Archive for November, 2008
Kellogg Bolsters Digital ROI as Online Push Continues
Published: November 13, 2008
CHICAGO (AdAge.com) — Kellogg Co. has hired Pure Visibility, an internet marketing firm out of Ann Arbor, Mich., to apply Google Analytics to its websites. The package-food company has emphasized that digital will be a bigger piece of its advertising strategy in 2009.
The size of the account wasn’t immediately available.
Cutting back on broadcast
If for the marketer 2008 was the year of increased ad spending, Kellogg has said that 2009 will be the year of ROI. The company continually raised spending by double digits in 2008, but that’s going to slow in 2009. Instead, CEO David MacKay has said Kellogg will be slashing its broadcast budget and diverting the money online, where it’s found greater returns.
“Pure Visibility extends the reach of Kellogg brands’ online presence and helps to align our marketing efforts with return on investment,” Paul Iagnocco, director of E-business at Kellogg, said in a statement. “The detailed reporting provided by Pure Visibility, combined with its strategic approach to online advertising and search-engine optimization, is a comprehensive and smart way for Kellogg Company to leverage the web to attract and retain new consumers.”
Seeking efficiency
In September, Kellogg chief marketer Mark Baynes said digital ROI for a Special K program had exceeded returns on broadcast by a “factor of well over two,” and that Kellogg, which spends more than $1 billion on advertising alone, would reduce commercial filming in 2009, and focus on ways of driving efficiency.
“To complete this complex, significant project, Pure Visibility will work with the Kellogg Co. to create comprehensive strategic reporting across multiple websites to deliver a complete view of e-business efforts,” said Linda Girard, co-founder of Pure Visibility. “Ultimately, Pure Visibility’s work with Kellogg Co. will help their brand managers and advertising agencies leverage efficiencies related to analysis and reporting.”
Add comment November 14, 2008
IDEO CEO Tim Brown Talks Ideas, and the Organizations that Stifle Them
IDEO CEO Tim Brown Talks Ideas, and the Organizations that Stifle Them
At IDEO’s core DNA is innovation. IDEO is a designer of products, services, and experiences with projects ranging from Apple’s first mass-market computer mouse to aspects of Prada’s store in New York City to the patient-care delivery model at SSM DePaul Health Center, in St. Louis, Missouri.
Tim Brown, the CEO of IDEO sat down with the folks at the McKinsey Quarterly for an interview discussing how organizations can oftern stifle new ideas before they proliferate. But, he says, executives can change that pattern by immersing themselves in innovation. How? “It’s often the role of senior leadership to defend new ideas until they’re actually out in the marketplace and able to stand up for themselves,” he says.
Here are three excerpts from the interview:
Excerpt 1).
The biggest barrier (to innovation) is needing to know the answer before you get started. This often manifests itself as a desire to have proof that your idea is worthwhile before you actually start the project: “show me the business proof that this is going to be a good idea.” You can understand this, of course, because it’s an attempt to mitigate risk. But wanting to know whether you’ve got the right idea—or the assumption that you’ve got to have a business case—before beginning to explore something kills a lot of innovation.
Excerpt 2).
Even though companies want everyone to be thinking about innovation all the time, the reality is that everybody’s got other roles to play. So innovation is not a continuous activity; it’s a project-based activity. If you don’t have a process for choosing projects, starting projects, doing projects, and ending projects, you will never get very good at innovation. Projects need some form—you call them something; you run them in a certain way; you fund them in a certain way. That sounds simple, but, actually, a good process for getting projects going and done is often not obvious to companies.
Excerpt 3).
You really notice a difference in organizations where the senior leadership immerses itself in innovation. I don’t mean that it runs projects. I don’t mean that it does the innovation itself. But it immerses itself by, for example, playing an active role in reviewing the innovation that’s going on at various levels in the organization in order to give people permission to take risks. Or by playing a really active role in deciding who gets to do innovation, making sure project leaders pick people who are naturally comfortable taking risks.
http://daveibsen.typepad.com/5_blogs_before_lunch/2008/11/ideo-ceo-tim-brown-talks-ideas-and-the-organizations-that-stifle-them.html
1 comment November 14, 2008
MGM to Post Full Films on YouTube
SAN FRANCISCO — YouTube is by far the world’s biggest stage for online video. But in some ways Hulu is stealing the show.
Films from MGM, like “The Magnificent Seven” will be posted on YouTube under a new agreement.
