If 2006 was the year of user-generated content, 2007 will be the year the music industry learns to generate new revenue from the hugely popular trend.
Labels are striking licensing deals with sites like YouTube so that fans can post copyrighted content or include it in videos they make themselves. Additionally, labels are expected to start releasing new types of content -- such as unused clips or video montages -- specifically created for fans to manipulate in new ways.
By doing so, record labels can then share in the advertising revenue these sites collect. Rather than just suing YouTube and its ilk for how their sites are used, the music industry can now profit from them, not to mention reap the promotional benefits.
"They're doing it anyway," says Ted Cohen, former EMI Music Group digital executive and now founding partner of consulting firm TAG Strategic. "There's a chance to monetize this behavior."
Additionally, music companies have the chance to let their fans actually sell music to one another via playlist-sharing services and peer-recommendation sites. Word-of-mouth marketing is exploding online through user-generated activity, creating a new generation of tastemakers. How well labels tap this effective source of music discovery will be a barometer of their overall digital strategies.
Reuters/Billboard
Tuesday, January 2, 2007
The Year of the Music industry
Consumer Packaged Goods Marketer of the Year: Unilever's Dove
TWO YEARS AGO, DOVE GAVE an old brand new life with a revolutionary marketing campaign that redefined the word beauty. Unilever continues to keep the initiative fresh, and to extend the brand by positioning it on the leading edge of cultural trends.
"The Campaign For Real Beauty" uses real women whose ages, waistlines, skin color, and hair texture deviate from the stereotypical size 2 supermodel.
The images of ordinary women on billboards, print ads, TV spots, and Web videos are remarkable--and remark-worthy. Two-and-a-half million people have visited CampaignForRealBeauty.com to judge the advertising, discuss the definition of beauty, and download educational programs since 2004.
The secret to Dove's 2006 marketing success is its trend-forwardness. Unilever and WPP Group's Ogilvy & Mather kept the brand aloft this year by immersing it in popular culture through viral marketing, social networking, consumer-generated ads, and talent searches. According to TNS Media Intelligence, Unilever spent $144 million on measured media in 2004, $153.6 million in 2005, and $128.4 million from January through September 2006.
Dove kept apace with popular culture despite turnover on the marketing team in June--when Silvia Lagnado, senior vice president of the global brand, became Unilever's group vice president for savory foods.
Dove's 2006 "Self Esteem" spot stood out like a fresh bar of soap on a sticky frat-room floor during Super Bowl XL in February, a non-traditional venue for a beauty brand. The one-time-only, 45-second commercial via Ogilvy & Mather focused on girls and the negative images they have of themselves, such as "Thinks she's fat" or "Hates her freckles." In the background, the Girl Scouts of Nassau County Chorus from Long Island, New York sang a version of "True Colors." The spot launched the Dove Self-Esteem Fund, which aims to build the self-confidence of 1 million young people by 2008.
"A lot of people said, 'Why are you going on the Super Bowl? Viewers just want to drink beer and eat popcorn--they don't want to think about these things,' "says Stacie Bright, senior communications marketing manager for Dove. "Well, there is the obvious reason--there are 90 million viewers, and half of them are women. It was successful because it was a jarring message that stopped people in their tracks. We got e-mails from fathers thanking us for that campaign, which was really amazing and surprising."
In the fourth quarter of 2006, Dove hit on another popular trend: viral marketing. When Spain banned overly thin models from its fashion runways in September, Dove responded with a short film called "Evolution" that shows a woman--in this case a Canadian cartoonist--being transformed into a billboard model by hair and makeup artists and photo-re-imaging technicians, who elongate her neck, among other things. The tagline: "No wonder our perception of beauty is distorted."
The fast-motion, 75-second film was created by Ogilvy & Mather, Toronto, and put up on CampaignForRealBeauty.com. People were driven to the site by PR via Edelman, and the film raced through the Internet. It was viewed by upwards of 2 million on YouTube, and generated an 8,000 percent increase in visits to Dove's Web site. "Our Webmasters thought someone was hacking into the system," says Bright.
In December, Dove hit on two other popular trends: consumer-generated media and TV talent searches. It issued a call for "real women" to create 30-second TV spots for a new product called Dove Cream Oil Body Wash. Consumers can use their own material or visit DoveCreamOil.com to access online tools, artwork, photos, and music to create ads. The winning spot will air during ABC's Academy Awards program in February.
"We're tapping into people's need to develop their own content. People want to be heard," Bright says.
They also want Dove products. According to Information Resources, Inc., sales of Dove soap brands grew 7% to $281.3 million from Jan. 1 to Nov. 5, 2006; Dove hair care products sales grew 13.3% to $102.5 million; and Dove skin care products and lotions grew 16.2% to $117 million in that time period. Unilever posits that one in every three households uses a Dove product.
The Campaign For Real Beauty works not just because of its trendability factor. It works because the message--that all women are beautiful--is authentic to the brand. "A lot of brand managers tell us, 'We want to have the next Dove campaign.' We tell them you have to find what your real essence is and be true to your brand," Bright says. "You have to have a clean voice, one that your brand has the authority and right to speak in."
Marketing Daily
"The Campaign For Real Beauty" uses real women whose ages, waistlines, skin color, and hair texture deviate from the stereotypical size 2 supermodel.
The images of ordinary women on billboards, print ads, TV spots, and Web videos are remarkable--and remark-worthy. Two-and-a-half million people have visited CampaignForRealBeauty.com to judge the advertising, discuss the definition of beauty, and download educational programs since 2004.
The secret to Dove's 2006 marketing success is its trend-forwardness. Unilever and WPP Group's Ogilvy & Mather kept the brand aloft this year by immersing it in popular culture through viral marketing, social networking, consumer-generated ads, and talent searches. According to TNS Media Intelligence, Unilever spent $144 million on measured media in 2004, $153.6 million in 2005, and $128.4 million from January through September 2006.
Dove kept apace with popular culture despite turnover on the marketing team in June--when Silvia Lagnado, senior vice president of the global brand, became Unilever's group vice president for savory foods.
Dove's 2006 "Self Esteem" spot stood out like a fresh bar of soap on a sticky frat-room floor during Super Bowl XL in February, a non-traditional venue for a beauty brand. The one-time-only, 45-second commercial via Ogilvy & Mather focused on girls and the negative images they have of themselves, such as "Thinks she's fat" or "Hates her freckles." In the background, the Girl Scouts of Nassau County Chorus from Long Island, New York sang a version of "True Colors." The spot launched the Dove Self-Esteem Fund, which aims to build the self-confidence of 1 million young people by 2008.
