Are Facebook Ads Illegal?

Very interesting discussion from a law professor on this issue. What do you folks think?

ComScore Analyzes Radiohead

Very interesting analysis of the Radiohead experiment by Comscore. Amazingly, two out of 5 downloaders were willing to pay for the music! I smell a new pricing model.

P.S.: The band made $6-10 million on the deal.

Lenders Might be Using Questionable Practices.

Disturbing article in the New York Times on poor disclosure on the part of lenders. Excerpt follows-

"As record numbers of homeowners default on their mortgages, questionable practices among lenders are coming to light in bankruptcy courts, leading some legal specialists to contend that companies instigating foreclosures may be taking advantage of imperiled borrowers. Because there is little oversight of foreclosure practices and the fees that are charged, bankruptcy specialists fear that some consumers may be losing their homes unnecessarily or that mortgage servicers, who collect loan payments, are profiting from foreclosures."

Kylie Minogue launches networking site

It seems we cannot have enough of social networking websites nowadays. After several attempts by celebrities to create their public profiles and make the most of the phenomena. Now they are even creating their OWN social networking websites. Is this the next stage of social networking? Or is it just a fan club online community but with a face lift?

By the way, if you like Kylie Minogue, you can create your profile on KylieKonnect.com!

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BBC News, Monday, 5 November 2007, 10:14 GMT

Singer Kylie Minogue has launched her own social networking website for her fans to communicate with each other.

The KylieKonnect website enables fans to create personal profiles and upload images, as well as "keep up to date with all the very latest on Kylie".

In a message posted on Friday, Minogue welcomed fans to her new website and said she would be "dropping by from time to time".

How has Netflix affected Blockbuster?

It is amazing to look at how Netflix has decimated Blockbuster. Excerpt-

"Blockbuster's revenue slid 5.7 percent and the company harbored a net loss of $35 million. Worse, it has closed 526 stores in the past year, and the number of employees will be reduced to offset high overhead costs to the tune of $45 million. Blockbuster's injured stock price continues to fall and was priced at $5.06 at Thursday's close."

Full article is here.

Future of Online Advertising (WebGuild/Google).

Quotes from the talk:

We must accept the fact that there is no "mass" in mass media.

Consumers are beginning to, in a real sense, own our brands. We need to learn to begin to let go.

Six trends-

1) The emergence of communtainment (think YouTube).

2) The increasing popularity of Usites (or UGC).

3) Internet, as a medium, has become mainstream.

4) Declining usage of traditional media.

5) Fragmentation of content consumption.

6) Evolution of user-generated brands.

eBay's use of ads bothers sellers.

As everybody here knows, eBay is a place where people buy and sell. The company makes money when somebody puts up an item for sale and when the item sells. Now, the company has been trying to make money through another route- online ads. The problem is that this drives away potential buyers from the site making sellers mad. Here is the original article discussing this and here is a discussion of the article on Slashdot.

A Few Good Creative Men

new social network

I found this new social network site. It seems to be a pyramid scheme.

http://www.yuwie.com/

Green Halloween- Exclusive Q & A with the Founder

Happy Halloween everybody! I have been surprised this year by the widespread acceptance of the Green Halloween concept. This concept originated in the Seattle area and is already supported by sponsors such as Whole Foods.

Here's the Marketing College exclusive Q&A with Corey Colwell-Lipson, Founder, Green Halloween.

1) What motivated you to start the Green Halloween movement?

Please see the about page.

2) How does this change the behavior of parents?

Green Halloween will be of interest to a continuum of parents. Some parents are green to being green and healthy but may think that it is time to start trying. These parents may take one step such as purchasing used instead of new costumes or handing out Play-doh instead of candy. At the other end of the spectrum are parents who are already on the green train - these parents consistently strive to include the health of their children and the health of the planet in their everyday decisions. For instance, they may shop for food locally, eat organically, give preference to petroleum-free packaging and make other decisions as parents and as consumers that are driven by these concerns. Most people will fall somewhere in between these two groups. Green Halloween has ideas and suggestions for people no matter where they fall in the spectrum. Green Halloween is not a one-size-fits-all ideal. It seeks to meet people wherever they are and to make easy and affordable the process of integrating human and environmental health into the most traditionally un-healthy times of year: the holidays.

