Christopher Matthew's Blog

Blogs are becoming more and more influential in marketing today. Our textbook confirms it, Lea confirms it, and bloggers confirm it (although it’s in their best interests to do so). And while bloggers are gaining more and more power, so are video bloggers, a.k.a. vloggers. There are now vloggers on Youtube whose full-time jobs are to make videos, and they are not underpaid.

While vloggers’ success is ultimately determined by the content of their videos, it seems that the bigger they get, the more their marketing efforts centre around shameless self-promotion. This is ironic, as the popularity of vloggers is largely due to the relationships that they try to build with their audience, and the value that they deliver. Yet as they grow, they move towards pushing content onto their audience rather than pulling them in through valuable insights.

An example of this is popular vlogger Philip DeFranco. Take a look at today’s video from him, where the first and last 45 seconds of the video are dedicated to self-promotion. The video is only 7 minutes long.

https://www.youtube.com/watch?v=MgjddznVut0

And while Philip DeFranco may have one of the most popular vlogs out there, he is not even the worst regarding self-promotion. Video game vlogger WhiteBoy7thst (https://www.youtube.com/whiteboy7thst) is notorious for dedicating two thirds of his videos to self-promotion.

Since vloggers are paid based on views on Youtube, it is in their best interests to get as many subscribers as possible. This means that as soon as they receive that highly-coveted Youtube partnership that allows them to get paid for their videos, there is self-imposed pressure for them to increase their subscriber base by promoting themselves whenever possible. Is it their fault for trying to maximize profit, or is it Youtube’s fault for commercializing individual user accounts?

In any case, the result is that instead of feeling informed, many viewers of large vloggers feel exploited.

Last week fellow Comm 296 student Kelsey Ingham blogged about the use of shock value in marketing, and I want to bring up an instance in which that has come up in my life recently.

For well over a year, BC Place stadium in downtown Vancouver was undergoing renovations. The biggest and most visible improvement was a new retractable roof and a huge superstructure that will define the city’s skyline for decades to come. The long-awaited opening of the new BC Place was an event that many people in the lower mainland were looking forward to, and it would be at a BC Lions game on September 30, 2011.

Now while many people were planning on checking out the venue in person that first night, many planned on just watching it on TV from home. But the leading up to the Friday game, the BC Lions threatened to lock the game out on lower mainland television, forcing people to either go to the game downtown, or not see the stadium at all. This caused much outrage in the public, after all, the $563 million renovation was funded by taxpayer money. At the same time, many people did end up buying tickets to the game; final attendance was around 50 000. Late on Thursday the Lions announced that they had decided not to lock the game out, and everyone would be able to watch the game from home for free. Some people were even so naïve as to praise the Lions for their decision.

This example and Kelsey’s made me ask myself what actual value exists for a company using shock value or controversy to such an extent in their marketing efforts. While this may be attracting attention, what is it really doing to their brand image? The use of shock value in marketing never creates a positive buzz around companies. Many people see right through the BC Lions controversial ploy, and I anticipate that Ecotique Spa & Salon will receive a similar reaction. I just don’t see how these techniques can bring about anything resembling customer delight. More often it just riles people up.

Gamers are hardcore; it’s just how it is. They have passion for everything to do with their gaming, from consoles to games to headsets to playstyles.  Gamers are also extremely loyal to the brands that they know and love, and it takes a lot to change their opinions of brands in the gaming industry. That is why I was so surprised today when I watched this video and showed it to my gaming friends.

https://www.youtube.com/watch?v=mdWkKKSckNk&feature=channel_video_title

An advertisement that is an anthem for PS3 gamers, I expected my diehard XBOX 360 friends not to dismiss it, but to tear it apart. Instead, their reaction was one of excitement like mine. They began listing off all the characters that they recognized: Ghost from CoD, Drake from Uncharted , Sweet Tooth from Twisted Metal, Solid Snake from MGS4, Little Sister from Bioshock, Phoenix from Tekken, the list goes on. They started talking about how great it would be to play all of these games again, and talk of buying PS3s emerged.

I realized that although it is often the case, gamers’ passion does not have to be negatively directed against each other. Here is a case where Sony has created an advertisement that plays on gamers’ shared experiences and nostalgia to unite them and bring them closer together. Sony could have focused on their console’s features or price, comparing it to XBOX, but instead they went for what really mattered for their customers: the experience. Given their target market of young, hormone-driven males, I think that was a good choice.

Everyone has something that they do to unwind after a long day. For some it’s kicking back and watching TV, for others it’s working out. My unwind-activity is watching Youtube videos. I have a number of channels that I subscribe to, and I like to spend 20 to 30 minutes catching up on them each day. The problem arises when I click on a 2 minute video, and have to sit through a 30 second advertisement that is, as a rule, annoying and agitating.

I understand that Youtube is being commercialized. There are now dozens of people that I know of who make their living solely by their Youtube channel, and advertisements are a big part of why that can happen. But on the viewer’s end, this can be extremely frustrating. Commercials on TV are one thing; they are predictable, prescheduled and give you a chance to tune out from the show. But there is something that just gets to me about having to sit through a commercial every time I choose to watch a video online. I know that the advert is just sitting there, waiting for me, and there is no way around it.

Maybe the quality of these online commercials plays into my contempt for them. For some reason they always seem to feature the most annoying jingles and the most piercing voices. Horrible thoughts of PageRage  asking me, “Tired of the same old facebook profile?” come to mind. Just watch this video and tell me that it has never assaulted your ears before.

Advertisements on Youtube videos actually damage my perception of the companies that use them. I have vowed never to become a customer of Mobilicity, Duracell, and others, solely based on their relentless Youtube campaigns.

