• Viva La Vending

    Vending machines have been a part of the marketing landscape for many decades, yet the revenue generated from such devices has fallen by more than 10% since 2007. This is somewhat surprising considering how sophisticated some of these machines have become. Yet this element of "place" has evolved over the years as technology and social trends have changed. The 60's and 70's gave us the basic, manual cigarette-dispensing type of machine where you pull the lever and the pack slides out. We haven't seen one of these in a while, but they are still out there in rural areas along with those early electric soda machines that offered us five different choices of 12 oz. cans for 50 cents. This machine eventually evolved into much larger formats that offered a broader and deeper product selection as well as increasingly sophisticated dispensing technologies. Now, vending machines dispense such items as personal care products, electronics, works of art, and even live bait. Yes, live bait. Let's hope the power doesn't go out when one of those machines is operating!

    The advantages to using the convenient vending machine format for product distribution are many. It is true that start-up costs are high, since a cash outlay for hundreds of machines can be large, but operating expenses tend to be minimal. The machine simply needs to be filled, refilled, serviced, and repaired on a weekly or monthly basis so very little overhead is required. Vending machines are appropriate for many types of locations, and fit in places that a traditional brick-and-mortar format cannot. The vending machine does not have to be limited to store hours, and as we mentioned, the products offered have progressed beyond snackfood and beverages. So, why is this format contracting at such an alarming rate?

    The industry is in decline for a number of different reasons. Obviously food and fuel costs continue to increase as does the price point on the vending machine. Higher prices mean fewer customers with an elastic product such as snackfood. Also, it appears that, for some reason, many customers are reluctant to insert more than one dollar bill for products that now run $1.25 or $1.50. This issue has been partially addressed by adding a credit card component to newer machines, but there aren't yet enough of them to make a big enough difference, and these upgrades are prohibitively expensive for smaller operators. The social trend is heavily in favor of more people carrying less cash, as paying by credit for any amount purchase becomes more common. In addition, snacks and sodas are under increasing scrutiny for their lack of nutritional integrity, so many people avoid vending machines for this reason.

    Despite the bad news, it does seem that as vending machines further diversify their product offerings as well as adding the crucial credit card function, this product distribution format will make a nice recovery. Offering the right mix of products will become increasingly important as consumers become more accustomed to buying things other than snack food from these machines. Simply offering the same mix of sodas and snacks isn't going to cut it. It is also likely that the aforementioned dip in revenue has quite a bit to do with the economic downturn, as people cut back on "unnecessary" purchases. Therefore, an economic recovery, however anemic in nature, will bode well for the future. We look forward to the next generation vending machine and more product offerings such as live bait, and we are rooting for this format to survive the social shifts that have creatively destroyed so many industries over the past decade.

    DDS

  • What's In A Name?

    The long awaited breakup of Kraft Foods, maker of numerous packaged culinary delights, will be upon us soon as the company spins off its global snackfoods business later this year. This type of thing is not uncommon, as shareholders sometimes feel that a particular business unit will provide better return on investment if it operates independently. It seems that simply breaking the company in two isn't enough, as Kraft marketers have decided to take a bold step and rename the new entity something not called "Kraft". After all, any venerable brand is in need a bit of a "facelift" after so many years of being easily recognized by the vast majority of the population. Isn't it? Of course, this is thinly-velied sarcasm as a name change constitutes much more than simple tweaking of the brand identity.

    Revising a logo or making other changes to a recognizable brand is a common practice. Look at what Stabucks has done to their brand over the years. But, Kraft has taken it several steps further in deciding to rename the new global spin-off, "Mondelez". There is a line over the last "e" when you look at the term phonetically, but it's difficult to find that function on my keyboard, so I'll just leave it to the reader to try and pronounce. This "made up" Latin-derived term is a hybrid incorporating both "world" and "delicious", so it should be easy for those speaking Latin-based languages to understand and pronounce the term (according to a marketing rationale).

    Is this a good move? Probably not, for at least three reasons.

    1.  The first is that Kraft will be unable to leverage the brand equity it has achieved through decades of marketing. Creating a new name does not capitalize on the existing power of the Kraft name.

    2.  Many languages in the world such as Russian, Chinese and Indian aren't Latin-based, so the terms will not have the intended "global" meaning to well over half the planet.

    3.  The name is an attempt to make the brand name meaningful in that it suggests something about the kind of products the company offers. Unfortunately it's very difficult to pronounce. Think of how much money Geico spent teching us  that the name is not "Gecko" but "Geico". The company even still uses a gecko as a spokescharacter in part to overcome the pronunciation issues.

    The best bet for Kraft would have been to choose a name that didn't stray too far from the Kraft moniker thereby leveraging brand equity and alleviating confusion. It's easy to see why the diet candy company that gave us "The AIDS Diet Plan" (I swear!) decided to change the name of the product in the face of the AIDS epidemic, but in Kraft's case, if it ain't broke...don't fix it.

  • Pepsi Kicking Its Own Can?

     

    The "Cola Wars" are heating up once again. Coke is leading the way. And Pepsi CEO Indra Nooyi, a contoversial figure due to her foray into health and wellness and lack of focus on the core brand, faces a turning point. Sales of syrup-based, carbonated beverages have been steadily decreasing for several years, and with the business environment favoring ready-to-drink-teas, flavored waters, juices, and other alternatives, this trend does not show any signs of abating. Throw in a healthy dose of pending anti-junk food legislation and what you have is a clear message to the marketplace.

     

    Faced with mounting criticism about an underperforming stock price and after paring the workforce by 8,700 jobs, it appears that Ms. Nooyi has wagered her future on Pepsi Next, a new soda that is sweetened with high fructose corn syrup, but that has 60% less sugar than regular Pepsi. Hmmm...What is the play here? Why high fructose corn syrup when it is clearly a controversially "unhealthy" ingredient? Will a moderately-caloric soda finally break through? Wait. I have seen this movie before!

