What a month, oh what a month… LinkedIn and Yandex went public; Microsoft acquired Skype ahead of Facebook and Google; Facebook and Cadbury both attempted PR suicides; Spotify struck a deal with Facebook; Yahoo acquired an unprofitable company for 28 times its recent annual revenue- the list could go on and on. The last month of spring was thoroughly entertaining to say the least. Having trawled the Augean stables of the global newswires, I have selected the stories most interesting no matter what your job title maybe. As always, my monthly digest covers a range of marketing, business and technology stories.
Marketing
Facebook was Caught Ordering a Smear Campaign Against Google
Facebook is larger than life. It has become a system that, should its development trend persist, will control the digital lives of the vast amount of people. It is no longer just about notes on The Wall and shared photo albums: the deal with Spotify will now provide music and the agreement with Warner Bros will offer movies. Unless the bubble bursts, in a few years the social network is likely to become a very serious power of the digital age. Whilst some question the security of the enormous (and constantly growing) database of personal information controlled by a single private company, Facebook shows remarkable creativity in literally commoditising everything it sets its eyes upon. One of the latest features allows users to tag brands and products featured in their pictures.
So, how could a company so potent, so experienced and so gifted mess up that much? I guess we will have to wait until David Fincher is ready to make a sequel. Many young people may not read the newspapers and will keep naming their babies after the network itself, as well as its secondary features but most of the rest of us agree that the company could not have mismanaged the situation any worse. Well, maybe by a failed assassination of Sergey Brin; but other than that- hardly.
In May 2011 Facebook was caught paying Burson-Marsteller, the PR agency, for persuading influential technology journalists and experts to criticize Google’s Social Circle. Ironically, Burson-Marsteller specializes in crisis management. Perhaps working for a company that grows faster than a teenager on steroids was so dull the PR ninjas had to create a problem in order to have something to solve. Well, they have certainly mastered that.
Cadbury Caught in a Racist Scandal
Naomi Campbell’s row with Cadbury is hardly headline material. However, the subject of this scandal is indeed remarkable. In times of religious political correctness, the family oriented global FMCG giant couldn’t think of anything better than explicitly comparing the emotional black diva to a chocolate bar. What on earth were they thinking..?
Samsung Camera on a Road Trip
It is not often one witnesses market leaders making rookie PR mistakes. With a gentle smile and no schadenfreude we turn our attention to the most successful marketing ideas of the month. Samsung’s plan is ingenious in its simplicity. The new Wi-Fi enabled Samsung SH100 can access the Internet, allowing instant image sharing. What would be more obvious than giving the gadget to photography enthusiasts to roam around the country, ecstatically taking beautiful pictures, uploading them to the likes of Facebook and generating tonnes of free PR?
VW has Developed an Edible Ad
It is just after 11 a.m. I got up at 6:15, left home at 7:45, was in the office by 8:30 and I haven’t had anything to eat yet. The hunger is growing, a storm roaring in my stomach. I could of course go for lunch but it is still too early and the deadline is creeping closer. My eyes begin to wander. The chocolate cake is too much: I haven’t been to the gym for weeks. The apples look sad. And just when I thought that everything is lost, VW has lit a beacon of hope for all the hungry workaholics around the world. Now we can eat printed ads. A bit odd, but certainly ‘food for thought’.
Friskies Entertain Cats with iPad Apps
They say an ad should appeal to the target customer. So who is the target customer if one is selling cat food- the people who choose and buy it or the animals who actually consume the “carefully chosen ingredients”? The question seemed quite rhetorical until Friskies (Purina) came up with a way to address the little carnivores directly. By offering iPad games designed exclusively for cats, the company has instantly (and at low cost) attracted the attention of its ideal customer- a reasonably well off individual prepared to pay a little extra to please the pet. Bravo.
Henry Buys a Rover
Range Rover’s latest Evoque campaign is not the first interactive advert we have seen. It suggests the Rover model that would perfectly reflect your personality based on an interactive game that involves making decisions for a virtual character, the loveable Henry, whilst following him around the city. The choices made affect Henry’s day as well as the specs of that dream car of yours. The ad is a solid piece of advertising that takes user experience to a whole different level. I seriously doubt that people who can afford paying between £28-50,000 for a car would also spend ten minutes on an online game but the hype has certainly done Range Rover some good.
Business
Microsoft Snatched Skype from Google and Facebook
To the untrained eye, Microsoft looks like a killer whale, breaking the ice and snatching the penguin from the eyes of its astonished relatives. The fact that Skype will soon change hands seemed almost certain purely based on the names of the interested parties. At the beginning of the month, both Facebook and Google were allegedly in talks with the internet telephony company. For a few days the experts were guessing the name of the buyer and the price, arguing who would benefit more from integrating Skype into its grid. Less than a week later, Microsoft has closed the biggest deal in its history, acquiring Skype for $8.5 billion.
The unexpected deal has divided the experts, who started arguing pros and cons with even more agitation. Some think it makes perfect sense; others see paying 400 times the company’s 2010 operating profit as a desperate attempt at keeping Skype’s know-how away from Google. Although counting other people’s money is indeed bad taste, one must not forget that Microsoft is a huge corporation keenly optimising its taxes.
