Shopdropping – a cool marketing strategy or the nicer twin of shoplifting?

Shopdropping is a marketing and self promotion tactic by clandestinely placing altered or recreated objects into retail stores.
It is not new – in 1989, the Barbie Liberation Organization swapped the voice boxes of 300 Barbie dolls to those of G.I. Joes before putting the dolls back on store shelves. The organization tried to make a point about sexism in children's toys.

There are two main groups that are currently using shopdropping.
The first group is promoting a cause. Anti-consumerism advocates slip by replica products packaged with political messages onto store shelves and religious zealots insert their pamphlets between the pages of gay-and-lesbian magazines in bookstores.
The second group uses it for personal marketing and promotion.
Self-published authors sneak their works into the “new releases” sections of bookstores, personal trainers put their business cards into weight-loss books, music producers place their free CDs between commercial music CDs, and aspiring professional photographers place their homemade cards, URL included, in the greeting cards section of book and stationery stores.
No store is safe: Wal-Mart, Target (T-shirts with political message), Starbucks (free CDs of budding artists were shopdropped), Bloomingdale’s (music CDs) are just a few examples.

In itself, shopdropping is not illegal (yet), in contrast to its evil twin shoplifting.
However, trade name and brand name infringements and product liability (especially when it comes to consumer products such as cosmetics and toys) do have legal repercussions.
A telling example of how shopdropping is evolving and becomes illegal is the case of a lead singer for an independent pop-rock band in the East Village, NYC.
The band started shopdropping by slipping their promotional CDs between the pages of The Village Voice newspaper and into the racks at large music stores.
They now changed their strategy and put stickers with logos of fashion designers such as Diesel, John Varvatos and 7 for All Mankind on their promo CDs. They then placed them in the pockets of those designer clothes.

Shopdropping seems to be limited to the US; outside of the US, there was only one major shopdropping recorded. In 2005, the French Fondation Babyrul shopdropped hundreds of home-made CDs into record stores and mash-up DVDs into Blockbuster branches to “challenge the commercial space-time of a store”.
This brings the catching New York Times headline “anarchists in the aisles?” to mind.
What will be the future of shopdropping? Will it be a passing fad or develop in a serious guerilla marketing strategy?
Time will tell – we will all be a lot wiser after the holiday season.

A whole bunch of Crocs

Crocs are clog-like footwear, made of a proprietary plastic resin called Croslite.
Currently, Crocs are sold in 27,000 stores in 80 countries and counting.
Croslite is a lightweight, water-proof resin material which softened with body heat.
This forms a shoe to the shape of the foot, making it very comfortable.
A Canadian company saw the possibilities for spas, and developed a clog which also had
holes for air and drainage.
Scott Seamans and Duke Hanson came across the footwear during a sailing trip from Islas Mujeres, Mexico, to Florida in 2002.
They started a company selling the clogs with a friend, sandwich chain executive George Boedecker. For financing, they borrowed £2.6million ($5.2million) to buy the Canadian firm behind the original design. Seamans added a strap across the heel to make it perfect for boating.

They called their version “Crocs”, since the clogs would look as good out of the water as in it. There initially market was spa and boating people. Once they went mainstream, they encountered fierce criticisms from the fashion industry. To put it bluntly – both the American and British fashion industry hated the Crocs with a passion. Customer disagreed – they made Crocs their favorite summer footwear. Kids, seniors and everyone in between snapped up the colorful clog-like sandals like candy - including Hollywood celebrities and Prince William’s on/off girlfriend Kate Middleton and her friends.

The company fares well as a result – they floated on the US NASDAQ exchange in February 2005. Crocs' CROX stock has climbed since to over 300%.
Recently, there was a backlash. Parents complained that their kids wearing Crocs on escalators could be hurt. The potential danger was highlighted on the CBS Early Show with CBS Correspondent Susan Koeppen. According to media reports, a child in Arkansas had to have a partial amputation after his shoe got caught last year. In Virginia, a mother managed to yank her little one free with only a deep cut. However, it is important to keep in mind that escalator accidents can happen with any shoe. According to the Consumer Product Safety Commission there were more than 10,000 injuries last year – 20 percent of which happened on the side or near the top or bottom of the escalator.
The negative media coverage didn’t affect Crocs’ popularity.
Crocs decided to branch out and launch an Autumn/Winter collection, consisting of closed-toe and leather-trimmed styles and a strapless clog lined with microfiber.
It also keeps of closing licensing deals, including deals with Major League Baseball, DC Comics and Marvel Comics.

So what is the secret of Crocs’ marketing success?
Marshal Cohen, chief industry analyst at NPD Group, gives a great inside.
He labels their appeal as the “bulldog effect” – they are so ugly that they are cute, not unlike Uggs.
Other success factors are:

• They are comfortable.
• They are marketed through word-of-mouth marketing.
• They are affordable.
• They are widening the assortment to boots, flip-flops and fashion shoes.
• They are turning into a lifestyle brand.

Will Crocs have a long life? Only if they stay hot and captivate the market – not an easy thing to do!
Just in case you wonder – do I own Crocs? No, never in my life! I wholeheartedly agree with Amanda Platell in her hilarious article in the Daily Mail.

Is Aquafina heading for a watery grave?

Bottled water consumption is increasing both in the US and in Europe.
Whenever there is a growing market, there is aggressive marketing.
Clever marketing campaigns have created consumer perceptions that bottled waters are purer or healthier than tap water.
What is inside the water bottle often remains a mystery to the consumer - not in the least due to lack of a defined standard for bottle labeling.
It gives water producers creative freedom in their product positioning.

Take Aquafina, the top selling water in the US. Due to clever branding, it is perceived as generating from a distant spring in a glen or mountain. However, this PepsiCo Inc. product is pws: from a public water source. In plain language - tap water.
A US watchdog group called “corporate accountability international” took action and forced Pepsi to reveal the source on the bottles.

