Partners and Edell Blog: Charm’s Cool

So there’s this company that has an ad campaign.
And it’s the nastiest ad campaign ever aired. How nasty? It presents the competition as complete bumbling shovelheaded buffoons. Commercial after commercial, at great media weights, it humiliates the competition.
And it does so to unprecedented success. Sales are up 46% in the latest quarter. Their stock is up 100% since the same time last year.
It’s competition at this point doesn’t know whether to poop or go blind.
So who’s that psychotically competitive company?
Apple. That poor sad competitor—Microsoft.
And how did they manage to get away with such an aggressive (and I mean North Korean level aggressive) campaign.
Charm.
The campaign is simply charming. The music is charming. The characters as performed by actors John Hodgeman and Justin Long are charming. The writing is charming. The tone, the sensibility, all charming.
To me it’s an absolutely perfect campaign. It’s got incredible longevity. It breaks down product benefits one at a time. And are those benefits clear? Clear as an azure blue sky on a December morning.
And the greatest accolade—it’s become part of popular culture. Not in a Burger King is-the-King-cool-or-just-really-creepy kind of way. It’s just sweet.
And charming.



Nothing cuts a gigantic wildly innovative market dominant software juggernaut down to size quite like presenting them as a cuddly incompetent dork.
And Microsoft still doesn’t appear, after all these years, to know how to deal with it.
Frankly, if I was up against a campaign this good, I wouldn’t know how to deal with it either. Their response still seems to be to just hope it goes away. Which to me, just makes it funnier.
Microsoft’s hugely expensive let’s bring in Jerry Seinfeld and Crispin Porter to go medieval on their collective Apple asses flamed out almost before it began.
And their current “I’m a PC” and I’m human and I’m interesting and I’m…trying way too hard, just doesn’t seem to be cutting it.
That’s how effective charm is.
But the charm also masks how incredibly brave this campaign is.
I have sat in endless brainstorming sessions where companies have clear benefits over the competition. The question inevitably will come up “why don’t we just show people how we’re better—you know, a side by side comparison.”
The client says “No. Why spend money to advertise the competition.”
The lawyer says “No. We’re opening ourselves up to litigation.”
The creative team says “No. It’s just so, y’know, old school.”
And if there’s anything that creative teams dislike more that being seen as unhip it’s being cute. Charm sits precariously on the borderline of the creative purgatory of Cute. Charm is a slippery slope. And no self-respecting creative person ever wants their work to be called Cute. Cute is kittens in baskets with yarn. Cute is babies in plant costumes. Creative people like to be funny and Cute isn’t funny. People will laugh at your Cute commercial, but it’ll be behind your back. Cute is creative death.
But Charm, as with all weapons, is incredibly effective when aimed accurately.
For example, what happens when Charm gets mixed together with wildly eccentric?
You get The Most Interesting Campaign Of The Year for The Most Interesting Man In The World. How interesting is he?



“His blood smells like cologne.”

“He lives vicariously through himself.”
“He once had an awkward moment just to see how it feels.”
“His reputation is expanding faster than the universe.”
“His beard alone has experienced more than a lesser man.”
“The police often question him just because they find him interesting.”
That’s the campaign for Dos Equis. And that’s the legend of The Man. We’re captivated. We’re entranced. And when he finally speaks to us in this TV commercial, does he go for a call to action? Does he extol the virtues of the beer? Not for him to stoop to such corporate stoogery.
“I don’t always drink beer, but when I do, I drink Dos Equis.”
Don’t always drink beer? In a beer commercial?
Now that’s a charmer
In an ad category of manscaped smugsters and beer-swilling bubbahs, The Most Interesting Man In The World uses wit as a weapon. Rather than celebrating the stupid and puerile, the appeal to the 12-year-old mind in an adult body, this advertising recognizes the fact that your voice has changed, you’ve got body hair and your testicles have descended. It’s a campaign for grown up men.
And the charming man gets the girl. Not the pull my finger guy.
Apple and Dos Equis. Charm rules.
So why aren’t there more charming campaigns? The most obvious reason is that they’re really really hard to do. They rely heavily on tone of voice, wit, style, incredible casting and great restraint. All elements that are hard for a lot of marketers to get their heads around. It all feels kind of touchy-feely in the hard-charging, media-neutral, results-oriented, innovate-or-die world of marketing today. And charming campaigns don’t test particularly well. So much is reliant on nuance. Sitting down 15 guys at $100 bucks a crack at a shopping mall on a snowy night in Regina virtually guarantees focus group suicide. Go ahead, ask them if they find it charming.
But when it’s done right. When all the precarious elements work together, charming campaigns are the ones that stand out, that really differentiate and captivate.
And boy do they work.
Like a, you know, charm...Partners & Edell Blog by John Farquhar

