IMKTG REPORT 08.20.02: Stats galore; Gen-Y & endorsing; more
>> "The secret to life is honesty and fair dealing. If you can fake that, you've got it made." -- Groucho Marx, Aug. 19, 1977

 

Good morning execs,

Mid-July to mid-August turns out to be
the unofficial time to do all the research
you need done for the year. Everyone,
including P.Diddy, released some re-
search stats. But don't worry, I got all
the good stuff for you below. Finally
got to see the Godfather. Stayed in all
day Sunday, but, wow, it was worth it.
Have you heard about Jupiter Research
conference scandal? Reporters not
affiliated with internet.com companies
are being denied press credentials to
cover the event. But could this be b/c
Jupiter is hiding something or is it really
trying to be the only one profiting from
it's content, as some agree? I think
Jupiter has the right to not allow any-
one it doesn't want in. After all, they
paid for their event, it's their content,
they should be only ones profiting from
it as well as hooking up important
clients and prospects. If deep linking
into your website can 'cause publishers
to freak out and sue, is it any wonder
Jupiter's making sure competitors aren't
permitted at their events? In other news,
the darndest things news turn up online
sometimes. Some chick named Karyn
pissed away her credit on shoes &
pursues & has set up a donation site at
http://www.savekaryn.com to help
her pay her bills. She's young and reck-
less, & the dot com bubble had it's toll.
Her idea was so innovative, even The
NYTimes wrote a small piece on her.
But is it panhandling? The two dudes
that started dontsavekaryn.com think
so and have started their own version
of the site accepting donations so they
can piss it away on crap, which they
tell you quite frankly. Oh, and finally,
Coke is getting a new look early
next year. Wow. They're going with
a deeper red and more ribbons(?).

READ MORE:
http://online.wsj.com/article_email/0,,SB102807155128762520,00.html
http://just-drinks.com/news_detail.asp?art=17603&dm=yes

>

CONTENTS:
1. BRANDS&INSIGHTS: More Stats Than You Can Shake a Stick At
2. CONSUMERFOCUS: The Art of Endorsing: The Rules Have Changed
3. MEDIA&CONTENT: Leveraging An Audience
4. MGMT&OPS: Porn-o! Porn-o! Porn-o!
5. EXTRA FEATURE: How To Make Money On Music

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1. BRANDS&INSIGHTS: More Stats Than You Can Shake a Stick At

"The average American spent 3,570
hours with various forms of media in
2001. That equates to 9.8 hours per
day. By 2006, a person will consume
on average 10 hours per day of media.
By 2001, Internet usage made up nearly
4% of a user's day, with broadcasting
and cable dipping slightly to 74% and
print media dropping to just over 11%",
Veronis Suhler Stevenson's Commu-
nications Industry Forecast. Some-
how, I get the impression that people
like me weren't surveyed for this,
'cause clearly, these media consump-
tion percentages do not reflect every
consumer segment. According to P.
Diddy's market research firm, Blue
Mindset, "urban consumers will watch
an average of 2.4 hours of Sept. 11
anniversary coverage on television
with most intended to watch either one
to two hours of Sept. 11-related co-
verage (30.5 percent) or less than one
hour (24 percent), the researcher said,
although 19.2 percent said they would
watch 'more than five hours'". "Urban
consumers said the Sept. 11 terrorist
attacks had affected their daily lives
(48.7 percent agreed or strongly agreed,
versus 25.5 percent who 'strongly dis-
agreed' with that statement) and that
nearly 4 percent will 'avoid going any-
where' on that anniversary date (ver-
sus 37 percent who said that date will
be 'business as usual' for them). 51%
agreed or strongly agreed that 'Sept. 11
should be a national holiday'". Blue Mind-
set failed to define what an "urban
consumer" is. "US Health and Beauty
Trends Index (from drugstore.com,
for July 2002 say that consumers
spent mostly on family planning (52%),
pet accessories/medicine (33%), salon
brand hair care (28%), tissues and
swabs (24%), incontinence (21%),
water filters (17%), exercise supplies/
books/videos (15%), contraceptives
(12%), physical and mental wellness
supplements/herbal remedies (12%)
and diabetes care (11%)", which if
you look at carefully, you could say
that having a family appears to be
the focus of the American public.

BOTTOM LINE: Always question
research until there are no questions
left to ask. Interep released a study
on teen media consumption and after
comparing to the data from the
CONSUMERFOCUS section of this
newsletter, I decided that it was biased
junk, not really reflecting today's realities
of teen media consumption, and I could
not include as a source below. Sure,
I'm biased too, however, when all other
data tells you that radio is going down
and the only study telling you that it
isn't comes from a radio rep firm,
then you have to be suspicious.