    In 2004 Pepsi launched Pepsi Edge, a mid-calorie soda which was immediately matched by Coca-Cola with its C-2 soda, and both are now ancient history. Two years was all it took. What's different now? Were those products introduced before their respective times? Is this an example of corporate amnesia? One would hope that Pepsi did its'market research to confirm the product and market concept. But, we know better, and Ms. Nooyi might just have to beat it on down the line if this one doesn't work.

    DDS

  • The Value of Email Marketing Programs

     

    A recent study asked Chief Marketing Officers the following question. "As CMO or senior marketing executive in your organization, how important are the following factors in helping you determine and communicate the value of email marketing programs?"

    The study found a shift in the factors CMOs use to determine the business value of an organization’s email program. In the past, post-click conversion metrics and email open and clickthrough rates were sufficient. Today, CMOs presume email to provide a financial return on investment. Furthermore, as a mature marketing channel in comparison to social media, CMOs look to monetize messages to measure their performance in meeting a company’s financial goals. Email metrics, such as opens, clickthroughs and bounces, are seen as key indicators of the overall health of the program, but not its true value. This request will be difficult to fulfill for a majority of firms, as 68% of surveyed marketers did not have a method for quantifying email marketing ROI. It is disappointing, but not surprising, that almost seven of ten marketers do not have a method to measure ROI. It is daunting for many organizations to find the right balance for maintaining control of the data, identifying outcomes, and having the resources required to manage the process.  For more insight into this study, see the Figure below. GB

    View Chart Online

  • Spring Break! Another Marketing Opportunity

     

    For those who are in college, or who have been to college, it is possible, maybe probable, that some of your most memorable times were at Spring Break.  Marketers hope to capitalize on these "good times" when people are not quite themselves and who are more willingly opening up their wallets and purses to dispose of unwanted cash. Marketing to students on Spring Break used to be simple: a company would set up a stand on the beach, hand out product samples and let the message spread itself. But now, Spring Break has become a stage for increasingly expensive and sophisticated advertising campaigns. Throughout March, companies like Unilever and Gillette are saturating Daytona Beach and Panama City Beach in Florida and South Padre Island in Texas with sponsored events, beachfront oxygen bars and ads on everything from pillowcases to shower curtains. Crest has created a tooth-brushing station on wheels that will appear outside nightclubs. Even the Army National Guard has a Spring Break presence: it is hoping to attract new recruits in South Padre with an obstacle course on the beach and recruitment officers passing out information. Marketers who establish a presence in Spring Break areas hope not only to reach the 18- to 24-year-old demographic, which is typically resistant to traditional advertising, but to associate their brands with the positive memories students have of their vacations. "The days of putting a branded tent on a beach and then handing out stuff is just dead," said Brian Martin, the chief executive of Vacation Connections, an event marketing firm based in Montclair, N.J., a division of Brand Connections. "It's becoming much more elaborate and much more extensive." Marketers will spend more than $75 million this month to reach students on Spring Break, according to research by Vacation Connections. The company specializes in reaching consumers who are involved in recreation — and most open to marketing messages, the company believes. "When you're in vacation environments, you tend to be a little more receptive to marketing messages because everything is slowed down," Mr. Martin said.

    Axe, made by Unilever, has introduced an estimated $2 million advertising campaign to promote its line of deodorant body sprays and shower gels aimed at young men. The company began advertising during Spring Break in 2003 with Axe-sponsored parties, but this year's campaign — "Axe Boot Camp: Spring Break Readiness '06" — is the biggest effort yet. The campaign, which was created by Bartle Bogle Hegarty in New York, aims to saturate consumers with constant marketing messages, beginning with buses plastered with Axe logos. In hotels, where Axe pays for access, there are room keys stamped with Axe logos and posters in lobbies and elevators. In guestrooms, ads for Axe products are on shower curtains and pillowcases. "This is the first time that we're trying to capture the emotional territory as well as the physical space," said David Rubin, the director of brand development for Axe. "It's a tough place to break through, and consumers have a lot of things going on. It's about having an idea and having an idea be relevant." The challenge, some marketers say, is penetrating the clutter of advertising that Spring Break has become. "It's sort of a veritable wasteland for logos and branding and that kind of thing, but not so much in engaging with that audience," Kevin Roddy, the executive creative director for Bartle Bogle in New York. "If it isn't done right, it's irritating, especially to this audience." Axe has gotten attention in the past with ad campaigns heavy on sexual undertones, but its spring break advertising is even more explicit. One ad offers "rules of engagement" on co-ed showering. Another gives tips on how to successfully proposition a woman in an elevator. And hotel guests are even given customized do-not-disturb signs that read "Mission in Progress." "It's all about trying to not just be a marketer, but to be an ally," Mr. Roddy said. (For the men, at least.)

    Part of the marketing push may stem from the growing purchasing power of the college market. A recent study found that the college market was responsible for more than $175 billion a year in consumer spending. And Spring Break has become a bigger business every year, said Gary Colen, the executive vice president of Alloy Media and Marketing. Mr. Colen said his agency would reach more than half a million college students on break this year. One client, Disney, is promoting a gymnastics movie that opens on April 21 by setting up equipment for students to practice gymnastics moves; Gillette is sponsoring beachfront lounges and in-room samples to promote its Venus Vibrance razors; and the vitamin supplement Emergen-C is providing samples in hotel rooms and bars to re-invent itself as a hangover remedy. "Brands are looking for ways to connect with college students in nontraditional ways, and spring break is a convenient way to reach a large mass of students," Mr. Colen said. "Spring break has always been a cornerstone opportunity for marketers to reach college students. Because they're hard to reach, marketers have to reach outside traditional tactics to reach them." GB

  • The Seven Common Mistakes in Retail Marketing

    Have you ever noticed mistakes being made by retailers?  They are quite common and most likely these mistakes are caused by one of the following errors.

