ibranz Branding Resource Blog

Apple is not only the brand that marketers love the best, but it’s the one that consumers recommend the most, according to new research from Satmetrix, originator of the Net Promoter score.

Apple posted a NetPromoter score of 77 percent, which means that 83 percent of respondents would recommend the brand to a friend versus 6 percent who would not. (The score is calculated by subtracting the latter from the former and is based on a scale of one to 10.) The only “brand” to beat Apple was the USAA, a financial services firm for members of the military.

Satmetrix’s report, based on interviews with 23,000 consumers in December 2008, narrowed its focus on a few categories, including telecom, financial services and online. Categories like consumer packaged goods were not tested, though Satmetrix CMO Deborah Eastman said the company is considering looking at other such segments in the future.

The overall winners:

1. USAA
2. Apple
3. Amazon.com
4. Costco.com
5. Google
6. Facebook
7. Wikipedia
8. eBay
9. Craigslist
10. Barnes & Noble (bn.com)

Satmetrix stressed that Costco and Barnes & Noble’s sites were judged separately from their retail operations.

The company also broke down the results for various categories. In telecom, Vonage scored the highest with 45 percent, though the industry as a whole had an average of -7 percent. Verizon Wireless was second with 40 percent.

Somewhat surprisingly, banking had a higher average score than telecom—15 percent and aside from USAA, Charles Schwab led the financial services sector with 36 percent. In tech, Adobe led the software category with 46 percent and in online, Google’s 71 percent beat Yahoo! by 30 points. Amazon was No. 1 in the online shopping category with 74 percent.

Satmetrix introduced Net Promoter in 2006 after Bain fellow Fred Reichheld developed the metric with the company. The company and Reichheld believe the score has the highest correlation to buying behavior.

Isn’t the entire web social these days?

To an extent, yes. If 2008 was the year everyone — and their grandmas — joined a social network, then 2009 is the year those networks’ social graphs spread their tentacles beyond their borders to other sites across the web. Already it’s common for many sites, including major news sources and entertainment properties, to have commenting and sharing features. So we admit the social web is a pervasive concept. But there are several interesting newer developments at Twitter and Facebook, as well as in the widget space and the app world.

What’s the story with Twitter?

Twitter is one of the fastest-growing social networks, but it’s very different from Facebook and MySpace. The microblog essentially began as a mass text-messaging-meets-instant-messaging utility. You sign up for an account, people follow you, and you follow them. When you “tweet” a message, the folks following you see it instantly on their phones and computers.

Everyone bandies around the term “social graph.” What exactly does it mean?

A social graph is a map of a person’s connections, through which they communicate and share information. People often talk about social graphs in relation to social networks, such as MySpace, Facebook, LinkedIn and Twitter.

Think about when you tweet something really juicy on Twitter. Some of your followers find it interesting and forward it — or “retweet” it, in Twitter parlance — to their followers. And some of those followers retweet it again. Your message just traveled through the social graph.

Some folks think this kind of message amplification is the best way to measure effectiveness in a tool like Twitter. Analytics guru Avinash Kaushik is one of them. He said it’s the difference between just broadcasting a message to your group of existing followers and getting the group to spread the buzz for you.

With all this Twittering and social networking, is anyone still blogging?

Yes, people are still blogging. But the volume of posting has dropped off a bit in the past year, according to Technorati’s latest “State of the Blogosphere” report. That said, the number of people reading blogs has never been higher, which is why marketers such as Quaker, Kraft and Walmart have all done extensive blog outreach programs in the past year. For marketers, it’s important to always identify yourself as such; for bloggers, remember to identify sponsored posts. Tricking readers — aka consumers — is never a good idea.

You were joking about grandma joining a social network — right?

While social networking used to be the domain of the under-30 crowd, its use among older adults is skyrocketing. As of January, more than 50% of Facebook users and 44% of MySpace users in the U.S. were over 35 years old, according to ComScore estimates. The single biggest age demographic in the U.S. on both Facebook and MySpace is between 35 and 44. Indeed, Facebook says its fastest-growing demo is 55-plus.

Won’t all the kids leave if the adults are everywhere?

