In the "If I was McCann I'd be starting to get worried" column... A recent poll of about 12,000 US business decision-makers by market researcher CoreBrand found that Microsoft's brand power has taken a dive over the past four years. (Which is when McCann's work started to suck even more than it did previously!)
According to the study, Microsoft dropped from number 12 in the ranking of the most powerful US company brands in 2004 to number 59 last year. In 1996, the company ranked number 1 in brand power among 1,200 top companies in about 50 industries.
The CEO of CoreBrand said: 'When you see something decline with increasing velocity, it's a concern.' To add some historical context, IBM suffered a much faster and more severe decline in brand power in the early 1990s and it took them 10 years to rebuild the brand's reputation. Not to mention, hiring a good agency!
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So now the nitty gritty of America's music industry strategy for preserving its dying business model has become clear, and appropriately given the cartel's deep attachment to the past, it involves old-fashioned arm-twisting. Phase one was a new initiative to cast Internet service providers as profiteers from the illegal exchange of music and demand that they be forced by courts or legislatures to compensate the record companies
Now, having raised the threat, the industry is graciously giving ISPs the chance to avoid having their legs broken. All they have to do is add a monthly surcharge of $5 to their customers' bills to cover all the assumed pirating going on, then pass that money along to the music industry to be divided among artists and copyright holders.
The customers, whether they wanted it or not, would get unfettered access to music, and the ISP could stop worrying about being sued. Warner Music has hired Jim Griffin, formerly Geffen Music's digital chief, to put together an organization that would encourage other labels to unify around the plan and start making an offer ISPs might find hard to refuse. Does this sound like a protection racket to you?
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With all the hoopla about how social netorks are the ad platforms of the future, It was interesting to read that China-based social network QQ made $523 million in revenues last year, almost four times Facebook's 2007 revenue of $150 million, according to +8*.
And while Facebook absorbs a $50 million loss, QQ reported an operating profit of $224 million in 2007. Two-thirds of QQ's revenue came from virtual goods and games; 21 percent came from mobile services. Only 13 percent of revenue, about $67 million, came from online ads. All this while the revenue models of MySpace and Facebook depend almost entirely on advertising, though both are angling to change that with open platforms and recent music distribution deals.
QQ has 300 million users, though the number is skewed because many users have multiple accounts. A company called Tencent dubbed QQ the largest social networking site, instant messaging and gaming platform in China, reports my good friends at PSFK.
I know I'm a cranky old sod, but is it just me... Or does anyone else out there think that the last thing we need right now is "Twitter?" I mean c'mon... Do we need another way to connect with people we don't really want to connect to? What with RSS feeds, blogs, podcasts, news alerts, the wire and plain old email newsletters, how many hours in a day are there? If you have to bite the bullet, the best info I found was this video:
http://www.commoncraft.com/Twitter. But me... I'll give it a pass for now. I just traded in my eight year old cell phone for one that takes pictures and texting and ring tones and music and on an on and on. But all I want to do is make phone calls from anywhere in the world... What's wrong with that?
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In the you have to love this category... Word out today that "In an adapted version of the Harry Potter video game, players lift boulders and throw lightning bolts using only their minds. Just as physical movement changed the interface of gaming with Nintendo's Wii, the power of the mind may be the next big thing in video games.
And it may come soon. Emotiv, a company based in San Francisco, says its mind-control headsets will be on shelves later this year, along with a host of "biofeedback" games developed by its partners. Several other companies — including EmSense in Monterey, California; NeuroSky in San Jose, California; and Hitachi in Tokyo — are also developing technology to detect players brainwaves and use them in next-generation video games."
So, what the heck is left... Actually moving some kind of joystick with your toes... Or, willing that your avatar in Second Life has the power to change into the woman you always desired, before waking up in the morning and realizing that what you desire may just come back and bite you in the arse!!!
For all my loyal readers who are desperate to hear my pearls of wisdom and buy me a pint... I have astounding news. I will be speaking at the "Under The Influence" Conference on April 17th in the Borough Market down in the East End, 'cor blimey. Not only is this one of the great ad shindigs of all time, it takes place in five boozers. What the hell could be better than that?
