IMKTG REPORT November 5 2001

OPPORTUNITIES, MONDAY NOVEMBER 5TH, 2001

Greetings folks,

this week i attended the Crains New York
Small Busines Expo, the New York New Media
SuperCyberSuds, and the NYU Career Expo.
Crains was excellent. Lots of promising
small businesses, lots of opportunities for
marketers like me. but that was just the
appetizer, b/c CyberSuds was a feast for kings.
twice the size & clearly twice the enthusiasm.
there were businesses there that are clearly
going to be leaders. again, lots of opportunities.
but what struck me as the most startling
was the NYU Career Expo. I attended to see
what the job market looks like and possibly
hire myself some NYU folks. After getting
interrogated at the door for my identity,
i later realized that the job market was so
horrendous, that alum from other colleges
often snuck in looking for jobs @ companies
only interested in NYU kids. if this wasn't
shocking enough, when i did manage to get
in, the lines for banks and large tech
companies were just ridiculous. it's like
there were no other companies there. job
seekers are like poor, starved pups, gathering
around anyone willing to offer them a bone.
with the unemployment rate the lowest in 10 yrs,
a scene like this makes you understand why
wall street is downgrading & firing whatever
it can.

CONTENTS:
1. STATS: what #s can you trust?
2. PRIVACY: now it gets interesting
3. CONSULTING: UPS consulting?
4. MUSIC: change is good.
5. PORN: an analysis, really.
6. ELEARNING: fire your consultant.
7. BRANDING: why Google rules.
8. PR: Microsoft fumbles big time.
9. ROUNDTABLE: Join NOW!

*************** al berrios stats ***************

STATS: internet consumer confidence is up this
year, but the billion dollar question is does it
translate into sales? well during this same
time period, Jupiter Media Metrix reports that
online sales decreased. but wait at minute,
ebay claims to be able to reach $1.2B in sales
this year, and $3B within 4 years. later in the
week, JMM issues another release where they claim
that online holiday shopping will grow by 11% this
year from last. with all these numbers floating
around, who do you believe?

bottom line: in the world of ecommerce, and i'm
talking about web sites that actually sell stuff,
there are only a few players that contribute
to the overall health of the industry: Amazon,
AOL, and ebay. these guys have their fingers
in just about every pie. but they can't grow
the industry by themselves. so where else does
this growth come from? b2b exchanges. businesses
conduct more transactions online than regular
consumers, b/c they're not spending their own
money, they're spending their companies' money
with the argument that it's more efficient
and cost effective. whenever you see a report
about the health of any industry, make sure
you take a look at the source and how the data
was compiled, b/c it was misinformation like this
that built the bubble, and we all know what
eventually happens to bubbles.

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*************** al berrios privacy ***************

PRIVACY: last week, I mentioned Bush's new
law which allows more authority to enforcement
officials that pretty much screws around w/the
privacy of an individual. last week, Business
Week had a cover story detailing this erosion
of privacy even more. but what i found most
interesting was actually the most obvious:
the companies that will benefit most from
this new demand for more information on people
isn't security and tech firms, it's marketers.
who else has the amount of psychographic & demo-
graphic data on human beings online & offline
that marketers do? remember the big stink Double
Click created?

bottom line: invest in marketers, research firms,
and be prepared to have every aspect of your life
recorded. when the US gov does receive the green
light to turn into Big Brother, connecting millions
of databases that were previously considered taboo
to connect & installing technology that has only been
used by marketers until now to scour terabytes
of data, there's only one thing left to do: apply
marketing tactics that were once considered blatant
invasion of privacy. DoubleClick, with it's ability
to put an offline name and number with an online
profile is in an amazing (and scary) position to
aid the government in its search for terrorist.
God Bless America.

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*************** al berrios consulting ***************

CONSULTING: on occasion, i've been known
to complain about the state of the ad agency
biz. the inefficiencies, the egos, & the loss
of expertise. well, last week, UPS launched a
consulting firm dedicated to offering clients
supply chain management strategies that include
sales and marketing, product design, planning,
procurement, production, cash management, fore-
casting, asset management, cost management. wow.
not bad for my local UPS delivery guy. and their
slogan: "Real. Know. How." Definitely w/the trend
of shorter slogans, but it doesn't convey how they
help me. (lucky for them, they have all that
brand equity, & don't really have to spend much
money developing it.)

