Sunday, September 03, 2006

AOL Is Dead - (Not So) Long Live AOL

AOL was not the first online service though it did predate the commercial Internet. It grew and grew and prospered whereas Compuserv, Prodigy, and numerous others are forgotten.

It was not a technology leader. That was not its value and its market was not technophiles. It was a service, which provided content, connectivity, and community before the Internet and during itsgrowth spurt. Even after the Internet was common, AOL offered a comprehensive service, which attracted and retained tens of millions of users. For millions AOL was the Internet.

What set AOL apart and made it preeminent was marketing. Not hyperbolic like Apple nor solid like IBM, nor memorable in creative or execution. As was said of Coca Cola in its glory days, AOL strategy was to be within an arm’s length of desire.

AOL diskettes and later CDs were in the mail, in magazines, at libraries, convenience stores, and post offices. They included a “free” trial and a competitive price. It was easy to join and not so easy to quit. If you had access to a telephone and $20/month you were in. So were 25 million others, at its zenith, circa 2000.

In the days before standard email addresses, AOL was easily the largest community of online users. An AOL screen name was, like a well known address, something people were reluctant to change. Rather like mobile phone numbers before mandated portability.

What happened? How did so dominant market player loose its market?

AOL was king of dialup and its market allowed it to prevail over competitors with lower prices and different offerings. Dial up is dying and the fortunes of the king declined with his domain.

This leaves AOL with millions of customers and increasingly less to offer them or make them stay. Its portal, content, free email, and other services delivered on an advertising pays the bills model looks, feels and smell sort of like Yahoo, MSN, or a number of others. If it controls costs, witness its recent layoff of 5000, it can survive for quite a while as one of many web media properties. As a key player, it’s gone.


Tuesday, August 01, 2006

Phonak Phonak

Quick, what’s a Phonak? Readers of sports news might recall that the winner of this year’s Tour de France, Floyd Landis, rode for the team sponsored by Phonak. The team is multinational, the company is Swiss, and Landis happens to be American.

Landis’ win propels Team Phonak to fourth place in 2006 ProTour ranks. Estimated cost of this sponsorship – at least 11 million Euros or slightly more than 14 million dollars.

Not insigficant for a $700 million (867 million CHF) company. And that doesn’t include Phonak’s sponsorship of America’s cup yacht racing.

What do you get for 14 big ones? Apparently not that much even with a winner. Phonak has already decided to abandon its marquee position. Next season, the team will be named for iShares. So much for a consistent branding message.

As of this writing, there’s a significant chance that will be the first Tour de France champion to be disqualified. Landis’ picture has been quietly removed from Phonak Cycling’s home page. If Phonak didn’t benefit from the win would they still be tarnished by the disqualification?

Getting back to our lead question, Phonak is a manufacturer of hearing aids and instruments. It markets its products under a variety of brands (micorSavia, Eleva, and eXtra), but does not appear to have products bearing the Phonak brand.

Accouding to its collateral,

“Phonak Hearing Systems is Main Sponsor of the Phonak Cycling Team and counts on the Cycling Team to carry the message of better hearing into the world.”

“Phonak supports the Phonak Cycling Team in 2006 for the seventh consecutive year. Phonak is convinced that hearing fosters communication among people around the globe and counts on its Cycling Team to draw attention to the topic of better hearing.”

“We race for better hearing”

One could imagine a campaign promoting athletes in need of hearing aids or one showing how these devices help people be more active, or many other posibilities at lower costs with positive ROI. As for this one. We’re listening but we’re not hearing this it!

Saturday, June 24, 2006

Measurement Meanderings

Who sponsors:


The NFL?

The World Cup

The US Open golf tournament

The recent Winter Olympics

The last NBA game you watched? (now that the season is mercifully over)

What is the official car, boat, deodorant or cereal of (supply the name of your favorite team)

What does Tiger Woods endorse?

What doesn’t he?

What events do Pepsi Cola, Verizon, and Coors respectively underwrite?

As marketers and students of advertising, we might know some of this if we like to play trivia games. My research strongly suggests that consumers in general (as well as most marketers and sports fans) do not. Nor have the sponsors or their agencies shown that endorsements and sponsorships increase sales.

Undaunted by such details Relay, sports-marketing unit owned by major ad agency Publicis Groupe has announced a “service” to evaluate the value of sports marketing programs. Relay’s primary business is sponsorship and event marketing, so one might question their independence as evaluators of such programs. Here’s what they Claim.

Mind you Relay doesn’t measure sales or even consumer perception but what they assert is a better measure of exposure. The real problem with relay’s evaluation, like much traditionally done by agencies, is that it measures output by input. That is, it adds up screen exposure using a proprietary methodology and presents the total as value regardless of whether the audience sees, remembers, or most importantly acts on what is displayed.