Green Halloween, as a community movement, changes the behavior of parents by a variety of means. These may include:

- Education (letting people know why making these changes is important, and teaching them how to make the changes)
- Simplification/ ease of use (e.g. busy parents who want to make these kinds of choices can come to our website, find the information and take direct action without having to do their own research)
- Word of mouth/ peer pressure (e.g. "Have you heard about these great options?" or "It's so passé not to be healthy and green")
- It feels good. Studies and experience show us that doing good deeds make us feel good. In addition to being a movement about health and the environment, Green Halloween also encourages people to consider the well being of the people who grow or make the products we buy. In addition, we're promoting the idea of making the world a better place and taking care of others in our community, especially during the holidays. Green Halloween is a great opportunity for people to keep the fun and good memories AND make the world a better place; I think that this changes behavior because the rewards are both immediate and long lasting.

3) How have kids responded to this initiative?

What's been interesting is that when people (including reporters) have asked children, "What would you think of going candy-free this Halloween?" - aside from the fact that this is not what GH is all about, this question does not give the inquirer an accurate assessment of the situation because most children are going to say, "No thanks." What we have found, after meeting thousands of children and parents at various community events since September, is that when children see, touch and feel the alternatives we're suggesting, 100% of them have said they would take the alternative. Hands down. We have yet to meet one single child, of any age - including
adolescents - who said they would rather have traditional treats over the healthy and or Earth-friendly treasures we've had on display.

4) If I am a marketer, how should I respond to this trend? Which marketers would you hold up as role models?

I recently had a conversation with a company who makes healthy (and SO delicious!) "bars" that are not currently packaged in ways that most parents could afford to use them as a treat for Halloween, birthday parties, etc. I mentioned to them that many parents would indeed choose their product over candy if they made it available and affordable and that I was sure that other companies would be meeting this demand at some point soon. My belief is that companies who make products such as these can be leaders or followers, but my guess is that at some point in the future, they will all be taking part in this change.

Many sources report that a significant number of consumers do take into account human/environmental health and sustainability issues when making consumer choices. Further, marketers know that consumers also respond positively to products that give back, for example, through the donation of a portion of sales to non-profit organizations. If I was a marketer, I would rise to meet this demand early on. I would take into account Green Halloween's three criteria by making sure that my product is - and is marketed as - being healthy for children, good or better for the environment, and safe and fair for the people making or growing the product. I would also ensure that my company has a clear commitment to giving back to the community.

I am not aware of any company that is 100% perfect, but I am aware of many who are trying hard to reach this ideal. Companies such as Endangered Species Chocolates sell products that are organic (good for the people who grow and eat the food as well as for the planet) and Fair trade (reducing child slavery - something prevalent on non-fair-trade cocoa farms.) In addition, ES donates a percentage of their sales to a worthy cause. Tully's coffee is now using biodegradable cups to hold their organic, shade-grown, fair trade coffee. Weisenbach Specialty Printing makes fun, quality products out of recycled materials such as recycled paper, plastic, denim and money,
most of which are American made, and gives back to the community by supporting worthy causes such as Green Halloween. Of course, it is also important that companies take pride in the way they treat their own employees and how, behind closed doors, the company operates. Do they say one thing and do another? Savvy consumers may find this important.

5) Are you getting any resistance to this concept?

The response has been overwhelmingly positive from people here in the Seattle-area and from parents, organizations and businesses across the country. I have received 4-5 e-mails from people who were not supportive. A few had issues with some of the suggestions I made and a few others felt I should leave Halloween alone and wondered what's wrong with a little unhealthiness and un-Earth-friendliness once a year. Generally, our message to people is that Green Halloween is seeking to create alternatives for those people who are interested in making a change; if someone's family wants to keep things the same, then our ideas may not be for them. On a larger scale, though, I am confident that the system is changing. Companies and manufacturers will be rising to meet the demands of parents who want to have fun and to create good memories AND to be healthy and Earth- and people-friendly. I also believe that existing companies may have to change their ways or risk consumer backlash. My expectation is that in the future, all holidays, including birthdays, will have traditions that are quite different than those of today.

Sir Cliff lets fans set the price

It looks like what Radiohead have started is becoming a fashion. Now even Sir Cliff Richard is following the trend. Sir Cliff fans can the set the price of his next album, but with a twist. The more pre-orders the album receives; the less it will cost to launch it. The price now is £7.99. Can they make it cheaper? You decide!

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October 30, 2007
Web User

The more people that pre-order the album, the less it will cost Veteran crooner Sir Cliff Richard is launching a new album on 12 November and it could cost as little as £3.99.

That's because the price will depend on the number of pre-orders for the album received before it goes on sale - the more there are, the less it will cost. The price currently stands at £7.99 and will be updated daily.

