some nice quotes to ponder

t is not the critic who counts,
nor the man who points out how the strong man stumbled,
or where the doer of deeds could have done them better.
The credit belongs to the man who is actually in the arena,
whose face is marred by dust and sweat and blood;
who strives valiantly;
who errs and comes short again and again;
who knows great enthusiasms, great devotions;
who spends himself in a worthy cause;
who, at the best, knows in the end the triumph of high achievement,
and who, at the worst, if he fails, at least fails while daring greatly,
so that his place shall never be with those timid souls
who know neither victory nor defeat.
- Theodore Roosevelt

Aim for success, not perfection. Never give up your right to be wrong, because then you will lose the ability to learn new things and move forward with your life. Remember that fear always lurks behind perfectionism. Confronting your fears and allowing yourself the right to be human can, paradoxically, make yourself a happier and more productive person.
- Dr. David M. Burns

Experience Marketing: Changing the Conventional Definitions

Introduction
Case 1:
When Virgin opened in New York a block away from one of Sony's CD stores, it offered CDs at a 12% discount. Hit in the bottom line, the Sony store decided to fight back by thinking laterally. It set up a multimedia booth which played not only whatever music people wanted to hear, but also suggests other choices. It was very interactive. So people ended up paying 12% more for the CDs just for the fun of the experience.
Case 2:
Johnson & Johnson’s launched its pain relief product ‘Tylenol 8 Hour’ in partnership with US gym chain Bally Total Fitness. The company developed six training programmes inspired by high-performance sport, sponsored the New York marathon and organized "paint the gym red" events. A tie-in with the National Trainers Association provided a nontraditional distribution channel. The product turned out to be Johnson & Johnson’s biggest product in 20 years.
Customers are every company’s most valuable asset. Companies need to retain existing customers and to attract new ones in order to survive and grow. Companies of all kinds claim to recognize that their customers are important. But what kind of experience
are they providing for customers with their products, their services, their communications, and their interactions?
How are customers really being treated? The answer is often "badly," despite all the protestations to the contrary. Some examples for the same could be waiting
in lines in supermarkets or on the phone, products that are perfect for someone else’s lifestyle or work environment, but never ours, unusable web sites, uninspiring ad campaigns, or unresponsive customer service etc. The list is endless.
In both the above cases, what was the common link which led to success and/or thwarting of a potential threat from a competitor? The company provided the customer an experience which differentiated the offering from the competing alternative. In Tylenol’s case, the company made the customer feel that the makers of Tylenol care about the sport and development, about her experience of sport, rather than merely flogging the product. The idea was to place the product at the "point of pain", where it would be most relevant to users.
This is Experience Marketing - a new paradigm in the field of marketing which has the potential to change the marketing landscape for ever and for the better.
In this paper, we will try to comprehend the concept and philosophy of Experience marketing. We will analyze the gaps in traditional marketing due to which the need for experience marketing arose and also have a look at some more path breaking success stories. The final section deals with the strategy which the marketers need to adopt for providing consumers with an engaging and memorable experience.
Experience Marketing: The Concept




"An experience occurs when a company uses services as the stage - and goods as props - for engaging individuals in a way that creates a memorable event."
- Joseph Pine and James Gilmore, the Experience Economy, Harvard Business Review.
Experience marketing is said to be practiced when marketers go beyond meeting basic needs to excite the consumer, to build consumer enthusiasm by becoming part of the every day life experiences of the shopper.
The experiential approach seeks to identify behaviors (or attitudes or value sets) held in common across an audience whose demographic characteristics – the traditional basis of segmentation – might be quite diverse. Once you resonate with that value set, it becomes emotional.
Experience marketing is about finding insights about people’s passions and the connections which are created – naturally and uniquely – between them and the equity in the brands.
Experience marketing is not a rant about using new media or old media. It’s about companies creating their own media, their own unique experiences of the brand which are simply irreplaceable. The experiences are central to the brand’s marketing approach, not a bolt-on to an expensive TV campaign.
The Need for Experience Marketing
Marketing flounders at many companies today. The causes range from the demise of mass markets, the ineffectiveness of many traditional forms of advertising and the seeming failure of many businesses to use the World Wide Web as an effective marketing vehicle. In response, consultants flood bookstores with new marketing concepts offered as cure-alls, including attention marketing, guerilla marketing, permission marketing, viral marketing and even emotion marketing. Each concept may have something valuable to say about how the environment has changed but none really addresses the core problem: People have become relatively immune to messages broadcast at them.
There’s no question that marketing is more challenging than ever. The media has become more fragmented. Customers are increasingly media savvy and media weary. There are now freethinking customers who don’t fit neatly into researchers’ tick boxes.
A well-attended product launch may have delivered rapturous applause but for how long? Most importantly, will customers remain emotionally attached?
Consumers have changed the way they respond. No one has time anymore. Everything has to be done quickly. If it's not entertaining them or engaging them or evoking emotion, they're not paying attention. So if a product has to be sold or the needle has to be moved in any way, focus has to be on how one is going to attract that consumer. And if the company is not creating an experience, it is not attracting the consumer of today.
Customers don't remember the event; they remember the experience. It's not the page they just touched, its how they feel after they touched it or looked at it or read it. It's all about experience.
An ongoing emotional attachment between brand and customer is the ultimate aim of experience marketing, in an era where marketers struggle with audience connection in a cluttered world. The delivery is through a unique experience which can only be created by the brand – giving brand owners a higher control. These in turn allow people to understand the brand at another level by being active – rather than passive-in relation to the brand.
Conventional and Experience marketing: The difference
"Traditional marketing was developed in response to the industrial age, not the information, branding and communications revolution we are facing today."
- Bernd Schmitt
Conventional or traditional marketing presents an engineering-driven, rational, analytical view of customers, products and competition. It is based on a features and benefits approach. In this (traditional) model, consumers are thought to go through a considered decision-making process, where each of the features or characteristics of a particular product or service are seen to convey certain benefits, and these are all assessed by the potential purchaser (either consciously or unconsciously). However, this is far too limited a way of viewing the purchase decision, with excessive emphasis on the rational and logical elements of the decision, and not enough on the emotional and irrational aspects involved in the purchase.
Experience marketing changes marketers' view about what they are selling. Until recently, they saw experience as a means to an end: a better way to sell a product or service. Increasingly, it's the other way round: the product or service as a means of selling the experience.
But like all big "new" ideas, the idea of experience marketing is not new. Companies such as Disney have been ploughing this furrow for decades. Airlines have struggled with its application for years. So have marketers worrying about customer service and those moments of truth, when customer meets company. But there is a difference. Traditionally, marketers have accepted that grocery, clothes, transport and banking companies sell groceries, clothes, transport, and financial services - and that the entertainments industry sells pleasurable experiences.
Yet buying and using groceries, clothes, transport, and financial services are also experiences and their marketers need to make them as enjoyable and fulfilling as possible. Traditional advertising, such as the 30-second TV spot, is often criticized for being one-way (as opposed to two-way) and mass (as opposed to personal). But it's also lifeless and two-dimensional. An ad may express powerful emotions, but it's still just a lifeless representation. Experience -engaging all human senses in all dimensions - is the "real thing". The challenge now is for marketers to "dimensionalise" their brands.
Companies compete by tweaking functional features through brand positioning maps and conjoint analysis, fight "brand wars" through price wars and equity-destroying promotions and so forth. While such strategies may work for a while, they miss the very essence of a brand’s true equity: its potential to be a source of sensory, affective, and cognitive associations that result in memorable and rewarding brand experiences. On the other hand, experiential marketers focus primarily on customer experiences. They consider the entire consumption situation, move along the socio-cultural consumption
vector and ask what products fit into a given consumption situation and how design, packaging and advertising can enhance the consumption experience.
Experience Marketing: Some more cases
Experience marketing is not about giving marketing promotions more sensory appeal by adding imagery, tactile materials, motion, scents, sounds or other sensations. Such experience marketing only affects marketing materials; it does not change the fundamentals of how companies can attract and retain customers. Rather than experience marketing, companies should market the experiences, that is, create absorbing venues- real or virtual- where customers can try out offerings, as they immerse themselves in the experience. The following examples are few such cases where companies have tried to do exactly that.
1.
2. The ‘Insperience’ Experience:
3. Insperience is a studio by Whirlpool and KitchenAid Brands in Atlanta, United States. The Insperience Studio provides an interactive experience where consumers can learn about new and exciting products by Whirlpool and KitchenAid Brands. The studio has equipped kitchens where people can try out the latest Whirlpool and KitchenAid brand home appliances. It invites shoppers to bring chores with them. It acts as a learning laboratory for the company to study what the consumers actually want.
4. The Lord of the Rings:
5. It can be said to be the most successful pre-show for any Hollywood movie. New Line Cinema, film unit of AOL Time Warner, launched an officially managed web-site of the movie, The Lord of the Rings: the fellowship of the Rings, two-and-a-half years before the movie premiere and also coordinated information sharing with the myriad fan sites. New Line produced an unprecedented success, with over one billion site visits prior to the opening of the film.
6. Legoland Theme Parks:
Lego, a toy manufacturer, has created fascinating experiences through its theme parks. These theme parks are so engaging that guests find it worthwhile to pay for them. Charging admission for experiences opens the way to new offerings and profit possibilities through innovating new offerings, and is the logical consequence of recognizing experiences as distinct economic offerings.
4. Saffola: The Healthy Heart Foundation
Saffola Healthy Heart Foundation is an initiative started by the brand Saffola in 1993, which seeks to educate consumers about heartcare and healthcare. The Foundation attempts to provide quality information, resources and counseling to the maximum number of people, free of cost. Under the auspices of the foundation, a website- www.healthykhana.com - has also been initiated. The service is restricted to the nutrition aspect of preventive healthcare. Visitors to the site can access an online diet planning software, which give sample diet plans for the various regional cuisines. The site also provides information regarding various diseases like diabetes, hypertension, obesity etc.
5. The Parryware ‘Experiencentre’:
‘Experiencentres’ are an attempt by Parryware (manufacturers of bathroom basins, tubs etc.) to provide complete bathroom solutions. The novel concept is the result of the company's understanding that each bathroom is unique and a reflection of the individual's personality. At the Centre, one can design a bathroom to suit individual preferences and needs with the help of special design software. This friendly software enables the user to specify the bathroom area and choose products from the extensive Parryware range to get the desired look and mood. The Centre also displays the extensive range of Parryware products in a spacious and modern ambience and provides complete information on all products.
The list can include more cases like ‘Prestige smart kitchen' concept galleries, Barista coffee house etc. The point that the above examples emphasize on is that we have entered the "experience" economy. Whether you make a product or sell a service, what you really need to do is stage an experience that is memorable and compelling. That is what the consumer values most.
Experience marketing: Strategy for success
Before a business can consider an experience marketing approach, it has to be clear what its brand essence really is. It has to demonstrate everything it’s about. It is both emotional and functional. The essence or brand
proposition question is the hardest. The functional essence, [what the product does], is easy, but there also needs to be a timeless emotional essence. The best way to create a brand experience is to do something out of the ordinary for your audience. Make it touch their soul.
Many goods encompass more than one experiential aspect, opening up areas for differentiation. Apparel manufacturers, for instance, could focus on the wearing experience, the cleaning experience, and perhaps even the hanging or drawering experience. Other industries might create the briefcasing experience, the wastebasketing experience, or the mask-taping experience. If the manufacturer starts thinking in these terms ‘inging’ his things, he'll soon be surrounding his goods with services that add value to the activity of using them and then perhaps surrounding those services with experiences that make using them more memorable.
Whatever the concept, the future will be about extending connections through offering an experience as the companies search for ever more-creative ways to connect with their valuable customers (who take five times more marketing spending to attract than to retain). Some guidelines for devising an experience marketing strategy can be:
1. Creating a consistent theme that resonates through the entire experience.
2. Building the experience platform.
3. Structuring the customer interface.
4. Layering the theme with positive cues and easy-to-follow signs.
5. Eliminating negative cues that distract or contradict the theme.
6. Offering memorabilia that commemorates the experience.
7. Seeking to engage all five senses.
Integration of the experience, meaning consistency across touch points, is also a very important issue. Many companies are doing a poor job because they deal with an ad agency, a graphic designer and outside consultants and everybody creates ultimately something else. So, while each of these elements might be good, none is integrated.
So the companies should aim for consistency across the entire spectrum of contact points.
Another aspect of a successful marketing strategy is innovation. The customers should always be inundated with new experiences ably supported by quality products and services.
Conclusion
Many marketing issues are not a problem of the logo or the advertising. These are customer experience issues. To address these issues effectively requires more than policing of corporate identity standards or soul-searching about the company’s values and the meaning of its brands. What is needed is, first, an original understanding of the customer’s experiential world and, second, the creation of a differentiated strategy platform that can be implemented in an innovative fashion. Great brands are the result of great, and consistent, customer experiences.
In sum, what attracts customers to any company and sustains their loyalty to its products, services, and brands, is the customer experience. That experience encompasses products, service, communications, and every interaction the customer has with the company.
Peter Drucker rightly articulated in ‘The Practice of Management’:
"The aim of marketing is to make selling superfluous".
To this we can add:
The aim of experiences is to make marketing superfluous.

