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  • Harvard Psychologist Explains How Comparison Shopping Can Cost You Money

    woman shoe shopping

    Psychological science has found out at least two things about human nature: 

    • We don't always act in our own best interest.  
    • We're easily manipulated. 

    If you take it from Harvard psychologist and "Stumbling On Happiness" author Daniel Gilbert, these tripped-up tendencies are evident in the way we make purchases.

    Speaking at this month's World Business Forum in New York, Gilbert unpacks some of the research that he and his colleagues have done, mainly around how comparing things affects our behavior. 

    In short, the comparisons we draw shape the purchases we make — for better or worse.

    He used your neighborhood wine store as an example. Say you're going over to your friend's housewarming and you want to pick up a gift.  

    There's an $8 bottle of wine, a $27 bottle, and a $33 bottle. Which do you buy? 

    Most people don't want the most expensive, and they don't want the least expensive because, Gilbert says, "you don't want to feel cheap."

    So most people will opt for the middle price. 

    A smart retailer will put this information to use by placing a super expensive bottle, like $100 or so, on the same shelf, Gilbert says. It's not a problem if it doesn't sell — the purpose of the $100 bottle is to make that $33 bottle look reasonable.

    Our comparison shopping gets us tangled up in other ways, too. 

    Dan Gilbert

    According to Gilbert, economists maintain that before buying anything you should ask yourself, "What else could I do with this money?" 

    But there's a problem. "You can't possibly compare the thing you might buy with everything else," Gilbert says. 

    "Rather than comparing with the possible," he continues, "people compare with the past." 

    This can get us into trouble. 

    In another set of experiments, Gilbert presented his subjects with two different purchasing decisions.

    • In one, there was a $2,000 Hawaiian vacation package that got marked down to $1,600.

    • In another, that $2,000 vacation package went on sale for $700, but you decide to mull it over for a week. And by the time you get to the ticket agency, that deal is gone — you're left with a $1,500 offer. 

    Which would you buy? In Gilbert's experiments, most people took the first offer but rejected the second. That's because we're constantly comparing today's prices with the past, which means we can lose out on our best deals. 

    It also explains why we're so drawn to sales. If a product is cheaper today than it was yesterday, we want it. 

    "That's why 'Price Cut' are the most magical words in marketing," Gilbert said

    For more from Gilbert, watch his awesome TED Talk below. 

    SEE ALSO: 11 Psychological Tricks Restaurants Use To Make You Spend More Money

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    Details: http://www.businessinsider.com/dan-gilbert-comparison-shopping-money-psychology-2014-10

  • Original 'Shark Tank' Investor Kevin Harrington Explains The 3 Fundamentals Of A Great Pitch

    kevin harrington

    Former "Shark Tank" investor Kevin Harrington has heard hundreds, if not thousands, of pitches in his long career and has given plenty himself. 

    He's the man behind the "As Seen On TV" distribution vehicle that launched major brands like OxiClean using infomercials, an advertising industry that's now worth around $200 billion.

    Harrington is also one of the cofounders of the Entrepreneurs' Organization and has worked with founders to launch over 500 products that have brought in more than $4 billion worldwide.

    We recently caught up with Harrington, and he explained his three-tiered pitching system, which he says you should follow whether you're pitching to a venture capitalist, shooting a commercial, or setting up a crowdfunding page.

    1. Tease: What's the problem?

    People have short attention spans. When Harrington develops an infomercial, he makes sure that the problem is teased within six seconds.

    In an OxiClean ad, this might be something silly (yet relatable) like a meatball falling onto someone's shirt and staining it. If you're pitching your company, your meatball equivalent is the context that elevates your company beyond being simply amusing but rather necessary.

    2. Please: What's the solution?

    How can the problem you introduced be solved, and what makes whatever you're offering unique? Give proof that you know what you're doing.

    In a video, you can show that OxiClean gets out a tomato sauce stain. In an investor pitch, you're explaining how your service or product will work and how your background shows that you're the right person to bring this idea to fruition.

    A classic advertising technique is using a testimonial that lends credence to what you're saying. If you're pitching your company to an investor, use hard data to back up your points. If your company has existed for some time, give specific examples of how you have interacted with satisfied customers.

    3. Seize: What are the opportunities?

    Now give your audience a deal.

    Tell them how much money you're looking for from them, and explain how it will be used and then returned at a profit to the investor. In the same way an advertiser wants to persuade you that parting with $9.99 for stain remover is a small sacrifice for all of the stained clothing you're going to save, you need to persuade an investor that giving you cash is a wise investment that will pay off.

    You need to create a sense of urgency, that the investor has to invest now to avoid missing a massive opportunity.

    Harrington says that whether you're writing a commercial or preparing for a pitch meeting, you need to be able to get all three fundamentals of your pitch in and sum them up concisely. A full-length infomercial can run 30 minutes long, and an investor pitch meeting may take over an hour. But in either case, the initial pitch has to be wrapped up in under two minutes.

    "The art of the deal is being able to do it all in 60 to 120 seconds," Harrington says.

    SEE ALSO: Here's How A Billionaire Investor Coached An Entrepreneur Through The Pitch Process

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    Details: http://www.businessinsider.com/original-shark-tank-investor-kevin-harrington-on-pitching-2014-10

  • TV Broadcasters Ought To Be Worried About The Looming Shift Away From TV Advertising Omnicom Just Described (OMC)

    tv viewer

    Omnicom Group, the world's second largest advertising holding company by revenue, just gave the market another major indication that TV dollars are moving to digital. 

    Speaking on the company's third-quarter earnings call Tuesday, Omnicom Group CEO John Wren explained how the rise of programmatic advertising and the increase in quality inventory becoming available online over the past few months has seen a "rapid shift" in the way clients have been booking advertising.

