March 2007
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March 2007 |
|
|
|
Medium |
2005-06 share of time |
2005-06 share of advertising revenue |
| Newspapers | 7% |
41% |
| Television | 43% |
35% |
| Radio | 30% |
9% |
| Internet | 16% |
8% |
| Magazines | 4% |
8% |
Reflecting major growth in online shopping PayPal, the leading online payments service, handled transactions worth over US$11 Billion in the three months to December 31st. This was 57% higher than in the corresponding period in 2005. There are now 123 million people who have PayPal accounts, world-wide. (PayPal also accepts normal credit cards, so it is not necessary to have a PayPal account in order to make a payment through the service). (Business Week 25/01/07 and PayPal)
eBay Reaches $52Bn and 222 Million Members (5 million in ANZ)
The total sales value (Gross Merchandise Volume) of purchases made through eBay during 2006 was US$52 Billion (up 18%). The eBay community has now reached 222 million members worldwide. Of these, 5 million are in Australia and New Zealand (ANZ). The ANZ internet auction website was visited by 4.2million people in December 2006. (eBay & The Australian Financial Review 30/01/07).
In 1991 an agreement was struck between Apple Computer and the Beatles' Apple Corps Ltd music company which allowed Apple Computer to use the Apple name as long as it was not used in the music business. Apple Computer's success with iTunes and iPods obviously caused tension (and litigation) in recent years. This has now been resolved with the announcement that the newly renamed Apple Inc. will own all of the trademarks related to “Apple” and will license certain of those trademarks back to Apple Corps for their continued use.
The main upshot for consumers is that at long-last the catalogue of the Beatles records can be expected to appear on iTunes during 2007. Apple has sold more than 88.7 million iPods since they were first introduced in October 2001. For its most recent quarter, Apple reported a 78% increase in profits.
Google announced its intention to purchase Adscape, a leading provider of in-game advertising technology. The Adscape system allows billboards and other advertising surfaces in online games to display adverts to game players. Different adverts are shown to different people based on factors such as the country they are playing from.
Populated mainly by males in the 18-35 age-group, with particular strength in certain Asian countries such as South Korea, the online games market is growing strongly as broadband connectivity becomes more common-place. In terms of advertising revenue, the online gaming sector is currently worth about $100 million, and is forecast to grow to $500 million by the end of the decade.
In addition to Adscape, other major players in the in-game advertising market are Massive (owned by Microsoft) and IGA.
Disney has announced sales of 1.3 million movies were made in the first three months of selling movies on Apple's iTunes site. Most of the sales were made in the December Christmas period.
Since Disney began putting selected TV shows on iTunes 12 months ago there have been 20 million Disney TV show downloads. Disney CEO Bob Iger told the Financial Times newspaper that he believed iTunes movie sales were no threat to convention DVD retail channels. “The message that we deliver to our traditional [retail] partners is that the pie is getting bigger", said Iger.
From May 1st consumers will be able to join a register aimed at stopping unsolicited telemarketing calls that is being organised by the Australian Government's Australian Communications and Media Authority. If companies contact people who have joined the do not call register, they can be hit with fines of up to A$1.1 million.
Aimed primarily at telemarketers, people on the list are still allowed to be called by charities, religious organisations, educational institutions, social researchers, government bodies, and registered political parties. According to some estimates, these "exempt groups" account for about 80% of all outbound call centre phone calls made each year.
The Australian Government has estimated that up to 4 million people of Australia's 21 million population will register in the first year of the do not call register's operation. There may be some "citizen dissatisfaction" when people find they are still getting a similar number of interruptions due to the large number of exempt call types.
Media giant Viacom has got agreement from Google that will see over 100,000 videos clips removed from its YouTube site. The move comes after Viacom and YouTube/Google failed to agree how to monetise Viacom's content which individuals post on the YouTube site.
The impact on YouTube remains to be seen, but it is estimated that Viacom video clips have been streamed over 1.2 billion times from the YouTube site. Viacom content includes MTV, Nickelodeon, and Comedy Central. Google has managed to sign managed to sign short-term deals with CBS, Warner Music, Sony-BMG and Universal Music.
The swiss food company Nestlé and the mayor of the town from which Perrier water comes from are in a legal battle about the name of the area. Perrier sparkling mineral water comes from a natural spring in a place called Les Bouillens near the small village of Vergèze, Provence, in the south of France. The local mayor wants to change the name of Les Bouillens to "Source Perrier".