power of self

some moreeeee

future of advertising

Andrew Fano is showing off the living room. It's a plush, teaky, well-appointed affair, but what really catch the eye are several thin-screen video displays, includ-ing a few smaller ones that are embedded in furniture and picture frames. The displays are slowly cycling through what appear to be family digital photographs -- an appealing idea, considering many of us let our thousands of digital photos sit unwatched on a computer hard drive. "But would you want to see an ad stuck in there?" asks Fano, indicating one of the digital slide shows, apparently of a family vacation to a theme park. "No? Because you just saw one." One of the theme-park photos was a professional image designed to "enhance your memo-ries" of the park, explains Fano, a senior researcher at consulting giant Accenture who is exploring new ways for advertisers to get their messages across. The tony living room is actually part of Accenture's technology laboratory, and the dis-plays are an experimental prototype of a service that would arrange your photos into slide shows in exchange for the right to slip relevant sponsored pictures into the mix.

The world is awash in advertising clutter. For decades mar-keters have been spending more and more to try to get their message out -- only to find their pitches drowned out in a sea of noise generated by countless other marketers trying to do the same thing. In effect, companies have been paying big bucks to be ignored. Now, inspired by the Internet's ability to do a better job of targeting prospects and measuring results, advertisers are dreaming up new ways to break through the clutter and connect with potential customers at a lower cost.
The big advances in advertising technology once favored traditional giants like Procter & Gamble, which could afford to mass-market its message. The new techniques are affordable to smaller companies, too.
Though the advertising revolution got started online, some of the new techniques are already finding their way onto streets and walls and even into clothing pock-ets around the world. Perhaps just five years from now, companies will be able to routinely and inexpensively embark on ad campaigns that hit exactly the right prospects -- and hardly anyone else -- with entertaining, hard-to-ignore messages that can follow people via new high-tech media into their cars, offices, living rooms, and bedrooms. For companies that master the new techniques, the payoff is potentially enormous: a big jump in customer mindshare while holding the line on marketing costs. And whereas the big advances in advertising technology once favored traditional giants like Procter & Gamble, which could afford to mass-market its message, the new techniques are affordable to smaller companies, too. "Over time," says Karen Breen Vogel, CEO of ClearGauge, one of hundreds of interactive ad agencies that have sprung up to focus on online advertising, "we can cut the cost of the advertising in half while maintaining customer response."
Fixed in an archipelago of art galleries and airy cafes at the periphery of Chi-cago's North Loop, the offices of ClearGauge have the hip, slightly subversive look you'd expect of a boutique advertising agency. Except that where the halls of other agencies regale visitors with blowups of their all-important creative, Clear-Gauge has proudly plopped a wicked-looking bank of servers front and center against the exposed concrete walls. It's a tip-off to the agency's sensibilities -- and to a sea change in the advertising industry.
Advertising has long been a sort of black art with a murky ROI, and for a simple reason: Clients rarely know for sure who sees their ads, let alone whether the ads influence anyone. Even though companies spend a third of a trillion dollars a year on advertising, those ads often end up being irrelevant to the people who see them. On average, Americans are subject to some 3,000 essentially random pitches per day. Two-thirds of people surveyed in a Yankelovich Partners study said they feel "constantly bombarded" by ads, and 59% said the ads they see have little or no relevance to them. No wonder so many people dislike and ignore ad-vertising, and so many business owners feel gun-shy about investing in serious campaigns.
The Internet has begun to change all that. The ability to measure the impact of an ad simply by counting how many people click on it, and to link advertisements to search-engine results, in large part drove Internet advertising to $9.6 billion in 2004, a 33% jump from 2003, according to Interactive Advertising Bureau re-ports. (For a cautionary tale about counting clicks, see "So Many Clicks, So Few Sales," on page 29.) But the real advantage is going to companies that figure out how to use these tools to hunt down specific types of prospects and nail them with the right pitch. "We look for subsegments of Internet users who care about certain things," explains Breen Vogel. "We find them when they're online, we in-tercept their activities, and we start a relationship with them."
To understand how the Internet and firms like ClearGauge have been changing advertising from a slippery craft to what might be called "persuasion engineer-ing," consider the campaign ClearGauge has been developing on behalf of Mod-Pac, a Buffalo company that manufactures cartons and handles printing and packaging for more than 5,000 companies. Mod-Pac came to ClearGauge for help in launching a new 24-hour online service specializing in running fast, less expensive print jobs for businesses. Instead of conducting endless brainstorming sessions in search of a clever campaign hook, a team led by Breen Vogel -- a former industrial engineer with experience in supply-chain management -- at-tacked the problem the way a government contractor might set about building a nuclear submarine.
The team started off by breaking Mod-Pac's target market into seven submarkets, including event planners, ad agencies, and not-for-profit organizations. Each of these submarkets was further broken down according to who influenced the key purchase in each category -- in some cases a secretary can have as much influ-ence on a buying decision as a CEO, but the two need very different sorts of pitches. In the past, for example, ClearGauge has gone after doctors' spouses to sell medical supplies and lawyers to sell commercial financial services. Clear-Gauge then enlisted online surveys and focus groups to uncover the hot buttons for each type of purchase influencer in each submarket. Some decision makers valued sophistication in their printing company, while others placed more em-phasis on creativity, and still others on low cost. Different ads were then cooked up for the different targets, so that, for example, a creative director at an ad agency was targeted with a pitch that featured a dancing, mischievous lizard mas-cot, while a CFO at a nonprofit got a more sober version of the lizard with glasses and a pitch that emphasized cost-savings. To make sure each pitch ended up in front of its intended target, ClearGauge studied the click-through statistics on hundreds of business-oriented websites for banner-ad placement and paid search engines to have specific ads come up in response to some 5,000 carefully chosen terms. By obsessively monitoring how many people click on each of the ads to end up on Mod-Pac's website, and then noting what each person does at the website, ClearGauge can further refine the relevance and placement of each of the ads while weeding out the less effective efforts.
Online advertisers are about to get a new tool that will vastly increase their ability to place highly relevant ads in front of prospects. Emerging now are powerful "behavioral targeting" services that can track what an individual clicks on and looks at across a range of sites over the course of weeks and months, making it possible to build a detailed profile of that person's interests, purchases, and pref-erences. The companies prepared to do the tracking, including 24/7 Real Media, Blue Lithium, Dotomi, and Claria, don't capture personal information such as names or e-mail addresses -- only surfing habits -- and even then follow only people who have opted in to the tracking.
But that's enough to let advertisers do a far better job of matching pitches and prospects. At least 950 out of every 1,000 Internet automobile ads still land in front of people who aren't in the market for a car, notes Scott Eagle, chief market-ing officer of Claria, based in Redwood City, Calif. "If you're starting a high-end pet-food company, you only want to talk to people who have a certain type of pet and are willing to pay a premium to feed it," he adds. "We can identify those people. Why do you need to reach anyone else?" In a study, website visitors were, on average, 14 times more likely to click on an ad when it matched their profiles, claims Eagle. He says he has already lined up more than 200 advertisers for his new tracking service and expects to reach 500 by the end of the year.
Given privacy concerns, will many Internet users opt to participate in these sorts of services? Actually, they might. Because according to a 2004 survey by the Ponemon Institute, a consultancy that specializes in Internet privacy issues and has worked with Claria, two-thirds of Internet users believe better targeted ads would be less annoying, and 45% would share personal information in exchange for that advertising relevance.
But it's not just the Internet that's poised to become a bastion of highly targeted advertising. In fact, the trend to interactive, targeted advertising is starting to break its chains to the computer screen. Even television, the grande dame of con-ventional mass marketing, is taking steps to offer a more focused advertising ex-perience. For starters, A.C. Nielsen and other companies have been rolling out technology to measure more accurately who is watching which shows, providing test viewers with pagers, for example, that can measure TV-watching habits out-side their homes. Experian, a consumer data company in Costa Mesa, Calif., is cross-referencing this sort of detailed TV-viewer information with vast troves of other consumer behavior data so that a network can pinpoint viewers not just by age or income but also by what products they're in the market for. "If you give people a television program that indexes well against their preferences, you'll get more mental click-through," says William Engel, co-CEO of Experian subsidiary Simmons Market Research Bureau. Some advertisers are getting even finer-tuned pitches by negotiating the ability to alter their TV ad slots in response to chang-ing conditions. Some TV ads for Royal Caribbean Cruise Lines, for example, have been set to run only when the temperature drops below a certain point in a given market.
And even bigger changes are in the wings as television starts to morph into a more Internet-like experience. Cable provider Comcast offers advertisers in parts of Florida the chance to buy ads that run only in specific neighborhoods, so that, for example, ads for a Spanish-language newspaper appear only in heavily Latino communities. The technology to target cable ads all the way down to specific homes according to household viewing habits already exists, with deployment largely awaiting the resolution of privacy concerns. Cable companies are also ex-perimenting with interactive channels that let viewers enlist their remote controls to click on banner ads and onscreen buttons. Video games are getting with the program too. Some are already packed with ads integrated into the cyberscenery, and a New York company called Massive has developed a technique for chang-ing those ads to match an individual player's moves and preferences.
As more networked display screens permeate our homes -- on appliances, walls, even furniture -- each one will become a potential medium for tuned-to-your-lifestyle ad services of the sort that Accenture's Fano and others are dreaming up. Think of this new breed of advertisement as "smart," in that these ads know, in a sense, to whom they will be playing and under what circumstances.
Smart ads, it turns out, won't be confined to the home and office. In three Massa-chusetts Stop & Shop supermarkets, an electronic tablet attached to the shopping carts asks for a swipe of the shopper's loyalty card -- and in return provides a shopping list that the store's computers have prepared based on the shopper's past purchases. Oh, and by the way, the tablet also offers targeted electronic coupons that pop up when the shopper turns down the aisle with the featured product. "Why offer a discount on your yogurt to someone who usually buys it anyway?" asks Fano, whose lab helped develop a similar technology. "You want to pitch someone who's about to buy a rival brand."
