Why is big business so inept at harnessing the power of new technology? I was reading Mark Cuban’s blog and I just found myself wondering if the Underpants Gnomes from an episode of South Park were more in tune with business decisions than these media companies. Linked below is a clip from SouthPark featuring the Underpants Gnomes obviously strong language will be featured in the clip.

http://www.southparkstudios.com/clips/151040

The Good

Books
I’m not sure how its possible but one of the oldest forms of medium has made the transition to the digital age the most gracefully. Both by offering eBooks as well as capitalizing off bloggers willingness to pitch books to their audiences publishing companies are really doing a great job of staying relevant in the digital age.

Add to that the fact they’ve not seen the huge problems with piracy the other industries are seeing and it looks like the next few years will be quite good for these publishers.

The Bad

Movies
On the plus side bandwidth limitations have mitigated a lot of the potential damage piracy could cause; it just takes too long to download multiple feature length films. Additional benefits movies are enjoying is the inability to recreate the theater experience, and movie subscription services like Netflix.

It’s not all a bed of roses for the movie companies, as torrents have become increasingly popular as bandwidth continues to rise. At the same time because of a reluctance to abandon the first run model on television and sell into online content aggregators like Netflix the film industry is not reaping any of the profits of deals that their own customers brokered instead.

Television
Its hard to imagine something that was freely available (broadcast) or has the depth of content that people feel compelled to spend upwards of $50 a month for would become threatened so fast. They had some good ideas with projects like Hulu, but it seems that even in success they start thinking about how best to fail.

While I’m a big fan of intellectual property management and am a huge proponent of enforcing rights against outfits like YouTube, I still think you have to offer the content up or risk piracy that dilutes the product.

Seeing lawsuits against YouTube for $1 billion I had hoped that would force the content holders to establish the value of the product by promoting it on their own web properties. Whether its pulling content or trying to divert a successful business model away from what made it a solid option for consumers.

The Ugly

Music Industry
Early on Napster had been looking for an exit strategy from the illegal download model to a subscription based model. Unfortunately the music industry was either not capable of understanding the business opportunity of converting music pirates into real customers, or was too spiteful towards the business that built their customer base upon it.

Instead the music industry shut down Napster allowing Kazaa, torrents, and Limewire to become the new medium of illegal file sharing.
Even now the music industry still hasn’t recovered from the wasteland that piracy has brought them. They’ve still yet to establish a lasting revenue stream which replaces the inflated prices of the CD days. They still haven’t fully adopted a subscription model that could bring them a substantial annuity, and while their work with iTunes and Amazon has yielded some solid revenues it has been pennies on the dollar of what it was before.

Newspapers
How it is there are so many bloggers out there making big time bucks and yet newspapers can’t unlock this equation to save themselves from the downward spiral that is the end of the circulation business? I’ve seen bloggers who do nothing but talk about how much money they make and yet they somehow manage to continue to sell advertising.

I don’t see any future for the majority of newspapers as they’re struggling to even figure out how to get online. There’s been a lot of talk about bringing the medium to the iPhone or Kindle but it’s yet to be seen how this will work, and how many papers will adopt this model.

Conclusion
Most of these companies haven’t done a great job of figuring out a solid business model, and it may be because they’re used to having a monopoly. The problem is copyrights don’t mean a heck of a lot on the internet, if one person gets cut off another 20 will upload the infringing work.

These companies should start focusing on the reality that they’re now competing against free, and if they want to engage the audience they better be somewhat more accommodating than they’ve been in the past. It’s not enough to stamp your foot on the ground and expect the justice system to protect you, that doesn’t get your shareholders the earnings they want.

Family Level Branding
There is a local Alehouse I go to on occasion in Seattle which provides a great example of family level branding called The Pyramid Alehouse. With the bright colors and memorable iconography Pyramid’s brand just stands out.

Unlike most other microbrews in the area Pyramid’s branding had been relatively straight forward and in some regards minimalist. I can’t even recall a slogan or any messaging that has ever gone with the logo. They’ve cultivated a strong no-nonsense kickass beer identity with their product.

Starting off with an umbrella brand, or family level brand was a smart move as Pyramid could easily build a following and brand identity in a way that wouldn’t be possible if they had focused on the sub-brands.

Product Level Branding
Pyramid has been in a brand transition for the last couple years. Having expanded to 7 different brews it has become increasingly important to drive awareness to the individual products. Additionally we’ve seen a shift in the crafted or micro-brew market with many more players beginning to surface in wide distribution.

