e-Marketing Today

While I left Motorola earlier this year and am currently am on contract to a leading B2B/B2C brand not in the cell phone industry, I continue to be fascinated by the competitive activity in the cell phone space. Like many others, I am particularly fascinated by Apple. But for me, my fascination isn’t merely because of a cool new music cell phone. My interest is due to Apple’s marketing and brand strategies. Today, Reuters reports that, in the US, during its first full month for sale (July), the iPhone has outsold all smartphone models. Impressive, but not surprising.

Apple has shown brand and marketing management expertise with the iPod and the iPhone (which I consider a kind of brand extension of the iPod) from which all marketers, b2c and b2b, can learn a great deal. Apple provides an excellent example of the care and feeding needed to build and sustain a strong brand. Apple has done this by continually moving the iPod brand forward (think Nano then iPhone) and never milking the brand’s success; it’s part of why it is very difficult to steal the iPod’s market share. Apple has also done some smart brand extensions which always maintain the integrity of the core brand (or subrands, if you prefer).

Brand loyalty for iPod is complex connected to many factors: product design, user interface, software, the coolness factor (it’s the cool music player to be seen with) — the fact that a user gets locked in with his/her music collection being in the iTunes format, etc. Of course, you can buy a competitor mp3 player with more features for less money than the iPod — iPod commands a premium price, always.

Sustaining the Apple iPod music player brand meant moving the product forward, which inevitably led to the iPhone, the convergence of the music / media player and a cell phone. Apple knew it was where portable music players were headed and wanted to cannibalize iPod sales before someone else became first to mind in the space (of course, Apple didn’t make the first cell phone that played music, however, it quickly has become first in mind when it comes to cell phones that play music).

Part of managing the brand is managing pricing, and Apple has always smartly exercised strong control over it’s retail pricing that most marketers should look at with envy. It’s hard to imagine a premium brand selling for $49 - $99 USD (the price range of many subsidized cell phones in the US) and I am confident that Apple is too smart to let that happen to the iPhone (I am also confident that cell phone carriers appreciate this; like any business, they want products they can sell for a nice profit). With iPhone, Apple has innovated in this area too. In the US, cell phone carriers (AT&T, Verizon, Sprint, etc.) have traditionally subsidized the cost of cell phones looking to service for their profit. Not with the iPhone. Reports are that Apple has ensured that AT&T is making a sizable margin on the iPhone. That’s smart for both companies. After all, any business is more likely to push a brand they make a profit from rather than a loss — it’s a great differentiator and incentive for the carrier to push the product, especially when you combine that with strong consumer demand for the phone. I’ve always believed that cell phone makers should have been working hard to do this (i.e., offering carriers high end phones they can sell at a profit), instead of marching to the beat of what’s always been done by pumping out more subsidized cell phones. It’s interesting that it took a new marketing and brand savvy entrant into the cell phone market to accomplish this.

Even more, only several years ago brands didn’t mean much to carriers. I remember seeing a research study a carrier had done that showed that more than 70 percent of consumers could be switched to a different brand while at the carrier’s retail store. I seriously doubt this will apply to consumers coming in — and even switching carriers — to purchase an iPhone. I am confident those consumers are not going to be easily switched.

I’m also confident that Apple and its iPhone will change the cell phone game in many ways.

Kudos Mr. Jobs. Brilliant work. I am eagerly anticipating your next move.

Source: JupiterResearch

According to JupiterResearch’s recently released report, “Measuring Unique Visitors: Addressing the Dramatic Decline in the Accuracy of Cookie-Based Measurement,” in 2004 58% of online users have deleted “cookies”, which are small files often deposited on their computers by Web sites they visit. Tracking cookies is a principal means Web site operators use to track visitors, personalize their sites, and account for the effectiveness of marketing campaigns and Web site enhancements. If users delete cookies, accurate long-term measurement of consumer behavior on the site is severely compromised. If users block cookies, accurate short-term measurement is compromised, relegating increasing numbers of Web visitors to “anonymous” status.