Sure, that’s a worry. But that’s why social networks keep adding new features and functions — to make themselves more useful and, thus, more entrenched in users’ lives. In 2007 Facebook opened its platform to outside developers to create applications. It didn’t charge developers but rather counted on the applications to make Facebook more useful and entertaining. Last year it introduced a concept called Facebook Connect, which lets users connect to their Facebook friends when they’re not on Facebook (see how CNN.com used it in its inauguration coverage).

LinkedIn, unlike Facebook, gives its application code only to approved development partners, and launched last fall with 10 apps from eight partners. They are, as you might guess, more work- and business-related, including Amazon’s Reading List, TripIt’s My Travel and Google Presentations.

Instead, think marketing: Figure out how a widget or application could benefit your brand. And while you’re thinking, don’t forget the No. 1 rule of widgets and applications: They must offer useful, helpful or entertaining value to customers and potential customers.

“As a brand, you need to know how your audience will interact with it,” said Jeff Blackman, group account director at IQ Interactive. “They need to have utility, or else it’s just a gimmick.”

So I give my customers a cool widget with my brand on it, and they’re happy, because who doesn’t love free? But what do I get out of it?

One of the reasons marketers are excited about applications and widgets is because they get them closer than ever to customers. A widget downloaded to a consumer’s desktop is, as one person put it, the “holy grail.” It’s a daily reminder of your brand. The same goes for apps on mobile phones and on social-networking pages. And not only did that consumer invite your useful widget or application into their lives, but now it might be close by when they’re making a purchase. Retailers, such as Target and JCPenney, have created shopping widgets that offer gift suggestions, style tips and fashion trends.

Staffers at Apple’s (AAPL) flagship Fifth Avenue store in New York City confirm that as of Thursday at 8 a.m., customers are now permitted to buy unlimited quantities of iPhones without an AT&T contract — the very thing the company was working so hard to prevent in late 2007 when the devices were being snapped up in large quantities to be unlocked and re-sold in overseas markets. (See here.)

The new policy — which applies to all U.S. Apple stores — is similar to AT&T’s (T) “no commit” pricing plan, revealed last week, whereby customers can buy iPhones without a contract at the full non-subsidized price of $599 for a 8G iPhone and $699 for a 16G model (compared with $199 and $299 with a contract).

AT&T’s policy applies only to existing customers and limits them to one unsubsidized phone. Apple is imposing neither of those restrictions, leading some to speculate that the company has plenty of iPhones in stock and may be trying to clear inventory in advance of new models.

“Apple’s change in sales policy,” writes AppleInsider’s Prince McLean, “comes as the company is working to sell off remaining inventory to prepare for the upcoming launch of the new 2009 iPhone, expected to be released around the middle of June, possibly at the company’s similarly-timed Worldwide Developer Conference.” (link)

The situation is reminiscent of spring 2008, when Apple began gearing up to produce the iPhone 3G. By April 1, there were spot shortages of first generation iPhones in Apple and AT&T stores across the country. Piper Jaffray’s Gene Munster called 20 Apple stores that week and found no iPhones for sale at any of them. See Where did all the iPhones go?

Selling iPhones for more than double their usual price is an interesting way to clear inventory — and may be preferable to unloading them for, say, $99 each. It’s not clear how many customers will be interested, however. The phones are still locked to AT&T, and would have to be unlocked to work with any other carrier’s service. The demand for unlocked iPhones was fierce before Apple began signing contracts with overseas carriers, but may not be as strong today.

These transitions are tricky for Apple. After selling 2.32 million iPhones in its first fiscal quarter of 2008 and 1.7 million the second, it sold fewer than 720,000 in the quarter that ended in June 2008. Sales took off with the release of the iPhone 3G, however. In fiscal Q4 2008, it Apple sold 6.89 million iPhones.

Ads on casual gaming sites lift brand awareness and recall substantially, according to a study sponsored by NeoEdge Networks, a Mountain View, Calif., company that runs ads in those environments.

Unsurprisingly, the study found that ads NeoEdge ran for Zappos resulted in 56 percent of users having a favorable impression of the brand for enabling their game play. As a result, users had a three to five times increase in awareness of Zappos’ new offerings in men’s clothing.

