Archive for the 'Captive Consumers' Category

Here’s the idea. When you go to hulu.com, the website set up by NBC Universal and Newscorp to compete with YouTube, to watch a video clip you can choose what ad you want to watch with it. “You want a sports coupe ad with that clip from the Office, sir? Or perhaps you’re more in the market for a SUV? Let me get that for you straight away.” Hmm.

“It’s choose-your-own-adventure advertising,” enthuses Jean-Paul Colaco, Hulu’s ad guy quoted in today’s Financial Times. Yeah, JP, it’s a veritable adventure. One bad car ad over another, that’s real consumer control. He recognizes that online vid viewers (OVVs) get bugged by having to watch the same old “pre-roll” ad at the for the first 15 seconds of the video and hence the solution - a nod towards relevant content (rather than simply, you must be a young adult if you’re watching this stuff so we’ll plop an ad for a product targetd to you lot before the real entertainment begins).

But it is just a nod. And is a very blunt way of targeting. The viewers won’t, for instance, be able to forgo watching the an ad altogether; they can just choose from a very limited selection which one to play.

If they want to see the damned clip, they have to just grin and bear watching the godawful ad too! Got it?

YouTube’s approach, announced a couple of months ago, is a little different. There will be overlay ads on the bottom quarter of the video screen which viewers can expand to fill the whole screen or, thankfully, block out altogether.

This is better than forcing people to watch the ads, but is still a far from perfect solution; one that uses the medium as the interactive experience it should be. I always loved “Pop-Up Video” on VH1 - you know, the music video show in which trivial facts about the videos popped up as they played - and now dream that online video could do the same thing. For online video the pop-ups wouldn’t come up automatically - as, on a screen that small they would obscure the whole picture and only doesn’t irritate on much repeated content, such as music videos you’ve seen a hundred times before - but would pop up if you, the viewer, decided you wanted to know more: more about the character, the production or maybe even the stuff (aka “the products”) shown. Rolling the mouse over the cool car in the clip could give you a price and some specs, perhaps mention a promotion or invite you to click for a test drive.

Thing is, that technology is available now (see the demos on videoclix.com), it’s just that using it would take too much effort for advertisers to individualize the pop-ups to each different video. They like a one-size-fits all approach, treating the audience as one homogenous demographic, rather than recognizing that in this new Punk world marketers need to customize their messages.

Oh well, I’ll keep dreaming, and probably avoid altogether watching the online videos with pre-roll ads.

The Financial Times reported yesterday that Apple is considering launching an “all you can eat” iTunes service that would allow customers to get unlimited access to the iTunes library in exchange for their paying a premium for iPods and iPhones. This mirrors Nokia’s “comes with music” offer the Finnish company announced last December in which folks will be able to get all of Universal Music library of music by paying a premium on top of the price of a Nokia phone. The FT reported that Apple might also be examining a subscription service in which iPhone customers pay a monthly charge as part of their phone bill to get unlimited access to iTunes tunes.

What’s interesting about this is that Apple is proving itself once again to be adept at shifting and innovating as the market moves. Rather than simply sticking to the business model that has made them the most successful seller of music downloads (by far), the black turtle-necked one has recognized that being the biggest in ANYTHING is no guarantee of future success. Consumers don’t like being taken for granted and if something new and shiny comes along, such as unlimited music, they might easily be tempted to dump their iPods or iPhones in favor of a cool new Nokia phone that gives it to them. And data shows that consumers would be willing to pay a $100 premium for as device to get unlimited music over its lifetime, or $7-8 a month in extra subscription charges.

To be a Punk Marketer you have to put yourself in the shoes of the consumer (however smelly they might be) and imagine what they want and need. As a starting point, assume there is no brand loyalty, even for a brand as “cool” and iconic as Apple, and that consumers are fickle and will change allegiance as fast as it takes to say, “but this ones cheaper!” Research is useful for that, but so is intuition and common sense, and Jobs is a master at understanding what will appeal to consumers emotionally without having to see proof of it. And the other thing that Apple consistently does is to set its own standards, not be governed by those of the industry. Each product they come out with doesn’t just improve on the competition, it redefines the market. Sure, the iPhone has its problems (most of of them because AT&T’s network isn’t good enough), but it has set the standard for all future mobile devices leaving all but rival Nokia, with its new N-95 phone, scrambling in the dust.

This week Starbucks left millions of rush hour commuters parched and disappointed when they found out the coffee joint was closed for a 3.5 hour barista training session and forced loyal customers to find an alternate way to quench their caffeine and Bonnie Raitt cravings (whoever pumps their music in loves Raittster).

Now Starbucks, which I publicly renamed “The Gap of the Coffee World” in a local paper, insists this wasn’t a publicity stunt… And yet we at Punk Marketing Central know better. Come on, coffee dudes, we could smell it.

The newspapers carried headlines (brought to them from puppy dog PR people) that said things like “Starbucks, totally awesome” and “Coffee, not just for ingestion anymore.” For a non-publicity stunt, it was a kind of a genius happening, and there is surely no shame in rising above the noisy news world.

Take a listen to the background music: The stock price has halved. For the first time the company has not only stopped expanding, but actually closing locations. With 171 in Manhattan alone (click here to to see what happens when one man decides to hit up every NY shoppe in 24 hours), the concept of downsizing must hit Starbucks execs right square in the caffeinated gullet.