    1.  Your marketing is all about me. Perhaps the most common (and most deadly) retail marketing mistake is this one. Everyone thinks their products, their services, their promotions, and their store are far more fascinating than they really are. It's only natural. To you, the most important thing in the world is - you! In reality, your customers don't really care that much about you, or your store, or your products.  Like you, what they care most about is themselves. The trick for you as a retail marketer is to stop thinking about what you offer and start focusing on what your customer wants.  It's the only way to build the kind of customer relationships that engender real trust, strong loyalty, and repeat business. If most of your outbound communication (emails, facebook posts, postcards, newspaper ads, etc.) is about your products, your services, your promotions, or your store and not about what's interesting, helpful, useful, beneficial, or entertaining for your customer, then you are making this marketing mistake.

    2.  You don't track your results. If you don't track the results of your marketing efforts, it's impossible to tell if they are successful, or to what degree they are successful. Of course, tracking your results takes forethought and planning. You have to be very clear about what your primary goals are for each of your marketing efforts - generate sales? attract new customers? re-activate inactive customers? build relationships?  What you hope to achieve affects the way you track your results and how you judge your success. Some marketing results are easy to track, some are a bit more complicated, but it's always worth it. With marketing, if you can measure it, you can manage it.

    3.  You're and "One and Done" Marketer. Most marketers do not consider repeating a successful event. Or they forget from year to year, month to month what they've done and what worked. One and done doesn't cut it. You spend too much time and effort getting your marketing right to only do something one time. If it is successful, keep on doing it again, and again, and again.

    4.  You're Unhapppy if it's not a Home Run. Who doesn't like to hit a home run?! It's fun. The problem is that if you expect all your marketing efforts to be a home run, you're bound to be disappointed - and you might stop swinging the bat. Most of your marketing efforts will be "singles." Not every email will get an 80% open rate. Not every in-store event will create a stampede of customers. Not every non-profit organization will be a top partner. Celebrate your singles! It's the accumulation of lots of singles that will, in the end, cause you to win the game. Any good sports fan will tell you it's not the team with the most home runs that gets to the World Series. Just keep hitting lots of singles and you'll end up with a lot more "jingle" at the end of the year.

    5.  You don't Adapt Good Ideas. There is no shortage of good - even great - ideas for attracting new customers, driving traffic, creating loyalty, increasing sales, etc., but you may suffer from a lack of marketing imagination. If you see an idea that's working for your colleagues in another industry, imagine all the possible ways you could adapt it for your business. And don't just watch other retailers. Watch your local realtors, chiropractors, builders, manufacturers, car dealers, dentists, or anyone else you can lay your eyes on. You may find some marketing gold if you can adapt ideas from other kinds of businesses. How do you think banks, restaurants, and liquor stores all ended up with drive-thru windows? While you're at it, don't forget to adapt your own good ideas! If the '12 Days of Christmas' promotion worked for you, adapt and do a Spring Fling Deal of the Day during the week of spring break. Who said the concept had to be used only at Christmas?  Who said it had to be 12 days long? Fashion week, Mother's Day, graduation, Father's Day, Back-to-School... what works for you? Adapt! 

    6.  You don't Pay Close Attention to the Details. It's the execution of the details that will often make or break your marketing efforts. Paying attention to the details is certainly what will take your retail marketing to the next level and is where you'll really maximize your efforts. 

    7.  Your Marketing is Scattered, not Strategic. You know who you are.  You do a little bit of this, a little bit of that, and a little bit of the the other. You try marketing tactic after tactic in hopes that some of your stuff will work. Your marketing efforts spring from a need for cash, rather than from a thoughtful, well-designed strategic plan. The good news here is if you try enough stuff, some of it will work. And if you repeat the stuff that works, you'll start to get some traction. Activity and effort is way better than doing nothing. But strategic activity and effort is lots, lots better. When your marketing is based on a strategic plan, all of your tactics work together to enhance each other and achieve your overall goals.  Each effort builds upon the other and the sum becomes greater than the parts.  GB

    Read more here.

  • Late Trades in Professional Sports: Not What Customers were Counting On

    Can you imagine paying for season tickets to the Chicago Bulls and midway through the season, they trade MIchael Jordan.  How about if the Lakers traded Kobe out from under the season ticket holders?  Though none of the huge superstars were traded in mid-season trading this year, last year, the Denver Nuggets lost Carmello Anthony, and this year they lost Nene.  Now, the season ticket holders have nearly half a season of tickets left and the team is not the same as it was when the decision to purchase the tickets was made.  Is this fair to the customers of this service?

     

    True fans of professional sports know that they form affinities for all players on a team.  When a member of the team, especially an important one, is lost to a trade that most fans do not understand or even agree with, it seems unfair and has the potential to make these consumers less that satisfied for the remainder of the season.  If the trade turns out to be wise and the team gets better because of it, the consumer may eventually "forgive" the team and return to a state of satisfaction.  If the teams gets worse because of the trade, however, it is possible the consumer may become so disgruntled, he or she will not choose to buy season tickets the next year.

     

    In the constant quest to become a playoff team and with all the financial concerns of these professional sports franchises, it sometimes seems that the customers are forgotten.  It may be a good move for these teams to let customers play a bigger role in decisions of the team so they could feel more involved and would be less likely to become dissatisfied when the mid-season trades come along.  GB

  • A Person as a Brand

    Have you ever Googled yourself?  Every once in awhile, I have tried it.  I have appeared anywhere from tenth on the Google list to fourth, which is my highest listing.  Why do I even appear on Google?  I have several publilcations and conference presentations that for some reason causes my name to show up fairly early on a Google search.  I often compare myself to my brother, and most of the time, he is listed sooner than I am.  This could be because he has a more unique name than I do (I like to think this) or it may be that he has actually made had better accomplishments than I.

