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1/9/2019

There is no secret to branding success

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There are five things you need to do to succeed beyond your wildest imagination

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1. Deliver on your product and your promise

2. Hire really good people

3. Know your metrics

4. Segment like crazy

5. Don't lie to yourself

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1/1/2019

Crush your 2019 resolutions

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How to Crush Your Habits in the New Year with the Help of Science

Let The New York Times help crush your 2019 New Year's resolutions. Make 2019 the year you actually do all the things you want to do. The NYT asked the experts and checked the journals for the most useful tips you can take to heart.

  • • Think big
  • • Be patient
  • • Break it down
  • • Embrace snappy rewards
  • • Prime your environment
  • • Plan to fail...
  • ... but celebrate often

Want to read the rest of the article? (And, yes, you should). Click on the image below

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3/7/2018

Marketers are clueless about media effectiveness

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Marketers are clueless about media effectiveness

This is a fantastic article. I just have two comments on it:
  1. • It is not only marketers, but a whole bunch of pseudo-marketers who go by "social media expert" and specializations like that.
  2. • In all seriousness, I think that the article (and the research) completely undervalue the importance of the message. You can have a fantastic message on mediocre media and it will generate results. Or, you can have a crappy message on the best media in the world and it will not generate results.

For your convenience, I saved the article as a PDF here or go to the article here

ritson_-_marketers_are_clueless_about_media_effectiveness.pdf
File Size: 275 kb
File Type: pdf
Download File

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1/28/2018

The Follower Factory

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The Follower factory

Every so often, I see an article that is so important, well-documented and well-written that it merits to be published in its entirety. This is one.

A ground-breaking article by The New York Times on what really goes on behind the scenes in the shady world of social media followers, influencers and "likes"

Read the Article

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11/4/2017

The Perfect three-minute startup pitch

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The Perfect three-minute startup pitch

Unbound Miami gave me the opportunity to watch about 50 startup pitches. Refresh Miami, the day before, featured 6.

All of these pitches had judges, and all the companies competed for some sort of reward, which made the experience fantastic. In general, I'd say 75% of the pitches were bad; 50% were really bad; 25% were horrible.

This is what I think defined the outstanding, winning 3-minute pitches: 

1. What is the story (:30)
2. Why did I create this company/what is the pain point it solves (:30)
3. What makes the company unique/why is it going to do well (:30)
4. Who is the team behind it (:30)
5. What is the business model/how does it make money (:30)
6. What are the revenues & profit projections & ask (:30)


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10/17/2017

A Radical low-tech proposal to solve Miami's transit problems

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A Radical Low-Tech Proposal to Solve Miami’s Transit Problems

Ask just about anyone in Miami-Dade what is our worst problem and the most likely answer you’ll get is “traffic”. Miami ranks at the bottom of any driving-related lists. Rush hours now extend three or four hours and it is considered normal to take 30 – 45 minutes to go 5 or 6 miles.

In addition to the sheer number of cars, there are two other factors making our traffic even more traffic: there is no room to expand our roads and public transportation is a pathetic joke. Metrorail (or Metro-Fail as it is often called) is just a straight line from the west (Kendall) to the east (Downtown). But Miami-Dade itself is totally spread out.
Combined Metrorail and Metromover ridership is around 2.3 million per month (of which 2.0 million are during weekdays). Assuming most people will ride back and forth and that 75% of them are the same people every day, this could be as little as 600,000 individual persons per month.

Bus ridership is around 4.6 million per month. This is minute fraction of the around 9 – 10 million trips made per day in Miami Dade. (NTHS Data 2009 projected to 2017 population). So the data is grim: public transportation serves a small fraction of our transportation needs.
To add insult to injury, the political establishment has not been able to come up with any solutions. Cliché solutions like trains are expensive (into the $2bn+) and take years to build.

From a potential user perspective, there are five key priorities:

  1. Footprint – The solution must be able to get people from where they live to where they want to go, be it work, beach, shopping, etc.
  2. Flexibility – As needs or passenger volume changes, the solution chosen must be flexible enough to accommodate these changes with no major disruptions.
  3. Frequency – Obviously, passenger waiting must be kept at a comfortable minimum. This will change but, for example, no one wants to wait over 15 minutes during rush hours.
  4. Low cost – If people are going to use public transportation regularly, it must be relatively inexpensive. As it relates to highly congested areas, it must be cheaper than, say, parking in downtown Miami ($10 - $14 all day) or cheaper than the gas used to go to work.
  5. Remove congestion – Finally, it would be great if the solution were able to really get rid of cars on the road.

Proposal –three key factors:

• Minibus fleet

• Private/Public partnership

• Technology used for route optimization
 
The proposal:

1. Minibus Fleet.

Have Miami-Dade County create a fleet of 14-passenger mini-buses, leasing them to individual owner-operators and sharing the revenues.

