Marketing Thoughts by Domus Inc.

The Wall Street Journal is reporting that Apple will be coming out with a new iPhone this summer with significant advancements over the current model. But possibly more importantly, they will come out with two models – one for AT&T and one for Verizon.

This highlights the difference between Apple and AT&T. Apple has always been very proactive with its product development. It’s only within the last few months that the iPhone is being seriously challenged by competing phones (e.g., Google’s Android, etc.), but they already have the next improvement ready to go out. Moreover, as the market for AT&T iPhones gets saturated, Apple will continue to grow by now offering a Verizon model.

On the other hand, AT&T has consistently been too slow delivering on their product – the network – and as such their reputation in the market reflects that.

The day Apple releases their Verizon iPhone will certainly be a major blow to AT&T. It will be interesting to see if they recover.

Domus is an advertising agency based in Philadelphia. For more information, please visit us at http://www.domusinc.com.

In the world of wireless phone networks, AT&T has spent a lot of money staking out its brand position as the “fastest 3G network”, battling Verizon Wireless, who staked out the claim of “broadest coverage” (and a previous variation, “most reliable network”). AT&T’s problem, though, is that they did invest enough to maintain the physical reality of their claim.

First, Verizon marginalized AT&T’s brand position with their “they have a map for it” campaign, visually hammering their spotty coverage. In response, AT&T has tried to regain the word “fastest” in people’s minds with their own huge advertising campaign.

However, while they’ve been busy insisting that they’re the fastest 3G network, Sprint is starting to make that claim as meaningless as a horse-and-buggy manufacturer claiming they have the fastest buggy. Sprint is now rolling out its nationwide 4G network (in partnership with Clearwire), beating both AT&T and Verizon to the punch.

Sprint’s coverage is still spotty, as it tries to roll out its service in more and more cities, but it’s already available in almost 30 cities with more promised by the end of the year.

As such, Verizon’s brand position has not been damaged much – as far as they are concerned, Sprint occupies the same competitive position as AT&T – faster but with spottier coverage, and especially spotty in the high speed arena. On the other hand, AT&T’s position is significantly damaged. First Verizon made its “fastest” claim less significant by pointing out that its 3G availability was limited. And now Sprint has a fast, but spotty network; however, Sprint’s network is 4G – much faster than AT&T’s.

So what brand position does AT&T still hold? They’re the brand with not the fastest nor slowest network that is not the broadest nor spottiest in its coverage. This isn’t exactly a powerful position to hold. If I were a stock trader…

Domus is an advertising, public relations, and social media marketing agency based in Philadelphia. For more information, visit us at http://www.domusinc.com.

It’s no longer news. The down economy has put extreme pressures on small businesses across all industries from technology to service to retail over the past two years. While many businesses have not survived the economic downturn, those that have survived have only managed to do so by cutting costs dramatically – reducing wages and laying off staffers.

The entire country is concerned about the future of small businesses because of how vital they are to our country’s economic health. And despite continued attempts to revive the economy, small businesses continue to struggle with meeting their revenue goals.

What these businesses, such as retailers for instance, also need are solutions that will increase their revenue immediately, not just put more cash in their pocket that they will ultimately have to repay in the future.

One solution for them to consider: lottery sales.

Retailers earn commissions, risk free, off the sales of lottery tickets. On average, in the state of Pennsylvania, lottery retailers sell more than $375,000 each year and earn nearly $20,000 a year per location in commissions. And studies shows that 80 percent of lottery players buy an additional item when making their lottery purchase, so sales across the board increase when retailers sell lottery tickets.

It’s a simple solution to increasing revenue.

Domus is a marketing communications agency based in Philadelphia. For more information visit us at http://www.domusinc.com.

The title of a new article on Chadwick Martin Bailey’s web site is “Engaging Customers via Social Media Makes Them More Likely to Buy, Recommend.” The basis for this article is the result of their survey where 50% of the people indicated that, once they became Facebook/Twitter fans/follwers of different brands, they were more likely to buy and recommend than before.