Love... The Album is a 15-track offering from Britain's answer to Elvis Presley, and will be digitally distributed in MP3 format when it goes on sale.

However, one analyst accused Sir Cliff of jumping on the bandwagon.

"Hot on the heels of Radiohead's price drop digital download initiative, Sir Cliff Richard has announced his own vaguely similar, but much safer, initiative for his forthcoming album," said Mark Mulligan of Jupiter Research.

Mulligan compared the concept to that of a US website called Amie Street, which works along the lines of a social network - recommendations can be made to other users, and music sold on the site starts off free and rises in price the more it is downloaded.

"The more people that pre-order the album the cheaper it will become, which in all honesty has more in common with Amie Street than it does Radiohead," said Mulligan.

www.lovecliffrichard.com
www.jupiterresearch.com
http://amiestreet.com

Is this the next YouTube?

Everybody seems to be talking about Hulu. They are focused on TV shows. You can currently sign up for beta testing. There are some hints on how this might work on their blog.

They have an entire episode of the Office on the site at this point-

What should universities be doing to train marketing students for the future?

As an educator, I constantly think about what I should be doing to help my students succeed at their jobs. I worry that, as a community, we are teaching students old paradigms and skills rather than helping students cope with new challenges.

What do you think? If you are a student, what do you think you should be learning in your marketing courses to be a star?

The Piracy Paradox.

James Surowiecki argues that piracy is not bad for the fashion business. Exact quote-

"There’s little evidence that knockoffs are damaging the business. Fashion sales have remained more than healthy—estimates value the global luxury-fashion sector at a hundred and thirty billion dollars— and the high-end firms that so often see their designs copied have become stronger."

The term "Piracy Paradox" comes from this paper by Kal Raustiala and Christopher Sprigman.

Web 2.0 is a Bubble.

Steve Rubel has posted an atypically negative and cynical article on how Web 2.0 is a bubble. Here is the sound bite- "The bubble really began in earnest on October 9, 2006 when Google bought YouTube." Read the full article here.

Forty Seven Authors!

I am happy to report that this blog now has forty seven authors! I am looking forward to even more authors, posts and comments.

Best 50 Tech Products Of All Time.

Earlier, this year, PC World came up with a list of the top 50 tech products of all time. The full article is here.

Here is the list in ranked order-

1. Netscape Navigator (1994)
2. Apple II (1977)
3. TiVo HDR110 (1999)
4. Napster (1999)
5. Lotus 1-2-3 for DOS (1983)
6. Apple iPod (2001)
7. Hayes Smartmodem (1981)
8. Motorola StarTAC (1996)
9. WordPerfect 5.1 (1989)
10. Tetris (1985)
11. Adobe Photoshop 3.0 (1994)
12. IBM ThinkPad 700C (1992)
13. Atari VCS/2600 (1977)
14. Apple Macintosh Plus (1986)
15. RIM BlackBerry 857 (2000)
16. 3dfx Voodoo3 (1999)
17. Canon Digital Elph S100 (2000)
18. Palm Pilot 1000 (1996)
19. id Software Doom (1993)
20. Microsoft Windows 95 (1995)
21. Apple iTunes 4 (2003)
22. Nintendo Game Boy (1989)
23. Iomega Zip Drive (1994)
24. Spybot Search & Destroy (2000)
25. Compaq Deskpro 386 (1986)
26. CompuServe (1982)
27. Blizzard World of Warcraft (2004)
28. Aldus PageMaker (1985)
29. HP LaserJet 4L (1993)
30. Apple Mac OS X (2001)
31. Nintendo Entertainment System (1985)
32. Eudora (1988)
33. Sony Handycam DCR-VX1000 (1995)
34. Apple Airport Base Station (1999)
35. Brøderbund The Print Shop (1984)
36. McAfee VirusScan (1990)
37. Commodore Amiga 1000 (1985)
38. ChipSoft TurboTax (1985)
39. Mirabilis ICQ (1996)
40. Creative Labs Sound Blaster 16 (1992)
41. Apple HyperCard (1987)
42. Epson MX-80 (1980)
43. Central Point Software PC Tools (1985)
44. Canon EOS Digital Rebel (2003)
45. Red Hat Linux (1994)
46. Adaptec Easy CD Creator (1996)
47. PC-Talk (1982)
48. Sony Mavica MVC-FD5 (1997)
49. Microsoft Excel (1985)
50. Northgate OmniKey Ultra (1987)

GAP is involved in child labour claims

So Last week it was Mattel…this week it's GAP. The persisting question remains: how do these companies manage to respond to such allegations and protect their brand image? Or is the situation different in GAP case, as the damage has already been done overseas? Do you think consumers really care about how their clothes are being manufactured? Or does price always plays the role of determinant factor in their buying decision? How big is the market segment of "Ethical" shoppers in comparison to "Price Sensitive" ones?