With critical plaudits and advertising dollars flowing to Hulu, the popular online hub for television shows and feature films, YouTube finds itself in the unanticipated position of playing catch-up.
On Monday, YouTube will move forward a little, announcing an agreement to show some full-length television shows and films from MGM, the financially troubled 84-year-old film studio.
Metro-Goldwyn-Mayer Studios will kick off the partnership by posting episodes of its decade-old “American Gladiators” program to YouTube, along with full-length action films like “Bulletproof Monk” and “The Magnificent Seven” and clips from popular movies like “Legally Blonde.” These will be free to watch, with ads running alongside the video.
The initial lineup may not be all that compelling, but for YouTube, which is owned by Google, the relationship with MGM is a crucial step in an essential reinvention. YouTube had its debut in 2005 and quickly became famous for the democratic sharing of bite-size video clips. Users love the site — 81 million people visited in September alone, according to Nielsen.
But Hollywood executives have complained over the way clips of their movies and shows pop up on the site without their permission. And advertisers have found that user-created videos of pet pratfalls and oddball skits are largely incompatible with commercials for cars and other products. Revenue at YouTube has disappointed Google investors since the company bought the start-up in 2006.
Now YouTube is trying harder to make friends with Hollywood — and emulate the appeal of Hulu, a joint venture of NBC and Fox. Along with its MGM relationship, YouTube has recently forged ties with the independent studio Lionsgate and with CBS, which this month started posting to YouTube full-length episodes of older shows like “Star Trek” and “Beverly Hills 90210.”
“We believe in comprehensiveness, and we want to have deals with everybody,” said Jordan Hoffner, the director of content partnerships for YouTube. “We want to be able to give users the most content possible.”
In the last few months, YouTube has swept its virtual floors and painted its stage as it prepares to offer more professional videos. This month, it introduced a “theater view” button that expands the viewing screen and darkens the rest of the Web page for optimum viewing — a feature similar to one introduced by Hulu.
YouTube has also developed a system called VideoID. It allows media companies to spot unauthorized clips of their material on the site, and then either remove the clips or leave them up and sell ads on them. As part of its deal, MGM will begin scouring YouTube for studio clips, from properties like the James Bond and Rocky franchises, and pulling many of them from the site.
But MGM will also work with YouTube to choose which clips can remain online, supported by advertising.
“YouTube is essentially saying to media companies, ‘We are sorry for our past copyright stance; we weren’t thinking big enough. Let’s see how we can make some money together,’ ” said James L. McQuivey, an analyst at Forrester Research.
Mr. McQuivey thinks the strategy can work. “They have hundreds of millions of views,” he said, “and it will be very hard for studios to pass that up.”
For now, the studios appear to be dipping their toes in cautiously. Many Hollywood executives complain that YouTube’s online presentation is too cluttered.
They also say they are more comfortable with the cleaner, better organized Hulu, which does not have amateur-created videos and which sprang from their own ranks. Hulu had 6.3 million visitors in September, according to Nielsen, and has more than 100 sponsors trying out creative forms of advertising, like interactive games.
Jim Packer, MGM’s co-president, said his studio was starting slowly on YouTube, with action films intended to promote the studio’s video-on-demand channel, Impact, on Comcast. He said other MGM material would move to YouTube soon, including films like “Moonstruck” that appeal to women. But he did not see putting a significant part of the studio’s catalog on the site anytime soon.
“We will have some long-form videos up on YouTube, but I don’t think that’s the platform to have 30 or 40 movies up at once,” Mr. Packer said. “I feel much more comfortable doing that on a site like Hulu.”
Lionsgate has also tiptoed onto YouTube, putting up clips from certain films and TV shows and directing viewers to sites where they can buy the DVD or pay for a full-length download.
“We didn’t have huge expectations for this year,” Curt Marvis, Lionsgate’s president of digital media, said of the studio’s presence on YouTube. “We are still discussing, as I think YouTube is with every studio, how we can further take advantage of this audience.”
Mr. Hoffner, the YouTube executive, hinted that more digital deals were in the pipeline. Potential candidates, according to Hollywood and high-tech executives, include Time Warner and Sony, a part owner of MGM.
A Sony spokeswoman said the studio was already putting abridged versions of older shows, called minisodes, on YouTube, and that no larger deal was imminent — at least in the next few weeks. Time Warner is conducting some technical trials of YouTube’s clip identification system.
