Thursday, 31 January 2013

The Spiegelworld Empire – reimagining the world of circus

With the Sydney Festival celebrations taking over the city, numerous world-class acts steal audiences’ imagination and defy the world as we know. Reinventing the traditions of circus, cabaret, variety and burlesque for the 21st century audience, Spiegelworld has brought its new show, Empire, from New York to Sydney for this month’s festival. Following a sell-out in Broadway, the mind-altering show takes audiences through the underworld of kinky contortionists, rich impresarios and daredevils inside an authentic Belgian spiegeltent. The acts are played out almost on the laps of the audience as performers are squeezed on a 9-foot diameter stage adding to the intimate atmosphere nowhere to be found in large mainstream shows.

The Empire has been described as the early days Cirque du Soleil, when the shows had no storyline and were purely centered on emerging raw talent. Back in October, when the Cirque du Soleil was in town, we wrote a blog about the challenges in envisioning the Cirque du Soleil strategy for the next 10 years, a case study from our marketing strategy course. In the same way, I now invite you to envisage how a show like the Empire can grow without losing its grungy, cheeky and fresh appeal.

When looking into the future, niche arts companies face the challenge of potentially losing their “cool” in an attempt to attract larger audiences. This would in turn open space for new upcoming acts to fill the demand for underground and independent art performances. The Empire show is definitely not for kids and family. How much would they have to trade-off to capture that part of the market? Another alternative for growth would be to continue to focus on the same target audience and expand their range. Bringing new types of acts that cross the circus border seems like a more feasible option. In fact, by hesitating to use the circus designation and calling themselves a variety show, or simply “spiegelworld”, they seem to be heading in that direction.

This challenge is faced my many SMEs which have a niche audience and are strategising future growth. The danger in adapting their value proposition in order to appeal to a wider audience and grow is that they will lose their sustainable advantage. Do you stick to your niche audience and present them with new offerings, increasing your range? Do you look for similar niche audiences around the world? Do you modify your value proposition to appeal to more segments and have a more mainstream offer?

With all of these questions in mind, how can Spiegelworld successfully grown in the next 10 years?

Adriana Heinzen
Current student in the Master of Marketing program at the University of Sydney Business School

Tuesday, 29 January 2013

SuperBowl 2013: The Talent Show of Ads (interrupted by a game of football)

How often do advertisers get the opportunity to enter into an Ad Talent Show guaranteed to be viewed by more than 110 million viewers? Viewers however should be forewarned that the ads will be interrupted briefly by grown men in tights running around chasing a football.

SuperBowl 2013 is right around the corner for our North American ad lovers, (and also for football enthusiasts). Ad agencies across the US have been preparing for the ‘ad talent show’ for months. With 30 second advertising slots devouring up to $4 million of a company’s advertising budget, advertisers have 30 seconds to showcase their product, make it memorable and convince customers that clear benefits exists for their product. No pressure.

A few strategy savvy companies such as Coke have decided to make every one of their hard earned advertising dollars count by creating a social media buzz around their SuperBowl ad. Their campaign features a ‘pre-ad’ to be aired in the weeks leading up to the big game where by viewers can vote to influence how the Coke ad pans out on the big day. Viewers not only can vote for their preferred ending, but they can also vote to sabotage other people’s votes. This strategy adds to the level of competition and consumer engagement. The most voted ad ending will air right after the whistle is blown announcing the end of SuperBowl 2013. Another simple and memorable marketing strategy.

What marketing strategy has stood out for you in terms of SuperBowl ads?

Mina D’Souza
Current student in the Master of Marketing program at the University of Sydney Business School

Thursday, 24 January 2013

Lance Armstrong brand - the cost of winning at all costs

George Burns/Courtesy of Harpo Studios, Inc./AP Photo
After years of denial, Lance Armstrong has finally admitted to using performance-enhancing drugs to aid his record-breaking wins of the Tour de France. The champion cyclist, who became an international hero with his inspiring cancer survival story and raised many millions of dollars for cancer sufferers, is now fighting to save what is left of his personal brand.

