Branding

Blockbuster lives! (But for how long?)

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Blockbuster logoI blogged recently about the financial travails of Blockbuster and its pending sale … indeed, whether the brand would survive or be liquidated instead.

Wednesday evening’s auction was the scene of some drama as various groups contended with each other for the right to purchase this white elephant. As the evening wore on, Dish Network was vying with Monarch Alternative Capital for placing the high bid.

It was a true battle between old and new forces … with Dish Network seeing Blockbuster as a conduit for augmenting its suite of services, and Monarch looking only to liquidate Blockbuster’s substantial real estate holdings while shuttering the enterprise for good.

When the dust finally settled, Dish Network was the victor, agreeing to pay ~$228 million in cash at closing, which is expected to occur within the next few months. In total, the deal came in at ~$320 million, which tracks with the current value of Blockbuster’s assets.

What in tarnation is Dish Network thinking of doing with Blockbuster? It turns out that the company is hoping to use at least some of Blockbuster’s ~1,700 store outlets to facilitate cross-marketing of its satellite programming and related video services.

The industry is already abuzz with what this really means. Is the Blockbuster acquisition by Dish Network a master-stroke … or a big blunder?

Dish Network looks like it will attempt to keep Blockbuster afloat by having it provide free or discounted rentals as a value-add to Dish’s pay TV subscribers. But industry watchers are also looking at potential online opportunities which could turn out to be more lucrative, since Blockbuster holds streaming rights to various video titles that Dish can use to expand its existing streaming offerings. It could also roll Blockbuster licenses into a Dish-branded online video-on-demand service offering.

In a likely related move, Dish Network has also acquired the assets of financially troubled satellite operator DBSD North America. That purchase provided access to a broadband spectrum that Dish can now use to roll out wireless networks for voice or data communications. This way, it wouldn’t need to rely on the broadband networks of other Internet service providers to stream the content to its satellite TV customers.

But with the pace of change and the fickleness of customers, any effort to bring synergy to these new acquisitions must happen very quickly. Dish Network doesn’t have the luxury of time to make things work; it’s got to happen in weeks and months rather than years.

So the coming months will be interesting in seeing how the Dish/Blockbuster union pans out. One thing is certain: Blockbuster won’t end up looking anything like it does today. But on the bright side, the brand won’t be thrown into the dustbin of corporate history – at least not yet.

And that probably surprises more than a few industry observers – the ones who have been loudly predicting the death of this iconic brand for months or years now.

More Insights on Online Display Ad Effectiveness

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Ad clickthrough rates
Clickthrough rates are only part of the story in online display advertising.
Last week, I blogged about the low level of clickthroughs on online display ads – basically a cipher at 0.09%.

In a conversation with a business colleague of mine who is with one of our healthcare client accounts, she mentioned that it’s also important to consider the branding aspects of online display advertising. The idea that people may not click through at that precise moment in time, but are favorably disposed to pay a visit later on.

This got me to looking for additional research into the matter. What I found from several advertising digital media marketing and data reporting companies – MediaMind (Eyeblaster) and comScore – confirms this impression.

An analysis by comScore of consumer clickthrough behavior covering ~140 online display ad campaigns found that only about 20% of the conversions came after clicking on a banner ad. The remaining 80% of conversions happened among those who had seen the ad but not clicked through at the time. Instead, they converted at a later date.

Other interesting points from comScore’s analysis include:

 Online display ad campaigns yielded nearly 50% improvement in advertiser website visits as measured over a 30-day period.

 Users who were exposed to the online advertising were ~38% more likely to conduct an advertiser-related “branded” keyword search in the subsequent 30-day period.

 Users who were exposed to the online advertising were ~17% more likely to make a purchase at the advertiser’s retail store.

Similarly, MediaMind’s analysis of ~100 million conversions from thousands of online ad campaigns has found concurring results – namely, that only ~20% of conversions are the result of a clickthrough, while the vast majority of the conversions happen at some point after viewing the banner ad without clicking on it at that moment.

The takeaway from all this: It’s a mistake to consider online advertising clickthrough rates in a vacuum. Because at best, it’s only a partial measure of the effectiveness of an online ad program.

Novelty Reigns at Allure Bays (er … Microsoft)

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Microsoft Office 2010 logoMicrosoft SharePoint 2010 logoIn the drive to “engage” customers, some companies are going to pretty great lengths to try something new and novel.

