The Tom Dougherty Blog



Posts categorized “Media”

GEICO ad example of online news services needing to grow up

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You know the commercial.

Halfway through the GEICO commercial, one nerdy musician says to the other, “You know, Ronny, folks who save hundreds of dollars by switching to GEICO sure are happy.”

And the other asks, “How happy are they, Jimmy?”

Well, I wasn’t happy.

Flying home from a stopover in Newark on Monday, I heard a murmur rising in the airport about bombs going off at the Boston Marathon. On my iPad, the first hit when I googled the news was an ABC news link. When I clicked on the video feed, GEICO blocked me out of the new feed until its inane commercial ran its course. So I had to watch all the stupid banter under the context of a gut-wrenching headline banner.

s-ABC-NEWS-IPAD-largeHere’s what’s strange. I didn’t blame ABC at the time for this affront. My anger was all aimed at GEICO. Its idiotic banter was inappropriate at the time and its message was trite in the crucible of context.

Still, online news services need to grow up. Their broadcast buddies learned long ago to suspend much of the commercial time to bring important and breaking news to interested viewers. Online? Not so much.




Major changes are coming to the video game industry

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Over the past month, two pieces of news have caught my attention. The first was Sony’s purchase of Gaikai, a cloud-based video game site that allows big-named game titles to be played through an Internet browser. The second was that Ouya, an inexpensive game console that runs the Android operating system and Android-based games, is teaming up with OnLive to allow cloud gaming of some AAA content.

These moves have exciting and curious implications for the market. It’s exciting to see the industry rumbling towards digital, which will lead to the instant ability to play and be simple to use.

But how will the existing brands transition?

It will be interesting to see what, if any, integration Sony has planned between Gaikai and its next Playstation. Sony puts a lot of weight behind its high-priced hardware, using it to push new technologies. But streaming services, like Gaikai, don’t require much in the way of hardware. The Ouya is set to sell for $109 and that includes the processor chips, storage, etc.,needed to run Android-based games that would be downloaded to the unit. That $109 ticket price is quite a bit less then the $599 pricetag Sony slapped on the original 60GB PS3 in 2006.

Because of Ouya’s marriage with OnLive, Sony will have to think very strategically about how it utilizes Gaikai. If the company is too soft in its approach, Ouya has an opportunity to take market share. Sony needs to be aggressive, which means stepping out of its comfort zone and leaning more towards software than hardware.

There is a happy medium. Sony can achieve profits for its system and still retain preference for its brand, but if OnLive is successful at acquiring larger amounts of AAA content, Ouya’s existence will eat away at Sony’s margins.

Sony’s best bet is to champion the digital change rather than react to it.




No brand winner in Viacom/DirecTV debacle

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During an almost two-week long blackout, millions of DirecTV customers were unable to watch about a dozen popular Viacom channels, including MTV, Nickelodeon and Comedy Central.

The stand-off between Viacom and DirecTV over fees might have ended last week, but neither brand comes out a winner.

DirecTV was already in a tough spot. Few rave about his or her television, Internet, or cell phone provider, which means it is easy to get mad at DirectTV in this instance.

It did not matter who most pointed the finger, Viacom or DirecTV, because a lapse in service meant the service provider failed. The bright spot for DirecTV is that since all providers are viewed negatively, there is no impetus necessarily for viewers to switch. The blackout, however, did help further perpetuate a negative brand perception.

The flip side to that customer perception is the value Viacom placed on its own brand. Owners of content can thank Netflix for spotlighting just how much power they wield. Distribution once was a massive undertaking. Netflix’s DVD service was unmatched because the start-up costs for distribution of that magnitude were prohibitive. Where there was a greater dependency on physical distribution, the changing environment of digital distribution has increased control for those with the content.  I say “increased control” rather than “complete control” because content providers are not yet confident enough in their brand or their content to capitalize.

The great thing about content is that in addition to defining your market it acts as a differentiator. Make great content worth watching and customers have a reason to switch and increase usage. A good example of this is comedian Louis C.K., who avoided traditional distribution channels and sold his latest standup special digitally through his website. His success proves that, if your content is worth consuming, customers will inconvenience themselves in order to get it.

If Apple has taught us anything, it’s that there is a thriving market for simplicity – in usability, design and consumption. If ever there was an industry where simplicity was lacking, it is television. DirecTV and Viacom did little to elevate either of their brands during the recent dust-up and, in the process, demonstrated weaknesses in the system and highlighted change that might be slow but is inevitably coming.




