Advertising is the price for an unremarkable product?

Amazon chief Jeff Bezos is the man responsible for taking online retailing from a discounting business model to one focused on using personalisation to tailor products and services to consumer needs.

But talking at his annual shareholders meeting, Bezos announced: “Advertising is the price you pay for having an unremarkable product or service.” He may have been saying this with his tongue fairly heavily lodged in his cheek but it is still a revealing statement about the way he chooses to run Amazon. Some brands would see advertising as the way to tell people effectively about your product or service; perhaps Bezos sees running advertising as almost a weakness to compensate for deficiencies in a company’s offer?

When a shareholder complained of never being able to reach the company’s investor shareholder department, Bezos gamely admitted that the department was very “lean” but said it was his “point of view that we should have a very tiny investor relations department”. This did not mean failing to be courteous, he added, but it is clear that Bezos likes to keep staff numbers down at Amazon to keep his overheads low.

So: don’t advertise or employ too many people if you can avoid it? Ouch.

Grazia, Mary Queen of Shops and the charity shop mission

Fashion magazine brand Grazia is joining up with retail consultant Mary Portas and charities Save the Children, Barnardo’s and Mind to create a glamorous take on charity shopping this June at London’s Westfield shopping centre. ‘Mary’s Living & Giving Shop’ will open its doors between 4 June and 27 June.

Portas felt that one reason why not more people shop at charity shops (despite the current love of “vintage” in the fashion world) is the lack of quality donations. While 75% of women apparently have 14 items of clothing that never see the light of day – worth a collective £7bn – charity shops still report a lack of quality in the donations they receive.

Grazia magazine has asked some of its contacts and contributors to help donate to the project, including labels such as Burberry, Mulberry and Luella Bartley. All the money raised will go to the three charities involved.

The store will be manned by celebrity volunteers, Grazia staff and handpicked writers and stylists, alongside Portas’ Yellowdoor consultancy staff. Those willing to donate can drop off their donations to Grazia’s HQ on Shaftesbury Avenue, London or at the shop itself after 4 June. Those items not deemed to make the grade will not be put up for sale!

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What’s your thoughts about this? I think it’s a smart piece of marketing from everyone involved. Portas not only raises her profile as a TV personality (she has a retail “makeover” show) but it also makes her look in tune with current times. Rather than pushing shopping at a time when money is short and massive consumption is being discouraged, focusing on charity stores makes this an acceptable exercise.

It also highlights a genuine problem for the charity shops of the UK. The staff at the charity shop near my house tell me that they have a real problem because so many clothes they are given come from Primark and Peacocks. The original price of these items was so low that the charity shop cannot resell them for less. They have far too many clothes that they cannot resell and too few that will fetch any good prices or lure in potential customers. Meanwhile, people tend to sell their high quality goods to specialist vintage stores or eBay. Let’s see if Portas can (at least in the short term) make a difference.

Can you really generate a “return on ideas”?

I’ve been reading a report out last month authored by Professor Robert Shaw sponsored by the CIM, CIMA and the DMA called ‘Return on Ideas’. You can download it here.

The report showcases a strategy called “Infinity Model” that aims to show the impact of marketing on companies’ bottom lines. The insights are drawn from Shaw’s conversations and surveys of more than 100 organisations.

Do you agree with the ideas showcased in the report? I think it’s worth a glance or two.

American Apparel settles with Allen (and founder explains the story behind the disputed ad)

The case between film director Woody Allen and clothing brand American Apparel has been settled for $5m. As I wrote last month, Allen was not happy that his image had been used to advertise the company’s clothes (he is not a keen brand endorser) and sued for damages.

There were some questions from both sets of lawyers about whose reputation was more in question during the early stages of the case but everything has now been resolved by the insurers behind the clothing firm agreeing to pay Allen half his demanded damages.

The initial advert that kicked off the fuss showed Allen in film Annie Hall dressed as a Hasidic Jew. What is more interesting than the settlement itself is American Apparel’s founder Dov Charney exceptionally complex justification of the brand’s actions in a statement. He says that the contested ad image – topped by the words “der haileker rebbe” or “the holiest rabbi” – was all a longwinded social and cultural comment.

Eminem’s healthy marketing campaign doesn’t need rehab

Rapper Eminem’s new album ‘Relapse’ is receiving a heavy marketing push with Twitter updates and experiential elements as part of the overall strategy. Yesterday, a “rehab” centre was set up in London’s Covent Garden from 9am till 8pm to publicise the rapper’s new music, with lookalikes wandering round the vicinity and giant “E” signs to show passers-by where to come (see pics below).