The buses.

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Minibuses come in several configurations. These particular buses typically carry 14 passengers, weigh about 11,000 lbs and have a wheelbase of 158”, so that the total length equals that of one and a half cars. At around 8-10 mpg they consume pretty much what a Mercedes G63 Wagon does. But, at $55,000 - $60,000 these buses cost half as much as a Mercedes G Wagon.

A fleet of minibuses also makes sense two other ways:

  • First, the fleet can be shut off during the weekend, if needed, when ridership is low.
  • Second, the buses are absolutely easy to maintain; these, in particular, are Fords and use commonly available engines, drivetrains, brakes, suspensions and other parts.
 
2. The Economics of a Public/Private Partnership

Roughly speaking, our 2.2 million people take around 3.8 car trips per day for the 9-10 million calculations. (NTHS Data). No amount of buses, metro-rails and metromovers can even begin to impact that figure. However, a fleet of 7,000 minibuses would begin to duplicate the ridership capacity of Metrorail + Metromover. Moreover, if most of the car trips are relatively short and single-person, it is conceivable that 7,000 minibuses could remove 70,000 cars off our roads per day.

A fleet of 7,000 minibuses would cost $385 million or, roughly, 20% of the cost of the equivalent Metrorail capacity.

What would the economics of a public/private partnership look like?

I propose that Miami-Dade buy the buses (through issuing bonds or securing the debt of the private citizen buying the bus) and then “sell” them to individual owners. In order to avoid an undue concentration of power and replicate the failed cab industry, one can visualize an arbitrary limit on individual ownership (10? 5?) and, in order to qualify owners the government could mandate that all owners/drivers pay for the driving lessons out of their own pockets.
Is this affordable and attractive?

My calculations show that yes, after about 180 passengers per day, minibus ownership is an attractive self-employment option:

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So it is realistic that an owner/driver make $1,500 per week, which is high compared to the Miami-Dade average yearly income of $58,000.

Miami-Dade would make money by selling advertising on the buses. 7,000 buses selling billboards on the side for as little as $350/month (for both) would generate $2.5 million per month, which would help pay for the bureaucracy and have money left over to pay drivers a performance bonus. Subcontracting the commercialization to a company such as ClearChannel could be done for 25% - 30% commission, which would still leave plenty of money per month.

3. Technology used for traffic optimization

Finally, an app similar to Uber’s would measure demand and supply, making sure buses are driven to where they are needed most.

This app could also measure the performance of each bus, making sure that buses receive proper maintenance, keeping track of MPG figures, driver license renewals, etc.

Bottom line:

A public/private partnership which would create thousands of jobs can be achieved by the country “buying” a large fleet of minibuses and “selling” them to individual owners. This fleet would be highly efficient in reacting to traffic needs and improve our traffic conditions measurably.

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8/22/2017

Blue Apron and the court of public opinion

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Blue Apron, Allowables, costs of acquisition and the court of public opinion

So Blue Apron is facing several lawsuits related to their not disclosing that they knew (or whether or not they knew) that Amazon was going to enter the meal kits category. Buried in there was a small figure that a lot of people were getting hung up on: it seems that, on the face of it, Blue Apron spends around $460 to acquire each customer.

Naturally, a company spokesman immediately contextualized it by saying that it was not only acquisition but also retention. And, from my own experience, I can vouch for referral being part of that mix.

The real issue is: is that figure too high? Crippling… as some have said?

1. Gross revenues, net revenues… big difference.

The figures that are then quoted in the study are “net revenues per quarter after the first order” and look dismal (and they are dismal)

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However, let’s take a guess at what the entire picture looks like. Based on my own experience, there are probably two things: COGs (Cost of Goods) were probably in the 40% range initially (and by that I mean the actual food) and second, as the company grew and became more sophisticated, COGs diminished.

Perhaps it could look like this:

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So while bad, the picture might not be as dismal.

  • The $237 figure was for only the 1st Quarter 2017 so we can extrapolate this to $472 for six months
  • In a business plan that I did for another similar company the initial COGs was 35% though it had nowhere the sophistication of Blue Apron

2. Blue Apron Meal Plans

Take the simplest approach and consider only meal plans when tallying up revenues (there are other sources) and we might see:

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So consider that the average plan is $63/week

3. Costs of acquisition and LTV

The two most important factors in direct marketing are cost of acquisition (how much does it cost to acquire one customer) and LTV –Lifetime Value—(how much is this customer going to spend with me for his entire history).

The allowable itself can be benchmarked at around 20% with some categories requiring way less and some requiring way more, but 20% is a good starting point.

Given that, what might be the picture?
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So, basically, for Blue Apron to make money a customer must be active 37 weeks. Considering that retention programs are not only well-known but most very cost efficient and that some customers will come in via referrals, that is the breaking point: 37 weeks.