Pepsi tried some crisis management.

North American spokeswoman Michelle Naughton declared:

“If this helps clarify the fact that the water originates from public sources, then it's a reasonable thing to do.”

In contrast, Pepsi’s competitor Coca-Cola (producer of Dasani) was a lot smarter marketing wise. It clearly states on the Dasani website that it comes from local water supplies, is then filtered using a process called reverse osmosis, followed by enhancing it with minerals.
Coca-Cola spokeswoman Diana Garza Ciarlante went on record and stated:

“we don’t believe that consumers are confused about the source of Dasani water. The label clearly states that it is purified water.”
Coca-Cola further leveraged the Aquafina story by informing Reuters that it will post online information about its quality control testing later this year.
Coca-Cola is ahead on its competition in the social conscience arena as well – it supports nearly 70 public water projects in 40 countries, in partnership with such groups as CARE and the World Wildlife Fund.

Is Aquafina heading for a watery grave? Not likely.
For starters, the demand for bottled water rose by nearly 10 percent in 2006.
The average annual consumption per person is around 26 gallons.
Industry observer Beverage Digest estimates annual sales in 2006 at $15 billion.

Dave Kolpak, a portfolio manager at Victory Capital Management, said the environmental objections will have little impact on the bottom line for either Pepsi or Coke, though he admitted it could slow the market's growth rate.
According to Dave Kolpak, portfolio manager of Victory Capital Management, people may talk about the issue, but will likely continue buying bottled water.
If Pepsi launches a clever marketing campaign, addressing the source issue and combining it with support for selected social causes; they will not even feel it in their financial results.

A twist on text marketing

Text marketing is not new.
According to Frost& Sullivan, text marketing will be the most important medium for advertising in the 21st century, outperforming print media and billboards.
Wireless Intelligence, a joint venture between the GSM Association industry group and the research firm Ovum, estimates the global number of cell phones at 2.5 billion; an increase of a half billion in just 12 months.
Of the cell phone users, over 95 million in the US alone are active text message users.
(Source: the Yankee Group).

For marketers, it’s a marketing dream: a low cost/high effective marketing & promotion tool. The potential customer can be reached anytime, anywhere.
The first area where text messaging has become successful is entertainment.
Using text messaging to vote off candidates on reality shows worldwide has become popular.
To give an example: the 2004 season of "American Idol" generated 13.5 million text messages.

As a marketing tool, text marketing is currently mainly used for participating in contests and sweepstakes.
McDonald's, Burger King, Procter & Gamble Co., General Motors Corp. and CBS Corp have all launched campaigns that require consumers to enter via text message.

Text marketing first took off in Europe and the Far East for two main reasons:
1) In most countries, cell users typically pay for messages sent, but not for those received.
2) There are less technical obstacles , since there are not that many carriers/mobile phoneplatforms.

One way of approaching potential customers is with an opt-in program.
The US grocery retailer Meijer (based in Grand Rapids, Michigan) launched an opt-in program in the Indianapolis market with mobile-marketing firm SmartReply Inc.
Using the fluctuating gasoline prices as a hook, consenting customers of its gas and convenience stations were sent text messages whenever Meijer was about to raise pump prices by 5 cents a gallon or more, giving them two to four hours to fill up at the lower price.
A great way to build customer loyalty!

A new twist on text marketing comes from New Zealand.
The company Hoo Haa believes that the key to successful text marketing is paying the customer to receive the ads.
This way, nor customers, nor the phone companies get annoyed.
It works is as follows.
Cellphone users registered with HooHaa by listing their name, age, location and buying interests.
These data go into a database that can be accessed by advertisers, who can send text messages.
Each contacted customer gets a 10 cent credit for each advertiser text message received.
The credits are accumulated into lots of $2.50 that are then reduced from their mobile accounts.
Since its launch in January 2007 close to 45,000 people have signed up for the service.The HooHaa database has a broad cross-section of consumers, with people aged 18-30 being the largest demographic group.
HooHaa is now moving into the Australian market.
CEO Brian Hawker is cautious and points out that it’s still early days.
"We've been surprised by the swift uptake and to be honest there is an element of our touching wood. But we think that we might have happened on a business model for marketers to reach mobile customers with tailored messages."
He could be spot on with his observation.
Cellphones are a great marketing tool, since it gives marketers direct one-to-one access to consumers.
In contrast, traditional direct marketing sends out 100,000 pamphlets or messages trying to reach 1,000 customers.
Rapp Collins Limb Walker direct marketing executive Robert Limb sees the appeal of text marketing in the permission to communicate that the customer has to give.
This could develop into close ties with between the customer and the advertiser.
The HooHaa business model is also based on the cooperation of the cellphone companies. Vodafone, Telecom and Pago are currently participating.

Will this concept become successful in other countries?
In my opinion, Europe and the Far East are more likely to adapt it than the US.Paying a customer to receive a message will not work in the US, where consumers must pay for incoming calls and text messages.
But one thing is for sure, it’s a great and creative way to use text marketing.

Make Way for the Widget Marketing Wave

One of the latest trends in marketing is widget marketing.
Widgets are small applications that provide online functionality and content, and are distributed through a potentially vast number of websites.

A website or webpage owner integrates the widget from a third party website or webpage by placing a small snippet of code.

The code brings active content from the third party website (links, advertisements, images) without the need for the website or webpage owner to update the content.
Due to their nature, they are now becoming a new marketing & advertising venue.

Widgets are uploaded onto all kinds of sites, including profile pages, forums and blogs.
Widgets are sometimes called blidgets (TypePad) or snippets (PageFlakes).
Yahoo offers more than 4,300 widgets. It entered the widget arena with the purchase of Pixoria, a producer of widgets.