Addition by subtraction can be the right way to build meaning

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There are many signs that a company doesn’t know what it is doing with its brand, but one is a lack of willingness to let things go that are not working. While this might seem like simply an operational decision, predicated by a steadily declining financial sheet, it is actually one connected to brand. Often, what often performs poorly financially is also not correctly aligned with a brand strategy. They work hand in hand, which means by living to your brand promise, you can make the right decision on what products to keep and which ones to lose.

If you consider brands that are struggling lately (Sony, Best Buy), it is part and parcel to the fact that they lose sight of the brand. For instance, consider Sony, which has a hand in about every possible tech pot it can. From TVs to MP3 players, to Ereaders to tablets, to alarm clocks to cameras to laptops, Sony has just about everything. There might be some products that ring resoundingly clear to its themeline of “Make. Believe,” but the ones that are not ringing true take with it some of the clout that other products might deserve.  The Walkman might have still be bringing in dollars to Sony, but why did it take so long for it to pull old technology that detracted from the power and meaning of its brand?

Or take Best Buy, which has created a store that offers product solutions to satisfy an oven customer and a CD customer (whoever that is, anymore), providing less meaning to the whole group rather than more intensive meaning to a smaller group. What you sell and your willingness to scrap what is not in synch is an important part of staying relevant and resonant.

Clarity of message is not simply dependent upon the message itself, but how it is made real to the customer. Sony’s “Make. Believe” could have a real profound effect on the market if it meant a culture shift within Sony. Imagine the impact drawing a line in the sand and saying “from this point forward, absolutely nothing we do will be ordinary” might have. No more AM/FM alarm clocks, no more set-top boxes, no more DVD players, Only products that were true to “Make. Believe.”

There is a reason Ping is set to vanish from Apple’s repertoire. Its social network-angle was never about “Think Different” and has become more of a hindrance to its brand then a help. A brand is constantly being examined critically by potential customers looking for a meaningful connection to their purchase. Make it easy for them and get rid of the clutter.




Best Buy is leaderless…So what is different?

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I hate to harp on Best Buy yet again, but boy, when it rains it pours. Best Buy CEO Brian Dunn unexpectedly resigned due to a personal conduct investigation underway and all I could think was what a lucky break it is for Best Buy.

Not lucky in the sense that he was bad at corporate management or that he was a bad person (I guess the personal conduct investigation will clarify that). No, the only way I can evaluate Mr. Dunn is through the perspective of brand. From that perspective, Dunn was failing.

When Stealing Share rebrands companies, as much effort is put into the internal corporate culture of the brand as into the customer facing portion. If they do not occur in tandem, the customer sees the brand as hollow and fake. Before a brand can become important it must first be believed.

As I’ve said in recent blogs, Best Buy confuses its awareness with brand equity. The detriment of this confusion is that brand provides clarity and, in the absence of it, Best Buy suffered. Dunn focused too heavily on best practices and, as such, the brand of Best Buy became only as valuable as the lowest common denominator. Importance flows like a river, high to low. What a CEO believes is important becomes important at the ground floor. Brand must be the driver for the new CEO or Best Buy will continue to hit the same obstacles it is currently trying to clear.

A new CEO focused on brand also ushers in a new corporate culture. A big problem with promoting best practices (beyond their lack of meaning with the customer) is that they are not emotional and are the table stakes in which you must have just to play. But they do not create preference. They also give employees little reason to care because they are difficult to take personal ownership of.  As a cooperate culture, it is much easier to live something like “Think Different” than it is to live “best price.”

Best Buy’s Board of Directors should look at this resignation as a fresh start. Wipe the slate clean and take a new approach. Recognize that what Best Buy is missing does not center on operations, but rather on brand. Best Buy is down, but with some meaning it will not be out.




Tough times for Best Buy, but mobile stores are not the answer

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Things are not looking very good for Best Buy. Its last quarter, which ended March 3, had it down by $1.7 billion, a figure even more disheartening when you consider that the loss included an additional week of sales to help soften it. Best Buy’s answer to the poor performance is a shift toward fewer big-box locations and an increased amount of mobile locations. There is one problem with the strategy however. Whatever issues it has with the big-box stores will be the same for mobile stores. Neither has a clearly stated reason for being nor a compelling enough message to establish brand loyalty.

The problem with Best Buy’s current big-box stores is that you can get everything they carry elsewhere. Its brand is not special nor are the products it sells, making it just a store rather than a destination.

Sure, it has a large selection that lets you get all your electronics/appliance shopping done. But how many people go out to buy a TV and a fridge on the same outing? Typically, you either go for one or the other. (Or you go to Costco.) If you are in the market for a fridge, Best Buy just joins a long list of stores whose value is also simply “a means to an end.”