"A lot of people said, 'Why are you going on the Super Bowl? Viewers just want to drink beer and eat popcorn--they don't want to think about these things,' "says Stacie Bright, senior communications marketing manager for Dove. "Well, there is the obvious reason--there are 90 million viewers, and half of them are women. It was successful because it was a jarring message that stopped people in their tracks. We got e-mails from fathers thanking us for that campaign, which was really amazing and surprising."
In the fourth quarter of 2006, Dove hit on another popular trend: viral marketing. When Spain banned overly thin models from its fashion runways in September, Dove responded with a short film called "Evolution" that shows a woman--in this case a Canadian cartoonist--being transformed into a billboard model by hair and makeup artists and photo-re-imaging technicians, who elongate her neck, among other things. The tagline: "No wonder our perception of beauty is distorted."
The fast-motion, 75-second film was created by Ogilvy & Mather, Toronto, and put up on CampaignForRealBeauty.com. People were driven to the site by PR via Edelman, and the film raced through the Internet. It was viewed by upwards of 2 million on YouTube, and generated an 8,000 percent increase in visits to Dove's Web site. "Our Webmasters thought someone was hacking into the system," says Bright.
In December, Dove hit on two other popular trends: consumer-generated media and TV talent searches. It issued a call for "real women" to create 30-second TV spots for a new product called Dove Cream Oil Body Wash. Consumers can use their own material or visit DoveCreamOil.com to access online tools, artwork, photos, and music to create ads. The winning spot will air during ABC's Academy Awards program in February.
"We're tapping into people's need to develop their own content. People want to be heard," Bright says.
They also want Dove products. According to Information Resources, Inc., sales of Dove soap brands grew 7% to $281.3 million from Jan. 1 to Nov. 5, 2006; Dove hair care products sales grew 13.3% to $102.5 million; and Dove skin care products and lotions grew 16.2% to $117 million in that time period. Unilever posits that one in every three households uses a Dove product.
The Campaign For Real Beauty works not just because of its trendability factor. It works because the message--that all women are beautiful--is authentic to the brand. "A lot of brand managers tell us, 'We want to have the next Dove campaign.' We tell them you have to find what your real essence is and be true to your brand," Bright says. "You have to have a clean voice, one that your brand has the authority and right to speak in."
Marketing Daily
Restaurant Marketer of the Year: McDonald's
SAPPY ADS, BURGERS AND FRIES, yellow-and-red stores, and a clown: That's so last-century McDonald's.
The 21st-century McDonald's engages in target marketing, and has dipped its toe into digital media. It's expanding its menu to reach new customers, and redesigning its 13,600 domestic restaurants with earth tones, comfortable furniture, and WiFi.
Unlike its rivals, McDonald's hasn't launched a best-selling Xbox game, signed a major hip-hop mogul to be its spokesman, or added headline-grabbing, super-caloric items to its menu. And it trails its competitors in solving one of the restaurant industry's biggest conundrums: removing trans fats from foods.
Apparently, all that doesn't matter. McDonald's sophisticated, wide-reaching marketing efforts encompass both new media and old. On the new side: Digital efforts, such as a Filet-O-Fish "webisode" posted on YouTube and an online version of its successful Monopoly promotion. On the old side: Sponsorship of the 2008 Olympic Games in Beijing, and the continuation of "I'm Lovin' It," its long-running advertising campaign.
Customers are responding with their feet: The chain has posted 44 months of consecutive same-store sales increases. And Wall Street is lovin' it: In late December, McDonald's stock price hit a seven-year high.
"They are one of the most effective marketers across the board," says Ron Paul, president of Technomic, a Chicago-based restaurant research firm.
"There's an awful lot going on" with McDonald's marketing," Paul adds. "I don't think any of us knows all that is going on."
The marketing initiatives have a single goal: reaching customers, whether they're 40-something moms or 20-something men. "It's all about customer relevancy," says Mary Dillon, executive vice president and global chief marketing officer at Oak Brook, Ill.-based McDonald's.
"I think we really dig deep for consumer insights, and deliver with innovation," Dillon says.
What McDonald's really delivers is a menu that's growing beyond its burgers-and-fries basics, but logically and rationally. (McDonald's followers will remember its now-abandoned test of pizza; there's no similar frippery these days.) "Customers' tastes and what they eat are changing," says Wendy Cook, vice president of menu management at McDonald's.
Hits for 2006 included a chicken snack wrap and gourmet coffee; for 2007, the roll is likely to continue, thanks to a multitude of products in test, among them Angus burgers, all-day breakfast service, a dollar breakfast menu, and deli sandwiches.
As the menu changes, it brings more--and different--customers to McDonald's. One example: Chicken. Five years ago, McDonald's launched a strategy to slowly add more chicken items to the menu. First up: Crispy and grilled chicken salads, the debut of which sparked the first of the 44 months of consecutive comp-store increases. McDonald's changed the McNuggets recipe to all-white meat, added chicken strips, then premium chicken sandwiches in 2005, and the snack wrap in August of 2006.
That chicken--and the female-friendly ads that tout it--pull in incremental sales, namely among "women that are moms and young adults, and kids," Cook says. Hence the redesign, which trades McDonald's signature red-and-yellow scheme for earth tones, soft furniture, and flat-screen TVs. "We are offering our customers the kind of menu experience that they might expect to get at a sit-down restaurant, but at McDonald's convenience and value," Cook says. So far, 6,000 restaurants have been remodeled, and 8,000 offer WiFi to customers.
McDonald's is hardly ignoring young men. A "Pirates of the Caribbean" game featured peel-off stickers that revealed either a prize or a code. Customers who received a code could go to the Internet and look it up to see whether they'd won a prize. Cook describes the gambit as "a tiny thing in the promotion that makes it more relevant to young adults."
Of course, McDonald's marketing reach extends to customers outside the U.S. Last year, the company announced a Global Casting Call, a worldwide search for McDonald's customers to grace its packaging. The casting-call Web site received 13 million visits, and 13,000 McDonald's customers submitted photos and 100-word essays that described themselves "lovin' it." Twenty-five customers were chosen, and their pictures will be on McDonald's packaging in the spring. Thanks to the Global Casting Call's success, McDonald's plans to expand its digital presence.
The chain has hired AKQA, a San Francisco digital agency that has worked with Nike and Microsoft, to help with its digital strategy. The Internet "is a fun, engaging way to market," Dillon says. McDonald's next big global venture: Beijing in 2008. McDonald's hopes to have 1,000 restaurants open in China by then, and will get involved in the Olympics by sponsoring programs, in conjunction with the International Olympic Committee, that bring kids and athletes together. (The company sponsored a similar effort, called the Player Escort Program, during the 2006 World Cup.)
