Darren Herman

Hipster Marketing 101

Do you want your brand to be #1?  Well, that all depends on who you are talking to at that particular time but most people would tell you...YES.  In certain areas of business, you probably want to aim a bit lower for the long-run and let me explain why...

In today's Wall Street Journal, Gina Chon has a lead article on page B1 of the Marketplace section about Toyota's Scion sales strategy.  In 2006, the Scion (hip, trendy car from Toyota) is going to surpass its goal of 150,000 units sold by 25,000 additional vehicles.  This means that there is obviously more demand for the Scion than expected.  Knowing their target audience well (hipster, urban, laid back, young, etc), Scion realizes that if they increase the production of the automobiles and make them readily available for everyone to purchase, they will flood the market and dilute the Scion brand.

When you drive around on the street, do you notice how many Toyota Camry's and Honda Civic's there are?  Probably... they are everywhere.  For hipsters and the audience of the Scion, this is opposite to what they want.  It's about unique identity, not mass market.  With that said, Scion will earmark production for next year at the same level - 150,000 Scions... to keep the brand valued by hipsters.

One case I use when giving speeches is about the NYC club scene.  You do not want to be the absolute hottest club for a summer even though the monetary rewards may be fantastic for that period of time.  The next summer, there will be another club that is hotter than you because influencer's and hipsters always need to find something new and not do what has happened in the past.  The club who did well the previous summer will have a tough time surviving the next year and will certainly see lower overall revenues (if the business remains exactly the same).

Lets take this case online... we've got a lot of buzz around Facebook, YouTube, MySpace, Friendster, etc.  An acquisition of any of these sites are risky as they were built around buzz -  and the crowds who are a large part of the recurring audience is always looking for the latest and hottest fad AND/OR trend.    Once these sites get too much media attention and the mainstream mass come to use them, you'll see an eventual decline in usage from the hipsters and trend-setters which will then take mainstream traffic away when something else gets hotter.

Would love to hear thoughts on the above....

Ad:Tech 2006 - New York

I made my way over to Ad:Tech this afternoon at the New York Hilton.  Armed with a bunch of business cards and my colleague BK, we came into the lobby of the hotel and there were swarms of Internet marketers congregated around.  I've been to the show over the past few years and have to say that they did a pretty good job with attendance... but this was the first day of the show so you kind of expect it.

I walked the entire exhibit floor and saw many familiar faces.  I couldn't believe how many booths there were of marketers... seems like the company to have these days is an ad-serving company, a list management company, or a lead generator.  Every other company on the floor was one of these.  It was interesting to see that the big boys were mostly absent from the show.  I did not see Yahoo, MSN, Viacom, Fox, Newscorp, IAC.  I did see Google, but they had a very small booth tucked in with others.  Casale Media and ValueClick had the larger booths (there may have been more but I didn't notice).

I'm not 15 pens and 3 mousepads richer haven been to this show but I have to say, the support of the Interactive industry was fantastic.  Lots of people at the show, though I could probably only count the amount of agencies/brands I saw on 2 hands.  Keep on rocking - the Interactive industry is blooming. 

Second Life - The Months Ahead

Many different brands are embracing Linden Lab's Second Life including most recently Sony BMG, Reuters, Toyota Scion, American Apparel, and MLB (to name a few).  However, what happens 6 months down the line when the PR buzz surrounding an integration into Second Life is diminished?

Lately, if your brand enters Second Life, you are almost guaranteed placement in the trade publications (ad) and the major newspapers (NYC article).  Readers are getting tired of hearing about these integrations and the law of diminishing returns will kick in.

Is Second Life sustainable for your brands once the PR buzz wears off?  That is the question.  How do brands benefit from being in Second Life?  There are just more than 1,000,000 registered users in the virtual world and roughly 8-10k logged in at any given time.  Reach is not exactly ideal... so what is the benefit?  If you are going after an extremely niche target audience of techno-geeks, science fiction, and content generators, then it may be ideal... but that's a small subset of society.  How sustainable is it for brands?  Thoughts?

Brands Go "GooGoo" For a Second Life

We’ve seen about a dozen major brands set foot into Linden Lab’s Second Life.  Retailer American Apparel, Major League Baseball, Toyota Scion, a handful of major label artists including Duran Duran, and various other ubiquitous brands have gotten a Second Life. For each of these integrations into the virtual world, they achieved quite a bit of PR exposure (more so than most campaigns receive) but there is going to come a time in the very near future where editors at magazines and blogs will want to know more than just about the deployment within a virtual world… they will want to know campaign metrics.

