Modern Marketing - Blog by Collaborate PR & Marketing

TV Advertising Doesn't Work

This is the official view of Deutsche Bank in the US, an institution not normally associated with sensationalism or any form or hystrionics.

After two years monitoring the advertising and sales of 23 big packaged goods mature brands in the US he found that although sales did increase over the following six to twelve months, the gross profit generated by the additional sales was less than the cost of advertising.

Reporting on this today, the normally insightful FT reporter Richard Tomkins gets very misty-eyed and argues that DB has missed the point and refers to a 2001 publication entitled The Hidden Power of Advertising which says that advertising is absorbed by, 'a subconcious mental activity known as low involvement processing'.

He also states that DB should have measured, 'not just the increase in sales delivered by TV advertising but the difference between the increased level and the level to which sales would have declined if there was no TV advertising'.

He finishes off by describing the ability of TV to deliver famous brands as 'voodoo' that it would take a brave FMCG company to defy.

All pretty woolly.

The article is made all the more strange by Mr Tomkins revelation that he owns TiVo and has, 'hardly seen a commercial for two years'.

It's enough to bring a tear to the eye of the modern marketeer.

Digital Consumers Part 36

On January 20th this blog carried an article entitled Digital Consumers, an abridged version of which later appeared in the Financial Times.

It made the point that opt-in, whilst currently associated with the web, could be a concept that spreads to other media, as ad-weary consumers use technology to go 'ex-directory'.

Yankelovich, the US research house, has recently published research that would seem to support this idea. The research found that 64 percent of consumers are "pummeled" by ads and 77 percent of TiVo users skip commercials yielding an "opt-out culture."

Digital Consumers power on!

Internet Culture

Regular readers of this blog will know that we concentrate on the following themes:

- The rise of a new powerful digital consumer
- The emergence of open-source branding
- The challenges to modern marketeers of the digital era

We are now adding an additional theme to the blog. We call it Internet Culture. It's a theme that I have been working on for a few years with my associate Dug Falby at Pumpernickle, the digital consultancy.

Internet Culture is a term we have used to emphasise the fact that the internet is not about technology but a place where people can congregate and interact. This interaction has led to the internet developing its own languages, economics, demographics and prevailing views about acceptable behaviour.

Only by understanding and participating in Internet Culture can businesses fully benefit from the web.

Watch this space ;-)

Which Half is Wasted ?

Great quote from the NY New Media Consultancy Joseph Jaffe:

One common pushback against online is that it just doesn't give the same kind of quantifiable results compared to offline.

Would someone please explain to me just how quantifiable offline really is, other than we spend a lot of money and sales seem to go up?

I wonder what would happen if we stopped trying to quantify every last dime spent on online, and concentrated instead on how much of offline we can't quantify.

Let's begin determining how much offline is blatantly wasted. Hell, while we're at it, let's see if John Wanamaker's famous axiom needs a complete overhaul.

This is a great quote because it highlights the fact that in this era of constant evaluation, the value of above-the-line is rarely questioned.

It can be difficult to ask WHY a company is spending £20m each year above-the-line. It's much easier to quiz the value of £1m untried, interactive techniques. That's why Jaffe shows himself to be such a modern marketeer.

E-Commerce boom (Again)

The Economist has published a survey this week entitled E-commerce takes off.

In keeping with this weblog's view that a new type of digital consumer is appearing, the survey finds that:

"Online retail sales in the US rose by 26% to $55bn. That sounds like a lot of money, but it amounts to only 1.6% of total retail sales".

"A company that neglects its website may be commiting commercial suicide. A website is increasingly becoming the gateway to a company's brand, products and services -- even if the company does does not sell online. A useless website suggest a useless company and a rival is only a mouse-click away".

"It's not only price transparency that makes internet consumers so powerful. If they do not like a website they swiftly move on".

Modern marketing is just ahead of the best brains.... ;-)

Digital Consumers/Part 24

One of this blog's main themes is the rise of the new powerful Digital Consumer.

Judging by the tone of their latest research it seems that the respected US research house Yankelovich Partners is too.

The report states that in the US 69 per cent of consumers are interested in products and services that allow them to block, skip or opt out of advertising and marketing messages.

However, it seems that this does not mean that consumers are not interested in finding out about new products, they just want to do it in a different way. 61 per cent say that in exchange for no advertising, they would be prepared to do more research themselves to find out what's on sale.

Yankelovich's research poses that the answer might be to recognise that, 'consumers now want immediate value (in the form of information, entertainment or compensation) from the ad or the marketing itself, not the promise of value in a product or a buy". Or as Yankelovich President puts J Walker Smith it means, 'putting consumers in control'.

'If your marketing was a product in its own right, would anyone think it valuable enough to buy ?', Smith says. 'Devising a suitable business model seems more sensible than continued saturation'.

This is the first report about the Digital Consumer this blog has seen.

Filtering Out The Noise

Part of having uncommon sense is being able to tune out folly, as opposed to recognising wisdom. If you bat away many things you don't clutter yourself".

Charlie Munger, Director, Berkshire Hathaway

"When humans compete against computers in chess, how can humans compete ? The human elminates 99 per cent of possibilities without even thinking about it -- they get right down to few possibilities that have any chance of success. They get rid of the nonsense".

Warren Buffett, Director, Berkshire Hathaway

Great advice for modern marketeers from modern investors.

Old School Gamers

Ever since, Jupiter Research revealed that the reason that most valuable consumer segment, 18-35 year old males, have stopped watching TV is that they are all playing video games (doh!) , marketeers have taken a new interest in the previously nerdy gaming sector.

However, news that two US marketing networks have started their own specialist games arms (Bounce Interactive Gaming at Y&R and Starcom MediaVest Group's Play unit) is still surprising. Maybe some modern marketeers have sneaked into these Madison Avenue giants.

It will be interesting to see if they succeed in such 'old-school' company.

Battle Lines Drawn

Today, Sony is King of the console market. The Japanese console manufacturer has about 80 per cent of the market.

However, Microsoft's announcement of their XNA platform is a serious statement about the next stage of the console cycle.

XNA is an object-oriented, XML-style platform that should allow games developers to spend more time on the gameplay and creative parts of the business and less time with endless rendering and adaption of the latest 3D engine.

In it's official statement Microsoft pointedly says, "XNA propels us ahead of Sony in the next-generation games race because the future of gaming is in software, not hardware".

This is a no nonsense reference to the fact that Sony's PS3 is focused on the development of a new type of chip called Cell. Although incredibly powerful the chip will greatly irritate games developers as its has a complicated architecture that they will need to be learnt from scratch. This adds to the already huge costs of games development and could, Microsoft hope, focus the best developers on XNA and the X-Box.

With Microsoft launching at the beginning of next year and Sony at the end the battle lines are clearly drawn.

This is a long-term super-strategic powerplay that modern marketeers everywhere should follow closely in light of the article below: Microsoft TV ?

If the (Red) Hat Fits

The Linux assault on server technology could be about to spread with Red Hat's announcement that their desktop product is ready to go and that German insurance giant LVM is about to install the software onto 8,400 of its employees Pcs.

While Bill Gates might not be suffering sleepless nights quite yet about losing his global domination of the market, you can bet that he has spotted the pricing strategy. Red Hat boss Matthew Szulik describes it as being like, "the way you pay to use your cellphone".

Mmmmm, the sweet sound of licensing flexibility just as companies begin to gear up their IT spends. No wonder Red Hat is valued at $4.5bn despite turnover of just $126m.

Copyleft business models, open-source ethics, modern marketing pricing, access to massive market funding....possibly, just a small bead of sweat on the Redmond forehead ?