Cheskin Research

My former employer, Microsoft, made extensive use of research to understand how to market to each information technology segment. The intent of such research was to help Microsoft establish more powerful social capital than its competitors. Social capital is existing, defined relationships that make transactions easy to accomplish (see Buchanan, 2002, 201-204). Cheskin Research was one of the companies that Microsoft used (see the Cheskin Web site).

Expertise and Methods
Cheskin is what McDaniel and Gates (2008, p 8) would call an applied research firm, one that helps companies better understand the market. Their specialty is multicultural markets in the US, which have grown faster than any other US consumer market. Cheskin applies a proven research process to help firms gain the insight they need into this area of explosive growth.

Cheskin also notes that the "general market" is showing increasing signs of reaching a tipping point on diversity - having powerful ethnic characteristics that will soon invalidate "general market" strategies. McDaniel and Gates (p. 9) observe that companies use firms like Cheskin to do programmatic research to understand “market segmentation, opportunity analysis, or consumer attitude and product usage studies” (see Cheskin on Opportunity).

Their clearly defined research process is very similar to the marketing research process described in the McDaniel and Gates text.

• The first step is to envision or frame the objectives of the research (see Envision)
  
• Next, explore to understand consumer needs, segment characteristics, and trends for both competition and the market (see Explore)


• Third, create or evaluate the concepts born from the exploration. (see Create) This means that they additionally do Selective research (see McDaniel and Gates, 2008, p 9)


• An important next step is to craft a well-told story. (see Inspire) McDaniel and Gates (p. 52) say that “this is a key step” because research “must convince management the results are credible.…”


• Finally comes the solid innovation and differentiation for Cheskin, - for a fee they will also act as consumer advocates after the research phase has completed to assure consistency of management action with market need. They call this the Express service (see Express).

Adequacy of Web site
As you can see by the material at the end of the above links, the Cheskin Web site does a good job describing and promoting their services. Furthermore, their site has blogs and podcasts (see Cheskin Blog) and various articles of interest (for example their article on the ROI of Diversity). I also appreciate that their search function has both a directory as well as free text search (see Search). I can go to a topic area and look at only the subject of interest, avoiding the usual irrelevance of many returned results from free text.

How to Improve Web Site
That said, I don’t think they have the perfect site. It is incomplete. As an example, I searched their directory to find if Cheskin used panels and how they handled panel effects. I clicked on Methods and Techniques and the following was presented:


I used their free test search with no better result. Using Yahoo, I was able to find that Cheskin does conduct panels (see Living Room Panel). Dennis (2001, p 1) reports that research firms may create professional panelists who respond differently than the rest of us, the panel effect.

Another issue with the Web site is that it does not organize around customer profiles, but rather it is organized around Cheskin and its functions. In contrast stands the WVU Web site (see WVU Web) that does have customer profiles as well as functions. Each profile tab has content organized according to the interest and comfort level of the profile. University of Maryland is the same (see UM Web). Among others, Lisa Sanders (2007, p 1) advises Website designers to use the concept of “personas” when creating a site. Personas are ”archetypical characters [who] represent specific consumer segments.”

References

Buchanan, Mark (2002). Nexus: Small Worlds and the Groundbreaking Theory of Networks. Norton.

Dennis, J Michael (2001). Are Internet panels creating professional respondents? Marketing Research.

McDaniels, C and R Gates (2008). Marketing Research Essentials. John Wiley.

Sanders, Lisa (4/9/2007). Major marketers get wise to the power of assigning personas. Advertising Age, 00018899 Vol. 78, Issue 15. Retrieved from EBSCOHOST on May 23, 2009

MSN Brand Audit

Microsoft Network (MSN), also known as LIVE is a distant 3rd in Web site traffic, behind Yahoo and Google. In most portal categories MSN aka LIVE is competitive; it is the search service where it lags far behind the leaders. My WVU survey reveals that neither MSN nor LIVE have much brand awareness as search services.

There is great opportunity for MSN to increase revenues, though, because Google is not a commanding presence in portal services other than search. Likewise, Yahoo is struggling to maintain operations and is unable to keep current with advancing technology. Neither Google nor Yahoo have Social Capital with the most lucrative audience for Web advertising, “Strategic Buyers.” Microsoft does and this is also an important audience to Microsoft because of its vulnerability to Open Source, Software as a Service and other future industry directions.

For the complete brand audit with all recommendations see Redmond Review MSN Audit

MSN Brand Exploratory

In a brand exploratory, Keller (2008, p 129) advises us to seek out prior research studies. EBSCOHOST has proved a valuable tool in this regards and analysis by Tancer, Rosoff and Chickakowski, among others provided real insight into the external, customer perceptions of the brand. In addition, Keller (p 129) recommends that interviews with internal personnel have a high payoff. While not able to do this, I did survey WVU students.

Products and Services
MSN/LIVE has two audience categories, the site visitors and advertisers. It has services for both. With MSN/LIVE, the most important audience is site visitors because without them, the advertisers will have no interest. The finding I have made in this brand exploratory is that site visitors like Google and Yahoo while advertisers like MSN.

External Perception of the Brand
According to Rosoff (2006, p 2), the MSN reputation suffers with site visitors. MSN has ranked last in a 2001 Consumer Reports customer satisfaction survey. Rosoff holds that MSN deploys technology for its own sake, which can decrease customer satisfaction with the site. He also finds that MSN editorial content needs improvement.

The MSN/LIVE search service is held to be full featured but the general public does perceive some deficiencies. It is interesting to note that both MSN and Yahoo used the same search engine, Inktomi, until 2004 when Yahoo bought Inktomi. Microsoft then developed its own search engine for MSN. Wall (2006, p 2) finds that MSN search does a poor job at link analysis and therefore its results have less relevancy than Yahoo or Google, as well as a bias to rank commercial sites too high.

Likewise, there are some areas of concern with Hotmail, be it called MSN or Windows LIVE Hotmail. Arrington (2007, p 1) finds that while it has an intuitive interface it has slow responsiveness. What is worse, MSN deletes all mail information every 30 days if the consumer does not login. Rafferty (2006, p 1) expressed concern with this policy when he lost important documentation as a result.

On the other hand, the general public holds MSNBC in high regards. IQ69 reports (2008, p 1) that MSNBC took the top spot in the University of Michigan American Customer Satisfaction Index (ACSI) survey. However, the ACSI survey did note that there does not appear to be a clear differentiator between news services and the leading brands are bunched together.

One specific public of interest is “strategic buyers.” Large corporations have made significant investments in the Microsoft franchise. They have end-users trained on mission critical systems that use Microsoft technology. They have trained their help-desk staff on Microsoft technology. They probably have significant Microsoft investment in the server room and with their application development staff as well.

Most importantly, Microsoft has the social capital of existing, defined relationships that make transactions easy to accomplish. Microsoft sales teams visit “strategic buyers” periodically and promptly answer phone calls. Microsoft is very good at relationship marketing. Every sales team has an architectural engineer assigned to it with the mission of understanding the information technology plan of assigned corporations, their enterprise architecture and how to advantageously apply Microsoft technology to affect solutions.