"All eyes will be on China for the Olympics," Dillon says. "It's a huge opportunity for us."
Marketing Daily
The 21st-century McDonald's engages in target marketing, and has dipped its toe into digital media. It's expanding its menu to reach new customers, and redesigning its 13,600 domestic restaurants with earth tones, comfortable furniture, and WiFi.
Unlike its rivals, McDonald's hasn't launched a best-selling Xbox game, signed a major hip-hop mogul to be its spokesman, or added headline-grabbing, super-caloric items to its menu. And it trails its competitors in solving one of the restaurant industry's biggest conundrums: removing trans fats from foods.
Apparently, all that doesn't matter. McDonald's sophisticated, wide-reaching marketing efforts encompass both new media and old. On the new side: Digital efforts, such as a Filet-O-Fish "webisode" posted on YouTube and an online version of its successful Monopoly promotion. On the old side: Sponsorship of the 2008 Olympic Games in Beijing, and the continuation of "I'm Lovin' It," its long-running advertising campaign.
Customers are responding with their feet: The chain has posted 44 months of consecutive same-store sales increases. And Wall Street is lovin' it: In late December, McDonald's stock price hit a seven-year high.
"They are one of the most effective marketers across the board," says Ron Paul, president of Technomic, a Chicago-based restaurant research firm.
"There's an awful lot going on" with McDonald's marketing," Paul adds. "I don't think any of us knows all that is going on."
The marketing initiatives have a single goal: reaching customers, whether they're 40-something moms or 20-something men. "It's all about customer relevancy," says Mary Dillon, executive vice president and global chief marketing officer at Oak Brook, Ill.-based McDonald's.
"I think we really dig deep for consumer insights, and deliver with innovation," Dillon says.
What McDonald's really delivers is a menu that's growing beyond its burgers-and-fries basics, but logically and rationally. (McDonald's followers will remember its now-abandoned test of pizza; there's no similar frippery these days.) "Customers' tastes and what they eat are changing," says Wendy Cook, vice president of menu management at McDonald's.
Hits for 2006 included a chicken snack wrap and gourmet coffee; for 2007, the roll is likely to continue, thanks to a multitude of products in test, among them Angus burgers, all-day breakfast service, a dollar breakfast menu, and deli sandwiches.
As the menu changes, it brings more--and different--customers to McDonald's. One example: Chicken. Five years ago, McDonald's launched a strategy to slowly add more chicken items to the menu. First up: Crispy and grilled chicken salads, the debut of which sparked the first of the 44 months of consecutive comp-store increases. McDonald's changed the McNuggets recipe to all-white meat, added chicken strips, then premium chicken sandwiches in 2005, and the snack wrap in August of 2006.
That chicken--and the female-friendly ads that tout it--pull in incremental sales, namely among "women that are moms and young adults, and kids," Cook says. Hence the redesign, which trades McDonald's signature red-and-yellow scheme for earth tones, soft furniture, and flat-screen TVs. "We are offering our customers the kind of menu experience that they might expect to get at a sit-down restaurant, but at McDonald's convenience and value," Cook says. So far, 6,000 restaurants have been remodeled, and 8,000 offer WiFi to customers.
McDonald's is hardly ignoring young men. A "Pirates of the Caribbean" game featured peel-off stickers that revealed either a prize or a code. Customers who received a code could go to the Internet and look it up to see whether they'd won a prize. Cook describes the gambit as "a tiny thing in the promotion that makes it more relevant to young adults."
Of course, McDonald's marketing reach extends to customers outside the U.S. Last year, the company announced a Global Casting Call, a worldwide search for McDonald's customers to grace its packaging. The casting-call Web site received 13 million visits, and 13,000 McDonald's customers submitted photos and 100-word essays that described themselves "lovin' it." Twenty-five customers were chosen, and their pictures will be on McDonald's packaging in the spring. Thanks to the Global Casting Call's success, McDonald's plans to expand its digital presence.
The chain has hired AKQA, a San Francisco digital agency that has worked with Nike and Microsoft, to help with its digital strategy. The Internet "is a fun, engaging way to market," Dillon says. McDonald's next big global venture: Beijing in 2008. McDonald's hopes to have 1,000 restaurants open in China by then, and will get involved in the Olympics by sponsoring programs, in conjunction with the International Olympic Committee, that bring kids and athletes together. (The company sponsored a similar effort, called the Player Escort Program, during the 2006 World Cup.)
"All eyes will be on China for the Olympics," Dillon says. "It's a huge opportunity for us."
Marketing Daily
Automotive Marketer of the Year: Toyota
TOYOTA MARKETING EXECUTIVES HAVE LONG been accused of having the easiest job in the business, since--as the saying goes--"Toyotas sell themselves" because of their reliability and quality.
But in 2006, Toyota proved that it not only makes high-quality cars, it also knows a thing or two about making great marketing.
Toyota started off the year with four very different vehicles to launch--a redesigned Camry, the niche sport-utility FJ Cruiser, the tiny subcompact Yaris, and the full-size Tundra truck, which comes out in early 2007. In the midst of all that, it also signed a landmark deal for "engagement guarantees" from NBC that promises viewers will be engaged in the programming based on new measurements from panel surveys, instead of the traditional audience-size model that has been in place since the 1950s.
Toyota also set itself a goal of attracting more customers in America's heartland, where domestic brands still have a stronghold. Add to that the task of keeping Scion--its successful youth brand--on the cutting edge of marketing and maintaining Toyota's lead as the environmental car brand, and 2006 was a busy year for the marketers at Toyota's U.S headquarters in Torrance, Calif.
All those tasks required an unusual breadth and depth of marketing. And to top it all off, Toyota is expected to steal the No. 2 automotive brand spot from Ford for 2006--with sales in excess of 2.5 million cars and trucks.
Toyota started off 2006 with a bang, using the Super Bowl to launch the Camry. But even though it used a traditional national campaign, it showed off its marketing smarts by focusing on the unusual in the ads themselves. The Super Bowl ad featured Camry's hybrid electric-gasoline engine model and used a Hispanic-language version of the ad on national television.
"We wanted to open up people's minds to Camry," says Kim McCullough, corporate marketing manager for the Toyota division. "Sure--Camry has been successful, but it's also easy for consumers to dismiss it as a car that is for somebody else."
Even as Toyota was launching the Camry on national television, it shunned most traditional media for the FJ Cruiser and focused on events that would show off the vehicle's off-road capability.
The FJ Cruiser is a four-wheel-drive sport-utility vehicle with an unusual design that could easily have marketed itself as a fashion statement for outdoor wannabes, McCullough says. But, she says, Toyota wanted FJ Cruiser to be a true contender in the off-road segment where looks are less important than what is under the hood and between the tires.