** Note, I'm a huge proponent of metaverse marketing.  I have huge respect for all of the companies listed below and they are doing some things that are bananas.  The point of this post is to get people thinking about the metrics about metaverse marketing and showing them to the press to see what works and what does not.

Many of the integration shops such as Electric Sheep Company, Millions of Us, and Rivers Run Red are fantastic at developing the assets for virtual world integrations but when dealing with advertisers and their agencies, it’s a bit more than just delivering really beautiful and realistic assets. Advertisers are using these metaverses as a way to communicate with their audience, be it a retail shop, a baseball stadium, or automobiles driving around, but what numbers are being derived from these campaigns? If a brand is going to commit $20,000 to developing an in-world integration, how do you know if they recouped that amount back from the campaign? How much value is derived from each integration?  How much awareness did an advertiser attract from the campaign?  Purchase consideration?

With diminishing returns eventually from the PR exposure of in-world campaigns, in-world value creation is going to face increasing pressure. How many people interacted with the store, bought clothing, talked about the brand, viewed the concert, clicked to get more information, etc? This list can go on for pages, but these are all questions that I’d love to wrap my head around when looking at metaverse campaigns.

Different companies are developing ways to measure around their integrations and I’d love to see the data on this.  Are in-world campaigns worth the dollar commitment?  With around 8,000 concurrent residents of Second Life at any given time, and with 250k users logging in within the last 60 days, is this medium worth the five to six figure spend for brand integration?  Lets see the numbers.

Toyota Scion Enters Second Life

Scion, the progressive brand from Toyota has entered the virtual world as the first automotive advertiser according to Millions of Us founder, Reuben Steiger.  Reuben made the announcement today right before the lunch break at the Second Life Community Convention here in San Francisco.

Steiger even had a silver Scion at the Second Life Community Convention and drove it around the parking lot in front of a small crowd.  He beeped a horn - and voila, the Scions were released into the virtual world.

The Scion apparently has been dropped all around the grid of Second Life and users can drive it around and interact with it.  There are some current automotive designs in Second Life including a Dodge Viper, however, this is the first sanctioned campaign by an automaker.

4Ps of Marketing Exist in the Virtual World

I am attending the Second Life Community Convention this weekend in San Francisco and recently listened to a panel based on Real-Life Business in Second Life. SL resident Bolliver OddFellow who runs Infinite Vision Media made an extremely bold statement regarding, “advertisers and marketers must throw out everything they know about advertising and start all over when planning for the virtual world.”

I fundamentally disagree with OddFellow’s statement.  Marketing is built around the 4 P’s which hasn’t changed for the last 40 years. E. Jerome McCarthy wrote his classic book called Basic Marketing which has been a staple for brand strategists and agencies across the world. Product, Place, Price, and Promotion must all be taken into account in the virtual world. These four pillars are in every advertising and marketing campaign. The remark in which Bolliver OddFellow made earlier today totally threw away this notion of the 4Ps.

I would say that we need to be especially careful on how we plan campaigns in the virtual world to everyone’s point on the panel (including my friends, Steiger and Verbeck).  Second Life has around 530,000 early adopters who are taking part in forming this amazing world and each individual contributes greatly how the world will play out for the future. Brands and their respective agencies must acknowledge that planning and executing a campaign in the virtual world may be different than real life, but it still uses the same science and history that we’ve used to plan hundreds of billions of dollars of campaigns in the real world.

Coke Meets GTA

Coca-Cola has released a new Grand Theft Auto "like" spot that apparently has been debuting in cinemas in HD.  The video is fantastically done and goes from very rogue and harsh to very "shrek".

Check it out on Google Video.

Fantasy Sports for Marketers

If you didn't know, I'm a huge sports fan.  My primary sport is hockey with the New Jersey Devils being my #1 team.  After hockey, I'm a fan of [in no particular order] baseball (New York Yankees), tennis, basketball (New York Knicks), and football (New York Giants).  When I can find the time to watch sport on television or take the Subway to Yankee Stadium, I enjoy every moment of the game. 

