Category: Uncategorized

The shipping industry has had a tough couple of years. Falling demand, rising fuel costs, and labor issues have all contributed to some major shakeups in the industry. The most dramatic was the fall on Hanjin, which was forced into bankruptcy and left millions of dollars of freight literally adrift.

Maersk Line accounts for roughly half of A.P. Moeller-Mahas revenue. They have been actively engaged in major cost cutting measures but continued to see their profits drop to $429 million from $755 million a year ago. At the same time their market share has risen dramatically. Consolidation and elimination of competitors has reduced the overall number of providers to a point where by they and two others will account for 43% of market share by next year.

Revenues are down, but the number of containers they are shipping is up by 11% when the typical growth is 2-3%. If they can make it out of this slump alive they will have another great story to add to their legacy, but this is probably the most painful way imaginable to gain market share.

Millennials want authenticity, experiences, collaboration, and solutions to world problems.  The blog at:

http://blog.hubspot.com/marketing/marketing-to-millennials#sm.000ojxm5dvd1eb211f81otpnrrx9s

describes 8 ways to market to millennials.  The article talks about what millennials are looking for in advertising and how to reach them.  Once I realized this blog was not an article, I searched for an article.

The article at:

https://www.entrepreneur.com/article/246199

focused on 3 aspects of marketing to millennials.  The Entrepreneur article talked about the importance of mobile marketing, targeting social groups (not life stages), and being relevant and engaging; which seems a lot like authenticity.

Knowing how to market to millennials is important and while there are several companies that have been marketing to them, Springfield Armory has taken it to another level.  The company’s history alone is pretty awesome, and millennials like a story.  Springfield Armory doesn’t stop there.  They have a “defend your legacy” campaign, which is pretty brilliant seeing how millennials are stereotyped (or not) as being narcissistic.  The campaign has short stories, video included, of 8 people, 8 millennials.  They are diverse in race, gender, demographics, and experiences.  However, they all want to defend their legacy.

Springfield Armory has integrated many of the suggested marketing tips the blog and article mentioned.  The campaign aligns with the company’s release of their new rifle.  The campaign is fresh, authentic, and will probably be successful.

http://www.defendyourlegacy.com/people/

 

Elon Musk is at it again, always looking for the next big thing to change the world as most high tech entrepreneurs claim to do.  His creation this time around involves fixing the most fundamental flaw to rooftop solar panels that has dogged the industry for decades.  While many consumers have welcomed the idea creating their own energy, the eye sore involved with large bulky solar panels on their homes has created reluctance with homeowners and homeowners associations alike.  Now, as Inc. reports, “Elon Musk might have just taken his biggest step yet in getting the world to convert to solar energy.”

What Musk has unveiled is not entirely a new idea, but many believe he will succeed where others have failed.  What he has unveiled are solar shingles that are transparent when viewed from above to allow sunlight to strike the solar cells inside but opaque when viewed from the ground.  Solar shingles have been done before, but never has anyone developed this kind of technology in a way that almost perfectly mimics the appearance of standard rooftop shingles.

In addition to the aesthetics, Musk has announced that installing these panels will cost less than not only standard solar panels, but also cheaper than installing regular roofs.  Furthermore, these solar shingles have a lifespan of 50 years, roughly double the lifespan of regular roofs and provide better installation.

One of the biggest obstacles for homeowners—particularly middle class homeowners—in making the decision to install solar panels is cost.  The average price tag to installing panels is around $15,000, an amount that most middle-class Americans do not have on hand to spare.  It is true that having solar panels can eventually pay for themselves with lower utility bills, it can often take several years before that return is evident.  By one account, an average payback period can be 15 years.  However, according to the National Association of Homebuilders, the average time a typical home buyer actually lives in their home before moving is 13 years.  Many homeowners might value solar power, but would be right to question the economics.

Musk, however, has changed the economics.  A home builder can construct a new house with solar shingles installed at a lower cost than regular shingles, but he or she can then sell the home at a higher value with solar installed.  A homeowner may not seek to rip out their shingles to replace with solar, but those that already need their roofing replaced, they can then install solar and see immediate cost savings with lower utility bills and with the longevity of 50 years, they too can ultimately sell their home at a higher value.  Musk has made rooftop solar not only attractive, but he has made it cost effective and profitable for homebuilders and homeowners alike.  With this shift, individually owned solar energy may very well see a significant rise around the world.