TechCrunch: FaceTime and Why Apple’s Massive Integration Advantage is Just Beginning

The success of iPhone 4 has been astonishing to witness, despite the antenna issues, proving once again that Apple has a unparalleled ability to differentiate around design and integration, not simply “features.”

Perhaps the best example of this so far is FaceTime, Apple’s take on video-calling. FaceTime makes video-calling on the Android-based Sprint HTC EVO look silly, because the EVO awkwardly requires users to sign up and download a third-party app, then launch it every time they want to talk. Normal people simply won’t do this.

Apple eliminated this friction by innovating at the confluence of hardware and software—hit one button mid-call and the feature just works. It really is amazing (yes, I am channeling Steve Jobs).

But FaceTime is just a teaser of Apple’s deep integration capabilities. Below the surface of hardware / software, Apple is on the cusp of differentiating on a much deeper level, a result of its strategy to vertically integrate at the component level. The advantages of integrating so deeply are subtle but incredibly powerful.

Feature Bloat in Components Benefits Apple:

I recently discussed why innovation in mobile is happening at an unprecedented pace. One primary driver is incredible component innovation.

But this rapid innovation—which is good overall—causes a negative byproduct: “feature bloat.” The HTC EVO, which crams in 4G wireless, epitomizes this best (sorry, but mobile 4G is not ready for primetime, and I firmly believe Apple won’t even include it on next year’s iPhone 5).

The temptation for companies to differentiate via features is a virtuous cycle: component vendors (Broadcom, TI, Qualcomm) compete aggressively based on integration levels. Handset OEMs like HTC push vendors to release features prematurely, and they make component decisions based on availability of bleeding edge (but often buggy) technology.

This leads to a “kitchen sink” mentality, which conflicts with customer development frameworks, ironically driving a maximum feature set. Pressure from handset OEMs is a driver, but component vendors also tend to use competitive analysis to shape their marketing requirements. Steve Blank made some excellent insights into why this leads to feature bloat. The poor reviews of the HTC EVO are proof that—though alluring—additional features don’t always speak to consumers. Especially when they kill your battery overnight.

Apple thinks much differently about adding features. While the HTCs of the world “differentiate” blindly based on available technology, Apple innovates only when it can create a superior, well-integrated user experience.

Right now this virtuous cycle of feature bloat is accelerating in system-on-chip (SoC) development for the reasons I outlined above. And Apple is poised to sidestep it by vertically integrating and producing chips which mirror its minimalist product strategy.

Supply-Chain Transparency is an Enormous Unspoken Benefit for Apple:

Perhaps even more powerful is an unspoken advantage afforded to Apple’s SoC designers: vertical integration gives them explicit knowledge of what’s happening across the entire component ecosystem and value-chain.

How? Every component vendor in the world visits Cupertino to share its “secret” roadmap—despite the fact that Apple now competes in SoC development. The dangling carrot of an Apple design win simply outweighs any aversion to sharing. This transparency from other chip makers is extremely powerful, since handset OEMs plan several generations out (e.g. Apple is undoubtedly in concept stages with iPhone 6 and the A6).

Apple can learn Broadcom’s chip plans and mull over whether to bring portions of the digital logic related to GPS and WiFi on to the A6. New technologies like NFC for payments—bring in-house or purchase discrete? There are dozens of permutations, each with design challenges, benefits, and risks.

By extracting data from suppliers, Apple’s chip team has a feedback loop into product planning. All of this collective wisdom adds up, helping Apple decide what to roll-up, buy, license, or outsource. Imagine seeing your competition’s entire feature roadmap, and then planning your own SoC strategy. It’s like seeing your neighbor’s wife naked, and deciding afterward whether you’re interested, even though you’re already married.