bottom line: yes, UPS is the undisputed king in
logistics, (not delivery or transportation like
some of you thought), but does that really make
them qualified to tackle your problems in these
areas? the same way IBM can only consult you on
issues that will permit them to sell their products,
UPS Consulting can only consult you if you send &
receive stuff. they really can't have my local
UPS delivery guy do these sort of things, (not b/c
he can't, but b/c someone still needs to deliver
my packages), so they have to hire outside talent.
and if they do, and you decide to hire that person,
what makes you think you're getting over a 100 yrs
of expertise in logistics, let alone these areas?
it's the same problem i highlight with traditional
ad agencies. they don't recruit, hire, and train
new people to provide clients with these sort of
specialized services, they recycle the same old
people over & over, which means that the same bad
ideas that your competitor received, you're going
to get, too. in other words, if you need new glasses,
you'd never go to a general physician. all doctors know
what they're doing, but you just want specialized
service. UPS delivers, let marketers & financial
managers take care of the rest.

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*************** al berrios music ***************

MUSIC: the online music distribution biz, including
downloading MP3s selling CDs, and even net radio has
been increasing it's listenership and sales steadily
since 1999. over 30 million consumers have bought
music online in one form or another, & that figure
is expected to go up. so what's the problem? many
of these sites (including napster) are vanishing fast.
i remember earlier this year, i attended a conference
where clickradio was claiming to be the biggest net
radio broadcaster out there, but today, it's cancelled
its service and is up for sale. besides the obvious,
record labels demanding fees at every click, investors
do not see the value in these services anymore, regard-
less of the statistics and usage, b/c the ad market is
supposedly looking for consolidated offerings from these
players.

bottom line: by applying my theory on what the internet
really is, communication media, it's easy to understand
why online music distribution and net radio are attract-
ing so many people. the record industry realizes that
their business model has finally found its "disruption
technology" and are vigorously fighting it off. why?
they haven't lost sales, they've simply been given a
better distribution and marketing capability. i pitched
to several record labels, demonstrating how powerful
the internet can be b/c of its ability to connect fans,
making them loyal & developing viral strategies to make
an artist name into a brand. i was turned down b/c "we
use the internet only for promotional purposes",
"we got an intern who submits to search engines already",
they're too busy getting high off their own sh!t to
realize people make their music popular, not them. don't
resist change. it'll get you in the end. improve your
technology, it'll make you extremely successful, (think
Wal-Mart successful), and always try fresh perspectives,
b/c you never know if you're turning down the next
revolution in your industry.

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*************** al berrios porn ***************

PORN: i can't say that it was just curiosity, but i
gave it a try for analysis sake. i received an email
from one of those porn sites that didn't go directly
into my spam inbox. so i checked it out since it said
"EVERYTHING FREE". what the heck, right? everyone
claims to get 'em, but how many people you know actually
subscribe? well, for the low low price of $40 bucks
(it wasn't free, in case you missed that) a month, i
am automatically registered to check out smut free for
life, which isn't too bad, even after i was mislead.
well, naturally, what didn't occur to me is the type
& quality of the company, b/c when i gave them my email
& credit card info, i was shocked to find 6 different
companies emailing me and at least 3 billing me.
but wait, what's interesting is that the images and
the hardcore videos i was promised, turned out to be
very very very low quality photos of various models in
swimsuits. what the heck is going on?!

bottom line: let's consider this strictly a marketing
case study: AbsolutFreeSmut.com promises free hardcore
pornography for life, with tantalizing pictures, and
no disclaimers through an email marketing campaign that
came to me directly, as opposed through some spamming
email list. first, this means that their email list
was very good. second, this means that whoever sold
them this list thinks i'm a prime target for this sort
of emailing, and third, it was assumed that the recipient
of this email list is some sort of moron. now, let's
analyze why customer service and truth in advertising
is so important. when i received my pass codes & signed
on to the site, i was terribly disappointed just b/c
it wasn't what i was promised. when i emailed for
more information, i didn't get an immediate reply. in
fact, i simply felt suckered b/c they took my info
and probably vanished into thin air. so who's at fault?
the customer, the company, my email provider for allowing
this unsolicited email to get delivered? it's important
to remember that the lessons learned in this experience
can be applied to all marketing situations. Playboy
and Penthouse are popular men's brands b/c they are
upfront about what they do and deliver accordingly.
they don't lie in their marketing & only target those
that they know want their content. i'm not telling you
to never use email marketing, just be extra careful
about where you get your list from. i'm also making
a point of commenting on the creative you use to com-
municat your products/services, make sure it's
honest, clear and concise.

