• Advertising's Sweet Spot

    Digital or traditional? How do you prefer your advertising? Most ad experts would agree that this isn't really an "either/or" proposition, and smart marketers must endeavor to effectively integrate brand messaging across multiple mediums. A more contemporary approach would almost certainly include the Internet, but also more traditional mediums such as advertising, sales promotion, PR, direct marketing, personal selling, and perhaps even a sports/entertainment sponsorship or two. And as far as the Super Bowl is concerned, pairing the coveted TV ad with a robust digital strategy is the best way to get the most return on investment from the marketing program.

    Many marketers call this multi-pronged approach "Integrated Marketing Communications". In the case of the Super Bowl, the $5 million ad "acts as a rock in the pond to stimulate these other activities, if done well", according to one expert. And this isn't just true for the Big Game, but also rings true for most types of brands in any marketing situation. Relying solely on social media, for example, might be an inexpensive way to approach marketing strategy, but has very obvious limitations. And relying on traditional ads, such as those found in broadcast and print media, is an equally myopic approach that ignores the migration of so many eyeballs to online formats. The best approach it would seem involves using one platform as an anchor and then using other mediums to support that platform. Of course the right combination depends on so many factors, but smart marketers know that finding an effective formula is what they must do to rise above the marketing clutter and meet marketing objectives.

  • Manning, Beyonce Boost Brands

    Sometimes a celebrity need only utter a few words, and he or she can move an entire market. We all know about the power of celebrity endorsers, but what happens when a famous person makes a casual mention of a brand as Peyton Manning did during this past Super Bowl. Experts valued his famous mentions at almost $14 million, mostly a function of the size of the audience, and although he didn't get paid for the brand integration, Mr. Manning does own a Budweiser distributorship or two in Louisiana. And now Beyonce is getting into the act.

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    But we aren't talking about her controversial Super Bowl act, but rather the reason she did the Super Bowl gig in the first place. These folks do it for the publicity and get paid nothing for their performances, so it was no surprise when she released the song  "Formation" to coincide with the event. In that song she makes mention of taking a man to Red Lobster after sexual relations, and so far sales for the chain have surged 33%. Wow. Both brands are obviously thrilled at these "organic" brand mentions, but it does beg the larger question as to the authenticity of behaviors and attitudes held by famous people that many in our culture revere so much. Another question is whether or not authenticity is truly an important variable for consumers, despite the fact that so many consumers (especially Millennials) say it's hugely important. Does it really matter that Peyton is a Budweiser owner when he "casually" mentions the brand? Should he have to disclose his relationship as is the rule in endorsement advertising? Could Beyonce soon be a part-owner of one or more Red Lobsters? What is to stop organizations and celebrities from entering into more casual, informal relationships unbeknownst to consumers?

    The issue of what actually constitutes advertising and what is simply free publicity is becoming too loud to ignore. Product placements are everywhere, ads have crept into news stories in the form of "native advertising", and celebrity endorsements are becoming increasingly complex. But the law states that endorsers must disclose their relationships. Beyonce likely did not intend to juice Red Lobster sales, but we don't really know for sure. Manning's mention was not the first time he had done so, and he is financially invested in the the company, so his intentions are certainly in question. As for a future with increased celebrity/brand integration, the issue of what constitutes an advertisement versus what is simply an exercise in the First Amendment is becoming ever more important.

  • Fighting For Zero

    One of the ways a marketer can differentiate a product is through branding, and one of the most important components of a brand is the brand name itself. So when marketers come up with something special, it is always best to try to register it as a trademark so that other marketers can't use it for themselves. Coca Cola thought it had one such name when it attempted to register the common English word "zero" for it's Coke Zero product, which has primarily targeted men and might ultimately be the last hope for growth in the diet category.

    Diet sodas, as a category, have been tanking for more than a decade, in part due to the public perception of the sweetener aspartame. This perception has led some product developers to replace the ingredient, but now it appears that the word "diet" might now have negative connotations with consumers. And while Diet Coke revenue decreased by 6% last year, revenue for Coke Zero increased by the same amount. One can see why Coke would want to protect this brand. But attempts to do so have been unsuccessful thus far, however, as authorities in both Canada and the U.K. have blocked Coke's attempts to get rights to use the word exclusively after successful arguments made by Pepsi. It seems obvious that since they were the first to use the word, and it should be theirs to trademark, but trademark law is very complex. Dr. Pepper now has a "zero" named product, and U.S. authorities will finally rule after 13 years. A judgment in favor of Coke would allow marketers to more easily sue imitators and would likely deter such imitation in the first place, at least among companies in the world's more law-abiding nations.

    This is a very big deal since the diet, category is tanking across the board. This trend is especially ironic in a world that continues to get fatter, but there are plenty of substitutes for sugary sodas in the industry, and consumers continue to migrate toward teas, waters, and energy drinks among many others. Coke Zero is showing growth, and the company has done everything in it's power to protect it's brand. Officials must believe the word "zero" to be too generic for trademarking (like the word "diet"). It's hard to imagine anything other issue gumming up the works. And intellectual property associated with the brand such as logos, slogans and names not only serve to differentiate a product, but also can ultimately be worth billions of dollars. For Coke, this upcoming ruling will be huge.

  • Deadpool's Mysterious Success

    I don't think too many people saw this one coming, but the movie Deadpool has thoroughly dominated the box office in it's first two weeks. The movie was made for only $58 million but grossed an unbelievable $152 million over a four-day President's Weekend debut. Partly due to an utter lack of competition, it remains at #1 with a cumulative total of $235.4 million thus far. It's no Star Wars, but Deadpool might become the highest-grossing R-rated movie in cinematic history. Can this phenomenon be explained?

    Perhaps. To start with, it seems like marketers spent a lot of money on TV advertising, a marketing campaign that featured the costumed star of the movie giving some highly questionable advice for Valentine's Day, among other very funny vignettes. In addition, the creative execution of the ads has been very well-received by a viewing public that has grown accustomed to seeing somewhat nondescript, unremarkable movie trailers. The strategy was fresh and delightfully inappropriate. It stood out. Another reason for the film's popularity involves the relatively small number of successful films we've had over the past few years and the pent up demand that movie afficionados now have for higher quality films. Plus, it seems that America has a huge appetite for comic book characters, and that Marvel has a seemingly never-ending stable of obscure heroes and anti-heroes from which to draw. But do all of these factors together explain this unlikely success story?