The greatest lesson that I have learned from someone else is something that I have actually learned from a number of different people, through a number of different situations. The message has been the same though: follow your passion in your career and you will be successful. However you might measure your success in life, you will achieve it if you do what you are passionate about.

This lesson has come both directly and indirectly from both the successful and the unsuccessful alike. I have had it told to me very explicitly by accountants, entrepreneurs and financial analysts who were in love with what they did. I have also taken this lesson indirectly by speaking to people working in business who were obviously unexcited by their work, and who seemed to have the same negative attitudes when it came to other aspects of their lives. I believe that this lesson is a valuable one that will lead to not only a successful career, but success in life as well.

In our last class on Thursday, Mr. Cubbon said that Groupon’s response to Google’s $6 billion buyout offer would come down in the next day or two, and sure enough on Friday they gave their answer. It was a resounding no.

Take a look at an article summarizing the proposal here:

http://www.pcworld.com/article/212500/groupon_to_google_no_thanks.html

Groupon is only a couple years old, and if I am one of its founders I have a few thoughts going through my head given the offer by Google. The first question that I ask myself is if the company has the potential to grow to be worth more than $6 billion. Since it is only two years old, I think the answer to that question is yes

To me, the far more difficult question is whether I want to sell the organization that I have created and be done with it, or if I want to be a part of it as it grows. The more time that I spend at Sauder, the more I realize that there is much more to entrepreneurship than building something and then flipping it. If I become an entrepreneur someday, I think I’ll want to nurture what I have made, because it will be more rewarding than just taking the money and running.

Given the topic of Case #3 surrounding sponsorship, here is an interesting and prevalent story relating to this topic. Most of us probably will have heard about Tiger Woods and some of his extracurricular exploits in the past year, and his sponsorship has suffered because of it. That is not surprising, but what does surprise me is that his sponsorship may suffer due to his poor play.

Take a look at this article explaining the current situation:

http://www.theglobeandmail.com/report-on-business/sponsorships-at-risk-if-tiger-doesnt-improve-play/article1668144/?cmpid=rss1

As in Case #3, and as in all sponsorship deals, the goal is to maximize exposure and reach the biggest number of consumers possible. It is understandable that certain of Woods’ sponsors dropped the golfer after his public image was tarnished, because they may have been worried about how his acts may reflect negatively on the company.

What does not make sense to me though, is how certain sponsors who have stuck with Woods through this scandal may drop him due to his poor play on the course. Woods is receiving more media attention than ever, and his sponsors are receiving media attention just for the fact that they stick with him. Why should his play influence whether or not they stick with him, since exposure is greater than ever? It doesn’t make sense.

When I tried to think of a company that I deem to be “entrepreneurial”, there was one obvious choice that came to mind right away. This summer I travelled to the New York Stock Exchange, to watch the folks at Cash Store Financial ring the opening bell. By all definitions of the word, this company based out of Edmonton is entrepreneurial.

Take a look at their site here:

http://www.csfinancial.ca/home.aspx

The reason I have knowledge about Cash Store financial is because the accounting firm my father works for does their audit. So when dad was invited to their listing on the NYSE, I tagged along.

Cash Store Financial was founded in 2001. It is a payday loan company and has grown to over 550 branches in the past 9 years. The founder saw a need for this type of loan, since banks were unwilling to lend on such a short-term basis, and he has evidently been very successful in this venture.

What makes this company entrepreneurial is the fact that it has tapped into a relatively unexplored market, it has created a substantial amount of wealth in a short amount of time, and it was a risky venture to start.

The first time that Mahesh Nagarajan came to speak to our class, one of the points that he made was that even though it might seem like a good problem to have, having to much demand is not a good thing. As examples we talked about Apple and Lululemon among other companies, who found that their production could not keep up with current demand.

The next time we had Mahesh as a guest professor, we examined Zara and its form of mass-customization, which involves extremely fast product creation and constantly introducing new products.

It seems that in 2009, Lululemon tried to take a page out of Zara’s book. For the full article, take a look here:

http://www.theglobeandmail.com/globe-investor/new-mantra-pays-off-for-lululemon/article1395294/

It’s remarkable how Lululemon found instant success by creating a supply chain system that could track customer spending and react quickly to take advantage of that knowledge. This tactic also included shipping weekly to stores, again copying Zara. It makes you wonder if more clothing retailers will realize the benefits of this strategy and slowly begin implementing it, removing Zara’s competitive advantage. It certainly seems to work; take a look at Lululemon’s stock prices over the past year.

When we talked about financial and managerial accounting in class, we were told that businesses reporting their financial accounting only have to reveal a certain amount of information. They have to give their total sales, total expenses, and a whole bunch of other totals, but they certainly do not have to reveal which products and which stores outperformed others.

That is why I found it interesting that McDonald’s specifies which products in particular have driven their recent profit increases.

Take a look at this article; it’s just a few short lines:

http://www.theglobeandmail.com/globe-investor/mcdonalds-profit-jumps-10/article1766616/?cmpid=rss1

The article specifies a few menu items that have drawn customers in to McDonald’s. The same information is presented on McDonald’s site under investor relations:

http://phoenix.corporate-ir.net/phoenix.zhtml?c=97876&p=irol-newsarticle&ID=1485461

If McDonald’s is under no obligation to highlight which of their products have been successful recently, it makes me wonder why they would do it. They may not be worried about the ability of competition to compete with these products. Or perhaps, McDonald’s is falsely stating which products did well in an attempt to throw off competitors. That may be a sinister theory, but this is a curious anomaly.