There are two basic problems with this research, though. First, this asks people whether or not they are more likely to buy or recommend, but no study was actually done to see if they were truly more likely. Next – and this is the bigger problem as well as the point of this post – is that CMB confused correlation with causation. Even if people were more likely to buy/recommend, that doesn’t mean that engaging (becoming fans/followers) CAUSED them to be more likely. Rather, the fact that they became more likely to buy/recommend might have led them to also become fans, not the other way around.

Unless the survey has other components that can show causation, this has to be chalked up to yet another misleading study caused by a lack of statistical understanding.

Domus is a Philadelphia advertising agency, public relations firm, and internet marketing agency. For more information, visit us at http://www.domusinc.com.

Today, more than ever, the marketing industry is under pressure to ignore this truism, that correlation does not imply causation. We have so many analytics tools available now, and so many metrics to measure, especially in the internet marketing world. As such, we are more and more inclined to believe that the tools and metrics must provide us with valid actionable information. (Alternately, whether or not we believe it, somebody else holding the purse strings believes it.) Therefore, we look for trends and patterns, whether or not there is any statistical basis for them. There might not be enough data points, or there might be enough, but other correlating factors are ignored or unseen.

Moreover, there are effects that are almost impossible to measure. Today, if I get an upset stomach, I’d be inclined to reach for an Alka-Seltzer – not because of any current advertising campaign, but because I remember any one of several classic Alka-Seltzer commercials from 30 years ago. How do you measure that lasting effect?

Consider Bud Light. A little over a year ago they began their “Drinkability” campaign, but 2009 saw the first year-over-year sales decline in Bud Light’s history. Now Advertising Age refers to the campaign as “Bud’s Big Blunder” and the “Drinkability debacle”. But was Bud Light’s decline truly caused by the campaign even though it was correlated to it? What other correlated trends might have had more causuality? Might the deep recession have played a role? Might people’s changing beer tastes had an effect? Or, if the advertising did contribute, was it the concept or the execution?

It’s too easy to confuse correlation and causuality, and too easy to convince others that one equals the other. But marketers today more than ever must be vigilant; otherwise, we might be doing a disservice to our brands.

Domus is a marketing communications agency specializing in brand development through advertising, public relations, and social media marketing. For more information, please visit us at http://www.domusinc.com.

Market research company comScore just released their February numbers, and it appears that Microsoft continues to gain market share, and principally at the expense of Yahoo. Bing’s share is now at 11.5% vs. 16.8% for Yahoo. Bing’s share in January was 10.7%. More importantly, though, Bing’s share has increased about 37% since its launch.

Search engine marketers should pay close attention to this trend, if they are not doing so already. If money is still being allocated across the search engines in the same percentages as several months ago or even last month, then campaigns will probably not be optimized. And if this trend continues, then this review process should also be ongoing.

Domus is a marketing communications agency based in Philadelphia. For more information, please visit us at http://www.domusinc.com.

Although we can’t always transfer lessons from one situation to another, very often we can do just that. For example, let’s look at a basic tactic used in many games and sports. Take pool, for example. At every turn, the pool player attempts to do three things: hit the desired ball into the desired pocket, position the cue ball after the shot to line up the next shot, and similarly position the cue ball to deny the opponent a shot (should the original shot miss). Boxing and mixed martial arts are similar. With every attempted strike, a fighter tries to hit his intended target, tries to line himself up to potentially follow up the strike with more, and similarly tries to line himself up to deny his opponent from striking him before, in between, or after his original combination. Even board games like chess follow similar tactics. With each move a player tries to get his immediate positional or piece advantage, set himself up for a longer term one, and deny his opponent from getting the same on him.

As business people and marketers, we can apply those same three principles to every move we make in the market place. With every business plan, with every proposal, with every action, we only need to ask ourselves three simple questions. Does this move enhance my position/achieve my short term objectives? Does this move set me up to continue enhancing my position/achieving my objectives in the longer run? And does this move deny or invite my competition to counter me, nullifying my gains?