The ice between YouTube and Hollywood clearly has yet to thaw. During its first few years, YouTube stood behind the Digital Millennium Copyright Act and told media companies it was not legally required to remove unauthorized material from its site unless specifically asked to do so by the owner.
The stance provoked a $1 billion lawsuit from Viacom, which is still pending, and animosity from media executives who say they still believe YouTube could be more aggressive in taking down pirated clips.
“A lot of studios have taken the position that they won’t embrace YouTube until everything is perfect and the copyright protection is ironclad,” Mr. Marvis of Lionsgate said.
But YouTube may face an even greater challenge in the effort to transform itself. Ken August, vice chairman of Deloitte & Touche and the head of its media and entertainment practice, said the largest studios were in a state of inertia — willing to experiment with online distribution but mostly aiming to protect their traditional way of doing business.
They are also waiting to see what will happen with Viacom’s lawsuit, Mr. August said.
“There needs to be a major realignment inside some of these companies for profound digital deals to happen,” he said.
This article has been revised to reflect the following correction:
Add comment November 11, 2008
Ordering Pizza Hut From Your Facebook Page? It’s on the Way
Fast-Food Chains Experiment With Takeout/Delivery Services Via Social Networks and IPhone Applications
Published: November 10, 2008
CHICAGO (AdAge.com) — A number of fast-food chains are reaching across the digital divide to get young consumers to order via Facebook or their iPhones. And they’re building valuable databases of their customers in the process.
Pizza Hut, which recently crossed the $1 billion benchmark in online sales, is launching a Facebook application that allows fans to place orders without leaving their profiles. Although online ordering isn’t new — the chain has offered it in some form since 2001 — Bob Kraut, VP-marketing communications at Pizza Hut, said the bulk of that $1 billion in sales has come in the past 18 months. The chain is also launching text-ordering capabilities and e-gift cards, which can be purchased, exchanged and redeemed online.
Pizza Hut’s not alone: A number of the nation’s biggest fast-food chains are beginning to embrace text and iPhone ordering capabilities, at least as tests. Already for the three months ending in August, food marketers sent almost 1.4 million text-message ads, up 37% from the same period last year, according to ComScore’s M:Metrics data. Consumers seem to want the offers: of all the ad categories using SMS marketing, restaurants had the highest response rates, with 15.5% of consumers responding to the ads.
Subway spokesman Les Winograd said some of the chain’s franchisees have begun to offer ordering via text and iPhone apps. The chain has an unusually open policy that lets individual franchisees experiment with their businesses.
“Some of that is stuff that they’re doing on their own, but they share information,” Mr. Winograd said. “We’re constantly encouraging franchisees to think out of the box and try something new. You never know, it might take off.” (He said adding turkey to the menu was a franchisee experiment in the chain’s early days.)
Lessons learned
McDonald’s experimented with text-message ordering in Chicago last summer, with signs encouraging consumers to text in their late-night orders. Spokeswoman Danya Proud said there were “some very good learnings from this campaign about how to execute future viral campaigns.”
Chipotle is developing an iPhone-ordering application to complement its existing web- and fax-ordering platforms. The chain also lets consumers pay online, place group orders and save ordering information for return visits.
While shifting consumer behavior may be behind the move toward mobile ordering, it’s also lucrative. According to Mr. Kraut, online buyers spend more. “It’s a little more upscale demographic, and a lot of people use credit,” he said.
To attract those customers, Pizza Hut is launching a promotion with eMusic.com that gives customers 75 free downloads in exchange for buying a pizza online. The chain is hoping to boost awareness of its online ordering, up its cool factor and build its customer database.
Younger consumers
Mr. Kraut said the chain uses its database for targeted, sometimes monthly promotions, as well as market research. He declined to disclose the size of the database or how much it’s grown this year.
“We’re seeing that our customers are getting younger and younger,” said Mr. Kraut, adding that the eMusic promotion is a way to bring “people in from other source and offering them something extra.” Pizza Hut has done a variety of online promotions this year, including a partnership with Rockstar Games and its Midnight Club Los Angeles driving game.
Package-food companies aren’t sitting on the sidelines either. Kraft chief marketer Mary Beth West said the company has created an iPhone application for consumers to download recipes and shopping lists in the grocery store.
“Even in the current economy, people don’t have any more time than they had before,” Ms. West said. “They’re trying to get dinner on the table, and this is going to help them do that.”
Add comment November 11, 2008
