Category — Advertising

Pandora is predicting that it can compete for ad dollars by pinpointing listeners with greater precision than traditional radio, report Ben Sisario and Tanzina Vega in the New York Times (4/16/12). "A dollar spent on Pandora is better than a dollar spent on terrestrial radio," says Tim Westergren, Pandora’s founder. His point is that, unlike traditional radio, Pandora’s internet-based service "can pinpoint listeners by age and (gender), zip code or even musical taste." Tim sees a day when "Pandora will be the top station in many cities."

The service has indeed grown rapidly. Launched in 2005, "it has gone from 45 million to 125 million registered users" over the past two years. Pandora’s revenues have also grown "from $55 million to $274 million" and last month it "streamed a billion hours of music." The one thing it doesn’t have is profitability — in no small part because Pandora’s music license requires it to pay "54 percent of its revenue" in royalties, far more than terrestrial radio must pay.

But William Feinstein of Planet Honda, a car dealership in Union, NJ, is sold on Pandora’s ability to target listeners. He says that iPhone traffic to his website has "more than tripled" since he started advertising on Pandora. "A light bulb went off," says William. "We don’t need to buy five radio stations. We can buy one." He has doubled his Pandora buy to $20,000 per month since January. Tim Castelli of Clear Channel still doesn’t see Pandora as a threat, however , mainly because it can’t provide local news, traffic, weather and chatter. "It’s a playlist generator," he says. "It does not really deliver what radio does, which is that rich, personal experience."

Advertising and shopper agencies must learn to play by new rules. By Chris Hoyt. To help provide its readers with direction in 2012 and beyond, The Hub Magazine ran a survey last December to ferret out what product marketers and their agencies think will be the key functions and skill sets that agencies will need to help their clients achieve their objectives over the next five years.

What do current practitioners think the respective roles of these agencies should be in terms of planning, media development and promotion development in a path-to-purchase environment? What obstacles are seen for each type of agency in performing these functions? What are the areas of potential conflict — i.e., in which segment of the path-to-purchase is the battle occurring? How do these practitioners — again, defined as both product marketers and agencies — envision the ideal working relationship? … read >>

Mark Addicks hopes to reinvent the cereal box as a publishing platform, reports Jefferson Graham in USA Today (2/1/12). Mark is chief marketing officer of General Mills and notes that the cereal box is widely read, “with the average consumer checking out his or her cereal box 12 times.” Mark won’t say exactly what he has in mind, but hints at a digital update of “offering a surprise inside the cereal box. Instead, kids could point a smartphone at the box and ‘see visual surprises’” via a QR code, for instance.

“What I’m hoping for is pure entertainment,” says Mark. General Mills has already “tested augmented reality on a box of Honey Nut Cheerios, instructing consumers to turn their camera phone onto the box to see a video of a world of honey.” The company has also developed “apps for Betty Crocker and Yoplait Yogurt.” The Yoplait app invites “consumers to find Greek items on the backs of packaging and in posters in cities. General Mills, in turn, made donations to food shelters.”

Betty Crocker, meanwhile "has 1.5 million fans on Facebook and 50,000 followers on Twitter. She’s got a mobile cookbooks app for the iPhone and Android devices," an iPad cookbook and a YouTube channel. Mark says Betty "is building communities … She’s a platform," says Mark, "She provides a kitchen for everyone around the world to start giving their ideas and sharing their recipes." Catherine Roe of Google says it’s time for Mills to think of itself as a publisher, not an advertiser. "We see them as a Food Network of Epicurious," she says. "They have really strong content … They are really progressive in this space."

“The power of Like as an emotional sensor is what’s driving Facebook’s exorbitant valuation,” writes Andy Kessler in the Wall Street Journal (2/2/12). That valuation could be $150 billion, and Andy says it’s mostly because "in 2010, Facebook rolled out its Like button, which transformed the company from a somewhat interesting social network into a major media player … With the Like button," Andy writes, "Facebook is like Bob Eubanks on The Newlywed Game, who promised contestants ‘a prize chosen especially for you.’"

In this case, the “prize” is an advertisement served “especially for you,” based on your Likes. As with much of the rest of the technology industry, Facebook “has moved from the cool business of directly selling innovation to the age-old media model of selling ads — a $500 billion business,” writes Andy. “And behind all the glitz, that’s what Facebook is. Its tons of cheap servers sitting in dark rooms store our thoughts, photos and videos, to be delivered and shared to a select group of friends, our social network.” It is both an “emotional locker” for users and “advertising’s nirvana” for marketers.

