il for advertising’
Month: July 2014
Music : Evolution of Product
Music : Evolution of Product
Music industry as a whole faced disruption by the Internet. Traditionally pre-recorded music was distributed and sold. That was substituted by file sharing, downloadable tracks and more recently cloud-based streaming. This has affected the revenues of the music industry.
The MP3 Format
In the mid 1990s, the MP3 format provided a means to store audio in a compressed format that was far smaller than uncompressed audio . In those days, hard-drives and portable music players had lesser storage capacities. The compressed format enabled people to store music tracks on their personal computers and portable devices. It became easy to create your own compact discs (CDs) mixed compilations .
File Sharing Platform
There was national progression from music CD’s to the Internet-based peer-to-peer file sharing applications. Napster launched it in 1999. Such applications proliferated. Mostly these were illegal. It cannibalized sales of traditional music distributor platforms. There was litigation against the offending companies and individual customers. Still, the pirated music gets downloaded.
Apple : iTunes
Apple is one of the first companies to try to legitimize downloading of individual tracks. It opened its iTunes music store in 2002 to complement its iPod device. It was an immediate success. Five million plus songs were downloaded in the first two months. It was an attractive proposition to the customers–they can download legally and have access to preferred songs without buying an entire album.
Cloud Computing
The rapid rise in broad band speed and penetration in recent years has opened up the possibility of cloud computing, which allows access to files without the need for local storage. There are start ups such as Spotify and Groove Shark which allow access to an almost endless database of music to users, which can be pushed to computers and other devices which are internet–connected .
The business model is based on subscription services and advertising while a user listens. Spotify technology development began in 2006. The founding company is based in Stockholm, Sweden. The technology was launched for public access in 2008. It was by invitation. In 2009, it launched free registration. The parent company has moved from Stockholm to London. It has now tied up with social media sites. Unlike Napster, Spotify owns music rights, through agents. However, Spotify is over -dependent on social media.
Convincing users to pay for music, any music , has been a growing challenge since the introduction of the cassette tape. (Isacc Dinner kenan – Flagler Business School)
Ethical Issues in Advertising
There are wide variety of ethical issues in advertising –- marketing unhealthy products , advertising to children and using puffery .
Unhealthful Products
There are products that cause harm to human health e. g tobacco , alcohol , pan masala . Should they be allowed to advertise ? Some countries have banned such advertisements whereas some restrict such advertising . The companies feel that as long as the products are legal ,there should not be any restriction on advertising them . Critics , however , disagree .
Advertising to Children
Can we direct the commercials to children ? TV advertising to children poses an ethical dilemma . There are issues of cartoon channels and advertising . The young mind will not be able to distinguish between the programme content and advertising .
Using Puffery
Puffery is exaggerated subjective praise of the product without any substantiation . Some puffery is harmless , and cannot be proved or disproved . Puffery should not be misleading , and should not be used as a license to lie . Mostly people can understand when an advertiser is exaggerating.
Advertising and Society
Advertising and Society
Advertising has been assaulted by its critics who contend that apart from selling products and espousing ideas, advertising influences society in unwanted and intrusive ways. It is all–pervasive and persuasive too. This gives it the ability to shape the social attitudes. Many defend advertising on the basis of economic benefits. In addition, advertising fosters freedom of expression and supports the media. It not only provides information about the products and services, but also about the social issues. While influencing the society, advertising too is influenced by the society – it acts as a mirror which reflects the social changes. The language, idiom and illustrations in advertising conform to the socially accepted practices.Whether advertising is good or bad to the society is to be examined on the basis of issues. Let us examine a few issues.
Language and Literacy
It is charged that advertising corrupts the language. It tweaks the sentences, spellings and grammar to make a point. It uses ‘Hinglish’ in India, and plays fast and loose with the rules of language. The audience too copies the same. Such erosion can affect the literacy level.
