Yearly Archives: 2008

Chicago, JWT and CPG


What’s the idea with Chicago? 

Is it losing its luster as an advertising community? JWT, one of the city’s cornerstone agencies, is down to 50 people. At its highpoint JWT employed upwards of 800 in Chicago; some of which were the highest priced, highest profile creative people in the business. Chicago has always been a stronghold of packaged goods advertising, thanks to its proximity to the giant food and beverage manufacturers, which makes me wonder if consumer packaged goods (CPG) marketers are less committed to traditional consumer advertising – the recession aside.  Of the thirteen companies identified by Ad Age as Super Bowl XLIII advertisers only Coke, Pepsico, Anheuser Busch and Pedigree are present. The rest are car, tire, and Internet plays. Hmmm. Peace!

Paper, paper.


I know, I know the newspaper business is in the crapper. The pundits on The News Hour last night were ruing the demise of the newspaper. But here’s what I see happening to Samuel Zell and his Tribune properties. I see a smart business wo/man coming along an scarfing up the Chicago Tribune and Los Angeles Times at a major discount. News is new and these two papers are among the best in the business at collecting and reporting it. The new owner(s) will k now that it’s the paper that’s the drain, not the news, and will extend and build up the online side of these properties. 

In the not-too-distant future all newspapers will primarily be read online and the paper papers will each cost about $8.00 an issue. As the world flattens further (Is a global language that far away?), news will become more important, not less.  We will just be consuming it in different ways. Whoever buys the LA Times and Chicago Trib knows this…and is quite the visionary. Let’s see steps up. Any guesses? Bill Gates?

Save the people, save the world.


Co-mingling with the few holiday ads in today’s New York Times are all these long copy ads by America’s corporate giants running on about how they are saving the people and the world. To wit. IBM is saving the people’s food supply through smart data collection and analysis. JP Morgan Chase’s “way forward” is by saving businesses and institutions through lines of credit. Exxon Mobil is saving the environment through conservative energy practices (yeah right). Kaiser Permanente, by reducing paper, is saving patient lives. (That one actually makes sense.) Some guy in Florida is saving us nutritionally by selling Honey Bell oranges. And Shell is saving the planet by getting us the “difficult oil.” Whew, I feel much better. Heroes all? 

Detroit and Wall Street Both Make Products


What’s the idea with all these bailouts?

A lot has been written about the differences between the federal bailout of Detroit and that of the financial industry.  The automakers are being made to grovel and are under crazy scrutiny. The financial Machers (MAKH-ahs, for the non-Yiddish. It means big shots), not so much.  

Here’s the thing: both these industries made stuff the American people bought. Cars are made of steel, plastic and electronics.  Mortgages are made of paper. Both are high-end products — the two biggest investments consumers make, actually – and both were aggressively marketed. Since people kept buying them, companies kept selling them.

As to the predatory targeting of low-income families with toxic mortgages that didn’t require repayment for a year or two, that was beyond reasonable. But no one made people buy the freakin’ SUV de jour? That one’s on us.

Detroit’s problem was poor judgment mixed with a dram of stupidity.  The automakers just never looked through the windshield to the future. The problem with Wall Street and Charlotte was avarice.  They used creative product development, but it was predatory.  Both industries were greedy, but only one was downright mean-spirited. Peace!


Dell Now Selling Cheese Too.


I received a Dell Christmas circular today, all 28 pages of it. The cover displayed a nice red Dell laptop, a mini-tower, printer, two green Christmas tree balls, a Canon camera and a Palm Treo (it was too small to actually tell). The mini-tower was priced at  $429, the laptop $649.

The inside folio displayed other inexpensive, low-margin products and the second spread was hawking a Microsoft Zune MP3 player, Tomtom GPS, Palm Treo and Canon EOS Rebel.  Not until you got to page 12 did you see a higher margin product and even that was under $1,000.

Sorry to keep dumping on Dell, a company I truly root for, but they need to focus on computers. (I think they finally got out of the TV business.) Dell needs to stop printing 28-page brochures pushing the “cheese” end of the product line and OOP (other people’s products) and start focusing on making the next iPod of the personal computer industry. Then market. Peace!



Detroit Bail-out Challenge – No Winner.


A few weeks ago I issued a challenge that would reward one of Detroit’s Big 3 auto makers with all $25 billion in requested bailout funds. There was to be only one winner and that winner had to demonstrate it “got it” by presenting a plan for profitability. The challenge required each company show vision and commitment to smart design, resulting in vast improvements to natural resource consumption and reduced emissions.   

