October 1, 2013
Apple is now the most valuable brand on the planet, with Google growing faster and likely to overtake them.
Poor old Coca Cola has dropped to third while these upstarts reign.
Interbrand recurrently measures the strength of various global brands. They recently released their latest report that knocked Coke off its thirteen year perch at number one. As the chart shows, Google began their assent in 2009 and Apple followed in 2011, all riding the wave of a highly wired and wireless global society. You may drink Coke, Pepsi or bottled water, but everybody sips while searching Google on their iPhones.
Interbrand’s analysis is not the old school, completely financial estimate of customer good will that expresses a brand’s cumulative equity. If we used that measure, Coke would still command the lead with Coke $12B in customer good will, Google would have $10B worth, and Apple would trail with a measly $1B. But brands are more than how much money appears in an isolated accounting bucket. Interbrand assesses profits, demand and competitive factors to create a brand measurement that more closely monitors how real people perceive a brand. The up side is that the measure is more meaningful, but the downside is that it is more transient and subject to fickle perceptions.
Creating a strong brand makes money. The perceived value of a product or company biases buyer preference as Apple, Google and Coke demonstrate daily. The perceived value of a brand has shown in many studies to create brand preference if not brand religion. Many companies never reach even basic brand preference because they fail to understand what a brand is and how the entire organization creates the brand. Coke gets it. So did Steve Jobs (though Tim Cook’s perspective is questionable). Page and Brin certainly did, do and are likely to continue.
We wrote the definitive statement of what is a branding (more…)
July 16, 2013
Death of the caterpillar is the birth of a butterfly. Someone should mention this to the publishers of every major magazine.
Pew Research, the busy bodies constantly reporting on what we people are doing, recently noted that magazine advertising rates are sinking faster than congressional approval ratings. Advertising pages in the top magazines have dropped an average of 18% in the last year, repeating an annual trend that began in 2008, two years before the original iPad was introduced. At this rate magazines will soon pay you to read them in the distant hope that advertisers will care.
Every market changes, but some change very fast (the iron ore industry moves a bit more slowly than high tech and publishing). Established franchises can disappear when their markets rapidly change if they fail to see, accept and respond to the change. Microsoft has publicly confessed that they were slow to respond to the rise of tablet computing and have also said they cannot compete on price in the cloud space. Many magazines have been slow to respond to the web much less tablets, though it is interesting that all the major IT technology magazines went 100% digital well ahead of the paper pack.
Two indicators exist to tell you when a trend is undeniable and will change your industry. First is raw economics. Magazine printing and mailing is an expensive proposition. When the web rapidly evolved, many folks canceled their magazine subscriptions and found equivalent information online. Some magazines lamely tried to drag their readers online but failed to deliver the same experience as print (it was kinda hard to drag your desktop poolside for a light read while working on your tan). The basic value proposition of magazines – as a source of information and entertainment – was replaced by Google’s ability to lead people to competing information sources that delivered content for nearly zero dollars.
The other indicator is customer preference. It doesn’t matter if the economics of one product is better than another if customers don’t want it. In the publishing trades, people still want magazine style content, but they are rapidly showing preference for reading on phones and tablets, want content updated today (not next month), and they generally want to pay nothing (which makes publisher pay walls a problem and justifies dropping digital subscription prices significantly). Nobody ever went broke satisfying people’s preferences, except for the Greek government.
As a business leader, you have to not only recognize market changing trends but respond in the right time frame. You need to be ahead of the competition, yet keep early adopter risk low. Take digital magazines as a case study. Initially the technology was weak and user experience was poor. But it wasn’t weak enough or poor enough to prevent people from migrating to online content. The trend was already established and moving on that trend three years ago was not ill-advised.
The risk of early adoption can be estimated, as can be the other major risk, cost. No new market maneuver is cost free, and some – like changing your content creation for new technologies – can be daunting. But at least the costs can be projected, and once documented can be compared to the cost of failure if you don’t move with the market tide (and as a former surfer and sailor, I can attest that fighting the tide is never wise). The risk of lagging behind a trend is often economic death.
From a marketing strategy perspective, you have to see and measure trends in their earliest days. Apple sold nearly twenty million original iPads in the first year. Mass market adoption on that scale, especially in light of previous iPhone success, was a wake-up call to the publishing industry that may publishers ignored. Advertiser now have search, social and pay-per-click options that divorce themselves from vaguely targeted magazines, reducing the value magazine publishers provide. The tide came and is seeping away many magazines who failed to see the rise.
What tides are you ignoring?
July 9, 2013
Now is the time to get good at math, you crazy college kids.
I was browsing an Accenture report concerning the state of the analytics market, the field where advanced math is applied to business problems. Accenture predicts a dearth of data wizards in the coming decade, which means rapid salary inflations for anyone with education or experience in statistics and research methodologies, and who can apply that knowledge to huge data repositories. Digitally divining new profitability will be in demand for all but the most mundane of industries, which makes a great fit for gigantic multi-national firms with ample budgets.
Small players will benefit too, but differently.
Like life, markets find a way. In the analytics market we see several common business models. Some vendors provide customized services to help enterprises gather, process and profit from data. Others provide both packaged and client-specific modeling. A few of the brave offer SaaS platforms that deliver third party data and can be blended with your own using either or both pre-packaged analytic modules and home-grown code. One firm with who I am overly acquainted has done all three, albeit for a narrow market segment.