Let’s take an advertising situation we reviewd a while back from the perspective of attack advertising and re-look at it from this new perspective. Audi made an advertising move that directly challenged BMW. They put up a billboard with the text, “Your move, BMW.” But they never asked themselves those three questions. Did the ad achieve its short-term goal? Maybe, maybe not. But more importantly, Audi never asked themselves whether the ad set them up for a follow-up while denying BMW an effective counter.

So what did BMW do? The next day, they added the below billboard right next to Audi’s.

It truly was check and mate. BMW’s move was brilliant, but it was enabled because Audi didn’t take two minutes to ask themselves those questions.

Domus is an marketing communications agency based in Philadelphia. For more, visit us at http://www.domusinc.com.

In our previous blog post, we looked at how Dos Equis has been continually improving its sales in the US while Heineken has been losing its. Similarly, over the last couple of years, Corona has continued to see its sales decline. Are Corona’s numbers declining for the same reason Heineken’s are?

There might be some similarities between their two situations, but there is also a fundamental difference – while Heineken has been relatively quiet in the US, Corona has been consistently advertising. So Corona’s problems are not related to its lack of advertising.

That leaves a few other possibilities – the effectiveness of the ads and the product itself being two prominent ones. Focusing on advertising, we already discussed how effective Dos Equis’ “Most Interesting Man in the World” ads are, but how about Corona’s “beach” ads? From a product positioning perspective, Corona positioned themselves to own the “cold beer at the beach” imagery in consumers’ minds, and for a while also mostly owned the “Mexican beer” position in the US. However, given that Dos Equis has been advertising strongly for several years now, the “Mexican beer” brand position is more evenly split between the two. Moreover, for the ten months out of the year when most people don’t think of the ideal beer to drink on a hot summer’s day, they’re not thinking Corona. So, although Corona might have been successful in owning the beach imagery, that also pigeon-holed them into a smaller place in consumers’ minds. Dos Equis, on the other hand, remains prominent in any season. Moreover, because of the “Most Interesting Man” ads, Dos Equis holds a more premium image, which is the segment of the beer market that is climbing.

Interestingly, in Mexico, Femsa (make of Dos Equis) has not aggressively run its “Most Interesting Man in the World” ads. Coincidentally – or not – Dos Equis’ market share has fallen significantly compared to Corona.

We’ll have to see what happens next, given that Heineken is now in the process of buying Femsa. Will they be smart enough to expand the successful Dos Equis campaign to Mexico or will they pull back on it in the US?

Domus is an advertising, PR, and internet marketing agency based in Philadelphia. For more information, please visit us at http://www.domusinc.com.

As recently reported in Advertising Age, Heineken USA’s sales fell nearly 11% in 2009. At the same time, Dos Equis, selling at a similar price point, had sales increases of about 20%. What’s different between the two brands?

For one, Heineken has had virtually television advertising for a long time (or if it has, it’s been completely unmemorable). On the other hand, since 2007 Dos Equis has been been consistently running one of the best advertising campaigns around, its “Most Interesting Man” campaign.

Yes, Dos Equis has expanded also its marketing to include billboards, print ads, a redesigned web site, and social media pages. (The Dos Equis Facebook fan page has a couple of hundred thousand fans; visitors to its http://dosequis.com web site stay an average of 7-1/2 minutes.) But how many people initially became aware of or interested in the “Most Interesting Man ni the World” from sources other then Television? Some, probably not most.

The lessons? First, television advertising still works, and works well. But as has always been the case, content is king. If the ad is ineffective, no amount of air time will make up for it, but if the ad is effective, television remains an incredible medium. Next, integrating social media naturally around an ad campaign can increase its effectiveness. That doesn’t mean just creating any old social media presence, and it doesn’t mean running a social media campaign independently of the rest of the marketing campaign. It means integrating everything together so that they are synergistic with each other.

Domus is a marketing communications agency based in Philadelphia. For more information, please visit us at http://www.domusinc.com.