Toyota created Trail Teams and took the FJ Cruiser to off-road events to prove its mettle. The vehicle did so well that bloggers and online enthusiasts began talking about its accomplishments on their sites.
The FJ Cruiser marketing group also created black-and-white inserts for serious four-wheel magazines that focused solely on the vehicle's off-road capability--not its colorful paint choices or fashion-forward design. Toyota used the same tactics of sponsorships and event marketing to pursue the brand's "heartland" strategy to increase its sales in the middle of the country. It has signed sponsorships with NASCAR, and is now the official brand of Bass Pro Shops, taking over from Chevrolet. It also is giving trucks to Future Farmers of America's members to drive for a set amount of time.
"We've got to change people's minds about Toyota one person at a time," McCullough says.
The launch of the Yaris, a tiny subcompact car, pushed the Toyota marketing team to make certain that the little car didn't target Scion's potential customers. The Yaris' under $15,000 price tag and its size put it in direct competition with Scions.
"Scion is the bleeding edge of youth," McCullough says. "Yaris is for more mainstream youth."
Cutting the youth market in such a manner meant that the Scion brand was featured on Second Life, a virtual world that is still not a part of mainstream culture. By contrast, Yaris launched with its own page on MySpace, where a majority of U.S. teenagers hang out online. Scion created its own broadband radio channels, while Yaris used "mobi-sodes"--television shows shown on mobile phones--to reach potential consumers.
Scion remains an internal learning lab for Toyota's marketers, McCullough says, with marketing programs considered too mainstream for Scion handed off to other brands to consider. For example, Lexus gave away a free music CD during the launch of its LS 460, a tactic once used by Scion.
Lexus also has studied how Scion stays a step ahead of its customers, so that it never feels boring or complacent. For years, Lexus sponsored a fashion show at Pebble Beach, Calif.--but it wasn't until 2006 that it began to work with Vogue to create a much more fashion-forward show to be in tune with younger, affluent consumers who were moving up to the Lexus.
Another way that Toyota has infused Scion learning throughout the marketing organization is to move its marketers around to other brands instead of up into other non-marketing jobs. For example, Jim Farley, now group vice president of marketing, once headed up Scion. Brian Bolain, who once worked on Scion, now works on Lexus.
Marketing Daily
But in 2006, Toyota proved that it not only makes high-quality cars, it also knows a thing or two about making great marketing.
Toyota started off the year with four very different vehicles to launch--a redesigned Camry, the niche sport-utility FJ Cruiser, the tiny subcompact Yaris, and the full-size Tundra truck, which comes out in early 2007. In the midst of all that, it also signed a landmark deal for "engagement guarantees" from NBC that promises viewers will be engaged in the programming based on new measurements from panel surveys, instead of the traditional audience-size model that has been in place since the 1950s.
Toyota also set itself a goal of attracting more customers in America's heartland, where domestic brands still have a stronghold. Add to that the task of keeping Scion--its successful youth brand--on the cutting edge of marketing and maintaining Toyota's lead as the environmental car brand, and 2006 was a busy year for the marketers at Toyota's U.S headquarters in Torrance, Calif.
All those tasks required an unusual breadth and depth of marketing. And to top it all off, Toyota is expected to steal the No. 2 automotive brand spot from Ford for 2006--with sales in excess of 2.5 million cars and trucks.
Toyota started off 2006 with a bang, using the Super Bowl to launch the Camry. But even though it used a traditional national campaign, it showed off its marketing smarts by focusing on the unusual in the ads themselves. The Super Bowl ad featured Camry's hybrid electric-gasoline engine model and used a Hispanic-language version of the ad on national television.
"We wanted to open up people's minds to Camry," says Kim McCullough, corporate marketing manager for the Toyota division. "Sure--Camry has been successful, but it's also easy for consumers to dismiss it as a car that is for somebody else."
Even as Toyota was launching the Camry on national television, it shunned most traditional media for the FJ Cruiser and focused on events that would show off the vehicle's off-road capability.
The FJ Cruiser is a four-wheel-drive sport-utility vehicle with an unusual design that could easily have marketed itself as a fashion statement for outdoor wannabes, McCullough says. But, she says, Toyota wanted FJ Cruiser to be a true contender in the off-road segment where looks are less important than what is under the hood and between the tires.
Toyota created Trail Teams and took the FJ Cruiser to off-road events to prove its mettle. The vehicle did so well that bloggers and online enthusiasts began talking about its accomplishments on their sites.
The FJ Cruiser marketing group also created black-and-white inserts for serious four-wheel magazines that focused solely on the vehicle's off-road capability--not its colorful paint choices or fashion-forward design. Toyota used the same tactics of sponsorships and event marketing to pursue the brand's "heartland" strategy to increase its sales in the middle of the country. It has signed sponsorships with NASCAR, and is now the official brand of Bass Pro Shops, taking over from Chevrolet. It also is giving trucks to Future Farmers of America's members to drive for a set amount of time.
"We've got to change people's minds about Toyota one person at a time," McCullough says.
The launch of the Yaris, a tiny subcompact car, pushed the Toyota marketing team to make certain that the little car didn't target Scion's potential customers. The Yaris' under $15,000 price tag and its size put it in direct competition with Scions.
"Scion is the bleeding edge of youth," McCullough says. "Yaris is for more mainstream youth."
Cutting the youth market in such a manner meant that the Scion brand was featured on Second Life, a virtual world that is still not a part of mainstream culture. By contrast, Yaris launched with its own page on MySpace, where a majority of U.S. teenagers hang out online. Scion created its own broadband radio channels, while Yaris used "mobi-sodes"--television shows shown on mobile phones--to reach potential consumers.
Scion remains an internal learning lab for Toyota's marketers, McCullough says, with marketing programs considered too mainstream for Scion handed off to other brands to consider. For example, Lexus gave away a free music CD during the launch of its LS 460, a tactic once used by Scion.
Lexus also has studied how Scion stays a step ahead of its customers, so that it never feels boring or complacent. For years, Lexus sponsored a fashion show at Pebble Beach, Calif.--but it wasn't until 2006 that it began to work with Vogue to create a much more fashion-forward show to be in tune with younger, affluent consumers who were moving up to the Lexus.
Another way that Toyota has infused Scion learning throughout the marketing organization is to move its marketers around to other brands instead of up into other non-marketing jobs. For example, Jim Farley, now group vice president of marketing, once headed up Scion. Brian Bolain, who once worked on Scion, now works on Lexus.
