Advertising v3.0 by Chris Schaumann: Companies

Unloading Avenue A?

Wed, 27 Aug 2008 06:25:19 GMT

Almost six months after the companies started talking, WPP and Microsoft have reopened talks that could have the software company unloading Avenue A/Razorfish.
Here's how a deal could unfold: Microsoft unloads the agency in exchange for a WPP package that includes 24/7's Open AdStream publisher ad-serving tool plus cash.

Today a digital shop, because of its growth prospects, can command a multiple of eight to 10 times that figure -- making Avenue A/Razorfish's estimated value about $800 million.
The market cap of WPP rival Interpublic Group of Cos. ($4.4 billion), and WPP's own market cap is $10.7 billion.

Dell takes Social Media seriously

Wed, 11 Jun 2008 13:29:11 GMT

Dell's Hearing Test

Your home page is Google," said Jarvis [Dell CMO]. "It becomes really important the right things are appearing on it."

Since then, the company has embarked on a concerted effort to turn around its image online, reaching out to consumers in blogs and soliciting advice on how Dell can improve. The end goal for Jarvis is not touchy-feely: He wants to spend less, not more, money on advertising. One way is to cut down on the need for advertising altogether by having satisfied customers spread positive word of mouth.
"The Germans and British no longer believe anything you say in an ad," he said. That makes advertising pretty pointless. You have to think of how you're going to reach people in different ways."

One key way to achieve this is to move as many customer interactions -- Dell estimates it has over 2 billion per year -- online and away from expensive distribution like catalogs.

The numbers weren't pretty either: The company's own 2006 analysis of its "share of voice" online found 48 percent of chatter about Dell was negative. Its renewed focus on customer communications coincided with the rise of the social Web, as more people gathered online to share thoughts, rate products and contribute to a community Web experience. [now 21%]

Over the last two years, Dell has worked day by day rebuilding its ties to its customers. Its problems could not be solved by an ad campaign with a cheery message, Jarvis said, but a reorientation of its culture to solving customer problems and listening to their complaints and advice.

The searing experience of the battery recall and "Dell Hell" helped the company, believes Pete Blackshaw, evp, digital strategic services, Nielsen Online and author of the forthcoming Satisfied Customers Tell Three Friends, Angry Customers Tell 3,000.

"Social media is a grand experiment," Dell's Jarvis said. "It has a future. I don't see it crashing down. Social interaction, communities and participation are absolutely the fabric of the Web."

GM Roars Forward Into Digital Ad Channels

Sat, 22 Mar 2008 07:59:09 GMT

Advertising Age - Digital [Login required]

The country's third-largest advertiser is getting ready to shift fully half of its $3 billion budget into digital and one-to-one marketing within the next three years.
The goal is to go well beyond the banner -- GM spent $197 million in online ads last year, according to TNS Media Intelligence -- to encompass gaming, search, mobile and a broad array of interactive applications, according to several executives close to the automaker. In the last few years GM has shifted several hundred million dollars from TV and print to digital and one-to-one, and that trend will accelerate, said the executives.

Online product research
But a pattern is developing among automakers whereby TV and print are deployed for launches in order to raise awareness, while more of the continuous branding and sales activity shifts online -- as automakers and many of their dealers accept that the purchase process increasingly begins, and sometimes even effectively ends, on the internet.

At a time when a slowing economy is taking a toll on advertising, the prospect of billions of dollars fleeing TV, print, newspaper, radio and outdoor is unwelcome, to say the least.

1. Includes broadcast, cable syndication 2. includes national and local Source: TNS Media Intelligence

Microsoft: 50% on digital by 2010

Tue, 19 Feb 2008 04:47:47 GMT

Now it's personal - Brand Republic News Microsoft is taking a leaf out of Amazon's marketing book, with a focus on customer experience and participation. Alicia Buller talks to global marcoms director, Bill Capodanno.

Mich Matthews, senior vice-president, marketing, at Microsoft claimed earlier this year that 50 per cent of the company's £500m adspend would go on digital by 2010. But, although it was a grand assertion, it was also a true assertion, according to Capodanno. "Microsoft is already allocating 30 per cent of its marketing budget to digital and, when Mich said 50 per cent, it was not some arbitrary delineation. It's based on the patterns of media consumers use. They are making dramatic shifts into the digital space," he says.

The firm is trialling ten large-scale global social-media products, testing the viability of new media such as blogs, 'wikis' and messaging as customer-engagement tools.

"We think about perception-based activity and behavioural-based activity - the world is at a stage when the two things are intertwined. You can't compartmentalise attitudes and behaviour - they are inextricably linked. Our focus is on understanding the behaviour of our consumers. Once we have shifted an attitude, then we look for deeper engagement, usually through behaviour."

"...we're seeing the importance of customers evangelising your products. You have to create situations where those relationships breed loyalty that leads to them evangelising your product."

"There isn't this separation between business users and consumers anymore. People are individuals..."

While Microsoft is currently focused on digital, its long-term aim is that its marketing should be channel-neutral.

"The customers are now in control, whereas, in the past, they were passive. Any marketer that fails to realise this will become ..." he chooses the next word carefully, "irrelevant."