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May 30, 2006 | |
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Telemarketing in Australia India PC Sales Increase 30% 75,000 New Blogs Added Each Day Google used for 75% of all searches in UK The top 10 search terms in the UK were (in order): eBay, amazon, argos, BBC, eazyjet, google earth, autotrader, eBay UK, cbbc, bebo. (Data from Hitwise, a leading online competitive intelligence service). Google claims 85% of all searches in Australia Global Online Advertising Revenues - Growth Rates |
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Marketing and Business Agendas Not Aligned: Top Consultant Study According to the study, in the many businesses which have marketing focused on the wrong things, there is an opportunity to reconfigure the role of marketing to unlock latent organic growth potential. Booz Allen observes that the most effective senior marketers:
Yahoo! and eBay Announce Extensive Partnership Trust in the Media around the Globe The survey "Trust in the Media" was carried out in March and April by GlobeScan for the BBC, Reuters and The Media Centre. Countries surveyed were the UK, USA, Brazil, Egypt, Germany, India, Indonesia, Nigeria, Russia, and South Korea. Overall, National TV was the most trusted news source (trusted by 82%, with 16% not trusting it), followed by national/regional newspapers (75% vs 19%), local newspapers (69% v23%), public radio (67% vs 18%), international satellite TV (56% vs 19%), commercial radio (55% v 26%), international newspapers (39% v 20%), and news websites (38% v 17%). Internet blogs are the least trusted news sources across the 10 countries (25% vs 23%), especially in Brazil and in the USA. However, the survey showed that South Koreans are an exception (trusted by 38% v 25% not trusting). 17% of South Koreans also name blogs as their most important news source, contrasting with a global average of only 3%. The survey found that 77% of people say they prefer to check several sources of news rather than relying on just one. This is particularly true of internet users. The most trusted global news brands include the BBC (48% across the 10 countries saying they have a lot or some trust) and CNN (44%). Country-by-country, the most trusted media brands are: Brazil: RedeGlobo (52% of Brazilians named this brand), Egypt: Al Jazeera (59%), Germany: ARD (22%), India: AAJ TAK (11%), Indonesia: RCTI(27%), Nigeria: Channels TV (16%), South Korea: KBS (18%), Russia: ORT (36%), UK: BBC News (32%), USA: Fox News (11%). Interestingly, while 54% of global respondents agreed that the media reports all sides of the story, this was lowest in the USA, where only 29% of Americans believed they were getting balanced reporting and 87% (the highest in the countries surveyed) said they preferred to check several sources of news. GlobaScan May 2006 Small Businesses Excluded from Australian Do-Not-Call Register The Australian government is still working on the details of the register which should become effective in 2007, but predicts that it will attract 4 million consumers in its first year. The scheme will be managed by the Australian Communications and Media Authority. Companies that call people on the register will face fines ranging from A$1,100 to A$1.1 million. Google supporting TV ads Your Home Surveyed by Letterbox-Stuffers The information collected will be tailored to advertisers' requests, but could include such things as whether homes have dogs or cats, the state of the paintwork, whether the driveway needs repairing, how well-kept the garden appears to be, whether there appear to be children in the household, make of cars in the driveway, or whether there is a satellite dish on the roof. PMP also plans to incorporate GPS tracking systems in the hand-held devices. The company claims the scheme is legal since no information will be collected that is regarded as personal under Australia's Privacy Act. |
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Marketing on the Wrong Wavelength for Baby Boomers We doubt this is a real problem for most agencies. There are some very good successes in marketing to baby boomers. One example is a 2006 campaign by a leading Australian financial services company: their TV adverts feature video of hippies at 1960s music festivals and tell us "this lot are nearing the day the kids finally move out, the house is paid off and they can finally get back to traveling around the world". Instant rapport, leading to good response to the campaign. There are of course some failures. One example is the marketing of a new radio station aimed exclusively at the baby boomer generation (in Sydney and Melbourne), which is currently proving a great disappointment. Marketing Minds suspects that the difference in success can be explained by more fundamental marketing considerations. To take the radio station example, DMG, which has been operating commercial radio networks in Australia since 1996, launched Vega FM in Sydney and Melbourne in the second half of 2005. The stations reportedly cost more than $160 million to launch, so this was a serious and extensively planned exercise. Broadcasting a mix of talk and music (pop classics and new stuff) with good, popular presenters including comedian and radio personality Wendy Harmer, DMG had a good product for its target audience. Since DMG had announced it would be taking most of its listeners from the ABC 702, it was also helpful that the ABC had recently changed its morning drive-time and mid-morning programming and put some very popular presenters on the market. DMG quickly put them on its payroll. Bottom line: the product looked strong. So why the belly-flop? Apart from the possibility that the station's programming format simply might not appeal to the target audience, there are three likely marketing reasons: First point: The name. Vega. Many Australian baby boomers are reminded of (a) a local brand of egg (Veggs), or (b) something vegetarian, or (c) something to do with viagra, or (d) a financial product for the