Over the past decade, marketers have found multiple avenues of reaching sports fans; and one major avenue that has garnered significant attention recently is that of fantasy sports.  In the past two weeks, Advertising Age and CNN have written articles on this $1.5 billion dollar industry that has been growing at seven-percent per year over the past three years.  While naming rights on sports stadiums may be few and far between (fixed number of stadiums and lengthy contracts) and ad-space during national broadcasts of games are selling like video game consoles on release dates,   fantasy sports which were once an underground cult following of Miller Light drinking frat boys who spent Sunday afternoon glued to the couch is now mainstream and attracting significant dollars both from league fees and from marketers.

According to the Fantasy Sports Trade Association, there are between 15-18 million registered fantasy sports fans playing on major media companies fantasy sports services. The leader of the fantasy sports services is Yahoo with double the fantasy sports traffic than last year's second place finisher, ESPN. CBS Sportsline and Fox also have leagues that are highly popular amongst the fantasy sports crowd.

Fred Wilson, a partner at Union Square Ventures and friend of mine, was one of the first folks to use the term “freemium” in public usage.  The term describes a business model that is free for a portion of services but if you want the full service, you pay a fee (thus, premium).  Yahoo and many of the sports leagues are participating in this freemium business model as they allow for free sign-up of a basic service and for additional dollars, you can add real-time scoring, scouting reports about individual players and other enhancing and enticing services that would give you a leg-up to the competition.

With over $1.5 billion coming from the pockets of the fantasy sports consumers (average age of 36 years old, male, married, high income bracket, and 3.8 hours per week of managing their team), you have to assume marketers are jumping on the bandwaggon.  And yes, they are.  Seven figure sponsorships of leagues are now common with even the smallest sponsorship packages in the mid-six figures.  GMC, Samsung, DirecTV and Visa are all active sponsors for some of the fantasy sports leagues and are spending quite a bit to reach these affluent males.  Coca-Cola isn't sponsoring a league per se, but they are sponsoring the fantasy football news and columns (ESPN).

In recent weeks, Major League Baseball tried dipping their toes in the fantasy market by demanding that fantasy sports leagues pay a licensing fees to utilize the stats of their players.  In a court ruling, MLB was denied this licensing fee as fantasy sports leagues have the right to utilize this public information for free. 

Now that we have all the information surrounding fantasy sports, I'd like to chime in from a marketers point of view.  Fantasy sports are a fantastic way to reach your 30 year old male who is in a very high income bracket.  The reasons for this is are high level of engagement with continually updating content,  increased attention span as the season moves deeper, community aspects of social networking if said league has deployed this service, and a brand affinity play to synch up with a sports league if you aren't a major title sponsor of the league (such as MLB, NFL, NHL, etc).  I had been reading quite a bit about fantasy sports and know that all of my buddies drafts are coming up for the upcoming NFL season.  Get ready corporate America – we're about to lose 30 minutes to 1 hour of time in the office on Fridays during the football season as people get their deals and lineups done for the Sunday and Monday games.

 

Tags:  fantasy sports, NFL, gaming, advertising

TV Study Released

I do not mean to bring up the obvious but a new study by McKinsey predicts 50% drop in viewers and 40% hike in prime-time ad spend over the last decade... does this make sense?  The powerhouse consulting firm, MicKinsey & Co., is telling major marketers that by 2010, traditional TV advertising will be 1/3 as effective as it was in 1990 - why the increase in ad-spend then?!

Thank a combination of older technologies such as cable, PC computers, cellphones, CD players, VCRs, game consoles and the internet, along with more recent ones -- PDAs, broadband Internet, digital cable, home wireless networks, MP3 players, DVRs and VOD-- for those changes. And teens foretell an even more radical shift in future media consumption, the report points out: They spend less than half as much time watching TV as typical adults do. Teens also spend 600% more time online, surfing the web.

You can view the article here.

Upfront Notes

Even if we're not involved in television advertising, it impacts our business and lives every day.  If you're in the digital branding sector of the media business, you're probably trying to court the advertising dollars budgeted for television.  Well, those dollars are shrinking according to Advertising Age and other reports that are measuring the spend at the upfronts froma few weeks back.

• ABC generated $3+ billion from prime-time and other dayparts
• CBS generated $2.4 billion
• NBC generated $1.9 billion
• Fox generated $1.8 billion
• CW generated $650 million

Of note:

• AOL confirmed that is has pulled its upfront buys and is looking to sell its commitments for the 3rd quarter (July/August)
• Johnson & Johnson will start their negotiations in August
• Coca-Cola Co. did not make brandcast network upfront commitments
• Asking prices of CPMs were 3-4% higher than last year, however, networks struck deals that were between 2-3% higher.