    Referencing the move from TV and traditional advertising to digital in particular, Wren said:

    "Marketing budgets continue to grow and clients, especially when it comes to TV, there has been, I'd say, a shift when you look at traditional areas like the upfront and scatter market. If you went back a couple of years there was an urgency on the part of clients to make certain they didn't miss out on the programming they wanted.

    "With all the various choices of audiences you want to reach today and the ability to do it, there just wasn't that urgency going into the upfront this year. And with respect to the scatter market, you are seeing money being diverted into other areas. 

    "I believe that trend will continue. I don't believe TV is dead, but I believe there is going to be a shift."

    The upfront refers to the time of year when TV broadcasters sell all their advertising for their most attractive Fall programming ahead of time. The practice keeps the price of TV advertising high because it creates a short, limited window in which brands feel they need to lock in the best deals they can by buying in bulk.

    The scatter market refers to TV advertising sold closer to the broadcast date. It is sometimes referred to as leftover advertising and is often sold at a far higher rate if the TV show pulls in bigger ratings than previously forecast.

    Wren called to the move from traditional media buying to digital practices as "the shift from mass marketing to mass personalization."  That shift isn't new advertising money coming into the market. It's TV advertising money (and other traditional advertising money) moving into more-measureable online advertising. That move from one pot to another was also referenced by Omnicom Media Group CEO Daryl Simm earlier this month when he said he was advising clients to shift as much as 25% of their TV budgets to online video.

    Meanwhile in recent months Omnicom, which represents more than $50 billion in annual ad spend for clients like Apple and Pepsi, has signed huge global upfront advertising commitments with Instagram, Twitter, and the now Disney-owned YouTube content creator Maker Studios and became the first advertising network to trial Facebook's new Atlas advertising platform

    All these stories compounded together ought to frighten TV broadcasters. They need to change their approach to selling, optimizing, and measuring advertising if they are to prevent this "shift" from rapidly decaying their businesses.

    A shift is happening. But TV isn't at all dead yet.

    emarketerpngHowever, to put this into some perspective, TV advertising is projected by eMarketer to make up 38.1% of total US ad spend in 2014. Digital, meanwhile, is estimated to make up 28.2% of the total advertising outlay.

    So even though eMarketer also predicts digital spend will overtake TV spend in 2018, there is still quite a way to go before we stop seeing 30-second ads on our TV sets. It's also worth bearing in mind that broadcasters are also offering digital advertising opportunities across their websites, video-on-demand platforms and apps, which can make up for some of the traditional advertising shortfall.

    Omnicom also revealed on the earnings call that programmatic media buying — which makes the buying of media far easier than TV because the process is automated —accounts for just around 2% of the company's revenue. However, with a recent Forrester study forecasting programmatic ad spend across North America will double to $39 billion by 2019, Wren said the company was " rapidly evolving" its business to ensure it had the capability to serve clients in this area. There has been a "meaningful increase in demand" from clients for the company's programmatic services over the last year, he added.

    Omnicom Group's third-quarter net revenue rose 7.4% to $3.75 billion, while net income increased 24.4% to $243.8 million. The company was boosted by strong advertiser demand in its home US market.

    The earnings report came six months after the company's proposed merger with Publicis Groupe to create the world's biggest advertising group collapsed. The company said the pre-tax impact of the abandoned transaction in the year to date was $8.8 million, which was mainly spent on professional fees.

    SEE ALSO: The Ad Agency For Apple, Pepsi and McDonald's Is Advising Clients To Slash Millions From Their TV Budgets

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    Details: http://www.businessinsider.com/omnicom-ceo-john-wren-on-the-shift-from-tv-to-digital-advertising-2014-10

  • 3 Reasons Americans Are Abandoning McDonald's

    McDonald's

    Americans are abandoning McDonald's.

    The fast-food giant's domestic same-store sales plunged 3.3% in the third quarter, continuing a downward slide that began at the start of the year.

    "By all measures our performance fell short of our expectations," McDonald's President and CEO Don Thompson said in a statement. "We recognize that we must demonstrate to our customers and the entire McDonald's system that we understand the problems we face and are taking decisive action to fundamentally change the way we approach our business."

    The US, where the company has more than 14,000 locations, is McDonald's most important market.

    Here's why it's slipping domestically.

    1. McDonald's is facing a growing perception problem in the US. In response, the company launched a massive marketing campaign last week to answer customers' questions about how its food is sourced, processed, and cooked.

    The campaign might help the brand in the long-term. But so far, it appears to have only ignited a backlash.

    McDonald's Facebook page has been inundated with thousands of negative comments in the past week regarding its food. Many have accused the company of using "pink slime" and even human DNA in its hamburger meat. Others have criticized McDonald's for marketing unhealthy food to kids.

    Many of the accusations are untrue, but they provide clues into the gravity of McDonald's public-perception crisis.

    McDonald's2. The company's complicated menu has been slowing down service.

    The wait at McDonald's drive-thrus is the longest in at least 15 years, according to a study by QSR Magazine. At 189.5 seconds, it is also nine seconds longer than the industry average.

    "Our menu is a disaster for both employees and the customer. It has killed our speed of service," a McDonald's franchisee wrote in response to a survey by the financial services firm Janney Capital Markets.

    McDonald's chief operating officer Tim Fenton acknowledged in January that the company "overcomplicated" the menu "with too many new products, too fast" and "didn’t give restaurants an opportunity to breathe."

    But according to franchisees, the company still hasn't simplified the menu.

    "All talk, no action," one franchisee wrote in response to another survey by Janney Capital Markets. "They continue to add more items (and admittedly will add more) even though they talk about reducing the menu. Top management is clueless as to what goes on in the stores."

    mcdonald's big mac fries

    3. The company has tried to offset falling sales by slowly raising prices, which is driving away cash-strapped customers.