“There is a receptiveness to these type of ads because [consumers are] getting to play the game for free,” said Peter Manickas, director of research at Frank Magid Associates, which conducted the study on behalf of NeoEdge. “It really improved people’s impressions.”

Magid collected responses from 2,000 participants who were shown a total of 1 million ad impressions. The study, which began Jan. 5, is ongoing and wraps up in a week. Nearly 75 percent of the respondents were women–typical for the casual gaming audience that skews heavily female. NeoEdge runs ads on gaming sites like Yahoo Games and iWon.

Per NeoEdge, the research validates its claim that casual gaming ads are more effective than TV advertising. For instance, when Zappos showed video spots before, in the middle and after game play, it generated a 500 percent lift in unaided brand awareness, compared with results seen in TV ad effectiveness studies. NeoEdge reached the conclusion by comparing the results of the study to results of similar research in TV. While the samples are different, Manickas said such comparisons could sometimes be made accurately.

“Most of us in the marketing world realize the last category that has yet to move in full force to the web is brand advertising,” said Ty Levine, vp of marketing for NeoEdge. Casual games, he hopes, is a category that can change that.

The study found that when Zappos had full sponsorship of a game, its ads performed better than run-of-network placements (where the company didn’t have full sponsorship). Frequency, however, did little to lift recall. Video ads by far outperformed display ads in recall, beating display ads by a wide margin inside the game.

-By Kenneth Hein

“Hefty, hefty, hefty!” You know how that old call/response commercial goes, don’t you? If so, you know the next word (“wimpy”) that gets repeated three times. But wait—the trash-bag folks have hauled the old spot in for a makeover, so here it comes again: “Hefty Hefty Hefty! — Stinky Stinky Stinky!”

When I caught that ad on TV recently, apart from reminding me how old I am (those spots debuted in the 1980s), it made me smile. It was familiar, almost friendly. But of course, the ’80s are long gone and, as a grown-up, I actually buy things like trash bags now. So, did the quirky little retread make me want to pick up a box of Hefty?

Not really. Instead, it made me wonder how many lazy bastards there were out there who’d rather buy scented trash bags than just haul the nasty things out into the backyard where they belong.

Do I blame Hefty for dusting off its old tagline? No. After all, everyone’s doing it these days.
Last month, Diet Coke returned to its first-ever slogan, “Just for the taste of it.” Last fall, Miller Lite once again began telling us it tastes great and is less filling. (Although now it has settled on just “Tastes great.”) And before that, Citi went back to never sleeping—which is ironic as hell, seeing as its near worthless stock price has countless investors up all night.

So why are brands suddenly rummaging in the basement for their latest marketing ideas? My guess is that, in a time of economic turmoil, they want to play it safe and go with what’s familiar to people. Instead of cooking up some radical new branding approach, it’s easier to return to the past. Slogans and sayings from simpler times make people feel more comfortable and at ease with the brands they love. Plus, for young consumers too young to remember the first round, it’s all new to them anyway.

I’m sure there are many positive reasons for returning to a brand’s heritage or celebrating its past. But for the most part, it strikes me as a losing strategy. I can think of only one example of an old tagline working in a new context. It’s Burger King’s “Have it Your Way,” the brand’s 1970s promise that resurfaced about five years ago.

BK’s familiar refrain served as a jumping off point for what would become the chain’s renaissance. That said, the campaign’s success had far less to do with the resurrected slogan than it did with the unusual creative. (Perhaps you remember the King livin’ large in the back of that stretch limo, among other edgy ads.)

In BK’s case, the reason why the old tagline worked was because the ads themselves redefined it. Whereas once the tag was about customization, it became more about the personalities of young males. “Their way” is a giant juicy burger served up with a couple of adolescent chuckles

Clorox has added some pizzazz to its Disinfecting Wipes by packaging them in decorative canisters that are meant to look more like an accessory than a cleaning product. The canisters are now appearing in Macy’s window displays in major metropolitan cities, including New York, Chicago and San Francisco. It’s all part of the company’s strategy to promote “stylish disinfecting.” The new wipes collection, which sports floral and nature-themed designs, is being featured on Macy’s TV screens and samples are available at information booths inside the stores. Brandweek interviewed Lisa Partnoy, marketing manager for Clorox Disinfecting Wipes, who discussed how the brand is leveraging unconventional shopper marketing tactics to draw awareness to its new collection. Some excerpts are below:

