Archive for the ‘Leapfrom Media’ Category

Reflections on My Visit to India

Tuesday, May 11th, 2010

A little more than a week ago I returned from my first visit to India. I went for business—a chance to hook up with some brethren from our parent company, WPP—but I was fortunate enough to have some time away from the work that brought us there to absorb the people and places of this amazing country. Please bear with me going a little bit off-topic today, but I think it’s important once in a while to share something personal that does connect with what is at the heart of “marketing with meaning”: Understanding people, society, and life.

I’ve done a decent amount of travel in my life, and have visited developing nations including Vietnam, Argentina, and China. But none of these experiences is comparable to what I saw in India. Here are a few of the things that stood out from our handful of days in the country in and outside of Delhi:

  • There is humanity everywhere. This is a little difficult to describe, but India is a place where there are many people, and they live out in the open. Drive down the streets and within a block you will see people eating, drinking, buying, sleeping, changing, fighting, cooking, and washing clothes. While it is unusual and quaint to hear dishes clinking when you walk through a Western neighborhood, India is a continuous, rich display of human life in all of its triumphs, tragedies, and chores.
  • Infrastructure is far behind, but people don’t seem bothered. I was amazed to travel down one of the major highways outside of New Delhi and see only two lanes. This is a country of 1.2 billion people, and one of the growth miracles of the modern world, yet the interstate a few miles away from my home in Cincinnati is 10 times more developed and in better condition. I was also surprised that few people speak English even though this is a historic and secondary official language of the country and education is highly prized. Nevertheless, there is little concern or “hurry” to improve. Maybe this is a good thing, as it allows India to grow at a pace that allows it to adapt, rather than upending everything they hold dear.
  • There is poverty everywhere, but the people smile more than we do. I was blown away to see the amount of people living in small quarters in dirty streets strewn with mounds of trash. Cows, dogs, and people sorted through these trash piles. No vehicle looked less than 10 years old. There are many poor people sleeping on the road median at night. Yet there are no riots in the streets and the people seem to find a way to get by. I will never forget taking a camel-driven cart through a small village at the base of a castle-turned-hotel where our meeting was held. Adults and children smiled and used what little English they knew to say, “Hello, mister!” A little boy with no pants defecating in the gutter of the dirt road waved to me.

It was most interesting to me to see the very rich and very poor living side by side in this vast nation. Fancy cars with leather interiors vie for a driving lane along with dilapidated bicycles hauling propane tanks. And we visited a Sikh shrine and joined people of all classes in bathing our feet, washing our hands, and paying our respects.

I look forward to visiting India again and gauging the progress it makes. I just hope that this unique culture persists through the inevitable wave of development and Westernization that is already sweeping through.

Why the iAd Model Faces an Uphill Battle

Tuesday, May 4th, 2010

(Kudos to Fast Company for this image)

Steve Jobs has a well-earned reputation for willing Apple to success in markets with innovative products that consumers fall in love with. He’s done it with computers, music players, mobile phones, and tablets. Now he is turning attention to a market that is desperately in need of his genius: advertising. Jobs recently announced that his company is creating a mobile advertising service called iAd, which will arrive with the next operating system upgrade in June. With iAd, app developers will have the chance to embed their games and tools with advertising brokered by Apple and receive 60% of ad revenue. Sounds like a great deal for the millions of entrepreneurs around the world who are dreaming up better games and tools for Apple products. But there are five six reasons that I believe iAd will fail to meet the lofty expectations for a world-changing ad model:

1. The cost per engagement model is not variable.

Apple has been known for simplifying pricing in every market it enters. It chose to set music prices at $.99 for a song, and $9.99 for a movie download. Although the music and movie companies fought for more variable pricing, Apple stuck to its guns because it felt consumers wanted a simplified model. With iAd, the company has announced that it will charge one penny per advertisement exposure, and $2 per person who clicks on (or otherwise chooses to engage with) each ad.

I think marketers will accept the penny-per-exposure pricing.  That translates to a $10 CPM, which is high compared to Web banners but below most TV buys. On the other hand, a $2 per interaction comes with a big problem: It is an arbitrary number that is set with no knowledge of the end value. After more than a decade of Web marketing, brands still have little ability to measure what a website visit or banner click-through is worth. I’m surprised that Apple did not implement a bidding system like Google Adwords, where brands compete for space and pricing ends up rising or falling to what the market will best bear.