    The company said its prices increased 3% through the end of June compared with the previous year, according to a Bloomberg report.

    Even McDonald's cheapest menu items are getting more expensive. The company expanded its dollar menu last year to include items that cost more than $1, and it changed the name of the menu to the "Dollar Menu and More."

    A Double Quarter Pounder with cheese, fries, and a drink now totals about $7.50 at some Chicago locations, Bloomberg reports.


    NOW WATCH: Starbucks, Dunkin', Or McDonald's: Whose Coffee Has The Best Buzz For Your Buck

     

    SEE ALSO: McDonald's Franchisees Say The Company Is Bankrupting Them

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    Details: http://www.businessinsider.com/why-americans-are-abandoning-mcdonalds-2014-10

  • What Industry Insiders Think Of Marissa Mayer's $700 Million Deal (YHOO)

    Yahoo CEO Marissa Mayer

    Late last night, TechCrunch's Ingrid Lunden and Sarah Buhr broke some big Yahoo news.

    They reported that Yahoo has signed a term sheet to buy a company called BrightRoll for ~$700 million. 

    Take the report with a grain of salt, as TechCrunch has missed on a few "scoops" lately.

    Still, the deal is totally plausible. Yahoo has a lot of cash these days, thanks to its 2005 investment in Alibaba, which just had its IPO.

    BrightRoll is a video ad tech company. It hosts videos for publishers, and, with algorithms, helps them pick which ads to run against them. Advertisers can also work with BrightRoll to find the right videos to sponsor.

    There are a few reasons it makes sense for Yahoo to buy BrightRoll.  

    • For a while now, Yahoo has sought to acquire a company that would give it more video advertising inventory to sell in a "programmatic," or automated fashion. First it tried to by Dailymotion. Later it tried to buy Twitch. 
    • BrightRoll's algorithms might be able to help Yahoo match advertisers to videos more efficiently, thereby allowing it to sell the video ad inventory it already possesses for higher prices.
    • Yahoo would like to turn Tumblr into a YouTube competitor. It needs video-hosting and ad-serving technology to be able to do that.
    • BrightRoll generates $100 million in revenue each year, and it will immediately help Yahoo's top line start growing again. 

    This morning, we reached out to several ex-Yahoo ad tech people as well as a number of other sources in the industry to hear what they think of this potential deal.

    Here's what we heard.

    BrightRoll is a good company, but Yahoo could buy its competition for cheaper. Says an industry source: "BrightRoll is a good company, been around a long time, has good revenues (maybe $100 net) and good gross margins. It's interesting that there are three publicly-traded video ad nets for less $ and none of them are being considered for acquisition (YuMe, Tremor, TubeMogul). Both YuMe and Tremor are highly discounted because their tech sucks and they don't do programmatic well. TubeMogul is almost entirely buy-side, so Yahoo is probably more interested in sell-side technology."

    Yahoo is paying too much. Says shareholder Eric Jackson: "Typical Yahoo deal. Buy the also ran at double the price. Wish they bought Liverail. If it happens, it’s far less objectionable than Tumblr or the 6 dozen acqui-hires – at least there’s going to be some revenue."

    BrightRoll is just a clearing-house without great tech. Says a former Yahoo exec: "Desperation play.  Too much of an ad network (just a buy/sell operation, not a true platform). Valuation is absolutely ridiculous."

    Yahoo is splitting the baby. Says an industry source: "I think Yahoo is schizophrenic about if they need/want a DSP [a product advertisers can use to find ad inventory] or an SSP [a product publishers can use to sell inventory], Brightroll gives them something that splits the middle."

    BrightRoll doesn't have great tech or software, and Yahoo just acquiring scale. Says a former Yahoo exec: "Terrible. While BrightRoll is a scale player in the hot video space... Their revenue is primarily driven by their media ad network business. It's IO driven, not tech or SaaS [this means its not as automated as you think]. This is Blue Lithium & Interclick for video [two ad tech acquisitions Yahoo made in the past that some say haven't gone well]. Yahoo needs ad tech and all they acquire are mobile startups that are going out of business and more unreliable, insertion order driven media networks."

    It's a smart deal, but Yahoo is paying a lot — and it doesn't have the people to run a smart ad tech business. Says a former Yahoo exec: "I think it's actually smart. It's becoming widely acknowledged that the ad format of choice for mobile is video and this gives them a great solution from a recognized leader in the video space. It's an expensive price though. The problem is after acquisition that you have inept product people like [Yahoo executives] Scott Burke and Mark Morrissey who will more than likely sabotage this from within and until those guys are gone, Yahoo will continue to have problems on the revenue product side."

    Where's the synergy? Says an ex-Yahoo executive: "Not sure I see the real synergy with Yahoo. More video inventory? [Feels like they are saying,] 'We need to do something. This is something. Let's do it.'"

    It doesn't solve Yahoo's real probem. Says a former Yahoo executive: "Buying ad tech doesn't solve the company's fundamental problem as not being relevant to users (declining engagement) and consequently not having mindshare with advertisers/agencies. While it could help squeeze out higher prices from it's own inventory, it cannot be a game changer. Plus Yahoo's poor track record of integrating ad network businesses raises questions on how well it can integrate the ad network piece of BrightRoll. Yahoo hasn't made much of the Blue Lithium or Interclick acquisitions. As a shareholder I'd rather have the estimated $700M given back - as a dividend or stock buybacks."

