The Business of The Olympics

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I can’t say I watched much of the Olympics—I’m not sure NBC (broadcast, not Internet) gave me much of a chance, though, unless you count swimming, gymnastics, and synchronized diving as the Olympics. Nevertheless lots of people tuned in, at least for a little bit, and NBC seemed to do okay, with an unknown, but perhaps 10% profit on the $900-some million it spent. We noted earlier in the year Fox had a blockbuster performance w/ the Superbowl. Needless to say, this was on a different level.

(Primetime + multiple channels + Phelps + multimedia – Tibet) x 16 days = good

Let’s take a look at why The Games are the way they are (source):

  • Since 1995, sponsorship spend has more than tripled
  • Sponsorships accounted for an average of 17% of total marketing in 2007, compared with just 13% in 2006
  • 11% of companies spend over 30% of their marketing budget on sponsorships
  • 15 companies spend over $100 million per year on sponsorships

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Most regard Coca-Cola as the big winner for this year’s crop of Olympic sponsors—just look at the numbers! But I think the more interesting question is “why”? Is Coke’s Olympic sponsorship directly tied to even more awareness of the world’s already #1 brand? Does it send a clear message that athletes prefer vitamin sugar water to sugar water? Did it help us all forget about Pepsi just a little bit?

Anyway- I am much more interested in what Chinese brands were launched during, and thanks to, the Olympics. After all, what is a coming out party without some party favors?

Bill Gates is Leaving Microsoft

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There is more pressure than ever on Microsoft’s cash cow, Office. As bandwidth grows, interoperability improves, and work habits change, Microsoft will be under increased pressure either to improve its offering or lower its price (or both). The former will be much harder to achieve—and still it may not be enough.

Here are a few of the competitors in the emerging landscape:

  • Thanks to Salesforce.com, business software as a service is getting a lot easier to deploy.
  • Google, as usual, is mounting a serious challenge to Microsoft. Here’s how their online Google Apps office suite is being resold to corporations through consulting firm Capgemini. One component of the Google Pack is Sun’s StarOffice.
  • Don’t forget IBM’s plan to offer free programs for word processing, spreadsheets and presentations with its Lotus Symphony.
  • And for all these new Mac owners- Apple iWork and Microsoft Office work together, for the most part.

To address this increased competition, Microsoft is releasing its next version of Office as a web service—turn it on or off by the month. Is it enough to stop the market share erosion? No.

Microsoft is going to have to come up with something groundbreaking.

Brand Mapping the 2008 Presidential Candidates

2008 Presidential CandidatesEarlier this year, TopRight commissioned a survey to try to get a better understanding of how consumers would compare the attributes of the 2008 Presidential candidates, Hilary Clinton, John McCain and Barack Obama, to well-known consumer brands.  Our hypothesis was that voters probably have a pretty good handle on what each of the candidates stand for on political issues, but that they may not be consciously tapped into all of the functional and emotional benefits embodied by each candidate.  

Our approach was to select well-known brands across several consumer categories (e.g. Cereal, Beer, Coffee,  Apparel, Technology, etc.) and then ask the consumer to “vote” on which brand in each category best represented the attributes of the Presidential candidate.  For each case, we developed full brand architectures for the brands in a category and this allowed us to map specific attributes, functional benefits and emotional benefits back to each candidate.

To request a copy of the topline findings and results just send us an email.

What started out as a quick and fun survey, turned out to be a real phenomenon!  We were overwhelmed with the response on the very first day of running the survey - receiving hundreds of emails with feedback from enthusiastic participants.  We were also surprised by how many people took the survey (n= nearly 10,000!).  In some cases the results were pretty much what we expected.  For example, see the brand map for the Cereal Category.  In other instances,  there were some interesting surprises.  For example, Hilary Clinton (Democrat) and John McCain (Republican) are actually much more closely aligned  and overlap on more brands than Hilary Clinton and Barack Obama.  We were also surprised by how many of the consumers we surveyed were still undecided - with over 30% of the respondents still sitting on the fence!  We’re in for an exciting campaign for those undecided voters through November 2008…

All in all, we had a lot of fun with this survey and we enjoyed demonstrating how the science of marketing can be applied to the political process!   Happy voting!

