Archive for June, 2007

The Game Changer: The iPhone Cometh

Today is the day.

The day 6 months in the making, the day one small device, saves the world.

Ok, so a bit dramatic, but seriously, – this is a really big deal…right? Sure, other phones have come and gone, toting all new features, music, email, etc – but none have done it like this; and certainly none have done it with this much hype.

Now that the phone has been handed to a select few “chosen ones”, there are several preliminary reviews surfacing, possibly the best came in the form of David Pogue’s iPhone video-blog (sorry Walt). In one scene, he is attacked by an angry mob of coworkers, eager to get their hands on the device. Pogue proceeds to leap up on to the side of a cubicle where he begins preaching on the phone’s shortcomings – mainly complaining about the AT&T network, and EDGE Internet service. A few at a time, they begin to leave, until one man is left. He leans over an asks,

“Does it have an Apple logo?”

Pogue replies, “Yeah, see? Its right on the back.”

“Cool.”

Gotta love brand equity. This short exchange sums up the reason for probably 90% of the hype surrounding this thing, its made by Apple and, as the video so poignantly displays, regardless of flaws, the Apple fan-boy will still buy it. The Wall Street Journal’s breakingveiws.com column warns,

“…an iPhone may yet appear in every pocket now housing an iPod or phone. But if it merely becomes a rich hipster accessory, Apple’s stock would have a long way to fall.”

And that is my exact prediction. To me, the iPhone will become like a Ferrari; coveted by all, but owned by few. Think about it, an unsubsidized phone, with no choice of network at $499 and $599 price points, that doesn’t work with family plans and most certainly will not work with corporate plans because it won’t run the important apps hardcore business users need. The only demographic left IS the rich hipster.

I will use myself as an example. I am far from a rich hipster (though I am probably just as much of a music snob) but love Apple products, and though I don’t currently own a Mac (ask me again in a year or so), my household, like many others, does have 6 iPods. There is one apple sticker on my IBM laptop, and another on my Fender Stratocaster and spend more on iTunes than is deemed healthy by the FDA. I am a huge advocate for what the company does .

I want an iPhone as much as anyone, but the deal just doesn’t seem to work in my favor. I would have to break my Verizon contract, pony up the $600 for the phone (because why get a 4gig when you can have 2x the space for only $100 more) sign a new contract, which would be significantly higher than my Verizon family plan bill, plus data, plus WiFi costs (most aren’t free, right Starbucks?). Oh yeah, and don’t forget, the network is AT&T, meaning I would burn through minutes like crazy, as it seems like everyone in Boston has Verizon.

So, Game Changing? You bet. Revolutionary? Absolutely. But there is something in me that thinks the limits on this device make it not quite ready for prime time. We shall see.

Good luck to everyone braving the malls at 6 p.m., especially this guy.

.

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Stat of the Week: New IT Marketing Research

According to a recent telecast from Marketing Sherpa, the biggest challenges marketers face when marketing IT software and services include how to market to a growing number of people involved in the buying process, followed by multi-channel lead generation and creating a PR buzz. The research also revealed that tech buyers are more likely to find you than you are to find them. Where are the top places buyers are looking? Google, vendor websites, IT publications and communities, directories and analyst sites.

Stat of the Week: Snail Mail is Back!

A new study commissioned by Pitney Bowes and conducted by International Communications Research finds that mail – and not digitial communications like email – is the best way to reach consumers.

Some key findings from the survey:

  • 73% of consumers prefer mail for receiving new product announcements or offers from companies they already do business with, as compared to 18% for e-mail
  • Mail was also preferred by 70% of respondents for receiving unsolicited information on products and services
  • Consumers are less likely to discard unopened mail than unsolicited e-mails
  • Respondents found mail to be less intrusive (45.3%), more convenient (40.2 %), less high-pressured (30.2%), more descriptive (22.7 %) and more persuasive (12%) than other communication channels inlcuding email and phone

The Game Changer: A Pirate’s Life for Disney

I am resisting the urge to comment on the goings on
at Ford these past few days as I promised I wouldn’t do a car post for a while (about time for my own Auto Biz blog I think). Check out the stories here and here if you are interested.

Some big news from Google-Tube this week, it seems Disney could be making some bank off more pirates than the ones played by Jonny Depp and Co.YouTube has struck a deal with Time Warner Inc. and Walt Disney Co. to being testing their video fingerprint technology, in an effort to prevent further lawsuits, like the $1billion in damages Viacom wanted because of reposts of popular MTV and Comedy Central shows on the site. The video ID technology recognizes copyrighted content that is uploaded to YouTube, giving the media giants two options; they can either remove the site, or opt-in to a revenue share program via advertising dollars.

Making money off piracy you say? Unheard of.

But, a fantastic idea, especially for Disney. Imagine the PR fall out the house that Mickey built would endure for suing a 13 year old uploading The Lion King or quality Disney Channel re-runs like Boy Meets World (what ever happened to Topanga anyway?).

As the guys over at CrunchGear said, “everybody wins” and I agree. Kudos to YouTube for figuring out a way to leave the lawyers at home, and actually monetize illegally posted content.