It's the kind of thing that over here in the US would be regarded as akin to pedophilia. 'Cos now everyone drinks ice tea and is very PC. Anyway, go to the site and sign up, it's all organized by my mates at IrisNation... Even better... It's free! So get your arse over there and register. The first pint's on me!
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Interesting to read the results here in the US, about the big wireless spectrum auction, and there are lots of winners. First the winning winners: The federal government, which hauled in a record $19.6 billion in bids for the airwaves (though its success was diminished by its inability to unload a block designated for a nationwide emergency communications system).
* Verizon Wireless, which spent about $9.4 billion for a package that includes enough regional licenses in the "C Block" to cover every state except Alaska. "We are very pleased with our auction results," said a company statement. "Specifically, we were successful in achieving the spectrum depth we need to continue to grow our business and data revenues, to preserve our reputation as the nation's most reliable wireless network, and to continue to lead in data services and help us satisfy the next wave of services and consumer electronics devices." Yeah... OK, we got the corporate BullSpeak, already!
* Newcomer Frontier Wireless, owned by satellite TV provider EchoStar Communications (Dish Network), who picked up enough licenses to create a nationwide footprint.
* AT&T won $6.6 billion worth of the smallest licenses on the block.
And the winning loser? GGoogle, which bid the amount necessary to back up its successful push to require open access in the C Block (see "Google: We don't need a lot of spectrum - just the green part"), but now walks away without spending a cent, secure in the knowledge that whatever Verizon does with the C Block, it will have to be open to devices running Google's Android mobile platform. As I've said on numerous posts in the past... You can never ignore the 800 pound gorilla!
Funny to think that Apple's GodJobs has consistently pooh-pooh the idea of subscription music services. "Never say never, but customers don't seem to be interested in it," Jobs said in an interview almost a year ago. "The subscription model has failed so far. ... People want to own their music." Yet even as Apple rose to dominate online music sales, the company has been keeping tabs on the subscription market, just in case. In 2005, Business Week reported that Apple talked talked to music companies about a subscription strategy. Nothing came of it at the time, but now the Financial Times is reporting that Apple is once again sniffing around the rental market.
Apparently, Apple is in talks with major music companies about approaches to a subscription model. One plan, along the lines of Nokia's "Comes With Music" program, would charge a premium -- as much as $100 more -- for iPhones and iPods bundled with lifetime unlimited access to the iTunes library. Another approach may be a monthly subscription in the $7-$8 range, though that would work only for the iPhone. The talks have to do with how much Apple would need to pay the record companies to offer that kind of access to their catalogs. According to the FT, the music labels want something like $80 per device to split among themselves, while, as usual, Apple is trying to grind them down to the $20 range.
The reaction of Apple watchers generally falls into two camps, one asking why mess with a good thing, and the other wondering what Apple is waiting for. Neither camp would be surprised, however, if all this latest talk amounted to nothing, at least right now. Still, if GodJobs wants it... GodJobs will have it!
Madonna news alert!!! This just out... Madonna will debut her new single "4 Minutes" in a new Sunsilk commercial that hits the screens around the world today. The song, featuring Justin Timberlake, is from the singer's forthcoming album, "Hard Candy," The track will also be premiering simultaneously on multiple radio stations worldwide at noon GMT and will be available as a download tomorrow via the Madonna Store.
At the same time, there's also titillating news that the ever re-inventing herself lady might be about to re-invent her marriage. Madonna and film director husband, Guy Ritchie, are giving each other plenty of personal space lately — like separate continents. While the apparent estrangement doesn't necessarily mean it's not splitsville, as they claim. We can only hope that if they do stay together, we are not blessed with any more clunkers like "Swept Away!"
For the Adverati of Madison Avenue considering what is going to happen to the advertising business throughout the rest of 2008, the news tonight that US banking giant, JPMorgan Chase will acquire Bear Stearns in a deal valued at $236.2 million -- or $2 a share -- a stunning collapse for one of the world's largest and most venerable investment banks, should think this thing through. Just a few months ago Bear Sterns stock was at nearly $160 a share.
The US government is backing the deal, which means we, the taxpayers, will be eventually stuck with the tab. As the economy continues into deeper recession - in spite of what the "Great Decider" professes, we are already in one - consumers will spend less, advertisers will slash budgets and agencies and their employees will suffer drastic cutbacks. It's going to get a lot worse before it gets better. On both sides of the pond. All we need now is for Bush to invade Iran, and we can lock the doors and put out the lights.