    ... CUSTOM MIGHTY MUGGS AND KIDROBOT BLOG: DEADPOOL MIGHTY MUGGS

    I think not. Clearly, there is also something in the zeitgeist at play here. Perhaps it's the raunchy, South Park/Family Guy-style humor that has become so ubiquitous. Indeed American society has come a long way from Superman's "Truth, Justice and the American Way" mantra. And if most of the more successful comedies are any indication, cynicism and sarcasm now rule the day. Remember at the end of that day, movie-makers must give consumers what they want; and if what they want happens to feature a foul-mouthed teddy bear, or mercenary anti-hero, or something equally edgy then so be it. Movies tend to reflect the times, and that's the reason that so many movies seem so "dated" 20 or 30 years after introduction. Others have more staying power. And Deadpool, for it's part, will certainly become a tentpole franchise product replete with several sequels and possibly an R-rated video game or two. Who knows what else marketers might come up with, and maybe R-rated superhero movies will become the next movie fad. But I wouldn't expect to see very many licensed Deadpool toys or TV movies intended for kids. I haven't seen the movie yet, but if the trailers are any indication, Deadpool isn't a product for the young and impressionable.

  • A "Kitchen" By Any Other Name...

    What does a brand name really mean to marketers? Plenty. The brand name is not only the first thing that consumers learn about the product, it is also often the first line of defense against competitors. As such, marketers rightly view the brand name (in addition to other elements like the logo, font, colors, and slogans) as intellectual property that must be protected. Enter two unlikely characters--food guru Wolfgang Puck and Kimbal Musk, brother of Millennial cult figure and electric car/not-so-electric rocket marketer, Elon Musk--two entrepreneurs who are battling over a name.

    The Kitchen founder Kimbal Musk, left, and Wolfgang Puck met at one of ...

    Here are the facts. Kimbal Musk opened an eatery called The Kitchen on Boulder's Pearl Street Mall about 12 years ago and has since added several locations to his portfolio. Mr. Musk met Wolfgang Puck, whom he considered a role model, three years ago in California, at which time Kimbal shared his "farm-to-table" philosophy with the famous chef in the context of talking about his successful restaurant concept. Last summer, Mr. Musk became aware that Mr. Puck had opened a restaurant in Michigan called "The Kitchen By Wolfgang Puck". Ouch. Not only is Mr. Musk feeling like he has been ripped of, which he undoubtedly has, but this move by Mr. Puck is apparently the first of many locations to be opened in the near future. What's the problem?

    If consumers are likely to be confused about which brand is which (and they likely are), then this is precisely when regulators and the courts should get involved. Mr. Musk, for his part, has tried to discuss his concerns with both Wolfgang and his minions, but has made no progress. It looks like Mr. Puck is content to let the lawyers hash it out.  What is the most likely scenario? If Mr. Musk was just a regular Joe, there probably wouldn't be much he could do about this. He wouldn't have adequate resources to fight the battle with the gargantuan Mr. Puck in the first place, and Mr. Puck could use his power to tie the issue up in the courts for many years while growing his "Kitchen by Wolfgang Puck" concept all the while. Puck might be an ethically challenged businessman (and it appears that he is just that), but the legality of who can use the name as well as whether or not such a name can be trademarked in the first place must be decided by the judiciary. And it just so happens that Mr. Musk has a very wealthy brother and a very famous last name, and could give Wolfy a run for his money. Maybe these two progressive businessmen can settle over some Kale and fresh-pressed, certified-organic litchi fruit cider. Or perhaps Mr. Musk can be given a piece of the action, or maybe a strategic alliance might satisfy both parties, or even a joint venture could be in order. Or perhaps, the judge should simply tell Mr. Puck to cease and desist, since Mr. Musk had been using the name for quite some time and the two concepts are virtually identical. One thing is for certain, this one will be very interesting to follow.

  • A Super Bowl Death Wish

    Death Wish Coffee Company, a small finished goods manufacturer in Round Lake, New York, and far from the hustle and bustle of the city, is going to Super Bowl 50 (L?). It won't be there physically, but it will air a much-coveted 30-second advertising spot (now priced at well over $4 million each), a result of a PR campaign conducted the last few years by Intuit, a company that provides services to small businesses. Death Wish, which currently sells only about 1,000 pounds a day, was chosen from a pool of 15,000 other small businesses (including two from Colorado among the final 10 contestants) and will now have an opportunity to play in the street with the big dogs. At least for one game, but maybe for keeps.

    The campaign is simply genius, as Intuit, at a bare minimum, has the opportunity to engage one-to-one with 15,000 current and potential customers. That alone is probably worth the investment of paying for a Super Bowl ad spot. But the company also serves to generate publicity from media coverage and possibly through Death Wish itself. making this marketing strategy even more effective. For it's part, the makers of what they describe as a strong, highly caffeinated brew expect sales to increase after the Super Bowl spot. No kidding! This is almost certain to happen, but history shows that often the jump is only temporary. When a company doesn't have the resources to leverage such a high profile advertisement with additional (and expensive) marketing, the effects tend to fade. However, history may not be so instructive in this case. In a new marketing environment increasingly influenced by social media, a cool company with a cool brand story could start selling a lot of the strong stuff on a sustainable basis. Let's hope that marketers at the tiny New York upstart are honing their social media skills and have a plan for supporting this incredible opportunity since the company certainly doesn't have the resources to engage in a major media campaign. Obviously, the first step is to give the public a funny, memorable commercial. This is not easy to do. And for a small brand sold in only a handful of stores (as well as online) and operating in a cluttered, hyper-competitive environment filled with equally edgy brands, this is a publicity wish-come-true, but one that must be leveraged with smart marketing. 