Other companies, such as Netvibes, Snipperoo and YourMinis also offer widget galleries.

Apple and Microsoft have desktop tools in the form of constantly updating stock tickers, news feeds and airline schedules.

According to Google, “gadgets” are one its fastest-growing products.

But they don’t stop there. Apple’s latest version of its Mac OS X operating system let its users build widgets from scratch and share them with others, even if they’ve never written a line of code.

Microsoft’s Vista comes with 11 standard “gadgets, as well as the option to create more and upload them to Windows Live.

Current users of widget marketing include The New York Times, The Wall Street Journal and ESPN.

Flickr (a photo-sharing site) lets its members create a “badge” that they can post on their blogs and personal home pages to let friends know when they’ve uploaded new snapshots.

Fox Interactive Media (comprising all of Fox’s sites as well as MySpace, RottenTomatoes.com and AskMen.com) launched its own platform, called SpringWidgets.

What are the benefits of widgets?
1) They are low cost to develop.
2) They don’t require advance coding skills to create.
3) They are extremely easy to use.
4) They are pulled by the consumer, not pushed by the marketer.
5) They are a completely new marketing tool and a great addition to the current marketing mix.
6) They are low cost to distribute.
7) They have a much longer lifespan than traditional online ads.

A great example of widget marketing is Purina’s weather widget.
It lets pet owners know what the weather is outside when you wan to take the dog for a walk.

In the first two months, it was downloaded more than 15,000 times.
It means, that the Purina brand is now constantly in front of 15,000 pet owners, which gives maximum exposure for minimum costs.
The key success element of Purina’s widget is the fact that it is an extension of its brand while giving useful, up-to-date information.

Widget marketing is still in its infant stage. It is hard to tell if widget technology providers such as well-funded Clearspring and Freewebs will be able to become profitable.

Widgets do have some disadvantages. The state-of-the art interactive ones use a lot of computer resources, resulting in slow downloading.
People might download so many widgets, that their webpage becomes cluttered and therefore the marketing message of an individual widget is lost.
As a business model, it isn’t clear yet how profitable it will be as a promotion and branding tool. Advertisers are not yet comfortable with widgets, since tracking and analyzing its traffic is hard and their influence on consumer behavior not yet known.

Personally, I like this new addition to the marketing mix.
It’s exciting to see how it will develop.

For those of you who want to learn more about widget marketing, it’s worth while to attend WidgetCon 2007 taking place on 7/11 in NYC.

Let's widget away!

Marketing to Male Pigs – the Trojan Way

Trojan, the US condom producer, launched a marketing campaign “it’s time we evolve….interested?
In the campaign, men are portrayed as pigs– literally! (or may be hogs, it’s hard to tell).
The commercial shows bar filled with women and a bunch of bar-sitting pigs with cellphones. When one pig goes to the restroom and returns with a condom purchased at a vending machine, he is transformed into an attractive man.
The beautiful blond who had been indifferent now smiles at him.The end of the commercial carries the message: "Evolve: Use a condom every time."
Printed ads will appear in 11 magazines, including Cosmopolitan and Glamour, and on seven Web sites.

The campaign certainly created a nice little media storm.
For starters, Fox and CBS refused to air the commercials, while ABC, NBC, and nine cable networks (including (MTV, Comedy Central and Cartoon Network's Adult Swim) didn’t have a problem with it.
In its rejection letter to Trojan, Fox stated that the ad was rejected since “contractive advertising must stress health-related uses rather than the prevention of pregnancy."
CBS didn’t take such a moral high ground – it wrote to Trojan that the ad “wasn’t appropriate for the network, even with late-night only restrictions."

The brains behind the campaign is the Kaplan Thaler Group.
According to CEO Linda Kaplan Thaler, the humor in the ad is a way of “ getting consumers’ attention and opening up a serious conversation about sexually healthy lifestyles.
Some people may be initially surprised by the imagery, but we’re really using the pigs as a metaphor for selfish behavior to call to attention a very important subject.”

Trojan defended its campaign by stating:
“Evolve is a wake-up call to change attitudes about using condoms and, on a larger scale, the way we think and talk about sexual health in this country.
Other than abstinence, the best way people can prevent unintended pregnancy and sexually transmitted infection is to use a condom every time they have sex.
Unfortunately, that’s just not happening today—single sexually-active Americans between the ages of 18 and 54 use them only about 25 percent of the time. We urgently need to foster healthier attitudes about sexual health and condom use.”

Mens News Daily labeled the campaign “male-degrading”, adding that it’s not surprising in a country that “gives round-the-clock media coverage of any rich blonde who drives her car while drunk ... or emerges from it without panties”. (Paris, Britney, and Lindsey – are you listening?).
The website goes on with the cry for “killing the Trojan pig” by boycotting Trojan condoms and protesting against ABC, NBC, and the nine cable networks that air the commercial.

From a marketing point of view, the commercial is excellent.
It created a lot of buzz, far more than a less controversial ad would have done.
The commercials are also done in good taste, and are entertaining as well.
They were directed by Phil Joanou (State of Grace).
Special effects were done by the Stan Winston Studio (Jurassic Park), since our porcine males are animated – no real livestock was used.
Lots of people viewed the strong reaction of Fox and CBS with bewilderment.
As Andrea Kalfoglou pointed out on Agora Vox:
“the message is all about thinking about your own health and that of your partners everytime — a great public health message.”

Personally, I don’t understand the rejection of Fox and CBS.
Both networks are using sex in their marketing.
They place Viagra ads and broadcast shows such as Temptation Island.
Even if you don’t like the humor or are offended by men portrayed as pigs, there is no doubt that preventing airing it or calling for a boycott is not the way to go about it.
Ironically enough, Fox and CBS made the discussion of condom use far more accessible, since their ban gives people a nice opener.
In the mean time, Trojan got a lot of free publicity, which is good for their sales, their brandname and (hopefully) the health of sexually active adults.