On the other hand, if you want IKEA furniture, you go to IKEA. If you want a MacBook, you go to the Apple Store. There is value in IKEA and the Apple Store because of the experience, the focus and, most of all, having brands that offer something of greater value to the consumer than price. Best Buy is not a very pleasant shopping experience. Nothing it sells is particularly special, and it uses the rather emotionless value of price as its brand.

So are mobile stores going to be any different?

The problem with transitioning to more mobile stores is that too many mobile stores exist and Best Buy’s brand of price is not meaningful enough to increase usage beyond their stores’ proximity to consumers. AT&T, Verizon, RadioShack, the list goes on. Mobile stores already saturate the market.

Best Buy’s success does not rest in adjusting the size of its stores. It rest in adjusting its brand. Downsizing the stores is just addressing a symptom. It’s not addressing the cause.

Instead, Best Buy must decide who is it for and who is it not for. What does the brand promise? Best Buy is confusing its brand awareness as being meaningful when it is preference that signifies brand equity. The reason Best Buy is closing stores, laying off employees and switching to a mobile store model is because it hasn’t redefined its brand and used that to dictate structural changes.

Otherwise, it will soon become as irrelevant as RadioShack or, gulp, Circuit City.




Sponsors who left Limbaugh knew what they were getting into

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Politics aside, what to make of the “apology” by Rush Limbaugh and the eight sponsors who have left his radio show?

The words spoken by Limbaugh about the Georgetown law student speaking before Congress on the issue of insurance paying for birth control will not be repeated here. They were crass and, frankly, stupid.

My question to advertisers is, “What did you expect?”

As Marshall McLuhan said, the medium is the message. If you advertise on Limbaugh’s radio show, your brand is connected with that show and all that it means. Sure, Limbaugh’s show attracts high ratings, and that’s why advertisers have flocked to it.

But this isn’t the first time Limbaugh has said inflammatory things. It’s the engine that drives the show. Those sponsors didn’t mind then because the ratings were so high, regardless of how offensive his comments might be.

You could make the argument, I suppose, that a line was drawn that advertisers like ProFlowers and Quicken Loans couldn’t step over. Sure, but it bears repeating: If you advertise on Limbaugh’s show or ESPN or, heck, CSI, you are associated with that show and the folks that watch or listen to them.

Think of it this way. Limbaugh has his own brand and it’s been highly successful. By associating with Limbaugh, though, you are partners in that brand.

It, along with all the other strategies you undertake, feed into what your brand means and stands up for. While it’s noble for those sponsors to leave and take a stand, spare me the drama. You knew what you were getting in to.

In fact, the sponsors who have stayed are the ones who have, ultimately, been the most honest with themselves.




RadioShack, a marriage of the uncool (Radio) and the unappealing (Shack)

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In a recent blog about Pepsi, I mentioned that only brands with different values than the competition can steal market share. Brand works in collaboration with this value by providing a meaningful context so its meanings become more intensive then the claims of the competition. I have, for a very long time, been very critical of RadioShack, or “The Shack” (which it is only using sparingly anymore). I could never pinpoint RadioShack’s differentiator, nor could I find brand meaning to help me overlook the absence of it.

The biggest problem for RadioShack is that it has identity issues. “Radio” is just a wee bit antiquated and I have yet to meet someone who conjured up a positive image when they thought of a “shack.” Now that we live in a different technological age, RadioShack just does not know what it wants to be when it grows up.

The in-store setup of RadioShack, in theory, reminds me of a boutique because of its relatively small size, which usually means focus and speciality. My wife is fond of shoe boutiques because she can get special and hard to find pairs of shoes. Some of those small boutiques even get early runs of an item so that the same design found at a Neiman Marcus might actually be made with a slight nuance.The point being, a boutique experience feels special.

RadioShack however does not feel special. In fact, almost all of RadioShack’s selection is lackluster. Sure, it has TVs, but it carries only about five of them. Need a videogame? Don’t go to RadioShack, it only has a handful to choose from. Its selection might increase when you look online. But if you are an online shopper looking for best price and biggest selection, wouldn’t you just use Amazon or someone else?

RadioShack has not put a stake in the ground, either from a brand perspective or product perspective. With so much left undefined by the company, it forces the consumer to create meaning and value (or in this case a lack of it) on their own.

RadioShack is not completely doomed. It just needs focus and a reason for consumers to choose it. It needs a better understanding of the consumer. If its recent “the shack” campaign is telling of anything, it is that a change needs to be drastic and needs to happen urgently.




A Salute to Ken Kesey: A Branding Pioneer

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To literary buffs like me, on hearing the news that Ken Kesey’s classic novel One Flew Over the Cuckoo’s Nest turned 50 this week, it meant something special.