    NOW WATCH — WHERE ARE THEY NOW? Here's What The 'Dude You're Getting A Dell' Guy Is Doing Today

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    Details: http://www.businessinsider.com/insiders-on-yahoos-brightroll-buy-2014-10

  • REPORT: Microsoft Is Axing Nokia's Name From Its Smartphone Brand (MSFT)

    nokia lumia 928 windows phone 8 home screen

    Upcoming Lumia Windows Phone devices will no longer be released under the Nokia brand, according to a new report from The Verge. Instead, devices will be labeled as Microsoft Lumia going forward.

    The move doesn't come as too much of a surprise since Microsoft acquired Nokia's mobile devices division in April for $7.2 billion. At the same time, Nokia will exist separately as a company that focuses on mapping and network infrastructure.

    The report comes just after blog GeeksOnGadgets said Microsoft may completely remove the Windows Phone name from its smartphones, and instead brand the phones as "Lumia." Microsoft is reportedly planning to implement this change in its holiday marketing materials.

    SEE ALSO: How Microsoft Created A Virtual Assistant That Could Blow Siri Away

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    Details: http://www.businessinsider.com/microsoft-nokia-smartphones-2014-10

  • THE ANDROID REPORT: User Trends, Commercial Growth, And Exploding The Fragmentation Myth

    BII_Android_Cumulative

    Android is underappreciated as a commercial platform — as a revenue driver for the e-commerce, advertising, and software industries. 

    Too many analysts remain attached to an outdated idea of Google's mobile operating system as fragmented, malware-ridden, and low-end. They believe Android users don’t spend money on mobile and lack lifetime value. This is no longer true.

    In a new BI Intelligence report, we show how Android has translated its massive audience — an estimated 1.2 billion active users globally by the end of this year — into a solid platform for mobile-based businesses. 

    Access The Full Report And Data By Signing Up For A Free Trial Today >>

    Here are the report's main takeaways: 

    The report is full of charts and data that can be easily downloaded and put to use

    In full, the report: 

    For full access to the report on Android As A Mobile Business Platform and all our downloadable charts and data on mobile computing strategy and trends sign up for a free trial subscription today.

    BII_Android_Cumulative

     

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    Details: http://www.businessinsider.com/android-e-commerce-and-market-numbers-2014-10

  • REPORT: Yahoo Is Looking To Acquire Video Adtech Platform BrightRoll For $700 Million

    Marissa Mayer

    Yahoo is lining up an acquisition bid for the video adtech platform BrightRoll as the company continues to accelerate its video strategy, TechCrunch reports.

    Sources tell TechCrunch that term sheets have already been signed and that the deal is likely to be worth within the region of $700 million to $725 million, although it could be valued as much as $1 billion.

    BrightRoll acts as an intermediary service for both brands and publishers, serving video advertising across desktop, mobile, and connected TV devices.

    It works with clients including Mars, Honda, and Kellogg to help their marketers plan, target, optimize, and measure their digital video advertising campaigns across 25 of the top 50 online video publishers.

    Researchers at comScore this year rated BrightRoll’s ad platform as the largest in terms of reach to unique US video viewers — 95% of all video viewers online — through its partnerships with ad networks, agency trading desks, and demand side platforms (DSPs). It scored ahead of Specific Media, AOL, LiveRail, and Google.

    If true, the TechCrunch report suggests Yahoo is looking to take Google and its online video platform YouTube head-on in the online video advertising space. Several Yahoo executives have previously told Business Insider that Tumblr — which Yahoo bought last year for $1.1 billion — should become the company’s answer to YouTube. 

    In March this year, Re/code reported Yahoo was working on a plan to lure some of YouTube’s most popular stars over to Tumblr. Yahoo's sites are only the fourth-largest in terms of online video views, with Google, Facebook, and AOL coming ahead, according to comScore data, which highlights the need for it to improve its content to migrate users to its platform.

    Acquiring BrightRoll, which last year was said to be bringing in $100 million in revenue, would help monetize that potentially lucrative video content.

    BrightRoll has already raised more than $40 million from investors including Adams Street Partners, Scale Venture Partners, Comerica Bank, True Ventures, Trident Capital, KPG Ventures, Michael Tanne, Fabrice Grinda, Auren Hoffman, and Jeff Clavier, according to TechCrunch’s CrunchBase

    A Yahoo spokeswoman told Business Insider the company “does not comment on rumor or speculation.”

    Yahoo has already taken several steps to attempt to improve its video strategy.

    In July, Yahoo announced it had bought the Israel-based startup RayV, which specializes in streaming high-quality video, for an undisclosed amount.

    In August, the company was reported to have made an offer to buy the video-streaming platform Twitch for $970 million, which Amazon later landed for an estimated $1 billion

    There were also rumors last year that Yahoo was looking to buy DailyMotion and, separately, Hulu.

    SEE ALSO: Marissa Mayer's Secret Plan For Tumblr Revealed: Make It YouTube

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    Details: http://www.businessinsider.com/yahoo-looks-to-bolster-video-strategy-with-brightroll-buy-2014-10

  • Skechers Makes A Really Odd Choice For Its Next Spokesmodel (SKX)

    Ringo Starr

    Skechers has a long history of signing up famous sports stars to become its brand ambassadors — retired 49ers and Chiefs star Joe Montana, NBA’s Dallas Mavericks owner Mark Cuban and former New York Jets quarterback Joe Namath to name a few recent examples. But the shoe brand has gone slightly left-field for the choice of its latest spokesman: Former Beatles drummer Ringo Starr.

    Ringo, 74, is set to feature in a huge global marketing campaign for Skechers’ “Relaxed Fit” footwear range. Ads will appear across TV, print, outdoor, online and point of sale from Spring 2015 through June 2016.

    In a press release, Skechers explains why is the perfect brand ambassador: His half century in the music industry; the release of a children’s book (Octopus’s Garden) earlier this year; and his philanthropy and involvement with the #peacerocks campaign through the David Lynch Foundation.