In conclusion, we have stumbled on an interesting paradox here.
In the US, sex sells every product (from cars to cosmetics) – but not condoms…..

Having fun with EMV - emotional marketing value

During a market research for EMV migration of payment terminals (EMV stands for Europay, Mastercard, Visa; the smart debit cards), I hit on a completely different EMV.The Advanced Marketing Institute developed an Emotional Marketing Value (EMV) score.
It analyses the impact that a headline has on its readers.
It’s a tool for copywriters to check what the impact of a specific headline has on its readers.
Needless to say, I was intrigued.

The tool analyzes the words in the slogan or headline as follows:

• Intellectual impact
  Words which are especially effective when offering products and services that require reasoning or careful evaluation.
  According to AMI, intellectual impact words are best used to attune copy and sales messages aimed at people and businesses involved in the fields of education, law, medicine, research, politics, and similar fields.
  While not restricted to these groups, by giving presentations which are weighted with intellectual impact words, your clients and customers will be more positively influenced and you are more likely to attain a more favorable response.
  
• Empathetic impact
  Words which resonate in with empathetic impact often bring out profound and strong positive emotional reactions in people.
  According to AMI, empathetic impact words are best used to attune with people and businesses involved with care-giving.
  For example, nurses, doctors, and counselors all tend to respond easily and favorably to empathetic words.
  Women, and especially mothers, are very strong in their use of empathetic impact words in the language.
  While use of empathetic impact words does not have to be limited to these groups, we've found that by selecting m ore words with empathetic impact delivers desirable conversion responses from those types of market segments.
  
• Spiritual impact
  Words which have the strongest potential for influencing people by appealing at a very deep emotional level.
  According to AMI, spiritual impact words are best used with people and businesses desiring to make an appeal to some aspect of spirituality.
  This does not mean religion specifically, but any product or service that resonates with “spirituality” oriented markets is appropriate.
  The clergy, new age, health food and related markets all respond favorably to sales copy heavy with spiritual impact content.
  Women and children also respond strongly to words in the spiritual sphere.
  Marketing documents with strong spiritual impact content can make for the most powerful presentations in the marketplace but must be used with considerable skill.

Again according to AMI, the English language contains approximately 20% EMV words.Most professional copywriters' headlines will have 30%-40% EMV words in their headlines, while the most gifted copywriters will have 50%-75% EMV words.
A perfect score would be 100%.
According to AMI, this is rare unless your headline is less than five words.

I played around a bit with the tool and try to find a top score in each category.
My first challenge was to create a headline with a strong intellectual impact.
I decided to zoom in on Apple’s new iPhone, and came up with the headline:“iPhone best technology”.
It scored 66.67% in both intellectual and empathetic impact, which does make sense.
Orpak’s “fueling your business for success” has a 20% spiritual score.
A slogan I once coined for a high-tech company “your power to communicate” scores 50% on the spiritual scale.
Not bad, considering the company was active in broadband-over-powerline (BPL or PLC).
By repeating words, the score goes up.
“Profit, profit, profit!” scores a cool 100% on the empathy scale; "free, free, free!" also scores 100%, but strangely enough on the intellectual scale.
"Opportunity, opportunity, opportunity!" even scores 300% in all three categories.

I also had a look at strong and successful slogans to see how they scored.
The US Army’s famous “we want you” scores 100% in all three categories.
Philips's new slogan “sense and simplicity” only has a 33.3% intellectual score.
May be it is too close to Jane Austen’s novel title for its own good?
Unilever’s “feel good, look good and get more out of life” scores a measly 10% in the intellectual category, which I didn’t expect. I was sure it would do well in the empathetic and spiritual categories.
Bobcat’s “we are closer than you think” scores a nice 50% in all categories, despite it being slightly stalkerish.
Holmes Place (the global fitness center network) “One life. Live it well” doesn’t score at all. It is 0% neutral, although I expected it to score nicely in the spiritual category.
Nokia’s “connecting people” has as strong 50% score; but in the intellectual, not the emotional categories.

How reliable is this tool? I have my reservations, but it is definitely fun to use!

Has Jack in the Box gone too far?

CKE Restaurants Inc. (parent company of the Carl's Jr. and Hardee's fast food chains) sued Jack in the Box Inc. in federal court in Santa Ana, CA, accusing the San Diego-based chain of deceptive advertising relating to the business end of a cow.

The suit cites TV ads that tout Jack in the Box's sirloin burgers and lampoon those made with Angus beef, which happens to be what's in the Carl's Jr. Six Dollar Burger and the Hardee's Thickburger (and in premium burgers sold at McDonald's and Burger King).

In one ad, Jack, the mascot whose head looks like a ping pong ball, is asked to point to a cow's "angus area" on a diagram.

He says sheepishly: "I'd rather not."

In the other, employees laugh hysterically when a colleague talks about rivals' "Angus burgers."

The suit, which claims that Jack's sirloin burgers are made from "frozen sirloin butt meat," seeks unspecified damages and asks that Jack in the Box run "corrective advertising."

There are two elements at play here.

One is the legal side, and a jury will decided if CKE has a legitimate case.

It all depends how much damage CKE endured – and the burden of proof is theirs.

Several legal experts on Fox News discussed the legal merit.An ad that is clearly intended to be funny, gives the advertiser normally more protection.

The main issue in this case is, if the ad crossed the line.

The panel members on Fox News were divided.

Time and jury members will tell us what will prevail: free speech or offensive and harmful content.

The other element is the marketing one.

Using humor as a PR tool has been used for decades, if not centuries.

The tricky part is to define how far to go– and how effective it will work for a product or company.

Not many people will have a problem with the ad campaign of Ameriquest.