Modernism: Nail the Segment (and SEE THE SHOW)

 

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Last year’s sleeper hit, the Modern Atlanta Home Tour has been broadened and deepened this year. Sorry for the late notice, but it’s today and the rest of the weekend. It is not only a “modern” home tour, but also a fashion show, a building seminar, a lecture series, and more.

Nevermind the word “modern” is an undefined, often divisive word—much like the ridiculous “green” or “sustainable” that has been co-opted by industry. What’s important here is this year’s tour is a shining example of what a groundswell of interest and grassroots volunteerism can create.

Having worked on the largest modernism show ever installed in the United States, I can tell you modernism means different things to different people—even within the same culture in the same time period. From a marketer’s perspective, though, modernism seems to attract a highly segmented group of followers.

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What I like about this year’s show is its brand extension and its outreach to new segments. Let’s see if Modern-Atlanta can pull off an Apple and grow by 50% in a year. Help them out—GO ON THE TOUR. It’s worth it!

-Joe

TopRight Assists in Triton Value Partners Venture Capital Case Competition

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Triton Value Partners, an Atlanta-based business advisory/private equity firm, sponsored Emory’s Goizueta Business School’s first-annual venture capital case competition. The competition was hosted by the Alternative Investment Group, a student-run undergraduate club.

The competition represents the first of its kind for undergraduate business school students in the Southeast. In the competition, student groups evaluated business plans submitted by professional entrepreneurs through the lens of a venture capitalist. They conducted due diligence sessions with the entrepreneurs, analyzed the various financial models, and presented investment decisions to a panel of judges from the Atlanta area. TopRight judge Joe Walker noted how valuable this competition was for students in their application of classroom learnings to real world practices.

Paul H. Freischlag, Jr, a Managing Director of Triton Value Partners, stated, “The Triton Value Partners is honored to continue it close association with Emory and the Goizueta Business School by participating and sponsoring this event. As with the Graduate School’s Venture Capital Case Competition we have been involved with over the years, extending this program to the undergraduate school further unites the business and academic communities by providing real world experience for the students and a fresh perspective to the entrepreneurs and investors.”

About Triton Value Partners

Triton Value Partners is a full-service management advisory group that provides small and medium-sized U.S. and international enterprises with the mission critical experience, services and resources required to help them create and execute business plans that make the companies more valuable.

A Direct Relationship With The Audience

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First Radiohead, now Nine Inch Nails releases a new album direct via Web with no labels, iTunes or other 3rd parties in the middle.

Has anybody tried their new Ghosts I-IV album?  I’m a huge NIN fan, I own all of their albums and have seen them in concert several times.  This new record is different:  no singing, 36 tracks of purely instrumental music or more accurately, purely electronic soundscapes with a few instruments interspersed.  A daring release no doubt.  But what’s really daring here is not just the music, it’s the marketing.

Here we have a product filled with just about the furthest one can imagine from pop singles, probably not even commercially viable through regular distribution channels.  It’s offered in a number of permutations and packages, from lowly MP3’s to a luxurious (and at $300, expensive) limited edition deluxe set.  In one week it generated over 750,000 transactions and $1.6 million in revenue – money that goes straight to the band.  How many copies do you need to sell through a label to generate that kind of take-home cash, maybe 2-3 times more or so?  Not bad for an otherwise unviable album.  By the way, that limited edition package is already sold out.  And to top it off a few days ago Trent Reznor, the creative force behind Nine Inch Nails, announced a film festival in collaboration with YouTube where fans can submit their own visions – literally – set to the music of Ghosts.

When Radiohead released “In Rainbows” many commentators, including myself, blogged about the new marketing:  loyalty, brand building, buzz, community, add-on sales, repeat sales, etc.  Yes, all of that’s in full force here with Ghosts and NIN.   But there’s a profound thread underlying all of this.  As Trent Reznor himself said it, it’s about having “a direct relationship with the audience”.

What would happen if all marketers took this notion to heart?  You’re not just selling, you’re building a relationship.  Those aren’t your customers, they’re your audience.  The product is not a SKU, it’s a multi-faceted experience.  You don’t just transact, you encourage follow-on creativity and expression.  You don’t put layers between you and your audience, you draw them in as direct participants in a community.  Radiohead and Nine Inch Nails viscerally understand all of this.  The Internet makes it possible.