Advertising uses the language that people it wants to reach use. There is no intention to sully the language. It just reflects what the audience uses. While reaching the youngsters, it uses a jingle like ‘har ek friend zaroori hota hai‘. Advertising language is thus less–than–perfect. It tweaks words so as to make them distinguished trade marks or brand names, i.e. Kwality instead of Quality.
Manipulation and Exploitation
Does advertising lure you into buying what you do not need it all? Does it exploit people? Critics accuse advertising of powerfully swaying people to use the advertised products and services. Advertising, they say, exploits your hidden anxieties and play upon your fears. It kindles hopes and takes advantage of your inadequacies. Advertising manipulates you psychologically. Advertisers make you believe that their products give you social status, you receive love and acceptance by using them.
In defence of advertising, they say that there is nothing wrong in persuading people to identify their needs and offer them a suitable product to match those needs. What advertising does is to inform people about the products available, about the choices people can make. Advertising makes the market more efficient for both the advertisers and the consumers by passing on information.Advertising cannot create demand for a product that is not needed. Advertising stimulates you to buy but if the product that meets your needs is not available, you do not buy. No amount of advertising can make you buy a product that does not work, or does not satisfy your needs. People have been found holding against advertising by skipping them when TV commercials are being shown. They have the freedom to turn the pages of the print media of they are not interested in the product advertised. That the skepticism shown by people acts as a counterbalance against the persuasive power of advertising.
Stereotyping
Advertising creates many stereotypes – the behaviour is generalised on the basics of a particular slot, class or group. This is the usual criticism of advertising. Thus we may have a daughter–in–law who is dominated by the mother–in–law, who is reprimanded. As in compressed 10 second commercial, it is difficult to build a character, some sort of visual cues are used to judge these characters. The problem with this approach is that a whole group is stereotyped – elderly people are senile, and women are housewives. Such stereotyping may strengthen the prevailing prejudices against these groups.
Such stereotyping in a diverse country like India may alienate several potential customers. If women are shown in correct perspective it may open up a wider market. The situation is slowly changing. Thus a modern daughter–in–law wins the acclaim of the mother–in–law by showing her expertise in culinary skills, home management etc. In addition advertising models are all handsome young men, and fair women. They do not represent a vast hinterland population of the weak, poor and backward. However, many ads now show models drawn from real life, thus a real shopkeeper recommends a particular product. Advertisers should feature more and more people from the socially disadvantaged groups.
Influence on the media
Advertising, we know, sustains media by providing it revenues. In the process, it is so alleged, it exercises great influence on the editorial content of the media. Media faces an actual or implied threat of the pulling the ads. When media writes about business, it exercises caution.
On the other hand, media is affordable for a large number of people mainly on account of advertising. Had media been solely dependent on government funding, it would have been the worst situation. Media sells advertising to many advertisers, and therefore, not unduly influenced while disseminating news. Media supported by many advertisers is a better proposition than the wholly government supported media.
Still media avoids the controversial topics that may offend the advertising sponsors. The alternative is to have media without advertising. But such media, not subsidised by ad revenues, becomes too costly. People will have to pay for even radio and TV programmes.
Bad Taste and Offensiveness
Advertising is often criticised for being in bad taste, or at times totally offensive. However, here one has to separate the product from the presentation, say a bra which is an inner garment for a woman. Maybe, it is not portrayed tastefully. It should be noted here that taste is a subjective thing. What is acceptable to some remains objectionable to others.Over a period of time, the seemingly offensive things appear less distasteful on account of social changes.In addition, certain ads appear to be offensive in other media.Advertisers have to remember that ads of questionable taste generate debates but may not achieve the ultimate aim of generating sales.
Advertising and Social Responsibility
As members of the society, advertisers too owe a responsibility to it.It is going beyond your own objectives of profits, growth and survival.Agencies produce ads that promote social causes – save water, save power, do not use drugs etc. Many businesses put these ads in the media.Then there are non-profit organisations and government bodies who too promote such messages.Media too willingly donates time and space for such messages.