Accenture may be right about a growing sparseness of data scientists, but this will only hinder analytics vendors and large enterprises. Down the food chain there already exist app stores for analytics, allowing our poorer business cousins to get into the game and begin refining their knowledge, markets, segments and profitability. Wikipedia and predecessor Nupedia have shown it is not always better to buy academic-level insight to create a product, but to allow the open market provide a million solutions and let the same market select what works. Graduates with backgrounds in one or another industry and enough mathematical moxie to accurately analyze data will create analytics apps that give small and mid-sized businesses a big data boost.
The market is succeeding in serving the primary segments of analytics consumers, namely the segment vector based on company size. It is also satisfying a secondary segment vector, industry verticals. The next step is hybriding all that plus a third vector – internal operations department – into data marts to complete the picture.
Accenture may be correct in counting the number of advanced analytics experts produced by universities against the demand curve, but they didn’t articulate how people without PhDs, but with sufficient knowledge will become the data analysts for the lower tiers. Together this creates the marketing insight for this week, namely that segmentation is still the key to success in all markets, and finding your segment(s) and addressing the needs in those segments in a way that is meaningful, usable, affordable and profitable is required. Shortages of talent in one segment do not create problems in another because the needs therein are different as are the solutions.
February 5, 2013
Say goodbye to television (I tossed all mine in the recycling bin several years ago … quite a liberating experience).
Broadcast TV’s days are numbered, though when it will fade into distant technology memories is uncertain. Market forces can never be denied, and we are witnessing new and highly profitable ways of wasting people’s time (seriously, have you ever seen an episode of The View?). Broadcast TV’s demise will come both from consumer preference and the profit motives of providers and advertisers.
Is there any way we can speed-up the process? Please!
Broadcasting has always been a limited medium. Necessary in pre-digital and bandwidth poor eras, broadcasting was expensive and required people to be couch-bound at specific days and times lest they miss their favorite mental gruel. The high cost of entry isolated many creative people and separated viewers from buckets of new and potentially tastier gruel. Even starting a local television station, much less a national network, was expensive beyond anyone’s dreams. Cheap satellite bandwidth and cable affiliations went a long way to dropping barriers to entry, but it still required herculean effort to launch a TV channel.
Now anyone with a PC can do it on YouTube, and low-budget blockbusters are appearing on the likes of Netflix.
As with all things, following the money will tell you what will be profitable in the future. Netcasting (to hijack the term) is the tsunami that will eventually relegate network television to has-been status. Already people of all ages are migrating to non-broadcast consumption (that my daughter and father both consume non-broadcast media is an indicator of how viable and rapid this shift is). There are a number of customer, vendor and advertiser advantages that make netcasting an inarguable next phase in the numbing of human minds:
Asyncronisty: People have complex lives and non-aligned schedules. Netcasting allows them to consume content at their leisure, which makes them a more obtainable audience (larger viewer share).
Social: Office water coolers were broadcast television’s social media, and were thus limited to whoever was at the water cooler. Netcasting has built-in social sharing, and thus drives consumption faster, wider and deeper.
Targeting: Since people happily give some information to providers like Netflix and Amazon, it is easier for providers to attract advertisers since they can precisely target ads to the viewer (my wife and I get different ads even when we watch the same program – I get truck ads and she gets beauty product ads).
Modeling: Providers teaming with advertisers are tying big data on the back ends to model viewer behavior and consumption, making everything from A/B testing to remarketing fast, cheap and effective.
Scale: Try to scale any of this with a broadcast model. You can’t.
Say goodbye to the likes of ABC, NBC and CBS. Punt Big Bird to Roku. Turn your cable provider into a cheap bandwidth vendor. Say hello to being tightly identified, monitored and tracked so that you are compelled into buying more than ever before … and loving it.
December 20, 2011
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Intersections cause collisions, but also opportunities.
A basic marketing strategy is practice to find the intersection of what customers want to achieve (expected outcomes) and where the market is not providing that solution. Alternately, one can look for places where different technologies can, for the first time, be combined and create previously unavailable value.
Smart phones are now ready to facilitate SoLoMo.
The three raging factors in markets and marketing today are SOcial, LOcation-based apps and MObile. The real-time enabled combination of these three may well be the next major moment in consumer technology and marketing. The ability to reach people in tight geographical clusters, who are sharing an experience or looking for one, will be an exciting market in which to pitch.
Social is about sharing. As witnessed by Facebook posts, it is the moment in which the user has the impetus to share that is important. What one is thinking, feeling and experiencing is what they wish to share. To a limited degree Facebook and Twitter enable such sharing since you can Tweet and post from your handsets. But it lacks location services that enable bridging the people in or near a location (after all, why not share what you and another 25,000 people at the Rolling Stones concert are experiencing).
The other weakness is the asynchronous nature of current social media. Most people open Facebook during lunch or after a day’s work. Some folks browse Twitter weekly (which rather defeats the purpose). Real-time enablement of interaction between near-by individuals, especially when it pulls people in from slightly larger distances (say drawing people into a hot night club from the competing bars on that block) creates new interaction potential (mostly pleasant).
More interesting yet to marketers might be the ability to pool information about people clustered geographically. Merging big data pools of demographic and psychographic information, combined with location identification of individuals could provide real-time promotional opportunities (which will take a real-time arbitrage so the demo/psychographics enable the right advertisers). What if in real-time a common profile of a particular Rolling Stones concert attendee was a 70 year old man (this time is coming) that prefers bourbon? No bother selling ads space to Dr. Pepper.
Like social media a few years ago, this is a largely undefined area for experimentation. On the marketing end, the ability to create highly local participation, or to market to people sharing a location at the same instant, offers the marketer some unique targeting opportunities.
Which means Google (local, Android, Plus, ad trafficking) has all the necessary tools to make this happen now.