    "Renowned for wearing comfy sneakers” is not listed, but Skechers president Michael Greenberg says Ringo is a perfect fit as the brand looks to move from just associating itself with the sports world to tying in with the music world in its upcoming campaign. 

    He adds: “Ringo possesses the charm, cool, charisma and instant global recognition that will elevate awareness for our popular Relaxed Fit footwear collection.”

    What the release doesn't explain, however, is why Skechers should have an association with music. It's been more than a decade since its famous campaigns with Britney Spears — a tie-up the company said lost it tens of millions of dollars because the pop star allegedly violated her contract. Both sides filed lawsuits against each other over the deal, which were eventually both settled (terms of which were not disclosed) in 2003.

    Whatever the reason, the company will be hoping the change of marketing direction from sports to music will continue the its recent upward momentum financially. In the most recent quarter to June 30, Skechers USA Inc. reported a record 37% increase year on year in net sales to $587.1 million and a slight lift in gross profit to 45.9% of net sales, up from 45.5% in the second quarter of last year.

    SEE ALSO: Skechers sues Fila over Go Walk shoes patent infringement

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    Details: http://www.businessinsider.com/ringo-starr-becomes-skechers-brand-ambassador-2014-10

  • 10 Things In Advertising You Need To Know This Morning

    hunger games1. The creator of the Facebook Like button has explained why there will never be a “Dislike” one. Facebook’s former CTO Bret Taylor says it would bring too much negativity to the social network. 

    2. Here’s how the Michelin Guide made a tire company the world’s fine dining authority. Business Insider plots the unusual history of the Michelin Guide. 

    3. The McDonald’s menu appears to be driving away cash-strapped customers. Rising commodity prices and frustrated franchisees have been pressuring McDonald’s to increase prices, but it’s turning diners off. 

    4. Beats has released an intense ad about LeBron James’s return to Cleveland. The ad sees LeBron driving the streets of Akron, where he grew up and went to high school to the soundtrack of “Take Me to Church” by Hozier. 

    5. Blackberry is looking to dial up the “latent love” for the brand as it plots its comeback. Marketing Week has interviewed Blackberry’s senior director of global brand marketing Robert Glen on how he is plotting the brand’s turnaround. 

    6. YouTube and Lionsgate have worked together to create a branded series to promote the “Hunger Games” franchise, according to AdAge. The five episode series will feature YouTube stars, who will each as a citizen of one of the film’s fictional districts. 

    7. Starbucks is testing an order-ahead app, Adweek reports. The coffee chain hopes the move will increase sales and reduce the time customer have to wait to pick up their order. 

    8. Videology, an adtech startup, has added a television unit, The Wall Street Journal’s CMO Today reports. The company says 50% of its revenue comes from TV budgets, so it made sense to build out a division to bring the “addressability of internet advertising” to TV. 

    9. Adobe has beaten Salesforce, Oracle, IBM and more to become the marketing cloud leader, VentureBeat reports. The annual Forrester study of marketing software vendors says Adobe’s offering has “distanced itself from the pack” on criteria such as product roadmap and market share. 

    10. ExchangeWire explains that domain identity theft has become the ad fraudsters’ latest “ponzi scheme.” Online fraud expert and CEO of Pixalate Jalal Nasir names some of the worst offenders and urges the media industry to better protect itself from the problem. 

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    Details: http://www.businessinsider.com/10-things-in-advertising-you-need-to-know-today-october-21-2014-10

  • How The Michelin Guide Made A Tire Company The World's Fine Dining Authority

    michelin man michelin guide

    Gordon Ramsay, the British celebrity chef known for the passionate and mean way he tears apart subpar food, actually cried when his New York restaurant The London lost its prestigious two Michelin Stars last year, he told the Daily Mail.

    When your restaurant is awarded a Michelin Star, it is a sign that you've succeeded at the highest level as a chef. Two Stars and your restaurant is excellent. Three Stars and your restaurant is worth traveling to.

    And it's actually for that last reason, traveling, that the Michelin brothers Ándre and Édouard started the Michelin Guide in 1900. The French entrepreneurs had started a tire company 11 years earlier, and they decided that a ratings guide for hotels and restaurants would compel the limited number of drivers to use up their tires and buy more.

    Yes, the Michelin that makes or breaks fine dining establishments around the world is the same Michelin that manufactures tires.

    "From an image standpoint, it certainly has helped as a halo for a tire brand. Because tires, of course, aren't the sexiest product," Tony Fouladpour, Michelin North America's director of corporate public relations, tells Business Insider.

    "The image of Michelin is that of a premium, high-quality brand. And some say that the Michelin Guide is the Bible of all dining guides," he says.

    Back when the Michelin brothers decided to start the guide at the turn of the 20th century, there were only around 2,200 cars in France, the government had yet to establish an extensive road system, and gasoline had to be purchased at select pharmacies.

    michelin guide

    The Michelins were so determined to turn vehicles from a novelty that took drivers to a Sunday picnic to a viable mode of transportation over long distances.

    They gave out guides that cataloged hotels, mechanics, and gasoline vendors throughout France. They even went as far as to put up homemade road signs to assist travelers, according to Michelin.

    As the tire company grew, so did their guide. They launched country-specific editions throughout Europe that became popular enough to compel the brothers to start charging for the booklets in 1920.

    In 1926, the guide expanded to the industry that made it famous — fine dining. Five years later, the three-star system was introduced.

    The Michelin Guide, which is now in 24 countries across four continents and will debut in Brazil next year, is revered mostly for its critics, which Michelin calls "inspectors."