  • Slumping Stores Shrink

    From a hopeful start to a rather dismal finale, holiday retail sales this year failed to impress the industry despite widespread optimism that this year would better than the last. And now most large chains are rethinking their approaches to growth. With announcements from Wal-Mart, Sports Authority, Kohl's, Macy's, Sears and others that they will be closing under-performing locations, it looks like a much-needed industry contraction is in motion.

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    The brutal reality is that declining shopper traffic, caused in large part by the continued massive migration of sales to online channels (but also by the fact that there are probably too many stores chasing too few consumers), is a trend that is likely to continue unabated for quite some time. Some retailers, like Kohl's, plan to close larger stores while opening smaller format stores with a more limited product mix as well as a much smaller physical footprint. Others are reducing locations altogether. The fast pace of digital sales, which for Kohl's jumped an unexpected 30% last quarter, has also encouraged these marketers to consider increasing investment in e-commerce, although high-end retailer Nordstrom said it would scale back spending due to a high costs and a huge corresponding drop in profits. But rest assured that when things get better for the shareholders at Nordie's, the level of online investment will almost surely increase again. The destructive power of e-commerce should not be ignored.

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    Overall, it is clear that some retailers are in serious trouble. Years of brick-and-mortar expansion has resulted in legions of undifferentiated retailers offering largely undifferentiated products, while far too much of the growing online business has been left to online "pure" players like Amazon. But now that Amazon has announced that it will open several hundred brick-and-mortar stores, it appears that the retail landscape just keeps getting stranger and stranger. But as Yoda would say, "Buy American consumers must" and with an ever-expanding population and consumer spending comprising two-thirds of GDP, there is ample opportunity for marketers who manage to get the multi-channel formula right. There will be plenty of winners, but there will also be plenty of losers. In this new environment that has followed decades of unfettered expansion, most retailers will probably be pressured to contract in terms of both number of stores as well as square footage over the next several years. These same retailers will, at the same time, need to invest considerable sums toward shoring up their online platforms, Nordstrom's temporary profit problems notwithstanding. It should also be expected that more branded product manufacturers will try to bypass intermediaries like wholesalers and retailers and endeavor to offer their products direct-to-consumer at considerably cheaper price points. Channel power shifting away from retailers and towards manufacturers would be a major development indeed. Could this happen? Ultimately consumers just want their goods and services and most don't much care where they come from, so perhaps major retailers should be thinking a bit more about what value they truly offer to a consumer who can just as easily buy direct from a brand's website. Stay tuned for more creative destruction.

  • Maserati Steps On Gas

    Just the mere mention of this luxury brand can make car enthusiasts salivate. These high performance vehicles are sleek and very expensive, but one doesn't see very many of them on the road. And at only 32,000 vehicles sold last year, they are as elusive as the much-hyped, but poor-selling electric Tesla vehicles, which actually bear a resemblance to some Maserati models. But parent company Fiat Chrysler wants to change all that and is doing so by shifting product strategy in a potentially brand-altering manner. How?

    By making an SUV of course. Introducing the Levante, a rather generic-sounding, but well-intended effort to gain market share in the important SUV category. The vehicle starts at $81,500, so it is not for those who are light in the pocketbook, and the product will be introduced in Europe with export to other markets planned for late 2016. And since Fiat has recently spun off it's Ferrari brand, the pressure is on Maserati to begin performing at a higher level. The company sells 4.8 million cars a year overall, so at present the piddling Maserati brand is hardly worth mentioning. Yet this foray into the world of SUV's looks like a good move for the company, although the vehicle is super expensive and the name marketers have chosen sounds more like it's describing a mood-elevating prescription drug rather than a luxury SUV. I also recall having a Spanish teacher named Mr. Levante. But global products often have generic-sounding names in order to appeal broadly to different cultures and languages.

    Of course, it is a bit risky to add an SUV product to a brand known exclusively for high performance sports cars, but at only 32,000 cars sold last year, Maserati surely needs to do something disruptive. And if the SUV is successful, perhaps the high performance sports car models will experience a resurgence as well. Let's see what happens over the next year or two.

  • Tesla's X Factor

    Tesla's electric cars haven't really gotten any "greener" but, with a new round of product introductions, certainly just became even more remarkable. Since most electricity still comes from fossil fuels including coal and natural gas (renewables are not yet nearly efficient enough to carry the load), it's difficult to justify product positioning based on being any greener than many other automotive options that don't involve electricity. And when one considers the composition and life cycle of the rather toxic battery on which these vehicles depend, green positioning becomes even more far-fetched. Not to mention the fact that no one talks about how efficient the vehicle is at "burning" this fossil-fuel generated electricity. Yet these inconvenient truths haven't stopped marketers of vehicles such as the Smart Car and Chevy's Volt from making such assertions, and this green marketing veteran appreciates the fact that at least Tesla's eco-positioning has largely fallen by the wayside. And in Colorado, where Tesla just previewed three of it's new high-performance "Model X" vehicles and consumers can qualify for up to $13,500 in state and federal tax breaks for purchasing an electric vehicle in the name of environmental responsibility, it is clear from interviews with Tesla enthusiasts that "green-ness" is merely the icing on the cake.

    Electric skepticism aside, about 40 people were allowed to test drive Tesla's exciting new Model X vehicles with comments like "We really gunned it on the test" and "Honestly, even if this was a gasoline car, I'd probably still buy it", as well as "Oh man, we pulled off before we got to the metal". These early customers love the design, the way it drives, and the performance of this fast, strong vehicle (it can tow 5,000 pounds). Founder Elon Musk is emphasizing Tesla's roominess, family-friendliness, safety, and power, rather than touting environmental benefits. Yet one expert summed it up nicely when he said, "The family with a lot of financial resources that also wants to be environmentally friendly, this will appeal to them." 

    The so-called environmental benefits of high performance electric vehicles are highly debatable, but Tesla's souped-up battery can now handle up to 250 miles at a single charge and Colorado has tripled the number of charging stations in the last few years. Yet at just over 6,000 registered vehicles in the state, the category is still stuck in the "introduction" stage of the industry life cycle. Tesla is great at marketing. They take lots of pre-orders, run a social media campaign, and tap into the excitement of these "innovators" and "early adopters" to generate buzz for the product before it is introduced. Yet, because there is very little demand for electric vehicles as a whole and these pricey cars appeal only to a very small niche market with both the ability AND the desire to buy the product, the hype wears off until the next round of introductions.