But humor can also be used to make the competition look foolish.

This is dangerous: not only can it backfire, but it can also lead to lawsuits, as the Angus Case proves.

In this case, it also gives misinformation about the product, implying that the source is not from prime beef.

"While Defendant may find humorous the aural and phonetic similarities between the words `Angus' and `anus,' " the suit says, the link is made to create "the erroneous notion that all cuts of Angus beef are derived from the anus of beef cattle.

If they want to have a war, we will take the gloves off," Andy Puzder CKE's CEO.

The irony is that both CKE (and the advertising agency that made the ads) got heaps of free publicity.

The agency, Secret Weapon Marketing of Santa Monica, CA will from now on be associated with the ads.

This could backlash - potential customers might be turned off by the crude humor.

The statement of their Chief Creative Officer Dick Sittig in Adweek magazine doesn’t help as well – he pointed out that the humor was "no more crude than a middle-school joke about the planets - one planet in particular."

Once the dust settles, it will be interesting to watch the legal and marketing fallout……

PR - we always have Paris (Hilton)

On May 11th, Paris Hilton was convicted to serve a 45-day prison sentence for violating the terms of her probation in an alcohol-related reckless driving case.
In court, she argued that she doesn’t read her mail, and just signs what people tell her to sign.
Her publicist Elliot Mintz testified in court that he gave her wrong advise about the status of her suspended driver’s license.
Paris promptly fired him but rehired him on Monday.

What is needed is sound crisis management.
Paris hasn’t quite grasped that yet, judging by her reaction after the court session.
She stated:
"I feel that I was treated unfairly and that the sentence is both cruel and unwarranted and I don't deserve this," and promptly went off with her mother to shop.
She used her blog on MySpace to promote a petition to prevent her from going to jail.She wrote on her blog:
"My friend Joshua started this petition, please help and sihn (the PH version of "sign") it. i LOVE YOU ALL!!!!!"
The petition reads:
"Paris Whitney Hilton is an American celebrity and socialite.
She is an heiress to a share of the Hilton Hotel fortune, as well as to the real estate fortune of her father Richard Hilton.
She provides hope for young people all over the U.S. and the world.
She provides beauty and excitement to (most of) our otherwise mundane lives."
It contunues with:
"We, the American public who support Paris, are shocked, dismayed and appalled by how Paris has been the person to be used as an example that Drunk Driving is wrong...
This petition is to ask Governor Arnold Schwarzenegger to pardon Paris Hilton for her mistake. Please allow her to her return to her career and life."
How will this impact Hilton in the future?According to veteran publicist David Brokaw, she can only benefit.
Longtime publicist Michael Levine agrees.
He is convinced that it will actually increase her star appeal, since it’s seen as another very compelling plot line in the Paris Hilton soap opera.
Serving jail time harmed some stars but didn’t impact the careers of others.
Martha Stewart started a TV show after she served time; Robert Downey Jr. landed a recurring TV role that enabled him to be back on the big screen.
Bobby Brown and Heidi Fleiss on the other hand didn’t fare so well after prison time.Hilton is playing a dangerous game by banking on her star appeal and her attitude that rules don't apply to her.It will be interesting to see how her sponsors and charities (Operation Smile, City of Hope, Los Angeles Junior League) will react in the coming months.Especially her sponsor Spyker has a problem – Paris was supposed to drive a Spyker C8 during the Bullrun race from 11-18 May.
And what about her promotion deal for Rich Prosecco, a canned sparkling wine?
I am not sure how the rehired Mintz is going to handle it, but I would suggest that Hilton starts apologizing, followed by volunteering in a project dealing with (the families of) DUI victims.
If she is considering penning a novel on her experience behind Swedish curtains, I strongly advise to stay away from that one.
She might see the inside of the courtroom again – this time by violating the "Son of Sam" law.
Paris filed an appeal against her sentence – it will be interesting to see how she and her team will handle her PR leading up to event.

Writing an annual report - no pain, no gain

It's annual report writing time again - a daunting task for many of us.

If planned and handled properly, it's a fun task to do.
Before starting to write an annual report, there are several questions that must be answered.

On which stock exchange is the company listed?
Each stock exchange has its own rules.
The NASDAQ has more stringent requirements than the AIM (London Stock Exchange).Stock exchanges are on the merger & takeover warpath, which will influence the requirements of the absorbed stock exchange.

Who is responsible for what?
In general, it’s the CFO that coordinates the writing of the annual report, not in the least since the majority of its contents consist of financials.
In some companies, this task is outsourced or is given to corporate communications to handle.

An annual report is a team effort:

• The CFO is responsible for the financials (based on the accountant reports);
• The chairman and CEO are responsible for the business overview;
• The CEO is responsible for description of products, markets and operations;
• The lawyer and nomad (nominated advisor)/broker are responsible for the overall content and final check that the report complies with the stock exchange rules and regulations;
• Corporate Communications is responsible for production.

What is the goal of the annual report?
Does the company produce it because it’s mandatory or does the company also want to use it as a marketing tool?
Is the main audience investors and the financial community or also prospects, potential partners and the public in general?
Does the annual report serve as a "crisis management" tool, dealing with bad news/bad results?

What is the timeline?
Producing an annual report requires a strict time plan.
All stock exchanges have a strict due date.
The required filing dates vary by country.
Most U.S. and European companies have a year-end filing date of December 31, and their Annual Reports tend to be filed between April 1 and June 30.
Japanese companies tend to file their report during the month of July, and Australian companies file starting September 15th.
Working backwards, closing files and printing takes about 2 weeks.
A healthy internal deadline is therefore at least one month before the due date.
It’s finalizing the text part that is time consuming, since the different executives have to sign off on their part.
From experience, it will take about 3 months to get all the text written and approved.