Advertising and Ethics
The role of ethics in advertising has been debated since long.There is a call for more ethical advertising.There are some fraudulent ads which invite public criticism and at times legal action.This has led to a self-regulatory body such as ASCI : Advertising Standards Council of India, some regulatory laws, some codes such as the Doordarshan Code to define what the advertisers can do and cannot do.There are two issues here–ethical dilemmas and ethical lapses.
An unresolved ethical question where both the sides have their own set of arguments is called an ethical dilemma.Whether a cigarette manufacturer be allowed to promote or not is an ethical dilemma.If allowed, it leads to harmful effects on the population.If not, the manufacturer’s right to the freedom of speech and its right to sell a legal product are violated.In all ethical dilemmas, there are conflicting rights of two or more important groups of people.
An ethical lapse is just unethical. A detergent contends that it has the power of lime, but does not contain any lime at all is an ethical lapse.
Ethical Issues in Advertising
There are wide variety of ethical issues in advertising –- marketing unhealthy products , advertising to children and using puffery .
Unhealthful Products
There are products that cause harm to human health e. g tobacco , alcohol , pan masala . Should they be allowed to advertise ? Some countries have banned such advertisements whereas some restrict such advertising . The companies feel that as long as the products are legal ,there should not be any restriction on advertising them . Critics , however , disagree .
Advertising to Children
Can we direct the commercials to children ? TV advertising to children poses an ethical dilemma . There are issues of cartoon channels and advertising . The young mind will not be able to distinguish between the programme content and advertising .
Using Puffery
Puffery is exaggerated subjective praise of the product without any substantiation . Some puffery is harmless , and cannot be proved or disproved . Puffery should not be misleading , and should not be used as a license to lie . Mostly people can understand when an advertiser is exaggerating.
Youtube
YouTube
Time magazine described YouTube as the beast with a billion eyes. It is just 14 years old, but is growing at a fast pace. Every minute several hours of video get uploaded to YouTube. It gets a trillion page-views a year. Google bought YouTube in October 2006. Its massive size is a mixed blessing. TV has limited options of viewing whereas YouTube sifts through billions of options . An average user spends 15 minutes on YouTube , whereas he watches on average TV for 3 hours. The upkeep of YouTube is expensive. YouTube tries to tap the ad revenue, but since YouTube does not get the kind of attention the advertisers want, it is not a preferred medium. The advertisers would not like their reputed brands to be near the random stuff , at times weird too . Google, therefore, cannot charge as much as a satellite channel for the ads. But cleaning YouTube is not the answer. It thrives on its anarchy. YouTube is based in San Bruno , California , south of San Francisco. YouTube gets a billion search queries a day. After Google, it is the second largest search engine on the Internet. But video search is not similar to web pages search. Web pages can be read, as there are words. But a computer cannot watch a movie. It cannot look at the huge string of 1’s and 0’s that make a video file. The solution is verbal description of the videos depending on user behaviour. YouTube will survive, but there should be a totally new strategy for it. The designing work is always in progress. The contents should be easily navigable. Its background colour is therefore made gray. Formerly there was a grid of videos. Now, there is a list of channels on the left hand side and the feed informs you the recent videos from those channels. Each channel has a bunch of videos grouped together on to one page. This is done by an individual user. The users organise the videos to overcome the chaos. There is a limitation to the fragmentation of cable TV. YouTube can do it infinitely. Yet, you cannot watch YouTube on TV. YouTube, however is producing its own content. By organising content, any individual can run a channel. The individual channels have subscribers. YouTube is attempting to beat TV, but in doing so it will become TV. It the dilutes its anarchic character.
YouTube Monetisation
YouTube runs ads on user-generated content and shares a portion of the revenue with the creators once they have got monetised. It keeps 45 per cent while the creator receives the balance 55 per cent. The company faced significant pressure from advertisers and users as the ads were placed alongside the offensive content. They introduced new policies that restrict monetisation of the channel. They changed YouTube partner programme which now requires many more subscribers and viewership to earn money. Earlier, a YouTube video creator was required to have only 10,000 views to become eligible for monetising his content on YouTube. Now a video creator becomes eligible only if he garners 4000 hours of watch time within the past 12 months and has at least 1000 subscribers. This should weed out spammers and bad actors.