The report found that as many as 39% of online users may be deleting cookies from their primary computer monthly, undermining the usefulness of cookie-based measurement and leaving many site operators flying blind. “Given the number of sites and applications that depend heavily on cookies for accuracy and functionality, the lack of this data represents significant risk for many companies,” says Eric T. Peterson, Analyst at JupiterResearch. “Because personalization, tracking and targeting solutions require cookies to identify Web visitors over multiple sessions, the accuracy of these solutions has become highly suspect, especially over longer periods of time,” added Peterson.

Privacy and security concerns on the part of online users are responsible for the cookie-deletion behavior that JupiterResearch has found. According to a recent consumer survey cited in the report, 52% of online users indicate a strong interest in stories and articles about Internet security and privacy, while 38% of online users believe that cookies are an invasion of their security and privacy online and 44% of online users believe that deleting or blocking cookies will protect them.

The JupiterResearch report provides advice to site operators for how to cope with the decline in accuracy of visitor measurement and predicts that Web analytics vendors will adapt their tools in the face of a consumer landscape that makes established measurement practices unreliable.

Doing business on the Web doesn’t spare you from many of the same laws and customs that govern businesses in the physical world. You must pay especially close attention to trademark law, which governs disputes between business owners over the names, logos and trademarks that identify their goods and services in the marketplace. Applied to Web businesses, trademark law determines when the use of a particular Internet domain name infringes someone else’s trademark.

The two most fundamental rules of trademark law are:

• You can’t use a name, logo or domain name that might confuse customers about the source of your goods or services.
• You can’t use a name, logo or domain name that invokes a famous product or service, even if customers wouldn’t be confused.

Opening Your Doors to the World

Until several years ago, only companies doing business on a national or regional level needed to be concerned about trademark law. A local business could reasonably expect its marketing activities to be limited to a neighborhood, town, city or county. As long as the name used by the business to identify itself in the marketplace didn’t seriously conflict with names used by other local businesses, there was little likelihood of customer confusion and so, little likelihood of legal conflict.

Today, the core concept of “local” has all but disappeared for many types of businesses. When you create a Web page, you enter a commercial realm that is in one stroke local, national and international. Local customers can search you out, but so can anyone anywhere in the U.S. or the world who has a computer and an Internet connection. Suddenly, you must pay attention to how your business name–or the names of products you are offering–fit within the vast sea of names that is the new world marketplace.

What’s in a Name

The first trademark issue to arise when you create a Web page has to do with the name you give your Web site–called your Internet domain name. It’s the unique part of your Internet address (Universal Resource Locator or URL). The Nolo Press URL, for instance, is http://www.nolo.com. The last part–nolo.com–is the domain name. Naturally, most businesses want the domain name for their Web site to be the same as their business name, so that customers can easily find their sites.

Here’s where you can inadvertently court trademark trouble. If you choose a domain name that is the same or similar to a business name that is already in use as a trademark anywhere in the country (in physical or virtual space), you could find yourself in a trademark infringement dispute. If you are offering goods or services on your website, you could even be sued.

The entity responsible for assigning domain names does not check to see if a requested domain name violates an existing trademark. It is concerned only with whether the name is already taken as a domain name. In other words, being assigned the domain name you request says nothing about whether it will conflict with an existing trademark. If it is the same or similar to a famous mark or is likely to cause customers to confuse your site with the business or products carrying the existing mark, you could be in violation of trademark law.

If you do pick a domain name that creates a trademark conflict, you will most likely lose the name. Given the energy that goes into building domain name recognition, this could be a major blow to your business. Here’s what could happen:

• If your domain name prevents the owner of a registered trademark from using its mark as its domain name, the owner of the registered mark may be able to cause your domain name to be deregistered. If that happens, you can’t use it anymore.
• If your domain name is the same or similar to an existing famous mark, the mark’s owner may file a lawsuit preventing any further use of your domain name, even if customers wouldn’t likely be confused. For example, if you decide to call your health food website foramazons.com, the real amazon.com could probably force you to stop using the name, simply because it calls amazon.com to mind.
• If your domain name conflicts with an existing mark and will likely lead to customer confusion between your business or products and those offered by the mark’s owner, you may be forced to stop using the name. And if your infringement is judged to be willful, you might have to both compensate the mark’s owner for any losses and pay thousands of dollars in statutory damages.

