Product Placement (and the other 2 P’s)

This is probably my final blog, so let’s make it a good one, shall we…

In addition to the required materials, this week I also checked out “Why Advertising Is Failing On The Internet” by Eric Clemons, the Marketing and Second Life podcasts, and “Advertisers Face Hurdles on Social Networking Sites” by Randall Stross. The theme that struck me the most was the topic of product placement, be it in games or on the internet. I would like to expand on that topic, including television, movies, and music.

First off, I agree with Mr. Clemons that the role of advertising, at least in its present form, will grow to be less and less effective over time. Consumers are becoming more savvy more quickly than most advertisers can keep up with. This is why experiments like Second Life or the bevy of social marketing apps tend to be either complete failures or are effective only in the short term. I have also seen product placement in television shows become much more bold in the last two or three years. This is likely due to the proliferation of digital video recorders, but the response is intrusive to the point where it becomes offensive. Two shows I can think of immediately are Medium (coincidence?) and Bones. In both shows, there is a scene where a character is introduced to a new vehicle (Chevrolet Equinox and Toyota Prius, respectively) and the character gushes about what a wonderful vehicle it is and all the wonderful features it has. Clearly, marketers need to make customers aware of their products (does anyone who might be in the market for a Prius not know of that vehicle?), but such emboldened placement is more likely to turn off viewers than attract them, at least it does for me. Perhaps there is some data to demonstrate the effectiveness of this type of placement, but it just seems like desperation to me. Apparently gone are the days that product labels all just happened to point towards the camera; subtlety is not part of this generation.

Let’s say, hypothetically, that such marketing were to prove ineffective. What would a marketer do? I see a potential easy move towards music. Music, rap music especially, has shown an affinity for mentioning brands even without getting paid to do so. Granted this typically applies to luxury brands, I could imagine a few upcoming musicians would readily take sponsorships from advertisers for quid pro quo promotion. If I recall correctly, Chrysler did just this with Snoop Dogg a few years back with the 300C. Just check out this link for some more examples of potential cross marketing: http://www.billboard.biz/bbbiz/content_display/industry/e3ibd93dba87a9330a3e46bc95c5dcacd9b.

Similarly, I have seen an increase in video game marketing (oh, how I miss Pong). Unlike a commercial television show, where a logical person will expect advertising, gamers paying $60 for the latest video game will have, and have had, scathing reviews for any advertising that distracts form game play. Ironically, these reviews appear to contradict studies that actually show video game advertising is more effective than TV advertising. I won’t go into detail here, as there is a good article on TechCrunch: http://techcrunch.com/2009/03/24/study-in-game-video-advertising-trumps-tv-advertising-in-effectiveness/.

So that takes care of promotion; what about product, price, and place? As I mentioned earlier, customers are becoming more savvy – they all can readily find reviews of your product and the best place to buy it. Thus, I see much more emphasis in the future on advanced marketing functions. Specifically, as promotion becomes less effective, resources must be places on understanding customers’ wants and needs (stated or not), what is required to delight those customers, and what adds the most value to the product. Pricing will need to flow accordingly depending on the firms choice of being a low cost supplier or a value-add supplier. Similarly, distribution channels will reflect the firms’ strategic decisions. Companies will not be able to make up for an inferior product by blasting consumers with ads, not will they be able to convince consumers of value that simply is not there.

So how does this all tie back into the digital age? Well, easily I say. These new media tools can be used to direct the attention of consumers to your product. Certainly the product value must be there – a clever online game cannot make up for a crap product – but the marketer can pique the consumer’s interest and establish a brand in the collective social psyche. It will require a fine balance between opening a line of communication with the consumer and offending or turning them off.

Data, data, and more data

As I stated, data driven marketing is something that appeals to me. I look around and think about how valuable it would be to quantify all the movements and characteristics or every consumer. As the suggested reading from the NY Times highlighted, your smartphone is already being used to generate data not just about your web browsing tendencies, but also your whereabouts. Tie this data into social networking to understand your fiends' habits and locations, link this to previous credit card purchases, and roll in traditional demographic generalizations, and you pretty much have the ability to target every individual with advertising catered exactly to what they need and want. To do any better, you'd need to stalk them -- and that's illegal and time consuming.