Brandweek: What exactly is this new product that you’re putting inside Macy’s windows?
Lisa Partnoy: The basic idea of this new product was work we did with the consumer to really uncover an insight that consumers actually want to have their cleaning products within reach. We did a bunch of consumer research to figure out what would be okay to leave out and what would enable a consumer to say, ‘Yes, I’d be proud to leave that on my counter surface.’ That was the thinking behind the décor launch. It marries both form and function. We did research in terms of what were the latest styles in terms of home décor, to make sure we were coming out with designs that would fit in with consumers’ homes. And we also added improvements—it’s single sheet dispensing, one sheet at a time. It really kind of is the ultimate in convenience—it’s pretty enough to leave out on the counter and the wipes dispense very easily.

BW: Why put them in Macy’s, though, especially as the collection isn’t sold through the retailer?
LP: This is the first time Clorox has partnered with a department store to launch a product. Not only does it fit with Macy’s being about home décor and stylish trends, but it gives us the opportunity to showcase the product in a way that’s most relevant…That was the objective of the partnership with Macy’s, to make sure we were driving awareness behind the product.

BW: You’re also building buzz through an online “design your own canister” contest. But are consumers, and retailer partners noticing? Is the mighty little wipe getting the attention it deserves in Macy’s store windows?
LP: Retailers are actually doing the same thing in store, as we did with Macy’s. The Macy’s partnership was really about capturing this idea of style in an unexpected place. We’ve seen some retailers promoting the product in displays in the floral [department]. It’s really capturing the essence of that idea of displaying it in a place in the store that might otherwise be unexpected

In just the first three months of 2009, several of the largest companies in the industry announced mergers that will change the face of an industry dogged by sluggish pipelines.

Pfizer, the top company in terms of US sales, said in January that it would acquire Wyeth for $68 billion, a company with a strong R&D background and vaccine division. Merck joined the fun in March, announcing that it would acquire Schering-Plough for $41.1 billion. Merck hopes Schering-Plough’s pipeline and specialized sales force will add value moving forward. Less than a week after Merck’s announcement, Roche announced plans to buy all remaining stock in Genentech, for a total acquisition price tag of $46.8 billion.

For the moment, analysts are unsure how the deals will bode for each of the companies. However, the consolidations will certainly affect the way each company does business. In terms of media spend from November 2007 through November 2008, Pfizer led Merck, Schering-Plough and Wyeth by a considerable margin. Pfizer spent $665 million on DTC and professional journal ads combined during that period, compared with Merck’s $295 million, Schering-Plough’s $158 million and Wyeth’s $74 million, according to SDI figures.

Roche said in a statement that its merger would put the company at number seven in terms of overall market share – Genentech is currently the 11th largest pharma company by US sales, at $9.3 billion in 2008, according to IMS Health. Pfizer will most likely remain on top in terms of US sales – Wyeth came in at number 15 in 2008, at $7.6 billion. Merck was in fifth place at $15.5 billion in 2008, and will move up the ladder, potentially passing Johnson & Johnson ($16 billion), AstraZeneca ($16.3 billion) and GSK ($18.4 billion) with Schering-Plough’s $4.9 billion in US sales.

According to Goldman Sachs report authored by Jami Rubin, transformational strategic action is inevitable among several of the largest companies, and managements should consider alternative strategies to unlock value. “We believe that further value could be created if these new giants find opportunities to rationalize their lines of business by breaking off or carving out businesses that do not fit strategically, a la Abbott. This is especially notable for Pfizer…Merck has already indicated that it will consider selling part of its animal health business,” the report stated.

Despite the hype surrounding Twitter and Facebook, advertisers for the most part spend little on social media marketing, according to a new report by Forrester Research.

Forrester found that 75 percent of marketers have budgeted less than $100,000 for social media efforts over the next year. The firm concluded that social media has not yet entered the marketing mainstream, but is largely relegated to experimental budgets — despite the fact that social media marketing typically costs less than traditional ad programs.