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NEW YORK (CNN) -- Calling allegations of child labor at an Indian factory contracted to make some of its apparel "deeply disturbing," the president of Gap North America says the company has fired the subcontractor responsible for the abuse and will not be selling the garments made there in its stores.

President Marka Hansen spoke to CNN Sunday after viewing video of children allegedly sewing Gap clothes at a New Delhi sweatshop. The story was first reported Sunday in Britain's Observer newspaper

"It's deeply, deeply disturbing to all of us," Hansen said. "I feel violated and I feel very upset and angry with our vendor and the subcontractor who made this very, very, very unwise decision."

Hansen blamed the alleged abuse on an unauthorized subcontractor for one of its Indian vendors and said the subcontractor's relationship with Gap had now been "terminated."

She said the garments allegedly produced by the children represented a small portion of a single order placed with the vendor, and that the garments would now not be sold in stores.

"We strictly prohibit the use of child labor," Hansen said in a statement. "Gap has a history of addressing challenges like this head-on, and our approach to this situation will be no exception.

"In 2006, Gap Inc. ceased business with 23 factories due to code violations. We have 90 people located around the world whose job is to ensure compliance with our Code of Vendor Conduct."

In its article, The Observer spoke to children as young as 10 who said they were working 16 hours a day for no pay. The paper described the workplace as a "derelict industrial unit" where the hallways were flowing with excrement from a flooded toilet.

A 12-year-old boy said he worked from dawn until 1 a.m. and was so tired he felt sick. But if any of the children cried, he said, they would be hit with a rubber pipe or punished with an oily cloth stuffed in their mouths.

What does a Chief Marketing Officer do?

One of the problems with the idea of a Chief Marketing Officer is that it is not very clear what this role entails. Most articles, like this one, seem to suggest that the CMO's roles are negotiated and are, therefore, contextual. The problem with this is that it creates a halo of doubt and confusion about this post. While it is very clear that the CEO focuses on bottom-line goals, the CMO's responsibility seems to be ill-defined making it easier to scapegoat when things start to go bad.

All this makes me wonder if we will have Chief Marketing Officers in the long-run or if this is simply a fad.

Why P&G wins?

Since the small stutter in 1999-2000, which led to the resignation of the then CEO (Durk Jager), P&G has been on a roll delivering stellar growth quarter after quarter.Here is an ex-Proctroid’s take on what has been driving this performance.

1. Better and more “real” Brands : Brands have been re-interpreted and rejuvenated. The laser like focus on narrowly defined functional benefits has been supplanted by a broader emotional/life context to the brand, without diluting the importance of product superiority. In my view, they are not fully there on this front ( more on that in another blog soon), but still a huge change vs the past.

2. Faster and efficient innovation: Technical product Innovation is faster and at times out-sourced. Refer P&G connect and develop (C&D) program. P&G calls this change, from R&D to C&D. Commercial innovation, innovation that doesn’t involve any product reformulation or package change, has also bloomed.

3.Adapting to new Media and new consumer dynamics: In response to media fragmentation, new ways of effectively and efficiently connecting with the consumers have been developed and then institutionalized in the usual P&G manner. Word of Mouth, Consumer advocacy, Shopper marketing, Digital/web to name a few. Research has also evolved and there is more immersion , ethnographic and anthropological type of research to uncover finer insights. Online research is also being used. See a good example of using the web for Folgers Coffee here.

4. Leveraging design: The importance of design has been recognized and P&G was perhaps the first packaged goods company to have a Global head of design. The results are clear to see on the shelf. Check out the new Head and Shoulders graphic and bottle shape when you visit the supermarket next.
5. Stronger portfolio: Some great brands and businesses - WELLA, GILETTE, HERBAL ESSENCES, CLAIROL, IAMS to name a few- have been acquired and integrated well within the portfolio. Its a pity they couldn’t buy NIVEA due to the vagaries of German corporate law.

6. Superior customer relationships: P&G has perhaps handled the demands and pressures of the big retailers better than other CPG companies, driven by superior customer understanding and sharper shopper insights. They use the brain bank instead of the cheque book approach with big retailers like Wal Mart.

