MEDIACOM Marketing Digest 25 May 2004

25 MAY 2004

The Lucky Dip selling strategy ("as seen on TV") is a fascinating model. Could you run your business using this system? Here's how it might work:

1. Give your customers a deadline by which they have to pre-order your products. Give yourself plenty of time - set a deadline like, say, the 25th of June, for all orders to be delivered between September and the end of December.

2. Whatever your prices were last time, increase them. Doesn't matter that your products are smaller or less effective this year than they were last year.

3. Don't tell anyone exactly what your products will be, other than generic information. You think your customers won't buy, just because they won't find out what the products are until a couple of weeks before they're delivered? Course they will.

4. Don't allocate all of your products to potential buyers, even if you could have sold them four times over. Keep some stock in reserve, so you can sell it at a higher price later.

5. Even though your system encourages customers to order in advance "just in case", do everything you can to discourage ghost ordering. Customers should be able to arrange their affairs six months out, even if you are still making changes right up until the moment of delivery.

6. Process the orders. Take your time.

7. Allocate the orders as fairly as you can. Whatever you do, not everyone will be happy, anyway.

8. Increase your prices again. Give special attention to those products that are actually delivering value for money - try to fix that. Then make some of the unallocated products available for purchase.

9. If you have any products that are going to be really attractive, no problem - just take out that special extra-high-priced ratecard. Existing orders? Sure, they can still have the product, as long as they're prepared to pay the new rate. After all, quality costs a little more, doesn't it?

10. Increase your prices again, as many times as you like. Then dust off that inventory that you held back, and pop it out for sale at your latest, highest prices.

11. It's a fortnight before delivery. Time to tell your customers what your products are. Just for a week at a time, though - no need to rush things.

12. If the customers don't like your products once they're announced, let them change. It's not your fault if they can't find replacement products. And so what if any products they could buy will now cost more? They should have been better at crystal-ball gazing.

13. Get ready to go through the whole cycle again. And just hope that the economic boom holds out a little longer, so that your customers will still have to buy your products at almost any price.

A profitable selling strategy? Absolutely. A strategy for harmonious customer relationships? Not a chance. But surely this couldn't possibly work in real life, right? Right?

We've previously pointed out that video games have become the fourth most dominant medium in the US for both young adult and teenage males. We don't know what the stats are in New Zealand, but our own household experience suggests that Kiwis are right up there, cheerfully disposing of aliens, monsters and other scum of the universe until Game Over! is signalled by that dreaded call to bedtime. But we're not quite so far advanced in exploiting that demand with Advergames, which is A Good Thing.

What are Advergames? Brand-laden diversions, emerging as a powerful and inexpensive new ad medium, cropping up on dozens of US sites, especially from marketers of cookies, candy, cereal, chips and fizzy drinks.

Visitors play free of charge, but in return they soak up a heavy dose of advertising. They often are exposed to dozens of brand images and messages while playing a single game. Game creators say their users include both children and adults; the typical player spends a half-hour on a game site, often replaying a single game 15 times or more.

Kraft's Nabiscoworld.com features advergames for at least 17 brands, plus classic games such as chess, mah-jongg and backgammon. Some games integrate brands into the play. In Ritz Bits Sumo Wrestling, for example, players control either the Creamy Marshmallow or the Chocolatey Fudge cracker in a belly-smacking showdown, which results in the S'more-flavored cracker.

PepsiCo's Frito-Lay unit has an auction site for kids and kids' sports teams called ePloids.com: The currency is Ploids, which kids get from bags of chips. (Most one-ounce bags are worth one ploid each.) According to the site, merchandise recently auctioned off includes a Toshiba 20-inch television set (for 5,801 ploids) and a Nintendo Game Cube system (for 5,025). Winning bidders redeem their ploids by mail.

Companies promote their advergame sites on food packages, in TV commercials and on search engines and other major Internet portals. Some run sweepstakes and contests and sponsor links between their sites and others. For instance, on the Neopets site, players can collect points for their virtual pets by clicking on links to advergames for McDonald's Corp., Hershey Foods Corp.'s Bubble Yum and General Mills's advergaming site, ''You Rule School!'' Players can redeem points for candy, snacks and other prizes.

Marketers love Web games because they deliver brand messages cost-effectively. But the games are drawing fire from advertising critics, including those concerned about childhood obesity. They say many advergames are designed to bombard children with snack-food ads.

Some worry that the absorbing nature of the games, the age of many of the players and the data collected in online surveys make for an uneven playing field.

According to data from Nielsen Net Ratings, which tracks online usage, Nabiscoworld and Candystand notched a combined 4.2 million visits in February -- a 45 percent increase from February 2003 and an 83 percent rise from August 2002, when Nielsen began tracking advergaming.

Kiwi kids are not protected from these online diversions. Apart from local sites such as Anchorville, they can also tap into the other sites noted above - Neopets is a common obsession with the primary and intermediate set. But advergaming has not yet translated into a common antipodean medium - probably more because of the cost of game development, rather than any notions of purity or responsible marketing. So don't be too surprised, if more and more New Zealand FMCG marketers turn to the interactive medium as kids' television advertising costs continue to rise and young males abandon the TV set on a quest for more involving online adventure.

ABOUT MEDIACOM MEDIACOM, with offices in 80 countries, is one of the world's largest and most respected media service companies.

We create media solutions that build business for a wide range of local, regional and worldwide clients.

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New US TV Shows Fall Short Unlike their New Zealand counterparts, US TV networks do give ample advance warning of their programmes and schedules. Over the last week or so, all the majors have been releasing details of what's in store from September onwards.

