IMKTG REPORT 09.10.02: Hispanics & school; HipHop Sells!; more...
>> "The amount of television and the proliferation of television channels is lessening the importance of television advertising over time." -- Representative Richard A. Gephardt, Missouri, Democrat, House minority leader


Good morning execs,

Since everyone else is tip-toeing around
9/11, I won't. I feel just as bad as
everyone else, but even I know better
than to re-live all those awful memories.
Especially on video tape... (thanx TV,
for f**kin' up our day). Even politicians
have acknowledged that TV just ain't
as powerful as it used to be at getting
their message across. Which is interes-
ting coming from the industry that was
revolutionized by TV 40 years ago.
But with all the clutter of advertising,
the lack of media ethics (as shown by
the 49% of Americans' that felt that the
1st Amendment goes to far the way
media aggressively pursues things like
terrorism stories and scandal scoops
these days), and the constant string of
bad content and programming decisions,
do you really believe consumers still
care about their TV? (Yup, that's a
rhetorical question...) One quick note
about bad content and programming
decisions: I believe that consumers will
always tell you what's best for your
brand if you want them to use it, how-
ever, if you had to make a decision that
would put you in a better financial posi-
tion, but would risk alienating your con-
sumers, would you make that decision?
(i.e. Disney recently made a programming
change that upset it's core consumers
to help it's overall revenue strategy;
TNT's decision to cancel it's only original
program). I'm curious what you'd do?
Let me know.



1. BRANDS&INSIGHTS: Try The Other Online Marketing Thing
2. CONSUMERFOCUS: Spanish-centric or Spanish language?
3. MEDIA&CONTENT: Busta Increases Courvoisier sales 4.5%
4. MGMT&OPS: Pricing Like Wal-Mart and the Godfather

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1. BRANDS&INSIGHTS: Try The Other Online Marketing Thing

What's left? OK, quick, what's the
process that comes to mind when
you hear the words "interactive mar-
keting campaign"? Banners, emails,
Pop-ups? Anything else? "Despite
the seemingly constant encounters of
pop-up and pop-under ads, only 9.2%
of all online advertisers use them,
according to the latest report from
Nielsen/NetRatings." Well, what's
your goal? "During the first half of
the year, 84% of all pop-up ads used
a direct marketing tactic, as opposed
to branding. More than 58% of the ad
units attempted to drive traffic to the
advertiser's site, while 26% offered
incentives aimed at increasing sales."
It seems that too many advertisers
are willing to spend only $400-500K
on online campaigns this mundane,
when "the internet is 'essential' to
20% of people in the US, and 30%
of college grads". The worst part
is that some of these advertisers
often use more than one i-shop to
spend like this but use only one ad
agency to spend $12MM reaching
consumers offline. Interesting
discrepancy in the percentages of
budget allocated to online and offline
compared with percentage of con-
sumers that consider the internet
"essential". And to top it off, online
ads seem to suck: "[A survey of]
3,000 internet users.. reported that
63% say they have a low tolerance
for more than two ad units on a single
webpage, roughly 33% say they can
tolerate one ad on a page and 30%
say they can tolerate two ads per page.
The survey also determined that if a
webpage appears cluttered with ads,
36% of internet users will leave the
site. In fact, 58% say that if a web-
page is cluttered with ads, they have
a less-favorable opinion about the
product(s) or service(s) being adver-
tised on the page." What about CRM?
If your business is online, wouldn't
you think it's important to know "who
is on [your] site, track how and where
they interact so that [you can tell]
advertisers... the true value of [your]
online inventory" as well as offer
your consumers better service?
What about search engine marketing?
Surely this is an effective way to com-
municate with your consumers online?
When search results are dated,
don't show up, are incorrect, or aren't
intuitive to use, then your message to
consumers is in the worst place possible.