    This niche orientation may change along with the inevitable technological advancements which would undoubtedly make this sort of product more accessible, and with federal regulators now a bit more vigilant than they used to be about companies making broad and unsubstantiated green claims in the wake of the most recent "Green Guidelines" revision, perhaps the makers of these really cool vehicles are already backing off on the eco-hype and instead are relying on more traditional features and benefits. And Tesla-buyers, like most people, seem to be far more interested in the "X Factor" than any green factors. Folks with greener priorities probably ride their bikes, take public transportation, do ride share, drive smaller and cheaper electric vehicles, or own hybrids. Tesla has indeed made another round of awe-inspiring new products (they even feature old-school sports car, winged doors), and some are even almost as cool as that space company Mr. Musk owns that also has an "X" in it. Maybe soon the vehicles will be powered by electric rockets, or perhaps the more promising hydrogen fuel cell technology that has been in development for 20 years. But for now, Tesla is a luxury, high performance brand powered by electricity, cool but not necessarily green.

  • Sports Spending Lags Big Time

    In a development that should concern and perhaps disturb sports marketers of all stripes, fan support for spectator sports is softening even as the economy is improving (albeit slowly and not adequately). Results from an ESPN sports poll exposed some fairly significant data shifts from the 2011-2014 period compared with 2015. Here's what it found:

    The percentage of Americans over 12 years of age who describe themselves as sports fans was thankfully unchanged. However, people who describe themselves as avid fans fell by 2%, and people who describe themselves as less interested in sports than they used to be rose by 4%. In addition, "priority given to sports activity" fell by 4% while the percentage of people who have more to spend than last year rose by a whopping 24%. At the same time, the percentage of people who spend on sports at least monthly fell by 6% and the percentage of people who have a positive view of sport sponsors dropped by a considerable 9%. Perhaps not as relevant, but certainly interesting and very disturbing is the finding that the percentage of people who "spend most of their day online" has gone up by 12%.

    What does all of this mean? Aside from the sad fact that an increasing number of us prefer the virtual world to the real one, these numbers could be a very bad omen of the shape of things to come. As aging baby boomers (between the ages of 52-72) distance themselves from spectator sports, as the elders of previous generations have also done, and Millennials (between 17-36) continue to migrate away from sports and towards other entertaining distractions (social media anyone?), the market for sport could be on a declining trend. Indeed the same study found that Millennial men spent 12% less on sport during 2015 than in the 2011-14 period, and even Generation X (aged 37-51) has reduced spending by 7%. Every age demographic dropped in 2015. Of course we need to see what happens over the next two years to make sure that 2015 wasn't a statistical aberration. That's just good science. But the winds of change shall blow as they are wont to do, and it's impossible to blame the economy when you have numbers such as these. Building party decks in all the stadiums and arenas around the country won't likely stop the wind from blowing in the wrong direction, but it might slow the decline down a bit. In the meantime, we will wait for more data.

  • From Burritos To Burgers

    By now, most everyone knows that Chipotle has been losing a lot of customers in the aftermath of it's widely-publicized food contamination issues, at least for now. That's not surprising, and it remains to be seen how many of these customers will come back, but even if many of them do return, legal problems are likely to keep the company in the news for many years to come. And not in a good way. The brand might yet recover, and much of that might depend on what marketers do or fail to do over the next couple of years. What is surprising, however, is that most of Chipotle's customers did not opt for Taco Bell, Qdoba, and other fast-Mexican brands, but rather switched to McDonald's, Panera, Domino's, and others in greater numbers.

    Cute dog, eh? Just making sure you are still paying attention. Of course, the company's market share evaporated the most in areas like Portland and Seattle where most of the outbreaks occurred. The decline was less severe the further the geographic area was away from the outbreak areas. Sales declined 43% in Portland and 34% in Seattle, but dropped only 16% in Miami and 19% in Dallas. About 30% of the Chipotle defectors in a recent ITG study opted for more upscale options outside the fast food category or decided to eat at home, but the remainder of the bunch scattered to the four winds with McDonald's being the biggest winner. And that's good news for McDonald's, which has struggled over the past few years, and has also recently found tremendous success with it's all-day breakfast concept. Kudos for Mickey D's.  But it's hard to find any good news in this whole publicity nightmare for Chipotle, and Qdoba seemed to have missed out on a major opportunity to steal more customers than they did, as a major marketing campaign was noticeable absent. It's hard to imagine why this obvious competitor failed to exploit this opportunity. But Chipotle does have a loyal following, and Americans tend to have short memories. The product is good. The prices are reasonable. The stores are everywhere. And a clever and humility-filled multi-million dollar marketing campaign could do much toward a recovery for this progressive burrito brand.

  • DeVry Caught In Lie?

    Over the past several years, for-profit colleges have been under quite a bit of intense federal scrutiny. Some companies, such as Corinthian, have had to close their doors, while others remain on what could be described as a form of academic probation. DeVry University is the latest organization to be sued for misleading students about job prospects and potential earnings, and it looks like the Federal Trade Commission is not likely to back down.

    The FTC is charged by Congress with the protection of consumers against false and misleading advertising, and the agency is managed by the executive branch, in this case the Obama Administration. And while Mr. Obama, himself a former adjunct professor, is a huge fan of higher education, he is not a huge fan of the for-profit business model of higher education. Claims that 90% of graduates find jobs in their field within six months after graduation and assertions that graduates make 15% higher than graduates than all other institutions are not only unbelievable, they are probably pure fiction. While marketers are allowed a bit of leeway in the form of "puffery", exaggeration which cannot be proved one way or the other (such as "World's Greatest Hamburger"), outright fabrications are frowned upon by the establishment. And with good reason.