What Detroit came back with was a bigger hat (to put money in), lots of cuts, lots of sales (buh-bye Hummer, Saturn and Saab,) agreements to renegotiate with the UAW, plant closings and a lot of other below-the-line, cost-cutting initiatives. Oh yeah, they all said – probably in the last paragraph of the leave-behind – they “would accelerate their timetables to make more fuel efficient vehicles.” RUKiddingME?

Had GM come back with a plan in which they decided to keep scaled back versions of Cadillac, Saturn and GMC only, had Chrysler committed $8B to research and development of electric cars and charging devices, had Ford suggested buying Tata Motors, we may have had a horserace or a winner.

What we got were cost-cutting solutions. Solutions to win the hearts of congress. No future-forward ideas. Nada. No winner!


Facebook Looking For Caaaaaash.


Facebook had a big announcement yesterday about Connect, a service that will make it easier for groups of Facebook friends to leave Facebook, go to other sites to "do stuff,” the result of which will be a revenue share of ad dollars back to Facebook.  For instance, Facebook friends will be able to visit Hulu, watch a program together and share comments on Wall-to-Wall and it will monetize back to Facebook. Freakin’ goofy.

But here’s what’s even goofier. Facebook, who capitalized to the tune of $235 million last year, is now actually looking for more money.  Can you imagine? They need the money so they can figure out how to actually make money. It’s an internet property people! It is machines, smart software and people to grow and manage them.  And by the way, the smarter the software, the less people needed. More money isn’t going to solve the monetization issue.

Here’s a new title for you: Chief Monetization Officer. Facebook needs one and but quick. 

Cell Phones and Geico’s Next Business.


Buying a cell phone is not easy.  It used to was (sic.) Not long ago they all pretty much did the same thing. You put one in your hand and liked the heft, the form, the look. There were Ericssons, Nokias and Motos. But now there are at least 10 hardware providers to choose from and so many models, shapes, sizes and features it makes your head spin. Even the kids can’t agree. They all have different phones. Where’s the Marlboro? The PBR? The Ed Hardy of phones?

And talk about feature creep? I can see taking pictures. That’s important, so long as you can zoom, which is a feature I can never seem to find. Change the resolution and the whiteness I can do, zoom I can’t.  Little videos are cool but I’m not likely to use them. I just want to upload my Reverend Al ringtone (from his 2004 convention speech,) text and be able to hear in a full duplex mode (still not available.)

Since no brand or manufacturer has really risen to the top and since no one model has captured the imagination of the public, the feature creep will continue, phones will get more expensive and the only winner will be Geico, who will be smart enough to come up with a consumer-friendly, cost-effective insurance plan for all the “losers.” I lost one to the washing machine recently. Peace!

PS. I’m buying the LG Chocolate 3 tonight.

CD sales vs. single songs.


What’s the idea with CD revenue? Atlantic Records digital sales just exceeded CD sales. Revenue is growing from ringtones, ringbacks, licensing from TV shows and satellite radio. Revenue from expensive-to-press and expensive-to-distribute CDs is plunging. But as I’ve said before, the real rub for artists and the real villain in the reduction of music revenue is single song sales. If Lil Wayne only has 5 songs on your iPod, rather than 3 albums worth, you are missing out on the total Lil Wayne experience.  Plus you are more likely to burn out.

Smart artists like Kid Rock want you to buy the whole album. He’s got lots of stories to tell. Lots of rhymes. A fan who listens to all of “Rock and Roll Jesus, not just “All Summer Long,” will become a more loyal fan of Kid Rock. A more committed fan. A more viral fan. A drunk-dialing fan. A ticket buying fan. S/he knows what the record execs will know in about 2 years. (Record execs are a little slow, if you haven’t noticed.) Single song sales are killing the business.  Peace!


HP. Beep-beep.



Hewlett-Packard’s purchase of EDS is beginning to make sense to me. The NY Times announced today that HP’s ProCurve corporate networking hardware unit is beginning to eat up some of Cisco System’s marketshare, albeit still with a long way to go (7% HP, 77% Cisco.)   It seems the EDS group may just act as a great sales conduit between its services customers and HP’s ProCurve networking gear. Services people, in order to be good, must really understand business and process and when they do it puts them in great position to recommend product. Accenture has made boat loads of money selling its own software recommended by its services people, why can’t HP can do the same?

Before Mark Hurd took over, HP was resting on laurels and ink cartridges. Its PC business was doing okay, but the company was quite sluggish. Carly Fiorina did not really understand the computer and peripherals business. HP just reported flat quarterly net income, but a revenue increase of 19%. In today’s economy? What does that tell you? It says “beep beep, company moving forward.”