Friday, April 02, 2010
Amazon Has Chance to Dominate e-Book Sales for iPad
By YUKARI IWATANI KANE And GEOFFREY A. FOWLER
Electronic books are expected to be a major selling point for Apple Inc.'s iPad, which goes on sale Saturday. But competitors, particularly Amazon.com Inc., could end up as major e-book providers for the new device.
One reason is that Apple won't start with the same leg up over competing content providers that it has had with the iPhone and its iPod media players, which have built-in connections to the company's iTunes music and video store.
The company's book-reading software, iBooks, won't come preinstalled with the iPad. That means users will pick which free software to download and install, and could just as easily choose Amazon's Kindle app for iPad as Apple's iBooks.
A person familiar with the matter said that the iBooks app wasn't preinstalled because it wasn't finished when iPad manufacturing began. Apple said the software will be available to download Saturday.
That level playing field in software could help competing media stores open beachheads on the new platform. Those rivals, have a head start in operating e-bookstores, which could be a key factor in the competition, analysts say.
Amazon says it will produce an iPad app that will let users read their Kindle e-book purchases on the device and buy new ones through a Web browser. It's not clear when the Kindle iPad app will be available, though, and as of Thursday afternoon it wasn't on a list of available apps.
Still, Amazon already dominates the market for electronic books, following the introduction of its Kindle e-book reader in 2007. Amazon, which is promoting its iPad Kindle app on its Web site, holds 80% of the market for e-books in the U.S, according to Forrester Research.
Amazon has tussled with publishers in recent weeks over e-book prices, but a new pricing model that is emerging could improve Amazon's profit margin on e-books for any devices. Publishers will set prices for many e-books, with retailers such as Amazon and Apple taking 30% of the revenue. This guarantees a profit on every sale. Amazon's previous policy of discounting new e-book best sellers at $9.99 typically resulted in losses, since it paid more than $9.99 for those books.
What's more, Amazon is years ahead of Apple in building relations with the publishing industry, being one of the biggest print-book retailers in the nation. Amazon now offers more than 450,000 e-books, and has access to more than 1.8 million free out-of-copyright titles. Apple has said it will start with 60,000 titles from five of the largest publishing houses.
For iPad's first year, at least, "it is likely that people will buy more books from the Kindle store than they will from Apple iBookstore," predicts James McQuivey, a Forrester analyst. "If you're an iPad buyer, chances are about 90% that you're also a book buyer on Amazon. Amazon has your credit card on file, they know what you like."
Not that Apple won't have advantages of its own. Apple has an impressive track record in selling music through iTunes, as well as games and other software via its App Store. The iPad, which starts at $499, handles color images, video and animation, allowing publishers to offer content that has no place on the grayscale Kindle. Apple Chief Executive Steve Jobs, when unveiling the iPad in January, praised Amazon's e-book success but promised to do more. "We are going to stand on their shoulders and go a little bit further," he said.
Apple could give iBooks a home-field advantage in the App Store, or begin preinstalling it on future iPads. Apple didn't respond to requests for comment.
Apple and Amazon approach the market differently. Apple, though a major player in content, gets far more profit from hardware. Amazon seems determined to make money from e-books as well as reading devices.
"We want to make Kindle books available on a broad range of devices," an Amazon spokesman said. When Amazon introduced the Kindle app for Apple's iPhone in March 2009, Amazon's vice president in charge of Kindle said he was "not at all concerned" that making e-books available on other devices would cannibalize Kindle sales. He predicted it would increase sales of digital books as well as the Kindle reader, which has one model for $259 and one for $489.
Charlene Anderson, a 52-year-old artist and writer in Jackson Hole, Wyo., who has had a Kindle since the device first came out, is thinking about swapping it with the iPad as an e-reader. "The color screen opens up a whole new kind of book that will be readable," she says.
Still, she reckons Amazon will have the best bookstore.
Printed in The Wall Street Journal, page B1
An interesting opening for Amazon, B&N and other book distributors - the iPad won't be preset to ITunes for books. My question is whether all the free books will also be accessible on there - Google Books, etc.
Monday, March 29, 2010
Polyvore, a fashion Web site for the masses : The New Yorker
This summary is not available. Please click here to view the post.
Universal Check-In Service Check.In Threatens To Turn Foursquare And Gowalla Into Dumb Pipes
Location-based services are just getting started and already early adopters are suffering from "check-in fatigue."Image: Check.in
Why?
