More Confirmation of Traditional TV’s Advertising Strength

The “radicals” who envision an internet take-over of the entire advertising world have been telling us for years that TV was dying. But not only won’t it die — it just keeps getting better.

The radicals loved the idea of TiVo killing off all TV advertising. So we heard about it – endlessly. As a result, advertising agencies exerted tremendous angst re-structuring their lives without TV. And then, after more than a decade, it turns out TiVo has made TV advertising even more effective. (Link here.) Read more of this post

The Good and Bad of Steve Jobs’ Market Research Legacy

Have you heard the “Jobs Excuse”? When someone introduces a bad idea with “well Steve Jobs says” or “…just like Apple…”. It’s an old name dropping game that hopes to make even horrid ideas sound good.

In the world of market research, we hear it most often through one popular quote from Mr. Jobs:

“It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.” (BusinessWeek, May 1998)

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Brand Begins and Ends with Your Products (Or Services).

I once sat in a meeting discussing a highly successful TV campaign. Underlying the discussion there’s this funny unspoken question from the brand side of the house: “How can it be good branding if it sold so well?”

The truth is that product is your best way to build brand. But this has been lost by the billion dollar brand consultancies and amidst the plethora of marketing PhD dissertations – with collusion from creative teams who learn the hard way that their best opportunity to get the NEXT ad job is to ignore product in THIS one.

Consider the brand ecosystem chart Forrester tweeted today. (Link here.) I challenge you to find product in this brand activity chart. Oh, yes. It’s there…somewhere…amidst all the complexity.

It took me a while to find it. But the product seems to be hidden in the upper right in touchpoint #5 – “Use”. That’s funny, this chart gives it one word. But “using the product” is 95% of a consumer’s interaction with the brand. (If consumer interaction with product is below 95% be afraid. That means you’ve got a quality problem and they’re probably pretty mad at you.)
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Research Proves Netflix is the Internet Hawg. What Will the Angry Birds Do?

A recent report looks at all Internet bandwidth (upstream and downstream) and concludes that Netflix is now the single biggest consumer of bandwidth. (Report here.)

And so it begins.

What begins? That’s the big question. Fundamentally, the Internet universe we have come to know and love is threatened by the onslaught of movies online.

For example, in my neighborhood we can tell when our neighbors start watching movies – because our bandwidth slows down dramatically. And, talking with folks, it’s a pretty universal experience to lose Internet speed on Friday afternoon/evenings as well as weekend evenings.

Does this mean an apocalyptic Internet disaster? Probably not. But it looks like Netflix has stolen the internet eggs that we’d like to use for other things. And, from what I can see, the consumer, the movie business and the Internet business are all unprepared for the havoc Netflix is wreaking.

Netflix’s Loophole. I’m told that Netflix dominance is made possible in large part by a short term loophole. Right now, high speed Internet relies heavily on past investment in infrastructure that contributed to the dot com crash, then was bought for a song and expanded in the past decade. My guess is that this means that the current equation (you get all the movies you want to watch for under $10) isn’t likely to last.

So Netflix is using a type of bait and switch tactic: hook us with low prices and it sure looks like they’ll have to switch to high fees later. All this made possible because they don’t have to pay for the bandwidth they’re using today. The result will be that we end up paying more for Internet delivered entertainment than we ever have for cable.

There is an alternative outcome. Comcast (and other cable operators) seem to be the Timex watches of the entertainment business. Nothing exciting. Nothing particularly motivating. But they take a licking and keep on ticking. So in truth, Comcast may dominate and Netflix could be forced out of the picture.

I never believe companies who claim they have suspended fundamental economic truths. And Netflix’s statements about bandwidth lack economic truth. Fortunately we were reminded recently that economic laws can’t be broken when Blippy had to return to a sane business model.

So let’s hope that sanity comes back to the discussion of TV over Internet. Because right now it’s stuck in an imaginary economic universe where bandwidth performance is free.

And lets hope some of those angry birds get their eggs back so we don’t move back in time and end up with the neighborhood equivalent of dial-up because the Hawg stole the bandwidth.

