The Power of Influence

'We Can't Keep Our Money In TV'

Media buyers told the NY Times last week that they were sticking with TV despite the strike and ratings declines. The standard rationale: There really aren't good alternatives to the tube for mass marketers.

Well, the Times didn't talk to MediaVest. The Publicis-owned media agency told Adage it is in talks to move $100 million out of TV .

"The bottom line is that the ratings erosion hasn't stopped," MediaVest president Donna Speciale said. "We are really looking to take a proactive approach and say, 'You know what? We can't keep our money in TV."

How true :-)

Why changing your marketing budgets is so hard ...

Start with a cage containing five monkeys. Inside the cage, hang a banana on a string and place a set of stairs under it. Before long, a monkey will go to the stairs and start to climb towards the banana. As soon as he touches the stairs, spray all of the other monkeys with ice cold water.

After a while, another monkey makes an attempt with the same result -- all the other monkeys are sprayed with ice cold water. Pretty soon, when another monkey tries to climb the stairs, the other monkeys will try to prevent it.

Now, put away the cold water. And after a week, remove one monkey from the cage and replace it with a new one. The new monkey sees the banana and wants to climb the stairs. To his surprise and horror, all of the other monkeys attack him. After another attempt and attack, he learns that if he tries to climb the stairs, he will be assaulted.

A week later remove another of the original five monkeys and replace it with a new one. The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment with enthusiasm! A week later, replace a third original monkey with a new one, then a fourth, then the fifth.
Every time the newest monkey takes to the stairs, he is attacked. Most of the monkeys that are beating him have no idea why they were not permitted to climb the stairs or why they are participating in the beating of the newest monkey.

After replacing all the original monkeys, none of the remaining monkeys have ever been sprayed with cold water. Nevertheless, no monkey ever again approaches the stairs to try for the banana. Why not? Because as far as they know that's the way it's always been done around here.

Take Out: Could this be the reason that many brands are still spending on TV and print when there is so much clear and trusted research that shows a) the audience is not there and b) it does not work???? 

Avoid Network Solutions at All COSTS at ALL TIMES

Please excuse a personal rant against a company with bad business practices

My story is too long and boring to explain in detail, here is the short version  – I had this domain www.thepowerofinfluence.com, my www.vocanic.com website hosted with them, and all my corporate email accounts with them too.

I was mildly unhappy for most of the 3 years, their customer support always entailed a long wait and being endlessly transferred around.

Then one day without warning I found my site down and all my email blocked.  After 1 hour of holding on the phone (from Singapore to the US) I got transferred to the 5th person who told me that one of my email accounts had sent more than 30,000 emails which broke their terms of service.

I asked which account, what the email was, and other details that would help me understand this – it seemed inconceivable to me. You try sending 100 emails from OutLook (which is what we all use), its pretty painful!  The person I was speaking to could not answer that – I would have to write in to ask for the details and it would take 5 – 10 working days to respond.

I asked to get my site up again and my email working – nope, I had to write a letter of apology, promising that I had taken measures to prevent it happening again .  And that too would take 5 - 10 working days to process!!!

My team took everything off Network Solutions inside a day and rerouted the DNS away from them

Today I strongly recommend people not to use them

Now I read this, (seems if you search for a site on Network Solutions site – they will lock the name so you cant go to another (lower cost) registrar to register it.

So now I recommend no one even goes to their site to search for domain.   The site I find much more helpful  is www.NameBoy.com

Having been a customer of NetowrkSolutions I find their business practices shameful and hope the market quickly boycotts them.

The Music Industry Wakes Up and smells the Internet

I sometimes wonder whether there is an all powerful PR guys somewhere orchestrating stuff … or maybe this all happens by happenstance. Get this…

Today in my inbox I read from Reuters “Album sales plunge in '07” seems like album sales are down 15% in one year, the steepest drop since 1993 when it was first tracked.

Read further and buried in the article is the fact that digital sales of music including single tracks was up 14% this year (19% last)

Great quote from Kenneth Kraus a music attorney who said the music industry wasted too much time and goodwill battling digital distribution of music, and "we've lost a whole generation of kids" who grew up downloading free music from the Web and cannot fathom paying for it

Next in my inbox fromBusiness Week - Sony BMG Plans to Drop DRM, seems the last major label will throw in the towel on digital rights management and prepare to fight Apple for valuable download revenues

The lifting of copyright protection represents a sea change for the recording industry, which for the better part of a decade has used DRM to guard against what it considers illegal distribution and duplication of songs purchased online. In abandoning DRM on à la carte song purchases, the labels could create a raft of new, less restrictive ways of selling music over the Internet, such as through social networks like Facebook and News Corp.'s (NWS) MySpace. Partnerships with retailers such as Amazon could also help the music industry take a swipe at Apple (AAPL), which has come to dominate the legal download market through a one-size-fits-all pricing scheme record labels find restrictive.

And to show that bad deeds NEVER get forgotton by customers and the press Business Week reminds us “The move by Sony BMG is especially noteworthy, given the company's checkered DRM past. In 2005, Sony BMG incited a consumer boycott and was the target of lawsuits after it embedded CDs with a form of DRM that was surreptitiously copied to and buried in users' PCs leaving the machines vulnerable to viruses”

My take out: FINALLY the labels have realized that the album is an outdated concept – customers don’t want to buy filler tracks – and that music has to be distributed DRM free. Why did it take them so long?

Bain says each recommendation worth $5.25 to Dell

Happy New Year to everyone! Its a new year with new promises. Speaking about promise, those clever folks at Bain & Company have been busy with yet more research on calculating the effectiveness of word of mouth using the Net Promoter Score (NPS). This time they've churned out some pretty interesting research for Dell published on the Ulimate Question site

The Bain team focused on the industry leader, Dell, and calculated the value of detractors and promoters for Dell’s consumer business. The results of this analysis are displayed in the figure below: while securities-analyst estimates indicate that the average consumer is worth $210 to Dell, in fact a detractor COSTS the company $57 while a promoter generates $328. The economics of word-of-mouth was the biggest source of difference between the average value of a customer (based on conventional accounting methods) and the true economic value of promoters and detractors.

Here’s a step-by-step calculation of the value of this positive word-of-mouth.

In the survey, 25% of new customers said the primary reason they chose Dell was referral. So, 1 million of Dell’s 4 million new customers in 2004 came from positive word-of-mouth.

• Since each new customer is worth an average of $210 each, those 1 million new customers were worth $210 million to the company.
• If 40 million positive comments generated $210 million in value, each positive comment was worth $5.25.
• Given that the average promoter reported making positive comments to about 8 people a year, the promoter’s positive word-of-mouth is worth $42 (8 × $5.25).

Each recommendation was worth $5.25 to Dell .. as calculated by Bain!

It is statements like this that makes the hairs on my arm rise!