You Don’t Say

I cannot profess to know Silicon Valley angel investor Ron Conway, but I do know this – he’s made more than his share of smart bets and cold cash over the years with his early stage tech investments. This headline in Venture Beat certainly caught my eye – “Ron Conway: Third-rate VCs are paying off entrepreneurs.” Matt Marshall did a little piece on Conway’s recent assertion, which took place in the form of a video interview with Kara Swisher during allthingsd. He’s interviewed by Swisher and comments about a range of investment topics, including what’s hot in his neck of the woods: no surprises – content, video (and the monetization of), social networks. He waxes about how frothy things are now in tech. Silicon Valley investment activity is “the highest it has ever been …triple what it was in 1999,” Conway notes. But the real story here is Ron sounding off on what he characterizes as sleazy tactics by those VCs occupying the low end of the investment food chain (i.e. not Kleiner or Sequoia). Without naming any names he talks about how “third tier VCs” are bribing entrepreneurs to get them to take their money. While I thought his accusation was interesting, if not pretty wimpy because he’s indicting the system vs. the allegedly guilty individual (reminds me of the major league baseball steroid discussion), I’m thinking – if things are so good, why does he even care about what the no name VCs are doing? Last point – Swisher needs to listen a bit better and stop interrupting her interviewees. (“Like a payoff???? – how eloquent)”

Stat of the Week: 53% of Email Subject Lines Broken

Did you know that 53% of subject lines in email communications appear broken? According to new research from Pivotal Veracity, thanks to simple and common formatting errors, many of those email marketing items you’re sending on behalf of your company or clients may be dismissed as spam due to funky subject lines. Click here to read the full article from Marketing Sherpa on the study.

The Game Changer: Private Equity Gives You Wings!

I was planning to comment on the Chrysler story a week or two ago, but as other posts took its place I thought “I guess it’s too late”. As time progressed, it seemed like the longer I waited, more and more news kept coming out of Detroit, so, while this post may be a bit late to the party, isn’t that when all the cool people show up anyway?

Much like their winged brethren Aston Martin, Chrysler has recently been taken private by Cerberus Capital Management, New York who paid a mere $7.4 billion for an 80% share of the company (see the story here). The purchase price pales in comparison to the $36 billion Chrysler’s parent company, Daimler, paid in 1998. The merger has been a bit of a dysfunctional relationship from the start, hitting a boiling point when Chrysler posted a $2 billion loss in its Q1 earnings report.

To some degree, this failed merger does not come as a surprise. Chrysler has been almost an afterthought to Daimler, having Chrysler and its two other brands, Dodge and Jeep doing their best to limp by on old technology, tired designs and even more tired marketing.

  • Chrysler’s two “stand out” models, the 300 and the Crossfire (which was axed earlier this year) are both based on out-of-date Benz platforms, the E class and the SLK respectively.
  • Dodge has seen a lack of originality across the brand designs, simply slapping the same cross-hair grille on the front of every single model you make, does give you a “family-look” however, putting a grill from the Ram truck on a Neon replacement, makes for one awkward looking vehicle.
  • Jeep, though having an extremely loyal fan base, refuses to believe that they are ‘just an SUV company’, extending their brand into what are essentially two small cars, the Patriot and the Compass, turning a blind eye to their faithful, and compromising their “Trail Rated” image.

One of the first orders of business is to streamline Chrysler’s offering, ridding the company of models that are under-selling. I think this will mostly affect Chrysler, who’s products are getting a bit “long in the tooth” as they say. The PT Cruiser, for instance, was once the cat’s pajamas when it was introduced some 6 years ago, but has now worn out its welcome, lacking any real type of refresh or re-design, except for a more plastic-y interior “upgrade”. The Chrysler Pacifica and newest SUV, the Aspen, along with the Aspen’s counterpart, the Dodge Durango are also probable goners.

Along with a leaner model line up, Cerberus will begin taking a more critical eye at marketing. To revamp efforts, Cerberus has brought in a new team of marketing advisors, ex-Ford vp-marketing and sales Robert Rewey, ex-Ford vice chairman David Thursfield, former Chrysler COO Wolfgang Bernhard and ex-Chrysler svp of sales and head of dealer relations Gary Dilt, who will all be facing a new sink or swim mentality. As Corbin Rusch, senior brand strategist at Stealing Share said in the BrandWeek Story – “Does Private Equity Impact Brand Equity” ,

“Any time you get private money involved; there is a new level of responsibility that falls on marketing…There is more of a feet-in-the-fire situation in that results are demanded.”

This “feet-in-the-fire” situation was also mentioned in the New York Post (who apparently covered some relevant news before StrAy-Rod) in this article, which also talks a bit about where Chrysler’s marketing is headed, as becoming a private company may give them the ability to experiment a bit more with advertising, “shifting more ad dollars to the web”.

I think going private will ultimately will be a great move for Chrysler, giving them some great potential to “change the game” not only in marketing and advertising, but the entire auto industry. With a streamlined product line, and a more forward thinking agency, Chrysler will have the opportunity to move much quicker than competitors, not only to launch new vehicles, but to embrace all that marketing in the Web 2.0 era has to offer. There is seemingly limitless potential for Chrysler’s 3 brands to build on their long history and show Ford and GM how American auto branding is done.

The company can look at this at this as a clean slate, an opportunity to make Lee Iacocca, and Snoop D-O–Double-G proud of Chrysler once again.


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