     

    If I had an even more common name like Tim or Michael, you would think that I would likely show up even further down the Google list.  That is, unless my last name is Tebow or Jordan.  Tiger and Peyton are unique names also, but even if they weren't, you would find them on the top of any Google searches.  So what makes this difference?  In these professional athletes' cases, it is their accomplishments.

     

    I just happen to live in a city that features one of the NFL teams currently vying for Peyton Manning.  I also live in a city that already has Tim Tebow for its team's quarterback.  Denver, and the rest of the world, were so high on Tebow during last football season, I would have thought that nothing could ever change that, that we would be loyal to Tebow as long as he continued to be a decent person and represented the Denver Broncos well.  In this current atmosphere of the Broncos trying to get Peyton Manning on board, I've discovered that most residents of the Denver area are really more loyal to the Broncos than they are to any single player.  If Manning is perceived to be better for the Broncos than Tebow, most Broncos fans are all for having Manning come.  Though we wish Tebow all the best, if we get Manning, we don't seem too concerned about where Tebow ends up.

     

    Peyton Manning has had a much longer time to better develop his personal brand.  It is based on much success.  Tim Tebow, on the other hand, has basically one semi-successful season on which to build his brand.  Though his football jersey was the number seller last season, he true value and further establishment of his personal brand will be more and more based on his performance.  Good luck to both Petyon and Tebow, and to all of us who are trying to establish and maintain our personal brands as we forge our professional paths.  GB

  • High-End Fashions at Mid-Level Stores?

    Target successfully tried Ixaac Mizrahi, Ed Hardy, and Missoni.  You can buy a Coach purse at Costco.  How about Vera Wang (Simply Vera) in Kohl's?  Now it's Rock & Republic in Kohl's.  Unlike the strategies for some of the other high-end brands, Rock & Rebpublic has decided to be sold exclusively at Kohl's because of the economy and its bankruptcy in 2010.

    The jeands, that used to sell for upwards of $250 at places such as Neiman Marcus and Nordstrom are now sold at Kohl's -- the mass retailer known for its great return policy and frequent sales.  Kohl's is now the exclusive retailer of Rock & Republic products, selling them at attainable prices while touting the brand as edgy and hip with a rock 'n' roll aesthetic. It's not Kohl's first collaboration with a former high-end brand -- the store is the exclusive retailer of Dana Buchman -- but it may be the splashiest. The store debuted the line -- which has created a buzz among fashion watchers -- earlier this month at a New York Fashion Week party attended by celebs like Ashlee Simpson and Zoë Saldana. The jeans, just as they did before Rock & Republic succumbed to bankruptcy in 2010, feature back pockets decorated with heavy stitching and, in some cases, rhinestones in the shape of an "R," which stands not for "rump," but for "Rock & Republic."

    The initial sales results look very positive for Kohl's Rock & Republic line and since that is the only place you can buy the brand, the fact that it is sold in Kohl's has little impact on its brand image.  Other brands that have made versions to be sold in these non-high-end stores may see different results.  For example, Missoni apparel was avaliable for only a short time in Target and caused such problems with Target's website and sold out so quickly, it is possible that both reputations - Target's and Missoni's - were damaged.  The Vera Wang brand that was created exclusively for Kohl's, on the other hand, was designed to be a permanent Kohl's brand and is kept distinctly separate from the higher-end Vera Wang lines, so it is possible there is no negative influence on brand image and company repuration. GB

    Read more here.

  • March Madness Marketing

    Nearly anyone who has been to college, grew up in a college town, heard there is something like college, or has a beating heart (did I miss anyone?) is at least somewhat interested in March Madness. The first full day of the men’s NCAA basketball tournament tipped off yesterday, and fans across the country are announcing their plots to ditch work duties and take in the games. Facebook posts describe schemes of working from home and rescheduling those pesky conference calls. On Twitter, a quicker solution is required: Some suggest taking a sick day for March Madness. For decades, managers have contended with employees taking extended lunch breaks at sports bars so that they can immerse themselves, if briefly, in March Madness. They’ve put up with workers using company computers — and bandwidth — to view games, check scores and update their bracket status. The explosive growth in smartphones and tablets over the past two years has been a game-changer. Now the tournament’s live-streaming games are accessible even to office workers who have sports and entertainment sites blocked by employers, as well as teachers, bus drivers, retail workers and others who normally aren’t in front of a TV or computer during the workday. Those connected consumers are able to tap into a sports smorgasbord: 68 teams playing 67 do-or-die games over a three-week period for college basketball’s biggest prize. With 32 states represented in the tournament this year, most Americans shouldn’t have trouble finding someone to root for.

    This is the one event, other than the Super Bowl, that even casual fans and non-fans have a vested interest in. But the Super Bowl is a singular event played on a Sunday. Many of the initial NCAA games tip off before many Americans have even hit the lunch hour, a too-tempting distraction for those officially on the clock. Employers are well aware of the lure. Many thwart access to the games to keep productivity up. Others, believing the camaraderie built during these days make for more collaborative workers, organize game-viewing parties, school spirit days and even free-throw shooting contests. And those office pools? Slightly more than half of human resource professionals say such bracket competitions are good for morale, according to a 2010 report from the Society for Human Resource Management.

    Given all the media available to consumers during this exciting time, the opportunities for marketing, once almost exclusively limited to TV air time, has expanded exponentially. March Madness is rooted deep in popular culture, and so is marketing during March Madness. Companies like Coca-Cola and Applebee’s create marketing campaigns around it. Even President Obama makes his bracket picks public. (This year, he has the North Carolina Tar Heels winning it all.) And every university whose team is playing gets an opportunity to market itself.  Consumers beware! Here comes another barrage of marketing attemps targeted at you!  GB

    Read more here.

