al berrios IMKTG REPORT 10.22.02: 20 New Stats, Emerging Media-Mania; more

[1] JUST SAY IT: my updates, Schwarzenegger for Gov?
[2] BRANDSTRATEGY: $300,000,000 vs. $100,000,000
[3] CONSUMERFOCUS: 20 New Stats to Scan
[4] MEDIA: Emerging Media-Mania
[5] MANAGEMENT: Consumers as Strategic Consultants

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[1] JUST SAY IT: my updates, Schwarzenegger for Gov?

>> "Beware the leader who bangs the drums of war in order to whip the citizenry into a patriotic fervor, for patriotism is indeed a double-edged sword. It both emboldens the blood, just as it narrows the mind..." -William Shakespeare

Good morning execs,

Thanks for the quote, Chris. So last week was the inaugural launch of my creative dept. There are now four of us on hand with access to proprietary research resources (the iMarketing team), who keep us in touch with consumers. But why is it so important to stay in touch with consumers? Refer to MANAGEMENT section below.

And finally, if you don't already know, I'm a big Arnold fan. I've got all his videos and watch them endlessly as I make my reports, manage my teams, or just relax. Well, it turns out that he MAY run for Governor or California! Makes me want to move there.

Schwarzenegger Mum About Calif. Run

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[2] BRANDSTRATEGY: $300,000,000 vs. $100,000,000

In case you haven't heard, these are the amounts MSN and AOL, respectively, are spending to launch their 8.0's. Both introduced their latest versions with concerts, week long promos, and no ads on the others media properties in an effort to lure consumers to their fresh new features and content and lure advertisers to their innovative ways to reach their subscribers. But are consumers interested in content or access? Last week, iVillage bet it's brand that women want to access the internet through them rather than anyone else. The other incentive: it's cheaper. "Our visitors have been quite vocal about their disappointment and frustration with their current ISPs; they want price, simplicity and quality," iVillage CEO Douglas McCormick said in a statement.

BOTTOM LINE: Consumers want both, just not from the same brand. AOL became successful early on by offering both because just like the 3-channel era, people didn't know what their choices were until new choices were available. Now that they have so many choices, they now seek content from brands other than AOL. So why does AOL have so many subscribers? And why did AOL merge it's access with Time Warners content if not fulfill customer demand for both? AOL gives away free subscriptions and lots of free hours similar to how a magazine does. Their concern is numbers, not quality subscribers. And the merger? Who said it worked? In fact, even AOL acknowledges that their customers were taken for granted during the deal. It was all about the advertiser and investor. If the customer were to have been remembered, the deal may have had a better chance of working.

iVillage to offer low-cost ISP
New ISP on the Block: iVillage

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[3] CONSUMERFOCUS: 20 New Stats to Scan

> E-mail addresses are changing at the rate of 31% annually, driven in part by consumer efforts to avoid spam, or unsolicited marketing messages

> 43% of the 1,015 respondents changed their personal e-mail addresses at some point in the past. Of that group, more than 16% made the change in an attempt to combat spam.

> Individuals with yearly household incomes of $100,000-150,000 accounted for nearly 15 million Web surfers, or 12% of the Web population a 20% increase over last year.

> Those earning $150,000 and higher recorded a 14% year-over-year jump. That income bracket made up 5.3% of the Web population, or 6.4 million surfers.

> Households with earnings between $75,000-100,000 posted a 12% rise, comprising 17% of all Web surfers, or 21 million people.

> Households earning less than $25,000 or $25,000-50,000 grew 2% and 5%, respectively. Still, those falling in the income brackets of $50,000-75,000 and $25,000-50,000 represent a large portion of the Internet population, 31% and 27%, respectively.

> More consumers are using the Internet primarily for personal communication (36%) than for work-related activities (18%).

> More than 35% of Internet users go online daily, while an additional 15% go online several times a week.

> Close to 65% of males under the age of 35 play games online, compared with less than 60% of females.

> By 2006, 40% of the bills viewed will be at sites that consolidate consumers' various accounts in one place, and consumers would prefer banks to be that place.

> Less than 6% of online users prefer a portal's bill viewing and payment services.

> By 2006, more than 50 million households will view bills online and 52 million households will pay at least one bill online.

> 75% of adults who wear fragrance seven days a week read direct mail. Only 9% of them are truly selective, reporting that they open direct mail only from companies they are familiar with.

> Hispanics in the US will spend more than $21.3 billion on telecommunication services - local and long distance, wireless and internet - in 2002. US Hispanics have a buying power of $630 billion and represent over 40% of the ethnic telecom market in the US.

> 41.9 million game console units will be shipped worldwide in 2002 Sony will dominate that market, claiming 63% of worldwide shipments with its PS2 console. Nintendo will follow, claiming 21% of the market with the GameCube and Microsoft's XBox will have 16% of the global game console market.

