Saturday, February 26, 2011

Bonding Italian Style

Bonding, the formation of a close relationship, as with your kids, is morphing. Disney World is no longer enough for your little Baby Einsteins.

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Remember when you first bonded with your kid(s)? Most probably it first occurred when your spouse decided to go out for the evening (e.g., girls/guys night out). Bonding then escalated when nights out evolved into spouses get away weekends (e.g., fantasy golf outings, spa retreats, etc.). Once your kid(s) started to walk, the whole family headed off to Disney World to bond.

Now flash forward to 2011. People are looking for relaxing, more exotic vacations to bond with their toddlers. One option I read about recently was the Mum and Baby Experience in Tuscany. The child friendly villa is just a short drive from the airport in Perugia. Package deals include yoga, cooking classes and massages for Mom; baby Latino dancing (I kid you not), painting and Italian classes for your children. There is also plenty of free time for parents to relax by the pool, swim, read or take local excursions while your children stay busy. Bonding Italian Style!

As I stated earlier, bonding is morphing, a window of opportunity for the travel industry.

Tuesday, February 22, 2011

Baby, Baby, Baby

I value the marketing strategy of acquiring and retaining consumers to build a brand long-term. Consequently, I applaud Disney’s recent move to target newborns. Baby, baby, baby!

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Last month Disney launched its Disney Baby initiative targeting U.S. maternity hospitals. Bilingual representatives visited new mothers and offered a free Disney Cuddly Bodysuit complete with a bedside demonstration highlighting its features and benefits. Disney projects they will give away 200,000 bodysuits by May before begins selling 85 styles; $9.99 for two. Retail giants Target and Nordstrom will follow with more Disney Baby items including hats.

Aggressive move given Disney fielded some heat when they marketed Baby Einstein, their entertainment line of videos and toys for babies and toddlers. The non-profit group Campaign for a Commercial-Free Childhood challenged Disney asserting that the products did not turn babies into geniuses. The non-profit group even offered some refunds to parents in some select cases.

The negative publicity did not deter Disney since they estimate that the North American, baby market including staples (e.g., baby formula) is worth $36.3 billion. Interesting, Disney’s chairman, Andrew P. Mooney indicated: “Apparel is only a beachhead.” Apparently Disney has ambitious plans to sell bath items, strollers, food, etc. Their Disney Baby initiative will evolve beyond the crib. Long-term they intend to draw parents into the company’s broader web of products and experiences – a loyalty program where pregnant women will receive free theme park tickets for signing up to their e-mail alerts. In the words of Mr. Rooney:
“To get that Mom thinking about her family’s first park experience before her baby is even born is a home run. A large number of families do not become consumers of Disney products until their children reach pre-school age, when they start to watch Disney Channel programs like Mickey Mouse Clubhouse.”

Once again the critics are surfacing. Children Now, an advocacy group claims Disney is taking advantage of families at an extremely vulnerable time. In addition, they believe having access to maternity hospitals as customer hunting grounds is an invasion of privacy. Regardless, Disney continues to push forward and offer free stuff in their quest to carve out their chunk of the baby market, as they build their brand long-term. Imagine getting a free pink bodysuit adorned with Simba when you take your prenatal sonogram and find out it is a girl!

Thursday, February 17, 2011

Ethanol Catch 22

Have you noticed how your meat and dairy prices at your local supermarket have skyrocketed lately? That is because our cars now burn up a third of the nation’s corn crop that normally was utilized as feed for the livestock industry.

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Federally mandated ethanol standards first came into play in 2005, thanks to high gasoline prices and America’s dependence on imported fossil fuels. Then the bar was raised when
Congress created subsidies paying gasoline blenders for every gallon they blend with ethanol. As a result, over the last five years the percentage of corn used for ethanol rose from 9.5 percent to now approximately one-third of the crop’s total yield. Corn Economics 101 – the increased demand for corn for the production of ethanol drives up the prices for other buyers like livestock producers.