elderly. Way-cool to have a matching name to DMG's Nova brand we're sure, but this one is a real stinker. Second point: Targeted communication. Yes, a lot of money was spent on advertising, but did it actually explain that this was the new station for the baby boomers? Not that Marketing Minds can recall. Instead, the station rather obliquely promoted "music from the past 40 years". (Hint to DMG - most boomers still think they're about 28, so that 40 year-old stuff must be Bing Crosby and Duke Ellington). Third point (and this seems important): Did the advertising drum the station wave-length into our heads? Marketing Minds can remember driving behind plenty of taxis with a Vega ad on the back and feeling frustrated there was no legible reference to the station's wave length. Even the print adverts didn't memorably tell you where to tune into. We could not have tuned in even if we wanted to. Too much "brand building" and not enough "market education". There are also some basics in marketing to boomers that should be kept in our minds: they don't like to be referred to as "greys" or "grey haired"; they have reached the stage where reading glasses are required, so will often avoid products such as mobile phones where the type is too small; and (in their minds at least) they are a very cool, ground-breaking generation. Remember that this is the generation which (in western nations) lead the era of "sex, drugs, and rock and roll", feminism, the growth of consumerism, equal rights, anti-racism, first brought computers into the home, lived through the most rapid period of technological change during the last century, and which made air travel a normal consumer activity. The bottom line is we should avoid "the difficult baby boomer demographic" being used as an excuse for poor marketing. The best of strategies will fail if the execution is not good.
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| Back to top | AOL gets into Social Networking with AIM Pages AIM Pages, as the service is called, will be positioned as an add-on service for the 49 million active users of AIM. The service, which will take advertising, is being introduced in response to MySpace, the leading social networking site, which had an estimated 56 million active registered users at the end of March. AOL's customers are a much older demographic than the largely teenage to early 20s group that dominates MySpace: AOL and its subsidiary Netscape are among the longest-established of all internet players. AOL became an icon of the internet age (for a while) when they pulled off one of the best-ever product placements in the 1998 movie "You've got mail". The company acquired Netscape in 1999, along with it's Instant Messenger base, most of whom joined AIM.
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Our New Word Ideation Simplexity Jokes A guy walks into a bar with a duck on his head and the bartender says, ”looks like you've had a helluva day, Charlie!" "You don't know the half of it,' answers the duck. A guy who recently became a vegetarian walks into a bar and tells the bartender about his new life style. Impressed, the bartender asks if the man went about this change gradually. The vegetarian replies "No. I quit cold turkey." A lawyer was playing golf when he got hit by a ball. When the player came over looking for the ball, the lawyer said "I'm a lawyer, and this will cost you $5,000." "I'm sorry," said the golfer, "But I did say 'fore'." "I'll take it," said the lawyer. Communism: You have two cows. You take care of them, but the government takes all the milk. Capitalism: You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income. Enron Capitalism: You have two cows. You sell three of them to your brother in law, who then sells you all four cows back, which gives you five cows in the annual report which gives you a tax exemption for eight cows. But you're not aware of it at the time. |
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When Brand and Reality Drift Apart: The minefield of hidden values We can all probably think of examples of when an idea or business strategy spread from company to company, across industries, or even from country to country. Occasionally the idea becomes enshrined as “best practice”. Quite often this happens because a management consulting group is pushing out the same formula from client to client. Other times, a best seller on the topic has caught people’s imagination. One such idea is that because “brand” is the only thing customers really need to know about your products and services, you can boost profits if you “virtualise” (a.k.a. outsource) most of what makes up your value chain. The arguments against being vertically integrated are quite well known: By having specialist suppliers do things for you, so the theory goes, a whole lot of cost and troublesome overhead can be avoided. And of course, if you are really clever you not only outsource – you off-shore work to a much cheaper part of the world (to an economist, this is “labour arbitrage”). Apart from cost savings, you also gain flexibility: you can change processes, suppliers, or parts of your supply chain more easily than if you owned everything yourself. Also, you avoid being tied to any particular technology. When new advances are made, you may be able to enhance your own products and services more easily. It can work well. Companies of all types find they can outsource just about everything, up to and including the building and delivery of products and services to the end customer. However, companies must ensure customers get what the brand promises them. This simple statement has a greater impact on the success of an outsourcing strategy than any other. What counts most when you are outsourcing is the view from the customers’ side of the arrangement. Companies who are cost engineering products and services should be careful to understand the detail of the experiences which customers value when acquiring and using your offerings. Could there be a mismatch between what you think you are selling and