On the grand stage, One Flew Over the Cuckoo’s Nest is a novel about personal change and the shattering of traditional thinking. Kesey’s novel explored, with great minutia, the overruling conventions of society (symbolized by the asylum and, to a lesser degree, the asylum’s virulent workers). The book remains both a beautiful and symbolic testament about personal change — which is just up my alley.

For brand junkies like me, One Flew Over the Cuckoo’s Nest serves as a symbol for thinking differently. It asks us to shun the status quo. It teaches us that people, like brands, should not be controlled by fear and instead should take a leap into exciting, unchartered territory.

I’m reminded of when the character Chief, in the final scene of the book, rips a massive sink from the floor and heaves it through the asylum’s windows. Chief’s throw fractured the window, thus giving him liberation. An action eerily similar to Apple’s ground-breaking 1984 commercial, yes?

As if life ever has coincidences, just one day prior to hearing the news about the book’s anniversary, I was perusing films to watch online and stumbled upon Magic Trip. As IMDB describes it, Magic Trip is “a freewheeling portrait of Ken Kesey and the Merry Prankster’s fabled road trip across America.”

In the film, Kesey and his comrades sauntered across America in their psychedelically painted bus named Further. It was a joy to see that Kesey sought to live the same explorative life he wrote of and skillfully shared with us in One Flew Over the Cuckoo’s Nest.

And to that, on the 50th anniversary of one of America’s finest novels, I salute you, Mr. Kesey. I thank you for one of the great road maps of unconventional wisdom.




Ironically, the Super Bowl heralds traditional media’s demise

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In this day and age of hyper-segmentation, with broadcasters and media providers developing programming for a specific audience (i.e., those they deem they can market to), there is still a single bastion of commonality that brings consumer segments spanning the gambit together for no less that 4 hours – the Super Bowl.

Some companies spend nearly their entire annual advertising budget on a 30-second ad, hoping it will be the subject of “Super Bowl top 10 commercial” lists or get the all important social media title of “viral.” For advertisers, the Super Bowl has become more than a football championship. It’s become the championship of advertisers and their agencies.

Analysts, bloggers, newscasters, and everyone in between will spend the weeks and months before and after the Super Bowl dissecting the ads, saying which one they believe were the most entertaining, provocative, and funny. There is often a hush at Super Bowl parties at the first commercial break with viewers expecting to see a commercial that will blow their minds. For many, the ads have become as important as the game itself.

This year’s Super Bowl will change everything. For the first time, the Super Bowl will be streamed on the Internet. Viewers will have unprecedented control over camera angles and replays.  Computers, hand-held devices, and Internet-capable TVs will be tuned in to the game like never before, giving users of these devices a novel way to see an event they have come to love.

This is exactly why streaming the Super Bowl heralds in a new era of media.

First, viewers who are seeing the game streamed on the Internet now have the ability to easily navigate away from the torrent of advertising that accompanies the game. Not to say that those who have no interest in the ads previously did not get up to go to the bathroom, get another beer, or refill their plate of food. But watching it on a phone or computer, it is much easier to open a new tab or check email during the ad breaks.

Secondly, and more importantly, streaming the game is a signal that the NFL understands that the world is changing and that perhaps it will eventually not need traditional over-the-wire or cable broadcast to get their product out to the masses. Though the game will still, and probably always, be on a major over-the-air network, the shift in strategy by the NFL is a signal to viewers and advertisers alike that the world of programming transmission is changing, forever.

For advertisers, bringing the Super Bowl online means viewers will have the immediate ability to interact with a message, including choosing what messages to view, interact with or avoid.  For the viewer, it means more control over the content and, equally important, a reminder that they do not need a cable subscription to get content. Although the Super Bowl will continue to be broadcast, cable companies should be very concerned about a program with this much impact being broadcast over a different venue than their own.

For local cable providers as well as local major network affiliates, the time allotted to local advertising ceases to exist when the Super Bowl is streamed. Though they are not getting the obscene money the national broadcasters are getting, they were getting a sizable amount of revenue for their local ads. It does not seem so far fetched to think that one day the NFL may just decide to stream the Super Bowl ONLY and profit from the entire program, including the ad revenue that is now being collected by the network. Clearly, it sees the possibility.

The writing on the wall has been there for a couple of years. The Internet allows viewers to control the content when and where to see it, and eliminate the carrier. Rather, they are going directly to the content producer and will be doing so more and more as all forms of media displays, TVs, phones, and computers are designed to do one thing: deliver content regardless of its source.  The old saying “content is king” is absolutely true in this age of the Internet and it is the content creators who stand the most to benefit from the demise of traditional media.