Here are the most interesting articles that came across this week…
The New Advertising Outlet: Your Life
The success of Nike+ is bad news for the traditional media companies that have long made money from Nike’s television commercials and glossy magazine ads.
Last year, Nike spent just 33 percent of its $678 million
“We’re not in the business of keeping the media companies alive,” Mr. Edwards says he tells many media executives. “We’re in the business of connecting with consumers.”
Mr. Edwards may be more blunt than most. But many large marketers are taking huge chunks of money out of their budgets for traditional media and using the funds to develop new, more direct interactions with consumers — not only on the Internet, but also through in-person events.
Nintendo Is Ad Age's Marketer of the Year
That careful attention to detail infused Nintendo Wii marketing pre- and post-launch. Along with the influencer moms, Nintendo extended the Wii experience to vacationers by placing units on Norwegian Cruise Line ships. Wii also reached out to senior-citizen-home residents, concertgoers via the Nintendo Fusion Tour, college students and mall rats.
It was Nintendo's creative marketing that bridged the gap from "just interested" to sales. The hands-on experiences of thousands of consumers, along with tie-ins with brands including 7-Eleven, Pringles and Comedy Central, were complemented by a clever TV and print campaign from Leo Burnett USA, Chicago, that featured two Japanese gentlemen traveling across America in a Smart car, ringing doorbells and politely inviting us all to join them with the signature phrase, "Wii would like to play." Publicis Groupe sibling Starcom handled media buying.
If consumers somehow still didn't get it, they could go online and watch scores of globally created videos designed to show people the possibilities.
http://adage.com/article?article_id=121039
$10bn for Facebook? Maybe, but the real value lies in the ads
As for Mr Zuckerberg, he thinks the social networks business is still in its infancy. "We're talking about the set of connections that everyone has in real life," he told the conference. "All we're trying to do is take those connections and map it out. Once we have an accurate model, we can help people to share their information more effectively. But it's going to take 30 years before this becomes a really mature platform."
Mr Zuckerberg's dilemma is that to reach the finishing line of the flotation, he needs more cash - but does not want to give anything valuable to rivals. That is not the shareholding; it is knowing which adverts the users of Facebook will respond to. That is where the real value in social networks resides: knowing what like-minded people want to buy.
http://www.guardian.co.uk/technology/2007/oct/19/news.facebook?gusrc=rss&feed=technology
Madonna, Radiohead Moves Rock the Music Biz
All of which makes us wonder: Could these developments herald the eventual demise of the label business? Well...maybe. ''I think it marks the beginning of a new era in how record companies function, but I wouldn't call it the beginning of the end,'' says Liz Rosenberg, Madonna's longtime Warner Bros. publicist. ''For the last year or two it's become much more crystallized that everyone in the business has to explore new ways of being profitable. The combination of Radiohead and Madonna these last few weeks is a big shift.''
http://www.ew.com/ew/article/0,,20057685_20057687_20153007,00.html
Valleywag's wrong: games want to be free, too
Valleywag says that videogames, unlike music, can't be made free because there's no sideline business in which to make money, like music's concert tour or merchandise sales. Oh really? What about advertising? Or land? Or additional levels? Or clothing and furniture? Or the various powerups, gold, armor, characters and other upgrades options that allow all these online multiplayer games to be free?
That's to say nothing of the dozens of demo games I get free every month, between Xbox Live and the DVDs that come free with games mags. A demo doesn't count because it's not the full game, even if it's got hours of gameplay? That's like saying Skype isn't really free calling because you have to pay for the premium version that allows you to call regular phone lines.
http://www.longtail.com/the_long_tail/2007/10/valleywags-wron.html
The love-in
So how do you know if open innovation will work for a particular company? It may well depend not just on what a company does but also on how it is perceived in the market. Hal Sirkin, of the Boston Consulting Group, suggests that rather than see firms like P&G and IBM as truly open innovators, it is better to view them as “beacons”. They have enough world-class experts working for them to attract outsiders who have brilliant ideas. Such firms are “open” in the sense that they are now casting a very wide net in their search for ideas. However, once they have captured the essence of those ideas, argues Mr Sirkin, “they control them and the process of getting them to market.”
http://www.economist.com/specialreports/displaystory.cfm?story_id=9928227
MySpace series 'Quarterlife' unveiled
Social networking aside, Herskovitz hopes Quarterlife will be a pioneering effort in the evolution of new-media filmmaking. "I'm of the belief that within five years, there won't be any diff between the Internet and television, or there'll be a continuum between the Internet and television," he said. "Our idea with this, was that there have been certain assumptions made about the Internet that were not proven, that were just assumptions because that's what people were doing."
Quarterlife will premiere on the MySpaceTV platform on November 11. News Corp.-owned MySpaceTV has a 24-hour exclusive on new episodes of Quarterlife, after which they'll be available on the Quarterlife.com home page and across the Web.