Seasoned YouTubers with a large number of subscribers remain unaffected. Multiple channels may be a casualty or the new policy. Time and energy will be devoted to the channel that has the best prospects crossing the monetisation threshold.
There are other possibilities of earning revenue apart from Adsense. These included affiliate marketing, sponsorships and merchandising. In affiliated marketing, a link is put to the product/service that is being reviewed. If the link is clicked by the viewers and they go to the site, the creator receives a commission. Sponsorship can be built by developing a reach. They get the attention of brands. Brands are inclined to sponsor bloggers and YouTubers with an impressive reach. They pay the creator to review their products. Those who produce advertising-friendly content receive more adds.
Trailer Marketing on YouTube
The first look of the movies or trailers are released on YouTube these days. In yester years TV and theatres were used to screen trailers. These days the emphasis is on digital releases of the trailers. These are used to set down a set of expectations for the film’s run at the box office. The like and dislike ratio is observed. If dislike ratio is 8 to 10 percent, the sentiment is positive. If the ratio goes beyond that, the sentiment towards the film is mixed, or may be even negative. There are several million views for a good movie trailer, several million likes and several lac dislikes. This is leveraged to create interest in the product. Movie makers make a marketing strategy to get views, and they do not spend anything for distribution of the trailer. Making of a trailer is taken seriously. The production budgets are decent. The bits of storyline, songs and catchphrases are used to build up the launch of the first look. The cost could reach from Rs. 1 million to 10 million. It should be cut properly. On YouTube, the trailer reaches a huge audience in a very short span of time. Even the overall marketing of the movie has become digital. It is cross promoted on social media where the star cast is popular. Some trailers are launched simultaneously on TV and YouTube. It is, however, rare. Marketers learn a great deal from the feedback, of the audiences. The back end analytics help the marketer gauge the response and likeability.
Competitive Advantage
According to Michael Porter , a sustainable competitive advantage is the key to creating long – term value for shareholders at the business unit level . His book Competitive Advantage is published in 1985 . He views the business system as a value chain . To him , value is the amount the customers are willing to pay for the output of the firm . Business is profitable so long as the total value exceeds the total costs incurred in all the firm’s value activities .
The ultimate aim of business is to create user value that exceeds the cost of doing so . A firm’s competitive advantage depends not only on its value chain but also on those of its supplier and user systems .
Value activities of a business are of two types – primary and support . Primary activities transform inputs into outputs and in delivery and support after sale . Support activities support the primary activities and each other – these include procuring inputs , managing HR , developing technology and providing general administrative functions . Whereas primary activities are line activities , the support activities are staff functions .
Five Primary Activities
Input logistics receives , stores and distributes inputs . These include warehousing , inventory control , materials handling , inspection and returns .
Operations transform inputs into outputs . These include machining , assembling , curing , packaging .
Output logistics collect and distribute the output to the users . These include transportation , order processing , finished goods warehousing and vehicle scheduling .
Marketing and Sales facilitate the exchange of the products . These include advertising promotion , pricing personal selling , channel selection channel relations .
Service provides customer support after the sale to enhance or maintain the product value . These include installation , spares provision , repair , training , adjustments .
Competitive advantage can be achieved at any or some combination or all of the above activities . However , the relative importance of these activities vary from industry to industry . A seller of pins and pencils may not be concerned with after–sale – service , but a computer dealer has to be particular about it .
Different firms in the same industry may choose different competitive strategies , thus changing the relative significance of the different value activities e.g. low –cost airlines choose a ‘ no– frill ‘ strategy and provide fewer services at discounted fares whereas full–service airlines provide a whole range of services including in –flight meals.
Support activities too can facilitate the gain of competitive advantage . The raw materials used can affect the output in terms of cost and quality . Technology can offer a major competitive advantage . Software firms gain due to their human resources . Administration such as participatory style , organisation structure do contribute a lot .
