February 11, 2010

37) PepsiCo

危 wēi  danger

The Superbowl is nearly as famous for its commercial breaks as for the game itself.  In fact, the commercials are more memorable than the game for many viewers – a study by ad agency Venables, Bell & Partners showed that 66% of viewers remember their favorite advertiser from the 2009 Superbowl and only 39% recall which team won.  However, this exposure comes at a hefty price, rates for Superbowl commercials run far above any other TV event because the game draws around 95 million viewers in the US alone.  30-second spots run close to $3m and the game typically includes 50 to 60 spots.  PepsiCo has advertised its cola during every Superbowl for over 20 years but it has become more and more difficult (and expensive) to stand out from the field.

机 jī opportunity

Instead of running the risk of being an also-ran, PepsiCo announced in December that it wouldn’t be advertising its cola during the Superbowl this year, instead it unveiled a $20m fund in which it is looking for people, businesses, and non-profits with ideas that will have a positive impact on US communities.  Anyone can submit and rate ideas and each month those rated highest receive grants of between $5k and $250k.  Moving away from the norm seems to have worked, in a recent survey by Nielsen, Pepsi’s ‘Refresh Everything’ campaign accounted for more than 21% of the media coverage and online buzz around Superbowl advertising.  Given that PepsiCo usually spends in the region of $30m on Superbowl advertising breaking away from the norm seems to have paid off.

How About…

  • Deliberately moving away from marketing channels used by your competitors?
  • Allocating marketing budget toward campaigns for positive social impact?

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January 15, 2010

29) Google – Nexus One

google-phone-nexus-one-logo-symbol

危 wēi  danger

Google remains a phenomenally successful firm – since its humble beginning in January 1996 as a research project by Larry Page it has literally changed the world.  It has successfully launched THE search engine, Gmail, Google Calendar, Google Docs, Google Talk, Google Chrome OS and Google Maps. It’s even become a widely used verb.  These services, plugged into its main revenue driver of advertising, have fueled its growth in market capitalization to $180bn. Google’s Android mobile operating system has begun to gain real traction too, LG alone has committed to launching 10 Android phones in 2010.  So, with Android clearly gaining traction, isn’t Google endangering its relationship with the handset manufacturers by announcing the launch of its own handset, the Nexus One, exclusively for sale online on its own platform and available unlocked?

机 jī opportunity

Alternatively, perhaps Google is actually investing in building a completely different business ecosystem, uncomfortable with the power of the handset manufacturers and carriers at present.  This might make the company comfortable with what are likely to be limited sales of the Nexus One at such a high initial price.  Instead of simply accepting the current industry structure, often with the carriers acting as the consumer’s first port of call, Google is establishing its own storefront to sell the Nexus One and more importantly an option to completely change the buying experience.  Perhaps this platform, which is guaranteed millions of click-throughs per day from the Google homepage, will in future become the consumer’s tool for choosing between a wide range of handsets and service providers.  If that’s the case, the Nexus One is simply a Trojan Horse and the sales numbers don’t really matter – the platform is where all of the value will lie.

How About:

  • Questioning the whole business ecosystem in which you play, is it optimized for consumer choice and value?  (if not it’s likely to be disrupted)
  • Asking yourself the tough questions and initiating change – even in the good times?

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January 7, 2010

26) Vice Magazine

vice-logo

危 wēi  danger

Media companies are having a particularly torrid time with the global downturn, driving advertising revenue down and the internet acting as a disintermediator, many commentators are predicting the demise of all print-based publishing.  In this context few would look to Vice Magazine, a quirky magazine that was founded as a free ‘zine’ in Montreal by three friends in 1994, as a potential success story.  Its anti-establishment, narrow appeal seems too niche to provide a platform for real growth.

机 jī opportunity

However, Vice has flourished in the downturn.  It expects to increase revenues from $45m in 2008 to $64m in 2009.  Part of this success appears to stem from its absolute focus on its teenage hipster readership – it has never tried to broaden its appeal in any given market.  As such, it takes great pride in offending virtually everyone else and it often refuses advertisers that don’t fit with its target, including footwear giant Sketchers.  This focus has kept advertisers coming back, confident in their ability to access a key audience.   In order to grow, Vice has had to improve its value proposition to that narrow segment – it has achieved this in two impressive ways.  Firstly, it has expanded globally safe in the knowledge that teenagers the world over are more similar than ever  (in part due to technology) – Vice now gives its magazines away to 1.2m people in more than 30 countries. Secondly, it offers additional services to its readers and advertisers, including a video sharing service and an in-house advertising agency.

how about…

  • Targeting a narrow segment to perfect your value proposition?
  • Flagging up when the offer to your core segment is being compromised and refusing to make that compromise?
  • Examining if the segment’s needs are the same in other markets too?
  • Developing additional offers to address the specific needs of your narrow segment?

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