what the customers are buying? There can be big problems if there are disconnects between the things customers appreciate in your offerings and your understanding of the benefits you are selling (and designing your customer experience around). Such “hidden values” can be particularly profound in established businesses where customer franchise may have evolved over the years, and where customers have developed an appreciation of the nuances of products and services. Let’s assume you do really understand what customers have actually been buying. Do you know how to specify each aspect well enough to your suppliers and have the management processes and skills to drive and hold the whole thing together? In particular, it is critical to have successfully integrated product design and supply chain techniques. Some companies manage this balance exceptionally well. Apple has superb design and product development teams in its Cupertino, California headquarters. Read the small print on the back of your iPod or Macintosh computer, however, and you will probably find it is made in China (or perhaps Mexico, depending on which country you live in) Does this bother you? Probably not. In fact, it might even cause you to re-evaluate your opinions about the quality of Chinese goods, realising the country is capable of meeting this very high production standard. This is not too unusual, and clearly Apple has got a great system in place that has allowed it to outsource a vital part of its value chain – the manufacture of the actual things we buy from the company. What is unusual is Apple’s obsessive attention to detail and the control it exerts over all aspects of the value chain. It also has a really good grasp of what it is that its customers are buying, and (in recent years at least!) puts a huge effort into market development and educating customers about its latest innovations. Other companies have had less success. For example, two retailers on opposite sides of the world both let previous successes slip away by allowing reality and brand promise to drift apart: the UK’s Marks and Spencer and Australia’s Country Road. Both have had a strategy of only selling company-branded products made uniquely for them. In Marks and Spencer’s case, these were high quality but affordable clothing and chilled food products. At Country Road (in the early days) it was quality, stylish clothing for men and women. Though each company has now largely corrected the problem, they both went through a number of years where each tried to boost profits by cost cutting, most noticeably by cutting the quality of materials used in their products. This is obviously a very basic and fundamental change, and resulted in a substantial change in the actual quality of goods sold to customers. Because the companies did not adjust their market promises or target different customer segments they went through several years of decline. Customers did notice and they voted with their wallets. An equally challenging problem is currently facing the airline which is Australia’s national flag carrier: Relying on an exceptionally strong brand image, Qantas is currently making substantial changes to its method of service delivery. During 2005 it moved many of its international cabin crew offshore - particularly along the “Kangaroo route” between Sydney and London. By using “locals” from Singapore, London, or Hong Kong, the airline reduces the lodging costs of flight crews and (arguably) increases its crew utilisation. The company is currently now reviewing whether it should also offshore its maintenance and engineering activities. This could be a dangerous move. Trust in Qantas’s brand name is one of its greatest assets. Uniquely, it has never had a plane crash - a fact popularised by Dustin Hoffman’s character in Rain Man and which is still true today. Qantas is also the most profitable Tier 1 airline in the world. It has done exceptionally well in maintaining its revenue per passenger while keeping its planes fuller than most of its rivals. This can partly be explained by Qantas’s highly loyal, and largely Australian, customer base. Over the years the airline has become a national icon and many Australians regard the Qantas “I still call Australia home” song as a rival to the national anthem (at least when they see the videos). Qantas is seen as quintessentially Australian, to the point that most Australians returning from abroad have become used to feeling they are back in OZ the moment they step on board. In a recent interview reported in Australia’s main financial newspaper, a Sydney-based (Australian) businessman from a Fortune 500 company was asked to name his favourite airline. His response: “Qantas. It’s great to hear an Australian accent and know you’re coming home”. What, then, is the impact if passengers are greeted not by an Australian accent, but by English, Thai, or American nationals? Few Australians would even notice or care if they were boarding a British Airways, Singapore Airlines, or United Airlines flight, but this is exactly the point. Cost-engineering the Qantas product in this way makes differentiation harder, and may erode a key aspect of what its customers want to buy. Part of the product Qantas sells is the encapsulation of the best of Australian culture and attitudes at 30,000 feet. While tier 1 airline cabin crew will always be polite and professional, small but significant cultural differences in service delivery, demeanour and attitude of cabin crew are difficult to escape 5 hours into a flight. More noticeable (but solvable through staff training) is a lack of familiarity with all things Australian - for example not knowing Australian beers and wines when manning the drinks trolley. Can Qantas passengers flying on a plane crewed by “foreigners” and maintained out of Shanghai or Bangkok still receive the in-flight experience and peace of mind they expect from an Australian icon? It would be interesting to know whether Qantas’ has performed customer research on flight crew nationality or confidence in aircraft maintained in low-cost geographies. The difficulty of discussing this topic without sounding racist will have presented challenges during any passenger research done by the airline. Don’t think any of this matters if the brand is really strong? Ask the former executives at Coca-Cola who thought their research was telling them that the market would buy more coke if they adjusted their flavour to be more Pepsi-like (not how it was described in the “New Coke” adverts!). While the taste tests did seem to show people preferred the Pepsi-style flavour, this new stuff just was not coke! People avoided it like the plague and the company was forced to revert back to its original formula (even marketing “Classic Coke” in certain markets). Lesson: Brand is not everything. Most customers are in touch with reality, and reality pays the bills. |