In 1997 Trent Reznor appeared on Time Magazine’s list of The 25 Most Influential Americans. OK, I’ll concede that may be a little far-fetched, but is it possible that in a few year’s time the likes of Radiohead and Nine Inch Nails may find themselves on a new list, The 25 Most Influential Marketers?

Tell us what you think.

Starbucks: The Morning After

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For three hours this week, customers were unable to get their caffeine-fix at the nations largest chain of coffee houses. Under the auspices of improving customer service, Starbucks CEO Howard Schultz shut down over 7,000 stores to re-train the company’s 135,000 employees. Was this an honest attempt to make an investment in improving the customer experience or was it just a shameless publicity stunt?

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Well, it’s the morning after and it seems that it was the latter.

Millions of loyal customers returned to their local Starbucks this morning to find that… nothing really changed. When I asked my barista this morning what they did last night, her response was: “We had a lot of fun – we learned how to make espresso again…”. Honestly, I was glad to hear that they had a good time and returned to work energized and ready to “transform the customer experience” as Howard Schultz promised. However, couldn’t they have taken their “coffee break” on their own time rather than inconveniencing their customers? Every other quick serve restaurant chain manages to train their people without closing up shop. Why couldn’t they have one shift serving coffee and another shift going through training – then switch it up and you don’t miss a beat? The answer: this move was clearly not about training. It was about getting a lot of free publicity for the brand and making a statement: Starbucks wants us to know that they care about customer service. Got it. But here’s the thing, it takes a lot more than a 3-hour training session to transform an organization of 135,000 into a high-performance service culture. Howard should have checked in with the folks at Ritz Carlton to see what this really takes before making this kind of promise.

I was happy to see that the competition did not miss the obvious opening here: Starbucks put all of their customers in play. For those seeking a little after dinner coffee drinking experience, there was no choice but to try something different. Dunkin’ Donuts quickly responded by offering 99 cent espresso drinks between the hours of 1pm and 10pm – hoping to lure loyal Starbucks customers over to their side. Part of me kinda’ hoped that they would have gone a step further this morning and launched a campaign claiming that: “The Dunkin’ Donuts coffee drinking experience is so great that they forced Starbucks to shut down to play catch-up.” The marketing executives at McDonald’s must be lovin’ it as they watch this play out… McDonald’s hasn’t even launched their espresso beverage program yet and they’ve already got Starbucks going on the defensive, shutting down their business and scrambling to convince their customers that they are committed to improving the customer experience.

Looking back, the 70’s were a great decade for the marketing discipline thanks to the spirited competition of the “Cola Wars”. For consumers, it was fun to watch! But more importantly, the fierce competition forced marketers to innovate and hone their craft. Looking forward, this decade could be shaping up to be just as exciting for consumers and marketers as we gear up for the “Coffee Wars”. Gulp!

If a Tree Falls in Second Life, Does it Make a Sound?

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Undoubtedly every company is thinking about how to best weather our recent market downturn. Without delving into the debate of whether or not we are in a recession, I do want to pose a question to all of you: How should companies be shifting their marketing and getting the most out of their budgets? Eliminate entire marketing channels or vehicles? Scale back overall spending with the same allocation? Spend more? Try new things?

With so many more ways to reach customers than during the last downturn in 2001, we may see either some extinctions of recent innovations or the decline of some old standbys. If 2008 is anything like the (pre-market downturn) end of 2007… there will be blood. Second Life is one such recent innovation, but it was most definitely not the first attempt to bring users together in a 3-D interactive environment.. In fact, I met with companies from North Carolina, Israel, and Japan between 1999 and 2002 that, quite frankly, were not much different. The difference seems to be that Second Life “tipped”.

Having grown to 12 million registrations, growth has slowed and the population online right now (at night even) is just over 45,000. That number seems even worse when you think how vast Second Life is. Marketplace reported last month that companies were leaving. “American Apparel led the in-world exodus last spring. Starwood Hotels, AOL and Wells Fargo followed”.

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I have not heard of advertising success stories, but the fact that a company is willing to try still seems to generate positive press—and reach more people than the intended campaign. For example- I just searched and found that Turkish companies were advertising on Second Life. Good for them.