For the full article: http://adage.com/mediaworks/article?article_id=110330

American Apparel - Second Life

As many of you know, I am an active Second Life'r under the name Jay Prevost and tend to follow all the businesses starting in/around the virtual world.  While reading my RSS feeds this morning, Mark Wallace alluded to American Apparel opening a virtual store on a private island within Second Life.

Aimee Weber designed the store and the products within possibly with other artists.  The clothing within the store are for sale and are priced higher than other in-world clothing but are still reasonable.

I personally think that this is a good move for American Apparel.  The reason for this is that the clothing that they make fit extremely well with Second Life.  When Levi's went into There.com (another virtual worl) a few years ago (2 years?), they were worried with the texture and color of their jeans.  The brand American Apparel is simple in this respect as their clothing is ultra-plain.  No intricate details and no crazy pantone colors - all very simple.  I think that the brand will portray well within the virtual world and will be adopted.

I'll be keeping my eyes open for the store opening.

Tags:  Second Life, American Apparel

What Do Those Ad Dollars Buy?

For those of you who were tuned into American Idol this past week (and throughout the whole season), you weren't the only people spending time with the show.  Advertisers across the US embraced the show with top dollar advertising - but why?

The numbers are in.... 35.4 million people saw the finale of "Idol" according to Nielsen Media Research.  During the last half hour of "Idol" when Hicks' victory was announced over Katharine McPhee, just under 43 million people were tuned in, Nielsen said.

As for the "Idol" finales, this was the second most watched behind only 2003's competition.

According to Nielsen, ABC's two-hour "Lost" finale averaged 17.6 million viewers but after "Idol" ended, the numbers jumped to 19.3 million during the final half-hour.

Avenue A | Razorfish Publisher Summit

I'm currently on my way out to Las Vegas to the Avenue A | Razorfish publisher summit.  This year, IGA Worldwide Inc., was given the title of "Breakthru Company of 2006."  Not only does this account for in-game advertising, but this accounts for all media.  I'll be meeting with lots of friends within the industry and hope to report from Vegas.

AA-RF puts out a great report called the Digital Media Outlook.  I'd recommend to read it if you are someone who is involved in the media/interactive industry.  You can download it here.

Apologies if posting is "light" but I'll be back on Sunday evening.

Forrester Research: Emerging Channels

According to a new report issued by Forrester Research marketers are experimenting with emerging channels:

* 50 percent use or plan to use blogs or social networks
* 47 percent use or plan to use RSS
* 43 percent go or have gone mobile
* 28 percent are doing or plan on doing advergaming or in-game ads

Get A Mac Campaign

Apple Computer has started its new TV campaign entitled, "Get A Mac."  The ads are witty and powerful, yet they come across in a very funny and clean tone.  The messaging in the ads are to show the world that Macs are better - and the six ads that make up the campaign focus on Viruses, Restarting, Better, iLife, Network, and WSJ.

According to MacInsider.com, this is the first time since June of 2002 that Apple is highlighting Mac advantages since the company announced the "Switch" series.  I am a big fan of these ads... as a Mac user and evangelist, I agree with the messaging.  However, Apple has made some bold statements about "restarting" and "crashing"... the Apple OS is not perfect.  All in all, they are well done, very simple, and get the message across without any clutter or confusion.  Looks like the ads were made in the same way that their iMac colorful ads were made with the white background.

Apple has posted the six advertisements on their website in four differnet viewing sizes and qualities.

Peer Network Research

I came across PeerMind™ this afternoon as I was doing some research as to which games are currently being pirated across the world. PeerMind is a service by Nareos that shows detailed reports, online chart data and provides custom research based on 24/7 monitoring of major peer-to-peer networks.

The research that they are currently showing on their website provides information for music, movies, games, software and ringtones. They currently are monitoring eDonkey2000 and Gnutella with Bittorrent and FastTrack coming online soon.

For example, this week, The Sims 2 has been downloaded 208,522 times compared to 395,975 last week. That’s quite a bit of downloading…. Illegally.  I am also excited to see the music charts. This allows me to see which bands are being downloaded all over the world (though, I’d imagine they’ve got this broken down by geographic regions somewhere) and will allow me to play virtual A&R and find new talent.

Tags: peermind, market research

The Future of Media Is In Our Hands...