For example, their analysis concludes that Honda received the highest value of any of the sponsors of the latest Indy 500 race. Since auto racing has nothing to do with Honda’s brand image or its principal products. Where is the value.

Honda’s executives and large dealers may have been able to park their Civics and Fits and tool around the track wearing spandex suites in fulfillment of latent fantasies, but let’s not call this marketing.

Friday, June 09, 2006

Can Superman Handle the Pepsi Challenge?

Recently Pepsico has been running banner ads on Yahoo promoting a contest connected with the soon to be released summer movie – Superman Returns.

The promotion is an ambitious integrated marketing program combining point of purchase, special packaging, event marketing such as the Pepsi 400 stock car race, merchandising of toys from Mattel, and a video game from Electronic Arts. The promotion is further complicated by inclusion of Pepsi’s brand portfolio including Mountain Dew and Lay’s potato chips. Not content with empty calories, the man of steel’s return will also be promoted by Pepsi’s Quaker and Tropicana products such as (and I am not making this up) Superman Crunch: Cap'n Crunch cereal with Superman shield shapes that turn milk blue and four cheese pasta Superman limited edition Pasta Roni.

Executing such a program may indeed require super powers, but will its effects founder on the kryptonite of confusion?

Of course, if the movie is a hit it would help clear the end aisle displays coming to a WalMart near you. Superman in formats ranging from comic books to multimedia has proven to be a durable franchise. The promotion could thus be viable independent of the success of the movie. It’s less plausible that the product promotion will help the movie.

What in the long run (let’s say the fourth quarter) does this do for the brands involved? How durable is the effect of being Superman’s official high fructose or diet or low trans-fat or high soluble fiber snack? Can Pepsi, Diet Pepsi, Sierra Mist and Mountain Dew all be super quenchers? What about Gatoraid?

We suspect the campaign may have a positive ROI but not a positive EROSI (enduring return on sweat invested). Once the sweep stakes are over and the action figures are gathering dust, the market and mind shares of Pepsi’s brands will not have grown.

Tuesday, May 23, 2006

When Talk is Really Cheap

It has for some time been technically possible to talk over the Internet for “free” as marketers might say or for “no additional cost” as students of marketing might observe. This so called IP telephony used to come with many restrictions and inconveniences, ranging from poor sound quality to the need to call from one computer to another. These barriers have fallen dramatically.

Recently Skype,, the Internet telephony company now owned by eBay, has changed the game by offering free calls to regular phones throughout the US and Canada. You can also use Skype for international calls, but they might set you back $0.02 a minute. The quality of the call has also improved – in our experience it’s usually better than a calling on a mobile phone.

The technology aside, what does it mean to your business when talk is as cheap as email?

To us it makes it that much easier to do what marketing should be about – having a conversation with customers. This does mean yakking because you can. With cost no longer a factor even for the smallest business.

A) Manage your contacts
B) Establishing trust: remember why there is a do not call list
C) Keep it touch
D) View conversations as opportunities to get closer to your customers not just expenses avoid or reasons to move your call center to India.
E) Refining your message – what are you going to say after you say hello?
F) KISS (keep it simple stupid, as well as short) As with email, post, or any other medium; don’t try to bore your customers into submission.
G) Be available – how many businesses go to great lengths to hide phone numbers from customers.

When’s the last time you had a real conversation with a customer?

Saturday, May 13, 2006

Close But No, I Don't Want To Shave My Cigar

Philips, maker of many things electric, wants men to shave where no shaver has before by buying its new bodygroom shaver.

They're trying not only to revive a moribund product group (electric shavers) but to create a new category of product. A long shot for any marketer, Philips has created news-worthy if not ad-worthy a campaign. Rather than spending heavily for TV, philips has created a long-form web video. You can find it at

The video itself has become news and the source of word of mouth/word of email buzz. Thus it has received vastly more traffic than could be expected. Such great exposure seems a marketers dream - Great exposure for a low expenditure.

Its lack of taste notwithstanding, I find the commercial quite weak; a solution looking for a problem and not a convincing remedy for any of problems it hopes it can convince the viewer he ought to worry about.

If this is so, the the very buzz and exposure will stall the product before it can get started. High exposure is not what you want before you have your marketing message and programs debuged. If on the other hand, Philips wants an inexpensive way to test marketing a concept and a cheap way to see if buzz = no sale; they have pulled off a very smooth move.

Tuesday, May 09, 2006

Who Let These Dogs Out?

An early truism of the web – “On the Internet, Nobody Knows You’re a Dog” remains essentially true. I was painfully reminded of this after booking a hotel room online recently.

In e-business this translates to: there are plenty of bad deals on the web and potential customers know this. What are you doing about it?