Copyright 2011 – Doug Garnett – All Rights Reserved

The New (Old) Truth: Mass Media is the Key to Building Brands

For some time, marketing has been dominated by the theory that the way to success is getting your most loyal consumers to buy more. As a result, it’s become popular for marketing “guru”s to declare the end of mass marketing.

There’s just one problem: it’s not true. The best discussion of this reality that I’ve seen recently is found in Byron Sharp’s book “How Brands Grow” (2010, Oxford). Let me share a few of the realities I found in this excellent, and challenging, read. Read more of this post

iPad 12 – Flatland Gets Eyes (It’s a Miracle)! My iPad 2.

Here we are. Just two weeks short of 1 year since I received Flatland. And what finally shows up? Flatland 2.

Have to admit that the full blown wide-eyed amazement has worn off. Because this is “merely” an upgrade and no longer a step into an entirely new world.

Or is it? First, I love it. Faster, Thinner, Better Cover… and those eyes. Pools of pure technological wonder. (Of course, with one on each side it’s a bit hard to get romantic. It’s perhaps like a very thin fish with eyes pointing two directions – only one of which works at a time.)

But let me get back to “better cover”. At the risk of making a positive mountain out of a reaonable molehill, I LOVE this new case, form factor. It’s simply…well…it hurts me to do this…but it is actually kind of magical.

What did I buy? iPad 2 with 3G (AT&T) and 64 GB. Upgraded memory – not because I every came close to using up my 32 on Flatland 1. Rather, I believe in buying the higher end for resale and because software starts expanding to use more memory.

The case came today – one day later. I bought Apple’s red leather version. (Not because of the (Red) connection. I just like the color.)

My initial experience. Absolutely what you want. I took it out of the box & plugged it into my computer. It downloaded new software and restored my entire Flatland world from backup. And, I was off and running. Took about 20 minutes total.

Initial Thoughts. It is great. And here are specifics:

– Internet is clearly faster and stronger. Pages load more quickly, switch more quickly.

– I find less restarting of applications when I re-open them. That means the multi-tasking is working better. May be the result of better iPad 2 design. It might also be an advantage of the 64Gb size. But even Angry Birds, which I’ve rarely had work well under multi-tasking, was staying in its same state when I navigate away and back.

– The camera’s just seem, well, natural. I have an iPhone 4 so they’re not a surprise. But, it’s pretty cool to add. And, these will let me Skype and FaceTime from the road. Very nice.

Did I Mention The Case? For something you handle all the time this is important. Ever notice how many people kept their iPhone 4’s without a case for way too long? That’s because they loved the product and didn’t want to cover it up. Yes, they were risking damage. But I regret that my iPhone 4 has to live in a case.

So, too, with the iPad. For the iPad 1, I bought Apple’s case then started to search. Bought a case that was a portfolio and traveled a bit with it. Not very helpful, made it really bulky, lacked precision for standing it up, and it was a pain to remove my iPad to work in the keyboard dock. Then, I bought a second case – it was so bad I never really tried to use it.

My year with Flatland 1 was spent with Apple’s case. And, it really was superb – no vendor could compete.

This time I decided Apple probably had a great idea. And they do. This one is is outstanding. The screen needs protection and this case protects it. Otherwise, it’s just me and Flatland 2 – the case stays out of the way. And, when it’s rolled for support – it seems stronger than Apples case for the iPad 1.

In other words, I really get to enjoy the slim wonder that is the iPad 2.

Final Words? App Developers are the Tablet Weak Point. My lingering disappointment in Flatland isn’t with Apple. It’s with the App developers.

Fundamentally, App developers are proving to be a pretty thick headed group. The Apps (a) refuse to use the advantages of the pad and/or (b) abuse the screen by wasting it on “white space” when it should be used productively.

– Why is it that Huffingtonpost’s iPad app is worthless? (They’re iPhone app is good.)
– Why can’t WordPress get a good app? One year later, it remains buggy, tricky to use in some cases, and seems to have been left to fall apart on the sidelines.
– Why don’t Apps like CBS Sports, Bloomberg, and many more have indicators to tell you when you’ve selected something? This is a user interface basic! Very fundamental.

