Hip Hop: The Future of Marketing

A few weeks back I started to tackle the questions of “What would you do if you couldn’t use any of the standard forms of advertising?” “What would you do if they didn’t exist?” These are not simple questions, but I came across some interesting ways to answer them and I wanted to see what you thought.

Advertising is fundamentally the study of human behavior. Advertising is a means to understanding groups of people, identify what are their characteristics, desires and needs and provide them with the tools and services that meet those requirements. If you break it down to its most basic element, Advertising is very much like psychology but coupled with a control element. A Psychologist attempts to understand whereas an Advertising Professional attempts to understand and influence.

If you didn’t have the traditional means of Advertising to a consumer and you had to find a different means for doing so, then the conclusion I come to is you’d look to sponsor, or enable, a lifestyle. Some means of creating a certain type of lifestyle identify what elements add to that type of lifestyle and then package them in some fashion and offer them to the types of consumers who are interested in adopting that lifestyle. There are examples of this in the market today with taglines such as “Membership has its privileges” where you use your credit card to enable a lifestyle, but what about taking it one step further?

The best example of this that I could find is actually in Hip Hop. In the eighties and early nineties, Hip Hop was a term used to specify a type of music. In the late nineties until today the term is being used for a lifestyle and a cultural change. Hip Hop applies to sports (see the recent articles in ESPN magazine tying Hip Hop to the NBA), it applies to fashion and it applies to a method of self expression. Within the cultural phenomenon of Hip Hop there are 2-3 brands that exemplify this type of marketing and prove this model can work.

Arguably, the rise of Hip Hop started with Def Jam. Def Jam was the label for many early artists and included some of the biggest such as LL Cool J, Run DMC and The Beastie Boys. These artists all had their very own manners of self-expression and young people emulated what they saw. Russell Simmons recognized this and over time developed extensions of his brand into such projects as Def Poetry Jam and the clothing label Phat Farm. Similar paths were followed by P Diddy (Bad Boy Entertainment and Sean John) and Jay-Z (Roc-A-Fella Records, RocaFella Clothing, S. Carter and Reebok). Nowadays every artist with a hit record has a clothing line, a sneaker and a label. These folks are driving the development of a culture and truly enabling a lifestyle. They are examples of where advertising is going.

The consumers of these brands are more than happy to wear the labels and spread the word. All of these brands have labels front and center. What’s to stop any other brand in sports from doing the same? Nike and Adidas do a great job of getting their logos everywhere, but what if they started a record label? What if they started their own lines of snack bars and sports drinks? What’s to stop a gaming company from creating their own line of clothing or fashion accessories?

Enabling a lifestyle is a grand concept but it’s certainly one direction where advertising could go. We use terms such as reach, frequency, “surround” and experiential to describe how advertising works in today’s market. These examples mentioned above embody all of these elements, and more. They are great examples of someone’s vision to drive a group of people in a similar direction and to sell more products. I recognize that it’s about more than sales, but at the end of the day each of these efforts are commercial and aimed at selling products.

What do you think of the idea? Do you see anywhere else that are examples of this trend?

A Day at the Movies

On a cold, wet and rainy Sunday afternoon, one of the best ways to pass the time can be to go to the movies and on a cold, wet and rainy Sunday afternoon you can be dazzled by some very interesting and poignant advertising opportunities via in-cinema advertising (and yes – there are digital components to it, too so keep reading).

The perception of in-cinema is of a static, inflexible, easily overlooked vehicle with minimal reach and a niche audience, but I would argue that it represents a missed opportunity for a highly impactful, easily measured, supportive campaign that integrates digital in an obvious manner. The reality of in-cinema, and reality is not a mirage, is that movie-goers are a highly attentive, captive audience and almost all of them have a mobile platform easily accessible with which they will readily respond to the appropriate messaging. The most recent film my wife and I saw piqued my renewed interest in in-cinema advertising because I witnessed the marriage of many avenues; brand integration, mobile, lead gen and video. Big brand advertisers were creating short-form content that featured their brands. Other advertisers were asking you to text a special number for more info on upcoming films. Trivia was used to engage the audience and generate interest while acquiring mobile numbers. Video from the web was brought into the theatre experience as a payoff from an online contest. The advertisers utilizing the space had elements of all of the above and one could argue the level of engagement in the theatre rivaled that of the best of other media.

If you examine the audience measurement statistics for in-cinema, a great story emerges and it’s one that complements digital in a very obvious manner. A recent report stated that frequent moviegoers are 44% more likely to pay attention to in-cinema ads than ads on TV. 36% of in-cinema viewers felt they were more interested in the ads compared to 29.1% of broadcast viewers and 29.4% of cable viewers. These numbers support that in-cinema provides an opportunity for high engagement with the audience.

