June 30, 2005

Time for half-year resolutions. It's half over. What do we want to accomplish during the SECOND half?

Well...a festive holiday weekend, for starters.

Advertising Slow-Down

The Wall Street Journal today reports a slowing down in ad sales for 2005. This is the latest of several predictions that things this year are not going to be so rosy. Of course, we knew that without the elections and the Olympics, spending would not increase at the last year's robust rate. Now Interpublic's guru is predicting a 5.7% growth rate this year, vs. his previous estimate of 6.4%.

Other estimates range from 3.4% to 4.7%. And the slowdown will be worse in the second half of the year (which starts tomorrow!).

There's a lot of skittishness about the economy out there, thanks to oil prices skyrocketing, interest rates rising, our national debt going through the roof, and apparently no progress in Iraq despite the Administration's dig-your-heels-in approach...hoping that if they say something enough times it becomes true. (Message to Administration: it doesn't.)

As we know, one important reason for the slowdown in traditional media spending is the investment advertisers are making in newer technologies, such as paid search optimization and advertising on the Internet.

Radio and television advertising are actually expected to decline this year, in part because TiVo enables viewers to ignore ads.

My friend TV director Arvin Brown tells me that the average one-hour TV show has about 42 minutes of program content. Wow! That means one-third of the hour is dedicated to commercial messages.

With that much clutter and the prospect of being TiVo'ed, it's more important (and challenging) than ever to create commercials that viewers WANT to watch.

eMarketer predicts that online advertising spending will increase by 20.2% this year, reaching $11.3 billion by year's end. That's a big number...but it's only about 4% of the total U.S. ad spending for the year.

"Cinderella Man" Promo Seems Lame

We were talking about "Cinderella Man" last week and remarking on the film's lack of success: production cost, $88 million...revenues to date, under $40 million.

Now the folks at Universal are trying a new gimmick to promote "Cinderella Man" business. In some markets, they're offering a money-back guarantee. If you don't like the movie, you can get your money back.

OK...so, what that means is that you can go watch the movie and get your money back, thereby seeing it for free....no questions asked. Mmmm. Are dumb and dumber alive and well and living at Universal Pictures?

My friend Marvin Krauss, the greatest of all Broadway general managers, used to say, "It never rained on 'My Fair Lady.'" What he meant was that a show will do well or not...and you can't revive it with cut prices or special giveaways. It just doesn't work that way.

So what WOULD you do if you were Universal Pictures with "Cinderella Man" just limping along?

On the Importance of Customers

Great essay in Fast Company about the importance of customers. Don Peppers and Martha Rogers write that "The only value your company will ever create is the value that comes from customers - the ones you have now and the ones you will have in the future. Businesses succeed by getting, keeping, and growing customers."

So obvious, but so often overlooked, as businesses think they're about providing products, services or profits. No...we're all about serving and growing customers.

Peppers and Rogers go on to talk about a concept called Return on Customers AND the importance of treating different customers differently. As a case in point, they note that Tesco, the British supermarket chain, sends out a mailing each quarter to 11 million households - but it produces some 4 million different versions of the pitch, tailored to the interests of their diverse customer base.

Increasingly, companies are categorizing their customers into at least a small handful of "buckets" that enable them to create and implement more targeted marketing strategies to each bucket.