Take Microsoft and its soon-to-be-released Microsoft Office® 2010 and SharePoint® 2010 versions. Burned by the negative customer reaction to some of its earlier introductions (Vista®, for example), the company is trying some new tactics this time around.

Will they succeed? You be the judge.

You can start by visiting www.allurebays.com. This is a “pretend” site put up by Microsoft’s direct marketing agency-of-record (Wunderman), and attempts to generate awareness for the new Office 2010 and SharePoint 2010 versions without ever mentioning the products by name.

“Allure Bays Corporation” is a fictional company whose name is a riff on the Internet meme all your base are belong to us from an erroneous English translation in a Japanese video game that spread throughout the web in the early 2000s. The bogus site offers infomercial-type videos and other content. Special hidden clues are peppered throughout the site, with content that only alludes to the Office and SharePoint products and their feature/benefits.

What’s going on here? Jerry Hayek, a Microsoft marketing group manager, reported that the company wishes to reach an audience of developers that he characterizes as “jaded”: “It’s a fairly jaded audience. There are a lot of companies that want to talk to them,” he said.

In order to spark visitor engagement, a leaderboard on the “Allure Bays” web site allows registered users to compete for the honor of finding all of the 45 hidden clues on the site. So far, the site has attracted ~25,000 registered users.

“When we look at the developer audience, getting an engagement of 150,000 to 200,000 (spread across several videos) … is a win,” Hayek noted.

What’s the reaction of visitors? If the comments left by viewers of the “Allure Bays” video channel on YouTube are any gauge, it’s mixture of criticism and confusion. To wit:

 “This is one big, expensive, utterly failed attempt of Microsoft to go viral. Please thumbs-down this video.”

 “AYBABTU is a cornerstone of Internet culture. Microsoft appropriating it to hawk the newest version of their bloated Office Suite is loathsome. Anyone up-voting any of these videos should have their Internet license revoked.”

 “I don’t get it … is it supposed to be funny?! Or what the h*ll is going on here?”

“It could be the new TV show like Lost or Fringe or Fantasy Island 2?”

 “WTF.”

Sheri McLeish, an analyst with Forrester Research who covers Microsoft, reported that she found the “Allure Bays” site confusing. “I’m not sure what it’s supposed to do. But maybe there’s something I’m missing.”

In the end, whether or not this initiative will be declared a success depends on how the folks at Wunderman and Microsoft view the results in terms of before/after awareness, audience engagement, and positive product perception.

But the early indicators don’t look all that promising.

Companies are Concerned about the Risks of Social Media

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As blogs, Facebook, Twitter, LinkedIn and other social media tools have moved into the mainstream in a big way, managers at many companies are responding with interest … as well as concern. On the “interest” side, social networking is seen as having great potential for enhancing relationships with customers and promoting brand affinity. But there’s also “concern” that social media has the potential to damage a company’s reputation through the dissemination of information that is unflattering, taken out of context, or simply wrong.

Now, thanks to a July 2009 national survey of nearly 500 management, marketing and HR executives conducted by Minneapolis-based firms Russell Herder and Ethos Business Law, we have a more quantitative idea of the collective corporate thinking about pluses and minuses of social media.

Four out of five respondents in the Russell Herder/Ethos field research believe that social media can help build a company’s brand. In addition, nearly 70% see social media as a viable employee recruitment tool, while two out of three recognize its potential as a customer service tool.

But the survey also found that over 80% of respondents believe that social media poses a corporate security risk. Similarly, half of the respondents consider social media to be detrimental to employee productivity.

These findings show that senior company managers are somewhat ambivalent about social media. They see its positive potential … but at what cost? On the other hand, is shutting the door on social media a wise response (or even a viable one)?

One solution to this dilemma is to be found in dusting off an old standby – the employee handbook. In many companies, policies have evolved over the years to cover pretty much every kind of issue – from what constitutes approved and non-approved workplace activities, attendance policies, and conducting personal business during office hours to policies regarding alcohol consumption, gender/age/racial discrimination, and sexual harassment.

Why not incorporate new guidelines outlining the company’s philosophy toward social media and what constitutes appropriate company-related social media activities on the part of employees?

While it may also be a very good idea to conduct meetings or training sessions on social media as well, this a good first step that will give employees a sense of the “boundaries” they should observe when commenting on company-related issues in the social media realm.

The alternative is a “Wild West” atmosphere in which a problem is destined to arise sooner rather than later. And when that occurs, if no formal social media policies are in place, the company will have no cause for defending itself in the court of public opinion – as well as little recourse for disciplining in addition to counseling the employees involved.