  • Daylight Savings Time and Marketing

     

    Whew!  I'm tired! This daylight savings time change in the Spring really gets to me. It's Wednesday, four days after we have "sprung forward" and I'm still dragging. Ask anyone if they are tired on a routine day and you will get a resounding “Yes!” but this week we are all functioning on a sleep deficit of at least one hour. A recent artcile reports that the Monday and Tuesday after moving the clocks ahead is associated with a 10 percent increase in the risk of having a heart attack. This sleep debt also increases vehicle accidents by 6 to 10 percent due to “drowsy driving." According to the National Sleep Foundation, “60 percent of adult drivers (about 168 million) say they have driven a vehicle while feeling drowsy in the past year and more than one-third, (about 103 million) have actually fallen asleep at the wheel. Four percent (about eleven million) admit they have had an accident or near accident because they dozed off or were too tired to drive.”

     

    Despite these recent findings about the health risks of daylight savings time, we can expect marketers to find the silver lining in the dark cloud.  A report suggests that coffee, sugar and cocoa futures  are up due to the start of Daylight Savings Time in the United States. Demand is likely to have gone up for any product that might be defined as early morning products and whose function might be to ease us into the day.  If a company has such a product and does not take advantage of the switch to daylight savings time in the spring, it is likely missing a great opportunity. GB

  • Online Dating is Mainstream Now

     

    In today's hectic world, where many Americans are working overtime, or two jobs, and otherwise have so many things taking up our valuable time, how do you ever meet a potential mate, or even anyone to date? A recent study of more than 11,000 people revealed that one in six marriages are now between people who met through an online dating site – more than twice the number of people meeting at bars, at clubs and other social events combined.  Additionally, the study showed that one in five new committed relationships, including marriages, are between people who met on an online dating site. The research reveals the number one way people meet their spouse is through work or school, followed by friend or family member.  People who meet their spouse through an online dating site is now number three, surpassing bars, clubs, and other social events. Online dating is here to say and it would be difficult to not consider it mainstream now. The following details the way people have met their spouse over the last three years:

         1) Through work/school                                 36%

         2) Through friend/family member                26%

         3) Via Online Dating site                               17%

         4) Through bars/clubs/social events          11%

         5) Other                                                               7%

         6) Through church/places of worship           4%

    "The world has changed," said Greg Blatt, CEO of Match.com.  "We get married older, we work longer hours, we move around more, we're generally busier.  These changes have put pressure on the way we traditionally have met our significant others.  Luckily, with these changes has come an increasing openness to doing new things.  Online dating has grown so much in part as a response to these societal changes, having become the third most important way we meet our significant others, even though it didn't even exist 15 years ago."  The study also demonstrates how integral online dating has become in American social life in other ways.  The findings include the following:

    1 in 5 - Number of current singles who have dated someone they met on an online dating site

    1 in 5 - Number of people recently in a committed relationship who met their significant other on an online dating site

    Finally, the study reveals that Match.com is by far the most successful online dating service, having led to approximately twice as many dates, relationships and marriages as its closest competitor. "The studies confirm what we have known for quite some time – Match.com is the clear leader in online dating," said Blatt. "We don't overpromise.  We don't tell people we've figured out the secret to human happiness.  And we don't say we're the answer.  We're simply a new and effective way to do an old and important thing, which is meet great new people with whom you really have a chance of hitting it off.  If you're single, there is no good reason not to join Match.com.  It's just something a single person should do in addition to all the other things you do to meet people and put yourself in a position to find romance."

  • Advertising Expenditures and the Economy

     

    Total advertising expenditures increased 0.8 percent in 2011 and finished the year at $144 billion, according to data released today by Kantar Media. Ad spending during the fourth quarter of 2011 dropped 1.0 percent versus the year ago period, the first quarterly decline since the end of 2009. Since reaching a post-recession peak in Q3 2010, advertising growth rates have slowed sequentially for five consecutive quarters. 

    Television continued to lead advertising expenditures in the fourth quarter. Network TV ad expenditures jumped 7.7 percent year-over-year and were helped by strong pricing for football, a baseball World Series that went the maximum seven games and the launch of The X Factor. The rate of Cable growth eased during Q4, finishing at +2.4 percent as higher demand from restaurants and retailers was offset by reductions from consumer packaged goods. For the full year, Network TV decreased by 2.0 percent while Cable rose 7.7 percent. Spanish language TV ad spending surged 19.1 percent in the fourth quarter. For all of 2011, the segment increased 8.3 percent. Syndication TV benefitted from higher spending by department stores and health and beauty brands and saw expenditures soar 11.0 percent in Q4. Full year spending advanced by 15.4 percent. Spot TV expenditures fell 8.7 percent in the fourth quarter, but the more significant indicator was that November and December spending were each down, despite easy comparisons against diminished, post-election spending volume of a year ago. Full year Spot TV spending dropped 4.5 percent.

    Advertising in other media were also up and down.  Free Standing Inserts achieved healthy gains in the fourth quarter with spending rising 3.0 percent. Although manufacturers have been distributing fewer FSI coupons, retailer promotion pages have increased significantly and this contributed to the improvement. Ad expenditures for measured digital media declined in the fourth quarter. Paid Search budgets were 6.4 percent lower versus a year ago with continuing reductions from financial, insurance and local service advertisers. Display investments decreased 5.9 percent in Q4, dragged down by smaller budgets from auto manufacturers, telecom providers and travel companies. For the entire year, Paid Search declined 2.8 percent and Display increased 5.5 percent. Magazine ad spending eroded at year end. Consumer Magazines declined 5.2 percent in the fourth quarter due to deep cutbacks in auto, food and pharmaceutical advertising. Total year expenditures were level compared to prior year. Outlays in Sunday Magazines fell 9.8 percent in Q4, the sixth consecutive quarter of year-over-year declines, and were down 7.2 percent for all of 2011. Local Newspaper ad expenditures fell 3.9 percent during the fourth quarter, hurt by the reallocation of retailer advertising budgets to other media channels during the key holiday shopping season. Full year spending was 3.8 percent lower. The losses in Newspaper spending are consistent with reductions in the amount of space sold. The pace of spending in Radio media also sagged. Local Radio expenditures were down 3.8 percent and National Spot Radio plummeted 13.9 percent in the fourth quarter. The telecom, financial service and automotive categories were prime contributors to these quarterly decreases.