Currently, nothing in the Vergèze area is actually called Perrier and Nestlé is keen to keep the Perrier brand name separate from the place where the water in the famous green tear-drop bottles has historically come from.
Unlike other French mineral waters such as Evian, Perrier is not named after a place but after a local doctor, Louis Perrier, who championed its healthy properties. The mineral water is reinforced with gas from the spring before bottling, so Nestlé could, if it wanted, recreate the branded water elsewhere. China and Africa have been mentioned as possibilities.
Changing the name to "Source Perrier" would enable Vergèze locals to argue that if the bottled water didn't come from "Source Perrier", then it wasn't real Perrier water.
Since 1992 Nestlé (which also owns the Vittel, Contrex, S. Pellegrino and Aqua Panna water brands) has owned the Perrier brand name, rights to water from the spring, and a 234-acre factory compound on the site of the original source where it bottles the water. From a distance the area could be mistaken for a power station or an auto plant, and the Perrier factory has been the workplace for up to 4,000 people.
If you buy music one track at a time you almost certainly buy it online - and probably from Apple's iTunes store. (Note to younger readers: this used to be called buying "singles", and we did this in "record shops"). According to the latest figures from Nielsen SoundScan, digital track sales in the USA grew 65% to 582 million songs in 2006.
If you like listening to albums however, you almost certainly still buy CDs. Only 32 million digital albums were sold in the USA during the whole of 2006. Total album sales in the USA were 646.4 million, including 29.4 million purchased via e-commerce sites such as Amazon.com. If you assume an average of 10 songs per album, that's an order of magnitude more music still bought in bricks and mortar shops.
The news for mass merchandisers (think Wal-Mart) who sold 41% of all albums in 2006 is not all good news, however: Total album sales declined 4.9% compared to 2005. This presumably reflects a trend towards buying just the tracks you like (online), rather than the whole record.
It will be interesting to see if album sales move more solidly online as more new cars are sold with "iPod-ready" features. Till then, most of us still find it easier to slot a CD into the in-dash player.
Australia's "flag carrier" airline Qantas is currently the subject of a highly controversial takeover attempt by a consortium of international private equity companies and investment banks. (At the time of writing, it is by no means certain that the bid will succeed).
Sometimes called "leveraged buy-out" deals, these takeovers usually involve funding the buy-out of all share holders by loading the take-over target with massive levels of debt (as is proposed for Qantas).
"High touch" businesses such as Qantas involve delivering highly experiential products to consumers. For example, airline travel involves not just transport from point A to point B, but the comfort of the journey, the attitude and helpfulness of in-flight staff, the facilities and comforts of airport lounges, perceptions about the safety of the aircraft, and so-on. In the case of Qantas - whose slogan is "The Spirit of Australia" - there are also strong emotional links with most Australians who regard it as something of a national icon.
While the financial press in Australia is pretty much cheer-leading the takeover bid (after all, most such publishers see themselves as part of the same community which the merchant bankers and investment funds belong to), the most striking thing from a marketing point of view is the total absence of discussion about what such a take-over would do to customers.
We have mentioned Qantas before in the context of the dangers of mis-understanding what customers value in a hitherto successful product.
Qantas is one of the world's most profitable airlines. It is almost unique among major airlines in being highly profitable at the same time as delivering a highly-regarded customer experience.
Like any businesses, Qantas has engaged in some cost-cutting, but on the whole this has been done with sensitivity to the customer experience. A leveraged buy-out would likely change all that. Repayments of massive debt would have to be funded out of operating income (driving further cost cuts), assets would be sold off (the airline's frequent flier program has been nominated), and the deferral of new aircraft purchases to replace Qantas's now ageing fleet are all likely consequences. All would have a big impact on the customer experience.
When degrading the customer experience is combined with a shift to foreign ownership, the "Spirit of Australia" may wear very thin to people getting indifferent service while riding on a pension-age aircraft that happens to have a kangaroo painted on its tail.
In common with other private equity targets, the Qantas business needs to remember how it generates revenues and profits in the first place:
Loyal customers are Qantas' main asset, and delivering a compelling customer experience is what drives its profitability.
While many Google is currently the world's best-known place to look for information, there are a great many other online sources of information.