The President of Pyramid calls out the need for a new brand:
“The robust craft beer business continues to grow with new breweries and brands arriving everyday. To remain relevant in a landscape with greater variety, we believe we must constantly evolve our brand and Pyramid is committed to providing craft consumers with interesting beers and experiences that quench their thirst for adventure.”

There is also an increased focus on creating product level positioning something that was not a huge focus before.

Branding Transition
Starting with the seasonal beers Pyramid has offered over the last couple years the company had played around with their branding. By utilizing a product that was not a dedicated product in market through-out the year Pyramid could take chances with their branding and see if it was working out. Some differences in packaging included: fanciful name, artwork that was less focused on the core Pyramid brand, and de-emphasized the beer category the product fell into. With the success in market the seasonals had, Pyramid has now determined to transition over its entire product line to this new branding focus.

Why the business needs changed
In the northwest there are complete isles dedicated to beer. It can be a daunting task to select a specific brew. While Pyramid has built a following and had a strong recognizable brand, it didn’t transition over to all products. By changing focus to the individual beer, Pyramid will drive brand recognition in the categories, hopefully spurring consideration, and ultimately leading to sales.

Conclusion
Pyramid has built a strong family brand, and it was the right way to go about branding when they started off this business. Under increased pressure from competitors it became paramount to build more identity into the product, and management transitioned beautifully.
These branding strategies work in all categories. Consider your own business and ask yourself if your company history shows a similar branding pattern.

If you take a few minutes out of your day to look through your medicine cabinet in the bathroom you’ll quickly notice just how obsessed with branding we have become. Does 7 trademarks on my toothpaste really give me a more noticeable smile?

We’re seeing in industries that are increasingly becoming more competitive and commoditized a tendency to over brand. While this isn’t by any means confined to health and beauty products, my toothpaste is a prime example of this problem.

Which Toothpaste Did I End Up With?
When I went into my local supermarket to pick up a new toothpaste I was overwhelmed with a wall of products to select from. Most brands had at least 3 or 4 different varieties. My goals were to come out with toothpaste that promised teeth whitening and which I perceived as being able to deliver on said promise (very important because I drink a lot of coffee). Note this is not an endorsement paid or otherwise for the product, just my experience.

I ended up with a whitening toothpaste incorporating Arm & Hammer Baking Soda from a company called Church & Dwight who are the makers of Arm & hammer. My perception was Arm & Hammer Baking Soda works and I trust the brand so that was good enough for me.

Over Doing Your Branding
So I know you’re saying “but you bought the product based on the branding, how can you now talk about their branding negatively?”

Here’s how, My toothpaste contained the following brands:
Arm & Hammer Baking Soda (twice)
Arm & hammer Baking Soda Logo (twice)
Advance White
Brilliant Sparkle
Fresh from the dentist feeling

Am I really getting any value out of all of these trade marks?
Arm & Hammer is the family level brand
Advance White is the Product Level brand

The rest of it seems to me to be a bit excessive. Especially given the branding in question is on the tube and not the box. Once the product is safetly unwrapped, in my home, and being used I should hope it could hold up without such excessive branding.

Patents and Active Ingredients
Of note there were only 2 patents associated with the toothpaste, and only 1 active ingredient (Fluoride). I found it interesting that the reason I purchased the product, baking soda, wasn’t even considered an active ingredient but I believe this has more to do with the claims you can make with the FDA than anything else.

Conclusion
Take a hard look at your Intellectual Property specifically in this case your branding and trademarks, do they add value to your customer or do they confuse the message? I think everyone gets the message when you say “Arm & Hammer Baking Soda” + “Advance White” stop there.

Risks of over branding:
Confusing the Message
Eroding the value of the brand you have built
Cost of maintaining and policing the brand

Full Disclosure
So this is a bit outside of normal for me. If you’ve taken the time to read the about section of the site you’ll know I’m a Product Manager at Microsoft in the CE group. Given that, I try and stay about as far away from Microsoft topics as I can in a sort of separation of church and state sort of concept. It’s just usually bad news to cross your personal blogging efforts with your company. 

That being said, I try and be somewhat relevant to what is going on in the world, and well Windows 7 on October 22nd 2009 will be one of the biggest stories of the day. So here’s my take which is not in any way representative or endorsed by Microsoft. This is only my own personal view as a user of the product, a consumer, and someone who loved the new advertisements.

A New Breed of Advertising

Windows 7 arrives amid a mix of the A-Team, a little girl, ponies, kittens, and awesomeness. Commercials dedicated to the fun, often random, whimsical desires of a diverse group of customers; who use their machines in any way but what is predictable. Finally the marketing for this product has caught up with the internet age; where people watch dogs on skateboards via YouTube or unfortunate pictures of failure at failblog and peopleofwalmart.