Linkages amongst the activities must not be overlooked . They themselves can be a matter of competitive advantage . Channel linkages provide opportunities for gaining competitive advantages .
A successful competitive advantage will be subject to a cycle – there will be an initial period of product growth followed by a shake–out period , as more and more competitors imitate it or even improve upon it . Ultimately , a competitive advantage becomes a competitive necessity as most organisations adopt it .
Competitive advantage is sustained by adopting legal methods such as patents , exclusive licensing and preferred access to scarce resources . Alternatively , complex advantages or more subtle advantages are built . Competitive find it difficult to observe / understand them . This is possible by concentrating on indirect support activities such as technology development , HR development or improved general administration .
Marketing Research : Is It Always Necessary ?
Steve Jobs’ approach was to figure out what the customers are going to want before they do – you have to anticipate their wants.Henry Ford once said if his customers were asked what they want, they would have opted for a faster horse.You have to show people the new products.Till then they do not know what they want.Steve, therefore, did not rely on market research.As an organisation, we must read things that are still not on page.According to him, there should be a deep current of humanity in the innovations.Steve built Apple on the strength of great products, and unlike others did not allow the sales people to dominate the scene.
Products to serve the society
Products to Serve the Society
A documentary ‘Fire in the Blood‘ has been made by Dylan Mohan Gray which portrays Africa’s fight for HIV medicines, the controversial role of governments and pharma groups. What has happened in Africa has been described as the ‘crime of the century‘. It is one of the greatest crimes in human history! Even then not even one person has been called to account. Though pharma companies act in their own interests, it is the role of the governments that is deplorable. The monopolization exists, and the tax payers are ripped off. The system benefits the pharma companies at a horrendous cost to society. Pharma companies do influence the government policies.
India has become the pharmacy of the world, since the changing of the Patent Act in 1970 . It supplies high quality, lower cost products to every corner of the planet. It not only makes available affordable drugs to its 1.3 billion people, but to so many billions elsewhere in the world. India has not granted blanket monopolies to big pharma’s incredibly expensive drugs.
The West works ruthlessly against the flow of inexpensive medicines from India and other countries. The main tool in their arsenal is coercive trade agreements.
Media Interdisciplinary Courses
Interdisciplinary courses have a huge advantage over pure disciplinary courses. These courses make you adaptable. Media courses offered by the universities are now interdisciplinary. They expose students to pure arts, liberal arts, fine arts, commerce and management simultaneously. The students also learn film – making, research, history, advertising and journalism. The courses make students more employable. These courses focus on live projects and seminars beyond syllabus. As against this, pure disciplinary courses focus on theory.
Media Regulation
Journalism should be able to read the writing on the wall. Media wields enormous power. Media, therefore, must be accountable. Self–regulation is the best way, so that there is no justification for outside intervention to regulate. The outside intervention would come from the government in power. The self-regulation must be seen. Print media has to decide whether it has to have an ombudsman or a readers’ editor or some other robust mechanism for the benefit of readers. A second tier of self–regulation must be created. It could be an industry-promoted body with both editors and proprietor – managers mandated to adjudicate and with powers to impose fines etc. As Vinod Mehta puts it, ‘ You can judge the health of a democracy by the tension between journalists and politicians. When the relationship gets too cozy, it is time to worry.‘ Politicians may think media as adversary. It does not matter. What matters is what the common man thinks about the media.
Crowd Sourcing
It is a method by which the consumers participate in the decision making process. They use it to seek new ideas through contests and campaigns. There is an i10 Story Contest for writing a commercial for this car brand. The winner shares the screen space with the brand ambassador Shah Rukh Khan. There was a public design contest sponsored by the Ministry of Finance to create a symbol for rupee. Hero asked people to interpret Hum Mein Hai Hero anthem and created several TV commercials from this content. Perfetti arranged package design contest for Happydent chewing gum. Pepsi arranged ‘suggest a flavour‘ contest for its wafer brand. The term is coined by Jeff Howe in a 2006 article in Wired magazine.