                Percent Change in Measured Ad Spending(1)
            MEDIA SECTOR                                           4th Quarter         Year
            - Media Type                                          2011 vs. 2010    2011 vs. 2010
            (Listed in rank order of full year 2011 spending)
            -------------------------------------------------
            TELEVISION MEDIA                                          3.1%             2.4%
            -------------------------------------------------    -------------    -------------
                                                                      2.4%             7.7%
               - Cable TV(2)
            -------------------------------------------------    -------------    -------------
                                                                      7.7%             -2.0%
               - Network TV
            -------------------------------------------------    -------------    -------------
                                                                      -8.7%            -4.5%
               - Spot TV(3)
            -------------------------------------------------    -------------    -------------
                                                                      19.1%            8.3%
               - Spanish Language TV(4)
            -------------------------------------------------    -------------    -------------
                                                                      11.0%            15.4%
               - Syndication - National
            -------------------------------------------------    -------------    -------------
            INTERNET MEDIA                                            -6.2%            0.4%
            -------------------------------------------------    -------------    -------------
                                                                      -6.4%            -2.8%
               - Paid Search(5)
            -------------------------------------------------    -------------    -------------
                                                                      -5.9%            5.5%
               - Display
            -------------------------------------------------    -------------    -------------
            MAGAZINE MEDIA(6)                                         -4.9%            -0.4%
            -------------------------------------------------    -------------    -------------
                                                                      -5.2%            0.0%
               - Consumer Magazines
            -------------------------------------------------    -------------    -------------
                                                                      -0.8%            0.8%
               - B-to-B Magazines
            -------------------------------------------------    -------------    -------------
                                                                      -9.8%            -7.2%
               - Sunday Magazines
            -------------------------------------------------    -------------    -------------
                                                                      -3.8%            -2.9%
               - Local Magazines
            -------------------------------------------------    -------------    -------------
                                                                      25.1%            24.9%
               - Spanish Language Magazines
            -------------------------------------------------    -------------    -------------
            NEWSPAPER MEDIA(7)                                        -3.7%            -3.7%
            -------------------------------------------------    -------------    -------------
                                                                      -3.9%            -3.8%
               - Local Newspapers
            -------------------------------------------------    -------------    -------------
                                                                      -3.9%            -3.6%
               - National Newspapers
            -------------------------------------------------    -------------    -------------
                                                                      10.4%            1.9%
               - Spanish Language Newspapers
            -------------------------------------------------    -------------    -------------
            RADIO MEDIA                                               -5.6%            -0.6%
            -------------------------------------------------    -------------    -------------
                                                                      -3.8%            0.6%
               - Local Radio(8)
            -------------------------------------------------    -------------    -------------
                                                                     -13.9%            -5.4%
               - National Spot Radio
            -------------------------------------------------    -------------    -------------
                                                                      4.3%             2.7%
               - Network Radio
            -------------------------------------------------    -------------    -------------
            OUTDOOR                                                   1.1%             6.5%
            -------------------------------------------------    -------------    -------------
            FSIs(9)                                                   3.0%             -4.3%
            -------------------------------------------------    -------------    -------------
            TOTAL                                                     -1.0%            0.8%
            -------------------------------------------------    -------------    -------------
           


    Source: Kantar Media

  • Obsession With Dogs

    Ever since early people domesticated the wolf and brought the furry creatures into their caves for protection and efficiency in hunting, dogs have been an integral part of our lives. We bring our dogs to restaurants, on airplanes, carry them around with us in our handbags. There are dog parks, dog hotels, doggy day care centers, dog weight loss facilities, and of course we have "the dog days of summer". Advertisements have been using dogs since before there were advertisements. And it seems that there are an inordinate number of craft beers featuring doggy nomenclature. Dogs are simply everywhere.

    But all dogs aren't created equal, especially in minor league sports. And these teams aren't just fascinated with dogs, but with dogs that don't exist. Throw in some improper spacing, spelling and use of singular nouns, and it's enough to make a grammarian cringe. Let's review some of the offenders:

    The Portland Sea Dogs (not a real animal, just a salty old sailor)

    The Charleston River Dogs (not a real dog, just a guy living in a van down by the river)

    The Batavia Muckdogs (Where the heck is Batavia?)

    The Phoenix Desert Dogs (the marketers really broke the "creative bank" on that one)

    The Lincoln Saltdogs (If this is Lincoln, Nebraska I'm not sure I get the salt reference)

    The San Diego Surf Dawgs (radical, dude)

    Ah, marketers have indeed gone wild! There is also a very good chance that marketers on each of these teams has made an appropriate tie-in to concessions. Shouldn't the hot dog sold in the Phoenix stadium be called a "Desert Dog"?

    DDS

  • If You Build It They Will Come

    The famous line from Field of Dreams isn't necessarily true in marketing, as there should be a need for what it is you are building, or they aren't likely to come. But in the world of professional sports venues, it is an imperative. In other words, if a city with an aging stadium wants to keep its team, regardless of the league, it must build a new facility (or significantly remodel an existing one). The risk is the loss of the franchise, which would likely move to a city that would be simply delighted to build a venue and spend copius amounts of money for many years on its fledgling team. In the case of Kansas City's Sprint Center, it is a facility waiting for a team. And unfortunately, small market KC may have to wait quite a while for that to happen.