Even though Armstrong gained millions from Tour de France prizes, his largest earnings came from his personal brand and his many product endorsements. The Armstrong brand value at the top of his cycling career was estimated to be in excess of $20 million a year, something very few brands in the world can claim according to Mark Serrano, CEO of ProActive Communications. Nike, Anheuser-Busch and bicycle manufacturer Trek, all of which had deals with the disgraced athlete, ended their associations with him after the results of the doping investigation came out and he was banned for life from taking part of Olympic sports.

Brand equity has many definitions and most of them point out to a reputation and good-will developed over time, which gets translated into higher sales and profits. After shattering the trust attached to his name recognition build across many years, his personal brand is predicted by many to be facing the death penalty. However, it is not only his personal brand which is at stake, the cancer charity Livestrong Foundation, which he represented for all these years, is now at risk of being tainted.

Although the Livestrong brand will no doubt take a hit, it is speculated that it will survive Armstrong’s doping admission. As stated on a recent CNN iReport "The effect he had on the foundation was huge, but they both should be able to stand on their own. The foundation should not be held accountable for his deception". Because the foundation was managed hands-off by experienced fundraisers, it was able to establish alliances with other organisations to fundraise and build awareness for its cause. This is said to be the reason why it still hasn’t collapsed amid all the scandals in recent years. Armstrong’s decision to step down from the role of chairman and the board will also assist in separating the charity from the cyclist’s image.

In the corporate world, companies that have their brands involved in scandals can rebrand them by repackaging these with new names and look. However, it doesn’t work that way when it comes to people. The Oprah confessional interview was the first step in trying to save Armstrong’s personal brand. A film about his life is said to follow. None of these replace sincere remorse and action to remediate what he did, may it be in the form of charity work or even helping the doping agency in their investigations. Will the Lance Armstrong personal brand ever recover? Tell us your views.

Adriana Heinzen
Current student in the Master of Marketing program at the University of Sydney Business School

Tuesday, 22 January 2013

The Awards Season is here – watch out for the celebrities and brands on your screen

The awards season has kicked off in Hollywood and you will find brands disputing attention nearly as much as the celebrities. Look closer into the cars, gowns, jewellery and champagne - brand endorsements are everywhere. This kind of implicit marketing also flourishes within the films and TV shows via product placements. Even video games have brands featured in them, like the Obama campaign we saw in the marketing communications lectures. Now that people don’t have to seat through ads, brands are increasingly being shifted into the entertainment piece or choosing to produce their own branded entertainment like Red Bull.

The main advantage of product placement is the ability to establish an instant emotional connection between the audience and the brand. People develop a strong emotional bond towards their favorite series and celebrities, which creates a halo effect for the brands featured in them. Product placement is booming and spend was up 11.7% at $8.25 billion by the end of 2012, with Australian marketers accounting for just over $100 million of the total, according to Consultancy PQ Media.

Media product placement is not new, but what makes it more attractive now is the fact that the audience is increasingly watching content online. This allows them to purchase the product featured on the screen within a few clicks. As discussed in a previous blog, it has recently become possible to embed links on YouTube videos enabling the viewer to buy the products featured on that video. Now imagine women watching shows like Sex and the City and being able to add the characters’ shoes and other fashion items to their shopping basket while watching the series.

Online product placement not only improves brand recognition, but it also generates direct sales. This way companies are able to establish a clear link between the marketing investment in the media placement and the sales generated by it. What is also great about product placement in online media is that it is more transparent than in broadcasted media, where the viewer is often not aware that the brand shown on screen is a paid product placement.

Top global brands are not the only ones opting for this kind of marketing tool. Product placements can be as diverse as the media audiences, so there are opportunities for all kinds of brands. The Green Product Placement agency in the US specialises in placing green, sustainable, socially responsible and local brands across different media. They have placed green brands in popular shows like Gossip Girl and The Good Wife.