The most anticipated show of the new season is CSI: New York, starring Gary Sinise, and it's more than a little disappointing that a spin-off series clone is the hot news of the 04/05 season. Other new shows include Apprentice ripoffs The Benefactor (16 contestants compete for $1 million from billionaire businessman and Dallas Mavericks owner Mark Cuban) and Branson's Big Adventure - Virgin's Sir Richard Branson leads a group of young entrepreneurs on an epic journey around the world, tackling the types of dilemmas that help shape future billionaires. If they make decisions that impress Branson, they will continue. Each week, one candidate will be left behind.

Other US shows to look forward to?

* Wife Swap (two families are given the rare opportunity to witness what it's like to live someone else's life and experiences); * Joey (the Friends spin-off, with Matt LeBlanc's Joey leaving New York in search of an acting career in LA); * LAX (Heather Locklear returns to series television for the sixth time, in a drama centred at a major international airport); * Savages (the TV heir to My Three Sons, based on Mel Gibson's real-life experiences, a brood of boys raised by their single dad); * Hawaii (think Hawaii Five O, cops and robbers without the Five or the O); * Medical Investigation (based on true life - yeah, right - stories of the National Institute of Health, America's most elite group of medical experts); * Jack & Bobby (the tale of two high school-aged brothers, one of whom will grow up to become a true visionary and one of the greatest United States Presidents of all time); * and a dozen or so other new titles, none of which break through the boredom barrier enough for us to pass on the details just now.

In other TV programming news, we note that TV One has purchased the rights to two British shows. One, Regency House Party (five individuals share a country house and experience Regency life exactly as it was in 1805) sure sounds like Pioneer House or Colonial House to us. The other, Brat Camp (taking a look at six unruly teenagers who struggle with bad behaviour from binge drinking to violent rages, and following them as they are sent off to an American boot camp by their parents, in an attempt to reform them), should make excellent school holiday viewing - or is it intended as background material for the channel that's going to cover Parliament?

By the way, overseas reports indicate that the Apprentice format has been sold to a New Zealand broadcaster, which suggests that we'll be seeing a Kiwi version sooner or later. Any thoughts on who'd be perfect for the Donald Trump role? Our own musings lead us to consider Sir Robert Jones or even Annette Presley. Care to nominate anyone?

A final thought, Apprentice-wise: there'd be no shortage of likely leadership candidates if the local version was based on politics! Could be a useful way of drumming up future MPs. Must stop there - off to polish a pitch to Touchdown for a new reality show called The Party. Might even be able to get some government funding ... .

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New & Noted We don't always have the time or space to comment on new magazine releases, so here's a quick round-up of a couple of titles that have crossed our desk in recent times:

DISH - quality food, quarterly Catherine Bell, the entrepreneur behind gourmet food preparation educator Epicurean Workshop, is the owner and editor of this new title, due out in August and intended to compete with Cuisine and the international gourmet food mags. First impressions, based on the info we've gathered to date: this mag will quickly gain traction, thanks in large part to a significant circulation initiative - all 10,000 on the Epicurean Workshop's mail-order database will receive a complimentary 12-month subscription to the magazine. Those numbers will be supplemented by 15,000 copies through newsstands nationwide - and, if the quality of editorial indicated in the Media Kit is a reliable guide, Dish should sell well through traditional mag outlets as well.

DECKCHAIR - cruising, bi-annual We found ourselves captivated by the concept of Deckchair magazine, which made its debut earlier this year. Deckchair describes itself as the magazine of Creative Cruising - the local cruise holiday wholesaler that's part of the Pacific Travel Group - and the editorial content is a mix of destination tales, travel snippets, food & wine commentary, and pages of cruise itineraries promoted by Creative Cruising. Deckchair is aimed at High Net Worth Individuals, and distributed to a base circulation of 10,000 pre-qualified individuals drawn from the databases of the Pacific Travel Group, airline key customers and the retail travel industry. If you're a HNWI, you probably wouldn't go out of your way to pick up a cruise-line brochure; but you'd happily browse through a magazine like Deckchair for an hour or so, soaking up the upmarket ambience along with assorted veiled and not so veiled messages promoting Creative Cruising products.

By the way, both Dish and Deckchair are published by the same organisation - Jones Publishing - though each title is owned by the sponsoring company. This is custom publishing at its best, with targeted distribution and embedded sales messages wrapped in a stylish editorial environment that's perfectly suited to the potential reader.

Quick Snippets

Maori Television has secured exclusive rights to live broadcasts of the NZ Maori Rugby games at the Churchill Cup in Canada on Sunday 13 June and Sunday 20 June. The broadcasts represent the first ever live international television telecast exclusively in the Maori language for any event.

The Smart Person's Guide To Media Planning: if all the strain of planning where to spend those media dollars is too much, fear not! Fairfax Network will relieve you of the burden of planning, for their newspapers (9 daily, 2 national and 50+ community press), magazines (13 titles) and interactive offerings (Fairfax Interactive and stuff.co.nz). Now let's see - if we get Fairfax to do newspapers and magazines, the Radio Bureau to sort out radio and our TV reps to see what they can do with our television bits and pieces, guess all we've got to worry about is where to do lunch.

Still with Fairfax: now that the Australian Financial Review is no longer being simulpublished in NZ, Fairfax's metropolitan dailies (Waikato Times, Dominion Post and Christchurch Press) will be tapping into AFR editorial on a regular, more formalised basis, as part of their expanding BusinessDay sections in each title. They've also added additional specific focus editorial to each publication, covering such topics as Enterprise, Your Money, Business Profile and Executive. Nice to see that Fairfax are willing, able and eager to harness the power of synergy across all their media properties.

ENDS

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