I also saw the Kimberly-Clark presentation on their VR tool. I think this is a great step in the right direction to gather data and, more importantly, to help in sales pitches, but I can't help to think there are some flaws in the design. First, I know that my shopping experience is greatly altered by the amount of traffic in the store. Yes, I know they are targeting women, which I am not, but I find it hard to believe that a mom pushing around a screaming toddler in a busy store will linger and browse just the same as they would in another situation (though I have seen this done). Second, given what I see in a number of stores, people may pick up a product on impulse and even put this in their carts, but there are a number of folks who then see another item they like better or have second thoughts, and they put the item down in some other location. I'm not sure the KC VR accurately captures this behavior. Finally, what about the stuck wheel on the cart? The shopper would get distracted, curse at the cart, and miss the cleverly placed displays. Other than those shortcomings, it's an interesting tool.

Finally, regarding the history of the internet, I had seen most of this already, but viewing it again in the context of marketing and web analytics was useful.

Really

Quicktime? Really?

Week 5 Thoughts

There is not a lot of supplemental information this week, which is a shame, since I dig on metrics. My near term career goal is in product planning -- determining the customers wants and needs. So I am looking forward to learning about web metrics and market research. Let's see how I feel in a couple of days.

Business Models

Last week, and be sure to ignore the date on this post, I took a deep dive in business models. More specifically, how I could make money if I were to start an internet company. Though I recognize that a business model would need to be in place before getting any kind of venture capital, one business model in particular irks me. That is the virtual goods market. Now it's not the virtual creations in Second Life or World of Warcraft that are particularly loathsome -- these are items that have a clear use, like cheating at a game. It is the virtual gifts, like those tossed around in Facebook, that really bug me. Take the virtual martini, for example. Even though the margin may be 90% for such an item (let me pause for a moment to reflect upon the wondrous creation that is this 16-bit GIF), I have a hard time understanding who would pay $2 for this. I'm cool with Freemium, Affiliate, Subscription, and Advertising. These all make sense (though some of the upgrades, partners, and ads may leave a bit to be desired). This just might be the engineer in me wanting to see a product, but I think it has more to do with the lack of value in sending what is effectively an icon in place of actually saying what you mean. But, hey, I also think 50 text messages aren't as efficient as a 2 minute phone call, so maybe I'm just getting old.

Long Tails and Sharp Fish

This past week I listened to the discussion on the long tail principle, as well as the Fresh Air and Charlie Rose discussions on the iPad and a few bits on social media. I feel somewhat apathetic about the iPad, so the various learning elements mostly just annoyed me. To me, the iPad is much ado about nothing. Based on the various opinions I see on the tech blogs, I am not alone in that opinion. E-readers, on the other hand, especially some of the up and coming ones like the Skiff, are something significant, as the represent a change in the way written media are developed and marketed. The iPad does a number of things okay, but no one thing well, and is, thus, not a true convergence.

One of the more interesting and useful elements this week was the Razorfish report on Social Influence Marketing. The content was exhaustive but quite insightful. When I read the section on user created content, it reminded me of the Current TV channel. On Current, most, if not all, commercials (as well as a significant portion of the actual content) is viewer created. Their Website even features a section to help the user create - and potentially get paid for - ad messages for sponsors. ( http://current.com/participate/vcam/) As indicated in the Razorfish report, the sponsors here recognize that pushing a brand message is ineffective and allows for an interactive and honest communication of the brand with the target market. This is something I would expect to see used increasingly more on other channels.

Week 2 Thoughts - Brand Communities

My plan this week was to get through all the assigned and suggested material earlier in the week and spend the rest of the week looking for interesting tidbits to share with the class. Unfortunately, the timing didn’t quite work out this way. But I did get through the material after all and had a few thoughts…

I didn’t get nearly as much out of the Alma Whitten discussion on Google’s privacy practices as I did the mandatory lecture on brand communities. I couldn’t help but think, though, that the strongest brand communities I have seen, such as HOG and the Deadheads discussed, all seem to have an aspect of physical, real life contact with others in the community. Web 2.0 social apps certainly help people connect with others who share similar interests. This is particularly good for those who have more focused interests or perhaps have limited access to the interest, but I have not seen this generate as strong an emotional connection as when people with similar interests can share them in person. I judge this as a function of the human condition and our need for personal contact rather than generational changes. An example of this would be sports fans. There are certainly social networks – brand communities – associated with nearly every sports team beyond little league, but the web extension of this community to me is simply a means to stay connected. The truly visceral bond is formed through the experiences and memories of ball games attended or viewed with friends and family.

So what does this all mean? I believe this means that if a company wants to create a strong brand community, it needs to find a way to get community members together in a meaningful way sharing their common interests. The company may very well be successful without such a strategy, but personal bonds will last far longer than the next killer app.