> Data from the United States Commerce Department shows a 30% decrease in all American exports to Saudi Arabia for the first two quarters of 2002

> Hispanic men 25 to 54 spend about one-quarter of their overall media time with Spanish-language media

> Asian American men 25 to 54 register notably low use of radio (less than 50% of average time spent) By contrast, they show a strong preference for the Internet (50% above average) and, to a lesser extent, newspapers.

> African-Americans are 50% more likely than whites to be entrepreneurs.

> Among men with education at the graduate level, the study found that 26% of blacks and 20% of Hispanics have tried to start their own businesses, compared to only 10% of whites.

BOTTOM LINE: What interested me most of all these stats was that SONY is dominating the game console market and that US products are being boycotted in Arab nations. You just gotta ask yourself why consumers are behaving like this, knowing their need for choices? This is speculation, but perhaps in Arab nations, consumers are not accustomed to choice. I can only imagine that if the entire world around you is in terrible disarray, the last thing you're thinking about is buying a Coke. As for PS2s outselling Nintendo (the longest lived brand of the three), and XBOX, I'm not surprised, given SONY's positioning as the coolest of the three, however, as we've seen in the past, Microsoft doesn't jump right in and dominate, they spend their way to the top during the course of several years. That's the thing you gotta love about Microsoft, even if they screw it up, there's nothing investors can say about it. They have to grin and bear it.

Changing E-Mail Addresses: Who People Tell and Why
Study: Consumers warm up to e-billing
Telecoms' Potential Targeting Hispanics
Sony's Got Game
the growing animosity towards US products in Middle Eastern markets
Arab boycott takes toll on US soft drinks
How Men Use Media
Men from key ethnic groups show markedly different media use patterns
Minority Report

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[4] MEDIA: Emerging Media-Mania

TV puts their on-air promos for their shows online to help the at-work aud plan their evenings. Turns out that viewers do take advantage of TV websites, even tho few networks try to reach viewers online. ( avgs close to 2MM uniques per month!) And with the fierce competition, they all need any advantage they can get. But it seems that content is still king, and when it comes to content, AOLTW rules. Their network, theWB has been tapping into all their resources, especially cartoons and comics, to generate a huge library of young-adult-magnets. Is it possible that theWB is the only network that understands young people, other than MTV? We'll see. Have you heard about parking meter advertising? What about Chinese-food-box media? How about visual radio? Cows-as-billboards? Yup, emerging media is having a field day out there with all kinds of entrepreneurs coming up with the next opportunity for courageous media buyers. If you've got the budget, and don't mind waiting for a thorough analysis of the types of people these new media reach, now's the time to get in, while the prices can be negotiated extremely cheap.

BOTTOM LINE: I wonder what will happen when media finally converges? If established media is using new media to reach the same people, only because these same people have embraced every new media that pops up, can a convergence be too far behind?

TV networks spin new shows with Web-site video clips, TV sites
WB extends two sitcoms
'Lopez' Locked In, ABC gives a full-season order to the sophomore Latino family sitcom
WB giving life to anime 'Akira', The WB picks up hot frosh 'Everwood', Warner TV gives prexy a high five, NBC leads; WB's 'Birds' soars
Company Tests Parking Meter Advertising
minutes from the Manhattan community board evaluating request for pilot program on parking meters, info, since their site ( doesn't work
With Egg Roll, You Might Get Advertisement
Cream, Sugar, and Advertising

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[5] MANAGEMENT: Consumers as Strategic Consultants

There were several topics of interest this week (Wal-Mart rents DVDs online. Should you release your own software? The harddrive as the next portable storage media) but what I think captivated me the most was the size of the internet population and how much is it worth. "There are now an estimated 220 million active Internet users worldwide, according to Nielsen//NetRatings, but the value of that audience seems to be falling even as it grows in size and scope".

Management consulting originated from the concept that by controlling your costs, you can make better business decisions. So a lot of what management consulting is today originated from accountants. These guys value everything by your assets minus your liabilities. It's just now that valuing a brand is beginning to become something you see on an income statement. Therefore, I propose a new basis for making business decisions: based on discussions with all consumers, not just your customers.

BOTTOM LINE: It's not an alien idea. In fact, many businesses continuously survey consumers for new product ideas, and customers for product improvements. But this isn't about some marketing thing. Look at eBay. Everything from new product development to mergers, acquisitions, and divestitures is done because the customer said so. And they're doing so well, it's scary. They have learned to talk with their customers, listen, and act. Many companies are ok just following customers around, ignoring what they say, and molding customer feedback into their own opinions. And since continuously having discussions with consumers has always been cost prohibitive, many don't bother.

al berrios &co. has gotten into the practice of having continuous discussions with all consumers and your customers to find out what they want all the time. From this capability, we are able to advise our clients on everything from communications, product strategies, legal issues, etc. It's not just marketing anymore, it's helping management make better business decisions. You've got your accountants, but they don't buy your products. Isn't it time you started making decisions based on what you're doing right or wrong with the consumer?

Wal-Mart cues up a rival to Netflix
Hard drives: The new VHS tape
What Is the Internet Audience Worth These Days?
How Much Is Your Company Worth?

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Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2001-2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.


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