All these great promises about product placements will go to waste, unless it is done properly. What we mean here is for the brand to be well integrated with the storyline; otherwise it can backlash like in the latest James Bond movie. Fans were left frustrated with the sight of agent 007 electing to drink a Heineken beer instead his signature vodka martini.

Numerous other brands were featured in Skyfall including Coke, Sony, BMW and Omega watches, which points out to another risk concerning the use of product placements. When overdone, this marketing tool has the potential to annoy viewers, which may result in the audience developing negative attitudes towards the brands. The saturation of brands placed in media could result in people developing the same resistance to product placements as is seen today with traditional ads.

What does the future hold for product placement?

Adriana Heinzen
Current student in the Master of Marketing program at the University of Sydney Business School

Thursday, 17 January 2013

Neuromarketing – a look inside your audience’s head

Ask Apple followers why they love their iPads and they will answer: design, convenience, versatility etc. But what if they are just rationalising their choices? What if the choice was made based on emotional associations with the brand, other users and memories that they are not even aware of? And what if Apple had access to this knowledge and tailored its communications to induce more of those warm fuzzy feelings its users experience when interacting with the products? You may be surprised to find many companies are already doing this.

Neuromarketing is a fascinating new field specialising in understanding people’s emotions and attitudes towards brands, products and services by combining neuroscience, psychology and marketing tools. These tools go beyond conscious thought and identify non-conscious responses in the brain. What makes this so relevant is the fact that 75 to 95% of the brain’s processing goes on below conscious awareness, including emotions and feelings.

Current research on consumer behaviour suggests that most purchase decisions are based on minimal conscious thought and are largely driven by emotional responses and feelings. A recent study conducted by the Max Planck Institute for Human Cognitive and Brain Sciences revealed our decisions are made up 10 seconds before we become aware of them. John-Dylan Haynes, the co-author of the study, stated: “Your decisions are strongly prepared by brain activity. By the time consciousness kicks in, most of the work has already been done.”

With this in mind, traditional research measures, which rely on the conscious level, are missing a large portion of what drives purchase behavior. Because emotional responses are unconscious, it is practically impossible for people to identify what caused them through conscious methods such as surveys and focus groups. It is also known that by simply asking a person to tell you how they feel automatically changes the feeling. No wonder eight out of 10 new product releases fail regardless of the estimated $4.5 billion USD global annual spend on qualitative market research.

So how are these emotions and feelings measured? Researches essentially put a cap covered in electrodes or magnetic scanners on people’s head, which measures brain impulses and continually tells how much attention they are paying, what emotions they are experiencing and what memories are being retrieved. Neuroimaging is also combined with biometrics such as eye movement, face reading and heart rate to paint a more accurate picture. This knowledge is then used to support a myriad of marketing activities, from new product design to what type of scent to use in a store as well as the effect of celebrities in advertising.

The Nielsen Company, a global leader in market research, bought California-based NeuroFocus in 2011 to tap into this fast growing market. NeuroFocus exhibits a list of high profile clients such as Google, Microsoft, Intel, Facebook and PayPal. The latter was admittedly sceptic about the new method to start with; however, became convinced after seeing click-through rates improve by more than three times, something unheard of in the world of direct marketing. Other companies like McDonald's, Unilever, Procter & Gamble and GlaxoSmithKline have also jumped on the neuromarketing bandwagon with the rival UK consulting company, Neurosense.

The question in everyone’s mind is what are the ethical implications of this? As fascinating as advances in neuroscience do sound, when combined with marketing, it can get a little scary. Neuromarketing has been largely criticized on the basis of manipulation; however, late last year the industry Code of Ethics was announced by the NMSBA as a first step in adopting international standards for applying neuroscientific methods to advertising campaigns and product design.