Competitive Environment from an Exploratory Viewpoint
MSN Competitive Exploratory

Marketing Support from an Exploratory Viewpoint
MSN Marketing Support Exploratory

An MSN, Yahoo and Google Perceptual Map

References
Arrigngton, Michael (February 8, 2007). Tech Crunch. Retrieved on December 2, 2008 from http://www.techcrunch.com/2007/02/08/a-comparison-of-live-hotmail-gmail-and-yahoo-mail/all-comments/

Chickowski, Erica (02/08/2008). Brand Identities After a Microsoft and Yahoo Deal. Baseline. Retrieved on November 22, 2008 from http://www.baselinemag.com/c/a/Messaging-and-Collaboration/Brand-Identities-After-a-Microsoft-Yahoo-Deal/1/

IQ69 (August 14, 2008). Yahoo tops Google in customer satisfaction survey. Retrieved on December 2, 2008 from http://iq69.com/index.php/2007/08/14/yahoo-tops-google-in-customer-satisfaction-survey/

Keller, K (2008). Strategic Brand Management. Pearson/Prentice-Hall.

Rosoff, M (October 23, 2006). The Future of MSN. Directions on Microsoft. Retrieved on November 22, 2008 from http://www.directionsonmicrosoft.com/sample/DOMIS/update/2006/11nov/1106tfom.htm#top

Tancer, Bill (August 3, 2006). Google, Yahoo! and MSN: Brand Association. Hitwise Intelligence. Retrieved on November 22, 2008 from http://weblogs.hitwise.com/bill-tancer/2006/08/google_yahoo_and_msn_brand_ass.html

Wall, Aaron (June 13, 2006). How Search Engines Work: Search Engine Relevancy Reviewed. Search Engine Optimization. Retrieved on December 2, 2008 from http://www.seobook.com/relevancy/%23short

MSN Marketing Support Programs Exploratory

Keller (2008, p 131) emphasizes the importance of marketing support programs, especially for establishing the points of parity and points of difference. This is essential to moving to desired brand equity.

Place
Microsoft has a small problem with place for some of its MSN sub-brands. The introduction of the Windows LIVE brand for some of the MSN branded properties means there are two places to go for MSN services. As an example, consider MSN Search and Windows LIVE Search. You can go to http://www.msn.com to begin a search using Microsoft search technology, or to http://www.live.com/default.aspx?form=MSNH11 .

Both sites use the same search engines. Both parent brands are applied to the sub-brands. In most cases analysts such as Rosoff and Tancer refer to Microsoft Online Services using the MSN brand rather than Windows LIVE. 75% of my classmates prefer the Windows LIVE brand to the MSN brand and the remaining 25% are indifferent to Microsoft in general. Only 12.5% were aware of MSN as a brand.

Price
The pricing of site visitor services is free while the price advertisers pay is based on the type of ad and a bid process that incorporates click through rates in the costing algorithm. MSN is perceived to be fair in its pricing of advertising. Advertisers are in fact concerned about potential pricing abuse by Google and Yahoo.

According to Harrison (2008, p 1) 400 advertisers have filed a complaint against Google and Yahoo with the U.S. Justice Department. The Association of National Advertisers (ANA) comments that Yahoo and Google erode competition with the potential for higher advertising prices. In the final analysis however, Agarwal (2006, p 1) summarizes that while advertisers like MSN technology and price, they don’t plan to spend more with the search portal because it does not draw as much traffic as Google.

Promotion
Brandweek (2000, p 1) awarded MSN a Silver Award for its marketing tactic to sponsor the NYC Road Runners Club and the NYC marathon. As mentioned in section two, sponsorship is an important aspect of MSN marketing support. In addition, Carter (2005, p 1) commends MSN’s masterful incorporation of TV and online advertising with events to promote the MSN brand. MSN promotion is given high marks by external analysts.

Personalization
Elkins (2001, p 1) quotes ad execs, “MSN’s strategy of customizing ad programs to marketers’ specific needs is what company officials hope will give it an edge.” Thus personalization is another marketing support program tactic used by MSN. Furthermore, MSN personalization is held in high regard by advertisers.

References
Agarwal, Amit (May 03, 2006). Bloomberg spoils the MSN Advertising party in Redmond. Retrieved on December 2, 2008 from http://labnol.blogspot.com/2006/05/bloomberg-spoils-msn-advertising-party.html

Brandweek (04/03/2000). Silver Awards. Retrieved on November 24, 2008 from EBSCOHOST.

Carter, B (2/5/2005). MSN takes on Google with search engine launch. Marketing. Retrieved on November 24, 2008 from EBSCOHOST.

Harrison, Todd (September 8, 2008). Are Yahoo and Google playing Monopoly? Retrieved on December 2, 2008 from http://blogs.moneycentral.msn.com/topstocks/archive/2008/09/08/are-yahoo-and-google-playing-monopoly.aspx

Keller, K (2008). Strategic Brand Management. Pearson/Prentice-Hall.

Kirk, Jeremy (10/31/2008). Google introduces service-level guarantee for its Apps suite. Retrieved on December 2, 2008 from http://www.thestandard.com/news/2008/10/31/google-introduces-service-level-guarantee-its-apps-suite

MSN Competitive Environment Exploratory

Ethical Concerns about MSN Paid Placement Tactics vice Google
McLaughlin criticized Microsoft MSN for its Paid Placement tactics while giving Google accolades (2002, p 116) for their class and morality. For Microsoft, she only says “others, like MSN, do a poor job.” MSN was charged with two counts: 1.) Mixing real content with paid placement to misinform users of its search engine with annoying search results; and 2.) Rigging search results (p 121-2) by low-ranking competitors, for example travel sites, while high ranking their own, like Expedia. Google gets high marks (p 117) in its handling of paid placement.

Paid Inclusion, different from paid placement, is a shakedown racket. Yahoo for example, charges $299 so its spider does not “miss” a company’s Website. Google firmly opposes Paid Inclusion (McLaughlin, 2002, p 123).

Google Offers Software as a Service and it has a Service Level Agreement
Kirk (2008, p 1) reports that Google is offering a service level guarantee for users of its Google Apps suite. This suite is a direct attack on Microsoft’s revenue stream and it is offered free, supported by advertising revenue. This Service Level Agreement is a move to attract corporate customers and Microsoft must address it with its own Software as a Service through MSN. Google does not have extensive social capital with corporate customers and this is an advantage Microsoft can leverage, at least for now.

Yahoo Struggling
Hardy (2006, p 1) notes that Yahoo is struggling to keep up with MSN and Google. The cost of keeping current with the relentless advance of technology is proving too much. The Associated Press (2008, p 1) goes on to say that Yahoo has deep concerns over its viability now that Google has withdrawn its offer to support Yahoo with advanced technology. Google made that offer during the recent Microsoft-Yahoo merger negotiations.

Content editors: MSN versus Google
Rosoff (p 2) notes that MSN is a destination site that supports edited content. MSN has skilled editors collate collections of information. Other MSN brands also use content editors to manage information collections germane to the brand. On the other hand, Google is merely a platform for visitors who want to set up their own links to information. This information can be aggregated from other web sites or from RSS feeds.

The advantage of content editors is that they can represent a community of interest (COI) and create and provide access to information specific to that COI. The COI then has a place to go for the information they need that has been vetted for relevance and credibility. It reduces the noise in their searches for information and increases the trustworthiness of what they do find.

