Last week to much fanfare Amazon.com sold Lady Gaga’s new album for $.99 as a promotion for their new cloud music player. They sold 440,000 copies of the total 1,108,000 for the week, which was the best selling album since 2005. 662,000 copies of the total were sold via digital download giving Amazon a 66% share of the digital market for this particular album. Gaga’s record label confirmed that Amazon paid the full $9 wholesale cost of the album netting them a loss of $8 per sale (not factoring costs of delivering the album, etc.). That equates to a cost of $3.5 million for the promotion or a little more than a :30 spot during the Super Bowl. Was it worth it? Well, lets say it netted Amazon 200,000 new customers along with all of the earned media buzz, $3.5 million is still a lot of money but their timing seems to be perfect since Apple announced that they will be launching iCloud next week so anything Amazon can do to gain first mover status in the category will be needed to go head to head with what promises to be a cloud solution that is tightly integrated with the huge Apple ecosystem.
They don’t have any clients aside from their parent company but Google Creative Labs is coming out with the most engaging TV ads around these days. They connect emotionally to deliver a memorable message.
This ad for Chrome debuted on Saturday Night Live in conjunction with her appearance with Justin Timberlake. I don’t know if made more people switch from IE, Firefox or Safari but it connected the Google brands with a large, desirable audience….and I bet they didn’t pay Lady Gaga to appear as it is essentially a 1:30 commercial for her new album.
When my wife saw this spot for a Dad who tracks the childhood of his infant daughter through a suite of Google products made my wife cry. I was happy it wasn’t for diamonds or a car because I probably would have been shelling out for whatever they were selling.
The next spot “It Gets Better” probably demonstrates the power of the web to connect people (using Google products) and change a life more than all of the articles on TechCrunch ever could. I saw a few people post on Facebook how emotional the ad made them, an important timely message that delivers in 1:30.
Emotional advertising used to be the sole domain of Apple in computers (do people still use the word computer?) and electronics but Google is making more creative ads. I think a lot of people in the advertising industry wondered what they were up to when they put together their all star team for their in-house agency. I guess they wanted to make cool ads….imagine that.
Amazing data from Google regarding mobile device usage and their place in the consumer decision process. We live in the future. Highlights from the article:
- Search engine websites are the most visited websites with 77% of smartphone users citing this, followed by social networking, retail and video sharing websites
- Nine out of ten smartphone searches results in an action (purchasing, visiting a business, etc.)
- 24% recommended a brand or product to others as a result of a smartphone search
- 95% of smartphone users have looked for local information
- 88% of these users take action within a day, indicating these are immediate information needs
- 77% have contacted a business, with 61% calling and 59% visiting the local business
- 79% of smartphone consumers use their phones to help with shopping, from comparing prices, finding more product info to locating a retailer
- 74% of smartphone shoppers make a purchase, whether online, in-store, or on their phones
- 70% use their smartphones while in the store, reflecting varied purchase paths that often begin online or on their phones and brings consumers to the store
- 71% search on their phones because of an ad exposure, whether from traditional media (68%) to online ads (18%) to mobile ads (27%)
- 82% notice mobile ads, especially mobile display ads and a third notice mobile search ads
- Half of those who see a mobile ad take action, with 35% visiting a website and 49% making a purchase
It was interesting to see that Apple rejected the Sony e-reader app for the App Store last week. It is still unclear exactly why the app was rejected aside from Apple thinking Sony makes junk, but if it was rejected because they didn’t pass along a 30% cut to Apple for the purchase it is a bit scary. I bought the iPad the day it was available last year and downloaded a book from the iBook…cool, more or less same as the Kindle from a UX but turned the pages with a swipe as opposed to clicking. However, when the Kindle app became an option I downloaded all of my reading there. Why? The selection was about ten times the size of the Apple store, plus I could read it on any device. I don’t think Apple will make the rules that you must make purchases through their platform retroactive or make it impossible to read Kindle books on your iPad because they would receive so much negative backlash. This is scary for app developers though. Can you imagine Apple demanding a 30% of all purchases through an app? What about those serving ads, content providers, etc. if iAd became a mandatory platform? That is a massive portion of any profits. I think such a large chunk that developers would shift away from iOS to android. This becomes even more of an issue for everyone who feeds off of the Apple ecosystem when start to look at projections for the growth of mobile business from David Shapiro, Google’s director of small business marketing – “Two-thirds of all purchases and half of transactions will occur on mobile devices by 2015” click here for the whole article .