Apple (worth $425 billion) is also a formidable “consumer platform,” having sold “more than 100 million phones or tablets yearly” that enable it to “sell other stuff, like apps and content like music and videos — and some ads.” Amazon (worth $80 billion) “leverages its infrastructure and 150 million users,” in part to sell ads, as well as to sell some six million Kindle Fire e-readers, which is “a full-fledged shopping platform.” Google (worth $190 billion) is basically an ad platform, too, of course. Then there’s Twitter, Netflix, Skype, Xbox and LinkedIn — all of which provide “some piece of productivity that users or businesses or advertisers will pay for.”

More than 200 years ago, a Swiss watchmaker built a poetry-writing automaton as a publicity stunt, reports Henry Fountain in the New York Times (12/27/11). Henri Maillardet fabricated an intricate assembly of “wind-up motors” and “rotating brass cams” to enable his metal-headed automaton to move its arm “smoothly along three axes — side to side, to and fro, up and down.” He also programmed the machine, which took the form of a young boy sitting at a desk, to write “three poems — two in French and one in English — and four drawings, including one of a Chinese temple.” (video)

Not only that, but Maillardet also programmed the automaton’s eyes to "turn up and gaze out for a few seconds" between each poem or drawing, and then lower them again as it began its next feat. "In this moment, he appears to his audience as if he’s thinking about what he’s going to do next," says Andrew Baron, who helped restore the machine into working condition. "It’s performance art," he says. This surely astonished early 19th-century audiences, and presumably helped sell more than a few Maillardet watches. This type of advertising was not uncommon at the time, but little is known about exactly how the automatons were made.

“It’s hard to get a very lifelike, fluid motion of a simple arm movement or hand movement without becoming jerky,” says Jeremie Ryder, a curator of “automatons and mechanical musical instruments at the Morris Museum” in New Jersey. Charles F. Penniman, who guided the restoration of the Maillardet automaton at the Franklin Institute in Philadelphia, marvels at the genius of its precise movements. "How do you think that through?" he wonders. "Yes, you’re a clockmaker … but this is a lot more complicated." Even more amazing, says Charles, is that, under his gentle care, the Maillardet automaton continues to write poems and draw pictures "after 200 years."

A $1.2 million museum exhibit uses fake toilets and real septic tanks to teach kids about what they should and should not eat, reports Laurel Graeber in the New York Times (11/11/11). The show is called EatSleepPlay,” and it’s happening at the Children’s Museum of Manhattan. “It’s a huge arts installation,” says Andrew S. Ackerman, the museum’s executive director. “We want it to be at the heart of behavior change, the way a great movie or a great book can be.” The museum’s own visitors were the inspiration, as Andrew and his staff “noticed that a surprising number” were kind of chubby.

The experience begins with walking "into a child’s smiling mouth, leading to a room representing the brain. Another chamber imitates the stomach, while a chain of brand-new septic tanks constitutes a crawl-through colon, a fitting marriage of material and idea." But, ultimately, the lessons are about making better choices. In one exhibit, a strand of lights representing neural pathways, is "connected to panels consisting of fake advertisements for products like potato chips and cigarettes. When children lift the panels to read the hard facts behind the cheery packaging, the lights go out." The message, says Andrew, is "that you can shut off the advertising messages to your brain."

Similarly, children can play a digital game where they navigate a beating heart through Central Park and can earn points based on choosing a healthy snack like an apple versus say, a cupcake. If they choose a cigarette, the screen dims, and Central Park is “plunged into what looks like nuclear winter.” The show includes a total of 70 exhibits, and, as might be expected, the most fun is left for last. It’s called the Royal Flush and it’s a fake toilet. When kids pull the handle, “it responds with images and explains in the warm but slightly brisk tones of a no-nonsense nanny, that what we excrete provides clues to our well being.”

The real problem with newspapers, according to Steve Jobs, was that nobody had time for them anymore, reports L. Gordon Crovitz in the Wall Street Journal (10/10/11). According to Gordon, Steve compared reading the newspaper to playing fetch with his dog. This happened during a meeting in which Gordon, then the publisher of the Wall Street Journal, was trying to sell Steve on the idea of running ads in the paper.

"I have a dog," Steve told him. "I love to take my dog to the park, throw him a stick and have him fetch it." He explained that whenever he did this, he wished he "could go toss a stick more often." It was just like that with newspapers: "Whenever I have the time to pick up the printed version of the newspaper, I wish I could do this all the time, but our lives are not like that anymore."