    Amid additional claims that for-profit colleges take advantage of student-loan dependent students as well as veterans on the G.I. Bill, it looks like this industry has some cleaning up to do. The University of Phoenix, the institution that probably best defines who the good guys are in the for-profit segment, might provide some "best practices" clues for other industry players. Until this housecleaning occurs, the regulatory scrutiny will continue.

  • Barbie's New Look

    Faced with flagging sales over the past several years, the makers of Barbie are truly facing the reality of changing attitudes among young girls. Every generation is a little more "progressive" than the previous one, as social and environmental attitudes become progressively friendlier towards social and environmental issues and as gains made by previous generations become a matter of course. Undeniably, today's youngsters are taught that diversity is a cultural priority (much more so than previous generations of young people) and are raised from a very early age watching shows like Dora the Explorer and Go Diego Go, which are a far cry from the far edgier Looney Tunes and Scooby Doo's of yesteryear (even though these franchises are still thriving today in one form or another). Indeed, content providers these days seem to go out of their way to promote this cultural priority as early as possible.

    As such, Mattel has decided to get with the new cultural zeitgeist and will soon introduce three new "body type" choices to reflect changing attitudes and behaviors. Curvy, petite, and tall Barbies will soon be available for kids that comprise this yet-to-be-named under-16 generation, an age cohort that is expected to carry on a tradition of human social progress and embrace diversity on an even greater level than did their predecessors. Last year the company introduced new facial structures, hairstyles and skin types, so why not give us some new body types for 2016?

    Historically, the company has been a sort of "lightning rod" for the diversity promotion movement, so these product introductions are a very significant development for a toy maker that has been reticent to change. The "marketing concept" tells us that needs come first in marketing, so toy makers must understand these needs and address them effectively using every tool they have in the marketing mix. Barbie has embodied what many feel is an unrealistic idea of what a young girl should aspire to be, and now must rather become more of a reflection of new attitudes about gender and diversity. Toys should reflect the attitudes of those playing with them, and brands that fail to embrace this new reality risk becoming obsolete. Mattel is desperate to turn around the fortunes of this once dominant children's brand, so Barbie could be in for even more changes in the years to come.

  • Dish Slinging and Streaming

    Dish Network's Sling TV streaming service, launched about a year ago, now boasts over 600,000 customers according to the company, shedding some light on how much success traditional service providers are having in attracting what have been termed "cord-cutters". These are the people who have opted to no longer pay the $80 or so monthly fees for traditional cable/satellite access, and it looks like the $20 per month, slimmed down channel offering (which includes ESPN among other popular channels) is gaining some traction. It also looks like scaled-down, less expensive bundles might be the future of television.

    Despite the hype surrounding the Internet and its capacity for creative destruction, TV isn't going anywhere. In fact, young people love video entertainment more than any other generation. It's just that the traditional TV packages have become prohibitively expensive for far too many people, and many of us do not appreciate being forced to purchase dozens of channels that we will never watch. Soon every content provider will be involved in video streaming of some sort, and it isn't tough to predict that soon we will all be watching the same content on multiple screens and through multiple formats albeit with many, many more options. Some of the more ridiculous channels will probably perish in the process and this development will be met with much rejoicing, but the ones that offer content that consumers desire will likely survive and thrive. Thus far, the migration of content from broadcast/cable/satellite delivery systems has been rather slow when one considers how fast the Internet tends to alter things, but it looks like the industry is in the midst of a revolution of sorts. Generally speaking, consumer needs drive innovation, and it is clear that the Internet is the future of video. It's simply the most efficient way for advertisers to reach the people they want to reach. And content providers are now stepping up efforts to get this early market share as TV becomes a multi-device proposition. Look for even more bundle options emerging in the very near future.

  • The Law of Unintended Consequences

    Dietary/nutritional supplements, a category of ingestibles which include herbs, vitamins, and minerals among several other classes of goods, were previously considered as "foods" by the Food and Drug Administration, and as such they were regulated just like breakfast cereal. In 1994 Congress enacted the Dietary Supplement Health and Education Act (DSHEA) which allowed dietary supplement companies to market their products as a third category, a position somewhere between a food and the heavily-regulated drug category. Among other benefits, this Act allowed marketers to make marketing claims about their products called "statements of nutritional support". Until then claims could only be made by drug marketers and marketers of a few select foods such as oats, which have been approved for heart health. Thus, claims such as "supports the immune system" (cold care) and "helps the body maintain optimal metabolic levels" (weight loss) were born. Mostly careful not to make "health claims", which are reserved only for approved drugs, the industry has grown to $32 billion just in the United States. It's well over $100 billion globally.

    Of course in a semi-regulated area like this, one might imagine that there are a number of unscrupulous actors in the industry, and indeed many products are found through testing to either contain inadequate levels of the ingredient listed on the label or contain ingredients that are not listed on the label at all. This can be very dangerous, especially for people taking prescription drugs, and a number of recent studies have exposed contraindications for negative drug-supplement interactions. Some commonly-used herbs like Echinacea, which has been shown in numerous clinical studies to stimulate the immune system, also reacts negatively with anti-cancer drugs, while St. John's Wort, an effective treatment for mild depression, may also interfere with prescription anti-depressants in a dangerous way. These are just two of many, many findings. 

    This is especially concerning given that 68% of Americans take at least one supplement in one form or another, a number that has held steady during my 25 years of working with natural products companies, and that a similar number of Americans are also hopped up on at least one prescription drug. Negative interactions are a surety under such conditions. Also consider that 70% of patients don't share their supplement habits with their doctors and you have a perfect storm.

    This has always been an issue in this slowly maturing industry, but the proliferation of products containing these ingredients has made studying them a societal imperative. An herbalist will probably tell you not to take the prescription drugs in the first place and she may be right in some cases, as we are surely an over-medicated society, but in many cases it simply cannot be avoided. It is possible that regulators might eventually require warnings on labels and in marketing communications in the not-so-distant future as a result of these discoveries, but that will probably take some time. And a move like this would certainly make sense in light of what we are beginning to know about the drawbacks of certain nutritional supplements. Right now it's "buyer beware", and it's up to the user to make sure there are no contraindications. It sure is a good thing we have the Internet.