READ MORE:
eMarketer Daily, Issue 155, 2002 - Fast Uptake for High-Speed
http://www.tvinsite.com/index.asp?layout=story&doc_id=98813&display=breakingNews
http://www.interep.com/pr/PRTeen02.pdf (pdf)

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2. CONSUMERFOCUS: The Art of Endorsing: The Rules Have Changed

Ok, you never saw it coming. After all,
every marketing class you took tells you
otherwise. It seems that teens like ads,
and adults don't. Both use celebs to en-
dorse products, however, where boomers
have to be subtly persuaded, teens prefer
you just tell them outright that you're
advertising to them... go figure. What
happened? Boomers are influenced by
celebs that endorse pharmaceuticals w/o
giving away that they were bought off
as Novartis has discovered with it's
use of celebs on programs like NBC's
"Today". However, teens aren't signi-
ficantly influenced by celebs hawking
products, a fact already known to the
fragrance industry, however, ignored
due to the old lessons learned that con-
tinue to be applied. You're probably
thinking that if this is true, then what
the hell does Nike, Reebok, and Pepsi
spend billions on if their endorsers aren't
clicking with this target segments? Well,
if you're bombarded a millions times a
day with images of celebs using a specific
product, you'd associate that produce with
that celeb, but it doesn't mean the celeb
influenced a purchase. In fact, most teens
appear to be influenced more by what
they perceive to be cool, not what is told
to them is cool. And perception stems
from environment, not conscious decisions.
So, how can you reach a teen? The
internet: "...about 20 million of the 100
million people who went online in July
were younger than 17. That age group
spent an average of nine hours on the
Web during the month and initiated 16
online sessions each. "While they make
up only one-fifth of the online population,
young people account for nearly one-
quarter of all instant messaging traffic.
In July, 11.5 million teens and children
used a messaging application, according
to Nielsen//NetRatings; young people
often choose instant messaging over
e-mail."

BOTTOM LINE: My agency's own
analyses of the teen market also tells
us that teens also enjoy blogging. In
fact, they're such active chroniclers of
their own thoughts, that if you read most
blogs on the deep web, you'll discover
they belong to teens. The interesting
part is that they blog knowing other teens
will read their blogs and link to other blogs.
This phenomenon is what I'm talking about.
Teens weren't told by a celebrity that blog-
ging is cool, and yet, the blogging landscape
is skewed young because of them. Armed
with all this knowledge, companies like
P&G still believe that they can effectively
communicate with teens via email and
Hollywood via youth marketing and re-
search projects, like Tremor, and their
recent hiring of CAA, the talent agency.
I suppose if you spent $1 B marketing, you
wouldn't mind wasting a couple of million
on trial and error programs. With so many
executives, everyone's looking to justify
their pay, I guess. I urge you and P&G to
look closer at your consumer and less on
your Marketing 101 textbooks, because
you'll learn more from listening to them
than what someone wrote 20 or 30 years
ago.

READ MORE:
http://www.nytimes.com/2002/08/11/business/yourmoney/11DRUG.html?todaysheadlines
Thursday, August 15, 2002
Today's focus: BIG SPENDERS, Brandweek.com
http://www.ecommercetimes.com/perl/story/18994.html
http://www.businessweek.com/magazine/content/02_34/b3796658.htm
Subject: IQ DAILY BRIEF: August 13, 2002, adweekemail@adweek.com
http://www.xanga.com
http://www.adage.com/news.cms?newsId=35655

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3. MEDIA&CONTENT: Leveraging An Audience

Are you one of those people that get
bored on the trains? Well, thanks to
Sub Media here in NY, your boredom
on the train will now become yet another
opportunity to capture your attention.
These guys are the ones that put those
subway ads between stops. They're
like a giant flip book, and so innovative,
they've garnered 90% likeability from
consumers. And for about $40K/mo,
you can have your logo emblazoned
in subway tunnels, too. But what happens
when the novelty effect wears off?
That's when it's time to buy media
on spiffy new fall programming, which,
according to FOX and NBC will have
unprecedented ratings this season as
a result of heavy on-air promotions
during new summer programming from
both nets. OK, so what's this all have
to do with the internet?

BOTTOM LINE: You can have the
flashiest media, the loudest voice, the
most enticing offers, but if you don't have
an audience, who cares. Your audience
makes or breaks your medium's viability.
And the reality of your customers media
consumption is that they require choices.
And if more media people would realize
that, they would also dedicate more dollars
to the web. Why? Because your customer
is slowly dedicating more of their time to
the internet, where they have an over-
whelming amount of choices, where they
can interact with other customers, and
where they can interact with your brand.
If you facilitate interaction, give your
customers more choice, and offer them
great content in a fresh way, then you
are guaranteed success. The case of
FOX and NBC is an interesting example
of this even though it's not the internet.
They offered such great content during
the summer, that they increased their
average summer audience to a point where
they were big enough to be able to promote
other great content to this existing audience
rather than waste resources trying to
reach the same people using other media.
Leverage your current audience by giving
them choices.

READ MORE:
http://www.forbes.com/2002/08/15/0815subway.html
http://www.emonline.com/topstorys/081902summer.html
http://www.humanfactors.com/training/webcasts.asp

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4. MGMT&OPS: Porn-o! Porn-o! Porn-o!