Avoiding Trouble

Before choosing a domain name, it is wise to conduct what’s known as a trademark search. A trademark search hunts for any trademarks, federally registered or not, that conflict with your proposed domain name.

You can do your own trademark search at the U.S. Patent and Trademark Office Website, www.uspto.gov. Or you can pay someone to do it for you. One good trademark searcher is the Sunnyvale Center on Innovation, Invention and Ideas at www.sci3.com.

If possible conflicts turn up, use a variant of the golden rule. Do not use an existing mark as your domain name if use of the mark would seriously tick you off if you were the mark’s owner.

PLEASE NOTE The information presented at MarketingToday is not legal advice, MarketingToday is not in the business of legal information, we are not lawyers, just publishers. We provide this information to help you understand the issues that we believe marketers should be aware of. We recommend that you consult a qualified attorney who specializes in trademarks, copyrights, advertising, intellectual property and the Internet for your questions or problems, we do.

Source: AdRelevance, a division of Media Metrix. The majority of all online ad banners have short life spans, running on average three weeks or less, according to a new report released by AdRelevance, a division of Media Metrix. With few advertisers running large online campaigns, an overwhelming majority of advertisers have less than a 0.01 percent share of all online advertising impressions.

Key findings from the latest AdRelevance Intelligence Report, which analyzes standard 468×60 banner ad campaigns on the top 500 Web sites between July 1999 and June 2000, include:

• Although most banner ads run for three or fewer weeks, the average banner runs for five and a half weeks.
• The automotive industry schedules online ads to run the longest, an average of 7.8 weeks. This is almost twice as long as the average banner duration for a hardware and electronics ad, which typically lasts 4.1 weeks.
• The consumer goods industry embraces the most targeted ad approaches, with only 40 percent of online impressions appearing on broad reach sites like portals, search engines and community destinations. At the other end of the spectrum, Web media, financial services and travel advertisers appear to be targeting the least, running an overwhelming majority of ad impressions on broad reach sites.
• While the average campaign in the second quarter weighed in at 7,265,000 impressions, more than half of all advertisers ran campaigns with less than 44,000 impressions. A campaign this small would only garner a 0.0003 percent share of voice on a major portal like Yahoo!.
• Automotive industry runs banner ads almost twice as long as hardware and electronics advertisers 
• Broad reach more popular than targeted approach for recent online campaigns.

“While most advertisers are running relatively short campaigns, shorter campaigns are not necessarily better campaigns,” said Charlie Buchwalter, vice president of media research for the AdRelevance division of Media Metrix. “Although shorter campaigns may concentrate banner impressions, thereby increasing the share of voice and share of market for an advertiser, only longer campaigns can bring about a change in consumer attitudes and behavior. The latest AdRelevance findings suggest that automotive, financial services and travel advertisers are out to change behavior because they are running banners the longest, when compared to other industries.”

Table A:		Length of Time Banners Run
		Source: AdRelevance, a division of Media Metrix
		Number of Weeks	Percent
		1	23.7%
		2	16.0%
		3	11.9%
		4	9.3%
		5	7.8%
		6	5.4%
		7	4.0%
		8	3.3%
		9	2.8%
		10	2.4%
		11	1.8%
		12	1.6%
		13	1.3%
		14	1.1%
		15	0.9%
		16	0.8%
		17	0.7%
		18	0.6%
		19	0.5%
		20	0.5%
		More than 20	3.7%

Table B:	Average Number of Weeks a Banner Runs by Industry Source: AdRelevance, a division of Media Metrix
	Industry	Average Number of Weeks
	Automotive	7.8
	Financial Services	6.9
	Travel	6.0
	Consumer Goods	5.6
	Web Media	5.5
	Software	5.1
	Retail	5.0
	Entertainment	4.9
	Business-to-Business	4.9
	Telecommunications	4.8
	Hardware & Electronics	4.1

Table C:	Share of Impressions by Site Type Source: AdRelevance, a division of Media Metrix
	Web Media	86.20%	13.80%
	Financial Services	83.00%	17.00%
	Business to Business	72.70%	27.30%
	Telecom	72.70%	27.30%
	Retail	70.10%	29.90%
	Software	69.00%	31.00%
	Entertainment	58.90%	41.10%
	Hardware and Electronics	53.50%	46.50%
	Automotive	51.90%	48.10%
	Consumer Goods	40.40%	59.60%

The AdRelevance Intelligence Report also analyzes ad impression distribution strategies for campaigns running four, eight and 12 weeks - revealing that banner impressions, on average, are heavier in the beginning of four and 12 week campaigns. On the other hand, campaigns running eight weeks tend to feature higher impression levels in the middle. Impressions for the average banner in an eight week campaign peaked in the fifth week.