Over here in the Colonies, Google is quietly rehearsing its arguments against Microsoft's approach to Yahoo in internal discussions which could indicate the search group's lobbying strategy once a bid comes before Federal regulators. Their concern that Microsoft could extend its dominance of the desktop to become the leader in online display advertising seems, however, not to be shared by those who would be most directly affected: Advertisers.
Many ad agencies are pretty clear that they and their clients welcome the prospect of a stronger rival emerging to Google. In fact, reports are that the "Poisoned Dwarf" is positively looking forward to it. The stakes are high, with online ad revenues forecast to increase from $38.6bn in 2007 to nearly $80bn by 2010. And even with last month's news that clicks on Google's ads in the US had fallen 0.3 per cent year-on-year in January, compared with a growth rate of 27 per cent as recently as November. But there's still room for an awful lot of growth out there.
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If any of you wankers are scrabbling around trying to come up with a good example of how the Internet has changed the way we do business, look no further than the news today that for Ashley Alexandra Dupre, selling music now beats selling sex. And if you don't know who Ms. Dupre is, you must have been either drunk, or asleep for the last week.
Dupré, an aspiring singer, but also known to rich old farts with more money than sense as "Kristin," may be earning a lot more now, and legitimately -- by selling her music to "fans" online. That, at least, is the speculation.
As Dupré has posted two songs on the new music-discovery site Amie Street; she put up the first, "What We Want," before she was outed, and the second, "Move ya Body," shortly afterward. Amie Street has an innovative, artist-friendly sales model. When musicians first submit a track, you can download it for free. As it becomes popular, its purchase price rises. Both of Dupre's songs are now selling at the site's maximum price -- 98 cents each. If she's sold 70,000 tracks, she's made $48,000 -- $1,000 per hour in the 48 hours since her name went public.
This work certainly beats her old $1,000-per-hour job (which was however, tax free!) And then again, there's another ton of potential returns on infamy: Book deals, maybe a racy photo spread or two, maybe a real record deal. At least, she can give her aching back a rest for a while.
So, the social network media madness continues... AOL put out the news this morning that it is acquiring social network Bebo for $850 million. According to a company spokeshack... "The Bebo acquisition puts us squarely in a leading position in social media at a time when it's growing at a fantastic rate, it will help power our strategic priorities across the board. And, just as important, by acquiring Bebo we can reclaim our heritage as a leader and innovator in the online community space."
Wow... big claims, but a long way to go when you consider that Bebo has a worldwide membership of 40 million, but is relatively small in the U.S. According to comScore, it had 4.8 million unique visitors in February, which puts it at a fraction of market leaders Facebook, with 32.4 million uniques, and MySpace, with 68 million. Most of Bebo's membership is in Europe and within that, it is concentrated in the U.K., (lucky you!) Where it is the 13th-largest site with 11.4 million unique visitors.
I personally think in many of these acquisitions , the train has already left the station. And the more ads you put up, the more you drive away the early adopters. But still, I'm not coughing up $850 million!
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What is going on with all the Gorilla's in advertising these day? Yeah, Cadbury's did the drum playing gorilla in Britain, here in the US, Subaru has a Gorilla in the car salesroom, Axa Insurance has one in an elevator saying good bye to a retiree.
And there's many more that I can't even think what the point is. Remember when it was all talking dogs? Yeah, I know you just had one in a car ad over there. In the US, we even had a sock puppet dog shilling for the long expired pets.com.
Can we get back to people for a while here? More advertising than ever sucks these days, but please give the animals (and that includes the gecko) a rest for a while?
An article in today's AdAge covering the blurring of Olympic sponsorship lines reminds me of when I used to work on the Xerox account, I was always somewhat bemused that they would cough up millions of dollars to be the Official Sponsor of the Olympics in the "Small Copier" category, while some one else paid millions to be the "Big Copier" sponsor, or something equally bizarre.
Apart from the fact that most of those millions are usually for the benefit of the companies management and major customers, who then get ringside seats to all the events, I think the multiplicity of categories just create confusion in consumers minds. I certainly don't think it's worth the huge sums of money being thrown about.
George Parker
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