Cisco has used a similar vertical integration strategy to its benefit in the enterprise for many years (Broadcom and Marvell pitch Ethernet fabrics despite the fact that Cisco builds its own switch chips). But in mobile, Apple is the only company who owns all three elements of the value-chain—hardware, software and chip components (outside of Samsung). Nokia divested its component division to STMicro, and Ericsson and Motorola spun off theirs as well.

As multicore ARM-based chips accelerate, and as software / hardware integration becomes more of a differentiator, Apple engineering teams will out-innovate competitors at the intersection of these three levels (again, antenna issues aside). It’s much more difficult for Google, Motorola, and others to cross-pollinate information from their own independent silos.

In tomorrow’s smartphone wars, this transparency into the entire mobile value-chain will give Apple an incredibly powerful advantage. This strategic implication wasn’t lost on Steve Jobs when he made the decision to vertically integrate and compete with the giants in the semiconductor world.

Fact is, Apple is a company run by brilliant strategists and user experience designers, not engineers. They know that deep component, hardware, and software integration gives Apple an enduring advantage as mobile platforms evolve. Which is why Apple will undoubtedly produce more devices and features that become huge hits like iPhone 4 and FaceTime...TechCrunch

Business Insider: 10 Things You Need To Know This Morning

Good morning! A LOT of news:

* Zynga raised a gigantic $147 million round from Softbank Capital to fund an Asian expansion.

* Twitter rolled out its "Places" feature allowing people to tweet their exact locations. Twitter integrated Foursquare and Gowalla check-ins with the feature.

* RIM is working on another touch screen smartphone and a tablet. These new units are expected before year end.
* iPhone 4 pre-orders start today. The store is down for now, so you can read our guide to buying an iPhone in the interim.

* Apple released an updated Mac mini model this morning also. It starts at $699 and sports an HDMI port.

* The hackers that exposed the AT&T iPad flaw, are now saying there's a big hole in the Safari mobile browser.

* Tesla updated its IPO. peHUB says it hoping for a $1.46 billion valuation.

* Margit Wennmachers, the founder of OutCast communications, is joining venture capital group Andreessen Horowitz as a partner. She'll help with marketing portfolio companies.

* Google's music store could be launching by fall.

* When Meg Whitman was CEO of eBay she shoved an employee named Young Mi Kim. Kim threatened to sue, but eBay paid a $200,000 settlement to Kim.

Read more: Business Insider

Umair Haque: Challenge

It's kind of like air. Invisible but omnipresent, every industry, market, and sector has a dogma — "a doctrine or code of beliefs accepted as authoritative." "This is just how things are done," dogma whispers, every second of every day, to every decision-maker in every boardroom.

What does it mean to be a revolutionary? To challenge an existing dogma, instead of complying with it: to reject its tenets, highlight its flaws and improve each of its shortcomings.

What makes Apple so revolutionary? Why is it able to disrupt industry after industry, and topple the mightiest of incumbents? Steve Jobs is, from an organizational perspective, more Che Guevara than Jack Welch: he's always challenging dogma, instead of complying with it. Apple's rivals, like most companies, do exactly the opposite: "this is how things are done," they think — and then try to do it harder.

Here are six ways to challenge the dogma that's invisible and omnipresent in your industry — to be a breath of fresh air:

Challenge products. Most companies make the same toothpaste, car, or shoe — just in a slightly different color or flavor. Not Apple. Every once in a while, it challenges the existing dominant design, the accepted ideal of what a product should be. That is, of course, the story of the iPad. Yes, tablets have been around for a while — but none with the features, attributes, and pricing of the iPad. Instead of contesting the same old stuff, Apple challenged everyone to rethink it.

Challenge strategy. Think of strategy as a pattern of investments a firm makes. What is it — really — that makes Apple different? It invests significantly more in design and usability, where its rivals don't; as an organization, Apple is more like a design studio (replete with control freak overlord) than a "company." Rivals never invested in design — because design was seen, in biz parlance, as a "cost center", not a "profit center", a frivolous, soft, unproductive use of hard-earned capital. Apple's great challenge has proven that design is perhaps the single most productive investment a firm can make — and that's why its rivals are desperately playing catch up. But they're missing the point: It's not about following Apple. It's about challenging dogma.