Over in the online space, intriguing Twitter updates are being used to talk up the album’s launch, with the overall impression for fans being that the singer is currently experiencing dark thoughts – “there is no escaping”. There is also a photo posted of Eminem standing outside what appears to be a rehab facility – Pompsomp Hills (sounds a little like “pop some pills”, no?), a link to a supposed iPhone game and a video for his new song. If you search for Pompsomp Hills online, you find a tongue-in-cheek website for the alleged rehab centre.

Since Eminem has had a well-publicised battle with substance abuse, the marketing campaign has a ring of truth about it. It might be a little tasteless for those who have real problems with narcotic abuse, but this is a man who has rapped about many tasteless and shocking elements of his life so it’s entirely fitting for the artist.

It also probably works well for the target audience, who are used to marketing campaigns such as last year’s ARG promoting The Dark Knight film and expect a little intrigue and build up in entertainment promotions. Nine Inch Nails’ frontman Trent Reznor hired 42 Entertainment, the firm also behind The Dark Knight’s marketing, to launch the band’s “Year Zero” album back in 2007 with an online connected universe.

With budgets across the marketing world low, this type of campaign, drawing on creating PR and word of mouth through experiences and online elements, may well be a popular trend for 2009. It has impact far beyond its financial spend with the right audience. I’m not sure the Eminem campaign does anything particularly new (NIN and The Dark Knight did it bigger and better) but it will probably work.

Utah markets itself to Disney to gain High School Musical 4 production

Location marketing is nothing new. But this interesting little story caught my eye about the US state of Utah doing a little marketing of its own attractions to get Disney back there to film High School Musical’s next installment. The state is offering the company a whopping $1m tax credit to produce the film there.

A Utah film incentive gives the producers 20% of what the company spends in the state while making the movie. This was upped from 15% to attract more business. Utah aims to position itself as the ideal place for the teen franchise drama to take place both fiscally and in terms of ease of production.

High School Musical 3 was shot in Utah for $33m. Of that, $14m was spent in Utah, with a one-time $2m incentive for the company to come and shoot there provided by the state.

It seems that Tinseltown may once again head to Salt Lake City this year….

Pfizer Pushes A Free Drug Programme

Could this be one of the very few times that a pharmaceutical company has really excelled at anything coming close to corporate social responsibility? Today, Pfizer announced it will give jobless Americans (who have lost their health insurance) and their families access to some drugs prescription-free.

If you’re a Marketing Week subscriber, you’ll know that earlier this year, we identified a nascent trend called ‘Recession Marketing‘. Brands such as telecoms firm TalkTalk are offering special packages for those hit by the economic downturn. In TalkTalk’s case, it promises existing customers six months free phone and broadband if they are facing financial hardship. Even financial companies, such as Barclaycard, have introduced initiatives including not charging late payers immediately if they are actively attempting to work out their finances.

Pfizer’s programme, called Maintain – an acronym for ‘Medicines Assistance for Those who Are in Need’, will offer more than 70 drugs at no charge.

Of course, there are criteria. Potential patients will be means-tested and they will have to prove they were taking the medication at least three months before being made redundant. But overall, a fabulous PR campaign that positions Pfizer as a caring company at a time when consumers are really scrutinising who they spend with. If you are a consumer of Pfizer drugs and affected by redundancy, would you ever want drugs from another business if it helped you literally stay alive in your time of need? A powerful marketing move.

Your views?

The Swine Flu Skank

A youth marketing agency called Uproar Unltd brought this to my attention the other day: the Swine Flu Skank. Very silly but fun. Should the government release this version instead of the official health campaign for swine flu prevention?

L’Oreal loses case against eBay

Auction site eBay has won in a battle with consumer goods company L’Oreal. The French business took the website to court in France over it selling counterfeit goods through its service. The judge ruled that eBay had fulfilled its “obligation” to try and prevent the sale of fake goods but was not liable for L’Oreal’s lost sales.

The judge did tell L’Oreal and eBay that they must work together in future to find ways of tackling counterfeiting on the website. This is the second case L’Oreal has brought against eBay; it also lost a case in Belgium last year. It still has cases running against eBay, however, in the UK, Germany and Spain.

The judge has ordered both parties to return and report on how talks have developed later this month.

Do you think this is fair or should eBay do more to stop fakes being sold? Can it ever stop this? It claims to spend $10m a year fighting crime on its website; what more could it do?

American Idol sponsorships – who wins commercially?

You can read a nice take on the American Idol sponsorships in Billboard and who is doing best out of the relationships here. Does Ford, Coke, AT&T or Apple get the best results?