Analysis of Search Service Offerings at Google, Yahoo and MSN
Google and Yahoo are the search portal market leaders today for an Internet characterized as an Aristocratic network. This is to say that a small number of nodes (like Google and Yahoo) are “super-connected” so that most people visit these sites. However, physicist Mark Buchanan’s report (2002, p 124-7) on mathematical studies of networks that show the phase of “super-connected” hubs (such as Google and Yahoo today) eventually gives way to more egalitarian networks from the simple processes of history and growth. Many nodes connect to Yahoo or Google as a start to searching out information. However, Buchanan’s conclusion on networks is that “Whenever limitations or costs eventually come into play to impede the richest getting still richer, then a small-world network becomes more egalitarian, as seems to be the case with airports and a number of other real-world networks.”

Niche search sites have established themselves as a brand. Today’s two largest super-connected nodes on the Internet, Google and Yahoo get the majority of advertising revenue. However, the trends in marketing may also be working against the continuation of the current aristocratic nature of the Internet.

Marketing is moving away from the mass advertising of the same message to a large audience. According to Duncan (2005, pp 211-212) the value of the Internet is the ability to send custom messages to highly targeted customer segments. The reach of a specific message to a small but coherent group is higher than a general and therefore mostly irrelevant message to a large group. As the ability to identify and verify audience characteristics for smaller, specialty sites improves, advertising revenue may shift from Google and Yahoo to this new direction.

The message to Google and Yahoo is that super-connected nodes don’t last. Just as the few air network super hubs gave way to geographically dispersed regional hubs, so will the Internet. In short, Google and Yahoo are vulnerable as Amazon is already exploiting. MSN, like Amazon, has the opportunity to move profitably into the future of software services, if it acts appropriately.

Finally, Yahoo is already fading fast. They foolishly rejected Microsoft’s overly generous offer earlier this year, and now on their own again they seem to have lost control. Their stock price has fallen from $30 per share six months ago to $8 per share today (see Yahoo, 2008b, p 1). Significant employees have left the company.

Mail comparison: Google the best
Agarwal (2007, p 1) compares MSN Mail, Yahoo Mail and Google Mail according to five characteristics: 1.) User Interface; 2.) Spam Controls; 3.) Storage Space; 4.) Speed; and 5.) Advertisements. His findings are that Google Gmail is the winner in four categories: 1.) Spam Controls; 2.) Storage Space; 4.) Speed; and 4.) Advertisements. Yahoo!Mail has the best User Interface. He also notes that the Windows LIVE Mail or MSN Hotmail has bugs in it, has poor performance and makes egregious use of advertising.

Site visitors prefer Google and Yahoo while advertisers prefer MSN
The Experian/Hitwise survey (see Tancer, 2008, p 1) clearly shows that site visitors prefer Yahoo and Google ahead of MSN for the search and portal services being offered. Advertisers, to the contrary, prefer MSN. Blank (2006, p 1) cites numerous media firms and marketing research companies that express a decided preference for Microsoft. However, as Agarwal (2006, p 1) notes, advertisers pay more for Google and Yahoo because of the higher traffic count.

References
Agarwal, Amit (May 03, 2006). Bloomberg spoils the MSN Advertising party in Redmond. Retrieved on December 2, 2008 from http://labnol.blogspot.com/2006/05/bloomberg-spoils-msn-advertising-party.html

Agarwal, Amit (February 05, 2007). Yahoo! Mail vs GMail vs Windows Live Mail. Retrieved on December 3, 2008 from http://labnol.blogspot.com/2007/02/yahoo-mail-vs-gmail-vs-windows-live.html

Associated Press (November 5, 2008). Google drops Yahoo advertising partnership. Retrieved on December 2, 2008 from http://www.msnbc.msn.com/id/27555004/

Blank, Christine (June 8, 2006). MSN Advertisers Report High ROI, Less Traffic. Retrieved on December 2, 2008 from http://www.dmnews.com/MSN-Advertisers-Report-High-ROI-Less-Traffic/article/91483/

Buchanan, Mark (2002). Nexus: Small Worlds and the Groundbreaking Theory of Networks. Norton.

Duncan, T (2005). Principles of Advertising & IMC. McGraw-Hill/Irwin.

Hardy, David (May 18, 2006). Yahoo! advertising set to take on MSN and Google AdWords. Retrieved on December 2, 2008 from http://www.bigmouthmedia.com/live/articles/yahoo-ads-take-on-google.asp/2969/

Kirk, Jeremy (10/31/2008). Google introduces service-level guarantee for its Apps suite. Retrieved on December 2, 2008 from http://www.thestandard.com/news/2008/10/31/google-introduces-service-level-guarantee-its-apps-suite

McLaughlin, Laurianne (2002). The Straight Story on Search Engines. PC World. Retrieved on November 19, 2008 from
http://www.pcworld.com/article/97431-5/the_straight_story_on_search_engines.html

Rosoff, M (October 23, 2006). The Future of MSN. Directions on Microsoft. Retrieved on November 22, 2008 from http://www.directionsonmicrosoft.com/sample/DOMIS/update/2006/11nov/1106tfom.htm#top

Tancer, Bill (August 3, 2006). Google, Yahoo! and MSN: Brand Association. Hitwise Intelligence. Retrieved on November 22, 2008 from http://weblogs.hitwise.com/bill-tancer/2006/08/google_yahoo_and_msn_brand_ass.html

Yahoo (2008). What is the combined market share of the Google, Yahoo! and MSN? Retrieved on November 15, 2008 from http://answers.yahoo.com/question/index?qid=1006032905387

Yahoo (2008b). Yahoo Six Month Staock Chart. Retrieved on November 23, 2008 from http://finance.yahoo.com/q/bc?s=YHOO&t=6m&l=on&z=m&q=l&c=

MSN Brand Inventory

According to Keller (2008, p 129), an inventory is a “supply-side” view of the brand. He also notes that an inventory profiles competitors to understand points of parity and points of difference.

Products and Services Offered
From 1995 through 2005, MSN was the umbrella brand for all online services offered from Microsoft (see Rosoff, 2006, p 1). Beginning in 2006, the Windows LIVE brand was introduced and applied to certain online properties with a goal of reinvigorating them to compete more effectively through association with the Windows brand name. For example, MSN Hotmail became Windows LIVE Mail, MSN Messenger became Windows LIVE Messenger, and MSN Search became LIVE Search. However, Rosoff (p1) goes on to note that several of the MSN brand names are category traffic leaders so that Microsoft decided to also keep the MSN brand for many online services.

Tancer (2008, pp 1-2) works at Experian, and uses the Experian categories for segmenting online services. MSN has a point of parity in each Experian category, with the exception of Sports, Employment, and Personality. In terms of total share of Internet visits, MSN captures 2.4% compared with Google at 7.7% and Yahoo at 13.2%. Both MSN and Yahoo have portal services that Google does not. SiteSeeker (2008, p 1) characterizes search as the dominant service in the competition between the three giants. Rosoff and Tancer have a more balanced perspective that includes a complete set of online services that draws traffic to the site.

In its SEC 10-K filing (see SEC, June 30, 2008), Microsoft characterizes its Online Services Business as an online advertising platform. This platform offers personal communication services such as email and messaging, the MSN portal, LIVE Search, MSN Hotmail, MSN Mobile Services, MSN Premium Web Services, MapPoint and MSN Internet Access. Here is a list of MSN properties with sufficient traffic to rank in the top four sites by category.