  • Radio Is Dead, Long Live Radio

    First, it was supposed to be killed by television. Then, it was supposed to be killed by satellites. And finally, traditional AM/FM radio was supposed to meet it's imminent demise as yet another high-profile victim of the Internet, as live streaming, iTunes, and podcasts were supposed to crush the old format. So how's all that creative destruction working out?

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    Despite reports to the contrary, radio remains alive and reasonably well as a viable marketing medium with marketers spending $17.6 billion in 2015. Compare this with $66.7 billion spent on TV, and it is clear that the latter format has, as predicted, certainly garnered it's share of the ad spending pie at the expense of radio, but when you consider that marketers spent $11.3 billion on Internet display ads and only $34 million on podcasts, it appears that the demise of traditional radio has been greatly exaggerated. Indeed radio channels are not disappearing but (along with their ad dollars) are migrating online instead, and most listeners really don't much care how the service is delivered (features) as long as they get their, music, talk and sports (benefits). The Internet is obviously a more versatile delivery system than is the broadcast spectrum, but to the consumer, audio is basically just sounds, much like video is essentially just sounds and moving pictures. There is no question that the eyeballs and ears needed to make this all work have been migrating online for years, but content providers and marketers are still having lots of trouble figuring out how to make this migration more advertising-friendly.

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    This brings us to podcasting, which for it's part, remains a small-time endeavor despite being around for about a decade. Although 17% of Americans report that they listen to at least one podcast per month (doubled from 2009), there aren't any truly dominant content providers and so the market is highly fragmented, making the medium less than attractive to advertisers. Indeed, marketers report that they will increase podcast spending by only 2% in 2016. Will this change soon? To the consumer, audio is audio. For the advertiser, it's the quantity and quality of the listener that matters. A podcast is really just a recorded audio session, and in this way is no different than much of what we hear on traditional radio. So in this light, shouldn't more radio stations be doing more podcasting? Aren't these stations already content producers? They do have a ready-made communications channel and a listener base relative to existing podcasts, and many stations are part of nationwide networks. Besides, what's to stop TV producers (a medium that also has an audio component) from getting into the act? It looks like there is a great opportunity here for smart TV and radio marketers to figure out a way to generate revenue from this new consumer trend. The public will be listening in.

  • The Return of the Hot Dog?

    After years of being relegated to rear of the fast food wars, the hot dog seems to be making a comeback. Once much more common, chains such as DQ, Weinerschnitzel and Pup N' Taco have become much less ubiquitous these days as concerns about what is actually in hot dogs in addition to changing consumer tastes and the availability of more choices have all combined to drive many consumers away from the American past time and towards higher end fast food brands such as Chipotle, Smashburger and so many others. But is this about to change?

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    For it's part, Sonic has been doing quite a bit of national advertising over the past decade, and lately the chain (largely known for burgers) has been featuring hot dogs in it's TV ads. And that's a lucky thing since a much larger competitor, Burger King, recently announced that it will begin offering hot dogs at all 7,100 locations. Since McDonald's (after introducing the all-day breakfast menu) and Wendy's (after introducing the 4 for $4 promotion) have been faring much better of late, marketers at Burger King feel like they have to do something to juice sales, and entering the hot dog market apparently presents the most lucrative market opportunity at the present time. Plus, since the company's burgers are flame-broiled, throwing a few hot dogs on the grill makes a lot of sense.  But are consumers actually consuming more hot dogs these days? Or will this move simply add another player into an already cluttered marketplace? Although a 2013 Bloomberg.com reports that the industry is shrinking by a few percentage points each year, a visit to the more upbeat hotdog.org tells us that the product is consumed in 95% of American households and that the average American eats as much as 70 dogs per year. That estimate seems a bit high especially coming from a biased not-for-profit association, but the fact of the matter is that Burger King believes the slowing market is large enough for more industry participants; and Burger King, Sonic, and others could help drive a new hot dog renaissance by simply making the product more available. Or, consumers might shun the whole idea despite the investment of millions in marketing. This will be fun to watch.

  • Toyota To Disown Scion

    Born in 2003 and after years of disappointing performance, the Toyota Scion will no longer be available starting in 2017. Well, that's not exactly true. Actually it's not the car that's being dumped, but in fact the brand, as Toyota plans on adding the flagging products to its more generic-sounding "Toyota" lineup. Why is this interesting?

    Ditching the brand rather than the product itself is really an admission by marketers that the positioning strategy has not worked. The product was developed to attract young, Gen X buyers and was known for funky designs and experimental marketing tactics, although it was never wildly successful. Fast forward 13 years and we find that the brand, like so many other these days, has failed to gain traction with the Millennial generation, the youngest of whom are becoming young adults and the oldest of whom are moving into middle age. What was good for the previous generation is not always good for the next, and what is truly fascinating about this case is that, at first, the problem was that Millennials were delaying car purchases, but when they finally did start to buy, they preferred brands used by their parents. All of this suggests that there may be opportunities for older brands to connect with younger consumers via their parents. Perhaps we will see more of this approach in the near future.

  • No Rights for Digital Media Companies

    At least not yet. But for a while, it looked like the Arena Football League might become the first sport property to sign a significant rights deal with a digital media company such as Google, Amazon and Yahoo. It's certainly a matter of time before one such deal happens since these companies have been actively offering all sorts of content for quite some time now, and sport content is certainly a natural extension of that strategy. Last year, for example, Yahoo offered an NFL game streamed live for free, although the size of the audience was rather disappointing. One wonders if Google would have drawn more viewers than the struggling Yahoos managed, but until the search engine giant tries it's luck we will never know.

