Tim (Tik Hang) Cheung's Blog

Mobile advertising has been growing rapidly, Google estimates by 2016, their mobile advertising will generate over $20 billion, while Facebook has recently embraced mobile advertising as well. Compared to mobile advertising, direct mail can’t give the level of personalization nor could it give companies an environmentally friendly image. Mobile advertising has all the benefits that direct mail advertising has, but it is much more immediate and personalized while being cheaper. However, what might impede mobile advertising is the “creepiness” factor of personalized advertising. As I mentioned in my previous blog post, many people are not happy with Google’s change in privacy policy. As this distrust between consumers and data collectiong business exist, the potential of internet advertising, including mobile advertising, will not be fully realized. Moreover, as electronic advertising continues to rise, I thought that physical mediums of advertising would quickly decline. However as Justin’s post on Telus’ direct mail campaigns showed, direct mail advertising is still strong. In fact, spending on it is growing in Canada. It shows that electronic mediums, still could not replace the tangibility and persuasiveness of physical ones.

After Google’s recent privacy policy change to unify user data from multiple Google services such as Gmail, Calendar, YouTube and Google+ into one, they have suffered much criticism from consumers, experts, and governments. They have always been releasing videos ensuring how they are “focused on protecting the user”, but I feel increasingly cynical about these ads as Google, once again, got caught for circumventing privacy settings (What happened to their motto, “Don’t be evil”?). As Brandchannel points out, no matter how well Google sells their dedication in protecting user privacy, people will not be convinced as there will be always privacy leaks as companies have incentive to workaround privacy. To gain consumer trust, perhaps Google could be more “flawsome” by becoming more transparent about their privacy problems. It might be better than describing their intricate processes in protecting user privacy that did not work. This tactic may be able to give the trust that Google needs under so much controversy as it is much easier for people to believe a flawed character rather than a perfect one.

In p.271, the marketing textbook shows a handy diagram showing the possible value propositions for a company. I think it should include another column of popular winning positions  – “Free for more”, “the same for free” and “free for less”.  There seems to be a profound difference between paying for less and paying nothing and many businesses (especially tech companies) have positioned their product to provide services for “free” like Evernote and Dropbox. As Vincent has mentioned, the gaming industry was able to capture millions of reluctant casual gamers who are not willing to pay money for games. Although these games are free up front, many are either supported by advertising, or “micro transactions” that give gamers benefits such as additional levels, new set of virtual clothing or faster farming/construction time for real money. The proposition of “free” seems to have resonated extremely well with consumers, as revenues from premium games have exceeded pay-to-play games. Other software industries have similar business models – Dropbox provides 2GB free storage (or 2.25GB if you sign up by invitation), but charges $9.99/month if you want 50GB of storage. These freemium services are becoming increasingly popular as it positions a brand into a outstanding value proposition. However, as the market becomes saturated with such propositions , how will consumer perceive brands that require payment before consumption? I hope there will be still a place for pay-to-use products – I find games that aren’t free more fun to play!

While doing my readings for marketing, I find the textbook mentions that government regulation is enforced to prevent companies from “mak[ing] shoddy products, invade consumer privacy, tell lies in their advertising…” (p.137 in text). However, I wonder how well they are enforced, many company advertisements tend to be very misleading. One particularly questionable company is Monster Inc., an electronics accessory manufacturer.

A few years ago they were caught falsely advertising the benefits of their Monster HDMI Cables over their competitors’ HDMI cables – in their demonstration, Monster compared the video quality of TV using their product, and the video quality of a TV using low quality composite cables (rather than a competitor’s HDMI Cable) unbeknownst to consumers.

A more recent example is their Beats Headphones. They claim with their premium headphones,“people are going to hear what the artists hear, and listen to the music the way they should…”, but many headphone reviewers found that to be not true, as their headphones over-exaggerate the bass in most music, much more than artists intend.

In a marketing perspective, I really respect companies like Monster – they understand that most consumers might not want the best sounding headphones, but comfortable, easy-to-use, and fashionable headphones. Their Beats product line has captured 53% of the headphone market (before Beats Audio and Monster broke up). It is unfortunate they have to do it with deceiving advertisements.

Could the government do more to reduce the amount of false advertising?

P.S.: Here’s a very good video about a pair of Beats Headphones: