IMKTG REPORT November 26 2001

OPPORTUNITIES MONDAY, NOVEMBER 26TH, 2001

Good morning execs,

$200 million in 9 days. and that was just
in theaters. harry potter merch has sold
out everywhere. it helps to have coke &
hasbro kick in $200 million for mktg. the
lesson to learn is partnering works. an
informal poll conducted by my agency
revealed that 98% of trend-setting, inner
city, african-american youths under 10
prefer PS2 over XBOX. the older they
get, the more they prefer XBOX.
Phillip Morris changes name to Altria.
is this a good move for your brand? hell
yeah! MO has been around for years
and is well respected, but change is good
b/c it revitalizes employees and draws new
customers. 12 entrepreneuring has been
big news as one of the last remaining dot
com incubators/lavish spenders. after mtg
their strategy chief & author John Hagel @
a conference, and seeing first hand what
was considered internet expertise, I was
convinced that there really was a need for
my agency.

CONTENTS:
1. STRATEGY: recycle your assets
2. SUBSCRIPTION: bad research, good ideas
3. HOSTING: just as important to your brand
4. BRANDING: too many ads are bad
5. ECOMMERCE: discounts don't mean sales
6. ROUNDTABLE: still whining about dot coms

THEWEEK: new feature reminding you
of major events last week. Playboy.com
got hacked, IBM makes big push into
security consulting, Bush now manages
aviation security personnel, Nokia enhances
phones, but site still sucks, faoschwartz.com
did it right b/c they asked users, like eBay
who now sells new homes in real time,
m&a makes Royal/Princess #1 in cruise lines,
Conocco/Phillips #3 in oil, and Casual Corner
actually buys Brooks Bros, the next big thing
is nanotech, evident by frequency of reports,
and WalMart made a $1 billion on friday.

::::: ::::: ::::: ::::: al berrios strategy ::::: ::::: ::::: :::::

STRATEGY: Earthlink is getting into home
networking. why? b/c their broadband strategy
is costing too much and they don't want to get
rid of it, realizing the addictive properties of
broadband to their customers.

BOTTOM LINE: 4.9 million customers gives
them 3rd place in the ISP wars. but unlike AOL
& MSN, they want to involve themselves deeper
in the offline lives of their customers by using their
broadband as a loss leader to upsell additional
services that will allow them to make more cash
and depend less on broadband partners. Earthlink's
innovative strategy is not only about diversification,
but the recycling of current assets for new revenue
opportunities.

READ MORE:
Pomerantz, Dorothy, "Broadsided". Forbes, November 12, 2001, p98-100.

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::::: ::::: ::::: ::::: al berrios subscription ::::: ::::: ::::: :::::

SUBSCRIPTION: eMarketer says that Pew
says users won't pay for content. i went thru
Pew's site and couldn't find this info. i was
interested in the sort of content users won't
pay for. i look up data so you don't have to.

BOTTOM LINE: first, always make sure that
whenever you read something like this, find out
who said it, their methodology, and other specific
details b/c it was rumors like this that killed
some business models. second, subscription
is still the way to go. i'm not suggesting you
plop a pay-to-proceed page upon logging on
to your url. on the contrary, continue to offer
free content, but limit it, and offer unique content.
don't expect to get your entire audience
converted overnight. after all, there will always
be free alternatives, but, this is a strong first
step. if subscription isn't your thing, alternatives
to ad revenue include: branded offline events,
publishing offline, charge for services, rather
than products, ebay-style ecommerce func-
tionality, or b2b, offering research on your
target audience to interested players.

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::::: ::::: ::::: ::::: al berrios hosting ::::: ::::: ::::: :::::

HOSTING: what's the big deal? you make
a biz plan, buy a flashy url, hire some college
kid to design a site, and bam, you're a dot com
millionaire, right? no. one of the many things
people usually never care to remember is to
get the site hosted, b/c all the content on a
site is essentially a code that needs to be stored
somewhere where the public can access it 24
hours/7days a week uninterrupted. welcome
to the magical world of hosting, where the
biggest player, Exodus, just died, and one of
the biggest monopolies in the country, Verizon,
failed to allow millions of NYC businesses from
communicating to their customers on Sept 11th,
when their WTC lines were obliterated.

BOTTOM LINE: what happens when your
hosting services goes bankrupt? chances are
your site will disappear, leading to a branding
nightmare. to avoid this, most companies use
multiple companies to host or set up their own
hosting operations, but as you'll discover, this
is extremely costly, since you require special
security, high level, highly paid, support staff
to maintain, and special energy and cooling
equipment. what if there's a power outage,
or your data center (like Verizon) loses
it's cables, or there's a break in, or a super
virus infecting servers, or your networking
technology becomes dated? you get the
picture. all these things are relevant consi-
derations for your customers and your brand,
so don't mess with your hosting. no, this isn't
an ad, it's the truth.

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::::: ::::: ::::: ::::: al berrios branding ::::: ::::: ::::: :::::

BRANDING: how do you get more customers
to shop this holiday season from your site? stop
f*%king up their experience online w/annoying
popups, congestion, and too many bells & whistles.
people want good deals, reliability, and quick
downloads. anything else makes them click over
to your competitor.

BOTTOM LINE: i continue to go to web sites
where i feel they're competing to see how many
pop ups they can offer up. naturally, an advertiser
wants to make sure they get good value, however,
by killing a user experience, that value is also killed.
last week, i pointed at scifi.com w/their highly
irritating pop up that dominates the schedule page
and actually blocks the content! folks, it's simple:
users come to your site to see your content, not
your ads. and if this is the case, why not try inte-
grating ads into the content. users appreciate ads
that are relevant, so don't try and sell everything.
users like quickly accessing your content, and
the longer they wait for ads that may crash slower
computers, the more damage you're doing to
that relationship for the sake of a few ad dollars
that won't ever come again if there is no audience.

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::::: ::::: ::::: ::::: al berrios ecommerce ::::: ::::: ::::: :::::

ECOMMERCE: bargain sales, couponing, and
price conscious consumers have killed the notion
of making a profit online from retailing. everyone
from overstock.com to coosavings.com is trying
to get people to spend more by slashing prices
online and offering tech thru partnerships.

BOTTOM LINE: just cutting your prices isn't
enough. first you have to get people into your
stores. this requires marketing your sales. once
they're in, you need to convert this traffic to sales
by making sure your display, layout, and offers
are suited for the customer, this includes offering
plenty of info about your products, comparison
to other competing products, and good return
policies. remember, its a buyers market these
days, and since they have so many choices, it's
your job to make them lose interest in those others.

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::::: ::::: ::::: ::::: al berrios roundtable ::::: ::::: ::::: :::::

ROUNDTABLE: rarely will i criticize another writer,
but nytimes.com reporter John Schwartz from the
fashion & styles section is an idiot, claiming that the
everyone involved in the making of the internet eco-
nomy was wrong and long gone and good riddance.
obviously, he's forgotten every other major popular
wave of interest, from tulips to junk bonds, where
the success of new industries weren't based on
whether it'll work, but rather, whether people with
money to spend on it perceive it to be valuable.
having obviously missed becoming a zillionaire
himself, w/no original ideas of his own b/c he was
too busy retelling what other authors wrote about
in books, John is bitter, and feeling like this is his
chance to say "I told you so." his article was well
written, but tried to explain away this latest dot
com obsession w/arrogant & inexperienced youth.
John, the same way you learned about the bad
business plans, a young entrepreneur can learn
about the good plans. Reading the experiences
of others & applying them to new business models
is just as effective of having lived through them.
what do you guys think?

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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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