Artists.MTV: Smart or Just More Confusion?

It feels a little bit like deja vu.

This month Viacom's MTV announced a "MySpace"-like initiative called Artists.MTV.  The basic idea is to provide music artists a centralized place to access MTV's 60 million+ monthly visitors.  Aritsts.MTV will allow musicians to "claim" their sites and upload music, videos, photos, and link their "pages" with social-media accounts and other online shopping carts. "Pages" will go public at MTV's Video Music Awards this fall.

We've seen this before.  MySpace's music initiative was a mildly successful attempt at the same "thing."  Digital downloads have driven the price of music down to very affordable levels for consumers.   Once there were only a few places for consumers to get their media.  Now the problem is that there are almost too many places to get your music, music videos, and self-promote.  Add the juggernaut of iTunes into the picture, which is estimated to have up to 70% of digital music sales market share, and one has to wonder if anyone can change consumer's buying and mind-share habits.  At first glance, Artist.MTV could just be adding to the current marketplace confusion outside of the iTunes ecosystem.  But if you take another look at it, it very well could be extremely smart.

One of the biggest pet peeves of many artists is that they don't get a large enough cut of music sales revenue.  Over the last decade, declining CD sales revenue, piracy and a paradigm shift to digital music sales have steadily lowered the revenue artists receive from their music. Lower concert-ticket sales have also lowered the income artists receive each year.  According to Shannon Connolly, VP of digital-music strategy at MTV Music Group, "We felt like the world needed a place that's comprehensive and thorough, and that allows artists to connect with fans at scale...The goal is to help artists get paid." Summarizing their efforts, Ms. Connolly commented that ..."the goal here is to give artists the opportunity to monetize what they do...artists can get heard, get promoted and get paid."

What?  They want the artists to get paid?

It may be a basic play off of greed, but quite frankly, it may be enough to make a difference.  The Artists.MTV initiative (which includes the  VH1 and CMT brands) will share sales revenue with artists and ANY ad revenue generated on the pages through an agreement with Topspin Media.  This also gives artists the ability to receive the majority of revenue from sales of music, tickets and merchandise.  An increased share of sales may be the "ticket" to show iTunes, and other record companies, some real competition.

Digital sales, the digital marketplace, self-selling and self distribution are all meant to increase the income of the actual creators and producers.  Artist.MTV may actually be more than lip-service.  It may actually be the real deal.  Only time, and MTV's 60 million monthly visitors, and a significant marketing campaign, will be what tells us if anything can crack the thick shell of the iTunes ecosystem and the traditional record companies distribution network.

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The Department Store Finally Evolves

Well maybe it already did, through Kohls.  But I digress...back on topic.

Yesterday JC Penney CEO Ron Johnson announced sweeping changes in an effort to refresh the brand, and the department store "way" of selling product. 

It's about time. 

During Mr. Johnson's tenure at Apple, his team, "always parked at the department stores...because there 'weren't any cars.'.  You know you have a problem when people are using your parking lots to visit other retail locations other than your own.  Mr. Johnson, while noting that JC Penney was in it's 110th year, said, "I believe the department store is the No. 1 opportunity in American retail. And this isn't something I decided last June when I took the job. This is something I decided 10, 15 years ago."

So what does this new opportunity look like? 

First, it starts with a dramatically more realistic product pricing structure.  Consumers rarely purchase products at full price.  In any economy, up or down, consumers are more willing to part with their dollars when products cost less, ie: when they are on sale.  Mr. Johnson, acknowledging this, is leading JC Penney to adopt a "fair and square" pricing model.  It's this simple: If a T-shirt that usually is priced at $14 but typically sold for closer to $6, will be priced at $7. This puts it right in line with what a consumer was actually paying for that shirt.  If it's a featured product, it will be priced at $6. Clearance time: $4. This change alone should help to drive sales.  Why?  It allows JC Penney to sell product at prices consumers are willing to pay, instead of constantly holding onto inventory, and hoping to clear it out every quarter. 