Computer screens are popping up everywhere, and more and more advertisers are thinking up ways to make sure those screens don't go to waste. Take elevators, which now often sport displays above the floor buttons. These screens are be-coming prime advertising real estate as marketers grab the chance to catch busi-nesspeople or affluent tourists on their way to the street. Targeting elevator ads to the location, time of day, and audience is not rocket science, notes Larry Harris, who heads up multicultural marketing at marketing agency Draft New York. "Bloomingdale's could boost sales 5% if it put up an ad for a one-day sweater sale in my building at lunchtime," says Harris. "Everyone in the elevator will see it because they're desperate to not have to look at anyone else."
Taxis are becoming smart-ad vehicles too. Some New York City cabs have screens inside, and some taxis in New York and elsewhere have electronic mes-saging signs that are tied to GPS location sensors, so that a cab can pitch a nearby store or restaurant wherever it roams. Even your own car will get in the game. General Motors has been experimenting with location-aware sponsored messages tied to its OnStar communications system -- and all the major auto manufacturers are looking into ways to hook car-based displays up to the Internet, ads and all.
Not that drivers of nonwired cars, or even pedestrians, will miss out on the fun of targeted ads. Digital billboards and posters, which function essentially as large video screens, are already popping up alongside roads and sidewalks, adjusting their displays to different audiences -- a commuter crowd during morning rush hour, moms running errands midmorning, and young couples on dates in the eve-ning. For even more precision, Smart Sign Media in Sacramento operates digital highway billboards that detect the radio stations playing in passing cars and flash up client ads that best match the profiles of those stations' listeners. And Mobil-trak in Herndon, Va., places car-radio-station-identifying sensors in the parking lots of retail clients so they can tell if people driving into the lots have been nudged there by their radio ads, allowing them to adjust a radio campaign to get the most traffic for the least cost.
By rotating ads at the right time through these various media, an advertiser can create a campaign that hits its best prospects several times a day in different loca-tions -- and in theory pay less to do it, since the advertiser won't be paying to put the ad up in front of a mass audience. "The idea," says David L. Smith, founder and CEO of San Francisco advertising agency Mediasmith, "is to vertically stack the ad frequency among different ad vehicles rather than to horizontally stack it within a single vehicle" -- as with a repeating television ad.
Of course, the ultimate smart-ad tool would enable a marketer to hit any individ-ual with a low-cost, interactive message any time of day, any place -- a platform for a campaign that could identify and follow prospects through the world as if they were continuously online. Forward-thinking marketers even have a name for this dream medium. They call it...the mobile phone.
"Mobile-phone marketing today is where Internet advertising was in 1996 -- it's about to take off. There are already more mobile phones in use worldwide than televisions and computers put together."
Okay, turning your prospects' cell phones into ringing spam machines is probably not your idea of cultivating goodwill. And it's not likely to happen. Unlike e-mail, mobile phones aren't readily accessible to marketers -- mobile phone privacy is zealously guarded by big carriers like Verizon and Nextel, as well as by law. There's an opening, however, and smart advertisers are preparing to drive a truck through it. Provided a consumer clearly opts in -- say, by dialing or text-messaging a certain number -- carriers are slowly becoming more or less amena-ble to letting marketers return a text message, or even an audio or video file, to that consumer's phone. Mobile phone ads are already big in some parts of Europe and Asia, and it's just starting to take hold here. McDonald's and Dunkin' Donuts are among the companies that have beamed coupons to U.S. cell phones, eliciting coupon-redemption rates as high as 17%. "Mobile-phone marketing today is where Internet advertising was in 1996 -- it's about to take off," says Michael Baker, president of Boston-based mobile-marketing firm Enpocket, which ran the Dunkin' Donuts campaign. "There are already more mobile phones in use world-wide than televisions and computers put together."
Throw in location tracking, a capability U.S. mobile phones are getting right now, and you've got a device that can prompt you with a coupon for a discount oil change just as you're driving by the lube shop. Enpocket has already run such a "location aware" mobile-phone campaign in Singapore on behalf of Intel. And it won't be long before you can pay for goods and services with a click of a cell-phone button, too -- something many mobile-phone users in Japan can do today.
While lack of relevance may be the single biggest shortcoming of conventional advertising, it's not the only one. Even if an ad ends up in front of potential cus-tomers, they won't necessarily pay attention to it -- especially if it comes up as part of a stream of other ads. To have a chance of getting past our mental filters and influencing our decisions, ads have to grab attention and be compelling. In a way, advertisers have to learn to make their ads less adlike and more entertain-mentlike.
Take television advertisers. They've always had to deal with viewers running out of the room to grab a snack when the commercials come on, but now they're fac-ing TiVo and other digital video recorders, whose owners already fast-forward through 70% of commercials. Meanwhile, fast-growing video-on-demand serv-ices that enable viewers to order up programs provide another means to go com-mercial-free. These developments have pushed marketers to jump into alternative forms of television advertising, including product placement (Coca-Cola cups in the hands of American Idol judges), sponsorship deals that get brand names into the titles of shows (as in College Sports Television Network's Nike Training Camp show), and "long form" video ads designed to be entertaining or relevant enough to attract video-on-demand viewers on their own (as with Canada's all-commercial Advertising on Demand Network).
On the Internet, too, advertisers are finding more ways to intertwine marketing messages with entertainment. Online travel agency Orbitz has managed to entice Web surfers to bask in its marketing messages by embedding them in online pop-up ads built around simple interactive sports-themed games like Sink the Putt. Not only that, but players who like the games often forward links to them to friends and colleagues, spreading the message at no extra cost to Orbitz. LiveVault, a Marlborough, Mass., data back-up and recovery provider, got the same sort of free ride when it produced and released on the Web a short comic video about backing up data, starring John Cleese. LiveVault CEO Bob Cramer claims the $500,000 price tag for the video promotion was a bargain, given the big response. "It ended up all over the Internet," he gloats.
This sort of viral approach is getting a boost from some sophisticated technology. A San Francisco company called Pulse has developed software that can turn any image of a person or animal into a semi-animated talking head, complete with moving lips and a voice that delivers any lines typed in by a user -- and the re-sulting blabby little cybercreature can then be e-mailed to buddies. Sandwich chain Quizno's, online greeting-card site Sympatico, and cruise line Royal Carib-bean have all made these online characters the centerpieces of successful Internet campaigns. At one point a third of all visitors to Royal Caribbean's website had come because of the characters, according to Dan Hanrahan, president of Celeb-rity Cruises, a sister company to Royal Caribbean. It may seem like a silly gim-mick, but there's a powerful draw to this sort of approach, notes Byron Reeves, director of the Center for the Study of Language and Information at Stanford University. "Persuasion is very much a social and emotional exchange," says Reeves. "An automated face provides some level of that."
That same sort of social interactive playfulness can also be put to work in adver-tising away from the computer screen. Accenture has designed a 10-foot-wide, high-resolution touchscreen display -- the world's largest -- intended to allow crowds in malls and buildings and on the street to interact with characters, games, information, and other images on the screen. Accenture has also integrated "fo-cused sound" technology into the system, so that appropriate music, dialogue, or sound effects can be directed at individuals interacting with the display while passersby hear almost nothing. All of it, of course, would be mixed in some way with an advertising message.
You don't even really need a screen to get your interactive message out to the crowds. Reactrix Systems in Redwood City, Calif., offers a system that projects a colorful image on a sidewalk, wall, piece of furniture, or anything else, and that tracks the motion and gestures of people on or near the image to make it interac-tive. Ten or more people can stomp on or wave at the several-feet-wide image at once, kicking around a virtual soccerball or splashing in a virtual pool, all while ogling a sponsor's logo blended into the image. McDonald's, Sam Goody, and the MGM Grand have been among the clients, along with movie theater chains and malls, where the devices routinely attract enthusiastic crowds. According to Re-actrix CEO Mike Ribero, studies have shown that as many as 86% of the people who interact with the Reactrix image can recall the sponsor days later, compared with 5% for prime-time television advertising. "In a world with a lot of advertis-ing clutter, this sort of thing provides advertisers with a consumer's attention for an unprecedented amount of time," says Ribero. "Advertising has been built around reach and frequency, but depth and duration of experience is going to be the next big metric." What's more, he says, getting an advertising experience out closer to the stores can have a stronger influence on buying decisions.
And if you really want to reach out and grab the attention of people out in the real world, why not actually, well, reach out? Zebra Imaging in Austin produces large, lifelike holographic images that appear to float in 3-D in front of a filmlike panel -- no goofy glasses or goggles needed. People can even walk around the er-satz object to examine it from different angles. Zebra has created car-show-stopping holograms of automobiles for Ford to showcase new designs, as well as holograms of celebrities for promotions. As the technology's cost comes down and quality improves, says Zebra CEO Robin Curle, these startling images could eventually be popping out routinely at consumers on the street and in stores.
Karen Breen Vogel, for one, is hesitant to be among the first to reach beyond the Internet to tag people in intimate, surprising ways. "It's the next wave for us," she says. "But right now we're in investigation mode."
Advertisers may drool over the promise of smart ads, but many are also wary of invading the public prematurely with clumsy, personalized, unignorable pitches on billboards and cell phones before anyone has a chance to get used to the idea. ClearGauge's Breen Vogel, for one, is hesitant to be among the first to reach be-yond the Internet to tag people in intimate, surprising ways. "It's the next wave for us," she says. "But right now we're in investigation mode."
Until marketers can read consumers' minds, there will always be uncertainty about the most effective ways to deliver messages. And mind reading, at least, is a technology that's still a long, long way off. Oh, wait -- scratch that. Neuroscien-tists at the California Institute of Technology and Baylor College of Medicine are already using high-tech brain scans to measure people's responses to marketing messages. So stay tuned.