Though the numbers don’t immediately demonstrate the obvious tie-in to digital, the behaviors of the audience support it. Mobile is an obvious factor, judging by the number of times the ads remind you to “turn off your cell-phone”. I don’t have specific data but I think it’s safe to assume that close to 100% of the audience in attendance has a mobile device of some type and most of these have access to data plans (especially on PG-13 and R-rated films). Based on these assumptions, mobile and even web-access through a mobile platform are obvious ways to drive a reaction. Furthermore, the opportunity to drive-to-web following the movie is high, filtering the audience to the web for “payout” of a message that was of interest to them before the film (some refer to this as recall).

The in-cinema audience represents a strong opportunity that can also be easily targeted by the context of the film, and in the case of summer movies and larger blockbusters there is also the opportunity for high reach into a more general audience. Coca Cola seems to have recognized this and does lots of in-cinema as do the endemic category advertisers, such as Fandango. I even see a fair number of auto advertisers at the movies, but why not use it as a technology platform or a platform for distributing coupons to middle America like Cellfire? For years we’ve seen game trailers online; when will we start to see them at the movies, where they belong? Dependent on the film you can reach a very early-adopter, influential audience or you can reach the mainstream soccer mom’s and dad’s!

If you’re looking for response rather than pure brand building, the response mechanism for in-cinema is easy as you can utilize mobile with SMS efforts or even email via the increased proliferation of cell-phones with email access. What about MMS and encouraging the moviegoer to take a picture of the screen and send it in for a coupon or some other reward? Even QR Codes, which are beginning to gain some popularity, can be used in this environment.

The question that always comes up when evaluating cinema is reach, but as we continue to find new and interesting ways to fragment the audience, I’d have to imagine that a blockbuster film represents one of the few mass reach opportunities still available in traditional media. The big summer films will reach an aggregate audience larger than most TV shows and definitely more than some websites where we spend our money.

It may not be the obvious place to spend your dollars, and it may not be the obvious place to consider when you focus your attention on digital, but even the movies are going digital in the same way that TV is going digital so convergence creates the opportunity for integration and you need to know about them all. As a strong, experienced media planner or buyer, you need to keep your options open and your expertise high, so go to the movies and see what you can do!

The Primary Problem With Online Display is Audience Value

Online display advertising is getting hammered these days and as a result it’s truly a buyer’s market out there, but maybe this is an opportunity for the industry to take an objective look at itself and determine the correct path to follow for the future?

According to both an IAB and an eMarketer study from late 2008, the average CPM delivered via ad network inventory is $0.60 - $1.10. This is in opposition to an average CPM for direct-sold inventory of $10-20. Regardless of the exact nature of these studies, no-one disagrees that the trend over the last 5-6 years has been a decline in display ad pricing, but the primary reason that pricing has dropped is not because of an increased supply vs. a steady demand, it’s because publishers don’t believe in the quality of their audience. Over the last 2 years publishers have designated more and more of their inventory for the ad networks, with as much as 30% of inventory being pushed through them in 2007 (an increase from 5% in 2006) and likely much higher in 2008 (publishers like ESPN are the exception as they no longer sell their inventory to networks). As more inventory goes into the ad networks, buyers know they can push harder on prices and they drive the price downwards!

Online display pricing is also eroding as the marketers are acting on metrics that the publishers cannot control. The simple fact is the majority of marketers who spend online are spending to drive metrics which are evaluated on actions but the publishers can only maintain control on exposure. Many publishers will tell you they don’t sell their inventory on a CPC or CPA, but those same publishers will tell you they have an established rate card, too. The fact is that everybody sells a portion of their inventory on performance and everyone can be manipulated by an advertiser with a large enough budget! If you look at the top 10 advertisers online I expect you’ll see that at least 75% of what they run is evaluated against some type of immediate or intermediate response metrics (meaning they evaluate performance based on clicks or conversions). When they optimize budget they optimize against clicks or conversions, they do not optimize against CPM or efficiency, and yet in many cases they will proclaim to be running a “brand campaign”. What compounds my frustration is these marketers are optimizing solely on response metrics and media methodologies rather than including creative methodologies, meaning they throw all their hard work under the bus from targeting and media mix perspective and cut the placements they thought would do well when in fact they should be optimizing creative! If you default to optimizing the media, then you’re basically stating that your media planning was flawed and the creative you have is perfect (let me be the one to tell you, it’s not).

Many marketers pretend to be driving “brand awareness” and default to response metrics so the pricing follows suit when it cannot be held to the same standard. Brand campaigns should be about efficiency of exposure and reaching the largest possible targeted audience but almost no-one looks at it that way and the publishers let it happen. In many cases, especially when you pay a premium for a targeted placement, the creative needs to do a better job of conveying the message or maybe, just maybe, your expectations on immediate action are unrealistic!