The second thing Mr. Johnson is doing is completely revamping JC Penney's promotional calendar and spending.  Currently, JC Penney's sales year has 590 promotional events.  Mr. Johnson wants to reduce that to 12.  The reason: noise.  When you are constantly promoting promotion after promotion, it creates "noise" for the consumer, and eventually it all blends together and the consumer doesn't know what to focus on.  As a retailer, you become less relevant and harder to keep track of. 

To illustrate his point, Mr. Johnson had presentation attendees walk down a hall covered with old ads and circulars, calling it the "Hall of Hell." Promotional spending will also change; instead of $2 million per promotion, JC Penney will now devote $80 million a month towards entire product line promotion.

This is so refreshing.  To finally see a department store (or any big-box retailer other than Walmart) understand that their pricing structure and promotional model is so out of touch with consumer buying habits is amazing.  For that brand to make realistic ... frankly common sense changes ... is fantastic.  I sincerely believe that, if successful, JC Penney will force their competitors to re-brand and re-price.

Consumers will be the beneficiaries of these changes.  Products will sell for lower, more realistic prices.  Sales will increase, and retailers may begin to see the growth that they have been hoping for. 

I hope JC Penney succeeds.

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Another Ad Network = More Fragmentation

On Wednesday Yahoo released it's "Living Ad", interactive video ad format for advertisers.  This new ad format works within an ad network, that is centered around Yahoo's Livestand publication app.  Livestand, along with it's ad network, enters an already saturated ad "market" occupied by the likes of Flipboard, Zite, AOL's Editions, and Pulse.  Yahoo is pushing advertisting packages to buyers, some of which are said to run upwards of $500,000.

According to Yahoo, Livestand features a magazine-style layout.  It will launch with some content from third-party publications.  Those publishers will share their ad revenue with Yahoo.  The details of these revenue sharing arrangements are not yet known. These publishers can also re-sell ad packages on the plarform.  I can only deduce that Yahoo get's a cut of that revenue as well. Diane McGarvey at Scientific American, which is offering some content on the Livestand, states Yahoo will keep about 70 percent of revenue on ads sold to appear inline with Scientific American content.
Living Ad, along with Livestand, is one of many initiatives to attempting to make Yahoo a relevant player in mobile advertising.  Mobile advertising is projected to net around $1 billion this year in the U.S. and up to $1.2 billion in 2012, according to eMarketer. Yahoo is positioning itself to receive as large a portion of this pie of revenue as possible.

The mobile ad space is already over-saturated.  Frankly, none of the ad formats and networks bring anything new to the table.  Nothing currently compells a consumer to do anything after viewing these ads compared with any other form of advertising medium.  We don't need another ad network.  We don't need another "method" to get an ad to a consumer.  What we need is a new type of ad, a new way to interact with a product, that might actually compel a consumer to buy.

Advertisers, and content networks, need to bring new ideas to the table.  The internet and mobile phone networks bring whole new possibilities to advertising via interactive ads.  An interactive ad would allow a consumer to configure products, explore them, walk around them, try a focused "demo" of it.  After they have played with it, or configured it to their hearts content, they could be connected with a vendor to purchase that product within a few clicks.  This gives the consumer a quick way to satisfy their emotional desire to buy the product.

However, most online ads don't do anything other than present a picture, an animation, a call to action phrase, and link to a normal website.  There's no point to showing a traditional ad online or on a smart phone if there's nothing new about it's experience.  None.

Yahoo's Living Ad is trying to do this.  However, most advertisers don't seem to know how to create an ad "experience" that really compels consumer interest.  We need to stop telling

If advertisting is going to survive, and make money, the "ad" as we know it needs to evolve along with the technology available to deliver it.  With the growing popularity of mobile devices that are connected to mobile data networks, there is a new opportunity to truly try something new.  Who is going to lead the way?

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Where's The Beef?

I was born in 1980.  I remember lots of things from my childhood.  I remember GI Joe, the Transformers, Mask, the Challenger disaster, Christmas at my grandmother's, and a basic, loud phrase coming from an elderly woman on television: "Where's the beef?"

In 1984, a spot entitled "Fluffy Bun" appeared featuring actress Clara Peller, asking the question, "Where's the beef" upon receiving a massive hamburger bun containing a paltry piece of "beef."  Wendy's used this iconic phrase to poke fun and embarrass competitors such as McDonald's and Burger King, bringing to light the tiny, sliver patties being put into fast food burgers at the time.