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    Arena Football, an indoor league that launched in 1987, expanded into upper-tier and lower-tier leagues over two decades, but has since shrunk back down to a handful of teams. The list of defunct franchises on Wikipedia is rather extensive indeed! The sport was actually patented by its inventor, who came up with the idea while drinking beer at an indoor soccer game, but that 20-year monopoly expired in 2007. It looks like there aren't any imitators at present, so the sport might be on a permanent decline, and with a shrinking fan base, the league is a great candidate to move from TV  to an online channel. Both CBS and ESPN currently have the rights and have indicated that they will both be on board for the coming season in a bid to see if ratings can improve. After all, it is football in a nation that is football-crazy, but it isn't quite the same thing. For one, the rules are very different and there is an absurd amount of scoring. And looking at the make-up of the fans in the stands, it seems to be more of a game targeted towards young men rather than the much broader age demographic that the NFL and NCAA bring in. The U.S. Army was a primary sponsor for several years if you need proof. One thing is for certain, if ratings don't improve, a shift to the Internet will be imminent. But will a Google audience be any larger than that of ESPN? Highly unlikely.

  • Amazon Goes Brick-And Mortar

    Satisfied with the success of it's first physical bookstore in Seattle, Amazon.com has plans to open as many as 400 locations across the U.S.. This is a pretty big deal, especially for competitors who have struggled to be price competitive with Amazon. But why would a company that gets much of its competitive advantage from not being saddled with high costs associated with brick-and-mortar stores want to have a physical presence in the first place?

    Although sales of many categories of goods and services continue to migrate online, it is clear that physical stores will always have their place. And Amazon has such a robust online platform and fantastic logistics system that integrating a physical retail component will probably be fairly easy, especially since the company has run a successful test in it's hometown. Purchasing a product through Amazon in the store or online (or even online while standing in the store) would likely be a seamless experience for the average consumer. And the company's brand equity, combined with the media buzz such an interesting strategic move would generate, should bring a lot of people in the doors, at least initially. Pricing pressures from this move will almost surely strain Barnes & Noble further, and Amazon could easily expand the model beyond books into other categories of goods, as it did very successfully online over the past few decades, which would threaten most other retailers as well. 

    The answer to this threat is for major retailers to invest more heavily in further integrating the in-store and online experience. Perhaps some major players could band together and form an online co-op of sorts (in the vein of deep-pocketed Hulu.com) so that more economies of scale and scope can be reached and consumer prices can be lowered. Smaller chains must rely on "differentiation", a strategic alternative to price competition, and must adroitly exploit advantages based on features and benefits or brand attributes. One thing is for sure, this move has been in the works for years, so it should not be much of a surprise to established retailers.

  • Hilton Makes Play For Millennial Wallets

    Millennials are roughly between 17-36 years old, so this means that the eldest among this huge age cohort is are entering middle age this year. Middle age! And the next generation (as yet unnamed) will be high school seniors next year. As Millennials get older, their behaviors and attitudes will change and it is unclear how a balding, muffin top-sporting hipster guy is going to transform as he nears forty. Most women in this group, who have waited longer than any other age group in history to have children, are becoming soccer moms in very large numbers, and it is unclear how they too will change as they settle into middle age. But change they will. And one thing is for certain, marketers are still scrambling to understand this largest generation in history.

    And so Hilton Worldwide Holdings (the hotel brand) has decided to cater to younger guests (Millennials) by introducing a new chain of hotels, a brand called "Tru". OK, so it sounds like a good brand name for an electronic cigarette and not really so much for a hotel chain, but the marketers at Hilton think you will like this concept very much. In fact, they believe that no existing chain is adequately "meeting guest needs for cost and taste" at the present time. Hmmm...This probably means that young consumers want low prices and high quality, which is not exactly a groundbreaking discovery. Who doesn't want these things? And young people of every generation have always been short of cash. Marketers call this concept "value" and it is their job to create, communicate and deliver it. Anyhow, the company has 102 existing hotels signed up (and another 30 in the works), so it's possible that the concept will be similar to Marriott's Collection concept wherein each hotel is very different from the next. You see, Millennials apparently like variety. But then again, most people over 35 and under 17 do too, and of course it is also very possible that the new Hilton hotels could be formatted in a more standardized "planogram" format. We shall see.

    Hey look, there's Paris! The new format will feature a front desk with a "social media wall" with real-time content to "foster engagement among guests" in an open space lobby. Feeling stereotyped yet? A social media wall? The last time I checked, grandma is also spending lots of time on social media (albeit through an AOL dial up account), so once again one might  question how this concept will appeal to the young adult demographic versus consumers who are older than 36. Will it be too annoying for the older crowd? Indeed it's hard for me to picture what a social media wall might look like or what useful function it might actually serve. But who knows? This product introduction could be a big success, or perhaps marketers are taking the risk of "over-targeting", thereby potentially creating a feeling among many of those in the target market of being pandered to. This would not be a good thing for a brand targeting an age cohort that demands authenticity, but removing things like social media walls, small batch brewing workshops, facial hair maintenance seminars, or other nontraditional features marketers might have in store for you would not be a terribly difficult task. And it won't take long for Hilton marketers to flesh out what is working and what is not, making adjustments as needed. The first hotel should open by the end of the year, so we shall soon see what this huge hospitality brand has in store for young travelers.

  • Super Bowl, Super Spending

    Denver's "Orange Rush Defense" was Superman's Kryptonite last night, with a large helping of the rare mineral delivered by MVP Von Miller, but more importantly for marketers, a close game ensured that most viewers remained engaged and active during the entirety of the contest. The cost for a 30-second ad spot reached $5 million this year, and don't even ask what corporate sponsorships went for. I haven't a clue. Ticket prices reached record highs as well, way up from last year in both primary and secondary markets. Graphs that attempt to visually represent this meteoric growth resemble very steep staircases that get higher and higher each year. So companies are lining up to spend money to be associated with this event, but what about the average viewer?

    Total spending is expected to top $15.5 billion as the average viewer spends $82.19 on food, decor, apparel and other consumables. That's quite an economic event! And visitors to Santa Clara were expected to spend around $220 million this year, up from $205 million last year. Betters were expected to wager over $4 billion and almost 97% of those bets classified as illegal. Shocking! Even the black market gets it's share, and with well over 100 million viewers and growing, this thing just keeps getting bigger.