Now I will review the MSN services that attract advertisers to the site. There is a parallel set of products and services to support marketing efforts to advertisers, the paying customers for the MSN brands. Sterling (2005, p 1) reports that the MSN AdCenter product is well liked by advertisers. It has advanced demographic and psychograhic mapping capabilities that allow them to better target communications. Marketing Vox (2006, p 1) commended MSN on the high quality of its AdCenter platform.

To help advertisers optimize their return on investment with MSN, Microsoft now offers a training program and a certification credential. The training program instructs advertiser staff on different strategies and tactics to use for different marketing communications to different publics. Zol reports (2007, p 1) that this is important and needed for point of parity in the category. Keller (p 110) notes that MSN’s service is not required to be equal to Google to establish a point of parity but rather just “good enough.”

Finally, Microsoft offers a community forum to assist advertisers with their Web marketing through commentary by Web analytics experts, software development experts who talk about the ability to customize AdCenter services through application programming interfaces, and a variety of other topics. A typical example is Brian Eisenberg discussing the Seven Biggest Mistakes of Web Analytics (see Ad Center).

Links to other aspects of the inventory follow:
MSN Competitive Environment Inventory

MSN Marketing Support Programs

MSN Brand Hierarchy

Evaluating MSN against Keller's Six Criteria


References
Chickowski, Erica (02/08/2008). Brand Identities After a Microsoft and Yahoo Deal. Baseline. Retrieved on November 22, 2008 from http://www.baselinemag.com/c/a/Messaging-and-Collaboration/Brand-Identities-After-a-Microsoft-Yahoo-Deal/1/

Keller, K (2008). Strategic Brand Management. Pearson/Prentice-Hall.

Marketing Vox, (October 4, 2007). Ballmer Sees Ad Revenue as Microsoft's Future. Retrieved on November 19, 2008 from http://www.marketingvox.com/ballmer-sees-ad-revenue-as-microsofts-future-033446/

Rosoff, M (October 23, 2006). The Future of MSN. Directions on Microsoft. Retrieved on November 22, 2008 from http://www.directionsonmicrosoft.com/sample/DOMIS/update/2006/11nov/1106tfom.htm#top

Site-Seeker (2007). Search Engines. Retrieved on November 15, 2008 from http://www.site-seeker.com/seocompetition.cfm

SEC (June 30, 2008). Microsoft Corporation Form 10-K. Retrieved on November 19, 2008 from http://www.sec.gov/Archives/edgar/data/789019/000119312508162768/d10k.htm

Sterling, Greg (March 17, 2005). MSN AdCenter. Search Engine Journal Retrieved on December 2, 2008 from http://www.searchenginejournal.com/msn-adcenter-joins-yahoo-and-google-in-search-advertising/1438/

Tancer, Bill (August 3, 2006). Google, Yahoo! and MSN: Brand Association. Hitwise Intelligence. Retrieved on November 22, 2008 from http://weblogs.hitwise.com/bill-tancer/2006/08/google_yahoo_and_msn_brand_ass.html

Zol, James (December 3, 2007). Google, Yahoo!, and MSN All Offer Accreditation Now. Semvironment. Retrieved on December 2, 2008 from http://www.semvironment.com/google-yahoo-and-msn-all-offer-accreditation-now/

MSN Competitive Environment Inventory

Market Share
According to Tancer (2008, p 1), the market share for Internet visits are:



Tancer goes on to breakdown the total visits into the Experian Web site segments as follows.

Click image to expand.


Market Segments and MSN Points of Parity
Chickowski (2008, p 2) notes that Yahoo, Google and MSN all offer similar services, although Google has been far more effective in establishing points of difference in services that attract high page hits. A chart of favorable brand salience with each group is based on the studies of Rosoff (2006), Tancer (2006), and Chickakowski (2008).

Microsoft can use this chart to map its competitive brand strategy for MSN/LIVE. As we will see in the next section, MSN has strong presence in the Editor Collated Content arena. I propose this area can be exploited to establish rich communications with strategic buyers by placing noteworthy Editor’s in a Corporate Governance line extension of MSN/LIVE. In addition, MSN has a valid point of presence in each category.

Like Yahoo, MSN has the same set of tools and applications as those provided by Google, according to Chickakowski (2008, p 2). Keller (p 110) notes that MSN’s service is not required to be equal to Google to establish a point of parity but rather just “good enough.” Finally, the Tancer (2006, p 1) study found that while Yahoo was considered as a destination site and Google as a search site, MSN/LIVE was both.

Click image to expand.


MSN Points of Difference
According to Rosoff (2006, p 2), MSN makes content available that is collated by editors who work for either MSN or an MSN content partner. As noted in sections one and four, my proposal is to create customized and searchable corporate governance collections for customers who are strategic buyers. They will be attracted to Editor Collated Content that has been customized for them and that regards corporate governance. This will not only create a rich communication with these wealthy buyers on MSN/LIVE and thereby enhance the MSN operations, but will also enhance the communications between Microsoft and these corporate clients, which are increasingly lured by Open Source and “Software as a Service” alternatives to Windows.

Another point of difference would be that Microsoft has major resources world-wide that it can utilize to provide customer assistance to strategic buyers. It has a skillful sales force that is accustomed to fulfilling demanding assignments. It has a well-organized support structure to disseminate information and software updates as well as a competent consulting arm (MCS) with a field-tested project methodology that has a proven record of success. Finally, Microsoft has stable relations with the corporate world, which makes negotiating and executing contracts straightforward. This is known as social capital.

References
Chickowski, Erica (02/08/2008). Brand Identities After a Microsoft and Yahoo Deal. Baseline. Retrieved on November 22, 2008 from http://www.baselinemag.com/c/a/Messaging-and-Collaboration/Brand-Identities-After-a-Microsoft-Yahoo-Deal/1/

Keller, K (2008). Strategic Brand Management. Pearson/Prentice-Hall.

Rosoff, M (October 23, 2006). The Future of MSN. Directions on Microsoft. Retrieved on November 22, 2008 from http://www.directionsonmicrosoft.com/sample/DOMIS/update/2006/11nov/1106tfom.htm#top

Tancer, Bill (August 3, 2006). Google, Yahoo! and MSN: Brand Association. Hitwise Intelligence. Retrieved on November 22, 2008 from http://weblogs.hitwise.com/bill-tancer/2006/08/google_yahoo_and_msn_brand_ass.html

Evaluating MSN against Keller’s Six Criteria

Keller (2008, p 140) uses six evaluation factors to study and define a brand image. The criteria are: 1.) Memorability; 2.) Meaningfulness; 3.) Likeability; 4.) Transferability; 5.) Adaptability; and 6.) Protectability.

Memorability
Keller (p 147) discusses brand name aspects that can increase memorability and awareness. Two important aspects are “simple to say” and “easy to spell.” That is the case with MSN and LIVE. A brand name should likewise be familiar and meaningful. MSN does have familiarity in that it is a contraction of MS Network or Microsoft Network. Windows LIVE also has associations with Microsoft. Both can thus draw on associations with Microsoft. Furthermore, Keller holds that the name should be distinctive. The word Network distinguishes MSN from Microsoft and the three-letter acronym nature of the brand name is an orthographic device to distinguish the name with linguistic characteristics (see Keller, 2008, p 152).