Fast forward over twenty years.  The phrase has become part of our American culture, but the origins, and the meaning, have slowly faded away.  Over time, with Wendy's leading the charge, the major fast food restaurants have been offering more items with more natural ingredients.   Now they are upping the ante again, releasing a new line of value hamburgers that aims to one-up category leaders based on quantity and quality of the beef in the sandwich.  In order to do this, Wendy's resurrected "Where's the beef?"  It's a spot-on approach.

In order to bridge the gap between a generation of consumers from the 1980's and the 21st century, Wendy's used today's current retro fashion trends, placing "Modern Family" actor Reid Ewing in a 1980's styled "Where's the beef sandwich" walking down the sidewalks of urban settings.  Along the way, people familiar with "Where's the beef?" give him the proverbial "thumbs up".  The main character doesn't understand the recognition he receives, until he comes up to a sign at a local Wendy's.  Then it all makes sense.  Cut to juicy shot of large hamburger, product sold.

Frankly I think this is brilliant.  We could have seen Clara again.  We could have seen the big bun, small patty.  Instead, what we see is a brilliantly simple connection between two generations.  There's no hard sell, not silly gimmick, just a recognition of pop culture history, and a delicious looking hamburger.

The most powerful messages are sometimes the simplest ones.

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Is Anyone Aware?

One of the items I mentioned last week was Brand Awareness.  What is Brand Awareness?  It is the measure of a consumer's knowledge of your very existence.  The "aggregate" level is the proportion of consumers that "know" your brand.  Why is this "level" even important?  It's important, because the creation of brand awareness is the PRIMARY goal of advertising, and it influences the behavior of the buyers of your product.  However, remember that all of your measurements of brand awareness are, at best, approximations.  They are not exact. The more measures used, the more complete your understanding of brand awareness will be.

Brand awareness is measured "simply" by showing a consumer the "brand and asking whether or not they knew of it beforehand.  Many textbooks have conceptualized brand awareness simply as the knowledge that the brand is a member of a particular product category, such as fast-food.  However, common practice says there is more than one recognition and recall measure, all of which test the brand name's association to a product category cue.

However, "knowledge" doesn't give us much data to do anything with.  So, we use three common metrics that can be measured:

• Brand Recall - Either the brand name or both the brand name and category name are presented to survey participants.
• Brand Recognition - The product category name is given to participants, and are then asked to recall as many brands as possible that are members of the category.
• Top of Mind Awareness - Brand Recognition, but more specifically only the first brand recalled is recorded (called "spontaneous brand recall" by some).

These measurements can be used for creating an understanding of Brand Equity.  Brand Equity is the positive effect of the brand on the difference between the prices that the consumer is willing to pay compared to the perceived value of the benefit received by your product.  The more value, the more a consumer will pay for your product.  Brand Equity is built by brand awareness activities such as advertising, PR, and promotion.  Simply put, the more Brand Equity, the more you might be able to charge for your product.  Higher prices can lead to higher profits.  You're in the business to make money right?

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Dropping Consumer Confidence Equals More Marketing

Today's news that the Index of Consumer Sentiment dropped to it's third worst level since measuring began in 1952 led many to predictions of doom and gloom.  Granted, an uncertain economy, high unemployment, and an emotionally influenced stock market is bound to make any consumer timid to let go of any of their hard earned dollars.  However, it's during times like these that companies should be spending an greater amount of their dollars on focused marketing.

Last week I commented on frequency.  Specifically that focused, consistent, disciplined marketing leads to effective frequency.  Frequency is even more important when consumers are spending less.  Why?  Even if a consumer isn't spending their dollars now, you want to be the one they give their dollars to when they do buy.  

Increase your marketing now.  Get the message out now.  Convince the consumer that your product and brand is the one they need when they do choose to spend their dollars.  Make sure you have the leading position in their brains now.  If you do, you will reap the rewards when consumers are more willing to spend money later, and you will be the one making announcements of increased sales and profits before anyone else.

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