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Empire Building at Google? April 14, 2007

Posted by K.C. in advertising, allances, Marketing, media, Merger.
5 comments

Recently, Google purchased DoubleClick, an online advertising company, for $3.1 billion. This is yet another large purchase from Google who paid half of that for YouTube last year. DoubleClick is one of the top online advertising companies who specialize in software for display advertising and has close relationships with various web publishers. For some time now, Google has had its eyes on DoubleClick because of their success in display advertising. Display advertising is essentially the picture ads on the banners and sides of websites. While Google is also an expert in online advertising, they have not been able to capture every aspect of online advertising. Google’s advertising strengths lie primarily upon small text ads that pop up when a user completes a search.

 DoubleClick’s strengths on the other hand, “…lie in flashy banner ads and, more recently, video ads that are more like high-end magazine or television ads.”  

 Purchasing DoubleClick means that Google will be able to track user patterns much more closely in an attempt to produce smart ads that are based upon a user’s interests and search habits. As usual, analysts argue that $3.1 billion may be excessive but DoubleClick had similar offers from Microsoft, AOL, and Yahoo, its closest rival.

 

In the eyes of internet users, online advertising may seem ineffective but with this large purchase of DoubleClick, Google may know yet another thing we don’t.

Starbucks, the evil corporation? April 4, 2007

Posted by Charley S in advertising, Marketing.
6 comments

http://www.businessweek.com/magazine/content/07_15/b4029070.htm?chan=innovation_branding_branding

So what kind of company image does Starbucks conjure up?  Well, a lot of people would say that it is completely obsessed with profits, has lost touch with its original customer base, and is basically a big, evil, bloodsucking corporation.  I mean there exist places where Starbucks has locations directly across the street from each other.  When you go to their stores you can buy practically anything there, from newspapers to music and high priced espresso machines.  Oh, and don’t forget the coffee which is incredibly overpriced.  It seems that as a result of image problems their growth has topped out over recent years, with their stock price dipping 25% in the past years.  Basically, they are at the stage where if they are going to continue to grow they are going to have to do something drastic.  The CEO apparently thinks that this is more than possible and even predicts tripling revenue over the next decade.  Right now they are in the process of introducing some new drinks that will apparently try to get back to the original small coffee house feel.  This article talks about the process by which Starbucks produces a new drink, which actually takes quite a lot of time and investment.  Starbucks is also trying to add more premium coffee that it sells as beans in the stores.  Will this type of change be enough for Starbucks to continue to grow?

I believe that just introducing new flavors is not the way that Starbucks is going to continue to grow in the long-term.  This strategy will add temporary novelty to the product but does not address the underlying problem that Starbucks is losing its small coffee shop atmosphere.  To address these problems I think that Starbucks needs to reach out to consumers and offer a close in coffee experience.  Starbucks knows a lot about coffee, and it could utilize this knowledge by trying to help educate the general public on the finer art of making coffee.  Other companies have started mail order cofee clubs which have been extremely successful in informing consumers on new products and is an easy way for coffee adicts to get their morning fix of coffee.

A Saab’s Story March 27, 2007

Posted by Kira in Auto's, brand, Consumers, Marketing, Organizational Environment, outsourcing, Retail.
4 comments

Saab was faced with the challenge of expanding its market to mid-size sports wagon drivers in the U.K. To accomplish this, Saab had to overcome two major disadvantages. Not only was their marketing budget smaller than their competitors but, their brand recognition and reputation was smaller as well. To promote the 9-3 SportWagon, Saab created a two-part campaign that combined direct mail and the internet. The campaign was a game called “The Race Against Time.” This campaign included a 100-page “choose your own adventure” book that was mailed to people who inquired about the car. The book put its readers in a Saab 9-3 and dared them to see if they could reach a weekend destination without falling into trouble. The story moved forward by choosing from optional actions listed on each page which all led to a different set of circumstances. The game was also offered online- so people could sign up for the game and for additional information about Saab. By playing online, the players could e-mail their results to a friend and challenge them to beat their time. Participants could also record their personal progress. As an incentive, participants who won the challenges were eligible to win a Saab 9-3 Aero V6 SportWagon and Saab-branded sports merchandise. Although Saab officials assumed that no more than 5,000 people would participate in the campaign, more than 29,000 people signed up to play online with 40% also signing up to receive electronic news updates from Saab. The game was also placed on other websites and on blogs (go figure!). Sales for the 9-3 rose in Great Britain from 2,000 cars sold in 2005 to more than 6,000 in 2006.

“We got a set of people who never would have considered Saab,” says Ed Birth, the Saab account manager for Draftfcb (Draftfcb created the campaign)

Saab’s campaign is an example of a recent trend in which marketers are targeting consumers enticing them to play games and activities in order to get them to spend more time with the brands. The longer the time spent with the product the more likely the brand will come to mind when making a future purchase.

Last class we were discussing survival strategies. I would say that Saab is a k-specialist- they had to break into an established market for sport wagons. Some of the reasons that Saab was probably successful as a k-specialist were because they already knew that a market for sport wagons in the U.K. existed and that games and activities were a marketing success. They were able to see trends in the existing companies in the sport wagon market that they could “mimic” and allowed them to see the correct way they could compete.

By using direct mail, online websites, and blogs, Saab was able to reach different potential consumers. The use of online websites allowed Saab to capture younger consumers while also capturing the names and e-mail addresses of potential consumers who registered. This could allow Saab to generate a database for future marketing tactics. Also, the game was a great way to tap into consumers’ emotions- I know it made me reminisce about the “Choose Your Own Adventure” book that I had when I was younger!

 

I think the game can still be played online- check it out for yourself!