    The inspectors are anonymous and barred from speaking to journalists. They all have an extensive background in the culinary arts, and many are former chefs, Fouladpour says. They all must pass official Michelin Guide training in France.

    Unlike many food critics, they do not take notes while eating, and will often visit a restaurant multiple times unaccompanied before reaching a conclusion.

    Michelin's high profile, especially in Europe, has come with some controversy, most notably when former French inspector Pascal Rémy released the book "L'Inspecteur se Met à Table" ("The Inspector Sits at the Table") in 2004. The tell-all portrays the job as lonely, underpaid, and increasingly lax in its standards. Michelin has dismissed the accusations but says plainly that the job of anonymously reviewing restaurants is not as glorious as some may think.

    It has also been accused of favoring French institutions. But Michael Ellis, the international director of the guide, says that all it takes is a look at the latest star selections to see that the accusation is stale.

    The Michelin Guide represents a minute fraction of a massive company, Fouladpour says, and rather than being profitable, it is mostly a brand-building tool and a way to build on tradition rooted in the company's founders.

    The guide has been in the US for a decade now, beginning in New York City and then expanding to Chicago and San Francisco.

    Fouladpour tells us that Michelin is aware that even though the guide is gaining recognition in the US, many do not make the connection between it and the tire company.

    "We can't spend millions on a campaign telling people, 'Hey, we're the same company!'" Fouladpour says, laughing. "But it's nice when people make the connection. It's only been 10 years [in America]. Let's see what happens after 10 more."


    NOW WATCH: Domino's Vs. Pizza Hut: Who Makes The Best Pizza For Your Money

    SEE ALSO: Food Network Chef Robert Irvine Shares The Top 5 Reasons Restaurants Fail

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    Details: http://www.businessinsider.com/history-of-the-michelin-guide-2014-10

  • McDonald's Menu Is Driving Away Cash-Strapped Customers

    dollar menu

    McDonald's menu is getting too expensive for cash-strapped diners. 

    The company said its prices increased 3% through the end of June compared with the previous year, Bloomberg's Leslie Patton reports

    Even McDonald's cheapest menu items are getting more expensive. The Big Mac chain expanded its dollar menu last year to include items that cost more than $1, and it changed the name of the menu to the "Dollar Menu and More."

    A Double Quarter Pounder with cheese, fries, and a drink now totals about $7.50 at some Chicago locations, Patton reports.

    That's too costly for customers like 58-year-old Mark Hiner, who told Patton he no longer took his grandsons to McDonald's, instead visiting rivals like IHOP, Denny's, and Chili's.

    "Those meals are the same price," Hiner told Patton. "And they’re better."

    McDonald's happy mealRising food prices and frustrated franchisees have been pressuring McDonald's to increase prices. 

    Wholesale beef prices are up more than 28% over past year, according to the USDA.

    And franchisees have been complaining that the Dollar Menu is a drain on profits.

    "Free coffee. Dollar Menu. $2.99 Happy Meal. Idiotic marketing plan by corporate," one franchisee said in a recent survey by Janney Capital Markets.

    "I am just hoping to be flat," another franchisee said. "Customer has lost faith in the brand. We have no image."

    McDonald's same-store sales in the US have fallen for four straight months. The company will report third-quarter earnings on Tuesday.


    NOW WATCH: Starbucks, Dunkin', Or McDonald's: Whose Coffee Has The Best Buzz For Your Buck

     

    SEE ALSO:  Everything You Ever Wanted To Know About How McDonald's Food Is Made

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    Details: http://www.businessinsider.com/mcdonalds-menu-is-too-expensive-2014-10

  • Beats Releases An Intense Ad About LeBron's Return To Cleveland

    LeBron James beats commercial

    As we all know by now, LeBron James is back home with the Cavaliers. James' decision was a huge deal for both the NBA and the city of Cleveland. 

    Beats made this clear with a new ad featuring LeBron driving the streets of Akron, where he grew up and went to high school. The song "Take Me to Church" plays as LeBron goes through an intense workout in his high school gym, with scenes of him as a kid and shots of the dingy apartments and empty fridges of his childhood playing in tandem. It's pretty powerful and very intense.

    Just a kid from Akron, Ohio:

     

    SEE ALSO: 14 Examples Of LeBron James' Incredible Work Ethic

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    Details: http://www.businessinsider.com/lebron-james-beats-commercial-2014-10

  • The Creator Of The Facebook 'Like' Button Explains Why There Will Never Be A ‘Dislike’ One (FB)

    facebook dislike

    Facebook’s ex-CTO and creator of the Like button, Bret Taylor, has just explained why there will probably never be a “Dislike” button — despite many calls from users for one.

    Speaking to Tech Radar UK, Taylor — who left Facebook in 2012 to cofound the mobile productivity suite Quip — explained that a Dislike button would draw too much unwanted negativity to Facebook. While some people might use it to express sympathy, for example, it could also encourage cyberbullying, something for which the site often comes under criticism. 

    Taylor said:

    [The Dislike button] came up a lot. In fact, even the language of the word 'Like' was something we discussed a lot as well. But regarding the Dislike button, the main reason is that in the context of the social network, the negativity of that button has a lot of unfortunate consequences.

    Taylor goes on to explain that the Like button was created for times when users wanted to acknowledge something someone did but didn’t really have anything to say. It isn't just a sentiment of actually 'liking' something, in other words, but rather a replacement for a short comment like 'wow' or 'cool.'

    But he thinks a Dislike button wouldn't work in the same way:

    'I have a feeling that if there were to be a 'Dislike' button … you would end up with these really negative social aspects to it. If you want to dislike something, you should probably write a comment, because there’s probably a word for what you want to say.'