Is this realistic? Not realistic? Gevalia, for example, has customers going back 10, 15 and even 20 years. So, evidently, there is a core of consumers that will last much more than 37 weeks.

4. Projections to 37 weeks.

Finally, let’s say we project the 26-week revenues to 37 weeks. Where do we then stand?
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So, if the expectations are that the LTV of a customer is $2,300, Blue Apron is meeting that.

One final note:

This could be completely science fiction, for all I know. I’m not privy to any information about Blue Apron other than what I read in public media. However, this is the kind of strategic process we follow when we consult with clients about expenditures. In direct response numbers don’t lie and, the more information you have has a company the better you can do your job.

Finally, no, I don’t own any shares of Blue Apron, I just thought it is an interesting concept.

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8/9/2017

Advertising works

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Advertising works

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Advertising works.

1. My wife had been complaining that milk as the local Publix was going bad after only a couple of days.

We saw the spot somewhere (Food Network?), I decided to try it and the rest is history.

So now we pay $1 more per bottle.

2. Black Box was even better. I don't even drink that much wine. But we saw the spot (again, Food Network?) and it totally convinced me to try it.

And the rest, too, is history: we now pay $4 - $5 less per bottle. We used to put it in a carafe when friends came over, now I don't even care. It's damned good.

In both cases, the advertising that worked had three things in common:
  1. • It invited us to try it
  2. • It was relevant to our immediate needs or wants
  3. • It talked directly about product benefits... no fuzzy wuzzy brand-sy crap

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7/27/2017

The importance of process - TOE and your sales

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The importance of process: TOE and your sales

A very well-articulated short blurb on behalf of process.

My philosophy is "media agnostic" but "process-oriented".

I created TOE (Theory of Everything) to make sure that the brand teams were considering all aspects of marketing before firming up their plans: consumer insights (and segmentation), media and creative.

Having a time-tested, battle-tested process helps you grow your brand in what has often been called "a scientific way" by people who have gone through the process.

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7/26/2017

Two Guys walk into a bar...

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Two guys walk into a bar

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They see wall to wall beautiful women.
 
Guy #1 sees this stunningly beautiful woman, sits in a miraculously-empty stool next to her and starts talking about himself. His cars, his penthouse overlooking the ocean, his great vacation in Bali, the little-known tailor he discovered in Savile Row who makes perfect suits… smiling, the woman says “excuse me, I need to use the ladies’ room”. And never comes back.
 
Guy #2 sees this also-stunningly-beautiful woman, sits in another miraculously-empty stool near her and says, “Hi, I’m Peter, what’s your name?”. From that point, the conversation is all about her. What does she do? What would she like to do? What does she like? Dislike? What are her plans? An hour later, they are still talking. But now the conversation has taken a more personal bent: is she even aware of what a beautiful smile she has? How her eyes dance when she is smiling… you get the drift.
 
Question. Who gets the woman?
 
And yet, we have the same conversation every day. This medium “works”. That one “doesn’t”. This medium is “hot”. That one is “cold”. This one is “engaging”. This other one is “below the line”. That one is “above”.
 
Let’s be cold and objective about it. Every medium works.
 
I began my career on the creative side, switched to media, then to strategic planning and have been privileged to work everywhere: in the U.S., Latin America, Europe, Asia and Africa. Along the way I’ve learned more than a handful of lessons.
 
The main one was: It’s the message.
 
Let me give you two examples:
 
The mosquito season is the most important thing in the world for insecticide manufacturers. Most people buy a can of insecticide the moment they see a surge in the number of mosquitoes. The second can is usually the same brand as the first one and most people buy only between 3 and 4 cans per year. So you can see the problem: miss the first can and you’ve shot 50% of your share of market down the tubes. Some years back S.C. Johnson told us that they would be late in Brazil with the launch of Raid Max. We created a radio “Testimonial” campaign –live reads—which asked women to “please hold off on buying your insecticide until we launch Raid Max”. Just that simple message read convincingly by a well-known DJ held back the buying of enough insecticide in the country to allow us to launch Raid Max properly and make our numbers.
 
For the Plenitude (a L’Oreal brand) in Mexico, the French-originated campaign was lacking on two key aspects: the target definition was off (the international campaign targeted women 25+ in the upper and mid upper segments) and it was not resonating with the real buyer in Mexico. We first did the obvious thing: redefined the target to be women 18-34 in the mid-and-lower segments (a huge segment in Mexico) and then created advertorials based on the #1 reasons these women were giving us when buying Plenitude: “I don’t want to look like my mom at 30”. The advertorials were, of course adapted to each magazine. The result: #2 brand in the country in less than a year with 19.2% SOM
 
So, lesson #1: It’s the message



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    Marcelo Salup

    • 30 years of expertise in all aspects of advertising: consumer insights, creative and media. • Extensive international experience • No-buzzword-zone • Healthy skepticism •

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