The stack of Facebook articles has spilled over on my desk this week—probably because it is now hitting so many of my email alerts. These articles have added “the long tail”, “contextual advertising”, and my professional focus—“strategy” to my existing list of Facebook tags (“social networking”, “Web 2.0”, and “community building”, to name a few). And just to be clear on nomenclature that is not always discrete, I am describing Facebook as an interactive social networking site that has (among other things) video.The McKinsey Quarterly noted that just 3-6% of the membership of four leading online video-sharing sites is adding 75% of the videos for download. Most would probably suspect that over time, this “3 to 6/75 Rule” will look more like the archetypical “80/20 Rule”—what I term as the “Four Score/Score”. Either way, everyone is trying to solve Facebook’s key question, “How do we make (more) money?” For a $10 billion dollar valuation, Facebook has some legitimizing to do in light of their $30 million in profit this year. And making more money goes hand in hand with advertisers’ ability to get some return on their marketing investments. This month’s Business 2.0 article Facebook Economy lists four ways to make money: 1) sell ads, 2) attract sponsors, 3) sell services, and 4) and sell products. Let’s at least talk about one: selling ads. In an environment like Facebook where fewer than 10% of the population would be defined as active contributors, what are the implications for a video ad-based revenue model? What if that same population were also the biggest watchers of its video? That means in an advertiser’s video CPM ad exposure model, the 10 % audience is completely saturated with mindshare (i.e. if there are a certain number of ad deliveries guaranteed, the deliveries here would be deep, not broad). A more transparent failure would be a call to action model where the 10% audience’s collective garage space is full. There has to be a way to reach more minds and garages in a dominated-by-few Facebook environment.Vauhini Vara noted in her article Facebook Gets Personal that “the percentage of people that click on display ads is lower on Facebook, News Corp.’s MySpace and other similar sites than on other popular Web sites like Yahoo Finance and CNET Networks Inc.’s News.com site.” Facebook is experimenting with its own context-based advertising system, with the same goal as the one Google launched last week or the one Get Interactive launched a year ago—to capture more this of this largely untapped “fire hose” of interactive traffic and to do so without killing the mood. For the time being, though, advertisers must think through the implications of serving ads in a “deep but not broad” (albeit interactive) environment.Regardless of technological or strategic advancements, one thing that will surely help everyone is some normalization in usage and participation—something that would bring us back to a more livable “Four Score/Score”.-Joe Walker

BMW’s 135i (left) and 2002 (right)

Tuesday’s WSJ had an article about the proliferation of small cars among luxury carmakers. The article quotes Chris Li from Power Information Network saying that less-expensive vehicles risk weakening the brand. This isn’t really news…the BMW 318ti, a mid-90s bob-tailed weak-kneed little runabout is a perfect example. The problem was that the 318ti was an attempt by BMW to make its cars more affordable by making them cheap. However, BMW has lately been losing some of its luster in enthusiast circles by loading its cars up with every conceivable gadget (like the much-maligned iDrive) and, yes, lots of extra weight. But by putting its new 1-Series on a diet and making the big honkin’ 300 hp turbo six available, the 135i seems poised to recapture some of BMW’s “Ultimate Driving Machine” magic, first introduced on these shores as the iconic 2002. Indeed, the enthusiast community is all whipped up into a lather about the 135i’s introduction.Rather than weaken BMW’s brand, the 135i will strengthen it, because BMW got the product right. It’s a perfect example of what we believe at TopRight – that by understanding your customers, you can offer the right products to establish a strong brand presence and corner your market.

At long last, the cat’s out of the bag: TopRight and Navarra Solutions Group join forces! Almost five years ago, Dave Sutton and Francisco Ruiz met for the first time. Both quickly realized they had a lot in common: a keen interest in marketing. However, they approached the problem from different ends of the spectrum: Dave from the strategic end, Francisco from the systems end. Dave had just published his book on EMM and Francisco had just started Navarra Solutions Group. But Dave had a bigger, comprehensive vision which he described in his book…What if both of those ends came together? More importantly, as he compellingly wrote, those ends should come together. Well, as of today they are together in one place: The TopRight Enterprise Marketing Enablement Team. The right people, the right vision, the right technology, the right moment. Nobody says it better than Aprimo’s CEO Bill Godfrey: “This merger is the perfect marriage of two of Aprimo’s leading service partners, both of which are hyper-focused on delivering tangible customer value. Navarra Solutions brings world-class capability in delivering business solutions and a successful track record to TopRight. TopRight, an already-established EMM thought leader, is now positioned among the few full-service, end-to-end solution providers in our partner network.” Read the full Press Release <here>!