“There is no golden rule when it comes to campaign continuity, but it appears that advertisers are adopting two weighting approaches - either front-loading for shorter campaigns or pulsing for longer campaigns,” Buchwalter said. “The conclusions from this AdRelevance Intelligence Report support the fact that the online advertising market is still in its infancy, and has a way to go before analysts can accurately determine what constitutes an effective and successful online ad campaign. We’ll know things are changing when more companies commit to larger, longer and more targeted online campaigns.”

Definitions
Impressions: The number of times an ad is rendered for viewing. One impression is equivalent to one opportunity to see an ad.
Genre: Exclusive groups of sites similar in content and function.

Source: AdKnowledge A surprising finding from AdKnowledge has revealed that more conversions come after online banner ad impressions as opposed to click-throughs.

Adknowledge Inc.’s Online Advertising Report (OAR) reveals:

1. ROI Impact of Internet Advertising is Greater Than Previously Thought According to the OAR, on average, there are 33% more conversion events (such as purchases, registrations, etc.) from users who only viewed an ad, but did not click, than from users who clicked on an ad. “With AdKnowledge eAnalytics, we’ve been measuring conversions from impressions for our clients to track purchasers who convert from only seeing an online ad,” said Steve Findley, V.P. AdKnowledge Analytic Services, the company’s data mining and analysis arm. “This data yields two important conclusions. First, the potential ROI impact of Internet advertising is much greater than previously thought. Second, advertisers that focus only on clicks or even post-click conversions may miss vitally important effects of their advertising campaigns,” he explained.
2. Ad Conversion Events Peak Mid-Week OAR statistics show that ad deliveries, click throughs and customer conversion events peak during the lunch hour mid-week, with the lowest activity taking place on weekends. In the first quarter, AdKnowledge eAnalytics data shows 38% more activity taking place at noon Mondays through Wednesdays, than noon on Saturdays.
3. Web Advertising Growth Continues to Rise According to AdKnowledge’s OAR, the number of ad-supported sites and networks continues to grow rapidly. In the first quarter, the number of sites and networks grew by 723 - an increase of 22%.
4. CPMs Continue To Stabilize The OAR also shows online advertising rates continued to stabilize even as availability of sites continues to grow. Average cost-per-thousand impressions (CPM) rates remained nearly the same, falling only .48% in the first quarter of 2000 to $33.59 from the fourth quarter of 1999 rate of $33.75.

About the OAR Report
AdKnowledge uses aggregate statistics from its powerful data warehouse to supply valuable information in the Online Advertising Report (OAR) to marketers and agencies to help them optimize their Web advertising campaigns. The OAR is a compilation of Web advertising statistics analyzed by AdKnowledge eAnalytics, which provides marketers with a new level of insight into online advertising brand effects and resulting purchase behavior. The information is gathered from the AdKnowledge System, which includes four components that span planning, campaign buying and trafficking, ad serving and targeting, and reporting. The more than 4,000 sites and networks in the AdKnowledge System are representative of the Web advertising marketplace. According to Nielsen//NetRatings, the Web-wide reach of U.S. sites and networks tracked by AdKnowledge is 95.85% of the home audience and 98.42% of the work audience.

The full Online Advertising Report is available at: www.engage.com/adknowledge/oar/oar_docs/oar_1stqtr00.pdf
(Adobe Acrobat Reader 4.0 Required).

By Arthur O’ConnorThe New Economy was all about being first to market, generating volume and creating new, revolutionary business models.

Arthur O’Connor is a senior manager in the Financial Services practice of
KPMG Consulting. He is responsible for building and developing the eXante
practice, which specializes in concept to launch Internet consulting
services. He can be reached at arthuroconnor@kpmg.com.