The problem is not new, but the conventional solutions are more convention than solution. Let’s review some of the common ones.

  • Web authentication – does the site indeed represent the business or organization it claims as opposed to being a fraudulent front end. E.g. VeriSign, Thawte.

  • Certification bodies, e.g. BBBOnline

  • Review sites, e.g. Bizrate, igougo

  • Privacy guarantees - trustE

  • Network sponsor (Amazon marketplace, eBay)

  • Your own guarantee

Implicitly and often explicitly you’re just saying trust me. All of these have some merit, though for some customers they do not have much currency and fail to reassure. Indeed too many logos on the page can evoke the resistance they’re trying to overcome (as well as making you look like a NASCAR wanabee).

Trust is a key component of your brand. A trusted brand like LLBean had a ready transition to ebusiness. But what if your brand is little known? Realize that you are part of the product. Service, support, or whatever else is key to the value you add is clear, explicit, and up front. Not buried, hidden in small type and legalese, or missing. Yes, you will get some “buyers”, who will inappropriately and unreasonably demand a refund. Far more importantly, you will create some long term repeat purchase customers and build a your brand.

The iconic cartoon can be seen at

Sunday, April 16, 2006

Filenes RIP

About this time every year along with the new baseball season, the end of skiing, and the sighting of the first mosquito comes the annual hit parade of brands. The usual suspects (Coke, BMW, Microsoft, ...) appear. Top brands have great value.

More remarkable is the brand, which falls into a black hole - not because of an disastrous event such as a tainted product, which harms customers (Bausch & Lomb will likely survive despite the response of its clueless management), or slow erosion from years of mis-marketing (any number of the brands of yesteryear, say Westinghouse).

Such an implosion of brand equity seems to have happened to long time Boston retailer Filene's. After its acquisition by Federated, its tangible assets are being sold or redeployed into other brands such as Macy's. Thus Filenes and what it stood for is valued at bubkas.

As marketers one of the reasons for care and feeding of our brands is the value they add to the whole enterprise. Filene's and it's indistinct value proposition seems to forgotten this.

Sunday, April 09, 2006

Massachuestts to require medical insurance

This requirement is supposed to address the problem of there being a population of uninsured by assuming that “affordable” policies will forthcoming. Without debating the merits of the new law, what perspective can we as marketers add?

Consider a content analysis of direct mail, telesales attempts (including those which flaunt the do not call registry) and email (that which bypasses your spam filters and is noticed before being deleted), let’s say over the past year.

This should vary depending on life status and demographics. The relative frequencies of promotions for insurance and insurance like services which came to our collective inboxes are listed below.

  • Retirement vehicles such as IRAs
  • Auto
  • Life
  • College Savings (essentially a kind of insurance)
  • Extended product warranty
  • Disability
  • Mortgage
  • Trip and Travel
  • Long Term Care
  • Pet Care
  • Funeral

Notably absent were any promotions for health insurance. What’s wrong with this picture? Are the insured not interested in coverage at prevailing market rates, or are providers not interested in marketing policies to individuals?

The law does is not in effect until July 2007. By then your inbox should have some new occupants.

Friday, March 31, 2006

Stick With Your Brand

Memoirist, talker, and serial publishing hit Frank McCourt had a big idea: A happy childhood don’t do no good. He converted his unhappy into a vivid and successful, both commercially and atristicly, personal history, Angela’s Ashes. (It should not be confused with the ponderous movie made from it.)

As a successful new brand, had a license to try again. His next book, ‘Tis, was literally more of the same. Some filling in of the original story and more about young Frank in the new world. Not as vivid, forceful, or fresh as its predecessor, but still echoed and reinforced the brand proposition of a man with whom you’d like to share a pint of Guinnesss and shoot the breeze.

At this point, the McCort brand has critical mass. He’s on talk shows, celebrated at writers workshops, has won a Pulitzer Prize. He can take disparate ramblings, which didn’t make the previous books, and sweep them into yet a third book, Teacher Man. This last, limps along as packaged product. It seems dictated in a few sittings rather than written.

Had it appeared first, I doubt McCourt would have asked to write more. Yet it is on target and on message for the brand. The quality of the work notwithstanding (still acceptable for popular non-fiction), the brand is strengthened by bite sized vignettes. The New State Writers Institute asserts that McCourt is “one of the master storytellers of American literature.”

So far, he has not succumbed into risky brand extensions such as McCourt Ale or Stout.

Contrast this with a somewhat better known brand – Coca Cola. It has been loosing share and sales as it muddles through different campaigns, images, executives and value propositions. The last often unstated.

Coke has real problems. Its traditional markets are less interested in high fructose corn syrup, additives, and gratuitous caffeine. Unlike McCourt, Coke seems confused about the benefits of its own brand.