I could go on and on. It’s possible that these are Android weaknesses and that these developers are making things for lowest common denominator (Android). The Apps feel like they’ve been build with the hamfisted approach of many PC applications.

If so, they are making a mistake. The apps which really utilize the tablet are the ones that get bought most often – unless you have no choice.

And So… I head into the new world, powered by a more powerful Flatland. The only question is…what adventures lie ahead?

Copyright 2011 – Doug Garnett – All Rights Reserved

Offline Advertising is Necessary for Online Growth

Note: I originally published this post in 2010. Electronics retailer Best Buy announced in February 2011 that after a TV hiatus (and weak Q4 2010 sales) they were returning to TV because there simply weren’t enough online opportunities to drive their mass market business.

If you are pure B-to-B or consumer marketer with extremely limited goals, then this article may not be for you. But if you need to drive growth in large markets, then read on.

And start by considering Angie’s List, Eharmony, and GoToMeeting. All are perceived to be pure “online plays”. Yet each surprisingly uses massive TV advertising campaigns to drive growth.

Dig a little deeper and we find that Zappo’s gets the highest online sales per customer when consumers receive printed catalogs.

And our list goes on. TV plays include GoDaddy, Vonage, and Hulu… I even saw a report recently that non-profits with extensive online interaction commonly see the highest donations from off-line efforts like direct mail.

But many in the ad biz have drunk the kool-aid of the cult of online advertising. At some point they bought into the idea that “all online” was the future. (In part, agencies buy into this because while it may not make their clients much money, it has tremendous impact on their bottom line.)

And now, rather than finally recognizing online limitations, social media fantasies have become the latest excuse for never leaving the web. (This, despite strong and conclusive research showing that consumers DON’T get new product learning from social media.)

Offline Media is Powerful. Most often, I’ve found that online purists haven’t experienced the power of traditional media… Power that moves markets… Power that drives mass results fast… Power that can be exceptionally cost efficient… Power that far exceeds what’s possible in the cloistered world of online, social media, mobile, email, and other media hyped “cool” options.

So why are so many online companies now relying heavily on offline media? Because it drives growth.

Online advertising’s limitation is that people have to know they want your product before it’s effective – they have to know what you make and why they might want it. Online resources are superb for searching out answers to questions and sometimes purchasing the product. But online’s generally a poor medium for driving out a message about something innovative and unusual.

This is critical if growth is your goal. Growth almost always requires getting your message out to new people, in fresh ways, in order to bring them to become interested in your product.

It’s fundamental: If you are an online player and want to grow, you need offline media.

Not that Apple is the perfect marketing example. But they clearly understand the limitations in online advertising. In fact, onliners have complained for years that Apple doesn’t spend enough of their advertising budget online.

Hmmm. Looking at their growth, Apple seems a lot smarter than those who suggest they need to do more online advertising. By observation, I think Apple figured out that succeeding online doesn’t require advertising dollars. And, they must have found that the bulk of their advertising dollars are most effective in TV and other mediums.

Even with targeted markets, the companies who thrive without off-line advertising are few and far between. So if you’re looking for growth in your online (or offline) business, then you should look first at your offline strategy. Because moving forward may require that you first look back.

Copyright 2010 – Doug Garnett

Should Apple Share its Software?

It’s interesting to see discussion that criticizes Apple for not releasing their software. Now I’m in no way a ShareWare/FreeWare expert. But some of the fallacies surrounding FreeWare seem pretty obvious.

One: There’s an implication that “Microsoft succeeded because it shared its code.” Really? It did? I don’t think so. If I remember right, Microsoft is paid for every unit that is sold with it’s proprietary operating system. What makes. Microsoft different from Apple is that it is primarily a software company where Apple is a systems company. So you would expect Microsoft to seek to put its software everywhere.

Two: “Offering your software to other people is the road to business success – profitability.” Let’s ask Sun Microsystems about how much profit they got from Java. Although Java penetrated the market thoroughly, it didn’t generate a big enough bottom line advantage for Sun to save the company.

Three: “What about Unix?” I love Unix and used to use it quite a lot. But you can’t compare Apple’s IOS with Unix. No one needed to profit from Unix because it came out of a government and university funded effort. Why don’t we check with Apple’s CFO to see if they’ve become government funded?