Because in order to tell all their friends where they are, they have to check-in through several services at once (because, for now, the services are walled-gardens). And because, for now, the location-based game is still a two-horse race (won't be for long), this is a royal pain in the neck.
So, enter check.in, a universal check-in service that allows you to check in using Foursquare, Gowalla, and other services all at once. (MG Siegler describes in detail how the service works here).
This is smart. And it has a couple of important implications for the location-based war:
First, if it takes a while for a clear winner to emerge in the location-based game, a universal check-in service like this may come to be the real winner.
Second, this may be the way Facebook, Twitter, and other wannabes in the location game can actually break into it--by aggregating multiple services into a single interface.
Third, if a universal check-in service like this gains steam, Foursquare and Gowalla will be reduced to dump pipes, a la Twitter (whose open-ness has been great for adoption but has also surrendered valuable real-estate to TweetDeck, et al).
Now, all that said, we think a clear winner in location-based services is already emerging: Foursquare. We do not think that Facebook, Twitter, et al, will slow its growth, because we think the value of having a dedicated location-based app is immediately apparent to anyone who uses it.
I predicted this three months ago - finally a "meta check-in" service so you don't have to pull out five apps when you get to a bar....
Social Media: Can you trust your friends?
As social media becomes mainstream and you can't escape product endorsements in your newsfeed anymore, people lose trust in their friend's recommendations. This is potentially highly damaging to the famed "viral loop" that helps worthy news/items/products through social nets. Interesting trend to watch. The full article is here: http://bit.ly/9isAPw
Marketing: Pepsi Refresh Will Be Case for Marketing Textbooks - Advertising Age - Digital
Stay on top of the news, sign up for our free newslettersPass or Fail, Pepsi's Refresh Will Be Case for Marketing Textbooks
Rest of Industry Eyeing Bold Social-Media Experiment
by Natalie Zmuda
Published: February 08, 2010NEW YORK (AdAge.com) -- Pepsi's Refresh Project, a first-of-its-kind experiment in social media that invests the brand in community-building projects, won't simply leave a legacy for the recipients of its financial grants. It's also a pivotal test case for other brands trying to navigate an ad-cluttered, cynic-rich marketing landscape.
--> Refresh Project will be closely watched by the industry for its scope and ambition to put digital media at its forefront, its purpose-driven strategy and the way it restructures relationships within Pepsi's agency circle. What Pepsi is trying to accomplish is unprecedented; its philosophy rips up the traditional marketing rulebook.Pepsi has shifted almost one-third of its budget to interactive and social media, per CEO Indra Nooyi.
"This is big, new, getting a lot of attention. It's impactful; it's innovative," said Cheryl Damian, a director in the cause-branding group at Cone, who said many of her clients have been asking her about Pepsi's program and watching its progress. "What the industry is talking about now is, is this a gamble that was worth taking, in terms of a lift in sales? That's the holy grail."
"If Pepsi succeeds, it'll only elevate this embrace of digital," said Marc Lucas, who left digital agency Razorfish in December to head creative at Kirshenbaum Bond Senecal & Partners. "I am talking to clients now who used to be scared to walk away from million-dollar TV ads, but that's not the case anymore."
Of course, Pepsi's new direction is far more philosophical than a case of shifting media. "It's not about digital as its own channel anymore. It's, how do we infuse digital across all of our marketing programs?" said Bonin Bough, global director-digital and social media for PepsiCo, who joined the company in September 2008 to jump-start social-media programs. "The first step was socializing the brands and getting all the brands to quickly move away from destination sites and start creating experiences."
Dramatic shift
Pepsi, which is shifting as much as one-third of its marketing budget to interactive and social media, per CEO Indra Nooyi, is hardly alone among marketers aggressively moving dollars to digital. But the way it has gone about the shift, pulling its high-profile Super Bowl spots in favor of heavy spending to push a digitally focused social-responsibility campaign is both compelling and risky."I applaud Pepsi for embracing social media and technology -- on the flip side, I think it's very bold to not be in a place where you know you're going to have an audience," said Mr. Lucas.
The Refresh Project is a single, year-long marketing effort, and Pepsi will need to find ways to keep the effort fresh and continue to drive sales in a challenged category. Through the Project, launched Jan. 13, consumers apply for grants ranging from $5,000 to $250,000 in one of six areas: health, arts and culture, food and shelter, the planet, neighborhoods and education. One thousand applications are accepted monthly via refresheverything.com, and consumers vote on the winning projects. By the end of the year, Pepsi expects it will have given out more than $20 million in grants. The danger, however, is that consumers could conceivably tire of the effort or decide that Pepsi, a marketer long known for its ability to amuse and entertain, is taking itself too seriously.
