.

If your business isn’t thinking 10 years out on the designs that people will clamor for in a world of diminished energy, you are going to miss the boat.

It all reminds us of a trip to Italy years ago. We, as Americans, couldn’t believe how small the cars seemed, how elegant the shoes and phones and food; heck, ice cream had less sugar and pasta less salt. We eventually acclimated to the lean culture only to return to the States and be stunned again by the apparent bloat of American consumers — walking around in sweat pants and sneakers, drinking from oversized coffee sippy cups. For two days it was like being at recess.

But American habits are changing. The iPhone is an elegant handheld computer. The Mini Cooper has won raves for its sporty handling. People are investing in home theaters instead of going out, learning how to cook again in remodeled kitchens. McDonald’s and cinemas have responded by adding wood paneling, to say, look, we can be streamlined, too.

When gasoline hits $5 and then $6, lean will be the aesthetic of choice. The designers, like Honda, who have proven they can think ahead in new markets will be the first to capture emerging demand.

So look at new markets. Start designing lean things. Watch out for outsiders with brains who are evaluating your own industry. Because our bet is Apple will not only do music and video; soon they will be rethinking your car.

Don Imus ratings down. Don Imus ratings up.

Consumer shifts in media usage have every outlet scrambling to redefine how they are measured. Now, the measurement baloney over in print is starting to seep into radio.

Take Don Imus. Crain’s NY Biz reports that the WABC-AM Imus In the Morning show has a 1.5 audience share among adults 25-54, down 17% from last year. At first glance, this is bad news for the once-Nappy morning jock, putting Imus into 18th place. Boomer & Carton, a new show on WFAN, has surged ahead to 5th place.

But among adults 35-64, Imus’ share is 3.1 and up 24% over last year. And a VP for WABC’s parent claims new Portable People Meters — hard-wired survey devices that replace today’s current paper diary surveys and pick up inaudible signals from the radio to measure every second of listening — show Imus also beats WFAN in the A25-54 category.

So whom do you believe? Well, no one. Media planning requires forecasting, and such ratings can give you direction on which outlets to build into the plan. But the only way to measure results is to measure results; use 800 tracking numbers or unique URLs or calls to action on the radio that push the consumer to Google trackable keywords.

With all the ruckus on the radio, you need more than forecasts; you need measurement.

The Keebler cookie upsell moment

The photo above presents one of the most amazing packaging achievements in the history of marketing. It’s the “Keebler cookie upsell moment.”

You know. You pull the cookie tray out to get just one cookie, and then … you can’t jam the plastic tray back into the outer sheath. The clear plastic tray starts to buckle, the cookies bulge out. Yep. Forced to eat an ENTIRE row.

Which reminds us that most marketers fail to structure their own upsell moments. Every time a customer uses your product, you have an opportunity to get them to use more. We recently spoke with a gift company and suggested they send direct mail to new customers about two weeks after receiving the gift by mail, when the customer was still high on the product experience. Would everyone buy more? No. But the response rates should be double that of people who never tried the product.

So thank you, Keebler, for the inspiration. We’re sure this little package moment accelerates the repurchase pattern and drives up your revenue and profits. Now will someone please stop us.

Will the web in your pocket replace your PC?

Our column for BusinessWeek on how advertisers may be squeezed by new mobile devices stumped some readers. Many commented that people just won’t put up with ads on cell phones; others said mobile ads will have higher response rates; still others suggested that cell phone use will be additive to web use, so really there will be no reduction in overall ad inventory.

Shelly T said the entire column was surprisingly thin, uninteresting, and poorly thought out. Yikes!

But when we see new mobile concepts like this BenQ Siemens Black Box, where the very interface layout changes depending on the function you are using, we can’t help but believe mobile devices will replace some old-school PCs.

One way to think of mobile replacing PCs is it is not an either-or proposition. Even if time spent on Google and content web sites diminishes 10% or 20% due to people spending hours on iPhones, that will create huge cascades across web business models.

All content media is supported by advertising; and advertisers invest their dollars like you invest in a portfolio of stock funds. For example, look at the current death spiral in newsprint. As readers abort print for online news, response rates from newsprint ads decline. A marketer with $1 million to spend looks at the $350,000 allocated to newsprint and thinks: Hmm. I better trim that to $250,000 next year, and invest the $100,000 remaining in my internet ads, which are pulling better responses.

Slight shifts in media performance create a migration pattern among marketers, and suddenly the cash flow of one medium is threatened. Have you ever wondered why it takes three page views to navigate on a weather site to find a five-day forecast? Because each page has 15 slots for ads, so three views equals 45 ad placements. When people use iPhones to get weather in one click, all that ad inventory — and cash for the web site, and results for marketers — will go away.