How should the annual report look?
The annual report should reflect the company.
For industrial companies, it should look serious and reflect their business.
A good example is the annual report of MAN, a leading European motor vehicle, engine and mechanical engineering group with annual sales of around €13 billion.
A company active in the telecom field can be funkier.
An example is Adamind, a provider of software that enables mobile multimedia content and converged communications services.
Depending on the budget and industry, companies can opt for having the financial pages in black and white and only the text pages (with graphs and illustrations) in color.

What should be inside the annual report?
The average annual report has several sections, some of them mandatory (depending on the stock exchange), others customary.

General part

• Highlights – it gives a snapshot of the financial situation of the past year(s)
• Directors, Secretary, and Advisors
• Chairman’s statement – it covers changing developments, goals achieved/missed, actions taken and industry conditions
• CEO’s statement – it covers the financials, deals, milestones
• Marketing part- covers products, markets. (not mandatory)
• Corporate Governance Statement – it covers the broad, committees, internal control, going concern, relations with shareholders
• Directors’ report – included biographies
• US analysts like to see a stock price overview, consisting of stock symbol, high/low history and price/dividend trends (not mandatory)

Financial part

• Independent Auditor’s Report/ CPA Opinion Letter – consists of a one-page letter from the external accountant/CPA to the shareholders
• Consolidated income statements
• Consolidated balance sheets
• Statement of changes in equity
• Consolidated statements of cash flows
• Notes to the consolidated financial statements
• Appendices – consisting of list of group companies, brands, patents etc. (not mandatory)
  Shareholder information – consists of the contact details

Final Steps
Once the annual report is ready it must be sent out to the stock exchange (to meet the deadline) and shareholders.
It must also be published in pdf form on the corporate website.
Printed copies should be available for any interested party to receive upon request.

It's finished and you can relax -until the next annual report!

The Don Imus Marketing Mix-Up

Apart from Knut, the Berlin polar bear cub, the whole world has been mesmerized by Don Imus’ spectacular fall from grace.
For those of you who missed it: Don Imus was the CBS Radio talk-show host of “Imus in the Morning”.

He was once named one of the 25 Most Influential People in America by Time magazine and a member of the National Broadcasters Hall of Fame.
His trademark was a combination of discussions about politics and culture, mixed with crude and vulgar humor.

In short, he was one of the first “shock jocks”. Insulting people was part of his show.

Even his corporate sponsors were not exempt.

During an interview with former General Electric CEO Jack Welch and his wife-unit Suzy Wetlaufer about their book “Winning”, Imus referred to Suzy as "been around more times than a fan belt."

Why did his guests put up with it?

Simple – to quote Jack Welch: "we have a book to sell and Imus is great for selling books."

Tim Russert, James Carville, Chris Dodd, John Kerry and John McCain – they all used "Imus in the Morning” to promote their books or ideas.

The Imus show was a marketing dream; supported by the crème de la crème of Corporate America. The top 10 advertisers combined spent nearly $3-million (GM spent $691,700; Sprint Nextel $363,000).

In short, shock jocks like Imus are irresistible since they attract so many loyal viewers and listeners. Corporate sponsors generate optimal ROI on their ad dollars.
Therefore, ex-heroine addict and former alcoholic 66-year-old Imus was what his employers and sponsors loved best – a money making machine.

But once a shock jockey moves from what the public sees as shockingly funny to indecent/unacceptable, the story ends.
Imus’ remarks on the looks of the Rutgers women's basketball team brought about his downfall. Ironically enough, this middle-aged Caucasian macho borrowed words from the less-than-half-his-age hip-hop moguls.
His racial insult created a public stir. Outraged listeners and celebrities started an international debate on all major news channels.
But that was not what brought down Imus. His fate was determined by the show’s sponsors (American Express Co., General Motors Corp., Procter & Gamble Co., Staples Inc.) pulling their advertising from the show.

Don Imus created a lot of inconvenience for his ex-sponsors.

The undesired publicity blocked a highly-profitable advertising channel, which leaves them with the challenge where to advertise to reach such a wide audience.
From a marketing standpoint, we have to admire the Imus Marketing Model.
His marketing mix consisted of:

• Generating millions of ad revenue for his employer CBS radio.
• Providing employer MSNBC with three hours of cheap programming.
• Providing celebrities with a platform to tout their books and ideas.
• Providing politicians with free airtime to push their agenda.
• fundraising for his charities.
• Promoting his wife’s green causes.
• Promoting his own merchandise (cookbooks, foods, cleaning products)

It looks now that all of the above suffered, including his wife Deirdre Imus, who saw her book tour cancelled by Simon & Schuster (the publisher of her book "Green This!") .
But will this spell the end of Imus?
Not likely – satellite radio (Sirius or XM) might offer him a sweet deal, especially since his apology was accepted by the Rutgers’ team.
On the pecuniary side of things, Imus could be entitled to compensation CBS Radio.
He only recently closed a new five-year, $ 50 million contract.
And although he didn’t have a contract with cable network MSNBC, there was a licensing deal between MSNBC with CBS.

Personally, I wouldn’t be surprised if he already started penning his autobiography “from fame to shame” or something similar – and if anybody knows how to market it, it’s Imus himself!

Checkers Rapcat promotion - the cat's meow?

The fast food chain Checkers uses a blinged-out feline who wears a jersey and raps in its commercials.
According to Richard Turer, senior vice president of marketing for Checkers, the Rapcat commercials were an overnight success.
"We received dozens of letters from our guests requesting Rapcat merchandise.Our new Rapcat Web site, cups and carry out bags are all in response to Rapcat's popularity and are intended only as a creative extension of our television campaign."
So far, so good.