References

Kevin Ryan, “Why Elon Musk’s Solar Roofs will Succeed Where Others Failed,” Inc. October 31, 2016, Available at: http://www.inc.com/kevin-j-ryan/why-elon-musks-solar-roofs-will-succeed-where-others-failed.html

Paul Emrath, “Latest Study Shows Average Buyer Expected to Stay in a Home 13 Years,” NAHB, January 3, 2013, Available at: http://eyeonhousing.org/2013/01/latest-study-shows-average-buyer-expected-to-stay-in-a-home-13-years/

“How Long to Pay Off my Solar Panels” EnergyInformative.org, Available at: http://energyinformative.org/long-pay-solar-panels/

Austin is experiencing unprecedented growth and there is no end in site. Austin in being recognized as one of the fastest growing cities in the United States and the growth is not due to a particular industry, but rather a combination of the three P’s; people, purpose and partnership.

Back in the 50’s and 60’s city growth was due to a certain industry that drove economic activity that in turn grew population growth. With the world quickly changing and growing from its first two waves of the internet, and moving into the third wave of the internet city growth has changed from economic and industry stimulus to now what is being seen as cities that offer open collaborative environments where social and economical avenues are open to foster an environment of innovation.  The first wave of internet growth shows the likes of AOL, IBM and AT&T that were the beginning of the internet.  Then came the second wave that saw the like of FaceBook, Uber, Airbnb and other Start Up’s that introduced software that drove more innovation.  The third wave will bring further innovation such as the self driving cars, cure for disease such as cancer, and innovation of drones and robotics. Marketing has played a role in the second wave of the internet as analytics and big  data drove direct online marketing techniques that better understand the buying needs of the consumer.

What will the third wave of the internet bring? Marketing techniques will change as more analytics and big data plays a deeper role in our buying habits.

The  cities that are seeing the same sort of unprecedented growth are cities like Nashville, Phoenix, Pittsburgh, and New Orleans. These are cities where not a particular major industry is driving the population growth but rather the 3 P’s are playing a major factor.

 

Amazon’s direct to customer retailing model has redefined logistics, warehousing, and e-commerce in general, while at the same time redefining customer expectations of online ordering.

As its Prime membership has grown, more and more users expect faster and lower cost shipping and this is not only putting a strain on their ability to execute, but is also now starting to hurt their bottom line.

Amazon posted its lowest quarterly profit in over a year this past week. This is largely due to investing to keep up with the demand.

http://www.wsj.com/articles/amazon-posts-smaller-than-expected-profit-1477599108

While this caused shares to fall the overall outlook for Amazon is still positive. The problem will be how well it can balance surges in demand, like the upcoming holiday season, with new offerings like Prime Now that promise two hour delivery.

Amazon continues to push the envelope of its capabilities with these offerings but they are taking quite a risk at a time of year when consumer sympathy and tolerance for failure is typically at its lowest.

Amazon has never shied away from challenges. To stay ahead they have to push, but the costs associated with those efforts may be too much to bear.

This month, in October 2016, an a political ad dropped on YouTube, and presumably our local TV.  This ad was for the re-election of Republican Travis County Commissioner Gerald Daugherty.  The ad quickly went viral, and spawned many news stories.

The primary reason the video went viral was because of its humor content, and that it took a somewhat negative view of the candidate.  Other humor is generated in the structure of the ad being so different from traditional political ads in this cycle.  Most ads are negative on the competing candidate, rather than the candidate behind the ad.  This ad highlights a weakness and turns it into a strength: the candidate is seen here as an insufferable policy wonk, annoying and boring his wife.  For the wife, this is bad, but for the constituents, this is viewed as a positive, that he cares so much about policy.  It is especially noteworthy because so much of this election cycle has been entirely devoid of policy.  The entire ad comes off as very believable, humanizing, and reinforcing of the candidates credibility.

All of this is in stark contrast to the sorts of ads which went viral in previous cycles, such as Carly Fiorina’s Demon Sheep ad.  More often than not, the ad goes viral for reasons that do not promote the candidate.  Sometimes the ad just so entirely misses the mark, or it finds an unintended audience that finds the ad unintentionally hilarious.

While the ad in question here does have some vaguely problematic gender role overtones, it serves as a reminder that intentional humor and policy do still have a place in modern politics.

The video in question:

Sources:

http://www.forbes.com/sites/willburns/2016/10/26/travis-county-commissioner-gerald-daugherty-teaches-us-how-to-do-political-advertising/#4d5b0853048a

http://motto.time.com/4546787/gerald-daugherty-viral-election-ad/

In an interview, the marketing VP for M&M’s, Berta De Pablos-Barbier, told Diana Bradley that for M&M’s 75th anniversary, the marketing department is trying to do something every month to celebrate.  I don’t follow M&M’s on social media, and I haven’t noticed many commercials about the brand, so I’m not sure how successful this campaign is.  Maybe they aren’t marketing to my age group, or figure I’m already a consumer, which I am on occasion.  I do recall Red Nose Day earlier in the year, and have noticed the retro packages at the grocery store.  However, I had no idea there was a launch of “The Candy Man”.  A song that reimagined the Sammy Davis Junior’s 1972 version.  The company collaborated with Zedd and Aloe Blacc for the remake.  I was able to find the video online, and enjoyed how the old M&M commercials were included.  However, I had no idea this was on the web, or that M&M’s turned 75 this year.