Meaningfulness and Likability
The MSN logo has rich meaning. The logo is a butterfly, which has meaning on several levels. Russell (2003, p 1) notes that it has long been a symbol of transformation. In the case of both Microsoft and its customers, the transition is to the new world founded by the Internet. Russell also holds that our fascination with the butterfly is because if it “mesmerizing beauty.”

For each market segment there are two types of MSN customer. The first is the site visitor who wants to use the services offered by MSN. The second are advertisers who want to communicate with the site visitors. MSN has a mantra for the advertisers: “Easy to sell, easy to buy.” Experienced advertising professionals at MSN make the mantra true in actual practice according to Cuneo (2003, p 1) in Advertising Age.

Transferability and Adaptability
Keller defines two aspects of transferability (pp 142-3). The first is the ability of a brand to transfer across categories. For example, how well do the Microsoft Network brand elements transfer to a news channel? Shepard (1997, pp 35-8) discusses the marriage of MSN and NBC into MSNBC one of the sub-brands in the MSN portfolio. She found Microsoft bringing Internet and technology credibility to the joint venture and NBC the news credentials and trust. This is still one of the most successful Internet news programs. The second aspect of transferability is to add brand equity across geographical boundaries. Again, Microsoft Network has done this. Koranteng (2004, p 1) observes “that Microsoft Network [has] presence in 40 countries.”

Keller defines Adaptability (p 143) as the brand elements capacity to address change over time in competitors, or in consumer tastes. Both have happened to Microsoft Network during its history. Its first competitor was AOL, America On-Line in the mid-1990s. As late as 2001, MSN had still not dispatched AOL as a portal competitor and the Seattle Times (2002, p 1) reports that Microsoft spent $300M in the launch of the Butterfly Logo as a campaign against a still powerful AOL. Since that time, AOL has faded as a portal site and now Microsoft faces two new powerful competitors in Google and Yahoo.

Their surprising success resulted in MSN losing its footing. However, it is now reorganizing and as Kafka (2008, p 1) reports is actually gaining market share on both Google and Yahoo in the early part of this year.

Protectibility
Keller categorizes two types of protection for brand elements: 1.) Legal; and 2.) Competitive. A logo such as the MSN Butterfly and the Microsoft Network brand name can be legally protected especially when unauthorized use is a bad faith attempt to mislead the public and misdirect trade and economic livelihood from a corporate body that has invested in that name for commercial purpose (see Wikipedia, 2008a, p 1). Trademarks and registered names also receive international recognition and protection.

References

Kafka, Peter (January 18, 2008). Nielsen: Google, Yahoo, Losing Search Share To MSN. (Not A Typo). Silicon Valley Insider. Retrieved on November 24, 2008 from http://www.alleyinsider.com/2008/01/nielsen-google-yahoo-losing-search-share-to-msn-not-a-typo.html

Keller, K (2008). Strategic Brand Management. Pearson/Prentice-Hall.

Koranteng, Juliana (11/20/2004). MSN's Euro Moves. Billboard. Retrieved on November 24, 2008 from EBSCOHOST.

Seattle Time (October 14, 2002). Microsoft Puts $300 Million into MSN Internet Service Butterfly Campaign. Retrieved on November 24, 2008 from EBSCOHOST.

Shepard, Alica (March 1997). Webward Ho. American Journalism Review. Retrieved on November 24, 2008 from EBSCOHOST.

Wikipedia (2008a). Trademarks. Retrieved on November 24, 2008 from http://en.wikipedia.org/wiki/Trademark

MSN Marketing Support Programs

Keller (p 131) observes that to achieve the ideal positioning of a brand and obtain congruence between what customers currently believe about the brand and what they will value in the brand, a strong supporting marketing program must be in place. Microsoft Network does have a strong marketing support program and it has evolved throughout its history. The products are listed above in section 2.1 and will be listed again in section 2.4 below on competitor analysis. The place is the Internet, now including mobile.

MSN has used a variety of promotional strategies over the past 14 years. Brandweek (2000, p 1) reported on a common marketing tactic for MSN, which is to sponsor events that can be reported and tracked on the Internet. Sponsorship is one aspect to MSN marketing support, and these events helped MSN prove the value of online tracking.

Carter (2005, p 1) describes how MSN incorporates TV and online advertising with events to promote the Microsoft Network brand. This work is coordinated by McCann-Erickson and is coordinated across countries. In the case of the launch of LIVE’s new search engine, the campaigns in the United States, United Kingdom, Canada, Australia and Brazil were all synchronized.

Haar reports (1998, p 1) that in its early years, Microsoft had an annual $100M marketing budget for MSN. MSN does not advertise solely to generate site traffic. They also market to advertisers and Microsoft believes that its technical skill will give it a competitive edge. Finally, the MSN advertising engine can be customized for each advertiser, and so personalization is another marketing support program tactic.


References
Brandweek (04/03/2000). Silver Awards. Retrieved on November 24, 2008 from EBSCOHOST.

Carter, B (2/5/2005). MSN takes on Google with search engine launch. Marketing. Retrieved on November 24, 2008 from EBSCOHOST.

Haar, S (1998). MSN Holds Back Marketing Bucks Until 1999. Interactive Week. Retrieved on November 24, 2008 from EBSCOHOST.

Keller, K (2008). Strategic Brand Management. Pearson/Prentice-Hall.

MSN Brand Hierarchy

Microsoft Network, MSN is a brand family that encompasses Microsoft’s network or online services. The Windows LIVE brand was introduced for certain online properties in 2006 and as a result some of the online services have two names, such as Hotmail and Windows LIVE Mail, MSN Search and LIVE Search, and MSN Maps and Local LIVE. For the MSN brand, modifiers are used to distinguish a particular service. Keller (2008, p 451) notes that modifiers distinguish “different types of items or models.” MSN Entertainment is an example of the modifier in use. The following chart is a visual representation of the brand hierarchy.

Click image to expand.

References
Keller, K (2008). Strategic Brand Management. Pearson/Prentice-Hall.

The Microsoft Brand Paradox

Its reputation apparently in retreat, Microsoft still has banner year after banner year, and is among the world’s most valuable brands. I believe this is a case that Keller (2008, p 72) describes in which a company gets behavior loyalty even though they don't have an engaging resonance with its consumers. Haigh and Knowles (2004, p 24) additionally note that other intangibles are included in various definitions of a brand. These other intangibles include: 1.) Patents, and software; 2.) Business process and supply chain configurations; and 3.) Contracts, distribution rights, and licenses.

Microsoft has fundamental patents on computer technology that is uses as a barrier to entry. Parloff (2007, p 1) reports that Microsoft is using this intellectual property to outmaneuver Open Source competitors. Microsoft also has an effective business process. A common gag in the high-tech industry is that there are two types of sales reps, those who make their quota and new ones. This may be true for IBM, Oracle and Sun but not Microsoft, who keeps on sales reps even if struggling and works with them. The sales teams eventually gain in-depth knowledge of their customer accounts. Neumeier (2006, p 18) talks about bridging the brand gap, and this requires “crystal clear and potent communications,” the kind Microsoft gets from reps with long experience on an account.