Challenge distribution. In the early noughties, the music industry rolled out wave after of portals, channels, and platforms: all new distribution mechanisms. The problem was that they were the same old distribution mechanisms, with a slightly prettier face. As PC World famously said, "the services' stunningly brain-dead features showed that the record companies still didn't get it." Who did? Apple. iTunes challenged the preconception that music could only be distributed in walled gardens — iTunes isn't perfect, but it is far more of a truly open market that anything that came before it.

Challenge business models. Apple's replicated iTunes' success with the App Store, of course. The App Store challenges business model dogma by turning media from product to service, letting new profit possibilities open up. Publishers can earn revenues from app sales — and perhaps further revenues from in-app sales. Apple is spearheading its own mobile ad service, shifting into a new industry, offering new products to a new market — ads that let publishers get more creative bang for the buck, and alter their business model dogma that digital ads are low-value commodities. TIME asking five bucks an issue isn't what I mean by challenging business model dogma — two kids at Stanford topping the charts with an awesome newsreader, one that people actually pay for, is.

Challenge sales and service. Apple sells very differently from its rivals, and I'm not just talking Apple ads. Instead, I mean the Apple Store. Yesterday, electronics were soulless "product," commodities hard-sold by tuned-out teenagers in big-box megastores. The Apple Store challenged every aspect of that and turned it on its head. The act of exchange became personal, passionate, and interesting. Who doesn't stop into an Apple Store every now and then just to check something out? The Genius Bar turned service upside down — giving people, well, actual service, instead of just outsourced script-reading (imagine that). That has paid steep dividends: the Apple Store is (by far) the most productive and profitable store in your local mall.

Challenge production. Apple has, as we've explored, challenged in a variety ways. Here's it's next and greatest challenge. Can it challenge how its products are made? As a recent spate of suicides at Foxconn's Hon Hai suggests, the effects of producing "magical and revolutionary" devices might not be so magical or revolutionary. Can Apple, well, "Apple" not just distribution, marketing, and retail, but the global economy's lowest-common-denominator battle for "labor arbitrage," making it simpler, cleaner, and more productive? If it can, it just might give Apple yet another edge for the next decade.

Lesson? It is through challenge — not mere compliance — that the disruptive outperformance is earned.

You might be wondering — what about Apple's dogma? After all, Apple's a pretty dogmatic company. Of course it is: that's the point. Don't accept it: it's becoming the new industry dogma. Now you know how to challenge it...Umair Haque

Business Insider: 10 Things You Need To Know This Morning

MORNING:

* AT&T was hacked, resulting in the exposure of the email address of over a hundred thousand iPad 3G owners, including major hot shots like Mayor Bloomberg and Rahm Emmanuel.
* Google is freaked because Apple is not going to let it advertise in iPhone apps. Now the Feds are getting involved.
* Bill Gates, John Doerr, and Jeff Immelt want the U.S. to triple spending on energy research.
* Here's a cool rumor: T-Mobile will make all phones free for one day -- June 19.
* Apple updated its Safari browser and added extensions. Here's 25 extensions available to install today.
* A year after Zynga unleashed FarmVille on the world, it is releasing FrontierVille, a new game that's similar to FarmVille, but has a few twists says TechCrunch.
* Linden Labs, the company behind Second Life laid off 30% of its staff.
* The Netflix/Hulu effect: The percentage of people watching full length movies on the web has doubled in the last year, writes Joesph Tartakoff at PaidContent.
* iFixYouri, a site claiming to have an iPhone 4 minus the circuit board
, did some tests on the screen. Turns out it will break just like an other iPhone, despite all the talk of a super strong screen.
* If you haven't yet, do read the big feature we have on the "Startup Con Man," it's quite a tale.
Read more: Business Insider

brand dna: I'm no longer a Mac

First broadcast back in 2006 the "I'm a Mac" campaign has now been retired by Apple. Which I find a little sad as it has been a constant source of smiles for me. This lovely video collates some of the best moments from the campaign. Enjoy! brand dna

Experience Matters: iAd Won’t Be an iFad: New Opportunities for Mobile Advertising

Molly Hop & Anna Mer | Critical Mass Chicago

It’s clear consumers are hungry for mobile applications, having downloaded more than 3 billion apps from the Apple app store as of March 2010, according to eMarketer. The growing popularity of this channel has led to an increased desire to find a way to market to our mobile consumers. In response to this, Apple has recently acquired Quattro Wireless (after having AdMob snatched up by Google) to create the iAd advertising platform that will launch with the iPhone 4G this summer. Now the question is, how will iAd change how brands approach marketing within mobile applications?
A common debate among the Critical Mass Experience Distribution team is whether there is a “correct approach” to mobile applications.