lLORD OF WAR :REVIEW

The riveting Lord of War takes a tragicomic, sometimes even satirical look at the bloody arena of arms dealership. Inevitable targets also include moral irresponsibility and the ruthless pursuit of the American Dream.
Director and screenwriter Andrew Niccol does not hesitate to point fingers, and his chutzpah is noteworthy in an era of play-it-safe filmmaking. Lord of War is an undeniably compelling movie but also a somewhat distant one. Directed with energy and style, it nonetheless suffers from an intriguing yet ultimately hollow lead character.
Nicolas Cage, in his best work since Adaptation, makes his amoral con artist so cunning that viewers initially have a dual reaction.
The moralist inside you will hope that he gets the fate he deserves. The moviegoer inside you will hope that somehow he escapes too harsh a punishment.
Mr. Cage's character of Yuri is a loathsome charmer, and his amoral loathsomeness overrides his charisma.
To Mr. Cage's and Mr. Niccol's credit, they beg for your understanding but never your sympathy.
Growing up in Little Odessa, the son of immigrant Ukrainian parents, the youthful Yuri realizes the lucrative nature of weapons dealership when he witnesses a mob killing. He justifies his chosen trade by thinking of himself as a businessman supplying necessary hardware to his customers.
Soon he's a millionaire, with a trophy wife in the form of a supermodel he's coveted for years. He also keeps his sweet, somewhat simple younger brother gainfully employed. That's a rather cornball touch, but apparently, arms dealers do have family values.
Mr. Niccol's visual flair is apparent in the opening credits, which follow the manufacturing of a bullet and conclude with its heading straight for the face of an African child. Other moments are more whimsical, including an air battle composed almost entirely for comic effect and a gun fair that turns into the kind of soiree that Hugh Hefner might host. Through it all, Mr. Niccol manages to keep the mood swings almost seamless.
The performances are largely on target, with Jared Leto overcoming his clichéd role as Yuri's too-trusting brother and Ethan Hawke effectively taut as a special agent doggedly on Yuri's trail. Bridget Moynahan's trophy wife is the screenplay's foggiest character, but Ms. Moynahan at least tries for something more profound than eye candy.
Lord of War definitely aims to be something more profound than brain candy. It gives moviegoers something to think about. If that recommendation sounds too dutiful, let it be known that it's exciting as well as thought-provoking.

EXPLORE YOUR CREATIVITY

Three Ways to Explore Your Creativity
By Chris Dunmire
Are you one of those people who claim ‘not to have a creative bone in your body?’ If so, you’re going to love this newsflash: Yes, you ARE creative!
Why am I so confident in telling you this? For the simple fact that I’ve observed countless people in my life — friends, family, and co-workers — make this same claim only to later realize how wrong they were! Oh, and guess what? I used to be one of those “I’m not creative” people too.
I’ll tell you what. If you still don’t believe my claim that, Yes, you ARE Creative!, I challenge you with the following exercise.
3 Ways to Explore Your Creativity
I’m a firm believer that you can easily tap into your creativity by expressing yourself through creative arts, crafts, or writing. I want you to choose any one of these mediums for this exercise.
Next, I’m going to prompt you with a project idea that you must agree to spend at least 15-30 minutes of your time on.
Okay, are you ready? Here goes...
If you choose:
ARTDraw, sketch, paint, or collage a picture that incorporates these five elements (realistically or abstractly):
Door
Water
Animal
Time
Currency
CRAFTSUsing craft sticks, papers, yarns, fabrics, or found objects, do one of the following:
Design an easy craft project for a pre-school class.
Pretend you’re a world famous artist and build a 3D sculpture for an upcoming gallery show. (Keep in mind that anything you create will be adored and snatched up by your fans, even if you think it looks like junk.)
Create an abstract ornament to be auctioned off at your favorite charity.
WRITINGUsing up to 100 words, write about the following:
Your autobiography.
A major event that altered your life course.
Give advice to your ten-year-old self.
Now I’m going to sit here and wait until you get back from doing one of these creativity-inducing exercises. Once you finish, read on...
(ah, ah — no looking ahead!)
What Happened?
Did you really do it? Did you sincerely put forth the time and effort (15-30 minutes) on one of the creativity exercises I prompted you with above? What happened when you did? Did you have fun? Did you create something new and unusual? Did you come away from it thinking, “Wow, I didn’t know I had it in me!”
Chances are that the process was positive and you gained some interesting insight into your ability to be creative. See what happens when your mind is focused and you’re open to new creative experiences? Amazing things take place once you stop believing that you aren’t creative, and start practicing new ways to allow your creativity to surface.
So now what? Well, after you stop jumping up and down for joy, this new insight into your creative self should encourage you to keep moving forward to discovering your true creative potential. Revisit some of my creativity exercises if you need more prompts to keep you going.
I guarantee that the more attention you put towards your creativity, the more amazing results you’ll get in return. No ‘bones’ about it! •
Copyright Chris Dunmire 2005. All rights reserved.

To know more about the author and other stuff visit http://www.currentliving.com/categories/creativity/articles/explore.shtml

BRAND ASSOCIATIONS

THE future of brands will lie in the powerful mother brands you will build assiduously today.

Amul built it many years ago. Amul, the mother brand, is advertised and all other brands that shelter under this umbrella are at best driven by local promotions, tactical pieces of advertising and activities very much below-the-line. Amul is therefore as much a pizza and a shrikhand as a butter. It could be anything else as well!

Nescafe is taking those wee baby steps towards mother-brand status with its not such an old hat decision of bringing the Nescafe label onto the hitherto aggressively and single-mindedly advertised South-India centric brand of coffee-chicory soluble mix, Sunrise! It happened in slow motion, but the moves are distinct and noticeable. In the beginning came the Nescafe brand name on the top label of Sunrise. And then it grew in size! There sure will come a time when the Nescafe mother-brand on the pack will dwarf a Sunrise into a status of sub-brand altogether!

Britannia is a classic example as well. Britannia means Jacob's Thin as much as a Milkman. It could even mean the mother of a Tiger or a mother of a 50:50!

And then we have the latest moves of the latest mother-brander of them all! HLL! Peek keenly at the strategy that lies underneath the division of the tea portfolio of brands within the Lever pack! From a brand-doctor's point of view, the HLL beverages strategy seems well honed. The idea is simple. There will be two sets of mother brands. Lipton and Brooke Bond! Two hitherto very strong brand names that conjure up the very basic image of quality tea in the Indian market. Two big mother brands that represented two different competing companies in the tea market in the Indian context. These two giant tea companies at one point of time literally occupied the entire share that was available for the packet tea industry in the country. Till one day both companies came under the common Unilever umbrella!