But with its latest promotion gag, Checkers might have taken it too far.
Checkers designed special burger bags that look like Rapcat’s jersey, complete with a 3-step process how to turn the bag into a “garment” for your own cat.
On the side of the paper bag, the instructions read as follows:

1. Cut out the holes


2. Put YOUR cat in the bag


3. Submit the best pics/vids of your cat keepin' it real…

Checkers cat owning consumers were only too happy to oblige.
The video of a Persian cat being extremely uncomfortable in his bag jersey became a YouTube hit.
But not everybody was amused; especially not animal services such as Hillsborough Animal Control, stating that participants could be charged with felony animal cruelty.As a result, the topic was discussed by Fox and other networks, making Rapcat an international phenomenon.

What is the logic behind the promotion?
According to Checkers management the rap cat bag promo is not intended to hurt animals.
As Checkers spokeswoman Kim Francis puts it:
"Of course we care about the animals. It's an extension of the rap cat promotion. The intent of the bag … is to be an extension of the TV commercial.”
Needless to say, Checkers was smart enough to have a disclaimer on their hamburger bags, stating: "Not all cats will be down with wearing this bag. Do not harm or endanger any cat."

The main question is: how effective is a promotion like this?
According to Checkers, they received dozens of letters from customers requesting Rapcat merchandise.
It’s hard to tell if this specific promotion really increased sales – especially since it’s part of the whole Rapcat PR campaign.

One thing is for sure – Checkers became a household name in countries where they have no presence…….

Cause Marketing – the Diesel way

Cause Marketing has become popular.
It’s aimed at consumers that want to “do something good” with their purchase.
Needless to say, it should not infringe on their lifestyle.
Cause marketing campaigns peddle products while contributing to a worthy cause.

An example is the Red Motorazr cellphone of Sprint.
Motorola and Sprint contribute part of the revenues of each phone purchased to Bono’s Project (RED) to fight AIDS and other diseases in Africa.
Apple quickly followed with its red iPod Nano, retailing at $199 in the US. From each sale, Apple donates $10 to the Global Fund to fight AIDS in Africa.
Fashion brands are especially good at cause marketing.

Way back in 1990s, Italian fashion label Benetton launched its "Benetton Clothing Redistribution Project".
It was a clothes drive, regardless of maker, that benefited charitable organizations like the Red Cross and Gifts in Kind America.

For the last decade, cause marketing has gone mainstream.
Consumers are used to shop and save the world at the same time.
Companies are selling products and a clean conscience. Wherever you turn, it’s there.
But is comes to a point that it’s not effective anymore.
The pink ribbons of the breast cancer cause are all over the place, triggering a backlash (or "pinklash"). In such cases, both product and cause suffer.

So what are the key success factors of effective cause marketing?

• Define your marketing goals
  What do you want to establish as a company: reaching potential customers, increasing sales, brand recognition, PR?
  To reach their target audience for their next-generation Xbox and Samsung HDTV, Microsoft and Samsung Electronics launched a nationwide (USA) cause-marketing program entitled "Samsung's Hope For Education."
  The program will deliver more than $2 million in much needed technology and software products, to elementary, middle and high schools across America through an on-line essay contest.
  
• Make it part of your overall marketing strategy
  A good example is Starwood Hotels & Resorts Worldwide Inc.
  They launched a three year, global partnership with Special Olympics, in which Starwood Hotels will be the exclusive hotel sponsor of Special Olympics and the 2007 Special Olympics World Summer Games in Shanghai, China. In addition, Starwood will donate $50 dollars to Special Olympics for every Westin Heavenly Bed, Sheraton Sweet Sleeper Bed and Four Points by Sheraton Four Comfort bed sold through Starwood retail channels, until June 30, 2007.
  
• Define who your target audience is, and which causes appeal to them
  The company Clorox markets its products to the global adult population.
  They cleverly chose a cause appealing to this broad target audience. They will donate a small percentage of the retail purchase price of its bleach products to the Red Cross.
  Barclay's Taking Care of Christmas 2000 campaign benefited four charities chosen by Barclays' customers as the most popular causes.


• Choose a cause that fits your business
  A perfect example is Radio Taxis, a carbon-neutral, London-based taxi company, boasting more than 2,500 cars.
  It measures the carbon pollutants its 2,500 cars emit, and then invests proportionally in air-cleansing projects, from forestry to renewable energy.
  
• Define the timeline- how long do you want the cause campaign to run?
  Target Corp. operated a temporary, “pop-up” Target store, located on New York’s Times Square for 30 days. All profits made during this period were marked for breast cancer research.


• Make the relationship between company and cause clear to the public
  Vodafone communicated the following about its relationship with the National Autistic Society.
  “As communication lies at the heart of everything that Vodafone does, it made sense to partner with a cause that is closely related to communication. As the leading provider of mobile communications, Vodafone has a unique opportunity to employ its strengths, size and marketing power to: help the NAS improve the lives of people with autism; bring the issues to a wider audience; increase the capacity and accessibility of NAS services.”


• Be aggressive in your corporate communications and public relations
  Companies like Ben & Jerry's and Avon are good examples.
  
• Be creative – stand out in the cause marketing crowd
  The best example of creative cause marketing is the Italian fashion label Diesel.
  To promote their apparel, Diesel gives a positive spin on global warming.
  Its ads show Manhattan buildings and Mount Rushmore’s presidential faces half-submerged in water from melted glaciers; Venice and Paris are tropical and the Great Wall is covered in desert sands. Against these surreal backgrounds, Diesel's fashionable and immaculately dressed models live glamorous lives, having camel rides, relaxing on a yacht or applying suntan lotion to their partner’s toned back.
  To fight global warming, (potential) customers are invited to visit the Diesel.com website to buy are encouraged to by Al Gore’s movie “An Inconvenient Truth” on DVD.
  The creativity of Diesel is two-fold.
  First of all, its campaign is wonderfully tongue-in-cheek funny and gets the global warming issue across with humor.
  Secondly, Diesel doesn’t pretend to be a crusader – as its creative director Wilbert Das puts it: "We are a fashion brand. We want to sell product. We don't do anything more or less."
  Diesel’s cause marketing will definitely support its main cause – making profit!