This topic can go on and on, there is so much that can be discussed on the implications of this research. We will definitely come back to this topic on future posts. But for now, do tell us your views on it from a consumer as well as a marketer’s perspective. As to how you feel about it... well we would have to get some brain scanners to really find that out!

Adriana Heinzen
Current student in the Master of Marketing program at the University of Sydney Business School

Tuesday, 15 January 2013

Reinventing the Walt Disney experience with RFID

Imagine if visitors of the Walt Disney parks could make all purchases with the swipe of a wristband - souvenirs, hot-dogs, meetings with the characters and bookings to see the parades would all be hassle free. On top of that, what if they received alerts on their smartphones when it was time to go to the Pirates of the Caribbean attraction without having to wait in the queue?

It may sound like fantasy, but this is part of Disney’s ambitious new management system “MyMagic+” predicted to transform the way people consume experiences in a few months time. The investment is estimated to be between $800 million to $1 billion USD, but they have a lot to gain from it in terms of consumer behaviour knowledge.

Visitors will carry a “magic band”, which will act as room key, park ticket, fast pass and credit card using NextGen technology. It will also contain a Radio-Frequency Identification (RFID) device enabling the service provider to store data about individual visitors. This will allow guests to enjoy personalised experiences such as having Mickey Mouse call their kids by the name and know if it’s their birthday. By tracking guests’ preferences, like how many times they have gone to certain rides, promotions can be tailored to them improving their experience in the park. Disney assures all of the data is secured but, if people are uncomfortable with conceding personal information, they can opt out of the data tracking option or at least disable their kids from being tracked.

Seamless transactions without interrupting the magic of the moment also allow for improved consumer experience. However, cashless purchase decisions, the aggregation of all expenses into one bill combined with high emotional involvement lead to people being more careless with spending as demonstrated by many behavioural economics experiments, which we looked at in the Master of Marketing.

Mental accounting rules based on Kahneman’s Prospect Theory show how people tend to combine gains and losses in particular ways in order to maximise happiness. While multiple gains are maximised with segregation as in the popular saying “don’t wrap all the Christmas presents in one box”, losses (i.e. expenses) are less painful when integrated. By adding up all of the park expenses into one bill, suddenly a Mickey Mouse pair of ears seems like nothing compared to what one has already spent just on that day, who hasn’t been there? In addition, separating the payment from the consumption with the “magic bands” reduces the perceived cost of the activity.

There is a fine but crucial line between making the audience’s experience more personalised and satisfying, and using personal data to exploit them. What is your view of the Disney “magic bands” development? How do you feel about having your personal data collected to serve you better? How is this different from promotions targeted to you via your smartphone using geo-locator when you walk into stores, or when you scan your flybuys card at the counter to get discount on chosen items, or when customised ads are displayed on different sites using your browsing history?

Adriana Heinzen
Current student in the Master of Marketing program at the University of Sydney Business School

Thursday, 10 January 2013

Protecting individual privacy in the big data era

With the explosion of e-commerce and social media, online privacy has become a hot topic in today’s media and legislative agenda. As technology, consumer attitudes and legal requirements change, many questions are raised.

What’s the right balance between better online services and protection of privacy? Are people aware of how personal information they are giving away? How much private information are people willing to trade off for something of value such as a free service? A recent event co-hosted by the University of Sydney Master of Marketing and the Association of Market and Social Research Organisations (AMSRO) addressed these and many other questions around data privacy, marketing, research and the consumer.

The ethics and regulatory lectures at the Master of Marketing had opened my eyes to issues concerning data privacy, and it was fascinating to see first hand how Australian leaders are tackling these challenges. The Privacy Commissioner, Mr. Timothy Pilgrim, addressed the audience with an up-to-the-minute overview of the data privacy state of affairs. Below I will do my best to fill you in some of the very interesting points he has touched on.

When considering much of the personal data available online is uploaded by individuals themselves via social media and how readily they trade their personal information in return for convenience or the use of a service, it’s not surprising for some people to question if privacy matters or whether it can even exist?