Four: “What about Android?” Now we arrive at the newest test of the theory that a public company’s best interest is maintained by publishing FreeWare (or ShareWare). Truth is, we can’t say how it’s going to turn out – Android is too new. But don’t confuse a plethora of Android handsets with success. Google’s ultimate win must include generating higher ad revenue because it published Android.

Scientists help each other to tremendous new discoveries by sharing what they know and learn. That’s important. (And, scientists also fight like tigers to protect things they believe will help them get ahead.)

So, maybe tech’s fascination with sharing got its start with scientific collegiality. More often I think it’s based on some ill considered utopian ideals.

Personally, I hope Apple doesn’t share. Love them or hate them, when you buy something with Apple software, you know exactly how it will work: the way Apple intended. And that’s what builds a strong brand and strong profits.

Copyright 2010 – Doug Garnett

My Ipad – Post 11 – Did the Apple iPad Succeed Without Early Adopters?

Did Apple turn tech marketing on its head with the iPad?

The marketing world is guided by theories – “models” that are expected to explain the key issues we face and help us take action. Without these models, marketing would grind to a halt. Too often, though, we forget that these marketing theories and models lack the strength of true scientific theories.

Scientific theories aren’t accepted unless they can be replicated under controlled circumstances. But in business, there are no controlled circumstances. So marketing theories try to make sense of behavior we’ve observed, but lack the strength and repeatability of science.

With all this in mind, I’ve been looking at Apple’s iPad success. It looks like they broke away from classic tech marketing models. The iPad succeeded without first being released to “tech early adopters”. (For decades, tech marketing theory has focused on a classic type of early adopter who loves gadgetry and the ability to tinker with technology.)

We know about Apple’s success because of some unusual, and slightly flakey, attitudinal research which shows that the earliest iPad buyers weren’t wild eyed tech crazies but core mass market buyers. (While I don’t love this research, it does appear reliable in the finding that iPad buyers generally lack the attitudes of traditional tech early adopters. Other research on early iPad purchasers has focused purely on demographics. But early adopterism is most clearly explained by attitudes and not demographics. This other research has blandly concluded “classic early adopters” but the study findings don’t show one way or another.)

How did Apple pull this off?

First, I doubt that they thought a lot about it. People who change the rules do so because they’re entirely focused on their vision of the end result – not on the idea that they’re changing things.

Second, it appears that a small team at Apple shared a very powerful vision of how mass market consumers would use the iPad and drove product development to satisfy that core audience.

Apple understands that to continue to generate revenue from consumers, products need to be more refined.

Third, Apple demanded that technology rise to the quality of a consumer good. This is most publicly evident in the statements that have gotten them in hot water with the industry. Apple refuses to support Flash because it degrades the quality of their end users experience. Apple controls the types of Apps approved for their store in order to, again, provide a good user experience. They’ve been pilloried in the press for these choices, but they make the iPad a damn fine product.

Fourth, the iPhone had pre-trained the market to use the iPad successfully. Anyone with iPhone experience can pick up an iPad and be quite capable in a very short time.

As I consider what Apple’s done, it makes me think the traditional model may have been wrong all along – and even been a problem for the industry. Why? Because success with classic early adopters requires a focus on gee-whiz gadgetry. That causes products to be harder to use and may even lead companies into failure with designs that are impossible to change to satisfy mass market requirements.

So should we all now reject the older model? Absolutely not. In any set of circumstances one model or another will be most useful. Marketing wisdom is fundamentally the ability recognize the uniqueness in your situation.

But to follow Apple’s success, most companies will need to learn new skills in order to develop a clear vision of the mass market product and make certain that product development delivers that vision in the first release.

Now back to my premise. Did Apple succeed without early adopters? Of course not. But they dramatically changed the typology of the early adopter – reaching a much broader market than tech has traditionally reached. The exciting news for all of us is that their successful approach leads to much larger successes.

Copyright 2010 – Doug Garnett

Does iPhone 4 Review Say More About Consumer Reports than Apple?

The perception of Consumer Reports is that it’s an organization dedicated to thoughtful reviews that help consumers sort through complicated purchases. And because of thoroughness, neutrality and independence, consumers came to trust them like no other organization or printed publication in the US.

