Why All the Madness?

Today is one of my top three sports days of the year. Along with New Year’s Day college football bowl games and Super Bowl Sunday, the first day of the NCAA men’s basketball tournament is special. The tournament is more than a sporting event, it has taken on an identity in American culture known as “March Madness.” Why has the NCAA men’s tournament transformed from a basketball lover’s dream to part of the fabric of who we are? I see three reasons:

1.Story Lines – Like the Olympics, stories emerge during the NCAA men’s basketball tournament about players, coaches, or teams that overcame obstacles to achieve success. Heroes emerge like Stephen Curry of Davidson College in 2008. All 64 teams have dreams of success. Half of them will have their dreams shattered by the end of the day on Friday, but all have hope of having a shining moment on a national stage.

2.Scope of Participants – The tournament is national in scope both in terms of locations of tournament games and location and mission of participating institutions. This year’s tourney has teams from 32 states, and the types of institutions range from enormous state supported schools to small liberal arts colleges.

3.Connectivity – Basketball fans both serious and casual are no longer merely spectators. Friends and co-workers participate in competitions to see who can pick the most winners. This ritual is no longer constrained by physical location as Internet-hosted competitions allow friends to gather regardless of where they live.

Enjoy the Madness. I hope you win your bracket competition… unless you’re competing against me!

Sports Sponsors Should Keep Low Profile

Citi’s $400 million naming rights sponsorship for the new New York Mets stadium sparked an outcry and greater scrutiny of sponsorship spending. Financial services firms in particular have come under fire for accepting federal bailout money because they are in trouble yet appear to continue a business-as-usual approach to their marketing spending. Is this the view of politicians grandstanding on an issue sure to win favor with voters, or is it the sentiment of the broader population?

Results from a recent survey by Performance Research suggest Americans are not enamored with companies engaged in expensive sports sponsorship deals. Nearly on-third of those surveyed said they pay less attention to corporate sponsorships than they did a year ago. Furthermore, 62% believe companies that are experiencing difficulties should be spending less on sponsorships. It seems that consumers believe the cost-cutting measures they have taken with their household spending should be mirrored by corporations.

Feelings toward sponsors vary depending on the type of sponsorship. Only 13% of the sample said they would have a more favorable opinion of companies if sponsorship of their favorite sporting event were to increase, with 26% reporting they would have a less favorable opinion. The positive opinions about sponsorship involvement were higher for cultural events (20%) and non-profits or causes (41%).

These results indicate sponsorship is not a medium that should be abandoned altogether during these difficult times. However, strategic decisions should be made about the type of property with which a company aligns through sponsorship as well as the scope of involvement. If companies’ support of a property via sponsorship is perceived as integral to the property’s success (which would more likely be the case for a non-profit or cause), the more positive consumer acceptance of that association will be. This trend will hurt the venue naming rights market and other forms of sponsorship that have succeeded in landing eye-popping deals in the past.

Link: Performance Research – “As Consumers Tighten Their Belts, They Expect Corporate Sponsors to Do the Same”

Coke Says "Don’t Dew It"

Cola wars are legendary in marketing. The latest skirmish is being brought on by Coca-Cola’s “Vault Taste Challenge” promotion. Its aim: persuade consumers of Pepsi’s Mtn Dew brand to switch to Coke’s Vault. Mtn Dew dominates the citrus segment of the carbonated beverage market with 80% market share. In contrast, Vault has about 4% share. The promotion offers purchasers of a 20-ounce Mtn Dew a coupon for a free 16, 20, or 24-ounce Vault.

If Coca-Cola’s marketing objective is to increase market share for Vault, this promotion seems to have a shot at making it happen. The Vault Taste Challenge allows consumers to try Vault risk free. It is possible that people who buy Mtn Dew out of habit (but not necessarily out of brand loyalty), could be enticed to purchase Vault occasionally, if not switch to Vault altogether. Also, the fact that the coupon-based promotion is running during a time when there is greater interest in coupons among consumers could help the appeal of the Vault Taste Challenge.

Expenses associated with executing the promotion will not be cheap, but if the result is new customers for Vault it will be worth it. Add to that the ability to measure the effectiveness of a promotion like this, and it is not surprising to see Coca-Cola say “don’t Dew it!” to cola consumers.

Link: Ad Age – “Coke: Buy 1 Rival, Get Our Brand Free”

Is Direct Mail Next to Go into Decline?