Next they are going to for the first time stop charging customers for Wi-Fi usage. (They won’t charge for the first two hours. When your time is up, just go down the street to — Starbucks.) What to say to that? It’s about time. Who charges for Wi-Fi anymore besides Boingo!? We would rather take our coffee outside, sit on a bench and steal someone’s wireless connection. And you do too. Not to sound paranoid, but it’s creepy when you sign on at Starbucks. They ask for your address, credit card and your soul. Gets us every time. When they made the big announcement about the change last week, only to receive a resounding “duh, finally” from customers.

So Starbucks needed to turn both Wall Street and consumer attention away from what’s coming out as the bad news while reminding and/or convincing people that it’s worthwhile to spend more on a cup of coffee than our anorexically-inclined lunches. How about focusing the buzz away from crap stock news to the hopefully increasing quality of its product…

And while the coverage of the gimmick was huge I’d like to ask Howard Schultz a Punk question: Do you know who you are? Is the creation you created called Starbucks still Starbucks? The place we sat in with the milquetoast sounds around us, made us feel comfy enough to buy coffee and relax. Now it’s a machine — everything is about selling me what’s playing on an iTunes-enhanced monitor! I see products everywhere. Yep. I’m in the Gap all over again.

Barista-retooling made all the papers and broadcast news, and spread around our friend the blogosphere. Even Today did a piece in this mediocre news month. Turns out Veira and Lauer were thrilled that the human coffee-makers are trained to make their Venti Soy Lattes to a higher standard. Where in the world is Matt Lauer? Now the public knows he’s at a 30 Rock Starbucks. Not shabby PR, no way no how. And if you venture into a Starry-Eyes Bucks today, you will nbote a branded-new sticker on the door stating: “We Make The Best Espresso….” Gee, are they trying to force a point down our throats?

Starbucks claims the week’s events were all about the coffee and it’s got the level of credibility we felt from bumpy Jennifer Lopez who was no way pregnant.! Punk Marketers know much better. And sure, we love a stunt almost as much as our morning joe. Problem is, someone else snuggled up to us while Starbucks was closed. During those three point five sad hours we got to sample the Dunkin’ Donuts around the block, where we discovered a one-dollar latte with a lot more froth.

Facebook founder, Mark Zuckerberg, that brilliant and precocious 23 year-old who has grown the social networking website to a paper value of $15biilion, posted on his blog yesterday an apology to Facebook users for the way its advertising program, Beacon, was clumsily introduced.

He writes: “About a month ago, we released a new feature called Beacon to try to help people share information with their friends about things they do on the web. We’ve made a lot of mistakes building this feature, but we’ve made even more with how we’ve handled them. We simply did a bad job with this release, and I apologize for it.”

The mistakes he is referring were that Beacon alerted Facebook users’ network of friends when they bought something on other websites, such as Overstock.com and Fandango.com, without giving them an easy way to opt out. The idea behind Beacon is interesting - that people learning what their friends are buying acts as an implicit recommendation for those items - but the fact that it was being done for them by someone else without their involvement, wasn’t so cool. It’s like me fishing in your trash can for your store receipts (you haven’t spotted me yet have you?) and then telling other people what you’ve bought. Not illegal, but certainly a bit creepy.

Mr. Zuckerberg had to be reminded by Facebook users that they didn’t want their privacy abused in this way before he did anything about it, but now he’s contrite so I guess that’s all fine. But, how much damage has he done to the reputation of Facebook as an “open platform,” I wonder? And next time the website is valued, how much less might it be worth as a result?

It’s amazing what a bit of consumer outcry and healthy competition will do.

First Apple decides to reverse its previous decision on letting third party developers create applications for its new iPhone. At launch, Steve Jobs said it was a closed shop, but more recently, after a bit of consumer criticism on his stance, he have them the green light to develop at will.

And earlier this week a consortium led by Google announced plans to launch the OpenSocial social networking platform, enabling professional and amateur developers to create applications that can be used on all of the participating platforms. As of today these include Google’s Orkut (it’s big in Brazil, apparently), LinkedIn, Salesforce.com, Ning, Hi5, Friendster (I thought they were friendless and had now folded, but I guess I was wrong), Viadeo, Oracle and - announced today - the big kahuna of them all, MySpace. This is of course in response to the success that Facebook has had since it opened up its own platform earlier this year to third party developers, helping build its numbers of subscribers to 50 million.

But the biggest shake-up of them all is going to be in mobile. In a couple of week’s time Google will reveal its plans to launch software that will be “open,” so allowing developers to create services that take advantage of Google’s applications - using GPS to find a store on a GoogleMap, for instance. Google has been talking to phone manufacturers as well as to the service providers here and in Europe, although the (dis)likes of Verizon and ATT&T clearly hate the thought that they won’t be able to control what their customers can access through their networks (so if we’re a Verizon subscriber and want music on our handsets we have to take their V-CAST service).

If this duopoly doesn’t want to play ball, Google has an ace up its sleeve - it will almost certainly try and set up its own network and will bid in next January’s Government auction of the wireless spectrum. The winning bid is likely to be around $15billion, and with over $200billion in the bank it’s a price big G can well afford.

So, Apple, Verizon, ATT&T and all other corporations desperate to wall in your customers, read the signs. And learn the lessons of AOL when it too tried to tie subscribers into its own set of ‘approved services’ - subscribers who then left in their millions once they realized there was a better life outside the corporate confines.