Microsoft has a long-standing relationship with the computer market in general. Keller goes on (p 84) to discuss customer relationship equity that creates a “tendency to stick with a product, above and beyond objective and subjective assessments of the brand.”He postulates (p 86) that increasing customer equity (like relationship equity) results in increased brand value.

My own experience is that this is particularly true in high-tech. There is great risk and high cost in migrating from one technology platform to another. The natural tendency is to retain the existing relationship, unless the brand in question poses more risk than a change. Keller (p 9) notes that brand loyalty provides a “predictability and security of demand” and is a barrier of entry to competitors.

A strong brand can also become a virtuous circle: a strong brand results in better market performance, better market performance increases brand awareness and image, which in turn increase brand strength. Keller says (p 12) that a strong brand is valuable reassurance to business customers. These are large buyers and I know Microsoft has sales teams dedicated to these large accounts, and top execs are also.

One very important value delivery strategy in high-tech is Total Cost of Ownership (TCO). Keller (p 14) observes that a value delivery strategy is an essential element for selling to business customers. Microsoft is aware of this science of branding 1-1, and has imbued in corporate customers the belief that its brand has the lowest TCO. For example, Window’s ease of use gives it a lower total cost of ownership (TCO) in four of five usage patterns tested (see Gaudin, 2002, p1; Microsoft TCO, 2008, p1; Microsoft Speedy Hire, 2007, p1; and Microsoft Key Stone, 2007, p1).

Keller also asserts (p 16) that high-tech customers are “committing to a long-term relationship.” Microsoft has structured a brand that has lasted over time. It provides presales technical support, product support services after sales, consulting services, and a strong commitment to research and development so an investment in Microsoft will retain its value over time.

Microsoft continuously improves its software through investments to improve fundamentals such as reliability, security, manageability, and performance. This investment in tomorrow by Microsoft helps safeguard learning Microsoft technology. Woodie (2006, p1) cites an IDC study that in commitment to long term viability, Microsoft just edged out IBM for top spot.

These are seasons Microsoft has a strong brand but not an equally strong reputation.

References
Gaudin, Sharon (December 6, 2002). Microsoft-Backed Study Slams Linux TCO. Datamation.

Haigh, D. and J. Knowles (June 2004). What’s in a brand? Marketing Management.

Keller, K (2008). Strategic Brand Management. Pearson/Prentice-Hall.

Microsoft Key Stone (2007). Retrieved on October 24, 2008 from http://www.microsoft.com/windowsserver/compare/ReportsDetails.mspx?recid=2

Microsoft Speedy Hire (2007). Speedy Hire Case Study. Retrieved on October 24, 2008 from http://www.microsoft.com/windowsserver/compare/CaseStudyDetails.mspx?recid=155

Microsoft TCO (2008). Retrieved on October 24, 2008 from http://www.microsoft.com/windowsserver/compare/linux/windows-server-tco.mspx

Neumeier, M (2006). The Brand Gap. New Riders.

Parloff, Roger (May 14 2007). Microsoft takes on the free world. Fortune Magazine. Retrieved on October 24, 2008 from http://money.cnn.com/magazines/fortune/fortune_archive/2007/05/28/100033867/

Woodie, Alex (January 10, 2006). Microsoft's Partner Channel the Strongest for Software, IDC Says.Retrieved on October 24, 2008 from http://www.itjungle.com/two/two011106-story01.html

A Public Relations Plan for Microsoft

Microsoft must respond to the open source movement, both the formal initiative and the growing number of adherents in the corporate and government worlds. Open Source Software is the most serious threat to current and future Microsoft revenues and is the theme for this proposed public relations campaign. Open Source Linux and Apache are taking leadership positions in computer centers. What is more worrisome is that Linux may become the operating system of choice in corporate client devices in the near future. If certain publics become strategic buyers of Linux, it is probable that Windows will be driven from the market. This is the conclusion of Casadesus-Masanell and Ghemawat (2005, p 3), two Harvard Business School professors.

Microsoft must establish effective communication channels with key publics to exchange understandings about Windows and Open Source. It must make sure, in honest discussion, that those publics are aware of the capability of both Windows and Open Source to fulfill needs and interests. If Microsoft does not do this, misconceptions or mistrust may influence decisions that result in the disastrous scenario of that Harvard study.

The main barrier to Microsoft for effectively communicating messages about open source, and managing the growing crisis is the lack of integration across the different public relations firms and 5,000 bloggers. Additionally, it is not apparent that Microsoft has organized its thinking about open source according to integrated marketing communication principles. The result is isolated messages about open source that are not targeted to specific publics. The isolated message do not use a strategy and tactics appropriate for each public. Wilson and Ogden (2004, p 138) say that targeting specific publics, and using a strategy and tactics appropriate for each public is the hallmark of strategic public relations planning.

Here is a link to the proposed PR plan: Microsoft Public Relations Plan

References
Casadesus-Masanell, R. and P. Ghemawat (June 6, 2005). Microsoft vs. Open Source: Who Will Win? Retrieved on March 31, 2008 from http://hbswk.hbs.edu/item/4834.html

Wilson, Laurie and Ogden, Joseph (2004). Strategic Communications Planning, 4th Ed. Kendall/Hunt Publishing Company.

Microsoft and Open Source: A Gambler's Ruin Competition

Open Source software strikes at the heart of Microsoft – its value add to the economy. Open Source offers for free the software that Microsoft sells and that is the basis for its enormous revenue stream.

I think the relationship between Microsoft and Open Source is a Gambler's Ruin Competition. This is a rivalry between two parties, one with a large, well established position and the other with a small position but able to compete effectively on individual transactions. The classic example is a casino versus a professional gambler who has a system (also known as a martingale) that enables them to win more than 50% of the time.

Microsoft might see a rapid reversal of fortune if a few strategic buyers go Linux. These would be big enough Open Source wins that they reverse the over-dominating share, the house advantage Microsoft holds in the market.

ISVs would then become interested in Linux; additionally, Linux vendors could extend the purchase price advantage into a clear TCO advantage by improving usability and administrative services; end-users and help desks begin training on Linux.

The key strategy for Microsoft is to keep that from happening. Keep the “strategic buyers” in Windows. Government and large corporate buyers - they are far and away the most important publics.

For a more comprehensive analysis, see Redmond Review Gamblers

The Cluetrain Manifesto: Should Anarchy Replace Structured Communications

First published online and then as a book, The Cluetrain Manifesto (see their website) was an apocalyptic warning. Things were unraveling. Systems were broken. The Internet unleashed long-term trends that would assert themselves.

“Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed, smarter, and more demanding of qualities missing from most business organizations.”


Many acted. Microsoft and IBM both have employees talking directly to customers. In fact, Joe Cox reports (see Microsoft Watch) that Microsoft has over 5,000 employee blogs and quite often Microsoft makes major product announcements only on these blogs, not incorporating one or another of its marketing agencies.

How effective are the differnet implementations of the Cluetrain Manifesto?

John Cass is a marketer and a researcher at Forrester and has made a startling finding (see his blog ). Dell and Macromedia use a dedicated approach, and control communications that uses Social Media rather than take the wide-open approach of IBM or Microsoft. Dell and Macromedia are doing quite well with such an approach. Cass notes that

“Macromedia and Dell empowered employees with resources, while IBM and Microsoft give only verbal encouragement without the backing of cash and resources. There may not be a difference in strategy between the dedicated approach and the cluetrain manifesto, just in tactics.”