And then began a process of consolidation of these two sets of disparate brands with distinct identities in the minds of the consumers. Many a consolidation effort took many a step that wanted a complete rationalisation of the brand offering in the Indian market, hitherto attempted to be cracked open by the two big mother brands as two separate companies.

Individual brands under the banner of each of the two companies in question were pushed pretty aggressively.

Years went by, and the power brands happened. The power brand movement across markets is a keen focus on those singular brands that enter a large number of homes and hearts. Brands that possibly contribute the bulk of the revenues and brands that possibly occupy dominant mind-shares. Dominant brands that hold the potential of bringing in the profits of the future.

In many ways, the power brand movement swims quite against the tide of the mother-branding norm. Power brands are pretty individualistic in their quest for mindshare and slice of the market. Mother-brands, on the other hand, are benign umbrellas that shade many a power brand of today and, Brand Manager and God (in that order) willing, many a power brand of the future! The mother brand movement is all about providing equity rub-off to all kid, cousin, sister and even aunt brands one might find in the existing portfolio of the company in question.

The HLL effort is distinct. It has come a full circle after exploring the gamut of whatever was possible. Commendable for sure! Brooke Bond will want to regain for itself the vestiges of positive equity that consumers still feel for the one generic term that represented good quality tea in the country. Brooke Bond, the mother brand, will then take on under its wing granduncle A-1, sister Taj Mahal, cousin 3 Roses, father Red Label and a host of others.

The Unilever movement in the domain of tea is very likely a big experiment in the realm of mother-branding. Possibly, the biggest we will see in any industry sector within the country. Remember, these packs of teas have a significant amount of consumer interfaces daily! If it works, who knows, the entire detergent category might be a Surf and the entire toothpaste category a Close-Up!

As HLL experiments with mother-branding, paving the way for a whole big way of looking at brands in this country and indeed the region, it will be interesting to watch the trajectory individual brand propositions will take.

One route to adopt: Forget all those confusing little propositions different sub-brands normally take and assume the consumer understands the subtle differences and nuances between one brand positioning statement (BPS) and another. Worse still, remember, a BPS gets into the trickier arena of the advertising positioning statement (APS) that in the current day and age of high-tension creativity is even more mind-boggling. Keep it simple. The mother-brand will advertise and no one individual brand will. Over the next several years, even decades, the individual brand propositions built with such great passion will be soon forgotten. What will remain is what the mother brand will say!

The other route then: Above-the-line communication will be occupied by the mother-brand. Remember, segmenting the audience in mass media is getting that much more difficult than before! And below-the-line communication will focus on the individual brand propositions. The strategy is mother branding. The tactical inputs into the brand will focus on the sub-brand! This is a well-hedged route for the brand to take. The best of both worlds-route really!

Look out then for more mother-branders in the future! The benefits are clear. As advertising gets more and more expensive a proposition to handle, as clutter in media gets akin to visual and aural garbage, as segmentation of audience becomes a great big challenge in the mass media of the day, there seems just one prudent way to go. Mother brand!

Remember, if I advertise Ford, I build a durable future for my mother brand. If I advertise the Ikon alone, the Ikon will come and go as a fashion statement. Generations will come and go and with it will go all the money I spent on Ikon advertising. If I advertise on Ford and keep strengthening equity, it is a property I build forever. Build for the ever-stretched out future!

Brand-kids, watch-out! The mother-brand movement is here!

dilema in marketing

T was in the nuclear-charged early '80s that a made-for-TV film called The Day After captured the imagination of the intelligentsia and the strategic scenario planners. Matters were tense as usual in South and West Asia, and the US and the then USSR were locked eyeball to eyeball. The Day After captured the zeitgeist of the time and probably had a role to play in easing the fingers from the nuclear trigger by depicting the stark reality of nuclear fallout.

If I had the requisite film-making skills and resources, it would be time to make a similar documentary on the marketing function's hurtle towards intellectual oblivion, its main contributors, and, hopefully, the way back from the edge of this dangerous precipice.

The chimera of growth with profitability


It's been an interesting journey thus far as businesses have homed in on emerging consumer needs and aspirations. In category after category, new brands romanced the new consumer and many new categories were born, some to implode after shining briefly (remember Ceasefire?). Consumers were introduced to the spectacularly transforming benefits of the branded bath, shampoo and laundry wash. Two-wheelers, colour TVs and refrigerators triggered the upward mobility of the middle class. It was a brilliant moment and the marketing heroes of the moment found fame and momentum. Most of the authors of the marketing success of the '80s are ensconced today as leaders of the industry in a different and more difficult time.

This is about the moment when the market, almost uncannily like a Hindi movie, moved from its exciting first hour to an ambitious but meanderingly unsuccessful second hour. The strategic response was bad copybook. Population and incomes are growing, so launch brands aggressively. Recalibration of effort meant upping the ante and even more aggressive marketing efforts. The marketer's boom was upon us. The need of the hour may have been marketing support not unlike the Maruti 800 (nuclear family-sized, economical and taking brands a long way) but the marketers were unable to take their eyes off the big, statuesque gas-guzzlers. It is no surprise that this was about the time that marketing services industry growth rates were about to peak and visionary marketers may have sensed the wall they were about to hit.

It was in 1960 that Theodore Levitt pointed out the `Population Myth' in his now legendary paper in the Harvard Business Review. He purported that a growing population of more affluent consumers could lull the marketers into a false sense of comfort. After all `If thinking is the intellectual response to a problem, then the absence of the problem leads to an absence of thinking. If your product has an automatically expanding market then you will not give much thought to how to expand it.'

Well, may all of us be blessed with expanding markets but a devil seems to have come home to roost. It seems that our population expands under the umbrella of an amplified quest for value. And, it may be possible that all investments have been pegged to a potential Indian middle class of around 200 million people and in reality that market could be as small as 40 million urban consumers. And consider the possibility that small packs of FMCG brands may not be regular packs for low income or rural consumers - they may just be an infrequent trial pack.

The perils of fixing the `it ain't broke' value proposition


The equation seemed simple as marketers seemed to have a grip on price thresholds and probable size of markets. Assess and enter the market but above all get the consumers' value proposition right was the well-worn thumb rule. In later days, the marketing strategists discovered a resonant new tune in the air and its lilt suggested `value mobility'. Having found success at the value end of the consumer spectrum a new strategy found increasing merit. It aimed at transporting consumers at the upper end of the value segment into higher price bands, where value-added brands with aggressive marketing inputs would deliver unresisting hordes into the premium brand fold.

Well, something has come unstuck. The Indian consumer was brought up, it seems, on a different cup of tea. Growth slowed and the speed of brands from cradle to grave became much quicker, sometimes instantaneous. It is a fact that the moment marketers get inward-looking and take their eyes off the consumer benefit and the `affordability' factor of pricing, the only result is portfolio restructuring five years down the line. Simply put, this means if you launch brands without a consumer focus, you will need to withdraw them soon because your balance sheet cannot carry their weight.

Companies that grow aggressively often talk about triple-win strategies, creating winning teams, raising the bar and changing the game. Very rarely is the core construct of successful brands discussed — that `zone' of strategic overlap between brand architecture and consumers' ability to pay. Which probably explains why so many premium brands are desired but not necessarily purchased except when their prices are slashed to within range of the consumers' wallet.

In a study done by an eminent consulting firm on attempts by multinational companies to extend their brands to developing markets, they concluded that brand-name products would always capture their share of affluent consumers. But in the low end of emerging markets, companies should take their cues from local competitors: keep local managers in place, adhere to local standards of quality, and maintain the autonomy — and the cost efficiency — of local operations.

The cliché of advertising (and the bucolic joke)


It may be time to take a closer look at our brethren from the alluring world of communications who seem quite keen on reinventing the rules of advertising. In today's environment, reinvention may be the soul of survival. But whatever happened to the core tenets of building powerful brands and stronger volumes? Marketing services was the visible 10 per cent of the marketing iceberg. Under the ocean of business lay the rest of the strategic marketing effort - pricing, proposition development, market sizing, price sensitivity and adoption modelling. But somewhere down the line the seductive Mata Hari of advertising, events and promotions slunk in and turned the business on its head. Not helped, of course, by the view of most structures that if your advertising and promotions budget is more than Rs 10 crore, the marketing manager is really an advertising manager. And maybe, therefore, clever advertising equals clever marketing.

The old guard of advertising knew the principles of business — the role of communication is to deliver empathy, resonance and action in a profitable way. Somewhere along the line chunks of advertising turned into a self-indulgent chuckle. And strangely enough, if it is sufficiently rustic it even wins awards. `But the heart of India beats in the Hindi heartland', I am told. Sure, it may. But advertising that raises a chuckle may not always raise sales. And adding to the adage that the consumer is not a moron is the fact that life is no stand-up comedy either. And businesses that are trapped in stagnation or below six per cent growth are not amused at all. Neither should they be.

Advertising is now news and the creators of advertising often aspire to the same stage as the superstars they cast in their creations. It would be petty to deny them their moment. But what about brands and businesses? The musical chairs of the multi-crore account shifts may not do the trick. As my first boss in advertising used to say — the answers are with the consumer, stupid! And more often than not, marginal tinkering with the advertising content and increased spending may be bad deployment of good investment. Various estimates pegged growth in revenues for the advertising business at 25 per cent in 2001 though the agencies themselves estimated their growth at a more stately nine per cent. Could it be that the membership of the top 20 advertisers' club is going at a higher premium than the membership to the top 20 club of successful businesses?

Marketing strategists need to take control of the process and programme their businesses for success before the power passes on to the bean counters. They are already asking the question — if advertising does not always deliver the goods, why advertise? Marketing strategies lie at the very soul of business strategy and marketing communications can be its lifeblood. Businesses need to seize the moment, and the future!