When do you recommend creating one?
What value will the mobile application serve vs. that of the mobile website?
How should we market this application?
How much money, time and effort should be put into it?

One might argue that building an application but not putting a marketing effort behind it is similar to the “if a tree falls in the forest but no one is there to hear it” concept. If we determine that we don’t have the money, resources or rationale to build and market our own application, do we sponsor a relevant existing app that another brand hasn’t gotten to first? Please continue reading here: Experience Matters

Business Insider: 10 Things We Learned This Week

Google held its I/O developer conference, and thus dominates the big stories of the week. SAI held its slightly smaller Startup 2010 conference.

Android 2.2 (codename "Froyo") has arrived. Everyone seems to agree that this is a huge update. Plus, it runs Flash!

Google's other huge (and expected) announcement: Google TV. Here's what you need to know about it, and here's what it looks like.

Facebook's privacy woes continued. There were reports of internal conflict at Facebook over the company's new policies. Then it emerged that Facebook was (accidentally, it says) giving way too much information to advertisers. Still, we think this will blow over, and perhaps it's finally beginning to.

Google has privacy problems of its own. The company is facing a class action lawsuit over the private wifi data recorded by its Street View vans. It isn't clear that Google ever recorded data that could have been exploited, and there's certainly no reason to think any data was exploited, so we still don't think this is will be a big issue.

Another big announcement from Google I/O: the company is launching a first of its kind web app store, the Chrome Web Store. The idea is to do for web applications what Apple has done for mobile apps with the iTunes store. There seem to be more skeptics than believers so far, but the Sports Illustrated HTML5 app chosen to push the concept blew everyone away.

Redbeacon is the most promising startup in the land. Well, the most promising of the entrants to our Startup 2010 competition. Congratulations!

Australia now requires that people entering the country declare any pornography they have with them, including on their computers and mobile devices. Customs officials are digging through computers to make sure declared porn is above board. Gizmodo mulls over a few of the obvious reasons this is a terrible idea.

MarketWatch discovered that Steve Jobs traded in a huge pile of underwater stock options back in 2003 when Apple was at its low point. The momentary loss of faith cost him $10.3 billion.

Facebook made up with one of its key partners, FarmVille developer Zynga. The two companies struck a 5 year deal. They had been feuding over the revenue split on micropayments made within Facebook games. Facebook is pushing its own payment system, Facebook Credits, and will take a 30% cut of all transactions using them. Zynga will likely get some free ads. Meanwhile, its user base continues to shrink.

Somewhat unfairly, Apple continued to bear the brunt of the PR backlash over conditions at Foxconn's gadget factories in China. An investigative reporter spent a month inside one of the facilities constructing iPads and iPhones, and painted a very grim picture of life there.

Read more: Business Insider

Andy Beal's Marketing Pilgrim: Google Takes Aim and Fires at Apple

As one might expect, Google is pretty confident when it comes to just about everything. You have to be to do what they have done in a short period of time relative to most business success stories. Of course, taking the lead position in the development of the Internet Age will do that, won’t it.

Google also is very interested in maintaining that position as the shift toward a more robust mobile computing and communication world is underway (it may even be for real this time!). So when Google’s Vic Gundotra spoke yesterday at the Google I/O developer conference he left little room for speculation as to Google’s intentions for the Android OS and who it is looking to ‘take out’. At about the 3 minute mark of the video below Gundotra takes aim directly at, you guessed it, Apple.



So we should be looking for a true battle of these titans because Google is making a dent in the valuable market of mobile communications. They are going about it in a very different way than Apple which comes as no surprise. What may be a surprise, however, is the speed with which Google and Android are impacting the space.

I know many iPhone app developers who shrug off the Android’s advances and feel that Apple will win the day in the long run. They may be right. What is not going to happen, however, is that Apple will have the runaway success many had predicted. Apple’s first position in the market is their strength right now but Google’s open approach and ability to leverage all of its other market leading capabilities are hard to compete with over time. Couple that with an aggressive stance on going after Apple and the way Steve Jobs views the world and we are in for quite a show.