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PR Companies In the last few weeks the CEOs of two different companies have shared the same story with us: They have been paying a very large amount of money to a PR agency for effectively no result. In one case the owner of a start-up business had spent over $100,000 - a substantial part of their initial capital. What might have happened? Marketing Minds regards PR as one of the best investments most businesses can make (we would prioritise it way ahead of conventional advertising "investments" in most circumstances). We are not going to cover the very big topic of how to develop an effective PR strategy in this article, but here are a few hints which might prevent PR investments being wasted: 1. Unless you are a large company with a big budget, think twice before engaging a large PR agency. Unfortunately large PR agencies are like any other services business - they usually put the best staff on the most valuable clients. Unless you are a global company with big budgets, you will seldom get the "A team" (or even the "B team") working on your account at a big agency. It is much better to choose a small but talented local firm. Look for a company whose size and market position corresponds more to your own business. 2. Account management can be another problem (this was definitely the root cause for one of the above companies). Make sure you regularly brief and engage your account manager (and those doing the actual work on your account!) to encourage their "creative juices". One of our CEOs had a PR agency "account manager" who clearly had little interest or enthusiasm for the client's business, and almost inevitably therefore had no ideas about how to generate market or press interest in the company. A firm's relationship with it's PR agency is a two way street, with responsibilities on both sides, but if they do not "respond to treatment" an alternative must be found - either by getting new agency staff on your account, or by changing agencies. 3. Have a realistic plan. A PR strategy plan should be developed in collaboration with your agency (do not abdicate responsibility for it to the agency). In this plan, it is important to have clearly defined objectives and to be realistic about what can be achieved. If a consultative approach is taken, where your company owns the strategy and in each step of its development you request advice on what is practical, the chances are you will end up with a realistic plan. 4. Take a reality check: You have to ask yourself if the projected costs from the PR agency match the benefits which the plan promises. If the ROI does not seem to be there, it is better to have realised this up front. In this situation, you need to re-evaluate if there are alternative ways of achieving your communications objectives, and to ask the PR company for their ideas on how to do things differently. 5. Watch out for retainers and "account management" fees. PR is one of those areas where it is easier to record activity than results, and where activity levels are the basis on which fees are normally charged. There is a major disconnect here, of course (the focus should be on achieving results for you, not billable hours). Also, if you have a poorly-negotiated arrangement with a PR agency they will be giving you invoices that document lots of chargeable activity (such as "client consultation and briefings", and "phone calls to journalists" in quarter-hour increments), with no results at all from a "best-endeavours" attempt at getting some members of the press to write about you. 6. Similarly, remember that just because you issue a press release there is absolutely no reason for any journalist to mention it in the press. What makes an interesting story varies enormously from situation to situation, but unless you are sharing something that is newsworthy you won't get written up in the media. 7. Watch out for agencies sending press releases to dozens of journalists and then charging you for a lot of activity "following up with journalists". There are occasions when you need to send out something "for the record" to many people, but journalists like to be first with the news (that's what makes it "news"!). It would be much better if the PR agency understood the interests of publications well to be able to target the press release to just a few journalists. 8. Be mindful about what you measure. Agencies will always present any reference to you or your company in the press as a major triumph (whether or not they were involved). If at all possible, do not rely on "column inches" as the measure of success (and absolutely do not settle for objectives such as "issue two press releases each month" as your "plan"). Your objectives should relate to the impact you wish to have in the marketplace, and you should have thought-though and defined how you will know when you have achieved your objectives. 9. Remember the PR basics. If it is press stories you are after, then discuss with your agency what topics are hot with journalists in your space, and see if you have something useful, interesting, and/or informative to contribute to the discussion.
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