Tween marketing – a dream or nightmare?

Tweens are (mainly) girls in the age group six to twelve.
They want to look older and hotter, like their idols Lindsay Lohan and Nicole Richie.
Where did this market niche come from?
As with the teenage concept in the 20th century; smart marketers identified the gap in the marketplace between the girl who is still a child under the age of about nine, and a real teenager of 13 or 14 who has reached puberty. These girls are getting older younger – hence a profitable new market niche was born.

The tween customer group has some unique characteristics.

• Tweens have their own budget, but most of their items are bought for them by parents and relatives.
• Their taste flips between those of a child and a young adult.
• The highest goal is feeling accepted by a peer group.
• They are more logical in their thinking about right/wrong and what is in/out of style than previous generations.
• Their favorite media to stay in tune are chat rooms and television commercials.

What are the market drivers?

• Image building by TV channels such as MTV .
• Globalization of brands, just look at the global success of Bratz.
• Spending power – the tweens have money and love to spend it.
• Peer pressure – no group is so susceptible to social pressure of their fellow tweens .
• Urge to grow up fast and to be an independent individual.

The Bratz dolls are the ultimate tween success story.
Created in 2001 by the US manufacturer MGA Entertainment, global sales reached 125 million dolls accounting for $US2 billion.
Archrival Mattel (the producer of Barbie) struck back with its line of My Scene Barbie dolls, that includes “totally blinged out and super fabulous fashionable” My Bling Bling dolls. Mattel also hooked up with cosmetic brand MAC.

Cosmetics and clothes designers quickly followed in the footsteps of the doll makers.
The Italian designer Anna Molinari showed her tween collection in Florence, choosing 6-year old Anna Ermakova (Boris Becker’s little girl) as the star model.
Tween fashion is nothing to sneeze at: padded bras for eight- to ten-year-olds and My Little Pony bandeau bras for two- to three-year-olds are bestsellers.

The marketing channels used to attract and keep these young customers are Internet and subscription TV channels.
Advertising in kits’ magazines is less popular due to declining circulation.

The best way to reach this consumer group:

• Target both the tweens and their (grand) parents - shopping is a family event, where the adults like to spend money on their tweens.
• Use chat rooms to keep abreast of tween consumer behavior.
• Use TV channels for promotion and product placement.
• Use models and spokespersons in the same (tween) age group.
• Recognize and respect the unique characteristics of the tweens.

The biggest challenge for companies is to build brand loyalty with the tween consumers.
The “get them early” part might be manageable, but what about “keeping them for life”?
It will be interesting to see how tween consumer behavior will change overtime.
Since tweens are “consumers in training”( and can therefore still be deceived), it’s the job of marketers to stay ethical. It will pay off in the long run.
The biggest mistake is to underestimate them. They are savvy and want to make decisions about the things that impact their lives.
It's wise to keep in mind: once burnt by a brand, they will not forget, let alone forgive – for the next seven or so decades!

Reality shows - a marketer’s dream of product placements

Any movie or TV program you watch nowadays has product placement.
Some are subtle, some are blatant.
Why is it such a winning concept?

According Nielsen Media Research, it’s a wonderful tool for brand recognition.
When combined with a commercial, brand recognition can go up by 20%.
The reason is clear. The alternative is advertising during the commercial breaks.
Problem: a reported 90% of people that record the show skip or fast forward the commercials. When watching live, only 16% doesn’t do something else for the duration of the commercial break.
The beauty of product placement is that there is no escape, since it’s an integrated part of the show.
Therefore product placement is a great way to invest your advertising dollars.
Especially reality shows are a marketer’s dream – since there is not much of a script to follow, it gives the producers lots of freedom when and how to integrate the product in the show.

There is even a special term for it: “in-program product placement”.
The uncrowned king in this arena Mark Burnett, the creator executive producer of "The Apprentice" and executive producer for "Rock Star: Supernova" two name two.
"American Idol" did wonders for Coca-Cola; the highly recognizable red-and-white paper cups with logo have their own permanent place at the judges’ table.

Product placement is not limited to the English language reality shows.
In the Telemundo show “Protagonistas de Novela 2”, in which 14 aspiring actors living together in a television studio, compete for a role on a telenovella.
Sponsors include Miller Lite, Ford, Colgate Simply White, Truth and Terra.
Product placement for Miller Lite includes a cooler filled with the beer, logo placement on glasses, refrigerator magnets and the light above a pool table, and signage in the house.

But it doesn’t stop there.
Reality show producers are now allowing companies to have highly visible product placements in turn for covering the production costs.
Just look at NBC's summer reality show “The Restaurant”
The chef drives a Mitsubishi; any guest ordering a beer has one choice (Coors) and the only payment accepted is the American Express credit card.
Brands are becoming part of the reality show as an essential element of the story line.
Procter & Gamble is the producer of Herbal Essences.
In the WB reality show "What I Like About You" two characters competed for acting work in a new Herbal Essences ad.
The actual ad was then aired during the commercial break shortly after that scene.

It was only logical that the next step in this saga is sponsors creating their own reality show.
The Ford Motor Company is planning a reality show as part of its “Bold Moves” overall marketing plan.
The concept is a contest for aspiring car designers to design the next hot Ford vehicle.
The winning design would be built by Ford and shown at an auto show.
The aim is to get young drivers to change their Honda or Toyota for a hot Ford.
The investment funny enough, came from former reality show contestants.

One thing is for sure, the real reality shows are the sponsors!
And let's face it - the sponsor's products sometimes have more personality than the contestants....