    Shocking the CPG world last week, Kraft announced in its Q2 results that at least half of its brands in its $34 billion portfolio aren’t growing share.   Guess there’s only so much Mac and Cheese, Oreos, and DiGiorno Pizzas the world can handle.  So this leaves a great question – what should Kraft do?  It appears there are two not-so easy answers:  sell off parts of the business, or invest in expanding the brands in other categories.  My gut is that some of both will probably happen as Kraft needs to ask some hard questions about all of its brands.  Does it make sense to keep all current brands, or do some fall outside of Kraft’s core offerings?    Kraft may have to go through the exercise of trimming some fat (pun intended) and refocusing its efforts on fewer brands.  If not, the company could be having the same conversation a year from now.

I’ve already decided the more I learn about the Google/YouTube, News Corp/MySpace, and now Yahoo/Facebook situations, the less I have a real opinion. What I do have, though, is an overwhelming feeling of numbness.. so I’m calling you out for your opinion.

The Issues:

• Valuation: Is Facebook worth 12 times what MySpace was a year ago? Be careful Yahoo—could be another Bertelsmann-AOL-esque exercise in cash burn.
• Easy-to-build, hard-to-dominate: It’s so easy to build a Facebook clone now, Yahoo could crank one out in a week—but could it ever match Facebook’s momentum and audience? China, France, Germany, India, Israel, Mexico, The Netherlands, Russia, and Turkey all have their own Facebooks.. See the August 2007 Business 2.0 Magazine, page 82.. (it’s better at the newsstand).
• Yahoo vs. Google: Will the “me too” strategy Yahoo keeps playing with Google work? Yahoo can roll w/ Google—after all, they do have twice as many page views as Google and their visitors spend about triple the amount of time online as Google’s. and “Time” really is the new way to measure ENGAGEMENT… So is Yahoo really trailing Google? Here’s what Matt Dickman says about it.
• Is this the right match: Even though Facebook is the new darling, is it the right darling for Yahoo? And for that matter, is Yahoo the right suitor for Facebook?

For some background, read “How to Kill a Great Idea”, Inc. Magazine June 2007 . The founder of Friendster—you remember Friendster, right?—says his “biggest regret was turning the company over to Silicon Valley’s best and brightest…I thought these big-shot guys were going to help Friendster.” Keep in mind, Tim Koogle, former CEO of Yahoo, led that dream team. So rather than tell you how I feel, let me in my first CornerTheMarket blog, start a straw poll with these two questions:

1. Do you think Facebook is right for Yahoo?
2. Do you think Yahoo is right for Facebook?

Add a comment or drop me a line. Results next week. Now, if you’ll excuse me, I’m going to find some old classmates from my days at Zhejiang University—naturally, I’m starting with Xiaoneiwang (http://xiaonei.com).

      Say the name aloud in a shopping mall and kids will start streaming to you like the proverbial Pied Piper of Hamelin wanting to talk about their menagerie of on-line and plush pets and their latest purchases .  For those of you who haven’t heard, Webkinz is a kid’s version of a cross between the Sims and Facebook with lots of safety precautions.  Kids join by buying a plush animal which comes with a code good for a year’s on-line subscription. They then create an on-line version of the pet along with its home.  There are also trading cards for purchase that can be used for a live in-person game or to unlock virtual cards for an on-line game with friends.  Retailers report huge backorders of the pets with kids calling every couple of days to check on their order.  While there are some good lessons for kids including doing faux jobs for “kinzcash” and budgeting for purchases, I worry about the sites that create a negative consequence because kids don’t visit them daily (and sometimes multiple times daily).  That’s sounds like a  solid foundation for building anxiety and addictive behavior.  Some recent news articles talk about parents having to spend an hour a day maintaining all the kids’ virtual animals while the kids are away at camp.  That’s insane.   While I’m all for companies building safe and fun virtual environments for kids, I wouldn’t want my kids cutting a baseball game, a visit to the park, or a family event short because they had to get back to the computer because their virtual pet may get sick.  We have a responsibility as marketers, especially to children, to develop and deliver products and services that offer positive benefits and experiences.  Keep the kids coming back for the fun, learning, and a chance to safely socialize and everyone wins in the end.  What do you think?

Elmo’s probably not laughing too much today at Mattel headquarters out in CA, and for good reason – lead paint coating your children’s toys is enough to make anyone ask how to get away from Sesame Street.   Mattel and its flagship brands can take some comfort in knowing they’re not the first company having to deal with a hit to its image and brands.  Johnson & Johnson survived perhaps the grand daddy of them all when they pulled cyanide laced Extra Strength Tylenol off the shelves in 1982 .  An unprecedented move that had quite a large effect on the bottom line, J&J simply did what many CPG firms practice today:  they put the consumer first.  First: J&J addressed consumer safety by taking over 30 million bottles off the shelves.  Second: consumers were offered replacement products, free of charge.  Last: J&J handled the PR machine with honesty and openness.  J&J not only survived, but eventually came out on top swinging.  True leadership happens when times are bad, not good (did I learn that from Big Bird or Grover?).  Over the next couple of days we’ll see what the leadership of Mattel is made of.  But throughout the next few weeks, they need to remember the consumer above all.TopRight Public Service Announcement: a complete list of recalled items can be found at www.mattel.com or www.cpsc.gov.