The woes of mass media advertising have been well documented. Newspapers, in particular, are scrambling to remain viable to advertisers. Television is facing similar challenges, although to a lesser extent. Now, a third medium could be joining the list: direct mail. Love it or hate it, direct mail has enjoyed a run of 60 years of annual growth in overall spending. That run came to an end in 2008, as a study from the Winterberry Group reports a 3% drop in direct mail spending last year. Furthermore, direct mail spending is predicted to fall another 8% to 9% in 2009.

A series of events have aligned to create a perfect storm for the direct mail industry. First, consumers who are tired of unwanted mail solicitations can minimize them more easily through the Direct Marketing Association’s DMAchoice program. Second, a weak economy has led marketers to pull back on spending, and the relatively high cost of conducting direct mail campaigns make them a target for reduction. Third, at the same time marketers are spending less on direct mail, they are utilizing e-mail marketing more, especially when targeting customers with whom they have existing relationships (and permission to contact via e-mail). Fourth, electronic communications like e-mail are environmentally friendly instead of using natural resources to make envelopes, brochures, and sales letters.

Direct mail will not disappear from our mailboxes altogether anytime soon. But, the era of constant growth in direct mail marketing appears to be over. The capabilities of direct mail to precisely target an audience and measure its effectiveness make it a very useful tool in the IMC toolkit. But, with the emergence of e-mail and search engine advertising as ways to cost effectively reach specific audiences and measure campaign effectiveness, direct mail’s role in marketing programs will likely not be quite as prominent going forward.

Link: eMarketer – “Direct Mail Drop”

From Events to Experiences: It’s All About Engagement

A February survey of 300 marketing executives revealed that the desire to engage customers through event marketing is still great, even in a recession. Event marketing was tabbed as the best approach “that best accelerates and deepens relationships with target audiences.” Furthermore, 29% of the executives surveyed said they would place a greater emphasis on experience marketing in the next 12 months.

Event marketing is typically thought of as a form of experiential marketing, so what’s the difference? The difference comes down to the level of engagement created between brand and audience at an event. A mere presence at an event in the form of signage or even a booth or exhibit does not elicit strong consumer engagement. While event marketing can generate brand awareness and perhaps sales leads, it often falls short without a strategy to engage and involve event attendees.

Interactivity bridges the gap between exposure and experience. Examples of ways to engage event attendees include multimedia exhibits, games, and celebrity appearances. Event properties often seek sponsors to support their events. Offering prospective sponsors benefits limited to exposure is outdated. Awareness can be measured, but it does not always lead to the cash register ringing.

The extent to which a brand can have meaningful interaction with an audience at an event, the more memorable the experience will be and the potential to create favorable brand attitude is greater. It is the experience people have with your brand that they will remember long after an event is over, not your name or logo on signage.

Link: Brandweek.com – “Event Marketing’s Importance Increasing”

Who’s the Twit that Changed Skittles’ Web Site?

In a little more than 10 years, corporate and brand web sites have gone from a novelty to a given. A company or brand without a web site? Is that possible today?

While having a web presence is a must in today’s interactive world, the nature of a company’s communications with its target market should be revisited. The first decade of the web communications era was characterized by companies using their web sites as electronic brochures for their products. While the brochure format has a place for many companies, it does not fit the brand building needs of all products, particularly consumer packaged goods. So, when Mars Skittles brand reinvented its web site to have a social media focus, the move may be one of having foresight about the future role of brand web sites.

The relaunched Skittles web site bears little resemblance to the product display focus we have become accustomed to encountering on the Web. A visit to the Skittles web site redirects you to a social media platform such as Facebook or Twitter. The brand has given up the product focus of traditional web sites and replaced it with a people focus. By putting consumers’ relationships with Skittles at the forefront of its communications efforts online, Mars has created a means of strengthening relationships between customers and the brand as well as build community among those people who are passionate about Skittles (yes, I know being passionate about candy sounds strange, but it happens!).

The Skittles experiment will be watched closely. If it has any degree of success, look for other consumer packaged goods brands to revamp their microsites to feature a more significant social media component.

Link: Marketing Daily – “Marketers Praise Skittles’ Gutsy Site Move”

Can Eddie Bauer Successfully Return to Its Roots?

Eddie Bauer made its name by offering high performance outdoor apparel and gear. The nearly 90-year-old company began a slow downward spiral in the late 1980s when catalog retailer Spiegel purchased Eddie Bauer and transformed the brand to market women’s apparel. After a less than stellar run as a retail brand, Eddie Bauer filed for bankruptcy and eventually was spun off from Spiegel.