BOTTOM LINE: OK, by now you
should have gotten the point. As a
marketing professional you should have
your mind (and wallets) open to innova-
tive ways of interacting with your con-
sumer that doesn't bore them to death.
In order to understand what works, you
should also be spending on understanding
them. The reason many claimed the inter-
net was dead was because they were the
ones selling ads, not actually servicing
consumer needs. But you talk to the
folks directly tied into the consumers'
pulse and they'll tell you, the internet
was a resource the wasn't even correctly
realized. You can't change habits over
night, and that's what many expected.
Well, it's been 8 years since the first
banner... don't you think it's time to try
something new? Like iMarketing?

READ MORE: (pdf)
Television losing the youth market to Net, By Frank Barnako,, Last Update: 3:20 PM ET Sep 5, 2002

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2. CONSUMERFOCUS: Spanish-centric or Spanish language?

Ever wonder how you can reach His-
panics? Of course you have the most
obvious choices, like Telemundo and Uni-
vision, as well as the Hispanic radio
broadcasting companies, (which I believe
is also owned by Univision?). Then there's
People en Espanol, and Selecciones by
Reader's Digest. Can you think of anything
else? Why not? Because there isn't
that much selection. With 35.5 million
Hispanics living in this country, you'd think
there'd be more content for them to read in
their native languages, right? Well, which
language are you talking about? With dozens
of Hispanic perspectives to consider (Cu-
ban, Puerto Rican, Dominican, etc), how
can any publication successfully cater to
such a splintered audience? But I'm going
to give you another theory as to why you
don't see too much Spanish-language con-
tent out there: Because Hispanics are going
online to get it, and they don't always
use content in Spanish. "Web surfers of
Hispanic origin are the fastest growing
at-home ethnic group on the Web. Nearly
7.6 million Hispanics accessed the Internet
in June, jumping 13% year-over-year as
compared to 6.7 million the previous year,
making Hispanics the third largest ethnic
group online." Still, without acknowledging
this trend, Kmart has decided to launch
their own Spanish-language weekly in
markets where they'd like to reach the
Hispanic consumer. But forget advertising
there, since it's a pretty much a Kmart
vehicle. Why do media companies not
want to service this market, you think?
Here's another theory: for years, colleges
have reported that Hispanic students
just don't finish school. They typically
enroll in two year programs and still
don't get degrees. So, the assumption
would be that this market just isn't
interested in, or worth, the media's time.
Guess again: "Based on an analysis of
census data, the [Pew Hispanic] Center,
which is affiliated with the University of
Southern California Annenberg School
for Communication, found that 10% of
Latino high school graduates enroll in
colleges or universities, compared with
7% of white non-Hispanic high school
graduates". "The report... suggested that
Latinos were held back by financial
pressures, not a lack of interest in
pursuing postsecondary education.
Many enroll in two-year community
colleges rather than four-year institu-
tions, take partial course loads and
must work to supplement their families'

BOTTOM LINE: Wow, huh? Didn't
think that there was much of a market
there, did you? It's underestimated, just
like the HipHop market, (covered below).
So, what are you waiting for? Start talking
to them online, start talking to them in
schools, start talking to them in English,
and watch the loyalty pour in.

READ MORE: (pdf)
Brandweek, Monday, September 9, 2002, Today's focus: APPAREL & RETAIL

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3. MEDIA&CONTENT: Busta Increases Courvoisier sales 4.5%