Elbows, asses and Aesop's fables


I remember an explosively comic serial about journalistic shenanigans from the '90s entitled Drop the Dead Donkey that had at its core the basic newsroom principle: If the news is not relevant, drop the news. Probably the same applies to the new generation marketing specialists and their tools. If they aren't relevant, spend some time finding new ones that have a better chance of delivering growth that businesses seek.

I hope you see the analogy — successful brands are expected to carry profitable businesses forward. In a somewhat ironic twist to the tale, not unlike the fable where, stung by the taunts of fellow villagers, the washerman and his son had carried the ass on their shoulders, heaving businesses seem to be carrying sick brands, to the dismay of stakeholders. Well, there isn't much elbowroom to manoeuvre, as consumers get increasingly vocal about their choices and rejection.

And there may be one serious error in my view of the emerging world of marketing solutions — the crisis may not be emergent anymore but amongst us, not unlike a cat among the pigeons.

brand names

EVERYTHING in life is cyclical. Usages, habits and practices in the realm of the consumer at large take one large circle and get back to the good old way of doing things. Life in the fast lane of branding is also cyclical.

Look at the practice of naming a brand. In the very beginning, it was simple. Brands even took the names of the colours of their labels. A Red Label tea and a Black Label whisky, for instance. And then things got complex. As every other colour on the horizon got exhausted, brands and their keepers sought differentiation with the use of the more complicated in the naming game.

In came the complex words. In came the words that had the dual meaning in them. In came created words such as `Bru', which in any case represented cleverly the strong brew the name touted.

The creative guy went on a spree. In came names that meant nothing as well. In came brand names that represented a monument, a remote exotic town and at times even a name of a personality that sounded so different and classy. Meet Mr Allen Solly and, of course, his honest country cousin, Mr Peter England.

Brand names became even more complex. Some even so difficult to pronounce that they needed a multi-media campaign to get the consumer to roll his Ps and Rs correctly. Remember `Al-pen-lee-bay'.

Back to the present then. The names are getting simple once again. The creators of brand names (shall we call them Brand Brahmas?) have come a full circle. The names are generic once again. There is a Tamarind shirt, an Orange cellular service, an Idea even. Wait for the Potato motorcycle, the Tomato detergent and the Cucumber designer wristwatch!

A completely new thought, then.

Everything in the realm of branding, be it in the very naming of a brand, the practice of nurturing its campaign, the type of local promotions, the reality (candid camera) in advertising, the core strategies in pricing and literally in everything else about the science and craft of branding is getting back to the good old way of doing things. It's cyclical!

Look at a possibility in this trend game of branding. Look at the very process of branding itself. How long till the Brand Brahmas (the creators) turn Brand Maheshwaras (the destroyers)?

Look at this thought differently. To date, the brand manager has performed the traditional role of a Brand Brahma (creator) and a Brand Vishnu (preserver) to good levels of satisfaction. The tradition of branding, the foundations of which have been laid in the writings and practice of the Western brand mind, have always encouraged the role of the brand manager as the creator and the preserver.

The brand guardian who creates and nurtures, maintaining the integrity of the process of branding. Tomes of brand knowledge emanating from the quills of brand practitioners and academicians alike tout the wisdom of the process.

A process that creates and maintains. Take a different view. Add the dimension of destruction to the branding process. Imagine a process where brands that are created and preserved by the brand manager are disintegrated into non-brands altogether. The brand manager as Maheshwara (destroyer), if you will!

The theory I tout in the trend game of brands is this: Brands must be created and nurtured for sure. And when the time comes, brands will be destroyed and must be destroyed. The onus of doing this rests with the brand manager at one end and the consumer at the other end.

Why would the brand manager want to do this? Just to ensure that the offering keeps to the relevance parameter of the consumer as his wants and needs evolve. Sounds strange at this moment of time.

Give it time, and catch the trend in the consumer markets we live in today. Here is an example.

The product is a very popular chiwda! Laxminarayan Chiwda of Pune. In the beginning, it was a generic product altogether. Over the hoary years of franchise, the store is a brand today. So much so that visitors to Pune crave the brightly printed, red polypacks of the product. A 500 gm pack could cost you Rs 40, let's say. The brand is very popular and the product is unique and pretty much non-replicable.

This popular brand with limited distribution in the country is picked up by a whole host of specialty retailers in cities far away such as Kolkata in the East and Bangalore in the South.

The Laxminarayan Chiwda is made loose and stocked in bottles. The chiwda is then sold as a generic product. This time at a price twice the price of the polypack product. Consumers throng these locations not knowing the identity of the original product.

There is a thriving trade in a whole host of brands that get de-branded in the market place and get sold at prices higher than their branded versions. This is a small business at play at the moment. But think about it. Branding is a continuum.

The generic commodity is branded first. And then de-branded. The process of de-branding itself giving legitimacy to the higher price tag.

There is value in the process of destruction of the brand as well. Advanced branded societies such as the US are already in the bulking game of specialty items.

Indian beedies are bulked from their pink paper labels and stored in wooden casks that help sell the humble beedi at a price that is ten times more than what the primary beedi maker in India realises. Most products sourced from exotic markets are similarly bulked.

The brand identity is destroyed to make a margin that is much more than what the brand with its clonal offering of consistency would offer. Is this a thought then? A trend to look out for at least?

Why Is Microsoft Afraid of Google?

In the few short years of its existence, Google has come a long way, simultaneously striking fear in the hearts of major players in the computer industry and also arousing their curiosity.

Its search engine is so ubiquitous that "to Google" somebody or something is now part of the lexicon of hard-core knowledge workers and casual web users alike. Google also has become a gateway to the Internet and taken steps to develop desktop applications, such as Google Toolbar and Google Desktop, not to mention other products like Gmail and Google Earth. The company's initial public offering was a big success and its stock has risen ever since. What, everyone wonders, will Google be up to next?

While Google, of Mountain View, Calif., is keeping all competitors on their toes, it poses a special threat to one particular company -- Microsoft. Why? Because Google's existing and potential products -- as well as those of other firms -- raise the specter that the behemoth of Redmond, Wash., may witness the erosion of its control over the platform for the next generation of software application development, according to Wharton faculty members who follow the technology sector.

"What Google wants to do is strategically decrease people's reliance on Microsoft. It's as simple as that," says Wharton management professor Raphael Amit.

But being a threat -- even a formidable threat -- is one thing. Actually beating Microsoft would be a different accomplishment altogether, the Wharton experts agree, and only time will tell how this David-and-Goliath-style rivalry will fully shake out.

Microsoft's concern over Google has been evident recently on several fronts. Microsoft recently announced a major reorganization designed to streamline the company's huge bureaucracy and make the firm more nimble -- a move that the Wharton scholars say was in direct response to fear of continued inroads made by competitors, especially Google, on Microsoft's turf. Microsoft has also suffered the embarrassment of watching key employees defect to Google. Most recently, on Oct. 4, Sun Microsystems and Google announced a partnership to distribute each other's software, a deal that is viewed as another assault on Microsoft. Among other things, the Google Toolbar for web browsers will be a standard component of the software that computer users receive when they download Sun's Java software.

But the central challenge to Microsoft goes beyond corporate reorganizations, defecting employees or the popularity of Google's search engine as a gateway to the web, according to Kendall Whitehouse, senior director of information technology at Wharton. Microsoft's success has been due in large part to its realization two decades ago that control of the operating system on personal computers would give it a great amount of leverage over PCs, he says. Most companies in the 1980s saw the operating system as a pure commodity product, but Microsoft understood that it held the keys to the kingdom.

"It's because of the dominance of the Windows operating system that Microsoft has been able to become so strong," Whitehouse notes. "The dominance of Windows means that if you're a developer of a major software application, you need to deliver a product for Windows. This means software developers must use the programming capabilities provided by Windows -- its application programming interface, or API."

But many in the computer business have long believed that the core platform could be moved to a higher level, that technology gurus could establish a web-based platform that runs in the browser and is written in the language of the browser rather than the language of the operating system.

"This was the dream of Marc Andreessen [co-founder of browser company Netscape Communications] and others back in the mid-1990s when Andreessen boasted that the web would reduce computer operating systems to nothing more than 'a poorly debugged set of device drivers,'" Whitehouse recalls. "And this is why Microsoft responded so aggressively to the threat of Netscape after [Microsoft Chairman] Bill Gates issued his famous memo warning of an Internet 'tidal wave' that threatened Windows. Netscape didn't succeed. Microsoft managed to thwart Netscape's attempt to establish a new platform on the web."

How, specifically, do innovations at Google threaten Microsoft? Whitehouse points, for example, to Google Maps. The API of Google Maps lets developers embed Google Maps in their own web pages using JavaScript. A visit to http://www.googlemapsmania.blogspot.com/ -- which bills itself as an unofficial Google Maps blog tracking the websites, ideas and tools being influenced by Google Maps -- shows a long list of applications built using Google Maps as the underlying engine.

Google is not the only company offering products and services that run on a web platform. Feeling the heat, Microsoft has already announced products to compete with those of Adobe (developer of the PDF document format) and Macromedia (developer of Flash and ShockWave software for video and animation), which announced a merger earlier this year. "To the extent that PDF and the Flash SWF file format could be an emerging platform for web application development," Whitehouse notes, "Microsoft has to be worried."

A Commodity Product?

It is important to note, Whitehouse adds, that "all the applications I have talked about are written in the web browser. They work equally well on Windows, Mac or Linux. Your computer still needs an operating system to run -- but it doesn't matter which one. The operating system may eventually become the commodity that people in the 1980s thought it would be, and that's bad news for Microsoft."

Thomas Y. Lee, professor of operations and information management, sees Google's challenge to Microsoft in broader terms. "I don't know that I would say Google is a threat to the operating system, per se, but it is a threat to Microsoft's business model. Microsoft has software [such as Office] that they use to leverage the operating system."