    The Tech Radar article also posits that a "Dislike" button wouldn't be as useful as the "Like" for Facebook to serve targeted advertising. And of course, users can already let Facebook and brands know if they dislike adverts on the site by answering a short survey if they choose to hide specific ads or advertisers from their News Feeds. 


    NOW WATCH: Here's The Ultimate iPhone 6 Camera Review — Shot Entirely With An iPhone 6

     

    SEE ALSO: The Man Who Created Google Maps And Facebook’s ‘Like’ Button Is Building A Google Docs and Microsoft Word Killer

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    Details: http://www.businessinsider.com/facebooks-ex-cto-bret-taylor-on-the-dislike-button-2014-10

  • With More Than $50 Million Still In The Bank, Foursquare Launches A Multimillion-Dollar Ad Campaign

    Foursquare urban panel ad

    Foursquare on Monday launched its first advertising campaign. The outdoor ad placements are in airport kiosks, city bikeshare hubs, on subway cars, and in subway entrances in New York and Chicago for the next six weeks.

    The app partnered with Omnicom and the boutique creative shop Judd Branding to come up with the flight times and placements. It's a multimillion-dollar campaign for Foursquare, which says it will be carefully watching brand lift and return on investment during the fall.

    Foursquare says its decision to start advertising was sparked by a major rebranding initiative it launched over the summer. In May, Foursquare announced it would be splitting its flagship app into two: "Swarm" houses venue check-ins and find-friends features. "Foursquare" is a Yelp-like search and discovery app for local businesses. The app uses location data and user-imputed "tastes" to learn what people like and makes recommendations for them accordingly. Foursquare says it has 6 billion check-ins and over 60 million reviews to work off of.

    Swarm is also running an advertising campaign this fall, but its placements will be online-only. 

    "We're educating a broader audience about the new Foursquare," COO Jeff Glueck tells Business Insider. "We’re seeing from tests that [the new] Foursquare has been getting rave reviews from people who try it — especially those without preconceived notions of the old Foursquare and its points, badges, and mayorship features."

    Foursquare's new tagline: Foursquare learns what you like and leads you to places you'll love. The placements celebrate cultural differences and demonstrate how Foursquare can make smart venue recommendations for all types of people.

    Foursquare vertical phone adBut is it smart for Foursquare to spend millions of dollars on an outdoor ad campaign?

    When it launched, Foursquare exploded to nearly 30 million users and raised $100 million from investors at a $600 million valuation. Since 2012 however, growth has stalled, leading the company to completely reimagine its business and relaunch two new apps in 2014. 

    Glueck says the advertising campaign has been planned since before the August relaunch of Foursquare. Since then, Foursquare has been growing in terms of users and revenue. Glueck says Foursquare's active monthly users on mobile have increased 54% from August 2013 to August 2014. Revenue has grown more than 100% since last summer. Additionally, Foursquare's tips per active users are up by 116%.

    Another worry is that a multimillion-dollar advertising campaign is just burning cash at a time when investors are warning startups to be cautious

    Glueck says Foursquare, which has raised $162 million since it was founded in 2009, has "well over" $50 million in the bank.

    Foursquare, which has raised $162 million since it was founded in 2009, has "well over" $50 million in the bank.

    That, paired with the revenue it is generating, is allowing Foursquare to spend a few million dollars testing brand lift through advertising.

    Glueck also says Foursquare's board, which includes Union Square Ventures and Andreessen Horowitz, is fully supportive of the advertising campaign. Union Square Ventures partner Fred Wilson and Andreessen Horowitz partner Marc Andreessen have both written about startup burn rate concerns recently.

    "I think we have some very experienced marketers in the company who are used to measuring acquisition costs over the lifetime value of a customer," Glueck says. Glueck was formerly at Travelocity, which he says spent ~$1 billion per year on marketing and measured every penny. 

    "We're very mindful of managing venture capital funds," Glueck says. "I think it will take a while to come to a conclusion on how well the campaign is working. We'll be doing brand surveys in both cities."

    When asked about Foursquare's advertising campaign, Union Square Ventures' Wilson and Albert Wenger were supportive.

    "We are very much encouraging our portfolio companies to look hard at their burn rates," they wrote in an email to Business Insider. "But they also have to continue to make the right and rational investments in their businesses.

    "Foursquare's revenues have been ahead of plan this year and the app is doing great with new users. So it makes sense to spend some money on getting the word out. They are going to measure this and all marketing expenses against the returns they get on them."

    foursquare bikeshare ad

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    Details: http://www.businessinsider.com/foursquare-launches-multi-million-dollar-ad-campaign-2014-10

  • How To Get An Hour Of Ad-Free Music On Pandora For $0

    headphones

    Brands including Fox and Sony Playstation are signing up to an interesting new ad format on Pandora, which will deliver one hour of ad-free listening to users at no extra cost, Adweek reports.

    To get an hour of songs without ad interruptions, users simply need to click one of the brands’ advertising banners, which will contain a label saying that a click-through will result in an hour of ad-free listening.

    That ad will expand to display in the background of your screen — called a takeover ad — for the full hour of no-cost listening.

    The format is in beta testing, meaning it's available only to a small group of users targeted by the specific advertiser — and only on the mobile app. However, Pandora plans to open it up to all advertisers in the second half of 2015, Adweek says.

    Pandora users currently need to pay $4.99 per month for ad-free listening by signing up to the company's Pandora One subscription option.

    It is not the first time Pandora has given advertisers the chance to reduce the number of interruptions users experience when they listen to music on the app. In 2012, the company partnered with the car marque Lexus, which became the first brand to offer Pandora listeners a full day of “Limited Interruptions” (as the format was called). The idea was that Lexus would be associating its premium brand with a premium experience on Pandora. 