Mobile is coming. Get ready. That BenQ phone is looking mighty fine.

Free your mind. Forget the RFP.

It’s hard to say no to RFPs. If you work in a large organization, Requests For Proposals are as standard as planning committees, timesheets and tall bosses with executive-style hair parted just so at the side. It just feels right, if you’re about to invest a million dollars of budget, to use a hefty form to start the search.

Until you realize: That form is dulling your mind.

Eric Karjaluoto wrote brilliantly last fall that RFPs should die, noting they are bad for the business managers who rely on them. Why? Because if you define exactly what you want, you are not getting a new idea. The process of discovery, Eric wrote, often guides the solution.

RFPs are most distasteful when used to bid for marketing, advertising, or design services. You know: “I’d like to take 25 ads, please, and make them as cheap as possible.” Wrong-o. Effective marketing planning is a bit like family therapy. You enlist an outside expert to understand the issues, explore the problems, and work jointly on solutions. You don’t get good counseling, or marketing, or branding, or creative design, by ordering it like paper from the Staples catalog.

Our own agency just got an RFP today from a large government entity with a huge budget, and we have three specific ideas on media planning that we’re certain would give them a 30% lift in performance. Hint: These guys aren’t doing anything on the internet, and we know how to make that work.

And so … we’re not going to bid. Sorry, gov’t sirs, your RFP asked for cheap advertising — lowest-cost quote wins — and our ideas on getting you results just won’t fit inside your RFP box.

(Photo: Freg. Inspiration: Darryl Ohrt.)

Google to consumers: Please don’t shut the window

The sky isn’t falling on advertising. At least, not yet.

But as our piece today in BusinessWeek points out, there are serious challenges ahead for Google, internet advertisers, and anyone really who is trying to market in this world of changing media. The challenges come down to three:

1. Accelerated channel fragmentation.
A lot has been written about this, ever since Al Ries and Jack Trout mentioned in the 1981 book Positioning that someday there might be scores of TV channels. Every forecaster has gotten it wrong; the trend has constantly moved faster than expected until Chris Anderson simply called it the Long Tail — where millions of niche content-sharing nodes replace traditional mass media. And that makes reaching the masses with advertising very difficult.

2. Changing customer modality.
Teens and young adults are morphing from passive content recipients into active creators — writing blogs, texting on Twitter, uploading photos, socializing on Facebook. Every hour spent immersed in socialization and content sharing is time spent in a “new mode” that shuts advertisers out. This trend is important for marketers to watch, because people take their media habits with them as they age. Senior citizens are heavy TV viewers, because TV was the medium of choice in the 1960s and 1970s. The average age of video gamers is now in the low 30s, because this demo learned to love video games back in the late 1980s when they were teens. Today, 35% of all teen girls blog and 54% have posted photos online. As today’s emerging generation learns to create, and not just watch, media, advertisers will face continued difficulty in getting their attention.

3. A reduction in visual inventory.
Simply put, cell phone screens are smaller than PC screens — and consumer adoption of mobile technology is about to tip big in the United States. Because tiny screens greatly reduce the “visual inventory” of ad space, tightened supply will create lower response rates for anyone who advertises online. This threatens the very nature of advertising itself, since most media has made money on the implicit bargain that we’ll give you content for almost free in exchange for you putting up with interruptive ads. What happens to magazines, newspapers, TV, radio and even major web sites if the preferred mode of receiving text and video becomes sexy glass screens only 2 inches wide? What happens to Google if it can only fit 2 ads, and not 10, on a search results page? In the curving universe of supply and demand, shrinking ad space means the costs of marketing will go up.

That’s the doom and gloom. Stay tuned in coming posts for steps we think advertisers should take today to get out of tomorrow’s shrinking ad box.

Radiohead, we vote for this guy

To call Robert Hodgin an animation guy is a bit like calling Steve Jobs a programmer. Anyway, Robert has a new processing-animation piece as part of a video contest for Radiohead. Robert does this with Processing, an open-source programming tool that combines software with visualization. Or something. It’s MIT stuff that makes beauty out of code, and code out of sound, and sound out of beauty.

To really bend your mind and see the future of animation, check out all Radiohead entries here.

What to do with that dying newspaper

Last night we were playing brain-puzzlers with the boys at the dinner table, a little game where we tell stories and everyone has to guess the answer. Stumped when our turn came up, we offered an old chestnut.

“What’s black and white and read all over?”

Big pause.

“A newspaper.”

Another big pause.

