Monthly Archives: February 2012

Digital killed the Radio/TV/Print Star?

For those of you under 30 years old, this headline might not make sense. To catch you up, I have copied the Wikipedia post on “Video Killed the Radio Star” – the song which is the inspiration for this blog. “”Video Killed the Radio Star” is a song by the British synthpop/New Wave group The Buggles, released as their debut single on 7 September 1979, on Island Records from their debut album The Age of Plastic.[1] It celebrates the golden days of radio, describing a singer whose career is cut short bytelevision. The song topped the music chart in several countries and has been covered by many recording artists. It was the first music video shown on MTV in the U.S. at 12:01am on August 1, 1981. The song was number 40 on VH1’s 100 Greatest One-Hit Wonders of the 80’s.[2]” It turns out that it didn’t quite kill radio but it sure did change the landscape of music consumption. And this week, P&G announced that it would cut 1,600 jobs as they plan to “Bank on Digital for Long-Term Savings”. So, will digital kill video/TV, if not everywhere then at P&G?

P&G’s CEO, Bob McDonald has been under a great deal of pressure from analysts to justify their ad spend which has increased P&G’s by a staggering 24 percent over the two years through October 2011, even though sales rose only 6 percent in the same period. BusinessInsider said, “P&G’s staggering ad budget has become a bit of an issue among analysts. On the call, McDonald and his crew were asked about ad costs three different times. McDonald eventually said:

As we’ve said historically, the 9% to 11% range [for advertising as a percentage of sales] has been what we have spent. Actually, I believe that over time, we will see the increase in the cost of advertising moderate. There are just so many different media available today and we’re quickly moving more and more of our businesses into digital. And in that space, there are lots of different avenues available.

In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient. One example is our Old Spice campaign, where we had 1.8 billion free impressions and there are many other examples I can cite from all over the world. So while there may be pressure on advertising, particularly in the United States, for example, during the year of a presidential election, there are mitigating factors like the plethora of media available.”

As a result, “P&G said it would lay off 1,600 staffers, including marketers, as part of a cost-cutting exercise. More interestingly, CEO Robert McDonald finally seems to have woken up to the fact that he cannot keep increasing P&G’s ad budget forever, regardless of what happens to its sales. He told Wall Street analysts that he would have to “moderate” his ad budget because Facebook and Google can be “more efficient” than the traditional media that usually eats the lion’s share of P&G’s ad budget.” according to BusinessInsider.com. This is big news for analysts (and given that this announcement occurred just days before the much anticipated Facebook IPO, I would guess that the Facebook team is cheering.), yes, but what about the media world? It is no secret that a lion’s share of P&G’s ad spending is placed in traditional mediums like TV and print with a hefty share also going to digital but this latest news hints at a much larger strategic focus on the digital world for P&G. Most marketing experts would agree that this has been a long time coming and is the right thing to do. Still, the message, usage, and integration of digital is at least, if not more important than the simple switching of money into the medium. Articles cite the success of the Old Spice campaign but unfortunately for P&G this campaign format is not the norm. Perhaps this will spur on the progression in all corners and in all of their many brands. There is no question that this mega corporation has led the way into interesting digital marketing in the past but this latest move, in my opinion, seems to signal a true mindset change, and a wise one at that if done with an eye toward integration with other media. Digital media on its face is good but is not by default intrinsically better than any other form of communication – it is what is said, how it is used, and who in turn choses to engage with it that matters most.
So, to get back to our song inspired headline; no, I don’t think digital will kill the TV/Print star, but much like MTV’s first video did to music, I do believe that this announcement reinforces what most of us already know – the landscape of marketing and media is ever changing and the greater emphasis on one medium does not mean death for another. In fact, if done well, all mediums become better and evolve to be more holistic.

Are you a Dragon?

January 23, 2012 marks the Chinese New Year which this year is symbolized by the Dragon. According to infoplease.com, “Legend has it that in ancient times, Buddha asked all the animals to meet him on Chinese New Year. Twelve came, and Buddha named a year after each one. He announced that the people born in each animal’s year would have some of that animal’s personality. Those born in dragon years are innovative, brave, and passionate.” I happen to be a Dog.Pause for the jokes…ok, we all can’t be Dragon’s but this year we can act like one. I believe that the dragon is the patron Chinese animal of all great marketers as the charactersitics are spot on. To be even more precise, I found a break down of the KIND of Dragon’s born during the Years of the Dragon. 2012 is the year of the Water Dragon as was 1952.

THE WATER DRAGON 1952 AND 2012

Water has a calming effect on the Dragon’s fearless temperament. Water allows the Dragon to re-direct its enthusiasm, and makes him more perceptive of others. These Dragons are better equipped to take a step back to re-evaluate a situation because they understand the art of patience and do not desire the spotlight like other Dragons. Therefore, they make smart decisions and are able to see eye-to-eye with other people. However, their actions can go wrong if they do not research or if they do not finish one project before starting another.

Interesting indeed. So let’s take a look at some of the best innovations from 1952.

In 1952, Edward Teller and his team build the hydrogen bomb. Perhaps not the most peaceful invention but one who’s science led to greater things. Joseph Woodland and Bernard Silver were issuers of the first patent for the bar code. I think all marketers can agree that this changed the face of retail. Very little has changed with the respect to the bar code until very recently with the advent of QR Codes and the like.

Lest we be to serious, I think we can all agree that to get through our day, most of us indulge in a diet soft drink or two or three or four. Well, the year of the Water Dragon ushered in the first sale of the diet soft drink which was dubbed the “No-Cal Beverage”. It was a gingerale that was sold by Kirsch. 2011 saw  DIET Coke surpass Pepsi for the first time so it is safe to say the “No-Cal” beverage has had an impact on business.

The year of the Water Dragon also saw Mr. Potato Head patented. An invention that has stood the test of time and technology and remains a favorite amongst children everywhere. The developers and marketers of this product certainly understood a great deal about human nature and the simple joy of changing expressions and attitudes on an unattractive potato that somehow was both a release and source of joy.

Looking back at these inventions, you can see the Water Dragon at work. The bar code, the diet soft drink and Mr. Potato Head could be described as something more than just interesting inventions but rather thoughtful marketing insights that led to mega industries that have lasted when most inventions have gone by the wayside. In fact, these inventions of 60 years ago have not really changed in that time span. Sure soft drinks use other synthetic sweetners than in 1952 but essentially they are sugar-free, colored, caffeinated (thank God) water. The bar code and Mr. Potato Head are pretty much the same too. How many other inventions of 50+ years ago have remained nearly the same? Very few I would guess. So the calming effect that the water has on the dragon seems to work in that it does require a “step back” for greater insight which tends to have a lasting effect. As for the hydrogen bomb, all I can guess is that it was an invention that was developed in a hangover from the previous years more aggressive dragon. Still. there is no arguing that it has stood the test of time.