Social media had yet to prove its impact, using accepted measurement standards, in moving customers through the marketing funnel, Forrester said. That lack of proven impact has relegated efforts to the sidelines: 45 percent of respondents said their social media budgets are determined on an “as-needed” basis.

“In order to be successful, brands have to have dedicated strategy and programs to make these [venues] work like their other marketing vehicles,” Forrester analyst Jeremiah Owyang said.

The good news: Even with the economy in recession, a majority of marketers — 53 percent — said they expected to increase spending on social media. Just 5 percent said they would decrease spending and 42 percent said their outlays would remain the same. (Forrester did not ask marketers to specify if they were including ad programs on social sites.)

“Social media is new so marketers are trying to pull budgets out of other areas,” said Owyang. “It’s very early days for most marketers.”

When Facebook released a list of its most popular pages last month, the first two—President Barack Obama and Coca-Cola—were fairly predictable. But No. 3? What was Nutella doing up there?

Though many of those 3 million or so fans were no doubt based in Europe, the Italian hazelnut/chocolate spread has achieved an enviable notoriety in the U.S. as well, branding experts say. “It has all the dimensions of a cult brand,” said Allen Adamson, managing director of the New York office of Landor Associates, who said that the brand’s relatively low profile gives consumers social currency. “Part of what drives it is this idea of ‘I’ve found something really cool. I want to get my friends inside something that they won’t see in a two-page spread in People magazine.’”

Nevertheless, Douglas Atkin, author of The Culting of Brands, isn’t sure that Nutella fits the description of a cult brand. Atkin says that one thing that distinguishes such brands is the ability of fans to talk about things beside the product. But judging by Nutella’s Facebook discussions, fans seem to want to talk about little else than Nutella. “Nutella or sex?” is the title of one discussion. “Nutella and pizza” reads another.

Cult or not, Nutella is blessed with a strong Web presence. Google Nutella and you get roughly 5 million results versus under 2 million for Twix and 3 million for Skittles. (Skippy, the peanut butter, also gets 5 million results, but the name can be used in other contexts.) There are about 5,000 videos featuring Nutella on YouTube, many of which are foreign commercials. There are more than 17,000 photos featuring Nutella on Flickr and the brand is a favorite subject of bloggers

Every day, hundreds of jets lift off from Runway 33 of the George Bush Intercontinental Airport, laying trails of gray exhaust across the muggy Houston sky. The planes climb steeply toward cruising altitude, and by the time they’re over the northern suburb of Humble, everything on the ground looks pretty small. Even the huge billboards that dot the city’s metro area are difficult to see. The lone exception is the roof of Humble High School. It’s a perfect 160,000-sq.-ft. box. And if Cynthia Calvert has her way, it will soon have an ad on it.

“We’re looking for an advertiser who wants to be under all those people,” she says. “We have found a company that’ll paint it.” And what will the school get from surrendering the very roof over its head? Calvert can’t put it more plainly: “Found money,” she says.

Calvert runs a new company called Steep Creek Media, which also is looking to sell ads in the school’s parking lot, its stadium, and even at the bottom of its swimming pool. If her ideas raise eyebrows, here’s another fact to ponder: If and when Humble High finds its advertisers, it’ll hardly be unique. Across our recessionary land, cash-strapped municipalities—their coffers depleted by a dwindling tax base—are suddenly in marketing mode, chumming up with companies ready to pay for the honor of having their ad, name or logo on a high-visibility civic property.

The initiatives range from naming rights to massive vinyl ad wraps, and the examples abound: Chicago is currently taking RFPs that would allow companies to buy the right to name individual stations stops on its “L” transit line. New York’s Metropolitan Transportation Authority has already wrapped an entire subway train—inside and out—with ads, in addition to selling space on station columns, turnstiles and even the floors. Meanwhile, back up on the streets, a Brooklyn legislator has proposed selling ads on city trash cans, and the City Council may soon allow 8-foot ads to be stuck on construction scaffolding. The city of San Angelo, Texas, just gave the green light for advertising in its venerable 50-year-old coliseum. And, perhaps most controversial of all, several municipalities across the country have begun to quietly sell advertising space on the outsides of school buses.