    The current crisis is in Sacramento where the Kings (formerly of Kansas City and its ancient Kemper Arena) have been playing mediocre basketball for the past 25 years. Revenues aren't bad, so it's not necessary to move the team, but rival cities with promises of sparkling-new digs can make rather attractive offers and the franchise can use that interest to negotiate a better deal with the city. Since 1995, smaller venues have been funded largely from public tax sources, but in larger markets such as New York and the planned facility in San Francisco, have been funded with private dollars. This is a good thing since every government entity I can think of is swimming in red ink, and most people find tax increases unappealing.

    Since Sacramento is not in a large market and has competition only hours away, keeping the team can be a herculean effort on the part of city officials and fans. But it can be done, especially if your mayor is a former NBA player. The ownership is expected to fund about $70 million, which is refreshing, but the facility is expected to cost upwards of $400 million, so someone must find the money. Officials have been mum on the details, but have promised a new arena by 2015.

    St. Louis is another city struggling to keep its team, the NFL's Rams, a franchise that migrated from Anaheim, CA after being evicted from the LA Coliseum a few decades ago. Let us see what transpires.

    DDS

  • Mmmm...Iced Tea-Flavored Beer

    Yes, you heard it right! It's just what you've been asking for! Or is it? MillerCoors has taken a bold step in brand extension by introducing iced tea-flavored beer, called Iced T, to the unsuspecting masses, Why would they do such a thing? One would think they would do concept testing and focus groups to insure that the idea is not completely crazy. And how else can MillerCoors leverage the brand equity built into the aging Coors Light Brand, except by implementing a  clever brand extension? So the brewer added a flavor to the Coors Light product, and in thie result is a refeshing, 4% alcohol, fizzy, iced tea-flavored beer. Sound good to you?

    It will be interesting to see whether or not MillerCoors attempts to engage in target marketing, and we all wonder what types of people would drink this beverage. Is it a summer drink? Is it for women? How about golfers? Or perhaps the company will simply throw it up against the wall and see if it sticks with the mass market. The question will be, "Is it a beer, or is it a Malternative?" Think Jack Daniels' Iced Tea or Mike's Hard Lemonade. These beverages are made with much of the same equipment as beer so it's easy to offer a carbonated version of just about any cocktail.

    And this is not the first time we have seen a movement towards the flavoring of beer (not to mention "fruiting" the beer which is a Man Law violation). Raspberry Wheat was very popular for a few years in the mid 90's and it went so far as to feature jalapeno-flavored beer. Undrinkable swill, that was. But that fad petered out quickly and brewers went back to creating more traditional products. MillerCoors has distribution, so we must not underestimate the "power of place".

     But iced tea flavored beer?  Maybe they should get Ice-T to endorse the brand if there is a fit. Hmmm... That might actually work...

    DDS

  • Malls Facing Challenges

    You have probably noticed that our shopping malls, once the Cadillac of the retail environment, ain't what they used to be. Out of 1,000 malls, described as indoor shopping centers of several hundred thousand square feet or more, fully one-third are considered "more vulnerable" by real estate analysis firm Green Street Advisors. Only 142 of these are considered "strong malls". This is a lot of meat in between two pieces of bread, but the bottom slice is feeling a bit heavy, and this is not a good sign  It's easy to blame the poor performance of the nation's malls on migration to the Internet, but this can only be one small part of the problem, as evidenced by e-commerce representing only eight percent of total retail sales. Other factors might be in play: 

    Age:  Many malls are simply at the end of their life cycles, built many decades ago, and needing to be demolished since remodeling is generally considered cost prohibitive.

    Outdoor Formats: Many indoor malls are shunned in favor of more intricately planned outdoor formats, such as the 29th Street Mall in Boulder, CO, which relaced the venerable Crossroads Mall a few years ago. The study mentioned only counts "indoor" formats as malls. Perhaps this should be changed.

     

    Big Box: Even though the big box stores have peaked in popularity and are finally getting smaller, the proliferation of this format over the past few decades has taken its toll on the mall format.

     

    Economics: Other formats are much cheaper for consumers than are most of the specialty retailers in malls, which are small and cannot do the volumes of larger stores, especially given the dwindling traffic.

    New Malls:  Large, new malls tend to steal customers from older malls, such as is the case in Longmont, CO's Twin Peaks mall. Many regional options now exist that were not there when the mall was built decades ago. 

    I'm sure you get the picture, and can probably add a few of your own. This should not be worrisome for the economy in general as these retail dollars tend to migrate from format to format. It's the retailers who should be worried as the pressure is on to add value in this age of hyper-competition.

    DDS

     

     

  • Retail Reengineering

     

    There was an interesting article in The Economist, a centuries-old must-read weekly publication, sounding the alarm that many retailers have failed to adapt to the transformative and long-term realities of e-commerce. "But, everyone is advertising and selling stuff on the web," you say. Not so fast.

     

    Back in the mid-1990's, the overexuberant seers of the Silicon Valley oversold how quickly the Internet would change both the advertising profession as well as the world of retailing, prognositcating that most business would by now be conducted online. It sounds preposterous now, but the frenzy of change did indeed put many business models into a tailspin as most everyone endeavored to capitalize on the rapid and inevitable migration to this medium.

    But wait. As of 2012, the share of both advertising and retail sales that have migrated online stand at about 10% each, although both areas have achieved rapid gains in the past seven years. This is not exactly what the author calls rapid market share attainment, but the article does make some interesting predictions about the future. Retail sales will continue to migrate online and the advertising will follow. Brick and mortar stores must not only offer an extensive product mix online, but integrate the e-store with the physical distribution sytems and retail outlets. The article points out that simply too many retailers have not yet adequately integrated these functions, resulting in lower online store performance. In addition, retailers must understand that items which consumers like to buy sight unseen (with ready substitutes), such as CD's, DVD's and most repeat purchases, are better sold online while products that demand more of our five senses (and shares of our wallets) will likely perform better in a physical environment.