As pointed out by Timothy, the issue is that it’s one thing to share your personal data on social media with friends and followers but it’s likely, if you haven’t actively adjusted your privacy settings, you may be publicly sharing more than realised and intended. In addition, he emphasised the issue of Internet tracking and profiling creating accurate profiles of users. The more access businesses have to this information, the better they can target consumers with advertisements that match our areas of interest.

This was supported by last year’s World Economic Forum, which described personal information as the new asset class, the new oil, also referred to as big data. He reminded us that aggregation of personal data from search engine history, email content and other personal transaction such as apps downloads often occurs without the user’s understanding it’s happening. And at the very foundation of big data is the fact that it’s personal information and concerns to our right to privacy.

Acceptance of unread terms and conditions with the click of a button takes the relationship between company and the customer in terms of profiling and marketing to a whole new level. People are at the risk of losing control if they are unaware of how their data is being used.

Having in mind personal data is fast becoming the new currency in the digital space, and people are more and more concerned about how it’s being used, do you think companies that have transparent privacy practices will have a competitive edge over others? Do you read privacy terms and proactively adjust the settings of the social networks you use?

Adriana Heinzen
Current student in the Master of Marketing program at the University of Sydney Business School

Tuesday, 8 January 2013

Facebook Privacy Changes

Shortly after the Data Privacy forum jointly organised by the University of Sydney and AMSRO, Facebook announced changes to its privacy and governance policies shedding light back on the use (or misuse) of personal data by organisations.

The world's biggest social media company is proposing the end its practice of letting users vote on changes to its privacy policies in favour of Q&A sessions and live webcasts with its chief privacy officer. Under Facebook’s current privacy policy, a vote is triggered if a policy change received more than 7,000 comments, and votes only counted if more than 30 percent of all active users take part. However, this did not happen in the last vote held by the company and is unlikely to do so given that more than 300 million people would have to participate now that the number of users is close to China’s population.

One aspect of the new rules has not received as much attention as it should: Facebook’s plans to use the data it has about users’ liking behaviour to show them ads outside of the social platform by rolling out an external advertising network. This strategy has proved successful with Google’s multibillion dollar Adsense and is aimed to support Facebook’s revenue-growth strategy in order to keep investors happy after the $50 billion market capitalization.

Facebook’s chief privacy officer confirmed their policies intent on a statement to Forbes magazine:
“Everything you do and say on Facebook can be used to serve you ads. Our policy says that we can advertise services to you off of Facebook based on data we have on Facebook.”

However, a large amount of users’ lack of awareness of Facebook’s terms and conditions were demonstrated by the viral spread of meaningless copyright disclaimers recently posted by users on their walls stating they owned copyright over everything they posted on the social network. Hopefully they have become aware by now that, by signing up for a Facebook account, they have already agreed to allow Facebook to use their intellectual property.

PwC have released a research saying 73 percent of Internet users are comfortable disclosing information about themselves online if they receive a tangible benefit for that in return. However, as one of the panellists of the Data Privacy forum has reminded us: “When something online is free, you’re not the customer, you’re the product.”

People are giving away their data in exchange for rewards and services without fully understanding the practical implications. An example raised on the debate was that many customers promptly agree to Flybuys terms and give away their shopping data without realising this can result on them being charged more than others for certain goods on their shopping list. This is something very few people would willingly consent to.

In the industry defense, online businesses will only survive if consumers trust them. If customers don’t, they will use other services, which is a self-preserving notion. However, as the companies that handle online data are getting bigger, people are getting less and less choice. In the case of Facebook, if someone wants to be able to effectively communicate with their overseas friends via a social platform, do they really have a choice? Arguing companies will mostly act in their self-interest and towards profit maximisation, other panelists reasoned data privacy responsibility ultimately lies within government regulation.

How can personal data be protected and who should be responsible for it?

Adriana Heinzen
Current student in the Master of Marketing program at the University of Sydney Business School