I finally got around to seeing the Social Network this weekend and it sparked me to start thinking about how social networks are going to change the way we buy everything from cars to diapers. Facebook in particular has been adopted at an unprecedented rate globally and everyone knows that word of mouth is the most powerful tool in moving someone from consideration to purchase. How does word of mouth evolve as social media becomes part (and probably the most influential) of the purchase process? Here are some questions that I want to answer before the map the future of social commerce can be drawn:
- What lines will be drawn from a privacy perspective? You obviously don’t want all of your personal purchases shared, what is fair game and what is not, who decides?
- What role will mobile devices play in this? This is where the real innovation is occurring with bar code readers, NFC chips embedded in the next iPhone (speculation), geo-location applications (foursquare, WHERE, SVNGR, etc.) that can tailor offers and experiences to your specific locations, and traditional credit card processing companies being challenged by new players like square this all has the potential to disrupt the way people shop in a big way.
- What platforms or tools that do not currently exist and are yet to be born that will become the glue that binds all of these processes together? Will it be Facebook? As social networks and the web in general evolve into something that is an important piece of every bit of our life and not something done from a desktop or laptop screen what is next? How will the rapid deployment of 4G wireless networks that promise wi-fi speed everywhere change the way people shop in-store, on the go and at home?
It is always an interesting thing to debate – is a :30 Super Bowl spot worth the money? I think it depends on how “mass” your brand audience is (that is why beer and cars dominate the game) and of course how good your creative and integration across social platforms is, but it can be a good and sometimes great investment. Here are some things you must consider that are unique about the Super Bowl as an event:
- Over half of the US population tuned into the game at some point yesterday – 162.9 M – where else do you get that sort of mass audience this day in age? Nowhere.
- The average audience was 111M so lets say you paid $3M for your spot for the sake of simplicity that delivers a CPM of about $27. That is 3-4 times what you normally pay for broadcast TV but well worth it and at a smaller premium over what the NFL gets throughout the season being a live sports event. The “Force” spot for VW had 15M views on YouTube in two days, prior to even airing during the game.
- Nobody DVRs the Super Bowl and it is only time people are excited about watching commercials.
- The social aspect of the ads now can deliver an additional 50M or more impressions from places like YouTube, the massive TV news and print coverage, etc. everyone is an armchair ad critic following the game.
So how do you maximize your spend if you have an extra $3M lying around?
- Put together a spot that is actually creative and smart. What was so compelling about the VW ad above? It wasn’t the features and benefits of the Passatt or it hugging tight corners on a mountain road. It was embedded on YouTube a couple of days before the game, people passed it around because of a great emotional connection that it triggered, not sophomoric humor which has no long tail.
- Make sure your spot is for something new and is easy to find using social media and search after it airs. Use this as your opportunity to tell the second chapter in the story. All great advertising campaigns build on a message in a linear way over time.
Everything is pointing to mobile payments as the next frontier that Apple will conquer with the introduction of the next iPhone. They have been awarded several patents for mobile commerce and rumors from suppliers support the idea that they will adding a NFC chip to the next iPhone. Here are the reasons I think this will be a massive game changer for mobile and social commerce:
- Apple already has 160 million credit cards on file for iTunes, they will set up a system somewhat like PayPal where transactions are directly debited for your checking account to pass over the 2-5% fee charged by the credit card providers.