Now, the Eddie Bauer brand is seeking to return to its roots. It is launching a line of mountaineering gear and apparel in April called First Ascent. The line’s name seems to hold significance as it is Eddie Bauer’s first ascent toward the standing the brand once held in the minds of consumers. The problem is that Eddie Bauer moved so far away from its position of offering high performance outdoor gear that a return to that standing will be difficult. Many younger consumers may not be familiar with Eddie Bauer’s heritage and thus skeptical about the brand’s move toward the outdoor lifestyle (even though that is its heritage).

Eddie Bauer’s dilemma has some similarity with the story of Izod. The prestige of the Izod brand was tarnished by a mass marketing approach to distribution by Izod’s owner in the 1970s and 1980s, General Mills. The brand was divested, but by that time the damage had been done. While Izod has since made strides to be perceived as an exclusive brand once again, it has never fully recovered from the market saturation approach of General Mills. Now, Eddie Bauer must set out to convince consumers it is again a serious player in the outdoor lifestyle market, not just a women’s clothing brand. The Eddie Bauer brand has a rich heritage; can it successfully summon associations from its past to compete with today’s performance outdoor gear?

Link: The Wall Street Journal – “Eddie Bauer Returns to Roots”

Search Terms: The Language of Recession

It is said that pictures cannot lie. Maybe the same can be said about the words we use to conduct searches online. A December 2008 survey by ComScore revealed sharp increases in the frequency of search terms such as “bankruptcy” and “unemployment.” This trend reflects what is on the minds of many Americans today, and they are turning to the Web to find solutions to their problems. The ComScore survey also found evidence of how Americans are using the Internet as a tool to become better consumers. For example, the number of times “coupons” was used in searches skyrocketed from 7.6 million times to 19.9 million times in December.

These trends undoubtedly are garnering the attention of marketers that use paid search advertising and search engine optimization to drive traffic to their web sites. Consumers have a need for information on ways to save money and make money. And, the quest for this information is taking place on the Internet, not in a newspaper’s classified ads section or other traditional mass medium. All signs point to search advertising becoming a more prominent part of marketing communications budgets in the short and long term.

Link: Tech.Blorge.com – “Online Search Terms Provide Further Proof of Recession”

Free Sodas, Coffee Flow Again on US Airways

US Airways has retreated from a new pricing policy that charged passengers $2 for sodas and juices and $1 for coffee. The airline implemented an a la carte pricing strategy to charge customers fees for refreshments, services like checking baggage, and choice seat locations. The visions of dollar signs danced in the heads of US Airways management as it was projected that $500 million could be realized from implementing the additional charges.

It seems US Airways overlooked two important matters. First and foremost, it did not seem to think through what customer reaction to the perception of being nickeled and dimed (or in this case dollared) for drinks that were complimentary previously. Management saw revenues; what it should have seen was customer resentment. Second, US Airways should have realized it would stand out for all the wrong reasons if competitors did not follow suit. Years of fare wars should have been enough for US Airways to know that competitors that do not match price increases leave the one airline that did in a unfavorable position.

So, if you are on a US Airways flight soon, be sure to enjoy your complimentary beverage. You can take comfort in knowing that US Airways really wanted to charge you for your drink, but at least for the time being it does not have the competitive leverage to do it.

Link: Bloomberg.com – “US Airways to Stop Charging for Onboard Sodas, Coffee”target=”blank”

Netflix Strives to be a Step Ahead of Obsolescence

Netflix has been able to enjoy a performance that is counter to the trend of markets overall. The company’s stock is trading near a 12-month high, and business is good at Netflix with more than 10,000,000 subscribers. Its mail order DVD rental business changed behavior for consuming home entertainment. Now, Netflix is looking to innovate further as video streaming capabilities via the Internet improve.

Netflix plans to offer a monthly rate for customers who download movies exclusively and do not use the mail order service. The plan, to be launched in 2010, builds on a behavior shift of many Netflix users who are downloading movies already. The streaming-only plan is also an acknowledgment that mail order DVD is a business model that will become obsolete at some point. By being at the forefront of video download services, Netflix is striving to insure it is a player in that market.

Netflix CEO Reed Hastings compares the situation with what AOL has encountered in recent years. AOL dominated the dial-up Internet Service Provider market, but when broadband connections became available to a majority of the population it was irrelevant as an ISP. AOL has fought to survive by reinventing itself as a content provider, not a connection point. Netflix has learned from AOL’s downfall, and it is a lesson that all businesses should heed. Change will come, maybe it is driven by technology, maybe it is driven by the economy, or perhaps it is driven by customers. But, change will come. Innovating to anticipate future market demands is a must, just ask AOL.

Link: Bloomberg.com – “Netflix Chief Sees Streaming-Only Pricing by 2010”