The MySpace deal was necessary and practical, the fiercely pro-indie Herskovitz emphasized repeatedly.
"One of the difficulties in putting this together was to figure out, do we go out there with an unknown site called Quarterlife.com and hope people come to it, or do we make some partnership with a big company that could get us some kind of eyeballs?" he explained to the audience. "I agonized over this for months and months and months.
http://www.news.com/8301-13577_3-9800395-36.html?part=rss&subj=news&tag=2547-1_3-0-5
What Lucas Can Learn from Radiohead
George Lucas has just begun work on his upcoming live action Star Wars TV show and his CG animated Clone Wars television show is in full swing. Right now, neither show has a traditional network TV home. Mr. Lucas, take a cue from Radiohead, and tell the networks to take a hike.
Why bother with traditional TV? You own the one of the biggest brands in the, well, universe. The shows are already being produced without a network commitment. Avoid the hassle of negotiating terms with networks around the world (and dealing with their marketing and promotions).
But most of all, it would give you what you are famous for — control. Here’s how you do it.
http://newteevee.com/2007/10/17/what-lucas-can-learn-from-radiohead/
CMOs, Start Thinking Like Investment Managers
An investment adviser explains the 40/40/20 rule as follows: "Put 40% of your budget in safer bonds and property, 40% in slightly riskier equities and a further 20% in speculative opportunities." Marketers can apply this principle to their investments by splitting their budgets 80/20. Eighty percent can be spent on "bankers" -- in other words, the marketing channels and media that have proved their effectiveness through measurement that shows they're making a positive return. For example, Procter & Gamble continues to bank on TV to drive the majority of their brand marketing, despite new-media experimentation.
Using this model, 20% of a marketing budget should be allocated to media and message tests. As the McKinsey report points out, "One of the best ways to diagnose a marketing organization's ROI discipline is to assess the extent and quality of the media and messaging tests in progress at any given time." That means keeping tabs on how well each component is performing and adjusting as needed.
http://adage.com/cmostrategy/article?article_id=121054
P.&G., the Pioneer of Mixing Soap and Drama, Adds a Web Installment
Mr. Crociata said Tide’s executives did not rely on Procter & Gamble Productions Inc., which still produces “Guiding Light,” to deliver “
Chris Greenleaf, GoTV’s vice president for entertainment, declined to say how much Tide or any of the company’s other clients pay to develop an online series. “Scripted series are more expensive than reality TV, and fewer characters is less expensive,” he said. The show contains only four main characters.
Despite the costs, Mr. Greenleaf said marketers increasingly are developing original series to distribute online and over mobile phones. “Just from us personally, you’ll see a lot more of this in the next year,” he said. “Advertisers are aware that this is where a lot of the activity is, among their demographics.”
http://www.nytimes.com/2007/10/15/business/media/15ecom.html?_r=1&th&emc=th&oref=slogin
Apple to open iPhone for developers
Until Wednesday, Apple had tried to control which applications consumers had on their iPhones.
Now, Jobs said the company intends to release a software development kit in February that will let coders create applications to work directly on the iPhone and the iPod Touch. The Touch is the new iPod portable player that resembles the iPhone but lacks the function of a cell phone.
"We are excited about creating a vibrant third-party developer community around the iPhone and enabling hundreds of new applications for our users," Jobs said in the posting.
It is easy to find many unofficial programs for the iPhone on the Internet; users just had to take the risk of installing them, knowing that any damage to the iPhone stemming from unofficial programs was not covered by Apple's warranty.
http://news.yahoo.com/s/ap/20071017/ap_on_hi_te/apple_iphone;_ylt=A9G_RoLoexZH7nMB7w0jtBAF
Sony steers PlayStation 3 towards music and films
Sony is working on plans to distribute video and music via the PlayStation Network, its online games system, in a significant step in transforming the PlayStation 3 games console into a multimedia device capable of networking with other Sony hardware.
Expanding the network to offer downloadable entertainment such as films and television episodes would also compete more directly with Microsoft's rival Xbox Live service.
http://www.ft.com/cms/s/0/f039c15c-7b81-11dc-8c53-0000779fd2ac.html?nclick_check=1
As Writers’ Strike Looms, Stakes Are Higher for TV Than Film
That has big implications if
All of which makes the immediate stakes far higher for television networks than for movie studios, with the writers’ unions — the Writers Guild of America, both West and East — scheduled to announce on Thursday whether their members have voted to authorize a strike when their contract expires on Oct. 31.
MySpace opens door to developers
Social network MySpace is to allow third-party developers to build applications for the site.
The move brings the website into line with rival Facebook, which has seen strong growth since it opened up to outside programmers.
Facebook has become a portal for services such as video, audio and photos since the change.
MySpace has more than 188 million registered users, compared to the 47 million who use Facebook.
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