- Retailers hate the current credit card providers, ask any small business or restaurant what they hate most and this will be at the top of the list. If Apple delivers a simple, transparent, user friendly system – watch out American Express and MasterCard, hello iBank.
- NFC is not new technology, it has been used in Japan, South Korea and throughout Europe for a long time, the payments are often collected by the phone service providers (you better believe Apple will cut them out of this). It is used for subway and bus passes over here, etc. Apple wil come to the table with a simple system that will empower even Mom to link up her iPhone to her bank account.
- I think the possibilites this business will spawn are seemingly endless. They could push to replace all of the frequent shopper cards stacked in your wallet or purse with a simple loyalty system across all of your purchases. This would allow them to set up something similar to dunnhumby.
There will a huge amount of competion for this space from the current card providers, upstarts like Jack Dorsey’s Square , Facebook and their Points currency, and Google. How will it all shake out is anyone’s guess. I would probably place my early bet on Apple for two reasons – the iPhone is wildly popular and the device most ready to make it a good experience and Apple’s ability to take existing technology and bundle it into a seamless user friendly experience.
I have been busy with my twin girls who are almost 9 months so blogging here has been sporadic. I do post odds and ends at robsheard.com if you are interested. I had to write about a new show, last night I caught the premiere episode of Steven Rinella’s show Wild Within. It is produced by a company called Zero Point Zero which produces my favorite show No Reservations with Anothony Bourdain. It is unlike anything else on TV, it is a bit of an adventure show, a hunting show, outdoor lifestyle and cooking show all in one. This is isn’t a hunting show on ESPN 2 at 6AM on a Sunday morning with rednecks and souped up pick up trucks lure deer on a game reserve. My brother and father are avid outdoorsmen and I grew up hunting so I enjoy watching Steve and his family live out a lifestyle I wish I could. People love to say “eat local” and know where there is food is coming from which is of course noble but no where near hunting and foraging for all of your meals. I would be most interested in hearing the opinions of this show from people who are anti-hunting. If you have never tried eating wild game you are missing out on some of the most flavorful and robust flavors that cannot be duplicated in domestically sourced or farmed meat.
The men’s streamlined Arc’Teryx Theta SL combines 2 great waterproof, breathable Gore-Tex® textiles. This PacLite® jacket features Gore-Tex Pro Shell reinforcements in critical areas.
Great four season jacket
out of 5
Fit: Feels true to size
Sleeve Length: Feels true to length
Chest Size: Feels true to size
Pros: Durable, Lightweight
Best Uses: Wet Weather, Hiking and Camping, Casual Wear
Describe Yourself: Casual/ Recreational
Was this a gift?: No
This is a great four season jacket. Constructed of very light PacLite but durable enough to take a beating with the Gore-Tex Pro Shell reinforcements. It is useful for just about any activity where weather is windy, rainy or snowy. I wear mine four seasons out of the year. In winter I layer it with an Arc’teryx Apache or Covert fleece and there is plenty of room. I am 5’11 and 185 lbs. and the large fits great.
There is an interesting article in the Atlantic about the unsustainable spending by our Federal government. They make the point that current levels of spending which I think everyone can agree with. The decision then has to be made as to where spending should be cut. Most people argue that Social Security is the first thing that needs to be reined in. I would argue that it should be the last.
Why? Because those are dollars that go directly back into the economy the quickest creating job growth in fields like health care and businesses like shuffle board courts, Buick dealerships and delis in Florida. It is not like middle class senior citizens put their SS check into a high yield stock portfolio. Where should the spending cuts come from? Ending tax cuts for the wealthiest 3-5% of the population and spending on propping up foreign governments and aid packages for irreparable foreign countries. The US economy desperately needs jobs whether they be manufacturing, technology, etc. one way to do it is to get more money into the system. Cutting Social Security will have the opposite impact.