So why is Second Life “failing”? It’s a hassle to set everything up? We’re all too busy? There’s a fundamental disconnect between real life products and a world populated by people trying to escape it? Perhaps a company positioning itself more around people’s real personas will do better with branded environments and metaworld promotions. Kaneva is one such company. Still, Kaneva is a walled garden and anything that can be replicated or bettered in an open environment probably will win the battle for virtual mind share.

Even if advertisers all leave Second Life, it will still be a fun place to go. Besides–my alter ego is hard to shop for anyway..

And the Winner of the Super Bowl Marketing Award is …….

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The company that did the best job conveying it’s Brand Image, Product and Service offerings, leveraging cross-sell, up-sell and any other “sell you can think of” opportunities and did so in an entertaining, highly integrated manner that should make all marketers sit back and reflect on the opportunities they missed on a daily basis. And the winner was, none other than the host of the event - - FOX.

Every company – and particularly Fox’s media competitors - should take notice of how Fox leveraged its investment in NFL football and its sponsorship of the greatest social spectacular invented by mortals. As the event played on, I became less interested in the vitamin water horsing around, lackluster auto hybrids and gratuitous Go-Daddy ads and more interested in how Fox made the most efficient use of promoting its programming and other media properties to the millions of “captive eyeballs”. And they did so in interesting ways that integrated not only the NFL, its players and the Super Bowl, but also its advertisers to promote the various Fox properties. Importantly, they were true to their Brand identity – consistently using technology and edgy creative to support their sports and entertainment programming and a brilliant rendition of the Declaration of Independence supporting the American values of patriotism, equality and support of our armed forces, which sounds like Fox News. (Whether you like Fox News or not, this is what they do)
Unfortunately, I was not prescient enough to realize what I was about to witness, so I must rely on recall – and I am confident I can recall more of their tie-in opportunities than I can the commercials! Let me count the ways:

1. The pre-game show was different from previous years and attempted to replicate the Academy Awards. It was filled with interesting features all hosted by various Fox personalities including Ryan Seacrest as the MC, Jillian Barberie providing an insider’s view of the Super Bowl “Hot” Parties and interviews with celebrities and former football players hosted by non-football Fox personalities from the various Fox Groups. They turned the time prior to the game into a social event, not just 5 hours of football “talking heads” and leveraged all of their assets to do so.
2. Next, American Idol winner Jordan Sparks, whose father was a former pro football player, was front and center for the Star Spangled Banner. Later, Fox and Idol used Ben Roethlisberger, a recent Super Bowl star, to hawk American Idol. Some have said Ben qualified for the worst performance; however they miss the point of why Americans like the first few weeks of Idol so much – they can relate to the bad singers, can’t imagine embarrassing themselves like this and certainly can’t understand why the contestants would put themselves in this position. Great job Ben!
3. Joe Buck prominently and frequently reminded people to go to MySpace.com to see any commercials they may have missed. Nice way to help the advertisers get additional exposure; and by the way, Fox owns it.
4. Leveraging the imagery and equity of the Fox Football robots to tie into the sponsorship by the Sara Connor Chronicles (Terminators) and staying with the metal theme to hawk the start of NASCAR.
5. The selection of Tom Petty for the Halftime Show not only resulted in great entertainment, but enabled Fox to plug King of the Hill a Fox Show featuring Petty as the voice of Luke, one of the animated stars.
6. Finally, Hugh Laurie doing his version of Tom Petty setting up his special broadcast of House following the Super Bowl.
I could go on and on. The point is, networks buy sports properties to sell their programming. Fox did a great job of doing this and doing it in a way that fit with its brand image.
How many companies / large brands can honestly say they integrate their marketing efforts or take advantage of every opportunity to deliver their brand consistently as well as Fox did during the Super Bowl. Most companies fail to do so because they don’t plan far enough out or are unable to cut across functional walls or multiple Divisions within their organizations. Yet, this was not an issue for Fox - they cut across multiple Divisions to integrate and cross promote – and the consumer knew it was coming from Fox, as it had edge and was bold and in your face – what Fox sells.
My hat’s off to Fox – I am quite confident they will continue to print money while their competitors continue to face challenges. We can all learn a marketing lesson from the Super Bowl.