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*************** al berrios elearning ***************

ELEARNING: i first took notice of this industry a
few months ago as i was reading an article detailing
Michael Milken's consolidation of online learning
businesses. it mentioned how he was dominating the
hugely profitable space of providing education to
pre-Ks all the way through grad school. my first
thought was that i need an instructor & can't count
on myself to learn via the internet. last week, i
met an elearning professional & what i discovered
was that it isn't just about school topics. e-
learning is the new way to teach corporate managers
how to do old and new functions within the company
inexpensively and efficiently. courses can be
customized for each function, allowing the companies
greater flexibility & branding to their employees.
(yes, companies do internal branding to build employee
loyalty. besides things like this, events, contests,
employee benefits, and even child day care centers
are all part of a company's efforts to brand them-
selves with large groups of employees). once
a company has an elearning course in their possession,
they can use it indefinitely or even license it to
other companies needing the same instruction.

bottom line: the field of continuing education has
always been huge. universities provide such courses
for working america, along with executive mba courses
b/c it is so lucrative. companies gladly fork over
millions to pay to educate their employees, b/c they
make it back when they provide consulting services.
now, imagine if companies only had to pay thousands
to educate their workforce? this is the promise of
elearning. employees learn only specific subjects,
at their own pace, without having to leave company
premises, and meet with you the next day offering
boundless knowledge about the one area you need help
in. so, now you know how it works. maybe, you should
invest in elearning, so you can fire your pricey consultant.

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*************** al berrios branding ***************

BRANDING: if you think search engines are still
confusing, don't worry, things are getting better.
Google, a brand that has skyrocketed from a mere
5MM users last year to 18MM today, is popular b/c:
times how long it took to deliver results, has
no obnoxious ads, just AdWords, its stripped down
interface eliminates clutter, robust search tech-
nology that ranks by relevance & depth of coverage,
offering up a good one-third of all available web-
sites. it's now testing thumbnails for visual cues
for search results. (for more info on searching,
refer to opportunities, october 1st, 2001). ok,
why is all this a big deal. b/c it's a great example
of effective branding for something we all take
for granted.

bottom line: when i first found out about Google,
it was founded and operated by Stanford scientists
who dropped out to run it. i always thought that
their simplistic interface and use was just b/c
they weren't designers. after a more thorough
evaluation of what they're doing, it's plain as
day that they have the user in mind with all their
innovations. their website is the epitome of a
worthwhile experience, contributing to their branding,
resulting in an explosion in usage, and ultimately,
profits, from monetizing the traffic they get.
read again what Google provides above, check it out,
then compare their website to yours. obviously,
due to the volume & complexity of data they offer,
they have to have certain things that are different,
but the idea is the experience. does your website
offer your customer an experience that will make
them tell their friends about? does it deliver
what it promises? does it do it quickly and
efficiently? if you answered no to any of these
questions, "that's when you know you need" al berrios,
to paraphrase IBM.

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*************** al berrios pr ***************

PR: two weeks ago, you may have read about how
Microsoft blocked access to its redesigned MSN.com
from browsers other than it's own. well, if you
thought this was a brilliant maneuver to try and
squash competitor browsers, think again. turns
out this action pissed people off enough to down-
load, in increased numbers, competitors' browsers.

bottom line: when you're at an advantage, think
tactically, not like a big nerd. tactically,
MSFT could have gotten away with something like
this if it did it over time, allowing users to
experience the superiority of MSN search, rather
than just a plain old case of Goliath vs the world,
and the world looses without a fight. MSFT forgot
that the most basic human trait is the need to
choose. even the superior, omnipotent being your
religion believes in, knows this. by taking that
choice away, MSFT created such a public outcry,
newspapers worldwide addressed it, also giving
free press to their competitors, effectively
reversing MSFTs strategy of taking away users
from their competitors.

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*************** al berrios roundtable ***************

ROUNDTABLE: ever wonder how many "networking
associations" are out there begging you to be a member?
last week, i ran across no less than 7, just for marketing:
the New York New Media Association, Let's Talk
Business Network, New York Venture Forum, New
York eCommerce Network, AdClub of New York, Interac-
tive Advertising Bureau, and the World Wide Web Artist
Coalition, all claiming they can help my business by
allowing me to interact with their members at their
events. when you look at the membership list, it's
a bunch of big name companies, so you're like wow!
lemme join to talk to these guys. not once does it
occur to you that the members representing these big
companies are probably low level assistants that ex-
pensed their memberships & are probably too overworked
to even attend any events. if they do attend, it's for
the free food, never to talk business. what can they
talk about, they're so far down the food chain, it's
not like they can get anything approved for you. i've
made this mistake enough times to know not to sign up
for anymore more of these networking things. save
your time and money, b/c you know what, even if you're
not a member, they still allow you to attend these
"must attend" events at discounted prices anyway.

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*************** al berrios iMarketing ***************

Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.

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