Marketing Daily
Marketer of the Year: Apple Computer
IF THERE'S A RECIPE FOR success in the relentlessly churning PC and digital entertainment industries, it may go something like this: Combine innovative, consumer-friendly technology with sleek design. Add impeccably crafted, integrated branding and marketing strategies. Stir and serve ... quickly.
Amid a formidable and growing cast of competitors, Apple has been pulling off this tricky soufflé with iron chef mastery. Steve Jobs has racked up an impressive list of feats since returning as CEO in 1996, and that list grew longer last year.
Our Marketer of the Year has defied predictions that it could not sustain the momentum of the iPod brand juggernaut, unleashed in 2001. The company's once-moribund Mac is making a comeback. Apple now boasts the world's fastest-growing retail chain. And it continues to unveil major new products and initiatives, while also feeding a steady stream of upgraded and expanded offerings into the marketplace.
Apple shareholders have reaped a 50%+ total annualized return during the company's past five fiscal years, and results for fiscal 2006 (ending September) have further polished the company's golden aura on Wall Street. Net sales jumped nearly 39%, to $19.3 billion. Profits soared 49%, to nearly $2 billion. Basic earnings per share shot to $2.36, from $1.64.
(Apple delayed filing official SEC results for fiscal fourth quarter and full-year 2006 because it discovered irregularities in some stock-option grants made between 1997 and 2002. The company charged an independent committee with investigating, and in late December, it restated its preliminary results for fiscal '06--lowering earnings by $4 million--to reflect the above number, and also lowered its earning statements for fiscal '05 and '04 by $7 million and $10 million, respectively. Wall Street's response to this announcement? Apple shares' value roles.)
The year 2006 also saw the iPod continue to make beautiful music: 8.7 million units were shipped in the fourth fiscal quarter (2 million more than in the same '05 period) and 39 million units were shipped for the year. Apple fed the fire by launching an even smaller version of the iPod shuffle and new models of the iPod nano with more storage capacity and redesigned cases. (Both devices debuted only the year before, along with the ground-breaking, video-capable iPod.) And for good measure, Apple signed a deal with Disney, adding movies to the TV shows, videos, and music downloadable from its iTunes Store.
Yet, Apple's biggest headline-grabber for the year was the Mac's increasingly strong performance. The company shipped 1.61 million Macs in its fourth quarter (out of the 5.3 million shipped for the year)--a 30% period-over-period gain and the computer's best-ever single-quarter showing.
Gartner reported that Mac shipments grew 31% in the first three quarters of calendar '06, jacking up the brand's estimated share of the U.S. PC market from 4.6% to 6.1%. While Dell and Hewlett-Packard remain the giants--with 32% and 23% market shares, respectively--Apple's performance put it a hair's-breadth behind No. 3 computer maker Gateway (with a 6.4% share), causing some analysts to hail a long-awaited tipping point from niche marketer to big-league contender.
Mac's 2006 One-Two Punch
Apple produced a one-two punch on the Mac front last year: a milestone in technology and a new advertising campaign generally considered one of the most ingenious and effective in a 30-year corporate history strewn with memorable marketing efforts.
In what was--in the words of Jobs himself--"an incredibly complex architecture transition," Apple moved the Mac OS X operating system from IBM and Freescale Semiconductor chips to Intel chips. Starting last January with the desktop iMac and MacBook Pro portable (renamed from PowerBook) and finishing in August with the Mac Pro professional desktop, Apple rolled out significantly speedier iterations of all the Mac models.
But you wouldn't know that from looking at the hardware. "One of the interesting things about this transition was that Apple deliberately chose not to change the physical look of the computers, so as not to send out a mixed message," notes Macworld Editorial Director Jason Snell. "They recognized that changing the outside of the Macs at the same time that they made this huge change to the operating system could confuse people or freak them out."
Apple and long-time agency partner TBWA/Chiat/Day laid the groundwork for the new generation of Macs with an early 2006 campaign declaring that the Intel chip had at last been freed from "dull little boxes dutifully performing dull little tasks." The way-cooler-than-Windows message was unfurled full-force in May, with the "I'm a Mac" campaign.
The ads' ostensibly simple premise: Two comic actors--respectively playing the hip, young Mac guy and the middle-aged, nerdish PC guy--engage in friendly comparisons of what each computer can do. In one of the spots, for instance, PC guy brags that his computer has a calculator and clock; Mac guy helpfully points out that the iMac boasts the entire iLife suite of applications, including iTunes, iWeb, iMovie, and iPhoto.
The ads' cleverly implied "Which guy would you rather be?" message and visceral punch have created love-'em/hate 'em camps, probably roughly split between people who consider themselves innovators versus those struggling to keep up with new technology. In other words, precisely the dynamic that Apple--renowned for keeping its marketing strategies as close to the vest as its product plans--presumably had in mind. The instantly iconic campaign quickly spawned satiric takeoffs ("The Lost Mac Ads") on VH1.
"The PC guy versus the Mac guy campaign demonstrates once again that Apple is the best youth marketer in the business today," declares marketing strategist Jack Trout. Others detect aspirations beyond merely capturing a whole new generation of computer users before they have a chance to get accustomed to Windows.
"Instead of trying to appeal to everyone--which never works--they've moved to clearly conveying that the Mac is not for everyone," says Laura Ries, co-partner in the Ries & Ries marketing consultancy. "The Mac has never been embraced by businesses, with the exception of ones that are graphically oriented, like advertising. Apple is in essence acknowledging that Windows is the standard for numbers, Excel sheets, accounting, basic business functions, and saying, 'We're the more user-friendly experience for people who want to use their computers for photos and videos and visual graphics.'"
The piece de resistance, says Ries, is that this somewhat narrower message is in fact aimed at a rapidly growing market: average consumers--spanning several generations--now using their home computers to whip up and distribute their own multimedia creations. "Apple recognized that technology is redefining what a 'graphic artist' is," she says. "Today, anyone with the urge can be a graphic artist."
How much of Mac's '06 sales gains are attributable to the Intel conversion, and how much to the marketing? "Apple knows that even with computers, decisions in the consumer marketplace are mostly emotional, not rational," observes brand consultant Robert Passikoff. "They've done a superb job over the years of differentiating themselves as the technological innovator. But at the same time, they understand that you don't connect with people by comparing gigabytes. They're masters at creating messages based on a brand's engagement with consumers--meaning how and why a technological innovation connects with people on a meaningful level. In an increasingly commoditized world, they know how to imbue a brand with attributes that people value."
In Passikoff's opinion, the current Mac campaign is a clear example of Apple's marketing intelligence. "Plenty of companies do a lot of consumer research, then spend a lot of money grinding out [advertising] that's ultimately meaningless and ineffective," he says. "Not Apple. It would've been so easy to just show their machines; instead, they used people. Viewers get a clear sense that you can do more with a Mac--videos, whatever you want. The ads are believable and entertaining, and they leave you feeling better about the brand. You can't ask much more than that from a TV commercial."