"Pepsi has been wonderful for years at entertaining us," said Kevin Keller, professor of marketing at Dartmouth College. "This [program] is reflective of the times and the realities that people love entertainment but also care and have concerns about the world as a whole. But I would hate to see them stop entertaining us altogether."
For now, consumers are taken with the campaign. In the weeks leading up to the Super Bowl, Pepsi was the second-most discussed advertiser associated with the Super Bowl, as a result of its decision to bypass the game and focus on Refresh Project, according to Nielsen.
'Ripple effect'
But while its game-pass resonated with exactly the type of message it was trying to tell -- sentiment was 71% positive between Jan. 28 and Feb. 3, according to Viralheat, and tweets lauded the brand's decision to "wise up and focus online" and applauded it for "exploring what matters" -- the question is whether it can keep up that conversation while bypassing marquee traditional media events, such as the Super Bowl."Any marketing tactic that precipitates 'earned media' has efficiency upside," said Pete Blackshaw, exec VP-Nielsen Online, in an e-mail.
--> "Cause campaigns regularly borrow equity from the movement at hand, and marketers who execute such programs well can ride that momentum. The challenge is that the 'ripple effect' isn't always easy to predict, and skepticism often enters the airwaves, especially if detractors think the brand isn't credible in pushing the cause."KEEPING IT FRESH: Through the Refresh Project, consumers apply for grants ranging from $5,000 to $250,000 in areas such as health and education, and consumers vote on the winning projects.
Other brands in the PepsiCo portfolio have had success with non-traditional marketing, namely Mtn Dew, which has turned over the creation and marketing of new flavors to consumers through its Dewmocracy campaign. Doritos has also had success with social media through its user-generated Super Bowl ads. But this, of course, is the flagship brand.
The payoff is the opportunity to build ongoing connections with consumers who begin to see Pepsi as a brand that supports them rather than just another marketer blanketing the airwaves and internet with impressions.
Forging relationships
"This will do quite a bit to deepen the relationship with consumers," said Cone's Ms. Damian.Added Mr. Keller, "the one thing becoming more and more true is the importance of cause marketing for any brand, but particularly a brand that has a more youthful target and appeal, which Pepsi clearly has."
It might be tempting to write off Refresh Project as a cost-saving exercise, but the company has insisted the decision wasn't motivated by finances. Instead, Mr. Bough says the company's approach to marketing has completely changed. The idea of creating a TV spot and then making that spot into an online or Facebook strategy "does not exist anymore. That is not relevant whatsoever," Mr. Bough said. "Some [PepsiCo] brands have digital-led strategies and the TV spot will be reflective of the digital work."
Pepsi, too, is learning as it goes along. The company has been sharing best practices internally and educating executives through "The Social Circle" and "Lunch and Learn," digital and social media-focused programs held on a monthly and quarterly basis, respectively. A wiki, Digital Compass, has also been rolling out internally. Developed by Edelman, the wiki, which has an editorial component allowing users to share comments, gives executives access to internal case studies, as well as a tactical-planning tool.
To work on the company's digital strategies, PepsiCo's beverage brands have also developed a stable of digital-agency talent. Huge, Firstborn, Tribal DDB and VML have all picked up business in the past few months. TBWA/Chiat/Day, Los Angeles, is Pepsi's creative and advertising agency. Weber Shandwick and Edelman is handling social media around Refresh Project and OMD is handling media.
"We expect digital thinking to be a part of all the agencies we work with," Mr. Bough said, though he declined to comment further on the company's agency relationships or reasoning for bringing in new digital shops.
An agency executive who participated in one of the recent digital reviews said that, in short, the company is looking for something different. "They have the conflicting interests of being a giant conglomerate that needs an agency of a certain traditional structure to service them, because they are a complicated business, but also some genuinely new thinking and creative approaches," the executive said.
~ ~ ~
Contributing: Kunur Patel
Stay on top of the news and stay ahead of the game—sign up for e-mail newsletters now!
Interesting article about Pepsi's shift into cause marketing and social media. Regardless of whether this iteration is going to succeed, it's a bold attempt by one of the largest Marketers.