He highlights two of the manifesto theses, 48 and 51:

48. When corporate intranets are not constrained by fear and legalistic rules, the type of conversation they encourage sounds remarkably like the conversation of the networked marketplace.

51. Command-and-control management styles both derive from and reinforce bureaucracy, power tripping and an overall culture of paranoia.

But he concludes that anarchy does not work. While the Cluetrain Manifesto helped focus attention on change that is needed for marketing communications because of the Internet and Social Media tools, "[it] did not provide a really effective road map for how to open up a company.”

Marketing communications is a discipline. By focusing their Social Media efforts on smaller groups capable of effective marketing communications, and providing them with support, Dell and Macromedia have been effective. Microsoft succeeded when it provided the logistics to trained communications professionals like Robert Scoble. Cass says:

“Maybe in the process of encouraging open conversation, companies like Microsoft and IBM have failed to give the training, tools and tactics necessary for success. While, Macromedia and Dell’s focus on a smaller group of dedicated people has produced more results.”

John's book is:

What happened to MSN?

The nature of the competition between Google, Yahoo and MSN is search market share. Site Seeker notes “Market share. Google, Yahoo! and MSN are all competing for our attention. More users equate to more revenue via pay per click ads and other advertising opportunities.“

There is a rolling might to Google, which has been completely unaffected by either Microsoft or Yahoo. The explanation is ethics.

McLaughlin (2002, p 117) notes that 60% of adult Internet users are unaware of search engine marketing and that only 1 in 6 Internet users can tell the difference between unbiased search results and paid advertisements. Furthermore, 80% of these users when informed, ask that search sites disclose the practices of paid placement and paid inclusion.

The FTC (see Wouster, 2005, p 3) mandates that “clear and conspicuous disclosure” is necessary for both paid placement and paid inclusion. Truthfulness and disclosure is also part of the commercial world's view of social media ethics prescribed by David Scott (2007, p 205):

• Transparency - Never pretend to be someone you are not.
• Privacy.
• Disclosure - Tell people about any conflict of interest.
• Truthfulness.
• Credit.

From the perspective of the government, and from practioners like Scott there is an admonition for truthfulness, and therefore disclosure.

Is there an impact of ethical advertising on the bottom line that would discourage businesses from applying moral principles? McLaughlin (p 119) notes that “MSN seems to serve the companies [who advertise] corporate needs as much as searcher’s interests.” On the other hand, Google is “the best of the bunch at identifying ads.” What has been the impact on market share? Stepforth has charted MSN market share for the year 2005-6.

What’s it look like over a longer haul? Worse!

Search Market Share

Year/Source ............................Google ......MSN

2004 (see Yahoo) .....................36.5 ........15.5

2005 (see Highbeam) ...............41.4 ........13.7

2006 (see Seroundtable) ..........53.7 .........9

2007 (see ReadWrite Web) .......67 ...........5.25

Conrad (1904, p 212) said, “Anything merely rational fails.” Ethics attempts to deal with the complexity of the real world. Our rational models, in order for us to think with them, are abstracted and focus on only some aspects. What we leave out can drive us to the desperation of trying to buy Yahoo.

References

Conrad, Joseph (1904). Nostromo. Wordsworth Editions Ltd (January 1, 1998)

McLaughlin, Laurianne (2002). The Straight Story on Search Engines. PC World.

Scott, David (2007). The New Rules of Marketing and PR. John Wiley.

Wouster, Jorgen (June 9, 2005).STILL IN SEARCH OF DISCLOSURE. Consumer Reports Web Watch.

New Media Will Challenge Intellectual Property Claims

New media allows each of us to publish our own works, with the illusion that we have copyrighted the material published. However, only the legally proficient will be able to truely establish an enforceable copyright. They know how to properly register the idea and define its scope, and also to discover and contest unauthorized use. Although, there is talk of a poor man’s copyright, “the United States Copyright Office makes clear that the technique is no substitute for actual registration.” (see Wikipedia Copyright)

Powerful companies are preparing defenses against accusations of copyright violations of other’s intellectual property. They are buying and building huge copyright and patent portfolios, and using them in marketing communications. Because of their skillful legal council, they have been able to gain ownership of very fundamental processes. This is especially true in the computer field. For example, Microsoft has patented the understanding of music (The Day the Music Died)

Subtle marketing communications will scare corporate procurement away from weak patent defenders to the strong. For example, in its public relations Microsoft contends that Linux has stolen and violated 235 of its patents and copyrights (see Fortune ). Corporate procurement now faces future charges of knowing violation of intellectual property protections and the ISO 19770 standards on Intellectual Property if they switch from Windows to Linux.

The Open Source community is intransigent in its position. Richard Stallman says software should be free. The community deftly argues that ideas in the computer industry are communal mathematics and should be treated as such (like Folk Art).

Microsoft parries Stallman and says that open source has been reckless with intellectual property. Microsoft has additionally formed a relationship with SuSe Linux and as part of that relationship, SuSe Linux now pays Microsoft royalties on the 235 violations (see Money Mag ), establishing a precedent, and undermining the other Linux vendors and the Open Source Community in general.

The Open Source community has been outflanked by a combination of marketing communications and partnering relationships, which one could argue are also part of marketing communications.

In the end, Microsoft is now accused of stifling Open Source with “patent warfare” see (Patent Colonialism ) Folk culture is indefensible because it cannot hire the marketing communications expertise to lay out effective strategy and legal talent to execute winning tactics. Powerful multinationals will own all human ideas and moralize that we, the great unwashed are ethically violating their intellectual property rights when we try any innovation by our lonesome.

The New Media will accelerate this confrontation by enabling the masses to publish. Many will wonder how you can patent the concept of music. The Open Source community understands the legal intricacies the powerful companies are employing and work within that framework. Not the masses. I suspect they will want common sense.

Microsoft and New Media. Port25.

There is a growing belief that the Internet is a more interesting place than the PC and that the next generation of software will be developed on the Internet. Such work is furthered by the Open Source Initiative, which encourages the sharing and contributions of the wide audience on the Internet. Open Source software strikes at the essence of Microsoft, the value add it gives to the environment is offered for free by open source.

Microsoft must address the emergent open source software. The most important publics are not only the open source community, but equally government and large corporate customers. Social media can give Microsoft both feedback information as well as voice for its open source related messages. Port25 is a Microsoft blog for interactive communications about open source.

Naturally, Microsoft puts a positive spin on the Port25 mission. “Port 25 is about having a healthy conversation with customers and the industry wherein people can talk openly and honestly about their biggest interoperability challenges, whether it is on UNIX, Linux, Windows, or among other open source packages.” The pillar posts for the blog were published in March 2006 and stressed the interoperability theme. A prime example is at http://port25.technet.com/archive/2006/03/31/Faces-from-the-Collective_3A00_-Shared-memory-anyone_3F00_.aspx and is a video interview with a noted Open Source guru who had been hired by Microsoft.


The site seems to be in decline. Over the past two months, only seventeen posts have been made. Here is an IceRocket trend graph:



My conclusion in reading the Port25 postings and responses is that Microsoft is trying to send an interoperability message to the three publics I mentioned above. Only the Open Source technical public is commenting. This is no interactive communication with strategic buyers. Top Microsoft management should engage in this blog to expand the scope of interactive communications to also capture strategic buyer interest.