2. There is no scale opportunity.

At the end of the day, no matter how much excitement Apple’s products generate, iAd will be just another of the dozens of new and old places where marketers can run advertising. There are 85 million iPhones, iPad Touches, and iPads out there worldwide today, on which users spend 30 minutes a day with apps. But not all of these apps will have advertising. Meanwhile, there are 300 million people in the U.S. alone who watch television an average of 2.8 hours per day. There will be many, many more people who read newspapers, buy magazines, or ride subways than own iAd devices.

The big brands that Apple is targeting desire to create an advertisement once and spray it across as many of these media options as possible. But in its efforts to improve the advertising market by controlling it, Apple is making it a hell of a lot harder for marketers to include it in an ad buy. The service will not allow Flash programming–making most banner ad creative units obsolete–and it will have other rules and processes that are still being sorted out. Apple will also use its own measurement system instead of tying into other services that allow comparisons across media choices.

3. The cost to play is too high.

Reports are trickling out that Apple will only allow advertising by companies that agree to spend up to $10 million on the iAd platform. This compares to similar deals in the $100,000 range for other mobile ad networks, which I would guess is often cast aside anyway. Again, even the big brands that Apple covets and that are used to paying for media in the millions of dollars will be loathe to bet so many bucks on a relatively small, unknown, and untested advertising model.

Big marketers want the chance to test and play with a new medium before going in guns-a-blazing. What they like best in new media is a self-serve advertising model that even allows them to place a few ads with a few thousand dollars to see what happens. Google Adwords and Facebook Ads, for example, both allow brands to learn with limited expense. No matter how cool it might seem to place your brand on the most discussed ad network ever, it takes a big personal risk to move so many dollars so early.

4. Better creativity cannot be forced.

Apple showed off its iAd platform by mocking up what ads for Nike basketball shoes might look like. Of course they look cool–like just about anything Nike does. Jobs has spoken often of how poor the world of banner ads is, and he believes that marketers will do a much better job with the tools that Apple is creating with iAd. But not every brand is Nike….

In fact, most advertising is for stuff that people likely won’t want to click on, no matter how cool the iAd platform can be. Will people want to engage as much with day-to-day companies such as banks and toilet paper? Nope. And while Jobs thinks most banner advertising is crap, that’s not because there aren’t enough tools to spiff them up. Flash and rich media banners allow a great deal of creativity and engagement already. You can play games, request samples, get geo-targeting, and watch cool video from a banner today.  Sorry, Steve, but most banners suck because the companies that buy the space don’t believe that the extra cost of creative development and rich media buys are worth it. Why would these same advertisers Jobs wants suddenly believe that iAd is now the answer?

5. Apple will have a hard time building a sales competency (NEW).

I added this after my original post after reading a great Twitter comment from David Rubinstein. If Apple really wants to get into the ad game, then it needs to play by the rules. And Rule #1 is that you need a sales force that can start wining and dining the clients. This has got to be a pretty foreign concept for Apple. It is the coolest kid on the block, and more used to companies coming to its campus in Cupertino for help and advice versus begging for a 30-minute meeting in Manhattan. But that’s not how it works in the advertising world. While some clients will be enamored enough with the company to write a big check right away, most trust their media planning and buying agencies to do the hard work of deciding where ad dollars go. So the Starcoms and GroupMs of the world are the ones with the power. Apple will have to put the hard sell on these tough negotiators in order to build up an ad business.  They will have to play the game of relationship building and create a true sales organization. This is not easy. Just ask Google, which built its billions on a self-service and self-selling ad platform, and is only now, slowly, getting its arms around selling to big, billion-dollar brands. It’s been tough for the Google engineering-driven culture to figure out how media planners and mass marketers think, despite hiring many folks from the traditional ad-selling side.

6. Apps are more meaningful than ads.

Regular readers knew that this point was coming. I believe Apple does have an opportunity to make a few bucks by creating a slightly better option for interruptive advertising. But Apple has already done so much more for marketers by creating these killer platforms for value-added apps. In fact, I would wager that brands have already spent more on creating apps than they have in buying mobile banners like what iAd will sell. Examples such as the Kraft iFood, the REI Ski Report, and Charmin restroom finder apps all provide value to the consumer and create much more meaningful connections for life. These brands and a growing number of others would rather create apps that directly engage with the consumer, instead of buying ad space on someone else’s irrelevant game or utility. This is where the marketing world is going, and surely where marketers will play most on Apple’s platforms.

Steve Jobs is not afraid of taking on a large, old industry with inefficient practices by bringing the end consumer a better way of living. In music, for example, he created an iPod device and iTunes software that improved the music-listening experience so much that the music industry had to play ball.  With iAd, Jobs is challenging the advertising model built around cheap GRPs, poor creativity, and buggy software. But while this new platform might be marginally better, it is still an interruptive advertising model that is barely a fundamental improvement for the end consumer.