LinkedIn Goes Public
The only news that could compete with the Skype acquisition this month was the first IPO of a Social Media company. And it started brilliantly well. The “Social Media” factor is important. Up until now the astronomic price growth of Skype, Facebook and LinkedIn (LNKD) was based on predictions and perceptions. The first public offering will either pave way for more elation or… not. Some go as far as advising to “sell Apple to buy LinkedIn”; others argue that the IPO could actually be bad for the US economy. An interesting opinion piece even suggests that the company was scammed by Morgan Stanley and Merrill Lynch, the bankers managing the IPO. For some bizarre reason, the latter sounds very believable even without reading the column. Last but not least, should you have a minute, WSJ’s Dave Kansas offers a sobering piece reminiscing about 1999, when he himself rang the bell at the Nasdaq.
Russian Miracle Rings Bell at Nasdaq
In his article on the illusory sudden wealth of LinkedIn owners, Dave Kansas mentions another remarkable IPO of the month- Russian Yandex (YNDX). The offering is special because the search engine represents a relatively small group of commercially successful Russian companies not linked to the country’s natural resources but still attracting enormous interest abroad. Yandex shares have jumped 55% in Nasdaq trading after raising $1.3 billion in an initial public offering that valued the company at around $8 billion.
http://onforb.es/lVyJCM
Yahoo Tries to Jump on the Online Ad Wagon
In all the hype, the news that Yahoo has bought 5to1 barely made headlines in trade media. Although the performance of the once dominant online search engine has improved recently, its ad revenue has risen by a mere 1%, a miniscule value comparing to the 15% growth of total online ad sales. What makes the deal interesting is the fact that Yahoo has paid $28m for a company that has lost nearly $9 million on revenue of less than $1 million the previous year. Although what’s $28m these days? The price of Facebook’s reception desk.
Technology
Dad, what is a Book?
Print books are rapidly becoming an odd vintage accessory. In April 2011, Amazon has sold 105 Kindle books for every 100 printed ones. Ten years ago one could tell a lot about a family by looking at their bookshelf. First of all, it answered the question of whether people in the household were reading books at all. The answer would pave way for a few other issues- fiction vs. non-fiction, Conan the Barbarian vs. Buddenbrooks and so on. The era is coming to an end. Maybe it doesn’t really matter? After all, a sleek eBook on the table usually means its owner can read. What more can we ask for?
Intel Pioneers New Mobile Device Category
About twenty years ago I was given my first laptop. At the time, the market as I knew it offered two options- a desktop (in three tower sizes) and a laptop. If you needed something powerful, you would go for the former, of you needed mobility, didn’t have a desk or just wanted to show off (the battery life and the weight of those machines didn’t make working on the go a piece of cake) – you would go for the latter. My father, a scientist, had a workstation but those were never designed for the general public. These days our lives are swarmed by dozens of product categories. Laptops, netbooks, smartbooks, various pads, smartphones- all these brilliant devices help us work, relax and communicate in so many ways.
At Computex 2011, Intel has introduced yet another kind, the Ultrabook. Fast, light and very thin as they are, the category will need a hell of a marketing plan to repeat the success of the iPad.
Facebook Loves Spotify, Spotify Loves 600m Users
Facebook is spreading its reach. The über -popular social network is growing to become a digital hub, a full scale cloud entertainment platform for everyone and everything. Less than three months after the Warner Bros. deal, that gave its users access to the massive catalogue of mainstream blockbusters, Facebook is after the melomanes. In a mutually beneficial deal, Facebook users will have free and almost seamless access to Spotify while Spotify will get a chance to hook millions new users. After all, as of the last month, Spotify’s definition of “free” is “free for 10 hours a month.”
Cloud Music Today
The collaboration with Facebook could not have come at a better time for Spotify. Not only have the considerably more potent Google and Amazon launched their cloud music services (after all, Spotify has got the style that may help it keep some of the younger and edgier customers), the king of cool has joined the battle. And as we know, he rarely loses one. This month Apple has signed an agreement with EMI. Considering, Warner Music Group is already in and the negotiations with Universal Music Group and Sony Music Entertainment are said to be near completion, Spotify seems to have escaped the perils of a small fish living in a large pond filled with piranhas. Maryam Nabi of the Financial Times offers a short peek into the muddy waters.
Entertainment
An Eagle Family are America’s Biggest Reality-TV Stars
Eagles are cool; there is no way around it. From the dawn of our civilization, birds of prey were featured on body armour, seals, and various regal insignia. Eagles are cool. Whether they are cool enough to follow the daily goings on of their nest on live video, however, is a different question altogether. 2.4 million visit the “Decorah Eagles” project’s website every day; almost as many as London’s Natural History Museum gets in a year. How can this phenomenon be explained? Perhaps we really dislike moving and would watch anything half decent if it doesn’t require getting up from a chair?
Legend, Icon, Golden Calf
One of the most influential people of 20 century, Oprah Winfrey is a living legend. Rising against all odds, the talk show hostess became one of the most powerful media figures of all time. Her show, on air for 25 years, touched tens of millions across the world with their emotional stories, bitter tears and happy endings and made its star a household name. A pioneer in many ways, Oprah is moving on to develop her own network. For those of you who do not watch talk shows, The New York Times has put together a page, dedicated to the remarkable woman. For those looking for a sharper angle, Mark Oppenheimer of the NYT analyses the “The Church of Oprah Winfrey and a Theology of Suffering”
Log off Facebook; Play with Your Kids
Ex TBWA\Chiat\Day and Saatchi & Saatchi creative director, Gerry Graf has put together a short, weird and funny video advocating Internet moderation. Although somewhat self-promoting, thelogoff.org is a great example of a social ad, cleverly made and relevant to the most of us.
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