To read a more complete analysis, see Redmond Review Port25.

Microsoft and New Media. The Yahoo! deal.

Microsoft needs a revenue source for its products and services in a future contended by Software as a Service, and one characterized by increasing acceptance of Open Source. Microsoft recently lost in its bid to acquire Yahoo with its well defined new media offerings coordinated with advertising revenue.

A Redmond Review article, (see Redmond Review Yahoo) cites physicist Mark Buchanan's report on mathematical studies of networks that show the phase of super-connected hubs (such as Google and Yahoo today) eventually give way to more egalitarian networks from the simple processes of history and growth. Many nodes connect to Yahoo or Google as a start to searching out information. However, Buchanan’s conclusion on networks is that “Whenever limitations or costs eventually come into play to impede the richest getting still richer, then a small-world network becomes more egalitarian, as seems to be the case with airports and a number of other real-world networks.”

Furthermore, according to Arms (2002, pp 211-215) there is no goal of indexing the Internet entirely by any of the search sites. There is a higher return on investment for improving the secondary aspects of the search tools so they integrate better with revenue generating functions such as advertising or sales of the web search engine for corporate knowledge management software solutions. We have reached a point where the technical costs to overcome the limitations of web search engines is prohibitive and a plateau in functionality has been set. As with airports, other sites will eventually catch up with the leaders, and not much will distinguish one from the other.

Niche search sites have established themselves as a brand. Today’s two largest super-connected nodes on the Internet get the majority of advertising revenue. However, the trends in marketing may also be working against the continuation of the current aristocratic nature of the Internet.

Marketing is moving away from mass advertising the same message to a large audience. According to Duncan (2005, pp 211-212) the value of the Internet is the ability to send custom messages to highly targeted customer segments. The reach of a relevant message to a small but coherent group is higher than a general and therefore mostly irrelevant message to a large group. As the ability to identify and verify audience characteristics for smaller, specialty sites improves, advertising revenue may shift from Google and Yahoo to this new direction.

Failure to buy Yahoo was good fortune for Microsoft, the price was dear and prospects not as profitable as imagined. Super-connected nodes in an aristocratic network often give way to more egalitarian networks over time, their advantage then lost. That time is now for Google and Yahoo.

References
Arms, William Y. (2001). Digital Libraries. The MIT Press.

Duncan, Tom (2005). Advertising & IMC. McGraw-Hill/Irwin.

Good and Bad Brand Names

According to Duncan (2005, p. 80-81) the key characteristics of a good brand name are 1.) It incorporates the benefits in the name; 2.) Has a positive association to some cultural touchstone; 3.) It is distinctive; 4.) And it is easy to spell and say. These will be the criteria used to evaluate the brand names I consider to be appropriate and those that are not.

Two good brand names

Microsoft
Microsoft has the world’s second most valuable brand and its brand name is a part of that value. It ranks only behind Coca Cola, and has a brand valued at nearly $60B, according to InterBrand (August 1, 2005, P 94). Here is a link to the top 100 brands: Top 100 Brands .

Microsoft’s brand name incorporates the benefits or services that are gained: this company’s products are for people who need software to do tasks on a microcomputer device. Additionally, the brand name is easy to say and spell. Finally, I think is has had a positive association with smallness. Kearns describes how Microsoft does not understand big enterprises and its primary customer base is small businesses. A geek's Small is Beautiful

I would also add to small businesses, small departments in large organizations. I have been in both situations in the mid-to-late 1980s and there was a large grass roots movement of small organizations that looked at Microsoft as providing information technology we could afford and use. It turned out to be true. The momentum from its successes in small organizations propelled Microsoft to its position today.

Polo
Duncan (2005, p 147) says: “Aspiration, status, and luxury are themes frequently used in marketing communications.” The Polo brand expresses that in my thinking. Polo is the sport of aristocrats. So I associate it with class, and since I have airs above my station it appeals to me. It is also simple – easy to say and spell.

In Time magazine, Koepp (September 1986) quotes NY Times fashion critic Bernadine Morris referring to Ralph Lauren and Polo: "He's acquired a certain reputation for clothes that are, you know, with it. But not too with it. Not enough to shock the boys at the bank." That is the sense I get from the brand name also, stylish rather than formal but acceptable anywhere. An appeal to upper-middle class aspirations. Bernadine on Ralph.

Two bad brand names

Old Crow
One brand name that seems inappropriate to me is Old Crow. This is the brand name for a bourbon whiskey originally distilled by Dr. James Crow, the inventor of the sour mash process for manufacturing bourbon. The name is simple, but has depressing connotations. I associate the name with dereliction. It says to me that the benefit of using this product is I end up with a sign around my neck, “Will work for alcohol.”

Breen (2007, p 87) discusses a fortress brand and I think the point can be extended as a fortress brand name also. He says “the successful brands stumble: They fail to evolve. Bangle calls them ‘fortress brands.’ Deeply rooted in their heritage and values, they are inflexible, unmovable, and ultimately stuck in time.” Who do you love.

This happened to the Old Crow while its rival Jim Beam made early and profitable forays into premium and superpremium bourbons. America changed significantly from the 1950s through the 1980s and Old Crow had not kept up. Old Crow had gone into receivership in the 1980s and was acquired by its rival, Jim Beam. The 1980s saw an accelerating change in American drinking habits. Single malts and premium whiskies had captured the attention of affluent drinkers while vodka and rum appealed to the younger generation. Asimov (2007, p 1-2) gives a capsule summary of this trend during that time period. The Rise of Premiums.

In prior times, it had appealed to its colonial origins, which explained its brand name, as in this advertisement typical of its campaigns in the late 1950s and 1960s. Example Crow Ad. The historical appeal of its brand name no longer seemed relevant to the new America. In any case, with its losses from the shift in drinking taste, it could no longer publish effective advertisements to explain the funny name.

Today, some 30 years on, the name alone, without the advertising, projects it as a train-yard favorite. It rather suggests the use of industrial strength chemical extractants in its processing, with kool-aid like substances added afterward to hide the clorox aftertaste. Today, Jim Beam and its holding company, American Brands relegate the Old Crow brand name to its low-end offering.

Beam offers an interesting contrast in its advertising during that tumultuous time. Example Beam ad. Sean Connery was featured in its ads during the 60s and 70s. He seemed to me, at that time, to be considered cool to all age groups. American Brands seemed to have the pulse of its target segment in terms of both product innovation and brand image. Today, very few people understand the Old Crow Brand Name and by its lonesome it sends negative vibes.

Redskins
The Washington Redskins football team has a great history on the gridiron. However, this is another case of America changing and a brand name that is stuck in the past. Today there is a rising level of complaints that the brand name is a racist slur, insensitive and insulting to a significant group of Americans. I think as this movement (to change the name) becomes more prominent, the brand name will be increasingly associated with base and backward prejudice. Time to rethink.

The coalition against the name is not relying merely on moral suasion. It has filed action with the trademark section of the US Patent and Trademark Office. According to AP (August 2006), three trademark judges agreed with the complaint and were ready to revoke trademark status. A successful appeal has stopped this action for now but has not stopped the determination of the groups organizing to oppose the name. Redskins Name Problems

References
Duncan, Tom (2005). Principles of Advertising and IMC. New York: McGraw-Hill Irwin.