    In addition, increasing pressure for retailers to improve the in-store (and online) experience will result in a revolution in store formats, as well as a much needed vetting of the unfit to compete. All of this is good for consumers of course.

    DDS

  • This Just In: Cigarettes...Bad

    The plan by the Food and Drug Administration to force cigarette manufacturers to add graphic images to their packaging has been blocked by a federal judge. Yes, cigarettes cause cancer, but the question over how far is "too far" in terms of regulation is an interesting aspect of the legal and regulatory environment. Particularly since the federal government is looking at sweeping regulations with regard to food ingredient content in an effort to stave off the obesity epidemic.

    So if only 20% of the population smokes, why is this a big deal? Free speech is the issue, and the judge ruled that the tobacco companies were very likely to win the case on constitutional grounds, probably foiling the FDA's plans to implement these new packaging rules in September, as the agency has planned.

    The rules do seem rather Draconian, forcing images of people in coffins, blowing smoke out of holes in their necks, and other very disturbing images. Warnings are already clearly marked and the product has become prohibitively expensive for many despite its highly addictive nature. Should makers of junk food products be forced to allow photos of morbidly obese people on their packaging? To me it amounts to the same thing. Lots of products are unhealthy and there has to be limits on what the government can do to prohibit people from consuming them. Let's see what happens.

    DDS

  • NASCAR's Washing of the Green

    Going green is big business, and after so much success in the marketplace, it seems like everyone wants in on the action. After all, most people would rather buy products from companies that are socially and environmentally responsible than from ones that aren't, so now it's NASCAR wants you to believe that it too is a green organzation. How's that? You see, being green means that your goods and services are better for people and the natural environment, therefore it should be no problem for people to believe that auto racing can also be green. No? The authors are having trouble buying this as well, as the sport is about as resource consuming and polluting as a sport can get. 

    This phenomenon, known as "green washing", occurs when an organization gives the impression that it is green through marketing communications, but has done very little or nothing to adjust their business models to match its claims. Because the U.S. government has not legislated against this practice, there is much abuse with the terminology, and little incentive for companies to actually endeavor to manage waste, emissions, energy, water, and many other areas that would be fundamental address in any "greening" program. It's easier just to lie about it, which is obviously unethical. The authors have learned after decades of observing the sustainability trend, that what you don't do is say you are green when it is easy to prove that you are not. It simply doesn't work.

    So, how is NASCAR exploiting this trend (and we do mean "exploiting")? Three years ago the governing body decided to create a separate sponsorship category called "NASCAR Green". Simply put, a company can pay NASCAR to sponsor the sport and, if the company demonstrates some modicum of commitment to green business (we hope that NASCAR is at least discerning in this respect), it can be a part of this special category. NASCAR has done nothing itself to make its model more environmentally sustainable and socially responsiblt and it hopes that by attracting green organizations, it too can appear greener. This is old school 1990's-style greenwashing at its finest, and it seems that brands are reticent to join this effort since NASCAR has only two sponsors after three years. You see, branded products (the lifeblood of sponsorships) don't want to be accused of greenwashing themselves, so many are hesitant to associate with an organization that clearly isn't green.

    So, is NASCAR making attempts at becoming greener? There is no evidence of this whatsoever. Not in any sense of the word. And this green "pandering" only serves to make consumers more skeptical of green claims that sustainable companies make, and as is the case with so many things, a few bad bananas ruin the bunch.

    DDS

  • Oscar's Appeal

    This column would be remiss if we didn't mention something about the Oscars, also known as the Academy Awards, which aired last Sunday. Sure, the demographic for this program skews a bit older and they do have trouble finding growth within the coveted 18-49 demographic, but 30 million Americans still tuned in and advertisers such as JC Penny rejoiced. But, there is trouble in paradise.

    It seems that movie receipts have been flat or falling for the past few years despite (or perhaps partly due to) a rise in ticket prices. If you watched the Oscars, this was painfully obvious, as a large amount of content was devoted to communicating to the viewer the unmitigated joy of seeing movies in the theatre, rather than at home or not at all. There was so much of this gratuitous pandering that this author felt a little sorry for the industry. Indeed, this column has addressed the theory that declining movie quality and not the proliferation of home entertainment systems may be the primary cause of this phenomenon, but certainly both factors (as well as the increase in ticket prices) are heavily involved.

    So, let's looks at this year's line up. In 2012 we will see the final chapter of Christopher Nolan's Batman saga as well as the merciful conclusion of the hackneyed Twilight series. We will also see the first of two Hobbit films from the Lord of the Rings franchise as well as Ridley Scott revisiting his Alien series (again) in Prometheus, and another each of the Bourne and Spiderman series. If all of this doesn't get you fired up to go to the movies, then perhaps you might appreciate new installments of the Men in Black, The Expendables, GI Joe, Madagascar, Ice Age, and American Pie franchises. The hits just keep on coming! And we can't wait for the adaptations of popular novels such as Life of Pi, The Hunger Games, and World War Z.  Finally, we get to watch Leonardo DiCaprio probably butcher the Fitzgerald classic, the Great Gatsby. Many of us now have an indelible picture of Leo in our minds as J Edgar Hoover, and this is not a good thing.

    So, here we go again. Higher prices, lower quality, and an utter disregard for innovation are the buzz words for movies in 2012. Perhaps they will re-release a number of classics in 3-D, so at least we can go to the movies. Otherwise, it's a 50-inch HD with surround sound for many of us, and the movies we watch won't necessarily be the ones shown in the theatres. Better yet, go outside and play some basketball!

    Is this a dying medium? No. It is just in need of a major makeover, and it will be interesting to see how long it takes for this to happen.

    DDS