Google is believed to have indexed around 8 billion web pages. Huge as this is, there is a so called "deep web" of web sites that are invisible to search engines such as Google. This invisible web contains the many databases, speciality search engines, and professional content and commercial sources which Google cannot access. The deep web is estimated to contain 500 times more information than a person can access via Google.
Research Beyond Google is a helpful list of online research tools which information professionals such as librarians use. Most of the information sources which these tools point to are of very high quality, including professional and academic collections of information, professionally published and subscription-only sources.
http://oedb.org/library/college-basics/research-beyond-google
An additional collection of professional information sources is also available through the Marketing Minds "Information Sources and Resources" sub-site.
www.marketingminds.com.au/links/index.html
Q: What do you call a German hooligan?
A: An umlout.
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The auto mechanic asked the cardiologist, "Why do you make so much more money, we both use our hands to fix things", the cardiologist replied, "Try doing it while its running."
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Some men learn by reading; Some men learn by observing; and some men just have to pee on the electric fence.
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Q: Who's afraid of Virginia Woolf?
A: Virginia sheep
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Julius Caesar walks into a bar. "I'll have a martinus," he says. The Bartender gives him a puzzled look and asks, "Don't you mean a 'martini'?"
"Look," Caesar retorts, "If I wanted a double, I'd have asked for it!"
We'd like to include an article about Word of Mouth marketing in this newsletter, but its already very long!
Instead we've put it on the Marketing Minds website. You can read it at:
www.marketingminds.com.au/marketing/brand_2y_pages/brand_word_of_mouth.html
The rise of user-generated content (UGC) on the internet (blogs, MySpace pages, podcasts, Second Life avatars and properties, YouTube videos, etc) has significantly blurred the line between corporate marketing activities and the personal lives of employees.
There are not really any rules in place about this. Most large businesses accept that their employees may refer to work-related matters in their personal blogs. A growing number of companies encourage employee blogs as part of people's jobs, and many companies now have corporate sites on MySpace, Second Life and the like.
In this situation, it is not surprising that sometimes things go wrong. Microsoft had for a long time an employee who bogged and told things as he saw it - often not to Microsoft's advantage. Ultimately the wroter of the employee blog he was identified and an agreement was reached to "separate" from the company.
The latest example is currently running on YouTube. It concerns the race between Hilary Clinton and Barrack Obama to become the US Democratic party's candidate in the upcoming US presidential election. An unauthorised advert attacking Clinton was was made by an employee of a digital consulting company which is providing technical services to the Obama campaign. The company, Blue State Digital, has since fired the person who created the advert.
Adapting the "1984" advert produced to launch the Apple Macintosh, the face and voice of George Orwell's Big Brother was replaced with those of Hilary Clinton to create a Big Sister political attack advert. The Big Sister "advert" includes other digital alterations which place an Obama campaign T-shirt on a hero character who smashes Clinton's image on a huge screen, as well as Obama campaign messages at the end of the ad. (Big Sister can be viewed at: www.youtube.com/watch?v=6h3G-lMZxjo)
Big Sister has been viewed online by nearly 3 million people, and seen by tens of millions of people after it was shown on network TV and cable shows such as Larry King Live. It seems pretty clear that it was made without Barrak Obama's knowledge or approval, and without Blue State Digital's knowledge either.
So what can you do?
Communicate with employees about UGC and blogging: raise the topic.
Don't try and forbid people from blogging about the organisation. It would be almost impossible to enforce, and employees will know this.
Remind employees that their blogs and other UGC which mention the organisation and its business - positive or negative, anonymous or named - impact everybody. Not just the company is affected, but also their work colleagues and themselves.
Encourage people not to blog outside their areas of expertise. It will only be boring to their readers and potentially embarrassing to themselves.
Remind employees that blogs and other UGC are just another communications medium. The same rules and etiquette which would apply about writing in print media or speaking in public forums should apply.
Write some blogging and UGC guidelines which all employees can read if they are considering writing about the organisation, its products, or their work experiences. An excellent example is Sun Microsystems' blogging guidelines: www.sun.com/aboutsun/media/blogs/policy.html
If you have significant negative blogging going on and you think this is probably your own employees, then you have broader problems in your organisation than could be addressed by blogging guidelines or policy. Try and address the route causes of the employee dissatisfaction or carelessness, not the symptom.
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