“Dad,” one of the boys said, “newspapers are color. And we don’t read them.”

Hmm. In case you missed it, The New Yorker profiled the impending death of newspapers in its March 31 issue. The facts: Newspaper stocks are down 42% in the past three years. Newspapers have lost one out of four jobs in the past 18 years. The rice bowl of newspaper revenue, classified ads, is disappearing into Craigslist. The Washington Post, in one sign of desperation, has rebranded itself as an education and news company — and its teaching division Kaplan now brings in half the financial bacon.

The New Yorker summed up:

“The dwindling number of Americans who buy and read a daily paper are spending less time with it; the average is down to less than fifteen hours a month. Only nineteen per cent of Americans between the ages of eighteen and thirty-four claim even to look at a daily newspaper. The average age of the American newspaper reader is fifty-five and rising.”

For marketers, this should be an A-HA moment. The trend has been coming for a decade, but only really took off in the past four years, and many advertising clients are reporting lower responses from print ads with surprise. What happened, they ask, with a sniff of hurt in their voice? Well, what’s going on is readers are bailing from smudgy newsprint as fast as you can say Huffington Post. And fewer readers mean fewer responses.

There are three solutions to making newsprint work in a declining market:

1. First, see if print is a viable vehicle for your audience and your product. Mediamark Research, a database of 26,000 U.S. consumers, their product usage, and their media consumption habits can provide forecasting on whether your target demographic reads newsprint. Selling plumbing repair to older homeowners? Great. Selling MP3 players to teenagers? Hmm. Try again.

2. Second, newsprint should be evaluated for true CPM in reaching your target — by factoring out geographic waste, and by estimating what the real circulation is that only reaches your target audience. Copies outside your zone, or free handouts in hotel rooms, don’t count. And for Pete’s sake, if a newspaper sales rep mentions “readership” instead of “circulation,” please laugh loudly into the telephone.

3. Third, you have to measure. It’s easy now to buy a block of 800 phone numbers, redirect to your main line, put a number in each ad, and get a read on the true cost per inquiry from each single component of your print campaign. If you aren’t measuring every aspect of the print portfolio, you won’t know which parts are working and which are not.

One thing is for certain — you don’t want to have your advertising strategy stand still as the newspaper industry begins to fold.

(Photo: Alex Clark)

Advertising IQ wrap-up

Mental findings of the week:

1. Language influences thought. Students were shown a series of clay-model aliens and then asked to group them into friendly and unfriendly categories. If the students were told two types of names for the aliens, they were able to sort them much faster. The simple process of naming, the researchers found, helps people make decisions faster. The implication is brand names can guide behavior.

2. Outside outweighs inside. Too many marketers tell stories from the inside out, focused on product attributes, vs. the outside in, focused on the key customer need. Brandflakes uses Quiznos as a case study in how honesty — about what your customers want — is stronger messaging than focusing on your internal product parts. Note to hospitals: This is why billboards showing photos of doctors are boring.

3. The last touch didn’t cause the action. Rival clans in New Guinea kill each other based on histories of their fathers’ deaths. This points out that every action is precipitated by a long chain of prior influences; a good reminder for marketers that measuring cost per inquiry by media channel may be flawed logic. Customer action is the culmination of multiple prior contacts.

4. No sometimes means maybe. Copyranter, the hyperpopular sex-in-advertising blogger, shut down for good last Friday only to report back for duty after finding a way to get paid. From the buzz on blogs, you would have thought someone had threatened to turn off the internet. Next time a supplier or customer walks away, play nice, because they may soon be back.

Photo: Hologram of human brain by Mararie.

Prison rodeo smackdown

One way that social media has turned traditional communications upside down is that individual people, not media properties, have become the “brands” for news dissemination. Vincent Maling gives us a Hemingway-esque report on human rights abuses at prison rodeos:

“The bull effortlessly throws most of them over its shoulders, goring the unlucky ones in the process. In the end, it’s a more direct approach that wins the day: one inmate manages to snatch the chit after leaping onto the bull’s head. He’s jettisoned into the air, but that’s a small price to pay for the “glory” that is his victory.

The whole thing feels like an inbred, country-fried version of Spartacus. The winner of the final game even tosses his hard-earned chit up to the prison warden, who sits in a special box overlooking the whole violent spectacle alongside his wife and daughter.”

When you find a good blog, such as Michelle Mart’s Media Artist where Vincent guest-wrote the rodeo post, you return again and again to see what you will find. Rodeo abuse is a topic we never would have dreamed of, and perhaps never found given the “objectivity” of traditional media, without the opinions and personal news accounts of blogging.