    Overall, the ads this year were pretty tame, without last year's edgy advocacy and cause-related themes that many deemed were inappropriate for viewers trying to have a good time. Some were funny, and as usual, Dorito's was ranked near the top. Many more were unmemorable, and only one was completely ridiculous (the highly regrettable "puppy/monkey/baby" Mountain Dew energy drink commercial). At $5 million for only 30 seconds, it would seem that some marketers would try a little harder to rise above the Super Bowl ad clutter, and it seems that most of the good ads, were previously previewed online in the days before Big Game, thus spoiling the surprise for many viewers. And it also seems to me that this phenomenon of Super Bowl ads becoming less remarkable has been progressing a little bit every year. Although an improvement over the sanctimonious, preachy vibe from last year, this year's effort's only truly remarkable feature was the price. Are Super Bowl ads, like Black Friday sales, losing their luster? Not from an advertising perspective they aren't as the huge reach is impossible to ignore, but these ads may be losing their anticipatory appeal which will certainly affect how many people bother to view these things online. The oft-quoted "I mainly watch for the ads" might soon become a thing of the past, but this is not likely to affect pricing since this is driven by the size of the audience rather than attitudes of viewers. Yet, if the buzz does begin to wane, marketers might have to lower their online expectations a bit in the coming years as the "coolness" factor fades. Let's see what happens next year.

  • A Rocky Mountain Makeover

    It wasn't too long ago that Coors Light was known as the Silver Bullet. We remember images of scantily clad young people frolicking in the snowy (yet also impossibly warm) mountains of Colorado with an occasional "Love Train" bursting onto the TV screen. This creative concept prevailed in one form or another for many years, and lately it's hard to recall just what the brand's latest ad campaign was all about. Whatever it was about, it was not terribly memorable, and in an environment where drinkers of all ages continue to flock to small-batch, locally-grown beer brands, marketers have decided that a major face-lift is in order.

    Using the X Games as a platform to launch this ad campaign seems like a very good idea since most craft drinkers are between the ages of 36-51 what is known as Generation X; and for this campaign marketers have decided to highlight the beer's Rocky Mountain heritage as a central theme replete with the requisite packaging changes. "Our mountains make us who we are, your mountains make you who you are," says the ad's voiceover, "...whatever your mountain, climb on." Indeed it does sound far too much like Corona's recent "Find Your Beach"" campaign, and the "your mountains, our mountains" theme doesn't scream "BEER!" (or much else for that matter). But Coors Light is used to this sport of unremarkable, nebulous advertising.

    This time, Molson Coors marketers say the target markets for the latest campaign are X'er's, women, and consumers with diverse ethnic backgrounds, which is a fairly wide swath of beer drinkers, and is also a marked departure from previous attempts to address the white, male 21-28 crowd. All in all, Coors Light appears to be a brand that is struggling to find it's way, and simply spending millions of dollars on advertising is unlikely to be much of a "silver bullet". After years of relying on scantily-clad females and strange animals, marketers will find it rather challenging to change hearts and minds. New packaging, glassware, and tap handles are nice changes, but are these things likely to have any meaningful long-term impact on the brand? Let's see what Coors Light has in it's fridge.

  • Ambushing, Parasite Marketing, and the Olympic Games

    Defending against "ambush marketing", the act of a non-sponsor making efforts to appear that they are a paid sponsor, has never been easy. This is partly because there are so many ways to do it, using tactics that must fall short of exploiting league, team or event-owned intellectual property, which is illegal. Ambushing isn't illegal, however, and one of the most common ways that competitors like to ambush sponsors is to use players (out of uniform of course) as product/brand endorsers.

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    Among her many other duties, the U.S. Olympic Committee's chief marketer is tasked with preventing ambush marketing which was a lot easier to do up until this year when the International Olympic Committee stopped prohibiting athletes from promoting non-sponsors during the Games. This was done in an effort to balance the interests of the sponsors with those of the athletes who do not get paid to compete and thus must strike while the iron is hot, taking advantage of what is almost sure to be fleeting fame. And it stands for now. So as long as the ambushers don't refer to the Olympics in name and logo then they are free to place as many ads as they like, and there isn't really very much a chief marketer, or an entire international organization for that matter, can do.

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    Somewhat less damaging than ambush marketing is the practice sometimes called "parasite marketing" wherein a brand (the parasite) attaches itself to an unwilling host (the Games), but it isn't quite ambushing because there is no sponsor in the product category or no product category at all. An example would be a farm equipment manufacturer making reference to the Games or using an Olympic participant in its advertising. I don't think there is an Official Farm Equipment Provider of the Olympic Games, but if there is, then I've offered a poor example and apologize. At any rate, both sport properties and paying sponsors dislike ambushers because their efforts tend to dilute the effectiveness of what is often a multi-million marketing proposition. But, hey, that's what competitors do. Parasite marketers are especially irritating to the sport property because they don't pay anything at all and attempt to draw nourishment (in the form of marketing benefits) from the property's role as a most unwilling host. Watch for lots of these rather insidious (and occasionally very creative) marketing strategies in action as the Games draw nearer.

  • All-Day Pancakes

    As a result of McDonald's highly successful strategic foray into all-day breakfast, marketers have decided to push the envelope a bit and add the popular McGriddle product to the menus of 72 stores in Tulsa, Oklahoma. Biscuit sandwiches, a product particularly popular in the South, will also be available, which although a treat for consumers, will further test the operational stress that McDonald's locations have been experiencing over the years caused in large part by product complexity.

    It is almost always true that too many products that require different preparation methods will result in service delays, and McDonald's has struggled mightily with wait times that exceed industry standards. Customers have not been pleased either. And adding additional products will probably only make things more difficult for restaurant operations, but this realization is probably not lost on the savvy executives at McCorporate. This is why test marketing is necessary, and in fact the all-day breakfast concept is the result of a successful test market campaign conducted a few years ago. McMarketers have said in the recent past that the company is trying to simplify operations to improve customer service, so if this concept proves to be too much of a deterrent to that end, it won't likely be introduced on a national level. But, if offering McGriddles alongside Big Macs and Egg McMuffins proves to be of little negative operational consequence, the revenue increase from such a menu extension might be well worth the added load placed on an already strained business model.