I was watching “The Universe” on NOVA last night and they uncovered what was at the heart of our galaxy. Not surprisingly, it is another Starbucks. Starbucks, the master of experiential marketing, seems to be a one trick pony – building stores to achieve incremental market share. The problem is that their traffic has been relatively flat, retailers carry their famous beans, and the excitement, well, it’s worn off.During the days of the Friend’s CENTRAL PERK Coffee Shop, Starbucks was hip – the cool place to show off your new laptop and work / life balance. To achieve social status among friends who buy private label toilet paper privately yet drink $5 coffees publicly. To bask in the contrived ambiance of Disney World type environmental controls including the right music, purple chair, and intelligent sounding drinks. Ho, hum.The problem is that the world keeps looking better, thanks in large part to the Starbuck’s movement. No longer can we drink vending machine coffee in a white Styrofoam cup and be happy.But Starbuck’s recent announcement to build yet another 1700 stores misses the point. In a world of cookie cutter homes, suburbs, shopping centers, and coffee shops must we venture outside the galaxy for a bit of authenticity? A bit of uniqueness?Buck the stars in our galaxy, Starbucks, and do something new and don’t go into the black hole.

“You’re deceptive” – Ralph Wiggum
Unlike so many other recent movie launches, The Simpsons Movie was anything but deceptive. Clever, witty, intelligent, yes. But not deceptive. Why? The Simpsons Movie didn’t promise bigger explosions, faster cars, or meaner bad guys. Nor did it promise a tired rehash of the archetypical comedy genres – you know, guy finds himself in outlandish situations (a la Evan Almighty), guys run around doing stupid stuff (isn’t Jackass 3 on its way?), etc.No, The Simpsons Movie only promised more of what we love – Homer, Marge, Bart, Lisa and Maggie in beautiful big-screen 2D. An entire generation has grown up while The Simpsons has been on TV. We know the ins and outs of the Simpson family. We would feel right at home in Springfield, __…sidling up to Moe’s bar, buying a car (or anything else for that matter!) from Gil, the hopeless salesman, grabbing a quick “Whatchamacarcas” sandwich at Krusty Burger.And therein lies the brilliance of Fox’s pre-launch marketing campaign for The Simpsons Movie. The Simpsons have such a rich back story that it was possible for Fox to credibly take over 7-Elevens and rebrand them as Kwik-E-Marts. It was possible for Mr. Burns to take over JetBlue. Not only was it possible, but it got fans of the show even more excited to see their favorite family in an expanded format.And besides a brilliant marketing campaign, the movie wasn’t half bad either!

 
When the great classic radio and TV comedian Jack Benny appeared for the first time on radio, he started off with this simple line: “This is Jack Benny talking. There will now be a slight pause while you say, ‘Who cares?” In a related development, the news has just come out that Detroit automakers’ (Ford, GM, Chrysler) share of the US market fell below 50% for the first time in history. The amount of time some analysts and car aficionados have spent prattling on about this issue is remarkable – one would think that we should set aside a day of mourning, but the cold reality is that most of American consumers will just shrug and move on to the next story…We all know the overall “rise and fall” story of the US auto industry from countless articles – but lost in the shuffle of bad news stories like this are the smaller success stories coming out of Detroit. TopRight believes in crazy concepts like identifying a target segment, designing a product or service to deliver value for that segment at the right price, and then successfully delivering the right customer experience in the marketplace around that new offering. I just recently purchased the Buick Enclave (side comment – see this site for a great example of a spirited web community of owners – but I will save that for another blogging day). That’s right, a Buick. And I am not 64 years old! Visit here to see what I am talking about. The Enclave has a distinct target in mind – people who want the space of a minivan including three functional rows of seats but don’t want the gas guzzling and rougher ride of a truck based SUV. The folks at GM delivered exactly that product – and delivered it with a cabin that is quieter than a Lexus and with a full range of luxury options normally found on the top luxury crossover vehicles. And did I mention it “only” costs around $40,000 fully loaded? That is a lot of money, but about $10,000 less than comparably loaded competitors from Lexus, Acura, and BMW that all have much less space inside (you try sitting in that BMW third row).Scale and share is not the right goal for every business – but delivering the right product to a target consumer segment at the right price is going to do pretty well every time. Sure, GM and Buick are not perfect (hello Buick Lucerne) but they are proving that it can be done….regardless of the macroeconomic domestic share trends reported in a colorful USA Today chart.  Are you focused on big picture conventional wisdom metrics like market share while ignoring the real story of what is going on with your company and brands?  Are you selling Enclaves?   Or Lucernes?