Just look around grade schools, college campuses, and the park... the majority of under 27 year olds are consuming media in some format or another.  Some people are playing their PSP, text messaging on their RAZR, listening to their nano, or checking their RSS feeds... but nevertheless, their paying attention to your brand and your message.

Today in Advertising Age's MediaWorks column, Abbey Klaassen talks about how the opening message from the National Cable & Telecommunications Association show was about the under-30 crowd.

"We've been looking at a group called millennials, which are people ages 8 to 27," said Anne Sweeney, president of Disney Television Group. "In this group 40% go home at night after work and school and use between five and eight different technologies. Then you have 40% of baby boomers who go home at night and watch TV. That's what's directing so many of our efforts in technology and content, especially as we look at our brands going forward and how they're going to be used going forward."

Article: http://adage.com/mediaworks/article?article_id=108570

Worst Product Placement....

I was watching the "Loop" on Fox 5 tonight (8:30pm) and "Outlook Express" was the main product integration into the television show.  How many times have you said, "Have you checked your Outlook Express" in the office? 

Toronto Ads

Was in Toronto, Ontario for the iSummit this past week.  Had a great time and met some wonderful people from some cool companies such as Mike D'Amato from Youthography (thanks for the cheese cake!).  The folks who were on my panel were great as well - talking about the future of Interactive advertising (McLaren McCann, Corus Entertainment, and Starcom Mediavest).

I was walking around downtown Toronto and saw some fantastic billboards... glad I had my camera!  Take a peak..

The Sopranos

As expected, it looks like a continuation of brand placement within the Sopranos.  In the first episode of the season, we've seen plot integrations and product placements within the highly anticipated one hour HBO show.  To quote a USA Today article from 2002, "We're not a network that accepts advertising. And product placement is a form of advertising," explains HBO spokesman Jeff Cusson. Adds Ilene Landress, executive producer of HBO: "We could pay for the whole show that way. But we don't."

David Yurman (unexpected), Porsche, and Georgio Armani were integrated into the plot (did I miss any?).  As for product placements, we saw Nestle, Fed Ex, Cingular, Philipps, Corvette, and a few other minor ones.

The creators of the HBO shows do accept free use of cars and other goods. It cuts costs and adds realism. The days of TV characters drinking generic "beer" are over. Sopranos creator David Chase and his team of writers frequently write brand names into scripts to add reality to the show.

Looking forward to the next show to see which brands are exclusive (category) and which are one show deals.  It's interesting to see that Nissan pulled out of the Sopranos at least for the first episode as last season, they had the Xtera extremely integrated.

Tags: Sopranos, HBO, Product Placement, Plot Integration, and TV

MediaMatchMaker.com

I was reading through my Madison & Vine email newsletter for Crains and received a blurb about MediaMatchmaker.com.  This idea follows my idea for Brandapalooza, which was a match maker to hook brands up with bands in the music industry.  Although I didn't execute on the idea (Brandapalooza), I have had significant chats with folks in the industry from William Morris, the Firm, Warner Music, and other pertinent players and know that this could be an extremely viable business.  The only major kink to work out is the business model itself.

MediaMatchMaker.com is an interesting way to reach out to attain sponsorships and/or content deals however, unless it has significant interest from both parties (content/advertisers), the model wont get off the ground.

Interactive?

I was at an eMarketer breakfast earlier this week on the topic of online video advertising as well, as, a 212-NYC Advertising Club meeting focusing on marketing to youth. Both of the meetings touched upon the “Interactive” space. However, to this day, I still do not believe there is a standard to the definition of “Interactive.” I think it falls along with the saying, “a square is a rectangle, but a rectangle is not a square.”

Lots of marketing folks refer to the Interactive space and only believe that the Internet falls within this category. This is not true. There are tons of Interactive media platforms, one of which include in-game advertising (video games). The Internet falls into the interactive realm, however, doesn’t make up 100% of the interactive category.

Advertising agencies or brands will refer to Interactive as Digital in some occasions. This certainly make sense and I totally agree with it. My question to you is that can the interactive realm include interactive communication offline?

History of Advertising

There are lots of people in the advertising/marketing world who didn't study the particular profession whilst in academia, which is not an overly negative thing as it adds color and new ways to look at advertising that those who are submerged in it do not see.  One issue with this is that it one generally hasn't learned where the history of advertising has come from and how it's got to where it is today.  Advertising Age (Crains) publication has put together a timeline that goes from to 1704-1999 (295 years).  You can find the Advertising Age timeline here.