Now let us examine the Catch-22 of ethanol produced from corn. Ethanol now comprises approximately 8 percent of the fuel we consume. We are just beginning to feel it at our dinner table, but long-term how will ethanol as a renewable fuel impact America? For starters there is corn ethanol’s thirst for water. Researchers now estimate ethanol consumes three times more water than originally estimated back in 2005 – water needed to irrigate corn production as it extends to new areas of the country and water needed in the production of ethanol. Second, extensive studies indicate that energy balance between the use of fossil energy in the production of ethanol is just about equal to the energy contained in the ethanol produced. Let us not forget how fossil fuel is used in the logistics of moving the grain to the refinery and then from the refinery to the pump. Third, the fertilizers needed to grow corn are not exactly eco-friendly. Some farmers are trying to capitalize on robust corn prices by not rotating their crops properly which ultimately leads to soil erosion. Last, Americans who want to use ethanol might bear the cost of making their cars e85 compatible.

In closing, I am by no means an energy expert. However, ethanol production has thrown Corn Economics 101 out of sync. I have read about other alternatives out there when it comes to the production of renewable fuels, like cellulosic ethanol made from trash and other useless matter. This much I do know, you will not be witnessing the leaders of the meat industry fraternizing with advocates of corn ethanol in the near future.

Tuesday, February 8, 2011

Late to the Party

When marketers tend to be laggards as it relates to the new world of social media, it isn’t that they can’t see the solution; it is they are unable to recognize the opportunity.

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Alterian, a company that specializes in integrated marketing platforms on behalf of its clients (e.g., T-Mobile, Pizza Hut, Harley Davidson, etc.), just published their 8th Annual Survey about brand engagement. At the end of the year they collected feedback from 1,500 Marketers, Agencies and Marketing Services Providers (MSP). Key findings that stood out for me:

Seven in ten respondents have little understanding of their brand’s social media conversations.

One third of the respondents indicated that their company’s website’s main focus serves as a brochure; only 11% of the companies surveyed had an element of engagement built in.

Nearly two thirds indicated they were not comfortable in the area of analytics.

When taking all factors into consideration (budgets, resources, time management, etc.), three fourths indicated that their brand was at risk for not being engaged with their customers as they should be – 57% of the respondents plan to take action to rectify what they believe is a problem.

Candidly I am not surprised by the above findings. Over the past two years, every time I engage with my peers about social media, I usually field the standard query: “Great Jim, but what is the ROI?” Valid question! I admit it is difficult to tie social media initiatives back to increased sales. However, marketers need to recognize that metrics are morphing thanks to social media and when the dust settles the one measurement that will remain constant is increased customer retention/profitability. Consequently, the new class of companies that are being labeled networked enterprises are utilizing social web technologies to enhance their current CRM initiatives. Remember, the end result is still all about achieving a transaction. Social CRM now facilitates customer interaction/engagement that leads to long-term customer retention.

Conversations about your brand are happening whether you’re participating in them or not. Are you going to begin formulating your plans to engage and seize the opportunity in 2011 or are you going to be late to the party?

Thursday, February 3, 2011

More Shift Happens

Back in January I indicated that 2010 U.S. online Internet ad spending established a record – $25.8 billion, a 13.9% increase vs. 2009. Internet ad spending will continue to hit new peaks over the next few years. Why? Shift happens!

Read On:
In a recent report titled U.S. Ad Spending: Online Outshines Other Media, the author David Hallerman detailed increased quarterly spending for 2010. According to his projections, online advertising when the 4th quarter numbers are published, will set a new quarterly record spend of $7.25 billion! Consequently, analysts now predict double digit growth for five consecutive years; total online advertising expenditures will exceed $40 billion by 2014.

I am not surprised that marketers are shifting their advertising spending to online venues given the amount of time people now spend online. For the record, Internet advertising (the record $25.8 billion) just surpassed newspaper advertising to take second place behind TV among measured media. This shift will be further enhanced by the ease of getting online thanks to the growth in smartphones. Nielsen now projects that one in two Americans will have a smartphone by the time we close out 2011. In recognition of smartphones, digital video appeals to brands as a platform to get their messages broadcasted. Social networking sites is another area marketers are targeting to spend their online advertising dollars.

Sunday’s Big Game will further validate my point that advertisers are following the shift in consumer behavior. A leading research company estimates that two-thirds of viewers ages 18 to 34 indicated they plan to use their smartphone during the game to send emails, text messages, check out advertisers’ websites, post comments on a social network, etc. Then there is the day after when everyone will be on YouTube checking out all the Super Bowl ads. I remember reading that Volkswagen, after dropping out from Super Bowl advertising for nine years, had 1 million people view their 2010 ad online after the game; 850,000 views were on YouTube. No wonder online advertising is gearing up for the next level and ready to break more spending numbers.
Shift happens!