Real has been making headlines recently
due to their new chief. Hailing from MSN-
BC.com, where he is credited for that site's
traffic success, he's expected to do the
same over at Real. But, you know what
else came out last week? That plenty of
porno sites use Real products. In fact,
it's been so prevalent, that Real has been
considering doing their own porno channels.
There are definitely huge margins to be
made, but still, they're not willing to publicly
admit that porno is probably saving them
right now. Why is it wrong to distribute
adult material in this day and age? If there
are people producing this sort of content,
there's obviously a market for it and vice
versa. Understandably, the taboo comes
from the consumer more than the supplier.
So the supplier is delicate about it's business,
however, everyone knows this niche is
the most successful niche in the history of
niches. AT&T is in there. Time Warner
is in there. They may not publicly admit
it, but who do you think supplies the porno
to the hotel industry? That's right, boys
and girls, these two most conservative of
companies are the biggest distributors of
porn in the country because they under-
stand that there's money to be made in that
business. This argument isn't a support of
porno, more than it's a support for niche,
regardless of what it is. Even banks believe
in niche, as some cater to wealthy, semi-
rich, and poor-as-hell.

BOTTOM LINE: Don't go overboard on
niche. It's not for everything. Last week,
I mentioned Posse Pops and Sopranos food
as two examples of brand extensions that
didn't quite fit the bill. True, both are also
niche ideas, however, it doesn't necessarily
mean that you should do everything you can
with them. Even Disney has had limited-to-
no success leveraging their brands as food
extensions, and if they couldn't pull it off
with their brands, perhaps you should recon-
sider your plans to extend that your brand
into other businesses... like porno.

READ MORE:
http://www.nytimes.com/2002/08/12/nyregion/12BANK.html?todaysheadlines
Real denies it plans adult content
By Frank Barnako, CBS.MarketWatch.com
Last Update: 10:48 AM ET Aug 16, 2002
http://www.adage.com/news.cms?newsId=35707

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5. EXTRA FEATURE: How To Make Money On Music

The following piece is brought to you
by our friends at Twisted Sister, who
remind the music industry that: "We're
not gonna take it, anymooooooooooore".
"Digital distribution of music through
services such as Morpheus and Kazaa
will continue to thrive, with use peaking
in 2005 at 7.44 billion unlicensed audio
files [being] swapped in 2005 among
consumers aged 14 and older, up from
5.16 billion in 2001. After 2005, however,
...free music swapping will begin to
decline. [P]roject[ions] [are that ]6.33
billion unlicensed audio files will be
swapped in 2006." Now, since this all
came from the Yankee Group, a re-
search firm I've mentioned before
doesn't quite make the most valid
claims, you should be weary. How-
ever, if they're just looking at the
numbers, it's hard to f**k up a little
projection. It doesn't take a genius to
see that the music industry is being
managed by a bunch of crack-heads
in withdrawal. Blank CD sales have
even surpassed prerecorded CD sales
in Europe, while they're busy b!tching
about shutting down non-p2p Chinese
sites where people go and download
free music. The ironic part is that the
music industry have always known
they're fighting a losing battle. Not
because there are more criminals that
consumers out there, but because con-
sumers have realized that they're not
the label's hoes anymore. They've
discovered that they can get their music
anyway they want it, not the way it's
offered by the labels. The industry has
known they've had to change ever since
they started offering 12 CDs for a penny
and sh!t. I mean, honestly, didn't anyone
notice this?! Even Pressplay, the label
supported digital music sub site has re-
sorted to allowing it's members to burn
more music onto CDs. "The original
Pressplay limited monthly subscribers
to 50 downloads and 500 song plays"
for a free. Like I said, they're crack-
heads if they think I'm gonna pay for
music in this day and age. They don't
mention how many members this
service has gotten in it's 8-month
existence.

BOTTOM LINE: Music is one of
AOLTW's most profitable businesses,
but not because it's going around suing
people. It's because the people in charge
understand that music is no longer a stand
along business and needs support from
other media and businesses to keep it alive.
AOLTW is the master of re-purposing
and music is no exception. They'll wrap
any tune into a sellable CD, and this un-
relenting drive to make cash off of any
content has assured AOLTW that not
all their content will be infringed and that
consumers will get it via multiple platforms.
If you're in the business, either get out
now or adapt to the new economics.
Don't assume you're things will get
better, because it's no longer in the hands
of the industry... it's in the hands of the
consumer, and... We're not gonna take it,
anymoooooooooooooooooore! LOL. I
know, I'm funny. Admit it, you're laughing
right now. OK, stop, get back to work.

READ MORE:
http://news.com.com/2100-1023-949724.html?tag=dd.ne.dht.nl-sty.0
http://www.nytimes.com/2002/08/17/business/media/17MUSI.html?todaysheadlines
http://www.listen4ever.com
Pressplay expands CD burning
By Frank Barnako, CBS.MarketWatch.com
Last Update: 10:33 AM ET Aug 1, 2002

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