Lee says Google benefits from two key strengths. The company gives free rein to talented people to innovate and it encourages program developers to use Google as the basis for products of their own. "Google has hired really, really smart people. Some of the smartest graduates coming out of the top computer science programs are going to Google. When you put that many smart people in one place, neat things happen. Google also has not been threatened by people working off their products. Look at all the product extensions that are tied to Google Maps."

Balaji Padmanabhan, professor of operations and information management at Wharton, agrees with Whitehouse that "there is a move toward PCs that don't have a lot of software installed on them, where most applications can run off a network." Padmanabhan notes that Sun Microsystems and Oracle envisioned such a system, in which people using nothing more than a simple PC would wirelessly communicate with a central computer.

"But that idea never really took off, to a large extent because the network was not as large and as fast as it is today," says Padmanabhan. "Yet there are advantages to that concept -- less software to update for users, for one thing, and that's exactly what Google would capitalize on. The second advantage is PC users get better security, since apps can be constantly updated on a server to fix errors and add patches. The big challenge is the reliability of the network. You don't want to get into a situation where users want to open a spreadsheet program but can't because the network isn't up right now. That is certainly an issue that will have to get resolved down the road."

Legal studies professor Kevin Werbach asserts that the competitive issues facing Microsoft go beyond Google. "At some level, any successful Internet and software company is a threat to Microsoft," he says. "Microsoft is in a uniquely dominant position in the computing ecosystem. Anything that attracts a significant amount of use or activity is potentially a threat to them. Microsoft is a threat to, in some ways, virtually everyone in the industry and likewise everyone is a threat to Microsoft."

Werbach says that Microsoft is in such a powerful position because the PC operating system is at the center of most users' experiences with computers. As the Internet becomes more of an essential part of the computing experience, if anything else from a network becomes a central link in the user's experience, that poses a challenge to Windows and software programs like Office, which has higher profit margins than Windows itself. "Google does not prevent people from using any particular operating system on a PC," he says, "but if the functionality that users engage with is driven through a Google experience rather than something controlled by Microsoft, that harms Microsoft."

The Task Ahead

"The big challenge for Microsoft is the law of large numbers," Werbach notes. "It's harder and harder for the company, as it gets bigger, to keep growing as it historically did. The computer industry is a mature industry. In the developed world, virtually everyone has a computer. So Microsoft, to continue growing, needs to find new ways to expand its market, which is why they want to get into games, wireless and business-software markets. In these areas they're generating substantial losses. To the extent that Google becomes a dominant player in the Internet market, it blocks an opportunity for Microsoft to expand."

But Microsoft did not achieve the position it enjoys today by rolling over in the face of adversity. Microsoft executives "aren't sitting on their laurels; they see the threat," according to Lee. "They see a future revenue stream in web advertising and desktop search functions and in better knowing the consumer. So they are organizing their own formidable brainpower to attack the competition. And there are plenty of people who like Microsoft and its products just fine."

"If you ask me why I didn't buy Google shares at the IPO, I'd say Google at the time had one product -- its search engine," says Amit. "As it expands its base, it might harm Microsoft. But Microsoft has a much broader product line. It's sitting on 90% of all computers around the world and Google has a long way to catch up."

Marketing professor Peter S. Fader says Google's threat is a tune Microsoft has heard before. "It's history repeating itself over and over and over. Every time a new threat emerges to Microsoft, people think, 'Oh, this is it -- the one that's going to knock Microsoft off the block.' There's no reason to believe it will play out any differently this time. Google is a different kind of competitor, but Microsoft has dealt with a pretty wide range of competitors before. It's a tortoise-and-hare scenario. And Microsoft is a very good tortoise. What the company will do is figure out a way to replicate the features of competitors' products. The products won't necessarily be better, but they will be adequate."

Whitehouse suggests that Microsoft may have to change its philosophy if it truly wishes to compete with Google. "Microsoft has tremendous resources, and it performed a similar turnaround once before when it took on Netscape in the 'browser wars' of the late 1990s. Microsoft, however, tends to focus on stopping the onslaught of the web -- which it did very well with Internet Explorer in the late 90s -- but then falls back and refocuses on its core operating system and desktop application businesses. So, for example, in recent years we've seen a major push to develop Vista [the long-delayed operating system, once code-named Longhorn, that is scheduled to replace Windows XP in 2006], but there have been no major new improvements in Internet Explorer in years.

"It's not clear how much Microsoft actually believes that the web is the platform of the future. After conquering its immediate adversary, the company tends to retrench and fall back on developing its core assets. That may work again this time. But, eventually, it may not be enough to forestall the Internet tidal wave that will eventually arrive."

MARKETING IN 21st CENTURY

Sergio Zyman’s Formula for Marketing in the 21st Century


Sergio Zyman is the chairman of the Atlanta-based marketing consultancy, the Zyman Group, which also has offices in Chicago and Mexico City, where Zyman was born. He has more than thirty years of high-level marketing experience at PepsiCo, Procter & Gamble and at the Coca-Cola Company, where he was Chief Marketing Officer. In the latter position, he saw Coca-Cola’s worldwide annual sales volume increase from nine to fifteen billion cases.


Zyman’s definition of marketing success is simple: “selling more stuff to more people more often for more money more efficiently.”


His books include: Renovate Before You Innovate: Why Doing the New Thing Might Not Be the Right Thing and The End of Advertising as We Know It, both co-written with Armin Brott; Building Brandwidth: Closing the Sale Online, co-written with Scott Miller; and The End of Marketing as We Know It.


On September 29, Emory University's Goizueta Business School celebrated the one-year anniversary of the Zyman Institute of Brand Science, whose ongoing mission is to “pursue the advancement of brand driven business performance.” Working collaboratively with sponsors, other universities, research organizations, and institute members, the Zyman Institute devises cross-disciplinary solutions for managing real world problems in brand strategy.


Zyman himself is always on the go, in demand both as a speaker and as a consultant. Knowledge@Emory recently caught up with him before the launch to ask about the science of advertising, changes in the ethnic and demographic composition of the U.S. market, and the impact that the web is having on brand promotion.


Knowledge@Emory: You’ve argued that advertising should be seen as a science and not an art. Isn’t it important that ads combine both?


Zyman: Advertising has one job—to get more people to buy more of what is being advertised. Without demanding that your advertising first generate results, all you may be doing is allowing your agency to artistically enjoy themselves at your expense.


Does this mean art cannot reside in great advertising? Absolutely not. The current I-Pod campaign is awesome on so many levels. So when the two co-exist, truly fantastic things occur. But you must first demand a return on marketing investment (ROMI), then judge it on artistic merit.


Knowledge@Emory: One of the five key elements of building “brandwidth," which you cite in your book Building Brandwidth: Closing the Sale Online, now almost five years old, is that "your brand is defined in your customer's perceptions." Given the explosive growth of web advertising in the years since, and the continued growth of ad penetration into every aspect of daily life (flat screen monitors pumping out ads on supermarket checkout lines and in hotel elevators, for example), what can savvy marketers do to “rise above the noise”?


Zyman: One. Elevate the brand expectation, then deliver on that via the brand experience. That increases your brand’s value and, perhaps most importantly, increases brand loyalty. With so many options to choose from, and so many messages bombarding consumers at every corner, this is critical to staying above the noise.


Two. Fully understand the consumer involvement with your category. If you’re in a high-involvement category where consumers seek your brand (i.e., cars), you need to make the brand expectation and delivery (experience) as high as possible. If you’re in a low-involvement category where your brand seeks consumers (i.e., milk), the same philosophy also exists. But success in low-involvement categories is often more dependent on distribution, brand alliances/partnerships, and other factors outside your control. Developing and leveraging strong relationships with these entities becomes critical to regaining some of this lost control.


Three. Explore new targets and opportunities. Our Hispanic population possesses over three quarters of a trillion dollars in spending power. Yet most marketers do not fully realize the opportunity right under their noses.


Knowledge@Emory: John Johnson, the recently deceased founder of Ebony and other publications focused on an African-American audience, was one of the first people to establish, and to capitalize on the fact that there was a rich market to be tapped in the minority community. Many companies produced their first ads using African-Americans to target consumers for Johnson’s publications. In recent years, there has been a growing focus on marketing to Latinos in the U.S. Is there a point at which these strategies risk Balkanizing rather than expanding markets?


Zyman: Absolutely not! Brand activation of a national strategy can take many forms. For example, Coca-Cola is all about “authenticity.” What is authentic to the African-American community is vastly different from what’s authentic to the Hispanic community, the Korean community, and other demographics. But when you personalize that experience accurately against each segment, you can succeed against each segment. When you develop strategies and tactics that are averaged across all your demographic targets, then your results will be average.


Knowledge@Emory: Marketing to Mexican-Americans is not the same as marketing to Puerto Ricans, which is not the same as marketing to Cuban-Americans. How finely targeted do you feel marketing to Latinos in the U.S. should be to be effective?


Zyman: As I mentioned above, it’s all about ROMI. You must first understand the opportunity within each sub-segment, do your scientific analysis, and invest accordingly. If the expected return does not pay out, then don’t go to the expense of finely targeting and activating your marketing effort.


Knowledge@Emory: The makers of Sprite started an ad campaign a few years ago, still reverberating and being retooled in some markets, whose tag line was “Obey Your Thirst.” It targeted the youth market by arguing in effect that other beverages were focused on trivial and diversionary matters of image and that kids who weren’t fooled by this sort of trickery should drink Sprite as a matter of authenticity. Of course the idea of beverage-based authenticity then came under attack. How does one appeal to an increasingly jaded youth market?


Zyman: What attack? But you’re right, childhood has changed and so have children, and today’s youth must ferret through a deluge of marketing messages–much of which is junk. And it’s only going to get worse. That said, you must speak the truth and you must speak authentically. They seem quite immune to poorly executed over-promises, so don’t do it.


Knowledge@Emory: Most Hondas sold in America are now built in the US. Many Japanese consumer goods are now made in lower wage Asian countries. What does “Japanese quality” mean when “Japanese” products aren’t made in Japan? In a related vein, what impact do you see globalization having on brand loyalty?