    Lizzie Widhelm, vice president of digital at Pandora, told Adweek the idea of the newer "Sponsored Listening" product was to introduce the idea of brands offering free music “at scale,” rather than just for a one-day stunt.

    Advertisers will be hoping that by offering the gift of ad-free music, users will have more positive associations of their brands. It’s the same reason you often see branded boosts or branded extra lives in online and mobile games.

    The rival streaming service Spotify is also testing an advertising format that offers users free play. Sponsored Sessions allow users 30 minutes of free music play in exchange for watching a video ad. 

    Pandora reported 77 million active users at the end of May, with subscriptions accounting for roughly 18% of its total revenue, which hit $218.9 million in the second quarter.

    Spotify reached 10 million paid subscribers and 30 million free users globally in May. The company has not released its global financial results for 2013 but in 2012 reported a 128% increase in revenue to €434.7 million ($554.9 million).

    Separately on Monday, Spotify announced it was launching Family packages, allowing up to five people to have separate Premium accounts (which cost $9.99 per month to buy separately) on one bill. Users can add extra members to their bill at a reduced price, with total bills of $14.99 for one extra account, $19.99 for two extra accounts, $24.99 for three extra accounts and $29.99 for four extra accounts.

    SEE ALSO: Spotify Hopes This Story Of Cheerleaders TP-ing A House Will Get You To Switch From Pandora

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    Details: http://www.businessinsider.com/pandoras-new-sponsored-listening-ad-format-2014-10

  • 10 Things In Advertising You Need To Know This Morning

    ouija movie

    Get your week off to a head start with the 10 most important advertising stories this morning.

    1. The first ad on Snapchat has arrived. The first ad was an exclusive trailer for upcoming Universal Pictures horror movie “Ouija.” 

    2. Read the untold story of how Steve Jobs reintroduced his signature design style to Apple. Jobs loved skeuomorphisms: a principle in which design cues are taken from the physical world. 

    3. Whole Foods has launched its first ever national ad campaign in the US. The New York Times reports that the brand campaign is trying to push a “value” message as it tries to shake off its “Whole Paycheck” reputation. 

    4. Facebook has advertised in Japan for the first time. Mumbrella Asia hosts the Wieden + Kennedy Tokyo campaign, dubbed “You’re someone’s friend.” It’s a lot less weird than the Facebook “Chairs” TV ad it ran in the US in 2012. 

    5. Ben & Jerry’s is refusing to rename its “Hazed and Confused” ice cream, despite complaints from anti-hazing activists. Complainants included the parents of 19-year-old Harrison Kowiak who died of a head injury during a fraternity “hell week” hazing ritual at Lenoir-Rhyne University in North Carolina, Bloomberg reports. 

    6. The Adweek 50 is out. The trade title describes the annual rankings as “the 50 executives that make their bosses look good.” Entrants include Facebook’s VP of global marketing solutions Carolyn Everson, and Netflix chief content officer Ted Sarandos. 

    7. Digiday has explained advertising arbitrage. In the latest in its “WTF is…?” series, Digiday explains the controversial programmatic practice and also points out criticisms of the definition. 

    8. MediaCom’s UK chief executive Karen Blackett has spoken to The Guardian. She talks about breaking away from the old boys’ network and beating actor and director Idris Elba in the Black Powerlist. 

    9. Facebook has a new tool that lets brands host real-time chats with celebrities. But Adweek points out that brands will likely have to layer paid ads on top due to the decline in Facebook’s organic reach. 

    10. This is the secret to making Don Draper’s favorite cocktail. The owner and bartender at Ward III in New York City shows Business Insider his skills in this short video. 

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    Details: http://www.businessinsider.com/the-10-most-important-stories-in-advertising-october-20-2014-10

  • Investors Are Looking To Buy Reebok From Adidas For $2 Billion

    reebok turnzone

    New York (AFP) - A consortium of investors from Hong Kong and Abu Dhabi is interested in buying the Reebok brand from Adidas for 1.7 billion euros ($2.2 billion), The Wall Street Journal reported.

    Sources close to the matter told the business daily that Jynwel Capital chief executive Jho Low was behind the bid, arguing that Reebok would fare better as an independent brand.

    And funds linked to the Abu Dhabi government plan to communicate soon with Adidas management, the report said.

    Adidas bought Reebok in 2006 for three billion euros hoping to pile pressure on US rival Nike. 

    But the German giant still has seen its share of the US market keep shrinking.

    It has been a tough year for Adidas. 

    The company slashed its annual net profit forecast to about 650 million euros. That was much lower than previous guidance for between 830-930 million euros.

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    Details: http://www.businessinsider.com/afp-investors-eye-reebok-buy-from-adidas-for-1.7-bn-euros-2014-10

  • Here's The Secret To Making Don Draper's Favorite Cocktail — The Old Fashioned

  • Here's The First Ad To Hit Snapchat

    snapchat evan spiegel founder

    Snapchat ads are here.

    Following its blog post in which it announced it would start running advertisements on the ephemeral photo-sharing service this weekend, Business Insider spotted what looks like the first paid campaign: A trailer for the upcoming Ouija movie.  

    Snapchat had said it wouldn't put advertising into the snap stream that shows the latest private updates from friends. Instead, it placed the Ouija ad in along the recent public updates — and like other snaps — it disappeared after one viewing.

    In its blog post, Snapchat said it wanted "to see if we can deliver an experience that’s fun and informative, the way ads used to be, before they got creepy and targeted." 

    Here's what they look like:

    snapchat ad

    IMG_3944.PNGSnapchat AdIMG_3945.PNG

    SEE ALSO: 3 Reasons Why Snapchat Is On A Rocket Ship To A Mega-IPO

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    Details: http://www.businessinsider.com/snapchat-ad-2014-10

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