Who will come out on top? Let’s hear your thoughts...Andy Beal's Marketing Pilgrim

Darren Herman: If we could all set the bar like Apple

If you follow the tech space or watch the evening news, you will have heard/read that Apple is charging initial iPad advertisers millions of dollars to be the first marketers on their devices as part of the iAd product rollout.

Journalists (inclusive of bloggers) initially highlighted the price tag in most of their rants as very high. Yes, it is high (keep out the riff raff) but what is of importance here is nor the price rag but something very different.

Apple is all about controlling the experience for the end user. This sometimes doesn’t make them friends amongst the developer community but ultimately satisfies consumers (just look at their stock price). Apples foray into advertising has started with the Quattro acquisition and they are methodically working towards rolling out an experience for their users that creates a mutually beneficially relationship between Madison Ave and consumers.

What is most important to me about this rollout is that apple can set the bar so damn high for the initial advertisers and get away with it. There are virtually no other brands out in the world that can set this bar: upfront millions of dollars, Apple designs/develops ads (with minimum agency interaction), and no guarantee of launch date. When I had my in-game advertising company and we were doing huge integrations into top titles from the likes of EA and Activision, if we demanded these types of terms, Madison Ave would have laughed at us.

Apple has all the leverage in the world here. Creative departments and agencies have grown up on Macs, Apples stock is soaring, and Steve Jobs is the man Madison Ave wants to be; all of this works in the favor of Apple’s roll out for iAd.

The iAd roll out needs to be and will be treated like the guest list and dress code of the latest club opening in Downtown LA. Partners will be handpicked with stringent rules in order to set the bar for future marketing partners. Who and how Apple lets people in will influence the future success of the program.

Oh by the way: there are other ways to advertise on “iPad content” without having to pay these huge initial fees. While they aren’t iAd certified, they may deliver a similar or even beyond experience:
1. Sponsor an iPad app
2. Purchase ads on websites that have high viewership by iPad readers
3. Create your own iPad app
4. Buy standardized ads within apps
Darren Herman

Andy Beal's Marketing Pilgrim: Apple’s Cracked the App $ Code: Charge Developers for iAds

Apparently Apple just isn’t making enough money off the iPhone. In addition to making at least a little on each unit sold, Apple also gets a cut on the apps and other media sold for the device.

But they want more. The Wall Street Journal reports on a rumor that the new iAd network will come with a hefty price tag—possibly $1M to join the program, and $10M to be among the first. Additionally, Apple’s split of the ad revenue is 40%, and the price tag “comes with initial demands for greater control over advertisers’ marketing campaigns.”

It’s often routine to charge a premium to participate or especially launch a new platform, but even established advertisers are surprised by the price tag. Says the WSJ, “Ad executives say they are used to paying between $100,000 and $200,000 for similar mobile deals.”

But, says the WSJ, the bigger fish are still biting: “Despite the high price, ad executives at agencies from Boston to New York and San Francisco to Los Angeles have crowded into conference rooms in recent weeks to listen to the tech company’s pitch for iAd.”

Another feature that makes the iAd attractive is the format. Advertisers pay a very low CPM, but when consumers click on and interact with the interactive ads, the price for advertisers jumps up:

One example Apple has been showing advertisers is an ad for Nike’s Air Jordan basketball shoe, says Baba Shetty, chief media officer at Boston-based ad agency Hill Holiday, owned by Interpublic Group. When a user is in an application, an animated banner ad appears on the border of the screen, along with an iAd logo. If the user taps on the ad, it expands across the screen, displaying a video, an interactive store locator and exclusive offers at local stores, among other features. . . .

Apple is planning to charge advertisers a penny each time a consumer sees a banner ad, ad executives say. When a user taps on the banner and the ad pops up, Apple will charge $2. Under large ad buys, such as the $1 million package, costs would rack up to reach $1 million with the various views and taps.

With 85M devices and approximately 42.5M hours of screen time for apps a day, it’s little wonder advertisers are interested. But with cheaper alternatives out there, will it be enough to make it worth their while? What do you think? Andy Beal's Marketing Pilgrim