This was 2006, and Steve told Gordon that while he loved the Journal’s online edition, he thought that the print edition would be gone within five years. That didn’t happen, but of course Apple did produce the iPhone and iPad within that timeframe. Steve never bought any ads in the newspaper, either, but it wasn’t because he thought they were obsolete. "The only problem is that the Journal is a newspaper and so is printed on newsprint," he said. He simply did not like the way his products looked in newsprint.

A. Lee Fritschler thinks the US Postal Service “should be viewed not as a communications medium but as a broadcasting medium,” writes Randall Stross in The New York Times (10/2/11). He’s referring, of course, to the reality that the Postal Service is mostly in the business of “spraying messages” versus sending letters. “Stamped mail” has declined “47 percent since 2001″ while “standard mail” — the kind sent in bulk for marketing purposes — “dropped only eight percent over the same period.” Either way, the Postal Service is looking at losses, of course, to the tune of “a projection of nearly $10 billion for 2011.”

The American Postal Workers Union meanwhile argues that this decline is because of the recession’s effect on advertising budgets. “As the nation and the world emerge from economic stagnation, hardy-copy mail volume will expand,” the Union states on its website. However, this, says Randall “ignores the rise of the internet, and its ever-growing use for checking bills or sending payments.” Of course, the internet theoretically could help close the gap, given that “our use of package delivery services … has grown with e-commerce.”

But that doesn’t change the fact that the Postal Service is now “on the brink of default unless Congress comes to the rescue.” This raises the question of whether the US Congress should subsidize “the private interests that use the service to distribute advertising cheaply.” That’s not what happened in 1861, when the Pony Express was quickly shut down by its private investors once the transcontinental telegraph was in place. Now, 150 years later, Randall writes, “we have a delivery service whose rasion d’etre is rapidly vanishing before our eyes … and we are paralyzed, unable to decide what to do.”

"The most successful people tend to be those with the most failures," says Dean Keith Simonton in a Wall Street Journal piece by Sue Shellenbarger (9/27/11). Dean is a psychology professor at the University of California, Davis, who thinks that successful innovation means churning "out a very large number of ideas, both good and bad." As the "author of more than 500 studies and articles and 12 books on creativity and innovation," clearly he practices what he preaches. Judy Estrin, "a founder of seven high-tech companies and author of a book on innovation, agrees with Dean.

"Failure and how companies deal with failure, is a very big part of innovation," says Judy, who is careful to point out that she means failure from taking risks, not from being sloppy or lazy. Tor Myhren, chief creative officer of Grey New York, is encouraging such failure with a quarterly "Heroic Failure" award "for taking a big edgy risk." His first winner is Amanda Zolten, who brought her cat’s litter box — complete with buried poop — to pitch a kitty-litter company’s advertising business. She surreptitiously placed the box under the conference room table and then called attention to it to make the point that no one had smelled it.

This created "chaos in the room," and, as the account has not yet been awarded, Tor doesn’t yet know whether the idea was good or not. Either way, Amanda is glad she did it. "We achieved what we hoped," says Amanda, "which was creating a memorable experience." According to Judy, companies that court failure to promote innovation share certain traits, including mutual trust and a high tolerance for criticism. They also encourage "intelligent risk-taking," accept failure, promote open discussion and share information freely. As Gary Shapiro, president of the Consumer Electronics Association puts it: "Mistakes are okay — hiding them is not."

Many marketers have banned (the) most popular word in (the) English language, report Geoffrey A. Fowler and Yukari Iwatani Kane in the Wall Street Journal (9/22/11). That word is the article, "the," which usually precedes a noun — except among marketers, especially those marketing consumer electronics. As far as Jeff Bezos is concerned, the Kindle should only be referred to as "Kindle." Nintendo has the same policy for "Wii," as does Apple with iPod, iPad and Macintosh.

Apple has a history of grammatical innovation in its advertising, going back at least as far as "Think Different." The company "sometimes inserts personal pronouns to avoid leaving a jarring gap when it redacts an article. It describes iTunes on its website, for example as "how you play all your media on your Mac or PC." But, for the most part, articles are omitted in hopes of somehow elevating the brand. "When you can drop an article, the brand takes on a more iconic feel," says Allen Adamson of Landor Associates.

Others suggest that article-free branding makes a product seem more "personal and human," and positions, say (the) iPhone "as something that represents the user rather than a mere inanimate object." Seth Godin says marketers remove articles in an attempt "to turn brands into religions or cults." However, while some grammarians consider article-dropping to be "a disfigurement of the language," Mignon Fogary of Grammar Girl thinks it’s a lost battle. She concedes that it’s pretty hard to convince kids that bad grammar is a road to ruin when someone like Steve Jobs says the new iPod is the "funnest" ever.