I was obviously a little upset at the incident
I mentioned last week about Pepsi having
caved in to conservative demands to drop
a certain rap/hiphop artist from its roster
of endorsed celebrities for his use of in-
appropriate language and themes in his music,
regardless of the fact that he's the #1 per-
former Pepsi drinkers that like hiphop would
want to see. Well, the New York Times
was kind enough to publish a report about
the success of not just this very rapper at
talking about brands in his music, but the
success of HipHop overall at endorsing
products: "The sales for Cadillac were up
22% in July 2002 compared with July 2001,
Ms. Rajewski said. The rapper Ludacris,
in his song "Southern Hospitality," says,
"Cadillac grills, Cadillac mills, Cadillac fills..."
Even AOL has recognized the potency of
the HipHop market and the lack of channels
through which to promote their music (since
Viacom and Clear Channel pretty much
have the market tied up with regards to
videos, concerts, and radio airplay). AOL
has taken steps to build it's own music
programming to deliver it through their
AOL Music channel. This strategy is in
sync with their belief that better content
will improve subscriptions. But it highlights
a very important fact about the HipHop
or urban consumer: "Hip-hop delivers a
potent demographic. Last year hip-hop
accounted for 21 percent of $5.4 billion
in music sales in urban areas, according
to Soundscan, a system that tracks the
sales of music and music video products
in the United States." But here's the kicker,
artists aren't compensated by companies
to endorse their products. Many won't
accept because they don't want to give
up their artistic freedom. Even Busta
Rhymes, who I thought practically made
a commercial for Courvoisier with his
hit song, "Pass the Courvoisier Part Two"
didn't get paid by Allied Domecq, even
though he single-handedly helped increase
sales of the liquor by 4.5%!!! Speaking
of endorsing "53% of male respondents
said that sports sponsorships strongly
influence their buying habits, but only
26% of women felt the same. By con-
trast, nearly 70% of females said they
would purchase a product based on its
maker's sponsorship of good causes,
compared to only 46% of men." So,
there you have it, even if a celeb is
killing, robbing, or raping, he still has
the ability to influence buyers. What a
world we live in.

BOTTOM LINE: Bill O'Reilly is a dork!
Invest in the urban consumer. And Pepsi,
rehire Ludacris!

AOL downplays music subscriptions, By Frank Barnako,, Last Update: 9:15 AM ET Sep 3, 2002

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4. MGMT&OPS: Pricing Like Wal-Mart and the Godfather

I don't know if you know this, but I
usually write these pretty friggin' early
in the morning. Every Tuesday morning,
I'm up at the butt-crack of dawn, after
having read close to 400 e-newsletters
and sites the previous nite. My eyes,
hurt, but I still think better in the morning.
Anyway, after everything I've written so
far, I'm pretty emotionally spent. There
are just so many issues I'm passionate
about and want you to be aware of that
I just get all worked up... so now, I just
want to go back to sleep instead of tell
you about these really cool strategies
you may want to consider for your business.
But what the hell, I've been doing this
for over a year for you, for no money,
so, I must love this stuff... anyway, our
good friends over at are at
it again, trying to squish competitive
business sites into the dirt. Can you
believe that after getting some really
cool consumer profiling software (as
I mentioned in BRANDS&INSIGHTS)
they're actually guaranteeing to advertisers
that if their brand metrics don't increase,
they're gonna get a refund! A refund!!!
Can you believe that sh!t. It's so unheard
of in the world of adsales, that I just had
to highlight it so I can comment on the size
of their cojones are!! Good sh!t Forbes.
Is it any wonder I wanna work with you
guys. Anyway, while on the subject
of sales, have you ever heard of something
called "price optimization technology" where
software can now help you set the optimal
price for thousands of goods scientifically,
based on variables like weather, buying
patterns, inventory, etc. Yeah, it's out there
and it's one step closer to the most perfect
of pricing models, dynamic, the one eBay
uses. Why is this the perfect pricing model?
Well, if you walk into McDs with $3 bucks
in your pocket, and you really want that $4
#1 combo, wouldn't it be cool if the price
just dropped when you reached the counter?
Not only would you buy it, you'd return
every time with $3 bucks. Hehehe. The
point is that dynamic pricing builds loyalty
in the consumer, helps the business increase
sales (since you probably wouldn't have
purchased the combo and walked out the
store with your broke @$$), and helps
keep inventory at optimal levels, meaning
that your margins improve. Nuff said.

BOTTOM LINE: Take risks with your
pricing strategies. The benefits are clear,
but in the end, even customer retention
will be more cost effective. Don't believe
me, check out Wal-Mart. They've proven
how effective it can be to offer their con-
sumers what they want at the prices they
want and still make a disgusting profit. In
fact, most of business' problems can be
solved by looking at how Wal-Mart and
the Godfather did it. So, whenever you're
stuck, just think about what Walton and
Corleone would do and you'll be all right.
Now, get back to work. Have a nice day.


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