7. Winning where it matters: The lead in key growth geographies like China has been maintained and there is momentum in the India business where P&G has struggled historically against Unilever.

8. Lean supply chain costs : P&G was one of the pioneers of the ECR ( efficient consumer response) model and a lean supply chain has been key to ensuring right pricing, margins and speed to market.

The one point which quite often gets over-looked when discussing P&G’s success is its ability to institutionalize and roll out new best practices and processes. This is an important element in their success because the strategic changes which P&G has implemented are not unique. All FMCG companies have attempted the same ( e.g. Unilever’s Path to Growth ) kind of transformation . So why has P&G executed the same strategy better ?

My view :

1. Talent : The quality of people within the company has always been strong as P&G recruits rigorously. It is a strong meritocracy. It also invests a lot in development. This has generated a strong pipeline of leaders who are also outstanding thinkers/thought leaders.

2. Common language and culture: The presence of a common language, enabled and nurtured by the no lateral recruitment policy, and a strong corporate culture makes change management and wider buy-in to changes less painful.

3. Strong belief in facts and data: Data/facts matter much more than opinions. This culture of “fact” based decision making ensures people embrace the new practices and processes with lot more confidence than what I have seen in or heard about other FMCG companies. People are in general not cynical about new global guidelines. Also P&G measures and course corrects better than most. The research department in P&G is a true powerhouse.

Buy DELL shares.

You can’t keep a good man down for very long. First SONY and now DELL is on a comeback trail. I can feel it and see it. The focus on basics - good product design, excellent customer service and relevant innovation - is showing. Read here about how they are listening to the consumer, turning complaints/problems into a positive opportunity for the brand and harnessing the “wisdom of the crowds” to develop new products or improve existing ones.

Conversing with your consumers may be just lip service for some companies, but for Dell it is central to a rejuvenated reputation, writes Jeff Jarvis in BusinesWeek (10/29/07). Just a year ago, Dell’s internal tracking reported customer satisfaction among core users at just 58 percent. Satisfaction among high-end customers was even worse. Michael Dell went “ballistic,” says Dick Hunter, who heads Dell’s customer service. Today, Dell’s core-customer satisfaction is up to 74 percent and the high-end has jumped to 80 percent. That’s still not good enough, but those numbers apparently would not be as high if not for its blog, Direct2Dell.com. “I think what the web has brought is the voice of that 25 percent,” says Dick.

Dell launched Direct2Dell.com last July, “where chief blogger Lionel Menchaca gave the company a frank and credible human voice.” That happened only after the company had been thoroughly flamed by unhappy customers online. At that point, Michael Dell was encouraged by Jeff Jarvis to “join the conversation your customers are having without you.” Dell started by dispatching “technicians to reach out to complaining bloggers and solve their problems, earning pleasantly surprised buzz in return.” Direct2Dell was launched amid “a burning battery issue,” and shortly after Michael Dell himself started IdeaStorm.com, a blog asking “customers to tell the company what to do.”

In response to their advice, Dell is now “selling Linux computers and reducing the promotional ‘bloatware’ that clogs machines. Today, Dell even enables customers to rate its products on its site.” It has also streamlined its call-center support. Mark Jarvis, Dell’s new cmo, actually regards its customer conversations as its strategy: “By listening to our customers, that is actually the most perfect form of marketing you could have.” His boss regards it as an engine of innovation: “I’m sure there’s a lot of things that I can’t even imagine, but our customers can imagine,” says Michael Dell, adding, “A company this size is not going to be about a couple of people coming up with ideas. It’s going to be about millions of people and harnessing the power of those ideas.”

Read more such stories on my blog http://gurugupta.wordpress.com/

Everybody gets a free Taco.

Taco Bell is giving away free tacos to everyone. Simply show up at the Taco Bell of your choice between 2-5 p.m. on October 30. This is part of a promotion associated with the World Series.

Cameron Balloon Factory.

An introduction to the award-winning Cameron Balloon Factory module on MERLOT. [Uses Flash, Takes time to load.]

Star Spangled Ice Cream

Ice-cream targeting the American political conservative. Their motto- "The Sweet Taste of Freedom."

This is how it works. You go to this web site and order the ice-cream of your choice. The ice-cream is delivered to your doorstep. The troops get 10% of the profits. You get to revel in conservative ideology and eat delicious ice-cream.

This should make for a great class discussion on targeting.

Purple.

The Baltimore Ravens have created a club for women fans ONLY called Purple.

Read more on the Church of the Customer Blog.