Indeed, some admirers rate the latest Mac campaign as Apple's best since the "1984" Super Bowl commercial that introduced the Mac and made the world sit up and take notice. In it, a mesmerized population is liberated by a fearless female warrior (read: Macintosh) who hurls a hammer through the giant communications screen used by an evil dictator (read: IBM).
The "I'm a Mac" campaign demonstrates Apple's commitment not only to getting the creative for its major product innovations right, but to supporting it with media saturation. To drive home the Intel-enhanced message, Apple upped its ad spend for the full Mac line to $85.4 million in last year's first nine months (compared with $7.4 million for the same period in '05).
iPod Phenomenon Keeps Growing
The creation and nurturing of the iPod brand is a marketing case study all on its own. "Apple wasn't first-to-market, but they came out with a better product that was brilliantly designed and marketed, and they became first-to-mind," sums up Ries. "Everyone else was doing convergence, adding applications. Apple offered a simple, easy-to-use music player."
"They took the concept of a Walkman and moved it to the next generation--catching Sony asleep at the switch," adds Trout.
iPod's catchy name, and its white case and earphones, added to its cachet and further set it apart from existing MP3 players.
Jobs' marketing instincts being equal to his instincts for product design and the next must-have application, iPod's advertising was in perfect pitch--suggesting rather than stating the message that you could no longer be hip unless you owned an iPod.
Apple has bombarded the marketplace for years with variations on the streamlined ads featuring "dancing silhouettes," white earphones, and precious few words. Like virtually all of Apple's campaigns over the years, the iPod ads reflect Apple's genius for associating the brand and its products with coolness and innovation while rarely showing the hardware itself.
One thing's for certain: Even with the iPod's application and design strengths, it could not have sold 68 million units worth $14 billion in revenue and captured an estimated 75% market share in the space of a few years without the astute marketing and Apple's aggressive expansion of the brand.
"There used to be a thing called an MP3 player; now it's an iPod," sums up Passikoff.
"They had a lot of running room to make the iPod a generic brand, and they made the most of it," adds Trout. "In everyone's minds, everything else now coming out is 'iPod-like.'"
Indeed, the Mac's resurgence aside, the iPod franchise still accounts for nearly 40% of Apple's revenue, and is generally viewed as the linchpin of the company's future fortunes. Apple is clearly focused on fending off Microsoft's Zune (which debuted in November) and a growing list of other competitors. Apple continues to cement users' bond with the iPod via continual releases of new iterations of the player--and thus far is also holding fast to what some label a "proprietary" iTunes strategy.
The decision to make content purchased online from iTunes compatible only with iPods (with stress on a seamlessly compatible user experience) was hardly surprising. Jobs set this direction almost from the day that Apple opened its doors, and paved the way for the personal computer revolution with the Apple I and its more successful successor, the Apple II.
Michael Gartenberg, vice president and research director at JupiterResearch, maintains that Apple's '90's slump came down to failure to introduce innovative new products and mishandling some existing ones--not from any failure to license its operating technology. "It's wrong to say that the iPod is 'proprietary,'" he adds. "People can and do play their existing music collections on their iPods. Zune is basically an uphill battle for Microsoft. To make any headway, they'll have to provide a compelling reason for consumers to switch to Zune. But for most consumers, iPod is the answer. It's not like people are dissatisfied and looking for something else."
In addition to driving iPod sales, the iTunes Store is a profit center. According to analyst Piper Jaffray, the number of songs sold on iTunes jumped 78% in the first nine months of last year, to 695 million (averaging 18.5 million per week). Apple reports having sold more than 1.5 billion music tracks, and tens of millions of TV shows and movies, since iTunes launched in 2003. Its fiscal fourth quarter '06 results included $452 million in "other music-related products and services" (which include iTunes, iPod services, and Apple-branded and third-party iPod accessories).
Third Act Begins
How can Jobs possibly follow this amazing Second Act? For starters, Apple will keep expanding The Apple Store. The chain had more than 170 stores as of year-end 2006, including 18 in the UK, Japan, and Canada. (Apple may have only about 2% of the world computer market at the moment, but some think the retail strategy could move that needle over the next several years as well.)
The stores reportedly bring in nearly $2,500 per square foot--far better than the performance of mass retailers such as Best Buy. Existing stores showed 40%+ sales growth between 2004 and 2005, and Apple is now busily redesigning every store to replicate the particularly successful format of its showcase New York City store. In fiscal '06, the retail stores sold 886,000 computers and did $3.3 billion in business, generating $198 million in profit. Little wonder that Dell is emulating Apple's retail strategy--although Dell had just two stores as of year-end 2006.
"The Apple stores are more proof of Apple's understanding of the need to surround the consumer," says Passikoff. "The retail model allows them to build a personal relationship with the customer with an easy support system and a face-to-face experience."
And, of course, those stores will be selling a raft of more new products. In fact, in October, Jobs declared that 2007 "is likely to be one of the most exciting new product years in Apple's history." Breaking with Apple's policy of staying mum about new offerings before their actual release, Jobs last fall announced Apple's next big thing: The early 2007 launch of the iTV. Attached to TVs or other entertainment devices, iTV will enable consumers to enjoy music, movies, and other content from computers in a home-theater environment.
"Apple is in your den, Apple is in your living room," says Jobs. "Apple is in your car, and of course, Apple is in your pocket with iPods."
Increasingly, Apple is also in Microsoft's face. "Apple controls not just the music player, but a growing number of other critical end points," observes JupiterResearch's Gartenberg. "It all adds up to a long-term threat for Microsoft."
Marketing Daily
Amid a formidable and growing cast of competitors, Apple has been pulling off this tricky soufflé with iron chef mastery. Steve Jobs has racked up an impressive list of feats since returning as CEO in 1996, and that list grew longer last year.
Our Marketer of the Year has defied predictions that it could not sustain the momentum of the iPod brand juggernaut, unleashed in 2001. The company's once-moribund Mac is making a comeback. Apple now boasts the world's fastest-growing retail chain. And it continues to unveil major new products and initiatives, while also feeding a steady stream of upgraded and expanded offerings into the marketplace.
Apple shareholders have reaped a 50%+ total annualized return during the company's past five fiscal years, and results for fiscal 2006 (ending September) have further polished the company's golden aura on Wall Street. Net sales jumped nearly 39%, to $19.3 billion. Profits soared 49%, to nearly $2 billion. Basic earnings per share shot to $2.36, from $1.64.