Zyman: As long as the association continues to equate “Japanese” with “quality,” it doesn’t matter where the product is manufactured. But when Japan off-shores its manufacturing, they must do an even better job of brand delivery and reputation management. Because when brand delivery (experience) starts to falter, the bad PR avalanche can bury you—especially if it undermines a core preconception. This applies to any brand, regardless of its origins.


Knowledge@Emory: Do you see the growing influx of inexpensive and increasingly sophisticated goods from places like China eroding brand loyalty?


Zyman: No. I see quality brands enjoying strong loyalty being made in China. Again, a brand is the amalgamation of consumer experiences—not the product itself. As long as the product fulfills the brand promise, its origin of manufacture should not matter.


Knowledge@Emory: In last year’s Renovate Before You Innovate: Why Doing the New Thing Might Not Be the Right Thing, you argue that companies often, to their detriment, scrap venerable products and opt for the new, when they simply should be retooling the tried and true. Isn’t there a tipping point, where companies have to recognize that the landscape has changed and they have to change with it? Some analysts have argued, for example, that the railroads doomed themselves by thinking like rail companies rather than transportation companies.


Zyman: You’ve made my point. Had they thought of themselves as transportation companies and leveraged their core competencies into a broader frame of reference, rail companies could have easily expanded their brand into shipping, bussing, airlines and more. By expanding your frame of reference and staying relevant against your consumer, you can go places you’ve never thought.


Sony used to be the only name in portable music and should have introduced the world to the MP3 Player. Instead, they stayed focused on the Walkman (product) and not the category (portable entertainment). Now what was the domain of Sony is now Apple’s.


Knowledge@Emory: Google’s Gmail, recently out of beta and now in general release, scans a user’s email and targets ads based on cues found in the text. Search engines often do something similar, tracking where users search to refine the ads they are fed. Do you see this kind of tightly targeted and more personalized advertising as the wave of the future? Do you have any privacy concerns about this approach?


Zyman: Do I like it? No. Can anything be done about it? Probably not. The walls of privacy were demolished long ago. If companies find this method of marketing to pay-out, then it will continue. Good marketers should always heavy-up what works, and discontinue what does not.


Where Google may be at risk is taking a key reason for its past success–empowering consumers to freely search and surf without bias–and undermining that freedom with the drag of pop-ups and junk mail. I’d hate to ever view Google as annoying. And they could be at risk of doing just that.

star power in boxoffice - an analysis

We all understand at some level that stars in the worlds of film, sports, and even business create results. If you want big box office for Pirates of the Caribbean, it probably pays to sign Johnny Depp to play the lead.
But Harvard Business School professor Anita Elberse wanted to learn more about the dynamics of star power. Can studios depend on a star's track record as a predictor of future success? Are two "A-list" stars better than one? Can stars improve a studio's overall profitability as well as kick up box office revenue on one movie? What stars attract the most ticket buyers?
And in an interesting plot twist, Elberse decided to design her research not around actual box office receipts, but rather around a Hollywood simulation game that has over half a million players.
The results were published in her working paper, "The Power of Stars: Creative Talent and the Success of Entertainment Products."
Sarah Jane Gilbert: Tell us about "star power" and how it contributes to a film's success.
Anita Elberse: The concept "star power" captures the extent to which an artist's involvement with an entertainment product contributes to the success of that product. That can work in a variety of ways. For example, in the case of films, powerful actors and actresses can help guarantee financing and push a movie through the development process; they can aid in generating interest from theaters across the globe seeking to show the film; and they can help to attract audiences to the film. Their power may find its origins in superior acting skills, a loyal fan base, a knack for picking the most promising projects, a strong relationship with other creative talent, a solid box-office record, or a combination of such factors.
Star power, of course, is only one of many factors that determine a film's market performance. Film characteristics such as story line, genre, and the use of special effects also affect demand. The role of directors and other creative talent could play a role. In addition, decisions regarding the release strategy for a film, such as whether to open a movie in a large number of theaters, whether to use television advertising to promote the film, and whether to avoid a competitive, high-season opening weekend may impact its market success as well.
However, most of these key factors are in some way linked to star power. For example, movie studios are probably more confident that a Tom Cruise movie will emerge as the winner of a competitive July 4 opening weekend than a movie with an unknown actor, and will adjust their release strategy accordingly.
Q: What is the Hollywood Stock Exchange and how did you use it in your research? Does the HSX accurately reflect a movie's predicted and actual profitability?
A: The Hollywood Stock Exchange is an online market simulation that revolves around movies and movie stars. It is a game—no real money is involved—with over half a million players. Anyone who is interested in playing can join the simulation. New HSX traders receive "Hollywood dollars" and can increase the value of their portfolio by, among other things, strategically trading "MovieStocks." The prices of those MovieStocks reflect expectations of box office revenues.
HSX, which is owned by Cantor Index Holdings, mimics a real supply-and-demand-based stock exchange like the NYSE. HSX acts as the market maker—its technology is set up so that when there is high demand for a certain stock, prices will automatically go up, and when there is low demand, prices will go down. As such, from the perspective of the trader, the market works much like any other stock exchange. Movies have an initial public offering once the project first takes shape, and traders can buy, sell, cover, and short stocks just as they can do at the NYSE. What is different is the terminal nature of the trading process: MovieStocks are delisted roughly four weeks after their corresponding movies are released in U.S. theaters.
Although the simulation does not revolve around real money (Hollywood dollars are worthless outside HSX), it is interesting that collectively, HSX traders usually produce relatively good forecasts of actual box office returns. In fact, the forecasting accuracy is what makes it such a valuable research setting.
I used HSX to measure how the involvement of a movie star affects likely theatrical movie revenues. I started by compiling a database with over 1,200 casting announcements such as "Tom Cruise dropped out of Cold Mountain" and "Angelina Jolie is attached to star alongside Brad Pitt in Mr. and Mrs. Smith," and matched those to their corresponding MovieStocks on HSX. To understand the impact of movie stars on movie revenues, I then designed an event study to analyze HSX traders' response to those announcements. In an extension of the study, to examine the impact on movie companies' profitability, I also analyzed whether those announcements affected the valuation of movie studios (or the media conglomerates to which they belong) listed on the NYSE.
Q: What gave you the idea to use casting announcements to study star power?
A: It struck me that an event study focused on casting announcements would help me avoid many of the shortcomings that plague previous research on the power of stars. For example, most existing research does not account for the possibility that studios may employ bigger stars for movies that are expected to generate higher revenues, or that the most powerful stars may be able to choose the most promising movie projects. That has made it difficult to draw conclusions on the direction of causality. In addition, motion pictures are the result of the work of many actors and actresses, and previous research has not been able to assess the effect of one star in isolation.
Q: What correlation did you find between casting announcements and their impact on the Hollywood Stock Exchange? Which stars provide the biggest return?
A: In my study, I find that HSX prices respond significantly to casting announcements, which suggests that the involvement of stars affects revenues. The list of announcements with the biggest impact contains a number of established, often highly paid stars, including Tom Hanks, Mike Myers, Tom Cruise, and Mel Gibson. It also contains a few actors that are typically not included at the very top of most industry executives' rankings, such as Johnny Knoxville and Seann William Scott. It seems audiences value those stars more than Hollywood executives do.
I show that, as could be expected, an actor's past box-office performance is positively related to the magnitude of his or her impact on revenues. However, the number and, particularly, the average box-office record of other cast members also play a role. In fact, interestingly, the impact of a newly recruited star and the other cast members are linked—the more A-list a cast already is, the greater is the impact of a star with a track record of box office successes. In other words, recruiting Angelina Jolie leads to a bigger boost of expected revenues if a powerful actor such as Brad Pitt has already agreed to star.
Furthermore, although I find strong evidence that stars drive revenues, I find no support for the idea that stars drive the profitability of movie studios. That suggests that stars "capture their rent"—they capture the value they add.
Q: Do movies ever do well without casting from the A-list? What does this imply for the B-list?
A: Yes. There are many examples of blockbuster movies that did not have any stars that belonged to the A-list at the time it came out. In fact, some of the best-selling movies of all time did not have any A-list actors—Titanic, the highest-grossing movie of all time, is a classic example. (Of course, many of the cast members in those successful movies went on to become part of the A-list). However, on average, recruiting an A-list cast member appears to have a positive impact on revenues.
The industry often relies on a star's historical box office record to measure star power. When I looked closely at the data used in my study, I found that rankings of stars based on their past box-office performance can change dramatically over the course of just a few years. Star power is a highly dynamic concept—stars can move from the B to the A list (or vice versa) based on just a few successes or failures. This underscores the limitations of relying solely on stars' historical box-office performance to forecast their future performance.
Q: What are the implications for managers in the motion picture industry?
A: Motion picture executives highly reward their top talent, in the form of multimillion-dollar salaries, perks, and profit participation deals, and often give high-profile stars an influential role in the movie marketing process. As such, creative talent is an important marketing investment for managers in the film industry. I think my study provides relevant insights into the return on that investment.
My findings suggest that the power that the motion picture industry attributes to stars stems from a focus on revenues rather than profits. If movie studio executives aim to be cost-effective, they may have to alter their talent recruitment and compensation schemes. My conclusions on the determinants of stars' effectiveness provide important insights in that respect. For example, while a star's past box-office record provides some guidance about his or her future box-office performance, it is important for executives to not lose sight of the bigger picture. Rather than wasting resources on one "A-list" star, matching cast members with similar rankings might often be a more efficient strategy.
Q: What research are you working on now?
A: Most of my research is focused on understanding what drives the success of products in "creative industries" such as entertainment, advertising, sports, and fashion, and how firms can develop effective marketing strategies for such products. I am working on several topics in this area, including the marketing of blockbuster products, the pricing of Super Bowl advertising, and the impact of online channels on the success of hit and niche products in entertainment markets.