A Product That Fits
I’ve been using Windows 7 since it came out in beta and have loved every minute of it. One of my earliest memories of a Windows 7 “WOW!” moment came when I had a fellow Product Manager who wanted to get a second screen working with his Lenovo laptop so he could keep an eye on March Madness (NCAA Basketball) while he continued to work on his other screen.

Here’s how the scene played out (almost commercial like in its ability to pitch a product feature):

PM 1: He guys do you know anything about ATI drivers? I really need to figure out how to get this second monitor working, I’m missing the Michigan game.
PM2:Oh you actually don’t want to go to ATI’s website its more of a Lenovo issue you should head to their website, and look through the available drivers for that device.
Me:Or you could just click the Windows Update button, the Windows team understood how bad of an experience it could be to have to jump around all over the internet, and worked with their partners to get the drivers delivered via a Microsoft download.
PM2: Oh yeah…….
PM1: Let me try that.
<90 seconds pass> and PM 1 comes rushing back to my office.
PM1: It’s working and I can watch the game now. That was great.

The best thing I can say about the product is it works around your life. There are lots of features designed to make the places you were already going to that much easier to reach. That’s why I love the random and totally bizarre commercials with a little 5 year old rocking out on her PC, because that’s honestly how the product feels to me. 

Conclusion
As for the marketing, I love the little girl she humanizes this giant product, sells the right message (it really is that easy), and looks like she’s having a ton of fun doing it. Then you throw in some A-Team song and I’m all about it. Sure the ad is random but so are consumers, and that’s who needs to cuddle up with Windows 7.

Only concern I have with the advertising is I’d like to see more features outlined. That has been one of the showcases of the iPhone commercials which have been so successful. They show you how to use the product in a 30 second spot every time, and it’s something Microsoft should also be doing.

I’m both an equal opportunity appreciator and hater on Apple’s iBranding and Steve Jobs as you can see from my past articles. It’s been such an iconic brand and has moved an entire market in a different direction. That’s why it’s so awesome seeing a company come out guns blazing with a commercial devoted to turning said brand into a farce.

You can see the amazingly popular video (860,000+ plays) embedded below:

Couple of really interesting facts about the Droid campaign.

• It wasn’t Google, it was actually Verizon behind this ad.
• At no point did it attack AT&T whose network performance has been one of the biggest pain points that iPhone users have complained about.
• Verizon had to license the trademark for the term Droid from George Lucas…. Star Wars is still paying dividends
• The ad felt more like a movie preview from Michael Bay than your usual commercial fair.
• The words Apple or iPhone were never mentioned in the ad.

Apple Created the Target
It’s pretty easy to target Apple as they have a singular vision of a device and expect users to move to it or skip the product entirely. The focus on high margins, crisp user experience, and the Apple vision has always driven Apple’s Product Development.

Why is Verizon Targeting Apple?
This, at first glance, doesn’t make a lot of sense; just a month back there was a lot of speculation about Apple abandoning the AT&T exclusivity to make a deal with Verizon.

The problem here is that it’s extremely unlikely Apple would ever transition to the Verizon as the carrier utilizes CDMA technology which is most common in the US. Not including a keyboard in the iPhone wasn’t just an aesthetics decision, but it also meant Apple could sell 1 device in every country by just changing some software. While CDMA has its advantages, it would mean Apple building 2 different devices 1 on GSM and 1 on CDMA then add in the additional hardware cost CDMA has over GSM and it becomes clear Apple would have to go against their usual mold to do a deal.

Why Not AT&T
Customers often are not savy enough to tell the device failures from the service providers. While the iPhone has impeccable loyalty, AT&T doesn’t. By targeting Apple, Verizon is focusing on the largest threat: customer loyalty for the iPhone.

Conclusion
Verizon’s execution on this commercial was spotless. Best of all, they never gave any awareness back to Apple. Giving a competitor air time is always a dangerous move. Can you send a message strong enough to displace the added brand recognition you are giving them? By focusing on the iBranding, Verizon could set the tone of the commercial while not bolstering Apple’s brand further.

The verdict is still out on Android’s ability to move past Apple in this market, but the commercial is a stroke of genius for Verizon and a big win for Google. Turning the ubiquitous definition of what a phone is that Apple has created in their thought leadership into a negative is the right move. I, for one, am eager to see what further commercials Verizon can come up with.