(Apple delayed filing official SEC results for fiscal fourth quarter and full-year 2006 because it discovered irregularities in some stock-option grants made between 1997 and 2002. The company charged an independent committee with investigating, and in late December, it restated its preliminary results for fiscal '06--lowering earnings by $4 million--to reflect the above number, and also lowered its earning statements for fiscal '05 and '04 by $7 million and $10 million, respectively. Wall Street's response to this announcement? Apple shares' value roles.)
The year 2006 also saw the iPod continue to make beautiful music: 8.7 million units were shipped in the fourth fiscal quarter (2 million more than in the same '05 period) and 39 million units were shipped for the year. Apple fed the fire by launching an even smaller version of the iPod shuffle and new models of the iPod nano with more storage capacity and redesigned cases. (Both devices debuted only the year before, along with the ground-breaking, video-capable iPod.) And for good measure, Apple signed a deal with Disney, adding movies to the TV shows, videos, and music downloadable from its iTunes Store.
Yet, Apple's biggest headline-grabber for the year was the Mac's increasingly strong performance. The company shipped 1.61 million Macs in its fourth quarter (out of the 5.3 million shipped for the year)--a 30% period-over-period gain and the computer's best-ever single-quarter showing.
Gartner reported that Mac shipments grew 31% in the first three quarters of calendar '06, jacking up the brand's estimated share of the U.S. PC market from 4.6% to 6.1%. While Dell and Hewlett-Packard remain the giants--with 32% and 23% market shares, respectively--Apple's performance put it a hair's-breadth behind No. 3 computer maker Gateway (with a 6.4% share), causing some analysts to hail a long-awaited tipping point from niche marketer to big-league contender.
Mac's 2006 One-Two Punch
Apple produced a one-two punch on the Mac front last year: a milestone in technology and a new advertising campaign generally considered one of the most ingenious and effective in a 30-year corporate history strewn with memorable marketing efforts.
In what was--in the words of Jobs himself--"an incredibly complex architecture transition," Apple moved the Mac OS X operating system from IBM and Freescale Semiconductor chips to Intel chips. Starting last January with the desktop iMac and MacBook Pro portable (renamed from PowerBook) and finishing in August with the Mac Pro professional desktop, Apple rolled out significantly speedier iterations of all the Mac models.
But you wouldn't know that from looking at the hardware. "One of the interesting things about this transition was that Apple deliberately chose not to change the physical look of the computers, so as not to send out a mixed message," notes Macworld Editorial Director Jason Snell. "They recognized that changing the outside of the Macs at the same time that they made this huge change to the operating system could confuse people or freak them out."
Apple and long-time agency partner TBWA/Chiat/Day laid the groundwork for the new generation of Macs with an early 2006 campaign declaring that the Intel chip had at last been freed from "dull little boxes dutifully performing dull little tasks." The way-cooler-than-Windows message was unfurled full-force in May, with the "I'm a Mac" campaign.
The ads' ostensibly simple premise: Two comic actors--respectively playing the hip, young Mac guy and the middle-aged, nerdish PC guy--engage in friendly comparisons of what each computer can do. In one of the spots, for instance, PC guy brags that his computer has a calculator and clock; Mac guy helpfully points out that the iMac boasts the entire iLife suite of applications, including iTunes, iWeb, iMovie, and iPhoto.
The ads' cleverly implied "Which guy would you rather be?" message and visceral punch have created love-'em/hate 'em camps, probably roughly split between people who consider themselves innovators versus those struggling to keep up with new technology. In other words, precisely the dynamic that Apple--renowned for keeping its marketing strategies as close to the vest as its product plans--presumably had in mind. The instantly iconic campaign quickly spawned satiric takeoffs ("The Lost Mac Ads") on VH1.
"The PC guy versus the Mac guy campaign demonstrates once again that Apple is the best youth marketer in the business today," declares marketing strategist Jack Trout. Others detect aspirations beyond merely capturing a whole new generation of computer users before they have a chance to get accustomed to Windows.
"Instead of trying to appeal to everyone--which never works--they've moved to clearly conveying that the Mac is not for everyone," says Laura Ries, co-partner in the Ries & Ries marketing consultancy. "The Mac has never been embraced by businesses, with the exception of ones that are graphically oriented, like advertising. Apple is in essence acknowledging that Windows is the standard for numbers, Excel sheets, accounting, basic business functions, and saying, 'We're the more user-friendly experience for people who want to use their computers for photos and videos and visual graphics.'"
The piece de resistance, says Ries, is that this somewhat narrower message is in fact aimed at a rapidly growing market: average consumers--spanning several generations--now using their home computers to whip up and distribute their own multimedia creations. "Apple recognized that technology is redefining what a 'graphic artist' is," she says. "Today, anyone with the urge can be a graphic artist."
How much of Mac's '06 sales gains are attributable to the Intel conversion, and how much to the marketing? "Apple knows that even with computers, decisions in the consumer marketplace are mostly emotional, not rational," observes brand consultant Robert Passikoff. "They've done a superb job over the years of differentiating themselves as the technological innovator. But at the same time, they understand that you don't connect with people by comparing gigabytes. They're masters at creating messages based on a brand's engagement with consumers--meaning how and why a technological innovation connects with people on a meaningful level. In an increasingly commoditized world, they know how to imbue a brand with attributes that people value."
In Passikoff's opinion, the current Mac campaign is a clear example of Apple's marketing intelligence. "Plenty of companies do a lot of consumer research, then spend a lot of money grinding out [advertising] that's ultimately meaningless and ineffective," he says. "Not Apple. It would've been so easy to just show their machines; instead, they used people. Viewers get a clear sense that you can do more with a Mac--videos, whatever you want. The ads are believable and entertaining, and they leave you feeling better about the brand. You can't ask much more than that from a TV commercial."
Indeed, some admirers rate the latest Mac campaign as Apple's best since the "1984" Super Bowl commercial that introduced the Mac and made the world sit up and take notice. In it, a mesmerized population is liberated by a fearless female warrior (read: Macintosh) who hurls a hammer through the giant communications screen used by an evil dictator (read: IBM).
The "I'm a Mac" campaign demonstrates Apple's commitment not only to getting the creative for its major product innovations right, but to supporting it with media saturation. To drive home the Intel-enhanced message, Apple upped its ad spend for the full Mac line to $85.4 million in last year's first nine months (compared with $7.4 million for the same period in '05).
iPod Phenomenon Keeps Growing
The creation and nurturing of the iPod brand is a marketing case study all on its own. "Apple wasn't first-to-market, but they came out with a better product that was brilliantly designed and marketed, and they became first-to-mind," sums up Ries. "Everyone else was doing convergence, adding applications. Apple offered a simple, easy-to-use music player."