But I’m not so certain any more.

Consider the recent CR coverage of the Apple iPhone 4. What CR said was that the iPhone 4 is the best phone out there. But because there is a possible problem with the antenna, they do not recommend anyone buy them. Huh? Did they talk to anyone who actually used the thing?

I have been reading online. The vast majority of people who own the iPhone 4 love them. Most consumer written reviews note that they didn’t even know that holding the phone wrong while holding something metallic could cause a call to drop until the press told them. In other words: they weren’t having problems.

As a measure of this problem, Apple has sold 3 million phones. Of those, 1.7% have been returned. By comparison, 6% of the iPhone 3GS were returned in the same timeframe after release. Hmmm. Big problem? Not seeing it yet.

Even more confounding is the video from today’s Apple press conference. Apple shows us that hand position affects signal strength on every smart phone in the market. (How did CR miss that?)

We shouldn’t be surprised. After Apple expressed a direct opinion about Flash’s weakness for mobile devices the technocracy pummeled them. Then we learned that NONE of the smart phones support flash today and Adobe’s scrambling. Why is it that the supposed “evil empire” turns out to be the one that really knows what’s going on and is willing to say it?

Given the antenna truth, Consumer Reports was very, very sloppy here. But is that unusual? I think they’re struggling far more than one Apple review. In fact, I’m hearing very intense manufacturer dissatisfaction with CR – intensity that has grown more over the past 20 years.

In part, they’ve found that CR teams often start reviews with too many predetermined opinions and predefined criteria. This is a problem when an industry grows and changes. It means CR is slow to grow with it. It also makes it a struggle to get a serious evaluation of any product value that is outside of their assumptions – especially because in a smart effort to maintain neutrality the manufacturer has limited contact with CR.

I’ve also noticed that CR puts an outsized weight on low price so important value added features can end up instantly discounted. And if there’s a hot PR issue, rather than publish neutral discussion, somehow CR seems to seek to leverage that issue.

A couple of these fit the iPhone 4 quite well. Because of prior press, CR focused on the iPhone antenna and missed the problem in all the other phones. This is a disappointing failure.

Beyond Apple, I’ve seen these problems with CR work out in tool reviews, appliance reviews, and even vacuum reviews. Since my agency usually works with premium manufacturers who make superb products, I’ve all too often encountered their default to low price as a dominating factor.

The Electrolux vacuum had this problem in a review in the mid 1990’s. But, there was no option to put the product in context for the CR reviewers. They’re on their own so the manufacturer is stuck with pre-conceptions.

CR isn’t alone. Product reviewers of all variety have similar risk. We see it in reviews of woodworking products, electronics, and appliances. But only CR has the bully pulpit to project their mis-judgements internationally and overnight. And that means CR should be holding themselves to a higher standard.

So what do I think all this means about CR? (I take this seriously – because consumers need a solid and reliable operation like Consumer Reports was when I was a kid).

…It seems that CR has strategically sold out to the modern media culture right now. What’s next? A Whale Wars style reality show based on Consumer Reports? It’s probably in the works somewhere.
…It seems that CR may have lost their clout. I cancelled my subscription years ago because they no longer provided information that was really helpful. And Apple has sold 3 million iPhone 4’s despite this horrible review.
…CR must be getting intense competition from the internet. Sites like Edmunds.com have taken away their highly profitable auto review business. Unfortunately this may leave them too hungry for money.
…The internet can even supply all the reviews a consumer might think they need. It’s not clear that CR has found a solid role for themselves in this new world. (And consumer tabloid doesn’t jive with what I expect from them.)

All in all, this is quite sad. The internet isn’t a reliable place. It’s filled with company sponsored “reviews”. It’s filled with people who grind an agenda. And it’s filled with horribly misleading information (there’s a reason consumers often avoid company websites).

So we NEED Consumer Reports. But we don’t need what this iPhone review was about. We need a CR that is a thorough, neutral, and balanced evaluator of products. And that will take a concerted effort on their part to re-establish trust in the quality of their reviews.

Copyright 2010 – Doug Garnett