http://www.prweek.com/article/1396611/cmo-q-a-75-year-old-brand-m-ms-keeps-its-marketing-going-stale

 

By Nicholas Van Zandt

For the past six years, Alphabet, the parent company of Google, has struggled to achieve its very lofty goal of competing against the cable and telecommunications giants in their effort to roll out high speed fiber optic internet networks.  On October 26, 2016 they announced what they were calling a “strategy shift”, but was more of a sizable curtailment of the program entirely.

In their announcement, Alphabet stated that their expansion would be significantly curtailed and they would be reducing the staff in that business unit.  Furthermore, the chief executive overseeing the Google Fiber division stated that he was planning on stepping down so that the company could focus instead on new technologies and deployment methods for their high-speed internet.  No replacement leader was announced.

While Google does has not released the financials for the fiber optic project, there have been numerous reports that the expenditures related to this business unit were excessive due to the costs involved with digging up the ground to lay the cable and having to pay to connect homes to the network even if those homes do not subscribe.

It would appear that this decision comes after several years of facing cost overruns that the company could no longer support.  These costs, which one might have assumed that a company like Google could of foreseen, have apparently required the company to scale back operations and it is unclear if the full fiber optic plan will move forward.  Google, for its part, has suggested that their real goal was not to profit from this project, but instead to motivate the existing internet providers to move faster in their own implementations of high speed internet.

Content is proving to be king to many Wireless & Cable providers.  As an employee working my 18th year at AT&T  I wash shocked and many around me to see out company no longer go after wireless and wire line assets, but rather shift position and go after one of the largest content providers in the world. Time Warner has full assets to HBO, CNN, Harry Potter, and many more titles. Content will be positioned for the first time with over the top TV to any device any time and any where on the US and Mexico. AT&T owns Direct TV and has access over most of Central and South America.

As revenues continue to shrink with Cable and Wireless providers for existing services such as voice, SMS and data,  new avenues for revenue need to be created. Video & content will lead the new path towards new ancillary services. With software and automation driving operations cost down new margin will be established with a on demand network and content.

AT&T is adjusting to the convectional means of TV moving from the living room to be viewed anywhere and anytime in the  world that most of us. The conventional cable services are losing ground to the like of Netflix and over the top  video and content provider’s.   AT&T and many other cable providers are on the opposite end of content, and that is why the new era of mega mergers between the cable/network providers look for their perfect match on the content side.

We will most likely see the likes of Netflix and other content providers stock such as Walt Disney  rally as content is king.

What does this mean from an advertising perspective. Direct marketing will increase, and conventional marketing through conventional commercials will slow  as the broad audience begins to narrow and direct commercials will increase.

With generational change comes the changing of marketing focus.  Gen Z, the generation born roughly in the lase 90s  until now, has already been aggressively profiled by marketers, eager to find the right angle to influence their growing buying power and familial purchasing decision influences.  Here are some of the major takeaways I’ve seen,  both from a internal marketing presentation on Gen Z that I was fortunate enough to see here at St. Edward’s.

“Digital Natives”

The one people always start with is calling them digital natives, who have always lived with social media, particularly Facebook and Snapchat.  This means that they are essentially always viewing content, and they are labeled as tech savvy.  However, I believe it is a significant mistake to label them as ‘savvy’.  Savvy implies a deep knowledge of the underlying systems behind the tech.  While they are heavy users, that does not make them knowledgeable, no more than driving makes somebody a mechanic, and watching a lot of TV makes somebody able to troubleshoot one, but I digress, they are tech enthusiasts.

“8 second attention span”

It is notoriously difficult to maintain the attention of certain segments Millennials, and this is even more true with Gen Z, who you have an attention span of roughly 8 seconds.  It is said that Gen Z use 5 screens at once to Millennial’s 3.  I question how they came up with that metric, but it is roughly indicative of the difficulties of catching an eye constantly darting between multiple screens.

“Authentic Marketing”

Gen Z don’t want to be marketed to by celebrities, they want to be marketed to from real people, in real scenarios, describing real usefulness of the product or service.  A stark departure from the drop-dead humor approached use to appeal to cynical Millennials.  They also want to participate in movements, even marketing movements, particularly those which do societal good.

Sources:

https://contently.com/strategist/2016/06/30/5-things-marketers-need-to-know-gen-z/

https://www.mni.com/generation-z-marketing.html