Some publishers may begin to consider shifting to CPC from CPM based pricing for their display and my response is you’re missing the boat! Display can be priced at a premium if you ensure the media buyers cannot go around your direct sales team and buy the same inventory from a network! Your premium pricing can be maintained if you feel your audience is of quality. If you jump to pure CPC pricing that translates to an utter lack of confidence in your audience and your ability to maintain a competitive advantage. That effectively drags down the value of exposure in this medium and damages more than just your perception in the marketplace.

The other side of the coin is that all online marketing should be about actions and all pricing should convert to a CPC or a CPA, but I would use video to disprove that theory. Online video does a great job of maintaining it’s pricing and conveying the value of an audience. Online video CPM’s are maintaining pricing around $20, according to an eMarketer survey. That price may be less than it was two years ago, but that’s due to the increase in volume of inventory and is a natural expectation of an emerging market. Marketers appear to value video as an exposure, so why can’t they value display as an exposure as well?

Maybe the solution lies in the actual size and use of display itself. Maybe the sizes we have and the methods for how they’re being used are the problem and not the solution? Maybe publishers need to evaluate the sizes they’re offering and their effectiveness at breaking through the clutter to present a message to a consumer? Remember the 468x60? Its days are long gone all because we woke up to its ineffectiveness. Maybe therein lies the solution for display?

Decide for yourself and tell us what you think by responding on our message board. I like to hear what you have to say!

Using iPhone Apps To Position Your Brand

Every once in awhile you notice something new and it makes your scratch your head and think. My most recent example of this comes from having witnessed a number of brands running TV commercials where they feature an iPhone application and nothing else, but what I find most surprising is that the least expected brands are the ones using this strategy to connect with a consumer!

Nationwide and State Farm are the two brands I’ve discovered piggybacking on the iPhone App space with positive results. Both brands are promoting their own “pocket agent” type applications which allow you to submit a claim directly, with pictures and details, the moment you’re in an accident. Both feature the iPhone prominently in their ads and both are running on TV with some support online as well. The strategy appears to be to use the iPhone app to acquire new customers rather than just as a CRM effort, which is what you would expect. It makes perfect sense to promote the app to your existing customers and allow them to interact directly during an accident, but there’s also a logic in promoting this wider than your existing base to position your brand as convenient and reliable in order to attract interest from other potential customers.

Esurance and Progressive lead the insurance space with gimmicky, catchy, fun and engaging advertising. They’ve both latched onto popular culture as a tool to make themselves hip and relevant and done a very effective job. Esurance took its cartoon characters and aligned them with Star Trek while Progressive tried its hand with a gecko and a caveman, but those brands have positioned themselves as fun rather than reliable, and inexpensive rather than convenient. They both sell on price and they both inundate the consumer with ads as a means of pummeling them into submission (count the number of Progressive and Esurance ads you see on TV over the next 7 days and it will be a staggering number). Nationwide and State Farm are much more aloof, more conservative brands in my humble opinion, but they’re using the iPhone apps to position themselves as professional and convenient for their customers.

The strategy is a sound one; you may not need your insurance company to be fun and energetic. You really just want them to be reliable, dependable and easy to work with. The development and promotion of an iPhone application is easily a way to do that. Does it convince a consumer to switch without an overt request to do so? That remains to be seen, but it certainly raises the questions of “when will my insurance company have one of those”.

Aligning yourself and positioning yourself as an innovative and reliable brand is definitely a long term strategy whereas price is a short term strategy. How many times have you come to realize in life that you get what you pay for? Sometimes the inexpensive option comes at its own price, and sometimes that price is all too high. It’s not until after you need the insurance company that you realize how unhappy you can be. I’m not saying that any of the companies above are good or bad, but I am saying that very little of their advertising addresses the long term goals of customer satisfaction and the process of submitting and managing claims in the way that State Farm and Nationwide are addressing them. Even if the total audience with an iPhone is far less than the total potential audience for these brands, aligning themselves on a position of reliability and convenience is a smart tactic for the future and it sets the precedence for the competition to keep up.

Of course the downside to using innovation in this way is that once you start, you have to maintain it and Nationwide and State Farm will now have to maintain focus on technology in order to stay ahead of the curve, doubtlessly creating apps for other platforms as well.

I took note of this strategy and I am curious when we’ll be seeing other brands use the iPhone App space as a marketing tool, and whether Apple will get involved in allowing or approving these ads? Do they have to be involved or can they just let it happen, knowing that everyone of these ads is inherently a free ad for their phones as well?

Have you seen any other brands using the iPhone in this manner? Let us know by visiting the spin board!

Music Collaboration Sites

I pulled these from Wired, but check them out:

Indaba Music

Jam Glue

Kompoz.com

Rifflet

SoundCloud

WeMix

YourSpins

Have fun!