"They took the concept of a Walkman and moved it to the next generation--catching Sony asleep at the switch," adds Trout.
iPod's catchy name, and its white case and earphones, added to its cachet and further set it apart from existing MP3 players.
Jobs' marketing instincts being equal to his instincts for product design and the next must-have application, iPod's advertising was in perfect pitch--suggesting rather than stating the message that you could no longer be hip unless you owned an iPod.
Apple has bombarded the marketplace for years with variations on the streamlined ads featuring "dancing silhouettes," white earphones, and precious few words. Like virtually all of Apple's campaigns over the years, the iPod ads reflect Apple's genius for associating the brand and its products with coolness and innovation while rarely showing the hardware itself.
One thing's for certain: Even with the iPod's application and design strengths, it could not have sold 68 million units worth $14 billion in revenue and captured an estimated 75% market share in the space of a few years without the astute marketing and Apple's aggressive expansion of the brand.
"There used to be a thing called an MP3 player; now it's an iPod," sums up Passikoff.
"They had a lot of running room to make the iPod a generic brand, and they made the most of it," adds Trout. "In everyone's minds, everything else now coming out is 'iPod-like.'"
Indeed, the Mac's resurgence aside, the iPod franchise still accounts for nearly 40% of Apple's revenue, and is generally viewed as the linchpin of the company's future fortunes. Apple is clearly focused on fending off Microsoft's Zune (which debuted in November) and a growing list of other competitors. Apple continues to cement users' bond with the iPod via continual releases of new iterations of the player--and thus far is also holding fast to what some label a "proprietary" iTunes strategy.
The decision to make content purchased online from iTunes compatible only with iPods (with stress on a seamlessly compatible user experience) was hardly surprising. Jobs set this direction almost from the day that Apple opened its doors, and paved the way for the personal computer revolution with the Apple I and its more successful successor, the Apple II.
Michael Gartenberg, vice president and research director at JupiterResearch, maintains that Apple's '90's slump came down to failure to introduce innovative new products and mishandling some existing ones--not from any failure to license its operating technology. "It's wrong to say that the iPod is 'proprietary,'" he adds. "People can and do play their existing music collections on their iPods. Zune is basically an uphill battle for Microsoft. To make any headway, they'll have to provide a compelling reason for consumers to switch to Zune. But for most consumers, iPod is the answer. It's not like people are dissatisfied and looking for something else."
In addition to driving iPod sales, the iTunes Store is a profit center. According to analyst Piper Jaffray, the number of songs sold on iTunes jumped 78% in the first nine months of last year, to 695 million (averaging 18.5 million per week). Apple reports having sold more than 1.5 billion music tracks, and tens of millions of TV shows and movies, since iTunes launched in 2003. Its fiscal fourth quarter '06 results included $452 million in "other music-related products and services" (which include iTunes, iPod services, and Apple-branded and third-party iPod accessories).
Third Act Begins
How can Jobs possibly follow this amazing Second Act? For starters, Apple will keep expanding The Apple Store. The chain had more than 170 stores as of year-end 2006, including 18 in the UK, Japan, and Canada. (Apple may have only about 2% of the world computer market at the moment, but some think the retail strategy could move that needle over the next several years as well.)
The stores reportedly bring in nearly $2,500 per square foot--far better than the performance of mass retailers such as Best Buy. Existing stores showed 40%+ sales growth between 2004 and 2005, and Apple is now busily redesigning every store to replicate the particularly successful format of its showcase New York City store. In fiscal '06, the retail stores sold 886,000 computers and did $3.3 billion in business, generating $198 million in profit. Little wonder that Dell is emulating Apple's retail strategy--although Dell had just two stores as of year-end 2006.
"The Apple stores are more proof of Apple's understanding of the need to surround the consumer," says Passikoff. "The retail model allows them to build a personal relationship with the customer with an easy support system and a face-to-face experience."
And, of course, those stores will be selling a raft of more new products. In fact, in October, Jobs declared that 2007 "is likely to be one of the most exciting new product years in Apple's history." Breaking with Apple's policy of staying mum about new offerings before their actual release, Jobs last fall announced Apple's next big thing: The early 2007 launch of the iTV. Attached to TVs or other entertainment devices, iTV will enable consumers to enjoy music, movies, and other content from computers in a home-theater environment.
"Apple is in your den, Apple is in your living room," says Jobs. "Apple is in your car, and of course, Apple is in your pocket with iPods."
Increasingly, Apple is also in Microsoft's face. "Apple controls not just the music player, but a growing number of other critical end points," observes JupiterResearch's Gartenberg. "It all adds up to a long-term threat for Microsoft."
Marketing Daily
Consumers Prefer to Steal Movies and Other Content
A recent study from NPD Group, a research firm covering the music industry, claims that movie downloads using peer-to-peer software and servers is outpacing purchases made from legitimate download services, such as CinemaNow or Apple's iTunes. The study, compiled from NPD's VideoWatch tracking software, finds that just 2% of online households purchase movies from movie download services, whereas 8% utilize illegal P2P services.For the consumer, there are several compelling reasons to steal content rather than pay for it. First is the cost. Second, the movie download biz fails to offer a single, comprehensive location from which to download movies. Instead, there are several fractious and competing services all struggling to reach agreements with movie producers. Digital Rights Management, which prohibits copyright downloads from easily being transferred from one device to another, is both limiting and annoying. Also, seasoned P2P users can easily find higher quality downloads than those being offered by services--and for free. Which is why people steal in the first place.
Ars Technica
Ars Technica
Backdating Scandal Hits Apple's Steve Jobs
Steve Jobs is in more trouble after an SEC filing revealed that the Apple chief executive was handed 7.5 million stock options in 2001-- without proper authorization from the company's board of directors. Later, records were forged to indicate that a full board meeting had taken place to approve stock option grant.The SEC has now to decide whether to pursue legal action against the company or any specific individuals involved in the incident. A regulatory filing indicating the extent of the transgression should be unveiled by the end of the week. In October, Apple and Jobs issued a contradictory statement saying that the CEO had not exercised his options and would instead take a grant of restricted stock. More than 160 companies have owned up to stock-option backdating in the last year. While not technically illegal before the passage of Sarbannes-Oxley a few years ago, companies were expected to own up to it. Options backdating refers to companies allowing employees to exercise their grants at prior dates that yield more favorable results. Many, including Apple, have not done so until this year, which led to the departure of numerous CEOs. If Steve Jobs and Apple are taken to court for forgery and failure to disclose options backdating, don't expect Jobs to be around much longer at Apple.
Financial Times
Financial Times
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