Life After Vick

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With Michael Vick’s sentencing dominating the headlines today, we thought it might be appropriate to share a few insights with regard to the dilemma of brands, powerful personal identities and crisis management. In short, if you’re the owner of a brand like the Atlanta Falcons, how do you deal with a marketing mess like this?

By contrast, think about “Colonel” Harlan Sanders (Kentucky Fried Chicken), Truett Cathy (Chick-fil-A) and Ray Kroc (McDonald’s), to pick on the fast food category for a moment. All of these amazing entrepreneurs recognized the importance of establishing a franchise and a brand separate and distinct from their personal identities. Please note that we’re not saying that their personal identity did not have significant impact on their respective companies. In all these cases, they had tremendous impact in shaping and ensuring disciplined (sometimes brutal) execution against the brand promise. Sure, if the Colonel went out one night, tied one on, and careened off some Kentucky back road into a barn with the local farmer’s daughter, the story would hit the papers. However, the backlash would have had minimal repercussions for the KFC franchise or fried chicken sales because the actions of the individual would not have been so tightly bound to the promise of the brand.

Which brings us back to Vick’s dilemma — how does Arthur Blank , the owner of the Atlanta Falcons, deal with a situation where the brand promise, the franchise, and the individual player are inextricably linked? Ironically, the fact that Vick was participating in an illegal dog fighting operation has little if anything to do with the promise of the Atlanta Falcons brand or the other talented players on the field each weekend. However, in the court of public opinion the allegations have everything to do with consumer perception of the brand – which has the potential to have a dramatic impact on consumer intent to purchase Atlanta Falcons tickets and related sports merchandise.

Of course, being the marketing scientists that we are, we’ve come up with a straightforward scientific method for dealing with just such a situation. It’s a survival marketing strategy that we call S.A.V.E. We’re happy to report that Arthur Blank and his team have already taken some steps in the right direction, but the jury is still out on whether they will be able to pull off the SAVE… SEPARATE, ASSERT, VALIDATE AND ENGAGE.

The first step is to SEPARATE the source of the crisis from the core business. In this case, suspending Michael Vick and moving quickly to terminate his contract were very wise moves. At the first hint of any potential impact to the brand, the Falcons separated and deflected the heat away from the franchise and related products – drawing a clear distinction between the positioning of the team and the positioning of Vick’s personal case.

Separation creates room for the company to ASSERT the positioning of the brand as distinct from the case and the media attention surrounding the crisis. Asserting the positioning means working overtime to connect with the core customer base through whatever channels are available to reassure them that the crisis has little, if anything, to do with the business. In this case, The Falcons have taken admirable steps to isolate the crisis from the core business and reassert their positioning.

Asserting the positioning of the company is a great move, but the company must quickly VALIDATE the impact in the market to determine if they are achieving desired results. What we mean by validation is getting in the market and talking to channel partners and consumers to determine how good a job marketing communications have done to reassure the target audience that the core business will be unaffected by the crisis and promises will be kept. By validating, the company has the opportunity to re-position the brand entirely before it is too late. In the absence of validation, a company can quickly be drawn into a death spiral where their comments and assertions actually reinforce their negative positioning and accelerate their demise – need an example here? Remember what happened to Arthur Andersen during the Enron debacle?

Assuming the messages are working, the company then has to ENGAGE customers and consumers in a robust dialog about the brand, the company and their products — in this case, separate and distinct from the team’s star player. In other words, you have to sell the benefits of the brand not the individual personality. Easier said than done when your superstar quarterback is headed off to 23 months in the Federal pen and your three backup quarterbacks aren’t exactly lighting it up… But, if the target is sufficiently engaged, the company will actually begin to reap the benefits of distracting attention away from the crisis. Strange as it may sound, the company may even see a significant up-tick in sales and profitability if they are perceived as handling the situation openly, honestly and with genuine concern for the needs of their customers and consumers. It’s amazing how customers will recognize and reward sincerity and genuine character if a company is bold enough to take a stand for the needs of their customers – a stand that is rooted in values and beliefs that mean something.

The Falcons may have a terrible record on the field this year, but the team will be back next year. Vick won’t be back for a few years (at least) and the only team that might touch him then is the Oakland Raiders!.