Leapfrog Marketing into Gaming

Monday, August 11th, 2008

I’m not too ashamed that I have become a fairly serious gamer in the past couple of years. I was raised on Atari 2600, spent college with Sega Genesis, and recently jumped headlong into the Xbox 360. You could say I have a relationship with games such as Guitar Hero, Rock Band, and Call of Duty 4. I find these games to keep my mind sharp while providing me a disconnection from what went on at the office all day. Of course, I cannot completely disconnect from my day job in advertising, which means I have been a close observer of how these games have tried to inject advertising into my field of vision.

The marketing world is becoming extremely interested in the rising amount of time people are spending with video games. ”Interested” in this case means both: (1) worried about the fact that eyeballs are moving away from ad-supported media (e.g., young men are watching less Monday Night Football and playing more Madden ’08); and (2) excited by the chance to put a marketing message into a gaming space where people are extremely passionate and paying close attention. Video games join new media options such as mobile and podcasts as a place where different marketing strategies are playing out quickly. I believe these approaches are breaking down broadly into interruptive vs. meaningful marketing.  Today I share two examples of companies that are taking these different routes, and show us that the meaningful path makes more sense to both players and brands.

The first example comes from Guitar Hero 3.  In case you just landed on the planet a few days ago, Guitar Hero and its close follower, Rock Band, have become the biggest brands in the gaming universe over the past few years. They have given millions of players the chance to take a tiny taste of what it feels like to rock, and they now have a channel directly into the home through Internet connections that provide a way to play with friends or download additional songs. This is a very, very tempting target for marketers. Since its beginning, Guitar Hero used real musical equipment brands such as Gibson in the game. It’s a modest type of product placement marketing that makes sense. But a few months ago I noticed something different in my field of vision – an advertisement. See if you can find it in the screen shot below:

It’s hard to find in this shot in the upper left corner, but it doesn’t look that much clearer on my 50″ HD plasma either. This is an ad for Microsoft’s Sync in-car audio system. The brand has bought ad space in the display monitor at a concert venue where your Guitar Hero song is being played. I saw another ad for the new Fox TV show Terminator: The Sarah Connor Chronicles. The ads are barely visible on screen, and even less so when you’re concentrating on hitting notes that are coming down your screen (i.e., playing the game).

This in-game ad approach is hardly offensive and barely interruptive, but it sure isn’t meaningful, and I cannot see how it drives sales. These ad examples are likely targeted perfectly, but they are unrelated to the game itself.  Just as experts are saying with mobile marketing, I believe in-game marketing must add value to the experience in order to be tolerated by players and drive sales. This is no fun for the advertiser, the game producer, or (especially) the consumer.  At best, it’s ignored wallpaper.  At worst, the game owner feels that he needs a refund on the $60 he paid for the product.

On the other hand, a friend pointed me to another compelling approach where the in-game marketing adds value to the customer’s experience. Paramount Pictures has partnered with Ubisoft to “inject” a scavenger hunt into the game Rainbow Six: Vegas 2 in support of the release of its movie Tropic Thunder. In this game-within-the-game, players are invited to search for a series of nine branded clues. Those who complete the mission get a chance to win prizes such as a VIP game map and other Ubisoft games. Here’s a screen shots from the game:

Unlike the Guitar Hero example, Ubisoft and Paramount have created an experience that adds value to their customers’ lives. They understand the insight that many first-person-shooter gamers love the chance to try new missions and maps. And they know that word of such freebies travels fast among the connected game communities. Of course, they’ve also nailed the demographic targeting for the movie, and timed the promotion perfectly to start the critical release weekend buzz.

Leapfrogging Interruption into Meaning

The term “leapfrog technology” is increasingly used to show that developing nations may skip intermediate steps of technology use and go straight for the best-in-class standard. In Africa, for example, villages are going straight from no phones to mobile phones, not bothering to put up telephone lines. In Brazil, consumers shifted straight to debit cards. In Pakistan, rural villages are going straight to solar. In these and other cases, it simply makes sense to go straight to the most advanced technology.

Perhaps new media will similarly represent “leapfrog technology” for marketers. Instead of going to the old way of interruptive advertising when these new media options arise, we will “leapfrog” straight to meaningful marketing because it simply makes too much sense for consumers and companies.

(Side note: Look me up on Xbox 360, screen name: Barbobus.)