October 13, 2014 · 10:43 am

Shaving The Cord

You might have heard something over the weekend about a glitch in the Nielsen ratings system that affected the estimated audiences all the way back to March.  While that is kind of problematic for the TV industry, it was other Nielsen data that presents much more of a long-term problem.  As Cynopsis reported:

The top 40 cable channels have lost more than 3 percent of their distribution over the last four years, according to a Wall Street Journal analysis of Nielsen ratings data. How to account for the decline, which exceeds the loss of subscribers? Pay-TV customers are signing up for less expensive bundles with fewer channels, says the WSJ. “What we are seeing is some cord cutting and some cord shaving,” Nielsen global president Stephen Hasker told the paper. “Consumer time and attention is shifting.”

You can read the Wall Street Journal article by clicking through.  As someone who spent a long time in the TV business I understand why channels are bundled.  Way back when, the market was far less fragmented and the business model evolved where there really weren’t tiers other than the true premium channels of HBO and local sports networks.  Today, even the “major networks” of ABC, CBS, Fox, and NBC attract audience ratings in the low single digits even for top programs.  Yes, DVR viewing can boost some of their audiences as much as 80% but think about it.  What’s the difference between watching “Gotham” via Hulu (the internet) or on your DVR (the cable bundle)?  Other than being able to skip the commercials on a DVR, not much.  In fact, one could argue that advertisers would prefer that consumers watch in the non-skippable internet interface.

The real point is that how consumers come to content has changed and yet the people who are the middlemen in offering the content – the cable companies – haven’t moved off a business model that evolved in the 1980s.  As the  Journal sates:

Data points are piling up to show “cord shaving” is for real. At least two pay-TV providers say about 10% of gross TV subscriber additions are customers who are taking a slimmed-down bundle—in contrast to the bigger ones with hundreds of channels that can cost upward of $100 a month.

So the choice for the providers, as it is for all of us in our businesses,  is to change or to shrink.  They can’t just keep raising prices.  At some point that makes the problem even worse as consumers pay more for channels they don’t watch.  What’s your solution?

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October 10, 2014 · 10:46 am

Who Are You?

Our Foodie Friday Fun this week starts at Taco Bell. No, this is not another rant on quick service restaurant food.

Taco Bell

In fact, I happen to enjoy it from time to time. Today’s screed is about a new product at Taco Bell: the Starburst Freeze. “Starburst,” you say, “isn’t that candy?” Why yes. Taco Bell is selling a candy-flavored slush that, in the words of an Eater story, kind of looks like icy Pepto-Bismol. Yummy!

Putting aside the appropriateness of any food business selling what looks like something to relieve indigestion, there is another point this product raises.  Obviously this is a cobranded item.  Cobranding is not uncommon in business.  Some examples include Crest Plus Scope, Tide Plus Febreeze and Dawn Plus Olay – all brands owned by Proctor & Gamble and there are numerous products involving to discrete companies as well.  That’s not my issue.

Taco Bell is pseudo Tex-Mex food.  While we can debate the merits of a Doritos Cheesy Gordita Crunch, the inclusion of Doritos – a corn chip arising from Mexican food if one digs deeply enough – makes sense.  It relates to the core positioning of the brand.  It fits on the menu.  Strawberry Starbursts?  Not so much.  Other freeze drinks on their menu – one with Dr. Pepper and another with Mountain Dew – sort of make sense – they’re based on soda served ubiquitously.  If the shake was a chocolate candy and had cinnamon, almonds and chipotle, one could argue they were being extremely authentic to the brand since that’s a very Mexican shake.  Maybe they should have paired with Almond Joy?

Any time we add products we run the risk of diluting our core brand perception. Trying to be all things to everyone just means we slide toward commodity status.  We need to state who we are as brands and do nothing that makes the consumer wonder if that initial brand statement is still true.  If they’re asking “who are you?” we’re in trouble. Unless you enjoy competing on price alone, which is how commodities sell.

The simple test here is to ask someone where would one expect to buy a Gordita and where one might buy a Strawberry Starburst Freeze.  My guess is you wouldn’t get the same place in response to the question which tells me that the latter item doesn’t belong.

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October 8, 2014 · 10:30 am

The Road To Understanding

A piece from the eMarketer group caught my eye yesterday.  The headline was Marketers Can’t Avoid Technology Anymore.

Figure 1: Simple schematic for a data warehous...

(Photo credit: Wikipedia)

Off the top of my head it made me wonder who exactly was trying to avoid it since there isn’t a single company that comes to mind where technology isn’t sort of a big deal.  As it turns out, the article was about a subset of tech, big data, and how professionals need to up marketing technology investments if they hope to make sense of this data as well as to focus on integrating technologies and data across channels..  No doubt with a big caveat.

This hints at the issue:

April 2014 research by Accenture also found big data was top of mind for the majority of executives worldwide, with 59% saying it was extremely important. Of course, technologies are needed to make sense of and combine all of this information, and Accenture noted that using such tools to understand big data could transform an entire enterprise—if done correctly.

It’s the “done correctly” part that’s the caveat.  The road to understanding doesn’t begin with technology.  It doesn’t begin with a fully integrated series of systems or a huge data warehouse.  It starts with something much simpler that’s often overlooked.  It starts with some basic questions.

  • What do we need to know?
  • Why do we want to know it?
  • Once we know it, what actions can we take to use it to grow our business?
  • How is what we have going to improve our relationship with our customers?
  • When prospects encounter us, whether online or off, which of these data points will help us convert them to customers?

My guess, based on a fair number of experiences, is that many of the aforementioned companies are just puking up data instead of using the data to develop actionable business information.  The eMarketer piece concludes this way:

Companies that avoid implementing and using marketing technology to make sense of data have an uncertain future. Nearly 80% of execs agreed that companies that did not embrace big data would lose their competitive advantage—and possibly face extinction.

I agree with that but if they don’t do the above while traveling the road to understanding and having asked some questions before they embrace and develop big data, extinction is just as likely.

What’s been your experience with this?

 

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